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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
REGENT BANCSHARES CORP.
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
758924104
--------------
(CUSIP Number)
With Copies to:
Betsy Z. Cohen J. Baur Whittlesey, Esquire
Chairman and Chief Executive Officer Ledgewood Law Firm, P.C.
JeffBanks, Inc. 1521 Locust Street - 8th Fl.
1845 Walnut Street - 10th Floor Philadelphia, PA 19102
Philadelphia, PA 19103 (215) 731-9450
(215) 861-7000
(Name, Address and Telephone Number of Person Authorized to
Receive Notes and Communications)
July 6, 1998
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g),
check the following box. [ ]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.240.13d-7(b) for other
parties to whom copies are to be sent.
The remainder of this cover shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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Page 2 of 7 Pages
CUSIP No. 758924104
(1) Names of Reporting Persons; S.S. or I.R.S. Identification Nos. of
Above Persons (entities only)
JeffBanks, Inc. 23-2189480
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(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [ ]
(3) SEC USE ONLY
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(4) Source of Funds (See Instructions) OO
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
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(6) Citizenship or Place of Organization Commonwealth of Pennsylvania
---------------------------------
Number of (7) Sole Voting Power 0
--------------
Shares
Beneficially (8) Shared Voting Power 711,266(1)
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Owned By
Each (9) Sole Dispositive Power 0
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Reporting
Person (10) Shared Dispositive Power 0
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With
(11) Aggregate Amount Beneficially Owned by Each Reporting Person 711,266(2)
-----------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) [ ]
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(1) JBI has the sole right to vote these shares for approval of the Merger
transaction referred to in Items 3 and 4 and for no other matter.
(2) The number of shares indicated does not include the shares purchasable
by JBI upon exercise of an option issued to JBI on March 27, 1998 as
described in Item 4. Prior to the exercise of the option, JBI is not
entitled to any rights as a shareholder of Regent Bancshares Corp.
("RBC") in regard to the shares covered by the option. The option may
only be exercised upon the occurrence of certain events referred to in
Item 6, none of which has occurred as of the date hereof. JBI
expressly disclaims beneficial ownership of any of the shares of RBC
which are purchasable by JBI upon exercise of the option until such
time as such events occur.
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Page 3 of 7 Pages
(13) Percent of Class Represented by Amount in Row (11) 20.9%(3)
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(14) Type of Reporting Person (See Instructions) Co
--------------------------
Item 1. Security and Issuer
This statement relates to the Common Stock, par value $.10 per share
of Regent Bancshares Corp. (the "Issuer" or "RBC").
The principal executive offices of the Issuer are located at 1430
Walnut Street, Philadelphia, Pennsylvania 19102.
Item 2. Identity and Background
This statement is being filed by JeffBanks, Inc. ("JBI"). JBI is a
corporation organized under the laws of the Commonwealth of Pennsylvania and
is a registered bank holding company under the Bank Holding Company Act of
1956, as amended, which owns as its principal assets Jefferson Bank and
Jefferson Bank of New Jersey. JBI's executive officers are located at 1845
Walnut Street, 10th Floor, Philadelphia, Pennsylvania, 19103.
JBI has not during the last five years been (i) convicted in a
criminal proceeding, or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to such
laws.
Item 3. Source and Amount of Funds or Other Consideration
The irrevocable proxies to vote 711,266 shares of RBC Common Stock
which are the subject of the Schedule 13D were issued to JBI in connection
with the proposed merger of a limited purpose subsidiary of JBI with and into
RBC, with RBC thereby becoming a wholly-owned subsidiary of JBI. No
consideration apart from the merger consideration has been or will be paid for
such proxies.
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(3) The percentage indicated represents the percentage of class
attributed to the 711,266 shares of RBC for which JBI has received
irrevocable proxies to vote as described in Item 3. It does not
include the shares as to which JBI has an option to purchase upon the
occurrence of certain events, as described in Item 6.
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Page 4 of 7 Pages
Item 4. Purpose of Transaction
On July 6, 1998, JBI received irrevocable proxies from the directors
and officers of RBC and their affiliates who hold 711,266 shares of RBC Common
Stock. The proxies authorized JBI to vote such shares at the Annual Meeting of
RBC to be held July 8, 1998 in favor of approval and adoption of the Amended
and Restated Agreement and Plan of Merger dated March 27, 1998 and effective
March 18, 1998 (the "Merger Agreement") between RBC, JBI, Regent National Bank
("Regent"), Jefferson Bank and JeffBanks Acquisitioncorp V, Inc. ("JBI Merger
Sub"), a wholly-owned subsidiary of JBI formed for the purpose of effectuating
the merger with RBC. RBC, as part of the Merger Agreement, had undertaken to
use its best efforts to obtain these proxies. The proxies were delivered to
JBI to help assure JBI that the Merger Agreement would be approved by Regent
Shareholders.
Except as otherwise set forth in this Item 4 and Item 6 below, JBI
has no present intent or proposal that relates to or would result in (i) the
acquisition by any person of additional securities of the Issuer; or the
disposition of securities of the Issuer; (ii) a class of equity securities of
the Issuer becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Act; (iii) or any action similar to any of those
enumerated above.
Item 5. Interest in Securities of the Issuer
On July 6, 1998, JBI received from the directors and executive
officers of RBC and their affiliates, irrevocable proxies representing 711,266
shares of RBC Common Stock. The receipt of such proxies gave JBI control of
approximately 20.9% of the outstanding shares of RBC Common Stock.
JBI has sole power to vote on behalf of all of the 711,266 shares,
respecting the Merger Agreement.
The Shares which are purchasable by JBI upon exercise of the Option
(as defined in Item 6 below) are equal to approximately 19.9% of the
outstanding RBC Shares on the purchase date. JBI expressly disclaims
beneficial ownership of the Option Shares because the Option is exercisable
only in the circumstances referred to in Item 6 below, none of which has
occurred, as of this date. If the Option were exercised, JBI would have sole
right to vote or to dispose of the Option shares issued as a result of such
exercise.
JBI has not been a party to any transaction in RBC Common Stock in
the last 60 days.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
Pursuant to the Merger Agreement and in consideration thereof, RBC
granted an option to JBI (the "Option") to purchase, under certain conditions,
up to that number of shares of RBC Common Stock as equals 19.9% of the issued
and outstanding shares of RBC Common Stock at a purchase price of $14.39 per
share (the "Purchase Price"), subject to adjustment in certain circumstances.
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Page 5 of 7 Pages
The Option was issued to JBI pursuant to an Option Agreement, dated
March 27, 1998 and effective as of March 18, 1998 (the "Option Agreement")
which was incorporated into the Merger Agreement.
The Option Agreement generally provides that JBI may exercise the
Option, in whole or in part, if both an Initial Triggering Event and a
Subsequent Triggering Event have occurred prior to the occurrence of an
Exercise Termination Event, provided that written notice of such exercise is
provided within 6 months following such Subsequent Triggering Event (or such
later period as provided in the Option Agreement).
The Initial Triggering Event is any one of the following events or
transactions which occurs after March 18, 1998:
(i) RBC or Regent, without having received JBI's prior
written consent, shall have entered into an agreement to engage in an
Acquisition Transaction (as defined in the Merger Agreement) with any person,
or the RBC Board of Directors shall have recommended that the shareholders of
RBC approve or accept any Acquisition Transaction other than as contemplated
by the Merger Agreement;
(ii) any person, other than JBI or any of its subsidiaries,
shall have acquired beneficial ownership or the right to acquire beneficial
ownership of 10% or more of the outstanding shares of RBC Common Stock;
(iii) the RBC shareholders shall have voted and failed to
approve the Merger Agreement at the RBC Meeting, or the RBC Meeting shall not
have been held in violation of the Merger Agreement or shall have been
cancelled prior to termination of the Merger Agreement or if, prior to the RBC
Meeting (or if the RBC Meeting shall not have been held or shall have been
cancelled, prior to such termination), it shall have been publicly announced
that any person shall have made, or disclosed an intention to make, a proposal
to engage in an Acquisition Transaction;
(iv) the RBC Board of Directors shall have withdrawn or
modified in any manner adverse in any respect to JBI its recommendation that
RBC's shareholders approve and adopt the transactions contemplated by the
Merger Agreement, or RBC or Regent shall have authorized, recommended or
proposed an agreement to engage in an Acquisition Transaction with any person;
(v) any person other than JBI or any of its subsidiaries
shall have made a proposal to RBC or its shareholders to engage in an
Acquisition Transaction and such proposal shall have been publicly announced;
(vi) any person other than JBI or any of its subsidiaries
shall have filed with the Commission a registration statement or tender offer
materials with respect to a potential exchange or tender offer that would
constitute an Acquisition Transaction;
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Page 6 of 7 Pages
(vii) RBC shall have willfully breached any covenant or
obligation contained in the Merger Agreement in anticipation of engaging in an
Acquisition Transaction, and following such breach JBI would be entitled to
terminate the Merger Agreement; or
(viii) any person shall have filed an application or notice
with the Federal Reserve Board or other federal or state bank regulatory or
antitrust authority for approval to engage in an Acquisition Transaction.
A Subsequent Triggering Event is either of the following:
(i) the acquisition by any person (other than JBI or any
subsidiary of JBI) of beneficial ownership of 25% or more of the then
outstanding shares of RBC Common Stock; or
(ii) the occurrence of the Initial Triggering Event
described in section (ii) above except that the percentage referred to therein
is 25%.
The Exercise Termination Event is any of:
(i) the Merger Effective Date, as defined in the Merger
Agreement;
(ii) termination of the Merger Agreement in accordance with
the provisions thereof if such termination occurs prior to the occurrence of
an Initial Trigger Event, except a termination by JBI due to a willful breach
of the Merger Agreement by RBC or due to the failure of the RBC Board of
Directors to recommend approval and adoption of the Merger Agreement by RBC's
shareholders (each, a "Listed Termination"); or
(iii) the passage of 18 months (or such longer period as
provided in the Option Agreement) after termination of the Merger Agreement if
such termination follows the occurrence of an Initial Triggering Event or is a
Listed Termination.
Upon the occurrence of certain events set forth in the Option
Agreement, RBC may be required to repurchase the Option or the shares
purchased under the Option Agreement. The terms of such repurchase obligations
are set forth in the Option Agreement.
A copy of the Merger Agreement, including the Option Agreement, is
attached hereto, as Annex A and the foregoing summary, as well as the other
information contained in this report, is qualified in its entirety by
reference thereto.
Other than the Merger Agreement, including as an Exhibit, the Option
Agreement, there are no other contracts, arrangements, understandings or
relationships among the persons named in Item 3 as parties to the Merger
Agreement with respect to any securities of RBC.
Item 7. Materials to be Filed as Exhibits
A copy of the Merger Agreement, including the Option Agreement, is
attached hereto as Annex A.
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Page 7 of 7 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
JeffBanks, Inc.
By: /s/ Paul Frenkiel
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Name: Paul Frenkiel
Title: Senior Vice-President -- Finance
July 6, 1998
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ANNEX A
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
AMENDED AND RESTATED AGREEMENT and PLAN OF MERGER, dated March 27, 1998
and effective as of March 18, 1998 (this "Plan"), by and among Regent Bancshares
Corp. ("RBC"), Regent National Bank ("Regent"), JeffBanks, Inc. ("JBI"),
JeffBanks Acquisitioncorp. V, Inc. ("JBI Merger Sub") and Jefferson Bank
"Jefferson").
RECITALS:
A. RBC. RBC is a corporation duly organized and validly existing in
good standing under the laws of the State of New Jersey with its principal
executive offices located in Philadelphia, Pennsylvania. As of the date hereof,
RBC's authorized capital stock consisted of 5,000,000 shares of Preferred Stock,
par value $.10 per share ("Preferred Stock") and 10,000,000 shares of common
stock, par value $.10 per share ("RBC Common Stock"), of which no shares of
Preferred Stock and 3,409,203 shares of RBC Common Stock were outstanding.
B. Regent. Regent is a national banking association duly organized and
validly existing in good standing under the laws of the United States, with its
principal executive offices located in Philadelphia, Pennsylvania. As of the
date hereof, Regent's authorized capital stock consisted of 3,000,000 shares of
common stock, par value $1.00 per share ("Regent Common Stock") of which
1,275,000 shares of Regent Common Stock were outstanding, all of which are owned
by RBC.
C. JBI. JBI is a corporation duly organized and validly existing in
good standing under the laws of the Commonwealth of Pennsylvania with its
principal executive offices located in Philadelphia, Pennsylvania. As of the
date hereof, JBI's authorized capital stock consisted of 10,000,000 shares of
common stock, par value $1.00 per share ("JBI Common Stock"), of which 5,038,251
shares of JBI Common Stock were outstanding.
D. JBI Merger Sub. JBI Merger Sub is a corporation formed for the
purpose of accomplishing the transactions contemplated by this Plan duly
organized and validly existing in good standing under the laws of the
Commonwealth of Pennsylvania with its principal executive offices located in
Philadelphia, Pennsylvania. As of the date hereof, JBI Merger Sub's authorized
capital stock consisted of 100 shares of Common Stock, par value $.01 per share
("JBI Merger Sub Common Stock"), of which 100 shares of JBI Merger Sub Common
Stock were outstanding, all of which are owned by JBI.
E. Merger Transaction. Pursuant to this Plan, the parties have agreed
that JBI
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will acquire RBC and Regent by means of a merger of JBI Merger Sub with and into
RBC (the "Merger") as a result of which RBC will become a direct wholly owned
subsidiary of JBI and Regent will become a second-tier subsidiary of JBI (the
"Acquisition"). Immediately following the Merger Effective Date (as hereinafter
defined), JBI intends to merge RBC into JBI, with JBI being the surviving entity
(collectively with the Merger, the "Merger Transaction"). Thereafter, JBI and
RBC intend to merge Regent into Jefferson, with Jefferson being the surviving
entity (the "Bank Merger").
F. Stock Option Agreement. As a condition and inducement to JBI's
willingness to enter into this Plan, concurrently with the execution and
delivery of this Plan, RBC has executed and delivered a Stock Option Agreement
with JBI (the "Stock Option Agreement") in substantially the form attached
hereto as Exhibit A, pursuant to which RBC is granting to JBI an option to
purchase, under certain circumstances, shares of RBC Common Stock.
