EXHIBIT 2
AGREEMENT AND PLAN OF REORGANIZATION
dated as of June 14, 2001
by and between
UNITED BANKSHARES, INC.
and
CENTURY BANCSHARES, INC.
TABLE OF CONTENTS
Page
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RECITALS:................................................................... 1
ARTICLE I................................................................... 1
Certain Definitions
1.01 Certain Definitions............................................. 1
ARTICLE II.................................................................. 6
The Merger
2.01 The Merger...................................................... 6
2.02 Effective Date and Effective Time............................... 6
ARTICLE III................................................................. 7
The Bank Merger
3.01 The Bank Merger................................................. 7
3.02 Effective Date and Effective Time............................... 7
ARTICLE IV.................................................................. 7
Consideration; Exchange Procedures
4.01 Merger Consideration............................................ 7
4.02 Rights as Stockholders; Stock Transfers......................... 8
4.03 Fractional Shares............................................... 8
4.04 Exchange Procedures............................................. 8
4.05 Anti-Dilution Provisions........................................ 9
4.06 Options......................................................... 9
ARTICLE V................................................................... 10
Actions Pending the Effective Time
5.01 Forebearances of Century........................................ 10
5.02 Forebearances of United......................................... 12
ARTICLE VI.................................................................. 13
Representations and Warranties
6.01 Disclosure Schedules............................................ 13
6.02 Standard........................................................ 13
6.03 Representations and Warranties of Century....................... 13
6.04 Representations and Warranties of United........................ 20
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ARTICLE VII................................................................. 27
Covenants
7.01 Reasonable Best Efforts......................................... 27
7.02 Stockholder Approvals........................................... 28
7.03 Registration Statement.......................................... 28
7.04 Press Releases.................................................. 29
7.05 Access; Information............................................. 29
7.06 Acquisition Proposals........................................... 29
7.07 Affiliate Agreements............................................ 29
7.08 Takeover Laws................................................... 29
7.09 Certain Policies................................................ 29
7.10 Regulatory Applications......................................... 30
7.11 Indemnification................................................. 31
7.12 Benefit Plans................................................... 32
7.13 Notification of Certain Matters................................. 32
7.14 Directors and Officers.......................................... 32
7.15 Current Public Information...................................... 32
ARTICLE VIII................................................................ 33
Conditions to Consummation of the Merger
8.01 Conditions to Each Party's Obligation to Effect the Merger...... 33
8.02 Conditions to Obligation of Century............................. 33
8.03 Conditions to Obligation of United.............................. 34
ARTICLE IX.................................................................. 34
Termination
9.01 Termination..................................................... 34
9.02 Effect of Termination and Abandonment........................... 36
ARTICLE X................................................................... 36
Miscellaneous
10.01 Survival........................................................ 36
10.02 Waiver; Amendment............................................... 36
10.03 Counterparts.................................................... 36
10.04 Governing Law................................................... 36
10.05 Expenses........................................................ 36
10.06 Notices......................................................... 36
10.07 Entire Understanding; No Third Party Beneficiaries.............. 37
10.08 Interpretation; Effect.......................................... 37
EXHIBIT A Form of Stock Option Agreement
EXHIBIT B Form of Century Affiliate Agreement
ANNEX A Form of Supplement for Merger Sub Accession to Acquisition Agreement
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AGREEMENT AND PLAN OF REORGANIZATION, dated as of June 14, 2001 (this
"Agreement"), by and between CENTURY BANCSHARES, INC. ("Century") and UNITED
BANKSHARES, INC. ("United").
RECITALS
A. Century. Century is a Delaware corporation, having its principal
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place of business in Washington, DC.
B. United. United is a West Virginia corporation, having its principal
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place of business in Charleston, West Virginia.
C. Stock Option Agreement. As an inducement to the willingness of United
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to continue to pursue the transactions contemplated by this Agreement , Century
will grant to United an option to purchase 14.9% of the shares of the common
stock of Century pursuant to a Stock Option Agreement, in substantially the form
of Exhibit A to be executed simultaneously with this Agreement.
D. Intentions of the Parties. It is the intention of the parties to this
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Agreement that the business combination contemplated hereby be treated as a
"reorganization" under Section 368 of the Internal Revenue Code of 1986 (the
"Code").
E. Board Action. The respective Boards of Directors of each of United
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and Century have determined that it is in the best interests of their respective
companies and their stockholders to consummate the strategic business
combination transaction provided for herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein the
parties agree as follows:
ARTICLE I
Certain Definitions
1.01 Certain Definitions. The following terms are used in this Agreement
with the meanings set forth below:
"Acquisition Proposal" means any tender or exchange offer, proposal
for a merger, consolidation or other business combination involving Century or
any of its Subsidiaries or any proposal or offer to acquire in any manner a
substantial equity interest in, or a substantial portion of the assets or
deposits of, Century or any of its Subsidiaries, other than the transactions
contemplated by this Agreement.
"Agreement" means this Agreement, as amended or modified from time to
time in accordance with Section 10.02.
"Average Closing Price" has the meaning set forth in Section 9.02(g).
"Bank Merger" has the meaning set forth in Section 3.01.
"Bank Merger Effective Date" has the meaning set forth in Section
3.02.
"CNB" has the meaning set forth in Section 3.01.
"Century" has the meaning set forth in the preamble to this Agreement.
"Century Affiliate" has the meaning set forth in Section 7.07(a).
"Century Board" means the Board of Directors of Century.
"Century By-Laws" means the By-laws of Century.
"Century Certificate" means the Amended Certificate of Incorporation
of Century.
"Century Common Stock" means the common stock, par value $1.00 per
share, of Century.
"Century Meeting" has the meaning set forth in Section 7.02.
"Century Stock" means, collectively, Century Common Stock.
"Century Stock Options" has the meaning set forth in Section 4.06.
"Century Trust Preferred Stock" means preferred shares of stock issued
by Century Capital Trust I, a second tier business trust subsidiary of Century.
"Code" means the Internal Revenue Code of 1986, as amended.
"Compensation and Benefit Plans" has the meaning set forth in Section
6.03(m).
"Corporation Commission" means the Virginia State Corporation
Commission.
"Costs" has the meaning set forth in Section 7.11(a).
"DGCL" means the Delaware General Corporation Law.
"DOL" has the meaning set forth in Section 6.03(m)(iii).
"Determination Date" has the meaning set forth in Section 9.02(g).
"Disclosure Schedule" has the meaning set forth in Section 6.01.
"Effective Date" has the meaning set forth in Section 2.02(a).
"Effective Time" means the effective time of the Merger, as provided
for in Section 2.02.
"Environmental Laws" means all applicable local, state and federal
environmental, health and safety laws and regulations, including, without
limitation, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation, and Liability Act, the Clean Water Act,
the Federal
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Clean Air Act, and the Occupational Safety and Health Act, each as amended,
regulations promulgated thereunder, and state counterparts.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" has the meaning set forth in Section 6.03(m)(iii).
"ERISA Affiliate Plan" has the meaning set forth in Section
6.03(m)(iii).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"Exchange Agent" has the meaning set forth in Section 4.04(a).
"Exchange Ratio" has the meaning set forth in Section 4.01(a).
"Governmental Authority" means any court, administrative agency or
commission or other federal, state or local governmental authority or
instrumentality.
"IRS" has the meaning set forth in Section 6.03(m)(ii).
"Indemnified Party" has the meaning set forth in Section 7.11(a).
"Insurance Amount" has the meaning set forth in Section 7.11(b).
"Insurance Policy" has the meaning set forth in Section 7.11(b).
"Lien" means any charge, mortgage, pledge, security interest,
restriction, claim, lien, or encumbrance.
"Material Adverse Effect" means, with respect to United or Century,
any effect that (i) is material and adverse to the financial position, results
of operations or business of United and its Subsidiaries taken as a whole or
Century and its Subsidiaries taken as a whole, respectively, or (ii) would
materially impair the ability of either United or Century to perform its
obligations under this Agreement or otherwise materially threaten or materially
impede the consummation of the Merger and the other transactions contemplated by
this Agreement; provided, however, that Material Adverse Effect shall not be
deemed to include the impact of (a) changes in tax, 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 their holding
companies generally, or (c) changes in market interest rates or the projected
future interest rate environment, or (d) any modifications or changes to
valuation policies and practices in connection with the Merger or restructuring
charges taken in connection with the Merger, in each case in accordance with
generally accepted accounting principles.
"Merger" has the meaning set forth in Section 2.01(b).
"Merger Consideration" has the meaning set forth in Section 4.01(a).
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"Merger Sub" means a Delaware corporation, and/or one or more other
corporations or limited liability companies to be organized under the corporate
laws of the State of Delaware by United prior to the Effective Time.
"Multiemployer Plan" has the meaning set forth in Section 6.03(m).
"NASDAQ" means The NASDAQ Stock Market, Inc.'s National Market System.
"New Certificate" has the meaning set forth in Section 4.04(a).
"Old Certificate" has the meaning set forth in Section 4.04(a).
"Option Exchange Ratio" has the meaning set forth in Section 4.06(a).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" has the meaning set forth in Section 6.03(m).
"Person" means any individual, bank, corporation, limited liability
company, partnership, association, joint-stock company, business trust or
unincorporated organization.
"Previously Disclosed" by a party shall mean information set forth in
its Disclosure Schedule or in United or Century's SEC Documents..
"Proxy Statement" has the meaning set forth in Section 7.03.
"Registration Statement" has the meaning set forth in Section 7.03.
"Regulatory Authorities" has the meaning set forth in Section 6.03(i).
"Replacement Option" has the meaning set forth in Section 4.06(a).
"Representatives" means, with respect to any Person, such Person's
directors, officers, employees, legal or financial advisors or any
representatives of such legal or financial advisors.
"Rights" means, with respect to any Person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any person any
right to subscribe for or acquire, or any options, calls or commitments relating
to, or any stock appreciation right or other instrument the value of which is
determined in whole or in part by reference to the market price or value of,
shares of capital stock of such person.
"SEC" means the Securities and Exchange Commission.
"SEC Documents" has the meaning set forth in Section 6.03(g).
"Secretary of State" means the Secretary of State of the State of
Delaware.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
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"Stock Option Agreement" has the meaning set forth in Recital C.
"Subsidiary" and "Significant Subsidiary" have the meanings ascribed
to them in Rule 1-02 Section 210.1-(2)(w) of Regulation S-X of the SEC.
"Surviving Corporation" has the meaning set forth in Section 2.01(b).
"Takeover Laws" has the meaning set forth in Section 6.03 (o).
"Tax" and "Taxes" means all federal, state, local or foreign taxes,
charges, fees, levies or other assessments, however denominated, including,
without limitation, all net income, gross income, gains, gross receipts, sales,
use, ad valorem, goods and services, capital, production, transfer, franchise,
windfall profits, license, withholding, payroll, employment, disability,
employer health, excise, estimated, severance, stamp, occupation, property,
environmental, unemployment or other taxes, custom duties, fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority whether
arising before, on or after the Effective Date.
"Tax Returns" means any return, amended return or other report
(including elections, declarations, disclosures, schedules, estimates and
information returns) required to be filed with respect to any Tax.
"Treasury Stock" shall mean shares of Century Stock held by Century or
any of its Subsidiaries in each case other than in a fiduciary capacity or as a
result of debts previously contracted in good faith.
"United" has the meaning set forth in the preamble to this Agreement.
"United Board" means the Board of Directors of United.
"United Common Stock" means the common stock, par value $2.50 per
share, of United.
"United Compensation and Benefit Plans" has the meaning set forth in
Section 6.04(k).
"United Consultants" has the meaning set forth in Section 6.04(k).
"United Directors" has the meaning set forth in Section 6.04(k).
"United Employees" has the meaning set forth in Section 6.04(k).
"VSCA" means the Virginia Stock Corporation Act.
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ARTICLE II
The Merger
2.01 The Merger. (a) Prior to the Effective Time, United shall take any
and all action necessary (i) duly to organize the Merger Sub for the purpose of
consummating the Merger, (ii) to cause Merger Sub to become a party to this
Agreement, to be evidenced by the execution by the Merger Sub of a supplement to
this Agreement in substantially the form of Annex A , and delivery thereof to
Century; and (iii) to cause Merger Sub to take all actions necessary or proper
to comply with the obligations of United and such Merger Sub to consummate the
transactions contemplated hereby.
(b) At the Effective Time, Century shall merge with and into Merger
Sub (the "Merger"), the separate corporate existence of Century shall cease and
Merger Sub shall survive and continue to exist as a Virginia corporation (Merger
Sub, as the surviving corporation in the Merger, sometimes being referred to
herein as the "Surviving Corporation"). United may at any time prior to the
Effective Time change the method of effecting the combination with Century
(including, without limitation, the provisions of this Article II) if and to the
extent it deems such change to be necessary, appropriate or desirable; provided,
however, that no such change shall (i) cause the approval of the stockholders of
United to be required as a condition to the Merger, (ii) alter or change the
amount or kind of Merger Consideration (as hereinafter defined), or the relative
proportions of cash and United Common Stock included therein, (iii) adversely
affect the tax treatment of Century's stockholders as a result of receiving the
Merger Consideration or (iv) materially impede or delay consummation of the
transactions contemplated by this Agreement; and provided further, that United
shall provide Century prior written notice of such change and the reasons
therefor.
(c) Subject to the satisfaction or waiver of the conditions set forth
in Article VIII, the Merger shall become effective upon the occurrence of the
filing in the office of the Secretary of State of a certificate of merger in
accordance with Section 251 of the DGCL or such later date and time as may be
set forth in such articles and the issuance of a certificate of merger by the
Secretary of State under the DGCL. The Merger shall have the effects prescribed
in the DGCL.
(d) At the Effective Time, the Certificate of Incorporation of Merger
Sub shall be the Certificate of Incorporation of the Surviving Corporation until
thereafter amended in accordance with applicable law.
2.02 Effective Date and Effective Time. (a) Subject to the satisfaction or
waiver of the conditions set forth in Article VIII, the parties shall cause the
effective date of the Merger (the "Effective Date") to occur on (i) the fifth
business day to occur after the last of the conditions set forth in Article VII
shall have been satisfied or waived in accordance with the terms of this
Agreement (or, at the election of United, on the last business day of the month
in which such fifth business day occurs or, if such fifth business day occurs
within the last five business days of such month, on the last business day of
the succeeding month) or (ii) such other date to which the parties may agree in
writing. The time on the Effective Date when the Merger shall become effective
is referred to as the "Effective Time."
