EXHIBIT 10.3
------------
STOCK REGISTRATION AGREEMENT
STOCK REGISTRATION AGREEMENT among Union Bankshares, Inc. ("Union"),
and the undersigned shareholders of Citizens Savings Bank & Trust Company
("CSBT") (such shareholders, are collectively referred to herein as the
"Shareholders").
WHEREAS, Union and CSBT are parties to an Affiliation Agreement dated
as of the date of this Stock Registration Agreement (the " Affiliation
Agreement"), which provides, among other things, that upon the consummation
of the transaction contemplated therein (the "Merger") the shareholders of
CSBT will receive shares of Common Stock, par value $2.00 per share, of Union
("Union Common Stock") in exchange for the issued and outstanding shares of
capital stock of CSBT; and
WHEREAS, in connection with the Affiliation Agreement, Union has agreed
with the Shareholders that it will take appropriate steps to register under
the Securities Act of 1933, as amended (the "Securities Act") up to 150,000
shares of the Union Common Stock to be received by the Shareholders in
connection with the Merger upon the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and agreements
contained herein, the parties agree as follows:
Section 1. Demand Registration Rights. (a) Except as otherwise
provided in Subsection 1(b), upon written request of one or more of the
Shareholders or the duly authorized representative thereof asserting that
the sale of Common Stock is necessary in order to provide funds for the
payment of federal and/or state taxes imposed by reason of the death of
Xxxxxxxxx X. Xxxxx, Union shall, with reasonable promptness, prepare and file
a registration statement on a form to be selected by Union to register under
the Securities Act for sale to the public the number of shares of Union
Common Stock received by such Shareholders in the Merger as shall be
specified in such request, and shall use its best efforts to cause the same
to become effective; provided, however, that Union shall not be obligated to
(i) effect more than one such registration pursuant to this Agreement, (ii)
register fewer than 50,000 nor more than 150,000 shares of Union Common Stock
pursuant to such request, or (iii) effect such registration if none of the
Shareholders is then an affiliate of Union or CSBT under Rules 144 or 145 of
the Securities and Exchange Commission (the "Commission"). Upon receipt of
Shareholders' demand for registration pursuant to this Subsection 1(a), Union
shall determine in its reasonable business judgment, giving due
consideration to the potential impact of the proposed sale upon the trading
market in the Union Common Stock, whether the shares to be sold pursuant to
the registration statement shall be sold through an underwritten public
offering, through assistance of an investment banking firm, or through a
broker-dealer.
1
If the shares are to be sold in an underwritten public offering or with the
assistance of an investment banking firm, Union shall be entitled to
designate the managing underwriter or investment banking firm, as the case
may be, subject to the approval of the holders of at least a majority of
the total number of shares of Union Common Stock to be sold pursuant to the
registration statement, which approval shall not be unreasonably withheld.
(b) Union shall be entitled to postpone, for a reasonable period of
time, the filing of any registration statement otherwise required to be
prepared and filed by it pursuant to this Section 1, and may withhold
efforts to cause a registration statement to become effective, if Union
determines, in its reasonable business judgment, that such registration and
offering would materially interfere with or adversely affect negotiation or
completion of any transaction that is pending or being contemplated by Union
(whether or not a final decision has been made to undertake such
transaction) at the time the right to postpone is exercised, including,
without limitation, any equity or convertible debt financing, merger,
consolidation, acquisition, corporate reorganization or any other material
transaction or development involving Union and/or any of its subsidiaries.
In such event Union (i) shall promptly give each Shareholder owning shares of
Union Common Stock proposed to be included in such registration statement
written notice of such determination, and (ii) shall be required to file,
and to notify the Shareholders of its willingness to proceed with, such
registration statement as soon as practicable after Union shall determine, in
its reasonable business judgment, that such registration and offering will
not materially interfere with the aforesaid material transaction or
development, but in no event later than 120 days from the date of the
postponement.
Section 2. Covenants of the Shareholders. Each of the Shareholders
covenants and agrees that such Shareholder will:
(a) In any request for registration pursuant to Section 1,
specify (i) the number of shares of Union Common Stock as to which
such request relates, (ii) express such Shareholder's intention to
offer such shares for distribution and (iii) contain an undertaking
to provide all such information and materials and take all such
action and execute all such documents as may be required in order to
permit Union to comply with all applicable requirements of the
Commission and to obtain acceleration of the effective date of the
registration statement.
(b) Immediately suspend, or cause to be suspended, all offers
and sales of the Union Common Stock pursuant to any registration
statement referred to in Section 1, upon receipt of written notice
from Union that Union has determined, in its reasonable business
judgment, that the registration statement is no longer current
because of material non-public developments
2
affecting Union; provided, however, that in such event Union shall use
its reasonable best efforts to amend the registration statement
promptly to permit resumption of offers and sales by the
Shareholders.
