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EXHIBIT 4.1
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated November 15, 1996, between F.N.B.
Corporation, a Pennsylvania corporation ("FNB") and West Coast Bancorp, Inc., a
Florida corporation ("West Coast").
W I T N E S S E T H :
WHEREAS, FNB and West Coast have entered into an Agreement and Plan of
Merger of even date herewith (the "Merger Agreement"), which agreement has been
executed by the parties hereto prior to this Agreement; and
WHEREAS, as a condition and inducement to FNB's pursuit of the
transactions contemplated by the Merger Agreement and in consideration therefor,
West Coast has agreed to grant FNB 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) West Coast hereby grants to FNB an irrevocable option (the
"Option") to purchase, subject to the terms hereof, up to 426,991 authorized but
unissued fully paid and nonassessable Common Shares, $1.00 par value, of West
Coast ("Common Shares"), at a price per Share equal to $15.00 (as adjusted as
set forth herein, the "Option Price"); provided, that in no event shall the
number of Shares for which this Option is exercisable, when combined with the
West Coast Common Shares beneficially owned at such time by FNB, exceed 19.9% of
the issued and outstanding Common Shares. The number of Common Shares 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 Common Shares are issued or
otherwise become outstanding after the date of this Agreement (other than
pursuant to this Agreement), the number of Common Shares subject to the Option
shall be increased so that, after such issuance, it equals 19.9% of the number
of Common Shares then issued and outstanding including Common Shares
beneficially by FNB, but 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 West Coast or FNB to breach any
provision of the Merger Agreement.
2. (a) Subject to compliance with applicable laws and regulations, the
Holder (as hereinafter defined) may exercise the Option, notwithstanding the
provisions of the Confidentiality Agreements (as defined in the Merger
Agreement) 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). Each of the following shall be an Exercise
Termination Event: (i) the Effective Time (as defined in the Merger Agreement)
of the Merger; (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 (other than termination due to (A) the failure of FNB
to satisfy a condition to closing, (B) failure to obtain the requisite approval
of West Coast shareholders following a favorable recommendation by the West
Coast Board, or (C) the withdrawal by the West Coast financial advisor of its
fairness opinion); (iii) the passage of 12 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 (iv) such
other date as to which the Holder and West Coast agree. The term "Holder" shall
mean the holder or holders of the Option. The rights set forth in Sections 7 and
9 shall terminate when the right to exercise the Option terminates (other than
as a result of a complete exercise of the Option) as set forth herein.
(b) The term "Initial Triggering Event" shall mean any of the following
events or transactions occurring after the date hereof:
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(i) West Coast or any of its Subsidiaries (as hereinafter
defined) (each a "West Coast Subsidiary"), without having received
FNB's prior written consent, shall have entered into an agreement to
engage in an Acquisition Transaction (as hereinafter defined) 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 (the "1934 Act"), and the rules and
regulations thereunder) other than FNB or any of its Subsidiaries (each
a "FNB Subsidiary") or the Board of Directors of West Coast shall have
recommended that the shareholders of West Coast approve or accept any
Acquisition Transaction other than as contemplated by the Merger
Agreement or this Agreement. For purposes of this Agreement, (a)
"Acquisition Transaction" shall mean (x) a merger or consolidation, or
any similar transaction, involving West Coast or any Significant
Subsidiary (as defined in Rule 1-02 of Regulation S-X promulgated by
the Securities and Exchange Commission (the "SEC")) of West Coast, (y)
a purchase, lease or other acquisition of all or substantially all of
the assets or deposits of West Coast or any Significant Subsidiary of
West Coast, or (z) a purchase or other acquisition (including by way of
merger, consolidation, share exchange or otherwise) of securities
representing 15% or more of the voting power of West Coast or any
Significant Subsidiary of West Coast, and (b) "Subsidiary" shall have
the meaning set forth in Rule 12b-2 under the 1934 Act;
(ii) Any person (excluding the officers and directors of West
Coast) other than FNB, any FNB Subsidiary or any West Coast Subsidiary
acting in a fiduciary capacity shall have acquired beneficial ownership
or the right to acquire beneficial ownership of 15% or more of the
