Exhibit
10(a)
Agreement
and Plan of Merger
By
and Among
Southside
Bancshares, Inc.,
Southside
Merger Sub, Inc.
and
Fort
Worth Bancshares, Inc.
Dated
as of May 17, 2007
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Table
of Contents
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Page
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Preamble
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1
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ARTICLE
1 - TRANSACTIONS AND TERMS OF MERGER
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1
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1.1
Merger
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1
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1.2
Time and Place of Closing
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1
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1.3
Effective Time
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2
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1.4
Conversion of Company Common Stock
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2
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1.5
Merger Sub Common Stock
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2
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1.6
Parent Common Stock
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2
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1.7
Company Options and Warrants
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3
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1.8
Organizational Documents and Directors and Officers of
Surviving Corporation
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3
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1.9
Purchase Price Adjustment
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3
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ARTICLE
2 – DELIVERY OF MERGER CONSIDERATION
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4
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2.1
Exchange Procedures
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4
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2.2
Rights of Former Company Shareholders
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5
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2.3
Dissenters’ Rights
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5
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ARTICLE
3 – REPRESENTATIONS AND WARRANTIES
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6
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3.1
Company Disclosure Letter
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6
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3.2
Standards
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6
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3.3
Representations and Warranties of the Company
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6
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3.4
Representations and Warranties of Parent
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21
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ARTICLE
4 – COVENANTS AND ADDITIONAL AGREEMENTS OF THE
PARTIES
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23
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4.1
Conduct of Business Prior to Effective Time
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23
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4.2
Forbearances
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23
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4.3
State Filings
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25
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4.4
Company Shareholder Approval
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26
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4.5
Reasonable Best Efforts
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26
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4.6
Applications and Consents
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26
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4.7
Notification of Certain Matters
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27
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4.8
Investigation and Confidentiality
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27
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4.9
Press Releases; Publicity
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27
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4.10
Acquisition Proposals
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28
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4.11
Takeover Laws
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28
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4.12
Retention Bonuses; Change in Control Bonuses; Employee
Benefits and Contracts
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28
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4.13
Indemnification
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29
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ARTICLE
5 – CONDITIONS PRECEDENT TO OBLIGATIONS TO
CONSUMMATE
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29
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5.1
Conditions to Obligations of Each Party
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29
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5.2
Conditions to Obligations of Parent
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30
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5.3
Conditions to Obligations of The Company
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31
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ARTICLE
6 – TERMINATION
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32
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6.1
Termination
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32
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6.2
Effect of Termination
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32
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6.3
Termination Fee
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33
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ARTICLE
7 – MISCELLANEOUS
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33
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7.1
Definitions
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33
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7.2
Non-Survival of Representations and Covenants
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41
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7.3
Expenses
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41
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7.4
Entire Agreement
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42
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7.5
Amendments
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42
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7.6
Waivers
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42
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7.7
Assignment
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42
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7.8
Notices
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42
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7.9
Governing Law
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43
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7.10
Counterparts
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43
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7.11
Captions
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43
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7.12
Interpretations
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43
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7.13
Severability
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44
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7.14
Waiver of Jury Trial
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44
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LIST
OF EXHIBITS
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Exhibit
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Description
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A
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Form
of Director Support Agreement
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B
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Form
of Shareholder Support Agreement
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C
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Form
of Retention Agreement
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D
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Form
of Employment Agreement
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AGREEMENT
AND PLAN OF MERGER
Preamble
THIS
AGREEMENT AND PLAN OF MERGER (this “
Agreement ”) is made and entered into as of May
17, 2007, by and among Southside Bancshares,
Inc. , a Texas corporation (“ Parent
”), Southside Merger Sub, Inc. , a
Texas corporation and wholly owned subsidiary of Parent
(“ Merger Sub ”) and Fort Worth
Bancshares, Inc. , a Texas corporation (the “
Company ”).
The Boards of
Directors of Parent, Merger Sub and the Company have approved
this Agreement and the transactions described
herein. This Agreement provides for the acquisition
of the Company by Parent pursuant to the merger of Merger Sub
with and into the Company (the “ Merger ”),
with the Company as the surviving corporation.
Concurrently
with the execution and delivery of this Agreement, as a
condition and inducement to Parent’s willingness to
enter into this Agreement, each of the directors who are not
also officers has executed and delivered to Parent an
agreement in substantially the form attached as Exhibit
A hereto (the “ Director Support Agreement
”) and each of the beneficial holders of 5% or more of
the outstanding shares of Company Common Stock who are not
also directors has executed and delivered to Parent an
agreement in substantially the form attached as Exhibit
B hereto (the “ Shareholder Support Agreement
”), pursuant to which they have agreed, among other
things, subject to the terms of such Shareholder Support
Agreement, to vote the shares of Company Common Stock held of
record by such Persons or as to which they otherwise have sole
voting power to approve and adopt this Agreement.
Certain terms used
and not otherwise defined in this Agreement are defined in
Section 7.1.
NOW,
THEREFORE , in consideration of the above and the
mutual warranties, representations, covenants and agreements
set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the
Parties agree as follows:
ARTICLE
1
TRANSACTIONS
AND TERMS OF MERGER
1.1
Merger
. Subject to the terms and conditions
of this Agreement, at the Effective Time, Merger Sub shall be
merged with and into the Company in accordance with Sections 5.01
and 5.02 of the Texas Business Corporation Act (the “
TBCA ”) and with the effect provided in Section 5.06
of the TBCA. The Company shall be the surviving
corporation (the “ Surviving Corporation ”)
resulting from the Merger and the separate corporate existence of
Merger Sub shall thereupon cease. The Company shall
continue to be governed by the Laws of the State of Texas and the
separate corporate existence of the Company with all of its rights,
privileges, immunities, powers and franchises shall continue
unaffected by the Merger; provided that, by virtue of the
Merger, the Company shall become a wholly owned subsidiary of
Parent.
1.2
Time
and Place of Closing .
Unless otherwise mutually agreed to by Parent and the Company, the
closing of the Merger (the “ Closing ”) shall
take place in the offices of Bracewell & Giuliani LLP, 1445
Ross Avenue, Suite 3800, Dallas, Texas 75202 at 10:00 a.m., Dallas
time, on the date when the Effective Time is to occur (the “
Closing Date ”).
1.3
Effective
Time . Subject to the
terms and conditions of this Agreement, on the Closing Date, the
Parties will cause articles of merger to be filed with the
Secretary of State of the State of Texas as provided in Section
5.04 of the TBCA (the “ Articles of Merger
”). The Merger shall take effect when the Articles
of Merger becomes effective (the “ Effective Time
”). Subject to the terms and conditions hereof,
the Parties shall use their reasonable best efforts to cause the
Effective Time to occur on a mutually agreeable date following the
date on which satisfaction or waiver of the conditions set forth in
Article 5 has occurred (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the
fulfillment or waiver of those conditions).
1.4
Conversion
of Company Common Stock
.
(a) At
the Effective Time, in each case subject to Section 1.4(d), by
virtue of the Merger and without any action on the part of the
Parties or the holder thereof, each share of Company Common
Stock that is issued and outstanding immediately prior to the
Effective Time (other than the Excluded Shares) shall be
converted into the right to receive an amount in cash, without
interest, equal to the Per Share Purchase Price.