G. Intention of the Parties. It is the intention of the parties to this
Plan that (i) the Merger shall be accounted for as a pooling of interests under
generally accepted accounting principles, and (ii) the Merger Transaction and
the Bank Merger shall qualify as a reorganization under Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
H. Approvals. The Board of Directors of each of RBC, Regent, JBI,
Jefferson and JBI Merger Sub has determined that this Plan and the transactions
contemplated hereby and by the Stock Option Agreement are in their respective
best interests and the best interests of their respective shareholders, and has
approved, at meetings of each of such Boards of Directors, this Plan and, at the
RBC and JBI Board meetings, the Stock Option Agreement.
NOW, THEREFORE, In consideration of the mutual promises and obligations
contained herein, the parties hereto, intending to be legally bound hereby,
adopt and make this Plan and prescribe the terms and conditions hereof and the
manner and basis of carrying it into effect, which shall be as follows:
I. THE MERGER.
1.01 The Merger. In the event that all of the conditions set forth in
Article VI hereof have been satisfied or waived:
(A) The Continuing Corporation. On the Merger Effective Date, JBI
Merger Sub shall merge with and into RBC, the separate existence of JBI Merger
Sub shall cease and RBC (sometimes hereinafter referred to as the "Continuing
Corporation") shall survive. The
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name of the Continuing Corporation shall be "JeffBanks Acquisitioncorp. V, Inc."
(B) Effect of the Merger. At the Merger Effective Date, the Continuing
Corporation shall be considered the same business and corporate entity as each
of RBC and JBI Merger Sub, and thereupon and thereafter, all the property,
rights, powers and franchises of each of RBC and JBI Merger Sub shall vest in
the Continuing Corporation and the Continuing Corporation shall be subject to
and be deemed to have assumed all of the debts, liabilities, obligations and
duties of each of RBC and JBI Merger Sub and shall have succeeded to all of each
of their relationships, fiduciary or otherwise, as fully and to the same extent
as if such property rights, privileges, powers, franchises, debts, obligations,
duties and relationships had been originally acquired, incurred or entered into
the by Continuing Corporation.
(C) Liabilities. Upon consummation of the Merger, the Continuing
Corporation shall thenceforth be responsible and liable for all the liabilities,
obligations and penalties of each of the corporations so merged. All rights of
creditors and obligors and all liens on the property of each of JBI and RBC
shall be preserved unimpaired.
(D) Certificate of Incorporation; Bylaws; Directors; Officers. The
Certificate of Incorporation and Bylaws of the Continuing Corporation shall be
those of JBI Merger Sub, as in effect immediately prior to the Merger Effective
Date in each case as amended as of the Merger Effective Date as provided in
Exhibits B and C attached hereto. The directors and officers of JBI Merger Sub
in office immediately prior to the Merger Effective Date shall be the directors
and officers of the Continuing Corporation, together with such additional
directors and officers as may thereafter be elected, who shall hold office until
such time as their successors are elected and qualified or their earlier
resignation, removal or death. On or before the Merger Effective Date, JBI shall
cause the election or appointment of (i) Robert B. Goldstein, O. Francis Biondi
and Barbara H. Teaford as additional directors of Jefferson, (ii) Robert B.
Goldstein and John W. Rose as additional Class A directors of JBI and (iii)
Robert B. Goldstein as Vice Chairman of JBI and President and Chief Operating
Officer of Jefferson.
1.02 Merger Effective Date; Closing. The Merger shall become effective
upon the filing and acceptance of articles of merger by the Pennsylvania
Department of State and the Secretary of State of the State of New Jersey (the
"Merger Effective Date") which such articles of merger shall be filed within ten
days after satisfaction of all conditions set forth in Article VI hereof,
including, without limitation, the receipt of the regulatory approvals referred
to in Paragraphs (B) and (C) of Section 6.02 hereof unless otherwise agreed to
in writing by the parties hereto. All documents required by the terms of this
Plan to be delivered at or prior to consummation of the Merger shall be
exchanged by the parties at the times prescribed herein (the "Closing"), which
shall be held on the Merger Effective Date at
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the offices of Jefferson, 1845 Walnut Street, Philadelphia, Pennsylvania 19103
(or at such other location as may be mutually agreed upon) at 10:00 a.m.
1.03 Other Matters. Notwithstanding any term of this Plan to the
contrary, JBI may, in its discretion at any time prior to the Merger Effective
Date, designate a direct or indirect wholly-owned subsidiary to substitute for
JBI Merger Sub as a constituent corporation in the Merger by written notice to
RBC so long as the exercise of this right does not adversely affect the
interests of the RBC shareholders, or cause a delay in consummation of the
transactions contemplated herein. JBI shall also have the right to cause JBI
Merger Sub or such substitute, to be the surviving corporation of the Merger, so
long as the exercise of such right does not have an adverse effect on the
interests of the holders of the capital stock of RBC, or cause a delay in, or
otherwise adversely affect, consummation of the transactions described herein.
Nothing in this Plan shall be deemed to restrict the ability of JBI or any of
its subsidiaries to merge with or with and into another entity so long as no
such other transaction shall adversely affect the parties' ability to consummate
the Merger Transaction and the Bank Merger or cause a delay in, or otherwise
adversely affect, consummation of the transactions contemplated herein, or
adversely affect the qualification of the Merger Transaction and the Bank Merger
as a "reorganization" under Section 368(a) of the Code.
II. MERGER CONSIDERATION.
2.01 Merger Consideration. Subject to the provisions of this Plan, at
the Merger Effective Date, automatically as a result of the Merger, and without
any action on the part of any party or shareholder:
(A) Outstanding JBI Common Stock. The shares of JBI Common Stock issued
and outstanding immediately prior to the Merger Effective Date shall, on and
after the Merger Effective Date, remain issued and outstanding shares of JBI
Common Stock.
(B) Outstanding RBC Common Stock. On the Merger Effective Date, each
share of RBC Common Stock (excluding shares owned by RBC) issued and outstanding
immediately prior to the Merger Effective Date shall, by virtue of the Merger,
automatically and without any action on the part of the holder thereof, become
and be converted into the right to receive .303 shares (the "Exchange Ratio")
(subject to possible adjustment as set forth in Section 2.06 hereof) of JBI
Common Stock (the "Merger Consideration"). Any shares of RBC Common Stock owned
by RBC shall be canceled and retired upon the Merger Effective Date and no
consideration shall be issued in exchange therefor.
(C) Outstanding Shares of JBI Merger Sub. Each of the shares of JBI
Merger Sub Common Stock issued and outstanding immediately prior to the Merger
shall, by virtue
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of and after the Merger, be converted into one share of RBC Common Stock and
thereafter shall collectively constitute all of the issued and outstanding
shares of the capital stock of the Continuing Corporation.
(D) Outstanding Shares of Regent. The shares of Regent Common Stock
issued and outstanding immediately prior to the Merger shall, on and after the
Merger, remain issued and outstanding shares of Regent Common Stock.
2.02 Shareholder Rights; Stock Transfers. On the Merger Effective Date,
holders of RBC Common Stock shall cease to be, and shall have no rights as,
shareholders of RBC, other than to receive the Merger Consideration provided
under Section 2.01 hereof and Section 2.03 hereof. After the Merger Effective
Date, there shall be no transfers on the stock transfer books of JBI Merger Sub
or the Continuing Corporation of the shares of RBC Common Stock which were
issued and outstanding immediately prior to the Merger Effective Date.
2.03 Fractional Shares. Notwithstanding any other provision hereof, no
fractional shares of JBI Common Stock, and no certificates or scrip therefor, or
other evidence of ownership thereof, will be issued in the Merger. Instead, JBI
shall pay to each holder of RBC Common Stock who would otherwise be entitled to
a fractional share of JBI Common Stock an amount in cash determined by
multiplying such fractional share of JBI Common Stock by the Index Price (as
hereinafter defined). As used herein, the term "Index Price" shall mean the
average of the daily closing prices for JBI Common Stock on the Nasdaq National
Market System ("Nasdaq NMS") for the 20 consecutive full trading days ending at
the close of trading on the business day immediately prior to the Merger
Effective Date.
2.04 Exchange Procedures. As promptly as practicable after the Merger
Effective Date, JBI shall send or cause to be sent to each shareholder of record
of RBC immediately prior to the Merger Effective Date transmittal materials for
use in exchanging such shareholder's certificates formerly representing RBC
Common Stock ("Old Certificates") for the consideration set forth in Section
2.01(B) hereof and Section 2.03 hereof. The certificates representing the shares
of JBI Common Stock ("New Certificates") issuable in exchange for the Old
Certificates and any fractional share checks which an RBC shareholder shall be
entitled to receive, and any dividends or other distributions paid on any shares
of JBI Common Stock that such shareholder shall be entitled to receive prior to
the delivery to Chase Mellon Securities Transfer Company (the "Exchange Agent")
of Old Certificates representing all of such shareholder's shares of RBC Common
Stock will be delivered to such shareholder only upon delivery to the Exchange
Agent of Old Certificates representing all of such shares (or indemnity
satisfactory to JBI and the Exchange Agent, in their judgement, if any of the
certificates are lost, stolen or destroyed) owned by such shareholder. No
interest will be paid
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on any such fractional share checks or dividends to which the holder of such
shares shall be entitled to receive upon such delivery. After the Merger
Effective Date, to the extent required by law, former shareholders of record of
RBC shall be entitled to vote at any meeting of holders of JBI Common Stock the
number of whole shares of JBI Common Stock into which their respective shares of
RBC Common Stock are converted, regardless of whether such holders have
exchanged their Old Certificates for New Certificates in accordance with the
provisions of this Plan. Notwithstanding the foregoing, neither the Exchange
Agent nor any party hereto shall be liable to any former holder of RBC Common
Stock for any amount properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
2.05 Options. Any valid option to purchase shares of RBC Common Stock
(an "RBC Option"), outstanding and unexercised immediately prior to the Merger
shall, by virtue of the Merger, automatically and without any action on the part
of the holder thereof, become and be converted into an option (a "JBI Option")
to purchase that number of shares of JBI Common Stock as shall equal the
Exchange Ratio multiplied by that number of shares of RBC Common Stock which
such option entitled the holder thereof to purchase (rounded to the nearest
whole share), at an exercise price equal to the exercise price per share of the
RBC Option divided by the Exchange Ratio (rounded to the nearest cent). JBI
shall perform each such JBI Option in accordance with the terms of the plan or
agreement by which it is evidenced, subject to the foregoing. The maximum number
of shares of RBC Common Stock which are issuable upon exercise of the options
referred to above, as of the date hereof, has been Previously Disclosed (as such
term is defined in Section 8.08(C) hereof.
2.06 Anti-Dilution Provisions. In the event that (i) JBI changes the
number of shares of JBI Common Stock issued and outstanding prior to the Merger
Effective Date as a result of a stock split, stock dividend, recapitalization,
reclassification or other distribution with respect to the outstanding JBI
Common Stock and the record date therefor shall be prior to the Merger Effective
Date, or (ii) between the date hereof and the Merger Effective Date, JBI issues
JBI Common Stock or securities convertible into or exchangeable for shares of
JBI Common Stock, at a price per share of JBI Common Stock (or, with respect to
securities convertible into or exchangeable for shares of JBI Common Stock at a
conversion or exchange price per share) less than the market value per share of
JBI Common Stock at the time of issuance or a binding agreement to issue such
JBI Common Stock or such convertible or exchangeable securities is entered into,
then the Exchange Ratio shall be proportionately adjusted effective upon the
record date for any such event.
III. ACTIONS PENDING MERGER.
3.01 Actions Pending Merger. From the date hereof until the Merger
Effective
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Date, except as expressly contemplated by this Plan, without the prior written
consent or approval of the Chairman or President of JBI, RBC will not, and will
cause Regent not to:
(A) Dividends. Make, declare or pay any dividend or declare or make any
distribution on, any shares of its capital stock or directly or indirectly
combine, redeem, reclassify, purchase or otherwise acquire any shares of its
capital stock.
(B) Compensation; Employment Agreements. Enter into or amend any
employment, severance or similar agreements or arrangements with, increase the
rate of compensation or increase any employee benefit of (except normal
individual increases in the ordinary course of business in accordance with
existing policy consistent with current practice), or pay or agree to pay any
bonus to, any of its directors, officers or employees, except in accordance with
plans or agreements existing, as Previously Disclosed and as in effect on the
date hereof.
(C) Benefit Plans. Enter into or modify (except as may be required by
applicable law or except in accordance with plans or agreements as Previously
Disclosed and as in effect on the date hereof) any pension, retirement, stock
option, stock purchase, savings, profit sharing, deferred compensation,
consulting, bonus, group insurance, or other employee benefit, incentive or
welfare contract, plan or arrangement, or any trust agreement related thereto,
in respect of any of its directors, officers or other employees, including
without limitation taking any action that accelerates (i) the vesting or
exercise of any benefits payable thereunder; or (ii) the right to exercise any
employee stock options outstanding thereunder.
(D) Acquisitions and Dispositions. Dispose of or discontinue any
material portion of its assets, business or properties (except for the sale of
foreclosed properties, or properties received in lieu of foreclosure, in the
ordinary course of business, consistent with past practice and purchases and
sales of investment securities consistent with current practice), or merge or
consolidate with, or acquire all or any substantial portion of, the business or
property of any other entity (except for properties received through, or in lieu
of, foreclosure in the ordinary course of business, consistent with past
practice).
(E) Amendments. Amend its Certificate or Articles of Incorporation or
Bylaws.
(F) Actions in Ordinary Course. Take any other action or engage in any
loan, deposit, investment or other transaction not in the usual, regular and
ordinary course of business consistent with current practice, including, but not
limited to, (i) significantly changing asset liability sensitivity, (ii) making
loans, (iii) purchasing securities, (iv) entering into any material contract,
except for this Plan and the Stock Option Agreement, to be performed after the
date hereof, and (v) incurring any indebtedness for borrowed money, in
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each case in a manner not consistent with current practice.
(G) Agreements. Agree or commit to do or take any of the foregoing
actions.
IV. REPRESENTATIONS AND WARRANTIES.
Each of RBC and Regent hereby represents and warrants to JBI, Jefferson and JBI
Merger Sub, and each of JBI, JBI Merger Sub and Jefferson hereby represents and
warrants to RBC and Regent as follows:
(A) Recitals. The facts set forth in the Recitals of this Plan with
respect to it are true and correct.
(B) Capital Shares. The outstanding shares of it are validly issued and
outstanding, fully paid and nonassessable, and subject to no preemptive rights.
