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) April 4, 1997
PEOPLE'S SAVINGS FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
Connecticut 34-0-18162 06-1259026
(State or other (Comission File Number) (IRS Employer
jurisdiction of Identification
incorporation) No.)
123 Broad Street, New Britain, Connecticut 06053
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (860) 224-7771
Not Applicable
(Former name or former address, if changed since last report)
Item 1. Changes in Control of Registrant.
(b) On April 4, 1997, People's Savings Financial Corp. ("People's
Corp.") announced that it had entered into an Agreement and Plan of Merger
(the "Agreement") pursuant to which People's Corp. will merge with and into a
newly formed wholly owned subsidiary of Webster Financial Corporation
("Webster") in a tax free stock-for-stock exchange (the "Merger").
Item 7. Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
Exhibit No. Description
2.1 Agreement and Plan of Merger, dated as of April 4,
1997, by and between Webster Financial Corporation,
Webster Subsidiary Corporation and People's Savings
Financial Corp.
2.2 Option Agreement, dated as of April 4, 1997, by and
between Webster Financial Corporation and People's
Savings Financial Corp.
99 Press Release of People's Savings Financial Corp.
and Webster Financial Corporation dated April 4,
1997.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PEOPLE'S SAVINGS FINANCIAL CORP.
Date: April 15, 1997 /s/ John G. Medvec
(signature)
John G. Medvec
Executive Vice President & Treasurer
INDEX TO EXHIBITS
Exhibit
Number Exhibit Description
2.1 Agreement and Plan of Merger, dated as of April 4, 1997, by
and between Webster Financial Corporation, Webster Subsidiary
Corporation and People's Savings Financial Corp.
2.2 Option Agreement, dated as of April 4, 1997, by and between
Webster Financial Corporation and People's Savings Financial
Corp.
99 Press Release of People's Savings Financial Corp. and Webster
Financial Corporation dated April 4, 1997.
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
WEBSTER FINANCIAL CORPORATION,
WEBSTER SUBSIDIARY CORPORATION
AND
PEOPLE'S SAVINGS FINANCIAL CORP.
DATED AS OF
APRIL 4, 1997
TABLE OF CONTENTS
Page
ARTICLE I THE MERGER1
1.1 The Merge. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 Effective Time. . . . . . . . . . . . . . . . . . . . . . . . .1
1.3 Effects of the Merger.. . .. . . . . . . . . . . . . . . . . . .2
1.4 Conversion of People's Corp. Common Stock.. . . . . . . . . . .2
1.5 Conversion of Merger Sub Common Stock.. . . . . . . . . . . .3
1.6 Options.. . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.7 Certificate of Incorporation. . . . . . . . . . . . . . . . . .4
1.8 By-Laws.. . . . . . . . . . . . . . . . . . . . . . . . . . . .4
1.9 Directors and Officers. . . . . . . . . . . . . . . . . . . . .4
1.10 Tax Consequences.. . . . . . . . . . . . . . . . . . . . . .4
ARTICLE II EXCHANGE OF SHARES. . . . . . . . . . . . . . . . . . . . . . .5
2.1 Webster to Make Shares Available. . . . . . . . . . . . . . . .5
2.2 Exchange of Shares. . . . . . . . . . . . . . . . . . . . . . .5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PEOPLE'S CORP. . . . . . . .6
3.1 Corporate Organization. . . . . . . . . . . . . . . . . . . . .6
3.2 Capitalization. . . . . . . . . . . . . . . . . . . . . . . .7
3.3 Authority; No Violation.. . . . . .. . . . . . . . . . . . . . .7
3.4 Consents and Approvals. . . . . . .. . . . . . . . . . . . . . .8
3.5 Loan Portfolio; Reports.. . . . . .. . . . . . . . . . . . . . .9
3.6 Financial Statements; Exchange Act Filings; Books and Records. .9
3.7 Broker's Fees.. . . . . . . . . . . . . . . . . . . . . . . 10
3.8 Absence of Certain Changes or Events. . . . . . . . . . . . . 10
3.9 Legal Proceedings.. . . . . . . . . . . . . . . . . . . . . . 10
3.10 Taxes and Tax Returns. . . . . . . . . . . . . . . . . . . . 10
3.11 Employee Plans.. . . . . . . . . . . . . . . . . . . . . . . 11
3.12 Certain Contracts. . . . . . . . . . . . . . . . . . . . . . 12
3.13 Agreements with Regulatory Agencies. . . . . . . . . . . . . .12
3.14 State Takeover Laws; Certificate of Incorporation. . . . . . .13
3.15 Environmental Matters. . . . . . . . . . . . . . . . . . . . 13
3.16 Reserves for Losses. . . . . . . . . . . . . . . . . . . . 13
3.17 Properties and Assets. . . . . . . . . . . . . . . . . . .. . 14
3.18 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.19 Liquidation Account. . . . . . . . . . . . . . . . . . . . .. 15
3.20 Compliance with Applicable Laws. . . . . . . . . . . . . . .. 15
3.21 Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . .. 15
3.22 Affiliates.. . . . . . . . . . . . . . . . . . . . . . . . . 16
3.23 Ownership of Webster Common Stock. . . . . . . . . . . . . . .16
3.24 People's DRIP. . . . . . . . . . . . . . . . . . . . . . . . 16
3.25 Fairness Opinion.. . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF WEBSTER . .. . . . . . . . . 17
4.1 Corporate Organization. . . . . . . . . . . .. . . . . . . . . 17
4.2 Capitalization. . . . . . . . . . . . . . . .. . . . . . . . . 17
4.3 Authority; No Violation.. . . . . . . . . . .. . . . . . . . . 18
4.4 Regulatory Approvals. . . . . . . . . . . . . . . . . . . . . 19
4.5 Financial Statements; Exchange Act Filings; Books and Records. 20
4.6 Absence of Certain Changes or Events. . . . . . . . . . . . 20
4.7 Compliance with Applicable Law. . . . . . . . . . . . . . . . 20
4.8 Ownership of People's Common Stock; Affiliates and Associates. 20
4.9 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . 21
4.10 Agreements with Regulatory Agencies. . . . . . . . . . . . . 21
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS. . . . . . . .. . . . 21
5.1 Covenants of People's Corp. . . . . . . . . . . . . . .. . . . 21
5.2 Covenants of Webster. . . . . . . . . . . . . . . . . .. . . . 24
5.3 Merger Covenants. . . . . . . . . . . . . . . . . . . .. . . . 24
5.4 Compliance with Antitrust Laws. . . . . . . . . . . . .. . . . 24
5.5 Employment and Other Agreements.. . . . . . . . . . . .. . . . 25
ARTICLE VI ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . 25
6.1 Regulatory Matters. . . . . . . . . . . . . . . . . . . . . . 25
6.2 Access to Information.. . . . . . . . . . . . . . . . . . . . 26
6.3 Shareholder Meetings. . . . . .. . . . . . . . . . . . . . . . 27
6.4 Legal Conditions to Merger. . . . . . . . . . . . . . . . . . 27
6.5 Stock Exchange Listing. . . . . .. . . . . . . . . . . . . . . 27
6.6 Employees.. . . . . . . . . . . .. . . . . . . . . . . . . . . 27
6.7 Indemnification.. . . . . . . . .. . . . . . . . . . . . . . . 28
6.8 Subsequent Interim and Annual Financial Statements. . . . . . 29
6.9 Additional Agreements.. . . . . . . . . . . . . . . . . . . . 29
6.10 Advice of Changes. . . . . . . . . . . . . . . . . . . . . . 29
6.11 Current Information. . . . . . . . . . . . . . . . . . . . 29
6.12 Execution and Authorization of Bank Merger Agreement... . . . 30
6.13 Change in Structure. . . . . . . . . . . . . . . . . . . . . 30
6.14 Transaction Expenses of People's.. . . . . . . . . . . . . . 30
ARTICLE VII CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . 30
7.1 Conditions to Each Party's Obligation To Effect the Merger. . 30
7.2 Conditions to Obligations of Webster and Merger Sub.. . . . .. 31
7.3 Conditions to Obligations of People's Corp. . . . . . . . . .. 33
ARTICLE VIII TERMINATION AND AMENDMENT . . . . . . . . . . . . . . . . .. 33
8.1 Termination.. . . . . . . . . . . . . . . . . . . . . . . . . 33
8.2 Effect of Termination.. . . . . . . . . . . . . . . . . . . . 35
8.3 Amendment.. . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.4 Extension; Waiver.. . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE IX GENERAL PROVISIONS. . . . . . .. . . . . . . . . . . . . . . . 35
9.1 Closing.. . . . . . . . . . . .. . . . . . . . . . . . . . . . 35
9.2 Nonsurvival of Representations, Warranties and Agreements. . . 35
9.3 Expenses; Breakup Fee.. . . . . . . . . . . . . . . . . . . . 36
9.4 Notices.. . . . . . . . . . . . . . . . . . . . . . . . . .. . 36
9.5 Interpretation. . . . . . . . . . . . . . . . . . . . . . .. . 37
9.6 Counterparts. . . . . . . . . . . . . . . . . . . . . . . .. . 37
9.7 Entire Agreement. . . . . . . . . . . . . . . . . . . . . .. . 37
9.8 Governing Law.. . . . . . . . . . . . . . . . . . . . . . .. . 37
9.9 Enforcement of Agreement. . . . . . . . . . . . . . . . . . . 38
9.10 Severability.. . . . . . . . . . . . . . . . . . . . . . . . 38
9.11 Publicity. . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.12 Assignment; Limitation of Benefits.. . . . . . . . . . . . . 38
9.13 Additional Definitions.. . . . . . . . . . . . . . . . . . . 38
EXHIBITS
A Articles of Combination and Bank Merger Agreement
B Option Agreement
C Certificate of Merger
D People's Savings Financial Corp. Stockholder Agreement
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of April 4, 1997
(this "Agreement"), is entered into by and among Webster Financial
Corporation, a Delaware corporation ("Webster"), Webster Subsidiary
Corporation, a Delaware corporation and wholly-owned subsidiary of
Webster ("Merger Sub"), and People's Savings Financial Corp., a
Connecticut corporation ("People's Corp.").
WHEREAS, the Boards of Directors of Webster, Merger Sub and
People's Corp. have determined that it is in the best interests of
their respective companies and shareholders to consummate the
business combination transaction provided for herein in which
Merger Sub will, subject to the terms and conditions set forth
herein, merge with and into People's Corp., with People's Corp.
being the Surviving Corporation (as defined) and a wholly-owned
subsidiary of Webster (the "Merger");
WHEREAS, prior to the consummation of the Merger, Webster and
People's Corp. will respectively cause Webster Bank, a federal
savings bank and wholly-owned subsidiary of Webster, and the
People's Savings Bank & Trust ("People's Bank"), a Connecticut-
chartered state savings bank and wholly-owned subsidiary of
People's Corp., to enter into a merger agreement, in the form
attached hereto as Exhibit A (the "Bank Merger Agreement"),
providing for the merger (the "Bank Merger") of People's Bank with
and into Webster Bank, with Webster Bank being the "Surviving Bank"
of the Bank Merger, and it is intended that the Bank Merger be
consummated immediately after consummation of the Merger;
WHEREAS, as an inducement to Webster to enter into this
Agreement, People's Corp. will enter into an option agreement, in
the form attached hereto as Exhibit B (the "Option Agreement"),
with Webster immediately following the execution of this Agreement
pursuant to which People's Corp. will grant Webster an option to
purchase, under certain circumstances, an aggregate of 476,167
newly issued shares of common stock, par value $1.00 per share, of
People's Corp. ("People's Common Stock") upon the terms and
conditions therein contained, and
WHEREAS, the parties desire to make certain representations,
warranties and agreements in connection with the Merger and also to
prescribe certain conditions to the Merger;
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
1.1 The Merger.
Subject to the terms and conditions of this Agreement, in
accordance with the Delaware General Corporation Law (the "DGCL")
and the State of Connecticut Stock Corporation Act, as amended (the
"Connecticut Corporation Law), at the Effective Time (as defined in
Section 1.2 hereof), Merger Sub shall merge into People's Corp.,
with People's Corp. being the surviving corporation (hereinafter
sometimes called the "Surviving Corporation") in the Merger. Upon
consummation of the Merger, the corporate existence of Merger Sub
shall cease and the Surviving Corporation shall continue to exist
as a Connecticut corporation, and a wholly owned subsidiary of
Webster.
1.2 Effective Time.
The Merger shall become effective on the Closing Date (as
defined in Section 9.1 hereof), as set forth in the certificate of
merger (the "Certificate of Merger") in the form attached as
Exhibit C hereto which shall be filed with the Secretaries of State
of the States of Connecticut and Delaware on the Closing Date. The
term "Effective Time" shall be the date and time when the Merger
becomes effective on the Closing Date, as set forth in the
Certificate of Merger.
1.3 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 Sections
33-820 and 33-821 of the Connecticut Corporation Law.
1.4 Conversion of People's Corp. Common Stock.
(a) At the Effective Time, subject to Sections 1.4(b), 2.2(e)
and 8.1(h) hereof, each share of People's Common Stock issued and
outstanding prior to the Effective Time (other than Objecting
Shares (as such term is defined below in this Section 1.4)) shall,
by virtue of this Agreement and without any action on the part of
the holder thereof, be converted into and exchangeable for that
number of shares of Webster common stock, par value $.01 per share
("Webster Common Stock"), determined by dividing $34.00 by the Base
Period Trading Price (as defined below), as may be adjusted as
provided below, computed to five decimal places (the "Exchange
Ratio"); provided, however, that if the Base Period Trading Price
shall be greater than $40.00, the Exchange Ratio shall be 0.85000
and if the Base Period Trading Price shall be less than $34.00, the
Exchange Ratio shall be 1.00000. The number of shares of Webster
Common Stock issuable with respect to each share of People's Common
Stock, as determined as set forth herein, is called the "Merger
Consideration." For purposes of this Agreement, the term "Base
Period Trading Price" shall mean the average of the daily closing
prices per share for Webster Common Stock for the 15 consecutive
trading days which shares of Webster Common Stock are actually
traded (as reported on the Nasdaq Stock Market National Market
System) ending on the day preceding the receipt of the last
required federal bank regulatory approval (such period herein
called the "Base Period").
(b) All of the shares of People's Common Stock converted into
Webster Common Stock pursuant to this Article I shall no longer be
outstanding and shall automatically be canceled and shall cease to
exist, and each certificate (each a "Certificate") previously
representing any such shares of People's Common Stock shall
thereafter represent the right to receive (i) the number of whole
shares of Webster Common Stock and (ii) cash in lieu of fractional
shares into which the shares of People's Common Stock represented
by such Certificate have been converted pursuant to this Section
1.4(a) and Section 2.2(e) hereof. Certificates previously
representing shares of People's Common Stock shall be exchanged for
certificates representing whole shares of Webster Common Stock and
cash in lieu of fractional shares issued in consideration therefor
upon the surrender of such Certificates in accordance with Section
2.2 hereof, without any interest thereon. If prior to the
Effective Time Webster should split or combine its common stock, or
pay a dividend or other distribution in such common stock, then the
Exchange Ratio shall be appropriately adjusted to reflect such
split, combination, dividend or distribution.
(c) At the Effective Time, all shares of People's Common
Stock that are owned by People's Corp. as treasury stock and all
shares of People's Common Stock that are owned directly or
indirectly by Webster or People's Corp. or any of their respective
Subsidiaries (other than shares of People's 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
Webster Common Stock which are similarly held, whether held
directly or indirectly by Webster or People's Corp., as the case
may be, being referred to herein as "Trust Account Shares") and
other than any shares of People's Common Stock held by Webster or
People's Corp. or any of their respective Subsidiaries in respect
of a debt previously contracted (any such shares of People's Common
Stock, and shares of Webster Common Stock which are similarly held,
whether held directly or indirectly by Webster or People's Corp.,
being referred to herein as "DPC Shares")) shall be canceled and
shall cease to exist and no stock of Webster or other consideration
shall be delivered in exchange therefor. All shares of Webster
Common Stock that are owned by People's Corp. or any of its
Subsidiaries (other than Trust Account Shares and DPC Shares) shall
become treasury stock of Webster.
(d) Certificates for fractions of shares of Webster Common
Stock will not be issued. In lieu of a fraction of a share of
Webster Common Stock, each holder of People's Common Stock
otherwise entitled to a fraction of a share of Webster Common Stock
shall be entitled to receive an amount of cash equal to (i) the
fraction of a share of the Webster Common Stock to which such
holder would otherwise be entitled, multiplied by (ii) the actual
market value of the Webster Common Stock, which shall be deemed to
be the average of the daily closing prices per share for Webster
Common Stock for the fifteen consecutive trading days on which
shares of Webster Common Stock are actually traded (as reported on
the Nasdaq Stock Market National Market System) ending on the third
trading day preceding the Closing Date. Following consummation of
the Merger, no holder of People's Common Stock shall be entitled to
dividends or any other rights in respect of any such fraction.
(e) Notwithstanding anything in this Agreement to the
contrary and unless otherwise provided by applicable law, shares of
People's Common Stock that are issued and outstanding immediately
prior to the Effective Time and that are owned by shareholders who
have properly objected within the meaning of Sections 33-855
through 33-872 of the Connecticut Corporation Law (the "Objecting
Shares"), shall not be converted into the right to receive shares
of Webster Common Stock, unless and until such shareholders shall
have failed to perfect or shall have effectively withdrawn or lost
their right of payment under applicable law. If any such
shareholder shall have failed to perfect or shall have effectively
withdrawn or lost such right of payment, each share of People's
Common Stock held by such shareholder shall thereupon be deemed to
have been converted into the right to receive and become
exchangeable for, at the Effective Time, shares of Webster Common
Stock pursuant to Section 1.4(a) hereof.
(f) People's Corp. shall give Webster (i) prompt notice of
any objections filed pursuant to Section 33-861 of the Connecticut
Corporation Law received by People's Corp., withdrawals of such
objections, and any other instruments served in connection with
such objections pursuant to the Connecticut Corporation Law and
received by People's Corp. and (ii) the opportunity to direct all
negotiations and proceedings with respect to objections under the
Connecticut Corporation Law consistent with the obligations of
People's Corp. thereunder. People's Corp. shall not, except with
the prior written consent of Webster, (x) make any payment with
respect to any such objection, (y) offer to settle or settle any
such objections or (z) waive any failure to timely deliver a
written objection in accordance with the Connecticut Corporation
Law.
1.5 Conversion of Merger Sub Common Stock.
Each of the shares of the common stock, par value $.01 per
share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall become shares of the Surviving Corporation
after the Merger and shall thereupon constitute all of the issued
and outstanding shares of the Surviving Corporation.
1.6 Options.
At the Effective Time, each option granted by People's Corp.
to purchase shares of People's Common Stock which is outstanding
and unexercised immediately prior thereto shall be converted
automatically into an option to purchase shares of Webster Common
Stock in an amount and at an exercise price determined as provided
below (and otherwise subject to the terms of the 1986 Stock Option
and Incentive Plan (the "1986 Option Plan"), the 1986 Stock Option
Plan for Outside Directors (the "1986 Directors Plan"), the 1995
Stock Option and Incentive Plan (the "1995 Stock Option Plan") or
the 1995 Stock Option Plan for Outside Directors (the "1995
Directors Plan") (the 1986 Option Plan, the 1986 Directors Plan,
the 1995 Stock Option Plan, and the 1995 Directors Plan,
collectively, the "People's Stock Plans");
(1) The number of shares of Webster Common Stock to be
subject to the option immediately after the Effective Time shall
be equal to the product of the number of shares of People's Common
Stock subject to the option immediately before the Effective Time,
multiplied by the Exchange Ratio, provided that any fractional
shares of Webster Common Stock resulting from such multiplication
shall be rounded down to the nearest share; and
(2) The exercise price per share of Webster Common Stock
under the option immediately after the Effective Time shall be
equal to the exercise price per share of People's Common Stock
under the option immediately before the Effective Time divided by
the Exchange Ratio, provided that such exercise price shall be
rounded to the nearest cent.
(3) For purposes of the People's Stock Plans, service as
an advisory director of Webster Bank shall be deemed to be service.