(b) Notwithstanding any other provision in this Agreement to the
contrary, if United shall exercise its right to delay the Effective Date
pursuant to this Section, and a record date for any dividend or other
distribution in respect of the United Common Stock is taken during the period of
such delay such that the Century Stockholders will not be entitled to
participate in such dividend, each stockholder of Century shall be entitled to
receive, upon surrender of the Old Certificates and compliance with the other
provisions of Article IV, a payment
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equal to the amount and kind of dividend or other distribution that such holder
would have received had such holder been a holder of record of the shares of
United Common Stock issuable to such holder in the Merger on the record date for
such dividend or other distribution.
ARTICLE III
The Bank Merger
3.01 The Bank Merger. (a) At the Effective Time, Century National Bank
("CNB"), a wholly-owned subsidiary of Century, shall merge with and into United
Bank, a wholly-owned subsidiary of United (the "Bank Merger"), the separate
existence of CNB shall cease and United Bank shall survive and continue to exist
as a Virginia Banking Corporation. United may at any time prior to the
Effective Time, change the method of effecting the combination with CNB
(including without limitation the provisions of this Article III) if and to the
extent it deems such changes necessary, appropriate or desirable; provided,
however that no such change shall (i) alter or change the amount or kind of
Merger Consideration, or the relative proportions of cash and United Common
Stock included therein, (ii) adversely affect the tax treatment of Century's
stockholders as a result of receiving the Merger Consideration or (iii)
materially impede or delay consummation of the transactions contemplated by this
Agreement, and provided further, that United shall provide Century with prior
written notice of such change and the reasons therefor.
(b) Subject to the satisfaction or waiver of the conditions set
forth in Article VIII, the Bank Merger shall become effective upon the
occurrence of the filing in the office in the Corporation Commission of articles
of merger in accordance with the VSCA or such later date and time as may be set
forth in such articles and the issuance of a certificate of merger by the
Corporation Commission under the VSCA. The Bank Merger shall have the effects
prescribed in the VSCA.
3.02 Effective Date and Effective Time. Subject to the satisfaction or
waiver of the conditions set forth in Article VIII, the parties shall cause the
effective date of the Bank Merger (the "Bank Merger Effective Date") to occur on
(i) the fifth business day to occur after the last of the conditions set forth
in Article VIII shall have been satisfied or waived in accordance with the terms
of this Agreement (or, at the election of United, on the last business day of
the month in which such fifth business day occurs or, if such fifth business day
occurs within the last five business days of such month, on the last business
day of the succeeding month) or (ii) such other date to which the parties may
agree in writing. The time on the Bank Merger Effective Date when the Merger
shall become effective is referred to as the "Bank Merger Effective Time."
ARTICLE IV
Consideration; Exchange Procedures
4.01 Merger Consideration. Subject to the provisions of this Agreement, at
the Effective Time, automatically by virtue of the Merger and without any action
on the part of any Person:
(a) Each holder of a share of Century Stock (other than Century or
its subsidiaries or United and its subsidiaries, except for shares held by them
in a fiduciary capacity) shall receive in respect thereof consideration
consisting of a combination of (i) 0.4500 share of United Stock (the "Exchange
Ratio") and (ii) an amount of cash equal to $3.43 (collectively, the "Merger
Consideration").
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(b) Outstanding United Stock. Each share of United Common Stock
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issued and outstanding immediately prior to the Effective Time shall remain
issued and outstanding and unaffected by the Merger.
(c) Treasury Shares. Each share of Century Common Stock held as
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Treasury Stock immediately prior to the Effective Time shall be canceled and
retired at the Effective Time and no consideration shall be issued in exchange
therefor.
(d) Merger Sub. Each share of capital stock of Merger Sub issued and
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outstanding immediately prior to the Effective Time shall remain outstanding and
unaffected by the merger, and no consideration shall be issued in exchange
therefor.
4.02 Rights as Stockholders; Stock Transfers. At the Effective Time,
holders of Century Stock shall cease to be, and shall have no rights as,
stockholders of Century, other than to receive the Merger Consideration and any
dividend or other distribution with respect to such Century Stock with a record
date occurring prior to the Effective Time, the payment, if any, in lieu of
certain dividends on United Common Stock provided for in Section 2.02(b), and
the consideration provided under this Article IV. After the Effective Time,
there shall be no transfers on the stock transfer books of Century or the
Surviving Corporation of shares of Century Stock.
4.03 Fractional Shares. Notwithstanding any other provision hereof, no
fractional shares of United Common Stock and no certificates or scrip therefor,
or other evidence of ownership thereof, will be issued in the Merger; instead,
United shall pay to each holder of Century Common Stock who would otherwise be
entitled to a fractional share of United Common Stock (after taking into account
all Old Certificates registered in the name of such holder) an amount in cash
(without interest) determined by multiplying such fraction by the closing price
of United Common Stock as reported by NASDAQ reporting system (as reported in
the Wall Street Journal) on the Effective Date.
4.04 Exchange Procedures. (a) At or prior to the Effective Time, United
shall deposit, or shall cause to be deposited, with Mellon Investor Services,
LLC (in such capacity, the "Exchange Agent"), for the benefit of the holders of
certificates formerly representing shares of Century Common Stock ("Old
Certificates"), for exchange in accordance with this Article IV, (i)
certificates representing the shares of United Common Stock ("New Certificates")
and (ii) an amount of cash necessary to pay the cash portion of the Merger
Consideration and any payments required by Section 2.02(b) (the "Exchange
Fund"). The Exchange Fund will be distributed in accordance with the Exchange
Agent's normal and customary procedures established in connection with merger
transactions.
(b) As soon as practicable after the Effective Time, and in no event
later than five business days thereafter, the Exchange Agent shall mail to each
holder of record of one or more Old Certificates a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
Old Certificates shall pass, only upon delivery of the Old Certificates to the
Exchange Agent) and instructions for use in effecting the surrender of the Old
Certificates in exchange for New Certificates, the cash portion of the Merger
Consideration, any cash in lieu of fractional shares into which the shares of
Century Common Stock represented by the Old Certificates shall have been
converted pursuant to this Agreement and any payment required pursuant to
Section 2.02(b) of this Agreement. Upon proper surrender of an Old Certificate
for exchange and cancellation to the Exchange Agent, together with such properly
completed letter of transmittal, duly executed, the holder of such Old
Certificates shall be entitled to receive in exchange therefor (i) a New
Certificate, a (ii) a check representing the amount of the cash portion of the
Merger Consideration, (iii) a check representing the amount
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of any cash in lieu of fractional shares which such holder has the right to
receive in respect of the Old Certificates surrendered pursuant to the
provisions of this Article IV, and (iv) any payment required by Section 2.02(b),
and the Old Certificates so surrendered shall forthwith be cancelled.
(c) Neither the Exchange Agent, if any, nor any party hereto shall be
liable to any former holder of Century Stock for any amount properly delivered
to a public official pursuant to applicable abandoned property, escheat or
similar laws.
(d) No dividends or other distributions with respect to United Common
Stock with a record date occurring after the Effective Time shall be paid to the
holder of any unsurrendered Old Certificate representing shares of Century
Common Stock converted in the Merger into the right to receive shares of such
United Common Stock until the holder thereof shall be entitled to receive New
Certificates in exchange therefor in accordance with the procedures set forth in
this Section 4.04. After becoming so entitled in accordance with this Section
4.04, the record holder thereof also shall be entitled to receive any such
dividends or other distributions by the Exchange Agent , without any interest
thereon, which theretofore had become payable with respect to shares of United
Common Stock such holder had the right to receive upon surrender of the Old
Certificates.
(e) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of Century for six months after the Effective Time shall be paid to
United. Any stockholders of Century who have not theretofore complied with this
Article III shall thereafter look only to United for payment of the Merger
Consideration , cash in lieu of any fractional shares and unpaid dividends and
distributions on United Common Stock deliverable in respect of each share of
Century Common Stock such stockholder holds as determined pursuant to this
Agreement, in each case, without any interest thereon.
4.05 Anti-Dilution Provisions. In the event United changes (or establishes
a record date for changing) the number of shares of United Common Stock issued
and outstanding prior to the Effective Date as a result of a stock split,
reverse stock split, stock dividend, reorganization, recapitalization or similar
transaction with respect to the outstanding United Common Stock and the record
date therefor shall be prior to the Effective Date, or shall establish a record
date prior to the Effective Date with respect to any dividend or other
distribution in respect of the United Common Stock other than a cash dividend
consistent with past practice, the stock portion of the Merger Consideration
shall be proportionately adjusted.
4.06 Options. (a) At the Effective Time, each outstanding option (each, a
"Century Option") to purchase shares of Century Common Stock under any and all
plans of Century under which stock options have been granted and are outstanding
(collectively, the "Century Stock Plans") shall vest pursuant to the terms
thereof and shall be converted into an option (each, a "Replacement Option") to
acquire, on the same terms and conditions as were applicable under such Century
Stock Option (other than any requirement that an option be exercised within a
specific time period after termination of employment or cessation of service as
a non-employee director, which requirement shall be waived or deleted from each
option by amendment thereto), the number of shares of United Common Stock equal
to (a) the number of shares of Century Common Stock subject to the Century Stock
Option, multiplied by (b) 0.5894 (the "Option Exchange Ratio"). Such product
shall be rounded to the nearest whole number. The exercise price per share
(rounded to the nearest whole cent) of each Replacement Option shall equal (y)
the exercise price per share for the shares of Century Common Stock which were
purchasable pursuant to such Century Stock Option divided by (z) the Option
Exchange Ratio. Notwithstanding the foregoing, each Century Stock Option which
is intended to be an "incentive stock option" (as defined in Section 422 of the
Code) shall be adjusted in accordance with the requirements of Section 424 of
the Code. At or prior to the Effective Time, Century shall use its reasonable
best efforts, including using its reasonable best efforts to obtain any
necessary consents from optionees, with respect to the Century Stock Plans
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to permit the replacement of the outstanding Century Stock Options by United
pursuant to this Section and to permit United to assume the Century Stock Plans.
Century shall further take all action necessary to amend the Century Stock Plans
to eliminate automatic grants or awards thereunder following the Effective Time.
At the Effective Time, United shall assume the Century Stock Plans; provided,
that such assumption shall be only in respect of the Replacement Options and
that United shall have no obligation with respect to any awards under the
Century Stock Plans other than the Replacement Options and shall have no
obligation to make any additional grants or awards under such assumed Century
Stock Plans.
(b) At all times after the Effective Time, United shall reserve for
issuance such number of shares of United Common Stock as necessary so as to
permit the exercise of options granted under the Century Stock Plans in the
manner contemplated by this Agreement and the instruments pursuant to which such
options were granted. United shall make all filings required under federal and
state securities laws no later than the Effective Time so as to permit the
exercise of such options and the sale of the shares received by the optionee
upon such exercise at and after the Effective Time and United shall continue to
make such filings thereafter as may be necessary to permit the continued
exercise of options and sale of such shares.
ARTICLE V
Actions Pending the Effective Time
5.01 Forebearances of Century. From the date hereof until the Effective
Time, except as expressly contemplated by this Agreement or disclosed in the
Disclosure Schedule, without the prior written consent of United, Century will
not, and will cause each of its Subsidiaries not to:
(a) Ordinary Course. Conduct the business of Century and its
Subsidiaries other than in the ordinary and usual course or fail to use
reasonable efforts to preserve intact their business organizations and assets
and maintain their rights, franchises and existing relations with customers,
suppliers, employees and business associates, or take any action reasonably
likely to have an adverse affect upon Century's ability to perform any of its
material obligations under this Agreement.
(b) Capital Stock. Other than pursuant to Rights Previously
Disclosed and outstanding on the date hereof, (i) issue, sell or otherwise
permit to become outstanding, or authorize the creation of, any additional
shares of Century Stock or any Rights, (ii) enter into any agreement with
respect to the foregoing, or (iii) permit any additional shares of Century Stock
to become subject to new grants of employee or director stock options, other
Rights or similar stock-based employee rights.
(c) Dividends, Etc. (a) Make, declare, pay or set aside for payment
any dividend, other than dividends from wholly-owned Subsidiaries to Century or
another wholly-owned Subsidiary of Century) on or in respect of, or declare or
make any distribution on any shares of Century Stock or (b) directly or
indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise
acquire, any shares of its capital stock.
(d) Compensation; Employment Agreements; Etc. Enter into or amend or
renew any employment, consulting, severance or similar agreements or
arrangements with any director, officer or employee of Century or its
Subsidiaries, or grant any salary or wage increase or increase any employee
benefit, (including incentive or bonus payments) except (i) for normal
individual payments of incentives and bonuses to employees in the ordinary
course of business consistent with past practice, not to exceed $400,000 in the
aggregate, (ii)
10
mutually agreeable amendments to the Employment Agreement, as amended, between
Century and its President, (iii) for normal individual increases in compensation
to employees in the ordinary course of business consistent with past practice,
(iv) for other changes that are required by applicable law, (v) to satisfy
Previously Disclosed contractual obligations existing as of the date hereof,
(vi) for grants of awards to newly hired employees consistent with past
practice.
(e) Benefit Plans. Enter into, establish, adopt or amend (except (i)
as may be required by applicable law or (ii) to satisfy Previously Disclosed
contractual obligations existing as of 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 (or similar
arrangement) related thereto, in respect of any director, officer or employee of
Century or its Subsidiaries, or take any action to accelerate the vesting or
exercisability of stock options, restricted stock or other compensation or
benefits payable thereunder.
(f) Dispositions. Except as Previously Disclosed, sell, transfer,
mortgage, encumber or otherwise dispose of or discontinue any of its assets,
deposits, business or properties except in the ordinary course of business and
in a transaction that is not material to it and its Subsidiaries taken as a
whole.
(g) Acquisitions. Except as Previously Disclosed, acquire (other
than by way of foreclosures or acquisitions of control in a bona fide fiduciary
capacity or in satisfaction of debts previously contracted in good faith, in
each case in the ordinary and usual course of business consistent with past
practice) all or any portion of, the assets, business, deposits or properties of
any other entity.
(h) Governing Documents. Amend the Century Certificate, Century By-
laws or the certificate of incorporation or by-laws (or similar governing
documents) of any of Century's Subsidiaries.
(i) Accounting Methods. Implement or adopt any change in its
accounting principles, practices or methods, other than as may be required by
generally accepted accounting principles.
(j) Contracts. Except in the ordinary course of business consistent
with past practice, enter into or terminate any material contract (as defined in
Section 6.03(k)) or amend or modify in any material respect any of its existing
material contracts.
(k) Claims. Except in the ordinary course of business consistent
with past practice, settle any claim, action or proceeding, except for any
claim, action or proceeding which does not involve precedent for other material
claims, actions or proceedings and which involve solely money damages in an
amount, individually or in the aggregate for all such settlements, that is not
material to Century and its Subsidiaries, taken as a whole.