(C) Qualification. It is duly qualified to do business and is in good
standing in the states of the United States and foreign jurisdictions where its
ownership or leasing of property or the conduct of its business requires it to
be so qualified. It has the corporate power and authority to carry on its
business as it is now being conducted and to own all its material properties and
assets. It has in effect all federal, state and local authorizations, licenses
and approvals necessary for it to own or lease its properties and assets and to
carry on its business as it is now conducted.
(D) Subsidiaries. Except as Previously Disclosed, in the case of RBC
and Regent, it does not have any subsidiaries.
(E) Authority. Subject to receipt of any necessary approval by its
shareholders and the regulatory approvals referred to in Section 6.02 hereof, it
has the corporate power and authority to execute, deliver and perform its
obligations under this Plan and, in the case of RBC, the Stock Option Agreement,
this Plan and, in the case of RBC, the Option Agreement has been authorized by
all necessary corporate action by it and this Plan and, in the case of RBC, the
Stock Option Agreement is a valid and binding agreement of it enforceable
against it in accordance with its respective terms, subject to bankruptcy,
insolvency, receivership, conservatorship and other laws of general
applicability relating to or affecting creditors rights and to general equity
principles.
(F) No Conflict. The execution, delivery and performance of this Plan
and, in the case of RBC, the Stock Option Agreement and the consummation of the
transactions contemplated by this Plan and, in the case of RBC, the Stock Option
Agreement will not
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constitute (i) a breach or violation of, or a default under, any law, rule or
regulation or any judgment, decree, order, governmental permit or license, or
agreement, indenture or instrument of it or of any of its subsidiaries or to
which it or any of its subsidiaries or properties is subject or by which any of
them are bound, which breach, violation or default is reasonably likely to have,
either by itself or in the aggregate with one or more other events, occurrences
or circumstances, a Material Adverse Effect (as such term is defined in Section
8.08(B) hereof), on it, or (ii) a breach or violation of, or a default under,
its Certificate or Articles of Incorporation or Bylaws; and the consummation of
the transactions contemplated by this Plan and, in the case of RBC, the Stock
Option Agreement will not require any consent or approval under any such law,
rule, regulation, judgment, decree, order, governmental permit or license or,
except as Previously Disclosed, the consent or approval of any other party to
any such agreement, indenture or instrument, other than the required approvals
of applicable regulatory authorities referred to in Section 6.02 hereof.
(G) Financial Reports and SEC Documents. Its Annual Reports on Form
10-K for the fiscal years ended December 31, 1996 and 1997, and all other
reports, registration statements, definitive proxy statements or information
statements filed or to be filed by it or any of its subsidiaries subsequent to
December 31, 1996 under the Securities Act of 1933, as amended (together with
the rules and regulations thereunder, the "Securities Act") or under Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(together with the rules and regulations thereunder, the "Exchange Act"), in the
form filed, or to be filed, with the SEC (collectively, its "SEC Documents") (i)
complied or will comply as to form in all material respects with the applicable
requirements under the Securities Act or the Exchange Act, as the case may be,
and (ii) did not and will not, at the time of such filing, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading; and each of the
balance sheets in or incorporated by into any such SEC Document (including the
related notes and schedule thereto) fairly presents and will fairly present the
financial position of the entity or entities to which it relates as of its date,
and each of the statements of income and changes in shareholders' equity and
cash flows or equivalent statements in such report and documents (including any
related notes and schedules thereto) fairly presents and will fairly present the
results of operations, changes in shareholders' equity and changes in cash
flows, as the case may be, of the entity or entities to which it relates for the
periods set forth therein, in each case in accordance with generally accepted
accounting principles ("GAAP") consistently applied during the periods involved,
except in each case as may be noted therein, subject to normal year-end audit
adjustments in the case of unaudited statements.
(H) Conduct of Business in Ordinary Course. Except as Previously
Disclosed, since September 30, 1997, (i) it and each of its subsidiaries have
conducted their respective
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businesses in the ordinary and usual course (excluding the incurrence of
expenses related to this Plan and the transactions contemplated hereby) and (ii)
no event has occurred which, either by itself or in the aggregate with one or
more other events, occurrences or circumstances, is reasonably likely to have a
Material Adverse Effect on it.
(I) Litigation; Regulatory Action. Except as Previously Disclosed, no
litigation, proceeding, or controversy before any court or governmental agency
is pending which, either by itself or in the aggregate with one or more other
events, occurrences or circumstances, is reasonably likely to have a Material
Adverse Effect on it and, to the best of its knowledge, no such litigation,
proceedings or controversy has been threatened; and except as Previously
Disclosed, neither it nor any of its subsidiaries is a party to, or subject to
any order, decree, agreement, memorandum of understanding or similar arrangement
with, or a commitment letter or similar submission to, or has adopted any board
resolution at the request of, any federal, state or other government,
governmental agency or authority charged with the supervision or regulation of
financial institutions or their holding companies or the issuance of securities
or engaged in the insurance of deposits (including, without limitation, the
Office of the Comptroller of the Currency (the "OCC"), the Pennsylvania
Department of Banking, the Board of Governors of the Federal Reserve System (the
"FRB") and the Federal Deposit Insurance Corporation (the "FDIC")) or the
supervision or regulation of it or any of its subsidiaries or properties
(collectively, the "Regulatory Authorities"); and except as Previously
Disclosed, neither it nor any of its subsidiaries has been advised by any
Regulatory Authority that such authority is contemplating issuing or requesting
(or is considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum of understanding, commitment letter or similar
submission or any such resolutions. Since Regent received notification of its
most recent CAMEL rating from the OCC, a copy of which has been furnished to
JBI, there has been no change in such rating.
(J) Compliance with Laws. Except as Previously Disclosed, it and each
of its subsidiaries is in material compliance, in the conduct of its business,
with all applicable federal, state and local statutes, laws, regulations,
ordinances, rules, judgments, orders or decrees applicable thereto or to the
employees conducting such businesses, including, without limitation, the Equal
Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment Act,
the Home Mortgage Disclosure Act and all other applicable fair lending laws
relating to discriminatory business practices; and, except as Previously
Disclosed, it and each of its subsidiaries has all permits, licenses,
authorizations, orders and approvals of, and has made all filings, applications
and registrations with, all Regulatory Authorities that are required in order to
permit them to conduct their businesses substantially as presently conducted;
all such permits, licenses, certificates of authority, orders and approvals are
in full force and effect and, to the best of its knowledge, no suspension or
cancellation of any of them is threatened; and, except as Previously Disclosed,
neither it nor any of its subsidiaries
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has received notification or communication from any Regulatory Authority (i)
asserting that it or any of its subsidiaries is not in material compliance with
any of the statutes, regulations, or ordinances which such Regulatory Authority
enforces or (ii) threatening to revoke any license, franchise, permit, or
governmental authorization or (iii) threatening or contemplating revocation or
limitation of, or which would have the effect of revoking or limiting, federal
deposit insurance (nor, to its knowledge, do any grounds for any of the
foregoing exist).
(K) Material Contracts. Except as Previously Disclosed and except for
this Plan and the Stock Option Agreement, in the case of RBC and Regent only, it
is not bound by any material contract to be performed after the date hereof.
(L) Defaults. Except as Previously Disclosed, in the case of RBC and
Regent only, neither it nor any of its subsidiaries is in default under any
material contract, agreement, commitment, arrangement, lease, insurance policy,
or other instrument to which it is a party, by which its respective assets,
business, or operations may be bound or affected, or under which it or its
respective assets, business, or operations receives benefits, and there has not
occurred any event that, with the lapse of time or the giving of notice or both,
would constitute such a default. Neither it nor any of its subsidiaries is
subject to, or bound by, any contract containing covenants which (i) limit the
ability of it or any subsidiary to compete in any material line of business or
with any person, or (ii) involve any material restriction of geographical area
in which, or method by which, it or any subsidiary may carry on its business
(other than as may be required by law or any applicable Regulatory Authority).
(M) Title to Properties. Except as Previously Disclosed, in the case of
RBC and Regent only, it and each of its subsidiaries has good and marketable
title, free and clear of any charge, mortgage, pledge, security interest,
restriction, claim, lien or encumbrance ("Liens") (other than Liens for current
taxes not yet delinquent, pledges to secure deposits or in the ordinary course
of business consistent with past practice) to all of the properties and assets,
tangible and intangible, owned by it or its subsidiaries. To the best of its
knowledge, all buildings and all fixtures, equipment and other property and
assets are held under valid leases or subleases by it or its subsidiaries
enforceable in accordance with their respective terms (except as may be limited
by bankruptcy, insolvency, receivership, conservatorship and other laws of
general applicability relating to or affecting creditors rights or by general
equity principles).
(N) No Brokers. Except as Previously Disclosed in the case of RBC with
respect to arrangements between Keefe, Bruyette & Woods, Inc. and RBC, all
negotiations relative to this Plan and the transactions contemplated hereby have
been carried on by it and its agents directly with the other parties hereto and
their agents and no action has been taken by it that would give rise to any
valid claim against any party hereto for a brokerage commission,
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finder's fee or other like payment.
(O) Employee Benefit Plans. Except as Previously Disclosed:
(i) RBC has delivered to JBI a true and complete copy of its
401(k) Plan, which is the only "employee benefit plan" within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), covering employees or former employees of it and Regent (the
"Employees").
(ii) All employee benefit plans of Regent covering Employees,
to the extent subject to ERISA (the "ERISA Plans"), have been operated and
administered, and are in material compliance with, applicable law, including
ERISA and the Code, or any rules or regulations thereunder, and all filings,
disclosures and notices required by any such laws have been timely made, except
for failures to so comply which are not reasonably likely, either by themselves
or in the aggregate with one or more other events, occurrences or circumstances,
to have a Material Adverse Effect on it. There is no pending or, to the best of
its knowledge, threatened litigation relating to the ERISA Plans which is
reasonably likely, either by itself or in the aggregate with one or more other
events, occurrences or circumstances, to have a Material Adverse Effect on it;
and neither it nor any of its subsidiaries has engaged in a transaction with
respect to any ERISA Plan that, assuming the taxable period of such transaction
expired as of the date hereof, would subject it or any of its subsidiaries to a
tax or penalty imposed by either Section 4975 of the Code or Section 502 of
ERISA in an amount which is reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect on it.
(iii) All contributions required to be made under the terms of
any ERISA Plan of RBC or its subsidiaries have been timely made.
(iv) There are no material current or projected liabilities
for retiree health or life insurance benefits.
(P) No Regulatory Impediment. It knows of no reason why the regulatory
approvals referred to in Section 6.02 hereof should not be obtained.
(Q) Labor Matters. Neither it nor any of its subsidiaries is a party
to, or bound by any collective bargaining agreement, contract or other agreement
or understanding with a labor union or labor organization, nor is it the subject
of a proceeding asserting that it or any subsidiary has committed an unfair
labor practice (within the meaning of the National Labor Relations Act) or
seeking to compel it or any subsidiary to bargain with any labor organization as
to wages and conditions of employment, nor is there any strike or other labor
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dispute involving it, pending or, to the best of its knowledge, threatened, nor
is it aware of any activity involving its employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
(R) Insurance. It and each of its subsidiaries has taken all requisite
action (including without limitation the making of claims and the giving of
notices) pursuant to its directors' and officers' liability insurance policy or
policies in order to preserve all rights thereunder with respect to all matters
(other than matters arising in connection with this Plan and the transactions
contemplated hereby) that are known to it.
(S) Asset Classification. In the case of RBC and Regent only, it has
Previously Disclosed a list, accurate and complete in all material respects, of
all loans, extensions of credit or other assets of Regent that are classified by
it as of December 31, 1997 (the "Asset Classification"); and no amounts of
loans, extensions of credit or other assets that are classified as of December
31, 1997 by any regulatory examiner as "Other Assets Especially Mentioned",
"Substandard", "Doubtful," "Loss," or words of similar import are excluded from
the amounts disclosed in the Asset Classification, other than amounts of loans,
extensions of credit or other assets that were charged off by Regent prior to
December 31, 1997; and in the case of RBC and Regent only, the allowance for
loan and lease losses disclosed in its SEC Documents were, and the allowance for
loan and lease losses disclosed in its SEC Documents for periods ending after
the date of this Plan will be, adequate as of the date thereof, under generally
accepted accounting principles consistently applied to banks and bank holding
companies and all other applicable regulatory requirements for all losses
reasonably anticipated in the ordinary course of business as of the date thereof
based on information available as of such date; and in the case of RBC and
Regent only, the assets comprising other real estate owned and in-substance
foreclosures included in any of its non-performing assets are carried net of
reserves at the lower of cost or market value based on current independent
appraisals or current management appraisals.
(T) Affiliates. Except as Previously Disclosed, in the case of RBC and
Regent only, to the best of its knowledge, there is no person who, as of the
date of this Plan, may be deemed to be an "affiliate" of RBC or Regent as that
term is used in Rule 145 under the Securities Act.
(U) Takeover Laws; Dissenters' Rights. In the case of RBC and Regent
only, it has taken all necessary action to exempt the transactions contemplated
by this Plan (including those contemplated by the Stock Option Agreement) from,
or the transactions contemplated by this Plan (including those contemplated by
the Stock Option Agreement) are otherwise exempt from, the requirements of any
"moratorium," "control share," "fair price," "affiliate transaction," "control
transaction," "business combination" or other anti-takeover laws and
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regulations (collectively, the "Takeover Laws") of the Commonwealth of
Pennsylvania or the State of New Jersey, including, without limitation, Chapter
25 of the Pennsylvania Business Corporation Law, the New Jersey Shareholders
Protection Act and the New Jersey Corporation Takeover Bid Disclosure Law.
Holders of RBC Common Stock and JBI Common Stock do not have dissenters' or
appraisal rights in connection with the execution of this Plan or the
consummation of any of the transactions contemplated hereby.
(V) Environmental Matters. Except as Previously Disclosed, in the case
of RBC and Regent only, to the best of their knowledge:
(i) No Hazardous Substances (as hereinafter defined) have been
stored, treated, dumped, spilled, disposed, discharged, released or deposited
at, under or on (1) any property now owned, occupied, leased or held or managed
in a representative or fiduciary capacity ("Present Property") by RBC or any of
its subsidiaries, (2) any property previously owned, occupied, leased or held or
managed in a representative or fiduciary capacity ("Former Property") by RBC or
any of its subsidiaries during the term of such previous ownership, occupancy,
lease, holding or management or (3) any Participation Facility (as hereinafter
defined) during the time that RBC or any of its subsidiaries participated in the
management of, or may be deemed to be or to have been an owner or operator of,
such Participation Facility, where such storage, treatment, dumping, spilling,
disposing, discharging, releasing or depositing would have a Material Adverse
Effect on RBC and its subsidiaries, taken as a whole.