The adjustment provided herein shall be and is intended to be
effected in a manner which is consistent with Section 424(a) of the
Internal Revenue Code of 1986, as amended (the "Code"). The
duration and other terms of the option immediately after the
Effective Time shall be the same as the corresponding terms in
effect immediately before the Effective Time, except that all
references to People's Corp. or People's Bank in the People's Stock
Plans (and the corresponding references in the option agreement
documenting such option) shall be deemed to be references to
Webster.
1.7 Certificate of Incorporation.
At the Effective Time, the Certificate of Incorporation of
People's Corp., as in effect at the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation.
1.8 By-Laws.
At the Effective Time, the By-Laws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the By-Laws of
the Surviving Corporation.
1.9 Directors and Officers.
At the Effective Time, the directors and officers of Merger
Sub immediately prior to the Effective Time shall be the directors
and officers of the Surviving Corporation. One director of
People's Corp., to be selected by the Board of Directors of Webster
in consultation with People's Corp., shall be invited to serve as
an additional member (the "New Member") of the Board of Directors
of Webster Bank for a term not to expire prior to Webster's 2000
annual meeting of stockholders. The New Member will receive
directors fees on the same basis as other non-employee directors of
Webster Bank who are not directors of Webster, which fees as of the
date hereof are based on an annual retainer of $10,000 (payable in
shares of Webster Common Stock, in accordance with the Directors
Retainer Fees Plan of Webster), and $750 per meeting attended. In
addition, the non-employee directors of People's Corp. serving
immediately prior to the Effective Time will be invited to serve on
an advisory board to Webster after the Bank Merger for a period of
up to 24 months. Such advisory directors will each be paid for
such service up to $40,000 based on a quarterly retainer of $3,500
and quarterly meeting attendance fees of $1,500 for each meeting
attended; provided, however, that while any such advisory director
also is a director of Webster Bank, such director will not receive
any compensation as an advisory director.
1.10 Tax Consequences.
It is intended that the Merger, either alone or in conjunction
with the Subsidiary 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 the Code.
ARTICLE II
EXCHANGE OF SHARES
2.1 Webster to Make Shares Available.
At or prior to the Effective Time, Webster shall deposit, or
shall cause to be deposited, with Webster's transfer agent,
American Stock Transfer & Trust Company, or such other bank, trust
company or transfer agent as Webster may select (the "Exchange
Agent"), for the benefit of the holders of Certificates, for
exchange in accordance with this Article II, certificates
representing the shares of Webster Common Stock and the cash in
lieu of fractional shares (such cash and certificates for shares of
Webster Common Stock, being hereinafter referred to as the
"Exchange Fund") to be issued pursuant to Section 1.4 and paid
pursuant to Section 2.2(a) hereof in exchange for outstanding
shares of People's Common Stock.
2.2 Exchange of Shares.
(a) As soon as practicable after the Effective Time, the
Exchange Agent shall mail to each holder of record of a Certificate
or Certificates 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) and instructions for use in effecting the
surrender of the Certificates in exchange for certificates
representing the shares of Webster Common Stock and the cash in
lieu of fractional shares into which the shares of People's Common
Stock represented by such Certificate or Certificates shall have
been converted pursuant to this Agreement. People's Corp. shall
have the right to review both the letter of transmittal and the
instructions prior to such documents being finalized. Upon
surrender of a Certificate for exchange and cancellation to the
Exchange Agent, together with such letter of transmittal, duly
executed, the holder of such Certificate shall be entitled to
receive in exchange therefor (x) a certificate representing that
number of whole shares of Webster Common Stock to which such holder
of People's Common Stock shall have become entitled pursuant to the
provisions of Article I hereof and (y) a check representing the
amount of cash in lieu of fractional shares, if any, which such
holder has the right to receive in respect of the Certificate
surrendered pursuant to the provisions of this Article II, and the
Certificate so surrendered shall forthwith be canceled. No
interest will be paid or accrued on the cash in lieu of fractional
shares and unpaid dividends and distributions, if any, payable to
holders of Certificates.
(b) No dividends or other distributions declared after the
Effective Time with respect to Webster Common Stock and payable to
the holders of record thereof shall be paid to the holder of any
unsurrendered Certificate until the holder thereof shall surrender
such Certificate in accordance with this Article II. After the
surrender of a Certificate in accordance with this Article II, the
record holder thereof shall be entitled to receive any such
dividends or other distributions, without any interest thereon,
which theretofore had become payable with respect to shares of
Webster Common Stock represented by such Certificate. No holder of
an unsurrendered Certificate shall be entitled, until the surrender
of such Certificate, to vote the shares of Webster Common Stock
into which his People's Common Stock shall have been converted.
(c) If any certificate representing shares of Webster Common
Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it
shall be a condition of the issuance thereof that the Certificate
so surrendered shall be properly endorsed (or accompanied by an
appropriate instrument of transfer) and otherwise in proper form
for transfer, and that the person requesting such exchange shall
pay to the Exchange Agent in advance any transfer or other taxes
required by reason of the issuance of a certificate representing
shares of Webster Common Stock in any name other than that of the
registered holder of the Certificate surrendered, or shall
establish to the satisfaction of the Exchange Agent that such tax
has been paid or is not payable.
(d) After the close of business on the day immediately prior
to the Effective Time, there shall be no transfers on the stock
transfer books of People's Corp. of the shares of People's 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 canceled and exchanged for certificates
representing shares of Webster Common Stock as provided in this
Article II.
(e) Any portion of the Exchange Fund that remains unclaimed
by the shareholders of People's Corp. for six months after the
Effective Time shall be returned to Webster. Any shareholders of
People's Corp. who have not theretofore complied with this Article
II shall thereafter look only to Webster for payment of their
shares of Webster Common Stock, cash in lieu of fractional shares
and unpaid dividends and distributions on Webster Common Stock
deliverable in respect of each share of People's Common Stock such
shareholder holds as determined pursuant to this Agreement, in each
case, without any interest thereon. Notwithstanding the foregoing,
none of Webster, People's Corp., the Exchange Agent or any other
person shall be liable to any former holder of shares of People's
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 Webster, the posting by such person of a bond
in such amount as Webster may reasonably 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 shares of Webster Common
Stock and cash in lieu of fractional shares deliverable in respect
thereof pursuant to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PEOPLE'S CORP.
People's Corp. hereby makes the following representations and
warranties to Webster and Merger Sub as set forth in this Article
III, each of which is being relied upon by Webster and Merger Sub
as a material inducement to enter into and perform this Agreement.
All of the disclosure schedules of People's Corp. referenced below
and thereby required of People's Corp. pursuant to this Agreement,
which disclosure schedules shall be cross-referenced to the
specific sections and subsections of this Agreement and delivered
herewith, are referred to herein as the "People's Corp. Disclosure
Schedule."
3.1 Corporate Organization.
(a) People's Corp. is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Connecticut. People's Corp. 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 any material business conducted by it or the character or
location of any material properties or assets owned or leased by it
makes such licensing or qualification necessary. People's Corp. is
duly registered as a bank holding company with the Board of
Governors of the Federal Reserve System ("FRB") under the Banking
Holding Company Act of 1956, as amended ("BHCA"). The Certificate
of Incorporation and By-Laws of People's Corp., copies of which
have previously been delivered to Webster, are true, correct and
complete copies of such documents as in effect as of the date of
this Agreement.
(b) People's Bank is a state chartered savings bank duly
organized, validly existing and in good standing under the laws of
the State of Connecticut. The deposit accounts of People's Bank
are insured by the Federal Deposit Insurance Corporation (the
"FDIC") through the Bank Insurance Fund (the "BIF") to the fullest
extent permitted by law, and all premiums and assessments required
in connection therewith have been paid by People's Bank. People's
Bank is the only subsidiary of People's Corp. that is a
"Significant Subsidiary" as such term is defined in Regulation S-X
promulgated by the Securities and Exchange Commission (the "SEC").
People's Bank 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 any material
business conducted by it or the character or the location of any
material properties or assets owned or leased by it makes such
licensing or qualification necessary. The Certificate of
Incorporation and By-Laws of People's Bank, copies of which have
previously been delivered to Webster, are true, correct and
complete copies of such documents as in effect as of the date of
this Agreement.
3.2 Capitalization.
(a) The authorized capital stock of People's Corp. consists
of 10,000,000 shares of People's Common Stock and 1,000,000 shares
of serial preferred stock, no par value (the "People's Preferred
Stock"). As of the date hereof, there are (x) 1,906,863 shares of
People's Common Stock issued and outstanding and an additional
636,961 shares of People's Common Stock held in People's Corp.'s
treasury, (y) no shares of People's Common Stock reserved for
issuance upon exercise of outstanding stock options or otherwise,
except for 222,500 shares of People's Common Stock reserved for
issuance pursuant to the People's Stock Plans (of which options for
166,500 shares are currently outstanding) and (ii) 476,167 shares
of People's Common Stock reserved for issuance upon exercise of the
option to be issued to Webster pursuant to the Option Agreement,
and (z) no shares of People's Preferred Stock issued or
outstanding, held in People's Corp.'s treasury or reserved for
issuance upon exercise of outstanding stock options or otherwise.
All of the issued and outstanding shares of People's Common Stock
have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof. Except for the
Option Agreement and the People's Stock Plans, People's Corp. 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
People's Common Stock or People's Preferred Stock or any other
equity security of People's Corp. or any securities representing
the right to purchase or otherwise receive any shares of People's
Common Stock or any other equity security of People's Corp. The
names of the optionees, the date of each option to purchase
People's Common Stock granted, the number of shares subject to each
such option, the expiration date of each such option, and the price
at which each such option may be exercised under the People's Stock
Plans are set forth in Section 3.2(a) of the People's Corp.
Disclosure Schedule. Since December 31, 1996 People's Corp. has
not issued any shares of its capital stock or any securities
convertible into or exercisable for any shares of its capital
stock, other than pursuant to the exercise of director or employee
stock options granted prior to December 31, 1996, under the
People's Stock Plans and pursuant to the People's Savings Financial
Corp. Dividend Reinvestment Plan and Stock Purchase Plan (the
"People's DRIP").
(b) Section 3.2(b) of the People's Corp. Disclosure Schedule
sets forth a true, correct and complete list of all Subsidiaries of
People's Corp. as of the date of this Agreement. People's Corp.
owns, directly or indirectly, all of the issued and outstanding
shares of capital stock of each of its Subsidiaries, free and clear
of all liens, charges, encumbrances and security interests
whatsoever, and all of such shares are duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive
rights, with no personal liability attaching to the ownership
thereof. No People's Corp. 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.
3.3 Authority; No Violation.
(a) People's Corp. has full corporate power and authority to
execute and deliver this Agreement and the Option Agreement and to
consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Option Agreement
and the consummation of the transactions contemplated hereby and
thereby have been duly and validly approved by the Board of
Directors of People's Corp. The Board of Directors of People's
Corp. has directed that this Agreement and the transactions
contemplated hereby be submitted to People's Corp.'s shareholders
for approval at a special meeting of such shareholders and, except
for the adoption of this Agreement by the requisite vote of
People's Corp.'s shareholders, no other corporate proceedings on
the part of People's Corp. (except for matters related to setting
the date, time, place and record date for the special meeting) are
necessary to approve this Agreement or the Option Agreement or to
consummate the transactions contemplated hereby or thereby. This
Agreement has been, and the Option Agreement will be, duly and
validly executed and delivered by People's Corp. and (assuming due
authorization, execution and delivery by Webster and Merger Sub of
this Agreement and by Webster of the Option Agreement) will
constitute valid and binding obligations of People's Corp.,
enforceable against People's Corp. in accordance with their 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) People's Bank has full corporate power and authority to
execute and deliver the Bank Merger Agreement and to consummate the
transactions contemplated thereby. The execution and delivery of
the Bank Merger Agreement and the consummation of the transactions
contemplated thereby have been duly and validly approved by the
Board of Directors of People's Bank and by People's Corp. as the
sole shareholder of People's Bank. No other corporate proceedings
on the part of People's Bank will be necessary to consummate the
transactions contemplated thereby. The Bank Merger Agreement, upon
execution and delivery by People's Bank, will be duly and validly
executed and delivered by People's Bank and will (assuming due
authorization, execution and delivery by Webster Bank) constitute
a valid and binding obligation of People's Bank, enforceable
against People's 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 and
the Option Agreement by People's Corp. or the Bank Merger Agreement
by People's Bank, nor the consummation by People's Corp. or
People's Bank, as the case may be, of the transactions contemplated
hereby or thereby, nor compliance by People's Corp. or People's
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 People's Corp. or the Certificate of Incorporation or
By-Laws of People's Bank, or (ii) assuming that the consents and
approvals referred to in Section 3.4 hereof are duly obtained,
(x) violate any Laws (as defined in Section 9.13) applicable to
People's Corp. or People's Bank, or any of their respective
properties or assets, or (y) violate, conflict with, result in a
breach of any provision of or the loss of any benefit under,
constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, result in the
termination of or a right of termination or cancellation under,
accelerate the performance required by, or result in the creation
of any lien, pledge, security interest, charge or other encumbrance
upon any of the respective properties or assets of People's Corp.
or People's Bank 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
People's Corp. or People's Bank is a party, or by which they or any
of their respective properties or assets may be bound or affected.
3.4 Consents and Approvals.
(a) Except for (i) the filing of applications and notices, as
applicable, as to the Merger and the Bank Merger with the FRB under
the BHCA and the Office of Thrift Supervision ("OTS") under the
Home Owners Loan Act of 1933 ("HOLA") and the Bank Merger Act and
approval of such applications and notices, (ii) the filing of any
required applications or notices with the FDIC and OTS as to the
subsidiary activities of People's Bank which become service
corporation or operating subsidiaries of Webster Bank and approval
of such applications and notices, (iii) the filing of applications
and notices with the Banking Commissioner of the State of
Connecticut (the "Connecticut Commissioner") and approval of such
applications and notices as to the Merger and the Bank Merger (the
"State Banking Approvals"), (iv) the filing with the Connecticut
Commissioner of an acquisition statement pursuant to Section 36a-
184 of the Banking Law of the State of Connecticut prior to the
acquisition of more than 10% of the People's Common Stock pursuant
to the Option Agreement, if not exempt, (v) the filing with the SEC
of a registration statement on Form S-4 to register the shares of
Webster Common Stock to be issued in connection with the Merger
(including the shares of Webster Common Stock that may be issued
upon the exercise of the options referred to in Section 1.6
hereof), which will include the joint proxy statement/prospectus to
be used in soliciting the approval of People's Corp.'s shareholders
at a special meeting to be held in connection with this Agreement
and the transactions contemplated hereby (the "Proxy
Statement/Prospectus"), (vi) the approval of this Agreement by the
requisite vote of the shareholders of People's Corp., (vii) the
filing of the Certificate of Merger with the Secretary of State of
Connecticut pursuant to the Connecticut Corporation Law, (viii) the
filing of the Certificate of Merger with the Secretary of State of
Delaware pursuant to the DGCL, (ix) the filings required by the
Bank Merger Agreement, (x) the filings required for the Subsidiary
Merger, and (xi) such filings, authorizations or approvals as may
be set forth in Section 3.4 of the People's Corp. 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 People's Corp. of this Agreement
and the Option Agreement, (2) the consummation by People's Corp. of
the Merger and the other transactions contemplated hereby, (3) the
execution and delivery by People's Bank of the Bank Merger
Agreement, (4) the consummation by People's Corp. of the Option
Agreement; and (5) the consummation by People's Bank of the Bank
Merger and the transactions contemplated thereby, except, in each
case, for such consents, approvals or filings, the failure of which
to obtain will not have a material adverse effect on the ability of
Webster to consummate the transactions contemplated hereby.
(b) People's Corp. hereby represents to Webster that it has
no knowledge of any reason why approval or effectiveness of any of
the applications, notices or filings referred to in Section 3.4(a)
cannot be obtained or granted on a timely basis.
3.5 Loan Portfolio; Reports.
(a) As of December 31, 1996 and thereafter through and
including the date of this Agreement, neither People's Corp. nor
People's Bank is a party to any written or oral loan agreement,
note or borrowing arrangement (including, without limitation,
leases, credit enhancements, commitments, guarantees and interest-
bearing assets) (collectively, "Loans"), with any director, officer
or five percent or greater shareholder of People's Corp. or any of
its Subsidiaries, or any Affiliated Person (as defined in Section
9.13) of the foregoing.
(b) People's Corp. and People's Bank have timely filed all
reports, registrations and statements, together with any amendments
required to be made with respect thereto, that they were required
to file since December 31, 1992 with (i) the FRB, (ii) the FDIC,
(iii) the Connecticut Commissioner and any other state banking
commissions or any other state regulatory authority (each a "State
Regulator"), (iv) the SEC and (v) any other self-regulatory
organization ("SRO") (collectively "Regulatory Agencies"). Except
for normal examinations conducted by a Regulatory Agency in the
regular course of the business of People's Corp. and its
Subsidiaries, no Governmental Entity is conducting, or has
conducted, any proceeding or investigation into the business or
operations of People's Corp. or People's Bank since December 31,
1992.
3.6 Financial Statements; Exchange Act Filings; Books and Records.
People's Corp. has previously delivered to Webster true,
correct and complete copies of the consolidated statements of
position of People's Corp. and its Subsidiaries as of December 31
for the fiscal years 1994, 1995, and 1996 and the related
consolidated statements of earnings, stockholders' equity and cash
flows for the fiscal years 1993 through 1996, inclusive, as
reported in People's Corp.'s Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 filed with the SEC under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
in each case accompanied by the audit report of Coopers & Lybrand
L.L.P., independent public accountants with respect to People's
Corp. The financial statements referred to in this Section 3.6
(including the related notes, where applicable) fairly present, and
the financial statements referred to in Section 6.9 hereof will
fairly present (subject, in the case of the unaudited statements,
to recurring audit adjustments normal in nature and amount), the
results of the consolidated operations and consolidated financial
condition of People's Corp. and its Subsidiaries for the respective
fiscal periods or as of the respective dates therein set forth;
each of such statements (including the related notes, where
applicable) comply, and the financial statements referred to in
Section 6.9 hereof will comply, with applicable accounting
requirements and with the published rules and regulations of the
SEC with respect thereto and each of such statements (including the
related notes, where applicable) has been, and the financial
statements referred to in Section 6.9 hereof will be prepared in
accordance with generally accepted accounting principles ("GAAP")
consistently applied during the periods involved, except in each
case as indicated in such statements or in the notes thereto or, in
the case of unaudited statements, as permitted by Form 10-Q.
People's Corp.'s Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 and all reports filed under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act since December 31, 1993
comply in all material respects with the appropriate requirements
for such reports under the Exchange Act, and People's Corp. has
previously delivered or made available to Webster true, correct and
complete copies of such reports. The books and records of People's
Corp. and People's Bank have been, and are being, maintained in all
material respects in accordance with GAAP and any other applicable
legal and accounting requirements.
3.7 Broker's Fees.
Neither People's Corp. nor any People's Corp. 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, the Bank Merger
Agreement or the Option Agreement, except that People's Corp. has
engaged, and will pay a fee or commission to Advest, Inc.
("Advest") in accordance with the terms of a letter agreement
between Advest and People's Corp., dated January 14, 1997, as
amended on February 12, 1997, true, complete and correct copies of
which have been previously delivered by People's Corp. to Webster.
3.8 Absence of Certain Changes or Events.
(a) Except as disclosed in People's Corp.'s Annual Report on
Form 10-K for the fiscal year ended December 31, 1996, since
December 31, 1996 (i) neither People's Corp. nor any of its
Subsidiaries has incurred any material liability, except as
contemplated by the Agreement or in the ordinary course of their
business consistent with their past practices, and (ii) no event
has occurred which has had, or is likely to have, individually or
in the aggregate, a Material Adverse Effect (as defined in Section
9.13) on People's Corp.
(b) Since December 31, 1996 People's Corp. and its
Subsidiaries have carried on their respective businesses in the
ordinary and usual course consistent with their past practices.
3.9 Legal Proceedings.
(a) Neither People's Corp. nor any of its Subsidiaries is a
party to any, and there are no pending or threatened, legal,
administrative, arbitration or other proceedings, claims, actions
or governmental or regulatory investigations of any nature against
People's Corp. or any of its Subsidiaries in which there is a
reasonable probability of any material recovery against or other
material effect upon People's Corp. or any of its Subsidiaries or
which challenge the validity or propriety of the transactions
contemplated by this Agreement, the Bank Merger Agreement or the
Option Agreement as to which there is a reasonable probability of
success.
