SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
August 26, 1994
NBB Bancorp, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-17341 04-2997971
(State or other (Commission (IRS employer
jurisdiction of File number) Identification no.)
incorporation)
174 Union Street, New Bedford, Massachusetts 02740
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code
(508) 996-5000
The Exhibit Index appears on page 2.
There are 57 pages in this Report, including exhibits.
<PAGE>
Item 5 - Other Events
Effective as of August 26, 1994, NBB Bancorp, Inc. (the "Company") and
Fleet Financial Group, Inc. ("Fleet") amended and restated the Agreement and
Plan of Merger dated as of May 9, 1994 (as amended and restated, the "Merger
Agreement") to provide that if the Average Closing Price (as defined in the
Merger Agreement) of Fleet common stock, $1.00 par value ("Fleet Common
Stock") is equal to or less than $29.50 and the number of shares of Fleet
Common Stock to be used by Fleet to pay the consideration in the Merger would
prevent the Company's counsel from providing an opinion, in form and substance
reasonably satisfactory to Fleet and its counsel, that the Merger would be a
tax-free reorganization for federal income tax purposes, then the Merger will
be completed using an alternative structure. Under the alternative structure,
a wholly-owned subsidiary of Fleet, organized as a Delaware corporation
("Merger Subsidiary"), would merge with and into NBB (the "Alternative
Merger"). NBB stockholders are entitled to receive the consideration
described in the Merger Agreement, regardless of whether the Merger or the
Alternative Merger is consummated.
The Merger Agreement is attached hereto as an exhibit and incorporated
herein by reference. The foregoing summary of such exhibit is qualified in its
entirety by reference to the complete text of such exhibit.
Item 7 - Exhibits
(c) Exhibits.
2.1 Agreement and Plan of Merger by and Page 3
between Fleet Financial Group, Inc. and
NBB Bancorp, Inc. dated as of May 9, 1994,
as amended and restated as of August 26, 1994
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NBB BANCORP, INC.
Date: September 12, 1994 By:
Robert McCarter
Chairman, President and Chief
Executive Officer
109924.c1
<PAGE>
Exhibit 2.1
Agreement and Plan of Merger by and between Fleet Financial Group, Inc. and
NBB Bancorp, Inc. dated as of May 9, 1994, as amended and restated August 26,
1994.
109924.c1
9/12/94
<PAGE>
AMENDED AND RESTATED
AS OF AUGUST 26, 1994
_______________________________
_______________________________
AGREEMENT AND PLAN OF MERGER
By and Between
FLEET FINANCIAL GROUP, INC.
and
NBB BANCORP, INC.
Dated as of May 9, 1994
_______________________________
_______________________________
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(a) The Merger. . . . . . . . . . . . . . . . . . . . . 1
(b) Alternative Merger. . . . . . . . . . . . . . . . . 2
(c) Terminology . . . . . . . . . . . . . . . . . . . . 2
1.02 Effective Time . . . . . . . . . . . . . . . . . . . . . 2
1.03 Effects of the Merger. . . . . . . . . . . . . . . . . . 2
1.04 Conversion of Company Common Stock . . . . . . . . . . . 2
1.05 Dissenters' Rights . . . . . . . . . . . . . . . . . . . 5
1.06 Options. . . . . . . . . . . . . . . . . . . . . . . . . 6
1.07 Rights . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.08 ESOP . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.09 Articles of Incorporation. . . . . . . . . . . . . . . . 7
1.10 By-Laws. . . . . . . . . . . . . . . . . . . . . . . . . 7
1.11 Directors and Officers . . . . . . . . . . . . . . . . . 7
1.12 Tax Consequences . . . . . . . . . . . . . . . . . . . . 7
1.13 Conversion of Merger Subsidiary Common Stock . . . . . . 8
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.01 Parent to Make Shares and Cash Available . . . . . . . . 8
2.02 Election and Exchange Procedures.. . . . . . . . . . . . 8
ARTICLE III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . . . . 11
3.01 Corporate Organization . . . . . . . . . . . . . . . . . 11
3.02 Capitalization . . . . . . . . . . . . . . . . . . . . . 12
3.03 Authority; No Violation. . . . . . . . . . . . . . . . . 13
3.04 Consents and Approvals . . . . . . . . . . . . . . . . . 14
3.05 Loan Portfolio . . . . . . . . . . . . . . . . . . . . . 15
3.06 Financial Statements . . . . . . . . . . . . . . . . . . 15
3.07 Broker's Fees. . . . . . . . . . . . . . . . . . . . . . 16
3.08 Absence of Certain Changes or Events . . . . . . . . . . 16
3.09 Legal Proceedings. . . . . . . . . . . . . . . . . . . . 17
3.10 Taxes and Tax Returns. . . . . . . . . . . . . . . . . . 17
3.11 Employees. . . . . . . . . . . . . . . . . . . . . . . . 17
3.12 SEC Reports. . . . . . . . . . . . . . . . . . . . . . . 18
3.13 Company Information. . . . . . . . . . . . . . . . . . . 18
3.14 Compliance with Applicable Law . . . . . . . . . . . . . 18
3.15 Certain Contracts. . . . . . . . . . . . . . . . . . . . 19
3.16 Agreements with Regulatory Agencies. . . . . . . . . . . 19
3.17 Investment Securities. . . . . . . . . . . . . . . . . . 19
3.18 Environmental Matters. . . . . . . . . . . . . . . . . . 19
3.19 Assistance Agreements. . . . . . . . . . . . . . . . . . 20
3.20 Properties . . . . . . . . . . . . . . . . . . . . . . . 20
3.21 Insurance. . . . . . . . . . . . . . . . . . . . . . . . 21
3.22 Material Interests of Certain Persons. . . . . . . . . . 21
3.23 Regulatory Approvals . . . . . . . . . . . . . . . . . . 21
ARTICLE IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
REPRESENTATIONS AND WARRANTIES OF PARENT . . . . . . . . . . . . . . 21
4.01 Corporate Organization . . . . . . . . . . . . . . . . . 21
4.02 Capitalization . . . . . . . . . . . . . . . . . . . . . 22
4.03 Authority; No Violation. . . . . . . . . . . . . . . . . 23
4.04 Consents and Approvals . . . . . . . . . . . . . . . . . 24
4.05 Financial Statements . . . . . . . . . . . . . . . . . . 24
4.06 Broker's Fees. . . . . . . . . . . . . . . . . . . . . . 25
4.07 Absence of Certain Changes or Events . . . . . . . . . . 25
4.08 Legal Proceedings. . . . . . . . . . . . . . . . . . . . 25
4.09 SEC Reports. . . . . . . . . . . . . . . . . . . . . . . 25
4.10 Parent and Merger Subsidiary Information . . . . . . . . 26
4.11 Compliance with Applicable Law . . . . . . . . . . . . . 26
4.12 Ownership of Company Common Stock; Affiliates and
Associates . . . . . . . . . . . . . . . . . . . . . . . 26
4.13 Agreements with Regulatory Agencies. . . . . . . . . . . 26
4.14 Regulatory Approvals . . . . . . . . . . . . . . . . . . 26
ARTICLE V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
COVENANTS RELATING TO CONDUCT OF BUSINESS. . . . . . . . . . . . . . 27
5.01 Covenants of the Company . . . . . . . . . . . . . . . . 27
5.02 No Solicitation. . . . . . . . . . . . . . . . . . . . . 29
5.03 Covenants of Parent. . . . . . . . . . . . . . . . . . . 30
ARTICLE VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . 30
6.01 Regulatory Matters . . . . . . . . . . . . . . . . . . . 30
6.02 Access to Information. . . . . . . . . . . . . . . . . . 31
6.03 Shareholder Meeting. . . . . . . . . . . . . . . . . . . 33
6.04 Legal Conditions to Merger . . . . . . . . . . . . . . . 33
6.05 Restrictions on Resale . . . . . . . . . . . . . . . . . 33
6.06 Stock Exchange Listing . . . . . . . . . . . . . . . . . 33
6.07 Employee Benefit Plans . . . . . . . . . . . . . . . . . 34
6.08 Employee Termination And Other Benefits. . . . . . . . . 34
6.09 Indemnification; Directors' and Officers' Insurance. . . 35
6.10 Subsequent Interim and Annual Financial Statements . . . 37
6.11 Additional Agreements. . . . . . . . . . . . . . . . . . 37
6.12 Disclosure Supplements . . . . . . . . . . . . . . . . . 37
6.13 Current Information. . . . . . . . . . . . . . . . . . . 37
6.14 ALCO Management. . . . . . . . . . . . . . . . . . . . . 37
6.15 Execution and Authorization of Bank Merger Agreement . . 38
ARTICLE VII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . 39
7.01 Conditions to Each Party's Obligation to Effect the
Merger . . . . . . . . . . . . . . . . . . . . . . . . . 39
(a) Shareholder Approval. . . . . . . . . . . . . . . . 39
(b) Stock Exchange Listing. . . . . . . . . . . . . . . 39
(c) Other Approvals . . . . . . . . . . . . . . . . . . 39
(d) S-4 . . . . . . . . . . . . . . . . . . . . . . . . 39
(e) No Injunctions or Restraints; Illegality. . . . . . 39
7.02 Conditions to Obligations of Parent and Merger
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . 39
(a) Representations and Warranties. . . . . . . . . . . 40
(b) Performance of Obligations of the Company . . . . . 40
(c) Consents Under Agreements . . . . . . . . . . . . . 40
(d) Legal Opinion . . . . . . . . . . . . . . . . . . . 40
(e) Accountant's Letter . . . . . . . . . . . . . . . . 40
7.03 Conditions to Obligations of the Company . . . . . . . . 40
(a) Representations and Warranties. . . . . . . . . . . 41
(b) Performance of Obligations. . . . . . . . . . . . . 41
(c) Consents Under Agreements . . . . . . . . . . . . . 41
(d) Federal Tax Opinion . . . . . . . . . . . . . . . . 41
(e) Legal Opinion . . . . . . . . . . . . . . . . . . . 41
(f) Opinion of Financial Advisor. . . . . . . . . . . . 42
ARTICLE VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
TERMINATION AND AMENDMENT. . . . . . . . . . . . . . . . . . . . . . 42
8.01 Termination. . . . . . . . . . . . . . . . . . . . . . . 42
8.02 Effect of Termination; Expenses. . . . . . . . . . . . . 43
8.03 Amendment. . . . . . . . . . . . . . . . . . . . . . . . 44
8.04 Extension; Waiver. . . . . . . . . . . . . . . . . . . . 45
ARTICLE IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . 45
9.01 Closing. . . . . . . . . . . . . . . . . . . . . . . . . 45
9.02 Non-Survival of Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . . . . . . . . 45
9.03 Expenses . . . . . . . . . . . . . . . . . . . . . . . . 45
9.04 Notices. . . . . . . . . . . . . . . . . . . . . . . . . 46
9.05 Interpretation . . . . . . . . . . . . . . . . . . . . . 46
9.06 Counterparts . . . . . . . . . . . . . . . . . . . . . . 47
9.07 Entire Agreement . . . . . . . . . . . . . . . . . . . . 47
9.08 Governing Law. . . . . . . . . . . . . . . . . . . . . . 47
9.09 Jurisdiction and Venue . . . . . . . . . . . . . . . . . 47
9.10 Enforcement of Agreement . . . . . . . . . . . . . . . . 47
9.11 Severability . . . . . . . . . . . . . . . . . . . . . . 47
9.12 Publicity. . . . . . . . . . . . . . . . . . . . . . . . 47
9.13 Assignment . . . . . . . . . . . . . . . . . . . . . . . 47
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 9, 1994, as amended and
restated as of August 26, 1994 by and between NBB BANCORP, INC., a Delaware
corporation (the "Company") and FLEET FINANCIAL GROUP, INC., a Rhode Island
corporation ("Parent").
WHEREAS, the Board of Directors of Parent and the Company have
determined that it is in the best interests of their respective companies and
their stockholders to consummate a business combination transaction provided
for herein in which (i) except under the circumstances set forth in Section
1.04(a) of this Agreement, the Company will, subject to the terms and
conditions set forth herein, merge with and into Parent, with Parent as the
surviving corporation or (ii) under the circumstances set forth in Section
1.04(a) of this Agreement, Parent will organize a wholly-owned subsidiary of
Parent as a Delaware corporation ("Merger Subsidiary") which, subject to the
terms and conditions set forth herein, will merge with and into the Company
(the "Alternative Merger") (the term "Merger" referring to the transaction
described in (i) or (ii) above, whichever is to be consummated); and
WHEREAS, Parent will cause Merger Subsidiary to become a party to this
Agreement prior to the mailing of the Proxy Statement (as hereinafter
defined) to be sent to stockholders of the Company to seek their approval of
this Agreement; and
WHEREAS, as soon as practicable after the execution and delivery of
this Agreement, Fleet Bank of Massachusetts, N.A., a national banking
association and an indirect wholly-owned subsidiary of Parent ("Massachusetts
Bank," and sometimes referred to herein as the "Surviving Bank"), and New
Bedford Institution for Savings, a Massachusetts savings bank and a wholly
owned subsidiary of the Company (the "Bank"), will enter into a Bank
Agreement and Plan of Merger (the "Bank Merger Agreement"), providing for the
merger (the "Bank Merger") of the Bank with and into Massachusetts Bank; and
WHEREAS, Parent, promptly following the consummation of the Merger,
intends to cause (i) if the Alternative Merger is consummated, the merger of
the Company with and into Parent, (ii) the sale of certain assets and
liabilities of the Bank in exchange for cash and (iii) the Bank Merger to be
consummated.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and intending
to be legally bound hereby, the parties agree as follows:
ARTICLE I
THE MERGER
1.01 (a) The Merger. Subject to the terms and conditions of this
Agreement, in accordance with the Delaware General Corporation Law (the
"DGCL") and the Rhode Island Business Corporation Law (the "RIBCL"), at the
Effective Time (as defined in Section 1.02 hereof), unless the Alternative
Merger is consummated pursuant to Sections 1.01(b) and 1.04(a)), the Company
shall merge with and into Parent. Except in the event that the Alternative
Merger is consummated, Parent shall be the surviving corporation in the
Merger, shall continue its corporate existence under the laws of the State
of Rhode Island under the name of Fleet Financial Group, Inc. and upon
consummation of the Merger, the separate corporate existence of the Company
shall terminate.
(b) Alternative Merger. If the Alternative Merger is
consummated pursuant to Section 1.04(a), then, subject to the terms and
conditions of this Agreement, in accordance with the DGCL, at the Effective
Time (as defined in Section 1.02 hereof), Merger Subsidiary shall merge with
and into the Company. The Company shall be the surviving corporation in the
Alternative Merger and shall continue its corporate existence under the laws
of the State of Delaware under the name NBB Bancorp, Inc. Upon consummation
of the Alternative Merger, the separate corporate existence of Merger
Subsidiary shall terminate.
(c) Terminology. As used in this Agreement, the term "Merger"
means the Merger or the Alternative Merger, whichever is to be consummated.
As used in this Agreement, the term "Surviving Corporation" means Parent, if
the Merger is to be consummated, and the Company, if the Alternative Merger
is to be consummated.
1.02 Effective Time. Except in the event that the Alternative Merger
is consummated, the Merger shall become effective as set forth in the
certificate of merger (the "Certificate of Merger") which shall be filed with
the Secretary of State of the State of Delaware (the "Delaware Secretary")
and the articles of merger (the "Articles of Merger") which shall be filed
with the Secretary of State of the State of Rhode Island (the "Rhode Island
Secretary"), in each case on the Closing Date (as defined in Section 9.01
hereof). If the Alternative Merger is consummated, the Merger shall become
effective as set forth in the Certificate of Merger which shall be filed with
the Delaware Secretary on the Closing Date. The term "Effective Time" shall
be the date and time when the Merger becomes effective, as set forth in the
Certificate of Merger and, except in the event that the Alternative Merger
is consummated, the Articles of Merger.
1.03 Effects of the Merger. At and after the Effective Time, the
Merger shall have the effects set forth in Sections 259 and 261 of the DGCL
and, except in the event that the Alternative Merger is consummated, Section
7-1.1-69 of the RIBCL.