(ii) Neither RBC nor any of its subsidiaries disposed of, or
arranged for the disposal of, Hazardous Substances from any Present Property,
Former Property or Participation Facility, and no owner or operator of a
Participation Facility during the time that RBC or any of its subsidiaries
participated in the management of, or may be deemed to be or to have been an
owner or operator of, such Participation Facility, where such disposal or
arranging for disposal would have a Material Adverse Effect on RBC and its
subsidiaries, taken as whole.
(iii) No Hazardous Substances have been stored, treated,
dumped, spilled, disposed, discharged, released or deposited at, under or on any
Loan Property (as hereinafter defined), where such storage, treatment, dumping,
spilling, disposing, discharging, releasing, depositing or violation would have
a Material Adverse Effect on RBC and its subsidiaries, taken as a whole, nor is
there, with respect to any such Loan Property, any violation of environmental
law which could materially adversely affect the value of such Loan Property to
an extent which could prevent or delay RBC or any of its subsidiaries from
recovering the full value of its loan in the event of a foreclosure on such Loan
Property.
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(iv) Neither RBC nor any of its subsidiaries (i) is aware of
any investigations contemplated, pending or completed by any environmental
regulatory authority with respect to any Present Property, Former Property, Loan
Property or Participation Facility, (ii) has received any information requests
from any environmental regulatory authority or (iii) been named as a potentially
responsible or liable party in any Superfund, Resource Conservation and Recovery
Act, Toxic Substances Control Act or Clean Water Act proceeding or other
equivalent state or federal proceeding.
(v) As used in this Plan, (i) "Participation Facility" shall
mean any property or facility of which the relevant person or entity (A) has at
any time participated in the management or (B) may be deemed to be or to have
been an owner or operator, (ii) "Loan Property" shall mean any real property in
which the relevant person or entity holds a security interest in an amount
greater than $50,000 and (iii) "Hazardous Substances" shall mean (x) any
flammable substances, explosives, radioactive materials, hazardous materials,
hazardous substances, hazardous wastes, toxic substances, pollutants,
contaminants and any related materials or substances specified in any applicable
federal or state law or regulation relating to pollution or protection of human
health or the environment (including, without limitation, ambient or indoor air,
surface water, groundwater, land surface or subsurface strata) and (y) friable
asbestos, polychlorinated biphenyls, urea formaldehyde and petroleum and
petroleum-containing products and wastes.
(W) Tax Matters. Except as Previously Disclosed, (i) all reports and
returns with respect to Taxes (as defined below) that are required to be filed
by or with respect to it (collectively, the "Tax Returns"), have been duly
filed, or requests for extensions have been timely filed and have not expired,
for all periods immediately preceding the Merger Effective Date except to the
extent such filing is not yet due or all such failures to file, taken together,
are not reasonably likely to have either by themselves or in the aggregate with
one or more other events, occurrences or circumstances, a Material Adverse
Effect on it, and such Tax Returns were true, complete, accurate and correct in
all material respects, (ii) all taxes (which shall mean federal, state, local or
foreign income, gross receipts, windfall profits, severance, property,
production, sales, use, occupancy, license, excise, franchise, employment,
withholding or similar taxes imposed on the income, properties, operations or
activities of it, together with any interest, additions, or penalties with
respect thereto and any interest in respect of such additions or penalties,
collectively the "Taxes") shown to be due on the Tax Returns have been paid in
full on or before the due date or are being contested in good faith and
adequately reserved for, in accordance with GAAP, on its consolidated balance
sheet, (iii) the Tax Returns have never been examined by the Internal Revenue
Service, (iv) no written notice of deficiency, pending audit or assessment with
respect to the Tax Returns has been received from the appropriate state, local
or foreign taxing authority, or the period for assessment of the Taxes in
respect of which such Tax Returns were required to be filed has
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expired, (v) all Taxes due with respect to completed and settled examinations
have been paid in full or otherwise adequately reserved in accordance with GAAP
on its consolidated balance sheet, (vi) no issues have been raised by the
relevant taxing authority in connection with the examination of any of the Tax
Returns which are reasonably likely to result in a determination that would
have, either by themselves or in the aggregate with one or more other events,
occurrences or circumstances, a Material Adverse Effect on it, except as
reserved against, in accordance with GAAP, in its Financial Reports, and (vi) no
waivers of statutes of limitations have been given by or requested with respect
to any Taxes of it.
(X) Pooling; Reorganization. It is aware of no reason why the Merger
will fail to qualify (i) for pooling-of-interests accounting treatment or (ii)
as a reorganization under Section 368(a) of the Code.
(Y) Outstanding Securities. Except as set forth in the recitals to this
Plan, or Previously Disclosed pursuant to this Plan, in the case of RBC and
Regent only, neither it nor any of its subsidiaries has any securities (whether
capital stock or other equity securities, debt securities, or warrants, options
or rights to obtain the issuance of any such securities) authorized and reserved
for issuance and neither RBC nor Regent has any commitment to authorize, issue,
or sell any such shares or any securities or obligations convertible into or
exchangeable for, or giving any person any right to subscribe for or acquire
from such party, any such securities and no securities or obligations
representing any such rights are outstanding;
(Z) Articles and Bylaws. In the case of RBC and Regent only, it has
previously delivered to the other parties its Articles or Certificate of
Incorporation and Bylaws which are true, correct and complete copies of such
documents as in effect on the date of this Plan.
V. COVENANTS.
RBC and Regent hereby covenant to JBI, Jefferson and JBI Merger Sub, and JBI,
Jefferson and JBI Merger Sub hereby covenant to RBC and Regent, that:
5.01 Reasonable Best Efforts. Subject to the terms and conditions of
this Plan, it shall use commercially reasonable efforts in good faith to take,
or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or desirable, or advisable under applicable laws, as promptly
as practicable so as to permit consummation of the Merger at the earliest
possible date and to otherwise enable consummation of the transactions
contemplated hereby and shall cooperate fully with the other parties hereto, and
each party shall use, and shall cause each of their respective subsidiaries to
use, commercially reasonable efforts to cause to be satisfied the conditions
referred to in Article VI hereof, to lift or
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rescind any injunction or restraining order or other order adversely affecting
the ability of the parties to consummate the transactions contemplated by this
Plan, to obtain all consents (governmental or other) necessary or desirable for
the consummation of the transactions contemplated by this Plan and to defend any
litigation seeking to enjoin, prevent or delay the consummation of the
transactions contemplated by this Plan.
5.02 Irrevocable Proxies. In the case of RBC and Regent only, it shall
use its best efforts to cause each director and executive officer of RBC and
Regent to deliver to JBI on the date of this Plan or as promptly as practicable
thereafter, irrevocable proxies naming Betsy Z. Cohen, Harmon S. Spolan, or
either of them, as the attorneys-in-fact for such persons to vote the shares of
RBC held in his or her name (or to instruct the record holder of any such shares
held in nominee name for his or her benefit) for approval of this Plan, the
Merger and the transactions contemplated hereby.
5.03 Registration Statement.
(A) Each shall use its best efforts in good faith and in cooperation
with the other parties to promptly prepare and file with the SEC in accordance
with the requirements of the Securities Act, a registration statement (the
"Registration Statement") in connection with the issuance of the JBI Common
Stock contemplated by this Plan. Each shall use its best efforts to promptly
prepare and, if required, file with the SEC, a proxy or information statement to
be mailed to the holders of RBC Common Stock. RBC shall call a meeting of the
holders of RBC Common Stock to be held as soon as practicable after the
effective date of the Registration Statement for purposes of voting upon a
proposal seeking approval of this Plan and the Merger contemplated hereby, and,
subject to the right of the Board of Directors of RBC to withdraw or modify its
recommendations if such Board of Directors determines that it is required to do
so in the exercise of its fiduciary duties after consultation with counsel, it
shall recommend approval of this Plan and the transactions contemplated hereby,
and use its best efforts to obtain such approvals from the holders of RBC Common
Stock. RBC shall, at JBI's request, recess or adjourn its shareholders' meeting
if such recess or adjournment is deemed by JBI to be necessary or desirable.
(B) In the case of JBI only: (i) it shall use its best efforts to cause
the Registration Statement to be declared effective as soon as practicable after
the filing thereof; (ii) it shall use its best efforts to obtain, prior to the
effective date of the Registration Statement, all necessary state securities
laws or "blue sky" permits and approvals, provided that JBI shall not be
required by virtue thereof to submit to general jurisdiction in any state; (iii)
when the Registration Statement or any post-effective amendment or supplement
thereto shall become effective, and at all times subsequent to such
effectiveness, up to and including the date of the meetings, such Registration
Statement and all amendments or supplements thereto, with
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respect to all information set forth therein furnished by RBC or Regent relating
to RBC, Regent or their subsidiaries and by JBI relating to JBI and its
subsidiaries (a) will comply as to form in all material respects with the
provisions of the Securities Act and any other applicable statutory or
regulatory requirements, and (b) will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements contained therein not misleading; provided
however, in no event shall any party hereto be liable for any untrue statement
of a material fact or omission to state a material fact in the Registration
Statement made in reliance upon and in conformity with, written information
concerning another party furnished by such other party specifically for use in
the Registration Statement.
5.04 Press Releases. Unless approved by the other parties hereto in
advance, no party will issue any press release or written statement for general
circulation relating to the transactions contemplated hereby, except as
otherwise required by law or applicable stock exchange, National Association of
Securities Dealers, Inc. ("NASD") or Nasdaq NMS rule.
5.05 Access; Information.
(A) Upon reasonable notice, each party hereto shall afford the other
parties hereto, and their officers, employees, counsel, accountants and other
authorized representatives, access, during normal business hours throughout the
period prior to the Merger Effective Date to all of its properties, books,
contracts, commitments and records and, during such period, it shall furnish
promptly to the other parties hereto, (i) a copy of each material report,
schedule and other document filed by it pursuant to the requirements of federal
or state securities or banking laws, and (ii) all other information concerning
its business, properties and personnel as the other parties hereto may
reasonably request. No party shall be required to provide access to or to
disclose information where such access or disclosure would violate or prejudice
the rights of its customers, jeopardize the attorney-client or similar privilege
with respect to such information or contravene any law, rule, regulation, order,
judgment, decree, fiduciary duty or agreement entered into prior to the date
hereof. The parties will use their reasonable best efforts to make appropriate
substitute disclosure arrangements, to the extent practicable, in circumstances
in which the restrictions of the preceding sentence apply.
(B) No investigation pursuant to this Section 5.05 by any party shall
affect or be deemed to modify or waive any representation or warranty made by
any other party hereto or the conditions to the obligation of the first party to
consummate the transactions contemplated by this Plan; and (2) each party hereto
will not use any information obtained pursuant to this Section 5.05 for any
purpose unrelated to this Plan, the consummation of the transactions
contemplated hereby and, if the Merger is not consummated, will hold all
information and documents obtained pursuant to this paragraph in confidence (as
provided in Section 8.06
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hereof) unless and until such time as such information or documents become
publicly available other than by reason of any action or failure to act by such
party or as it is advised by counsel that any such information or document is
required by law or applicable stock exchange, NASD or Nasdaq NMS rule to be
disclosed, and in the event of the termination of this Plan, each party will,
upon request by the other party, deliver to the other all documents so obtained
by it or destroy such documents.
5.06 Acquisition Transactions.
(A) Prior to the Merger Effective Date, RBC shall not, and shall not
authorize or permit any of its subsidiaries or any of its or its subsidiaries'
directors, officers, employees, agents or representatives, directly or
indirectly, to solicit, initiate, facilitate or encourage (including by way of
furnishing or disclosing non-public information) any inquiries or the making of
any proposal with respect to any merger, consolidation or other business
combination involving it or its subsidiaries or the acquisition of all or
substantially all of the assets or capital stock of it and its subsidiaries
taken as a whole, or any similar transaction (an "Acquisition Transaction") or
negotiate, explore or otherwise engage in substantive discussions with any
person (other than JBI or its directors, officers, employees, agents and
representatives) with respect to any Acquisition Transaction or enter into any
agreement, arrangement or understanding requiring it to abandon, terminate or
fail to consummate the Merger or any other transactions contemplated by this
Agreement; provided that RBC may, in response to an unsolicited written proposal
with respect to an Acquisition Transaction from a third party, furnish
information to, and negotiate, explore or otherwise engage in substantive
discussions with such third party, and enter into any such agreement,
arrangement or understanding, in each case only if RBC's Board of Directors,
determines in good faith by a majority vote, after consultation with its
financial advisers and its outside legal counsel, that failing to take such
action would be a breach of the fiduciary duties of its Board of Directors in
connection with seeking an Acquisition Transaction that is more favorable to its
shareholders than the Merger.
(B) RBC shall promptly advise JBI in writing of the receipt of any
inquiries or proposals relating to an Acquisition Transaction, unless RBC's
Board of Directors determines in good faith by a majority vote, after
consultation with its outside legal counsel, that taking such action would be a
breach of the fiduciary duties of its Board of Directors in connection with
seeking an Acquisition Transaction that is more favorable to its shareholders
than the Merger.
5.07 Affiliate Agreements. In the case of RBC and Regent only, it will
cause each person who may be deemed to be an "affiliate" of RBC or Regent for
purposes of Rule 145 under the Securities Act to execute and deliver to JBI on
or before the mailing of the proxy
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statements for the meetings referred to in Section 5.03 hereof an agreement in
the form attached hereto as Exhibit D restricting the disposition of such
affiliate's shares of RBC Common Stock and the shares of JBI Common Stock to be
received by such person in exchange for such person's shares of RBC Common Stock
or shares of JBI Common Stock issuable pursuant to the exercise of the JBI
Options, as applicable.
