As part of OceanFirsts due diligence review in connection with the Transactions, OceanFirsts management provided Piper and Sandler ONeill, in
connection with their respective opinions, certain non-public, preliminary internal financial forecasts of Ocean Shores operating results, as projected by OceanFirst on the basis of OceanFirsts own assumptions regarding the operations of
Ocean Shore (which we refer to as the Ocean Shore projections). The accompanying prospective financial information was not prepared with a view toward public disclosure or with a view toward complying with the guidelines established by
the American Institute of Certified Public Accountants with respect to prospective financial information, but, in the view of OceanFirsts management, was prepared on a reasonable basis, reflects the best currently available estimates and
judgments, and presents, to the best of OceanFirsts managements knowledge and belief, the expected course of action and the expected future financial performance of Ocean Shore, as projected by OceanFirst on the basis of
OceanFirsts own assumptions regarding the operations of Ocean Shore. However, this information is not fact and should not be relied upon as being necessarily indicative of actual future
results, and readers of this joint proxy statement/prospectus are cautioned not to place undue reliance on the prospective financial information.
Neither
OceanFirsts independent auditors, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the prospective financial information contained herein, nor have they expressed any opinion or any
other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information.
The Ocean Shore projections were prepared solely for internal use and are subjective in many respects. The Ocean Shore projections reflect numerous estimates
and assumptions made with respect to business, economic, market, competition, regulatory and financial conditions and matters specific to the business of Ocean Shore, all of which are difficult to predict and many of which are beyond the control of
OceanFirst and Ocean Shore. The Ocean Shore projections reflect assumptions as to certain business decisions that are subject to change and, in many respects, subjective judgment, and thus are susceptible to multiple interpretations and periodic
revisions based on actual experience and business developments. OceanFirst can give no assurance that the Ocean Shore projections and the underlying estimates and assumptions will be realized. In addition, because the Ocean Shore projections cover
multiple years, the information by its nature becomes less predictive with each successive year. Actual results may differ materially from those set forth below, and important factors that may affect actual results and cause the Ocean Shore
projections not to be realized include, but are not limited to, risks and uncertainties relating to the business of Ocean Shore, industry performance, general business and economic conditions, customer requirements, competition and adverse changes
in applicable laws, regulations or policies. Other factors that could cause actual results to differ are further described in the sections of this joint proxy statement/prospectus entitled Where You Can Find More Information, Risk
Factors and Cautionary Statement Regarding Forward-Looking Statements beginning on page 140, page 27 and page 34, respectively. Stockholders are urged to review Ocean Shores most recent SEC filings for a
description of risk factors with respect to its business.
Furthermore, the Ocean Shore projections do not take into account any circumstances or events
occurring after the date they were prepared. OceanFirst can give no assurance that, had the Ocean Shore projections been prepared either as of the date of the merger agreement or as of the date of this joint proxy statement/prospectus, similar
estimates and assumptions would be used. OceanFirst does not intend to, and disclaims any obligation to, make publicly available any update or other revision to the Ocean Shore projections to reflect circumstances existing since their preparation or
to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error, or to reflect changes in general economic or industry conditions. The Ocean Shore projections do not give
effect to any business or strategic decision or action that has been or will be taken as a result of the merger agreement having been executed, or the effect on Ocean Shore of any business or strategic decisions or actions that would likely have
been taken if the merger agreement had not been executed, but which were instead altered, accelerated, postponed or not taken in anticipation of the Transactions. Further, the Ocean Shore projections do not take into account the effect on Ocean
Shore of any possible failure of the Transactions to occur. None of OceanFirst, Ocean Shore or their respective affiliates, officers, directors, advisors or other representatives has made, makes or is authorized in the future to make any
representation to any OceanFirst stockholder or Ocean Shore stockholder, or any other person, regarding Ocean Shores actual performance compared to the information contained in the Ocean Shore projections or that projected results will be
achieved. The inclusion of the Ocean Shore projections should not be deemed an admission or representation by OceanFirst or Ocean Shore that it is viewed as material information of Ocean Shore, particularly in light of the inherent risks and
uncertainties associated with such forecasts.
In light of the foregoing, and considering that the OceanFirst special meeting and the Ocean Shore special
meeting will be held several months after the Ocean Shore projections were prepared, as well as the uncertainties inherent in any forecasted information, OceanFirst stockholders and Ocean Shore stockholders are cautioned not to place unwarranted
reliance on such information in connection with their consideration of the OceanFirst share issuance proposal and the Ocean Shore merger proposal, as applicable.
The following unaudited prospective financial information with respect to Ocean Shore was provided to Piper and
Sandler O Neill by senior management of OceanFirst.
In addition to the years reflected in the table above, Piper used an estimated earnings growth rate of 8% from December 31,
2021, as provided by senior management of OceanFirst, to arrive at an estimated net income of $10.5 million for the year ending December 31, 2022.
In considering the recommendation of the Ocean Shore board of
directors that you vote to approve the merger agreement, you should be aware that Ocean Shores directors and executive officers have interests in the merger that are different from, or in addition to, those of Ocean Shores stockholders
generally. The Ocean Shore board of directors was aware of and considered those interests, among other matters, in reaching its decisions to (i) approve and adopt the merger agreement and the transactions contemplated thereby and
(ii) resolve to recommend the approval of the merger agreement to Ocean Shore stockholders. Ocean Shores stockholders should take these interests into account in deciding whether to vote FOR the proposal to approve the merger
agreement and whether to vote FOR the proposal to approve, by advisory (non-binding) vote, certain compensation arrangements for Ocean Shores named executive officers in connection with the merger. These interests are described in
more detail below, and certain of them are quantified in the narrative below and the table below.
Except as otherwise specifically noted, for purposes of quantifying the potential payments and benefits described in this section, the following assumptions,
as well as those described in the footnotes to the table under the heading Quantification of Payments and Benefits to Ocean Shores Named Executive Officers below, were used:
Ocean Shore maintains an employment agreement with Steven E. Brady, its President and Chief Executive Officer, that provides for the following severance
benefits if, within two years after a change in control, Ocean Shore or its successor terminates Mr. Bradys employment without cause or Mr. Brady voluntarily terminates employment with good reason:
The employment agreement
with Mr. Brady provides that upon Mr. Bradys termination of employment at or after attaining age 60 for any reason other than cause, Ocean Shore will continue health insurance coverage for Mr. Brady and his spouse through the date that each of
them attain age 65 and that, thereafter, Ocean Shore will fund the cost of Medicare supplement coverage for Mr. Brady and his spouse for the remainder of their respective lives.
Under the employment agreement with Mr. Brady, any payments or benefits payable to him would be reduced to the extent that such payments or benefits would
result in the imposition of excise taxes under Section 4999 of the Code, unless Mr. Brady would be better off on an after-tax basis receiving all such payments or benefits.
As described below in Agreements with OceanFirst, it is anticipated that Mr. Brady will enter into a separation and consulting
agreement with OceanFirst that will be effective as of the effective time of the first-step merger. The separation and consulting agreement will provide for payments and benefits that will be made in full satisfaction of Mr. Bradys rights
under his employment agreement in connection with his termination thereunder. The separation and consulting agreement will also set forth the terms and conditions of Mr. Bradys consulting arrangement with OceanFirst and his role as a
director of OceanFirst and include non-competition, non-solicitation, non-disparagement and confidentiality provisions. The potential payments payable by OceanFirst under the separation and consulting agreement will only become payable after the
effective time of the first-step merger. See Quantification of Payments and Benefits to Ocean Shores Named Executive Officers for the anticipated value of the payments and benefits that will be made to Mr. Brady as of the effective
time of the first-step merger.
Ocean Shore maintains change in control agreements with all of its executive officers (other than Mr. Brady), that provide for severance benefits in the
event of a termination of employment by Ocean Shore (or a successor) without cause or a resignation by the executive for good reason within one year following the change in control (which we refer to as a qualifying
termination).
The agreements provide that, in the event of a qualifying termination, each executive officer of Ocean Shore
would be entitled to the following severance benefits:
Under the change in control agreements, any payments or benefits payable to the executive officer will be reduced to the extent that such payments or benefits
would result in the loss of deductibility to Ocean Shore under Section 280G of the Code and imposition of excise taxes on the executive officer under Section 4999 of the Code.
See Quantification of Payments and Benefits to Ocean Shores Named Executive Officers below for the value of these payments and
benefits for each of Ocean Shores Named Executive Officers. For Mr. Esposito, assuming a qualifying termination as of the effective time of the first-step merger, the value of his lump sum cash payment would be $359,133, and the value of
continued health and welfare insurance coverage for 24 months would be $38,300.