1.04 Conversion of Company Common Stock.
(a) At the Effective Time, subject to Sections 2.02(b) and (d)
hereof, each share of the common stock, par value $0.10 per share, of the
Company (the "Company Common Stock") issued and outstanding immediately prior
to the Effective Time and all rights attached thereto (other than shares of
Company Common Stock (x) held in the Company's treasury, (y) held directly
or indirectly by Parent or the Company or any of their respective
Subsidiaries (as defined below) (except for Trust Account Shares and DPC
Shares (as such terms are defined in Section 1.04(c) hereof)) or (z) which
are Dissenting Shares (as such term is defined in Section 1.05 hereof) shall,
by virtue of this Agreement and without any action on the part of the holder
thereof, be converted into and exchangeable for the right to receive (i) the
number of Warrants (as defined in Section 1.04(d)) determined in accordance
with Section 1.04(d) and (ii) at the election of the holder thereof as
provided in Section 2.02, either:
(x) a number of shares of the common stock of Parent, par value
$1.00 per share (the "Parent Common Stock") (together with the number
of Parent Rights (as defined in Section 4.02(a) hereof) associated
therewith), rounded to the nearest thousandth of a share, determined
by dividing the Merger Consideration, as defined below, by the Average
Closing Price, as defined below (the "Per Share Stock Consideration"),
or
(y) cash in the amount of the Merger Consideration, as defined
below (the "Per Share Cash Consideration"),
provided, that, the aggregate number of shares of Parent Common Stock that
shall be issued in the Merger pursuant to Section 1.04(a)(ii)(x) shall be
equal to the "Aggregate Parent Stock Amount" as defined below. Accordingly,
consideration pursuant to Section 1.04(a)(ii)(y) shall be available to
holders of Company Common Stock only to the extent the consideration pursuant
to Section 1.04(a)(ii)(x) is not sufficient to pay the entire consideration
due under Section 1.04(a)(ii).
The "Merger Consideration" shall be equal to $48.50, provided, however, that
in the event that the Effective Time has not occurred on or prior to March
31, 1995, this amount shall be increased at the rate of $0.25 per share per
month for each full month (prorated on a daily basis for each partial month)
thereafter until the Effective Time. The "Average Closing Price" shall mean
the average closing sale price per share of Parent Common Stock on the New
York Stock Exchange (the "Stock Exchange") (as reported by the Wall Street
Journal or, if not reported thereby, another authoritative source), for the
10 consecutive Stock Exchange trading days ending on and including the fifth
trading day immediately preceding (but not including) the Effective Time.
Notwithstanding the foregoing, if the Average Closing Price is equal
to or less than $29.50, then the consideration payable pursuant to Section
1.04(a)(ii) shall consist solely of cash in the amount of the Per Share Cash
Consideration, provided that Parent may, at its option, pay part of such
consideration in the form of Parent Common Stock valued at the Average
Closing Price up to the number of shares which Parent previously repurchased
to be used in payment of the Merger Consideration under Section
1.04(a)(ii)(x). If the Average Closing Price is equal to or less than
$29.50, Parent shall provide a written notice (the "Parent Notice") to the
Company no later than 5:00 p.m. on the first business day following the last
Stock Exchange trading day of the period during which the Average Closing
Price is calculated, indicating its calculation of the Average Closing Price
and specifying the number of shares of Parent Common Stock, if any, which
Parent has elected to use to pay part of the consideration pursuant to
Section 1.04(a)(ii). The Company in turn shall notify Parent no later than
5:00 p.m. on the first business day following receipt of the Parent Notice
as to whether the Company has been advised by its counsel that such counsel
would be able, under then applicable law, to deliver to the Company an
opinion, in form and substance reasonably satisfactory to Parent and its
counsel (the "Tax Opinion"), that, if the Merger were to be consummated
using the number of shares of Parent Common Stock specified in the Parent
Notice (and assuming no decline in the fair market value of Parent Common
Stock between the date of the Parent Notice and the Effective Time), for
federal income tax purposes the Merger would constitute a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986,
as amended (the "Code"). If counsel has advised the Company that it is
unable to deliver the Tax Opinion, then Parent, the Company and Merger
Subsidiary agree to consummate the Alternative Merger and Parent shall
(x) pay the consideration payable pursuant to Section 1.04(a)(i) and (y) pay
the consideration payable pursuant to Section 1.04(a)(ii) in cash plus the
number of shares of Parent Common Stock specified in the Parent Notice. If
counsel has advised the Company that it would be able, under then applicable
law, to deliver to the Company the Tax Opinion if the Merger were to be so
consummated, then the Merger shall be consummated pursuant to Section 1.01(a)
and Parent shall (x) pay the consideration payable pursuant to
Section 1.04(a)(i) and (y) pay the consideration payable pursuant to
Section 1.04(a)(ii) in cash and the number of shares of Parent Common Stock
specified in the Parent Notice.
The "Aggregate Parent Stock Amount" shall equal (i) if the Average
Closing Price is greater than $29.50, such number of shares of Parent Common
Stock not less than 5,700,000 (or such lesser number of shares that would
enable Parent to pay the total consideration for the Merger pursuant to
Section 1.04(a)(ii)) and not more than 6,300,000 as shall be determined by
Parent prior to the Effective Time (Parent to notify the Company no later
than 5:00 p.m. on the first business day following the last Stock Exchange
trading day of the period during which the Average Closing Price is
calculated indicating its calculation of the Average Closing Price and
specifying the exact number of shares), plus such additional number of shares
of Parent Common Stock as may be required so that the aggregate portion of
the consideration for the Merger attributable to Parent Common Stock is equal
to at least 45% of the total consideration for the Merger, it being
understood that for purposes of calculating the total consideration for the
Merger, Dissenting Shares, cash received in lieu of fractional shares and the
Warrants shall each be deemed the receipt of cash and the value of the Parent
Common Stock shall be calculated using the closing sales price of Parent
Common Stock on the Stock Exchange on the date of the Effective Time; or
(ii) if the Average Closing Price is equal to or less than $29.50, the number
of shares of Parent Common Stock specified in the Parent Notice.
(b) The Per Share Stock Consideration, the Per Share Cash
Consideration, the Aggregate Parent Stock Amount and the number of Warrants
to be issued pursuant to Section 1.04(d) shall be subject to appropriate
adjustments in the event that, subsequent to the date of this Agreement but
prior to the Effective Time, the outstanding Parent Common Stock shall have
been increased, decreased, changed into or exchanged for a different number
or kind of shares or securities through reorganization, recapitalization,
reclassification, stock dividend, stock split, or other like changes in
Parent's capitalization.
(c) At the Effective Time, all shares of Company Common Stock that
are owned by the Company as treasury stock and all shares of Company Common
Stock that are owned directly or indirectly by Parent or the Company or any
of their respective Subsidiaries (other than shares of Company Common Stock
held directly or indirectly in trust accounts, managed accounts and the like
or otherwise held in a fiduciary capacity that are beneficially owned by
third parties (any such shares, and shares of Parent Common Stock which are
similarly held, whether held directly or indirectly by Parent or the Company,
as the case may be, being referred to herein as "Trust Account Shares") and
other than any shares of Company Common Stock held by Parent or the Company
or any of their respective Subsidiaries in respect of a debt previously
contracted (any such shares of Company Common Stock, and shares of Parent
Common Stock which are similarly held, whether held directly or indirectly
by Parent or the Company, being referred to herein as "DPC Shares")) shall
be cancelled and shall cease to exist and no Parent Common Stock, cash,
Warrants or other consideration shall be delivered in exchange therefor. All
shares of Parent Common Stock and Parent Preferred Stock that are owned by
the Company or any of its Subsidiaries (other than Trust Account Shares and
DPC Shares) shall become treasury stock of Parent.
(d) At the Effective Time, Parent shall issue and deliver in
accordance with the provisions of Article II a total of 2,500,000 warrants
(the "Warrants") as follows:
(i) Each holder of a share of Company Common Stock which is
being converted in accordance with Section 1.04(a) shall have the right
to receive a number of Warrants equal to the Warrant Amount, and
(ii) Each holder of a stock option issued under the Company
Stock Plan (as defined in Section 1.06) (a "Company Stock Option")
which is converted into a stock option under the Parent Stock Plan
pursuant to Section 1.06 shall have the right to receive a number of
Warrants equal to the Warrant Amount multiplied by the number of shares
of Company Common Stock underlying such Company Stock Option.
Each Warrant shall entitle the holder thereof to purchase one share of Parent
Common Stock at a price of $43.875 per share at any time during the period
beginning on the first anniversary of the Effective Time and ending on the
sixth anniversary of the Effective Time. The Warrant Amount means a
fraction, the numerator of which is 2,500,000, and the denominator of which
is the sum of the number of shares of Company Common Stock which are being
converted in accordance with Section 1.04(a) plus the number of shares of
Company Common Stock underlying the Company Stock Options. For purposes of
this Agreement, the "Warrant Shares" shall mean the shares of Parent Common
Stock issuable upon exercise of the Warrants.
1.05 Dissenters' Rights. Notwithstanding anything in this Agreement
to the contrary and unless otherwise provided by applicable law, shares of
Company Common Stock which are issued and outstanding immediately prior to
the Effective Time and which are owned by shareholders who, pursuant to
applicable law, (a) deliver to the Company, before the taking of the vote of
the Company's shareholders on the Merger, written demand for the appraisal
of their shares, and (b) whose shares are not voted in favor of the Merger,
nor consented thereto in writing (the "Dissenting Shares"), shall not be
converted into Parent Common Stock and/or cash and Warrants, unless and until
such holders shall have failed to perfect or shall have effectively withdrawn
or lost their right of appraisal and payment under applicable law. If any
such holder shall have failed to perfect or shall have effectively withdrawn
or lost such right of appraisal, the Company Common Stock of such holder
shall thereupon be deemed to have been converted into the right to receive
and become exchangeable for, at the Effective Time, that number of whole
shares of Parent Common Stock and/or cash and Warrants determined pursuant
to Section 1.04 and Section 2.02(c) hereof. Holders of Company Common Stock
who become entitled pursuant to the provisions of Section 262 of the DGCL to
payment for their shares of Company Common Stock under the provisions thereof
shall receive payment therefor from the Surviving Corporation and such shares
of Company Common Stock shall be cancelled.
1.06 Options. Commencing at least 15 days prior to the Effective
Time, each holder of a then outstanding stock option to purchase shares of
Company Common Stock pursuant to the NBB Bancorp, Inc. Stock Option Plan (the
"Company Stock Plan") shall be entitled to exercise such option (whether or
not such option would otherwise have been exercisable) at the exercise price
therefor, and if such options are not so exercised prior to the Effective
Time, at or immediately prior to the Effective Time each such holder shall
be entitled, upon election, to receive from the Company in cancellation of
such option a cash payment from the Company in an amount equal to the excess
of the Per Share Cash Consideration over the per share exercise price of such
option, multiplied by the number of shares covered by such option, subject
to any required withholding of taxes. At the Effective Time, any option
which has not been so exercised or cancelled shall be converted automatically
into (a) the number of Warrants determined in accordance with Section 1.04(d)
and (b) an option under the Fleet Financial Group, Inc. 1992 Employee Stock
Option and Restricted Stock Plan (the "Parent Stock Plan") to purchase shares
of Parent Common Stock in an amount and at an exercise price determined as
provided below and otherwise subject to the terms of the Parent Stock Plan
and the provisions of the Company Stock Plan providing for immediate vesting
as a result of the Merger:
(a) The number of shares of Parent Common Stock to be subject
to the new option shall be equal to the product of the number of shares
of Company Common Stock subject to the original option and the Per
Share Stock Consideration, provided, that any fractional shares of
Parent Common Stock resulting from such multiplication shall be rounded
to the nearest share; and
(b) The exercise price per share of Parent Common Stock under
the new option shall be equal to the exercise price per share of
Company Common Stock under the original option divided by the Per Share
Stock Consideration, provided, that such exercise price shall be
rounded up to the nearest cent.
The adjustment provided herein with respect to any options which are
"incentive stock options" (as defined in Section 422 of the Code shall be and
is intended to be effected in a manner which is consistent with Section
424(a) of the Code. The duration and other terms of the new option shall be
the same as the original option, except that all references to the Company
shall be deemed to be references to Parent.
1.07 Rights. The Board of Directors of the Company has approved, and
shall enter into and keep in effect, an amendment to the Shareholder Rights
Agreement dated as of November 14, 1989, between the Company and The First
National Bank of Boston, as Rights Agent (the "Company Rights Agreement"),
which, among other things, shall provide that a Distribution Date, as such
term is defined in the Company Rights Agreement, shall not have occurred,
and, as a consequence of which the Company Rights shall not have become
nonredeemable and the Company Rights shall not become exercisable for capital
stock of Parent upon consummation of the Merger (the "Rights Amendment").
1.08 ESOP. The parties hereto agree that, effective as of the
Effective Time (or as soon thereafter as practicable), the New Bedford
Institution for Savings Employee Stock Ownership Plan and Trust (the "Bank
ESOP") will be terminated in accordance with applicable law and regulations.
1.09 Articles of Incorporation.
(a) Except in the event that the Alternative Merger is consummated,
at the Effective Time, the Articles of Incorporation of Parent, as in effect
at the Effective Time, shall be the Articles of Incorporation of the
Surviving Corporation.
(b) If the Alternative Merger is consummated, unless otherwise
determined by Parent prior to the Effective Time, at the Effective Time, the
Certificate of Incorporation of the Company, as amended and restated in the
form acceptable to Parent in its sole judgment, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter further amended
as provided by law and such Certificate of Incorporation.
1.10 By-Laws.
(a) Except in the event that the Alternative Merger is consummated,
at the Effective Time, the By-Laws of Parent, as in effect immediately prior
to the Effective Time, shall be the By-Laws of the Surviving Corporation
until thereafter amended in accordance with applicable law.
(b) If the Alternative Merger is consummated, unless otherwise
determined by Parent prior to the Effective Time, the By-Laws of the Company,
as amended and restated in the form acceptable to Parent in its sole
judgment, shall be the By-Laws of the Surviving Corporation until thereafter
amended as provided by law, the Certificate of Incorporation of the Surviving
Corporation and such By-Laws.
1.11 Directors and Officers.
(a) Except in the event that the Alternative Merger is consummated,
the directors and officers of Parent immediately prior to the Effective Time
shall be the directors and officers of the Surviving Corporation, each to
hold office in accordance with the Articles of Incorporation and By-Laws of
the Surviving Corporation until their respective successors are duly elected
or appointed and qualified.
(b) If the Alternative Merger is consummated, the directors of Merger
Subsidiary immediately prior to the Effective Time shall be the initial
directors of the Surviving Corporation, each to hold office in accordance
with the Certificate of Incorporation and By-Laws of the Surviving
Corporation, and the officers of the Merger Subsidiary immediately prior to
the Effective Time shall be the initial officers of the Surviving
Corporation, in each case until their respective successors are duly elected
or appointed and qualified.
1.12 Tax Consequences. Except in the event that the Alternative
Merger is consummated, it is intended that the Merger shall constitute a
reorganization within the meaning of Section 368(a) of the Code, and that
this Agreement shall constitute a "plan of reorganization" for the purposes
of Section 368 of the Code.
1.13 Conversion of Merger Subsidiary Common Stock. If the Alternative
Merger is consummated, at the Effective Time, each share of the common stock
of Merger Subsidiary issued and outstanding immediately prior to the
Effective Time shall, by virtue of this Agreement and without any action on
the part of the holder thereof, be converted into and exchanged for one share
of common stock of the Surviving Corporation.
ARTICLE II
EXCHANGE OF SHARES
2.01 Parent to Make Shares and Cash Available. At or prior to the
Effective Time, Parent shall deposit, or shall cause to be deposited, with
a bank or trust company selected by Parent (and reasonably acceptable to the
Company) (the "Exchange Agent"), for the benefit of the holders of
certificates of Company Common Stock (the "Certificates"), for exchange in
accordance with this Article II, certificates representing the shares of
Parent Common Stock and the Warrants and cash which together constitute the
consideration for the Merger (such cash and certificates for shares of Parent
Common Stock and Warrants, together with any dividends or distributions with
respect thereto, being hereinafter referred to as the "Exchange Fund") to be
issued and paid, respectively, pursuant to Section 1.04 and Section 2.02 in
exchange for outstanding shares of Company Common Stock.
2.02 Election and Exchange Procedures.
(a) As soon as practicable after the Effective Time, and in no
event later than three business days thereafter (which date shall be referred
to as the "Mailing Date"), Parent shall cause the Exchange Agent to mail to
each holder of record of a Certificate or Certificates at the Effective Time
(1) a form letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only
upon delivery of the Certificates to the Exchange Agent) containing
instructions for use in effecting the surrender of the Certificates and (2)
an election form (the "Election Form"). The Company shall have the right to
approve the form of both the letter of transmittal and the Election Form.