Section 3. Covenants of Union. Union covenants and agrees that it
shall:
(a) Subject to its right to withdraw a registration statement
under Subsection 1(b) of this Agreement, use its reasonable best
efforts to have any registration statement filed pursuant to this
Agreement declared effective as promptly as practicable, advise a
Shareholder who owns shares of Union Common Stock included in such
registration statement, upon request, of the progress of such filing
and of any review thereof undertaken by the Commission and promptly
notify such participating Shareholders and their underwriter, if any,
and confirm such advice in writing (i) when such registration
statement becomes effective, (ii) when any post-effective amendment
to such registration statement becomes effective, and (iii) of any
request by the Commission for any amendment or supplement to such
registration statement or any prospectus relating thereto or
additional information.
(b) Use its reasonable best efforts to qualify, not later than
the effective date of any registration statement filed pursuant to
Section 1 of this Agreement, the shares of Union Common Stock of any
Shareholder registered thereunder under the "blue sky" or other state
securities laws of the States of Vermont and New Hampshire and in
connection with an underwritten offering pursuant to this Agreement,
such other states, not to exceed three in number, as the managing
underwriter in an underwritten public offering pursuant to Section 1
may reasonably request; provided, however, that Union shall not be
obligated to qualify as a foreign corporation or as a dealer in
securities or to execute or file any general consent to service of
process under the laws of any such jurisdiction where it is not so
subject or to amend its Articles of Association or By-laws, in order
to effect such registration.
(c) From time to time (i) after a demand for registration has
been made, advise the Shareholders of any event or development,
including a material adverse change in the financial condition,
business or affairs of Union, known to Union (other than events or
developments affecting market or economic conditions generally),
which may have a material adverse impact on the proposed offering,
and (ii) within the period of effectiveness of such registration
statement, advise such participating Shareholders of any event or
development requiring amendment of the registration statement or
prospectus used in connection therewith or rendering it inadvisable
to use the prospectus until it shall have been supplemented or
amended.
3
(d) Until 120 days from the effective date of any registration
statement filed pursuant to this Agreement hereof, or until
completion of the distribution of the shares of Union Common Stock
included in such registration, whichever occurs earlier, use its best
efforts to keep such registration statement in effect and current and
from time to time during such period to amend or supplement such
registration statement and the prospectus relating thereto to the
extent necessary to permit the completion within said period, in
compliance with the Securities Act, of the sale or distribution of
the shares of Union Common Stock included in such registration.
(e) Furnish to each participating Shareholder such number of
copies of any preliminary and final prospectuses and any amendments
and supplements thereto, as such Shareholder may reasonably request
in order to effect the offering and sale of the shares to be offered
and sold by such Shareholder.
(f) Furnish to any Shareholder, any underwriter participating
in any distribution pursuant to such registration statement, and any
attorney, accountant or other agent retained by such Shareholder or
underwriter, such information regarding Union as may be reasonably
requested by such person in connection with such registration
statement.
(g) For a period of two years from the date of this Agreement
or for such shorter or longer period as any Shareholder shall be
restricted with respect to the sale of shares of Union Common Stock by
virtue of applicable federal securities laws or regulations or shall
be an affiliate of Union as defined in Rule 144 under the Securities
Act or an affiliate of CSBT, as contemplated in Rule 145 under the
Act, (i) continuously have the Union Common Stock registered pursuant
to Section 12 of the Securities Exchange Act of 1934 (the "Exchange
Act"), and (ii) file with the Commission all reports required to be
filed under the Exchange Act in the manner and within the time period
required thereby so that sales of shares of Union Common Stock may be
effected in compliance with Rule 144; provided, however, that nothing
herein shall preclude or prevent Union from consummating any merger,
consolidation, liquidation disposition of substantial assets or any
comparable event, not in the ordinary course of business, or entering
into any agreement with respect to any of the above, which might or
would result in Union no longer being able to comply with this
Subsection (g).
Section 4. Costs and Expenses. The cost and expense of preparation
and filing of a registration pursuant to this Agreement and "blue sky"
qualifications related thereto pursuant to Subsection 3(b) shall be borne
by Union: provided, however, that Union shall not be liable or responsible for
(i) the fees and expenses of counsel, accountants and advisors for any
Shareholder, (ii) any transfer or sales taxes in connection with the sale
of Union Common Stock by the Shareholders, or (iii) underwriting discounts
and commissions or brokerage fees
4
or commissions or similar sales charges or fees payable in connection with
any sale of Union Common Stock by the Shareholders.