Adverse Actions. (a) Take any action while knowing that such action
would, or is reasonably likely to, prevent or impede the Merger from qualifying
as a reorganization within the meaning of Section 368 of the Code; or (b)
knowingly take any action that is intended or is reasonably likely to result in
(i) any of its representations and warranties set forth in this Agreement being
or becoming untrue in any material respect at any time at or prior to the
Effective Time, (ii) any of the conditions to the Merger set forth in Article
VIII not being satisfied or (iii) a material violation of any provision of this
Agreement except, in each case, as may be required by applicable law or
regulation.
11
(m) Risk Management. Except as required by applicable law or
regulation, (i) implement or adopt any material change in its interest rate and
other risk management policies, procedures or practices; (ii) fail to follow its
existing policies or practices with respect to managing its exposure to interest
rate and other risk; or (iii) fail to use commercially reasonable means to avoid
any material increase in its aggregate exposure to interest rate risk.
(n) Indebtedness. Incur any indebtedness for borrowed money other
than in the ordinary course of business.
(o) Commitments. Agree or commit to do any of the foregoing.
5.02 Forebearances of United. From the date hereof until the Effective
Time, except as expressly contemplated by this Agreement, without the prior
written consent of Century, United will not, and will cause each of its
Subsidiaries not to:
(a) Ordinary Course. Conduct the business of United and its
Subsidiaries other than in the ordinary and usual course or fail to use
reasonable efforts to preserve intact their business organizations and assets
and maintain their rights, franchises and existing relations with customers,
suppliers, employees and business associates, or take any action reasonably
likely to have an adverse effect upon United's ability to perform any of its
material obligations under this Agreement.
(b) Risk Management. Except as required by applicable law or
regulation, (i) implement or adopt any material change in its interest rate and
other risk management policies, procedures or practices; (ii) fail to follow its
existing policies or practices with respect to managing its exposure to interest
rate and other risk; or (iii) fail to use commercially reasonable means to avoid
any material increase in its aggregate exposure to interest rate risk.
(c) Extraordinary Dividends. Make, declare, pay or set aside for
payment any extraordinary dividend, other than in connection with the United
Stock Repurchase Program.
(d) Adverse Actions. (a) Take any action while knowing that such
action would, or is reasonably likely to, prevent or impede the Merger from
qualifying as a reorganization within the meaning of Section 368 of the Code; or
(b) knowingly take any action that is intended or is reasonably likely to result
in (i) any of its representations and warranties set forth in this Agreement
being or becoming untrue in any material respect at any time at or prior to the
Effective Time, (ii) any of the conditions to the Merger set forth in Article
VIII not being satisfied or (iii) a material violation of any provision of this
Agreement except, in each case, as may be required by applicable law or
regulation; provided, however, that nothing contained herein shall limit the
ability of United to exercise its rights under the Stock Option Agreement.
(e) Transactions Involving United. United agrees that prior to the
Effective time it shall not, and shall not permit any United Subsidiary, to
enter into any agreement, arrangement or understanding with respect to the
merger, acquisition, consolidation, share exchange or similar business
combination involving United and/or a United Subsidiary, where the effect of
such agreement, arrangement or understanding, or the consummation or
effectuation thereof, would be reasonably likely to result in the termination of
this Agreement, materially delay or jeopardize the receipt of the approval of
any Regulatory Authority or the filing of an application therefor, or cause the
anticipated tax treatment of the transactions contemplated hereby to be
unavailable; provided, however, that nothing herein shall prohibit any such
transaction that by its terms contemplates the consummation of the Merger in
accordance with the provisions of this Agreement and which
12
treats holders of Century Common Stock, upon completion of the Merger and their
receipt of United Stock, in the same manner as the holders of United Stock.
(f) Commitments. Agree or commit to do any of the foregoing.
ARTICLE VI
Representations and Warranties
6.01 Disclosure Schedules. On or prior to the date hereof, United has
delivered to Century a schedule and Century has delivered to United a schedule
(respectively, its "Disclosure Schedule") setting forth, among other things,
items the disclosure of which is necessary or appropriate either in response to
an express disclosure requirement contained in a provision hereof or as an
exception to one or more representations or warranties contained in Section 6.03
or 6.04 or to one or more of its covenants contained in Article IV; provided,
that (a) no such item is required to be set forth in a Disclosure Schedule as an
exception to a representation or warranty if its absence would not be reasonably
likely to result in the related representation or warranty being deemed untrue
or incorrect under the standard established by Section 6.02, and (b) the mere
inclusion of an item in a Disclosure Schedule as an exception to a
representation or warranty shall not be deemed an admission by a party that such
item represents a material exception or fact, event or circumstance or that such
item is reasonably likely to result in a Material Adverse Effect on the party
making the representation. All of Century's representations, warranties and
covenants contained in this Agreement are qualified by reference to the
Disclosure Schedule and none thereof shall be deemed to be untrue or breached as
a result of effects arising solely from actions taken in compliance with a
written request of United.
6.02 Standard. No representation or warranty of Century or United
contained in Section 6.03 or 6.04 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, event or circumstance unless such
fact, circumstance or event, individually or taken together with all other
facts, events or circumstances inconsistent with any representation or warranty
contained in Section 6.03 or 6.04 has had or is reasonably likely to have a
Material Adverse Effect. For purposes of this Agreement, "knowledge" shall mean
(i) with respect to United, actual knowledge of Xxxxxxx X. Xxxxx, Xxxxxxx X.
Xxxxx, Xx., Xxxxxx X. Xxxxxx, Xxxxx X. Xxxxxxxx, Xx., Xxxxx X. Xxxxxxxx, Xx.,
Xxxx Xxxxxx, III, Xxx X. Xxxxxx and Xxxxxx X. Xxxxxx, and (ii) with respect to
Century, actual knowledge of Xxxxxx X. Xxxxxxxxx, Xxxx X. Xxxxxx, F. Xxxxxxx
Xxxxxxx, Xxxxxx Xxxxxxxxx, Xxxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxxxx.
6.03 Representations and Warranties of Century. Subject to Sections 6.01
and 6.02 and except as Previously Disclosed, Century hereby represents and
warrants to United:
(a) Organization and Standing. Century is a corporation duly
-------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware. Century is duly qualified to do business and is in good standing in
the states of the United States and any foreign jurisdictions where its
ownership or leasing of property or assets or the conduct of its business
requires it to be so qualified.
(b) Capitalization. As of the date hereof, the authorized capital
--------------
stock of Century consists of (i) 10,000,000 shares of Century Common Stock, of
which as of May 31, 2001, 4,323,110 shares were outstanding and an additional
150,150 shares were held in treasury, (ii) 1,000,000 shares of preferred stock,
$1.00 par value, none of which are issued and outstanding or held in treasury as
of the date hereof. As of the date hereof, except pursuant to the terms of
options and stock issued pursuant to employee and director stock plans
13
of Century in effect as of the date hereof (the "Century Stock Plans"), Century
does not have and is not bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character calling for the
purchase or issuance of any shares of Century Common Stock or any other equity
securities of Century or any of its Subsidiaries or any securities representing
the right to purchase or otherwise receive any shares of Century Common Stock or
other equity securities of Century or any of its Subsidiaries. As of May 31,
2001, 1,039,422 shares of Century Common Stock were reserved for issuance upon
the exercise of stock options pursuant to the Century Stock Plans of which
options to purchase 950,996 shares of Century Common Stock have been issued. The
outstanding shares of Century Stock have been duly authorized and are validly
issued and outstanding, fully paid and nonassessable, and subject to no
preemptive rights (and were not issued in violation of any preemptive rights).
(c) Subsidiaries. (i) Century has Previously Disclosed a list of all
------------
of its Subsidiaries together with the jurisdiction of organization of each such
Subsidiary. (A) Century owns, directly or indirectly, all the issued and
outstanding equity securities of each of its Subsidiaries, (B) no equity
securities of any of its Subsidiaries are or may become required to be issued
(other than to it or its wholly-owned Subsidiaries) by reason of any Right or
otherwise, (C) there are no contracts, commitments, understandings or
arrangements by which any of such Subsidiaries is or may be bound to sell or
otherwise transfer any equity securities of any such Subsidiaries (other than to
it or its wholly-owned Subsidiaries), (D) there are no contracts, commitments,
understandings, or arrangements relating to its rights to vote or to dispose of
such securities and (E) all the equity securities of each Subsidiary held by
Century or its Subsidiaries are fully paid and nonassessable (except pursuant to
12 U.S.C. ? 55) and are owned by Century or its Subsidiaries free and clear of
any Liens.
(ii) Century has Previously Disclosed a list of all equity
securities, or similar interests of any Person or any interest in a partnership
or joint venture of any kind, other than its Subsidiaries, that it beneficially
owns, directly or indirectly, as of May 31, 2001.
(iii) Each of Century's Subsidiaries has been duly
organized and is validly existing in good standing under the laws of the
jurisdiction of its organization, and is duly qualified to do business and in
good standing in the jurisdictions where its ownership or leasing of property or
the conduct of its business requires it to be so qualified.
(d) Corporate Power. Each of Century and its Subsidiaries has the
---------------
corporate power and authority to carry on its business as it is now being
conducted and to own all its properties and assets; and Century has the
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and the Stock Option Agreement and to consummate the
transactions contemplated hereby and thereby.
(e) Corporate Authority. Subject in the case of this Agreement to
-------------------
receipt of the requisite approval of this Agreement (including the agreement of
merger set forth herein) by the holders of more than two-thirds of the
outstanding shares of Century Common Stock entitled to vote thereon (which is
the only vote of Century stockholders required thereon), the execution and
delivery of this Agreement and the Stock Option Agreement and the transactions
contemplated hereby and thereby have been authorized by all necessary corporate
action of Century and the Century Board. Assuming due authorization, execution
and delivery by United, this Agreement is a valid and legally binding obligation
of Century, enforceable in accordance with its terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to or
affecting creditors' rights or by general equity principles). The Century Board
of Directors has received the written opinion of Xxxxxxxx, Xxxxxxxx Xxxxxx &
Company, Inc. to the effect that as of the date hereof the consideration to be
received by the holders of Century
14
Common Stock in the Merger is fair to the holders of Century Common Stock from a
financial point of view.
(f) Consents and Approvals; No Defaults. (i) No consents or
-----------------------------------
approvals of, or filings or registrations with, any Governmental Authority or
with any third party are required to be made or obtained by Century or any of
its Subsidiaries in connection with the execution, delivery or performance by
Century of this Agreement or the Stock Option Agreement or to consummate the
Merger except for (A) filings of applications or notices with federal and state
banking and insurance authorities, (B) filings with the SEC, the NASDAQ Stock
Market and state securities authorities, and (C) the filing of articles of
merger with the Secretary of State of Delaware pursuant to the DGCL and the
issuance of a certificate of merger in connection therewith. As of the date
hereof, Century is not aware of any reason why the approvals set forth in
Section 8.01(b) will not be received without the imposition of a condition,
restriction or requirement of the type described in Section 8.01(b).
(ii) Subject to receipt of the regulatory approvals
referred to in the preceding paragraph, and expiration of related waiting
periods, the execution, delivery and performance of this Agreement and the Stock
Option Agreement and the consummation of the transactions contemplated hereby
and thereby do not and will not (A) constitute a breach or violation of, or a
default under, or give rise to any Lien, any acceleration of remedies or any
right of termination under, any law, rule or regulation or any judgment, decree,
order, governmental permit or license, or any agreement, indenture or instrument
of Century or of any of its Subsidiaries or to which Century or any of its
Subsidiaries or properties is subject or bound, (B) constitute a breach or
violation of, or a default under, the Century Certificate or the Century By-
Laws, or (C) require any consent or approval under any such law, rule,
regulation, judgment, decree, order, governmental permit or license or any
agreement, indenture or instrument.
(g) Financial Reports and SEC Documents; Absence of Certain Changes
---------------------------------------------------------------
or Events. (i) Century's Annual Reports on Form 10-K for the fiscal years ended
---------
December 31, 1998, 1999 and 2000, 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, 1998 under the
Securities Act, or under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act,
in the form filed or to be filed (collectively, Century's "SEC Documents") with
the SEC, as of the date filed, (A) as to Form, complied or will comply in all
material respects with the applicable requirements under the Securities Act or
the Exchange Act, as the case may be, and (B) did not and 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 therein, in light of the
circumstances under which they were made, not misleading; and each of the
balance sheets or statements of condition of Century contained in or
incorporated by reference into any such SEC Document (including the related
notes and schedules thereto) fairly presents, or will fairly present, the
financial position of Century and its Subsidiaries as of its date, and each of
the statements of income and changes in stockholders' equity and cash flows or
equivalent statements of Century in such SEC Documents (including any related
notes and schedules thereto) fairly presents, or will fairly present, the
results of operations, changes in stockholders' equity and cash flows, as the
case may be, of Century and its Subsidiaries for the periods to which they
relate, in each case in accordance with generally accepted accounting principles
consistently applied during the periods involved, except in each case as may be
noted therein, and subject to normal year-end audit adjustments and the absence
of footnotes in the case of unaudited statements.
(ii) Since March 31, 2001, Century and its Subsidiaries
have not incurred any liability other than in the ordinary course of business
consistent with past practice.
(iii) Since March 31, 2001, (A) Century and its
Subsidiaries have conducted their respective businesses in the ordinary and
usual course consistent with past practice (excluding matters related to this
Agreement and the transactions contemplated hereby) and (B) no event has
occurred or circumstance arisen
15
that, individually or taken together with all other facts, circumstances and
events (described in any paragraph of Section 6.03 or otherwise), is reasonably
likely to have a Material Adverse Effect with respect to Century.
(h) Litigation. No litigation, claim or other proceeding before any
----------
court or governmental agency is pending against Century or any of its
Subsidiaries and, to Century's knowledge, no such litigation, claim or other
proceeding has been threatened.
(i) Regulatory Matters. (i) Neither Century nor any of its
------------------
Subsidiaries or properties is a party to or is subject to any order, decree,
agreement, memorandum of understanding or similar arrangement with, or a
commitment letter or similar submission to, or extraordinary supervisory letter
from, any federal or state governmental agency or authority charged with the
supervision or regulation of financial institutions (or their holding companies)
or issuers of securities or engaged in the insurance of deposits (including,
without limitation, the Office of the Comptroller of the Currency, the Federal
Reserve Board and the Federal Deposit Insurance Corporation) or the supervision
or regulation of it or any of its Subsidiaries (collectively, the "Regulatory
Authorities").
(ii) Neither Century nor any of its Subsidiaries has been
advised by any Regulatory Authority that such Regulatory 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, supervisory letter or similar submission.
(iii) Century is not a financial holding company as defined
by the Xxxxx-Xxxxx-Xxxxxx Act of 1999.