(b) At
the Effective Time, all shares of Company Common Stock shall
no longer be outstanding and shall automatically be cancelled
and retired and shall cease to exist as of the Effective Time,
and each certificate or electronic book-entry previously
representing any such shares of Company Common Stock (the
“ Company Certificates ”) shall thereafter
represent only the right to receive the Per Share Purchase
Price, and any Dissenting Shares shall thereafter represent
only the right to receive applicable payments as set forth in
Section 2.3.
(c) If,
prior to the Effective Time, the issued and outstanding shares
of Company Common Stock shall have been increased, decreased,
changed into or exchanged for a different number or kind of
shares or securities as a result of a reorganization,
recapitalization, reclassification, stock dividend, stock
split, reverse stock split, or other similar change in
capitalization (which the parties agree does not include
Company Common Stock issued upon the exercise of Company
Options and Company Warrants), then an appropriate and
proportionate adjustment shall be made to the Per Share
Purchase Price.
(d) Each
share of Company Common Stock issued and outstanding
immediately prior to the Effective Time and owned by any of
the Parties or their respective Subsidiaries (in each case
other than shares of Company Common Stock held on behalf of
third parties) shall, by virtue of the Merger and without any
action on the part of the holder thereof, cease to be
outstanding, shall be cancelled and retired without payment of
any consideration therefor and shall cease to exist (together
with the Dissenting Shares, the “ Excluded Shares
”).
1.5
Merger
Sub Common Stock .
At the Effective Time, by virtue of the Merger
and without any action on the part of the Parties of the holder
thereof, each share of the common stock of Merger Sub that is
issued and outstanding immediately prior to the Effective Time
shall be converted into one share of Company Common
Stock.
1.6
Parent
Common Stock . At and
after the Effective Time, each share of Parent Common Stock issued
and outstanding immediately prior to the Effective Time shall
remain an issued and outstanding share of Parent Common Stock and
shall not be affected by the Merger.
1.7
Company
Options and Warrants . No
later than five Business Days prior to the Effective Time, the
Company shall take all actions necessary to either (a) cause each
outstanding Company Option or Company Warrant to be exercised in
accordance with its terms; provided , that, the exercise
of Company Options or Company Warrants shall not cause an
adjustment to the Per Share Purchase Price pursuant to Section
1.4(c) hereof, or (b) terminate each outstanding Company Option and
Company Warrant. Each Company Option or Company Warrant
that is not exercised prior to five Business Days prior to the
Effective Time shall be terminated and converted into the right to
receive an amount in cash, without interest, equal to (i) the Per
Share Purchase Price, minus (ii) the exercise price of such Company
Option or Company Warrant (the “ Option Termination
Payment ”). No later than five Business Days
prior to the Effective Time, the Company shall also take all
actions necessary to terminate the Company Stock Plans as of no
less than five Business Days prior to the Effective Time and to
cause the provisions in any other Company Benefit Plan providing
for the issuance, transfer or grant of any capital stock of the
Company or any interest in respect of any capital stock of the
Company to terminate and be of no further force and effect as of no
less than five Business Days prior to the Effective
Time. The Company shall ensure that no later than five
Business Days prior to the Effective Time no holder of any Company
Option or Company Warrant or any participant in any Company Stock
Plan or other Company Benefit Plan shall have any right thereunder
to acquire any capital stock of the Parties.
1.8
Organizational
Documents and Directors and Officers of Surviving Corporation
.
(a) The
Organizational Documents of the Company in effect immediately
prior to the Effective Time shall be the Organizational
Documents of the Surviving Corporation after the Effective
Time until otherwise amended or repealed.
(b) The
directors and officers of Merger Sub immediately prior to the
Effective Time shall be the directors and officers,
respectively, of the Surviving Corporation as of the Effective
Time, until the earlier of their resignation or removal or
otherwise ceasing to be a director or officer or until their
respective successors are duly elected and qualified, as the
case may be.
1.9
Purchase
Price Adjustment . At
least eight Business Days prior to the Closing Date, the Company
shall deliver to Parent and Merger Sub a good faith estimate of the
Company’s Net Shareholders’ Equity as of the close of
business on the Measurement Date (the “ Estimated Net
Shareholders’ Equity ”), together with supporting
documentation for such estimate and any additional information
relating thereto reasonably requested by Parent or Merger Sub.
Parent and its accountants and advisors shall be given full access
to all of the Company’s and its Subsidiaries’ books and
records for purposes of evaluating the accuracy and completeness of
the Estimated Net Shareholders’ Equity. If Parent
believes, in good faith, that the Estimated Net Shareholders’
Equity is in error, Parent may challenge the amount of the
Estimated Net Shareholders’ Equity within four Business Days
following delivery thereof by delivering a notice of disagreement
to the Company. If Parent does not timely deliver a
notice of disagreement to the Company, the Per Share Purchase Price
shall be based on the Estimated Net Shareholders’ Equity as
delivered to Parent. If Parent timely delivers a notice
of disagreement to the Company, Parent and the Company shall use
their good faith efforts to resolve any disputes with respect to
the Estimated Net Shareholders’ Equity prior to the Closing
Date, and the Per Share Purchase Price shall be based on the Net
Shareholders’ Equity amount as mutually agreed to in writing
by Parent and the Company. If Parent timely delivers a notice of
disagreement to the Company but Parent and the Company are unable
to resolve their dispute regarding the Estimated Net
Shareholders’ Equity within ten Business Days of the delivery
by Parent to the
1.10
Company of
such notice of disagreement, then this Agreement shall be deemed
terminated pursuant to Section 6.1(a) of this Agreement as of 11:59
p.m., Central time, on such tenth Business Day.
ARTICLE
2
DELIVERY
OF MERGER CONSIDERATION
2.1
Exchange
Procedures .
(a)
Delivery of Transmittal Materials . At least
20 days prior to the Effective Time, Southside Bank (the
“ Exchange Agent ”) shall send to each
holder of record of shares of Company Common Stock (each, a
“ Holder ”) (excluding the holders, if any,
of Excluded Shares) as of that date transmittal materials for
use in exchanging such holder’s Company Certificates for
the Per Share Purchase Price (which shall specify that
delivery shall be effected, and risk of loss and title to the
Company Certificates shall pass, only upon proper delivery of
such Company Certificates (or an effective affidavit of loss
in lieu thereof as provided in Section 2.1(e)) to the Exchange
Agent). With respect to holders of record of shares
of Company Common Stock who have not delivered the Company
Certificate representing such shares by the Closing Date, the
Exchange Agent shall sent to each such holder (excluding the
holders, if any, of Excluded Shares) transmittal materials
transmittal materials for use in exchanging such
holder’s Company Certificates for the Per Share Purchase
Price (which shall specify that delivery shall be effected,
and risk of loss and title to the Company Certificates shall
pass, only upon proper delivery of such Company Certificates
(or an effective affidavit of loss in lieu thereof as provided
in Section 2.1(e)) to the Exchange Agent).
