SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
C U R R E N T R E P O R T
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
July 10, 1995
Date of Report (Date Of Earliest Event Reported)
MIDLANTIC CORPORATION
(Exact Name Of Registrant As Specified In Its Charter)
New Jersey
(State Or Other Jurisdiction Of Incorporation)
0-15870 22-2699903
(Commission File Number) (IRS Employer Identification No.)
499 Thornall Street, Metro Park Plaza
P.O. Box 600, Edison, New Jersey 08818
(Address Of Principal Executive Offices) (Zip Code)
(908) 321-8000
(Registrant's Telephone Number, including Area Code)
NOT APPLICABLE
(Former Name Or Former Address, If Changed Since Last Report)
ITEM 5. OTHER EVENTS.
On July 10, 1995, Midlantic Corporation
("Midlantic"), PNC Bank Corp. ("PNC") and PNC Bancorp,
Inc. ("PNC Sub") entered into an Agreement and Plan of
Reorganization (the "Reorganization Agreement") and an
Agreement and Plan of Merger (the "Merger Agreement")
providing for, among other things, the merger (the
"Merger") of Midlantic with and into PNC Sub, with PNC
Sub surviving the Merger. The Merger is expected to
qualify as a tax-free reorganization under the Internal
Revenue Code of 1986, as amended, and to be accounted for
as a pooling of interests.
Pursuant to the Merger Agreement, each share of
the common stock, par value $3.00 per share (the
"Midlantic Common Stock"), of Midlantic outstanding on
the date of the Merger (excluding shares of Midlantic
Common Stock held by Midlantic as treasury stock or
shares held by PNC or any of its subsidiaries, but
including shares of Midlantic Common Stock (i) held
directly or indirectly by PNC or Midlantic or any of
their respective subsidiaries in a fiduciary capacity
that are beneficially owned by third parties and (ii)
held by PNC or Midlantic or any of their respective
subsidiaries in respect of a debt previously contracted)
will be converted into 2.05 shares of the common stock,
par value $5.00 per share, of PNC ("PNC Common Stock").
No fractional shares of PNC Common Stock will be issued
in the Merger, and Midlantic's stockholders who otherwise
would be entitled to receive a fractional share of PNC
Common Stock will receive a cash payment in lieu thereof.
Consummation of the Merger is subject to
certain standard conditions, including, but not limited
to, approval of the Merger by the holders of a majority
of the shares of the Midlantic Common Stock cast at a
meeting of such holders, approval of the issuance of
shares of PNC Common Stock in the Merger by the holders
of a majority of the votes cast at a meeting of the
holders of PNC Common Stock and the receipt of all
required regulatory approvals without the imposition of
any condition or requirement which, in the reasonable
opinion of the Board of Directors of PNC or Midlantic, so
materially and adversely affects the anticipated economic
and business benefits to PNC or Midlantic, respectively,
of the transactions contemplated by the Reorganization
Agreement as to render consummation of such transactions
inadvisable.
Following the Merger, PNC will increase the
number of directors serving on the PNC Board of Directors
by four and will elect Garry J. Scheuring, the Chairman,
President and Chief Executive Officer of Midlantic and
three directors of Midlantic, selected by Midlantic and
subject to approval by PNC, to serve on the PNC Board of
Directors.
As a condition to the execution and delivery of
the Merger Agreement and the Reorganization Agreement,
Midlantic and PNC entered into reciprocal stock option
agreements, each dated as of July 10, 1995 (collectively,
the "Stock Option Agreements"). Pursuant to the Stock
Option Agreements, Midlantic granted PNC an option to
purchase up to 10,425,000 shares of Midlantic Common
Stock at a price of $48.00 per share and PNC granted
Midlantic an option to purchase up to 45,500,000 shares
of PNC Common Stock at a price of $35.00 per share. Each
option is exercisable only upon the occurrence of certain
events described therein, none of which has occurred as
of the date hereof.
In connection with entering into the Merger
Agreement, the Midlantic Board of Directors approved an
amendment (the "Amendment") to the Rights Agreement,
dated February 23, 1990, between Midlantic and Midlantic
National Bank, as Rights Agent (the "Rights Agreement"), so
that neither the actions to be taken by PNC in order to
effectuate the Merger (as contemplated by the Merger
Agreement and the Reorganization Agreement) nor the
execution of the Stock Option Agreements will constitute
an event which would allow exercise of the rights under
the Rights Agreement.
The Merger Agreement, the Reorganization
Agreement, the Stock Option Agreements and the Amendment
are attached hereto as exhibits and incorporated herein
by reference in their entirety. The foregoing summaries
of the Merger Agreement, the Reorganization Agreement,
the Stock Option Agreements and the Amendment do not
purport to be complete and are qualified in their
entirety by reference to such exhibits.
ITEM 7. FINANCIAL STATEMENT AND EXHIBITS.
(c) Exhibits
The following Exhibits are filed with this
Current Report on Form 8-K:
Exhibit
Number Description
2.1 Agreement and Plan of Reorganization,
dated as of July 10, 1995, among Midlantic
Corporation, PNC Bank Corp. and PNC
Bancorp, Inc.
2.2 Agreement and Plan of Merger, dated as of
July 10, 1995, among Midlantic
Corporation, PNC Bank Corp. and PNC
Bancorp, Inc.
99.1 Stock Option Agreement, dated as of July
10, 1995, between Midlantic Corporation
and PNC Bank Corp.
99.2 Stock Option Agreement, dated as of July
10, 1995, between PNC Bank Corp. and
Midlantic Corporation.
99.3 Amendment, dated as of July 10, 1995, to
the Rights Agreement, dated as of February
23, 1990, by and between Midlantic
Corporation and Midlantic National Bank,
as Rights Agent.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned
hereunder duly authorized.
Dated: July 20, 1995
MIDLANTIC CORPORATION
By: /s/ Joseph H. Kott
________________________
Name: Joseph H. Kott
Title: Executive Vice President
and General Counsel
EXHIBIT INDEX
Exhibit
Number Description
2.1 Agreement and Plan of Reorganization,
dated as of July 10, 1995, among Midlantic
Corporation, PNC Bank Corp. and PNC
Bancorp, Inc.
2.2 Agreement and Plan of Merger, dated as of
July 10, 1995, among Midlantic
Corporation, PNC Bank Corp. and PNC
Bancorp, Inc.
99.1 Stock Option Agreement, dated as of July
10, 1995, between Midlantic Corporation
and PNC Bank Corp.
99.2 Stock Option Agreement, dated as of July
10, 1995, between PNC Bank Corp. and
Midlantic Corporation.
99.3 Amendment, dated as of July 10, 1995, to
the Rights Agreement, dated as of February
23, 1990, by and between Midlantic
Corporation and Midlantic National Bank,
as Rights Agent.
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION
("Reorganization Agreement" or "Agreement") dated as of
July 10, 1995, among MIDLANTIC CORPORATION ("MC"), a
New Jersey corporation having its principal executive
office at Metro Park Plaza, P.O. Box 600, Edison, New
Jersey 08818, PNC BANK CORP. ("PNC"), a Pennsylvania
corporation having its principal executive office at
One PNC Plaza, Pittsburgh, Pennsylvania 15265, and PNC
BANCORP, INC. ("Bancorp"), a Delaware corporation and a
wholly-owned subsidiary of PNC having its registered
office at 222 Delaware Avenue, Wilmington, Delaware
19899.
WITNESSETH
WHEREAS, the parties hereto desire that MC shall
be merged with and into Bancorp ("Merger") pursuant to
an Agreement and Plan of Merger substantially in the
form attached hereto as Annex A ("Plan of Merger"); and
WHEREAS, the parties hereto desire to provide
for certain undertakings, conditions, representations,
warranties and covenants in connection with the
transactions contemplated hereby;
NOW, THEREFORE, in consideration of the premises
and of the mutual representations, warranties and
covenants herein contained and intending to be legally
bound hereby, the parties hereto do hereby agree as
follows:
ARTICLE 1
DEFINITIONS
1.1. "Bank Holding Company Act" shall mean the
Bank Holding Company Act of 1956, as amended.
1.2. "Closing Date" shall mean the date
specified pursuant to Section 4.8 hereof as the date on
which the parties hereto shall close the transactions
contemplated herein.
1.3. "Code" shall mean the Internal Revenue
Code of 1986, as amended.
1.4. "Commission" or "SEC" shall mean the
Securities and Exchange Commission.
1.5. "Department of Banking" shall mean the
Pennsylvania Department of Banking.
1.6. "Effective Date" shall mean the date
specified pursuant to Section 4.8 hereof as the
effective date of the Merger.
1.7. "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.
1.8. "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
1.9. "FDIA" shall mean the Federal Deposit
Insurance Act.
1.10. "FDIC" shall mean the Federal Deposit
Insurance Corporation.
1.11. "Federal Reserve Board" shall mean the
Board of Governors of the Federal Reserve System.
1.12. "Intellectual Property" means domestic
and foreign letters patent, patents, patent
applications, patent licenses, software licensed or
owned, know-how licenses, trade names, common law and
other trademarks, service marks, licenses of
trademarks, trade names and/or service marks, trademark
registrations and applications, service mark
registrations and applications and copyright
registrations and applications.
1.13. "Investment Companies" means the Compass
Capital Group of open-end mutual funds.
1.14. "Investment Company Act" means the
Investment Company Act of 1940, as amended.
1.15. "Material Adverse Effect" shall mean,
with respect to MC or PNC, as the case may be, a
material adverse effect on the business, results of
operations or financial condition of such party and its
Subsidiaries taken as a whole.
1.16. "MB" means Midlantic Bank, N.A., a wholly
owned subsidiary of MC.
1.17. "MC Financial Statements" shall mean
(i) the consolidated balance sheets of MC as of
March 31, 1995 and as of December 31, 1994 and 1993 and
the related consolidated statements of income, cash
flows and changes in shareholders' equity (including
related notes, if any) for the three months ended
March 31, 1995 and each of the three years ended
December 31, 1994, 1993 and 1992 as filed by MC in SEC
Documents and (ii) the consolidated balance sheets of
MC and related consolidated statements of income, cash
flows and changes in shareholders' equity (including
related notes, if any) as filed by MC in SEC Documents
with respect to periods ended subsequent to March 31,
1995.
1.18. "MC Option Agreement" shall mean the
Stock Option Agreement dated of even date herewith
between MC and PNC pursuant to which MC will grant PNC
the right to purchase certain shares of MC Common Stock
(as defined below), approval of the Merger by MC's
Board of Directors having been received on a prior
date.
1.19. "Option Agreements" shall mean the MC
Option Agreement and the PNC Option Agreement.
1.20. "PNC Financial Statements" shall mean
(i) the consolidated balance sheets of PNC as of
March 31, 1995 and as of December 31, 1994 and 1993 and
the related consolidated statements of income, cash
flows and changes in shareholders' equity (including
related notes, if any) for the three months ended
March 31, 1995 and each of the three years ended
December 31, 1994, 1993 and 1992 as filed by PNC in SEC
Documents and (ii) the consolidated balance sheets of
PNC and related consolidated statements of income, cash
flows and changes in shareholders' equity (including
related notes, if any) as filed by PNC in SEC Documents
with respect to periods ended subsequent to March 31,
1995.
1.21. "PNC Option Agreement" shall mean the
Stock Option Agreement dated of even date herewith
between PNC and MC pursuant to which PNC will grant MC
the right to purchase certain shares of PNC Common
Stock (as defined below).
1.22. "Pennsylvania Banking Code" shall mean
the Pennsylvania Banking Code of 1965, as amended.
1.23. "Previously Disclosed" shall mean
disclosed prior to the execution hereof in (i) an SEC
Document filed with the SEC subsequent to January 1,
1994 and prior to the date hereof or (ii) a letter
dated of even date herewith from the party making such
disclosure and delivered to the other party prior to
the execution hereof. Any information disclosed by one
party to the other for any purpose hereunder shall be
deemed to be disclosed for all purposes hereunder. The
inclusion of any matter in information Previously
Disclosed shall not be deemed an admission or otherwise
to imply that any such matter is material for purposes
of this Agreement.
1.24. "Proxy Statement" shall mean the joint
proxy statement/prospectus (or similar documents)
together with any supplements thereto sent to the
shareholders of PNC and MC to solicit their votes in
connection with this Agreement and the Plan of Merger.
1.25. "Registration Statement" shall mean the
registration statement with respect to the PNC Common
Stock to be issued in connection with the Merger as
declared effective by the Commission under the
Securities Act.
1.26. "Rights" shall mean warrants, options,
rights, convertible securities and other arrangements
or commitments which obligate an entity to issue or
dispose of any of its capital stock, and stock
appreciation rights, performance units and other
similar stock-based rights whether they obligate the
issuer thereof to issue stock or other securities or to
pay cash.
1.27. "SEC Documents" shall mean all reports
and registration statements filed, or required to be
filed, by a party hereto pursuant to the Securities
Laws.
1.28. "Securities Act" shall mean the
Securities Act of 1933, as amended.
1.29. "Securities Laws" shall mean the
Securities Act; the Exchange Act; the Investment
Company Act; the Investment Advisers Act of 1940, as
amended; the Trust Indenture Act of 1939, as amended;
and the rules and regulations of the Commission
promulgated thereunder.
Other terms used herein are defined in the
preamble and the recitals to this Reorganization
Agreement and in Articles II, III and IV hereof.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF MC
MC hereby represents and warrants to PNC and
Bancorp as follows:
2.1. CAPITAL STRUCTURE OF MC
The authorized capital stock of MC consists of
(i) 40,000,000 shares of preferred stock, no par value
("MC Preferred Stock"), none of which is issued and
outstanding, and (ii) 150,000,000 shares of common
stock, par value $3 per share ("MC Common Stock"), of
which, as of June 30, 1995, 52,128,214 shares are
issued and outstanding and 633,883 shares are held in
treasury. As of June 30, 1995, no shares of MC
Preferred Stock or MC Common Stock were reserved for
issuance, except that (i) 1,389,333 shares of MC Common
Stock were reserved for issuance pursuant to MC's
dividend reinvestment and stock purchase plans, (ii)
5,830,616 shares of MC Common Stock were reserved for
issuance upon the exercise of stock options heretofore
granted pursuant to MC's stock option plans, (iii)
500,000 shares of MC's Series B Junior Participating
Preferred Stock were reserved for issuance upon
exercise of rights pursuant to the Rights Agreement
dated as of February 23, 1990 between MC and MB, as
amended (the "MC Rights Agreement"), (iv) 10,425,000
shares of MC Common Stock were reserved for issuance
pursuant to the MC Option Agreement and (v) 1,517,500
shares of MC Common Stock were reserved for issuance
pursuant to MC's 8 1/4% Convertible Subordinated
Debentures due 2010. All outstanding shares of MC
Common Stock have been duly issued and are validly
outstanding, fully paid and nonassessable. MC does not
have and is not bound by any Rights which are
authorized, issued or outstanding with respect to the
capital stock of MC except for the MC Option Agreement
and as Previously Disclosed and except for Rights
issued pursuant to the MC Rights Agreement. None of
the shares of MC's capital stock has been issued in
violation of the preemptive rights of any person. MC
has taken all action necessary so that the execution of
this Reorganization Agreement, the Plan of Merger and
the MC Option Agreement and the consummation of the
transactions contemplated hereby and thereby do not and
will not result in the grant of any rights to any
person under the MC Rights Agreement or enable or
require the Rights thereunder to be exercised,
distributed or triggered.
2.2. ORGANIZATION, STANDING AND AUTHORITY OF MC
MC is a duly organized corporation, validly
existing and in good standing under the laws of New
Jersey with full corporate power and authority to carry
on its business as now conducted and is duly licensed
or qualified to do business in the states of the United
States and foreign jurisdictions where its ownership or
leasing of property or the conduct of its business
requires such qualification, except where the failure
to be so licensed or qualified would not have a
Material Adverse Effect on MC. MC is registered as a
bank holding company under the Bank Holding Company
Act.
2.3. OWNERSHIP OF MC SUBSIDIARIES; CAPITAL
STRUCTURE OF MC SUBSIDIARIES
MC does not own, directly or indirectly, 5% or
more of the outstanding capital stock or other voting
securities of any corporation, bank or other
organization except as Previously Disclosed
(collectively the "MC Subsidiaries" and individually a
"MC Subsidiary"). The outstanding shares of capital
stock of each MC Subsidiary are validly issued and
outstanding, fully paid and (except as provided in 12
U.S.C. SECTION 55) nonassessable and, except as Previously
Disclosed, all such shares are directly or indirectly
owned by MC free and clear of all liens, claims and
encumbrances. No MC Subsidiary has or is bound by any
Rights which are authorized, issued or outstanding with
respect to the capital stock of any MC Subsidiary and,
except as Previously Disclosed, there are no
agreements, understandings or commitments relating to
the right of MC to vote or to dispose of said shares.
None of the shares of capital stock of any MC
Subsidiary has been issued in violation of the
preemptive rights of any person.
2.4. ORGANIZATION, STANDING AND AUTHORITY OF
MC SUBSIDIARIES
Each MC Subsidiary is a duly organized
corporation or banking association, validly existing
and in good standing under applicable laws. Each MC
Subsidiary (i) has full power and authority to carry on
its business as now conducted, and (ii) is duly
licensed or qualified to do business in the states of
the United States and foreign jurisdictions where its
ownership or leasing of property or the conduct of its
business requires such licensing or qualification and
where failure to be so licensed or qualified would have
a Material Adverse Effect on MC. Each MC Subsidiary
has all federal, state, local and foreign governmental
authorizations necessary for it to own or lease its
properties and assets and to carry on its business as
it is now being conducted, except where the failure to
be so authorized would not have a Material Adverse
Effect on MC.
2.5. AUTHORIZED AND EFFECTIVE AGREEMENT
(a) MC has all requisite corporate power and
authority to enter into and perform all of its
obligations under this Reorganization Agreement, the
Plan of Merger and the MC Option Agreement. The
execution and delivery of this Reorganization
Agreement, the Plan of Merger and the MC Option
Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly and
validly authorized by all necessary corporate action in
respect thereof on the part of MC, except that the
affirmative vote of the holders of a majority of the
shares of MC Common Stock cast by the holders of such
shares entitled to vote thereon is the only shareholder
vote required to approve the Plan of Merger pursuant to
the New Jersey Business Corporation Act and MC's
Restated Certificate of Incorporation and Bylaws. The
Board of Directors of MC has directed that this
Agreement and the Plan of Merger be submitted to MC's
stockholders for approval at a special meeting to be
held as soon as practicable.
(b) Assuming the accuracy of the representation
contained in Section 3.5(b) hereof, this Reorganization
Agreement and the Plan of Merger constitute legal,
valid and binding obligations of MC, enforceable
against it in accordance with their respective terms,
subject as to enforceability, to bankruptcy, insolvency
and other laws of general applicability relating to or
affecting creditors' rights and to general equity
principles.