(j) Compliance with Laws. Each of Century and its Subsidiaries:
--------------------
(i) is in compliance with all applicable federal, state,
local and foreign 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 and other laws relating to
discriminatory business practices;
(ii) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations with, all
Governmental Authorities that are required in order to permit them to own or
lease their properties and to conduct their businesses as presently conducted;
all such permits, licenses, certificates of authority, orders and approvals are
in full force and effect and, to Century's knowledge, no suspension or
cancellation of any of them is threatened;
(iii) has received, since December 31, 1998, no notification
or communication from any Governmental Authority (A) asserting that Century or
any of its Subsidiaries is not in compliance with any of the statutes,
regulations, or ordinances which such Governmental Authority enforces or (B)
threatening to revoke any license, franchise, permit, or governmental
authorization (nor, to Century's knowledge, do any grounds for any of the
foregoing exist); and
(iv) as of July 1, 2001, will be in compliance with the
privacy provisions of the Xxxxx-Xxxxx-Xxxxxx Act, and all other applicable laws
relating to consumer privacy.
16
(k) Material Contracts; Defaults. Except for this Agreement, the
----------------------------
Stock Option Agreement and those agreements and other documents filed as
exhibits to Century's SEC Documents, neither Century nor any of its Subsidiaries
is a party to, bound by or subject to any agreement, contract, arrangement,
commitment or understanding (whether written or oral) (i) that is a "material
contract" within the meaning of Item 601(b)(10) of the SEC's Regulation S-K or
(ii) that restricts or limits in any way the conduct of business by it or any of
its Subsidiaries (including without limitation a non-compete or similar
provision). Neither Century nor any of its Subsidiaries is in default under any
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 receive 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.
(l) No Brokers. No action has been taken by Century that would give
----------
rise to any valid claim against any party hereto for a brokerage commission,
finder's fee or other like payment with respect to the transactions contemplated
by this Agreement, excluding a Previously Disclosed fee to be paid to Friedman,
Billings, Xxxxxx & Co., Inc.
(m) Employee Benefit Plans. (i) Century has Previously Disclosed a
----------------------
complete and accurate list of all existing bonus, incentive, deferred
compensation, pension, retirement, profit-sharing, thrift, savings, employee
stock ownership, stock bonus, stock purchase, restricted stock, stock option,
severance, welfare and fringe benefit plans, employment or severance agreements
and all similar practices, policies and arrangements in which any employee or
former employee (the "Employees"), consultant or former consultant (the
"Consultants") or director or former director (the "Directors") of Century or
any of its Subsidiaries participates or to which any such Employees, Consultants
or Directors are a party (the "Compensation and Benefit Plans"). Neither
Century nor any of its Subsidiaries has any commitment to create any additional
Compensation and Benefit Plan or to modify or change any existing Compensation
and Benefit Plan.
(ii) Each Compensation and Benefit Plan has been operated
and administered in all material respects in accordance with its terms and with
applicable law, including, but not limited to, ERISA, the Code, the Securities
Act, the Exchange Act, the Age Discrimination in Employment Act, or any
regulations or rules promulgated thereunder, and all filings, disclosures and
notices required by ERISA, the Code, the Securities Act, the Exchange Act, the
Age Discrimination in Employment Act and any other applicable law have been
timely made. Each Compensation and Benefit Plan which is an "employee pension
benefit plan" within the meaning of Section 3(2) of ERISA (a "Pension Plan") and
which is intended to be qualified under Section 401(a) of the Code has received
a favorable determination letter or has applied for a favorable determination
letter in compliance with the Code (including a determination that the related
trust under such Compensation and Benefit Plan is exempt from tax under Section
501(a) of the Code) from the Internal Revenue Service ("IRS"), and Century is
not aware of any circumstances likely to result in the revocation of any
existing favorable determination letter or in not receiving a favorable
determination letter. There is no material pending or, to the knowledge of
Century, threatened legal action, suit or claim relating to the Compensation and
Benefit Plans other than routine claims for benefits. Neither Century nor any of
its Subsidiaries has engaged in a transaction, or omitted to take any action,
with respect to any Compensation and Benefit Plan that would reasonably be
expected to subject Century or any of its Subsidiaries to a tax or penalty
imposed by either Section 4975 of the Code or Section 502 of ERISA, assuming for
purposes of Section 4975 of the Code that the taxable period of any such
transaction expired as of the date hereof.
(iii) No Compensation and Benefit Plans currently
maintained, or maintained within the last six years, by Century or any of its
Subsidiaries or any entity (and "ERISA Affiliate") which is considered
17
one employer with Century under Section 4001(a)(14) of ERISA or Section 414(b)
or (c) of the Code is or was subject to Title IV of ERISA or is or was a
Multiemployer plan under Subtitle E of Title IV of ERISA. To the knowledge of
Century, there is no pending investigation or enforcement action by the PBGC,
the Department of Labor (the "DOL") or IRS or any other governmental agency with
respect to any Compensation and Benefit Plan.
(iv) All contributions required to be made under the terms
of any Compensation and Benefit Plan or any employee benefit arrangements under
any collective bargaining agreement to which Century or any of its Subsidiaries
is a party have been timely made or have been reflected on Century's financial
statements. None of Century, any of its Subsidiaries or any ERISA Affiliate (x)
has provided, or would reasonably be expected to be required to provide,
security to any Pension Plan pursuant to Section 401(a)(29) of the Code, and (y)
has taken any action, or omitted to take any action, that has resulted, or would
reasonably be expected to result, in the imposition of a lien under Section
412(n) of the Code or pursuant to ERISA.
(v) Neither Century nor any of its Subsidiaries has any
obligations to provide retiree health and life insurance or other retiree death
benefits under any Compensation and Benefit Plan, other than benefits mandated
by Section 4980B of the Code, and each such Compensation and Benefit Plan may be
amended or terminated without incurring liability thereunder. There has been no
communication to Employees by Century or any of its Subsidiaries that would
reasonably be expected to promise or guarantee such Employees retiree health or
life insurance or other retiree death benefits on a permanent basis.
(vi) Century and its Subsidiaries do not maintain any
Compensation and Benefit Plans covering foreign Employees.
(vii) With respect to each Compensation and Benefit Plan,
if applicable, Century has provided or made available to United, true and
complete copies of existing: (A) Compensation and Benefit Plan documents and
amendments thereto; (B) trust instruments and insurance contracts; (C) two most
recent Forms 5500 filed with the IRS; (D) most recent actuarial report and
financial statement; (E) the most recent summary plan description; (F) most
recent determination letter issued by the IRS; (G) any Form 5310 or Form 5330
filed with the IRS; and (H) most recent nondiscrimination tests performed under
ERISA and the Code (including 401(k) and 401(m) tests).
(viii) The consummation of the transactions contemplated by
this Agreement would not, directly or indirectly (including, without limitation,
as a result of any termination of employment prior to or following the Effective
Time) reasonably be expected to (A) entitle any Employee, Consultant or Director
to any payment (including severance pay or similar compensation) or any increase
in compensation, (B) result in the vesting or acceleration of any benefits under
any Compensation and Benefit Plan or (C) result in any material increase in
benefits payable under any Compensation and Benefit Plan.
(ix) Neither Century nor any of its Subsidiaries maintains
any compensation plans, programs or arrangements the payments under which would
not reasonably be expected to be deductible as a result of the limitations under
Section 162(m) of the Code and the regulations issued thereunder.
(x) As a result, directly or indirectly, of the
transactions contemplated by this Agreement (including, without limitation, as a
result of any termination of employment prior to or following the Effective
Time), none of United, Century or the Surviving Corporation, or any of their
respective Subsidiaries will be obligated to make a payment that would be
characterized as an "excess parachute payment" to an individual who is a
"disqualified individual" (as such terms are defined in Section 280G of the
Code), without
18
regard to whether such payment is reasonable compensation for personal services
performed or to be performed in the future.
(n) Labor Matters. Neither Century nor any of its Subsidiaries is a
-------------
party to or is bound by any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization, nor is
Century or any of its Subsidiaries the subject of a proceeding asserting that it
or any such Subsidiary has committed an unfair labor practice (within the
meaning of the National Labor Relations Act) or seeking to compel Century or any
such Subsidiary to bargain with any labor organization as to wages or conditions
of employment, nor is there any strike or other labor dispute involving it or
any of its Subsidiaries pending or, to Century's knowledge, threatened, nor is
Century aware of any activity involving its or any of its Subsidiaries'
employees seeking to certify a collective bargaining unit or engaging in other
organizational activity.
(o) Takeover Laws; Dissenters Rights. Century has taken all action
--------------------------------
required to be taken by it in order to exempt this Agreement, the Stock Option
Agreement and the transactions contemplated hereby and thereby from, and this
Agreement, the Stock Option Agreement and the transactions contemplated hereby
and thereby are exempt from, the requirements of any "moratorium", "control
share", "fair price", "affiliate transaction", "business combination" or other
antitakeover laws and regulations of any state applicable to Century
(collectively, "Takeover Laws"), including, without limitation, Section 2.03 of
the DGCL.
(p) Environmental Matters. To Century's knowledge, neither the
---------------------
conduct nor operation of Century or its Subsidiaries nor any condition of any
property presently or previously owned, leased or operated by any of them
(including, without limitation, in a fiduciary or agency capacity), or on which
any of them holds a Lien, violates or violated Environmental Laws and to
Century's knowledge, no condition has existed or event has occurred with respect
to any of them or any such property that, with notice or the passage of time, or
both, is reasonably likely to result in liability under Environmental Laws. To
Century's knowledge, neither Century nor any of its Subsidiaries has received
any notice from any person or entity that Century or its Subsidiaries or the
operation or condition of any property ever owned, leased, operated, or held as
collateral or in a fiduciary capacity by any of them are or were in violation of
or otherwise are alleged to have liability under any Environmental Law,
including, but not limited to, responsibility (or potential responsibility) for
the cleanup or other remediation of any pollutants, contaminants, or hazardous
or toxic wastes, substances or materials at, on, beneath, or originating from
any such property.
(q) Tax Matters. (i) All Tax Returns that are required to be filed
-----------
by or with respect to Century and its Subsidiaries have been duly filed, (ii)
all Taxes shown to be due on the Tax Returns referred to in clause (i) have been
paid in full, (iii) the Tax Returns referred to in clause (i) have been examined
by the Internal Revenue Service or 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 expired, (iv) all deficiencies
asserted or assessments made as a result of such examinations have been paid in
full, (v) no issues that have been raised by the relevant taxing authority in
connection with the examination of any of the Tax Returns referred to in clause
(i) are currently pending, and (vi) no waivers of statutes of limitation have
been given by or requested with respect to any Taxes of Century or its
Subsidiaries. Century has made available to United true and correct copies of
the United States Federal Income Tax Returns filed by Century and its
Subsidiaries for each of the three most recent fiscal years ended on or before
December 31, 2000. Neither Century nor any of its Subsidiaries has any
liability with respect to income, franchise or similar Taxes that accrued on or
before the end of the most recent period covered by Century's SEC Documents
filed prior to the date hereof in excess of the amounts accrued with respect
thereto that are reflected in the financial statements included in Century's SEC
Documents filed on or prior to the date hereof. As of the date hereof, neither
Century nor any of its Subsidiaries has any reason to believe that any
19
conditions exist that might prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
(ii) No Tax is required to be withheld pursuant to Section
1445 of the Code as a result of the transfer contemplated by this Agreement.
(r) Risk Management Instruments. Neither Century nor any of its
---------------------------
subsidiaries are parties to any interest rate swaps, caps, floors, option
agreements, futures and forward contracts and other similar risk management
arrangements, whether entered into for Century's own account, or for the account
of one or more of Century's Subsidiaries or their customers.
(s) Books and Records. The books and records of Century and its
-----------------
Subsidiaries have been fully, properly and accurately maintained in all material
respects, and there are no material inaccuracies or discrepancies of any kind
contained or reflected therein and they fairly reflect the substance of events
and transactions included therein.
(t) Insurance. Century Previously Disclosed all of the insurance
---------
policies, binders, or bonds maintained by Century or its Subsidiaries. Century
and its Subsidiaries are insured with insurers believed to be reputable against
such risks and in such amounts as the management of Century reasonably has
determined to be prudent in accordance with industry practices. All such
insurance policies are in full force and effect; Century and its Subsidiaries
are not in material default thereunder; and all claims thereunder have been
filed in due and timely fashion.
(u) Disclosure. The representations and warranties contained in this
----------
Section 6.03 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 6.03, in light of the circumstances in
which they are made, not misleading.
6.04 Representations and Warranties of United. Subject to Sections 6.01
and 6.02 and except as Previously Disclosed. United hereby represents and
warrants to Century as follows:
(a) Organization and Standing. United is a corporation duly
-------------------------
organized, validly existing and in good standing under the laws of the State of
West Virginia. United 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 assets or the conduct of its business requires it to
be so qualified.
(b) United Stock. (i) As of the date hereof, the authorized capital
------------
stock of United consists solely of 100,000,000 shares of United Common Stock, of
which as of May 31, 2001, 43,381,769 shares, including 1,992,509 shares held in
treasury, were outstanding. As of the date hereof, except as set forth in its
Disclosure Schedule, United does not have and is not bound by any outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of United Common
Stock or any other equity securities of United or any of its Subsidiaries or any
securities representing the right to purchase or otherwise receive any shares of
United Common Stock or other equity securities of United or any of its
Subsidiaries. As of May 31, 2001, United has 1,450,974 shares of United Common
Stock which are issuable and reserved for issuance upon exercise of United Stock
Options. The outstanding shares of United Common Stock have been duly authorized
and are validly issued and outstanding, fully paid and nonassessable, and
subject to no preemptive rights (and were not issued in violation of any
preemptive rights).
20
(ii) The shares of United Common Stock to be issued in
exchange for shares of Century Common Stock in the Merger, when issued in
accordance with the terms of this Agreement, will be duly authorized, validly
issued, fully paid and nonassessable, with no personal liability attaching to
the ownership thereof, subject to no preemptive rights and authorized for
trading on the NASDAQ National Market System.
(c) Subsidiaries. Each of United's Subsidiaries has been duly
------------
organized and is validly existing in good standing under the laws of the
jurisdiction of its organization, and is duly qualified to do business and is in
good standing in the jurisdictions where its ownership or leasing of property or
the conduct of its business requires it to be so qualified and it owns, directly
or indirectly, all the issued and outstanding equity securities of each of its
Significant Subsidiaries.
(d) Corporate Power. Each of United and its Subsidiaries has the
---------------
corporate power and authority to carry on its business as it is now being
conducted and to own all its properties and assets; and United has the corporate
power and authority to execute, deliver and perform its obligations under this
Agreement and the Stock Option Agreement and to consummate the transactions
contemplated hereby and thereby.