outstanding Common Shares (the term "beneficial ownership" for purposes
of this Agreement having the meaning assigned thereto in Section 13(d)
of the 1934 Act, and the rules and regulations thereunder);
(iii) The shareholders of the West Coast shall not have
approved the transactions contemplated by the Merger Agreement at the
meeting held for that purpose or any adjustment thereof, or such
meeting shall not have been held or shall have been canceled prior to
termination of the Merger Agreement, in either case, after West Coast's
Board of Directors shall have withdrawn or modified (or publicly
announced its intention to withdraw or modify or interest in
withdrawing or modifying) its recommendation that the shareholders of
West Coast approve the transactions contemplated by the Merger
Agreement, or West Coast or any West Coast Subsidiary, without having
received FNB's prior written consent, shall have authorized,
recommended, proposed (or publicly announced its intention to
authorize, recommend or propose or interest in authorizing,
recommending or proposing) an agreement to engage in an Acquisition
Transaction, with any person other than FNB or a FNB Subsidiary;
(iv) Any person other than FNB or any FNB Subsidiary shall
have made a bona fide proposal to West Coast or its shareholders to
engage in an Acquisition Transaction, which proposal has an economic
value equivalent to or in excess of that of FNB.
(v) West Coast shall have willfully and materially breached
any material covenant or obligation contained in the Merger Agreement
in anticipation of engaging in an Acquisition Transaction, and such
breach would entitle FNB to terminate the Merger Agreement; or
(v) Any person other than FNB or any FNB Subsidiary, other
than in connection with a transaction to which FNB has given its prior
written consent, shall have filed an application or notice with the
Federal Reserve Board or other federal or state bank regulatory
authority, which application or notice has been accepted for
processing, for approval to engage in an Acquisition Transaction.
(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 of beneficial ownership
of 25% or more of the then outstanding Common Shares; or
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(ii) The occurrence of the Initial Triggering Event described in
clause (i) of subsection (b) of this Section 2, except that the
percentage referred to in clause (z) shall be 25%.
(d) West Coast shall notify FNB promptly in writing of the occurrence
of any Initial Triggering Event or Subsequent Triggering Event (together, a
"Triggering Event"), it being understood that the giving of such notice by West
Coast shall not be a condition to the right of the Holder to exercise the
Option.
(e) No shares shall be issued pursuant to the exercise of this Option
if (i) at the time of the Initial Triggering Event and at the time of exercise,
FNB is in material breach under the Merger Agreement, or (ii) a preliminary or
permanent injunction has been issued by a court of proper jurisdiction.
(f) In the event the Holder is entitled to and wishes to exercise the
Option, it shall send to West Coast a written notice prior to an Exercise
Termination Event (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 10 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 agency is required
in connection with such purchase, the Holder shall promptly file the required
notice or application for approval, shall promptly notify the West Coast 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
approvals 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.
(g) At the closing referred to in subsection (e) of this Section 2, the
Holder shall pay to West Coast the aggregate purchase price for the Common
Shares purchased pursuant to the exercise of the Option in immediately available
funds by wire transfer to a bank account designated by West Coast, provided that
failure or refusal of West Coast to designate such a bank account shall not
preclude the Holder from exercising the Option.
(h) At such closing, simultaneously with the delivery of immediately
available funds as provided in subsection (f) of this Section 2, West Coast
shall deliver to the Holder a certificate or certificates representing the
number of Common Shares purchased by the Holder and, if the Option should be
exercised in part only, a new Option evidencing the rights of the Holder thereof
to purchase the balance of the shares purchasable thereunder. In addition, the
Holder shall provide to West Coast a letter agreeing that Holder will not offer
to sell or dispose of such shares in violation of applicable law or this
Agreement
(i) Certificates for Common Shares 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 between the registered holder
hereof and West Coast 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 West Coast and will be provided to the
holder hereof without charge upon receipt by West Coast of a written
request therefor."