(c) Except as Previously Disclosed, neither the
execution and delivery of this Reorganization
Agreement, the Plan of Merger or the MC Option
Agreement, nor consummation of the transactions
contemplated hereby or thereby, nor compliance by MC
with any of the provisions hereof or thereof shall (i)
conflict with or result in a breach of any provision of
the articles or certificate of incorporation or
association, charter or by-laws of MC or any MC
Subsidiary, (ii) assuming the consents and approvals
contemplated by Section 4.3(b) hereof and which are
Previously Disclosed are duly obtained, constitute or
result in a breach of any term, condition or provision
of, or constitute a default under, or give rise to any
right of termination, cancellation or acceleration with
respect to, or result in the creation of any lien,
charge or encumbrance upon any property or asset of MC
or any MC Subsidiary pursuant to, any note, bond,
mortgage, indenture, license, agreement or other
instrument or obligation, or (iii) assuming the
consents and approvals contemplated by Section 4.3(b)
hereof and which are Previously Disclosed are duly
obtained, violate any order, writ, injunction, decree,
statute, rule or regulation applicable to MC or any MC
Subsidiary, except (in the case of clauses (ii) and
(iii) above) for such violations, rights, conflicts,
breaches, creations or defaults which, either
individually or in the aggregate, will not have a
Material Adverse Effect on MC.
(d) Other than as contemplated by
Section 4.3(b) hereof and except as Previously
Disclosed, no consent, approval or authorization of, or
declaration, notice, filing or registration with, any
governmental or regulatory authority, or any other
person, is required to be made or obtained by MC or any
MC Subsidiary on or prior to the Closing Date in
connection with the execution, delivery and performance
of this Agreement and the Plan of Merger or the
consummation of the transactions contemplated hereby or
thereby.
2.6. SEC DOCUMENTS; REGULATORY FILINGS
MC has filed all SEC Documents required by the
Securities Laws and such SEC Documents complied, as of
their respective dates, in all material respects with
the Securities Laws. MC and each of the MC
Subsidiaries has filed all reports required by statute
or regulation to be filed with any federal or state
bank regulatory agency, except where the failure to so
file would not have a Material Adverse Effect on MC,
and such reports were prepared in accordance with the
applicable statutes, regulations and instructions in
existence as of the date of filing of such reports in
all material respects.
2.7. FINANCIAL STATEMENTS; BOOKS AND RECORDS;
MINUTE BOOKS
The MC Financial Statements fairly present the
consolidated financial position of MC and its
consolidated Subsidiaries as of the dates indicated and
the consolidated results of operations, changes in
shareholders' equity and cash flows of MC and its
consolidated Subsidiaries for the periods then ended in
conformity with generally accepted accounting
principles applicable to financial institutions applied
on a consistent basis except as disclosed therein. The
books and records of MC and each MC Subsidiary fairly
reflect in all material respects the transactions to
which it is a party or by which its properties are
subject or bound. Such books and records have been
properly kept and maintained and are in compliance in
all material respects with all applicable legal and
accounting requirements. The minute books of MC and
the MC Subsidiaries contain records which are accurate
in all material respects of all corporate actions of
its shareholders and Board of Directors (including
committees of its Board of Directors).
2.8. MATERIAL ADVERSE CHANGE
MC has not, on a consolidated basis, suffered
any material adverse change in its financial condition,
results of operations or business since December 31,
1994.
2.9. ABSENCE OF UNDISCLOSED LIABILITIES
Neither MC nor any MC Subsidiary has any
liability (contingent or otherwise), excluding
contractually assumed contingencies, that is material
to MC on a consolidated basis, or that, when combined
with all similar liabilities, would be material to MC
on a consolidated basis, except as Previously
Disclosed, as disclosed in the MC Financial Statements
filed with the SEC prior to the date hereof and except
for liabilities incurred in the ordinary course of
business subsequent to March 31, 1995.
2.10. PROPERTIES
MC and the MC Subsidiaries have good and
marketable title free and clear of all liens,
encumbrances, charges, defaults or equitable interests
to all of the properties and assets, real and personal,
which, individually or in the aggregate, are material
to the business of MC and its Subsidiaries taken as a
whole, and which are reflected on the MC Financial
Statements as of December 31, 1994 or acquired after
such date, except (i) liens for taxes not yet due and
payable, (ii) pledges to secure deposits and other
liens incurred in the ordinary course of banking
business, (iii) such imperfections of title, easements
and encumbrances, if any, as are not material in
character, amount or extent and (iv) dispositions and
encumbrances for adequate consideration in the ordinary
course of business. All leases pursuant to which MC or
any MC Subsidiary, as lessee, leases real and personal
property which, individually or in the aggregate, are
material to the business of MC and its Subsidiaries
taken as a whole are valid and enforceable in
accordance with their respective terms.
2.11. LOANS
Each loan reflected as an asset in the MC
Financial Statements (i) is evidenced by notes,
agreements or other evidences of indebtedness which are
true, genuine and what they purport to be, (ii) to the
extent secured, has been secured by valid liens and
security interests which have been perfected, and
(iii) is the legal, valid and binding obligation of the
obligor named therein, enforceable in accordance with
its terms, subject to bankruptcy, insolvency,
fraudulent conveyance and other laws of general
applicability relating to or affecting creditors'
rights and to general equity principles, in each case
other than loans as to which the failure to satisfy the
foregoing standards would not have a Material Adverse
Effect on MC.
2.12. TAX MATTERS
(a) MC and each MC Subsidiary have timely filed
federal income tax returns for each year through
December 31, 1993 and have timely filed, or caused to
be filed, all other federal, state, local and foreign
tax returns (including, without limitation, estimated
tax returns, returns required under Sections 1441-1446
and 6031-6060 of the Code and the regulations
thereunder and any comparable state, foreign and local
laws, any other information returns, withholding tax
returns, FICA and FUTA returns and back up withholding
returns required under Section 3406 of the Code and any
comparable state, foreign and local laws) required to
be filed with respect to MC or any MC Subsidiary,
except where the failure to file timely such federal
income and other tax returns would not, in the
aggregate, have a Material Adverse Effect on MC. All
taxes due in respect of the periods covered by such tax
returns have been paid or adequate reserves have been
established for the payment of such taxes, except where
any such failure to pay or establish adequate reserves
would not, in the aggregate, have a Material Adverse
Effect on MC and, as of the Closing Date, all taxes due
in respect of any subsequent periods ending on or prior
to the Closing Date will have been paid or adequate
reserves will have been established for the payment
thereof, except where any such failure to pay or
establish adequate reserves would not, in the
aggregate, have a Material Adverse Effect on MC.
Except as Previously Disclosed, no material (i) audit
examination, (ii) deficiency, or (iii) refund
litigations with respect to such returns is pending.
Not later than 60 days after the date hereof, MC shall
deliver to PNC a list of all (i) audit examinations,
(ii) deficiencies, and (iii) refund litigation with
respect to such returns. Neither MC nor any MC
Subsidiary will have any material liability for any
such taxes in excess of the amounts so paid or reserves
or accruals so established.
(b) All federal, state and local (and, if
applicable, foreign) tax returns filed by MC and each
MC Subsidiary are complete and accurate in all material
respects. Neither MC nor any MC Subsidiary is
delinquent in the payment of any material tax,
assessment or governmental charge, and, except as
Previously Disclosed, none of them has requested any
extension of time within which to file any tax returns
in respect of any fiscal year or portion thereof which
have not since been filed. Except as Previously
Disclosed, no material deficiencies for any tax,
assessment or governmental charge have been proposed,
asserted or assessed (tentatively or otherwise) against
MC or any MC Subsidiary which have not been settled and
paid. Except as Previously Disclosed, there are
currently no agreements in effect with respect to MC or
any MC Subsidiary to extend the period of limitations
for the assessment or collection of any tax.
(c) Except as Previously Disclosed, neither the
transactions contemplated hereby nor the termination of
the employment of any employees of MC or any MC
Subsidiary prior to or following consummation of the
transactions contemplated hereby could result in MC or
any MC Subsidiary making or being required to make any
"excess parachute payment" as that term is defined in
Section 280G of the Code.
(d) For purposes of this Section 2.12,
references to MC and any MC Subsidiary shall include
predecessors thereof.
2.13. EMPLOYEE BENEFIT PLANS
(a) MC has made available true and complete
copies of all qualified pension or profit-sharing
plans, any deferred compensation, consulting, bonus or
group insurance contract or any other incentive,
welfare or employee benefit plan or agreement
maintained for the benefit of employees or former
employees of MC or any MC Subsidiary, and will make
available to PNC (i) the most recent actuarial and
financial reports prepared with respect to any
qualified plans, (ii) the most recent annual reports
filed with any government agency and (iii) all rulings
and determination letters and any open requests for
rulings or letters that pertain to any qualified plan.
(b) Neither MC nor any MC Subsidiary (nor any
pension plan maintained by any of them) has incurred or
reasonably expects to incur any material liability to
the Pension Benefit Guaranty Corporation or to the
Internal Revenue Service with respect to any pension
plan qualified under Section 401 of the Code except
liabilities to the Pension Benefit Guaranty Corporation
pursuant to Section 4007 of ERISA, all of which have
been fully paid. No reportable event under
Section 4043(b) of ERISA has occurred with respect to
any such pension plan, other than a reportable event
that occurs by reason of the transactions contemplated
by this Agreement or an event for which the 30 day
notice requirement has been waived by the Pension
Benefit Guaranty Corporation.
(c) Neither MC nor any MC Subsidiary
participates in, or has incurred any liability under
Section 4201 of ERISA for a complete or partial
withdrawal from, a multiemployer plan as such term is
defined in ERISA.
(d) Except as Previously Disclosed, a favorable
determination letter has been issued by the Internal
Revenue Service with respect to each "employee pension
plan" (as defined in Section 3(2) of ERISA) of MC or
any MC Subsidiary which is intended to be a qualified
plan to the effect that such plan is qualified under
Section 401 of the Code and tax exempt under
Section 501 of the Code. No such letter has been
revoked or threatened to be revoked and neither MC nor
any MC Subsidiary knows of any reasonable ground on
which such revocation may be based. Such plans have
been operated in all material respects in accordance
with their terms and applicable law.
(e) No prohibited transaction (which shall mean
any transaction prohibited by Section 406 of ERISA and
not exempt under Section 408 of ERISA) has occurred
with respect to any "employee benefit plan" (as defined
in Section 3(3) of ERISA) maintained by MC or any MC
Subsidiary which would result in the imposition,
directly or indirectly, of an excise tax under
Section 4975 of the Code that would have, individually
or in the aggregate, a Material Adverse on MC.
(f) The actuarial present value of accrued
benefit obligations, whether or not vested, under each
"employee pension plan" maintained by MC or any MC
Subsidiary did not exceed as of the most recent
actuarial valuation date the then current fair market
value of the assets of such plan and no material
adverse change has occurred with respect to the funded
status of any such plan since such date.
2.14. CERTAIN CONTRACTS
(a) Except as Previously Disclosed, neither MC
nor any MC Subsidiary is a party to, or is bound by,
(i) any material contract as defined in Item 601(b)(10)
of Regulation S-K of the SEC or, to the knowledge of
the executive officers of MC involved in the
negotiation of, or conduct of PNC's due diligence with
respect to, this Agreement, any other material contract
or similar arrangement whether or not made in the
ordinary course of business (other than loans or loan
commitments and funding transactions in the ordinary
course of business of the MC Subsidiaries) or any
agreement restricting the nature or geographic scope of
its business activities in any material respect, (ii)
any agreement, indenture or other instrument relating
to the borrowing of money by MC or any MC Subsidiary or
the guarantee by MC or any MC Subsidiary of any such
obligation, other than instruments relating to
transactions entered into in the customary course,
(iii) any agreement, arrangement or commitment relating
to the employment of a consultant who was formerly a
director or executive officer or the employment,
election, retention in office or severance of any
present or former director or officer, or (iv) any
contract, agreement or understanding with a labor
union, in each case whether written or oral.
(b) Except as Previously Disclosed, neither MC
nor any MC Subsidiary is in default under any material
agreement, commitment, arrangement, lease, insurance
policy or other instrument whether entered into in the
ordinary course of business or otherwise and whether
written or oral, and there has not occurred any event
that, with the lapse of time or giving of notice or
both, would constitute such a default, except for such
defaults which would not, individually or in the
aggregate, have a Material Adverse Effect on MC.
2.15. LEGAL PROCEEDINGS
Except as Previously Disclosed, there are no
actions, suits or proceedings instituted, pending or,
to the knowledge of MC, threatened (or unasserted but
considered probable of assertion and which if asserted
would have at least a reasonable probability of an
unfavorable outcome) against MC or any MC Subsidiary or
against any asset, interest or right of MC or any MC
Subsidiary as to which there is a reasonable
probability of an unfavorable outcome and which, if
such an unfavorable outcome was rendered, would,
individually or in the aggregate, have a Material
Adverse Effect on MC. To the knowledge of MC, there
are no actual or threatened actions, suits or
proceedings which present a claim to restrain or
prohibit the transactions contemplated herein or to
impose any material liability in connection therewith
as to which there is a reasonable probability of an
unfavorable outcome and which, if such an unfavorable
outcome was rendered, would, individually or in the
aggregate, have a Material Adverse Effect on MC.
Except as Previously Disclosed, there are no actions,
suits or proceedings instituted, pending or, to the
knowledge of MC, threatened (or unasserted but
considered probable of assertion and which if asserted
would be reasonably expected to have an unfavorable
outcome) against any present or former director or
officer of MC, that might give rise to a claim for
indemnification and that (i) has a reasonable
probability of an unfavorable outcome and (ii) in the
event of an unfavorable outcome, would, individually or
in the aggregate, have a Material Adverse Effect on MC.
2.16. COMPLIANCE WITH LAWS
Except as Previously Disclosed, MC and each MC
Subsidiary is in compliance in all material respects
with all statutes and regulations applicable to the
conduct of its business, and neither MC nor any MC
Subsidiary has received notification from any agency or
department of federal, state or local government (i)
asserting a material violation of any such statute or
regulation, (ii) threatening to revoke any license,
franchise, permit or government authorization or (iii)
restricting or in any way limiting its operations,
except for such noncompliance, violations, revocations
and restrictions which would not, individually or in
the aggregate, have a Material Adverse Effect on MC.
Neither MC nor any MC Subsidiary is subject to any
regulatory or supervisory cease and desist order,
agreement, directive, memorandum of understanding or
commitment which could be reasonably anticipated to
have a Material Adverse Effect on MC, and none of them
has received any communication requesting that they
enter into any of the foregoing.
2.17. LABOR MATTERS
With respect to their employees, neither MC nor
any MC Subsidiary is a party to any labor agreement
with any labor organization, group or association and
has not engaged in any unfair labor practice. Since
January 1, 1994 and prior to the date hereof, MC and
the MC Subsidiaries have not experienced any attempt by
organized labor or its representatives to make MC or
any MC Subsidiary conform to demands of organized labor
relating to their employees or to enter into a binding
agreement with organized labor that would cover the
employees of MC or any MC Subsidiary. There is no
unfair labor practice charge or other complaint by any
employee or former employee of MC or any MC Subsidiary
against any of them pending before any governmental
agency arising out of MC's or such MC Subsidiary's
activities, which charge or complaint (i) has a
reasonable probability of an unfavorable outcome and
(ii) in the event of an unfavorable outcome would,
individually or in the aggregate, have a Material
Adverse Effect on MC; there is no labor strike or labor
disturbance pending or threatened against any of them;
and neither MC nor any MC Subsidiary has experienced a
work stoppage or other labor difficulty since
January 1, 1994.
2.18. BROKERS AND FINDERS
Neither MC nor any MC Subsidiary, nor any of
their respective officers, directors or employees, has
employed any broker, finder or financial advisor or
incurred any liability for any fees or commissions in
connection with the transactions contemplated herein or
the Plan of Merger, except for MC's retention of
Merrill Lynch & Co. to perform certain financial
advisory services.
2.19. INSURANCE
MC and the MC Subsidiaries each currently
maintains insurance in amounts reasonably necessary for
their operations. Neither MC nor any MC Subsidiary has
received any notice of a premium increase or
cancellation with respect to any of its insurance
policies or bonds, and within the last three years,
neither MC nor any MC Subsidiary has been refused any
insurance coverage sought or applied for, and MC has no
reason to believe that existing insurance coverage
cannot be renewed as and when the same shall expire,
upon terms and conditions as favorable as those
presently in effect, other than possible increases in
premiums or unavailability in coverage that have not
resulted from any extraordinary loss experience of MC
or any MC Subsidiary. The deposits of MB are insured
by the FDIC in accordance with the FDIA, and MB has
paid all assessments and filed all reports required by
the FDIA.
2.20. ENVIRONMENTAL LIABILITY
Neither MC nor any MC Subsidiary has received
any written notice of any legal, administrative,
arbitral or other proceeding, claim or action and, to
the knowledge of MC and the MC Subsidiaries, there is
no governmental investigation of any nature ongoing, in
each case that could reasonably be expected to result
in the imposition, on MC or any MC Subsidiary of any
liability arising under any local, state or federal
environmental statute, regulation or ordinance
including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act
of 1980, as amended, which liability would have a
Material Adverse Effect on MC; except as Previously
Disclosed, there are no facts or circumstances which
could reasonably be expected to form the basis for any
such proceeding, claim, action or governmental
investigation that would impose any such liability; and
neither MC nor any MC Subsidiary is subject to any
agreement, order, judgment, decree or memorandum by or
with any court, governmental authority, regulatory
agency or third party imposing any such liability.
2.21. ADMINISTRATION OF TRUST ACCOUNTS
Each MC Subsidiary has properly administered all
accounts for which it acts as a fiduciary or agent,
including but not limited to accounts for which it
serves as a trustee, agent, custodian, personal
representative, guardian, conservator or investment
advisor, in accordance with the terms of the governing
documents and applicable state and federal law and
regulation and common law, except where the failure to
do so would not, individually or in the aggregate, have
a Material Adverse Effect on MC. Neither MC, any MC
Subsidiary, nor any director, officer or employee of MC
or any MC Subsidiary acting on behalf of MC or an MC
Subsidiary, has committed any breach of trust with
respect to any such fiduciary or agency account, and
the accountings for each such fiduciary or agency
account are true and correct in all material respects
and accurately reflect the assets of such fiduciary or
agency account, except for such breaches and failures
to be true, correct and accurate which would not,
individually or in the aggregate, have a Material
Adverse Effect on MC.
2.22. INTELLECTUAL PROPERTY
Except as Previously Disclosed, MC or an MC
Subsidiary owns the entire right, title and interest in
and to, or has valid licenses with respect to, all of
the Intellectual Property necessary in all material
respects to conduct the business and operations of MC
and the MC Subsidiaries as presently conducted, except
where the failure to do so would not, individually or
in the aggregate, have a Material Adverse Effect on MC.