(e) Corporate Authority. This Agreement, the Stock Option Agreement
-------------------
and the transactions contemplated hereby and thereby have been authorized by all
necessary corporate action of United and the United Board prior to the date
hereof. Shareholder approval of the transactions contemplated hereby and
thereby is not required. Assuming due authorization, execution and delivery by
Century, this Agreement is a valid and legally binding agreement of United,
enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to or
affecting creditors' rights or by general equity principles).
(f) Consents and Approvals; No Defaults. (i) No consents or
-----------------------------------
approvals of, or filings or registrations with, any Governmental Authority or
with any third party are required to be made or obtained by United or any of its
Subsidiaries in connection with the execution, delivery or performance by United
of this Agreement or to consummate the Merger except for (A) filings of
applications and notices, with the federal and state banking and insurance
authorities; (B) filings with, and approval by, the NASDAQ National Market
System regarding the United Common Stock to be issued in the Merger; (C) the
filing and declaration of effectiveness of the Registration Statement; (D) the
filing of articles of merger with the Secretary of State pursuant to the DGCL
and the issuance of the related certificate of merger; (E) such filings as are
required to be made or approvals as are required to be obtained under the
securities or "Blue Sky" laws of various states in connection with the issuance
of United Stock in the Merger; and (F) receipt of the approvals set forth in
Section 8.01(b). As of the date hereof, United is not aware of any reason why
the approvals set forth in Section 8.01(b) will not be received without the
imposition of a condition, restriction or requirement of the type described in
Section 8.01(b).
(ii) Subject to the satisfaction of the requirements
referred to in the preceding paragraph and expiration of the related waiting
periods, the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby do not and will not (A)
constitute a breach or violation of, or a default under, or give rise to any
Lien, any acceleration of remedies or any right of termination under, any law,
rule or regulation or any judgment, decree, order, governmental permit or
license, or agreement, indenture or instrument of United or of any of its
Subsidiaries or to which United or any of its Subsidiaries or properties is
subject or bound, (B) constitute a breach or violation of, or a default under,
the certificate of incorporation or by-laws (or similar governing documents) of
United or any of its Subsidiaries, or (C) require any consent or approval
21
under any such law, rule, regulation, judgment, decree, order, governmental
permit or license, agreement, indenture or instrument.
(g) Financial Reports and SEC Documents; Absence of Certain Changes
---------------------------------------------------------------
or Events. (i) United's Annual Report on Form 10-K for the fiscal years ended
---------
December 31, 1998, 1999 and 2000 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, 1998, under the Securities
Act or under Section 13(a), 13(c), 14 or 15(d) of the Exchange in the form filed
or to be filed (collectively "United's SEC Documents"), as of the date filed,
(A) as to form complied or will comply in all material respects with the
applicable requirements under the Securities Act or the Exchange Act, as the
case may be, and (B) did not and 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 therein, in light of the circumstances under
which they were made, not misleading; and each of the balance sheets or
statements of condition of United contained in or incorporated by reference into
any such SEC Document (including the related notes and schedules thereto) fairly
presents, or will fairly present, the financial position of United and its
Subsidiaries as of its date, and each of the statements of income or results of
operations and changes in stockholders' equity and cash flows or equivalent
statements of United in such SEC Documents (including any related notes and
schedules thereto) fairly presents, or will fairly present, the results of
operations, changes in stockholders' equity and cash flows, as the case may be,
of United and its Subsidiaries for the periods to which they relate, in each
case in accordance with generally accepted accounting principles consistently
applied during the periods involved, except in each case as may be noted
therein, and subject to normal year-end audit adjustments in the case of
unaudited statements.
(ii) Since March 31, 2001, United and its Subsidiaries have
not incurred any liability other than in the ordinary course of business
consistent with past practice.
(iii) Since March 31, 2001, (A) United and its Subsidiaries
have conducted their respective businesses in the ordinary and usual course
consistent with past practice (excluding matters related to this Agreement and
the transactions contemplated hereby) and (B) no event has occurred or
circumstance arisen that, individually or taken together with all other facts,
circumstances and events (described in any paragraph of Section 6.04 or
otherwise), is reasonably likely to have a Material Adverse Effect with respect
to United.
(h) Litigation. No litigation, claim or other proceeding before any
----------
Governmental Authority is pending against United or any of its Subsidiaries and,
to the best of United's knowledge, no such litigation, claim or other proceeding
has been threatened.
(i) Regulatory Matters. (i) Neither United nor any of its
------------------
Subsidiaries or properties is a party to or is subject to any order, decree,
agreement, memorandum of understanding or similar arrangement with, or a
commitment letter or similar submission to, or extraordinary supervisory letter
from, any Regulatory Authority.
(ii) Neither United nor any of its Subsidiaries or
properties is a party to or is subject to any order, decree, agreement,
memorandum of understanding or similar arrangement with, or a commitment letter
or similar submission to, or extraordinary supervisory letter from a Regulatory
Authority, nor has United or any of its Subsidiaries been advised by a
Regulatory Authority that such agency is contemplating issuing or requesting (or
is considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum of understanding, commitment letter, supervisory
letter or similar submission.
22
(iii) United is not a financial holding company as defined
by the Xxxxx-Xxxxx-Xxxxxx Act of 1999.
(j) Compliance with Laws. Each of United and its Subsidiaries:
--------------------
(i) is in compliance with all applicable federal, state,
local and foreign 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 and other laws relating to
discriminatory business practices;
(ii) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations with, all
Governmental 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;
(iii) has received, since December 31, 1998, no
notification or communication from any Governmental Authority (A) asserting that
United or any of its Subsidiaries is not in compliance with any of the statutes,
regulations, or ordinances which such Governmental Authority enforces or (B)
threatening to revoke any license, franchise, permit, or governmental
authorization (nor, to United's knowledge, do any grounds for any of the
foregoing exist); and
(iv) as of July 1, 2001, will be in compliance with the
privacy provisions of the Xxxxx-Xxxxx-Xxxxxx Act, and all other applicable laws
relating to consumer privacy.
(k) Employee Benefit Plans. United has Previously Disclosed a
----------------------
complete and accurate list of all existing bonus, incentive, deferred
compensation, pension, retirement, profit-sharing, thrift, savings, employee
stock ownership, stock bonus, stock purchase, restricted stock, stock option,
severance, welfare and fringe benefit plans, employment or severance agreements
and all similar practices, policies and arrangements in which any employee or
former employee (the "United Employees"), consultant or former consultant (the
"United Consultants") or director or former director (the "United Directors") of
United or any of its Subsidiaries participates or to which any United Employees,
United Consultants or United Directors are a party (the "United Compensation and
Benefit Plans").
(ii) Each United Compensation and Benefit Plan has been
operated and administered in all material respects in accordance with its terms
and with applicable law, including, but not limited to, ERISA, the Code, the
Securities Act, the Exchange Act, the Age Discrimination in Employment Act, or
any regulations or rules promulgated thereunder, and all filings, disclosures
and notices required by ERISA, the Code, the Securities Act, the Exchange Act,
the Age Discrimination in Employment Act and any other applicable law have been
timely made. Each Compensation and Benefit Plan which is an "employee pension
benefit plan" within the meaning of Section 3(2) of ERISA (a "United Pension
Plan") and which is intended to be qualified under Section 401(a) of the Code
has received a favorable determination letter (including a determination that
the related trust under such United Compensation and Benefit Plan is exempt from
tax under Section 501(a) of the Code) from the Internal Revenue Service ("IRS"),
and United is not aware of any circumstances likely to result in revocation of
any such favorable determination letter. There is no material pending or, to the
knowledge of United, threatened legal action, suit or claim relating to the
United Compensation and Benefit Plans other than routine claims for benefits.
Neither United nor any of its Subsidiaries has engaged in a transaction, or
omitted to take
23
any action, with respect to any United Compensation and Benefit Plan that would
reasonably be expected to subject United or any of its Subsidiaries to a tax or
penalty imposed by either Section 4975 of the Code or Section 502 of ERISA,
assuming for purposes of Section 4975 of the Code that the taxable period of any
such transaction expired as of the date hereof.
(iii) No liability (other than for payment of premiums to
the PBGC which have been made or will be made on a timely basis) under Title IV
of ERISA has been or is expected to be incurred by United or any of its
Subsidiaries with respect to any ongoing, frozen or terminated "single-employer
plan", within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any of them, or any single-employer plan of any entity (an "
United ERISA Affiliate") which is considered one employer with United under
Section 4001(a)(14) of ERISA or Section 414(b) or (c) of the Code (an "United
ERISA Affiliate Plan"). None of United, any of its Subsidiaries or any United
ERISA Affiliate has contributed, or has been obligated to contribute, to a
multiemployer plan under Subtitle E of Title IV of ERISA at any time since
September 26, 1980. No notice of a "reportable event", within the meaning of
Section 4043 of ERISA for which the 30-day reporting requirement has not been
waived, has been required to be filed for any United Compensation and Benefit
Plan or by any United ERISA Affiliate Plan within the 12-month period ending on
the date hereof, and no such notice will be required to be filed as a result of
the transactions contemplated by this Agreement. The PBGC has not instituted
proceedings to terminate any Pension Plan or United ERISA Affiliate Plan and, to
United's knowledge, no condition exists that presents a material risk that such
proceedings will be instituted. To the knowledge of United, there is no pending
investigation or enforcement action by the PBGC, the Department of Labor (the
"DOL") or IRS or any other governmental agency with respect to any United
Compensation and Benefit Plan. Under each United Pension Plan and United ERISA
Affiliate Plan, as of the date of the most recent actuarial valuation performed
prior to the date of this Agreement, the actuarially determined present value of
all "benefit liabilities", within the meaning of Section 4001(a)(16) of ERISA
(as determined on the basis of the actuarial assumptions contained in such
actuarial valuation of such United Pension Plan or United ERISA Affiliate Plan),
did not exceed the then current value of the assets of such United Pension Plan
or United ERISA Affiliate Plan and since such date there has been neither an
adverse change in the financial condition of such United Pension Plan or United
ERISA Affiliate Plan nor any amendment or other change to such Pension Plan or
ERISA Affiliate Plan that would increase the amount of benefits thereunder which
reasonably could be expected to change such result.
(iv) All contributions required to be made under the terms
of any United Compensation and Benefit Plan or United ERISA Affiliate Plan or
any employee benefit arrangements under any collective bargaining agreement to
which United or any of its Subsidiaries is a party have been timely made or have
been reflected on United's financial statements. Neither any United Pension Plan
nor any United ERISA Affiliate Plan has an "accumulated funding deficiency"
(whether or not waived) within the meaning of Section 412 of the Code or Section
302 of ERISA and all required payments to the PBGC with respect to each United
Pension Plan or United ERISA Affiliate Plan have been made on or before their
due dates. None of United, any of its Subsidiaries or any United ERISA Affiliate
(x) has provided, or would reasonably be expected to be required to provide,
security to any United Pension Plan or to any United ERISA Affiliate Plan
pursuant to Section 401(a)(29) of the Code, and (y) has taken any action, or
omitted to take any action, that has resulted, or would reasonably be expected
to result, in the imposition of a lien under Section 412(n) of the Code or
pursuant to ERISA.
(v) Neither United nor any of its Subsidiaries has any
obligations to provide retiree health and life insurance or other retiree death
benefits under any United Compensation and Benefit Plan, other than benefits
mandated by Section 4980B of the Code, and each such United Compensation and
Benefit Plan may be amended or terminated without incurring liability
thereunder. There has been no communication to Employees
24
by United or any of its Subsidiaries that would reasonably be expected to
promise or guarantee such Employees retiree health or life insurance or other
retiree death benefits on a permanent basis.
(vi) United and its Subsidiaries do not maintain any
United Compensation and Benefit Plans covering foreign Employees.
(vii) With respect to each United Compensation and Benefit
Plan, if applicable, United has provided or made available to Century, true and
complete copies of existing: (A) United Compensation and Benefit Plan documents
and amendments thereto; (B) trust instruments and insurance contracts; (C) two
most recent Forms 5500 filed with the IRS; (D) most recent actuarial report and
financial statement; (E) the most recent summary plan description; (F) forms
filed with the PBGC (other than for premium payments); (G) most recent
determination letter issued by the IRS; (H) any Form 5310 or Form 5330 filed
with the IRS; and (I) most recent nondiscrimination tests performed under ERISA
and the Code (including 401(k) and 401(m) tests).
(viii) The consummation of the transactions contemplated by
this Agreement would not, directly or indirectly (including, without limitation,
as a result of any termination of employment prior to or following the Effective
Time) reasonably be expected to (A) entitle any United Employee, United
Consultant or United Director to any payment (including severance pay or similar
compensation) or any increase in compensation, (B) result in the vesting or
acceleration of any benefits under any United Compensation and Benefit Plan or
(C) result in any material increase in benefits payable under any United
Compensation and Benefit Plan.
(ix) Neither United nor any of its Subsidiaries maintains
any compensation plans, programs or arrangements the payments under which would
not reasonably be expected to be deductible as a result of the limitations under
Section 162(m) of the Code and the regulations issued thereunder.
(x) As a result, directly or indirectly, of the
transactions contemplated by this Agreement (including, without limitation, as a
result of any termination of employment prior to or following the Effective
Time), none of United, Century or the Surviving Corporation, or any of their
respective Subsidiaries will be obligated to make a payment that would be
characterized as an "excess parachute payment" to an individual who is a
"disqualified individual" (as such terms are defined in Section 280G of the
Code), without regard to whether such payment is reasonable compensation for
personal services performed or to be performed in the future.
(l) No Brokers. No action has been taken by United that would give
----------
rise to any valid claim against any party hereto for a brokerage commission,
finder's fee or other like payment with respect to the transactions contemplated
by this Agreement.
(m) Takeover Laws. United has taken all action required to be taken
-------------
by it in order to exempt this Agreement, the Stock Option Agreement and the
transactions contemplated hereby and thereby from, and this Agreement, the Stock
Option Agreement and the transactions contemplated hereby and thereby are exempt
from, the requirements of any Takeover Laws applicable to United.
(n) Environmental Matters. To United's knowledge, neither the
---------------------
conduct nor operation of United or its Subsidiaries nor any condition of any
property presently or previously owned, leased or operated by any of them
(including, without limitation, in a fiduciary or agency capacity), or on which
any of them holds a Lien, violates or violated Environmental Laws and to
Century's knowledge no condition has existed or event has occurred with respect
to any of them or any such property that, with notice or the passage of time, or
both, is
25
reasonably likely to result in liability under Environmental Laws. To United's
knowledge, neither United nor any of its Subsidiaries has received any notice
from any person or entity that United or its Subsidiaries or the operation or
condition of any property ever owned, leased, operated, or held as collateral or
in a fiduciary capacity by any of them are or were in violation of or otherwise
are alleged to have liability under any Environmental Law, including, but not
limited to, responsibility (or potential responsibility) for the cleanup or
other remediation of any pollutants, contaminants, or hazardous or toxic wastes,
substances or materials at, on, beneath, or originating from any such property.