(b) There is no injunction, order, judgment, decree, or
regulatory restriction imposed upon People's Corp., any of its
Subsidiaries or the assets of People's Corp. or any of its
Subsidiaries.
3.10 Taxes and Tax Returns.
Each of People's Corp. and its Subsidiaries has duly filed all
Federal and state tax returns required to be filed by it on or
prior to the date hereof (all such returns being accurate and
complete in all material respects) and has duly paid or made
provisions for the payment of all material taxes and other
governmental charges which have been incurred or are due or claimed
to be due from it by Federal and state taxing authorities on or
prior to the date hereof other than taxes or other charges
(a) which (x) are not yet delinquent or (y) are being contested in
good faith and set forth in Section 3.10 of the People's Corp.
Disclosure Schedule and (b) which have not been finally determined.
All liability with respect to the income tax returns of People's
Corp. and its Subsidiaries has been satisfied for all years to and
including 1995. The Internal Revenue Service ("IRS") has not
notified People's Corp. of, or otherwise asserted, that there are
any material deficiencies with respect to the income tax returns of
People's Corp. subsequent to 1993. There are no material disputes
pending, or claims asserted for, Taxes or assessments upon People's
Corp. or any of its Subsidiaries, nor has People's Corp. or any of
its Subsidiaries been requested to give any currently effective
waivers extending the statutory period of limitation applicable to
any Federal or state income tax return for any period. In
addition, Federal and state returns which are accurate and complete
in all material respects have been filed by People's Corp. and its
Subsidiaries for all periods for which returns were due with
respect to income tax withholding, Social Security and unemployment
taxes and the amounts shown on such Federal and state returns to be
due and payable have been paid in full or adequate provision
therefor has been included by People's Corp. in its consolidated
financial statements as of December 31, 1996.
3.11 Employee Plans.
(a) Section 3.11(a) of the People's Corp. Disclosure Schedule
sets forth a true and complete list of each employee benefit plan
(within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), arrangement or
agreement that is maintained or contributed to as of the date of
this Agreement, or that has within the last six years been
maintained or contributed to, by People's Corp. or any of its
Subsidiaries or any other entity which together with People's Corp.
would be deemed a "single employer" within the meaning of Section
4001 of ERISA or Code Sections 414(b), (c) or (m) or under which
People's Corp. or any such Subsidiary has any liability
(collectively, the "Plans").
(b) People's Corp. has heretofore delivered to Webster true,
correct and complete copies of each of the Plans and all related
documents, including but not limited to (i) the actuarial report
for such Plan (if applicable) for each of the last five years,
(ii) the most recent determination letter from the Internal Revenue
Service (if applicable) for such Plan, (iii) the current summary
plan description and any summaries of material modification,
(iv) all annual reports (Form 5500 series) for each Plan filed for
the preceding five plan years, (v) all agreements with fiduciaries
and service providers relating to the Plan, and (vi) all
substantive correspondence relating to any such Plan addressed to
or received from the Internal Revenue Service, the Department of
Labor, the Pension Benefit Guaranty Corporation or any other
governmental agency.
(c) Except as set forth at Section 3.11(c) of the People's
Corp. Disclosure Schedule, (i) Each of the Plans has been operated
and administered in all material respects in compliance 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 the
actuarial assumptions used for funding purposes in the most recent
actuarial report prepared by such Plan's actuary with respect to
such Plan, 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 Plan provides benefits, including,
without limitation, death or medical benefits (whether or not
insured), with respect to current or former employees of People's
Corp. or any People's Corp. Subsidiary beyond their retirement or
other termination of service, other than (w) coverage mandated by
applicable Law, (x) death benefits or retirement benefits under a
Plan that is an "employee pension plan," as that term is defined in
Section 3(2) of ERISA, (y) deferred compensation benefits under a
Plan that are accrued as liabilities on the books of People's Corp.
or any People's Corp. Subsidiary, or (z) benefits the full cost of
which is borne by the current or former employee (or his
beneficiary), (v) no liability under Title IV of ERISA has been
incurred by People's Corp. or any People's Corp. Subsidiary that
has not been satisfied in full, and no condition exists that
presents a material risk to People's Corp. or any People's Corp.
Subsidiary incurring a material liability thereunder, (vi) no Plan
is a "multi employer pension plan," as such term is defined in
Section 3(37) of ERISA, (vii) all contributions or other amounts
payable by People's Corp. or any People's Corp. Subsidiary as of
the Effective Time with respect to each Plan and all other
liabilities of each such entity 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, (viii) neither People's Corp. nor any People's
Corp. Subsidiary has engaged in a transaction in connection with
which People's Corp. or any People's Corp. Subsidiary 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, (ix) to the knowledge of People's Corp., there
are no pending, threatened or anticipated claims (other than
routine claims for benefits) by, on behalf of or against any of the
plans or any trusts related thereto, and (x) all Plans (other than
Plans providing for the payment of benefits from the general assets
of People's Corp. or any People's Corp. Subsidiary) could be
terminated as of the Effective Time without material liability;
(xi) no Plan, program, agreement or other arrangement, either
individually or collectively, provides for any payment by People's
Corp. or any People's Corp. Subsidiary that would not be deductible
under Code Sections 162(a)(1), 162(m) or 404 or that would
constitute a "parachute payment" within the meaning of Code Section
280G; (xii) no "accumulated funding deficiency" as defined in
Section 302(a)(2) of ERISA or Section 412 of the Code, whether or
not waived, and no "unfunded current liability" as determined under
Section 412(l) of the Code exists with respect to any Plan; and
(xiii) no Plan has experienced a "reportable event" (as such term
is defined in Section 4043(b) of ERISA) that is not subject to an
administrative or statutory waiver from the reporting requirement.
3.12 Certain Contracts.
(a) Except as set forth at Section 3.12 of the People's Corp.
Disclosure Schedule, neither People's Corp. nor any of its
Subsidiaries is a party to or bound by any contract, arrangement or
commitment (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 (either alone or upon the occurrence
of any additional acts or events) result in any payment (whether of
severance pay or otherwise) becoming due from Webster, People's
Corp., People's Bank, the Surviving Corporation, Webster Bank or
any of their respective Subsidiaries to any director, officer or
employee thereof, (iii) which materially restricts the conduct of
any line of business by People's Corp. or People's Bank, (iv) with
or to a labor union or guild (including any collective bargaining
agreement) or (v) (including any stock option plan, stock
appreciation rights plan, restricted stock plan or stock purchase
plan) any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this
Agreement or the Bank Merger Agreement, or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement or the Bank Merger
Agreement. People's Corp. has previously delivered to Webster
true, correct and complete copies of all employment, consulting and
deferred compensation agreements to which People's Corp. or any of
its Subsidiaries is a party. Section 3.12(a) of the People's Corp.
Disclosure Schedule sets forth a list of all material contracts (as
defined in Item 601(b)(10) of Regulation S-K) of People's Corp.
Each contract, arrangement or commitment of the type described in
this Section 3.12(a), whether or not set forth in Section 3.12(a)
of the People's Corp. Disclosure Schedule, is referred to herein as
a "People's Corp. Contract," and neither People's Corp. nor any of
its Subsidiaries has received notice of, nor do any executive
officers of such entities know of, any violation of any People's
Corp. Contract.
(b) (i) Each People's Corp. Contract is valid and binding and
in full force and effect, (ii) People's Corp. and each of its
Subsidiaries has in all material respects performed all obligations
required to be performed by it to date under each People's Corp.
Contract, and (iii) 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 People's Corp. or any of its
Subsidiaries under any such People's Corp. Contract.
3.13 Agreements with Regulatory Agencies.
Neither People's Corp. nor People's Bank 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
with, or has adopted any board resolutions at the request of (each,
whether or not set forth on Section 3.13 of the People's Corp.
Disclosure Schedule, a "Regulatory Agreement"), any Governmental
Entity that restricts the conduct of its business or that in any
manner relates to its capital adequacy, its credit policies, its
management or its business, nor has People's Corp. or People's Bank
been advised by any Governmental Entity that it is considering
issuing or requesting any Regulatory Agreement.
3.14 State Takeover Laws; Certificate of Incorporation.
The Board of Directors of People's Corp. has approved the
offer of Webster to enter into this Agreement, the Bank Merger
Agreement and the Option Agreement, and has approved People's
entering into this Agreement, the Bank Merger Agreement and the
Option Agreement, and the transactions contemplated thereby, such
that under the Connecticut Corporation Law and People's Corp.'s
Certificate of Incorporation the only vote of People's Corp.
stockholders necessary to consummate the transactions contemplated
hereby (including the Bank Merger, Subsidiary Merger and issuance
under the Option Agreement) is the approval of at least two-thirds
of the outstanding shares of People's Common Stock.
3.15 Environmental Matters.
(a) Each of People's Corp. and the People's Corp.
Subsidiaries is in compliance in all material respects with all
applicable federal and state laws and regulations relating to
pollution or protection of the environment (including without
limitation, laws and regulations relating to emissions, discharges,
releases and threatened releases of Hazardous Material (as
hereinafter defined), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials;
(b) There is no suit, claim, action, proceeding,
investigation or notice pending or to the knowledge of People's
Corp. and People's Bank's directors and executive officers
threatened (or past or present actions or events that could form
the basis of any such suit, claim, action, proceeding,
investigation or notice), in which People's Corp. or any People's
Corp. Subsidiary has been or, with respect to threatened suits,
claims, actions, proceedings, investigations or notices may be,
named as a defendant (x) for alleged material noncompliance
(including by any predecessor), with any environmental law, rule or
regulation or (y) relating to any material release or threatened
release into the environment of any Hazardous Material, whether or
not occurring at or on a site owned, leased or operated by People's
Corp. or any People's Corp. Subsidiary;
(c) To the knowledge of People's Corp. and People's Bank's
directors and executive officers, during the period of People's
Corp.'s or any People's Corp. Subsidiary's ownership or operation
of any of its properties, there has not been any material release
of Hazardous Materials in, on, under or affecting any such
property.
(d) To the knowledge of People's Corp. and People's Bank's
executive officers, neither People's Corp. nor any People's Corp.
Subsidiary has made or participated in any loan to any person who
is subject to any suit, claim, action, proceeding, investigation or
notice, pending or threatened, with respect to (i) any alleged
material noncompliance as to any property securing such loan with
any environmental law, rule or regulation, or (ii) the release or
the threatened release into the environment of any Hazardous
Material at a site owned, leased or operated by such person on any
property securing such loan.
(e) For purposes of this section 3.15, the term "Hazardous
Material" means any hazardous waste, petroleum product,
polychlorinated biphenyl, chemical, pollutant, contaminant,
pesticide, radioactive substance, or other toxic material, or other
material or substance (in each such case, other than small
quantities of such substances in retail containers) regulated under
any applicable environmental or public health statute, law,
ordinance, rule or regulation.
3.16 Reserves for Losses.
All reserves or other allowances for possible losses reflected
in People's Corp.'s most recent financial statements referred to in
Section 3.6 complied with all Laws and are adequate under GAAP.
Neither People's Corp. nor People's Bank has been notified by the
FRB, the FDIC, the Connecticut Commissioner or People's Corp.'s
independent auditor, in writing or otherwise, that such reserves
are inadequate or that the practices and policies of People's Corp.
or People's Bank in establishing such reserves and in accounting
for delinquent and classified assets generally fail to comply with
applicable accounting or regulatory requirements, or that the FRB,
the FDIC, the Connecticut Commissioner or People's Corp.'s
independent auditor believes such reserves to be inadequate or
inconsistent with the historical loss experience of People's Corp.
or People's Bank. People's Corp. has previously furnished Webster
with a complete list of all extensions of credit and other real
estate owned ("OREO") that have been classified by any bank
examiner (regulatory or internal) as other loans specially
mentioned, special mention, substandard, doubtful, loss, classified
or criticized, credit risk assets, concerned loans or words of
similar import. People's Corp. agrees to update such list no less
frequently than monthly after the date of this Agreement until the
earlier of the Closing Date or the date that this Agreement is
terminated in accordance with Section 8.1. All OREO held by
People's Corp. or People's Bank is being carried net of reserves at
the lower of cost or net realizable value.
3.17 Properties and Assets.
Section 3.17 of the People's Corp. Disclosure Schedule lists
(i) all real property owned by People's Corp. and each People's
Corp. Subsidiary; (ii) each real property lease, sublease or
installment purchase arrangement to which People's Corp. or any
People's Corp. Subsidiary is a party; (iii) a description of each
contract for the purchase, sale, or development of real estate to
which People's Corp. or any People's Corp. Subsidiary is a party;
and (iv) all items of People's Corp.'s or any People's Corp.
Subsidiary's tangible personal property and equipment with a book
value of $50,000 or more or having any annual lease payment of
$25,000 or more. Except for (a) items reflected in People's
Corp.'s consolidated financial statements as of December 31, 1996
referred to in Section 3.6 hereof, (b) exceptions to title that do
not interfere materially with People's Corp.'s or any People's
Corp. Subsidiary's use and enjoyment of owned or leased real
property (other than OREO), (c) liens for current real estate taxes
not yet delinquent, or being contested in good faith, properly
reserved against (and reflected on the financial statements
referred to in Section 3.6 above), (d) properties and assets sold
or transferred in the ordinary course of business consistent with
past practices since December 31, 1996, and (e) items listed in
Section 3.17 of the People's Corp. Disclosure Schedule, People's
Corp. and each People's Corp. Subsidiary have good and, as to owned
real property, marketable and insurable title to all their
properties and assets, reflected in its consolidated financial
statements of People's Corp. as of December 31, 1996, free and
clear of all liens, claims, charges and other encumbrances.
People's Corp. and each People's Corp. Subsidiary, as lessees, have
the right under valid and subsisting leases to occupy, use and
possess all property leased by them, and there has not occurred
under any such lease any material breach, violation or default by
People's Corp. or People's Bank, and neither People's Corp. nor any
People's Corp. Subsidiary has experienced any material uninsured
damage or destruction with respect to such properties since
December 31, 1996. All properties and assets used by People's
Corp. and each People's Corp. Subsidiary are in good operating
condition and repair suitable for the purposes for which they are
currently utilized and comply in all material respects with all
Laws relating thereto now in effect or scheduled to come into
effect. People's Corp. and each People's Corp. Subsidiary enjoy
peaceful and undisturbed possession under all leases for the use of
all property under which they are the lessees, and all leases to
which People's Corp. or any People's Corp. Subsidiary is a party
are valid and binding obligations in accordance with the terms
thereof. Neither People's Corp. nor any People's Corp. Subsidiary
is in material default with respect to any such lease, and there
has occurred no default by People's Corp. or People's Bank or event
which with the lapse of time or the giving of notice, or both,
would constitute a material default under any such lease. There
are no Laws, conditions of record, or other impediments which
interfere with the intended use by People's Corp. or any People's
Corp. Subsidiary of any of the property owned, leased, or occupied
by them.
3.18 Insurance.
Section 3.18 of the People's Corp. Disclosure Schedule
contains a true, correct and complete list of all insurance
policies and bonds maintained by People's Corp. and any People's
Corp. Subsidiary, including the name of the insurer, the policy
number, the type of policy and any applicable deductibles, and all
such insurance policies and bonds (or other insurance policies and
bonds that have, from time to time, in respect of the nature of the
risks insured against and amount of coverage provided, been
substantially similar in kind and amount to that customarily
carried by parties similarly situated who own properties and engage
in businesses substantially similar to that of People's Corp. and
any People's Corp. Subsidiary) are in full force and effect and
have been in full force and effect. As of the date hereof, neither
People's Corp. nor any People's Corp. Subsidiary has received any
notice of cancellation or amendment of any such policy or bond or
is in default under any such policy or bond, no coverage thereunder
is being disputed and all material claims thereunder have been
filed in a timely fashion. The existing insurance carried by
People's Corp. and People's Corp. Subsidiaries is and will continue
to be, in respect of the nature of the risks insured against and
the amount of coverage provided, substantially similar in kind and
amount to that customarily carried by parties similarly situated
who own properties and engage in businesses substantially similar
to that of People's Corp. and the People's Corp. Subsidiaries, and
is sufficient for compliance by People's Corp. and the People's
Corp. Subsidiaries with all requirements of Law and agreements to
which People's Corp. or any of the People's Corp. Subsidiaries is
subject or is party. True, correct and complete copies of all such
policies and bonds reflected at Section 3.18 of the People's Corp.
Disclosure Schedule, as in effect on the date hereof, have been
delivered to Webster.
3.19 Liquidation Account.
The liquidation account established by People's Bank in
connection with its conversion from the mutual to stock form has
been eliminated as provided under Connecticut law.
3.20 Compliance with Applicable Laws.
Each of People's Corp. and any People's Corp. Subsidiary has
complied in all material respects with all Laws applicable to it or
to the operation of its business. Neither People's Corp. nor any
People's Corp. Subsidiary has received any notice of any material
alleged or threatened claim, violation, or liability under any such
Laws that has not heretofore been cured and for which there is no
remaining liability.
3.21 Loans.
As of the date hereof:
(a) All loans owned by People's Corp. or any People's Corp.
Subsidiary, or in which People's Corp. or any People's Corp.
Subsidiary has an interest, comply in all material respects with
all Laws, including, but not limited to, applicable usury statutes,
underwriting and recordkeeping requirements and the Truth in
Lending Act, the Equal Credit Opportunity Act, and the Real Estate
Procedures Act, and other applicable consumer protection statutes
and the regulations thereunder.
(b) All loans owned by People's Corp. or any People's Corp.
Subsidiary, or in which People's Corp. or any People's Corp.
Subsidiary has an interest, have been made or acquired by People's
Corp. in accordance with board of director-approved loan policies
and all of such loans are collectible, except to the extent
reserves have been made against such loans in People's Corp.'s
consolidated financial statements at December 31, 1996 referred to
in Section 3.6 hereof. Each of People's Corp. and each People's
Corp. Subsidiary holds mortgages contained in its loan portfolio
for its own benefit to the extent of its interest shown therein;
such mortgages evidence liens having the priority indicated by
their terms, subject, as of the date of recordation or filing of
applicable security instruments, only to such exceptions as are
discussed in attorneys' opinions regarding title or in title
insurance policies in the mortgage files relating to the loans
secured by real property or are not material as to the
collectability of such loans; and all loans owned by People's Corp.
and each People's Corp. Subsidiary are with full recourse to the
borrowers, and each of People's Corp. and any People's Corp.
Subsidiary has taken no action which would result in a waiver or
negation of any rights or remedies available against the borrower
or guarantor, if any, on any loan. All applicable remedies against
all borrowers and guarantors are enforceable except as may be
limited by bankruptcy, insolvency, moratorium or other similar laws
affecting creditors' rights and except as may be limited by the
exercise of judicial discretion in applying principles of equity.
Except as set forth at Section 3.21 of the People's Corp.
Disclosure Schedule, all loans purchased or originated by People's
Corp. or any People's Corp. Subsidiary and subsequently sold by
People's Corp. or any People's Corp. Subsidiary have been sold
without recourse to People's Corp. or any People's Corp. Subsidiary
and without any liability under any yield maintenance or similar
obligation. True, correct and complete copies of loan delinquency
reports as of February 28, 1997 prepared by People's Corp. and each
People's Corp. Subsidiary, which reports include all loans
delinquent or otherwise in default, have been furnished to Webster.
True, correct and complete copies of the currently effective
lending policies and practices of People's Corp. and each People's
Corp. Subsidiary also have been furnished to Webster.
(c) Except as set forth at Schedule 3.21(c) each outstanding
loan participation sold by People's Corp. or any People's Corp.
Subsidiary was sold with the risk of non-payment of all or any
portion of that underlying loan to be shared by each participant
(including People's Corp. or any People's Corp. Subsidiary)
proportionately to the share of such loan represented by such
participation without any recourse of such other lender or
participant to People's Corp. or any People's Corp. Subsidiary for
payment or repurchase of the amount of such loan represented by the
participation or liability under any yield maintenance or similar
obligation. People's Corp. and any People's Corp. Subsidiary have
properly fulfilled in all material respects its contractual
responsibilities and duties in any loan in which it acts as the
lead lender or servicer and has complied in all material respects
with its duties as required under applicable regulatory
requirements.
(d) People's Corp. and each People's Corp. Subsidiary have
properly perfected or caused to be properly perfected all security
interests, liens, or other interests in any collateral securing any
loans made by it.