None of such Intellectual Property is subject to any
outstanding order, decree, judgment, stipulation,
settlement, lien, charge, encumbrance or attachment,
which order, decree, judgment, stipulation, settlement,
lien, charge, encumbrance or attachment would have a
Material Adverse Effect on MC.
2.23. CERTAIN INFORMATION
When the Registration Statement or any post-
effective amendment thereto shall become effective, and
at all times subsequent to such effectiveness up to and
including the time of the MC shareholders' meeting to
vote upon the Merger, such Registration Statement and
all amendments or supplements thereto, with respect to
all information set forth therein furnished by MC
relating to MC and the MC Subsidiaries, (i) shall
comply in all material respects with the applicable
provisions of the Securities Laws, and (ii) shall not
contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein
or necessary to make the statements contained therein
not misleading.
2.24. POOLING OF INTERESTS
As of the date of this Agreement, MC knows of no
reason relating to it or any of its Subsidiaries which
would reasonably cause it to believe that the Merger
will not qualify as a pooling of interests for
financial accounting purposes.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF
PNC AND BANCORP
PNC and Bancorp hereby jointly and severally
represent and warrant to MC as follows:
3.1. CAPITAL STRUCTURE OF PNC
The authorized capital stock of PNC consists at
June 30, 1995 of (i) 17,562,360 shares of preferred
stock, par value $1 per share (the "PNC Preferred
Stock"), of which at such date the following series and
respective number of shares were issued and
outstanding: 18,362 shares of $1.80 Cumulative
Convertible Preferred Stock, Series A; 6,336 shares of
$1.80 Cumulative Convertible Preferred Stock, Series B;
365,114 shares of $1.60 Cumulative Convertible
Preferred Stock, Series C; and 491,990 shares of $1.80
Cumulative Convertible Preferred Stock, Series D and
(ii) 450,000,000 shares of common stock, par value $5
per share ("PNC Common Stock"), of which 227,915,764
shares were issued and outstanding and 8,570,832 shares
were held in treasury. All outstanding shares of PNC
capital stock have been duly issued and are validly
outstanding, fully paid and nonassessable. None of the
shares of PNC's capital stock has been issued in
violation of the preemptive rights of any person. The
shares of PNC Common Stock to be issued in connection
with the Merger have been duly authorized and, when
issued in accordance with the terms of this
Reorganization Agreement and the Plan of Merger, will
be validly issued, fully paid, nonassessable and free
and clear of any preemptive rights. As of June 30,
1995, no shares of PNC Preferred Stock or PNC Common
Stock were reserved for issuance, except that
(i) 169,964 shares of PNC Common Stock were reserved
for issuance pursuant to PNC's dividend reinvestment
and stock purchase plans, (ii) 21,289,398 shares of PNC
Common Stock were reserved for issuance pursuant to PNC
employee benefit and stock incentive plans,
(iii) 1,693,527 shares of PNC Common Stock were
reserved for issuance upon conversion of the shares of
PNC Preferred Stock and convertible debentures, and
(iv) 45,500,000 shares of PNC Common Stock were
reserved for issuance pursuant to the PNC Option
Agreement.
3.2. ORGANIZATION, STANDING AND AUTHORITY OF PNC
PNC is a duly organized corporation, validly
existing and in good standing under the laws of
Pennsylvania, with full corporate power and authority
to carry on its business as now conducted and is duly
licensed or qualified to do business in the states of
the United States and foreign jurisdictions where its
ownership or leasing of property or the conduct of its
business requires such qualification, except where the
failure to be so licensed or qualified would not have a
Material Adverse Effect on PNC. Each of PNC and
Bancorp is registered as a bank holding company under
the Bank Holding Company Act.
3.3. OWNERSHIP OF PNC SUBSIDIARIES; CAPITAL
STRUCTURE OF PNC SUBSIDIARIES
PNC does not own, directly or indirectly, 25% or
more of the outstanding capital stock or other voting
securities of any corporation, bank or other
organization except as Previously Disclosed
(collectively the "PNC Subsidiaries" and individually a
"PNC Subsidiary"). The outstanding shares of capital
stock of the PNC Subsidiaries are validly issued and
outstanding, fully paid and (except as provided in 12
U.S.C. SECTION 55) nonassessable and all such shares are
directly or indirectly owned by PNC free and clear of
all liens, claims and encumbrances. No PNC Subsidiary
has or is bound by any Rights which are authorized,
issued or outstanding with respect to the capital stock
of any PNC Subsidiary and, except as Previously
Disclosed, there are no agreements, understandings or
commitments relating to the right of PNC to vote or to
dispose of said shares. None of the shares of capital
stock of any PNC Subsidiary has been issued in
violation of the preemptive rights of any person.
3.4. ORGANIZATION, STANDING AND AUTHORITY OF
PNC SUBSIDIARIES
Each PNC Subsidiary is a duly organized
corporation or banking association, validly existing
and in good standing under applicable laws. Each PNC
Subsidiary (i) has full power and authority to carry on
its business as now conducted, and (ii) is duly
licensed or qualified to do business in the states of
the United States and foreign jurisdictions where its
ownership or leasing of property or the conduct of its
business requires such licensing or qualification and
where failure to be licensed or qualified would have a
Material Adverse Effect on PNC. Each PNC Subsidiary
has all federal, state, local and foreign governmental
authorizations necessary for it to own or lease its
properties and assets and to carry on its business as
it is now being conducted, except where the failure to
be so authorized would not have a Material Adverse
Effect on PNC.
3.5. AUTHORIZED AND EFFECTIVE AGREEMENT
(a) Each of PNC and Bancorp has all requisite
corporate power and authority to enter into and perform
all of its obligations under this Reorganization
Agreement, the Plan of Merger and the PNC Option
Agreement. The execution and delivery of this
Reorganization Agreement, the Plan of Merger and the
PNC Option Agreement and the consummation of the
transactions contemplated hereby and thereby have been
duly and validly authorized by all necessary corporate
action in respect thereof on the part of PNC and
Bancorp, except that the affirmative vote of the
holders of a majority of the votes cast by the holders
of PNC capital stock eligible to vote thereon is
required to authorize the issuance of PNC Common Stock
pursuant to this Reorganization Agreement and the Plan
of Merger in accordance with New York Stock Exchange
("NYSE") policy. The Board of Directors of PNC has
directed that this Agreement and the Plan of Merger be
submitted to PNC's stockholders for approval at a
special meeting to be held as soon as practicable.
(b) Assuming the accuracy of the representation
contained in Section 2.5(b) hereof, this Reorganization
Agreement and the Plan of Merger constitute legal,
valid and binding obligations of PNC and Bancorp, in
each case enforceable against it in accordance with
their respective terms subject, as to enforceability,
to bankruptcy, insolvency and other laws of general
applicability relating to or affecting creditors'
rights and to general equity principles.
(c) Except as Previously Disclosed, neither the
execution and delivery of this Reorganization
Agreement, the Plan of Merger or the PNC Option
Agreement, nor consummation of the transactions
contemplated hereby or thereby, nor compliance by PNC
or Bancorp with any of the provisions hereof or thereof
shall (i) conflict with or result in a breach of any
provision of the articles or certificate of
incorporation or association, charter or by-laws of PNC
or any PNC Subsidiary, (ii) assuming the consents and
approvals contemplated by Section 4.3(a) hereof and
which are Previously Disclosed are duly obtained,
constitute or result in a breach of any term, condition
or provision of, or constitute a default under, or give
rise to any right of termination, cancellation or
acceleration with respect to, or result in the creation
of any lien, charge or encumbrance upon any property or
asset of PNC or any PNC Subsidiary pursuant to, any
note, bond, mortgage, indenture, license, agreement or
other instrument or obligation, or (iii) assuming the
consents and approvals contemplated by Section 4.3(a)
hereof and which are Previously Disclosed are duly
obtained, violate any order, writ, injunction, decree,
statute, rule or regulation applicable to PNC or any
PNC Subsidiary, except (in the case of clauses (ii) and
(iii) above) for such violations, rights, conflicts,
breaches, creations or defaults which, either
individually or in the aggregate, will not have a
Material Adverse Effect on PNC.
(d) Except for approvals specified in
Section 4.3(a) hereof, except as Previously Disclosed
and except as expressly referred to in this
Reorganization Agreement, no consent, approval or
authorization of, or declaration, notice, filing or
registration with, any governmental or regulatory
authority, or any other person, is required to be made
or obtained by PNC or Bancorp on or prior to the
Closing Date in connection with the execution, delivery
and performance of this Agreement and the Plan of
Merger or the consummation of the transactions
contemplated hereby or thereby.
3.6. SEC DOCUMENTS; REGULATORY FILINGS
PNC has filed all SEC Documents required by the
Securities Laws and such SEC Documents complied, as of
their respective dates, in all material respects with
the Securities Laws. PNC and each of the PNC
Subsidiaries has filed all reports required by statute
or regulation to be filed with any federal or state
bank regulatory agency, except where the failure to so
file would not have a Material Adverse Effect on PNC,
and such reports were prepared in accordance with the
applicable statutes, regulations and instructions in
existence as of the date of filing of such reports in
all material respects.
3.7. FINANCIAL STATEMENTS; BOOKS AND RECORDS;
MINUTE BOOKS
The PNC Financial Statements fairly present the
consolidated financial position of PNC and its
consolidated Subsidiaries as of the dates indicated and
the consolidated results of operations, changes in
shareholders' equity and cash flows of PNC and its
consolidated Subsidiaries for the periods then ended in
conformity with generally accepted accounting
principles applicable to financial institutions applied
on a consistent basis except as disclosed therein. The
books and records of PNC and each PNC Subsidiary fairly
reflect in all material respects the transactions to
which it is a party or by which its properties are
subject or bound. Such books and records have been
properly kept and maintained and are in compliance in
all material respects with all applicable legal and
accounting requirements. The minute books of PNC and
the PNC Subsidiaries contain records which are accurate
in all material respects of all corporate actions of
its shareholders and Board of Directors (including
committees of its Board of Directors).
3.8. MATERIAL ADVERSE CHANGE
PNC has not, on a consolidated basis, suffered
any material adverse change in its financial condition,
results of operations or business since December 31,
1994.
3.9. ABSENCE OF UNDISCLOSED LIABILITIES
Neither PNC nor any PNC Subsidiary has any
liability (contingent or otherwise), excluding
contractually assumed contingencies, that is material
to PNC on a consolidated basis, or that, when combined
with all similar liabilities, would be material to PNC
on a consolidated basis, except as Previously
Disclosed, as disclosed in the PNC Financial Statements
filed with the SEC prior to the date hereof and except
for liabilities incurred in the ordinary course of
business subsequent to March 31, 1995.
3.10. PROPERTIES
PNC and the PNC Subsidiaries have good and
marketable title free and clear of all liens,
encumbrances, charges, defaults or equitable interests
to all of the properties and assets, real and personal,
which, individually or in the aggregate, are material
to the business of PNC and its Subsidiaries taken as a
whole, and which are reflected on the PNC Financial
Statements as of December 31, 1994 or acquired after
such date, except (i) liens for taxes not yet due and
payable, (ii) pledges to secure deposits and other
liens incurred in the ordinary course of banking
business, (iii) such imperfections of title, easements
and encumbrances, if any, as are not material in
character, amount or extent and (iv) dispositions and
encumbrances for adequate consideration in the ordinary
course of business. All leases pursuant to which PNC
or any PNC Subsidiary, as lessee, leases real and
personal property which, individually or in the
aggregate, are material to the business of PNC and its
Subsidiaries taken as a whole are valid and enforceable
in accordance with their respective terms.
3.11. LOANS
Each loan reflected as an asset in the PNC
Financial Statements (i) is evidenced by notes,
agreements or other evidences of indebtedness which are
true, genuine and what they purport to be, (ii) to the
extent secured, has been secured by valid liens and
security interests which have been perfected, and
(iii) is the legal, valid and binding obligation of the
obligor named therein, enforceable in accordance with
its terms, subject to bankruptcy, insolvency,
fraudulent conveyance and other laws of general
applicability relating to or affecting creditors'
rights and to general equity principles, in each case
other than loans as to which the failure to satisfy the
foregoing standards would not have a Material Adverse
Effect on PNC.
3.12. TAX MATTERS
(a) PNC and each PNC Subsidiary have timely
filed federal income tax returns for each year through
December 31, 1993 and have timely filed, or caused to
be filed, all other federal, state, local and foreign
tax returns (including, without limitation, estimated
tax returns, returns required under Sections 1441-1446
and 6031-6060 of the Code and the regulations
thereunder and any comparable state, foreign and local
laws, any other information returns, withholding tax
returns, FICA and FUTA returns and back up withholding
returns required under Section 3406 of the Code and any
comparable state, foreign and local laws) required to
be filed with respect to PNC or any PNC Subsidiary,
except where the failure to file timely such federal
income and other tax returns would not, in the
aggregate, have a Material Adverse Effect on PNC. All
taxes due in respect of the periods covered by such tax
returns have been paid or adequate reserves have been
established for the payment of such taxes, except where
any such failure to pay or establish adequate reserves
would not, in the aggregate, have a Material Adverse
Effect on PNC and, as of the Closing Date, all taxes
due in respect of any subsequent periods ending on or
prior to the Closing Date will have been paid or
adequate reserves will have been established for the
payment thereof, except where any such failure to pay
or establish adequate reserves would not, in the
aggregate, have a Material Adverse Effect on PNC.
Except as Previously Disclosed, no material (i) audit
examination, (ii) deficiency, or (iii) refund
litigation with respect to such returns is pending.
Not later than 60 days after the date hereof, PNC shall
deliver to MC a list of all (i) audit examinations,
(ii) deficiencies, and (iii) refund litigations with
respect to such returns. Neither PNC nor any PNC
Subsidiary will have any material liability for any
such taxes in excess of the amounts so paid or reserves
or accruals so established.
(b) All federal, state and local (and, if
applicable, foreign) tax returns filed by PNC and each
PNC Subsidiary are complete and accurate in all
material respects. Neither PNC nor any PNC Subsidiary
is delinquent in the payment of any material tax,
assessment or governmental charge, and, except as
Previously Disclosed, none of them has requested any
extension of time within which to file any tax returns
in respect of any fiscal year or portion thereof which
have not since been filed. Except as Previously
Disclosed, no material deficiencies for any tax,
assessment or governmental charge have been proposed,
asserted or assessed (tentatively or otherwise) against
PNC or any PNC Subsidiary which have not been settled
and paid. Except as Previously Disclosed, there are
currently no agreements in effect with respect to PNC
or any PNC Subsidiary to extend the period of
limitations for the assessment or collection of any
tax.
(c) For purposes of this Section 3.12,
references to PNC and any PNC Subsidiary shall include
predecessors thereof.
3.13. EMPLOYEE BENEFIT PLANS
(a) PNC has made available to MC true and
complete copies of all qualified pension or profit-
sharing plans, any deferred compensation, bonus or
group insurance contract or any other incentive,
welfare or employee benefit plan or agreement
maintained for the benefit of employees or former
employees of PNC or any PNC Subsidiary, and will make
available to MC (i) the most recent actuarial and
financial reports prepared with respect to any
qualified plans, (ii) the most recent annual reports
filed with any government agency and (iii) all rulings
and determination letters and any open requests for
rulings or letters that pertain to any qualified plan.
(b) Neither PNC nor any PNC Subsidiary (nor any
pension plan maintained by any of them) has incurred or
reasonably expects to incur any material liability to
the Pension Benefit Guaranty Corporation or to the
Internal Revenue Service with respect to any pension
plan qualified under Section 401 of the Code except
liabilities to the Pension Benefit Guaranty Corporation
pursuant to Section 4007 of ERISA, all of which have
been fully paid. No reportable event under
Section 4043(b) of ERISA has occurred with respect to
any such pension plan, other than a reportable event
that occurs by reason of the transactions contemplated
by this Agreement or an event for which the 30 day
notice requirement has been waived by the Pension
Benefit Guaranty Corporation.
(c) Neither PNC nor any PNC Subsidiary
participates in, or has incurred any liability under
Section 4201 of ERISA for a complete or partial
withdrawal from, a multiemployer plan as such term is
defined in ERISA.
(d) Except as Previously Disclosed, a favorable
determination letter has been issued by the Internal
Revenue Service with respect to each "employee pension
plan" (as defined in Section 3(2) of ERISA) of PNC or
any PNC Subsidiary which is intended to be a qualified
plan to the effect that such plan is qualified under
Section 401 of the Code and tax exempt under
Section 501 of the Code. No such letter has been
revoked or threatened to be revoked and neither PNC nor
any PNC Subsidiary knows of any reasonable ground on
which such revocation may be based. Such plans have
been operated in all material respects in accordance
with their terms and applicable law.
(e) No prohibited transaction (which shall mean
any transaction prohibited by Section 406 of ERISA and
not exempt under Section 408 of ERISA) has occurred
with respect to any "employee benefit plan" (as defined
in Section 3(3) of ERISA) maintained by PNC or any PNC
Subsidiary which would result in the imposition,
directly or indirectly, of an excise tax under
Section 4975 of the Code that would have, individually
or in the aggregate, a Material Adverse Effect on PNC.
(f) The actuarial present value of accrued
benefit obligations, whether or not vested, under each
"employee pension plan" maintained by PNC or any PNC
Subsidiary did not exceed as of the most recent
actuarial valuation date the then current fair market
value of the assets of such plan and no material
adverse change has occurred with respect to the funded
status of any such plan since such date.
3.14. CERTAIN CONTRACTS
(a) Except as Previously Disclosed, neither PNC
nor any PNC Subsidiary is a party to, or is bound by,
(i) any material contract required to be filed by PNC
under Item 601(b)(10) of Regulation S-K of the SEC, any
agreement restricting in any material respect the
nature of its current business activities or the
geographic scope of its business activities in New
Jersey or in Philadelphia, Montgomery, Delaware,
Chester or Bucks Counties in Pennsylvania, (ii) any
agreement, indenture or other instrument relating to
the borrowing of money by PNC or any PNC Subsidiary of
an amount exceeding $100 million or the guarantee by
PNC or any PNC Subsidiary of any such obligation, other
than instruments relating to transactions entered into
in the customary course, (iii) any agreement,
arrangement or commitment relating to the employment of
a consultant who was formerly a director or executive
officer or the employment, election, retention in
office or severance of any present or former director
or executive officer of PNC, or (iv) any contract,
agreement or understanding with a labor union, in each
case whether written or oral.
(b) Neither PNC nor any PNC Subsidiary is in
default under any material agreement, commitment,
arrangement, lease, insurance policy or other
instrument whether entered into in the ordinary course
of business or otherwise and whether written or oral,
and there has not occurred any event that, with the
lapse of time or giving of notice or both, would
constitute such a default, except for such defaults
which would not, individually or in the aggregate, have
a Material Adverse Effect on PNC.