(o) Tax Matters. (i) All Tax Returns that are required to be filed
-----------
by or with respect to United and its Subsidiaries have been duly filed, (ii) all
Taxes shown to be due on the Tax Returns referred to in clause (i) have been
paid in full, (iii) the Tax Returns referred to in clause (i) have been examined
by the Internal Revenue Service or 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 expired, (iv) all deficiencies
asserted or assessments made as a result of such examinations have been paid in
full, (v) no issues that have been raised by the relevant taxing authority in
connection with the examination of any of the Tax Returns referred to in clause
(i) are currently pending, and (vi) no waivers of statutes of limitation have
been given by or requested with respect to any Taxes of United or its
Subsidiaries. Neither United nor any of its Subsidiaries has any liability with
respect to income, franchise or similar Taxes that accrued on or before the end
of the most recent period covered by United's SEC Documents filed prior to the
date hereof in excess of the amounts accrued with respect thereto that are
reflected in the financial statements included in United's SEC Documents filed
on or prior to the date hereof. As of the date hereof, neither United nor any
of its Subsidiaries has any reason to believe that any conditions exist that
might prevent or impede the Merger from qualifying as a reorganization within
the meaning of Section 368(a) of the Code.
(p) Books and Records. The books and records of United and its
-----------------
Subsidiaries have been fully, properly and accurately maintained in all material
respects, and there are no material inaccuracies or discrepancies of any kind
contained or reflected therein, and they fairly present the substance of events
and transactions included therein.
(q) Insurance. United's Disclosure Schedule sets forth all of the
---------
insurance policies, binders, or bonds maintained by United or its Subsidiaries.
United and its Subsidiaries are insured with insurers believed to be reputable
against such risks and in such amounts as the management of United reasonably
has determined to be prudent in accordance with industry practices. All such
insurance policies are in full force and effect; United and its Subsidiaries are
not in material default thereunder; and all claims thereunder have been filed in
due and timely fashion.
(r) Disclosure. The representations and warranties contained in this
----------
Section 6.04 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 6.04, in light of the circumstances under
which they are made, not misleading.
(s) Representations and Warranties of United with Respect to Merger
---------------------------------------------------------------
Sub. (i) Organization, Standing and Authority. The Merger Sub is or will be
---
duly organized and is validly existing in good standing under the laws of the
State of its organization, and is or will be duly qualified to do business and
in good standing in the jurisdictions where its ownership or leasing of property
or the conduct of its business requires it to be so qualified. The Merger Sub
will have been organized for the purpose of the transactions contemplated by
this Agreement, and no newly chartered Merger Sub will have previously conducted
any business or incurred any liabilities.
26
(ii) Power. The Merger Sub has the power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby.
(iii) Authority. This Agreement and the transactions
contemplated hereby have been authorized by all requisite action on the part of
the Merger Sub and its respective subsidiaries or members. This Agreement is a
valid and legally binding agreement of the Merger Sub enforceable in accordance
with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors' rights
or by general equity principles).
ARTICLE VII
Covenants
7.01 Reasonable Best Efforts. Subject to the terms and conditions of this
Agreement, each of Century and United agrees to use its reasonable best 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, so as to permit consummation of the Merger as promptly as
practicable and otherwise to enable consummation of the transactions
contemplated hereby and shall cooperate fully with the other party hereto to
that end.
7.02 Stockholder Approvals. Century agrees to take, in accordance with
applicable law or NASDAQ rules and its articles of incorporation and by-laws,
all action necessary to convene an appropriate meeting of its stockholders to
consider and vote upon the approval of this Agreement and any other matters
required to be approved by Century's stockholders for consummation of the Merger
(including any adjournment or postponement, the "Century Meeting"), as promptly
as practicable after the Registration Statement is declared effective. The
Century Board will recommend that the Century stockholders approve and adopt the
Agreement and the transactions contemplated hereby, provided that the Century
Board may fail to make such recommendation, or withdraw, modify or change any
such recommendation, if the Century Board, after having consulted with and
considered the advice of outside counsel, has determined that the making of such
recommendation, or the failure to withdraw, modify or change such
recommendation, would constitute a breach of the fiduciary duties of the members
of the Century Board under applicable law.
7.03 Registration Statement. (a) United agrees to prepare a registration
statement on Form S-4 (the "Registration Statement") to be filed by United with
the SEC in connection with the issuance of United Common Stock in the Merger
(including the prospectus of United and proxy solicitation materials of Century
constituting a part thereof (the "Proxy Statement") and all related documents).
Century and United agree to cooperate, and to cause their respective
Subsidiaries to cooperate, with the other and, its counsel and its accountants,
in preparation of the Registration Statement and the Proxy Statement; and
provided that Century and its Subsidiaries have cooperated as required above,
United agrees to file the Registration Statement (including the Proxy Statement
in preliminary form) with the SEC as promptly as reasonably practicable and in
any event within seventy-five (75) days from the date of this Agreement. Each
of Century and United agrees to use all reasonable efforts to cause the
Registration Statement to be declared effective under the Securities Act as
promptly as reasonably practicable after filing thereof. United also agrees to
use all reasonable efforts to obtain, prior to the effective date of the
Registration Statement, all necessary state securities law or "Blue Sky" permits
and approvals required to carry out the transactions contemplated by this
Agreement. Century agrees to furnish to United all
27
information concerning Century, its Subsidiaries, officers, directors and
stockholders as may be reasonably requested in connection with the foregoing.
(b) Each of Century and United agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied by it for
inclusion or incorporation by reference in (i) the Registration Statement will,
at the time the Registration Statement and each amendment or supplement thereto,
if any, becomes effective under the Securities Act, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and (ii) the
Proxy Statement and any amendment or supplement thereto will, at the date of
mailing to stockholders and at the time of the Century Meeting, as the case may
be, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or any statement which, in the light of the circumstances
under which such statement is made, will be false or misleading with respect to
any material fact, or which will omit to state any material fact necessary in
order to make the statements therein not false or misleading or necessary to
correct any statement in any earlier statement in the Proxy Statement or any
amendment or supplement thereto. Each of Century and United further agrees that
if it shall become aware prior to the Effective Date of any information
furnished by it that would cause any of the statements in the Proxy Statement to
be false or misleading with respect to any material fact, or to omit to state
any material fact necessary to make the statements therein not false or
misleading, to promptly inform the other party thereof and to take the necessary
steps to correct the Proxy Statement.
(c) United agrees to advise Century, promptly after United receives
notice thereof, of the time when the Registration Statement has become effective
or any supplement or amendment has been filed, of the issuance of any stop order
or the suspension of the qualification of United Stock for offering or sale in
any jurisdiction, of the initiation or threat of any proceeding for any such
purpose, or of any request by the SEC for the amendment or supplement of the
Registration Statement or for additional information.
7.04 Press Releases. Each of Century and United agrees that it will not,
without the prior approval of the other party, file any material pursuant to SEC
Rules 165 or 425, or issue any press release or written statement for general
circulation relating to the transactions contemplated hereby, except as
otherwise required by applicable law or regulation or NASDAQ rules.
7.05 Access; Information. (a) Each of Century and United agrees that upon
reasonable notice and subject to applicable laws relating to the exchange of
information, it shall afford the other party and the other party's officers,
employees, counsel, accountants and other authorized representatives, such
access during normal business hours throughout the period prior to the Effective
Time to the books, records (including, without limitation, tax returns and work
papers of independent auditors), properties, personnel and to such other
information as any party may reasonably request and, during such period, it
shall furnish promptly to such other party (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
the business, properties and personnel of it as the other may reasonably
request.
(b) Each agrees that it will not, and will cause its representatives
not to, use any information obtained pursuant to this Section 7.05 (as well as
any other information obtained prior to the date hereof in connection with the
entering into of this Agreement) for any purpose unrelated to the consummation
of the transactions contemplated by this Agreement. Subject to the requirements
of law, each party will keep confidential, and will cause its representatives to
keep confidential, all information and documents obtained pursuant to this
Section 7.05 (as well as any other information obtained prior to the date hereof
in connection with the entering into of this Agreement) unless such information
(i) was already known to such party, (ii) becomes
28
available to such party from other sources not known by such party to be bound
by a confidentiality obligation, (iii) is disclosed with the prior written
approval of the party to which such information pertains or (iv) is or becomes
readily ascertainable from published information or trade sources. In the event
that this Agreement is terminated or the transactions contemplated by this
Agreement shall otherwise fail to be consummated, each party shall promptly
cause all copies of documents or extracts thereof containing information and
data as to another party hereto to be returned to the party which furnished the
same. No investigation by either party of the business and affairs of the other
shall affect or be deemed to modify or waive any representation, warranty,
covenant or agreement in this Agreement, or the conditions to either party's
obligation to consummate the transactions contemplated by this Agreement.
(c) During the period from the date of this Agreement to the
Effective Time, each party shall promptly furnish the other with copies of all
monthly and other interim financial statements produced in the ordinary course
of business as the same shall become available.
(d) The provisions of this Section 7.05 are in addition to, and not
in lieu of, that certain letter agreement dated May 24, 2001 between the parties
(the "Letter Agreement"), the terms of which are hereby specifically confirmed.
7.06 Acquisition Proposals. Century agrees that it shall not, and shall
cause its Subsidiaries and its Subsidiaries' officers, directors, agents,
advisors and affiliates not to, solicit or encourage inquiries or proposals with
respect to, or engage in any negotiations concerning, or provide any
confidential information to, any person relating to, any Acquisition Proposal.
It shall immediately cease and cause to be terminated any activities,
discussions or negotiations conducted prior to the date of this Agreement with
any parties other than United with respect to any of the foregoing and shall use
its reasonable best efforts to enforce any confidentiality or similar agreement
relating to an Acquisition Proposal.
7.07. Affiliate Agreements. (a) Not later than the 15th day prior to the
mailing of the Proxy Statement, Century shall deliver to United a schedule of
each person that, to the best of its knowledge, is or is reasonably likely to
be, as of the date of the Century Meeting, deemed to be an "affiliate" of
Century (each, a "Century Affiliate") as that term is used in Rule 145 under the
Securities Act.
(b) Century shall use its reasonable best efforts to cause each
person who may be deemed to be a Century Affiliate to execute and deliver to
United on or before the date of mailing of the Proxy Statement an agreement in
the form attached hereto as Exhibit B.
7.08 Takeover Laws. No party hereto shall take any action that would cause
the transactions contemplated by this Agreement or the Stock Option Agreement to
be subject to requirements imposed by any Takeover Law and each of them shall
take all necessary steps within its control to exempt (or ensure the continued
exemption of) the transactions contemplated by this Agreement from any
applicable Takeover Law, as now or hereafter in effect.
7.09 Certain Policies. Immediately prior to the Effective Date, Century
shall, consistent with generally accepted accounting principles and on a basis
mutually satisfactory to it and United, modify and change its loan, litigation
and real estate valuation policies and practices (including loan classifications
and levels of reserves) so as to be applied on a basis that is consistent with
that of United; provided, however, that Century shall not be obligated to take
any such action pursuant to this Section 7.09 unless and until United
acknowledges that all conditions to its obligation to consummate the Merger have
been satisfied and certifies to Century that United's representations and
warranties, subject to Section 6.02, are true and correct as of such date and
that
29
United is otherwise material in compliance with this Agreement. Century's
representations, warranties and covenants contained in this Agreement 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 7.09.
7.10 Regulatory Applications. (a) United and Century and their respective
Subsidiaries shall cooperate and use their respective reasonable best efforts to
prepare all documentation, to effect all filings and to obtain all permits,
consents, approvals and authorizations of all third parties and Governmental
Authorities necessary to consummate the transactions contemplated by this
Agreement. Each of United and Century shall have the right to review in
advance, and to the extent practicable each will consult with the other, in each
case subject to applicable laws relating to the exchange of information, with
respect to, all material written information submitted to any third party or any
Governmental Authority in connection with the transactions contemplated by this
Agreement. In exercising the foregoing right, each of the parties hereto agrees
to act reasonably and as promptly as practicable. Each party hereto agrees that
it will consult with the other party hereto with respect to the obtaining of all
material permits, consents, approvals and authorizations of all third parties
and Governmental Authorities necessary or advisable to consummate the
transactions contemplated by this Agreement and each party will keep the other
party apprised of the status of material matters relating to completion of the
transactions contemplated hereby.
(b) Each party agrees, upon request, to furnish the other party with
all information concerning itself, its Subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably necessary or advisable
in connection with any filing, notice or application made by or on behalf of
such other party or any of its Subsidiaries to any third party or Governmental
Authority.
7.11 Indemnification. (a) Following the Effective Date and for a period
of six years thereafter, United shall indemnify, defend and hold harmless the
present directors, officers and employees of Century and its Subsidiaries (each,
an "Indemnified Party") against all costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the transactions contemplated by
this Agreement) to the fullest extent that Century is permitted or required to
indemnify (and advance expenses to) its directors and officers under the laws of
the State of Delaware, the Century Certificate, the Century By-Laws and any
agreement as in effect on the date hereof; provided that any determination
required to be made with respect to whether an officer's, director's or
employee's conduct complies with the standards set forth under Delaware law, the
Century Certificate, the Century By-Laws and any agreement shall be made by
independent counsel (which shall not be counsel that provides material services
to United) selected by United and reasonably acceptable to such officer or
director.
(b) For a period of six (6) years from the Effective Time, United
shall use its reasonable best efforts to provide that portion of director's and
officer's liability insurance that serves to reimburse the present and former
officers and directors of Century or any of its Subsidiaries (determined as of
the Effective Time) (as opposed to Century) with respect to claims against such
directors and officers arising from facts or events which occurred before the
Effective Time, which insurance shall contain at least the same coverage and
amounts, and contain terms and conditions no less advantageous, as that coverage
currently provided by Century; provided, however, that in no event shall United
be required to expend more than 200 percent of the current amount expended by
Century (the "Insurance Amount") to maintain or procure such directors and
officers insurance coverage; provided, further, that if United is unable to
maintain or obtain the insurance called for by this Section 7.11(b), United
shall use its reasonable best efforts to obtain as much comparable insurance as
is available for the Insurance Amount; provided, further, that officers and
directors of Century or any Subsidiary may be
30
required to make application and provide customary representations and
warranties to United's insurance carrier for the purpose of obtaining such
insurance.
(c) Any Indemnified Party wishing to claim indemnification under
Section 7.11(a), upon learning of any claim, action, suit, proceeding or
investigation described above, shall promptly notify United thereof; provided
that the failure so to notify shall not affect the obligations of United under
Section 7.11(a) unless and to the extent that United is actually prejudiced as a
result of such failure.