(e) Schedule 3.21(e) sets forth a list of all loans or other
extensions of credit to all directors, officers and employees, or
any other person covered by Regulation O of the FRB.
3.22 Affiliates.
Each director, executive officer and other person who is an
"affiliate" (for purposes of Rule 145 under the Securities Act of
1933, as amended (the "Securities Act"), and for purposes of
qualifying the Merger for "pooling-of-interests" accounting
treatment) of People's Corp. is listed at Section 3.22 of the
People's Corp. Disclosure Schedule, and except as indicated thereon
each such person has delivered to Webster, concurrently with the
execution of this Agreement, a stockholder agreement in the form of
Exhibit D hereto (the "People's Stockholder Agreement"). The
People's Stockholder Agreement has been duly and validly executed
and delivered by each person that is a party thereto (assuming due
authorization, execution and delivery by Webster and constitutes
the valid and binding obligation of such person, enforceable
against such person in accordance with their 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.
3.23 Ownership of Webster Common Stock.
Except as set forth at Section 3.23 of the People's Corp.
Disclosure Schedule, neither People's Corp. nor any of its
directors, officers, 5% or greater shareholders or affiliates (as
used above in Section 3.22) (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 outstanding capital stock
of Webster (other than those agreements, arrangements or
understandings specifically contemplated hereby).
3.24 People's DRIP.
People's Corp. has suspended the People's DRIP such that from
the date hereof, no issuances or purchases of People's Common Stock
under the People's DRIP shall be permitted, nor shall any other
obligations thereunder accrue.
3.25 Fairness Opinion.
People's Corp. has received an opinion from Advest to the
effect that, in its opinion, the consideration to be paid to
stockholders of People's Corp. hereunder is fair to such
stockholders from a financial point of view ("Fairness Opinion"),
and Advest has consented to the inclusion of the Fairness Opinion
in the Registration Statement (defined below).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WEBSTER
Webster, on behalf of itself and its wholly-owned
subsidiaries, Webster Bank and Merger Sub, hereby makes the
following representations and warranties to People's Corp. as set
forth in this Article IV, each of which is being relied upon by
People's Corp. as a material inducement to enter into and perform
this Agreement.
4.1 Corporate Organization.
(a) Webster is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
Webster 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. Webster is duly registered as a savings and loan
holding company with the OTS under HOLA. The Certificate of
Incorporation and By-Laws of Webster, copies of which have
previously been made available to People's Corp., are true, correct
and complete copies of such documents as in effect as of the date
of this Agreement.
(b) Merger Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware.
(c) Webster Bank is a federal savings bank chartered by the
OTS under the laws of the United States with its main office in the
State of Connecticut. Webster Bank has the corporate power and
authority to own or lease all of its properties and assets and to
carry on business as 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. The Charter and By-Laws of
Webster Bank, copies of which have previously been made available
to People's Corp., are true, correct and complete copies of such
documents as in effect as of the date of this Agreement.
4.2 Capitalization.
(a) The authorized capital stock of Webster consists of
30,000,000 shares of Webster Common Stock, of which 11,949,991
shares were outstanding (net of 54,578 treasury shares) at
February 28, 1997 and 3,000,000 shares of serial preferred stock,
par value $.01 per share ("Webster Preferred Stock"), none of which
were outstanding at February 28, 1997. At such date, there were
options outstanding to purchase 63,791 shares of Webster Common
Stock. All of the issued and outstanding shares of Webster Common
Stock have been duly authorized and validly issued and are fully
paid, nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof. As of the date of
this Agreement, except as set forth above, Webster 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 Webster Common Stock
or Webster Preferred Stock or any other equity securities of
Webster or any securities presenting the right to purchase or
otherwise receive any shares of Webster Common Stock or Webster
Preferred Stock, other than a warrant to purchase 300,000 shares of
Webster Common Stock issued to Fleet Financial Group and a
contingent payment arrangement with Fleet Financial Group as
described in the Form 8-K filed by Webster with the Securities and
Exchange Commission for such event and other than pursuant to that
certain Rights Agreement between Webster and American Stock
Transfer & Trust Co. The shares of Webster Common Stock to be
issued pursuant to the Merger are authorized and, at the Effective
Time, all such shares will be validly issued, fully paid,
nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof.
(b) The authorized capital stock of Merger Sub consists of
100 shares of common stock, par value $.01 per share, all of which
are issued and outstanding and owned by Webster free and clear of
all liens, charges, encumbrances and security interests whatsoever,
and all of such shares are duly authorized and validly issued and
fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to ownership thereof.
(c) The authorized capital stock of Webster Bank consists of
1,000 shares of common stock, par value $.01 per share, all of
which are issued and outstanding. The outstanding shares of common
stock of Webster Bank are owned by Webster free and clear of all
liens, charges, encumbrances and security interests whatsoever, and
all of such shares are duly authorized and validly issued and fully
paid, nonassessable and free of preemptive rights, with no personal
liability attaching to ownership thereof.
4.3 Authority; No Violation.
(a) Webster has full corporate power and authority to execute
and deliver this Agreement and the Option Agreement and to
consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Option Agreement
and the consummation of the transactions contemplated hereby have
been duly and validly approved by the Board of Directors of
Webster. No other corporate proceedings on the part of Webster are
necessary to consummate the transactions contemplated hereby. This
Agreement has been, and the Option Agreement will be, duly and
validly executed and delivered by Webster and (assuming due
authorization, execution and delivery by People's Corp.) will
constitute valid and binding obligations of Webster, enforceable
against Webster in accordance with their 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 law affecting creditors' rights and remedies
generally.
(b) Merger Sub has full corporate power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly approved by the
Board of Directors of Merger Sub and by Webster as the sole
shareholder of Merger Sub. No other corporate proceedings on the
part of Merger Sub will be necessary to consummate the transactions
contemplated hereby. This Agreement, upon execution and delivery
by Merger Sub, will be duly and validly executed and delivered by
Merger Sub and will (assuming due authorization, execution and
delivery by People's Corp.) constitute a valid and binding
obligation of Merger Sub, enforceable against Merger Sub 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) Webster Bank has full corporate power and authority to
execute and deliver the Bank Merger Agreement and to consummate the
transactions contemplated thereby. The execution and delivery of
the Bank Merger Agreement and the consummation of the transactions
contemplated thereby will be duly and validly approved by the Board
of Directors of Webster Bank and by Webster as the sole shareholder
of Webster Bank prior to the Effective Time. All corporate
proceedings on the part of Webster Bank necessary to consummate the
transactions contemplated thereby will have been taken prior to the
Effective Time. The Bank Merger Agreement, upon execution and
delivery by Webster Bank, will be duly and validly executed and
delivered by Webster Bank and will (assuming due authorization,
execution and delivery by People's Bank) constitute a valid and
binding obligation of Webster Bank, enforceable against Webster
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.
(d) Neither the execution and delivery of this Agreement by
Webster or Merger Sub, the Option Agreement by Webster or the Bank
Merger Agreement by Webster Bank, nor the consummation by Webster,
Merger Sub or Webster Bank, as the case may be, of the transactions
contemplated hereby or thereby, nor compliance by Webster, Merger
Sub or Webster Bank with any of the terms or provisions hereof or
thereof, will (i) violate any provision of the Certificate of
Incorporation or Bylaws of Webster, the Certificate of
Incorporation or By-Laws of Merger Sub or the Charter or By-Laws of
Webster Bank, as the case may be, or (ii) assuming that the
consents and approvals referred to in Section 4.4 are duly
obtained, (x) violate any Laws applicable to Webster, Merger Sub,
Webster Bank or any of their respective properties or assets, or
(y) violate, conflict with, result in a breach of any provision of
or the loss of any benefit under, constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance
required by, or result in the creation of any lien, pledge,
security interest, charge or other encumbrance upon any of the
respective properties or assets of Webster, Webster Bank or Merger
Sub 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 Webster, Webster Bank or
Merger Sub is a party, or by which they or any of their respective
properties or assets may be bound or affected.
4.4 Regulatory Approvals.
(a) Except for (i) the filing of applications and notices, as
applicable, as to the Merger and the Bank Merger with the FRB under
the BHCA and the OTS under HOLA and the Bank Merger Act and
approval of such applications and notices, (ii) the filing of any
required applications or notices with the FDIC and OTS as to the
subsidiary activities of People's Bank which become service
corporation or operating subsidiaries of Webster Bank and approval
of such applications and notices, (iii) the State Banking
Approvals, (iv) the filing with the Connecticut Commissioner of an
acquisition statement pursuant to Section 36a-184 of the Banking
Law of the State of Connecticut prior to the acquisition of more
than 10% of the People's Common Stock pursuant to the Option
Agreement, if not exempt, (v) the filing with the SEC of a
registration statement on Form S-4 to register the shares of
Webster Common Stock to be issued in connection with the Merger
(including the shares of Webster Common Stock that may be issued
upon the exercise of the options referred to in Section 1.6
hereof), which will include the Proxy Statement/Prospectus, (vi)
the approval of this Agreement by the requisite vote of the
shareholders of People's Corp., (vii) the filing of the Certificate
of Merger with the Secretary of State of Connecticut pursuant to
the Connecticut Corporation Law, (viii) the filing of the
Certificate of Merger with the Secretary of State of Delaware
pursuant to the DGCL, (ix) the filings required by the Bank Merger
Agreement, (x) the filings required for the Subsidiary Merger, and
(xi) such filings and approvals as are required to be made or
obtained under the securities or "Blue Sky" laws of various states
or with Nasdaq (or such other exchange as may be applicable) in
connection with the issuance of the shares of Webster Common Stock
pursuant to this Agreement, no consents or approvals of or filings
or registrations with any Governmental Entity are necessary in
connection with (1) the execution and delivery by Webster and
Merger Sub of this Agreement and the Option Agreement, (2) the
consummation by Webster and Merger Sub of the Merger and the other
transactions contemplated hereby, (3) the execution and delivery by
Webster Bank of the Bank Merger Agreement, and (4) the consummation
by Webster Bank of the transactions contemplated by the Bank Merger
Agreement except for such consents, approvals or filings the
failure of which to obtain will not have a material adverse effect
on the ability of People's Corp. to consummate the transactions
contemplated thereby.
(b) Webster hereby represents to People's Corp. that it has
no knowledge of any reason why approval or effectiveness of any of
the applications, notices or filings referred to in Section 4.4(a)
cannot be obtained or granted on a timely basis.
(c) Webster and Webster Bank have filed all reports,
registrations and statements, together with any amendments required
to be made with respect thereto, that they were required to file
since December 31, 1993, with (i) the OTS, (ii) the Connecticut
Commissioner and any other state banking commissions or any other
state regulatory authority (each a "State Regulator"), (iii) the
SEC and (iv) any other self-regulatory organization ("SRO")
(collectively "Regulatory Agencies"). Except for normal
examinations conducted by a Regulatory Agency in the regular course
of the business of Webster and its Subsidiaries, no Governmental
Entity is conducting, or has conducted, any proceeding or
investigation into the business or operations of Webster since
December 31, 1993.
4.5 Financial Statements; Exchange Act Filings; Books and Records.
Webster has previously delivered to People's Corp. true,
correct and complete copies of the consolidated balance sheets of
Webster and its Subsidiaries as of December 31 for the fiscal years
1995 and 1996 and the related consolidated statements of income,
changes in shareholders' equity and cash flows for the fiscal years
1994 through 1996, inclusive, as reported in Webster's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996
filed with the SEC under the Exchange Act, in each case accompanied
by the audit report of KPMG Peat Marwick LLP, independent public
accountants with respect to Webster. The financial statements
referred to in this Section 4.5 (including the related notes, where
applicable) fairly present, and the financial statements referred
to in Section 6.9 hereof will fairly present (subject, in the case
of the unaudited statements, to recurring audit adjustments normal
in nature and amount), the results of the consolidated operations
and consolidated financial condition of Webster and its
Subsidiaries for the respective fiscal periods or as of the
respective dates therein set forth; each of such statements
(including the related notes, where applicable) comply, and the
financial statements referred to in Section 6.9 hereof will comply,
with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto; and each of
such statements (including the related notes, where applicable) has
been, and the financial statements referred to in Section 6.9
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. Webster's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996 and all subsequently filed reports
under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act comply
in all material respects with the appropriate requirements for such
reports under the Exchange Act, and Webster has previously
delivered to People's Corp. true, correct and complete copies of
such reports. The books and records of Webster and Webster Bank
have been, and are being, maintained in all material respects in
accordance with GAAP and any other applicable legal and accounting
requirements and reflect only actual transactions.
4.6 Absence of Certain Changes or Events.
Except as disclosed in Webster's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996, true, correct and
complete copies of which have previously been delivered to People's
Corp., since December 31, 1996, no event has occurred which has
had, individually or in the aggregate, a Material Adverse Effect on
Webster.
4.7 Compliance with Applicable Law.
Except as set forth in Section 4.7 of the Webster Disclosure
Schedule, Webster and each Webster Subsidiary has complied in all
material respects with all Laws applicable to it or to the
operation of its business. Except as set forth in Section 4.7 of
the Webster Disclosure Schedule, neither Webster nor any Webster
Subsidiary has received any notice of any alleged or, threatened
claim, violation of or liability or potential responsibility under
any such Laws that has not heretofore been cured and for which
there is no remaining liability.
4.8 Ownership of People's Common Stock; Affiliates and Associates.
(a) Except for this Agreement, neither Webster 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, more than five percent of the outstanding capital stock of
People's Corp., excluding the shares of People's Common Stock
issuable pursuant to the Option Agreement to be executed subsequent
to the execution of the Agreement.
(b) Neither Webster nor any of its Subsidiaries is an
"affiliate" (as such term is defined in DGCL Section 203(c) (1)) or an
"associate" (as such term is defined in DGCL Section 203(c) (2)) of
People's Corp.
4.9 Employee Benefit Plans.
Webster has heretofore made available for inspection, or
delivered (if requested) to People's Corp. true, correct and
complete copies of each employee benefit plan arrangement or
agreement that is maintained as of the date of this Agreement (the
"Webster Plans") by Webster or any of its Subsidiaries. No
"accumulated funding deficiency" as defined in Section 302(a)(2) of
ERISA or Section 412 of the Code, whether or not waived, and no
"unfunded current liability" as determined under Section 412(l) of
the Code exists with respect to any Webster Plan. The Webster
Plans are in compliance in all material respects with the
applicable requirements of ERISA and the Code.
4.10 Agreements with Regulatory Agencies.
Neither Webster nor any of its affiliates 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
with, or has adopted any board resolutions at the request of any
Governmental Entity that restricts the conduct of its business or
that in any manner relates to its capital adequacy, its credit
policies, its management or its business, nor has Webster, nor
Webster Bank been advised by any Governmental Entity that it is
considering issuing or requesting any Regulatory Agreement.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 Covenants of People's Corp.
During the period from the date of this Agreement and
continuing until the Effective Time, except as expressly
contemplated or permitted by this Agreement, the Bank Merger
Agreement or the Option Agreement or with the prior written consent
of Webster, People's Corp. and each People's Corp. Subsidiary shall
carry on their respective businesses in the ordinary course
consistent with past practices and consistent with prudent banking
practices. People's Corp. will use its reasonable efforts to
(x) preserve its business organization and that of each People's
Corp. Subsidiary intact, (y) keep available to itself and Webster
the present services of the employees of People's Corp. and each
People's Corp. Subsidiary and (z) preserve for itself and Webster
the goodwill of the customers of People's Corp. and each People's
Corp. Subsidiary and others with whom business relationships exist.
Without limiting the generality of the foregoing, and except as set
forth in the People's Corp. Disclosure Schedule or as otherwise
contemplated by this Agreement or consented to by Webster in
writing, People's Corp. shall not, and shall not permit any
People's Corp. Subsidiary to:
(a) declare or pay any dividends on, or make other
distributions in respect of, any of its capital stock (except for
the payment of regular quarterly cash dividends by People's Corp.
of $.23 per share on the People's Common Stock with declaration,
record and payment dates corresponding to the quarterly dividends
paid by People's Corp. during its fiscal year ended December 31,
1996 and except that any People's Corp. Subsidiary may declare and
pay dividends and distributions to People's Corp.); provided,
however, that under no circumstances shall People's Corp. declare,
set aside or pay any dividends if it would result in the holders of
People's Common Stock receiving more than four dividend payments in
fiscal 1997, when considered with anticipated Webster dividends
based on past practice, nor shall People's Corp. be prohibited from
declaring, setting aside or paying dividends consistent herewith if
the Closing Date is such that holders of People's Common Stock
would receive fewer than four dividends in fiscal 1997, when
considered with anticipated Webster dividends based on past
practice it being understood that the parties hereto intend for
People's Corp. to pay its regular quarterly cash dividends to
stockholders as to any completed fiscal quarter prior to the
Effective Time;
(b) (i) split, combine or reclassify any shares of its
capital stock or issue, 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 the People's
Stock Plans in accordance with their present terms, all to the
extent outstanding and in existence on the date of this Agreement,
and except pursuant to the Option Agreement, or (ii) repurchase,
redeem or otherwise acquire (except for the acquisition of Trust
Account Shares and DPC Shares, as such terms are defined in Section
1.4(c) hereof), any shares of the capital stock of People's Corp.
or any People's Corp. Subsidiary, or any securities convertible
into or exercisable for any shares of the capital stock of People's
Corp. or any People's Corp. 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 People's Common Stock pursuant to stock options or
similar rights to acquire People's Common Stock granted pursuant to
the People's Stock Plans and outstanding prior to the date of this
Agreement, in each case in accordance with their present terms and
(ii) pursuant to the Option Agreement;
(d) amend its Certificate of Incorporation, By-Laws or other
similar governing documents;
(e) authorize or permit any of its officers, directors,
employees or agents to, directly or indirectly, solicit, initiate
or encourage any inquiries relating to, or the making of any
proposal from, hold substantive discussions or negotiations with or
provide any information to, any person, entity or group (other than
Webster) concerning any Acquisition Transaction (as defined below)
(an "Acquisition Transaction"). Notwithstanding the foregoing,
People's Corp. may enter into discussions or negotiations or
provide information in connection with a possible Acquisition
Transaction if the Board of Directors of People's Corp., following
receipt of written advice of counsel, reasonably determines in the
exercise of its fiduciary duty that such discussions or
negotiations must be commenced or such information must be
furnished. People's Corp. shall promptly communicate to Webster
the material terms of any proposal, whether written or oral, which
it may receive in respect of any such Acquisition Transaction and
whether it is having discussions or negotiations with a third party
about an Acquisition Transaction with or providing information in
connection with, or which may lead to, an Acquisition Transaction
with a third party. People's Corp. will promptly cease and cause
to be terminated any existing activities, discussions or
negotiations previously conducted with any parties other than
Webster with respect to any of the foregoing. As used in this
Agreement, Acquisition Transaction shall mean any offer, proposal
or expression of interest relating to (i) any tender or exchange
offer, (ii) merger, consolidation or other business combination
involving People's Corp. or any People's Corp. Subsidiary, or
(iii) the acquisition in any manner of a substantial equity
interest in, or a substantial portion of the assets, out of the
ordinary course of business, of, People's Corp. or People's Bank
other than the transactions contemplated or permitted by this
Agreement, the Bank Merger Agreement and the Option Agreement;
(f) make capital expenditures aggregating in excess of
$25,000;
(g) enter into any new line of business;
(h) acquire or agree to acquire, by merging or consolidating
with, or by purchasing an equity interest in or 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, or in the ordinary course of business
consistent with prudent banking practices;
(i) take any action that is intended or may reasonably be
expected to result in any of its representations and warranties set
forth in this Agreement being or becoming untrue 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, 1996 except as required by changes in GAAP or regulatory
accounting principles as concurred to by Webster's independent
auditors;
(k) (i) except as required by applicable law or to maintain
qualification pursuant to the Code, adopt, amend, renew or
terminate any Plan or any agreement, arrangement, plan or policy
between People's Corp. or any People's Corp. Subsidiary and one or
more of its current or former directors or officers, (ii) increase
in any manner the compensation of any employee or director 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), other than
20,000 options required to be granted as of April 22, 1997 pursuant
to the 1995 Directors Plan, (iii) enter into, modify or renew any
contract, agreement, commitment or arrangement providing for the
payment to any director, officer or employee of compensation or
benefits, other than normal annual increases in pay, consistent
with past practice, for employees not subject to an employment,
change of control or severance agreement, (iv) hire any new
employee at an annual compensation in excess of $30,000, (v) pay
expenses of any employees or directors for attending conventions or
similar meetings which conventions or meetings are held after the
date hereof, (vi) promote to a rank of vice president or more
senior any employee, or (vii) pay any retention or other bonuses to
any employees;
(l) except for short-term borrowings with a maturity of one
year or less by People's Bank in the ordinary course of business
consistent with past practices, 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;
(m) sell, purchase, enter into a lease, relocate, open or
close any banking or other office, or file an application
pertaining to such action with any Governmental Entity;
(n) 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 foreclosure, settlements in
lieu of foreclosure, or troubled loan or debt restructuring, in the
ordinary course of business consistent with past banking practices;
(o) make any new loans to, modify the terms of any existing
loan to, or engage in any other transactions (other than routine
banking transactions) with, any Affiliated Person of People's Corp.
or any People's Corp. Subsidiary;
(p) make any investment, or incur deposit liabilities, other
than in the ordinary course of business consistent with past
practices, including deposit pricing, and which would not change
the risk profile of People's Bank based on its existing deposit and
lending policies or make any equity investments;
(q) purchase any loans or sell, purchase or lease any real
property, except for the sale of real estate that is the subject of
a casualty loss or condemnation or the sale of OREO on a basis
consistent with past practices;
(r) originate (i) any loans except in accordance with
existing People's Bank lending policies, (ii) unsecured consumer
loans in excess of $10,000, (iii) commercial real estate first
mortgage loans in excess of $250,000 as to any loan or $500,000 in
the aggregate as to related loans, or loans to related persons, or
(iv) land acquisition loans to borrowers who intend to construct a
residence on such land in excess of the lesser of 75% of the
appraised value of such land or $100,000, except in each case for
loans for which written applications have been received by People's
Bank.;
(s) make any investments in any equity or derivative
securities or engage in any forward commitment, futures
transaction, financial options transaction, hedging or arbitrage
transaction or covered asset trading activities or make any
investments in any investment security with a maturity of greater
than one year;
(t) sell or purchase any mortgage loan servicing rights; or
(u) agree or commit to do any of the actions set forth in (a)
- - (t) above.