As described below in Agreements with OceanFirst,
it is anticipated that Janet M. Bossi, Ocean Shores Executive Vice President, and Kim M. Davidson, Ocean Shores Executive Vice President and Corporate Secretary, will enter into arrangements with OceanFirst effective as of the effective
time of the first-step merger that will provide for certain payments in lieu of the lump sum cash payment under their change in control agreements and set forth their new positions at OceanFirst following the effective time of the first-step merger.
Ocean Shore
maintains salary continuation agreements with each of Ocean Shores executive officers, other than Donald F. Morgenweck, Ocean Shores Senior Vice President and Chief Financial Officer, and Mr. Esposito, to provide them with additional
compensation at retirement. Under their salary continuation agreements, these executive officers will receive an annual benefit (the normal retirement benefit) payable in monthly installments upon termination of employment after having reached the
normal retirement age specified in the agreement. A reduced benefit is payable if the executive officer retires prior to the normal retirement age. The early termination benefit equals the normal retirement benefit multiplied by a fraction based on
the executives years of service. If, following a change in control, the executive officer terminates employment prior to normal retirement age, other than for cause, the executive officer will be entitled to the normal retirement benefit,
payable beginning in the month following termination of employment. Mr. Brady has not reached normal retirement age under his supplemental salary continuation agreement and Ms. Bossi and Ms. Davidson have not reached normal retirement age under
their salary continuation agreements and, therefore, the merger will entitle them to an enhanced benefit if they terminate employment following the merger. See Quantification of Payments and Benefits to Ocean Shores Named
Executive Officers below for the value of the enhanced benefits to which Mr. Brady, Ms. Bossi and Ms. Davidson will be entitled.
Ocean
Shore maintains a supplemental executive retirement plan in which Mr. Brady is the only participant. This plan provides for a benefit if a change in control occurs prior to the complete scheduled payment of the employee stock ownership plan (ESOP)
acquisition loans. The amount of the benefit equals the total number of shares of Ocean Shore common stock that would have been allocated to Mr. Brady under the ESOP had he remained employed through the last scheduled payment on all outstanding ESOP
acquisition loans, minus the number of shares allocated to Mr. Brady as of the change in control. See Quantification of Payments and Benefits to Ocean Shores Named Executive Officers below for the value of the benefit
to which Mr. Brady will be entitled under this plan.
It is anticipated that Mr. Brady will enter into a separation and consulting agreement with OceanFirst that will set forth Mr. Bradys entitlements and
continuing obligations in connection with his termination of employment with Ocean Shore and Ocean City Home Bank following the effective time of the first-step merger and his service as a non-employee director of and consultant to OceanFirst. It is
also anticipated that Ms. Bossi and Ms. Davidson will each enter into arrangements with OceanFirst that will set forth their new positions at OceanFirst following the effective time of the first-step merger. All arrangements entered into with
OceanFirst will be effective as of the effective time of the first-step merger.
The agreement provides that Mr. Brady will be subject to restrictive covenants in favor of OceanFirst,
including an indefinite restriction on the disclosure of confidential information, an agreement not to disparage OceanFirst and non-competition and non-solicitation covenants. The non-competition and non-solicitation covenants apply until 36 months
following the termination or the expiration of the consulting period.
Ocean Shore
maintains split dollar life insurance agreements with Mr. Brady, Ms. Bossi, Ms. Davidson and Anthony J. Rizzotte, Ocean Shores Executive Vice President and Chief Lending Officer, that provide that the executive officers designated
beneficiary will receive a portion of the proceeds of certain life insurance policies covering the executive officer if the executive officer dies while employed by Ocean Shore. Under the terms of the agreements, if the executive officer terminates
employment and qualifies as an eligible retiree or terminates employment other than for cause following a change in control, the agreement will continue in effect unless mutually terminated; provided, however, that the split dollar life insurance
agreements will terminate as of the date that the executive officer has been paid all benefits to which he or she is entitled under his or her salary continuation agreement. Mr. Brady and Mr. Rizzotte are eligible retirees under the split dollar
life insurance
agreements; accordingly, the merger has no impact on the continuation of their split dollar life insurance agreements. If Ms. Bossi or Ms. Davidson terminate employment following the effective
time of the first-step merger, their split dollar life insurance agreements will remain in effect unless mutually terminated.
See
Quantification of Payments and Benefits to Ocean Shores Named Executive Officers below for the present value of the value of the insurance coverage that would be provided to Ms. Bossi and Ms. Davidson through the date
on which they attain normal retirement age under their split dollar life insurance agreements.
Under the terms of the merger agreement OceanFirst has agreed, following the effective time of the first-step merger, to indemnify and
hold harmless all present and former directors, officers and employees of Ocean Shore and its subsidiaries against all costs or expenses (including reasonable attorneys fees), judgments, fines, losses, damages or liabilities incurred in
connection with any threatened or actual claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, whether arising before or after the effective time of the first-step merger, arising out of the fact
that such person is or was a director, officer or employee of Ocean Shore or its subsidiaries and pertaining to matters existing or occurring at or prior to the effective time of the first-step merger, including the transactions contemplated by the
merger agreement, to the same extent such persons are indemnified as of the date of the merger agreement by Ocean Shore pursuant to Ocean Shores certificate of incorporation, Ocean Shores bylaws or the governing or organizational
documents of any subsidiary of Ocean Shore, and has also agreed to advance expenses to such persons to the same extent as such persons are entitled to advancement of expenses as of the date of the merger agreement by Ocean Shore pursuant to Ocean
Shores certificate of incorporation, Ocean Shores bylaws or the governing or organizational documents of any subsidiary of Ocean Shore, except that, if required, such person provides an undertaking to repay such advances if it is
ultimately determined that such person is not entitled to indemnification.
The merger agreement requires the surviving corporation to maintain, for a
period of six years after completion of the first-step merger, Ocean Shores existing directors and officers liability insurance policy, or policies with a substantially comparable insurer of at least the same coverage and amounts
and containing terms and conditions that are no less advantageous to the insured, with respect to claims arising from facts or events that occurred at or prior to the completion of the integrated mergers. However, the surviving corporation is not
required to spend annually more than the 200% of the annual premium currently paid by Ocean Shore under its current policy, and if such premiums for such insurance would at any time exceed that amount, then the surviving corporation will maintain
policies of insurance which, in its good faith determination, provide the maximum coverage available at an annual premium equal to the premium cap. In lieu of the foregoing, Ocean Shore, in consultation with, but only upon the prior written consent
of OceanFirst, may (and at the request of OceanFirst, Ocean Shore will use its reasonable best efforts to) obtain at or prior to the effective time of the first-step merger a six year tail policy under Ocean Shores existing
directors and officers insurance policy providing equivalent coverage to that described in the preceding sentence if such a policy can be obtained for an amount that, in the aggregate, does not exceed 300% of the current annual premium paid as of
the date of the merger agreement by Ocean Shore for such insurance. For additional information see the section entitled The Merger Agreement Director and Officer Indemnification and Insurance beginning on page 104 of this
joint proxy statement/prospectus.
The merger agreement provides that, at the effective time of the first-step merger, OceanFirst will expand its board of directors from 10 members to 13 members
and will appoint Mr. Brady and two other current directors of Ocean Shore to the OceanFirst board.
At or promptly following the effective time of the first-step merger, OceanFirst will create an advisory board, the purpose of which shall be to advise
OceanFirst with respect to the integration of Ocean Shores business, as well
as to maintain and develop customer and other stakeholder relationships in Ocean Shores market area. The advisory board will consist of Mr. Brady and each member of the Ocean Shore board of
directors who has not been appointed to the OceanFirst board of directors. As consideration for service on the advisory board, each such member (other than Mr. Brady) will be entitled to receive compensation in the amount of $30,000 per year
for a period of two years following the closing of the first-step merger.
The information set forth in the table below is intended to comply with Item 402(t) of the SECs Regulation S-K,
which requires disclosure of information about certain compensation for each named executive officer of Ocean Shore that is based on, or otherwise relates to, the merger (which we refer to as merger-related compensation).
The merger-related compensation described below is based on the existing agreements with Ocean Shore. The table does not include amounts payable under the
anticipated new agreements with OceanFirst following the effective time of the first-step merger. For additional details regarding the anticipated new agreements with OceanFirst, see the discussion under the heading Agreements with
OceanFirst above.