(b) Each Election Form shall permit the holder (or in the case
of nominee record holders, the beneficial owner through appropriate and
customary documentation and instructions) to elect to receive Parent Common
Stock with respect to each share of such holder's Company Common Stock
("Stock Election Shares"), to elect to receive cash with respect to each
share of such holder's Company Common Stock ("Cash Election Shares") or to
indicate that such holder makes no election ("No Election Shares"). Any
shares of Company Common Stock with respect to which the holder (or the
beneficial owner, as the case may be) shall not have submitted to the
Exchange Agent, an effective, properly completed Election Form on or before
5:00 p.m., on the 20th day following the Mailing Date (or such other time and
date as Parent and the Company may mutually agree) (the "Election Deadline")
shall also be deemed to be "No Election Shares".
Any such election shall have been properly made only if the Exchange
Agent shall have actually received a properly completed Election Form by the
Election Deadline. An Election Form shall be deemed properly completed only
if accompanied by one or more Certificates representing all shares of Company
Common Stock covered by such Election Form, together with duly executed
transmittal materials included with the Election Form. Any Election Form may
be revoked or changed by the person submitting such Election Form at or prior
to the Election Deadline by written notice to the Exchange Agent, which
notice must be received by the Exchange Agent at or prior to the Election
Deadline. In the event an Election Form is revoked prior to the Election
Deadline, the shares of Company Common Stock represented by such Election
Form shall become No Election Shares. Subject to the terms of this Agreement
and of the Election Form, Parent or the Exchange Agent shall have reasonable
discretion to determine whether any election, revocation or change has been
properly or timely made and to disregard immaterial defects in the Election
Forms, and any good faith decisions of Parent or the Exchange Agent regarding
such matters shall be binding and conclusive. Neither Parent nor the
Exchange Agent shall be under any obligation to notify any person of any
defect in an Election Form.
If the aggregate number of Stock Election Shares does not equal the
Stock Conversion Number (as defined below), within five business days after
the Election Deadline, Parent shall cause the Exchange Agent to allocate
among holders of Company Common Stock the right to receive, with respect to
each such share, Parent Common Stock or cash in the Merger as follows:
(i) if the number of Stock Election Shares is less than the
Stock Conversion Number, then
(A) all Stock Election Shares shall be converted into the
right to receive Parent Common Stock,
(B) the Exchange Agent will select, on a pro rata basis,
first from among the holders of No-Election Shares and then (if
necessary) from among the holders of Cash Election Shares, a
sufficient number of such shares ("Stock Designee Shares") such
that the number of Stock Designee Shares shall, when added to
the number of Stock Election Shares, equal as closely as
practicable the Stock Conversion Number, and all Stock Designee
Shares shall be converted into the right to receive Parent
Common Stock, and
(C) any Cash Election Shares and any No-Election Shares
not so selected as Stock Designee Shares shall be converted
into the right to receive cash; or
(ii) if the aggregate number of Stock Election Shares is greater
than the Stock Conversion Number, then
(A) all Cash Election Shares shall be converted into the
right to receive cash,
(B) the Exchange Agent will select, on a pro rata basis,
first from among the holders of No-Election Shares and then (if
necessary) from among the holders of Stock Election Shares, a
sufficient number of such shares ("Cash Designee Shares") such
that the number of Cash Designee Shares shall, when added to
the number of Cash Election Shares, equal as closely as
practicable the Cash Conversion Number (as defined below), and
all Cash Designee Shares shall be converted into the right to
receive cash, and
(C) any Stock Election Shares and any No-Election Shares
not so selected as Cash Designee Shares shall be converted into
the right to receive Parent Common Stock.
"Stock Conversion Number" means the Aggregate Parent Stock Amount
divided by the Per Share Stock Consideration. "Cash Conversion Number" means
the difference between the number of shares of Company Common Stock
outstanding as of the Effective Time which are being converted pursuant to
Section 1.04(a) and the Stock Conversion Number.
The selection process to be used by the Exchange Agent shall consist
of such processes as shall be mutually determined by the Company and Parent
as shall be further described in the Election Form.
Upon surrender of a Certificate for exchange and cancellation to the
Exchange Agent, together with the Election Form, duly executed, the holder
of such Certificates shall be entitled to receive in exchange therefor (x)
a certificate representing that number of whole shares of Parent Common
Stock, if any, to which such holder of Company Common Stock shall have become
entitled pursuant to the provisions of Articles I and II hereof, (y) a check
representing the amount of cash, if any, which such holder has the right to
receive in respect of the Certificate surrendered pursuant to the provisions
of Articles I and II, and (z) a certificate representing the number of
Warrants to which such holder is entitled pursuant to the provisions of
Article I and the Certificate so surrendered shall forthwith be cancelled.
No interest will be paid or accrued on the cash and unpaid dividends and
distributions, if any, payable to holders of Certificates.
(c) After the Effective Time, there shall be no transfers on the
stock transfer books of the Company of the shares of Company Common Stock
which were issued and outstanding immediately prior to the Effective Time.
If, after the Effective Time, Certificates representing such shares are
presented for transfer to the Exchange Agent, they shall be cancelled and
exchanged for certificates representing shares of Parent Common Stock and/or
cash and certificates representing Warrants as provided in this Article II.
(d) Notwithstanding anything to the contrary contained herein,
no certificates or scrip representing fractional shares of Parent Common
Stock shall be issued upon the surrender for exchange of Certificates, no
dividend or distribution with respect to Parent Common Stock shall be payable
on or with respect to any fractional share, and such fractional share
interests shall not entitle the owner thereof to vote or to any other rights
of a shareholder of the Company. In lieu of the issuance of any such
fractional share, Parent shall pay to each former shareholder of the Company
who otherwise would be entitled to receive a fractional share of Parent
Common Stock, an amount in cash determined by multiplying (i) the Average
Closing Price by (ii) the fraction of a share of Parent Common Stock to which
such holder would otherwise be entitled to receive pursuant to Articles I and
II hereof.
(e) Any portion of the Exchange Fund that remains unclaimed by
the shareholders of the Company for twelve months after the Effective Time
shall be paid to Parent. Any shareholders of the Company who have not
theretofore complied with this Article II shall thereafter look only to
Parent for payment of their Warrants, shares of Parent Common Stock, cash and
unpaid dividends and distributions of the Parent Common Stock deliverable in
respect of each share of Company Common Stock such shareholder holds as
determined pursuant to this Agreement, in each case, without any interest
thereon. Notwithstanding the foregoing, none of Parent, the Company, the
Exchange Agent nor any other person shall be liable to any former holder of
shares of Company Common Stock for any amount properly delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws.
(f) In the event any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required
by Parent, the posting by such person of a bond in such amount as Parent may
direct as indemnity against any claim that may be made against it with
respect to such Certificate, the Exchange Agent will issue in exchange for
such lost, stolen or destroyed Certificate, the Warrants, shares of Parent
Common Stock and cash deliverable in respect thereof pursuant to this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Merger
Subsidiary as follows:
3.01 Corporate Organization.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Company has the corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it
makes such licensing or qualification necessary, except where the failure to
be so licensed or qualified would not have a Material Adverse Effect (as
defined below) on the Company and its Subsidiaries taken as a whole. As used
in this Agreement, the term "Material Adverse Effect" means, with respect to
Parent or the Company, as the case may be, a material adverse change in or
effect on the business, financial condition or results of operations of such
party and its subsidiaries taken as a whole, other than any such effect
attributable to or resulting from changes in interest rates or general
economic conditions. As used in this Agreement, the word "Subsidiary" when
used with respect to any party means any corporation, partnership or other
organization, whether incorporated or unincorporated, which is consolidated
with such party for financial purposes. The Company is duly registered as
a bank holding company under the Bank Holding Company Act of 1956, as amended
(the "BHC Act"). The Certificate of Incorporation and By-laws of the
Company, copies of which have previously been made available to Parent, are
true and complete copies of such documents as in effect as of the date of
this Agreement.
(b) The Bank is a savings bank duly organized, validly existing
and in good standing under the laws of The Commonwealth of Massachusetts.
The deposit accounts of the Bank are insured by the Federal Deposit Insurance
Corporation (the "FDIC") through the Bank Insurance Fund (the "BIF") or the
Savings Association Insurance Fund (the "SAIF") and by the Mutual Savings
Central Fund, Inc. (the "Central Fund"), through the Deposit Insurance Fund,
to the fullest extent permitted by law, and all premiums and assessments
required in connection therewith have been paid by the Bank. Each of the
Company's other Subsidiaries that is a "Significant Subsidiary" (defined for
purposes of this Agreement to mean subsidiaries other than those that are
either inactive or have an immaterial amount of assets) is a corporation,
partnership or business trust duly organized and, in the case of any such
corporation, is validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each Significant Subsidiary of the Company
has the power and authority to own or lease all of its properties and assets
and to carry on its business as it is now being conducted, and is duly
licensed or qualified to do business in each jurisdiction in which the nature
of the business conducted by it or the character or the location of the
properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or
qualified would not have a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole. The Amended and Restated Charter and By-laws
of the Bank and the Articles of Organization and By-laws of each other
Significant Subsidiary of the Company, copies of which have previously been
made available to Parent, are true and complete copies of such documents as
in effect as of the date of this Agreement.
(c) The minute books of the Company and the Bank contain true
and complete records in all material respects of all meetings since January
1, 1988 of their respective shareholders and Boards of Directors.
3.02 Capitalization.
(a) The authorized capital stock of the Company consists of
40,000,000 shares of Company Common Stock and 10,000,000 shares of preferred
stock, par value $0.10 per share (the "Company Preferred Stock"). As of the
date of this Agreement, there are (x) 8,660,394 shares of Company Common
Stock issued and outstanding and 873,433 shares of Company Common Stock held
in the Company's treasury, (y) no shares of Company Common Stock reserved for
issuance, except for 686,701 shares of Company Common Stock reserved for
issuance upon exercise of stock options (368,701 with respect to outstanding
stock options as of the date hereof) pursuant to the Company Stock Plan, and
(z) no shares of Company Preferred Stock issued or outstanding, held in the
Company's treasury or reserved for issuance, except for 150,000 shares of
Company Series A Junior Participating Cumulative Preferred Stock reserved for
issuance upon exercise of the rights (the "Company Rights") distributed to
holders of Company Common Stock pursuant to the Company Rights Agreement.
All of the issued and outstanding shares of Company Common Stock have been
duly authorized and validly issued and are fully paid, nonassessable and free
of preemptive rights. Except as referred to above or reflected in Section
3.02 of the Disclosure Schedule which is being delivered to Parent
concurrently herewith (the "Company Disclosure Schedule"), and except for the
Company Stock Plan and the Company Rights Agreement, the Company does not
have and is not bound by any outstanding subscriptions, options, warrants,
calls, commitments or agreements of any character calling for the purchase
or issuance of any shares of Company Common Stock or Company Preferred Stock
or any other equity security of the Company or any securities representing
the right to purchase or otherwise receive any shares of Company Common
Stock, Company Preferred Stock or any other equity security of the Company.
The names of the optionees, the date of each option to purchase Company
Common Stock granted, the number of shares subject to each such option, and
the price at which each such option may be exercised under the Company Stock
Plan are set forth in Section 3.02 of the Company Disclosure Schedule.
(b) The authorized capital stock of the Bank consists of
40,000,000 shares of common stock, par value $0.10 per share (the "Bank
Common Stock") and 10,000,000 shares of preferred stock, par value $0.10 per
share (the "Bank Preferred Stock"). As of the date of this Agreement, there
are (x) 10,000 shares of Bank Common Stock issued and outstanding and no
shares of Bank Common Stock held in the Bank's treasury, (y) no shares of
Bank Common Stock reserved for issuance, and (z) no shares of Bank Preferred
Stock issued or outstanding. Section 3.02 of the Company Disclosure Schedule
sets forth a true and correct list of all of the Company Subsidiaries as of
the date of this Agreement. Except as set forth in Section 3.02 of the
Company Disclosure Schedule, the Company owns, directly or indirectly, all
of the issued and outstanding shares of capital stock of each of the Company
Subsidiaries (or, in the case of Company Subsidiaries that are not
corporations, all of the outstanding partnership interests or beneficial
interests, as the case may be), free and clear of all liens, charges,
encumbrances and security interests whatsoever, and all of such shares of
capital stock are duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. No Company Subsidiary has or
is bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the purchase or
issuance of any shares of capital stock or any other equity security of such
Subsidiary or any securities representing the right to purchase or otherwise
receive any shares of capital stock or any other equity security of such
Subsidiary. Assuming compliance with Sections 1.06 and 1.07 hereof, at the
Effective Time, there will not be any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character by which the
Company or any of its Subsidiaries will be bound calling for the purchase or
issuance of any shares of the capital stock of the Company or any of its
Subsidiaries, other than shares reserved for issuance under the Company
Rights.
3.03 Authority; No Violation.
(a) The Company has all necessary corporate power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly and validly approved by the Board of Directors of the
Company. The Board of Directors of the Company has directed that this
Agreement and the transactions contemplated hereby be submitted to the
Company's shareholders for consideration at a meeting of such shareholders
and, except for the adoption of this Agreement by the requisite vote of the
Company's shareholders, no other corporate proceedings on the part of the
Company are necessary to approve this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Company and (assuming adoption of the Agreement
by the requisite vote of the Company's shareholders and the due
authorization, execution and delivery by Parent) constitutes a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforcement may be limited by general
principles of equity whether applied in a court of law or a court of equity
and by bankruptcy, insolvency and similar laws affecting creditors' rights
and remedies generally.
(b) The Bank has all necessary corporate power and authority to
execute and deliver the Bank Merger Agreement and to consummate the
transactions contemplated thereby. Upon the due and valid approval of the
Bank Merger Agreement by the Board of Directors of the Bank and by the
shareholders of the Bank, no other corporate proceedings on the part of the
Bank will be necessary to consummate the transactions contemplated thereby.
The Bank Merger Agreement, upon execution and delivery by the Bank, will be
duly and validly executed and delivered by the Bank and will (assuming
adoption of the Bank Merger Agreement by the requisite vote of the
shareholders of the Bank and Massachusetts Bank and the due authorization,
execution and delivery by Massachusetts Bank) constitute a valid and binding
obligation of the Bank, enforceable against the Bank in accordance with its
terms, except as enforcement may be limited by general principles of equity
whether applied in a court of law or a court of equity and by bankruptcy,
insolvency and similar laws affecting creditors' rights and remedies
generally.
(c) Except as set forth in Section 3.03 of the Company
Disclosure Schedule, neither the execution and delivery of this Agreement by
the Company or the Bank Merger Agreement by the Bank, nor the consummation
by the Company or the Bank, as the case may be, of the transactions
contemplated hereby or thereby, nor compliance by the Company or the Bank
with any of the terms or provisions hereof or thereof, will (i) violate any
provision of the Certificate of Incorporation or By-Laws of the Company or
the Amended and Restated Charter or By-laws of the Bank, (ii) assuming that
the consents and approvals referred to in Section 3.04 hereof are duly
obtained, (x) violate any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to the Company or the
Bank, or (y) violate, result in a breach of any provision of, constitute a
default under, or result in the creation of any material lien, pledge,
security interest, charge or other encumbrance upon any of the respective
properties or assets of the Company or any of its Significant Subsidiaries
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which the Company or any of its Significant Subsidiaries is a
party, or by which they or any of their respective properties or assets may
be bound or affected, except with respect to clause ii(x) and (y) above, for
such violations, breaches, defaults or creation of encumbrances which would
not have a Material Adverse Effect on the Company and its Subsidiaries taken
as a whole.