The consent of Webster to any action by People's Corp. or any
People's Corp. Subsidiary that is not permitted by any of the
preceding paragraphs shall be evidenced by a writing signed by the
President or any Executive Vice President of Webster.
5.2 Covenants of Webster.
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 People's
Corp.'s prior written consent, Webster shall not, and shall not
permit Webster Bank to:
(a) take any action that will result in (i) any of Webster's
representations and warranties set forth in this Agreement being or
becoming untrue, unless the failure of such representations or
warranties to be true would not, individually or in the aggregate,
have a Material Adverse Effect on Webster, or (ii) 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; or
(b) take any other action that would materially adversely
affect or materially delay the ability of Webster to obtain the
Requisite Regulatory Approvals or otherwise materially adversely
affect Webster's and Webster Bank's ability to consummate the
transactions contemplated by this Agreement.
5.3 Merger Covenants.
Notwithstanding that People's Corp. believes that it has
established all reserves and taken all provisions for possible loan
losses required by GAAP and applicable laws, rules and regulations,
People's Corp. recognizes that Webster may have adopted different
loan, accrual and reserve policies (including loan classifications
and levels of reserves for possible loan losses). In that regard,
and in general, from and after the date of this Agreement to the
Effective Time, People's Corp. and Webster shall consult and
cooperate with each other in order to formulate the plan of
integration for the Merger, including, among other things, with
respect to conforming, based upon such consultation, People's
Corp.'s loan, accrual and reserve policies to those policies of
Webster to the extent appropriate, provided, that any change in
People's Corp.'s policies in connection with such matters need not
be effected until the parties receive all necessary governmental
and stockholder approvals and consents to consummate the
transactions contemplated hereby.
5.4 Compliance with Antitrust Laws.
Each of Webster and People's Corp. shall use its reasonable
best efforts to resolve objections, if any, which may be asserted
with respect to the Merger under antitrust laws, including, without
limitation, the Hart-Scott-Rodino Act. In the event a suit is
threatened or instituted challenging the Merger as violative of
antitrust laws, each of Webster and People's Corp. shall use its
reasonable best efforts to avoid the filing of, or resist or
resolve such suit. Webster and People's Corp. shall use their
reasonable best efforts to take such action as may be required:
(a) by the Antitrust Division of the Department of Justice or the
Federal Trade Commission in order to resolve such objections as
either of them may have to the Merger under antitrust laws, or (b)
by any federal or state court of the United States, in any suit
brought by a private party or governmental entity challenging the
Merger as violative of antitrust laws, in order to avoid the entry
of, or to effect the dissolution of, any injunction, temporary
restraining order, or other order which has the effect of
preventing the consummation of the Merger. Reasonable best efforts
shall not include, among other things and to the extent Webster so
desires, the willingness of Webster to accept an order agreeing to
the divestiture, or the holding separate, of any assets of Webster
or People's Corp.
5.5 Employment and Other Agreements.
Following the Merger, Webster agrees that it shall honor the
existing written deferred compensation, employment, change of
control and severance contracts with directors and employees of
People's Corp. and People's Bank that are specifically listed at
Section 5.5 of the People's Corp. Disclosure Schedule; provided,
however, that in making the foregoing agreement, Webster will honor
such contracts only to the extent that, as represented at Section
3.11 hereof, none of such deferred compensation, employment, change
of control and severance contracts, nor any other Plan, program,
agreement or other arrangement, either individually or
collectively, provides for any payment by People's Corp. or any
People's Corp. Subsidiary that would not be deductible under Code
Sections 162(a)(1) or 404 or that would constitute a "parachute
payment" within the meaning of Code Section 280G.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Regulatory Matters.
(a) Upon the execution and delivery of this Agreement,
Webster and People's Corp. (as to information to be included
therein pertaining to People's Corp.) shall promptly cause to be
prepared and filed with the SEC a registration statement of Webster
on Form S-4, including the Proxy Statement/Prospectus (the
"Registration Statement") for the purpose of registering the
Webster Common Stock to be issued in the Merger, and for soliciting
the approval of this Agreement and the Merger by the shareholders
of People's Corp. Webster and People's Corp. shall use their
reasonable best efforts to have the Registration Statement declared
effective by the SEC as soon as possible after the filing. The
parties shall cooperate in responding to and considering any
questions or comments from the SEC staff regarding the information
contained in the Registration Statement. If at any time after the
Registration Statement is filed with the SEC, and prior to the
Closing Date, any event relating to People's Corp. is discovered by
People's Corp. which should be set forth in an amendment of, or a
supplement to, the Registration Statement, including the
Prospectus/Proxy Statement (including, without limitation, any
change in the Fairness Opinion), People's Corp. shall promptly
inform Webster, and shall furnish Webster with all necessary
information relating to such event whereupon Webster shall promptly
cause an appropriate amendment to the Registration Statement to be
filed with the SEC. Upon the effectiveness of such amendment,
People's Corp. (if prior to the meeting of shareholders pursuant to
Section 6.3 hereof) will take all necessary action as promptly as
practicable to permit an appropriate amendment or supplement to be
transmitted to its shareholders entitled to vote at such meeting.
Webster shall also use reasonable 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 People's Corp. shall furnish all
information concerning People's Corp. and the holders of People's
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, the Bank Merger, and, if
applicable, the Subsidiary Merger). People's Corp. and Webster
shall have the right to review in advance, and to the extent
practicable each will consult the other on, in each case subject to
applicable laws relating to the exchange of information, all the
information relating to People's Corp. or Webster and Merger Sub,
as the case may be, which appears 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; provided, however, that nothing contained herein shall
be deemed to provide either party with a right to review any
information provided to any Governmental Entity on a confidential
basis in connection with the transactions contemplated hereby. 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 contemplation of the transactions contemplated herein.
(c) People's Corp. shall, upon request, furnish Webster with
all information concerning People's Corp. and its directors,
officers and shareholders and such other matters as may be
reasonably necessary or advisable in connection with the
Registration Statement or any other statement, filing, notice or
application made by or on behalf of Webster or Merger Sub to any
Governmental Entity in connection with the Merger or the other
transactions contemplated by this Agreement.
(d) Webster and People's Corp. shall promptly advise each
other upon receiving any communication from any Governmental Entity
whose consent or approval is required for consummation of the
transactions contemplated by this Agreement which causes such party
to believe that there is a reasonable likelihood that any Requisite
Regulatory Approval (defined in Section 7.1(c) hereof) will not be
obtained or that the receipt of any such approval will be
materially delayed.
6.2 Access to Information.
(a) Upon reasonable notice and subject to applicable Laws
relating to the exchange of information, People's Corp. shall
accord to the officers, employees, accountants, counsel and other
representatives of Webster and Merger Sub, access, during normal
business hours during the period prior to the Effective Time, to
all its and People's Bank's properties, books, contracts,
commitments and records and, during such period, People's Corp.
shall make available to Webster (i) a copy of each report,
schedule, registration statement and other document filed or
received by it (including People's Bank) during such period
pursuant to the requirements of federal securities laws or federal
or state banking laws and (ii) all other information concerning its
(including People's Bank) business, properties and personnel as
Webster may reasonably request. Webster shall receive notice of
all meetings of the People's Corp. and People's Bank's Board of
Directors and any committees thereof, and of any management
committees (in all cases, at least as timely as all People's Corp.
and People's Bank, as the case may be) representatives to such
meetings are required to be provided notice). Up to two
representatives of Webster shall be permitted to attend all
meetings of the Board of Directors (except for the portion of such
meetings which relate to the Merger or an Acquisition Transaction
or such other matters deemed confidential ("Confidential Matters")
of People's Corp. or People's Bank, as the case may be) and such
meetings of committees of the Board of Directors and management of
People's Corp. and People's Bank which Webster desires. Webster
will hold all such information in confidence to the extent required
by, and in accordance with, the provisions of the confidentiality
agreement which Webster entered into with Advest dated February 11,
1997 (the "Confidentiality Agreement").
(b) Upon reasonable notice and subject to applicable Laws
relating to the exchange of information, Webster shall, and shall
cause Merger Sub to, afford to the officers, employees,
accountants, counsel and other representatives of People's Corp.,
access, during normal business hours during the period prior to the
Effective Time, to such information regarding Webster as shall be
reasonably necessary for People's Corp. to fulfill its obligations
pursuant to this Agreement or which may be reasonably necessary for
People's Corp. to confirm that the representations and warranties
of Webster contained herein are true and correct and that the
covenants of Webster contained herein have been performed in all
material respects. People's Corp. will hold all such information
in confidence to the extent required by, and in accordance with,
the provisions of the Confidentiality Agreement.
(c) No investigation by either of the parties or their
respective representatives shall affect the representations and
warranties of the other set forth herein.
(d) People's Corp. shall provide Webster with true, correct
and complete copies of all financial and other information provided
to directors of People's Corp. and People's Bank in connection with
meetings of their Boards of Directors or committees thereof.
6.3 Shareholder Meetings.
People's Corp. shall take all steps necessary to duly call,
give notice of, convene and hold a meeting of its shareholders
within 35 days after the Registration Statement becomes effective
for the purpose of voting upon the approval of this Agreement and
the Merger (the "Special Meeting"). Management and the Board of
Directors of People's Corp. shall recommend to People's Corp.'s
shareholders approval of this Agreement, including the Merger, and
the transactions contemplated hereby, together with any matters
incident thereto, and shall oppose any third party proposal or
other action that is inconsistent with this Agreement or the
consummation of the transactions contemplated hereby, unless the
Board of Directors of People's Corp. reasonably determines, based
upon the written advice of People's Corp.'s legal counsel, that
such recommendation or opposition, as the case may be, would
constitute a breach of the exercise of its fiduciary duty.
People's Corp. and Webster shall coordinate and cooperate with
respect to the foregoing matters.
6.4 Legal Conditions to Merger.
Each of Webster and People's Corp. shall use their reasonable
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 with respect to the
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 People's Corp. or Webster in
connection with the Merger and the other transactions contemplated
by this Agreement.
6.5 Stock Exchange Listing.
Webster shall cause the shares of Webster Common Stock to be
issued in the Merger and pursuant to options referred to herein to
be approved for quotation on the Nasdaq Stock Market National
Market System (or such other exchange on which the Webster Common
Stock has become listed, or approved for listing) prior to or at
the Effective Time.
6.6 Employees.
(a) To the extent permissible under the applicable provisions
of the Code and ERISA, for purposes of crediting periods of service
for eligibility to participate and vesting, but not for benefit
accrual purposes, under employee pension benefit plans (within the
meaning of ERISA Section 3(2)) maintained by Webster or Webster
Bank, as applicable, (other than Webster's employee stock ownership
plan), individuals who are employees of People's Corp. or People's
Bank at the Effective Time will be credited with periods of service
with People's Corp. or People's Bank before the Effective Time as
if such service had been with Webster or Webster Bank, as
applicable. Similar credit shall also be given by Webster or
Webster Bank in calculating other retirement plan, vacation and
similar benefits for such employees of People's Corp. or People's
Bank after the Merger.
(b) Webster and Webster Bank will pay severance in accordance
with Webster's policy described below as to employees of People's
Corp. or People's Bank whose employment is terminated in connection
with the Merger either because an employee's position is eliminated
or an employee is not offered comparable employment (i.e., not
offered employment for a position of generally similar job
description or responsibilities) within six months of the Effective
Time of the Merger (except for such employees referenced in Section
5.5 above, or who have existing employment or severance agreements
or whose employment is terminated for non-performance, cause or
like reason). Payments under such policy will be based on (i) one
week of base salary (or one week of average weekly hourly wages,
calculated on a weekly average basis for the quarter ended
March 31, 1997 in the case of hourly employees) for personnel
junior in rank to vice president; and (ii) two weeks of base salary
for personnel with a rank of vice president or senior; for each
full year of employment with People's Corp. or People's Bank with
a minimum of four weeks for personnel junior in rank to vice
president, and a minimum of eight weeks for personnel with a rank
of vice president or senior, up to a maximum in all cases of 26
weeks.
(c) Webster will cause Webster Bank to offer a position of
at-will employment to each of People's Bank's branch office
personnel in good standing as of the Effective Time. Webster will
use its reasonable best efforts in connection with reviewing
applicants for employment positions to give People's Corp. and
People's Bank employees who are not offered positions at the
Effective Time the same consideration as is afforded Webster or
Webster Bank employees for such position in accordance with
existing formal or informal policies. Webster will provide
outplacement assistance to People's Corp. and People's Bank
employees who are not offered positions at the Effective Time.
6.7 Indemnification.
(a) In the event of any threatened or actual claim, action,
suit, proceeding or investigation, whether civil, criminal or
administrative, 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 People's
Corp. (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 People's Corp. 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 to the extent permitted by applicable law and the
Amended and Restated Certificate of Incorporation and Bylaws of
People's Corp. It is understood and agreed that after the
Effective Time, Webster shall indemnify and hold harmless, as and
to the fullest extent permitted by applicable law and the Restated
Certificate of Incorporation and Bylaws of Webster or the
Certificate of Incorporation and Bylaws of Merger Sub, as may be
the case, each such Indemnified Party against any losses, claims,
damages, liabilities, costs, expenses (including reasonable
attorney's fees and expenses in advance of the final disposition of
any claim, suit, proceeding or investigation to each Indemnified
Party to the fullest extent permitted by law upon receipt of any
undertaking required by applicable law), judgments, fines and
amounts paid in settlement in connection with any such threatened
or actual claim, action, suit, proceeding or investigation, and in
the event of any such threatened or actual claim, action, suit,
proceeding or investigation (whether asserted or arising before or
after the Effective Time), the Indemnified Parties may retain
counsel reasonably satisfactory to Webster; provided, however, that
(1) Webster shall have the right to assume the defense thereof and
upon such assumption Webster shall not be liable to any Indemnified
Party for any legal expenses of other counsel or any other expenses
subsequently incurred by any Indemnified Party in connection with
the defense thereof, except that if Webster elects not to assume
such defense or counsel for the Indemnified Parties reasonably
advises the Indemnified Parties that there are issues which raise
conflicts of interest between Webster and the Indemnified Parties,
the Indemnified Parties may retain counsel reasonably satisfactory
to Webster, and Webster shall pay the reasonable fees and expenses
of such counsel for the Indemnified Parties, (2) Webster shall be
obligated pursuant to this paragraph to pay for only one firm of
counsel for each Indemnified Party, and (3) Webster shall not be
liable for any settlement effected without its prior written
consent (which consent shall not be unreasonably withheld or
delayed). Webster shall have no obligation to advance expenses
incurred in connection with a threatened or pending action, suit or
preceding in advance of final disposition of such action, suit or
proceeding, unless (i) Webster would be permitted to advance such
expenses pursuant to the DGCL and Webster's Restated Certificate of
Incorporation or Bylaws, and (ii) Webster receives an undertaking
by the Indemnified Party to repay such amount if it is determined
that such party is not entitled to be indemnified by Webster
pursuant to the DGCL and Webster's Restated Certificate of
Incorporation or Bylaws. Any Indemnified Party wishing to claim
indemnification under this Section 6.8, upon learning of any such
claim, action, suit, proceeding or investigation, shall notify
Webster thereof; provided, however, that the failure to so notify
shall not affect the obligations of Webster under this Section 6.8
except to the extent such failure to notify materially prejudices
Webster. Webster's obligations under this Section 6.8 continue in
full force and effect for a period of six years from the Effective
Time; provided, however, that all rights to indemnification in
respect of any claim asserted or made within such period shall
continue until the final disposition of such claim.
(b) Webster shall use commercially reasonable efforts to
cause the persons serving as officers and directors of People's
Corp. immediately prior to the Effective Time to be covered by a
directors' and officers' liability insurance policy ("Tail
Insurance") of substantially the same coverage and amounts
containing terms and conditions which are generally not less
advantageous than People's Corp.'s current policy with respect to
acts or omissions occurring prior to the Effective Time which were
committed by such officers and directors in their capacity as such
for a period not less than one year.
(c) In the event Webster or any of its successors or assigns
(i) consolidates with or merges into any other person and shall not
be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers or conveys all or
substantially all of its properties and assets to any person, then,
and in each such case, to the extent necessary, proper provision
shall be made so that the successors and assigns of Webster assume
the obligations set forth in this section.
6.8 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 (other than the fourth
fiscal quarter), Webster will deliver to People's Corp. and
People's Corp. will deliver to Webster their respective Quarterly
Reports on Form 10-Q, as filed with the SEC under the Exchange Act.
Each party shall deliver to the other any Current Reports on Form
8-K promptly after filing such reports with the SEC.
6.9 Additional Agreements.
In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this
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 constituent banks to the Bank Merger, as the case may be, the
proper officers and directors of each party to this Agreement and
Webster's and People's Corp.'s Subsidiaries shall take all such
necessary action as may be reasonably requested by Webster.
6.10 Advice of Changes.
Webster and People's Corp. shall promptly advise the other
party of any change or event that, individually or in the
aggregate, has or would be reasonably likely to have a Material
Adverse Effect on it or to cause or constitute a material breach of
any of its representations, warranties or covenants contained
herein. From time to time prior to the Effective Time, each party
will promptly supplement or amend its disclosure schedule 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 schedule or which is necessary to correct any
information in such disclosure schedule which has been rendered
inaccurate thereby. No supplement or amendment to such disclosure
schedule shall have any effect for the purpose of determining
satisfaction of the conditions set forth in Sections 7.2(a) or
7.3(a) hereof, as the case may be, or the compliance by People's
Corp. or Webster, as the case may be, with the respective covenants
set forth in Sections 5.1 and 5.2 hereof.
6.11 Current Information.
During the period from the date of this Agreement to the
Effective Time, People's Corp. will cause one or more of its
designated representatives to confer on a regular and frequent
basis (not less than monthly) with representatives of Webster and
to report the general status of the ongoing operations of People's
Corp. People's Corp. will promptly notify Webster of any material
change in the normal course of business or in the operation of the
properties of People's Corp. and of any governmental complaints,
investigations or hearings (or communications indicating that the
same may be contemplated), or the institution or the threat of
litigation involving People's Corp., and will keep Webster fully
informed of such events.