The table below sets forth the amount of payments and benefits that each of Ocean Shores named executive officers would
receive in connection with the first-step merger, based on multiple assumptions that may or may not actually occur or be accurate on the relevant date, including the assumptions described below and in the footnotes to the table, and reflects the
vesting of certain equity awards held by the named executive officers as of August 1, 2016 that would vest in accordance with their terms prior to the effective time of the first-step merger. For purposes of calculating such amounts, in addition to
the assumptions described in the footnotes to the table below, the following assumptions were used:
OceanFirst common stock is listed for trading on the NASDAQ under the symbol OCFC and Ocean Shore common stock is listed on the NASDAQ under the
symbol OSHC. Upon completion of the first-step merger, Ocean Shore common stock will no longer be listed on the NASDAQ and will be de-registered under the Exchange Act. It is a condition to each partys obligations to complete the
integrated mergers that the OceanFirst common stock to be issued pursuant to the merger agreement be authorized for listing on the NASDAQ (subject to official notice of issuance). Immediately following the completion of the Transactions, shares of
OceanFirst common stock will continue to be traded on the NASDAQ under the symbol OCFC.
OceanFirst currently pays a quarterly cash dividend of $0.13 per share, which is expected to continue, although the OceanFirst board may change this dividend
policy at any time. Ocean Shore currently pays quarterly cash dividends of $0.06 per share, which is expected to continue until the effective time, although, subject to certain restrictions in the merger agreement, the Ocean Shore board may change
this dividend policy at any time. OceanFirst stockholders will be entitled to receive dividends when and if declared by the OceanFirst board out of funds legally available for dividends. The OceanFirst board will consider OceanFirsts financial
condition and level of net income, future prospects, economic condition, industry practices and other factors, including applicable banking laws and regulations, in determining whether to pay dividends in the future and the amount of such dividends.
OceanFirsts principal source of income is dividends that are declared and paid by OceanFirst Bank on its capital stock. Therefore,
OceanFirsts ability to pay dividends is dependent upon the receipt of dividends from OceanFirst Bank. Insured depository institutions such as OceanFirst Bank are prohibited from making capital distributions, including the payment of dividends,
if, after making such distribution, the institution would become undercapitalized, as such term is defined in the applicable law and regulations. In the future, any declaration and payment of cash dividends will be subject to the
OceanFirst boards evaluation of OceanFirsts operating results, financial condition, future growth plans, general business and economic conditions, and tax and other relevant considerations. The payment of cash dividends by OceanFirst in
the future will also be subject to certain other legal and regulatory limitations and ongoing review by the OceanFirsts banking regulators.
Dissenters rights are statutory rights that, if applicable under law, enable stockholders to dissent from an
extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value of their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in connection with
the extraordinary transaction. New Jersey law provides that a stockholder is not entitled to demand the fair value of his or her shares of stock in any transaction if the stock is listed on a national securities exchange, if cash is to be received
or the securities to be received are listed on a national securities exchange. Because Ocean Shores common stock is listed on the NASDAQ, the holders of Ocean Shore common stock are not entitled to dissenters or appraisal rights in the
first-step merger.
Completion of the Transactions is subject to receipt of certain approvals, waivers and consents from applicable governmental and regulatory authorities,
without certain conditions being imposed by any governmental authority as part of a regulatory approval that would reasonably be expected to result in a materially burdensome regulatory condition. Subject to the terms and conditions of the merger
agreement, OceanFirst and Ocean Shore have agreed to use their reasonable best efforts and cooperate to promptly prepare and file all necessary documentation and to obtain as promptly as practicable all regulatory approvals necessary or advisable to
complete the transactions contemplated by the merger agreement. These include, among others, approval (or waiver of such approval) from the Federal Reserve Board and the OCC. OceanFirst and Ocean Shore submitted the FRB waiver request on August 26,
2016 and the OCC application on August 18, 2016. As of the date of this joint proxy statement/prospectus, the FRB waiver request has been granted, and the OCC application remains outstanding. Although neither Ocean Shore nor OceanFirst knows of any
reason why the OCC application should not be approved in a timely manner, Ocean Shore and OceanFirst cannot be certain when, or if, the OCC application will be approved.
OceanFirst is a savings and loan
holding company regulated and supervised by the Federal Reserve Board under the Home Owners Loan Act of 1933 (which we refer to as HOLA). Unless granted a waiver by the Federal Reserve Board, the transactions contemplated by the merger
agreement require prior approval of the Federal Reserve Board under HOLA.
OceanFirst Bank is an insured depository institution regulated and supervised by the OCC. The merger of Ocean Shore Bank with and into OceanFirst Bank requires
prior approval of the OCC under the Bank Merger Act. In evaluating an application for such approval, the OCC takes into consideration a number of factors, including (i) the competitive impact of the transaction; (ii) financial and managerial
resources of the bank parties to the bank merger or integrated mergers both on a current and pro forma basis; (iii) the convenience and needs of the community to be served and the record of the banks under the CRA, including their CRA ratings;
(iv) the banks effectiveness in combating money laundering activities; and (v) the extent to which the bank merger or integrated mergers would result in greater or more concentrated risks to the stability of the U.S. banking or financial
system. In connection with its review, the OCC provides an opportunity for public comment on the application and is authorized to hold a public meeting or other proceeding if it determines that would be appropriate.
OceanFirst
and Ocean Shore believe that the Transactions do not raise substantial antitrust or other significant regulatory concerns and that the parties to the Transactions will be able to obtain all requisite regulatory approvals. However, neither OceanFirst
nor Ocean Shore can assure you that all of the regulatory approvals described above will be obtained and, if obtained, OceanFirst and Ocean Shore cannot assure you as to the timing of any such approvals, their ability to obtain the approvals on
satisfactory terms or the absence of any litigation challenging such approvals. In addition, there can be no assurance that such approvals will not impose conditions or requirements that, individually or in the aggregate, would or could reasonably
be expected to have a materially burdensome regulatory condition.
Neither OceanFirst nor Ocean Shore is aware of any material governmental approvals or
actions that are required for completion of the Transactions other than those described above. It is presently contemplated that if any such additional governmental approvals or actions are required, those approvals or actions will be sought. There
can be no assurance, however, that any additional approvals or actions will be obtained.
On July 22, 2016, Robert Strougo, a purported Ocean Shore stockholder, filed a putative class action lawsuit in the Superior Court for
the State of New Jersey, Cape May County, against Ocean Shore, the members of the Ocean Shore board and OceanFirst on behalf of all Ocean Shore public stockholders. The lawsuit generally alleges that the members of the Ocean Shore board breached
their fiduciary duties by approving the merger agreement because the Transactions are procedurally flawed and financially inadequate, certain terms in the merger agreement are preclusive and unfair, and certain members of the Ocean Shore board are
conflicted. Plaintiff further alleges that OceanFirst aided and abetted such breaches. The lawsuit seeks to enjoin the merger, as well as unspecified money damages, costs and attorneys fees and expenses. On September 7, 2016, plaintiff filed
an amended complaint bringing disclosure claims alleging that OceanFirsts registration statement on Form S-4, of which this joint proxy statement/prospectus forms a part, omitted certain material information. Although the defendants
believe that they have meritorious defenses to the plaintiffs claims, defendants and plaintiffs agreed to the terms of a settlement on October 10, 2016 whereby additional disclosures were made in the Registration Statement. The terms of the
settlement are subject to, among other things, further documentation and Court approval.
On September 8, 2016, Robert Garfield, a purported stockholder
of OceanFirst, filed a putative class action in the Superior Court of New Jersey, Ocean County, captioned Garfield v. OceanFirst Financial Corp., et al
No. OCN-L-2469-16,
against OceanFirst and members of
the OceanFirst board on behalf of all public OceanFirst stockholders. The lawsuit generally alleges that the members of the OceanFirst board breached their fiduciary duties by approving the Transactions. The lawsuit further alleges the Transactions
are not in the best interests of the OceanFirst stockholders and provide personal benefits to the individual defendants. The lawsuit also alleges that the Registration Statement omitted certain material information. The lawsuit seeks to enjoin the
Transactions, as well as unspecified money damages, costs and attorneys fees and expenses. In furtherance of this action, on October 12, 2016, Robert Garfield filed a motion asking the
court (i) to enjoin the consummation of the Transactions pending completion of outstanding discovery requests, (ii) to direct OceanFirst to produce requested documents and be available for depositions and (iii) to set an evidentiary hearing to
continue the injunction pending curative disclosures or, alternatively, trial. OceanFirst believes the allegations in the lawsuit are without merit and it intends to vigorously defend against all claims asserted. However, neither OceanFirst nor
Ocean Shore can give you any assurance that OceanFirst may not face additional claims related to the Transactions.