3.04 Consents and Approvals. Except for (A) the filing of
applications and notices with, and the consents and approvals of, as
applicable, (i) the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), (ii) the Office of the Comptroller of the Currency
(the "Comptroller"), (iii) the Board of Bank Incorporation of The
Commonwealth of Massachusetts (the "Massachusetts Board" or the "State
Banking Approval"), (iv) the Central Fund, (v) the Commissioner of Banks of
The Commonwealth of Massachusetts (the "Commissioner"), and (vi) the
Massachusetts Housing Partnership Fund (the "MHP Consent"), (B) the filing
with the Securities and Exchange Commission (the "SEC") of a registration
statement on Form S-4 (the "S-4") of which the proxy statement in definitive
form relating to the meeting of the Company's shareholders to be held in
connection with this Agreement and the transactions contemplated hereby (the
"Proxy Statement") will be included as a prospectus, (C) the approval of this
Agreement by the requisite vote of the shareholders of the Company, (D) the
filing of the Certificate of Merger with the Delaware Secretary pursuant to
the DGCL and the Articles of Merger with the Rhode Island Secretary pursuant
to the RIBCL, and (E) the approval of the Bank Merger Agreement by the
requisite vote of the Board of Directors and the shareholders of the Bank,
and except for such filings, authorizations or approvals as may be set forth
in Section 3.04 of the Company Disclosure Schedule, no consents or approvals
of or filings or registrations with any court, administrative agency or
commission or other governmental authority or instrumentality (each a
"Governmental Entity") or with any third party are necessary in connection
with (1) the execution and delivery by the Company of this Agreement and the
consummation by the Company of the Merger and the other transactions
contemplated hereby, and (2) the execution and delivery by the Bank of the
Bank Merger Agreement and the consummation by the Bank of the transactions
contemplated thereby, except where the failure to obtain such consents or
approvals, or to make such filings or registrations, would not prevent or
significantly delay the Merger or the Bank Merger or otherwise prevent the
Company or the Bank from performing their respective obligations under this
Agreement, or would not have a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole.
3.05 Loan Portfolio. Section 3.05 of the Company Disclosure Schedule
sets forth all of the Loans in original principal amount in excess of
$100,000 of the Company or any of its Subsidiaries that as of the date of
this Agreement are classified by the Bank or any bank regulatory examiner as
"Special Mention", "Substandard", "Doubtful", "Loss" or "Classified,"
together with the aggregate principal amount of and accrued and unpaid
interest on such loans by category. Except for normal examinations conducted
by (i) the Federal Reserve Board, (ii) the FDIC, and (iii) the Commissioner
or any other state bank regulatory authority (collectively, "Regulatory
Agencies"), in the regular course of the business of the Company and its
Subsidiaries, no Regulatory Agency has initiated any proceeding into the
business or operations of the Company or any of its Subsidiaries during the
last two years.
3.06 Financial Statements. The Company has previously made available
to Parent copies of the consolidated balance sheets of the Company and its
Subsidiaries as of December 31 for the fiscal years 1992 and 1993, and the
related consolidated statements of income, changes in shareholders' equity
and cash flows for the fiscal years 1991 through 1993, inclusive, as reported
in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 filed with the SEC under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The December 31, 1993 consolidated
balance sheet of the Company (including the related notes, where applicable)
fairly presents in all material respects the consolidated financial position
of the Company and its Subsidiaries as of the date thereof, and the other
financial statements referred to in this Section 3.06 (including the related
notes, where applicable) fairly present in all material respects, and the
financial statements referred to in Section 6.10 hereof will fairly present
(subject, in the case of the unaudited statements, to recurring audit
adjustments normal in nature and amount) in all material respects, the
results of the consolidated operations and changes in shareholders' equity
and consolidated financial position of the Company and its Subsidiaries for
the respective fiscal periods or as of the respective dates therein set forth
and each of such statements (including the related notes, where applicable)
has been, and the financial statements referred to in Section 6.10 hereof
will be, prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied during the periods involved, except as
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q.
3.07 Broker's Fees. Neither the Company nor any Company Subsidiary,
nor any of their respective officers or directors, has employed any broker
or finder or incurred any liability for any broker's fees, commissions or
finder's fees in connection with any of the transactions contemplated by this
Agreement or the Bank Merger Agreement, except that the Company has engaged,
and will pay a fee or commission to Salomon Brothers Inc in accordance with
the terms of a letter agreement between Salomon Brothers Inc and the Company.
3.08 Absence of Certain Changes or Events.
(a) Except as may be set forth in Section 3.08 of the Company
Disclosure Schedule or otherwise disclosed herein or in the Company Reports,
since December 31, 1993:
(i) there has not been any Material Adverse Effect on the
Company and its Subsidiaries taken as a whole;
(ii) there has not been any incurrence by the Company of
any liability that has had, or to the knowledge of the Company any
liability that could reasonably be expected to have, a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole;
(iii) there has not been any agreement, contract or
commitment entered into, or agreed to be entered into, except for those
in the ordinary course of business, none of which has had a Material
Adverse Effect on the Company and its Subsidiaries taken as a whole;
(iv) there has not been any change in any of the accounting
methods or practices of the Company or any of its Subsidiaries other
than changes required by applicable law or generally accepted
accounting principles.
(b) Except as set forth in Sections 3.08 or 5.01 of the Company
Disclosure Schedule, or as consented to by Parent, and except for any
increase, grant, payment or arrangement that, if effected after the date
hereof, would be permitted pursuant to Section 5.01, since December 31, 1993,
neither the Company nor any of its Subsidiaries has (i) increased the wages,
salaries, compensation, pension, or other fringe benefits or perquisites
payable to any executive officer, employee, or director from the amount
thereof in effect as of December 31, 1993 (which amounts have been previously
disclosed to Parent), granted any severance or termination pay, entered into
or amended any contract to make or grant any employment, severance or
termination pay, or paid any bonus or (ii) suffered any material strike, work
stoppage, slow-down, or other labor disturbance.
3.09 Legal Proceedings. Except as set forth in Section 3.09 of the
Company Disclosure Schedule, there are no pending or to the knowledge of the
Company, threatened, legal, administrative, arbitral or other proceedings,
claims, actions or governmental investigations of any nature against the
Company or any Significant Subsidiary of the Company, as to which there is
a reasonable likelihood of adverse determination and which if adversely
determined, would (i) have a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole, or (ii) as of the date hereof, prevent or
materially and adversely affect the Company's ability to consummate the
transactions contemplated hereby.
3.10 Taxes and Tax Returns. Each of the Company and its Subsidiaries
has filed all Federal, state and, to the best of the Company's knowledge,
material local, information returns and tax returns required to be filed by
it on or prior to the date hereof (all such returns being true and complete
in all material respects) and has paid or made provisions for the payment of
all taxes and other governmental charges, except where the non-filing of
which or the non-payment of which would not have a Material Adverse Effect
on the Company and its Subsidiaries taken as a whole, and which have been
incurred or are due or claimed to be due from it by Federal, state, county
or local taxing authorities on or prior to the date hereof other than taxes
or other charges which (i) are not yet delinquent or are being contested in
good faith and (ii) have not been finally determined. The amounts set up as
reserves for taxes on the consolidated balance sheet of the Company included
in its Form 10-K for the period ended December 31, 1993 for the payment of
all unpaid Federal, state, county and local taxes (including any interest or
penalties thereon), whether or not disputed, accrued or applicable, for the
period ended December 31, 1993 or for any year or period prior thereto, and
for which the Company or any of its Subsidiaries may be liable in its own
right or as transferee of the assets of, or successor to, any corporation,
person, association, partnership, joint venture or other entity, are adequate
under GAAP and are sufficient to cover all such taxes due, except where the
failure to so accrue would not have a Material Adverse Effect on the Company
and its Subsidiaries taken as a whole. The Company has not received any
written notice of any pending tax examinations or audits, material disputes
or claims asserted for taxes or assessments upon the Company or any of its
Subsidiaries, nor has the Company or any of its Subsidiaries been requested
to give any currently effective waivers extending the statutory period of
limitation applicable to any Federal, state, county or local income tax
return for any period.
3.11 Employees.
(a) Section 3.11 of the Company Disclosure Schedule sets forth
a true and complete list of each employee benefit plan, arrangement or
agreement that is maintained as of the date of this Agreement (the "Plans")
by the Company, any of its Significant Subsidiaries or by any trade or
business, whether or not incorporated (an "ERISA Affiliate"), all of which
together with the Company would be deemed a "single employer" within the
meaning of Section 4001 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
(b) The Company has heretofore made available to Parent true and
complete, in all material respects, copies of each of the Plans and all
related documents, including but not limited to (i) the most recent actuarial
report for such Plan (if applicable), and (ii) the most recent determination
letter from the Internal Revenue Service (if applicable) for such Plan.
(c) Each of the Plans has been operated and administered in all
material respects in accordance with applicable laws, including but not
limited to ERISA and the Code, (ii) each of the Plans intended to be
"qualified" within the meaning of Section 401(a) of the Code is so qualified,
(iii) with respect to each Plan which is subject to Title IV of ERISA, the
present value of accrued benefits under such Plan, based upon reasonable
actuarial assumptions used for funding purposes, did not, as of its latest
valuation date, exceed the then current value of the assets of such Plan
allocable to such accrued benefits, (iv) no liability under Title IV of ERISA
has been incurred by the Company, its Significant Subsidiaries or any ERISA
Affiliate that has not been satisfied in full, (v) no Plan is a
"multiemployer pension plan," as such term is defined in Section 3(37) of
ERISA, (vi) all contributions or other amounts payable by the Company or its
Significant Subsidiaries as of the Effective Time with respect to each Plan
in respect of current or prior plan years have been paid or accrued in
accordance with generally accepted accounting practices and Section 412 of
the Code, and (vii) neither the Company, its Significant Subsidiaries nor
any ERISA Affiliate has engaged in a transaction in connection with which the
Company, its Significant Subsidiaries or any ERISA Affiliate could be subject
to either a civil penalty assessed pursuant to Section 409 or 502(i) of ERISA
or a tax imposed pursuant to Section 4975 or 4976 of the Code, except in each
case above, where the failure to do so would not have a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole.
3.12 SEC Reports. The Company has previously made available to Parent
a true and complete, in all material respects, copy of each (a) final
registration statement, prospectus, report, schedule and definitive proxy
statement filed since January 1, 1990 by the Company with the SEC pursuant
to the Securities Act of 1933, as amended (the "Securities Act"), or the
Exchange Act (the "Company Reports"), and (b) communication mailed by the
Company to its shareholders since January 1, 1990, and, as of their
respective dates, no such Company Reports contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading.
3.13 Company Information. The information provided in writing by the
Company for inclusion in the Proxy Statement and the S-4 will not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances in
which they are made, not misleading.
3.14 Compliance with Applicable Law. The Company and each of its
Subsidiaries hold, and have at all times held, all material licenses,
franchises, permits and authorizations necessary for the lawful conduct of
their respective businesses under and pursuant to all, and have complied with
and are not in default under any, applicable law, statute, order, rule or
regulation of any Governmental Entity relating to the Company or any of its
Subsidiaries, except where the failure to hold such license, franchise,
permit or authorization or such noncompliance or default would not have a
Material Adverse Effect on the Company and its Subsidiaries taken as a whole,
and neither the Company nor any of its Subsidiaries has received notice of
any material violations of any of the above.
3.15 Certain Contracts.
(a) Except as set forth in Sections 6.07, 6.08, 6.09 of this
Agreement or in Sections 3.15 or 5.01 of the Company Disclosure Schedule or
in the Company Reports, neither the Company nor any of its Subsidiaries is
a party to or bound by any contract, arrangement, commitment or understanding
(i) with respect to the employment of any directors, officers, employees or
consultants, (ii) which, upon the consummation of the transactions
contemplated by this Agreement or the Bank Merger Agreement will result in
any payment becoming due from Parent, the Company, the Surviving Corporation,
the Surviving Bank or any of their respective Subsidiaries to any officer or
employee thereof, (iii) which is a material contract (as defined in Item
601(b)(10) of Regulation S-K of the SEC) to be performed after the date of
this Agreement that has not been filed or incorporated by reference in the
Company Reports, (iv) which is a consulting or other agreement (including
agreements entered into in the ordinary course and data processing, software
programming and licensing contracts) not terminable on 60 days or less notice
involving the payment of more than $250,000 per annum, (v) which materially
restricts the conduct of any line of business by the Company or any of its
Significant Subsidiaries, or (vi) with or to a labor union or guild
(including any collective bargaining agreement). Each contract, arrangement,
commitment or understanding of the type described in this Section 3.15(a),
whether or not set forth in Section 3.15 of the Company Disclosure Schedule,
is referred to herein as a "Company Contract".
(b) Each of the Company and its Subsidiaries has performed in
all material respects all obligations required to be performed by it to date
under each Company Contract, except where such noncompliance would not have
a Material Adverse Effect on the Company and its Subsidiaries taken as a
whole, and no event or condition exists which constitutes or, after notice
or lapse of time or both, would constitute, a material default on the part
of the Company or any of its Subsidiaries under any such Company Contract,
except where such default would not have a Material Adverse Effect on the
Company and its Subsidiaries taken as a whole.
3.16 Agreements with Regulatory Agencies. Except as set forth in
Section 3.16 of the Company Disclosure Schedule, neither the Company nor any
of its Subsidiaries is subject to any cease-and-desist or other order issued
by, or is a party to any written agreement, consent agreement or memorandum
of understanding (each a "Regulatory Agreement"), with any Regulatory Agency
or other Governmental Entity that restricts in any material respect the
conduct of its business or that relates to its capital adequacy, its credit
policies or its management, nor has the Company or any of its Subsidiaries
been notified by any Regulatory Agency or other Governmental Entity that it
is considering issuing or requesting any Regulatory Agreement.
3.17 Investment Securities. Section 3.17 of the Company Disclosure
Schedule sets forth the book and market value as of April 30, 1994 of the
investment securities, mortgage backed securities and securities held for
sale of the Company and its Subsidiaries.
3.18 Environmental Matters. Except as set forth in Section 3.18 of
the Company Disclosure Schedule:
(a) Each of the Company and its Subsidiaries is in compliance,
and for the last three years has been in compliance, with all applicable
laws, rules, regulations, standards and requirements adopted or enforced by
the United States Environmental Protection Agency (the "EPA") and of state
and local agencies with jurisdiction over pollution or protection of the
environment, except where such noncompliance or violations would not have a
Material Adverse Effect on the Company and its Subsidiaries taken as a whole;
and
(b) There is no suit, claim, action or proceeding pending before
any court or Governmental Entity in which the Company or any of its
Subsidiaries has been named as a defendant (x) for alleged noncompliance with
any environmental law, rule or regulation or (y) relating to the release into
the environment of any Hazardous Material (as hereinafter defined) or oil at
or on a site presently or formerly owned, leased or operated by the Company
or any of its Subsidiaries or, to the knowledge of the senior officers of the
Company, on a site with respect to which the Company has made a commercial
real estate loan and has a mortgage or security interest in, except where
such noncompliance or release would not have a Material Adverse Effect on the
Company and its Subsidiaries taken as a whole. "Hazardous Material" means
any pollutant, contaminant, or hazardous substance under the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. (section)9601
et seq., or any similar state law. With respect to the items described in
Section 3.18 of the Company Disclosure Schedule, neither the Company nor any
Subsidiary has taken any action which would result in any of them being
deemed to be "owners" or "operators" under any environmental law, rule or
regulation, except where any such action would not have a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole.
3.19 Assistance Agreements. Except as set forth in Section 3.19 of
the Company Disclosure Schedule or in the Company Reports, neither the
Company nor any of its Subsidiaries is a party to any agreement or
arrangement entered into in connection with the consummation of a federally
assisted acquisition of a depository institution pursuant to which the
Company or any of its Subsidiaries is entitled to receive financial
assistance or indemnification from any governmental agency.
3.20 Properties. The Company and each Company Subsidiary has good and
marketable title to all the real property and all other property owned by it
and included in the December 31, 1993 consolidated balance sheet of the
Company (the "Balance Sheet"), other than property disposed of in the
ordinary course of business after December 31, 1993, except where the failure
to so have title would not have a Material Adverse Effect on the Company and
its Subsidiaries taken as a whole, and owns such property subject to no
encumbrances, liens, mortgages, security interests or pledges, except (a)
those items that secure liabilities that are reflected in the Balance Sheet
or the notes thereto or incurred in the ordinary course of business after the
date of the Balance Sheet, (b) statutory liens for amounts not yet delinquent
or which are being contested in good faith, (c) those items that secure
public or statutory obligations or any discount with, borrowing from, or
other obligations to, any Federal Reserve Bank or Federal Home Loan Bank,
inter-bank credit facilities, or any transaction by a subsidiary acting in
a fiduciary capacity, and (d) such encumbrances, liens, mortgages, security
interests, and pledges that do not have a Material Adverse Effect on the
Company and its Subsidiaries taken as a whole. Neither the Company nor any
Company Subsidiary has received any notice of violation of any applicable
zoning regulation, ordinance or other law, order, regulation or requirement
relating to its properties, except such violations which would not have a
Material Adverse Effect on the Company and its Subsidiaries taken as a whole.