6.12 Execution and Authorization of Bank Merger Agreement.
Prior to the Effective Time, (a) Webster shall (i) cause the
Board of Directors of Merger Sub to approve the Certificate of
Merger substantially in the form at Exhibit C, and (ii) approve the
Bank Merger Agreement as the sole shareholder of Webster Bank, and
(b) People's Bank shall execute and deliver the Bank Merger
Agreement.
6.13 Change in Structure.
Webster may elect to modify the structure of the transactions
contemplated by this Agreement as noted herein so long as (i) there
are no material adverse federal income tax consequences to the
People's Corp. shareholders as a result of such modification,
(ii) the consideration to be paid to the People's Corp.
shareholders under this Agreement is not thereby changed or reduced
in amount, and (iii) such modification will not be reasonably
likely to delay materially or jeopardize receipt of any required
regulatory approvals. In the event that Webster elects to change
the structure of the Merger, the parties agree to modify this
Agreement and the various exhibits hereto to reflect such revised
structure. In such event, Webster shall prepare appropriate
amendments to this Agreement and the exhibits hereto for execution
by the parties hereto. Webster and People's Corp. agree to
cooperate fully with each other to effect such amendments.
6.14 Transaction Expenses of People's.
(a) For planning purposes, People's Corp. shall, within
15 days from the date hereof, provide Webster with its estimated
budget of transaction-related expenses reasonably anticipated to be
payable by People's Corp. in connection with this transaction,
including the fees and expenses of counsel, accountants, investment
bankers and other professionals. People's Corp. shall promptly
notify Webster if or when it determines that it will expect to
exceed its budget.
(b) Promptly after the execution of this Agreement,
People's Corp. shall ask all of its attorneys and other
professionals to render current and correct invoices for all
unbilled time and disbursements. People's Corp. shall accrue
and/or pay all of such amounts as soon as possible.
(c) People's Corp. shall advise Webster monthly of all
out-of-pocket expenses which People's Corp. has incurred in
connection with this transaction.
(d) Webster, in reasonable consultation with People's
Corp., shall make all arrangements with respect to the printing and
mailing of the Joint Proxy Statement/Prospectus. Webster, if it
deems necessary, also shall engage (at Webster's expense) a proxy
solicitation firm to assist in the solicitation of proxies for the
Special Meeting. People's Corp. agrees to cooperate as to such
matters.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 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 Approvals.
This Agreement, including the Certificate of Merger, and the
Merger shall have been approved and adopted by the affirmative vote
of the holders of at least two-thirds of the outstanding shares of
People's Common Stock entitled to vote thereon.
(b) Stock Exchange Listing.
The shares of Webster Common Stock which shall be issued in
the Merger (including the Webster Common Stock that may be issued
upon exercise of the options referred to in Section 1.6 hereof)
upon consummation of the Merger shall have been authorized for
quotation on the Nasdaq Stock Market National Market System (or
such other exchange on which the Webster Common Stock may become
listed).
(c) Other Approvals.
All regulatory approvals required to consummate the
transactions contemplated hereby shall have been obtained and shall
remain in full force and effect and all statutory waiting periods
in respect thereof shall have expired (all such approvals and the
expiration of all such waiting periods being referred to herein as
the "Requisite Regulatory Approvals"). No Requisite Regulatory
Approval shall contain a non-customary condition that Webster
reasonably determines to be burdensome or otherwise alter the
benefits for which it bargained in this Agreement.
(d) Registration Statement.
The Registration Statement shall have become effective under
the Securities Act, and no stop order suspending the effectiveness
of the Registration Statement 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 or other legal restraint or prohibition
(an "Injunction") preventing the consummation of the Merger or any
of the other transactions contemplated by this Agreement or the
Certificate of Merger shall be in effect. No statute, rule,
regulation, order, injunction or decree shall have been enacted,
entered, promulgated or enforced by any Governmental Entity which
prohibits, restricts or makes illegal consummation of the Merger.
(f) Federal Tax Opinion.
Webster shall have received from Hogan & Hartson L.L.P.,
Webster's special counsel, an opinion to Webster and People's
Corp., in form and substance reasonably satisfactory to Webster,
substantially to the effect that on the basis of facts,
representations, and assumptions set forth in such opinion which
are consistent with the state of facts existing at the time of such
opinion, the Merger will be treated for federal income tax purposes
as a reorganization within the meaning of Section 368(a) of the
Code. In rendering such opinion, such counsel may require and, to
the extent such counsel deems necessary or appropriate, may rely
upon representations made in certificates of officers of People's
Corp., Webster, Merger Sub, their respective affiliates and others.
7.2 Conditions to Obligations of Webster and Merger Sub.
The obligation of Webster and Merger Sub to effect the Merger
is also subject to the satisfaction or waiver by Webster at or
prior to the Effective Time of the following conditions:
(a) Representations and Warranties.
The representations and warranties of People's Corp. set forth
in this Agreement shall be true and correct 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 of this paragraph, such representations and warranties
shall be deemed to be true and correct, unless the failure or
failures of such representations and warranties to be so true and
correct, individually or in the aggregate, would have a Material
Adverse Effect on People's Corp. Such determination of aggregate
Material Adverse Effect shall be made as if there were no
materiality qualifications in such representations and warranties.
Webster shall have received a certificate signed on behalf of
People's Corp. by each of the President and Chief Executive Officer
and the Chief Financial Officer of People's Corp. to the foregoing
effect.
(b) Performance of Covenants and Agreements of People's Corp.
People's Corp. shall have performed in all material respects
all covenants and agreements required to be performed by it under
this Agreement at or prior to the Closing Date. Webster shall have
received a certificate signed on behalf of People's Corp. by each
of the President and Chief Executive Officer and the Chief
Financial Officer of People's Corp. to such effect.
(c) Consents under Agreements.
The consent, approval or waiver of each person (other than the
Governmental Entities referred to in Section 7.1(c) hereof) whose
consent or approval shall be required in order to permit the
succession by the Surviving Bank pursuant to the Merger to any
obligation, right or interest of People's Corp. under any loan or
credit agreement, note, mortgage, indenture, lease, license or
other agreement or instrument shall have been obtained except for
those, the failure of which to obtain, will not result in a
Material Adverse Effect on the Surviving Bank.
(d) No Pending Governmental Actions.
No proceeding initiated by any Governmental Entity seeking an
Injunction shall be pending.
(e) Legal Opinion.
Webster shall have received the opinion of Tyler Cooper &
Alcorn, counsel to People's Corp., dated the Closing Date, as to
such matters as Webster may reasonably request. As to any matter
in such opinion which involves matters of fact, such counsel may
rely upon the certificates of officers and directors of People's
Corp. and of public officials, reasonably acceptable to Webster.
(f) Accountant's Comfort Letter.
People's Corp. shall have caused to be delivered on the
respective dates thereof to Webster "comfort letters" from Coopers
& Lybrand, LLP, People's Corp.'s independent public accountants,
dated the date on which the Registration Statement or last
amendment thereto shall become effective, and dated the date of the
Closing (defined in Section 9.1 hereof), and addressed to Webster
and People's Corp., with respect to People's Corp.'s financial data
presented in the Proxy Statement/Prospectus, which letters shall be
based upon Statements on Auditing Standards Nos. 72 and 76.
(g) Pooling of Interests.
Webster shall have received (i) advice of KPMG Peat Marwick
LLP, independent accountants, within two weeks of the date hereof,
to the effect that the Merger will be accounted for as a pooling of
interests, and (ii) as of the Effective Time, a written opinion of
KMPG Peat Marwick to the effect that the Merger will be accounted
for as a pooling-of-interests. The foregoing shall not apply in
the event that Webster prior to the effectiveness of the
Registration Statement advises People's Corp. that the Merger is to
be accounted for as a purchase.
7.3 Conditions to Obligations of People's Corp.
The obligation of People's Corp. to effect the Merger is also
subject to the satisfaction or waiver by People's Corp. at or prior
to the Effective Time of the following conditions:
(a) Representations and Warranties.
The representations and warranties of Webster set forth in
this Agreement shall be true and correct 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 of this paragraph, such representations and warranties
shall be deemed to be true and correct, unless the failure or
failures of such representations and warranties to be so true and
correct, individually or in the aggregate, would have a Material
Adverse Effect on Webster. Such determination of aggregate
Material Adverse Effect shall be made as if there were no
materiality qualifications in such representations and warranties.
People's Corp. shall have received a certificate signed on behalf
of Webster by each of the President and Chief Executive Officer and
the Chief Financial Officer of Webster to the foregoing effect.
(b) Performance of Covenants and Agreements of Webster.
Webster and Merger Sub shall have each performed in all
material respects all covenants and agreements required to be
performed by it under this Agreement at or prior to the Closing
Date. People's Corp. shall have received a certificate signed on
behalf of Webster by each of the President and Chief Executive
Officer and the Chief Financial Officer of Webster to such effect.
(c) Consents under Agreements.
The consent or approval or waiver of each person (other than
the Governmental Entities referred to in Section 7.1(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 Webster or Merger Sub is a party
or is otherwise bound shall have been obtained.
(d) No Pending Governmental Actions.
No proceeding initiated by any Governmental Entity seeking an
Injunction shall be pending.
(e) Legal Opinion.
People's Corp. shall have received the opinion of Hogan &
Hartson L.L.P., special counsel to Webster, dated the Closing Date,
as to such matters as People's Corp. may reasonably request. As to
any matter in such opinion which involves matters of fact, such
counsel may rely upon the certificates of officers and directors of
Webster and of public officials and opinions of local counsel,
reasonably acceptable to People's Corp.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 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
People's Corp. or Webster, if applicable:
(a) by mutual consent of Webster and People's Corp. 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 Webster or People's Corp. upon written notice
to the other party (i) 30 days after the date on which any request
or application for a Regulatory Approval shall have been denied or
withdrawn at the request or recommendation of the Governmental
Entity which must grant such Regulatory Approval, unless within the
30-day period following such denial or withdrawal the parties agree
to file, and have filed with the applicable Governmental Entity, a
petition for rehearing or an amended application, provided,
however, that no party shall have the right to terminate this
Agreement pursuant to this Section 8.1(b), 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;
(c) by either Webster or People's Corp. if the Merger shall
not have been consummated on or before December 31, 1997, unless
the failure of the Closing to occur by such date shall be due to
the failure of the party seeking to terminate this Agreement to
perform or observe the covenants and agreements of such party set
forth herein;
(d) by either Webster or People's Corp. (provided that the
terminating party is not in breach of its obligations under Section
6.3 hereof) if the approval of the shareholders of People's Corp.
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;
(e) by either Webster or People's Corp. (provided that the
terminating party is not then in breach of any representation,
warranty, covenant or other agreement contained herein that,
individually or in the aggregate, would give the other party the
right to terminate this Agreement) if there shall have been a
breach of any of the representations or warranties set forth in
this Agreement on the part of the other party, if such breach,
individually or in the aggregate, has had or is likely to have a
Material Adverse Effect on the breaching party, and such breach
shall not have been cured within 30 days following receipt by the
breaching party of written notice of such breach from the other
party hereto or such breach, by its nature, cannot be cured prior
to the Closing;
(f) by either Webster or People's Corp. (provided that the
terminating party is not then in breach of any representation,
warranty, covenant or other agreement contained herein that,
individually or in the aggregate, would give the other party the
right to terminate this Agreement) 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, and such breach
shall not have been cured within 30 days following receipt by the
breaching party of written notice of such breach from the other
party hereto or such breach, by its nature, cannot be cured prior
to the Closing;
(g) by Webster, if the management of People's Corp. or its
Board of Directors, for any reason, (i) fails to call and hold
within 35 days of the effectiveness of the Registration Statement
a special meeting of People's Corp.'s shareholders to consider and
approve this Agreement and the transactions contemplated hereby,
(ii) fails to recommend to shareholders the approval of this
Agreement and the transactions contemplated hereby, (iii) fails to
oppose any third party proposal that is inconsistent with the
transactions contemplated by this Agreement or (iv) violates
Section 5.1(e) of this Agreement; and
(h) by People's Corp., upon written notice delivered to
Webster, as provided below in this subsection (h), if the Base
Period Trading Price shall be less than $32.00, unless Webster
elects, as provided below in this subsection (h), that the Exchange
Ratio shall be 1.06250. If People's Corp. elects to exercise its
termination right pursuant to this subsection (h), it shall give
written notice to Webster within three business days following the
end of the Base Period. During the three business-day period
commencing with its receipt of such notice, Webster shall have the
option of agreeing to fix the Exchange Ratio at 1.06250. If
Webster makes the election contemplated by the preceding sentence,
then within such three business-day period Webster shall give
written notice to People's Corp. of such election and the revised
Exchange Ratio, whereupon no termination shall have occurred
pursuant to this subsection (h) and this Agreement shall remain in
effect in accordance with its terms (except as the Exchange Ratio
shall have been so modified), and any references in this Agreement
to "Exchange Ratio" shall thereafter be deemed to refer to the
Exchange Ratio as adjusted pursuant to this subsection (h).
8.2 Effect of Termination.
In the event of termination of this Agreement by either
Webster or People's Corp. as provided in Section 8.1 hereof, this
Agreement shall forthwith become void and have no effect except
(i) the last sentences of Sections 6.2(a) and 6.2(b) and Sections
8.2, 9.2 and 9.3 hereof shall survive any termination of this
Agreement, and (ii) notwithstanding anything to the contrary
contained in this Agreement, no party shall be relieved or released
from any liabilities or damages arising out of its willful or
intentional breach of any provision of this Agreement.
8.3 Amendment.
Subject to compliance with applicable law, this Agreement may
be amended by the parties hereto, by action taken or authorized by
their respective Board of Directors, at any time before or after
approval of the matters presented in connection with the Merger by
the shareholders of People's Corp.; provided, however, that after
any approval of the transactions contemplated by this Agreement by
People's Corp.'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 People's Corp. 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.
8.4 Extension; Waiver.
At any time prior to the Effective Time, the parties hereto,
by action taken or authorized by their respective Boards 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. 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 or failure to insist on
strict compliance with an obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
ARTICLE IX
GENERAL PROVISIONS
9.1 Closing.
Subject to the terms and conditions of this Agreement, the
closing of the Merger (the "Closing") will take place at 10:00 a.m.
at the main offices of Webster on (i) the fifth day after the last
Requisite Regulatory Approval is received and all applicable
waiting periods have expired, or (ii) such other date, place and
time as the parties may agree (the "Closing Date").
9.2 Nonsurvival 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 (other than pursuant to the Option
Agreement, which shall terminate in accordance with its terms)
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.
9.3 Expenses; Breakup Fee.
All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expense, except that all filing and other
fees paid to the SEC, the Connecticut Commissioner and the OTS in
connection with this Agreement shall be borne by Webster. In the
event that this Agreement is terminated by either Webster or
People's Corp. by reason of a material breach pursuant to Sections
8.1(e) or (f) hereof or by Webster pursuant to Section 8.1(g)
hereof, the other party shall pay all documented, reasonable costs
and expenses up to $500,000 incurred by the terminating party in
connection with this Agreement and the transactions contemplated
hereby, plus a breakup fee of $500,000. Except as set forth in the
next sentence, in the event that this Agreement is terminated by
Webster under Section 8.1(d) by reason of People's Corp.
shareholders not having given any required approval, People's Corp.
shall pay all documented, reasonable costs and expenses up to
$500,000 incurred by Webster in connection with this Agreement and
the transactions contemplated hereby. In the event that this
Agreement is terminated by Webster under Section 8.1(d) by reason
of People's Corp. shareholders not having given any required
approval, and there shall have been prior to the Special Meeting a
"Third Party Public Event" (as defined below), People's Corp. shall
pay all documented, reasonable costs and expenses up to $500,000
incurred by Webster in connection with this Agreement and the
transactions contemplated hereby, plus a breakup fee of $500,000.
For purposes of this Section 9.3, a "Third Party Public Event"
shall refer to any of the following events: (i) any person (as
defined at Sections 3(a)(9) and 13(d)(3) of the Exchange Act and
the rules and regulations thereunder), other than Webster or any
Webster Subsidiary, shall have made a bona fide proposal to
People's Corp. or, by a public announcement or written
communication that is or becomes the subject of public disclosure,
to People's Corp.'s shareholders to engage in an Acquisition
Transaction (including, without limitation, any situation in which
any person other than Webster or any Webster Subsidiary shall have
commenced (as such term is defined in Rule 14d-2 under the Exchange
Act), or shall have filed a registration statement under the
Securities Act, with respect to a tender offer or exchange offer to
purchase any shares of People's Common Stock such that, upon
consummation of such offer, such person would have beneficial
ownership of 10.0% or more of the then outstanding shares of
People's Common Stock); or (ii) any director, officer or affiliate
of People's Corp. shall have, by any means which becomes the
subject of public disclosure, communicated opposition to this
Agreement, the Merger or other transactions contemplated hereby, or
otherwise takes action to influence the vote of People's Corp.
shareholders against this Agreement and the Merger.
9.4 Notices.
All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, 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 Webster, to:
Webster Financial Corporation
Webster Plaza
145 Bank Street
Waterbury, Connecticut 06702
Attn.: James C. Smith
Chairman and Chief Executive Officer
with a copy (which shall not constitute notice)
to:
Hogan & Hartson L.L.P.
Columbia Square
555 Thirteenth Street, N.W.
Washington, DC 20004
Attn.: Stuart G. Stein, Esq.
and
(b) if to People's Corp., to:
People's Saving Financial Corp.
123 Broad Street
New Britain, Connecticut 06053
Attn.: Richard S. Mansfield
President and Chief Executive Officer
with a copy (which shall not constitute notice)
to:
Tyler Cooper & Alcorn
CityPlace One, 35th Floor
Hartford, Connecticut 06103
Attn.: William W. Bouton, Esq.
9.5 Interpretation.
When a reference is made in this Agreement to Sections,
Exhibits or Schedules, such reference shall be to a Section of or
an 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".
9.6 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.
9.7 Entire Agreement.
This Agreement (including the disclosure schedules, 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,
the Certificate of Merger, the Option Agreement, the People's
Stockholder Agreement and the Webster Stockholder Agreement.
9.8 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 rules.
9.9 Enforcement of Agreement.
The parties hereto agree that irreparable damage would occur
in the event that the provisions of this Agreement were not
performed in accordance with its 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
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.
9.10 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.
9.11 Publicity.
Except as otherwise required by law or the rules of the Nasdaq
Stock Market National Market System (or such other exchange on
which the Webster Common Stock may become listed), so long as this
Agreement is in effect, neither Webster nor People's Corp. shall,
or shall permit any of Webster's or People's Corp.'s 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, the Certificate of Merger, the Option Agreement or the
People's Stockholder Agreement without the consent of the other
party, which consent shall not be unreasonably withheld.
9.12 Assignment; Limitation of Benefits.
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 specifically provided
in Section 6.7 hereof, 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, and the covenants, undertakings and agreements set out
herein shall be solely for the benefit of, and shall be enforceable
only by, the parties hereto and their permitted assigns.
9.13 Additional Definitions.
In addition to any other definitions contained in this
Agreement, the following words, terms and phrases shall have the
following meanings when used in this Agreement.
"Affiliated Person": any director, officer or 5% or greater
shareholder, spouse or other person living in the same household of
such director, officer or shareholder, or any company, partnership
or trust in which any of the foregoing persons is an officer, 5% or
greater shareholder, general partner or 5% or greater trust
beneficiary.
"Laws": any and all statutes, laws, ordinances, rules,
regulations, orders, permits, judgments, injunctions, decrees, case
law and other rules of law enacted, promulgated or issued by any
Governmental Entity.
"Material Adverse Effect": with respect to Webster or
People's Corp., as the case may be, means a condition, event,
change or occurrence that is reasonably likely to have a material
adverse effect upon (A) the financial condition, results of
operations, business or properties of Webster or People's Corp.
(other than as a result of (i) changes in laws or regulations or
accounting rules of general applicability or interpretations
thereof, or (ii) decreases in capital under Financial Accounting
Standards No. 115 attributable to general changes in interest
rates), or (B) the ability of Webster or People's Corp. to perform
its obligations under, and to consummate the transactions
contemplated by, this Agreement, the Certificate of Merger and, in
the case of People's Corp., the Option Agreement.
"Subsidiary": with respect to any party means any
corporation, partnership or other organization, whether
incorporated or unincorporated, which is consolidated with such
party for financial reporting purposes.