Each of the OceanFirst board and the Ocean Shore board has unanimously approved the merger agreement. The merger agreement provides for (i) the merger of
Merger Sub with and into Ocean Shore, with Ocean Shore continuing as the surviving corporation in the first-step merger and as a wholly-owned subsidiary of OceanFirst, (ii) immediately following the completion of the first-step merger, Ocean Shore
will merge with and into OceanFirst, with OceanFirst continuing as the surviving corporation in the second-step merger and (iii) immediately following the completion of the integrated mergers, Ocean Shore Bank will merge with and into OceanFirst
Bank, a wholly owned bank subsidiary of OceanFirst, with OceanFirst Bank continuing as the surviving bank in the bank merger.
Prior to the completion of
the Transactions, Ocean Shore and OceanFirst may, by mutual agreement, change the method or structure of effecting the combination of Ocean Shore and OceanFirst, except that no such change may (i) alter or change the amount and kind of the merger
consideration, (ii) adversely affect the tax treatment of Ocean Shore stockholders or OceanFirst stockholders, (iii) adversely affect the tax treatment of Ocean Shore or OceanFirst or (iv) materially impede or delay the consummation of the
transactions contemplated by the merger agreement in a timely manner.
Subject to the terms and conditions of the merger agreement, at the effective time, each share of Ocean Shore common stock issued and outstanding immediately
prior to the completion of the first-step merger, except for specified shares of Ocean Shore common stock owned by Ocean Shore or OceanFirst, will be converted into the right to receive $4.35 in cash, without interest, and 0.9667 shares of
OceanFirst common stock.
If the outstanding shares of OceanFirst common stock or Ocean Shore common stock is 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, or if there is any
extraordinary dividend or distribution, an appropriate and proportionate adjustment will be made to the merger consideration.
OceanFirst will not issue any fractional shares of OceanFirst common stock in the first-step merger. Instead, any Ocean Shore stockholder who
otherwise would have been entitled to receive a fraction of a share of OceanFirst common stock will instead be entitled to receive an amount in cash, rounded to the nearest cent, determined by multiplying the fraction of a share (rounded to the
nearest thousandth when expressed in decimal form) of OceanFirst common stock to which the holder would otherwise be entitled by the average closing-sale price per share of OceanFirst common stock on the NASDAQ (as reported by
The Wall Street
Journal
) for the five full trading days ending on the day preceding the day on which the first-step merger is completed.
Upon the consummation of the integrated mergers, the certificate of incorporation and bylaws of OceanFirst
in effect immediately prior to the effective time will be the certificate of incorporation and bylaws of the surviving corporation after completion of the integrated mergers, until thereafter amended in accordance with applicable law and the terms
of such documents.
Upon consummation of the Transactions, OceanFirst has agreed to (i) increase the size of the OceanFirst board and
the board of directors of OceanFirst Bank to thirteen members and (ii) appoint Steven E. Brady and two other current members of the Ocean Shore board, to be selected by the Leadership Committee of OceanFirst in consultation with the OceanFirst board
and the Ocean Shore board, to the OceanFirst board and the board of directors of OceanFirst Bank, with one such appointee being appointed to each of the three classes of boards of OceanFirst and OceanFirst Bank.
In addition, at the effective time of the first-step merger, OceanFirst has agreed to create an advisory board, the purpose of which will be to advise
OceanFirst with respect to the integration of Ocean Shores business, as well as to maintain and develop customer and other stakeholder relationships in Ocean Shores market area. The advisory board is expected to consist of Steven E.
Brady and the four current members of the Ocean Shore board who are not selected for appointment to the OceanFirst board and the board of directors of OceanFirst Bank, as described above. The members of the advisory board will be appointed to the
advisory board for a term ending on the second anniversary of the effective time of the first-step merger and, in exchange for performing their duties on the advisory board, will be entitled to receive a fee of thirty thousand dollars per year.
At the effective time, each restricted
stock award in respect of shares of Ocean Shore common stock granted under an Ocean Shore equity plan will become fully vested and the restrictions thereon will lapse, and each holder of such restricted stock will be entitled to receive the merger
consideration.
Also at the effective
time, all outstanding and unexercised options to purchase Ocean Shore common stock will fully vest and will convert into options to purchase a number of shares of OceanFirst common stock (rounded down to the nearest whole share) determined by
multiplying (i) the number of shares of Ocean Shore common stock subject to such Ocean Shore stock option immediately prior to the effective time by (ii) 1.2084; and the exercise price per share of the new option will be equal to the quotient
obtained by dividing (a) the per share exercise price for the shares of Ocean Shore common stock subject to such Ocean Shore option by (b) 1.2084 (rounded up to the nearest whole cent).
The integrated mergers will
be completed only if all conditions to the integrated mergers set forth in the merger agreement (as discussed in this joint proxy statement/prospectus) are either satisfied or waived. See the section of this joint proxy statement/prospectus entitled
Conditions to Complete the Integrated Mergers.
The first-step merger will become effective as of the date and time specified in
the certificate of merger to be filed with the Secretary of State of the State of New Jersey. The second-step merger will become effective as set forth in the certificate of merger to be filed with the Delaware Secretary of State. The closing of the
integrated mergers will take place at 10:00 a.m., New York City time, on the last business day of the month in which the conditions set forth in the merger agreement have been satisfied or waived, unless another date or time is agreed to in
writing by OceanFirst and Ocean Shore. OceanFirst and Ocean Shore currently expect to complete the Transactions late in the fourth quarter of 2016 or early in the first quarter of 2017, subject to the requisite approval of the OceanFirst
stockholders, the requisite approval of the Ocean Shore stockholders, the receipt of regulatory approvals or waivers and the fulfillment of other customary closing conditions set forth in the merger agreement, but neither Ocean Shore nor OceanFirst
can guarantee when, or if, the Transactions will be completed.
The conversion of Ocean Shore common stock into the right to receive the merger consideration will occur automatically at the effective time. Promptly
following completion of the first-step merger, the exchange agent will exchange certificates representing shares of Ocean Shore common stock for the merger consideration to be received pursuant to the terms of the merger agreement.
As promptly as practicable after
the effective time, and in no event later than five business days thereafter, the exchange agent will mail to each holder of record of Ocean Shore common stock immediately prior to the effective time a letter of transmittal and instructions on how
to surrender shares of Ocean Shore common stock in exchange for the merger consideration the holder is entitled to receive under the merger agreement.
If
a certificate for Ocean Shore common stock has been lost, stolen or destroyed, the exchange agent will issue the merger consideration upon receipt of (i) an affidavit of that fact by the claimant and (ii) if required by OceanFirst, the posting of a
bond in an amount as OceanFirst may determine is reasonably necessary as indemnity against any claim that may be made against it with respect to such certificate.
Following completion of the first-step merger, there will be no further transfers on the stock transfer books of Ocean Shore of shares of Ocean Shore common
stock that were issued and outstanding immediately prior to the effective time.
OceanFirst and the exchange agent will be entitled to deduct and withhold from the merger consideration any cash in lieu of fractional shares of OceanFirst
common stock, cash dividends or distributions payable or any other cash amount payable under the merger agreement to any person the amounts they are required to deduct and withhold under the Code or any provision of state, local or foreign tax law.
If any such amounts are so withheld and paid over to the appropriate governmental authority, these amounts will be treated for all purposes of the merger agreement as having been paid to the stockholders from whom they were withheld.
No dividends or other
distributions declared with respect to OceanFirst common stock will be paid to the holder of any unsurrendered certificates of Ocean Shore common stock until the holder surrenders such certificate in accordance with the terms of the merger
agreement. After the surrender of a certificate in accordance with the terms of the merger agreement, the record holder of such certificate will be entitled to receive any such dividends or other distributions, without any interest thereon, which
previously become payable with respect to the stock consideration which the shares of Ocean Shore common stock represented by such certificate have been converted into the right to receive under the merger agreement.
The representations,
warranties and covenants described below, and elsewhere in this joint proxy statement/prospectus, and included in the merger agreement were made by OceanFirst and Ocean Shore for the benefit of the other party, only for purposes of the merger
agreement and as of specific dates. In addition, the representations, warranties and covenants may be subject to limitations, qualifications or exceptions agreed upon by the parties to the merger agreement, including those included in confidential
disclosures made for the purposes of, among other things, allocating contractual risk between OceanFirst and Ocean Shore rather than establishing matters as facts, and may be subject to standards of materiality that differ from those standards
relevant to investors. Moreover, information concerning the subject matter of the representations, warranties and
covenants may change after the date of the merger agreement, which subsequent information may or may not be fully reflected in public disclosures by OceanFirst or Ocean Shore. Therefore, you
should not rely on the representations, warranties, covenants or any description thereof as characterizations of the actual state of facts or condition of OceanFirst, Ocean Shore or any of their respective subsidiaries or affiliates without
considering the foregoing. The representations and warranties and other provisions of the merger agreement should not be read alone, but instead should be read only in conjunction with the information provided elsewhere in this joint proxy
statement/prospectus and in the documents incorporated by reference into this joint proxy statement/prospectus. See the section of this joint proxy statement/prospectus entitled Where You Can Find More Information beginning on page 140.