3.21 Insurance. To the knowledge of the Company, all of the policies
relating to insurance maintained by the Company or any Significant Subsidiary
with respect to its property and the conduct of its business (or any
comparable policies entered into as a replacement therefor) are in full force
and effect and neither the Company nor any Significant Subsidiary has
received any notice of cancellation with respect thereto.
3.22 Material Interests of Certain Persons. Except as disclosed in
the Company's proxy statement for its 1994 annual meeting of shareholders,
no officer or director of the Company, or any "associate" (as such term is
defined in Rule 14a-1 under the Exchange Act) of any such officer or
director, has any material interest in any material contract or property
(real or personal), tangible or intangible, used in or pertaining to the
business of the Company or any of the Company's Subsidiaries that would be
required to be disclosed in a proxy statement to shareholders under
Regulation 14A of the Exchange Act.
3.23 Regulatory Approvals. The Company is not, as of the date hereof,
aware of any reason why the regulatory approvals required to be obtained by
it or any of its Subsidiaries to consummate the Merger and the Bank Merger
would not be satisfied within the time frame customary for transactions of
the nature contemplated thereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to the Company as follows:
4.01 Corporate Organization.
(a) Parent is a corporation duly organized, validly existing and
in good standing under the laws of the State of Rhode Island. Parent has the
corporate power and authority to own or lease all of its properties and
assets and to carry on its business as it is now being conducted, and is duly
licensed or qualified to do business in each jurisdiction in which the nature
of the business conducted by it or the character or location of the
properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or
qualified would not have a Material Adverse Effect on Parent. Parent is duly
registered as a bank holding company under the BHC Act. The Restated
Articles of Incorporation and By-laws of Parent, copies of which have
previously been made available to the Company, are true and complete copies
of such documents as in effect as of the date of this Agreement.
(b) Massachusetts Bank is a national banking association duly
organized, validly existing and in good standing under the laws of the United
States. The deposit accounts of the Bank are insured by the FDIC through the
BIF to the fullest extent permitted by law, and all premiums and assessments
required in connection therewith have been paid by Massachusetts Bank.
Massachusetts Bank has the power and authority to own or lease all of its
properties and assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character or the location of the properties and assets owned or leased by it
makes such licensing or qualification necessary, except where the failure to
be so licensed or qualified would not have a Material Adverse Effect on
Massachusetts Bank. The Articles of Association and By-laws of Massachusetts
Bank, copies of which have previously been made available to the Company, are
true and complete copies of such documents as in effect as of the date of
this Agreement.
4.02 Capitalization.
(a) The authorized capitalized stock of Parent consists of:
(i) 300,000,000 shares of Parent Common Stock, of which at March 31, 1994,
137,617,952 shares were issued and outstanding, (ii) 16,000,000 shares of
Preferred Stock, par value $1.00 per share, ("Parent Preferred Stock"), of
which at March 31, 1994, (A) with respect to Cumulative and Adjustable
Dividends, 1,000,000 shares were designated and no shares were issued and
outstanding, (B) 12,553 shares were designated and 2,155 shares were issued
and outstanding as Series I 12% Cumulative Convertible Preferred Stock,
(C) 96,000 shares were designated and no shares were issued and outstanding
as Series II 6 1/2% Cumulative Convertible Preferred Stock, (D) 1,100,000
shares were designated and 519,758 shares were issued and outstanding as
Series III 10.12% Perpetual Preferred Stock, (E) 1,000,000 shares were
designated and 478,838 shares were issued and outstanding as Series IV 9.375%
Preferred Stock, (F) 1,500,000 shares were designated and no shares were
issued and outstanding as Cumulative Participating Junior Preferred Stock
pursuant to the Parent's Shareholder Rights Agreement ("Parent Rights"), and
(G) 1,415,000 shares were designated and outstanding as Dual Convertible
Preferred Stock and (iii) 1,500,000 shares of Preferred Stock, par value
$20.00 (the "Parent $20 Par Value Preferred Stock"), with Cumulative and
Adjustable Dividends, of which at such date, no shares were issued and
outstanding. As of March 31, 1994, there were 32,522,975 shares reserved for
issuance in connection with employee benefit, stock option, dividend
reinvestment, and stock purchase plans, warrants, the 6 1/2 Cumulative
Convertible Preferred Stock, the 12% Convertible Preferred Stock and the Dual
Convertible Preferred Stock. All of the issued and outstanding shares of
Parent Common Stock and Parent Preferred Stock have been duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive
rights. As of the date of this Agreement, except as referred to above or
reflected in Parent's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 filed with the SEC under the Exchange Act (the "Parent 1993
10-K"), Parent does not have and is not bound by any outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of Parent Common
Stock, Parent Preferred Stock or Parent $20 Par Value Preferred Stock or any
other equity security of Parent or any securities representing the right to
purchase or otherwise receive any shares of Parent Common Stock, Parent
Preferred Stock or Parent $20 Par Value Preferred Stock or any other equity
security of Parent. The shares of Parent Common Stock to be issued pursuant
to the Merger will be duly authorized and validly issued and, at the
Effective Time, all such shares will be fully paid, nonassessable and free
of preemptive rights. The Warrants and Warrant Shares have been duly
authorized and when issued will be fully paid, nonassessable and free of
preemptive rights. As of the Effective Time, Parent will have reserved
2,500,000 authorized but unissued shares of Parent Common Stock for issuance
upon exercise of the Warrants.
(b) The authorized capital stock of Massachusetts Bank consists
of 1,000,000 shares of common stock, par value $15.00 per share, 1,000,000
of which are issued and outstanding. Fleet Banking Group, Inc., a wholly-
owned subsidiary of Parent, owns all of the issued and outstanding shares of
capital stock of Massachusetts Bank, free and clear of all liens, charges,
encumbrances and security interests whatsoever, and all of such shares of
capital stock are duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. Massachusetts Bank does not
have and is not bound by any outstanding subscriptions, options, warrants,
calls, commitments or agreements of any character with any party that is not
a direct or indirect Subsidiary of Parent calling for the purchase or
issuance of any shares of capital stock or any other equity security of
Massachusetts Bank or any securities representing the right to purchase or
otherwise receive any shares of capital stock or any other equity security
of Massachusetts Bank.
4.03 Authority; No Violation.
(a) Parent has all necessary corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Parent
and the consummation by Parent of the transactions contemplated hereby have
been duly and validly approved by the Board of Directors of Parent, and no
other corporate proceedings on the part of Parent are necessary to consummate
the transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by Parent and (assuming adoption of the
Agreement by the requisite vote of the Company's shareholders and the due
authorization, execution and delivery by the Company) constitutes a valid and
binding obligation of Parent, enforceable against Parent in accordance with
its terms, except as enforcement may be limited by general principles of
equity whether applied in a court of law or a court of equity and by
bankruptcy, insolvency and similar laws affecting creditors' rights and
remedies generally.
(b) Massachusetts Bank has all necessary corporate power and
authority to execute and deliver the Bank Merger Agreement and to consummate
the transactions contemplated thereby. Upon the due and valid approval of
the Bank Merger Agreement by Parent as the sole shareholder of Massachusetts
Bank, and by the Board of Directors of Massachusetts Bank, no other corporate
proceedings on the part of Massachusetts Bank will be necessary to consummate
the transactions contemplated thereby. The Bank Merger Agreement, upon
execution and delivery by Massachusetts Bank, will be duly and validly
executed and delivered by Massachusetts Bank and will (assuming adoption of
the Bank Merger Agreement by the requisite vote of the shareholders of the
Bank and Massachusetts Bank and the due authorization, execution and delivery
by the Bank) constitute a valid and binding obligation of Massachusetts Bank,
enforceable against Massachusetts Bank in accordance with its terms, except
as enforcement may be limited by general principles of equity whether applied
in a court of law or a court of equity and by bankruptcy, insolvency and
similar laws affecting creditors' rights and remedies generally.
(c) Neither the execution and delivery of this Agreement by
Parent or the Bank Merger Agreement by Massachusetts Bank, nor the
consummation by Parent or Massachusetts Bank, as the case may be, of the
transactions contemplated hereby or thereby, nor compliance by Parent or
Massachusetts Bank with any of the terms or provisions hereof or thereof,
will (i) violate any provision of the Restated Articles of Incorporation or
By-Laws of Parent or the Articles of Association or By-laws or similar
governing documents of Massachusetts Bank, as the case may be, or
(ii) assuming that the consents and approvals referred to in Section 4.04 are
duly obtained, (x) violate any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to Parent or
Massachusetts Bank or any of Parent's Significant Subsidiaries, or (y)
violate, result in a breach of any provision of, constitute a default under,
or result in the creation of any material lien, pledge, security interest,
charge or other encumbrance upon any of the respective properties or assets
of Parent or Massachusetts Bank or any of Parent's Significant Subsidiaries
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which Parent or Massachusetts Bank or any of Parent's
Significant Subsidiaries is a party, or by which they or any of their
respective properties or assets may be bound or affected, except with respect
to clause ii(x) and (y) above, for such violations, breaches or defaults
which would not have a Material Adverse Effect on Parent.
4.04 Consents and Approvals. Except for (A) the filing of
applications and notices with, and the consents and approvals of, as
applicable (i) the Federal Reserve Board, (ii) the Comptroller, (iii) the
State Banking Approval, (iv) the Commissioner, (v) the Central Fund, (vi) the
MHP Consent, (B) the filing with the SEC of the S-4 of which the Proxy
Statement will be included as a prospectus, (C) the filing of the Certificate
of Merger with the Delaware Secretary and the filing of Articles of Merger
with the Rhode Island Secretary, (D) the approval of the Bank Merger
Agreement by the requisite vote of the Board of Directors and sole
shareholder of Massachusetts Bank, and except for such filings and approvals
as are required to be made or obtained under the securities or "Blue Sky"
laws of various states in connection with the issuance of the shares of
Parent Common Stock, Warrants and Warrant Shares pursuant to this Agreement
and such filings, authorizations or approvals as may be set forth in Section
4.04 of the Disclosure Schedule which is being delivered by Parent to the
Company herewith (the "Parent Disclosure Schedule"), no consents or approvals
of or filings or registrations with any Governmental Entity or with any third
party are necessary in connection with (1) the execution and delivery by
Parent and Merger Subsidiary of this Agreement and the consummation by Parent
and Merger Subsidiary of the Merger and the other transactions contemplated
hereby, and (2) the execution and delivery by Massachusetts Bank of the Bank
Merger Agreement and the consummation by Massachusetts Bank of the
transactions contemplated thereby, except where the failure to obtain such
consents or approvals, or to make such filings or registrations, would not
prevent or delay the Merger or the Bank Merger or otherwise prevent Parent
or Merger Subsidiary from performing their respective obligations under this
Agreement or prevent Massachusetts Bank from performing its obligations under
the Bank Merger Agreement, or would not have a Material Adverse Effect on
Parent. The vote of the holders of the outstanding shares of Parent Common
Stock is not required to approve this Agreement or the transactions
contemplated hereby.
4.05 Financial Statements. Parent has previously made available to
the Company copies of the consolidated balance sheets of Parent and its
Subsidiaries as of December 31 for the fiscal years 1992 and 1993 and the
related consolidated statements of income, changes in shareholders' equity
and cash flows for the fiscal years 1991 through 1993, inclusive, as reported
in the Parent 1993 10-K. The December 31, 1993 consolidated balance sheet
of Parent (including the related notes, where applicable) fairly presents in
all material respects the consolidated financial position of Parent and its
Subsidiaries as of the date thereof, and the other financial statements
referred to in this Section 4.05 (including the related notes where
applicable) fairly present in all material respects, and the financial
statements referred to in Section 6.10 hereof will fairly present (subject,
in the case of the unaudited statements, to recurring audit adjustments
normal in nature and amount) in all material respects, the results of the
consolidated operations and changes in shareholders' equity and consolidated
financial position of Parent and its Subsidiaries for the respective fiscal
periods or as of the respective dates therein set forth and each of such
statements (including the related notes, where applicable) has been, and the
financial statements referred to in Section 6.10 hereof will be, prepared in
accordance with GAAP consistently applied during the periods involved, except
as indicated in the notes thereto or, in the case of unaudited statements,
as permitted by Form 10-Q.
4.06 Broker's Fees. Neither Parent, Massachusetts Bank or any Parent
Subsidiary, nor any of their respective officers or directors, has employed
any broker or finder or incurred any liability for any broker's fees,
commissions or finder's fees in connection with any of the transactions
contemplated by this Agreement or the Bank Merger Agreement.
4.07 Absence of Certain Changes or Events.
(a) Since December 31, 1993:
(i) there has not been any Material Adverse Effect on
Parent and its Subsidiaries taken as a whole;
(ii) there has not been any incurrence by Parent of any
liability that has had, or to the knowledge of Parent could reasonably
be expected to have, a Material Adverse Effect on Parent and its
Subsidiaries taken as a whole;
(iii) there has not been any agreement, contract or
commitment entered into, or agreed to be entered into, except for those
in the ordinary course of business none of which has had a Material
Adverse Effect on Parent and its Subsidiaries taken as a whole;
(iv) there has not been any change in any of the accounting
methods or practices of Parent or any of its Subsidiaries other than
changes required by applicable law or generally accepted accounting
principles.
4.08 Legal Proceedings. There are no pending or to the knowledge of
Parent, threatened, legal, administrative, arbitral or other proceedings,
claims, actions or governmental investigations of any nature against Parent
or any Significant Subsidiary of Parent, as to which there is a reasonable
likelihood of adverse determination and which if adversely determined, would
(i) have a Material Adverse Effect on Parent and its Subsidiaries taken as
a whole, or (ii) as of the date hereof, prevent or materially and adversely
affect Parent's ability to consummate the transactions contemplated hereby.
4.09 SEC Reports. Parent has previously made available to the Company
a true and complete, in all material respects, copy of each (a) final
registration statement, prospectus, report, schedule and definitive proxy
statement filed since January 1, 1990 by Parent with the SEC pursuant to the
Securities Act or the Exchange Act (the "Parent Reports") and
(b) communication mailed by Parent to its shareholders since January 1, 1990,
and, as of their respective dates, no such Parent Reports contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances in which they were made, not
misleading.
4.10 Parent and Merger Subsidiary Information. The information
provided in writing by Parent or Merger Subsidiary for inclusion in the Proxy
Statement and the S-4 will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances in which they are made, not
misleading.
4.11 Compliance with Applicable Law. Parent and each of its
Subsidiaries holds, and have at all times held, all material licenses,
franchises, permits and authorizations necessary for the lawful conduct of
their respective businesses under and pursuant to all, and have complied with
and are not in default under any, applicable law, statute, order, rule or
regulation of any Governmental Entity relating to Parent or any of its
Subsidiaries, except where the failure to hold such license, franchise,
permit or authorization or such noncompliance or default would not have a
Material Adverse Effect on Parent, and neither Parent nor any of its
Subsidiaries has received notice of any material violations of any of the
above.
4.12 Ownership of Company Common Stock; Affiliates and Associates.
Neither Parent nor any of its affiliates or associates (as such terms are
defined under the Exchange Act), (i) beneficially own, directly or
indirectly, or (ii) is a party to any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of, in each case,
any shares of capital stock of the Company (other than Trust Account Shares
and DPC Shares). Neither Parent nor any of its Subsidiaries is an
"affiliate" (as such term is defined in DGCL (section)202(c)(1)) or an
"associate" (as such term is defined in DGCL (section)203(C)(2)) of the Company.
4.13 Agreements with Regulatory Agencies. Except as set forth in
Section 4.13 of the Parent Disclosure Schedule or as disclosed in Parent's
Annual Report on Form 10-K for the year ended December 31, 1993, neither
Parent nor any of its Subsidiaries is subject to any cease-and-desist or
other order issued by, or is a party to any Regulatory Agreement with any
Regulatory Agency or other Governmental Entity that restricts in any material
respect the conduct of its business or that relates in any manner to its
capital adequacy, its credit policies or its management, nor has Parent or
any of its Subsidiaries been notified by any Regulatory Agency or other
Governmental Entity that it is considering issuing or requesting any
Regulatory Agreement.