IN WITNESS WHEREOF, Webster, Merger Sub and People's Corp.
have caused this Agreement to be executed and delivered by their
respective officers thereunto duly authorized as of the date first
above written.
WEBSTER FINANCIAL CORPORATION
ATTEST:
By: /s/ John V. Brennan By:/s/ James C. Smith
John V. Brennan James C. Smith
Executive Vice President, Chief Chairman and Chief Executive Officer
Financial Officer and Treasurer
WEBSTER SUBSIDIARY CORPORATION
ATTEST:
By: /s/ John V. Brennan By:/s/ James C. Smith
John V. Brennan James C. Smith
Executive Vice President, Chief President
Financial Officer and Treasurer
PEOPLE'S SAVINGS FINANCIAL CORP.
ATTEST:
By: /s/ Teresa Sasinski By:/s/ Richard S. Mansfield
Teresa Sasinski Richard S. Mansfield
Secretary President and Chief Executive Officer
Exhibit 2.2
OPTION AGREEMENT
THE TRANSFER OF THE OPTION GRANTED
BY THIS AGREEMENT IS SUBJECT TO RESALE RESTRICTIONS.
This OPTION AGREEMENT, dated as of April 4, 1997 (this
"Agreement"), is entered into between PEOPLE'S SAVINGS FINANCIAL
CORP., Connecticut corporation ("Issuer"), and WEBSTER FINANCIAL
CORPORATION, a Delaware corporation ("Grantee").
WITNESSETH:
WHEREAS, Grantee, Webster Subsidiary Corporation, a
wholly-owned subsidiary of Grantee, and Issuer have entered into an
Agreement and Plan of Merger, dated as of April 4, 1997 (the
"Plan"), which was executed by the parties thereto prior to the
execution of this Agreement; and
WHEREAS, as a condition and inducement to Grantee's
entering into the Plan and in consideration therefor, Issuer has
agreed to grant Grantee the Option (as defined below).
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein and in the Plan,
the parties hereto agree as follows:
SECTION 1. Issuer hereby grants to Grantee an
unconditional, irrevocable option (the "Option") to purchase,
subject to the terms hereof, up to 476,167 fully paid and
nonassessable shares of common stock, par value $1.00 per share of
Issuer ("Issuer Common Stock") (which number of shares is equal to
19.99% of the total of (i) the number of outstanding shares of
Issuer Common Stock on the date hereof and (ii) 476,167), at a
price per share equal to $25.00 (the "Initial Price"); provided,
however, that in the event Issuer issues or agrees to issue any
additional shares of Issuer Common Stock (other than shares issued
upon the exercise of options outstanding as of the date of the Plan
in accordance with their terms pursuant to existing stock option
plans), or grants one or more options to purchase additional shares
of Issuer Common Stock at a price less than the Initial Price, as
adjusted pursuant to Section 5(b) hereof, such price shall be equal
to such lesser price (such price, as adjusted, is hereinafter
referred to as the "Option Price"). The number of shares of Issuer
Common Stock that may be received upon the exercise of the Option
and the Option Price are subject to adjustment as herein set forth.
SECTION 2. (a) Grantee may exercise the Option, in whole
or part, at any time and from time to time following the occurrence
of a Purchase Event (as defined below); provided, however, that
the Option shall terminate and be of no further force and effect
upon the earliest to occur of the following events (which are
collectively referred to as an "Exercise Termination Event"):
(i) The time immediately prior to the Effective Time;
(ii) 12 months after the first occurrence of a Purchase Event;
(iii) 12 months after the termination of the Plan following the
occurrence of a Preliminary Purchase Event (as defined below),
unless clause (vii) is applicable;
(iv) upon the termination of the Plan, prior to
the occurrence of a Purchase Event or Preliminary Purchase
Event, by Issuer pursuant to Sections 8.1(h), (e) or (f) of
the Plan, both parties pursuant to Section 8.1(a) of the Plan,
or by either party pursuant to Section 8.1(b) or (c) of the
Plan;
(v) 12 months after the termination of the Plan,
by either party pursuant to Section 8.1(d) of the Plan based
on the required vote of Issuer's shareholders not being
received, if no Purchase Event or Preliminary Purchase Event
has occurred prior to the meeting of shareholders (or any
adjournment or postponement thereof) held to vote on the Plan;
(vi) 12 months after the termination of the Plan,
by Grantee pursuant to Section 8.1(e) or (f) thereof as a
result of a breach by Issuer, unless such breach was willful
or intentional; or
(vii) 24 months after the termination of the Plan, by
Grantee pursuant to Section 8.1(e) or (f) thereof as a result of a
willful or intentional breach by Issuer, or by Grantee pursuant to
Section 8.1(g) of the Plan.
(b) The term "Preliminary Purchase Event" shall mean any of
the following events or transactions occurring on or after the date
hereof and prior to an Exercise Termination Event:
(i) Issuer without having received Grantee's
prior written consent, shall have entered into any letter of
intent or definitive agreement to engage in an Acquisition
Transaction (as defined below) with any person (as defined
below) other than Grantee or any of its subsidiaries (each a
"Grantee Subsidiary") or the Board of Directors of Issuer
shall have recommended that the shareholders of Issuer approve
or accept any Acquisition Transaction with any Person (as the
term "person" is defined in Section 3(a)9 and 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the rules and regulations thereunder) other than
Grantee or any Grantee Subsidiary. For purposes of this
Agreement "Acquisition Transaction" shall mean (x) a merger,
consolidation or other business combination involving Issuer,
(y) a purchase, lease or other acquisition of all or
substantially all of the assets of Issuer, (z) a purchase or
other acquisition (including by way of merger, consolidation,
share exchange or otherwise) of Beneficial Ownership (as the
term "beneficial ownership" is defined in Regulation 13d-3(a)
of the Exchange Act) of securities representing 10.0% or more
of the voting power of Issuer; provided, however, that
"Acquisition Transaction" shall not include a transaction
entered into after the termination of the Plan in which the
Issuer is the surviving entity, if in connection with such
transaction, no person acquires Beneficial Ownership of 10.0%
or more of the total voting power of the Issuer to be
outstanding after giving effect to such transaction and in
which the aggregate voting power of Issuer acquired by all
persons is less than 15% of the total voting power of Issuer;
(ii) Any Person (other than Grantee, any
Grantee Subsidiary or any current affiliate of Issuer) shall
have acquired Beneficial Ownership of 10.0% or more of the
outstanding shares of Issuer Common Stock;
(iii) (a) Any Person (other than Grantee or any
Grantee Subsidiary) shall have made a bona fide proposal to
Issuer or, by a public announcement or written communication
that is or becomes the subject of public disclosure, to
Issuer's shareholders to engage in an Acquisition Transaction
(including, without limitation, any situation in which any
Person other than Grantee or any Grantee Subsidiary shall have
commenced (as such term is defined in Rule 14d-2 under the
Exchange Act), or shall have filled a registration statement
under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to a tender offer or exchange offer to
purchase any shares of Issuer Common Stock such that, upon
consummation of such offer, such person would have Beneficial
Ownership of 10.0% or more of the then outstanding shares of
Issuer Common Stock (such an offer being referred to herein as
a "Tender Offer" or an "Exchange Offer", respectively)), and
(b) the shareholders of Issuer do not approve the Merger, as
defined in the Plan, at the Special Meeting, as defined in the
Plan;
(iv) There shall exist a willful or
intentional breach under the Plan by Issuer and such breach
would entitle Grantee to terminate the Plan;
(v) The special meeting of Issuers'
shareholders held for the purpose of voting on the Plan shall
not have been held pursuant to the Plan or shall have been
canceled prior to termination of the Plan, or for any reason
whatsoever Issuer's Board of Directors shall have failed to
recommend, or shall have withdrawn or modified in a manner
adverse to Grantee the recommendation of Issuer's Board of
Directors, that Issuer's shareholders approve the Plan, or if
Issuer or Issuer's Board of Directors fails to oppose any
proposal by any Person (other than Grantee or any Grantee
Subsidiary); or
(vi) Any Person (other than Grantee or any
Grantee Subsidiary) shall have filed an application or notice
with the Board of Governors of the Federal Reserve System (the
"FRB"), the Federal Deposit Insurance Corporation (the
"FDIC"), the Connecticut Banking Commissioner (the
"Commissioner"), or other regulatory or administrative agency
or commission (each, a "Governmental Authority") for approval
to engage in an Acquisition Transaction.
(c) The term "Purchase Event" shall mean any of the following
events or transactions occurring on or after the date hereof and
prior to an Exercise Termination Event:
(i) The acquisition by any Person (other than
Grantee or any Grantee Subsidiary) of Beneficial Ownership
(other than on behalf of the Issuer) of 25% or more of the
then outstanding Issuer Common Stock; or
(ii) The occurrence of a Preliminary Purchase
Event described in Section 2(b)(i) except that the percentage
referred to in clause (z) thereof shall be 25%.
(d) Issuer shall notify Grantee promptly in writing of the
occurrence of any Preliminary Purchase Event or Purchase Event
known to Issuer; provided, however, that the giving of such notice
by Issuer shall not be a condition to the right of Grantee to
exercise the Option.
(e) In the event that Grantee is entitled to and wishes to
exercise the Option, it shall send to Issuer a written notice (the
"Option Notice," the date of which being hereinafter referred to as
the "Notice Date") specifying (i) the total number of shares of
Issuer Common Stock it will purchase pursuant to such exercise and
(ii) the time (which shall be on a business day that is not less
than three nor more than 10 business days from the Notice Date) on
which the closing of such purchase shall take place (the "Closing
Date"); such closing to take place at the principal office of the
Issuer; provided, however, that, if prior notification to or
approval of the FDIC, the FRB, the Commissioner or any other
Governmental Authority is required in connection with such purchase
(each, a "Notification" or an "Approval," as the case may be), (a)
Grantee shall promptly file the required notice or application for
approval ("Notice/Application"), (b) Grantee shall expeditiously
process the Notice/Application and (c) for the purpose of
determining the Closing Date pursuant to clause (ii) of this
sentence, the period of time that otherwise would run from the
Notice Date shall instead run from the later of (x) in connection
with any Notification, the date on which any required notification
periods have expired or been terminated and (y) in connection with
any Approval, the date on which such approval has been obtained and
any requisite waiting period or periods shall have expired. For
purposes of Section 2(a) hereof, any exercise of the Option shall
be deemed to occur on the Notice Date relating thereto. On or prior
to the Closing Date, Grantee shall have the right to revoke its
exercise of the Option by written notice to the Issuer given not
less than three business days prior to the Closing Date.
(f) At the closing referred to in Section 2(e) hereof,
Grantee shall pay to Issuer the aggregate purchase price for the
number of shares of Issuer Common Stock specified in the Option
Notice in immediately available funds by wire transfer to a bank
account designated by Issuer; provided, however, that failure or
refusal of Issuer to designate such a bank account shall not
preclude Grantee from exercising the Option.
(g) At such closing, simultaneously with the delivery of
immediately available funds as provided in Section 2(f) hereof,
Issuer shall deliver to Grantee a certificate or certificates
representing the number of shares of Issuer Common Stock specified
in the Option Notice and, if the Option should be exercised in part
only, a new Option evidencing the rights of Grantee thereof to
purchase the balance of the shares of Issuer Common Stock
purchasable hereunder.
(h) Certificates for Issuer Common Stock delivered at a
closing hereunder shall be endorsed with a restrictive legend
substantially as follows:
The transfer of the shares represented by this
certificate is subject to resale restrictions arising under
the Securities Act of 1933, as amended, and applicable state
securities laws and to certain provisions of an agreement
among Webster Financial Corporation, Webster Subsidiary
Corporation and People's Savings Financial Corp., dated as of
April 4, 1997. A copy of such agreement is on file at the
principal office of Webster Financial Corporation, and will be
provided to the holder hereof without charge upon receipt by
Webster Financial Corporation of a written request therefor.
It is understood and agreed that: (i) the reference to the resale
restrictions of the Securities Act in the above legend shall be
removed by delivery of substitute certificate(s) without such
reference if Grantee shall have delivered to Issuer a copy of a
letter from the staff of the Securities and Exchange Commission
(the "SEC") or Governmental Authority responsible for administering
any applicable state securities laws or an opinion of counsel, in
form and substance satisfactory to Issuer's counsel, to the effect
that such legend is not required for purposes of the Securities Act
or applicable state securities laws; (ii) the reference to the
provisions of this Agreement in the above legend shall be removed
by delivery of substitute certificate(s) without such reference if
the shares have been sold or transferred in compliance with the
provisions of this Agreement and under circumstances that do not
require the retention of such reference; and (iii) the legend shall
be removed in its entirety if the conditions in the preceding
clauses (i) and (ii) are both satisfied. In addition such
certificates shall bear any other legend as may be required by law.
(i) Upon the giving by Grantee to Issuer of an Option Notice
and the tender of the applicable purchase price in immediately
available funds on the Closing Date, unless prohibited by
applicable law, Grantee shall be deemed to be the holder of record
of the number of shares of Issuer Common Stock specified in the
Option Notice, notwithstanding that the stock transfer books of
Issuer shall then be closed or that certificates representing such
shares of Issuer Common Stock shall not then actually be delivered
to Grantee. Issuer shall pay all expenses and other charges that
may be payable in connection with the preparation, issuance and
delivery of stock certificates under this Section 2 in the name of
Grantee.
SECTION 3. Issuer agrees: (i) that it shall at all times
until the termination of this Agreement have reserved for issuance
upon the exercise of the Option that number of authorized and
reserved shares of Issuer Common Stock equal to the maximum number
of shares of Issuer Common Stock at any time and from time to time
issuable hereunder, all of which shares will, upon issuance
pursuant hereto, be duly authorized, validly issued, fully paid,
non-assessable, and delivered free and clear of all claims, liens,
encumbrances and security interests and not subject to any
preemptive rights; (ii) that it will not, by amendment of its
certificate of incorporation or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any
other voluntary act, avoid or seek to avoid the observance or
performance of any of the covenants, stipulations or conditions to
be observed or performed hereunder by Issuer; (iii) promptly to
take all reasonable action as may from time to time be requested by
the Grantee, at Grantee's expense (including (x) complying with all
premerger notification, reporting and waiting period requirements
specified in 15 U.S.C. Section 18a and regulations promulgated thereunder
and (y) in the event prior approval of or notice to the FDIC, the
FRB, the Commissioner or any other Governmental Authority, under
the Change in Bank Control Act of 1978, as amended, the Bank
Holding Company Act, as amended, Section 36a-181 or Section 36a-
184, as applicable, of the Connecticut Bank Holding Company Act, or
any other applicable federal or state banking law, is necessary
before the Option may be exercised, cooperating with Grantee in
preparing such applications or notices and providing such
information to each such Governmental Authority as it may require
in order to permit Grantee to exercise the Option and Issuer duly
and effectively to issue shares of Issuer Common Stock pursuant
hereto; and (iv) to take all action provided herein to protect the
rights of Grantee against dilution.
SECTION 4. This Agreement (and the Option granted hereby)
are exchangeable, without expense, at the option of Grantee, upon
presentation and surrender of this Agreement at the principal
office of Issuer, for other agreements providing for Options of
different denominations entitling the holder thereof to purchase,
on the same terms and subject to the same conditions as are set
forth herein, in the aggregate the same number of shares of Issuer
Common Stock purchasable hereunder. The terms "Agreement" and
"Option" as used herein include any agreements and related options
for which this Agreement (and the Option granted hereby) may be
exchanged. Upon receipt by Issuer of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, Issuer will execute
and deliver a new Agreement of like tenor and date.
SECTION 5. The number of shares of Issuer Common Stock
purchasable upon the exercise of the Option shall be subject to
adjustment from time to time as follows:
(a) In the event of any change in the type or number of
shares of Issuer Common Stock by reason of stock dividends, split-
ups, mergers, recapitalizations, combinations, subdivisions,
conversions, exchanges of shares or other issuances of additional
shares (other than pursuant to the exercise of the Option), the
type and number of shares of Issuer Common Stock purchasable upon
exercise hereof shall be appropriately adjusted and proper
provision shall be made so that, in the event that any additional
shares of Issuer Common Stock are to be issued or otherwise become
outstanding as a result of any such change (other than pursuant to
an exercise of the Option), the number of shares of Issuer Common
Stock that remain subject to the Option shall be increased or
decreased (as applicable) so that, after such issuance and together
with the shares of Issuer Common Stock previously issued pursuant
to the exercise of the Option (as adjusted on account of any of the
foregoing changes in the Issuer Common Stock), the Option shall
equal the sum of 19.9% of the total of (i) the number of shares of
Issuer Common Stock then issued and outstanding and (ii) the number
of share issuable pursuant to this Option.
(b) Whenever the number of shares of Issuer Common Stock
purchasable upon exercise hereof is adjusted as provided in this
Section 5, the Option Price shall be adjusted by multiplying the
Option Price by a fraction, the numerator of which shall be equal
to the number of shares of Issuer Common Stock purchasable prior to
the adjustment and the denominator of which shall be equal to the
number of shares of Issuer Common Stock purchasable after the
adjustment.
SECTION 6. (a) Upon the occurrence of a Purchase Event
that occurs prior to an Exercise Termination Event, Issuer shall,
at the request of Grantee (whether on its own behalf or on behalf
of any subsequent holder of the Option (or part thereof) or of any
of the shares of Issuer Common Stock issued pursuant hereto),
promptly prepare, file and keep current a shelf registration
statement with the SEC, under the Securities Act covering any
shares issued and issuable pursuant to the Option and shall use its
reasonable best efforts to cause such registration statement to
become effective, and to remain current and effective for a period
not in excess of 180 days from the day such registration statement
first becomes effective, in order to permit the sale or other
disposition of any shares of Issuer Common Stock issued upon total
or partial exercise of the Option ("Option Shares") in accordance
with any plan of disposition requested by Grantee. Grantee shall
have the right to demand two such registrations which right shall
be transferable. Grantee shall provide all information reasonably
requested by Issuer for inclusion in any offering circular or, if
applicable, registration statement to be filed hereunder. In
connection with any such offering circular or, if applicable,
registration statement, Issuer and Grantee shall provide each other
with representations, warranties, indemnities and other agreements
customarily given in connection with such registration. If
requested by Grantee in connection with such registration, Issuer
and Grantee shall become a party to any underwriting agreement
relating to the sale of such shares, but only to the extent of
obligating themselves in respect of representations, warranties,
indemnities and other agreements customarily included in such
underwriting agreements. Notwithstanding the foregoing, if Grantee
revokes any exercise notice or fails to exercise any Option with
respect to any exercise notice pursuant to Section 2(e) hereof,
Issuer shall not be obligated to continue any registration process
with respect to the sale of Option Shares issuable upon the
exercise of such Option and Grantee shall not be deemed to have
demanded registration of Option Shares.
(b) In the event that Grantee requests Issuer to prepare an
offering circular or, if applicable, to file a registration
statement following the failure to obtain any approval required to
exercise the Option as described in Section 9 hereof, the closing
of the sale or other disposition of the Issuer Common Stock or
other securities pursuant to such offering circular or, if
applicable, registration statement shall occur substantially
simultaneously with the exercise of the Option.
(c) Concurrently with the preparation and filing of a
registration statement under Section 6(a) hereof, Issuer shall also
make all filings required to comply with state securities laws in
such number of states as Grantee may reasonably request.