(b)
Delivery of Merger Consideration . After the
Effective Time, following the surrender to the Exchange Agent
of a Company Certificate (or an effective affidavit of loss in
lieu thereof as provided in Section 2.1(e)) in accordance with
the terms of a letter of transmittal duly executed, the holder
of such Company Certificate shall be entitled to receive in
exchange therefor the Per Share Purchase Price in respect of
each of the shares of Company Common Stock represented by his,
her or its Company Certificate or Certificates (the “
Merger Consideration ”). If any
portion of the Merger Consideration is to be paid to a Person
other than the Person in whose name a Company Certificate so
surrendered is registered, it shall be a condition to such
payment that such Company Certificate shall be properly
endorsed or otherwise be in proper form for transfer, and the
Person requesting such payment shall pay to the Exchange Agent
any transfer or other similar Taxes required as a result of
such payment to a Person other than the registered holder of
such Company Certificate, or establish to the reasonable
satisfaction of the Exchange Agent that such Tax has been paid
or is not payable. Payments to holders of
Dissenting Shares shall be made as required by the
TBCA.
(c)
Payment of Taxes . The Exchange Agent (or,
after the agreement with the Exchange Agent is terminated,
Parent) shall be entitled to deduct and withhold from the
Merger Consideration otherwise payable pursuant to this
Agreement to any holder of Company Common Stock such amounts
as the Exchange Agent or Parent, as the case may be, is
required to deduct and withhold under the Internal Revenue
Code, or any provision of state, local or foreign Tax law,
with respect to the making of such payment. To the
extent the amounts are so withheld by the Exchange Agent or
Parent, as the case may be, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid
to the holder of shares of Company Common Stock in respect of
whom such deduction and withholding was made by the Exchange
Agent or Parent, as the case may be.
(d)
Return of Merger Consideration to Parent
. At any time upon request by Parent, Parent shall
be entitled to require the Exchange Agent to deliver to it any
remaining portion of the Merger
Consideration
not distributed to holders of Company Certificates that was
deposited with the Exchange Agent (the “ Exchange
Fund ”) (including any interest received with
respect thereto and other income resulting from investments by
the Exchange Agent, as directed by Parent), and holders shall
be entitled to look only to Parent (subject to abandoned
property, escheat or other similar laws) with respect to the
Merger Consideration payable upon due surrender of their
Company Certificates, without any interest thereon.
Notwithstanding the foregoing, neither Parent nor the Exchange
Agent shall be liable to any holder of a Company Certificate
for Merger Consideration or cash from the Exchange Fund in
each case delivered to a public official pursuant to any
applicable abandoned property, escheat or similar
law.
(e)
Lost Company Certificates . In the event any
Company Certificates shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the
Person claiming such Company Certificate(s) to be lost, stolen
or destroyed and, if required by Parent or the Exchange Agent,
the posting by such Person of a bond in such sum as Parent may
reasonably direct as indemnity against any claim that may be
made against the Company or Parent with respect to such
Company Certificate(s), the Exchange Agent will issue the
Merger Consideration deliverable in respect of the shares of
Company Common Stock represented by such lost, stolen or
destroyed Company Certificates. Prior to the
Effective Time, upon receipt of notice from any of its
shareholders that a Company Certificate has been lost or
destroyed, and prior to issuing a new certificate, the Company
shall require such shareholder to post a bond in such sum as
Parent may reasonably direct as indemnity against any claim
that may be made against the Company or Parent with respect to
such Company Certificate(s), unless Parent agrees to the
waiver of the requirement that such bond be
posted.
2.2
Rights
of Former Company Shareholders .
At the Effective Time, the stock transfer books of the
Company shall be closed as to holders of Company Common Stock and
no transfer of Company Common Stock by any such holder shall
thereafter be made or recognized. Until surrendered for
exchange in accordance with the provisions of Section 2.1, each
Company Certificate (other than Company Certificates representing
Excluded Shares) shall from and after the Effective Time represent
for all purposes only the right to receive the Merger Consideration
in exchange therefor.
2.3
Dissenters’
Rights . Any Person who
otherwise would be deemed a holder of Dissenting Shares (a “
Dissenting Shareholder ”) shall not be entitled to
receive the applicable Merger Consideration with respect to the
Dissenting Shares until such Person shall have failed to perfect or
shall have effectively withdrawn or lost such holder’s right
to dissent from the Merger under the TBCA. Each
Dissenting Shareholder shall be entitled to receive only the
payment provided by Section 5.12 of the TBCA with respect to shares
of Company Common Stock owned by such Dissenting Shareholder for
which the Dissenting Shareholder perfected such holder’s
dissenter’s rights. The Company shall give Parent
(a) prompt notice of any written demands for appraisal, attempted
withdrawals of such demands, and any other instruments served
pursuant to applicable Law received by the Company relating to
shareholders’ rights of appraisal and (b) the opportunity to
direct all negotiations and proceedings with respect to demand for
appraisal under the TBCA. The Company shall not, except
with the prior written consent of Parent, voluntarily make any
payment with respect to any demands for appraisals of Dissenting
Shares, offer to settle or settle any such demands or approve any
withdrawal of any such demands.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES
3.1
Company
Disclosure Letter . Prior
to the execution and delivery of this Agreement, the Company has
delivered to Parent a letter (the “ Company Disclosure
Letter ”) 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 of the Company’s
representations or warranties contained in this Article 3 or to one
or more of its covenants contained in Article 4. Any
disclosures made with respect to a subsection of Section 3.3 shall
be deemed to qualify any subsections of Section 3.3 specifically
referenced or cross-referenced with sufficient detail to enable a
reasonable Person to recognize the relevance of such disclosure to
such other subsections.
3.2
Standards
.
(a) No
representation or warranty of any Party hereto contained in
this Article 3 (other than the representations and warranties
in (i) Section 3.3(c), which shall be true and correct in all
respects (except for inaccuracies that are de minimis
in amount), and (ii) Sections 3.3(b)(i), 3.3(b)(ii), 3.3(d)
and 3.4(b)(i), which shall be true and correct in all material
respects) shall be deemed untrue or incorrect, and no Party
shall be deemed to have breached any of its representations or
warranties, as a consequence of the existence or absence of
any fact, circumstance or event unless such fact, circumstance
or event, individually or taken together in the aggregate with
all other facts, circumstances or events inconsistent with
such Party’s representations or warranties contained in
this Article 3, has had or is reasonably likely to have a
Material Adverse Effect on such Party; provided ,
that, for purposes of Sections 5.2(a) and 5.3(a) only, the
representations and warranties that are qualified by
references to “material,” “Material Adverse
Effect” or to the “Knowledge” of any Party
shall be deemed not to include such
qualifications.
(b) Unless
the context indicates specifically to the contrary, a “
Material Adverse Effect ” on a Party shall mean
any change, event, violation, inaccuracy or circumstance the
effect of which is a material adverse impact on (i) the
condition (financial or otherwise), property, business,
executive management team, assets (tangible or intangible) or
results of operations or prospects of such Party and its
subsidiaries taken as a whole or (ii) the ability of such
Party to perform its obligations under this Agreement or to
consummate the Merger or the other transactions contemplated
by this Agreement; provided ,
however , that “Material Adverse Effect”
shall not be deemed to include the impact of actions and
omissions of a Party (or any of its subsidiaries) taken with
the prior informed consent of the other Party in contemplation
of the transactions contemplated hereby; provided,
further , that general changes in the economy, as well as
changes in laws or regulations affecting the banking industry,
that do not have an effect on the Company or its subsidiaries
that is disproportionate to the effect on similarly-situated
financial institutions in Texas and contiguous states, shall
not be deemed to have a Material Adverse Effect on the
Company.