5.08 Certain Modifications; Restructuring Changes. In the case of
Regent, it shall use its best efforts to make reasonable modifications and
changes to its loan, litigation and real estate valuation policies and practices
(including loan classifications and levels of reserves) prior to the Merger
Effective Date so as to be consistent on a mutually satisfactory basis with
those of JBI and generally accepted accounting principles. Regent shall not be
required to modify or change any such policies or practices, however, until (i)
satisfaction of the conditions set forth in Section 6.01 hereof, (ii)
commencement of the United States Department of Justice review period set forth
in 12 U.S.C. ss.1849; (iii) such time as Regent and JBI shall reasonably agree
that the Merger Effective Date will occur prior to public disclosure of such
modifications or changes in regular periodic earnings releases or periodic
reports filed with any Regulatory Authority, and (iv) such time as JBI
acknowledges in writing that all conditions to JBI's obligations to consummate
the Merger (and JBI's rights to terminate this Plan) have been waived or
satisfied; provided, however, that in all circumstances Regent shall make such
modifications and changes not later than immediately prior to the expiration of
the statutory waiting period referred to above in clause (ii). Regent's
representations, warranties and covenants contained in this Plan shall not be
deemed to be untrue or breached in any respect for any purpose as a consequence
of any modifications or changes undertaken solely on account of this Section
5.08 nor will any such modifications or changes affect or be considered in the
definition of "Material Adverse Effect" contained in Section 8.08 hereof.
5.09 Takeover Laws. In the case of each of RBC and Regent only, it
shall not take any action that would cause the transactions contemplated by this
Plan (including those contemplated by the Stock Option Agreement) to be subject
to any applicable state takeover statute in effect as of the date of this Plan
and RBC and Regent shall take all necessary steps to exempt (or ensure the
continued exemption of) the transactions contemplated by this Plan (including
those contemplated by the Stock Option Agreement) from any applicable state
takeover law, as now or hereafter in effect, including, without limitation, the
New Jersey Shareholders Protection Act and the New Jersey Corporation Takeover
Bid Disclosure Law.
5.10 No Rights Triggered. In the case of RBC and Regent only, it shall
take all necessary steps to ensure that the entering into of this Plan and the
consummation of the transactions contemplated hereby (including without
limitation the Merger and the transactions contemplated by the Stock Option
Agreement) and any other action or combination of actions,
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or any other transactions contemplated hereby or thereby do not and will not (i)
result in the grant of any rights or claims under the Certificate of
Incorporation or Bylaws of Regent or RBC or under any agreement to which Regent
or RBC is a party other than as Previously Disclosed with respect to certain
employment agreements, or (ii) restrict or impair in any way the ability of JBI
or JBI Merger Sub to exercise the rights granted hereunder.
5.11 Regulatory Applications. It undertakes and agrees to use its best
efforts to cause the Merger to be effected, including, without limitation,
promptly preparing and filing any and all regulatory applications and disclosure
documents, and to take no action which would cause the Merger to fail to qualify
for pooling-of-interests accounting treatment.
5.12 Employees.
(A) In the case of JBI, prior to the completion of the Merger, it will
advise each of the current employees of RBC and Regent in writing that (i) it
will interview all current employees of Regent; (ii) it will consider in good
faith continuing to employ each such employee upon the completion of the Merger;
and (iii) any employee of Regent that is retained by JBI will be given credit
for his or her prior service with Regent for the purposes of determining the
entitlement to and amount of (a) retirement benefits provided under JBI's
current retirement plans (and any successor thereto) and (b) the required
employer contribution for the group health insurance currently provided by JBI.
(B) In the case of RBC and Regent, the employment agreements of each of
Robert B. Goldstein, Joel E. Hyman and Amanda Perkins, shall be amended or
replaced on terms acceptable to JBI or shall be terminated in accordance with
their terms or on such other terms as shall be acceptable to JBI.
5.13 Quarterly Information. In the case of RBC and Regent only, it
shall promptly after the end of each fiscal quarter after the date of this Plan
and on the Merger Effective Date provide JBI with a list of all of its loans,
extensions of credit or other assets that have been classified internally or by
any regulatory examiner since the date it provided JBI with the Asset
Classification.
5.14 Indemnification. In the case of JBI only:
(A) From and after the Merger Effective Date through the second
anniversary of the Merger Effective Date, it agrees to indemnify and hold
harmless each present and former director and officer of each of RBC and Regent
and each officer or employee of each of RBC and Regent that is serving as a
director or trustee of another entity expressly at the request or direction of
RBC or Regent (each, an "Indemnified Party"), against any costs or expenses
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(including reasonable attorneys' fees), judgments, fines, losses, claims,
damages or liabilities (collectively, the "Costs") incurred in connection with
any claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, and whether or not the Indemnified Party is a
party thereto, arising out of matters existing or occurring at or prior to the
Merger Effective Date (including the transactions contemplated by this Plan),
whether asserted or claimed prior to, at or after the Merger Effective Date, to
the fullest extent permitted under the RBC Certificate of Incorporation, the
charter of Regent, or the bylaws of either in effect on the date hereof;
provided, however, that no Indemnified Party shall be entitled to
indemnification for costs arising out of any matter that such Indemnified Party
had an obligation, pursuant to this Plan, to Previously Disclose to JBI and did
not so disclose.
(B) Any Indemnified Party wishing to claim indemnification under
Section 5.14(A) hereof, upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify JBI thereof, but the failure
to so notify shall not relieve JBI of any liability it may have hereunder to
such Indemnified Party if such failure does not materially prejudice JBI. In the
event of any such claim, action, suit, proceeding or investigation, (i) JBI
shall have the right to assume the defense thereof with counsel reasonably
acceptable to the Indemnified Party and JBI shall not be liable to such
Indemnified Party for any legal expenses of other counsel subsequently incurred
by such Indemnified Party in connection with the defense thereof, except that if
JBI does not elect to assume such defense within a reasonable time or if there
are issues which constitute conflicts of interest between JBI and the
Indemnified Party, the Indemnified Party may retain counsel satisfactory to such
Indemnified Party, and JBI shall remain responsible for the reasonable fees and
expenses of such counsel, with respect to those matters as to which a conflict
of interest exists as set forth above, promptly as statements therefor are
received; provided, however, that JBI shall be obligated pursuant to this
Section 5.14(B) to pay for only one firm of counsel for all Indemnified Parties
in any one jurisdiction with respect to any given claim, action, suit,
proceeding or investigation unless the use of one counsel for such Indemnified
Parties would present such counsel with a conflict of interest; (ii) the
Indemnified Party will reasonably cooperate in the defense of any such matter
and (iii) JBI shall not be liable for any settlement effected by an Indemnified
Party without its prior written consent, which consent may not be withheld
unless such settlement is unreasonable in light of such claims, actions, suits,
proceedings or investigations against and defenses available to, such
Indemnified Party.
(C) In the event JBI or any of its successors or assigns (1)
consolidates with or merges into any other corporation or entity 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 or entity, then, and in each case, to the extent
necessary, proper provision shall be made so that the successors and assigns of
JBI assume the obligations set forth in this Section 5.14.
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(D) JBI shall maintain in effect for not less than two years from the
Merger Effective Date the policies of directors' and officers' liability
insurance most recently maintained by RBC, provided that JBI may substitute
therefor policies with reputable and financially sound carriers of at least the
same coverage containing terms and conditions which are no less advantageous for
so long as such substitution does not result in gaps or lapses in coverage, with
respect to claims arising from or relating to matters occurring prior to the
Merger Effective Date; provided that in no event shall JBI be required to spend
more than an amount per year equal to 250% of the current annual premiums paid
by RBC, (the "Premium Amount") to maintain or procure insurance coverage
pursuant hereto and further provided that if JBI is unable to obtain the
insurance called for by this Section 5.14, JBI shall obtain as much comparable
insurance as is available for the Premium Amount per year and, provided further,
that in lieu of the foregoing, JBI may renew any existing insurance or purchase
any "discovery period" insurance provided for thereunder. JBI shall pay all
expenses (including attorneys' fees) that may be incurred by any Indemnified
Party in enforcing the indemnity and other obligations provided for in this
Section 5.14.
(E) The provisions of this Section 5.14 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and their
respective heirs and representatives.
5.15 Accountants' Letters. Each of RBC and JBI shall use its reasonable
best efforts to cause to be delivered to JBI, and JBI's directors and officers
who sign the Registration Statement, letters of Grant Thornton LLP and Arthur
Andersen LLP dated (i) the date on which the Registration Statement shall become
effective and (ii) a date shortly prior to the Merger Effective Date, and
addressed to JBI, and such directors and officers, in form and substance
customary for "comfort" letters delivered by independent accountants in
accordance with Statement on Auditing Standards No. 72.
5.16 Notification of Certain Matters. Except as may be otherwise
provided in Section 5.06(B) of this Agreement, each of RBC and JBI shall give
prompt notice to the other of any fact, event or circumstance known to it that
(i) is reasonably likely, individually or taken together with all other facts,
events and circumstances known to it, to result in any Material Adverse Effect
with respect to it or (ii) would cause or constitute a material breach of any of
its representations, warranties, covenants or agreements contained herein.
5.17 Form S-8 Registration Statement. As soon as reasonably practicable
following the Merger Effective Date, JBI shall prepare and file with the SEC, in
accordance with the requirements of the Securities Act, a registration statement
on Form S-8 registering the shares of JBI Common Stock issuable upon exercise of
the JBI Options.
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VI. CONDITIONS TO CONSUMMATION OF THE MERGER.
Consummation of the Merger is conditioned upon:
6.01 Shareholder Vote. Approval of (i) the Merger and the other
transactions contemplated hereby by the required vote of the shareholders of RBC
and as and to the extent required by law, by RBC as the sole shareholder of
Regent, and (ii) the Merger by the shareholders of JBI and JBI Merger Sub.
6.02 Regulatory Approvals. Procurement by JBI and RBC of all requisite
approvals and consents of Regulatory Authorities, and the expiration of
applicable statutory waiting periods relating thereto, provided, however, that
no such approval or consent shall have imposed any condition or requirement
(other than conditions or requirements Previously Disclosed) which would so
materially and adversely impact the economic or business benefits to JBI or RBC
of the transactions contemplated by this Plan that, had such condition or
required been known, such party would not, in its reasonable judgment, have
entered into this Plan.
6.03 Third Party Consents. All consents or approvals of all persons
(other than Regulatory Authorities) required for the consummation of the Merger
shall have been obtained and shall be in full force and effect, unless the
failure to obtain any such consent or approval is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on RBC or JBI.
6.04 No Injunction. There not being in effect any order, decree or
injunction of any court or agency of competent jurisdiction that enjoins or
prohibits consummation of the Merger Transaction or the Bank Merger.
6.05 Pooling Letter. Receipt (i) by JBI from Grant Thornton LLP of a
letter to the effect that it is not aware of any facts and circumstances which
might cause the Merger not to qualify for pooling-of-interests accounting
treatment and (ii) by RBC from Arthur Andersen LLP of a letter to the effect
that it is not aware of any facts and circumstances which might cause the Merger
not to qualify for pooling-of-interests accounting treatment.
6.06 Legal Opinions.
(A) The receipt by RBC, Regent and their directors and officers of an
opinion, dated the Merger Effective Date, of Ledgewood Law Firm, P.C., counsel
for JBI and Jefferson, in form and substance reasonably satisfactory to RBC and
Regent; and
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(B) The receipt by JBI and its directors and officers who sign the
Registration Statement of an opinion, dated the Merger Effective Date, of Duane,
Morris & Heckscher, LLP, in form and substance reasonably satisfactory to JBI.
6.07 Representations, Warranties and Covenants.
(A) (i) Each of the representations and warranties contained herein of
any party being true and correct as of the date of this Plan and upon the Merger
Effective Date with the same effect as though all such representations and
warranties had been made on the Merger Effective Date, except (x) for any such
representations and warranties made as of a specified date, which shall be true
and correct as of such date, (y) as expressly contemplated by this Plan, or (z)
for representations and warranties (other than the representations and
warranties set forth in Paragraph (A) of Article IV, which shall be true and
correct in all material respects) the inaccuracies of which relate to matters
that, individually or in the aggregate, do not materially adversely affect the
Merger and the other transactions contemplated by this Plan; (ii) each and all
of the agreements and covenants contained herein of any party to be performed
and complied with pursuant to this Plan and the other agreements contemplated
hereby prior to the Merger Effective Date shall have been duly performed and
complied with in all material respects, and (ii) JBI and RBC shall have received
a certificate signed by the Chief Executive Officer and the Chief Financial
Officer of the other party dated the Merger Effective Date, to such effect;
6.08 Effective Registration Statement. The Registration Statement shall
have become effective, no stop order suspending the effectiveness of the
Registration Statement having been issued and no proceedings for that purpose
having been initiated or threatened by the SEC or any other Regulatory
Authority.
6.09 Blue Sky Permits. JBI having received all state securities laws
and "blue sky" permits and other authorizations necessary in connection with the
issuance of the JBI Common Stock as set forth in the Registration Statement and
to otherwise consummate the Merger.
6.10 Tax Opinions. JBI and RBC shall have received opinions from
Ledgewood Law Firm, P.C. (as to JBI) and Duane, Morris & Heckscher, LLP (as to
RBC) to the effect that each of the Merger Transaction and the Bank Merger
constitute a reorganization under Section 368 of the Code, which such opinions
may rely upon factual representations contained in certificates of officers of
JBI, JBI Merger Sub, RBC, Regent and others.
6.11 Nasdaq NMS Listing. The shares of JBI Common Stock issuable
pursuant to the Merger having been approved for listing on Nasdaq NMS, subject
to official notice of issuance.
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6.12 Election of Directors and Officers. The election or appointment
immediately prior to the Merger Effective Date of those additional directors and
officers of Jefferson and JBI as specified in Section 1.01(D) hereof.
6.13 Opinion of Financial Advisor. RBC shall have received the written
opinion of Keefe, Bruyette & Woods, Inc., in form and substance satisfactory to
RBC, as to the fairness of the Merger Transaction to the shareholders of RBC
from a financial point of view, dated as of a date not less than five business
days prior to the date of mailing of the proxy statement with respect to the
Merger Transaction and the Bank Merger and such opinion shall not have been
withdrawn by Keefe, Bruyette & Woods, Inc. at any time prior to the Merger
Effective Date.
Provided, however, a failure to satisfy any of the conditions set forth
in Sections 6.05 and 6.06(B) hereof, shall only constitute conditions if
asserted by JBI; and a failure to satisfy any of the conditions set forth in
Sections 6.06(A), 6.11, 6.12 and 6.13 of this Article VI shall only constitute
conditions if asserted by RBC.
VII. TERMINATION.
7.01 Termination. This Plan may be terminated prior to the Merger
Effective Date either before or after receipt of required shareholder approvals:
(A) Mutual Consent. At any time prior to the Merger Effective Date, by
the mutual consent of JBI and RBC, if the Board of Directors of each so
determines by vote of a majority of the members of its entire Board.