SECTION 7. (a) Upon the occurrence of a Purchase Event that
occurs prior to an Exercise Termination Event, (i) at the request
(the date of such request being the "Option Repurchase Request
Date") of Grantee, Issuer shall repurchase, subject to compliance
with applicable law and out of funds legally available therefor,
the Option from Grantee at a price (the "Option Repurchase Price")
equal to the amount by which (A) the market/offer price (as defined
below) exceeds (B) the Option Price, multiplied by the number of
shares for which the Option may then be exercised and (ii) at the
request (the date of such request being the "Option Share
Repurchase Request Date") of the owner of Option Shares from time
to time (the "Owner"), Issuer shall repurchase such number of the
Option Shares from the Owner as the Owner shall designate at a
price (the "Option Share Repurchase Price") equal to the
market/offer price multiplied by the number of Option Shares so
designated. The term "market/offer price" shall mean the highest
of (i) the price per share of Issuer Common Stock at which a tender
offer or exchange offer therefor has been made after the date
hereof and on or prior to the Option Repurchase Request Date or the
Option Share Repurchase Request Date, as the case may be, (ii) the
price per share of Issuer Common Stock paid or to be paid by any
third party pursuant to an agreement with Issuer (whether by way of
a merger, consolidation or otherwise), (iii) the average of the 20
highest last sale prices for shares of Issuer Common Stock as
reported within the 90-day period ending on the Option Repurchase
Request Date or the Option Share Repurchase Request Date, as the
case may be, and (iv) in the event of a sale of all or
substantially all of Issuer's assets, the sum of the price paid in
such sale for such assets and the current market value of the
remaining assets of Issuer as determined by an investment banking
firm selected by Grantee or the Owner, as the case may be, and
reasonably acceptable to Issuer, divided by the number of shares of
Issuer Common Stock outstanding at the time of such sale. In
determining the market/offer price, the value of consideration
other than cash shall be the value determined by an investment
banking firm selected by Grantee or the Owner, as the case may be,
and reasonably acceptable to Issuer. The investment banking firm's
determination shall be conclusive and binding on all parties.
(b) Grantee or the Owner, as the case may be, may exercise
its right to require Issuer to repurchase the Option and/or any
Option Shares pursuant to this Section 7 by surrendering for such
purpose to Issuer, at its principal office, a copy of this
Agreement or certificates for Option Shares, as applicable,
accompanied by a written notice or notices stating that Grantee or
the Owner, as the case may be, elects to require Issuer to
repurchase the Option and/or the Option Shares in accordance with
the provisions of this Section 7. As promptly as practicable, and
in any event within 30 business days after the surrender of the
Option and/or certificates representing Option Shares and the
receipt of such notice or notices relating thereto, Issuer shall
deliver or cause to be delivered to Grantee the Option Repurchase
Price or to the Owner the Option Share Repurchase Price.
(c) Issuer hereby undertakes to use its reasonable best
efforts to obtain all required regulatory, shareholder and legal
approvals and to file any required notices as promptly as
practicable in order to accomplish any repurchase contemplated by
this Section 7. Nonetheless, to the extent that Issuer is
prohibited under applicable law or regulation from repurchasing any
Option and/or any Option Shares in full, Issuer shall promptly so
notify Grantee and/or the Owner and thereafter deliver or cause to
be delivered, from time to time, to Grantee and/or the Owner, as
appropriate, the portion of the Option Repurchase Price and the
Option Share Repurchase Price, respectively, that it is no longer
prohibited from delivering, within five business days after the
date on which Issuer is no longer so prohibited; provided, however,
that if Issuer at any time after delivery of a notice of repurchase
pursuant to Section 7(b) hereof is prohibited as referred to above,
from delivering to Grantee and/or the Owner, as appropriate, the
Option Repurchase Price or the Option Share Repurchase Price,
respectively, in full, Grantee or the Owner, as appropriate, may
revoke its notice of repurchase of the Option or the Option Shares
either in whole or in part whereupon, in the case of a revocation
in part, Issuer shall promptly (i) deliver to Grantee and/or the
Owner, as appropriate, that portion of the Option Purchase Price or
the Option Share Repurchase Price that Issuer is not prohibited
from delivering after taking into account any such revocation and
(ii) deliver, as appropriate, either (A) to Grantee, a new
Agreement evidencing the right of Grantee to purchase that number
of shares of Issuer Common Stock equal to the number of shares of
Issuer Common Stock purchasable immediately prior to the delivery
of the notice of repurchase less the number of shares of Issuer
Common Stock covered by the portion of the Option repurchased or,
(B) to the Owner, a certificate for the number of Option Shares
covered by the revocation.
(d) Issuer shall not enter into any agreement with any Person
(other than Grantee or a Grantee Subsidiary) for an Acquisition
Transaction unless the other Person assumes all the obligations of
Issuer pursuant to this Section 7 in the event that Grantee or the
Owner elects, in its sole discretion, to require such other Person
to perform such obligations.
SECTION 8. (a) In the event that prior to an Exercise
Termination Event, Issuer shall enter into a letter of intent or
definitive agreement (i) to consolidate or merge with any Person
(other than Grantee or a Grantee Subsidiary), and Issuer shall not
be the continuing or surviving corporation of such consolidation or
merger, (ii) to permit any Person (other than Grantee or a Grantee
Subsidiary) to merge into Issuer, and Issuer shall be the
continuing or surviving corporation, but, in connection with such
merger, the then outstanding shares of Issuer Common Stock shall be
changed into or exchanged for stock or other securities of any
other Person or cash or any other property or the then outstanding
shares of Issuer Common Stock shall after such merger represent
less than 50% of the outstanding shares and share equivalents of
the merged company, or (iii) to sell or otherwise transfer all or
substantially all of its assets to any Person (other than Grantee
or a Grantee Subsidiary) then, and in each such case, such letter
of intent or definitive agreement governing such transaction shall
make proper provision so that the Option shall, upon the
consummation of such transaction and upon the terms and conditions
set forth herein, be converted into, or exchanged for, an option
(the "Substitute Option"), at the election of Grantee, of either
(x) the Acquiring Corporation (as defined below) or (y) any person
that controls the Acquiring Corporation (the Acquiring Corporation
and any such controlling person being hereinafter referred to as
the "Substitute Option Issuer").
(b) The Substitute Option shall be exercisable for such
number of shares of Substitute Common Stock (as is hereinafter
defined) as is equal to the market/offer price (as defined in
Section 7 hereof) multiplied by the number of shares of Issuer
Common Stock for which the Option was theretofore exercisable,
divided by the Average Price (as hereinafter defined). The exercise
price of the Substitute Option per share of the Substitute Common
Stock (the "Substitute Purchase Price") shall then be equal to the
Option Price multiplied by a fraction in which the numerator is the
number of shares of Issuer Common Stock for which the Option was
theretofore exercisable and the denominator is the number of shares
for which the Substitute Option is exercisable.
(c) The Substitute Option shall otherwise have the same terms
as the Option, provided, that if the terms of the Substitute Option
cannot, for legal reasons, be the same as the Option, such terms
shall be as similar as possible and in no event less advantageous
to Grantee, provided, further that the terms of the Substitute
Option shall include (by way of example and not limitation)
provisions for the repurchase of the Substitute Option and
Substitute Common Stock by the Substitute Option Issuer on the same
terms and conditions as provided in Section 7 hereof.
(d) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean
(i) the continuing or surviving corporation of a consolidation
or merger with Issuer (if other than Issuer), (ii) Issuer in
a merger in which Issuer is the continuing or surviving
corporation, and (iii) the transferee of all or any
substantial part of Issuer's assets.
(ii) "Substitute Common Stock" shall mean the
common stock issued by the Substitute Option Issuer upon
exercise of the Substitute Option.
(iii) "Average Price" shall mean the average
closing price of a share of Substitute Common Stock for the
one-year period immediately preceding the consolidation,
merger or sale in question, but in no event higher than the
closing price of the shares of Substitute Common Stock on the
day preceding such consolidation, merger or sale; provided,
that if Issuer is the issuer of the Substitute Option, the
Average Price shall be computed with respect to a share of
Issuer Common Stock issued by Issuer, the corporation merging
into Issuer or by any company which controls or is controlled
by such merging corporation, as Grantee may elect.
(e) In no event, pursuant to any of the foregoing paragraphs,
shall the Substitute Option be exercisable for more than 19.99% of
the aggregate of (i) the shares of Substitute Common Stock
outstanding immediately prior to the issuance of the Substitute
Option and (ii) the shares subject to the Substitute Option. In
the event that the Substitute Option would be exercisable for more
than such number of shares of Substitute Common Stock but for this
clause (e), the Substitute Option Issuer shall make a cash payment
to Grantee equal to the excess of (i) the value of the Substitute
Option without giving effect to the limitation in this clause (e)
over (ii) the value of the Substitute Option after giving effect to
the limitation in this clause (e). This difference in value shall
be determined by a nationally recognized investment banking firm
selected by Grantee and the Substitute Option Issuer. In addition,
the provisions of Section 5(a) hereof shall not apply to the
issuance of any Substitute Option and for purposes of applying
Section 5(a) hereof thereafter to any Substitute Option, the
percentage referred to in Section 5(a) hereof shall thereafter
equal the percentage that the percentage of the shares of
Substitute Common Stock subject to the Substitute Option bears to
the number of shares of Substitute Common Stock outstanding.
SECTION 9. Notwithstanding Sections 2, 6 and 7 hereof, if
Grantee has given the notice referred to in one or more of such
Sections, the exercise of the rights specified in any such Section
shall be extended (a) if the exercise of such rights requires
obtaining regulatory approvals (including any required waiting
periods) to the extent necessary to obtain all regulatory approvals
for the exercise of such rights, and (b) to the extent necessary to
avoid liability under Section 16(b) of the Exchange Act by reason
of such exercise; provided, that in no event shall any closing date
occur more than 12 months after the related notice date, and, if
the closing date shall not have occurred within such period due to
the failure to obtain any required approval by the OTS, the FDIC,
the Commissioner or any other Governmental Authority despite the
best efforts of Issuer or the Substitute Option Issuer, as the case
may be, to obtain such approvals, the exercise of the rights shall
be deemed to have been rescinded as of the related notice date. In
the event (a) Grantee receives official notice that an approval of
the OTS, the FDIC, the Commissioner or any other Governmental
Authority required for the purchase and sale of the Option Shares
will not be issued or granted or (b) a closing date has not
occurred within 12 months after the related notice date due to the
failure to obtain any such required approval, Grantee shall be
entitled to exercise the Option in connection with the concurrent
resale of the Option Shares pursuant to a registration statement as
provided in Section 6 hereof. Nothing contained in this Agreement
shall restrict Grantee from specifying alternative means of
exercising rights pursuant to Sections 2, 6 or 7 hereof in the
event that the exercising of any such rights shall not have
occurred due to the failure to obtain any required approval
referred to in this Section 9.
SECTION 10. Issuer hereby represents and warrants to
Grantee as follows:
(a) Issuer has the requisite corporate power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly approved by the Board of
Directors of Issuer and no other corporate proceedings on the part
of Issuer are necessary to authorize this Agreement or to
consummate the transactions so contemplated. This Agreement has
been duly executed and delivered by, and constitutes a valid and
binding obligation of, Issuer, enforceable against Issuer in
accordance with its terms, subject to any required Governmental
Approval, and except as enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy
of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought.
(b) Issuer has taken all necessary corporate action to
authorize and reserve and to permit it to issue, and at all times
from the date hereof through the termination of this Agreement in
accordance with its terms will have reserved for issuance upon the
exercise of the Option, that number of shares of Issuer Common
Stock equal to the maximum number of shares of Issuer Common Stock
at any time and from time to time issuable hereunder, and all such
shares, upon issuance pursuant hereto, will be duly authorized,
validly issued, fully paid, non-assessable, and will be delivered
free and clear of all claims, liens, encumbrances and security
interests and not subject to any preemptive rights.
SECTION 11. (a) Neither of the parties hereto may assign any
of its rights or delegate any of its obligations under this
Agreement or the Option created hereunder to any other Person
without the express written consent of the other party, except that
Grantee may assign this Agreement to a wholly owned subsidiary of
Grantee and Grantee may assign its rights hereunder in whole or in
part after the occurrence of a Preliminary Purchase Event. The term
"Grantee" as used in this Agreement shall also be deemed to refer
to Grantee's permitted assigns.
(b) Any assignment of rights of Grantee to any permitted
assignee of Grantee hereunder shall bear the restrictive legend at
the beginning thereof substantially as follows:
The transfer of the option represented by this assignment
and the related option agreement is subject to resale
restrictions arising under the Securities Act of 1933, as
amended, and applicable state securities laws and to certain
provisions of an agreement among Webster Financial
Corporation, Webster Subsidiary Corporation and People's
Savings Financial Corp., dated as of April 4, 1997. A copy of
such agreement is on file at the principal office of Webster
Financial Corporation, and will be provided to any permitted
assignee of the Option without charge upon receipt of a
written request therefor.
SECTION 12. Each of Grantee and Issuer will use its
reasonable efforts to make all filings with, and to obtain consents
of, all third parties and Governmental Authorities necessary to the
consummation of the transactions contemplated by this Agreement,
including, without limitation, applying to the FDIC, the FRB, the
Commissioner and any other Governmental Authority for approval to
acquire the shares issuable hereunder.
SECTION 13. The parties hereto acknowledge that damages
would be an inadequate remedy for a breach of this Agreement by
either party hereto and that the obligations of the parties hereto
shall be enforceable by either party hereto through injunctive or
other equitable relief. Both parties further agree to waive any
requirement for the securing or posting of any bond in connection
with the obtaining of any such equitable relief and that this
provision is without prejudice to any other rights that the parties
hereto may have for any failure to perform this Agreement.
SECTION 14. If any term, provision, covenant or restriction
contained in this Agreement is held by a court or a federal or
state regulatory agency of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions and
covenants and restrictions contained in this Agreement shall remain
in full force and effect, and shall in no way be affected, impaired
or invalidated. If for any reason such court or regulatory agency
determines that Grantee is not permitted to acquire, or Issuer is
not permitted to repurchase pursuant to Section 7 hereof, the full
number of shares of Issuer Common Stock provided in Section 1
hereof (as adjusted pursuant hereto), it is the express intention
of Issuer to allow Grantee to acquire or to require Issuer to
repurchase such lesser number of shares as may be permissible
without any amendment or modification hereof.
SECTION 15. All notices, requests, claims, demands and
other communications hereunder shall be deemed to have been duly
given when delivered in the manner and at the respective addresses
of the parties set forth in the Plan.
SECTION 16. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto shall
be governed by and construed in accordance with the laws of the
State of Delaware (but not including the choice of law rules
thereof).
SECTION 17. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement and shall be effective
at the time of execution and delivery.
SECTION 18. Except as otherwise expressly provided herein,
each of the parties hereto shall bear and pay all costs and
expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder.
SECTION 19. Except as otherwise expressly provided herein
or in the Plan, this Agreement contains the entire agreement
between the parties with respect to the transactions contemplated
hereunder and supersedes all prior arrangements or understandings
with respect thereof, written or oral. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and permitted
assigns. Nothing in this Agreement, expressed or implied, is
intended to confer upon any party, other than the parties hereto,
and their respective successors except as assigns, any rights,
remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided herein.
SECTION 20. Capitalized terms used in this Agreement and
not defined herein but defined in the Plan shall have the meanings
assigned thereto in the Plan.
SECTION 21. Nothing contained in this Agreement shall be
deemed to authorize or require Issuer or Grantee to breach any
provision of the Plan or any provision of law applicable to the
Grantee or Issuer.
SECTION 22. In the event that any selection or
determination is to be made by Grantee or the Owner hereunder and
at the time of such selection or determination there is more than
one Grantee or Owner, such selection shall be made by a majority in
interest of such Grantees or Owners.
SECTION 23. In the event of any exercise of the option by
Grantee, Issuer and such Grantee shall execute and deliver all
other documents and instruments and take all other action that may
be reasonably necessary in order to consummate the transactions
provided for by such exercise.
SECTION 24. Except to the extent Grantee exercises the
Option, Grantee shall have no rights to vote or receive dividends
or have any other rights as a shareholder with respect to shares of
Issuer Common Stock covered hereby.
IN WITNESS WHEREOF, each of the parties has caused this Option
Agreement to be executed and delivered on its behalf by their
respective officers thereunto duly authorized, all as of the date
first above written.
People's Savings Financial Corp.
By: /s/ Richard S. Mansfield
Richard S. Mansfield
President and Chief Executive Officer
Webster Financial Corporation
By: /s/ James C. Smith
James C. Smith
Chairmanand Chief Executive Officer
EXHIBIT 99
Webster Contacts: People's Savings Contacts:
Christopher Capot, Media 203-578-2461 John G. Medvec, Investor, 860-224-7771
John V. Brennan, Investors, 203-578-2335
WEBSTER FINANCIAL CORPORATION TO ACQUIRE
PEOPLE'S SAVINGS FINANCIAL CORPORATION
WATERBURY, Conn., and NEW BRITAIN, Conn., April 3, 1997 - Webster
Financial Corporation (NASDAQ: WBST) and People's Savings
Financial Corporation (Nasdaq: PBNB) announced today that they
have signed a definitive merger agreement by which Webster
Financial Corp. ("Webster") will acquire People's Savings
Financial Corp. ("PSFC") on a stock-for-stock basis valued at
$34.00 per PSFC share in a tax-free exchange. The merger has an
aggregate transaction value of $67.6 million.
The exchange ratio will float based on the average of the daily
closing price of Webster's common shares during a certain 15-day
trading day period. If the average price of Webster common stock
is below $34.00, Webster can terminate the transaction, unless
People's Savings agrees to fix the exchange ratio as if the
average price of Webster common shares were $34.00.
Webster is the Waterbury, Conn.-based holding company for Webster
Bank, which operates 78 banking offices throughout Connecticut's
central corridor. PSFC is the New Britain, Conn.-based parent
company for People's Savings Bank & Trust ("PSB&T"), which
operates 9 banking offices in New Britain, Southington,
Newington, Plainville, Rocky Hill and Meriden and three trust
offices in New Britain, Meriden and Middletown.
The purchase price is approximately 1.4 times PSFC's book value
and 16.8 times PSFC 1996 earnings. The acquisition, which is
expected to close in the third quarter of 1997 and to be
accounted for as a pooling of interests, is expected to be
modestly accretive to Webster's earnings per share in the first
year. Webster expects to recognize acquisition related charges
of approximately $5.3 million after taxes at the time of the
transaction.
James C. Smith, chairman and chief executive officer of Webster,
said, "The acquisition of People's Savings Bank & Trust will
strengthen Webster's franchise by increasing market share and by
the addition of trust and investment management services.
Webster intends to expand People's Savings Bank & Trust's trust
and investment management services to meet the needs of Webster's
300,000 customers throughout Connecticut.
"People's Savings Bank & Trust is a growing, well-capitalized
institution with an attractive retail banking franchise," Smith
said. "This addition of trust and investment management services
greatly expands our ability to address the financial needs of our
consumer and business banking customers."
PSB&T manages $327 million in trust and investment management
services business.
The merger will increase Webster's assets to $5.9 billion and its
deposits to $4.4 billion, representing 8 percent of the total
deposit market share in Connecticut. On a pro forma basis,
Webster will rank second in deposit market share in its primary
markets of Hartford and New Haven counties.
Richard S. Mansfield, president and chief executive officer of
PSFC, said, "Our board of directors is unanimous in its belief
that the best long-term interests of our shareholders, customers
and employees are served by our merger with Webster. Our
institutions share common business philosophies and a strong
commitment to the state of Connecticut and the communities we
serve. The merger increases our capacity to provide financial
services, including expanded business banking services, to our
growing number of customers. Following the merger, People's
Savings Bank & Trust's customers will be able to transact
business at all Webster Bank locations and will benefit from
Webster's broad product offering."
At Dec. 31, 1996, PSFC had total assets of $482 million, deposits
of $358 million, loans of $257 million, shareholders' equity of
$46 million and nonaccrual assets equal to 37 percent of total
assets. PSFC had net income of $4.0 million, or $2.03 per fully
diluted common share for the year ended Dec. 31, 1996. A list of
PSB&T's office locations accompanies this release.
The merger must be approved by PSFC shareholders and by federal
and state bank regulatory authorities and is subject to various
customary closing conditions. The merger agreement has been
approved by the boards of directors of both Webster and PSFC.
Webster Financial Corporation, headquartered in Waterbury,
Connecticut, is the holding company for Webster Bank. Webster
has 78 banking offices extending from the Massachusetts border
through central Connecticut to Long Island Sound. Webster
provides financial services to individuals, families and
businesses throughout Connecticut.
List of People's Savings Bank & Trust offices:
BRANCHES
New Britain
Main Office - 123 Broad Street
Lafayette Square - 450 Main Street
Columbus Plaza - 150 Columbus Blvd.
Farmington Avenue - 553 Farmington Avenue
Southington
405 Queen Street
Newington
36 Fenn Road
Plainville
275C New Britain Avenue
Rocky Hill
2270 Silas Deane Highway
Meriden
834 Broad Street
TRUST OFFICES
New Britain
450 Main Street
Meriden
834 Broad Street
Middletown
49 Main Street