3.15. LEGAL PROCEEDINGS
Except as Previously Disclosed, there are no
actions, suits or proceedings instituted, pending or,
to the knowledge of PNC and Bancorp, threatened (or
unasserted but considered probable of assertion and
which if asserted would have at least a reasonable
probability of an unfavorable outcome) against PNC,
Bancorp or any PNC Subsidiary or against any asset,
interest or right of PNC or any PNC Subsidiary as to
which there is a reasonable probability of an
unfavorable outcome and which, if such an unfavorable
outcome was rendered, would, individually or in the
aggregate, have a Material Adverse Effect on PNC. To
the knowledge of PNC and Bancorp, there are no actual
or threatened actions, suits or proceedings which
present a claim to restrain or prohibit the
transactions contemplated herein or to impose any
material liability in connection therewith as to which
there is a reasonable probability of an unfavorable
outcome and which, if such an unfavorable outcome was
rendered, would, individually or in the aggregate, have
a Material Adverse Effect on PNC.
3.16. COMPLIANCE WITH LAWS
Except as Previously Disclosed, each of PNC and
the PNC Subsidiaries is in compliance in all material
respects with all statutes and regulations applicable
to the conduct of its business, and none of them has
received notification from any agency or department of
federal, state or local government (i) asserting a
material violation of any such statute or regulation,
(ii) threatening to revoke any license, franchise,
permit or government authorization or (iii) restricting
or in any way limiting its operations, except for such
noncompliance, violations, revocations and restrictions
which would not, individually or in the aggregate, have
a Material Adverse Effect on PNC. None of PNC or any
PNC Subsidiary is subject to any regulatory or
supervisory cease and desist order, agreement,
directive, memorandum of understanding or commitment
which could be reasonably anticipated to have a
Material Adverse Effect on PNC, and none of them has
received any communication requesting that they enter
into any of the foregoing.
3.17. LABOR MATTERS
With respect to their employees, neither PNC nor
any PNC Subsidiary is a party to any labor agreement
with any labor organization, group or association and
has not engaged in any unfair labor practice. Since
January 1, 1994, and prior to the date hereof, PNC and
the PNC Subsidiaries have not experienced any attempt
by organized labor or its representatives to make PNC
or any PNC Subsidiary conform to demands of organized
labor relating to their employees or to enter into a
binding agreement with organized labor that would cover
the employees of PNC or any PNC Subsidiary. There is
no unfair labor practice charge or other complaint by
any employee or former employee of PNC or any PNC
Subsidiary against any of them pending before any
governmental agency arising out of PNC's or such PNC
Subsidiary's activities, which charge or complaint
(i) has a reasonable probability of an unfavorable
outcome and (ii) in the event of an unfavorable
outcome, would, individually or in the aggregate, have
a Material Adverse Effect on PNC; there is no labor
strike or labor disturbance pending or threatened
against any of them; and neither PNC nor any PNC
Subsidiary has experienced a work stoppage or other
labor difficulty since January 1, 1994.
3.18. BROKERS AND FINDERS
Neither PNC nor any PNC Subsidiary, nor any of
their respective officers, directors or employees, has
employed any broker, finder or financial advisor or
incurred any liability for any fees or commissions in
connection with the transactions contemplated herein or
the Plan of Merger, except for PNC's retention of Smith
Barney Inc. to perform certain financial advisory
services.
3.19. INSURANCE
PNC and the PNC Subsidiaries each currently
maintains insurance in amounts reasonably necessary for
their operations and, to the best knowledge of PNC,
similar in scope and coverage to that maintained by
other entities similarly situated. Neither PNC nor any
PNC Subsidiary has received any notice of a premium
increase or cancellation with respect to any of its
insurance policies or bonds, and within the last three
years, neither PNC nor any PNC Subsidiary has been
refused any insurance coverage sought or applied for,
and PNC has no reason to believe that existing
insurance coverage cannot be renewed as and when the
same shall expire, upon terms and conditions as
favorable as those presently in effect, other than
possible increases in premiums or unavailability in
coverage that have not resulted from any extraordinary
loss experience of PNC or any PNC Subsidiary. The
deposits of those PNC Subsidiaries that are insured
depository institutions within the meaning of the FDIA
are insured by the FDIC in accordance with the FDIA,
and such institutions have paid all assessments and
filed all reports required by the FDIA.
3.20. ENVIRONMENTAL LIABILITY
Neither PNC nor any PNC Subsidiary has received
any written notice of any legal, administrative,
arbitral or other proceeding, claim or action and, to
the knowledge of PNC and the PNC Subsidiaries, there is
no governmental investigation of any nature ongoing, in
each case that could reasonably be expected to result
in the imposition, on PNC or any PNC Subsidiary of any
liability arising under any local, state or federal
environmental statute, regulation or ordinance
including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act
of 1980, as amended, which liability would have a
Material Adverse Effect on PNC; except as Previously
Disclosed, there are no facts or circumstances which
could reasonably be expected to form the basis for any
such proceeding, claim, action or governmental
investigation that would impose any such liability; and
neither PNC nor any PNC Subsidiary is subject to any
agreement, order, judgment, decree or memorandum by or
with any court, governmental authority, regulatory
agency or third party imposing any such liability.
3.21. ADMINISTRATION OF TRUST ACCOUNTS
Each PNC Subsidiary has properly administered
all accounts for which it acts as a fiduciary or agent,
including but not limited to accounts for which it
serves as a trustee, agent, custodian, personal
representative, guardian, conservator or investment
advisor, in accordance with the terms of the governing
documents and applicable state and federal law and
regulation and common law, except where the failure to
do so would not, individually or in the aggregate, have
a Material Adverse Effect on PNC. Neither PNC, any PNC
Subsidiary, nor any director, officer or employee of
PNC or any PNC Subsidiary acting on behalf of PNC or an
PNC Subsidiary, has committed any breach of trust with
respect to any such fiduciary or agency account, and
the accountings for each such fiduciary or agency
account are true and correct in all material respects
and accurately reflect the assets of such fiduciary or
agency account, except for such breaches and failures
to be true, correct and accurate which would not,
individually or in the aggregate, have a Material
Adverse Effect on PNC.
3.22. CERTAIN INFORMATION
When the Registration Statement or any post-
effective amendment thereto shall become effective, and
at all times subsequent to such effectiveness up to and
including the time of the PNC shareholders' meeting to
vote upon the Merger, such Registration Statement and
all amendments or supplements thereto, with respect to
all information set forth therein furnished by PNC
relating to PNC and the PNC Subsidiaries, (i) shall
comply in all material respects with the applicable
provisions of the Securities Laws, and (ii) shall not
contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein
or necessary to make the statements contained therein
not misleading.
3.23. POOLING OF INTERESTS
As of the date of this Agreement, PNC knows of
no reason relating to it or any of its Subsidiaries
which would reasonably cause it to believe that the
Merger will not qualify as a pooling of interests for
financial accounting purposes.
ARTICLE 4
COVENANTS
4.1. SHAREHOLDERS' MEETING
PNC and MC shall submit this Reorganization
Agreement and the Plan of Merger and, in the case of
PNC, the issuance of PNC Common Stock thereunder, to
their respective shareholders for approval at special
meetings to be held as soon as practicable. Subject to
the fiduciary duties of the respective boards of
directors of MC and PNC as determined by each after
consultation with such board's counsel, the boards of
directors of PNC and MC shall recommend at the
respective shareholders' meetings that the shareholders
vote in favor of such approval.
4.2. PROXY STATEMENT; REGISTRATION STATEMENT
As promptly as practicable after the date
hereof, PNC and MC shall cooperate in the preparation
of the Proxy Statement to be mailed to the shareholders
of MC and PNC in connection with the Merger and the
transactions contemplated thereby and to be filed by
PNC as part of the Registration Statement. PNC will
advise MC, promptly after it receives notice thereof,
of the time when the Registration Statement or any
post-effective amendment thereto has become effective
or any supplement or amendment has been filed, of the
issuance of any stop order, of the suspension of
qualification of the PNC Common Stock issuable in
connection with the Merger for offering or sale in any
jurisdiction, or the initiation or threat of any
proceeding for any such purpose, or of any request by
the SEC for the amendment or supplement of the
Registration Statement or for additional information.
PNC shall take all actions necessary to register or
qualify the shares of PNC Common Stock to be issued in
the Merger pursuant to all applicable state "blue sky"
or securities laws and shall maintain such
registrations or qualifications in effect for all
purposes hereof. PNC shall apply for approval to list
the shares of PNC Common Stock to be issued in the
Merger on the NYSE, subject to official notice of
issuance, prior to the Effective Date.
4.3. APPLICATIONS
(a) As promptly as practicable after the date
hereof, Bancorp and, if required, PNC, shall submit any
requisite applications for prior approval of the
transactions contemplated herein and in the Plan of
Merger (i) to the Federal Reserve Board pursuant to
Sections 3 and 4 of the Bank Holding Company Act, (ii)
to the Department of Banking pursuant to Section 116 of
the Pennsylvania Banking Code, and (iii) to the
Commissioner of Banking of New Jersey pursuant to N.J.
Stat. Ann. SECTION 17:9A-370, et seq., and the regulations
promulgated thereunder, and each of the parties hereto
shall, and they shall cause their respective
subsidiaries to, submit any applications, notices or
other filings to any other state or federal government
agency, department or body the approval of which is
required for consummation of the Merger. MC and PNC
each represents and warrants to the other that all
information concerning it and its directors, officers,
shareholders and subsidiaries included (or submitted
for inclusion) in any such application and furnished by
it shall be true, correct and complete in all material
respects.
(b) To the extent that the rights of MB under
any investment advisory contract with the Investment
Companies may not be assigned without the consent or
approval of another party thereto, MC shall cause MB to
use its reasonable best efforts to obtain any such
consent, which obligation may be satisfied by seeking
to obtain the approval of directors and shareholders of
the Investment Companies to new contracts, effective as
of the Effective Date with MB or with an affiliate of
PNC, as PNC may elect, on substantially the same terms
as existing contracts at meetings of shareholders to be
held as soon as practicable, except as PNC may
otherwise request that MB seek the requisite approvals
to merge one or more of the Investment Companies into a
similar fund in the PNC Family of Funds. MC and PNC
each represents and warrants that none of the
information or data in the proxy materials required for
the shareholder approvals referred to in this Section
4.3(b) and provided by it or any of its Subsidiaries
will contain at the time of the related meeting of
shareholders any untrue statement of a material fact or
any omission of any material fact, the omission of
which would be misleading in the circumstances in which
made.
4.4. BEST EFFORTS
(a) PNC, Bancorp, and MC shall each use its
best efforts in good faith, and each of them shall
cause its subsidiaries to use their best efforts in
good faith, to (i) furnish such information as may be
required in connection with the preparation of the
documents referred to in Sections 4.2 and 4.3 above,
and (ii) take or cause to be taken all action necessary
or desirable on its part so as to permit consummation
of the Merger at the earliest possible date, including,
without limitation, (1) obtaining the consent or
approval of each individual, partnership, corporation,
association or other business or professional entity
whose consent or approval is required for consummation
of the transactions contemplated hereby, provided that
neither MC nor any MC Subsidiary shall agree to make
any payments or modifications to agreements in
connection therewith without the prior written consent
of PNC, which consent shall not be unreasonably
withheld and (2) requesting the delivery of appropriate
opinions, consents and letters from its counsel and
independent auditors. No party hereto shall take or
fail to take, or cause or permit its Subsidiaries to
take or fail to take, or to the best of its ability
permit to be taken or omitted to be taken by any third
persons, any action that would substantially impair the
prospects of completing the Merger pursuant to this
Reorganization Agreement and the Plan of Merger, that
would materially delay such completion, or that would
adversely affect the qualification of the Merger for
pooling of interests accounting treatment or as a
reorganization within the meaning of Section 368(a) of
the Code; provided that nothing herein contained shall
preclude PNC or MC, as the case may be, from exercising
its rights under the PNC Option Agreement or the MC
Option Agreement, respectively. In the event that
either party has taken any action, whether before, on
or after the date hereof, that would adversely affect
such qualification, each party shall take such action
as the other party may reasonably request to cure such
effect to the extent curable without a Material Adverse
Effect on either of the parties.
(b) MC shall give prompt notice to PNC, and PNC
shall give prompt notice to MC, of (i) the occurrence,
or failure to occur, of any event which occurrence or
failure would be likely to cause any representation or
warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the
date hereof to the Closing Date and (ii) any material
failure of MC or PNC, as the case may be, to comply
with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder, and each
party shall use all reasonable efforts to remedy such
failure.
(c) Each party shall provide and shall request
its auditors to provide the other party with such
historical financial information regarding it (and
related audit reports and consents) as the other party
may reasonably request for securities disclosure
purposes.
4.5. INVESTIGATION AND CONFIDENTIALITY
MC and PNC each will keep the other advised of
all material developments relevant to its business and
to consummation of the transactions contemplated herein
and in the Plan of Merger. PNC and MC each may make or
cause to be made such investigation of the financial
and legal condition of the other as such party
reasonably deems necessary or advisable in connection
with the transactions contemplated herein and in the
Plan of Merger, provided, however, that such
investigation shall be reasonably related to such
transactions and shall not interfere unnecessarily with
normal operations. PNC and MC agree to furnish the
other and the other's advisors with such financial data
and other information with respect to its business and
properties as such other party shall from time to time
reasonably request. No investigation pursuant to this
Section 4.5 shall affect or be deemed to modify any
representation or warranty made by, or the conditions
to the obligations to consummate the Merger of, any
party hereto. Each party hereto shall hold all
information furnished by the other party or any of such
party's Subsidiaries or representatives pursuant to
Section 4.5 in confidence to the extent required by,
and in accordance with, the provisions of the
confidentiality agreement, dated June 27, 1995 between
MC and PNC (the "Confidentiality Agreement").
4.6. PRESS RELEASES
MC and PNC shall agree with each other as to the
form and substance of any press release related to this
Reorganization Agreement and the Plan of Merger or the
transactions contemplated hereby or thereby, and shall
consult each other as to the form and substance of
other public disclosures related thereto, provided,
however, that nothing contained herein shall prohibit
any party, following notification to the other parties,
from making any disclosure which is required by
applicable law or the rules of the NYSE.
4.7. COVENANTS OF MC AND PNC
(a) Prior to the Closing Date, and except as
otherwise provided for by this Reorganization
Agreement, the Merger Agreement, the Option Agreements,
or consented to or approved by the other parties
hereto, each of PNC and MC shall, and shall cause each
of its respective subsidiaries to, use its best efforts
to preserve its properties, business and relationships
with customers, employees and other persons.
(b) Neither PNC nor MC shall, and neither PNC
nor MC shall permit any of their respective
subsidiaries to, except with the prior written consent
of the other and except as Previously Disclosed or
expressly contemplated or permitted by this Agreement,
the Merger Agreement, or the Option Agreements:
(1) carry on its business other than in
the usual, regular and ordinary course in substantially
the same manner as heretofore conducted;
(2) in the case of MC only, declare, set
aside, make or pay any dividend or other distribution
in respect of its capital stock other than its regular
quarterly cash dividends on MC Common Stock in amounts
not in excess of $.32 per share, or, in the case of PNC
only, declare, set aside, make or pay any dividend or
other distribution in respect of its capital stock
other than (x) its regular quarterly cash dividend on
PNC Common Stock in amounts not in excess of $.35 per
share, except as may be increased by PNC's Board of
Directors at a regularly scheduled meeting, such
increase not to exceed 20%, or (y) any dividends
payable on any PNC Preferred Stock in accordance with
the provisions of the applicable certificate of
incorporation or certificate of designation relating to
such preferred stock;
(3) issue any shares of its capital stock
or permit any treasury shares to become outstanding
other than pursuant to the Option Agreements, the MC
Rights Agreement or Rights outstanding at the date
hereof; provided, however, that MC may issue shares of
MC Common Stock or permit treasury shares to become
outstanding in accordance with the terms of its
Dividend Reinvestment and Stock Purchase Plan and its
Savings and Investment Plan;
(4) incur any additional debt obligation
or other obligation for borrowed money other than in
the ordinary course of business consistent with past
practice;
(5) issue, grant or authorize any Rights
or effect any recapitalization, reclassification, stock
dividend, stock split or like change in capitalization,
or redeem, repurchase or otherwise acquire any shares
of its capital stock;
(6) amend its articles or certificate of
incorporation or association or by-laws; impose, or
suffer the imposition, on any share of stock held by
such party in any Subsidiary of such party of any lien,
charge or encumbrance, or permit any such lien, charge
or encumbrance to exist;
(7) merge with any other corporation,
savings association or bank or permit any other
corporation, savings association or bank to merge into
it or consolidate with any other corporation, savings
association or bank; acquire control over any other
firm, bank, corporation, savings association or
organization or create any subsidiary;
(8) except in the ordinary course of
business, waive or release any material right or cancel
or compromise any material debt or claim;
(9) liquidate or sell or dispose of any
material assets or acquire any material assets; except
as Previously Disclosed, make any capital expenditure
in excess of $250,000 in any instance or $500,000 in
the aggregate; or, except as Previously Disclosed,
establish new branches or other similar facilities or
enter into or modify any leases or other contracts
relating thereto that involve annual payments by such
party or any Subsidiary of such party that exceed
$100,000 in any instance or $500,000 in the aggregate,
except with respect to renewals of leases in the
ordinary course of business;
(10) increase the rate of compensation of,
pay or agree to pay any bonus to, or provide any other
employee benefit or incentive to, any of its directors,
officers or employees except (i) in a manner consistent
with past practice, (ii) for bonuses in respect of 1995
pursuant to the MC Annual Incentive and Bonus Plan
(including without limitation the provisions thereof
providing MC with discretion in determining the amounts
payable thereunder), provided, however, that in no
event shall the aggregate amount paid pursuant to such
plan in respect of 1995 exceed 140% of the aggregate
amount paid pursuant to such plan in respect of 1994,
consistent with the terms of such plan, and (iii) MC
and its Subsidiaries may in their discretion increase
the salaries of any or all of their respective
employees who were employees on or prior to
December 31, 1994, in the ordinary course of business
but only to the extent that the aggregate amount paid
by MC and its Subsidiaries as salaries during the 1995
calendar year to such employees is equal to or less
than 104% of the aggregate amount paid by MC and its
Subsidiaries to such employees during the 1994 calendar
year; enter into or modify any employment or severance
contracts with any of its present or former directors,
officers or employees; or enter into or substantially
modify (except as may be required by applicable law)
any pension, retirement, stock option, stock purchase,
stock appreciation right, savings, profit sharing,
deferred compensation, consulting, bonus, group
insurance or other employee benefit, incentive or
welfare contract, plan or arrangement, or any trust
agreement related thereto, in respect of any of its
directors, officers or other employees;
(11) change its lending, investment,
asset/liability management or other material banking
policies in any material respect except as may be
required by changes in applicable law;
(12) change its methods of accounting in
effect at December 31, 1994, except as required by
changes in generally accepted accounting principles
concurred in by its independent certified public
accountants, or change any of its methods of reporting
income and deductions for federal income tax purposes
from those employed in the preparation of its federal
income tax returns for the year ended December 31,
1994, except as required by law;
(13) authorize or permit any of its
officers, directors, employees or agents to directly or
indirectly solicit, initiate or encourage any inquiries
relating to, or the making of any proposal which
constitutes, a "takeover proposal" (as defined below),
or, except to the extent legally required for the
discharge of the fiduciary duties of its Board of
Directors, recommend or endorse any takeover proposal,
or participate in any discussions or negotiations, or
provide third parties with any nonpublic information,
relating to any such inquiry or proposal or otherwise
facilitate any effort or attempt to make or implement a
takeover proposal; provided, however, that each party
may communicate information about any such takeover
proposal to its stockholders if, in the judgment of
such party's Board of Directors, based upon the advice
of outside counsel, such communication is required
under applicable law. Each party will take all actions
necessary or advisable to inform the appropriate
individuals or entities referred to in the first
sentence hereof of the obligations undertaken herein.