OceanFirst and Ocean Shore will provide additional disclosure in their respective public reports to the extent they become aware of the existence of any material facts that are required to be disclosed under federal securities laws and that might
otherwise contradict the representations and warranties in the merger agreement and will update such disclosure as required by the federal securities laws.
The merger agreement contains customary representations and warranties of each of OceanFirst and Ocean Shore relating to their respective businesses. The
representations and warranties in the merger agreement do not survive the effective time.
The merger agreement contains representations and warranties
made by Ocean Shore relating to a number of matters, including the following:
The merger agreement contains representations and warranties made by OceanFirst relating
to a number of matters, including the following:
Certain representations and warranties of OceanFirst and Ocean Shore are qualified as to materiality
or material adverse effect. For purposes of the merger agreement, a material adverse effect, when used in reference to either Ocean Shore, OceanFirst or the combined company, means a material adverse effect on (i) the
business, properties, assets, liabilities, results of operations or financial condition of such party and its subsidiaries taken as a whole (provided that in the case of clause (i), a material adverse effect will not be deemed to include the impact
of (a) changes, after the date of the merger agreement, in U.S. generally accepted accounting principles (which we refer to as GAAP) or applicable regulatory accounting requirements, (b) changes, after the date of the merger agreement,
in laws, rules or regulations of general applicability to companies in the industries in which such party and its subsidiaries operate, or interpretations thereof by courts or governmental entities, (c) changes, after the date of the merger
agreement, in global, national or regional political conditions (including the outbreak of war or acts of terrorism) or in economic or market conditions affecting the financial services industry generally and not specifically relating to such party
or its subsidiaries, or (d) public disclosure of the transactions contemplated by the merger agreement or actions expressly required by the merger agreement or actions or omissions that are taken with the prior written consent of the other party in
contemplation of the transactions contemplated by the merger agreement; except, with respect to subclauses (a), (b) and (c), to the extent that the effects of such changes are materially disproportionately adverse to the business, properties,
assets, liabilities, results of operations or financial condition of such party and its subsidiaries, taken as a whole, as compared to other companies in the industry in which such party and its subsidiaries operate) or (ii) the ability of such
party to timely consummate the transactions contemplated by the merger agreement.
Ocean
Shore has agreed that, prior to the effective time (or earlier termination of the merger agreement), subject to specified exceptions, it will, and will cause each of its subsidiaries to, conduct its business in the ordinary course in all material
respects, use reasonable best efforts to maintain and preserve intact its business organization, employees, independent contractors and advantageous business relationships, and take no action that would reasonably be expected to adversely affect or
delay its ability to obtain any necessary approvals of any governmental entity or regulatory agency required for the transactions contemplated by the merger agreement or to perform its covenants and agreements under the merger agreement or to
consummate the transactions contemplated thereby on a timely basis.
Additionally, prior to the effective time (or earlier termination of the merger
agreement), subject to specified exceptions, Ocean Shore may not, and may not permit any of its subsidiaries to, without the prior written consent of OceanFirst, which, consent cannot be unreasonably withheld, conditioned or delayed, undertake the
following actions:
OceanFirst has agreed that, prior to the effective time (or earlier termination of the merger agreement), subject to specified exceptions, OceanFirst may not,
and may not permit any of its subsidiaries to, without the prior written consent of Ocean Shore, which, consent cannot be unreasonably withheld, continued or delayed, undertake the following actions:
OceanFirst and Ocean Shore have
agreed to use their respective reasonable best efforts to promptly prepare and file all necessary documentation, to effect all applications, notices, petitions and filings, to obtain all permits, consents, approvals and authorizations of all third
parties and governmental entities which are necessary or advisable to consummate the transactions contemplated by the merger agreement. However, in no event will OceanFirst or Ocean Shore be required to take any action, or commit to take any action,
or agree to any condition or restriction, in connection with obtaining the required permits, consents, approvals and authorizations of governmental entities that would reasonably be expected to result in a materially burdensome regulatory condition.
OceanFirst and Ocean Shore have also agreed to furnish each other with all information reasonably necessary or advisable in connection with any statement, filing, notice or application to any governmental entity in connection with the Transactions,
as well as to keep each other apprised of the status of matters related to the completion of the transactions contemplated by the merger agreement.
OceanFirst has agreed that, for
the period commencing on the effective time and ending on the first anniversary of the effective time, OceanFirst will cause the surviving corporation to provide the employees of Ocean Shore and its subsidiaries who continue to be employed by
OceanFirst or its subsidiaries immediately following the
effective time, while employed by OceanFirst or its subsidiaries after the effective time, with base salaries, wages and employee benefits (excluding equity and equity based compensation) that
are substantially comparable in the aggregate to the base salaries, wages and employee benefits provided to similarly situated employees of OceanFirst and its subsidiaries, except that OceanFirst may satisfy this obligation by providing such
continuing employees with base salaries, wages and employee benefits that are substantially comparable in the aggregate to the base salaries, wages and employee benefits provided by Ocean Shore or its subsidiaries to such continuing employees
immediately prior to the effective time.
Under the merger agreement, OceanFirst has agreed to, effective as of the effective time, assume and honor all
Ocean Shore benefit plans in accordance with their terms. OceanFirst has further acknowledged that a change in control within the meaning of the Ocean Shore benefit plans will occur at the effective time of the first-step merger.
The merger agreement requires the surviving corporation to use reasonable best efforts to, with respect to the continuing employees:
Effective prior to the closing, Ocean Shore
will terminate the Ocean Shore ESOP and (unless OceanFirst requests otherwise in writing) the Ocean Shore 401(k) Plan, in each case, in accordance with the terms of the merger agreement. As soon as practicable following the effective time,
OceanFirst will permit or cause its subsidiaries to permit the continuing employees to roll over their account balances and outstanding loan balances, if any, under the Ocean Shore 401(k) Plan into an eligible retirement plan within the
meaning of Section 402(c)(8)(B) of the Code maintained by OceanFirst or its subsidiaries. The accounts of all participants and beneficiaries in the Ocean Shore ESOP as of the effective time shall become fully vested as of the effective time. Any
cash or unallocated shares of OceanFirst common stock held in the Ocean Shore ESOPs suspense account after repayment of the Ocean Shore ESOP loan will be allocated as earnings to the accounts of the Ocean Shore ESOP participants who are
employed as of the effective time based on their account balances under the Ocean Shore ESOP as of the effective time. Promptly following the receipt of a favorable determination letter from the IRS regarding the qualified status of the Ocean Shore
ESOP upon the termination of the Ocean Shore ESOP, the account balances in the Ocean Shore ESOP will either be distributed to participants and beneficiaries or transferred to an eligible tax-qualified retirement plan or individual retirement account
as a participant or beneficiary may direct. OceanFirst has agreed to permit the Ocean Shore ESOP participants who become employees of OceanFirst or OceanFirst subsidiaries to roll over their account balances in the Ocean Shore ESOP to the OceanFirst
ESOP.
Under the terms of the merger agreement OceanFirst has agreed to, following the effective time, indemnify and hold harmless all present and former directors,
officers and employees of Ocean Shore and its subsidiaries against all costs or expenses (including reasonable attorneys fees), judgments, fines, losses, damages or liabilities incurred in connection with any threatened or actual claim,
action, suit, proceeding or investigation,
whether civil, criminal, administrative or investigative, whether arising before or after the effective time, arising out of the fact that such person is or was a director, officer or employee of
Ocean Shore or its subsidiaries and pertaining to matters existing or occurring at or prior to the effective time, including the transactions contemplated by the merger agreement, to the same extent such persons are indemnified as of the date of the
merger agreement by Ocean Shore pursuant to Ocean Shores certificate of incorporation, Ocean Shores bylaws or the governing or organizational documents of any subsidiary of Ocean Shore, and has also agreed to advance expenses to such
persons to the same extent as such persons are entitled to advancement of expenses as of the date of the merger agreement by Ocean Shore pursuant to Ocean Shores certificate, Ocean Shores bylaws or the governing or organizational
documents of any subsidiary of Ocean Shore, except that, if required, such person provides an undertaking to repay such advances if it is ultimately determined that such person is not entitled to indemnification.