3.3
Representations
and Warranties of the Company .
Subject to and giving effect to Sections 3.1 and 3.2
and except as set forth in the Company Disclosure Letter, the
Company hereby represents and warrants to Parent as
follows:
(a)
Organization, Standing, and Power . Each
Subsidiary of the Company is listed in Section 3.3(a) of the
Company Disclosure Letter. The Company and each of
its Subsidiaries are duly
organized,
validly existing, and, as applicable, are in good standing
under the Laws of the jurisdictions of their respective
formation. The Company and each of its Subsidiaries
have the requisite corporate power and authority to own,
lease, and operate their properties and assets and to carry on
their businesses as now conducted. The Company and
each of its Subsidiaries are duly qualified or licensed to do
business and are in good standing in the States of the United
States and foreign jurisdictions where the character of their
assets or the nature or conduct of their businesses requires
them to be so qualified or licensed. Each of the
Company and Fort Worth Bancorporation, Inc. is a bank holding
company within the meaning of the BHC Act and is currently
duly registered as such with the Federal Reserve Bank of
Dallas. Fort Worth National Bank (the “
Bank ”) is a national banking association in good
standing with the OCC. The Bank is an
“insured institution” as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder
and its deposits are insured by the Deposit Insurance
Fund.
(b)
Authority; No Breach of Agreement .
(i) The
Company has the corporate power and authority necessary to
execute, deliver, and perform its obligations under this
Agreement and to consummate the transactions contemplated
hereby. The execution, delivery, and performance of
this Agreement, and the consummation of the transactions
contemplated hereby, have been duly and validly authorized by
all necessary corporate action (including valid authorization
and adoption of this Agreement by its duly constituted Board
of Directors), subject only to the Company Shareholder
Approval and such regulatory approvals as are required by
law. Subject to the Company Shareholder Approval
and assuming due authorization, execution, and delivery of
this Agreement by each of Parent and Merger Sub, this
Agreement represents a legal, valid, and binding obligation of
the Company enforceable against the Company in accordance with
its terms (except in all cases as such enforceability may be
limited by (A) bankruptcy, insolvency, reorganization,
moratorium, receivership, conservatorship, and other laws now
or hereafter in effect relating to or affecting the
enforcement of creditors’ rights generally or the rights
of creditors of insured depository institutions, (B) general
equitable principles and (C) laws relating to the safety and
soundness of insured depository institutions, and except that
no representation is made as to the effect or availability of
equitable remedies or injunctive relief (regardless of whether
such enforceability is considered in a proceeding in equity or
at law) and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject
to the discretion of the court before which any proceeding may
be brought).
(ii) As
of the date hereof, the Company’s Board of Directors has
(A) by the affirmative vote of all directors voting, which
constitute at least a majority of the entire Board of
Directors of the Company, duly approved and declared advisable
this Agreement and the Merger and the other transactions
contemplated hereby; (B) determined that this Agreement and
the transactions contemplated hereby are advisable and in the
best interests of the Company and the holders of Company
Common Stock; (C) resolved to recommend adoption of this
Agreement, the Merger and the other transactions contemplated
hereby to the holders of shares of Company Common Stock (such
recommendations being the “ Company Directors’
Recommendation ”); and (D) directed that this
Agreement be submitted to the holders of shares of Company
Common Stock for their adoption.
(iii) Neither
the execution and delivery of this Agreement by the Company
nor the consummation by the Company of the transactions
contemplated hereby, nor compliance by it with any of the
provisions hereof or thereof, will (A) violate, conflict with
or result in a breach of any provision of the Company’s
or its Subsidiaries’ Organizational Documents, (B)
constitute or result in a Default under, or require any
Consent pursuant to, or result in the creation of any Lien on
any material assets of the Company or its Subsidiaries under,
any Contract or
Permit,
or (C) subject to receipt of the Regulatory Consents and the
expiration of any waiting period required by Law, violate any
Law or Order applicable to the Company or its Subsidiaries or
any of their respective material assets.
(iv) Other
than (A) the Regulatory Consents and (B) notices to or filings
with the Internal Revenue Service or the Pension Benefit
Guaranty Corporation or both with respect to any Benefit
Plans, no notice to, filing with, or Consent of, any
Governmental Authority is necessary in connection with the
execution, delivery or performance of this Agreement and the
consummation by the Company of the Merger and the other
transactions contemplated by this Agreement.
(c)
Capital Stock; Subsidiaries . The
Company’s authorized capital stock consists of (i)
1,500,000 shares of Company Common
Stock, of which, as of the date of this Agreement, 650,202
shares are issued and outstanding, 35,599 shares are subject
to Company Options, 19,866 are subject to Company Warrants and
11,998 shares are held in treasury, and (ii) 500,000 shares of
Company Preferred Stock, none of which are issued and
outstanding. Set forth in Section 3.3(c) of the
Company Disclosure Letter is a true and complete schedule of
all outstanding Rights to acquire shares of Company Common
Stock, including grant date, vesting schedule, exercise price,
expiration date and the name of the holder of such
Rights. Except as set forth in this Section 3.3(c)
or in Section 3.3(c) of the Company Disclosure Letter, there
are no shares of Company Common Stock or other equity
securities of the Company outstanding and no outstanding
Rights relating to the Company Common Stock, and no Person has
any Contract or any right or privilege (whether pre-emptive or
contractual) capable of becoming a Contract or Right for the
purchase, subscription or issuance of any securities of the
Company. All of the outstanding shares of Company
Common Stock are duly and validly issued and outstanding and
are fully paid and nonassessable. None of the
outstanding shares of Company Common Stock has been issued in
violation of any preemptive rights of the current or past
shareholders of the Company. There are no Contracts among the
Company and its shareholders or by which the Company is bound
with respect to the voting or transfer of Company Common Stock
or the granting of registration rights to any holder
thereof. All of the outstanding shares of Company
Capital Stock and all Rights to acquire shares of Company
Capital Stock have been issued in compliance with all
applicable federal and state Securities Laws. All
issued and outstanding shares of capital stock of its
Subsidiaries have been duly authorized and are validly issued,
fully paid and (except as provided in 12 U.S.C. Section 55)
nonassessable. All of the outstanding shares of
capital stock of the Company’s Subsidiaries are owned by
the Company or a wholly owned Subsidiary thereof, free and
clear of all Liens. None of the Company’s
Subsidiaries has outstanding any Right to acquire any shares
of its capital stock or any security convertible into such
shares, or has any obligation or commitment to issue, sell or
deliver any of the foregoing or any shares of its capital
stock. The outstanding capital stock of each of the
Company’s Subsidiaries has been issued in compliance
with all legal requirements and is not subject to any
preemptive or similar rights.
(d)
Financial Statements; Regulatory Reports; Proxy
Statements .
(i) The
Company has delivered to Parent true and complete copies of
(A) the Company Financial Statements; (B) all monthly reports
and financial statements of the Company and its Subsidiaries
that were prepared for the Company’s or any of its
Subsidiaries’ Board of Directors since January 1, 2006;
(C) the annual report of Bank Holding Companies to the Federal
Reserve Board for the year ended December 31, 2006, of the
Company and its Subsidiaries required to file such reports;
(D) all call reports and consolidated and parent company only
financial statements, including all amendments thereto, made
to the Federal Reserve Board, the OCC, the FDIC and the Texas
Department of Banking since January 1, 2006, of the
Company’s and its Subsidiaries required to file such
reports; and (E) all annual and quarterly reports and proxy or
information statements (or similar materials) disseminated to
the
Company’s
shareholders or the shareholders of any of its Subsidiaries at
any time since January 1, 2005.