Each party will notify the other immediately if any
such inquiries or takeover proposals are received by,
any such information is requested from, or any such
negotiations or discussions are sought to be initiated
or continued with, such party, and such party will
promptly inform the other party in writing of all of
the relevant details with respect to the foregoing. As
used in this Agreement, "takeover proposal" shall mean
any tender or exchange offer, proposal for a merger,
consolidation or other business combination involving
PNC or MC or any of their respective Subsidiaries or
any proposal or offer to acquire in any manner a
substantial equity interest in, or a substantial
portion of the assets of, PNC or MC or any of their
respective Subsidiaries other than the transactions
contemplated or permitted by this Agreement, the Plan
of Merger and the Option Agreements; or
(14) agree to do any of the foregoing.
(c) Unless such action would prevent the Merger
from being accounted for as a pooling of interests, and
if PNC shall request such action, then, on or before
the Closing Date, MC shall call for redemption and
cause to be redeemed (or converted by the holders
thereof into MC Common Stock) and cancelled by MC the
total outstanding principal amount of MC's 81/4%
Convertible Subordinated Debentures Due 2010 (the
"Debentures"), all in accordance with the terms and
conditions of the Indenture (the "Indenture") dated
June 15, 1985 and supplemented January 30, 1987 between
MC and Morgan Guaranty Trust Company of New York as
Trustee. In the event such redemption and cancellation
shall not occur prior to the Closing Date, PNC and
Bancorp shall, by Supplemental Indenture, jointly and
severally assume all of the obligations of MC under the
outstanding Debentures.
4.8. CLOSING; ARTICLES OF MERGER
The transactions contemplated by this
Reorganization Agreement and the Plan of Merger shall
be consummated at a closing to be held at the executive
offices of PNC, One PNC Plaza, Pittsburgh,
Pennsylvania, on the first business day following
satisfaction of the conditions to consummation of the
Merger set forth in Article 5 hereof (other than such
conditions relating to the receipt of officers'
certificates and legal opinions) or such later date
during such month in which such business day shall
occur (or, if such business day shall occur within 10
days prior to the end of such month, during the next
following month) thereafter as may be specified by PNC.
In connection with such Closing, Bancorp and MC shall
execute a certificate of merger and shall cause such
certificate to be delivered to the New Jersey Secretary
of State in accordance with Section 14A:10-4.1 of the
New Jersey Business Corporation Act and Bancorp shall
execute a certificate of merger and shall cause such
certificate to be delivered to the Delaware Secretary
of State in accordance with Section 252(c) of the
Delaware General Corporation Law. The Merger shall be
effective at the time and on the date specified in such
certificates of merger.
4.9. AFFILIATES
(a) MC and PNC shall cooperate and use their
best efforts to identify those persons who may be
deemed to be "affiliates" of MC or PNC within the
meaning of Rule 145 promulgated by the Commission under
the Securities Act and for purposes of qualifying the
"Merger" for "pooling interests" accounting treatment.
MC and PNC shall use its respective best efforts to
cause each person so identified to deliver to PNC or
MC, as the case may be, no later than 30 days prior to
the Effective Date, a written agreement (which
agreement shall be substantially in the form of
Exhibit 4.9(a) (in the case of MC affiliates) and
4.9(b) (in the case of PNC affiliates) hereof). Shares
of PNC Common Stock issued to such MC and PNC
affiliates in exchange for MC Common Stock or
previously owned by them shall not be transferable
until such time as financial results covering at least
30 days of combined operations of PNC and MC have been
published within the meaning of Section 201.01 of the
Commission's Codification of Financial Reporting
Policies, regardless of whether each such affiliate has
provided the written agreement referred to in this
section.
(b) PNC shall use its best efforts to publish
no later than ninety (90) days after the end of the
first month after the Effective Date in which there are
at least thirty (30) days of post-Merger combined
operations (which month may be the month in which the
Effective Date occurs), combined sales and net income
figures as contemplated by and in accordance with the
terms of SEC Accounting Series Release No. 135.
4.10. MC EMPLOYEES; DIRECTORS AND MANAGEMENT;
INDEMNIFICATION
(a) On and after the Effective Date (or as soon
thereafter as may be practicable), all persons who are
employed by MC and/or MC Subsidiaries on such date
shall be employed upon terms and conditions (including
benefits) which in the aggregate are no less favorable
with respect to their employment by PNC and its
subsidiaries after the Effective Date than those
generally afforded to other employees of PNC
subsidiaries holding similar positions, subject to the
terms and conditions under which those employee
benefits are made available to such employees and
provided that for purposes of determining eligibility
for and vesting of such employee benefits only (and not
for pension benefit accrual purposes) and, if
applicable, for purposes of satisfying any waiting
periods concerning "preexisting conditions" and the
satisfaction of any "copayment" or deductible
requirements), service with MC or a MC Subsidiary or
any predecessor thereto prior to the Effective Date
shall be treated as service with an "employer" to the
same extent as if such persons had been employees of
PNC, and provided further that this Section 4.10(a)
shall not be construed (i) to limit the ability of PNC
and its affiliates to terminate the employment of any
employee or to review employee benefits programs from
time to time and to make such changes as they deem
appropriate or (ii) to require PNC or its affiliates to
provide employees or former employees of MC or any of
its Subsidiaries with post-retirement medical benefits
more favorable than those provided to new hires at PNC
(except that such persons who are employed by MC and/or
MC Subsidiaries on the Effective Date ("MC Employees")
shall receive credit for service with MC and/or MC
Subsidiaries and their predecessors for purposes of
eligibility for such post-retirement medical benefits
to the extent that MC provided such credit with respect
to comparable plans). PNC agrees to honor in
accordance with their terms all employment, severance
and employee benefit plans, contracts, agreements,
arrangements, and understandings Previously Disclosed,
provided, however, that the foregoing shall not prevent
PNC from amending or terminating any such plan,
contract, agreement, arrangement or understanding in
accordance with its terms. The continued coverage of
the MC Employees under the employee benefit plans
maintained by MC and/or the MC Subsidiaries immediately
prior to the Effective Date (the "MC Plans") during a
transition period shall be deemed to provide the MC
Employees with benefits that are no less favorable than
those offered to other employees of PNC and its
Subsidiaries, provided that after the Effective Date
there is no material reduction (determined on an
overall basis) in the benefits provided under the MC
Plans. Notwithstanding anything in this Section 4.10
to the contrary, following the Effective Date, PNC
shall or shall cause Bancorp to provide a severance
plan to MC Employees. Such severance plan shall (i)
for a period of one year following the Effective Date,
be either the MC severance plan as Previously Disclosed
or the PNC severance plan as in effect on the date
hereof, as MC may elect on or prior to July 19, 1995
and (ii) thereafter, under the PNC severance plan (as
in effect from time to time).
(b) On or prior to the Effective Date, PNC
shall offer to enter into an employment agreement with
Mr. Garry J. Scheuring on the terms Previously
Disclosed.
(c) PNC's Board of Directors shall take all
requisite action to elect as directors of PNC effective
as of the Effective Date Garry J. Scheuring and three
other persons serving as directors of MC immediately
prior to the Effective Date, which three persons shall
be selected by MC subject to approval by PNC.
(d) In the event of any threatened or actual
claim, action, suit, proceeding or investigation,
whether civil, criminal or administrative, including,
without limitation, any such claim, action, suit,
proceeding or investigation in which any person who is
now, or has been at any time prior to the date of this
Agreement, or who becomes prior to the Effective Date,
a director or officer of MC (the "Indemnified Parties")
is, or is threatened to be, made a party based in whole
or in part on, or arising in whole or in part out of,
or pertaining to (i) the fact that he is or was a
director, officer or employee of MC, any of the MC
Subsidiaries or any of their respective predecessors or
(ii) this Agreement, the Merger Agreement, the Option
Agreements or any of the transactions contemplated
hereby or thereby, whether in any case asserted or
arising before or after the Effective Date, the parties
hereto agree to cooperate and use their best efforts to
defend against and respond thereto. It is understood
and agreed that after the Effective Date, PNC shall (or
shall cause Bancorp to) indemnify and hold harmless, as
and to the fullest extent permitted by law, each such
Indemnified Party against any losses, claims, damages,
liabilities, costs, expenses (including reasonable
attorney's fees and expenses in advance of the final
disposition of any claim, suit, proceeding or
investigation to each Indemnified Party to the fullest
extent permitted by law upon receipt of any undertaking
required by applicable law), judgments, fines and
amounts paid in settlement in connection with any such
threatened or actual claim, action, suit, proceeding or
investigation, and in the event of any such threatened
or actual claim, action, suit, proceeding or
investigation (whether asserted or arising before or
after the Effective Date), the Indemnified Parties may
retain counsel reasonably satisfactory to them after
consultation with PNC; provided, however, that (1) PNC
shall have the right to assume the defense thereof and
upon such assumption PNC shall not be liable to any
Indemnified Party for any legal expenses of other
counsel or any other expenses subsequently incurred by
any Indemnified Party in connection with the defense
thereof, except that if PNC elects not to assume such
defense or counsel for the Indemnified Parties
reasonably advises the Indemnified Parties that there
are issues which raise conflicts of interest between
PNC and the Indemnified Parties, the Indemnified
Parties may retain counsel reasonably satisfactory to
them after consultation with PNC, and PNC shall pay the
reasonable fees and expenses of such counsel for the
Indemnified Parties, (2) PNC shall be obligated
pursuant to this paragraph to pay for only one firm of
counsel for all Indemnified Parties, (3) PNC shall not
be liable for any settlement effected without its prior
written consent (which consent shall not be
unreasonably withheld) and (4) PNC shall have no
obligation hereunder to any Indemnified Party when and
if a court of competent jurisdiction shall ultimately
determine, and such determination shall have become
final and nonappealable, that indemnification of such
Indemnified Party in the manner contemplated hereby is
prohibited by applicable law. Any Indemnified Party
wishing to claim Indemnification under this Section
4.10(d), upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify PNC
thereof, provided that the failure of any Indemnified
Party to so notify PNC shall not relieve it of its
obligations hereunder except (and only) to the extent
that such failure materially prejudices PNC. PNC's
obligations under this Section 4.10(d) continue in full
force and effect for a period of six (6) years from the
Effective Date; provided, however, that all rights to
indemnification in respect of any claim (a "Claim")
asserted or made within such period shall continue
until the final disposition of such Claim.
(e) PNC agrees that all rights to
indemnification and all limitations on liability
existing in favor of the directors, officers and
employees of MC and its Subsidiaries (the "Covered
Parties") as provided in their respective Certificates
of Incorporation, By-Laws or similar governing
documents as in effect as of the date of this Agreement
with respect to matters occurring prior to the
Effective Date shall survive the Merger and shall
continue in full force and effect, and shall be honored
by such entities or their respective successors as if
they were the indemnifying party thereunder, without
any amendment thereto, for a period of six years from
the Effective Date; provided, however, that all rights
to indemnification in respect of any Claim asserted or
made within such period shall continue until the final
disposition of such Claim; provided, further, however,
that nothing contained in this Section 4.10(e) shall be
deemed to preclude the liquidation, consolidation or
merger of MC or any MC Subsidiary, in which case all of
such rights to indemnification and limitations on
liability shall be deemed to so survive and continue
notwithstanding any such liquidation, consolidation or
merger.
(f) PNC, from and after the Effective Date will
use its best efforts directly or indirectly to cause
the persons who served as directors or officers of MC
on or before the Effective Date to be covered by MC's
existing directors' and officers' liability insurance
policy (provided that PNC may substitute therefor
policies of at least the same coverage and amounts
containing terms and conditions which are not less
advantageous than such policy) but in no event shall
any insured person be entitled under this
Section 4.10(e) to insurance coverage more favorable
than that provided to him or her in such capacities at
the date hereof with respect to acts or omissions
resulting from their service as such on or prior to the
Effective Date. Such insurance coverage, if reasonably
available at a reasonable cost relative to the coverage
obtained, shall commence on the Effective Date and will
be provided for a period of no less than six (6) years
after the Effective Date; provided, however, that in no
event shall PNC be required to expend more than 125% of
the current amount expended by MC (the "Insurance
Amount") to maintain or procure insurance coverage
pursuant hereto and further provided that the Insurance
Amount shall be deemed reasonable for purposes of this
Section 4.10(f). MC agrees to renew any such existing
insurance or to purchase any "discovery period"
insurance provided for thereunder at PNC's request.
(g) In the event PNC or any of its successors
or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or
surviving corporation or entity of such consolidation
or merger, or (ii) transfers or conveys all or
substantially all of its properties and assets to any
person, then, and in each such case, to the extent
necessary, proper provision shall be made so that the
successors and assigns of PNC assume the obligations
set forth in this section.
(h) The provisions of Section 4.10(d), (e) and
(f) are intended to be for the benefit of, and shall be
enforceable by, each Indemnified Party and their
respective heirs and representatives. The provisions
of Section 4.10(b) are intended to be for the benefit
of, and shall be enforceable by Mr. Scheuring and his
heirs and representatives.
4.11. MC SUBSIDIARIES
MC undertakes and agrees that, if so requested
by PNC, it shall take all necessary action to
facilitate the merger of MC Subsidiaries with
subsidiaries of PNC effective on or after the Effective
Date; provided however, that in no event shall the
Closing be delayed in order to facilitate any such
merger and provided further, however, that MC shall not
be required to take any action that could adversely
affect the qualification of the Merger as a
reorganization within the meaning of Section 368(a) of
the Code.
4.12. DIVIDENDS
After the date of this Agreement, each of PNC
and MC shall coordinate with the other the declaration
of any dividends in respect of PNC Common Stock and MC
Common Stock and the record dates and payment dates
relating thereto, it being the intention of the parties
hereto that holders of PNC Common Stock or MC Common
Stock shall not receive two dividends, or fail to
receive one dividend, for any single calendar quarter
with respect to their shares of PNC Common Stock and/or
MC Common Stock and any shares of PNC Common Stock any
such holder receives in exchange therefor in the
Merger.
ARTICLE 5
CONDITIONS PRECEDENT
5.1. CONDITIONS PRECEDENT - PNC,
BANCORP AND MC
The respective obligations of the parties to
effect the Merger shall be subject to satisfaction or
waiver of the following conditions at or prior to the
Closing Date:
(a) All corporate action necessary to authorize
the execution, delivery and performance of this
Reorganization Agreement and the Plan of Merger and
consummation of the transactions contemplated hereby
and thereby shall have been duly and validly taken;
(b) The parties hereto shall have received all
regulatory approvals required or mutually deemed
necessary in connection with the transactions
contemplated by this Reorganization Agreement and the
Plan of Merger, all notice periods and waiting periods
required after the granting of any such approvals shall
have passed and all conditions contained in any such
approval required to have been satisfied prior to
consummation of such transactions shall have been
satisfied, provided, however, that no such approval
shall have imposed any condition or requirement which,
in the reasonable opinion of the Board of Directors of
PNC or MC so materially and adversely affects the
anticipated economic and business benefits to PNC or
MC, respectively, of the transactions contemplated by
this Agreement as to render consummation of such
transactions inadvisable;
(c) The Registration Statement (including any
post-effective amendment thereto) shall be effective
under the Securities Act, and no proceeding shall be
pending or to the knowledge of PNC threatened by the
Commission to suspend the effectiveness of such
Registration Statement, and PNC shall have received all
state securities or "Blue Sky" permits or other
authorizations, or confirmations as to the availability
of an exemption from registration requirements as may
be necessary;
(d) To the extent that any lease, license,
loan, financing agreement or other contract or
agreement to which MC or any MC Subsidiary is a party
requires the consent of or waiver from the other party
thereto as a result of the transactions contemplated by
this Agreement, such consent or waiver shall have been
obtained, unless the failure to obtain such consents or
waivers, individually or in the aggregate, would not
have a Material Adverse Effect on MC;
(e) None of the parties hereto shall be subject
to any order, decree or injunction of a court or agency
of competent jurisdiction which enjoins or prohibits
the consummation of the transactions contemplated by
this Reorganization Agreement and the Plan of Merger;
and
(f) The shares of PNC Common Stock that may be
issued in the Merger shall have been approved for
listing on the NYSE, subject to official notice of
issuance.
5.2. CONDITIONS PRECEDENT - MC
The obligations of MC to effect the Merger shall
be subject to satisfaction of the following additional
conditions at or prior to the Closing Date unless
waived by MC pursuant to Section 6.4 hereof:
(a) The representations and warranties of PNC
and Bancorp set forth in Article 3 hereof shall be true
and correct in all material respects as of the date of
this Reorganization Agreement and as of the Closing
Date as though made on and as of the Closing Date (or
on the date when made in the case of any representation
and warranty which specifically relates to an earlier
date), except as otherwise contemplated by this
Reorganization Agreement or consented to in writing by
MC; provided, however, that (i) in determining whether
or not the condition contained in this paragraph
(a) shall be satisfied, no effect shall be given to any
exceptions in such representations and warranties
relating to materiality or Material Adverse Effect and
(ii) the condition contained in this paragraph
(a) shall be deemed to be satisfied unless the failure
of such representations and warranties to be so true
and correct constitute, individually or in the
aggregate, a Material Adverse Effect on PNC;
(b) PNC and Bancorp shall have in all material
respects performed all obligations and complied with
all covenants required by this Reorganization Agreement
and the Plan of Merger;
(c) Each of PNC and Bancorp shall have
delivered to MC a certificate, dated the Closing Date
and signed by its respective Chairman, President,
Executive Vice President or Senior Vice President to
the effect that the conditions set forth in paragraphs
(a) and (b) of this section have been satisfied;
(d) No event shall have occurred that shall
preclude the Merger from being accounted for as a
pooling of interests;
(e) MC shall have received from Ernst & Young
letters dated not more than five days prior to (i) the
effective date of the Registration Statement and
(ii) the Closing Date, with respect to certain
financial information regarding PNC, each in form and
substance which is customary in transactions of the
nature contemplated by this Agreement;
(f) MC shall have received opinions of Arnold &
Porter and William F. Strome, Esquire, dated the
Closing Date, as to the matters specified in
Exhibit 5.2(f) hereto; and
(g) MC shall have received an opinion of
Skadden, Arps, Slate, Meagher & Flom, in form and
substance reasonably satisfactory to MC dated as of the
Effective Date, substantially to the effect that, on
the basis of facts, representations and assumptions set
forth in such opinion which are consistent with the
state of facts existing on the Effective Date, the
Merger will be treated for federal income tax purposes
as a reorganization within the meaning of Section
368(a) of the Code and that accordingly:
(i) No gain or loss will be recognized by
MC as a result of the Merger;
(ii) No gain or loss will be recognized by
the stockholders of MC who exchange all of their
MC Common Stock solely for PNC Common Stock in
the Merger (except with respect to cash received
in lieu of a fractional share interest in PNC
Common Stock); and
(iii) The tax basis of the PNC Common
Stock received by stockholders who exchange all
of their MC Common Stock solely for PNC Common
Stock in the Merger will be the same as the tax
basis of the MC Common Stock surrendered in
exchange therefor (reduced by any amount
allocable to a fractional share interest for
which cash is received).