It is understood and agreed that: (1) the reference to the resale restrictions
of the Securities Act of 1933 (the "1933 Act") in the above legend shall be
removed by delivery of substitute certificate(s) without such reference if the
Holder shall have delivered to West Coast a copy of a letter from the staff of
the SEC, or an opinion of counsel, in form and substance satisfactory to West
Coast, to the effect that such legend is not required for purposes of the 1933
Act; (ii) the reference to the provisions of this Agreement in the above legend
shall be removed by delivery of substitute certificate(s) without such reference
if the shares have been sold or transferred in compliance with the provisions of
this Agreement and under circumstances that do not require
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the retention of such reference; and (iii) the legend shall be removed in its
entirety if the conditions in the proceeding clauses (i) and (ii) are both
satisfied. In addition, such certificates shall bear any other legend as may be
required by law.
(j) Upon the giving by the Holder to West Coast 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 Common Shares
issuable upon such exercise, notwithstanding that the stock transfer books of
West Coast shall then be closed or that certificates representing such Common
Shares shall not then be actually delivered to the Holder. West Coast 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 preparation, issue and
delivery of stock certificates under this Section 2 in the name of the Holder or
its assignee, transferee or designee.
3. West Coast agrees: (i) that it shall at all times maintain, free
from preemptive rights, sufficient authorized but unissued or treasury shares of
Common Shares so that the Option may be exercised without additional
authorization of Common Shares after giving effect to all other options,
warrants, convertible securities and other rights to purchase Common Shares;
(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
West Coast; (iii) promptly to take all action as may from time to time be
required (including (x) complying with all premerger notification, reporting and
waiting period requirements specified in 15 U.S.C. Section 18a and regulations
promulgated thereunder and (y) in the event, under the Bank Holding Company Act
of 1956, 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 West Coast duly and effectively to issue Common
Shares pursuant hereto; and (iv) promptly to take all action provided herein to
protect the rights of the Holder against dilution as set forth in Section 5
hereof.
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 West Coast, 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 Common Shares 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 West Coast 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, West Coast
will execute and deliver a new Agreement of like tenor and date.
5. The number of Common Shares purchasable upon the exercise of the
Option shall be subject to adjustment from time to time as provided in this
Section 5.
(a) In the event of any change in Common Shares by reason of
stock dividends, splitups, mergers, recapitalizations, combinations,
subdivisions, conversions, exchanges of shares or the like, the type
and number of Common Shares purchasable upon exercise hereof shall be
appropriately adjusted and proper provision shall be made so that, in
the event that any additional Common Shares 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 Common Shares
that remain subject to the Option shall be increased so that, after
such issuance and together with Common Shares previously issued
pursuant to the exercise of the Option (together with the number of
Shares previously issued under this Option and the number of Shares
otherwise beneficially owned by FNB) (as adjusted on account of any of
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the foregoing changes in the Common Shares), it equals 19.9% of the
number of Common Shares then issued and outstanding.
(b) Whenever the number of Common Shares purchasable upon
exercise hereof is adjusted as provided in this Section 5, the Option
Price shall be adjusted by multiplying the Option Price by a fraction,
the numerator of which shall be equal to the number of Common Shares
purchasable prior to the adjustment and the denominator of which shall
be equal to the number of Common Shares purchasable after the
adjustment.
6. Upon the occurrence of a Subsequent Triggering Event that occurs
prior to an Exercise Termination Event, West Coast shall, at the request of FNB
delivered prior to an Exercise Termination Event (or such later period as
provided in Section 10) (whether on its own behalf or on behalf of any
subsequent holder of this Option (or part thereof) or any of the Common Shares
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 best efforts to cause such registration statement
to become effective and remain current in order to permit the sale or other
disposition of any Common Shares issued upon total or partial exercise of this
Option ("Option Shares") in accordance with any plan of disposition requested by
FNB. West Coast will use its best efforts to cause such registration statement
first to become effective and then to remain effective for such period not in
excess of 120 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 dispositions. FNB shall have the right to demand two such
registrations. The first demand registration effected under this Section 6 shall
be at West Coast's expense except for underwriting commissions and the fees and
expenses of FNB's counsel attributable to the registration of the Common Shares.