The merger agreement requires the surviving corporation to maintain, for a period of six years after completion of the first-step merger, Ocean Shores
existing directors and officers liability insurance policy, or policies with a substantially comparable insurer of at least the same coverage and amounts and containing terms and conditions that are no less advantageous to the insured,
with respect to claims arising from facts or events that occurred at or prior to the completion of the integrated mergers. However, the surviving corporation is not required to spend annually more than 200% of the current annual premium paid as of
the date of the merger agreement by Ocean Shore for such insurance (which we refer to as the premium cap), and if such premiums for such insurance would at any time exceed that amount, then the surviving corporation will maintain
policies of insurance which, in its good faith determination, provide the maximum coverage available at an annual premium equal to the premium cap. In lieu of the foregoing, Ocean Shore, in consultation with, but only upon the prior written consent
of OceanFirst, may (and at the request of OceanFirst, Ocean Shore will use its reasonable best efforts to) obtain at or prior to the effective time a six year tail policy under Ocean Shores existing directors and officers insurance
policy providing equivalent coverage to that described in the preceding sentence if such a policy can be obtained for an amount that, in the aggregate, does not exceed 300% of the current annual premium paid as of the date of the merger agreement by
Ocean Shore for such insurance.
In the absence of additional circumstances specified in the merger agreement, neither OceanFirst nor Ocean Shore is permitted to terminate the merger agreement
based on the failure of either such party to obtain the required vote of its stockholders. Instead, each of the parties will in good faith use its reasonable best efforts to negotiate a restructuring of the transaction (except that neither party
will have any obligation to alter or change any material terms, including the amount or kind of the consideration to be issued to holders of the capital stock of Ocean Shore as provided for in the merger agreement, in a manner adverse to such party
or its stockholders) and/or resubmit the merger agreement or the transactions contemplated thereby (or as restructured) to its respective stockholders for approval.
The merger agreement also
contains additional covenants, including, among others, covenants relating to the filing of this joint proxy statement/prospectus, obtaining required consents, the listing of the shares of OceanFirst common stock to be issued in the first-step
merger, access to information of the other company, the permissibility of representatives of OceanFirst and OceanFirst Banks attendance of Ocean Shore board meetings and certain committee meetings following the receipt of the requisite
regulatory approvals, exemption from takeover laws and public announcements with respect to the transactions contemplated by the merger agreement.
Each of Ocean Shore and OceanFirst has agreed to hold a meeting of its stockholders for the purpose of voting upon approval of the merger agreement, in the
case of Ocean Shore stockholders, and upon the OceanFirst share issuance, in the case of OceanFirst stockholders, in each case, as soon as reasonably practicable after this joint
proxy statement/prospectus is declared effective. Ocean Shore has agreed to use its reasonable best efforts to obtain from its stockholders the vote required to approve the merger agreement,
including by communicating to its stockholders its recommendation (and including such recommendation in this joint proxy statement/prospectus) that they approve the merger agreement and the transactions contemplated thereby and OceanFirst has made
similar covenants with respect to the OceanFirst share issuance. However, if the OceanFirst board, after receiving the advice of its outside counsel and, with respect to financial matters, its financial advisors, determines in good faith that it
would be reasonably likely to result in a violation of its fiduciary duties under applicable law to continue to recommend the merger agreement, then it may (but will not be required to) submit the merger agreement to its stockholders without
recommendation and may communicate the basis for its lack of a recommendation to its stockholders to the extent required by law. If the Ocean Shore board, after receiving the advice of its outside counsel and, with respect to financial matters, its
financial advisors, determines in good faith that it would be reasonably likely to result in a violation of its fiduciary duties under applicable law to continue to recommend the merger agreement, then it may (but will not be required to) submit the
merger agreement to its stockholders without recommendation and may communicate the basis for its lack of a recommendation to its stockholders to the extent required by law; except that the Ocean Shore board may not take any such actions unless (i)
if such action is taken in response to an acquisition proposal, such acquisition proposal did not result from a breach by Ocean Shore of its obligations relating to the non-solicitation of acquisition proposals and such acquisition proposal
constitutes a superior proposal; (ii) Ocean Shore gives OceanFirst at least three business days prior written notice of its intention to take such action and a reasonable description of the event or circumstances giving rise to its
determination to take such action (including, if such action is taken in response to an acquisition proposal, its basis for determining that such acquisition proposal, constitutes a superior proposal (including the latest material terms and
conditions of, and the identity of the third-party making, any such acquisition proposal, or any amendment or modification thereof, or describe in reasonable detail such other event or circumstances)) and (iii) at the end of such notice period, the
Ocean Shore board takes into account any amendment or modification to the merger agreement proposed by OceanFirst (it being understood that OceanFirst will not have any obligation to propose any adjustments, modifications or amendments to the terms
and conditions of the merger agreement), and after receiving the advice of its outside counsel and, with respect to financial matters, its financial advisors, again determines in good faith that it would nevertheless be reasonably likely to result
in a violation of its fiduciary duties under applicable law to continue to recommend the merger agreement (and, if such action is taken in response to an acquisition proposal, that such acquisition proposal constitutes a superior proposal). Any
material amendment to any acquisition proposal will require a new determination and notice period.
Under the terms of the merger agreement, each of
OceanFirst and Ocean Shore has agreed to adjourn or postpone the OceanFirst special meeting or the Ocean Shore special meeting, as the case may be, if, as of the time for which such meeting is originally scheduled, there are insufficient shares of
OceanFirst common stock or Ocean Shore common stock, as the case may be, represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of such meeting, or if on the date of such meeting, Ocean Shore or
OceanFirst, as applicable, has not received proxies representing a sufficient number of shares necessary to obtain the requisite Ocean Shore stockholder approval or the requisite OceanFirst stockholder approval. However, if (i) OceanFirst submits
the OceanFirst share issuance proposal to the OceanFirst stockholders without recommendation or (ii) Ocean Shore submits the merger agreement to the Ocean Shore stockholders without recommendation, then, in each case, an adjournment or postponement
of the meeting due to an insufficient quorum or the failure to obtain the requisite Ocean Shore stockholder approval or the requisite OceanFirst stockholder approval, as applicable, is not required by the terms of the merger agreement.
Under the merger agreement, unless the merger agreement has been terminated in accordance with its terms, OceanFirst has an unqualified obligation to convene
the OceanFirst special meeting and to submit the OceanFirst share issuance proposal to the OceanFirst stockholders for the purpose of approving the OceanFirst share issuance proposal, and Ocean Shore has an unqualified obligation to convene the
Ocean Shore special meeting and to submit the merger agreement to the Ocean Shore stockholders for the purpose of approving the Ocean Shore merger proposal.
Ocean Shore has agreed that it will not, and will cause its subsidiaries and its and their officers, directors, agents, advisors and representatives not to,
directly or indirectly, (i) initiate, solicit, knowingly encourage or knowingly facilitate inquiries or proposals with respect to, (ii) engage or participate in any negotiations with any person concerning or (iii) provide any confidential or
nonpublic information or data to, or have or participate in any discussions with, any person relating to, any acquisition proposal except to notify such person of the existence of these non-solicit provisions of the merger agreement. However, if
Ocean Shore receives an unsolicited bona fide written acquisition proposal prior to the date of the Ocean Shore special meeting and such proposal did not result from a breach of Ocean Shores non-solicitation obligations under the merger
agreement, Ocean Shore may, and may permit its subsidiaries and its and its subsidiaries officers, directors, agents, advisors and representatives to, furnish or cause to be furnished nonpublic information or data and participate in
negotiations or discussions to the extent that the Ocean Shore board concludes in good faith (after receiving the advice of its outside counsel, and with respect to financial matters, its financial advisors) that (1) such acquisition proposal
constitutes or is reasonably likely to lead to a superior proposal and (2) failure to take such actions would be reasonably likely to result in a violation of its fiduciary duties under applicable law, except that, prior to providing any such
nonpublic information or data, Ocean Shore provides such information or data to OceanFirst and enters into a confidentiality agreement with such third-party on terms no less favorable to it than the confidentiality agreement between OceanFirst and
Ocean Shore, and which confidentiality agreement does not provide such person with any exclusive right to negotiate with Ocean Shore.
Ocean Shore has
also agreed to, and to cause its officers, directors, agents, advisors and representatives to, immediately cease and terminate any activities, discussions or negotiations conducted before the date of the merger agreement with any person other than
OceanFirst, with respect to any acquisition proposal. In addition, Ocean Shore has agreed to use its reasonable best efforts, subject to applicable law, to (a) enforce any confidentiality, standstill or similar agreement relating to an acquisition
proposal and (b) within ten business days after the date of the merger agreement, request and confirm the return or destruction of any confidential information provided to any person other than OceanFirst. Ocean Shore has also agreed to promptly
(and in any event within 24 hours) advise OceanFirst following receipt of any acquisition proposal or any inquiry which could reasonably be expected to lead to an acquisition proposal, and the substance thereof (including the terms and conditions of
and the identity of the person making such inquiry or acquisition proposal and copies of any written acquisition proposal), and to keep OceanFirst apprised of any related developments, discussions and negotiations on a current basis, including any
amendments to or revisions of the terms of such inquiry or acquisition proposal.