4.14 Regulatory Approvals. Parent is not, as of the date hereof,
aware of any reason why the regulatory approvals required to be obtained by
it or any of its Subsidiaries to consummate the Merger and the Bank Merger
would not be satisfied within the time frame customary for transactions of
the nature contemplated thereby.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.01 Covenants of the Company. During the period from the date of
this Agreement and continuing until the Effective Time, except as expressly
contemplated or permitted by this Agreement or the Bank Merger Agreement or
with the prior written consent of Parent, the Company and its Subsidiaries
shall carry on their respective businesses in the ordinary course consistent
with past practice. The Company will use all reasonable efforts to
(x) preserve its business organization and that of its Significant
Subsidiaries intact, (y) keep available to itself and Parent the present
services of the employees of the Company and its Significant Subsidiaries and
(z) preserve for itself and Parent the goodwill of the customers of the
Company and its Significant Subsidiaries and others with whom business
relationships exist. Without limiting the generality of the foregoing, and
except as set forth in Section 5.01 of the Company Disclosure Schedule or as
otherwise contemplated by this Agreement or consented to in writing by
Parent, the Company shall not, and shall not permit any of its Subsidiaries
to:
(a) solely in the case of the Company, declare or pay any
dividends on, or make other distributions in respect of, any of its
capital stock, except (i) for the declaration and payment of regular
quarterly cash dividends in an amount not to exceed $0.30 per share of
Company Common Stock, provided, however, that the Company's regular
quarterly cash dividend may be increased by up to ten percent per share
beginning in the first quarter of 1995, and (ii) that the parties agree
(x) to consult with respect to the amount of the last Company quarterly
dividend payable prior to the Effective Time with the objective of
assuring that the shareholders of the Company do not experience a
shortfall based on the record and payment dates of their last dividend
prior to the Merger and (y) that the Company may pay a special dividend
to holders of record of Company Common Stock immediately prior to the
Effective Time consistent with the objective described in clause (x)
above;
(b) (i) split, combine or reclassify any shares of its capital
stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of
its capital stock except upon the exercise or fulfillment of rights or
options issued or existing pursuant to employee benefit plans, programs
or arrangements, all to the extent outstanding and in existence on the
date of this Agreement, or (ii) repurchase, redeem or otherwise acquire
(except for the acquisition of shares pursuant to the Bank ESOP or of
Trust Account Shares and DPC Shares), any shares of the capital stock
of the Company or any Company Subsidiary, or any securities convertible
into or exercisable for any shares of the capital stock of the Company
or any Company Subsidiary;
(c) issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any shares of its capital stock or any
securities convertible into or exercisable for, or any rights, warrants
or options to acquire, any such shares, or enter into any agreement
with respect to any of the foregoing, other than (i) the issuance of
Company Common Stock pursuant to stock options or similar rights to
acquire Company Common Stock granted pursuant to the Company Stock Plan
and outstanding prior to the date of this Agreement, or (ii) the sale
of Company Common Stock under the Bank ESOP, in accordance with their
present terms;
(d) amend its Certificate of Incorporation or By-laws;
(e) enter into any real property lease for a term longer than
one year;
(f) make any capital expenditures in excess of $500,000 in the
aggregate;
(g) enter into any new line of business;
(h) acquire or agree to acquire, by merging or consolidating
with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any
business or any corporation, partnership, association or other business
organization or division thereof or otherwise acquire any assets, other
than in connection with foreclosures, settlements in lieu of
foreclosure or troubled loan or debt restructurings in the ordinary
course of business, which would be material to the Company;
(i) take any action that is intended or would result in any of
its representations and warranties set forth in this Agreement being
or becoming untrue in any material respect, or in any of the conditions
to the Merger set forth in Article VII not being satisfied, or in a
violation of any provision of this Agreement or the Bank Merger
Agreement, except, in every case, as may be required by applicable law;
(j) change its methods of accounting in effect at December 31,
1993, except as required by changes in GAAP or regulatory accounting
principles as concurred to by the Company's independent auditors;
(k) except as required by applicable law or to maintain
qualification pursuant to the Code, (i) adopt, amend, renew or
terminate any Plan or any agreement, arrangement, plan or policy
between the Company or any Company Subsidiary and one or more of its
current or former directors, officers or employees or (ii) except for
normal increases in the ordinary course of business consistent with
past practice or as set forth in Section 5.01 of the Company Disclosure
Schedule, increase in any manner the compensation or fringe benefits
of any director, officer or employee or pay any benefit not required
by any plan or agreement as in effect as of the date hereof (including,
without limitation, the granting of stock options, stock appreciation
rights, restricted stock, restricted stock units or performance units
or shares);
(l) except in the case that the Alternative Merger is to be
consummated, knowingly take or cause to be taken any action which would
disqualify the Merger as a tax free reorganization under Section 368
of the Code;
(m) other than activities in the ordinary course of business
consistent with prior practice, sell, lease, encumber, assign or
otherwise dispose of, or agree to sell, lease, encumber, assign or
otherwise dispose of, any of its material assets, properties or other
rights or agreements;
(n) other than in the ordinary course of business consistent
with past practice, incur any indebtedness for borrowed money, assume,
guarantee, endorse or otherwise as an accommodation become responsible
for the obligations of any other individual, corporation or other
entity;
(o) file any application to open, relocate or terminate the
operations of any banking office of the Bank;
(p) make any equity investment or commitment to make such an
investment in real estate or in any real estate development project,
other than in connection with foreclosures, settlements in lieu of
foreclosure or troubled loan or debt restructurings in the ordinary
course of business;
(q) purchase or sell loans in bulk;
(r) foreclose upon or take deed or title to any commercial real
estate without first conducting a Phase I environmental assessment of
the property; or foreclose upon such commercial real estate if such
environmental assessment indicates the presence of hazardous material
in amounts which, if such foreclosure were to occur, would be
reasonably likely to result in a Material Adverse Effect on the Company
and its Subsidiaries taken as a whole;
(s) subject to Section 6.14, change the Company's policies and
practices with respect to asset liability management in any material
respect; or
(t) agree to do any of the foregoing.
5.02 No Solicitation. Neither the Company nor any Company Subsidiary
nor any of the directors, officers, employees, representatives or agents of
the Company or other persons controlled by the Company shall, except to the
extent required by applicable law relating to fiduciary obligations of
directors, upon advice of counsel, solicit or hold discussions or
negotiations with, or assist or provide any information to, any person,
entity, or group (other than Parent) concerning any merger, disposition of
a significant portion of its assets, or acquisition of a significant portion
of its capital stock or similar transactions involving the Company or any
Company Subsidiary. Nothing contained in this Section 5.02 shall prohibit
the Company or its Board of Directors from taking and disclosing to the
Company's shareholders a position with respect to a tender offer by a third
party pursuant to Rules 14d-9 and 14e-2 promulgated under the Exchange Act
or making such other disclosure to the Company's shareholders which, in the
judgment of the Board of Directors, based upon the advice of counsel, may be
required under applicable law. The Company will promptly communicate to
Parent the terms of any proposal, discussion, negotiation, or inquiry
relating to a merger or disposition of a significant portion of its capital
stock or similar transaction involving the Company or any Company Subsidiary
and the identity of the party making such proposal or inquiry, which it
receives with respect to any such transaction.
5.03 Covenants of Parent. During the period from the date of this
Agreement and continuing until the Effective Time, except as expressly
contemplated or permitted by this Agreement or with the prior written consent
of the Company, Parent and its Subsidiaries shall carry on their respective
businesses in the ordinary course consistent with past practice and use all
reasonable efforts to preserve intact their present business organizations
and relationships. Without limiting the generality of the foregoing and as
otherwise contemplated by this Agreement or consented to in writing by the
Company, Parent shall not, and shall not permit any of its Subsidiaries to:
(a) take any action that is intended or would result in any of
its representations and warranties set forth in this Agreement being
or becoming untrue in any material respect, or in any of the conditions
to the Merger set forth in Article VII not being satisfied, or in a
violation of any provision of this Agreement or the Bank Merger
Agreement, except, in every case, as may be required by applicable law;
(b) change its methods of accounting in effect at December 31,
1993, except in accordance with changes in GAAP or regulatory
accounting principles as concurred to by Parent's independent auditors;
(c) except in the case that the Alternative Merger is to be
consummated, knowingly take or cause to be taken any action which would
disqualify the Merger as a tax free reorganization under Section 368
of the Code;
(d) take or cause to be taken any action which would, or may
reasonably be expected to, significantly delay or otherwise adversely
affect the regulatory approvals required to consummate the Merger; or
(e) agree to do any of the foregoing.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Regulatory Matters.
(a) The Company shall promptly prepare the Proxy Statement and
Parent shall promptly prepare and file with the SEC the S-4, in which the
Proxy Statement will be included as a prospectus. The S-4 will constitute
the Registration Statement registering the issuance of the Warrants and
Parent Common Stock pursuant to this Agreement and the issuance of the
Warrant Shares upon exercise of the Warrants. Each of the Parent and the
Company shall use their best efforts to have the S-4 declared effective under
the Securities Act as promptly as practicable after such filing, and the
Company shall thereafter promptly mail the Proxy Statement to its
shareholders. Parent shall also use its best efforts to obtain all necessary
state securities law or "Blue Sky" permits and approvals required to carry
out the transactions contemplated by this Agreement and the Bank Merger
Agreement, and the Company shall furnish all information concerning the
Company and the holders of the Company Common Stock as may be reasonably
requested in connection with any such action.
(b) The parties hereto shall cooperate with each other and use
their best efforts to promptly prepare and file all necessary documentation,
to effect all applications, notices, petitions and filings, and to obtain as
promptly as practicable all permits, consents, approvals and authorizations
of all third parties and Governmental Entities which are necessary or
advisable to consummate the transactions contemplated by this Agreement
(including without limitation the Merger and the Bank Merger). The Company
and Parent shall have the right to review in advance, and to the extent
practicable each will consult with the other on, in each case subject to
applicable laws relating to the exchange of information, all the information
relating to the Company or Parent, as the case may be, and any of their
respective Subsidiaries, which appear in any filing made with or written
materials submitted to, any third party or any Governmental Entity in
connection with the transactions contemplated by this Agreement. In
exercising the foregoing right, each of the parties hereto shall act
reasonably and as promptly as practicable. The parties hereto agree that
they will consult with each other with respect to the obtaining of all
permits, consents, approvals and authorizations of all third parties and
Governmental Entities necessary or advisable to consummate the transactions
contemplated by this Agreement and each party will keep the other apprised
of the status of matters relating to completion of the transactions
contemplated herein.
(c) Parent and the Company shall, upon request, furnish each
other with all information concerning themselves, their respective
Subsidiaries, directors, officers and shareholders and such other matters as
may be reasonably necessary or advisable in connection with the Proxy
Statement, the S-4 or any other statement, filing, notice or application made
by or on behalf of Parent, the Company or any of their respective
Subsidiaries to any Governmental Entity in connection with the Merger and the
other transactions contemplated hereby.
(d) Parent and the Company shall promptly furnish each other
with copies of written communications received by Parent or the Company, as
the case may be, or any of their respective Subsidiaries from, or delivered
by any of the foregoing to, any Governmental Entity in respect of the
transactions contemplated hereby.
6.02 Access to Information.
(a) Upon reasonable notice and subject to applicable laws
relating to the exchange of information, the Company shall, and shall cause
each of its Subsidiaries to, afford to the officers, employees, accountants,
counsel and other representatives of Parent, access, during normal business
hours during the period prior to the Effective Time, to all its properties,
books, contracts, commitments and records and, during such period, the
Company shall, and shall cause its Subsidiaries to, make available to Parent
(i) a copy of each report, schedule, registration statement and other
document filed or received by it during such period pursuant to the
requirements of Federal securities laws or Federal or state banking laws
(other than reports or documents which the Company is not permitted to
disclose under applicable law) and (ii) all other information concerning its
business, properties and personnel as Parent may reasonably request (other
than information which the Company is not permitted to disclose under
applicable law). Neither the Company nor any of its Subsidiaries shall be
required to provide access to or to disclose information where such access
or disclosure would violate or prejudice the rights of the Company's
customers, jeopardize the attorney-client privilege of the institution in
possession or control of such information or contravene any law, rule,
regulation, order, judgment, decree, fiduciary duty or binding agreement
entered into prior to the date of this Agreement. The parties hereto will
make appropriate substitute disclosure arrangements under circumstances in
which the restrictions of the preceding sentence apply. Parent will hold all
such information in confidence to the extent required by, and in accordance
with, the provisions of the confidentiality agreement, dated April 11, 1994,
between Parent and the Company (the "Confidentiality Agreement").
(b) Upon reasonable notice and subject to applicable laws
relating to the exchange of information, Parent shall, and shall cause its
Subsidiaries to, afford to the officers, employees, accountants, counsel and
other representatives of the Company and the Bank, access, during normal
business hours during the period prior to the Effective Time, to such
information regarding Parent and its Subsidiaries as shall be reasonably
necessary for the Company to fulfill its obligations pursuant to this
Agreement to prepare the Proxy Statement or which may be reasonably necessary
for the Company to confirm that the representations and warranties of Parent
contained herein are true and correct and that the covenants of Parent
contained herein have been performed in all material respects. Neither
Parent nor any of its Subsidiaries shall be required to provide access to or
to disclose information where such access or disclosure would violate or
prejudice the rights of Parent's customers, jeopardize the attorney-client
privilege of the institution in possession or control of such information or
contravene any law, rule, regulation, order, judgment, decree, fiduciary duty
or binding agreement entered into prior to the date of this Agreement. The
parties hereto will make appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence apply.
During the period from the date of this Agreement to the Effective Time,
Parent will cause one or more of its designated representatives to confer on
a regular and frequent basis (not less than monthly) with representatives of
the Company and the Bank and to report the general status of the ongoing
operations of Parent and its Subsidiaries.
(c) All information furnished by Parent to the Company or its
representatives pursuant hereto shall be treated as the sole property of
Parent and, if the Merger shall not occur, the Company and its
representatives shall return to Parent or destroy all of such written
information and all documents, notes, summaries or other materials
containing, reflecting or referring to, or derived from, such information.
The Company shall, and shall use its reasonable efforts to cause its
representatives to, keep confidential all such information, and shall not
directly or indirectly use such information for any competitive or other
commercial purpose. The obligation to keep such information confidential
shall continue from the date the proposed Merger is abandoned and shall not
apply to (i) any information which (x) was already in the Company's
possession prior to the disclosure thereof by Parent; (y) was then generally
known to the public; or (z) was disclosed to the Company by a third party not
bound by an obligation of confidentiality or (ii) disclosures made as
required by law. It is further agreed that, if in the absence of a
protective order or the receipt of a waiver hereunder the Company is
nonetheless, in the opinion of its counsel, compelled to disclose information
concerning Parent to any tribunal or governmental body or agency or else
stand liable for contempt or suffer other censure or penalty, the Company may
disclose such information to such tribunal or governmental body or agency
without liability hereunder.
6.03 Shareholder Meeting. The Company shall take all steps necessary
to duly call, give notice of, convene and hold a meeting of its shareholders
to be held as soon as is reasonably practicable after the date on which the
S-4 becomes effective for the purpose of voting upon the approval of this
Agreement. The Company will, through its Board of Directors, recommend to
its shareholders approval of this Agreement and the transactions contemplated
hereby and such other matters as may be submitted to its shareholders in
connection with this Agreement; provided, however, that nothing contained in
this Section 6.03 or elsewhere in this Agreement shall prohibit the Company's
Board of Directors from failing to make such recommendation or modifying or
withdrawing its recommendation, if such Board shall have concluded in good
faith with the advice of counsel that such action is required to prevent such
Board from breaching its fiduciary duties to the shareholders of the Company,
and no such action shall constitute a breach of this Agreement.
6.04 Legal Conditions to Merger. Each of Parent and the Company
shall, and shall cause each of its Subsidiaries to, use its best efforts
(a) to take, or cause to be taken, all actions necessary, proper or advisable
to comply promptly with all legal requirements which may be imposed on such
party or its Subsidiaries with respect to the Merger or the Bank Merger and,
subject to the conditions set forth in Article VII hereof, to consummate the
transactions contemplated by this Agreement and (b) to obtain (and to
cooperate with the other party to obtain) any consent, authorization, order
or approval of, or any exemption by, any Governmental Entity and any other
third party which is required to be obtained by the Company or Parent or any
of their respective Subsidiaries in connection with the Merger and the Bank
Merger and the other transactions contemplated by this Agreement. Parent
also agrees to accept any conditions related to savings bank life insurance,
the discontinuation of impermissible activities or the divestiture of the
Company's or the Bank's direct or indirect interests in real estate or other
investments which are required by any Regulatory Agency in connection with
procuring the regulatory approvals required to consummate the Merger and the
Bank Merger.