The second demand registration shall be at FNB's expense. In addition, if at any
time after the occurrence of a Subsequent Triggering Event that occurs prior to
an Exercise Termination Event, West Coast proposes to register any of its equity
securities under the 1933 Act, whether for sale for its own account or for the
account of any other person, on a form and in a manner which would permit
registration of the Common Shares issued pursuant hereto for sale to the public
under the 1933 Act, it will each such time give prompt written notice to FNB of
its intention to do so, describing such securities and specifying the form and
manner and the other relevant facts involved in such proposed registration, and
upon the written request of FNB delivered to the Company within 10 business days
after the giving of any such notice (which request shall specify the Common
Shares intended to be disposed of and the intended method or methods of
disposition thereof), West Coast will use its best efforts to effect the
registration under the 1933 Act of all Common Shares which West Coast has been
so requested to register by FNB, to the extent requisite to permit the
disposition of the Common Shares in accordance with the intended methods thereof
as specified by FNB. West Coast shall be obligated to effect only one such
piggy-back registration pursuant to this Section 6. FNB shall pay such
incremental expenses incurred by West Coast in connection with registering the
Common Shares requested to be registered by FNB pursuant to its piggy-back
registration rights under this Section 6, which expenses are in addition to the
expenses that West Coast would have otherwise incurred in registering equity
securities under the 1933 Act. The foregoing notwithstanding, if, at the time of
any request by FNB for registration of Option Shares as provided above, West
Coast has initiated discussions with investment bankers concerning, or is in
registration with respect to an underwritten public offering of Common Shares,
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 inclusion of the Option Shares would interfere with the successful
marketing of the Common Shares offered by West Coast, 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
the Holder and West Coast in the aggregate; and provided further, however, that
if such reduction occurs, then the West Coast shall file a registration
statement for the balance as promptly as practical 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. Each such Holder
shall provide all information reasonably requested by West Coast for inclusion
in any registration statement to be filed hereunder. If requested by any such
Holder in connection with such registration, West Coast shall become a party to
any underwriting agreement relating to the sale of such shares,
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but only to the extent of obligating itself in respect of representations,
warranties, indemnities and other agreements customarily included in such
underwriting agreements for West Coast. In any such registration, West Coast and
FNB shall agree to indemnify each other on customary terms with regard to any
information provided by such party. Upon receiving any request under this
Section 6 from any Holder, West Coast agrees to send a copy thereof to any other
person known to West Coast 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.
7. (a) Upon the occurrence of a Repurchase Event (as hereinafter
defined) that occurs prior to an Exercise Termination Event, (i) at the request
of the Holder, delivered prior to an Exercise Termination Event (or such later
period as provided in Section 10), West Coast 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 the occurrence of an Exercise Termination
Event (or such later period as provided in Section 10), West Coast 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 "Repurchase Event" shall occur if (i) any person other than FNB or any of
its Subsidiaries shall have acquired beneficial ownership, or the right to
acquire beneficial ownership, or any "group" (as such term is defined under the
0000 Xxx) shall have been formed which beneficially owns or has the right to
acquire beneficial ownership of 50% or more of the then-outstanding Common
Shares, or (ii) any of the transactions described in Section 8(a)(i), 8(a)(ii),
or 8(a)(iii) shall be consummated. The term "Market/Offer Price" shall mean the
highest of (i) the price per share of Common Shares at which a tender or
exchange offer therefor has been made, (ii) the price per share of Common Shares
to be paid by any third party pursuant to an agreement with West Coast, (iii)
the highest closing price for Common Shares within the three-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
substantially all of West Coast's assets or deposits, the sum of the net price
paid in such sale for such assets or deposits, the sum of the net price paid in
such sale for such assets or deposits and the current market value of the
remaining net assets of West Coast as determined by a nationally recognized
investment banking firm selected by the Holder or the Owner, as the case may be,
divided by the number of Common Shares of West Coast outstanding at the time of
such sale. 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.