(d) If United or any of its successors or assigns shall consolidate
with or merge into any other entity and shall not be the continuing or surviving
entity of such consolidation or merger or shall transfer all or substantially
all of its assets to any entity, then and in each case, proper provision shall
be made so that the successors and assigns of United shall assume the
obligations set forth in this Section 7.11.
(e) The provisions of this Section 7.11 shall survive the Effective
Time and are intended to be for the benefit of, and shall be enforceable by,
each Indemnified Party and his or her heirs and representatives.
7.12 Benefit Plans. It is the intention of United that within a reasonable
period of time following the Effective Time (a) it will provide employees of
Century with employee benefit plans substantially similar in the aggregate to
those provided to similarly situated employees of United, (b) United shall cause
any and all pre-existing condition limitations (to the extent such limitations
did not apply to a pre-existing condition under the Compensation and Benefit
Plans) and eligibility waiting periods under group health plans to be waived
with respect to such participants and their eligible dependents, and (c) all
Century employees will receive credit for years of service with Century and its
predecessors prior to the Effective Time for purposes of eligibility and vesting
under United's benefit plans. Century employees shall not be entitled to
accrual of benefits or allocation of contributions under United's benefit plans
based on years of service with Century and its predecessors prior to the
Effective Date. United hereby adopts, confirms and agrees to honor, as of the
Effective Time, the provisions of Century's Severance Policy with respect to the
termination of employees within six months of the Effective Time, and agrees not
to modify, amend or rescind such policy until after the expiration of six months
from the Effective Time.
7.13 Notification of Certain Matters. Each of Century and United 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.
7.14 Directors and Officers. (a) United agrees to cause Xxxxxx X.
Xxxxxxxxx, if he is still a member of the Century Board immediately prior to the
Effective Time and willing and eligible to serve, to be elected or appointed as
a director of United at the Effective Time.
(b) United agrees to cause Xxxxxx X. Xxxxxxxxx and two (2) other
members of the Century Board on the date hereof (selected by United after
consultation with Century) who are members of the Century Board immediately
prior to the Effective Time and willing and eligible to serve to be elected or
appointed to serve on the board of directors of United Bank. United agrees to
appoint Xx. Xxxxxxxxx to serve as Vice Chairman of United Bank.
(c) United acknowledges the unique and substantial contributions of
Xxxxxx X. Xxxxxxxxx to the past growth of Century and the future success of the
Merger, and confirms its intention to seek to obtain Mr.
31
Xxxxxxxxx'x continued participation in the combined enterprise on a mutually
agreeable basis. Century agrees to cooperate fully with United in seeking the
continued participation of Xx. Xxxxxxxxx and to encourage Xx. Xxxxxxxxx to
accept such an arrangement.
7.15 Current Public Information. United agrees that it shall, for a period
of three (3) years following the Effective Time, use its best efforts to meet
the current public information requirements as set forth in paragraph (c) of
Rule 144 promulgated under the Securities Act, and will provide those persons
providing affiliate letters pursuant to Section 7.07 with such other information
as they may reasonably require and to otherwise cooperate with such persons to
facilitate any sales of United Common Stock issued to such persons pursuant to
this Agreement in compliance with the provisions of Rule 144 and/or Rule 145
promulgated under the Securities Act. The provisions of this Section 7.15 shall
survive the Effective Time and are intended to be for the benefit of, and shall
be enforceable by, such affiliates of Century.
ARTICLE VIII
Conditions to Consummation of the Merger
8.01 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each of United and Century to consummate the Merger is
subject to the fulfillment or written waiver by United and Century prior to the
Effective Time of each of the following conditions:
(a) Stockholder Approval. This Agreement and Plan of Reorganization
--------------------
shall have been duly approved by the requisite vote of the stockholders of
Century.
(b) Regulatory Approvals. All regulatory approvals required to
--------------------
consummate the transactions contemplated hereby, shall have been obtained and
shall remain in full force and effect and all statutory waiting periods in
respect thereof shall have expired and no such approvals shall contain (i) any
conditions, restrictions or requirements which the United Board reasonably
determines in good faith would either before or after the Effective Time have a
Material Adverse Effect on the Surviving Corporation and its Subsidiaries taken
as a whole or (ii) any conditions, restrictions or requirements that are not
customary and usual for approvals of such type and which the United Board
reasonably determines in good faith would either before or after the Effective
Date be unduly burdensome.
(c) No Injunction. No Governmental Authority of competent
-------------
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and prohibits
consummation of the transactions contemplated by this Agreement.
(d) Registration Statement. The Registration Statement shall have
----------------------
become effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the SEC.
(e) Blue Sky Approvals. All permits and other authorizations under
------------------
state securities laws necessary to consummate the transactions contemplated
hereby and to issue the shares of United Common Stock to be issued in the Merger
shall have been received and be in full force and effect.
32
(f) Listing. To the extent required, the shares of United Common
-------
Stock to be issued in the Merger shall have been approved for listing on the
NASDAQ National Market System, subject to official notice of issuance.
8.02 Conditions to Obligation of Century. The obligation of Century to
consummate the Merger is also subject to the fulfillment or written waiver by
Century prior to the Effective Time of each of the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of United set forth in this Agreement shall be true and correct,
subject to Section 6.02, as of the date of this Agreement and as of the
Effective Date as though made on and as of the Effective Date (except that
representations and warranties that by their terms speak as of the date of this
Agreement or some other date shall be true and correct as of such date), and
Century shall have received a certificate, dated the Effective Date, signed on
behalf of United by the Chief Executive Officer and the Chief Financial Officer
of United to such effect.
(b) Performance of Obligations of United. United shall have
------------------------------------
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Effective Time, and Century shall
have received a certificate, dated the Effective Date, signed on behalf of
United by the Chief Executive Officer and the Chief Financial Officer of United
to such effect.
(c) Opinion of Century's Counsel. Century shall have received an
----------------------------
opinion of Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel to Century, dated the
Effective Date, to the effect that, on the basis of facts, representations and
assumptions set forth in such opinion, (i) the Merger constitutes a
"reorganization" within the meaning of Section 368 of the Code and (ii) no gain
or loss will be recognized by stockholders of Century who receive shares of
United Common Stock in exchange for shares of Century Common Stock, except that
gain or loss may be recognized as to cash received as Merger Consideration and
cash received in lieu of fractional share interests. In rendering its opinion,
Xxxxxxxxx & Xxxxxxxxx, L.L.P. may require and rely upon representations
contained in letters from Century and others.
8.03 Conditions to Obligation of United. The obligation of United to
consummate the Merger is also subject to the fulfillment or written waiver by
United prior to the Effective Time of each of the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Century set forth in this Agreement shall be true and correct,
subject to Section 6.02, as of the date of this Agreement and as of the
Effective Date as though made on and as of the Effective Date (except that
representations and warranties that by their terms speak as of the date of this
Agreement or some other date shall be true and correct as of such date) and
United shall have received a certificate, dated the Effective Date, signed on
behalf of Century by the Chief Executive Officer and the Chief Financial Officer
of Century to such effect.
(b) Performance of Obligations of Century. Century shall have
-------------------------------------
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Effective Time, and United shall have
received a certificate, dated the Effective Date, signed on behalf of Century by
the Chief Executive Officer and the Chief Financial Officer of Century to such
effect.
(c) Opinion of United's Counsel. United shall have received an
---------------------------
opinion of Xxxxxx Rice XxXxxxx Xxxxx & Love PLLC, special counsel to United,
dated the Effective Date, to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion, the Merger
constitutes a reorganization under
33
Section 368 of the Code. In rendering its opinion, Xxxxxx Rice XxXxxxx Xxxxx &
Love PLLC may require and rely upon representations contained in letters from
United and others.
ARTICLE IX
Termination
9.01 Termination. This Agreement may be terminated, and the Acquisition
may be abandoned:
(a) Mutual Consent. At any time prior to the Effective Time, by the
--------------
mutual consent of United and Century, 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 Effective Time, by United or
------
Century, if its Board of Directors so determines by vote of a majority of the
members of its entire Board, in the event of either: (i) a breach by the other
party of any representation or warranty contained herein (subject to the
standard set forth in Section 6.02), which breach cannot be or has not been
cured within 30 days after the giving of written notice to the breaching party
of such breach; or (ii) a breach by the other party of any of the covenants or
agreements contained herein, which breach cannot be or has not been cured within
30 days after the giving of written notice to the breaching party of such
breach, provided that such breach (whether under (i) or (ii)) would be
reasonably likely, individually or in the aggregate with other breaches, to
result in a Material Adverse Effect.
(c) Delay. At any time prior to the Effective Time, by United or
-----
Century, if its Board of Directors so determines by vote of a majority of the
members of its entire Board, in the event that the Acquisition is not
consummated by March 31, 2002, except to the extent that the failure of the
Acquisition then to be consummated arises out of or results from the knowing
action or inaction of the party seeking to terminate pursuant to this Section
8.01(c).
(d) No Approval. By Century or United, if its Board of Directors so
-----------
determines by a vote of a majority of the members of its entire Board, in the
event (i) the approval of any Governmental Authority required for consummation
of the Merger and the other transactions contemplated by this Agreement shall
have been denied by final nonappealable action of such Governmental Authority or
(ii) any stockholder approval required by Section 8.01(a) herein is not obtained
at the Century Meeting.
(e) Failure to Recommend, Etc. At any time prior to the Century
-------------------------
Meeting, by United if the Century Board shall have failed to make its
recommendation referred to in Section 7.02, withdrawn such recommendation or
modified or changed such recommendation in a manner adverse in any respect to
the interests of United.
(f) Decline in United Common Stock Price. By Century, if the Century
------------------------------------
Board so determines by a vote of the majority of its entire board, at any time
during the five-day period commencing with the Determination Date (as defined
below) if the Average Closing Price is less than $18.45, subject, however, to
the following three sentences. If Century elects to exercise its termination
right pursuant to this Section 9.01(g), it shall give written notice to United
(provided that such notice of election to terminate may be withdrawn at any time
within the aforementioned five-day period). During the five-day period
commencing with its receipt of such notice, United shall have the option to
increase the consideration to be received by the holders of Century Common Stock
hereunder, by increasing the Exchange Ratio from 0.4500 to a number (calculated
to the nearest
34
ten-thousandth) obtained by dividing $8.303 by the Average Closing Price, and
increasing the Option Exchange Ratio from 0.5894 to a number (calculated to the
nearest ten-thousandth) obtained by dividing $11.733 by the Average Closing
Price. If United so elects within such five-day period, it shall give prompt
written notice to Century of such election and the revised Exchange Ratio and
Option Exchange Ratio, whereupon no termination shall have occurred pursuant to
this Section 9.01(g) and this Agreement shall remain in effect in accordance
with its terms (except as the Exchange Ratio and Option Exchange Ratio shall
have been so modified.)
For purposes of this Section 9.01(g), the following terms
shall have the meanings indicated:
"Average Closing Price" shall mean the average of the
closing prices of a share of United Common Stock on the
NASDAQ reporting system (as reported in The Wall Street
Journal, or if not reported therein, in another
authoritative source) during the period of twenty (20)
consecutive full trading days ending on the trading day
prior to the Determination Date, rounded to the nearest
whole cent.
"Determination Date" shall mean the date on which the last
required approval of a Governmental Entity is obtained
with respect to the Merger and the Bank Merger, without
regard to any requisite waiting period in respect thereof.
9.02 Effect of Termination and Abandonment. In the event of termination
of this Agreement and the abandonment of the Merger pursuant to this Article IX,
no party to this Agreement shall have any liability or further obligation to any
other party hereunder except (i) as set forth in Section 9.01 and (ii) that
termination will not relieve a breaching party from liability for any willful
breach of this Agreement giving rise to such termination.
ARTICLE X
Miscellaneous
10.01 Survival. No representations, warranties, agreements and covenants
contained in this Agreement shall survive the Effective Time (other than
Sections 2.02(b), 7.11, 7.12, 7.14, 7.15 and this Article X which shall survive
the Effective Time) or the termination of this Agreement if this Agreement is
terminated prior to the Effective Time (other than Sections 7.03(b), 7.05(b),
9.02, the Letter Agreement and this Article X which shall survive such
termination).
10.02 Waiver; Amendment. Prior to the Effective Time, any provision of
this Agreement may be (i) waived by the party benefited by the provision, or
(ii) amended or modified at any time, by an agreement in writing between the
parties hereto executed in the same manner as this Agreement, except that after
the Century Meeting, this Agreement may not be amended if it would violate the
DGCL.
10.03 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
10.04 Governing Law. This Agreement shall be governed by, and interpreted
in accordance with, the laws of the State of Delaware applicable to contracts
made and to be performed entirely within such State (except to the extent that
mandatory provisions of Federal law are applicable).
35
10.05 Expenses. Each party hereto will bear all expenses incurred by it
in connection with this Agreement and the transactions contemplated hereby,
except that printing expenses shall be shared equally between Century and
United.
10.06 Notices. All notices, requests and other communications hereunder
to a party shall be in writing and shall be deemed given if personally
delivered, telecopied (with confirmation) or mailed by registered or certified
mail (return receipt requested) 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 Century, to:
Century Bancshares, Inc.
0000 Xxxxxxxxxxxx Xxxxxx, X. X.
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxxx
With a copy to:
Bracewell & Xxxxxxxxx, L.L.P.
0000 Xxxxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxx X. Xxxxxxxx, Esq.
If to United, to:
United Bankshares, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx,
Chairman of the Board and Chief Executive Officer
Xxxxxx Xxxxxx
Chief Financial Officer
With a copy to:
Xxxxxx Xxxx XxXxxxx Xxxxx & Love PLLC
000 Xxxxxxxx Xxxxxx
P. O. Xxx 0000
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
10.07 Entire Understanding; No Third Party Beneficiaries. This Agreement
and any Stock Option Agreement entered into represent the entire understanding
of the parties hereto with reference to the transactions contemplated hereby and
thereby and this Agreement supersedes any and all other oral or written
agreements
36
heretofore made (other than any such Stock Option Agreement). Except for Section
7.12, nothing in this Agreement 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
Agreement.
10.08 Interpretation; Effect. When a reference is made in this Agreement
to Sections, Exhibits or Schedules, such reference shall be to a Section of, or
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and are not part of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." No provision of this Agreement
shall be construed to require Century, United or any of their respective
Subsidiaries, affiliates or directors to take any action which would violate
applicable law (whether statutory or common law), rule or regulation.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
CENTURY BANCSHARES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
Title: Secretary
UNITED BANKSHARES, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Xxxxxxx X. Xxxxx
Title: Chairman of the Board and
Chief Executive Officer
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Xxxxxx X. Xxxxxx
Title: Secretary
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EXHIBIT A
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT, dated as of June 14, 2001, between United
Bankshares, Inc., a West Virginia corporation ("Grantee"), and Century
Bancshares, Inc., a Delaware corporation ("Issuer").