6.05 Restrictions on Resale. The Company shall use all reasonable
efforts to cause each director, executive officer and other person of the
Company who, at the time of the shareholder's meeting called by the Company
to approve this Agreement, is an "affiliate" of the Company (for purposes of
Rule 145 under the Securities Act) and who has indicated to the Company that
such person intends to elect to receive Parent Common Stock pursuant to the
Merger, to execute "affiliate letters" prior to the Effective Time providing
that such person will not sell, pledge, transfer or otherwise dispose of any
shares of Parent Common Stock received by such person in the Merger except
in compliance with the applicable provisions of the Securities Act and the
rules and regulations thereunder. Parent shall use all reasonable efforts
to comply with Rule 144(c) under the Securities Act in order that all such
persons may resell such Parent Common Stock pursuant to Rule 145(d) under the
Securities Act.
6.06 Stock Exchange Listing. Parent shall cause the Warrants and the
shares of Parent Common Stock to be issued in the Merger and the Warrant
Shares to be approved for listing on the Stock Exchange, subject to official
notice of insurance, prior to the Effective Time.
6.07 Employee Benefit Plans.
(a) From and after the Effective Time and subject to applicable
law, the Surviving Corporation and the Surviving Bank shall provide the
employees of the Company ("Company Employees") with the same benefits
provided to its own employees; provided, that Parent shall not treat any such
employee as a "new" employee for purposes of any exclusion for an existing
condition under any health, dental or similar plan of Parent, the Surviving
Corporation, or the Surviving Bank. Notwithstanding anything to the contrary
herein, with respect to benefits payable to employees who shall have retired
from the Company and its Subsidiaries, whether before or after the Effective
Time, the Surviving Corporation and the Surviving Bank shall in no event take
any action to reduce such benefits and shall take such action as it deems
appropriate from time to time with respect to possible increases in the level
of such benefits, taking into consideration among other factors any similar
increases which Parent shall have effected with respect to its retired
employees.
(b) With respect to the provision of benefits to the Company's
employees pursuant to Section 6.07(a) hereof, to the extent that Company
Employees become participants in any employee benefit plans maintained by the
Surviving Corporation, the Surviving Bank, Parent or any of its Subsidiaries
("Parent Plans"), Company Employees shall be credited under the Parent Plans
for all prior years of service with the Company and any Subsidiary of the
Company (and any entities acquired by the Company or the Bank to the same
extent as the Company or the Bank recognize such service) for all purposes,
including but not limited to eligibility and vesting, vacation time and
401(k) plans, but excluding benefit accrual under the qualified defined
benefit pension plan of the Surviving Corporation, the Surviving Bank, Parent
or any of its Subsidiaries, to the extent of any duplication in benefits, to
the extent such service was recognized by the Company or any Subsidiary of
the Company under any of its plans.
(c) The provisions of this Section 6.07 are expressly intended
to be for the irrevocable benefit of, and shall be enforceable by, each
officer and employee covered hereby and his or her heirs and representatives.
6.08 Employee Termination And Other Benefits.
(a) Following the Effective Time, Parent shall honor and shall
cause the Company and the Bank, or any of their respective successors,
including without limitation, the Surviving Corporation and the Surviving
Bank, to honor in accordance with their terms all employment, severance and
other compensation agreements and arrangements which are between the Company
or the Bank and any director, officer or employee thereof and which have been
disclosed in Section 5.01 of the Company Disclosure Schedule, and to assume
all duties, liabilities and obligations under such agreements. Parent agrees
for itself and its Subsidiaries that the consummation of the transactions
contemplated hereby is a "Change in Control" as defined in the Special
Termination Agreements between the Company and/or the Bank and certain
officers as disclosed in the Company Disclosure Schedule.
(b) Parent agrees to offer, or cause the Surviving Bank to
offer, continued comparable employment on and after the Effective Time to all
employees of the Company or the Company Subsidiaries who were such
immediately prior to the Effective Time. Employees of the Company or the
Company Subsidiaries who are terminated on or within two years after the
Effective Time shall be provided, in addition to all other applicable
benefits, severance and other benefits set forth in Section 5.01 of the
Company Disclosure Schedule, with the following:
(i) the greater or more favorable of the severance and
other benefits set forth in (x) Fleet Financial Group, Inc.'s Severance
Pay and Benefits Plan appended to Section 6.08 of the Parent Disclosure
Schedule, or (y) Parent's severance pay and benefits plan policy
existing on the date of termination; and
(ii) continuation of health benefits for one year after
termination on the same terms and conditions as though they had
remained active employees of Parent or the Surviving Corporation or the
Surviving Bank (provided, that such employees shall not be treated as
"new" employees for purposes of any exclusion for an existing condition
under any health or similar plan), and thereafter shall be entitled to
continuation benefits (such as COBRA) for an additional eighteen month
period determined as though their employment had terminated at the end
of such one-year period.
(c) The provisions of this Section 6.08 are expressly intended
to be for the irrevocable benefit of, and shall be enforceable by, each
officer and employee covered hereby and his or her heirs and representatives.
6.09 Indemnification; Directors' and Officers' Insurance.
(a) 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 Time,
a director or officer or employee of the Company or any of its Subsidiaries
(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 the
Company, any of the Company Subsidiaries or any of their respective
predecessors or (ii) this Agreement or any of the transactions contemplated
hereby, whether in any case asserted or arising before or after the Effective
Time, the parties hereto agree to cooperate and use their best efforts to
defend against and respond thereto. It is understood and agreed that the
Company shall indemnify and hold harmless and that after the Effective Time,
the Surviving Corporation and Parent shall indemnify and hold harmless, as
and to the fullest extent permitted by applicable law, each such Indemnified
Party against any losses, claims, damages, liabilities, costs, expenses
(including reasonable attorney's fees and expenses), 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 Time), (i) the
Company, and the Surviving Corporation and Parent after the Effective Time,
shall promptly pay expenses in advance of the final disposition of any claim,
action, suit, proceeding or investigation to each Indemnified Party to the
full extent permitted by law, (ii) the Indemnified Parties may retain counsel
satisfactory to them, and the Company, and the Surviving Corporation and
Parent after the Effective Time, shall pay all fees and expenses of such
counsel for the Indemnified Parties within thirty days after statements
therefor are received, and (iii) the Company, the Surviving Corporation and
Parent will use their respective best efforts to assist in the vigorous
defense of any such matter; provided, that none of the Company, the Surviving
Corporation or Parent shall be liable for any settlement effected without its
prior written consent (which consent shall not be unreasonably withheld); and
provided further, that the Surviving Corporation and Parent 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 non-appealable, 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 6.09, upon learning of any such claim, action, suit, proceeding
or investigation, shall notify the Company and, after the Effective Time, the
Surviving Corporation and Parent, thereof, provided, that the failure to so
notify shall not affect the obligations of the Company, the Surviving
Corporation and Parent, except to the extent such failure to notify
materially prejudices such party.
(b) Parent agrees that all rights to indemnification existing
in favor, and all limitations on the personal liability, of the Indemnified
Parties provided for in the Company's Certificate of Incorporation or By-laws
or the Charter or By-laws or similar organizational documents of any of its
Subsidiaries as in effect as of the date hereof with respect to matters
occurring prior to the Effective Time shall survive the Merger and shall
continue in full force and effect for a period of not less than six (6) years
from the Effective Time; provided, however, that all rights to
indemnification in respect of any claim (a "Claim") asserted or made within
such period shall continue until the disposition of such Claim.
(c) Parent shall cause the persons serving as officers and
directors of the Company immediately prior to the Effective Time to be
covered for a period of three (3) years from the Effective Time by the
directors' and officers' liability insurance policy maintained by the Company
(provided, that Parent may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are not less
advantageous than such policy) with respect to acts or omissions occurring
at or prior to the Effective Time which were committed by such officers and
directors in their capacity as such; provided, however, that in no event
shall Parent be required to expend more than the amount (the "Insurance
Amount") equal to 200% of the current amount expended by the Company and the
Bank to maintain or procure insurance coverage pursuant hereto.
(d) In the event Parent or the Surviving Corporation 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 proper provision shall be made so that the successors and
assigns of Parent or the Surviving Corporation, as the case may be, assume
the obligations set forth in this section.
(e) The provisions of this Section 6.09 are expressly intended
to be for the irrevocable benefit of, and shall be enforceable by, each
Indemnified Party and his or her heirs and representatives.
6.10 Subsequent Interim and Annual Financial Statements. As soon as
reasonably available, but in no event more than 45 days after the end of each
fiscal quarter ending after December 31, 1993, Parent will deliver to the
Company and the Company will deliver to Parent their respective Quarterly
Reports on Form 10-Q, as filed with the SEC under the Exchange Act. As soon
as reasonably available, but in no event later than April 1, 1995, Parent
will deliver to the Company and the Company will deliver to Parent their
respective Annual Reports on Form 10-K for the fiscal year ended December 31,
1994, as filed with the SEC under the Exchange Act.
6.11 Additional Agreements. In case at any time after the Effective
Time any further action is necessary or desirable to carry out the purpose
of this Agreement, or the Bank Merger Agreement, or to vest the Surviving
Corporation or the Surviving Bank with full title to all properties, assets,
rights, approvals, immunities and franchises of any of the parties to the
Merger or the Bank Merger, the proper officers and directors of each party
to this Agreement and their respective Subsidiaries shall take all such
necessary action as may be reasonably requested by, and at the sole expense
of, Parent.
6.12 Disclosure Supplements. From time to time prior to the Effective
Time, each party will promptly supplement or amend the Disclosure Schedules
delivered in connection with the execution of this Agreement to reflect any
matter which, if existing, occurring or known at the date of this Agreement,
would have been required to be set forth or described in such Disclosure
Schedules or which is necessary to correct any information in such Disclosure
Schedules which has been rendered inaccurate thereby. No supplement or
amendment to such Disclosure Schedules shall have any effect for the purposes
of determining satisfaction of the conditions set forth in Sections 7.02(a)
or 7.03(a) hereof, as the case may be, or the compliance by the Company or
Parent, as the case may be, with the respective covenants set forth in
Sections 5.01 and 5.03 hereof.
6.13 Current Information.
(a) During the period from the date of this Agreement to the
Effective Time, the Company will cause one or more of its designated
representatives to be available to confer on a regular and frequent basis
(not less than monthly) with representatives of Parent and to report the
general status of the ongoing operations of the Company and its Subsidiaries.
The Company will promptly notify Parent of any material change in the normal
course of business of the Company or any of its Subsidiaries and of any
governmental complaints, investigations or hearings or the institution of
significant litigation involving the Company or any of its Subsidiaries and
will keep Parent reasonably informed of such events.
(b) Parent will promptly notify the Company of any material
change in the normal course of business of Parent or any of its Subsidiaries
and of any governmental complaints, investigations or hearings, or the
institution of significant litigation involving Parent or any of its
Subsidiaries, and will keep the Company reasonably informed of such events.
6.14 ALCO Management. The Company agrees that during the period from
the date of this Agreement to the Effective Time, the Company will consult
and cooperate with Parent in the development and implementation of a program
to manage the Company's interest rate sensitive assets and liabilities.
6.15 Execution and Authorization of Bank Merger Agreement. As soon
as reasonably practicable after the date of this Agreement, (a) Parent shall
(i) cause the Board of Directors of Massachusetts Bank to approve the Bank
Merger Agreement, (ii) cause Massachusetts Bank to execute and deliver the
Bank Merger Agreement, and (iii) approve the Bank Merger Agreement as the
sole shareholder of Massachusetts Bank, and (b) the Company shall (i) cause
the Board of Directors of the Bank to approve the Bank Merger Agreement, and
(ii) cause the Bank to execute and deliver the Bank Merger Agreement. The
Bank Merger Agreement shall contain terms that are normal and customary in
light of the transactions contemplated hereby and necessary to carry out the
purposes of this Agreement.
6.16 Organization of Merger Subsidiary.
(a) Prior to the mailing of the Proxy Statement to stockholders
of the Company for approval of the Merger, Parent will take any and all
necessary action to cause (i) Merger Subsidiary to be organized, (ii) Merger
Subsidiary to become a direct wholly owned subsidiary of Parent, (iii) the
directors and sole stockholder of Merger Subsidiary to approve this Agreement
and the consummation of the transactions contemplated hereby, (iv) Merger
Subsidiary to execute one or more counterparts to this Agreement and to
deliver at least one such counterpart so executed to the Company, whereupon
Merger Subsidiary shall become a party to and be bound by this Agreement, and
(v) if the Alternative Merger is to be consummated, Merger Subsidiary to take
all necessary action to complete the transactions contemplated hereby subject
to the terms and conditions hereof.
(b) On and as of the date Merger Subsidiary becomes a party to
this Agreement, Parent and Merger Subsidiary shall, jointly and severally,
represent and warrant to the Company as follows:
(i) Merger Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and all of its outstanding capital stock is owned directly by Parent, free
and clear of all liens, charges, encumbrances and security interests
whatsoever, and all of such shares of capital stock are duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive
rights. Since the date of its incorporation, Merger Subsidiary has not
engaged in any activities other than in connection with or as contemplated
by this Agreement;
(ii) Merger Subsidiary has all necessary corporate power
and authority to executive and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by Merger Subsidiary and the consummation of the transactions
contemplated hereby have been duly and validly approved by the Board of
Directors of Merger Subsidiary and by Parent in its capacity as sole
stockholder of Merger Subsidiary and no other corporate proceedings on the
part of Merger Subsidiary are necessary to consummate the transaction
contemplated hereby and will not (A) conflict with or violate the Certificate
of Incorporation or By-laws of Merger Subsidiary or (B) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to
Merger Subsidiary or by which any of its properties or assets is bound or
affected; and
(iii) Merger Subsidiary has duly and validly executed
and delivered this Agreement and this Agreement (assuming adoption of the
Agreement by the requisite vote of the Company's shareholders and the due
authorization, execution and delivery by the Company) constitutes a valid and
binding obligation of Merger Subsidiary enforceable against Merger Subsidiary
in accordance with its terms, except as enforcement may be limited by general
principles of equity whether applied in a court of law or a court of equity
and by bankruptcy, insolvency and similar laws affecting creditors' rights
and remedies generally.
ARTICLE VII
CONDITIONS PRECEDENT
7.01 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Shareholder Approval. This Agreement shall have been
approved and adopted by the affirmative vote of the holders of at least a
majority of the outstanding shares of Company Common Stock entitled to vote
thereon.
(b) Stock Exchange Listing. The Warrants, shares of Parent
Common Stock which shall be issued to the shareholders of the Company upon
consummation of the Merger and the Warrant Shares shall have been authorized
for listing on the Stock Exchange, subject to official notice of issuance.
(c) Other Approvals. All regulatory approvals required to
consummate the Merger and the Bank Merger shall have been obtained and shall
remain in full force and effect and all statutory waiting periods in respect
thereof shall have expired.
(d) S-4. The S-4 shall have become effective under the
Securities Act and no stop order suspending the effectiveness of the S-4
shall have been issued and no proceedings for that purpose shall have been
initiated or threatened by the SEC.
(e) No Injunctions or Restraints; Illegality. No order,
injunction or decree issued by any court or agency of competent jurisdiction
(an "Injunction") preventing the consummation of the Merger or the other
transactions contemplated by this Agreement shall be in effect. No statute,
rule, regulation, order, injunction or decree shall have been enacted or
enforced by any Governmental Entity which prohibits or makes illegal
consummation of the Merger.
7.02 Conditions to Obligations of Parent and Merger Subsidiary. The
obligation of Parent and Merger Subsidiary to effect the Merger is also
subject to the satisfaction or waiver by Parent at or prior to the Effective
Time of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and (except
to the extent such representations and warranties speak as of an earlier
date) as of the Closing Date as though made on and as of the Closing Date;
provided, however, that, for purposes hereof, such representations and
warranties shall be deemed to be true and correct in all material respects
unless the failure or failures of such representations and warranties to be
so true and correct represent, in the aggregate, a Material Adverse Effect
(as defined in Section 3.01 hereof). Parent shall have received a
certificate signed on behalf of the Company by the Chief Executive Officer
and the Chief Financial Officer of the Company to the foregoing effect.
(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and
Parent shall have received a certificate signed on behalf of the Company by
the Chief Executive Officer and the Chief Financial Officer of the Company
to such effect.
(c) Consents Under Agreements. The consent, approval or waiver
of each person (other than of the Governmental Entities with responsibility
for the regulatory approvals referred to in Section 7.01(c)) whose consent
or approval shall be required in order to permit the succession by the
Surviving Corporation pursuant to the Merger to any obligation, right or
interest of the Company or any Company Subsidiary of the Company under any
loan or credit agreement, note, mortgage, indenture, lease, license or other
agreement or instrument shall have been obtained, except where the failure
to obtain such consent, approval or waiver would not have a Material Adverse
Effect on the Company or its Subsidiaries taken as a whole.