5.3. CONDITIONS PRECEDENT - PNC AND BANCORP
The respective obligations of PNC and Bancorp to
effect the Merger shall be subject to satisfaction of
the following additional conditions at or prior to the
Closing Date unless waived by PNC pursuant to Section
6.4 hereof:
(a) The representations and warranties of MC
set forth in Article 2 hereof shall be true and correct
in all material respects as of the date of this
Reorganization Agreement and as of the Closing Date as
though made on and as of the Closing Date (or on the
date when made in the case of any representation and
warranty which specifically relates to an earlier
date), except as otherwise contemplated by this
Reorganization Agreement or consented to in writing by
PNC; provided, however, that (i) in determining whether
or not the condition contained in this paragraph
(a) shall be satisfied, no effect shall be given to any
exceptions in such representations and warranties
relating to materiality or Material Adverse Effect and
(ii) the condition contained in this paragraph
(a) shall be deemed to be satisfied unless the failure
of such representations and warranties to be so true
and correct constitute, individually or in the
aggregate, a Material Adverse Effect on MC;
(b) MC shall have in all material respects
performed all obligations and complied with all
covenants required by this Reorganization Agreement and
the Plan of Merger;
(c) MC shall have delivered to PNC and Bancorp
a certificate, dated the Closing Date and signed by its
Chairman, President and Chief Executive Officer or any
Executive Vice President to the effect that the
conditions set forth in this section have been
satisfied;
(d) The Rights issued pursuant to the MC Rights
Agreement shall not have become nonredeemable,
exercisable, distributed or triggered pursuant to the
terms of such agreement;
(e) No event shall have occurred that shall
preclude the Merger from being accounted for as a
pooling of interests;
(f) PNC shall have received from Coopers &
Lybrand letters dated not more than five days prior to
(i) the effective date of the Registration Statement
and (ii) the Closing Date, with respect to certain
financial information regarding MC, each in form and
substance which is customary in transactions of the
nature contemplated by this Agreement;
(g) PNC and Bancorp shall have received
opinions of Skadden, Arps, Slate, Meagher & Flom,
Joseph Kott, Esquire and local counsel reasonably
satisfactory to PNC, dated the Closing Date, as to the
matters specified in Exhibit 5.3(g) hereto; and
(h) PNC shall have received an opinion of
Arnold & Porter, reasonably satisfactory in form and
substance to PNC substantially to the effect that the
Merger when consummated in accordance with the terms
hereof and the Plan of Merger will constitute a
reorganization within the meaning of Section 368(a) of
the Code, and that the exchange of MC Common Stock to
the extent exchanged for PNC Common Stock will not give
rise to recognition of gain or loss for federal income
tax purposes to the shareholders of MC.
ARTICLE 6
TERMINATION, WAIVER AND AMENDMENT
6.1. TERMINATION
This Reorganization Agreement and the Plan of
Merger may be terminated, either before or after
approval by the shareholders of PNC and MC:
(a) At any time on or prior to the Effective
Date, by the mutual consent in writing of the parties
hereto;
(b) At any time on or prior to the Closing
Date, by PNC in writing, if MC has, or by MC in
writing, if PNC or Bancorp has, in any material
respect, breached (i) any covenant or agreement
contained herein or in the Plan of Merger or (ii) any
representation or warranty contained herein, and in
either case if (x) such breach has not been cured by
the earlier of 30 days after the date on which written
notice of such breach is given to the party committing
such breach or the Closing Date and (y) such breach
would entitle the non-breaching party not to consummate
the transactions contemplated hereby under Article V
hereof.
(c) At any time, by any party hereto in
writing, if the applications for prior approval
referred to in Section 4.3 hereof have been denied, and
the time period for appeals and requests for
reconsideration has run, or if any governmental entity
of competent jurisdiction shall have issued a final
non-appealable order enjoining or otherwise prohibiting
the Merger;
(d) At any time, by any party hereto in
writing, if the shareholders of PNC or MC do not
approve the transactions contemplated herein at the
special meetings duly called for that purpose; or
(e) By any party hereto in writing, if the
Closing Date has not occurred by the close of business
on March 31, 1996, unless the failure of the Closing to
occur by such date shall be due to the failure of the
party seeking to terminate this Agreement to perform or
observe the covenants and agreements set forth herein.
6.2. EFFECT OF TERMINATION
In the event this Reorganization Agreement or
the Plan of Merger is terminated pursuant to Section
6.1 hereof, this Agreement and the Plan of Merger shall
become void and have no effect, except that (i) the
provisions relating to confidentiality and expenses set
forth in Sections 4.5 and 7.1 hereof, respectively,
shall survive any such termination and (ii) a
termination pursuant to Section 6.1(b)(i) shall not
relieve the breaching party from liability for an
uncured willful breach of such covenant or agreement
giving rise to such termination.
6.3. SURVIVAL OF REPRESENTATIONS, WARRANTIES
AND COVENANTS
All representations, warranties and covenants in
this Reorganization Agreement and the Plan of Merger or
in any instrument delivered pursuant hereto or thereto
shall expire on, and be terminated and extinguished at,
the Effective Date other than covenants that by their
terms are to survive or be performed after the
Effective Date, provided that no such representations,
warranties or covenants shall be deemed to be
terminated or extinguished so as to deprive PNC,
Bancorp or MC (or any director, officer or controlling
person thereof) of any defense in law or equity which
otherwise would be available against the claims of any
person, including, without limitation, any shareholder
or former shareholder of either PNC or MC, the
aforesaid representations, warranties and covenants
being material inducements to the consummation by PNC,
Bancorp and MC of the transactions contemplated herein.
6.4. WAIVER
Except with respect to any required shareholder
or regulatory approval, PNC and MC, respectively, by
written instrument signed by an executive officer of
such party, may at any time (whether before or after
approval of this Reorganization Agreement and the Plan
of Merger by the shareholders of PNC and MC) extend the
time for the performance of any of the obligations or
other acts of MC, on the one hand, or PNC or Bancorp,
on the other hand, and may waive (i) any inaccuracies
of such parties in the representations or warranties
contained in this Agreement, the Plan of Merger or any
document delivered pursuant hereto or thereto, (ii)
compliance with any of the covenants, undertakings or
agreements of such parties, or satisfaction of any of
the conditions precedent to its obligations, contained
herein or in the Plan of Merger or (iii) the
performance by such parties of any of its obligations
set out herein or therein; provided, however, that no
such waiver executed after approval of this
Reorganization Agreement and the Plan of Merger by the
shareholders of PNC or MC shall change the number of
shares of PNC Common Stock into which each share of MC
Common Stock shall be converted pursuant to the Merger.
6.5. AMENDMENT OR SUPPLEMENT
This Reorganization Agreement and the Plan of
Merger may be amended or supplemented at any time by
mutual agreement of the parties hereto or thereto. Any
such amendment or supplement must be in writing and
approved by their respective boards of directors and/or
officers authorized thereby and shall be subject to the
proviso in Section 6.4 hereof.
ARTICLE 7
MISCELLANEOUS
7.1. EXPENSES
Each party hereto shall bear and pay all costs
and expenses incurred by it in connection with the
transactions contemplated in this Reorganization
Agreement, including fees and expenses of its own
financial consultants, accountants and counsel, except
that PNC and MC each shall bear and pay 50% of all
printing and mailing costs and filing fees associated
with the Registration Statement and the Proxy
Statement.
7.2. ENTIRE AGREEMENT
This Reorganization Agreement, the Plan of
Merger and the Option Agreements contain the entire
agreement between the parties with respect to the
transactions contemplated hereunder and thereunder and
supersede all prior arrangements or understandings with
respect thereto, written or oral, other than documents
referred to herein or therein and the Confidentiality
Agreement. The terms and conditions of this
Reorganization Agreement and the Plan of Merger shall
inure to the benefit of and be binding upon the parties
hereto and thereto and their respective successors.
Except as specifically set forth herein, or in the Plan
of Merger, nothing in this Reorganization Agreement or
the Plan of Merger, expressed or implied, is intended
to confer upon any party, other than the parties hereto
and thereto, and their respective successors, any
rights, remedies, obligations or liabilities.
7.3. NO ASSIGNMENT
No party hereto may assign any of its rights or
obligations under this Reorganization Agreement to any
other person.
7.4. NOTICES
All notices or other communications which are
required or permitted hereunder shall be in writing and
sufficient if delivered personally or sent by facsimile
transmission or overnight express or by registered or
certified mail, postage prepaid, addressed as follows:
If to MC:
Midlantic Corporation
Metro Park Plaza
P.O. Box 600
Edison, New Jersey 08818
Attention: Garry J. Scheuring
Chairman, President and
Chief Executive Officer
Facsimile No.: 908-321-8518
With a required copy to:
Midlantic Corporation
Metro Park Plaza
P.O. Box 600
Edison, New Jersey 08818
Attention: Joseph H. Kott
Executive Vice President and
General Counsel
Facsimile No.: 908-321-8518
and to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Attention: William S. Rubenstein, Esquire
Facsimile No.: 212-735-2000
If to PNC or Bancorp:
PNC Bank Corp.
One PNC Plaza
Pittsburgh, Pennsylvania 15265
Attention: Thomas H. O'Brien
Chairman and Chief Executive Officer
Facsimile No.: 412-762-4507
With a required copy to:
PNC Bank Corp.
One PNC Plaza
Pittsburgh, Pennsylvania 15265
Attention: Walter E. Gregg, Jr., Esquire
Executive Vice President,
Finance and Administration
Facsimile No.: 412-762-4507
and to:
Arnold & Porter
555 Twelfth Street, N.W.
Washington, D.C. 20004
Attention: Steven Kaplan, Esquire
Facsimile No.: 202-942-5999
7.5. CAPTIONS
The captions contained in this Reorganization
Agreement are for reference purposes only and are not
part of this Reorganization Agreement.
7.6. COUNTERPARTS
This Reorganization Agreement may be executed in
any number of counterparts, and each such counterpart
shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one
agreement.
7.7. GOVERNING LAW
This Reorganization Agreement shall be governed
by and construed in accordance with the laws of the
Commonwealth of Pennsylvania applicable to agreements
made and entirely to be performed within such
jurisdiction, except to the extent federal law may be
applicable.
IN WITNESS WHEREOF, the parties hereto,
intending to be legally bound hereby, have caused this
Reorganization Agreement to be executed in counterparts
by their duly authorized officers and their corporate
seal to be hereunto affixed and attested by their
officers thereunto duly authorized, all as of the day
and year first above written.
Attest PNC BANK CORP.
/s/ William F. Strome By /s/ Walter E. Gregg, Jr.
_____________________ _______________________
William F. Strome Walter E. Gregg, Jr.
Secretary Executive Vice President
(SEAL)
Attest PNC BANCORP, INC.
/s/ William F. Strome By /s/ Walter E. Gregg, Jr.
______________________ _______________________
William F. Strome Walter E. Gregg, Jr.
Assitant Secretary Executive Vice President
(SEAL)
Attest MIDLANTIC CORPORATION
/s/ John M. Sperger By /s/ Garry J. Scheuring
____________________ _______________________
John M. Sperger Garry J. Scheuring
Secretary Chairman, President and
Chief Executive Officer
(SEAL)
AGREEMENT AND PLAN OF MERGER OF
MIDLANTIC CORPORATION
WITH AND INTO PNC BANCORP, INC.
AGREEMENT AND PLAN OF MERGER ("Plan of Merger")
dated as of July 10, 1995, by and between MIDLANTIC
CORPORATION ("MC"), a New Jersey corporation having its
principal executive office at Metro Park Plaza, P.O.
Box 600, Edison, New Jersey 08818 and PNC BANCORP,
INC. ("Bancorp"), a Delaware corporation having its
registered office at 222 Delaware Avenue, Wilmington,
Delaware 19899, and joined in by PNC BANK CORP.
("PNC"), a Pennsylvania corporation having its
principal executive office at One PNC Plaza,
Pittsburgh, Pennsylvania 15265.
WITNESSETH
WHEREAS, the respective Boards of Directors of
MC, Bancorp and PNC deem the merger of MC with and into
Bancorp, under and pursuant to the terms and conditions
herein set forth or referred to, desirable and in the
best interests of the respective corporations and their
respective shareholders, and the respective Boards of
Directors of MC, Bancorp and PNC have adopted
resolutions approving this Plan of Merger and an
Agreement and Plan of Reorganization dated of even date
herewith ("Reorganization Agreement"); and
NOW, THEREFORE, in consideration of the premises
and of the mutual agreements herein contained, the
parties hereto do hereby agree as follows:
ARTICLE I
MERGER
Subject to the terms and conditions of this Plan
of Merger, on the Effective Date (as hereinafter
defined), MC shall be merged with and into Bancorp,
pursuant to the provisions of, and with the effect
provided in, Chapter 10 of the New Jersey Business
Corporation Act, N.J. Rev. Stat. SECTION 14A:10-1 et seq.
and 8 Del. Code Ch. 1, subchapter IX (said transaction
being hereinafter referred to as the "Merger"). On the
Effective Date, the separate existence of MC shall
cease and Bancorp, as the surviving entity, shall
continue unaffected and unimpaired by the Merger.
(Bancorp as existing on and after the Effective Date
being hereinafter sometimes referred to as the
"Surviving Corporation.")
ARTICLE II
CERTIFICATE OF INCORPORATION AND BY-LAWS
The Certificate of Incorporation and the By-Laws
of Bancorp in effect immediately prior to the Effective
Date shall be the Certificate of Incorporation and the
By-Laws of the Surviving Corporation, in each case
until amended in accordance with applicable law.
ARTICLE III
BOARD OF DIRECTORS
On the Effective Date, the Board of Directors of
the Surviving Corporation shall consist of those
persons serving as directors of Bancorp immediately
prior to the Effective Date.
ARTICLE IV
CAPITAL
The shares of capital stock of the Surviving
Corporation issued and outstanding immediately prior to
the Effective Date shall, on the Effective Date,
continue to be issued and outstanding.
ARTICLE V
CONVERSION AND EXCHANGE OF MC
SHARES; FRACTIONAL SHARE INTERESTS
1. On the Effective Date, each share of the
common stock of MC, par value $3 per share ("MC Common
Stock"), outstanding immediately prior to the Effective
Date (except as provided in Paragraphs 2, 5 and 7 of
this Article), including each attached right issued
pursuant to the Rights Agreement dated as of
February 23, 1990 between MC and Midlantic Bank, N.A.
(as amended), shall by virtue of the Merger be
converted into 2.05 shares of common stock, par value
$5 per share, of PNC ("PNC Common Stock").
2. On the Effective Date, all shares of MC
Common Stock held in the treasury of MC or owned
beneficially by any subsidiary of MC other than in a
fiduciary capacity or in connection with a debt
previously contracted and all shares of MC Common Stock
owned by PNC or owned beneficially by any subsidiary of
PNC other than in a fiduciary capacity or in connection
with a debt previously contracted shall be canceled and
no cash, stock or other property shall be delivered in
exchange therefor.
3. On and after the Effective Date, each holder
of a certificate or certificates theretofore
representing outstanding shares of MC Common Stock (any
such certificate being hereinafter referred to as a
"Certificate") may surrender the same to PNC or its
agent for cancellation and each such holder shall be
entitled upon such surrender to receive in exchange
therefor certificate(s) representing the number of
shares of PNC Common Stock to which such holder is
entitled as provided herein and a check in an amount
equal to the amount of cash to be paid pursuant to
Paragraph 7 of this Article V, without interest, to
which such holder is entitled. Until so surrendered,
each Certificate shall be deemed for all purposes to
evidence ownership of the number of shares of PNC
Common Stock into which the shares represented by such
Certificates have been changed or converted as
aforesaid. No dividends or other distributions
declared after the Effective Date with respect to PNC
Common Stock shall be paid to the holder of any
unsurrendered Certificate until the holder thereof
shall surrender such Certificate in accordance with
this Article V. After the surrender of a Certificate
in accordance with this Article V, the record holder
thereof shall be entitled to receive any such dividends
or other distributions, without any interest thereon,
which theretofore had become payable with respect to
shares of PNC Common Stock represented by such
Certificate. Certificates surrendered for exchange by
any person who is an "affiliate" of MC for purposes of
Rule 145(c) under the Securities Act of 1933, as
amended, shall not be exchanged for certificates
representing shares of PNC Common Stock until PNC has
received the written agreement of such person
contemplated by Section 4.9 of the Reorganization
Agreement. If any certificate for shares of MC Common
Stock is to be issued in a name other than that in
which a certificate surrendered for exchange is issued,
the certificate so surrendered shall be properly
endorsed and otherwise in proper form for transfer and
the person requesting such exchange shall affix any
requisite stock transfer tax stamps to the certificate
surrendered or provide funds for their purchase or
establish to the reasonable satisfaction of PNC or its
agent that such taxes are not payable.
4. Upon the Effective Date, the stock transfer
books of MC shall be closed and no transfer of MC
Common Stock shall thereafter be made or recognized.
Any other provision of this Plan of Merger
notwithstanding, neither PNC or its agent nor any party
to the Merger shall be liable to a holder of MC Common
Stock for any amount paid or property delivered in good
faith to a public official pursuant to any applicable
abandoned property, escheat or similar law.
5. In the event that prior to the Effective
Date the outstanding shares of PNC Common Stock shall
have been increased, decreased or changed into or
exchanged for a different number or kind of shares or
securities by reorganization, recapitalization,
reclassification, stock dividend, stock split or other
like changes in PNC's capitalization, all without PNC
receiving adequate consideration therefor, then an
appropriate and proportionate adjustment shall be made
in the number and kind of shares of PNC Common Stock to
be thereafter delivered pursuant to this Plan of
Merger.