(ii) The
Company Financial Statements delivered prior to the date of
this Agreement have been (and all Company Financial Statements
to be delivered to Parent as required by this Agreement will
be) prepared in accordance with GAAP. The Company
Financial Statements fairly present the financial position,
results of operations, changes in shareholders’ equity
and cash flows of the Company and its Subsidiaries as of the
dates thereof and for the periods covered
thereby. All call and other regulatory reports
referred to above have been filed on the appropriate form and
prepared in all material respects in accordance with such
forms’ instructions and the applicable rules and
regulations of the regulating federal and/or state
agency. As of the date of the latest balance sheet
forming part of the Company’s Financial Statements (the
“ Company Latest Balance Sheet ”), none of
the Company or its Subsidiaries has had, nor are any of such
entities’ assets subject to, any material liability,
commitment, indebtedness or obligation (of any kind
whatsoever, whether absolute, accrued, contingent, known or
unknown, matured or unmatured) that is not reflected and
adequately provided for in accordance with GAAP. No
report, including any report filed with the FDIC, the OCC, the
Texas Department of Banking, the Federal Reserve Board or
other banking regulatory agency, and no report, proxy
statement, registration statement or offering materials made
or given to shareholders of the Company since January 1, 2005,
as of the respective dates thereof, contained any untrue
statement of a material fact or omitted 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. No report,
including any report filed with the FDIC, the OCC, the Texas
Department of Banking, the Federal Reserve Board, or other
banking regulatory agency, and no report, proxy statement,
registration statement or offering materials made or given to
shareholders of the Company to be filed or disseminated after
the date of this Agreement will contain any untrue statement
of a material fact or will 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 will be made, not misleading. The
Company’s Financial Statements are supported by and
consistent with the general ledger and detailed trial balances
of investment securities, loans and commitments,
depositors’ accounts and cash balances on deposit with
other institutions, copies of which have been made available
to Parent. The Company and its Subsidiaries have
timely filed all reports and other documents required to be
filed by them with the FDIC, the OCC, the Texas Department of
Banking, and the Federal Reserve Board.
(iii) Each
of the Company and each of its Subsidiaries maintains accurate
books and records reflecting its assets and liabilities and
maintains proper and adequate internal accounting controls,
which provide assurance that (A) transactions are executed
with management’s authorization; (B) transactions are
recorded as necessary to permit preparation of the
consolidated financial statements of the Company in accordance
with GAAP and to maintain accountability for the
Company’s consolidated assets; (C) access to the
Company’s assets is permitted only in accordance with
management’s authorization; (D) the reporting of the
Company’s assets is compared with existing assets at
regular intervals and (E) accounts, notes and other
receivables and assets are recorded accurately, and proper and
adequate procedures are implemented to effect the collection
thereof on a current and timely basis.
(iv) Since
January 1, 2005, neither the Company nor any Subsidiary nor
any of their current directors or officers, nor to the
Company’s Knowledge, any former officer or director or
any current or former employee, auditor, accountant or
representative of the Company or any Subsidiary has received
or otherwise had or obtained Knowledge of any complaint,
allegation, assertion or claim, whether written or oral,
regarding a material weakness, significant
deficiency
or other defect or failure in the accounting or auditing
practices, procedures, methodologies or methods of the Company
or any Subsidiary or their respective internal accounting
controls.
(v) To
the Company’s Knowledge, since January 1, 2005, there
has not been (A) any significant deficiency in the design or
operation of internal controls that could adversely affect the
Company’s ability to record, process, summarize and
report financial data or any material weaknesses in internal
controls or (B) any fraud, whether or not material, that
involves management or other employees who have a significant
role in the Company’s internal controls.
(vi) None
of the Company or any of its Subsidiaries has any Liabilities
that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on the Company and any of
its Subsidiaries, taken as a whole, except Liabilities that
are accrued or reserved against in the accounts set forth in
the Company Latest Balance Sheet, included in the
Company’s Financial Statements delivered prior to the
date of this Agreement or reflected in the notes
thereto. None of the Company or its Subsidiaries
has incurred or paid any Liability since December 31, 2006,
except for such Liabilities incurred or paid (A) in the
ordinary course of business consistent with past business
practice and that are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
the Company and its Subsidiaries, taken as a whole, or (B) in
connection with the transactions contemplated by this
Agreement.
(e)
Absence of Certain Changes or Events . Since
December 31, 2006, except as disclosed in Section 3.3(e) of
the Company Disclosure Letter, (i) the Company and each of its
Subsidiaries have conducted their business only in the
ordinary course, (ii) neither the Company nor any of its
Subsidiaries has taken action that, if taken after the date of
this Agreement, would constitute a breach of Section 4.1 or
4.2, and (iii) there have been no events, changes, or
occurrences that have had, or are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
the Company and its Subsidiaries, taken as a
whole.
(f)
Tax Matters .
(i) All
Taxes of the Company and each of its Subsidiaries that are or
were due or payable (whether or not shown on any Tax Return)
have been fully and timely paid. The Company and
each of its Subsidiaries have timely filed all Tax Returns in
all jurisdictions in which Tax Returns are required to have
been filed by them or on their behalf, and each such Tax
Return is complete and accurate in all material
respects. Neither the Company nor any of its
Subsidiaries is the beneficiary of any extension of time
within which to file any Tax Return. There have
been no examinations or audits of any Tax Return by any Taxing
Authority. The Company and each of its Subsidiaries
have made available to Parent true and correct copies of their
United States federal and state income Tax Returns for each of
the three most recent fiscal years ended on or before December
31, 2006. No claim has ever been made by a Taxing
Authority in a jurisdiction where the Company or any of its
Subsidiaries does not file a Tax Return that the Company or
any of its Subsidiaries may be subject to Taxes by that
jurisdiction, and to the Company’s Knowledge, no basis
for such a claim exists.
(ii) Neither
the Company nor any of its Subsidiaries has received any
notice of assessment or proposed assessment in connection with
any Tax, and there is no threatened or pending dispute,
action, suit, proceeding, claim, investigation, audit,
examination, or other Litigation regarding any Tax of the
Company, any of its Subsidiaries or the assets of the Company
or any of its Subsidiaries. No officer or employee
responsible for Tax matters of the Company or any of its
Subsidiaries expects any Taxing Authority to assess any
additional Tax for
any
period for which a Tax Return has been filed. There
are no agreements, waivers or other arrangements providing for
an extension of time with respect to the assessment of any Tax
or deficiency against the Company or any of its Subsidiaries,
and neither the Company nor any of its Subsidiaries has waived
or extended the applicable statute of limitations for the
assessment or collection of any Tax or agreed to a Tax
assessment or deficiency. Neither the Company nor
any of its Subsidiaries has received any notice of any
contemplated or actual reassessment of any real property or
any portion thereof for general real estate Tax
purposes.