(B) Breach. At any time prior to the Merger Effective Date, by JBI or
RBC, if its Board of Directors so determines by vote of a majority of the
members of its entire Board, in the event of (i) a breach by the other party of
any representation or warranty contained herein, which breach has not been cured
within 30 days after the giving of written notice to the breaching party of such
breach and which breaches, individually or in the aggregate, materially
adversely affect the Merger and the other transactions contemplated by this
Plan, (ii) a material breach by the other party of any of the covenants or
agreements contained herein, which breach has not been cured within 30 days
after the giving of written notice to the breaching party of such breach. For
purposes of this Section 7.01(B), no representation or warranty of JBI or RBC
contained herein shall be deemed untrue or incorrect, and no party hereto shall
be deemed to have breached a representation or warranty, as a consequence of the
existence of any fact, circumstance or event if such fact, circumstance or
event, individually
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or taken together with all other facts, circumstances or events inconsistent
with any other representations and warranties contained herein is not reasonably
likely to have a Material Adverse Effect on the party making such representation
or warranty.
(C) Delay. By JBI or RBC, if its Board of Directors so determines by
vote of a majority of the members of its entire Board, in the event that the
Merger is not consummated by September 30, 1998; provided, however, that (i) if
any required regulatory approval shall not have been received by September 30,
1998, such date shall be extended without any action by or on behalf of the
parties hereto until five business days after receipt of such required
regulatory approval, but in no event later than November 30, 1998, and (ii) such
date may be extended by an agreement in writing among the parties hereto
approved by their respective Boards of Directors and executed in the same manner
as this Plan.
(D) No Approval. By JBI or RBC, if its Board of Directors so determines
by a vote of a majority of the members of its entire Board, in the event that
any shareholder approval contemplated by Section 6.01 hereof is not obtained at
a meeting or meetings called for the purpose of obtaining such approval.
(E) Withdrawal of RBC Recommendation. By JBI, if the Board of Directors
of RBC shall (i) withdraw, modify or change its recommendation or approval in
respect of this Plan or the Merger in a manner adverse to JBI, or (ii) approve
or recommend any proposal other than by JBI in respect of any Acquisition
Transaction.
(F) Withdrawal of JBI Board Approval. By RBC, if the Board of Directors
of JBI shall withdraw, modify or change its recommendation or approval in
respect of this Plan or the Merger in a manner adverse to RBC.
(G) Other Acquisition Transaction. Assuming RBC shall not have
contravened Section 5.06 hereof, by RBC to allow RBC to enter into an agreement
in respect of an Acquisition Transaction.
7.02 Effect of Termination and Abandonment. In the event of termination
of this Plan and the abandonment of the Mergers pursuant to this Article VII, no
party to this Plan shall have any liability or further obligation to any other
party hereunder except (i) as set forth in Section 8.01, (ii) that termination
will not relieve a breaching party from liability for any willful breach of this
Plan giving rise to such termination, (iii) that, upon the termination of this
Agreement by JBI pursuant to Section 7.01(B)(ii), Section 7.01(E) or upon
termination pursuant to Section 7.01(G), RBC shall pay JBI a fee, in immediately
available funds, equal to $1,500,000, and (iv) that, upon termination of this
Agreement by RBC pursuant to Section
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7.01(B)(ii) or Section 7.01(F), JBI shall pay RBC a fee, in immediately
available funds, equal to $1,500,000.
VIII. OTHER MATTERS.
8.01 Survival. If the Merger Effective Date occurs, the agreements of
the parties in Sections 5.03(B), 8.01, 8.03, 8.04, 8.06, 8.07 and 8.09 hereof
shall survive the Merger Effective Date; all other representations, warranties,
agreements and covenants contained in this Plan shall be deemed to be conditions
of the Merger Transaction and shall not survive the Merger Effective Date. If
this Plan is terminated prior to the Merger Effective Date, the agreements and
representations of the parties in Sections 4.03(N), 5.05, 8.01, 8.04, 8.05, 8.06
and 8.09 hereof shall survive such termination.
8.02 Waiver or Amendment. Prior to the Merger Effective Date, any
provision of this Plan may be (i) waived by the party benefitted by the
provision, or (ii) amended or modified at any time (including the structure of
the transaction), by an agreement in writing among the parties hereto approved
by their respective Boards of Directors and executed in the same manner as this
Plan, except that, after the vote by the shareholders of RBC, the consideration
to be received by the shareholders of RBC for each share of RBC Common Stock
shall not thereby be decreased.
8.03 Counterparts. This Plan may be executed in one or more
counterparts, each of which shall be deemed to constitute an original. This Plan
shall become effective when one counterpart has been signed by each party
hereto.
8.04 Governing Law. This Plan shall be governed by, and interpreted in
accordance with, the substantive laws of the Commonwealth of Pennsylvania
without regard to its principles of conflicts of laws, except as federal law may
be applicable.
8.05 Expenses. Except as otherwise provided in Section 7.02 hereof or
in this Section 8.05, each party hereto will bear all expenses incurred by it in
connection with this Plan and the transactions contemplated hereby, except
printing expenses of the Registration Statement which shall be shared equally
between RBC and JBI.
8.06 Confidentiality. Except as otherwise provided in Section 5.05
hereof, each of the parties hereto and their respective agents, attorneys and
accountants will maintain the confidentiality of all information provided in
connection herewith which has not been publicly disclosed.
8.07 Notices. All notices, requests and other communications hereunder
to a party
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shall be in writing and shall be deemed to have been duly given when delivered
by hand, telegram or telex (confirmed in writing) to such party at its address
set forth below or such other address as such party may specify by notice to the
parties hereto:
If to JBI, JBI Betsy Z. Cohen, Chairman
Merger Sub, or and Chief Executive Officer
Jefferson, to: JeffBanks, Inc.
1845 Walnut Street, 10th floor
Philadelphia, PA 19103
With, in each J. Baur Whittlesey, Esq.
instance, a copy to: Ledgewood Law Firm, P.C.
1521 Locust Street, 8th Floor
Philadelphia, PA 19102
If to RBC or Robert B. Goldstein, President
Regent, to: and Chief Executive Officer
Regent Bancshares Corp.
1430 Walnut Street
Philadelphia, PA 19102
With, in each Frederick W. Dreher, Esquire
instance, a copy to: Duane, Morris & Heckscher, LLP
Suite 4200
One Liberty Place
Philadelphia, PA 19103-2396
8.08 Definitions. Any term defined anywhere in this Plan shall have the
meaning ascribed to it for all purposes of this Plan (unless expressly noted to
the contrary). In addition:
(A) the term "knowledge" when used with respect to a party shall mean
the knowledge, after due inquiry, of any "Executive Officer" of such party, as
such term is defined in Regulation O of the FRB;
(B) the term "Material Adverse Effect" shall mean in the case of RBC or
Regent only, one or more events, occurrences or circumstances, which in the
aggregate, result, or are reasonably likely to result, in a decrease in the
shareholders' equity account of it, as determined in accordance with GAAP and as
measured from its financial statements as set
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forth in its Annual Report on Form 10-K for the year ended December 31, 1997, in
an amount equal to or greater than $600,000; provided, however, that the term
Material Adverse Effect shall not include the impact of (a) changes in banking
and similar laws of general applicability or interpretations thereof by courts
or governmental authorities; (b) changes in generally accepted accounting
principles or regulatory accounting requirements applicable to banks and bank
holding companies generally, (c) with respect to any loan of Regent, pursuant to
Section 5.08 hereof, where the financial condition of the borrower of such loan
and the value of any and all collateral securing such loan has not materially
deteriorated, any material increase in Regent's loan loss reserve with respect
to such loan or any loan charge-off with respect to such loan or any loan
charge-off in an amount which, in the view of JBI, should be reserved against
possible losses on such loan or charged-off with respect to such loan, (d)
decreases in the valuation of zero-coupon investment securities, to the extent
that such decrease is not in excess of $250,000, (e) Merger related expenses, to
the extent that such expenses are not in excess of $600,000 and (f) increases in
the provision for possible loan loss expense, to the extent that such increase
is not in excess of $500,000; and
(C) the term "Previously Disclosed" by a party shall mean information
set forth in a written disclosure letter that is delivered by that party to the
other party contemporaneously with the execution of this Plan and specifically
designated as information "Previously Disclosed" pursuant to this Plan.
8.09 Preserving Qualification of Merger Transaction as a Reorganization
under Section 368 of the Code. Neither JBI nor any of its subsidiaries shall
intentionally take, or cause to be taken, any actions that would cause the
Merger Transaction not to qualify as a "reorganization" within the meaning of
Section 368 of the Code.
8.10 Entire Understanding; No Third Party Beneficiaries. This Plan
represents the entire understanding of the parties hereto with to the
transactions contemplated hereby and thereby and supersedes any and all other
oral or written agreements heretofore made. Nothing in this Plan expressed or
implied, is intended to confer upon any person, other than the parties hereto or
their respective successors, any rights, remedies, obligations or liabilities
under or by reason of this Plan.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
JEFFBANKS, INC.
By: /S/ BETSY Z. COHEN
--------------------------
Chairman and
Chief Executive Officer
JEFFBANKS ACQUISITIONCORP. V,
INC.
By: /S/ BETSY Z. COHEN
--------------------------
Chairman and
Chief Executive Officer
JEFFERSON BANK
By: /S/ HARMON S. SPOLAN
--------------------------
President
REGENT BANCSHARES CORP.
By: /S/ ROBERT B. GOLDSTEIN
--------------------------
President and
Chief Executive Officer
REGENT NATIONAL BANK
By: /S/ ROBERT B. GOLDSTEIN
---------------------------
Chairman and
Chief Executive Officer
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<PAGE>
AMENDED AND RESTATED STOCK OPTION AGREEMENT
AMENDED AND RESTATED STOCK OPTION AGREEMENT (this "Agreement"), dated
March 27, 1998 and effective as of March 18, 1998, between JeffBanks, Inc., a
Pennsylvania corporation ("Grantee"), and Regent Bancshares Corp., a New Jersey
corporation ("Issuer").
RECITALS
A. Grantee and Issuer have entered into an Agreement and Plan of Merger
dated as of March 18, 1998 (the "Merger Agreement").
B. As an inducement to the willingness of Grantee to continue to pursue
the transactions contemplated by the Merger Agreement, Issuer has agreed to
grant Grantee the Option (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Merger Agreement the
parties hereto agree as follows:
1.(a) Issuer hereby grants to Grantee an unconditional, irrevocable
option (the "Option") to purchase, subject to the terms hereof, up to an
aggregate of 678,430 fully paid and nonassessable shares of the common stock,
par value $.10 per share, of Issuer ("Common Stock") at a price per share equal
to $14.39 (such price, as adjusted if applicable, the "Option Price"); provided,
however, that in no event shall the number of shares for which this Option is
exercisable exceed 19.9% of the issued and outstanding shares of Common Stock.
The number of shares of Common Stock that may be received upon the exercise of
the Option and the Option Price are subject to adjustment as herein set forth.
(b) In the event that any additional shares of Common Stock are issued
or otherwise become outstanding after the date of this Agreement (other than
pursuant to this Agreement and other than pursuant to an event described in
Section 5(a) hereof), the number of shares of Common Stock subject to the Option
shall be increased so that, after such issuance, such number together with any
shares of Common Stock previously issued pursuant hereto, equals 19.9% of the
number of shares of Common Stock then issued and outstanding without giving
effect to any shares subject or issued pursuant to the Option. Nothing contained
in this Section 1(b) or elsewhere in this Agreement shall be deemed to authorize
Issuer to issue shares in breach of any provision of the Merger Agreement.
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<PAGE>
2.(a) The Holder (as hereinafter defined) may exercise the Option, in
whole or part, if, but only if, both an Initial Triggering Event (as hereinafter
defined) and a Subsequent Triggering Event (as hereinafter defined) shall have
occurred prior to the occurrence of an Exercise Termination Event (as
hereinafter defined) provided that the Holder shall have sent the written notice
of such exercise (as provided in subsection (e) of this Section 2) within three
months following the first Subsequent Triggering Event to occur (or such later
period as provided in Section 10). Each of the following shall be an "Exercise
Termination Event"" (i) the Merger Effective Date (as such term is defined in
the Merger Agreement); (ii) termination of the Merger Agreement in accordance
with the provisions thereof if such termination occurs prior to the occurrence
of an Initial Triggering Event except a termination by Grantee pursuant to
Section 7.01(B) as a result of a willful breach by Issuer or Section 7.01(E) of
the Merger Agreement (each, a "Listed Termination"); or (iii) the passage of 18
months (or such longer period as provided in Section 10) after termination of
the Merger Agreement if such termination follows the occurrence of an Initial
Triggering Event or is a Listed Termination. The term "Holder" shall mean the
holder or holders of the Option. Notwithstanding anything to the contrary
contained herein, (i) the Option may not be exercised at any time when Grantee
shall be in material breach of any of its representations, warranties, covenants
or agreements contained in the Merger Agreement such that Issuer shall be
entitled to terminate the Merger Agreement pursuant to Section 7.01(B) thereof
and (ii) this Agreement shall automatically terminate upon the proper
termination of the Merger Agreement by Issuer pursuant to Section 7.01(B)(ii)
thereof as a result of the material breach by Grantee of its covenants or
agreements contained in the Merger Agreement or proper termination of the Merger
Agreement by Issuer pursuant to Section 7.01(F) of the Merger Agreement.