6. On the Effective Date, MC's obligations
under its Incentive Stock and Stock Option Plan (1986)
(the "1986 Plan") with respect to stock options granted
thereunder to any person who is, on the date MC's
shareholders approved the Merger, subject to the
reporting requirements of Section 16(a) of the
Securities Exchange Act of 1934, as amended, with
respect to equity securities of MC (an "Insider")
shall, as to the portion of the MC Option that is then
exercisable (determined by giving effect to the
acceleration provisions of Section 4(d)(ii) of the 1986
Plan but without regard to the acceleration provisions
of Section 4(d)(i) of the 1986 Plan) (a "Vested MC
Option") be assumed by PNC and each such option shall
become an option (a "PNC Option") that entitles such
Insider to receive, upon payment of the exercise price,
2.05 shares of PNC Common Stock for each share of MC
Common Stock covered by the Vested MC Option. Each
such PNC Option shall be subject to the same terms and
conditions as were applicable to the Vested MC Option,
except that immediately following the Effective Date,
the PNC Option shall be cancelled in exchange for the
number of shares of PNC Common Stock having an
aggregate "fair market value" equal to the product of
(1) the number of shares of PNC Common Stock subject to
such PNC Option and (2) the excess, if any, of the fair
market value of a share of PNC Common Stock on the
Effective Date over the exercise price of the PNC
Option. The portion of each MC Option held by an
Insider that is not a Vested MC Option shall
automatically become exercisable in accordance with
Section 4(d) of the 1986 Plan and shall be cancelled on
the Effective Date if not theretofore exercised. Each
MC Option held by any person who is not an Insider
shall be cancelled at the Effective Date and PNC shall
deliver to the holder of each such option, in respect
thereof, the number of shares of PNC Common Stock
having an aggregate fair market value equal to the
product of (1) the number of shares of MC Common Stock
subject to such option and (2) the excess, if any, of
the fair market value of a share of MC Common Stock on
the Effective Date over the exercise price of such
option. For purposes of this Paragraph 6, (1) "fair
market value" with respect to a share of MC Common
Stock shall have the meaning assigned to such term in
the 1986 Plan and (2) "fair market value" with respect
to a share of PNC Common Stock shall have the meaning
ascribed to the term "market value" in Paragraph 7 of
this Article.
7. Notwithstanding any other provision hereof,
each holder of shares or of Stock Options who would
otherwise have been entitled to receive a fraction of a
share of PNC Common Stock (after taking into account
all Certificates delivered by such holder or all shares
to be delivered to such holder upon termination of
Stock Options) shall receive, in lieu thereof, cash in
an amount equal to such fractional part of a share of
PNC Common Stock multiplied by the market value of such
Common Stock. The market value of one share of PNC
Common Stock on the Effective Date shall be the closing
price of such Common Stock in the New York Stock
Exchange -- Composite Transactions List (as reported by
The Wall Street Journal or other authoritative source)
on the last business day preceding such date. No such
holder shall be entitled to dividends, voting rights or
any other shareholder right in respect of any
fractional share.
8. The provisions pertaining to Stock Options
contained in Paragraphs 6 and 7 of this Article V are
intended to be for the benefit of, and shall be
enforceable by, the respective holders of Stock Options
and his or her heirs and representatives.
ARTICLE VI
EFFECTIVE DATE OF THE MERGER
Certificates of merger evidencing the
transactions contemplated herein shall be delivered to
the Delaware and New Jersey Secretaries of State for
filing as provided in the Reorganization Agreement.
The Merger shall be effective at the time and on the
date specified in such certificates of merger (such
date and time being herein referred to as the
"Effective Date").
ARTICLE VII
FURTHER ASSURANCES
If at any time the Surviving Corporation shall
consider or be advised that any further assignments,
conveyances or assurances are necessary or desirable to
vest, perfect or confirm in the Surviving Corporation
title to any property or rights of MC, or otherwise
carry out the provisions hereof, the proper officers
and directors of MC, as of the Effective Date, and
thereafter the officers of the Surviving Corporation
acting on behalf of MC, shall execute and deliver any
and all proper assignments, conveyances and assurances,
and do all things necessary or desirable to vest,
perfect or confirm title to such property or rights in
the Surviving Corporation and otherwise carry out the
provisions hereof.
ARTICLE VIII
CONDITIONS PRECEDENT
The obligations of PNC, Bancorp and MC to effect
the Merger as herein provided shall be subject to
satisfaction, unless duly waived, of the conditions set
forth in the Reorganization Agreement.
ARTICLE IX
TERMINATION
Anything contained in the Plan of Merger to the
contrary notwithstanding, and notwithstanding adoption
hereof by the shareholders of MC, this Plan of Merger
may be terminated and the Merger abandoned as provided
in the Reorganization Agreement.
ARTICLE X
MISCELLANEOUS
1. This Plan of Merger may be amended or
supplemented at any time prior to its Effective Date by
mutual agreement of Bancorp, PNC and MC. Any such
amendment or supplement must be in writing and approved
by their respective Boards of Directors and/or by
officers authorized thereby and shall be subject to the
proviso in Section 6.4 of the Reorganization Agreement.
2. Any notice or other communication required
or permitted under this Plan of Merger shall be given,
and shall be effective, in accordance with the
provisions of the Reorganization Agreement.
3. The headings of the several Articles herein
are inserted for convenience of reference only and are
not intended to be a part of or to affect the meaning
or interpretation of this Plan of Merger.
4. This Plan of Merger shall be governed by and
construed in accordance with the laws of New Jersey and
Delaware applicable to the internal affairs of MC and
Bancorp, respectively.
IN WITNESS WHEREOF, the parties hereto,
intending to be legally bound hereby, have caused this
Agreement and Plan of Merger to be executed in
counterparts by their duly authorized officers and
their corporate seals to be hereunto affixed and
attested by their officers thereunto duly authorized,
all as of the day and year first above written.
Attest PNC BANK CORP.
/s/ William F. Strome By /s/ Walter E. Gregg, Jr.
______________________ _______________________
William F. Strome Walter E. Gregg, Jr.
Secretary Executive Vice President
(SEAL)
Attest PNC BANCORP, INC.
/s/ William F. Strome By /s/ Walter E. Gregg, Jr.
______________________ ________________________
William F. Strome Walter E. Gregg, Jr.
Assistant Secretary Executive Vice President
(SEAL)
Attest MIDLANTIC CORPORATION
/s/ John M. Sperger By /s/ Garry J. Scheuring
____________________ _______________________
John M. Sperger Garry J. Scheuring
Secretary Chairman, President and
Chief Executive Officer
(SEAL)
MC STOCK OPTION AGREEMENT
This MC STOCK OPTION AGREEMENT ("Option
Agreement") dated as of July 10, 1995, between
MIDLANTIC CORPORATION ("MC"), a New Jersey corporation
registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended ("Bank Holding
Company Act"), and PNC BANK CORP. ("PNC"), a
Pennsylvania corporation registered as a bank holding
company under the Bank Holding Company Act.
WITNESSETH
WHEREAS, the Boards of Directors of MC and PNC,
together with the Board of Directors of PNC Bancorp,
Inc., have approved an Agreement and Plan of
Reorganization ("Reorganization Agreement") and have
adopted a related Agreement and Plan of Merger dated as
of the date hereof (together referred to herein as the
"Merger Agreements"), providing for certain
transactions pursuant to which MC would be merged with
and into PNC Bancorp, Inc., a subsidiary of PNC;
WHEREAS, as a condition to PNC's entry into the
Merger Agreements and to induce such entry, MC has
agreed to grant to PNC the option set forth herein to
purchase authorized but unissued shares of MC Common
Stock;
NOW, THEREFORE, in consideration of the premises
herein contained, the parties agree as follows:
1. Definitions.
Capitalized terms defined in the Merger
Agreements and used herein shall have the same meanings
as in the Merger Agreements.
2. Grant of Option.
Subject to the terms and conditions set forth
herein, MC hereby grants to PNC an option ("Option") to
purchase up to 10,425,000 shares of MC Common Stock, at
a price of $48 per share payable in cash as provided in
Section 4 hereof; provided, however, that in the event
MC issues or agrees to issue any shares of MC Common
Stock in breach of its obligations under the Merger
Agreements at a price less than $48 per share (as
adjusted pursuant to Section 6 hereof), the exercise
price shall be equal to such lesser price.
Notwithstanding anything else in this Agreement to the
contrary, the number of shares of MC Common Stock
subject to the Option shall be reduced to such lesser
number, if any, as may from time-to-time be necessary,
but only for so long as may be necessary, to cause PNC
not to (a) become an interested stockholder for
purposes of the New Jersey Shareholders Protection Act,
(b) become an Acquiring Person as such term is defined
in the MC Rights Agreement or (c) become an "Interested
Shareholder" or an "Affiliate" or "Associate" thereof
for purposes of Article EIGHTH of the Restated
Certificate of Incorporation of MC.
3. Exercise of Option.
(a) PNC may exercise the Option, in whole
or part, at any time or from time to time if a Purchase
Event (as defined below) shall have occurred and be
continuing; provided that to the extent the Option
shall not have been exercised, it shall terminate and
be of no further force and effect upon the earliest to
occur of (i) the Effective Date of the Merger or
(ii) termination of the Merger Agreements in accordance
with the provisions thereof prior to the occurrence of
a Purchase Event (other than a termination resulting
from a willful breach by MC of any covenant contained
therein) or (iii) six months after termination of the
Merger Agreements if such termination follows the
occurrence of a Purchase Event or is due to a willful
breach by MC of any covenant contained therein; and
provided further that any such exercise shall be
subject to compliance with applicable provisions of
law.
(b) As used herein, a "Purchase Event"
shall mean any of the following events or transactions
occurring after the date hereof:
(i) MC or any MC Subsidiary, without having
received PNC's prior written consent,
shall have entered into an agreement with
any person (other than PNC or any PNC
Subsidiary) to (x) merge or consolidate,
or enter into any similar transaction,
with MC or any MC Subsidiary,
(y) purchase, lease or otherwise acquire
all or substantially all of the assets of
MC or any MC Subsidiary or (z) purchase
or otherwise acquire (including by way of
merger, consolidation, share exchange or
any similar transaction) securities
representing 20% or more of the voting
power of MC or any MC Subsidiary;
provided, however, that in no event shall
any merger, consolidation, purchase or
similar transaction involving only MC and
one or more of its Subsidiaries or
involving only any two or more of such
Subsidiaries, be deemed to be a Purchase
Event, provided any such transaction is
not entered into in violation of the
terms of the Merger Agreements;
(ii) any person (other than MC, any MC
Subsidiary, the MC Subsidiaries in a
fiduciary capacity, PNC, affiliates of
PNC or subsidiaries of PNC in a fiduciary
capacity) shall have acquired beneficial
ownership or the right to acquire
beneficial ownership of 20% or more of
the outstanding shares of MC Common Stock
(the term "beneficial ownership" for
purposes of this Option Agreement having
the meaning assigned thereto in
Section 13(d) of the Exchange Act and the
regulations promulgated thereunder); or
(iii) any person (other than MC, any MC
Subsidiary, PNC or any PNC affiliate)
(x) shall have made a bona fide proposal
to MC by public announcement or written
communication that is or becomes the
subject of public disclosure to acquire
MC or any MC Subsidiary by merger,
consolidation, purchase of all or
substantially all of its assets or any
other similar transaction, (y) shall have
commenced a bona fide tender or exchange
offer to purchase shares of MC Common
Stock such that upon consummation of such
offer such person would own or control
20% or more of the outstanding shares of
MC Common Stock, or (z) shall have filed
an application or notice with the Federal
Reserve Board or any other federal or
state regulatory agency for clearance or
approval to engage in any transaction
described in clause (i) or (ii) above,
and thereafter the holders of MC Common
Stock shall have not approved the Merger
Agreements and the transactions
contemplated thereby at the meeting of
such stockholders held for such purpose
or such meeting shall not have been held
or shall have been cancelled prior to
termination of the Merger Agreements.
If more than one of the transactions giving rise to a
Purchase Event under this Section 3(b) is undertaken or
effected, then all such transactions shall give rise
only to one Purchase Event, which Purchase Event shall
be deemed continuing for all purposes hereunder until
all such transactions are abandoned. As used in this
Option Agreement, "person" shall have the meanings
specified in Sections 3(a)(9) and 13(d)(3) of the
Exchange Act.
(c) In the event PNC wishes to exercise
the Option, it shall send to MC a written notice (the
date of which being herein referred to as "Notice
Date") specifying (i) the total number of shares it
will purchase pursuant to such exercise, and (ii) a
place and date not earlier than three business days nor
later than 60 business days from the Notice Date for
the closing of such purchase ("Closing Date"); provided
that if prior notification to or approval of any
federal or state regulatory agency is required in
connection with such purchase, PNC shall promptly file
the required notice or application for approval and
shall expeditiously process the same and the period of
time that otherwise would run pursuant to this sentence
shall run instead from the date on which any required
notification period has expired or been terminated or
such approval has been obtained and any requisite
waiting period shall have passed.
4. Payment and Delivery of Certificates.
(a) At the closing referred to in
Section 3 hereof, PNC shall pay to MC the aggregate
purchase price for the shares of MC Common Stock
purchased pursuant to the exercise of the Option in
immediately available funds by a wire transfer to a
bank account designated by MC.
(b) At such closing, simultaneously with
the delivery of cash as provided in subsection (a), MC
shall deliver to PNC a certificate or certificates
representing the number of shares of MC Common Stock
purchased by PNC, and PNC shall deliver to MC a letter
agreeing that PNC will not offer to sell or otherwise
dispose of such shares in violation of applicable law
or the provisions of this Option Agreement.
(c) Certificates for MC Common Stock
delivered at a closing hereunder may be endorsed with a
restrictive legend which shall read substantially as
follows:
"The transfer of the shares
represented by this certificate is
subject to certain provisions of an
agreement between the registered
holder hereof and Midlantic
Corporation and to resale restrictions
arising under the Securities Act of
1933, as amended, a copy of which
agreement is on file at the principal
office of Midlantic Corporation. A
copy of such agreement will be
provided to the holder hereof without
charge upon receipt by Midlantic
Corporation of a written request."
It is understood and agreed that the above legend shall
be removed by delivery of substitute certificate(s)
without such legend if PNC shall have delivered to MC a
copy of a letter from the staff of the Commission, or
an opinion of counsel, in form and substance
satisfactory to MC, to the effect that such legend is
not required for purposes of the Securities Act.
5. Representations.
MC hereby represents, warrants and covenants to
PNC as follows:
(a) MC shall at all times maintain
sufficient authorized but unissued shares of MC Common
Stock so that the Option may be exercised without
authorization of additional shares of MC Common Stock.
(b) The shares to be issued upon due
exercise, in whole or in part, of the Option, when paid
for as provided herein, will be duly authorized,
validly issued, fully paid and nonassessable.
6. Adjustment Upon Changes in Capitalization.
In the event of any change in MC Common Stock by
reason of stock dividends, split-ups,
recapitalizations, combinations, exchanges of shares or
the like, the type and number of shares subject to the
Option, and the purchase price per share, as the case
may be, shall be adjusted appropriately. In the event
that any additional shares of MC Common Stock are
issued or otherwise become outstanding after the date
of this Option Agreement (other than pursuant to this
Option Agreement), the number of shares of MC Common
Stock subject to the Option shall be adjusted so that,
after such issuance, it equals 19.99% of the number of
shares of MC Common Stock then issued and outstanding
without giving effect to any shares subject or issued
pursuant to the Option. Nothing contained in this
Section 6 shall be deemed to authorize MC to breach any
provision of the Merger Agreements.
7. Registration Rights.
MC shall, if requested by PNC, as expeditiously
as possible following the occurrence of a Purchase
Event and prior to the second anniversary thereof, file
a registration statement on a form of general use under
the Securities Act if necessary in order to permit the
sale or other disposition of the shares of MC Common
Stock that have been acquired upon exercise of the
Option in accordance with the intended method of sale
or other disposition requested by PNC. PNC shall
provide all information reasonably requested by MC for
inclusion in any registration statement to be filed
hereunder. MC will use its best efforts to cause such
registration statement first to become effective and
then to remain effective for such period not in excess
of 180 days from the day such registration statement
first becomes effective as may be reasonably necessary
to effect such sales or other dispositions. The
obligations of MC hereunder to file a registration
statement and to maintain its effectiveness may be
suspended for one or more periods of time not exceeding
60 days in the aggregate if the Board of Directors of
MC shall have determined that the filing of such
registration statement or the maintenance of its
effectiveness would require disclosure of nonpublic
information that would materially and adversely affect
MC. The first registration effected under this
Section 7 shall be at MC's expense except for
underwriting commissions and the fees and disbursements
of PNC's counsel attributable to the registration of
such MC Common Stock. A second registration may be
requested hereunder at PNC's expense. In no event
shall MC be required to effect more than two
registrations hereunder. The filing of any
registration statement hereunder may be delayed for
such period of time as may reasonably be required to
facilitate any public distribution by MC of MC Common
Stock. If requested by PNC, in connection with any
such registration, MC will become a party to any
underwriting agreement relating to the sale of such
shares, but only to the extent of obligating itself in
respect of representations, warranties, indemnities and
other agreements customarily included in such
underwriting agreements. Upon receiving any request
from PNC or assignee thereof under this Section 7, MC
agrees to send a copy thereof to PNC and to any
assignee thereof known to MC, in each case by promptly
mailing the same, postage prepaid, to the address of
record of the persons entitled to receive such copies.
8. Severability.
If any term, provision, covenant or restriction
contained in this Option Agreement is held by a court
or a federal or state regulatory agency of competent
jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions and covenants and
restrictions contained in this Option Agreement shall
remain in full force and effect, and shall in no way be
affected, impaired or invalidated. If for any reason
such court or regulatory agency determines that the
Option will not permit the holder to acquire the full
number of shares of MC Common Stock provided in
Section 2 hereof (as adjusted pursuant to Section 6
hereof), it is the express intention of MC to allow the
holder to acquire or to require MC to repurchase such
lesser number of shares as may be permissible, without
any amendment or modification hereof.
9. Miscellaneous.
(a) Expenses. Except as otherwise
provided herein, each of the parties hereto shall bear
and pay all costs and expenses incurred by it or on its
behalf in connection with the transactions contemplated
hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants
and counsel.
(b) Entire Agreement. Except as otherwise
expressly provided herein, this Option Agreement
contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and
supersedes all prior arrangements or understandings
with respect thereto, written or oral. Notwithstanding
anything to the contrary contained in this Agreement or
the Merger Agreements, this Agreement shall be deemed
to amend the Confidentiality Agreement so as to permit
PNC to enter into this Agreement and exercise all of
its rights hereunder, including its right to acquire MC
Common Stock upon exercise of the Option. The terms
and conditions of this Option Agreement shall inure to
the benefit of and be binding upon the parties hereto
and their respective successors and assigns. Nothing
in this Option Agreement, expressed or implied, is
intended to confer upon any party, other than the
parties hereto, and their respective successors and
assigns, any rights, remedies, obligations or
liabilities under or by reason of this Option
Agreement, except as expressly provided herein.