Section 5. Indemnification. In connection with any registration of
Union Common Stock pursuant to this Agreement:
(a) Union shall indemnify and hold harmless each Shareholder who
sells shares of Common Stock pursuant to any such registration
statement (and any settlor, trustee, beneficiary or other person who
may be deemed to be a controlling person of such Shareholder within
the meaning of the Securities Act) against any losses, claims damages
or liabilities to which any such Shareholder, settlor, trustee,
beneficiary or other person, may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) shall arise out of or be
based upon any untrue or allegedly untrue statement of any material
fact contained in any such registration statement or upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and shall reimburse any legal or other
expenses reasonably incurred by such shareholder, settlor, trustee,
beneficiary or other person in connection with investigating or
defending against any such loss, claim, damage, liability or action;
provided, however, that Union shall not be liable for any losses,
claims, damages, liabilities or actions arising out of or based upon
any untrue statement or omission made in reliance upon and in
conformity with information furnished to Union by such Shareholder,
settlor, trustee, beneficiary or other person for use in any such
registration statement.
(b) Each Shareholder shall indemnify and hold harmless Union,
each of its directors, each of its officers who signs any such
registration statement, and each person, if any, who is deemed a
controlling person within the meaning of the Securities Act, against
any losses, claims, damages or liabilities to which Union or any such
director, officer or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) shall arise out of or
be based upon any untrue or allegedly untrue statement of any
material fact contained in any such registration statement or upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, made in reliance upon and in conformity with
information furnished to Union by such Shareholder for use in any such
registration statement, and shall reimburse any legal or other
expenses reasonably incurred by Union or any such director, officer or
controlling person in connection with investigating or defending
against such loss, claim, damage, liability or action.
5
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the
indemnifying party hereunder, notify the indemnifying party in
writing thereof, but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to
any indemnified party other than under this Section 5. In case any
such action shall be brought against any indemnified party and it
shall notify the indemnifying of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the
extent it shall wish, to assume and undertake the defense thereof
with counsel satisfactory to such indemnified party, and, after
notice from the indemnifying party to such indemnified party of its
election so to assume and undertake the defense thereof, the
indemnifying party shall not be liable to such indemnified party
under this Section 5 for any legal expenses subsequently incurred by
such indemnified party in connection with the defense thereof other
than reasonable costs of investigation and of liaison with counsel so
selected, provided, however, that, if the defendants in any such
action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there
may be reasonable defenses available to it which are different from
or additional to those available to the indemnifying party or if the
interests of the indemnified party reasonably may be deemed to
conflict with the interests of the indemnifying party, the
indemnified party shall have the right to select a separate counsel
and to assume such legal defense and otherwise to participate in the
defense of such action, with the expenses related to such
participation to be reimbursed by the indemnifying party as incurred.
Section 6. Changes in Union Common Stock. If, and as often as, there
are any changes in the Union Common Stock by way of stock split, stock
dividend, combination or reclassification, or through merger,
consolidation, reorganization or recapitalization, appropriate adjustment
shall be made in the provisions hereof, as may be required, so that the
rights and privileges granted hereby shall continue with respect to the Union
Common Stock as so changed.
Section 7. Notices. Notices given under this Agreement shall be
deemed given when received at the addresses for the parties set forth below
opposite their signatures.
Section 8. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 9. Assignment. This Agreement, including the registration
rights created herein, (i) shall be binding upon and shall inure to the
benefit of Union, its successors and
6
assigns, and (ii) may be assigned by any of the Shareholders only to such
members of the Xxxxx Family and their heirs and legal representatives as
shall, in the opinion of counsel to Union, be deemed to be affiliates of Union
immediately before the Merger or shall be restricted with respect to the
sale of shares of Union Common Stock by virtue of applicable federal
securities laws or regulation.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of this 16th day of February, 1999.
ADDRESS: UNION BANKSHARES, INC.
00 Xxxx Xx., X.X. Xxx 000
Xxxxxxxxxxx, XX 00000-0000 By: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, President
And Chief Executive Officer
SHAREHOLDERS:
0 Xxxxxxxxxxx Xxxx /s/ Xxxxxxxxx X. Xxxxx
Xx. Xxxxxxxxx, XX 00000 Xxxxxxxxx X. Xxxxx, individually
XXXXXXXXX X. XXXXX TRUST
U.A. dated 8/22/89
x/x Xxxxxxxxx X. Xxxxx, Xxxxx
0 Xxxxxxxxxxx Xxxx By: /s/ Xxxxxxxxx X. Xxxxx
Xx. Xxxxxxxxx, XX 00000 Xxxxxxxxx X. Xxxxx, Trustee
0 Xxxxxxxxxxx Xxxx /s/ Xxxxxxxx X. Xxxxx, XX
Xx. Xxxxxxxxx, XX 00000 Xxxxxxxx X. Xxxxx, XX,
Individually
7