(iii) Neither
the Company nor any of its Subsidiaries is a party to a Tax
allocation, sharing, indemnification or similar agreement or
any agreement pursuant to which it has any obligation to any
Person with respect to Taxes, and neither the Company nor any
of its Subsidiaries has been a member of an affiliated group
filing a consolidated federal or state income Tax Return or
any combined, affiliated or unitary group for any Tax purpose
(other than the group of which it is currently a member), and
neither the Company nor any of its Subsidiaries has any Tax
liability under Treasury Regulation Section 1.1502-6 or any
similar provision of Law, or as a transferee or successor, by
contract or otherwise.
(iv) The
proper and accurate amounts of Tax have been withheld by the
Company and each of its Subsidiaries and timely paid to the
appropriate Taxing Authority for all periods through the
Effective Time in compliance with all Tax withholding
provisions of all applicable federal, state, local and foreign
Laws, rules and regulations, including Taxes required to have
been withheld and paid in connection with amounts paid or
owing to any employee or independent contractor, and Taxes
required to be withheld and paid pursuant to Sections 1441,
1442 and 3406 of the Internal Revenue Code or similar
provisions under state, local or foreign Law.
(v) Neither
the Company nor any of its Subsidiaries has been a party to
any distribution occurring during the five-year period ending
on the date hereof in which the parties to such distribution
treated the distribution as one to which Section 355 of the
Internal Revenue Code applied. No Liens for Taxes
exist with respect to any assets of the Company or any of its
Subsidiaries, except for statutory Liens for Taxes not yet due
and payable.
(vi) Neither
the Company nor any of its Subsidiaries is a controlled
foreign corporation within the meaning of the Internal Revenue
Code. The Company and each of its Subsidiaries has
complied with all of the income inclusion and Tax reporting
provisions of the U.S. anti-deferral Tax regimes, including
the controlled foreign corporation, passive foreign investment
company and foreign personal holding company
regimes.
(vii) Neither
the Company nor any of its Subsidiaries has made any payments,
is obligated to make any payments, or is a party to any
contract that could obligate it to make any payments that
could be disallowed as a deduction under Section 280G or
162(m) of the Internal Revenue Code or any comparable
provision of state Tax Law.
(viii) Neither
the Company nor any of its Subsidiaries is or has ever been a
United States real property holding corporation within the
meaning of Internal Revenue Code Section 897(c) or any
comparable provision of state Tax Law. Neither the
Company nor any of its Subsidiaries has been or will be
required to include any adjustment in taxable income for any
Tax period (or portion thereof) pursuant to Section 481 of the
Internal Revenue Code or any comparable provision under state
or foreign Tax Laws as a result of transactions or events
occurring prior to the Effective Time.
(ix) The
Company and each of its Subsidiaries have disclosed on their
respective Tax Returns any position taken for which
substantial authority (within the meaning of Internal Revenue
Code Section 6662(d)(2)(B)(i) or comparable provision of state
Tax Law) did not exist at the time the return was
filed. Neither the Company nor any of its
Subsidiaries has participated in any reportable transaction,
as defined in Treasury Regulation Section 1.6011-4(b)(1) or
any comparable provision of state Tax Law, or a transaction
substantially similar to a reportable
transaction. Neither the Company nor any of its
Subsidiaries is a party to any joint venture, partnership, or
other arrangement or contract that could be treated as a
partnership for federal income Tax purposes.
(g)
Real Property .
(i)
Section
3.3(g)(i) of the Company Disclosure Letter contains a true and
correct legal description of each parcel of Property owned by the
Company or any of its Subsidiaries (the “ Owned
Property ”) and a summary description of all Facilities
located thereon. The Company and its Subsidiaries have
good and marketable fee simple title to the Owned Property, free
and clear of all Liens, other than Permitted
Encumbrances. To the Company’s Knowledge, the
transactions contemplated herein will not cause a Default, or event
of default under any of the Permitted Encumbrances.
(ii)
Section
3.3(g)(ii) of the Company Disclosure Letter describes all real
property currently leased by the Company or any of its Subsidiaries
(the “ Leased Property ”), the name of the
lessor or sublessor, the lease term, the lease commencement date,
the lease expiration date and the base annual rent (as well as any
agreed upon prospective or other adjustments
thereto). The Company has provided to Parent a complete
and accurate copy of each such lease, as amended. All
Leased Property, including the Facilities located thereon, is in
good condition and repair, and is suitable for its use by the
Company. All leases of Leased Property are in good
standing and are valid, binding and enforceable against the Company
or its Subsidiaries, as the case may be, and to the Company’s
Knowledge against the respective lessors, in accordance with their
respective terms, and, there does not exist under any such lease of
Leased Property any Default on the part of the Company or any of
its Subsidiaries (or to the Company’s Knowledge, on the part
of any lessor) or any event that, with notice or lapse of time or
both, would constitute a Default. To the Company’s
Knowledge, the transactions contemplated herein will not cause a
Default under any of the leases of Leased Property.
(iii)
The Company
and its Subsidiaries own each Owned Property and lease each Leased
Property, in each case free and clear of any Liens, title defects,
covenants, reservations of interests in title, pending
or threatened condemnations, planned public improvements,
annexation, special assessments, zoning or subdivision changes,
special assessments or fees or other material adverse claims
(collectively, “ Property Restrictions ”),
except for (A) Permitted Encumbrances, (ii) Property Restrictions
imposed or promulgated by Law or by any Governmental Authority
which are customary and typical for similar properties and (iii)
Property Restrictions which do not materially interfere with the
current use of the Property by the Company or its
Subsidiaries.
(iv)
The
building systems and facilities at or servicing the Facilities or
the Property, including, but not limited to, elevators, security
systems, HVAC, utilities, electrical systems, plumbing and water
systems, roofing, storm drainage, sewer systems, and telephone
service (including any cellular or digital facilities) are, to the
Company’s Knowledge, in good
(v)
condition
and working order. All Facilities on the Owned Property
and the Leased Property conform in all material respects to all
applicable state and local laws or use restrictions.
(h)
Environmental Matters .
(i) The
Company has delivered, or caused to be delivered to Parent, or
provided Parent access to, true and complete copies of, all
environmental site assessments, test results, analytical data,
boring logs, and other environmental reports and studies held
by the Company and each of its Subsidiaries relating to their
respective Properties and Facilities.
(ii) The
Company and each of its Subsidiaries and their respective
Facilities and Properties are, and have been, in compliance
with all Environmental Laws, except for violations that are
not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect, and there are no past or
present events, conditions, circumstances, activities or plans
related to the Properties or Facilities that did or would
violate or prevent compliance or continued compliance with any
of the Environmental Laws.
(iii) There
is no Litigation pending or threatened before any Governmental
Authority or other forum in which the Company or its
Subsidiaries or any of their respective Properties or
Facilities (including but not limited to properties and
facilities that secure or secured loans made by the Company or
its Subsidiaries and properties and facilities now or formerly
held, directly or indirectly, in a fiduciary capacity by the
Company or its Subsidiaries) has been or, with respect to
threatened Litigation, may be named as a defendant (A) for
alleged noncompliance (including by any predecessor) with or
Liability under any Environmental Law or (B) relating to the
release, discharge, spillage, or disposal into the environment
of any Hazardous Material, whether or not occurring at, on,
under, adjacent to, or affecting (or potentially affecting)
any such Properties or Facilities.