For purposes of the merger agreement, an acquisition
proposal means, other than the transactions contemplated by the merger agreement, any offer, proposal or inquiry relating to, or any third-party indication of interest in, (i) any acquisition or purchase, direct or indirect, of 25% or more of
the consolidated assets of Ocean Shore and its subsidiaries or 25% or more of any class of equity or voting securities of Ocean Shore or its subsidiaries whose assets, individually or in the aggregate, constitute more than 25% of the consolidated
assets of Ocean Shore, (ii) any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in such third-party beneficially owning 25% or more of any class of equity or voting securities of Ocean Shore or its
subsidiaries whose assets, individually or in the aggregate, constitute more than 25% of the consolidated assets of Ocean Shore, or (iii) a merger, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation,
dissolution or other similar transaction involving Ocean Shore or its subsidiaries whose assets, individually or in the aggregate, constitute more than 25% of the consolidated assets of Ocean Shore. For purposes of the merger agreement, a
superior proposal means any bona fide written offer or proposal made by a third party to consummate an acquisition proposal that the Ocean Shore board determines in good faith (after receiving the advice of its outside counsel and, with
respect to financial matters, its financial advisors): (1) would, if consummated, result in the acquisition of all, but not less than all, of the issued and outstanding shares of Ocean Shore common stock or all, or substantially all, of the assets
of Ocean Shore; (2) would result in a transaction that (A) involves consideration to the holders of the shares of Ocean Shore common
stock that is more favorable, from a financial point of view, than the consideration to be paid to the stockholders of Ocean Shore pursuant to the merger agreement, considering, among other
things, the nature of the consideration being offered and any material regulatory approvals or other risks associated with the timing of the proposed transaction beyond, or in addition to, those specifically contemplated hereby, and which proposal
is not conditioned upon obtaining financing and (B) is, in light of the other terms of such proposal, more favorable to the stockholders of Ocean Shore than the integrated mergers and the transactions contemplated by the merger agreement; and (3) is
reasonably likely to be completed on the terms proposed, in each case, taking into account all legal, financial, regulatory and other aspects of the acquisition proposal.
OceanFirsts and Ocean Shores respective obligations to complete the integrated mergers are subject to the satisfaction or waiver of the following
customary closing conditions:
Neither Ocean Shore nor OceanFirst can be certain when, or if, the conditions to the integrated mergers will be satisfied or waived or that the integrated
mergers will be completed.
The merger agreement can be terminated at any time prior to completion of the first-step merger in the following circumstances:
Additionally, Ocean Shore may terminate the merger agreement if, at any time during the five-day period commencing on the first date on which all requisite
regulatory approvals (and waivers, if applicable) necessary for consummation of the integrated mergers have been received (disregarding any waiting period) (which we refer to as the determination date) both of the following conditions
are satisfied: (i) the OceanFirst market value on the determination date is less than $14.46 and (ii) the number obtained by dividing the OceanFirst market value on the determination date by $18.08 (subject to certain adjustments), is less than the
number obtained by dividing (x) the average of the daily closing value of the NASDAQ Bank Index for the ten consecutive trading days immediately preceding the determination date by (y) the closing value of the NASDAQ Bank Index on July 12, 2016
minus 0.15.
If Ocean Shore elects to exercise its termination right as described above, it must notify OceanFirst in writing
of such election no later than the last day of the five day period commencing on the determination date. During the five day period commencing with OceanFirsts receipt of any notice duly delivered by or on behalf of Ocean Shore electing to
exercise Ocean Shores right to terminate the merger agreement as described above, OceanFirst will have the option to increase the exchange ratio to a level that would cause either of the requirements described in the preceding paragraph not to
be satisfied. If within such five day period, OceanFirst delivers written notice to Ocean Shore that it intends to proceed with the integrated mergers by paying such additional consideration, and notifies Ocean Shore of the revised exchange ratio,
then no termination by Ocean Shore will have occurred, and the merger agreement will remain in full force and effect in accordance with its terms (except that the exchange ratio will have been so modified).
If the merger agreement is
terminated, it will become void and have no effect, except that (i) each of OceanFirst and Ocean Shore will remain liable for any liabilities or damages arising out of its fraud or knowing, intentional and material breach of any provision of the
merger agreement and (ii) designated provisions of the merger agreement will survive the termination, including those relating to payment of termination fees and expenses and the confidential treatment of information.
In the event that, after the date of the
merger agreement and prior to the termination of the merger agreement, (i) a bona fide acquisition proposal has been made known to senior management or the Ocean Shore board or has been made directly to its stockholders generally or any person has
publicly announced (and not withdrawn) an acquisition proposal with respect to Ocean Shore, (ii) (A) thereafter the merger agreement is terminated by either OceanFirst or Ocean Shore because the integrated mergers have not been completed prior to
the termination date, and without the requisite Ocean Shore stockholder vote having been obtained or (B) thereafter the merger agreement is terminated by OceanFirst based on a breach of the merger agreement by Ocean Shore that would constitute the
failure of a closing condition and that has not been cured during the permitted time period or by its nature cannot be cured during such period and (iii) within 12 months after the date of such termination, Ocean Shore enters into a definitive
agreement or consummates a transaction with respect to an acquisition proposal (whether or not the same acquisition proposal as that referred to above), then Ocean Shore will, on the earlier of the date it enters into such definitive agreement and
the date of consummation of such transaction, pay OceanFirst, by wire transfer of same day funds, a $5.72 million termination fee.
In the event that the
merger agreement is terminated by OceanFirst based on the Ocean Shore board having (i) failed to recommend in this joint proxy statement/prospectus that the Ocean Shore stockholders approve the merger agreement, or withdrawn, modified or qualified
such recommendation in a manner adverse to OceanFirst, or resolved to do so, or failed to reaffirm such recommendation within two business days after OceanFirst has requested in writing that such action be taken, or failed to recommend against
acceptance of a tender offer or exchange offer for outstanding Ocean Shore common stock that has been publicly disclosed (other than by OceanFirst or an affiliate of OceanFirst) within ten business days after the commencement of such tender or
exchange offer, (ii) recommended or endorsed an acquisition proposal or (iii) breached certain obligations, including with respect to the non-solicitation of acquisition proposals or calling a meeting of its stockholders and recommending that the
Ocean Shore stockholders approve the merger agreement, in any material respect, then Ocean Shore will pay OceanFirst, by wire transfer of same day funds, a $5.72 million termination fee on the date of termination.
OceanFirst will pay Ocean Shore, by wire transfer of same day funds on the date of termination, a $5.72 million termination fee, in the event that the merger
agreement is terminated by Ocean Shore based on the OceanFirst board having (i) failed to recommend in this joint proxy statement/prospectus that the OceanFirst stockholders approve the OceanFirst share issuance, or withdrawn, modified or qualified
such recommendation in a manner adverse to Ocean Shore, or resolved to do so, or failed to reaffirm such recommendation within two business
days after Ocean Shore requests in writing that such action be taken or (ii) breached certain obligations, including with respect to calling a meeting of its stockholders and recommending that
they approve the OceanFirst share issuance, in any material respect.
All costs and expenses incurred in connection with the merger agreement and the transactions contemplated thereby will be paid by the party incurring such
expense, except that the costs and expenses of printing and mailing this joint proxy statement/prospectus shall be borne proportionately by OceanFirst and Ocean Shore based on the number of stockholders of such party and all filing and other fees
paid to the SEC in connection with the integrated mergers will be borne equally by OceanFirst and Ocean Shore.
Subject to compliance with applicable law, the merger agreement may be amended by the parties at any time before or after approval of
the matters presented in connection with integrated mergers by the stockholders of OceanFirst and the stockholders of Ocean Shore, except that after approval of the merger agreement by the Ocean Shore stockholders or the approval of the issuance of
shares of OceanFirst common stock in connection with the first-step merger by the OceanFirst stockholders, there may not be, without further approval of such stockholders, any amendment of the merger agreement that requires further approval under
applicable law.
At any time prior to the completion of the first-step merger, the parties may, to the extent legally permitted, extend the time for the
performance of any of the obligations or other acts of the other party, waive any inaccuracies in the representations and warranties contained in the merger agreement or in any document delivered pursuant to the merger agreement, and waive
compliance with any of the agreements or satisfaction of any conditions contained in the merger agreement, except that after approval of the merger agreement by the Ocean Shore stockholders or the approval of the issuance of shares of OceanFirst
common stock in connection with the first-step merger by the OceanFirst stockholders, there may not be, without further approval of such stockholders, any extension or waiver of the merger agreement or any portion thereof that requires further
approval under applicable law.