WITNESSETH:
WHEREAS, Grantee and Issuer have entered into an Agreement and Plan of
Reorganization (the "Merger Agreement");
WHEREAS, as a condition to the execution and delivery of the Merger
Agreement, Grantee has required that Issuer grant to Grantee the Option (as
hereinafter defined);
WHEREAS, as an inducement to the willingness of Grantee to continue to
pursue the transactions contemplated by the Merger Agreement, Issuer has
determined to grant Grantee the Option (as hereinafter defined); and
WHEREAS, the Board of Directors of Issuer has approved the grant of
the Option and the Merger Agreement on or prior to the date hereof;
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 644,143 fully paid and nonassessable shares of the common
stock, par value $1.00 per share, of Issuer ("Common Stock") at a price per
share equal to the $12.00; provided, however, that in the event Issuer issues or
agrees to issue any shares of Common Stock (other than shares of Common Stock
issued pursuant to stock options granted pursuant to any employee benefit plan
prior to the date hereof) at a price less than $12.00 per share (as adjusted
pursuant to subsection (b) of Section 5), such price shall be equal to such
lesser price (such price, as adjusted if applicable, the "Option Price");
provided, further, that in no event shall the number of shares for which this
Option is exercisable exceed 14.9% of the issued and outstanding shares of
Common Stock without giving effect to any shares subject or issued pursuant to
the Option. 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 14.9% 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 l(b) or elsewhere in this Agreement shall be deemed to authorize
Issuer to issue shares in breach any provision of the Merger Agreement.
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 (3) months following such Subsequent Triggering Event (or such later
period as provided in Section 10). Each of the following shall be an Exercise
Termination Event: (i) the Effective Time 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 except a
termination by Grantee pursuant to Section 9.01(b) (but only if the breach
giving rise to the termination was willful) or section 9.01(e) of the Merger
Agreement (each, a "Listed Termination"); or (iii) the passage of six (6) 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 covenants or agreements contained in
the Merger Agreement such that Issuer shall be entitled to terminate the Merger
Agreement pursuant to Section 9.01(b) thereof as a result of a material breach
and (ii) this Agreement shall automatically terminate upon the proper
termination of the Merger Agreement (x) by Issuer pursuant to Section 9.01(b)
thereof as a result of the material breach by Grantee of its covenants or
agreements contained in the Merger Agreement, (y) by Issuer or Grantee pursuant
to Section 9.01(d)(ii) if Grantee's shareholders do not approve the Merger
Agreement at the meeting, or (z) by Issuer or Grantee pursuant to Section
9.01(d)(i).
(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 any Significant Subsidiary (as defined in
Rule 1-02 of Regulation S-X promulgated by the Securities and Exchange
Commission (the "SEC")) (an "Issuer Subsidiary"), without having
received Grantee'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, 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. For
purposes of this Agreement, (a) "Acquisition Transaction" shall mean
(x) a merger or consolidation, or any similar transaction, involving
Issuer or any Issuer Subsidiary (other than mergers, consolidations or
similar transactions (i) involving solely Issuer and/or one or more
wholly-owned (except for directors' qualifying shares and a de minimis
number of other shares) Subsidiaries of the Issuer, provided, any such
transaction is not entered into in violation of the terms of the
Merger Agreement or (ii) in which the shareholders of Issuer
immediately prior to the completion of such transaction own at least
50% of the Common Stock of the Issuer (or the resulting or surviving
entity in such transaction) immediately after completion of such
transaction, provided any such transaction is not entered into in
violation of the terms of the Merger Agreement), (y) a purchase, lease
or other acquisition of all or any substantial part of the assets or
deposits of Issuer or any Issuer Subsidiary, or (z) a purchase or
other acquisition (including by way of merger, consolidation, share
exchange or otherwise) of securities representing 10% or
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more of the voting power of Issuer or any Issuer Subsidiary and (b)
"Subsidiary" shall have the meaning set forth in Rule 12b-2 under the
1934 Act;
(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
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, in each such case 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 of its
Subsidiaries) shall have made, or publicly disclosed an intention to
make, a 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 in any respect to Grantee its recommendation that the
shareholders of Issuer approve the transactions contemplated by the
Merger Agreement, or Issuer or any Issuer Subsidiary shall have
authorized, recommended, 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 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 SEC a registration statement or
tender offer materials with respect to a potential exchange or tender
offer that would constitute an Acquisition Transaction (or filed a
preliminary proxy statement with the SEC with respect to a potential
vote by its shareholders to approve the issuance of shares to be
offered in such an exchange offer);
(vii) Issuer 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
Grantee would be entitled to terminate the Merger Agreement (whether
immediately or after the giving of notice or passage of time or both);
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
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antitrust 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 (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 (i) of subsection (b) of this Section 2, except
that the percentage referred to in clause (z) of the second sentence
thereof shall be 25%.
(d) Issuer shall notify Grantee 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 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 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.
(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 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 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 June 14, 2001, between the
registered holder hereof and Issuer and to resale
restrictions arising under the
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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 reference 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 reference 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 reference to the provisions of
this Agreement in the above legend shall be removed by delivery of substitute
certificate(s) without such reference if the shares have been sold or
transferred in compliance with the provisions of this Agreement and under
circumstances that do not require the retention of such reference in the 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 subject to the receipt of any
necessary regulatory approvals 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
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 times maintain, free from
preemptive 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;
(iii) promptly to take all action as may from time to time be required
(including (x) complying with all applicable pre-merger 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 (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 herein to
protect the rights of the Holder against dilution.
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
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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. Any such new
Agreement executed and delivered shall constitute an additional contractual
obligation on the part of Issuer, whether or not the Agreement so lost, stolen,
destroyed or mutilated shall at any time be enforceable by anyone.
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 the
exercise of the Option and the Option 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, split-ups, mergers,
recapitalizations, combinations, subdivisions, conversions, 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 14.9% 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 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 a Subsequent Triggering Event that occurs
prior to an Exercise Termination Event, Issuer shall, at the request of Grantee
delivered within twelve (12) months (or such later period 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
dispositions. Grantee shall have the right to demand one such registration. The
Issuer shall bear the costs of such registration (including, but not limited to,
Issuer's attorneys' fees, printing costs and filing fees, but excluding
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 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
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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 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
twelve (12) month period referred to in the first sentence of this section shall
be increased to twenty-four (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 price per share of Common Stock at
which a tender or exchange offer therefor has been made, (ii) the price per
share of Common Stock to be paid by any third party pursuant to an agreement
with Issuer, (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 Issuer's 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 Issuer 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. 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
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Share Repurchase Price therefor or the portion thereof that Issuer is not then
prohibited under applicable law and regulation 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 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 the 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
described in Section 2(b) (i) hereof, except that the percentage
referred to in clause (z) shall be 50%.
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
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shares and share equivalents of the merged or acquiring company, or (iii) to
sell or otherwise transfer all or a substantial part 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 (A) the Acquiring Corporation
(as hereinafter defined) or (B) 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
a substantial part 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.
(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.
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(e) In no event, pursuant to any of the foregoing paragraphs, shall
the Substitute Option be exercisable for more than 14.9% 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 14.9%
of the shares of Substitute Common Stock outstanding prior to exercise 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.
(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 issuer of the Substitute Option (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 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 rights to require the Substitute
Option Issuer to repurchase the Substitute Option and the 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 and regulation 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
part or 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 (5)
business days after the date on which the Substitute Option
A-10
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 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, in full (and the Substitute Option Issuer shall use its reasonable
best efforts to receive all required regulatory and legal approvals 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 the Substitute Shares either in whole or to the extent of
prohibition, whereupon, in the latter case, the Substitute Option Issuer 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 Issuer 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 shares of the Substitute
Common Stock obtained by multiplying the number of shares of the 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 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,
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; and (ii) 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 prior to 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,
encumbrance and security interests and not subject to any preemptive rights.
A-11
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; 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. CFO , a
broker or investment banker) for the 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, but Grantee shall not be obligated to apply to state banking
authorities for approval to acquire the shares of Common Stock 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. 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 l(a) hereof (as adjusted pursuant to Section l(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.
17. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to the conflict of law
principles thereof (except to the extent that mandatory provisions of Federal
law or of the VSCA are applicable).
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
A-12
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.
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.
CENTURY BANCSHARES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx
Title: Secretary
UNITED BANKSHARES, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Xxxxxxx X. Xxxxx
Title: Chairman of the Board and
Chief Executive Officer
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Xxxxxx X. Xxxxxx
Title: Secretary
A-13
EXHIBIT B
FORM OF CENTURY AFFILIATE LETTER
____________, 2001
Century Bancshares, Inc.
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Chief Financial Officer
United Bankshares, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx,
Chief Financial Officer
Ladies and Gentlemen:
I have been advised that I may be deemed to be, but do not admit that
I am, an "affiliate" of Century Bancshares, Inc. a Delaware corporation
("Century"), as that term is defined in Rule 145 promulgated by the Securities
and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the "Securities Act"). I understand that pursuant to the terms of the
Agreement and Plan of Reorganization, dated as of June 14, 2001 (the
"Agreement"), by and between United Bankshares, Inc., a West Virginia
corporation ("United") and Century, Century plans to merge with and into a
wholly-owned subsidiary of United (the "Merger").
I further understand that as a result of the Merger, I may receive
shares of common stock, par value $2.50 per share, of United ("United Stock")
(i) in exchange for shares of common stock, par value $1.00 per share, of
Century ("Century Stock") or (ii) as a result of the exercise of Rights (as
defined in the Agreement).
I have carefully read this letter and reviewed the Agreement and
discussed their requirements and other applicable limitations upon my ability to
sell, transfer, or otherwise dispose of United Stock and Century Stock, to the
extent I felt necessary, with my counsel or counsel for Century.
I represent, warrant and covenant with and to United that in the event
I receive any United Stock as a result of the Merger:
1. I shall not make any sale, transfer, or other disposition of such
United Stock unless (i) such sale, transfer or other disposition has been
registered under the Securities Act, (ii) such sale, transfer or other
disposition is made in conformity with the provisions of Rule 145 under the
Securities Act (as such rule may be amended from time to time), or (iii) in the
opinion of counsel in form and substance reasonably satisfactory to United, or
under a "no-action" letter obtained by me from the staff of the SEC, such sale,
transfer or other disposition will not violate or is otherwise exempt from
registration under the Securities Act.
2. I understand that United is under no obligation to register the
sale, transfer or other disposition of shares of United Stock by me or on my
behalf under the Securities Act or to take any other action necessary in order
to make compliance with an exemption from such registration available.
3. I understand that stop transfer instructions will be given to United's
transfer agent with respect to shares of United Stock issued to me as a result
of the Merger and that there will be placed on the certificates for such shares,
or any substitutions therefor, a legend stating in substance:
"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities Act of 1933
applies. The shares represented by this certificate may be transferred only
in accordance with the terms of a letter agreement, dated June 14, 2001,
between the registered holder hereof and United Bankshares, Inc., a copy of
which agreement is on file at the principal offices of United Bankshares,
Inc."
4. I understand that, unless transfer by me of the United Stock issued to
me as a result of the Merger has been registered under the Securities Act or
such transfer is made in conformity with the provisions of Rule 145(d) under the
Securities Act, United reserves the right, in its sole discretion, to place the
following legend on the certificates issued to my transferee:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933 and were acquired from a person who
received such shares in a transaction to which Rule 145 under the
Securities Act of 1933 applies. The shares have been acquired by the holder
not with a view to, or for resale in connection with, any distribution
thereof within the meaning of the Securities Act of 1933 and may not be
offered, sold, pledged or otherwise transferred except in accordance with
an exemption from the registration requirements of the Securities Act of
1933."
It is understood and agreed that the legends set forth in paragraphs
(3) and (4) above shall be removed by delivery of substitute certificates
without such legends if I shall have delivered to United (i) a copy of a "no
action" letter from the staff of the SEC, or an opinion of counsel in form and
substance reasonably satisfactory to United, to the effect that such legend is
not required for purposes of the Act, or (ii) evidence or representations
satisfactory to United that the United Stock represented by such certificates is
being or has been sold in conformity with the provisions of Rule 145(d).
I further understand and agree that this letter agreement shall apply
to all shares of Century Stock and United Stock that I am deemed to beneficially
own pursuant to applicable federal securities law.
Very truly yours,
By ____________________________________
Name:
Title:
B-2
Accepted this ____ day of
_______________, 2001.
CENTURY BANCSHARES, INC.
By ___________________________
Name: Xxxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
UNITED BANKSHARES, INC.
By __________________________
Name: Xxxxxxx X. Xxxxx
Title: Chairman of the Board and
Chief Executive Officer
B-3
ANNEX A
FORM OF
SUPPLEMENT FOR MERGER SUB ACCESSION
TO MERGER AGREEMENT
This SUPPLEMENT FOR MERGER SUB ACCESSION TO MERGER AGREEMENT, dated as
of the ____ day of __________, 2001 (this "Supplement"), to the Agreement and
Plan of Reorganization, dated as of June 14, 2001 (as may be amended from time
to time in accordance with the terms thereof, the "Agreement"), by and between
United Bankshares, Inc., a West Virginia corporation ("United") and Century
Bancshares, Inc., a Delaware corporation ("Century").
WHEREAS, terms used but not otherwise defined herein have the meanings
specified in the Agreement; and
WHEREAS, pursuant to Section 2.01 of the Agreement, United has
determined to consummate the Merger in part through the merger of Century with
and into [ ], a Delaware corporation (the "Merger Sub").
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations and warranties contained in the Agreement, the
parties agree as follows:
1. Agreement. Merger Sub agrees (i) to be bound by and subject to the
---------
terms of the Agreement, (ii) to become a party to the Agreement, as provided by
Section 2.01 thereof, (iii) to perform all obligations and agreements set forth
therein, and (iv) to adopt the Agreement with the same force and effect as if
the undersigned were originally a party thereto.
2. Notice. Any notice required to be provided pursuant to Section 10.06
------
of the Agreement shall be given to the Merger Sub at the following address:
[Insert address and facsimile number]
IN WITNESS WHEREOF, this Supplement has been duly executed and
delivered by the undersigned, duly authorized thereunto as of the date first
hereinabove written.
[Insert name of Merger Sub ]
By:________________________________
Name:
Title:
CENTURY BANCSHARES, INC.
By:
Name: Xxxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
UNITED BANKSHARES, INC.
By:
Name: Xxxxxxx X. Xxxxx
Title: Chairman of the Board and
Chief Executive Officer