(c) Assignment. Neither of the parties
hereto may assign any of its rights or obligations
under this Option Agreement or the Option created
hereunder to any other person, without the express
written consent of the other party, except that in the
event a Purchase Event shall have occurred and be
continuing PNC may assign in whole or in part its
rights and obligations hereunder; provided, however,
that until the date 30 days following the date on which
the Federal Reserve Board approves an application by
PNC under the Bank Holding Company Act to acquire the
shares of MC Common Stock subject to the Option, PNC
may not assign its rights under the Option except in
(i) a widely dispersed public distribution, (ii) a
private placement in which no one party acquires the
right to purchase in excess of 2% of the voting shares
of MC, (iii) an assignment to a single party (e.g., a
broker or investment banker) for the purpose of
conducting a widely dispersed public distribution on
PNC's behalf, or (iv) any other manner approved by the
Federal Reserve Board.
(d) Notices. All notices or other
communications which are required or permitted
hereunder shall be in writing and sufficient if
delivered personally or sent by overnight express or by
registered or certified mail, postage prepaid,
addressed as provided in the Reorganization Agreement.
A party may change its address for notice purposes by
written notice to the other party hereto.
(e) Counterparts. This Option Agreement
may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall
constitute but one agreement.
(f) Specific Performance. The parties
agree that damages would be an inadequate remedy for a
breach of the provisions of this Option Agreement by
either party hereto and that this Option Agreement may
be enforced by either party hereto through injunctive
or other equitable relief.
(g) Governing Law. This Option Agreement
shall be governed by and construed in accordance with
the laws of New Jersey applicable to agreements made
and entirely to be performed within such state and such
federal laws as may be applicable.
IN WITNESS WHEREOF, each of the parties hereto
has executed this Option Agreement as of the day and
year first written above.
PNC BANK CORP.
By /s/ Thomas H. O'Brien
_______________________
Thomas H. O'Brien
Chairman and Chief
Executive Officer
MIDLANTIC CORPORATION
By /s/ Garry J. Scheuring
_______________________
Garry J. Scheuring
Chairman, President and
Chief Executive Officer
PNC STOCK OPTION AGREEMENT
This PNC STOCK OPTION AGREEMENT ("Option
Agreement") dated as of July 10, 1995, between MIDLANTIC
CORPORATION ("MC"), a New Jersey corporation registered
as a bank holding company under the Bank Holding Company
Act of 1956, as amended ("Bank Holding Company Act"), and
PNC BANK CORP. ("PNC"), a Pennsylvania corporation
registered as a bank holding company under the Bank
Holding Company Act.
WITNESSETH
WHEREAS, the Boards of Directors of MC and PNC,
together with the Board of Directors of PNC Bancorp,
Inc., have approved an Agreement and Plan of
Reorganization ("Reorganization Agreement") and have
adopted a related Agreement and Plan of Merger dated as
of the date hereof (together referred to herein as the
"Merger Agreements"), providing for certain transactions
pursuant to which MC would be merged with and into PNC
Bancorp, Inc., a subsidiary of PNC;
WHEREAS, as a condition to MC's entry into the
Merger Agreements and to induce such entry, PNC has
agreed to grant to MC the option set forth herein to
purchase authorized but unissued shares of PNC Common
Stock;
NOW, THEREFORE, in consideration of the
premises herein contained, the parties agree as follows:
1. Definitions.
Capitalized terms defined in the Merger
Agreements and used herein shall have the same meanings
as in the Merger Agreements.
2. Grant of Option.
Subject to the terms and conditions set forth
herein, PNC hereby grants to MC an option ("Option") to
purchase up to 45,500,000 shares of PNC Common Stock, at
a price of $35 per share payable in cash as provided in
Section 4 hereof; provided, however, that in the event
PNC issues or agrees to issue any shares of PNC Common
Stock in breach of its obligations under the Merger
Agreements at a price less than $35 per share (as
adjusted pursuant to Section 6 hereof), the exercise
price shall be equal to such lesser price.
3. Exercise of Option.
(a) MC may exercise the Option, in whole
or part, at any time or from time to time if a Purchase
Event (as defined below) shall have occurred and be
continuing; provided that to the extent the Option shall
not have been exercised, it shall terminate and be of no
further force and effect upon the earliest to occur of
(i) the Effective Date of the Merger or (ii) termination
of the Merger Agreements in accordance with the
provisions thereof prior to the occurrence of a Purchase
Event (other than a termination resulting from a willful
breach by PNC of any covenant contained therein) or (iii)
six months after termination of the Merger Agreements if
such termination follows the occurrence of a Purchase
Event or is due to a willful breach by PNC of any
covenant contained therein; and provided further that any
such exercise shall be subject to compliance with
applicable provisions of law.
(b) As used herein, a "Purchase Event"
shall mean any of the following events or transactions
occurring after the date hereof:
(i) PNC or any PNC Subsidiary, without having
received MC's prior written consent and
except as permitted by the Merger
Agreements, shall have entered into an
agreement with any person (other than MC
or any MC Subsidiary) to (x) merge or
consolidate, or enter into any similar
transaction, with PNC or any PNC
Subsidiary, (y) purchase, lease or
otherwise acquire all or substantially all
of the assets of PNC or any PNC Subsidiary
or (z) purchase or otherwise acquire
(including by way of merger,
consolidation, share exchange or any
similar transaction) securities
representing 20% or more of the voting
power of PNC or any PNC Subsidiary;
provided, however, that in no event shall
any merger, consolidation, purchase or
similar transaction involving only PNC and
one or more of its Subsidiaries or
involving only any two or more of such
Subsidiaries, be deemed to be a Purchase
Event, provided any such transaction is
not entered into in violation of the terms
of the Merger Agreements;
(ii) any person (other than PNC, any PNC
Subsidiary, the PNC Subsidiaries in a
fiduciary capacity MC, affiliates of MC or
subsidiaries of MC in a fiduciary
capacity) shall have acquired beneficial
ownership or the right to acquire
beneficial ownership of 20% or more of the
outstanding shares of PNC Common Stock
(the term "beneficial ownership" for
purposes of this Option Agreement having
the meaning assigned thereto in Section
13(d) of the Exchange Act and the
regulations promulgated thereunder); or
(iii) any person (other than PNC, any PNC
Subsidiary, MC or any MC affiliate) (x)
shall have made a bona fide proposal to
PNC by public announcement or written
communication that is or becomes the
subject of public disclosure to acquire
PNC or any PNC Subsidiary by merger,
consolidation, purchase of all or
substantially all of its assets or any
other similar transaction, (y) shall have
commenced a bona fide tender or exchange
offer to purchase shares of PNC Common
Stock such that upon consummation of such
offer such person would own or control 20%
or more of the outstanding shares of PNC
Common Stock, or (z) shall have filed an
application or notice with the Federal
Reserve Board or any other federal or
state regulatory agency for clearance or
approval to engage in any transaction
described in clause (i) or (ii) above, and
thereafter the holders of PNC Common Stock
shall have not approved the Merger
Agreements and the transactions
contemplated thereby at the meeting of
such stockholders held for such purpose or
such meeting shall not have been held or
shall have been cancelled prior to
termination of the Merger Agreements.
If more than one of the transactions giving rise to a
Purchase Event under this Section 3(b) is undertaken or
effected, then all such transactions shall give rise only
to one Purchase Event, which Purchase Event shall be
deemed continuing for all purposes hereunder until all
such transactions are abandoned. As used in this Option
Agreement, "person" shall have the meanings specified in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(c) In the event MC wishes to exercise
the Option, it shall send to PNC a written notice (the
date of which being herein referred to as "Notice Date")
specifying (i) the total number of shares it will
purchase pursuant to such exercise, and (ii) a place and
date not earlier than three business days nor later than
60 business days from the Notice Date for the closing of
such purchase ("Closing Date"); provided that if prior
notification to or approval of any federal or state
regulatory agency is required in connection with such
purchase, MC shall promptly file the required notice or
application for approval and shall expeditiously process
the same and the period of time that otherwise would run
pursuant to this sentence shall run instead from the date
on which any required notification period has expired or
been terminated or such approval has been obtained and
any requisite waiting period shall have passed.
4. Payment and Delivery of Certificates.
(a) At the closing referred to in Section
3 hereof, MC shall pay to PNC the aggregate purchase
price for the shares of PNC Common Stock purchased
pursuant to the exercise of the Option in immediately
available funds by a wire transfer to a bank account
designated by PNC.
(b) At such closing, simultaneously with
the delivery of cash as provided in subsection (a), PNC
shall deliver to MC a certificate or certificates
representing the number of shares of PNC Common Stock
purchased by MC, and MC shall deliver to PNC a letter
agreeing that MC will not offer to sell or otherwise
dispose of such shares in violation of applicable law or
the provisions of this Option Agreement.
(c) Certificates for PNC Common Stock
delivered at a closing hereunder may be endorsed with a
restrictive legend which shall read substantially as
follows:
"The transfer of the shares
represented by this certificate is
subject to certain provisions of an
agreement between the registered
holder hereof and PNC Bank Corp. and
to resale restrictions arising under
the Securities Act of 1933, as
amended, a copy of which agreement is
on file at the principal office of
PNC Bank Corp. A copy of such
agreement will be provided to the
holder hereof without charge upon
receipt by PNC Bank Corp. of a
written request."
It is understood and agreed that the above legend shall
be removed by delivery of substitute certificate(s)
without such legend if MC shall have delivered to PNC a
copy of a letter from the staff of the Commission, or an
opinion of counsel, in form and substance satisfactory to
PNC, to the effect that such legend is not required for
purposes of the Securities Act.
5. Representations.
PNC hereby represents, warrants and covenants
to MC as follows:
(a) PNC shall at all times maintain
sufficient authorized but unissued shares of PNC Common
Stock so that the Option may be exercised without
authorization of additional shares of PNC Common Stock.
(b) The shares to be issued upon due
exercise, in whole or in part, of the Option, when paid
for as provided herein, will be duly authorized, validly
issued, fully paid and nonassessable.
6. Adjustment Upon Changes in Capitalization.
In the event of any change in PNC Common Stock
by reason of stock dividends, split-ups, recapitaliz-
ations, combinations, exchanges of shares or the like,
the type and number of shares subject to the Option, and
the purchase price per share, as the case may be, shall
be adjusted appropriately. In the event that any
additional shares of PNC Common Stock are issued or
otherwise become outstanding after the date of this
Option Agreement (other than pursuant to this Option
Agreement), the number of shares of PNC Common Stock
subject to the Option shall be adjusted so that, after
such issuance, it equals 19.99% of the number of shares
of PNC Common Stock then issued and outstanding without
giving effect to any shares subject or issued pursuant to
the Option. Nothing contained in this Section 6 shall be
deemed to authorize PNC to breach any provision of the
Merger Agreements.
7. Registration Rights.
PNC shall, if requested by MC, as expeditiously
as possible following the occurrence of a Purchase Event
and prior to the second anniversary thereof, file a
registration statement on a form of general use under the
Securities Act if necessary in order to permit the sale
or other disposition of the shares of PNC Common Stock
that have been acquired upon exercise of the Option in
accordance with the intended method of sale or other
disposition requested by MC. MC shall provide all
information reasonably requested by PNC for inclusion in
any registration statement to be filed hereunder. PNC
will use its best efforts to cause such registration
statement first to become effective and then to remain
effective for such period not in excess of 180 days from
the day such registration statement first becomes
effective as may be reasonably necessary to effect such
sales or other dispositions. The obligations of PNC
hereunder to file a registration statement and to
maintain its effectiveness may be suspended for one or
more periods of time not exceeding 60 days in the
aggregate if the Board of Directors of PNC shall have
determined that the filing of such registration statement
or the maintenance of its effectiveness would require
disclosure of nonpublic information that would materially
and adversely affect PNC. The first registration
effected under this Section 7 shall be at PNC's expense
except for underwriting commissions and the fees and
disbursements of MC's counsel attributable to the
registration of such PNC Common Stock. A second
registration may be requested hereunder at MC's expense.
In no event shall PNC be required to effect more than two
registrations hereunder. The filing of any registration
statement hereunder may be delayed for such period of
time as may reasonably be required to facilitate any
public distribution by PNC of PNC Common Stock. If
requested by MC, in connection with any such
registration, PNC will become a party to any underwriting
agreement relating to the sale of such shares, but only
to the extent of obligating itself in respect of
representations, warranties, indemnities and other
agreements customarily included in such underwriting
agreements. Upon receiving any request from MC or
assignee thereof under this Section 7, PNC agrees to send
a copy thereof to MC and to any assignee thereof known to
PNC, in each case by promptly mailing the same, postage
prepaid, to the address of record of the persons entitled
to receive such copies.
8. Severability.
If any term, provision, covenant or restriction
contained in this Option Agreement is held by a court or
a federal or state regulatory agency of competent
jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions and covenants and
restrictions contained in this Option Agreement shall
remain in full force and effect, and shall in no way be
affected, impaired or invalidated. If for any reason
such court or regulatory agency determines that the
Option will not permit the holder to acquire the full
number of shares of PNC Common Stock provided in Section
2 hereof (as adjusted pursuant to Section 6 hereof), it
is the express intention of PNC to allow the holder to
acquire or to require PNC to repurchase such lesser
number of shares as may be permissible, without any
amendment or modification hereof.
9. Miscellaneous.
(a) Expenses. Except as otherwise
provided herein, each of the parties hereto shall bear
and pay all costs and expenses incurred by it or on its
behalf in connection with the transactions contemplated
hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants
and counsel.
(b) Entire Agreement. Except as
otherwise expressly provided herein, this Option
Agreement contains the entire agreement between the
parties with respect to the transactions contemplated
hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral.
Notwithstanding anything to the contrary contained in
this Agreement or the Merger Agreements, this Agreement
shall be deemed to amend the Confidentiality Agreement so
as to permit MC to enter into this Agreement and exercise
all of its rights hereunder, including its right to
acquire PNC Common Stock upon exercise of the Option.
The terms and conditions of this Option Agreement shall
inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns.
Nothing in this Option Agreement, expressed or implied,
is intended to confer upon any party, other than the
parties hereto, and their respective successors and
assigns, any rights, remedies, obligations or liabilities
under or by reason of this Option Agreement, except as
expressly provided herein.
(c) Assignment. Neither of the parties
hereto may assign any of its rights or obligations under
this Option Agreement or the Option created hereunder to
any other person, without the express written consent of
the other party, except that in the event a Purchase
Event shall have occurred and be continuing MC may assign
in whole or in part its rights and obligations hereunder;
provided, however, that until the date 30 days following
the date on which the Federal Reserve Board approves an
application by MC under the Bank Holding Company Act to
acquire the shares of PNC Common Stock subject to the
Option, MC may not assign its rights under the Option
except in (i) a widely dispersed public distribution,
(ii) a private placement in which no one party acquires
the right to purchase in excess of 2% of the voting
shares of PNC, (iii) an assignment to a single party
(e.g., a broker or investment banker) for the purpose of
conducting a widely dispersed public distribution on MC's
behalf, or (iv) any other manner approved by the Federal
Reserve Board.
(d) Notices. All notices or other
communications which are required or permitted hereunder
shall be in writing and sufficient if delivered
personally or sent by overnight express or by registered
or certified mail, postage prepaid, addressed as provided
in the Reorganization Agreement. A party may change its
address for notice purposes by written notice to the
other party hereto.
(e) Counterparts. This Option Agreement
may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall
constitute but one agreement.
(f) Specific Performance. The parties
agree that damages would be an inadequate remedy for a
breach of the provisions of this Option Agreement by
either party hereto and that this Option Agreement may be
enforced by either party hereto through injunctive or
other equitable relief.
(g) Governing Law. This Option Agreement
shall be governed by and construed in accordance with the
laws of Pennsylvania applicable to agreements made and
entirely to be performed within such state and such
federal laws as may be applicable.
IN WITNESS WHEREOF, each of the parties hereto
has executed this Option Agreement as of the day and year
first written above.
PNC BANK CORP.
By /s/ Thomas H. O'Brien
_______________________
Thomas H. O'Brien
Chairman and Chief
Executive Officer
MIDLANTIC CORPORATION
By /s/ Garry J. Scheuring
________________________
Garry J. Scheuring
Chairman, President and
Chief Executive Officer
AMENDMENT TO RIGHTS AGREEMENT
Amendment, dated as July 10, 1995, to the
Rights Agreement (the "Amendment"), dated as of February
23, 1990 (the "Rights Agreement"), between Midlantic
Corporation, a New Jersey corporation (the "Company"),
and Midlantic National Bank, a national banking
association (the "Rights Agent").
WITNESSETH
WHEREAS, no Distribution Date (as defined in
Section 3(a) of the Rights Agreement) has occurred as of
the date of this Amendment; and
WHEREAS, the Board of Directors of the Company
has approved and adopted this Amendment and directed that
the proper officers take all appropriate steps to execute
and put into effect this Amendment.
NOW, THEREFORE, the parties hereby agree as
follows:
1. Section 1(a) of the Rights Agreement is
hereby amended by inserting the following phrase after
the last word and before the period at the end of the
definition of "Acquiring Person":
"; provided, however, that neither
PNC Bank Corp., a Pennsylvania
corporation ("Parent"), nor any
Subsidiary of Parent shall be deemed
to be an Acquiring Person by virtue
of the fact that Parent is the
Beneficial Owner solely of Common
Stock or Voting Securities (i) of
which Parent or such subsidiary was
the Beneficial Owner on July 10,
1995, together with up to 1% more of
the Common Stock or Voting Securities
acquired after July 10, 1995 by
Parent's Affiliates and Associates,
(ii) acquired or acquirable pursuant
to the grant or exercise of the
option granted pursuant to the Stock
Option Agreement, dated as of July
10, 1995, between Parent and the
Company, (iii) held directly or
indirectly in trust accounts, managed
accounts and the like or otherwise
hold in a fiduciary capacity for
third parties and (iv) held in
respect of a debt previously
contracted."
2. This Amendment shall be effective immediately
upon its execution and the Rights Agreement shall
continue in full force and effect as amended hereby.
3. Capitalized terms used in this Amendment and
not defined herein shall have the meanings assigned
thereto in the Rights Agreement.
4. This Amendment may be executed in counterparts.
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed and their respective
corporate seals to be hereunto affixed and attested, all
as of the day and year first above written.
MIDLANTIC CORPORATION
ATTEST:
By: /s/ Garry J. Scheuring
By /s/ John M. Sperger _________________________
_________________ Name: Garry J. Scheuring
Secretary Title: Chairman, President and
Chief Executive Officer
MIDLANTIC NATIONAL BANK
ATTEST:
By /s/ John M. Sperger By: /s/ Garry J. Scheuring
___________________ __________________________
Secretary Name: Garry J. Scheuring
Title: Chairman, President and
Chief Executive Officer