(b) The Holder and the Owner, as the case may be, may exercise its
right to require West Coast to repurchase the Option and any Option Shares
pursuant to this Section 7 by surrendering for such purpose to West Coast, 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 West Coast 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 ten business days after the surrender of the Option and/or certificates
representing Option Shares and the receipt of such notice or notices relating
thereto, West Coast 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 West Coast is not then prohibited under
applicable law and regulation from so delivering.
(c) To the extent that West Coast 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, West Coast 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 ten
business days after the date on which West Coast is no longer so prohibited;
provided, however, that if West Coast at any time after delivery of a notice of
repurchase pursuant to paragraph (b) of this Section 7 is prohibited under
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applicable law or regulation, or as a consequence of administrative policy, from
delivery to the Holder and/or the Owner, as appropriate, the Option Repurchase
Price and the Option Share Repurchase Price, respectively, in full (and West
Coast hereby undertakes to use its 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 or the Option Shares whether in
whole or to the extent of the prohibition, whereupon, in the latter case, West
Coast shall promptly (i) deliver to the Holder and/or the Owner, as appropriate,
that portion of the Option Purchase Price or the Option Share Repurchase Price
that West Coast 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 Common Shares obtained by multiplying the
number of Common Shares 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, or (B) to the Owner, a certificate for the Option Shares it is then so
prohibited from repurchasing.
8. (a) In the event that, prior to an Exercise Termination Event, West
Coast shall enter into an agreement (i) to consolidate with or merge into any
person, other than FNB or a FNB Subsidiary, and shall not be the continuing or
surviving corporation of such consolidation or merger, (ii) to permit any
person, other than FNB or a FNB Subsidiary, to merge into West Coast and West
Coast shall be the continuing or surviving corporation, but, in connection with
such merger, the then outstanding Common Shares 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 Common Shares shall after such merger represent
less than 50% of the outstanding shares and share equivalents of the merged
company, or (iii) to sell or otherwise transfer all or substantially all of its
or any Significant Subsidiary's assets or deposits to any person, other than FNB
or a FNB 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
corporation of a consolidation or merger with West Coast (if other than West
Coast), (ii) West Coast in a merger in which West Coast is the continuing or
surviving person, and (iii) the transferee of all or substantially all of
West Coast's assets or deposits (or the assets or deposits of a Significant
Subsidiary of West Coast).
(ii) "Substitute Common Shares" shall mean the common shares 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 the
Substitute Common Share for the one year immediately preceding the
consolidation, merger or sale in question, but in no event higher than the
closing price of the substitute Common Shares on the day preceding such
consolidation, merger or sale; provided that if West Coast is the issuer of
the Substitute Option, the Average Price shall be computed with respect to
common shares issued by the person merging into West Coast 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
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Agreement (after giving effect for such purpose to the provisions of Section 9),
which agreement shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of Substitute
Common Shares as is equal to the Assigned Value multiplied by the number of
Common Shares for which the Option is then exercisable, divided by the Average
Price. The exercise price of the Substitute Option per Substitute Common Share
shall then be equal to the Option Price multiplied by a fraction, the numerator
of which shall be the number of Common Shares for which the Option is then
exercisable and the denominator of which shall be the number of Substitute
Common Shares 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 a number of shares which together with
shares of the Acquiring Corporation then beneficially owned by FNB, constitutes
more than 19.9% of the shares of Substitute Common Shares outstanding prior to
exercise of the Substitute Option.
9. (a) At the request of the holder of the Substitute Option (the
"Substitute Option Holder"), the issuer of the Substitute Option (the
"Substitute Option West Coast") 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 Substitute Common Shares 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 Shares (the "Substitute Shares"), the Substitute
Option West Coast 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 Shares within the three-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 notice of the required
repurchase of the Substitute Shares, as applicable.