(b) The term "Initial Triggering Event" shall mean any of the following
events or transactions occurring on or after the date hereof:
(i) Issuer or Regent National Bank (the "Issuer Subsidiary"),
without having received Grantee's prior written consent, shall have entered into
an agreement to engage in an Acquisition Transaction (as defined in the Merger
Agreement) with any person (the term "person" for purposes of this Agreement
having the meaning assigned thereto in Sections 3(a)(9) and 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the rules and
regulations thereunder) other than Grantee or any of its subsidiaries (each a
"Grantee Subsidiary") or the Board of Directors of Issuer (the "Issuer Board")
shall have recommended that the shareholders of Issuer approve or accept any
Acquisition Transaction other than as contemplated by the Merger Agreement;
(ii) Any person other than the Grantee or any Grantee
Subsidiary shall have acquired beneficial ownership or the right to acquire
beneficial ownership of 10% or more of the outstanding shares of Common Stock
(the term "beneficial ownership" for purposes of this
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<PAGE>
Agreement having the meaning assigned thereto in Section 13(d) of the 1934 Act,
and the rules and regulations thereunder);
(iii) The shareholders of Issuer shall have voted and failed
to approve the Merger Agreement and the Merger at a meeting which has been held
for that purpose or any adjournment or postponement thereof, or such meeting
shall not have been held in violation of the Merger Agreement or shall have been
cancelled prior to termination of the Merger Agreement if, prior to such meeting
(or if such meeting shall not have been held or shall have been cancelled, prior
to such termination), it shall have been publicly announced that any person
(other than Grantee or any Grantee Subsidiary) shall have made a bona fide
proposal to engage in an Acquisition Transaction;
(iv) The Issuer Board shall have withdrawn or modified (or
publicly announced its intention to withdraw or modify) in any manner adverse to
Grantee its recommendation that the shareholders of Issuer approve the
transactions contemplated by the Merger Agreement, or Issuer or the Issuer
Subsidiary shall have authorized, recommended or proposed (or publicly announced
its intention to authorize, recommend or propose) an agreement to engage in an
Acquisition Transaction with any person other than Grantee or a Grantee
Subsidiary;
(v) Any person other than Grantee or any Grantee Subsidiary
shall have made a bona fide proposal to Issuer or its shareholders to engage in
an Acquisition Transaction and such proposal shall have been publicly announced;
(vi) Any person other than Grantee or any Grantee Subsidiary
shall have filed with the Securities and Exchange Commission ("SEC") a
registration statement or tender offer materials with respect to a potential
exchange or tender offer that would constitute an Acquisition Transaction;
(vii) Issuer shall have willfully breached any covenant or
obligation contained in the Merger Agreement in anticipation of engaging in an
Acquisition Transaction with any person other than Grantee or a Grantee
Subsidiary, and following such breach Grantee would be entitled to terminate the
Merger Agreement pursuant to Section 7.01(B) or Section 7.01(E) of the Merger
Agreement; or
(viii) 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 "Federal Reserve Board") or other federal or state
bank regulatory or antitrust authority, which application or notice has been
accepted for processing, for approval to engage in an Acquisition Transaction.
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<PAGE>
(c) The term "Subsequent Triggering Event" shall mean any of the
following events or transactions occurring after the date hereof:
(i) The acquisition by any person (other than Grantee or any
Grantee Subsidiary) of beneficial ownership of 25% or more of the then
outstanding Common Stock; or
(ii) The occurrence of the Initial Triggering Event described
in clause (ii) of subsection (b) of this Section 2 except that the percentage
referred to therein shall be 25%.
(d) Issuer shall notify Grantee in writing of the occurrence of any
Initial Triggering Event or Subsequent Triggering Event (together, a "Triggering
Event") promptly after becoming aware of the occurrence thereof, it being
understood that the giving of such notice by Issuer shall not be a condition to
the right of the Holder to exercise the Option.
(e) In the event the Holder is entitled to and wishes to exercise the
Option (or any portion thereof), it shall send to Issuer a written notice (the
date of which being herein referred to as the "Notice Date") specifying (i) the
total number of shares it will purchase pursuant to such exercise and (ii) a
place and date not earlier than three business days nor later than 60 business
days from the Notice Date for the closing of such purchase (the "Closing Date");
provided, that if prior notification to or approval of the Federal Reserve Board
or any other regulatory or antitrust agency is required in connection with such
purchase, the Holder shall promptly file the required notice or application for
approval, shall promptly notify Issuer of such filing, and shall expeditiously
process the same and the period of time that otherwise would run pursuant to
this sentence shall run instead from the date on which any required notification
periods have expired or been terminated or such approval shall have been
obtained and any requisite waiting period or periods shall have passed. Any
exercise of the Option shall be deemed to occur on the Notice Date relating
thereto.
(f) At the closing referred to in subsection (e) of this Section 2, the
Holder shall (i) pay to Issuer the aggregate purchase price for the shares of
Common Stock purchased pursuant to the exercise of the Option in immediately
available funds by wire transfer to a bank account designated by Issuer and (ii)
present and surrender this Agreement to Issuer at its principal executive
offices, provided that the failure or refusal of the Issuer to designate such a
bank account or accept surrender of this Agreement shall not preclude the Holder
from exercising the Option.
(g) At such closing, simultaneously with the delivery of immediately
available funds as provided in subsection (f) of this Section 2, Issuer shall
deliver to the Holder a certificate or certificates representing the number of
shares of Common Stock purchased by
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<PAGE>
the Holder and, if the Option shall have been exercised in part only, a new
Option evidencing the rights of the Holder thereof to purchase the balance of
the shares purchasable hereunder.
(h) Certificates for Common Stock delivered at a closing hereunder may
be endorsed with a restrictive legend that shall read substantially as follows:
"The transfer of the shares represented by this certificate is
subject to certain provisions of an agreement, dated as of
March 18, 1998, between the registered holder hereof and
Issuer and to resale restrictions arising under the Securities
Act of 1933, as amended. A copy of such agreement is on file
at the principal office of Issuer and will be provided to the
holder hereof without charge upon receipt by Issuer of a
written request therefor."
It is understood and agreed that (i) the to the resale restrictions of the
Securities Act of 1933, as amended (the "1933 Act") in the above legend shall be
removed by delivery of substitute certificate(s) without such if the Holder
shall have delivered to Issuer a copy of a letter from the staff of the SEC, or
an opinion of counsel, in form and substance reasonably satisfactory to Issuer,
to the effect that such legend is not required for purposes of the 1933 Act;
(ii) the to the provisions of this Agreement in the above legend shall be
removed by delivery of substitute certificate(s) without such if the shares have
been sold or transferred in compliance with the provisions of this Agreement and
under circumstances that do not required the retention of such in the reasonable
opinion of counsel to the Holder; 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 the Holder to Issuer of the written notice of
exercise of the Option provided for under subsection (e) of this Section 2 and
the tender of the applicable purchase price in immediately available funds, the
Holder shall be deemed to be the holder of record of the shares of Common Stock
issuable upon such exercise, notwithstanding that the stock transfer books of
Issuer shall then be closed or that certificates representing such shares of
Common Stock shall not then be actually delivered to the Holder. Issuer shall
pay all expenses, and any and all United States federal, state and local taxes
and other charges that may be payable in connection with the initial
preparation, issue and delivery of stock certificates under this Section 2 in
the name of the Holder or its assignee, transferee or designee.
3. Issuer agrees: (i) that it shall at all at times maintain, free from
preemptive
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<PAGE>
rights, sufficient authorized but unissued or treasury shares of Common Stock so
that the Option may be exercised without additional authorization of Common
Stock after giving effect to all other options, warrants, convertible securities
and other rights to purchase Common Stock; (ii) that it will not, by charter
amendment 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 (it being agreed that this clause (ii)
shall not be deemed to prohibit or restrict Issuer from engaging in one or more
transactions contemplated in Section 8(a) hereof if the provisions of Section 8
hereof shall be complied with in connection with each such transaction); (iii)
promptly to take all action as may from time to time be required (including (x)
complying with all applicable premerger notification, reporting and waiting
period requirements specified in 15 U.S.C. Section 18a and regulations
promulgated thereunder and (y) in the event that, under the Bank Holding Company
Act of 1956, as amended (the "BHCA"), or the Change in Bank Control Act of 1978,
as amended, or any state or other federal banking law, prior approval of or
notice to the Federal Reserve Board or to any state or other federal regulatory
authority is necessary before the Option may be exercised, cooperating fully
with the Holder in preparing such applications or notices and providing such
information to the Federal Reserve Board or such state or other federal
regulatory authority as they may require) in order to permit the Holder to
exercise the Option and Issuer duly and effectively to issue shares of Common
Stock pursuant hereto; and (iv) promptly to take all action provided in Sections
5 and 8 as and when required pursuant to such Sections.
4. This Agreement (and the Option granted hereby) are exchangeable,
without expense, at the option of the Holder, 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 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 in substitution for
the lost, stolen, destroyed or mutilated Agreement.
5. In addition to the adjustment in the number of shares of Common
Stock that are purchasable upon exercise of the Option pursuant to Section 1 of
this Agreement, the number of shares of Common Stock purchasable upon exercise
of the Option and the Option
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<PAGE>
Price shall be subject to adjustment from time to time as provided in this
Section 5.
(a) In the event of any change in, or distributions in respect
of, the Common Stock by reason of stock dividends, splitups, mergers,
recapitalizations, combinations, subdivisions, exchanges of shares or the like,
the type and number of shares of 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 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 Common Stock that remain
subject to the Option shall be increased so that, after such issuance and
together with shares of Common Stock previously issued pursuant to the exercise
of the Option (as adjusted on account of any of the foregoing changes in the
Common Stock), it equals 19.9% of the number of shares of Common Stock then
issued and outstanding.
(b) Whenever the number of shares of 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 immediately prior to the
adjustment by a fraction, the numerator of which shall be equal to the number of
shares of Common Stock purchasable prior to the adjustment and the denominator
of which shall be equal to the number of shares of Common Stock purchasable
after the adjustment.
6. Upon the occurrence of the first Subsequent Triggering Event that
occurs prior to an Exercise Termination Event, Issuer shall, at the request of
Grantee delivered within six months (or such later periods as provided in
Section 10) of such Subsequent Triggering Event (whether on its own behalf or on
behalf of any subsequent Holder of this Option ( or part thereof) or any of the
shares of Common Stock issued pursuant hereto), promptly prepare, file and keep
current a registration statement under the 1933 Act covering any shares issued
and issuable pursuant to this Option and shall use its reasonable best efforts
to cause such registration statement to become effective and remain current in
order to permit the sale or other disposition of any shares of Common Stock
issued upon total or partial exercise of this Option ("Option Shares") in
accordance with any plan of disposition requested by Grantee. Issuer will use
its reasonable best efforts to cause such registration statement promptly to
become effective and then to remain effective for such period not in excess of
180 days from the day such registration statement first becomes effective or
such shorter time as may be reasonably necessary to effect such sales or other
such dispositions. Grantee shall have the right to demand no more than two such
registrations. Issuer shall bear the cost of such registrations (including, but
not limited to, Issuer's attorneys' fees, printing costs and filing fees),
except for underwriting discounts or commissions, brokers' fees and the fees and
disbursements of Grantee's counsel related thereto. The foregoing
notwithstanding, if, at the time of any request by Grantee for registration of
Option Shares as provided above, Issuer is
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<PAGE>
in registration with respect to an underwritten public offering by Issuer of
shares of Common Stock, and if in the good faith judgment of the managing
underwriter or managing underwriters, or, if none, the sole underwriter or
underwriters, of such offering the offer and sale of the Option Shares would
interfere with the successful marketing of the shares of Common Stock offered by
Issuer, the number of Option Shares otherwise to be covered in the registration
statement contemplated hereby may be reduced; provided, however, that after any
such required reduction the number of Option Shares to be included in such
offering for the account of the Holder shall constitute at least 25% of the
total number of shares to be sold by Holder and Issuer in the aggregate; and
provided further, however, that if such reduction occurs, then Issuer shall file
a registration statement for the balance as promptly as practicable thereafter
as to which no reduction pursuant to this Section 6 shall be permitted or occur
and the Holder shall thereafter be entitled to one additional registration and
the 12 month period referred to in the first sentence of this section shall be
increased to 24 months. Each such Holder shall provide all information
reasonably requested by Issuer for inclusion in any registration statement to be
filed hereunder. If requested by any such Holder in connection with such
registration, Issuer shall become a party to any underwriting agreement relating
to the sale of such shares, but only to the extent of obligating itself in
respect of representations, warranties, indemnities and other agreements
customarily included in such underwriting agreements for Issuer. Upon receiving
any request under this Section 6 from any Holder, Issuer agrees to send a copy
thereof to any other person known to Issuer to be entitled to registration
rights under this Section 6, in each case by promptly mailing the same, postage
prepaid, to the address of record of the persons entitled to receive such
copies. Notwithstanding anything to the contrary contained herein, in no event
shall the number of registrations that Issuer is obligated to effect be
increased by reason of the fact that there shall be more than one Holder as a
result of any assignment or division of this Agreement.
7.(a) At any time after the occurrence of a Repurchase Event (as
defined below) (i) at the request of the Holder, delivered prior to an Exercise
Termination Event (or such later period as provided in Section 10), Issuer (or
any successor thereto) shall repurchase the Option from the Holder 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 this Option may then be exercised and (ii) at
the request of the owner of Option Shares from time to time (the "Owner"),
delivered prior to an Exercise Termination Event (or such later period as
provided in Section 10), Issuer (or any successor thereto) 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 highest price per share of Common Stock
paid by any person that acquires beneficial ownership of 50% or more of the then
outstanding Common Stock, (ii) the price per share of Common Stock to be paid by
any third party pursuant to an
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<PAGE>
agreement with Issuer entered into after the date hereof and prior to the date
the Holder gives notice of the required repurchase of this Option or the Owner
gives notice of the required repurchase of Option Shares, as the case may be,
(iii) the highest closing price for shares of Common Stock within the six-month
period immediately preceding the date the Holder gives notice of the required
repurchase of this Option or the Owner gives notice of the required repurchase
of Option Shares, as the case may be, or (iv) in the event of a sale of all or
any substantial part of the Issuer's or Issuer's Subsidiary's assets or
deposits, the sum of the net price paid in such sale of such assets or deposits
and the current market value of the remaining net assets of Issuer or Issuer
Subsidiary as determined by a nationally recognized investment banking firm
selected by the Holder or the Owner, as the case may be, and reasonably
acceptable to Issuer, divided by the number of shares of Common Stock of Issuer
outstanding at the time of such sale on a fully-diluted basis. In determining
the market/offer price, the value of consideration other than cash shall be
determined by a nationally recognized investment banking firm selected by the
Holder or Owner, as the case may be, and reasonably acceptable to Issuer.
(b) The Holder and the Owner, as the case may be, may exercise
its right to require Issuer to repurchase the Option and 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 the Holder
or the Owner, as the case may be, elects to require Issuer to repurchase this
Option and/or the Option Shares in accordance with the provisions of this
Section 7. As promptly as practicable, and in any event within five 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 the Holder the Option Repurchase Price
and/or to the Owner the Option Share Repurchase Price therefor or the portion
thereof that Issuer is not then prohibited under applicable law, regulation and
administrative policy from so delivering.