(d) Legal Opinion. Parent shall have received the opinion of
Goodwin, Procter & Hoar, counsel to the Company, dated the Closing Date, in
a form that is customary for transactions of this type. As to any matter in
such opinion which involves matters of fact or matters relating to laws other
than Federal securities law, such counsel may rely upon the certificates of
officers and directors of the Company and its Subsidiaries and of public
officials and opinions of local counsel, reasonably acceptable to Parent.
(e) Accountant's Letter. The Company shall have caused to be
delivered to Parent letters from KPMG Peat Marwick, independent public
accountants with respect to the Company, dated the date on which the
Registration Statement or last amendment thereto shall become effective, and
dated the date of the Closing, and addressed to Parent and the Company, with
respect to the Company's consolidated financial position and results of
operations, which letters shall be based upon agreed upon procedures to be
specified by Parent, which procedures shall be consistent with applicable
professional standards for letters delivered by independent accountants in
connection with comparable transactions.
7.03 Conditions to Obligations of the Company. The obligation of the
Company to effect the Merger is also subject to the satisfaction or waiver
by the Company at or prior to the Effective Time of the following conditions
(except that the condition set forth in Section 7.03(d) shall not be a
condition to the Company's obligations to effect the Alternative Merger):
(a) Representations and Warranties. The representations and
warranties of Merger Subsidiary (if the Alternative Merger is to be effected)
and Parent set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and (except to the extent
such representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date; provided, however,
that, for purposes hereof, such representations and warranties shall be
deemed to be true and correct in all material respects unless the failure or
failures of such representations and warranties to be so true and correct
represent, in the aggregate, a Material Adverse Effect (as defined in Section
3.01 hereof). The Company shall have received a certificate signed on behalf
of Merger Subsidiary (if the Alternative Merger is to be effected) and Parent
by the Chief Executive Officer and the Chief Financial Officer of Parent to
the foregoing effect.
(b) Performance of Obligations. Merger Subsidiary (if the
Alternative Merger is to be effected) and Parent shall have each performed
in all material respects all obligations required to be performed by such
party under this Agreement at or prior to the Closing Date, and the Company
shall have received a certificate signed on behalf of Parent by the Chief
Executive Officer and the Chief Financial Officer of Parent to such effect.
(c) Consents Under Agreements. The consent or approval of each
person (other than of the Governmental Entities with responsibility for the
regulatory approvals referred to in Section 7.01(c)) whose consent or
approval shall be required in connection with the transactions contemplated
hereby under any loan or credit agreement, note, mortgage, indenture, lease,
license or other agreement or instrument to which Parent or any of its
Subsidiaries is a party or is otherwise bound, except those for which failure
to obtain such consents and approvals would not have a Material Adverse
Effect on Parent and its Subsidiaries taken as a whole (after giving effect
to the transactions contemplated hereby).
(d) Federal Tax Opinion. The Company shall have received from
its counsel, an opinion dated as of the Effective Time, in form and substance
reasonably satisfactory to the Company, rendered on the basis of facts,
representations, and assumptions set forth in such opinion or in writing
elsewhere and referred to therein, substantially to the effect that for
federal income tax purposes (i) the Merger constitutes a reorganization
within the meaning of Section 368(a) of the Code, and (ii) Parent and the
Company each will be a party to the reorganization within the meaning of
Section 368(b) of the Code (noting, however, that the nontaxability of the
shareholders of the Company resulting from such reorganization does not
extend to cash received as Per Share Cash Consideration, cash in lieu of a
fractional shares interest in Parent Common Stock, cash received by the
holders of Dissenting Shares or the Warrants, if any). In rendering any such
opinion, such counsel may require and, to the extent they deem necessary or
appropriate may rely upon, opinions of other counsel and upon representations
made in certificates of officers of the Company, Parent, affiliates of the
foregoing, and others.
(e) Legal Opinion. The Company shall have received the opinion
of Edwards & Angell, counsel to Parent, dated the Closing Date, in a form
that is customary for transactions of this type. As to any matter in such
opinion which involves matters of fact or matters relating to laws other than
Federal securities law, Rhode Island law or Delaware corporate law, such
counsel may rely upon the certificates of officers and directors of Parent
and of public officials and opinions of local counsel, reasonably acceptable
to the Company.
(f) Opinion of Financial Advisor. The Company shall have
received an opinion, dated as of the date of the Proxy Statement, from
Salomon Brothers Inc to the effect that as of the date thereof the
consideration to be received by the shareholders of the Company pursuant to
the Merger is fair to such shareholders from a financial point of view.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.01 Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after approval of the matters
presented in connection with the Merger by the shareholders of the Company:
(a) by mutual consent of Parent, Merger Subsidiary and the
Company in a written instrument, if the Board of Directors of each so
determines by a vote of a majority of the members of its entire Board;
(b) by either Parent and Merger Subsidiary or the Company upon
written notice to the other party (i) ninety days after the date on
which any request or application for a regulatory approval required to
consummate the Merger shall have been denied or withdrawn at the
request or recommendation of the Governmental Entity which must grant
such requisite regulatory approval, unless within the ninety day period
following such denial or withdrawal a petition for rehearing or an
amended application has been filed with the applicable Governmental
Entity, provided, however, that no party shall have the right to
terminate this Agreement pursuant to this Section 8.01(b)(i) if such
denial or request or recommendation for withdrawal shall be due to the
failure of the party seeking to terminate this Agreement to perform or
observe the covenants and agreements of such party set forth herein,
or (ii) if any Governmental Entity of competent jurisdiction shall have
issued a final nonappealable order enjoining or otherwise prohibiting
the consummation of any of the transactions contemplated by this
Agreement;
(c) by either Parent and Merger Subsidiary or the Company if
the Merger shall not have been consummated on or before May 31, 1995,
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 in any material respect the covenants and agreements
of such party set forth herein;
(d) by either Parent and Merger Subsidiary or the Company if
(i) any approval of the shareholders of the Company required for the
consummation of the Merger shall not have been obtained by reason of
the failure to obtain the required vote at a duly held meeting of
shareholders or at any adjournment or postponement thereof, or (ii) the
Company's Board of Directors determines that it will not recommend to
its shareholders approval, or modifies or withdraws its recommendation,
of this Agreement and the transactions contemplated hereby and such
other matters as may be submitted to its shareholders in connection
with this Agreement, if such Board shall have concluded with the advice
of counsel that such action is required to prevent such Board from
breaching its fiduciary obligations to the shareholders of the Company;
(e) by either Parent and Merger Subsidiary or the Company
(provided, that the terminating party is not then in material breach
of any representation, warranty, covenant or other agreement contained
herein) if there shall have been a material breach of any of the
representations or warranties set forth in this Agreement on the part
of the other party, which breach shall not have been cured within
forty-five days following receipt by the breaching party of written
notice of such breach from the other party hereto, or which breach, by
its nature, cannot be cured prior to the Closing; or
(f) by either Parent and Merger Subsidiary or the Company
(provided, that the terminating party is not then in material breach
of any representation, warranty, covenant or other agreement contained
herein) if there shall have been a material breach of any of the
covenants or agreements set forth in this Agreement on the part of the
other party, which breach shall not have been cured within forty-five
days following receipt by the breaching party of written notice of such
breach from the other party hereto.
8.02 Effect of Termination; Expenses.
(a) In the event of termination of this Agreement by either
Parent and Merger Subsidiary or the Company as provided in Section 8.01, this
Agreement shall forthwith become void and have no effect except (i) Sections
6.02(c), 8.02 and 9.03 and the last sentence of Section 6.02(a) (except as
noted in Section 8.02(c)), shall survive any termination of this Agreement,
and (ii) no party shall be relieved or released from any liabilities or
damages arising out of its willful breach of any provision of this Agreement.
(b) If this Agreement is terminated, expenses of the parties
hereto shall be determined as follows:
(i) Any termination of this Agreement pursuant to Section
8.01(a) or Section 8.01(d) hereof shall be without cost, expense or
liability on the part of any party to the other. Any termination of
this Agreement pursuant to Section 8.01(e) or Section 8.01(f) hereof
shall also be without cost, liability or expense on the part of any
party to the others, unless the breach of a representation or warranty
or the breach of a covenant or agreement is caused by the willful
conduct or gross negligence of a party in which event said party shall
be liable to the other party for all out-of-pocket costs and expenses,
including, without limitation, reasonable legal, accounting and
investment banking fees and expenses, incurred by such other party in
connection with the entering into of this Agreement and the carrying
out of any and all acts contemplated hereunder ("Expenses").
(ii) If this Agreement is terminated pursuant to Section
8.01(b) or Section 8.01(c) or the transactions contemplated hereby
otherwise fail to be consummated, in any such case because of the
failure to receive any required regulatory approval, Parent shall
reimburse the Company for all Expenses up to a maximum of $1,500,000.
(iii) The payment of Expenses is not an exclusive remedy,
but is in addition to any other rights or remedies available to the
parties hereto at law or in equity and no party shall be relieved or
released from any liabilities or damages arising out of its willful
breach of any provisions of this Agreement.
(c) In order to induce Parent to enter into this Agreement and
to reimburse Parent for incurring the costs and expenses related to entering
into this Agreement and consummating the transactions contemplated by this
Agreement, the Company will make a cash payment to Parent of $8,000,000 (the
"Expense Fee") if and only if :
(i) (x) the Company has terminated this Agreement pursuant to
Section 8.01(d) or (y) Parent and Merger Subsidiary have terminated
this Agreement pursuant to Sections 8.01(e) or 8.01(f) and the breach
of the representation, warranty, covenant or agreement was caused by
the willful conduct or gross negligence of the Company, and
(ii) (x) within six (6) months of any such termination, (A) the
Company shall have entered into an agreement to engage in an
Acquisition Transaction with any person other than Parent or any
subsidiary or affiliate of Parent or (B) the Board of Directors of the
Company shall have approved an Acquisition Transaction or recommended
that shareholders of the Company approve or accept any Acquisition
Transaction with any person other than Parent or any subsidiary or
affiliate of Parent, or (y) in the case of a termination pursuant to
Section 8.01(d), at the time of such termination any person other than
Parent or any subsidiary or affiliate of Parent, shall have made a bona
fide proposal to the Company or its shareholders to engage in an
Acquisition Transaction by public announcement or written communication
that shall be or become the subject of public disclosure.
Any payment required by the previous sentence will be (i) payable by the
Company to Parent (by wire transfer of immediately available funds to an
account designated by Parent) within five business days after demand by
Parent and (ii) net of any other payments made by the Company to Parent
pursuant to the provisions of Section 8.02(b)(i). In the event of a
termination under circumstances that would trigger a payment under this
Section 8.02(c), the standstill provisions contained in the Confidentiality
Agreement shall terminate.
Notwithstanding anything to the contrary set forth in this Agreement,
if the Company pays Parent the Expense Fee, the Company will have no further
obligations or liabilities to Parent with respect to this Agreement or the
transactions contemplated by this Agreement.
For purposes of this Agreement, "Acquisition Transaction" shall mean
(i) a merger, consolidation or other similar transaction with the Company,
(ii) any sale, lease or other disposition of 25% or more of the assets of the
Company and its subsidiaries, taken as a whole, in a single transaction or
series of transaction, or (iii) any tender or exchange offer for 25% or more
of the outstanding shares of Company Common Stock.
8.03 Amendment. Subject to compliance with applicable law, this
Agreement may be amended by the parties hereto, by action taken or authorized
by their respective Boards of Directors, at any time before or after approval
of the matters presented in connection with the Merger by the shareholders
of the Company; provided, however, that after any approval of the
transactions contemplated by this Agreement by the Company's shareholders,
there may not be, without further approval of such shareholders, any
amendment of this Agreement which reduces the amount or changes the form of
the consideration to be delivered to the Company's shareholders hereunder
other than as contemplated by this Agreement. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
8.04 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions contained herein;
provided, however, that after any approval of the transactions contemplated
by this Agreement by the Company's shareholders, there may not be, without
further approval of such shareholders, any extension or waiver of this
Agreement or any portion thereof which reduces the amount or changes the form
of the consideration to be delivered to the Company's shareholders hereunder
other than as contemplated by this Agreement. Any agreement on the part of
a party hereto to any such extension or waiver shall be valid only if set
forth in a written instrument signed on behalf of such party, but such
extension or waiver shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
ARTICLE IX
GENERAL PROVISIONS
9.01 Closing. Subject to the terms and conditions of this Agreement,
the closing of the Merger (the "Closing") will take place at the offices of
Goodwin, Procter & Hoar, One Exchange Place, Boston, Massachusetts 02109, at
10:00 a.m. on a date selected by Parent, which shall be not more than five
business days after the satisfaction of the conditions set forth in Section
7.01 hereof or at such other date, time and place as is mutually agreed upon
by the Company and Parent. The date on which such Closing takes place is
referred to herein as the "Closing Date". Parent shall provide the Company
written notice of the date selected by it as the Closing Date at least five
business days prior to such date.
9.02 Non-Survival of Representations, Warranties and Agreements.
None of the representations, warranties, covenants and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time, except for those covenants and agreements
contained herein and therein which by their terms apply in whole or in part
after the Effective Time.
9.03 Expenses. Except as provided by Section 8.02(b) hereof, whether
or not the Merger is consummated, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such expense, provided, however, that the
costs and expenses of printing and mailing the Proxy Statement, and all
filing and other fees paid to the SEC or any other Governmental Entity in
connection with the Merger, the Bank Merger and the other transactions
contemplated hereby, shall be borne by Parent, provided, however, that
nothing contained herein shall limit either party's rights under Section 8.02
hereof, including, but not limited to, the right to recover any liabilities
or damages arising out of the other party's willful breach of any provision
of this Agreement.
9.04 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, telecopies
(with confirmation), mailed by registered or certified mail (return receipt
requested) or delivered by an express courier (with confirmation) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Parent or Merger Subsidiary, to:
Fleet Financial Group, Inc.
50 Kennedy Plaza
Providence, Rhode Island 02903-2305
Attn: William C. Mutterperl, General Counsel
with a copy to:
Edwards & Angell
2700 Hospital Trust Plaza
Providence, Rhode Island 02903-2305
Attn: Duncan Johnson, Esq.
(b) if to the Company, to:
NBB Bancorp, Inc.
174 Union Street
New Bedford, MA 02740
Attn: Robert McCarter, Chairman
with a copy to:
Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
Attn: Paul W. Lee, P.C.
Regina M. Pisa, P.C.
9.05 Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table
of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement. Whenever the words "include," "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation." The phrases "the date of this Agreement," "the date
hereof" and terms of similar import, unless the context otherwise requires,
shall be deemed to be May 9, 1994.
9.06 Counterparts. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart.
9.07 Entire Agreement. This Agreement (including the documents and
the instruments referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof, other than the
Confidentiality Agreement.
9.08 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware, without regard to any
applicable conflicts of law.
9.09 Jurisdiction and Venue. The parties consent to the jurisdiction
of all federal and state courts in Massachusetts, and agree that venue shall
lie exclusively in Boston, Suffolk County, Massachusetts.
9.10 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that the provisions contained in
the last sentence of Section 6.02(a) and in Section 6.02(c) of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of the last sentence of Section
6.02(a) and Section 6.02(c) of this Agreement and to enforce specifically the
terms and provisions thereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
9.11 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
9.12 Publicity. Except as otherwise required by law or the rules of
the Stock Exchange, so long as this Agreement is in effect, neither Parent
nor the Company shall, or shall permit any of its Subsidiaries to, issue or
cause the publication of any press release or other public announcement with
respect to, or otherwise make any public statement concerning, the
transactions contemplated by this Agreement without the consent of the other
party, which consent shall not be unreasonably withheld.
9.13 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns. Except as
otherwise expressly provided herein, this Agreement (including the documents
and instruments referred to herein) is not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder.
<PAGE>
IN WITNESS WHEREOF, the Company and Parent have caused this Agreement
to be executed by their respective officers thereunto duly authorized as of
the date first above written.
NBB BANCORP, INC.
By: /s/ Robert McCarter
Title: Chairman and President
Attest:
By: /s/ Carol E. Correia
Title: Secretary
FLEET FINANCIAL GROUP, INC.
Attest: By: /s/ H. Jay Sarles
Title: Vice Chairman
By: /s/ Brian T. Moynihan
Title: Vice President
91401.c5
8/25/94