(iv) During
or prior to the period of (A) the Company’s or any of
its Subsidiaries’ ownership or operation (including but
not limited to ownership or operation, directly or indirectly,
in a fiduciary capacity) of, or (B) the Company’s or any
of its Subsidiaries’ participation in the management
(including but not limited to such participation, directly or
indirectly, in a fiduciary capacity) of any Property or
Facility, there have been no releases, discharges, spillages,
or disposals of Hazardous Material in, on, under, adjacent to,
or affecting (or potentially affecting) such Properties or
Facilities.
(i)
Compliance with Permits, Laws and Orders .
(i) Each
of the Company and its Subsidiaries has in effect all Permits
and has made all filings, applications, and registrations with
Governmental Authorities that are required for it to own,
lease, or operate its material assets and to carry on its
business as now conducted and there has occurred no Default
under any Permit applicable to its business or employees
conducting its respective business.
(ii) Neither
the Company nor any of its Subsidiaries is in Default under
any Laws or Orders applicable to its business or employees
conducting its business.
(iii) Neither
the Company nor any of its Subsidiaries has received any
notification or communication from any Governmental Authority,
(A) asserting that the Company or any of its Subsidiaries is
in Default under any of the Permits, Laws or Orders, which
such
Governmental
Authority enforces, (B) threatening to revoke any Permits, (C)
requiring or advising that it may require the Company or any
of its Subsidiaries (x) to enter into or consent to the
issuance of a cease and desist order, formal agreement,
directive, commitment, or memorandum of understanding, or (y)
to adopt any resolution of its Board of Directors or similar
undertaking that restricts materially the conduct of its
business or in any material manner relates to its management
or (D) requiring or advising that it may prohibit or
substantially delay the consummation of transactions of the
sort contemplated by this Agreement.
(iv) There
(A) is no unresolved violation, criticism, or exception by any
Governmental Authority with respect to any report or statement
relating to any examinations or inspections of the Company or
any of its Subsidiaries, (B) have been no formal or informal
inquiries by, or disagreements or disputes with, any
Governmental Authority with respect to the Company’s or
any of its Subsidiaries’ businesses, operations,
policies or procedures since January 1, 2005, and (C) is no
pending or, to its Knowledge, threatened, nor has any
Governmental Authority indicated an intention to conduct any,
investigation or review of the Company or any of its
Subsidiaries.
(v) Neither
the Company, nor any of its subsidiaries, nor any of their
directors, officers, employees or Representatives acting on
their behalf has offered, paid, or agreed to pay any Person,
including any Government Authority, directly or indirectly,
anything of value for the purpose of, or with the intent of
obtaining or retaining any business in violation of applicable
Laws, including (A) using any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense
relating to political activity, (B) making any direct or
indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds, (C)
violating any provision of the Foreign Corrupt Practices Act
of 1977, as amended, or (D) making any bribe, rebate, payoff,
influence payment, kickback or other unlawful
payment.
(vi) Except
as required by the Bank Secrecy Act, to the Company’s
Knowledge, no employee of the Company or any of its
Subsidiaries has provided or is providing information to any
law enforcement agency regarding the commission or possible
commission of any crime or the violation or possible violation
of any applicable Law by the Company or any of its
Subsidiaries or any employee thereof acting in such
capacity. Neither the Company nor any Subsidiary
nor any officer, employee, contractor, subcontractor or agent
of the Company or any Subsidiary has discharged, demoted,
suspended, threatened, harassed or in any other manner
discriminated against any employee of the Company or any of
its Subsidiaries in the terms and conditions of employment
because of any act of such employee described in 18 U.S.C.
Section 1514A(a).
(vii) Since
January 1, 2005, the Company and each of its Subsidiaries have
filed all reports and statements, together with any amendments
required to be made with respect thereto, that the Company and
each of its Subsidiaries were required to file with any
Governmental Authority and all other reports and statements
required to be filed by the Company and each of its
Subsidiaries since January 1, 2005, including any report or
statement required to be filed pursuant to the Laws of the
United States, any state or political subdivision, any foreign
jurisdiction, or any other Governmental Authority have been so
filed, and the Company and each of its Subsidiaries have paid
all fees and assessments due and payable in connection
therewith.
(j)
Labor Relations . Neither the Company nor
any of its Subsidiaries is the subject of any Litigation
asserting that the Company or any of its Subsidiaries has
committed an unfair labor practice (within the meaning of the
National Labor Relations Act or comparable state Law) or
seeking to
compel
the Company or any of its Subsidiaries to bargain with any
labor organization as to wages or conditions of employment,
nor is the Company or any of its Subsidiaries a party to or
bound by any collective bargaining agreement, Contract, or
other agreement or understanding with a labor union or labor
organization, nor is there any strike or other labor dispute
involving the Company or any of its Subsidiaries pending or,
to the Company’s Knowledge, threatened, nor, to the
Company’s Knowledge, is there any activity involving the
Company or any of its Subsidiaries’ employees seeking to
certify a collective bargaining unit or engaging in any other
organization activity.
(k)
Employee Benefit Plans .
(i) The
Company has disclosed in Section 3.3(k)(i) of the Company
Disclosure Letter, and has delivered or made available to
Parent prior to the date of this Agreement, with respect to
all of its Benefit Plans (including Benefit Plans maintained
by the Bank), correct and complete copies of (A) the most
recent plan documents (including all amendments thereto) of
all Benefit Plans and other writings setting forth the terms
of such Benefit Plans, (B) the most recent summary plan
description, together with each summary of material
modifications, and (C) written descriptions of plans for which
a plan document or other writing is not required or
available. Neither the Company nor any of its
Subsidiaries, nor any ERISA Affiliate has, or has at any time
had, any “obligation to contribute” (as defined in
ERISA Section 4212) to a “multiemployer plan” (as
defined in ERISA Sections 4001(a)(3) and
3(37)(A)). Each “employee pension
benefit plan,” as defined in Section 3(2) of ERISA, that
was ever maintained by the Company or any of its Subsidiaries
and that was intended to qualify under Section 401(a) of the
Internal Revenue Code, is disclosed as such in Section
3.3(k)(i) of the Company Disclosure Letter.
(ii) The
Company has delivered or made available to Parent prior to the
date of this Agreement correct and complete copies of the
following documents: (A) all trust agreements or
other funding arrangements for its Benefit Plans (including
insurance Contracts), and all amendments thereto, (B) with
respect to any such Benefit Plans or amendments, the most
recent determination letters, and all material rulings,
material opinion letters, material information letters, or
material advisory opinions issued by the Internal Revenue
Service, the United States Department of Labor, or the Pension
Benefit Guaranty Corporation after December 31, 1996, (C)
annual reports or returns, audited or unaudited financial
statements, actuarial valuations and reports, and summary
annual reports prepared for any Benefit Plans with respect to
the most recent plan year, and (D) with respect to each
Pension Plan, the most recent statement, whether or not
audited, showing the fair market value of assets of such
Pension Plan, and (E) the most recent summary plan
descriptions and any material modifications
thereto.