(c) To the extent that Issuer is prohibited under applicable
law or regulation, or as a consequence of administrative policy, from
repurchasing the Option and/or the Option Shares in full, Issuer shall
immediately so notify the Holder and/or the Owner and thereafter deliver or
cause to be delivered, from time to time, to the Holder 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 paragraph (b) of this Section 7 is prohibited
under applicable law or regulation, or as a consequence of administrative
policy, from delivering to the Holder and/or the Owner, as appropriate, the
Option Repurchase Price and the Option Share Repurchase Price, respectively, in
full (and Issuer hereby undertakes
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<PAGE>
to use its reasonable best efforts to obtain all required regulatory and legal
approvals and to file any required notices as promptly as practicable in order
to accomplish such repurchase), the Holder or Owner may revoke its notice of
repurchase of the Option and/or Option Shares whether in whole or to the extent
of the prohibition, whereupon, in the latter case, Issuer shall promptly (i)
deliver to the Holder and/or the Owner, as appropriate, that portion of the
Option Repurchase Price and/or the Option Share Repurchase Price that Issuer is
not prohibited from delivering; and (ii) deliver, as appropriate, either (A) to
the Holder, a new Agreement evidencing the right of the Holder to purchase that
number of shares of Common Stock obtained by multiplying the number of shares of
Common Stock for which the surrendered Agreement was exercisable at the time of
delivery of the notice of repurchase by a fraction, the numerator of which is
the Option Repurchase Price less the portion thereof theretofore delivered to
the Holder and the denominator of which is the Option Repurchase Price and/or
(B) to the Owner, a certificate for the Option Shares it is then so prohibited
from repurchasing. If an Exercise Termination Event shall have occurred prior to
the date of the notice by Issuer described in the first sentence of this
subsection (c), or shall be scheduled to occur at any time before the expiration
of a period ending on the thirtieth day after such date, the Holder shall
nonetheless have the right to exercise the Option until the expiration of such
30-day period.
(d) For purposes of this Section 7, a "Repurchase Event" shall
be deemed to have occurred upon the occurrence of any of the following events or
transactions after the date hereof:
(i) the acquisition by any person (other than Grantee
or any Grantee Subsidiary) of beneficial ownership of 50% or more of the then
outstanding Common Stock; or
(ii) the consummation of any Acquisition Transaction.
8.(a) In the event that prior to an Exercise Termination Event, Issuer
shall enter into an agreement (i) to consolidate with or merge into any person,
other than Grantee or a Grantee Subsidiary, or engage in a plan of exchange 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 or the
acquirer in such plan of exchange, (ii) to permit any person, other than Grantee
or a Grantee Subsidiary, to merge into Issuer or be acquired by Issuer in a plan
of exchange and Issuer shall be the continuing or surviving or acquiring
corporation, but, in connection with such merger or plan of exchange, the then
outstanding shares of 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 Common Stock shall after such merger or plan of
exchange represent less than 50% of the outstanding shares and share
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<PAGE>
equivalents of the merged or acquiring company, or (iii) to sell or otherwise
transfer all or substantially all of its or the Issuer Subsidiary's assets or
deposits to any person, other than Grantee or a Grantee Subsidiary, then, and in
each such case, the agreement governing such transaction shall make proper
provision so that the Option shall, upon the consummation of any 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
the Holder, of either (x) the Acquiring Corporation (as hereinafter defined), or
(y) any person that controls the Acquiring Corporation.
(b) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (i) the
continuing or surviving person of a consolidation or merger with Issuer (if
other than Issuer), (ii) the acquiring person in a plan of exchange in which
Issuer is acquired, (iii) the Issuer in a merger or plan of exchange in which
Issuer is the continuing or surviving or acquiring person, and (iv) the
transferee of all or substantially all of Issuer's assets or deposits (or the
assets or deposits of the Issuer Subsidiary).
(ii) "Substitute Common Stock" shall mean the common
stock issued by the issuer of the Substitute Option upon exercise of the
Substitute Option.
(iii) "Assigned Value" shall mean the market/offer
price, as defined in Section 7.
(iv) "Average Price" shall mean the average closing
price of a share of the Substitute Common Stock for one year 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 common stock issued by the person merging into Issuer or
by any company which controls or is controlled by such person, as the Holder may
elect.
(c) The Substitute Option shall 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 the Holder. The issuer of the Substitute
Option shall also enter into an agreement with the then Holder or Holders of the
Substitute Option in substantially the same form as this Agreement (after giving
effect for such purpose to the provisions of Section 9), which agreement shall
be applicable to the Substitute Option.
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<PAGE>
(d) The Substitute Option shall be exercisable for such number
of shares of Substitute Common Stock as is equal to the Assigned Value
multiplied by the number of shares of Common Stock for which the Option was
exercisable immediately prior to the event described in the first sentence of
Section 8(a), divided by the Average Price. The exercise price of the Substitute
Option per share of Substitute Common Stock shall then be equal to the Option
Price multiplied by a fraction, the numerator of which shall be the number of
shares of Common Stock for which the Option was exercisable immediately prior to
the event described in the first sentence of Section 8(a) and the denominator of
which shall be the number of shares of Substitute Common Stock for which the
Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs,
shall the Substitute Option be exercisable for more than 19.9% of the shares of
Substitute Common Stock outstanding prior to exercise of the Substitute Option.
In the event that the Substitute Option would be exercisable for more than the
maximum number of the shares of Substitute Common Stock permitted by the
preceding sentence but for this clause (e), the issuer of the Substitute Option
(the "Substitute Option Issuer") shall make a cash payment to Holder 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 the Holder and reasonably acceptable to the Issuer.
(f) Issuer shall not enter into any transaction described in
subsection (a) of this Section 8 unless the Acquiring Corporation and any person
that controls the Acquiring Corporation assume in writing all the obligations of
Issuer hereunder.
9.(a) At the request of the holder of the Substitute Option (the
"Substitute Option Holder"), the Substitute Option Issuer shall repurchase the
Substitute Option from the Substitute Option Holder at a price (the "Substitute
Option Repurchase Price") equal to the amount by which (i) the Highest Closing
Price (as hereinafter defined) exceeds (ii) the exercise price of the Substitute
Option, multiplied by the number of shares of Substitute Common Stock for which
the Substitute Option may then be exercised, and at the request of the owner
(the "Substitute Share Owner") of shares of Substitute Common Stock (the
"Substitute Shares"), the Substitute Option Issuer shall repurchase the
Substitute Shares at a price (the "Substitute Share Repurchase Price") equal to
the Highest Closing Price multiplied by the number of Substitute Shares so
designated. The term "Highest Closing Price" shall mean the highest closing
price for shares of Substitute Common Stock within the six-month period
immediately preceding the date the Substitute Option Holder gives notice of the
required repurchase of the Substitute Option or the Substitute Share Owner gives
notices of the required repurchase of Substitute Shares, as applicable.
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(b) The Substitute Option Holder and the Substitute Share
Owner, as the case may be, may exercise its respective rights to require the
Substitute Option Issuer to repurchase the Substitute Option and any Substitute
Shares pursuant to this Section 9 by surrendering for such purpose to the
Substitute Option Issuer, at its principal office, the agreement for such
Substitute Option (or in the absence of such an agreement, a copy of this
Agreement) and/or certificates for Substitute Shares accompanied by a written
notice or notices stating that the Substitute Option Holder or the Substitute
Share Owner, as the case may be, elects to require the Substitute Option Issuer
to repurchase the Substitute Option and/or the Substitute Shares in accordance
with the provisions of this Section 9. As promptly as practicable, and in any
event within five business days after the surrender of the Substitute Option
and/or certificates representing Substitute Shares and the receipt of such
notice or notices relating thereto, the Substitute Option Issuer shall deliver
or cause to be delivered to the Substitute Option Holder the Substitute Option
Repurchase Price and/or to the Substitute Share Owner the Substitute Share
Repurchase Price therefor or the portion thereof which the Substitute Option
Issuer is not then prohibited under applicable law, regulation and
administrative policy from so delivering.
(c) To the extent that the Substitute Option Issuer is
prohibited under applicable law or regulation, or as a consequence of
administrative policy, from repurchasing the Substitute Option and/or the
Substitute Shares in full, the Substitute Option Issuer shall immediately so
notify the Substitute Option Holder and/or the Substitute Share Owner and
thereafter deliver or cause to be delivered, from time to time, to the
Substitute Option Holder and/or the Substitute Share Owner, as appropriate, the
portion of the Substitute Option Repurchase Price and/or the Substitute Share
Repurchase Price, respectively, which it is no longer prohibited from
delivering, within five business days after the date on which the Substitute
Option Issuer is no longer so prohibited; provided, however, that if the
Substitute Option Issuer is at any time after delivery of a notice of repurchase
pursuant to paragraph (b) of this Section 9 is prohibited under applicable law
or regulation, or as a consequence of administrative policy, from delivering to
the Substitute Option Holder and/or the Substitute Share Owner, as appropriate,
the Substitute Option Repurchase Price and the Substitute Share Repurchase
Price, respectively, in full (and the Substitute Option Issuer hereby undertakes
to use its reasonable best efforts to obtain all required regulatory and legal
approvals and to file any required notices as promptly as practicable in order
to accomplish such repurchase), the Substitute Option Holder and/or Substitute
Share Owner may revoke its notice of repurchase of the Substitute Option or
Substitute Shares either in whole or to the extent of the prohibition,
whereupon, in the latter case, the Substitute Option Issuer shall promptly (i)
deliver to the Substitute Option Holder or the Substitute Share Owner, as
appropriate, that portion of the Substitute Option Repurchase Price or the
Substitute Share Repurchase Price that the Substitute Option Issuer is not
prohibited from delivering; and (ii) deliver, as appropriate, either (A) to the
Substitute Option Holder, a new Substitute Option evidencing
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the right of the Substitute Option Holder to purchase that number of shares of
the Substitute Common Stock obtained by multiplying the number of shares of
Substitute Common Stock for which the surrendered Substitute Option was
exercisable at the time of delivery of the notice of repurchase by a fraction,
the numerator of which is the Substitute Option Repurchase Price less the
portion thereof theretofore delivered to the Substitute Option Holder and the
denominator of which is the Substitute Option Repurchase Price and/or (B) to the
Substitute Share Owner, a certificate for the Substitute Option Shares it is
then so prohibited from repurchasing. If an Exercise Termination Event shall
have occurred prior to the date of the notice by the Substitute Option Issuer
described in the first sentence of this subsection (c), or shall be scheduled to
occur at any time before the expiration of a period ending on the thirtieth day
after such date, the Substitute Option Holder shall nevertheless have the right
to exercise the Substitute Option until the expiration of such 30-day period.
10. The 30-day, 6-month, 12-month, 18-month or 24-month periods of
exercise of certain rights under Sections 2, 6, 7, and 9 shall be extended: (i)
to the extent necessary to obtain all regulatory approvals for the exercise of
such rights (for so long as the Holder, Owner, Substitute Option Holder or
Substitute Share Owner, as the case may be, is using commercially reasonable
efforts to obtain such regulatory approvals), and for the expiration of all
statutory waiting periods; (ii) during the pendency of any temporary restraining
order, injunction or other legal bar to exercise of such rights; and (iii) to
the extent necessary to avoid liability under Section 16(b) of the 1934 Act by
reason of such exercise.
11. Issuer hereby represents and warrants to Grantee as follows:
(a) Issuer 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 authorized by the
Issuer Board on the date hereof 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 and validly executed
and delivered by Issuer.
(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 Common Stock equal to the maximum number of shares of Common Stock at
any time and from time to time issuable hereunder, and all such shares, upon
issuance pursuant thereto, will be duly authorized, validly issued, fully paid,
nonassessable, and will be delivered free and clear of all claims, liens,
encumbrances and security interests and not subject to any preemptive rights.
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12. Neither of the parties hereto may assign any of its rights or
obligations under this Agreement or the Option created hereunder to any other
person without the express written consent of the other party, except that in
the event a Subsequent Triggering Event shall have occurred prior to an Exercise
Termination Event, Grantee, subject to the express provisions hereof, may assign
in whole or in part its rights and obligations hereunder following the date of
such Subsequent Triggering Event; provided, however, that until the date 15 days
following the date on which the Federal Reserve Board has approved an
application by Grantee to acquire the shares of Common Stock subject to the
Option, Grantee may not assign its rights under the Option except in (i) a
widely dispersed public distribution, (ii) a private placement in which no one
party acquires the right to purchase in excess of 2% of the voting shares of
Issuer, (iii) an assignment to a single party (e.g., a broker or investment
banker) for the sole purpose of conducting a widely dispersed public
distribution on Grantee's behalf or (iv) any other manner approved by the
Federal Reserve Board.
13. Each of Grantee and Issuer will use its reasonable best 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
Federal Reserve Board under the BHCA for approval to acquire the shares issuable
hereunder.
14. 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. In connection therewith both
parties waive the posting of any bond or similar requirement.
15. 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 the Holder is not permitted to acquire, or Issuer is not permitted to
repurchase pursuant to Section 7, the full number of shares of Common Stock
provided in Section 1(a) hereof (as adjusted pursuant to Section 1(b) or Section
5 hereof), it is the express intention of Issuer to allow the Holder to acquire
or to require Issuer to repurchase such lesser number of shares as may be
permissible, without any amendment or modification hereof.
16. All notices, requests, claims, demands and other communications
hereunder shall be deemed to have been duly given when delivered in person, by
fax, telecopy, or by registered or certified mail (postage prepaid, return
receipt requested) at the respective addresses of the parties set forth in the
Merger Agreement.
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17. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania, without regard to the
conflict of law principles thereof.
18. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.
19. 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, including fees and
expenses of its own financial consultants, investment bankers, accountants and
counsel.
20. Except as otherwise expressly provided herein or in the Merger
Agreement, this Agreement contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings in 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 assignees.
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
assignees, any rights, remedies, obligations or liabilities under or by reason
of this Agreement, except as expressly provided herein.
21. Capitalized terms used in this Agreement and not defined herein
shall have the meanings assigned thereto in the Merger Agreement.
[SIGNATURES CONTAINED ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
REGENT BANCSHARES CORP.
By: /S/ ROBERT B. GOLDSTEIN
------------------------------------------------
Name: Robert B. Goldstein
Title: President and Chief Executive Officer
JEFFBANKS, INC.
By: /S/ BETSY Z. COHEN
------------------------------------------------
Name: Betsy Z. Cohen
Title: Chairman and Chief Executive Officer
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