(b) The Substitute Option Holder and the Substitute Share Owner, as the
case may be, may exercise its respective right to require the Substitute Option
West Coast to repurchase the Substitute Option and the Substitute Shares
pursuant to this Section 9 by surrendering for such purpose to the Substitute
Option West Coast, at its principal office, the agreement for such Substitute
Option (or, in the absence of such an agreement, a copy of this Agreement) and
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 West Coast 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 ten 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 West Coast 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
West Coast is not then prohibited under applicable law and regulation from so
delivering.
(c) To the extent that the Substitute Option West Coast 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
part or in full, the Substitute Option West Coast 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 Share Repurchase Price, respectively, which it is no longer
prohibited from delivering, within ten business days after the date on which the
Substitute Option West Coast is no longer so prohibited; provided, however, that
if the Substitute Option West Coast is at any time after delivery of a notice of
repurchase pursuant to subsection (b) of this Section 9 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,
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in full (and the Substitute Option West Coast shall use its best efforts to
receive all required regulatory and legal approvals as promptly as practicable
in order to accomplish such repurchase), the Substitute Option Holder or
Substitute Share Owner may revoke its notice of repurchase of the Substitute
Option or the Substitute Shares either in whole or to the extent of the
prohibition, whereupon, in the latter case, the Substitute Option West Coast
shall promptly (i) deliver to the Substitute Option Holder or Substitute Share
Owner, as appropriate, that portion of the Substitute Option Repurchase Price or
the Substitute Share Repurchase Price that the Substitute Option West Coast is
not prohibited from delivering; and (ii) deliver, as appropriate, either (A) to
the Substitute Option Holder, a new Substitute Option evidencing the right of
the Substitute Option Holder to purchase that number of the Substitute Common
Shares obtained by multiplying the number of Substitute Common Shares 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, or (B) to the Substitute Share Owner, a certificate for the
Substitute Option Shares it is then so prohibited from repurchasing.
10. The periods for exercise of certain rights under Sections 2, 6, 7,
9 and 12 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 is using
commercially reasonable efforts to obtain such regulatory approvals), and for
the expiration of all statutory waiting periods; and (ii) to the extent
necessary to avoid liability under Section 16(b) of the 1934 Act by reason or
such exercise.
11. West Coast hereby represents and warrants to FNB as follows:
(a) West Coast has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of West Coast and no other corporate proceedings on the part
of West Coast are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly executed
and delivered by West Coast.
(b) West Coast 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 Common
Shares equal to the maximum number of Common Shares 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.
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, FNB, subject to the express provisions hereof, may assign in
whole or in part its rights and obligations hereunder following such Subsequent
Triggering Event; provided, however that until the date 30 days following the
date on which the Federal Reserve Board has approved applications by FNB to
acquire the Common Shares subject to the Option, FNB 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
(i.e., a broker or investment banker) for the purpose of conducting a widely
disbursed public distribution on FNB's behalf, or (iv) any other manner approved
by the Federal Reserve Board.
13. Each of FNB and West Coast will use its 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 Bank Holding Company Act for approval to acquire the shares
issuable hereunder, but FNB shall not be
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obligated to apply to state banking authorities for approval to acquire the
Common Shares issuable hereunder until such time, if ever, as it deems
appropriate to do so.
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.
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 West Coast is not permitted to
repurchase pursuant to Section 7, the full number of Common Shares provided in
Section 1(a) hereof (as adjusted pursuant to Section 5 hereof), it is the
express intention of West Coast to allow the Holder to acquire or to require
West Coast 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.
17. This Agreement shall be governed by and construed in accordance
with the laws of the State of Florida, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws 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 with respect thereof, written or oral. The terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted 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.
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IN WITNESS WHEREOF, each of the parties had caused this Agreement to be
executed on its behalf by their officers thereunto duly authorized, all as the
date first above written.
F.N.B. CORPORATION
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Chairman of the Board and President
WEST COAST BANCORP, INC.
By: /s/ Xxxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
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