(iii) All
of the Company’s and its Subsidiaries’ Benefit
Plans are, and have at all times have been, in compliance with
the applicable terms of ERISA, the Internal Revenue Code, and
any other applicable Laws. Each of the
Company’s and its Subsidiaries’ ERISA Plans has
received a favorable determination letter from the Internal
Revenue Service and there are no circumstances that will or
could reasonably result in revocation of any such favorable
determination letter. Each trust created under any
of the Company’s or its Subsidiaries’ ERISA Plans
has been determined to be exempt from Tax under Section 501(a)
of the Internal Revenue Code and the Company is not aware of
any circumstance that will or could reasonably result in
revocation of such exemption. With respect to each
of the Company’s and its Subsidiaries’ Benefit
Plans, to the Company’s Knowledge, no event has occurred
that will or could reasonably give rise to a loss of any
intended Tax consequences under the Internal Revenue Code or
to any Tax under Section 511 of the Internal Revenue Code that
is reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect on the Company and its
Subsidiaries, taken as a
whole. There
is no pending or, to the Company’s Knowledge, threatened
Litigation relating to any Benefit Plans; there are no
pending, or, to the Company’s Knowledge, threatened
governmental audits or investigations with respect to any
Benefit Plan; and there are no pending, or to the
Company’s Knowledge, threatened, participant claims with
respect to any Benefit Plan, other than claims for benefits I
n the normal course of business.
(iv) Neither
the Company nor any of its Subsidiaries has engaged in a
transaction with respect to any of its Benefit Plans that,
assuming the Taxable Period of such transaction expired as of
the date of this Agreement or the Effective Time, would
subject the Company or any of its Subsidiaries to a Tax or
penalty imposed by either Section 4975 of the Internal Revenue
Code or Section 502(i) of ERISA. Neither the
Company nor any administrator or fiduciary of any of the
Company’s or its Subsidiaries’ Benefit Plans (or
any agent of any of the foregoing) has engaged in any
transaction, or acted or failed to act in any manner with
respect to any of the Company’s or its
Subsidiaries’ Benefit Plans that could subject the
Company or any of its Subsidiaries to any direct or indirect
Liability (by indemnity or otherwise) for breach of any
fiduciary, co-fiduciary, or other duty under
ERISA. No oral or written representation or
communication with respect to any aspect of any Benefit Plans
of the Company or its Subsidiaries has been made to employees
of the Company or any of its Subsidiaries that is not in
conformity with the written or otherwise preexisting terms and
provisions of such plans.
(v) Each
of the Company’s and its Subsidiaries’ Pension
Plans had, as of the date of its most recent actuarial
valuation, assets measured at fair market value at least equal
to its “current liability,” as that term is
defined in Section 302(d)(7) of ERISA. Since the
date of the most recent actuarial valuation, no event has
occurred that would be reasonably expected to adversely change
any such funded status in a material way. None of
the Company’s or its Subsidiaries’ Pension Plans
nor any “single-employer plan,” within the meaning
of Section 4001(a)(15) of ERISA, currently maintained by the
Company or any of its Subsidiaries, or the single-employer
plan of any ERISA Affiliate has an “accumulated funding
deficiency” within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA. All
required contributions with respect to any of the Company or
its Subsidiaries’ Pension Plans or any single-employer
plan of any of the Company’s or its Subsidiaries’
ERISA Affiliates have been timely made and there is no Lien,
nor is there expected to be a Lien, under Internal Revenue
Code Section 412(n) or ERISA Section 302(f) or Tax under
Internal Revenue Code Section 4971. Neither the
Company nor any of its Subsidiaries has provided, or is
required to provide, security to any of its Pension Plans or
to any single-employer plan of any of its ERISA Affiliates
pursuant to Section 401(a)(29) of the Internal Revenue
Code. All premiums required to be paid under ERISA
Section 4006 have been timely paid by the Company and its
Subsidiaries.
(vi) No
Liability under Title IV of ERISA has been or is expected to
be incurred by the Company or any of its Subsidiaries with
respect to any defined Benefit Plan currently or formerly
maintained by any of them or by any of their ERISA Affiliates
that has not been satisfied in full (other than Liability for
Pension Benefit Guaranty Corporation premiums, which have been
paid when due).
(vii) Neither
the Company nor any of its Subsidiaries has any obligations
for retiree health and retiree life benefits under any of its
Benefit Plans other than with respect to benefit coverage
mandated by applicable Law.
(viii) Except
as set forth in Section 3.3(k)(viii) of the Company Disclosure
Letter, no written, or, to the Company’s Knowledge, oral
representation or communication with
respect
to any aspect of a Benefit Plan has been made to any employee
that is not in accordance with the written or otherwise
pre-existing terms and provisions of such plans.
(ix) Except
as set forth in Section 3.3(k)(ix) of the Company Disclosure
Letter, the consummation of the transactions contemplated by
this Agreement will not (or will not upon termination of
employment within a fixed period of time following such
consummation) (A) entitle any employee, director or consultant
to severance pay, unemployment compensation or any other
payment, or (B) accelerate the time of payment or vesting or
increase the amount of payment with respect to any
compensation due to any employee, director or
consultant.
(l)
Material Contracts .
(i) Except
for Contracts listed in Section 3.3(l)(i) of the Company
Disclosure Letter, as of the date of this Agreement, neither
the Company nor any of its Subsidiaries, nor any of their
respective assets, businesses, or operations is a party to, or
is bound or affected by, or receives benefits under, (A) any
employment, severance, termination, consulting, or retirement
Contract, (B) any Contract relating to the borrowing of money
by the Company or any of its Subsidiaries or the guarantee by
the Company or any of its Subsidiaries of any such obligation
(other than Contracts evidencing deposit liabilities,
purchases of federal funds, fully-secured repurchase
agreements, and Federal Home Loan Bank advances of the Bank or
Contracts pertaining to trade payables incurred in the
ordinary course of business), (C) any Contract containing
covenants that limit the ability of the Company or any of its
Subsidiaries to engage in any line of business or to compete
in any line of business or with any Person, or that involve
any restriction of the geographic area in which, or method by
which, the Company or any of its Subsidiaries or Affiliates
may carry on their respective businesses (other than as may be
required by Law or any Governmental Authority), (D) any
Contract or series of related Contracts for the purchase of
materials, supplies, goods, services, equipment or other
assets that (x) provides for or is reasonably likely to
require annual payments by the Company or any of its
Subsidiaries of $25,000 or more or (y) have a term exceeding
12 months in duration (except those entered into in the
ordinary course of business with respect to loans, lines of
credit, letters of credit, depositor agreements, certificates
of deposit and similar routine banking activities and
equipment maintenance agreements that are not material), (E)
any Contract between or among the Company or any of its
Subsidiaries, (F) any Contract involving Intellectual Property
(excluding generally commercially available “off the
shelf” software programs licensed pursuant to
“shrink wrap” or “click and accept”
licenses), (G) any Contract relating to the provision of data
processing, network communications or other technical services
to or by the Company or any of its Subsidiaries, (H) any
Contract adversely affecting or otherwise restricting the
Company’s use of, ownership of or leasehold interest in
any of the Owned Property or Leased Property or (I) any other
Contract or amendment thereto that would be required to be
filed as an exhibit to a Form 10-K or Form 10-Q report under
Items 601(b)(4) and 601(b)(10) of Regulation S-K of SEC Rules
and Regulations if the Company were a SEC reporting
company. All indebtedness for money borrowed of the
Company or its Subsidiaries is prepayable without penalty or
premium.
(ii) All
interest rate swaps, caps, floors, option agreements, futures
and forward contracts, and