Simultaneously with the execution of the merger agreement, each of Ocean Shores directors, solely in his or her capacity as an Ocean Shore stockholder,
entered into a separate voting agreement with OceanFirst (which we refer to collectively as the Ocean Shore voting agreements), pursuant to which each such director agreed among other things, to vote all shares of Ocean Shore common
stock that such director owns of record or beneficially, and that such director subsequently acquires, in favor of the approval of the merger agreement and the approval of the first-step merger and the other transactions contemplated by the merger
agreement. Each director also agreed to vote against (i) any acquisition proposal made in opposition to or otherwise in competition or inconsistent with the first-step merger or the transactions contemplated by the merger agreement, (ii) any
agreement, amendment of any agreement (including the Ocean Shore articles of incorporation and bylaws) or any other action that is intended or would reasonably be expected to prevent, impede or, in any material respect, interfere with, delay,
postpone or discourage the transactions contemplated by the merger agreement and (iii) any action, agreement, transaction or proposal that would reasonably be expected to result in a breach of any representation, warranty, covenant, agreement or
other obligation of Ocean Shore in the merger agreement. As of the Ocean Shore record date, these stockholders beneficially owned and were entitled to vote, in the aggregate, 371,878 shares of the Ocean Shore common stock, allowing them to exercise
approximately 5.7% of the voting power of the shares of Ocean Shore common stock outstanding as of the Ocean Shore record date.
The foregoing description
of the Ocean Shore voting agreements is subject to, and qualified in its entirety by reference to, the Ocean Shore voting agreements, a form of which is attached to this joint proxy statement/prospectus as
Annex B
and is incorporated by
reference into this joint proxy statement/prospectus.
The integrated mergers will be accounted for using the acquisition method of accounting, in accordance with the provisions of FASB ASC Topic 805-10,
Business Combinations
. Under the acquisition method of accounting, the assets (including identifiable intangible assets) and liabilities (including executory contracts and other commitments) of Ocean Shore as of the effective date of the
integrated mergers will be recorded at their respective fair values and added to those of OceanFirst. If the purchase price exceeds the difference between the fair value of assets acquired and the fair value of the liabilities assumed, then such
excess will be recorded as goodwill. Financial statements of OceanFirst issued after the completion of the integrated mergers will reflect these fair values and will not be restated retroactively to reflect the historical financial position or
results of operations of Ocean Shore before the integrated mergers.
The following is a discussion of the U.S. federal income tax consequences of the integrated mergers to U.S. holders (as defined below) of
Ocean Shore common stock and is based upon the Code, Treasury regulations promulgated thereunder, administrative rulings and judicial decisions in effect as of the date of this joint proxy statement/prospectus, all of which are subject to change at
any time, possibly with retroactive effect. Any such change could affect the accuracy of the statements and conclusions set forth in this discussion. This discussion does not address any tax consequences arising under the unearned income Medicare
contribution tax pursuant to the Health Care and Education Reconciliation Act of 2010 nor does it address any tax consequences arising under the laws of any state, local or foreign jurisdiction or under any U.S. federal laws other than those
pertaining to the income tax.
The following discussion applies only to U.S. holders of Ocean Shore common stock who hold such shares as capital assets
within the meaning of Section 1221 of the Code (generally, property held for investment). Further, this discussion does not purport to consider all aspects of U.S. federal income taxation that might be relevant to U.S. holders in light of their
particular circumstances and does not apply to U.S. holders subject to special treatment under the U.S. federal income tax laws (such as, for example, dealers or brokers in securities, commodities or foreign currencies, traders in securities that
elect to apply a mark-to-market method of accounting, banks and certain other financial institutions, insurance companies, mutual funds, tax-exempt organizations, holders subject to the alternative minimum tax provisions of the Code, partnerships, S
corporations or other pass-through entities or investors in partnerships, regulated investment companies, real estate investment trusts, controlled foreign corporations, passive foreign investment companies, former citizens or residents of the
United States, holders whose functional currency is not the U.S. dollar, holders who hold shares of Ocean Shore common stock as part of a hedge, straddle, constructive sale or conversion transaction or other integrated investment, holders who
acquired Ocean Shore common stock pursuant to the exercise of employee stock options, through a tax qualified retirement plan or otherwise as compensation, holders who exercise appraisal rights or holders who actually or constructively own five
percent or more of Ocean Shore common stock).
For purposes of this discussion, the term U.S. holder means a beneficial owner of Ocean Shore
common stock that is, for U.S. federal income tax purposes, (i) an individual citizen or resident of the United States, (ii) a corporation, or entity treated as a corporation, organized in or under the laws of the United States or any state thereof
or the District of Columbia, (iii) a trust if (a) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of
the trust or (b) such trust has made a valid election to be treated as a U.S. person for U.S. federal income tax purposes or (iv) an estate, the income of which is includible in gross income for U.S. federal income tax purposes, regardless of its
source.
If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds Ocean Shore common stock, the tax treatment of a
partner in such partnership generally will depend on the status of the partner and the activities of the partnership. Any entity treated as a partnership for U.S. federal income tax purposes that holds Ocean Shore common stock, and any partners in
such partnership, should consult their tax advisors regarding the tax consequences of the integrated mergers to their specific circumstances.
It is a
condition to the obligation of OceanFirst and Ocean Shore to complete the integrated mergers that they receive a written opinion from their counsel, dated the closing date of the integrated mergers, to the effect that the integrated mergers will
together be treated as an integrated transaction that qualifies as a reorganization within the meaning of Section 368(a) of the Code. In the opinion of Skadden, Arps, Slate, Meagher & Flom LLP and Kilpatrick Townsend & Stockton
LLP, the integrated mergers will together be treated as an integrated transaction that qualifies as a reorganization within the meaning of Section 368(a) of the code, with the tax consequences described below. These opinions of counsel
will be given in reliance on facts and representations contained in representation letters provided by OceanFirst and Ocean Shore and on customary assumptions.
These opinions will not be binding on the Internal Revenue Service (the IRS) or any court. OceanFirst and Ocean Shore have not sought and will not seek any ruling from the IRS
regarding any matters relating to the integrated mergers and, as a result, there can be no assurance that the IRS will not assert, or that a court would not sustain, a position contrary to any of the conclusions set forth below. In addition, if any
of the representations or assumptions upon which those opinions are based are inconsistent with the actual facts, the U.S. federal income tax consequences of the integrated mergers could be adversely affected.
U.S. holders of Ocean Shore common stock generally will recognize gain (but not loss) in an amount equal to the lesser of (i) the U.S. holders gain
realized (i.e., the excess, if any, of the sum of the amount of cash consideration and the fair market value (as of the effective time of the integrated mergers) of the OceanFirst common stock received over the U.S. holders adjusted tax basis
in its shares of Ocean Shore common stock surrendered) and (ii) the amount of cash consideration received pursuant to the integrated mergers. Any gain or loss realized generally must be calculated separately for each identifiable block of shares
surrendered in the exchange, and a loss realized on one block of shares may not be used to offset a gain realized on another block of shares. Any recognized gain generally will be long-term capital gain if the U.S. holders holding period for
its Ocean Shore common stock exceeds one year at the effective time of the integrated mergers (except for gain treated as a dividend, as discussed below).
A U.S. holders aggregate tax basis in its OceanFirst common stock received pursuant to the integrated mergers, including the basis allocable to any
fractional share of OceanFirst common stock for which cash is received, will be equal to the U.S. holders aggregate tax basis in the Ocean Shore common stock surrendered pursuant to the integrated mergers, decreased by the amount of cash
received (excluding any cash received in lieu of a fractional share of OceanFirst common stock) and increased by the amount of gain, if any, recognized or any amount treated as a dividend, as described below (but excluding any gain resulting from
the deemed receipt and redemption of fractional shares).
A U.S. holders holding period in its OceanFirst common stock received pursuant to the
integrated mergers will include the holding period for its shares of Ocean Shore common stock surrendered in exchange therefor. U.S. holders who hold shares of Ocean Shore common stock with differing bases or holding periods should consult their tax
advisors with regard to identifying the bases or holding periods of the particular shares of OceanFirst common stock received in the integrated mergers.
The deemed redemption
generally will be substantially disproportionate with respect to a U.S. holder if the percentage of the outstanding OceanFirst common stock that the U.S. holder actually and constructively owns immediately after the deemed redemption is
less than 80% of the percentage of the outstanding OceanFirst common stock that the U.S. holder is deemed actually and constructively to have owned immediately before the deemed redemption. The deemed redemption will not be considered to be
essentially equivalent to a dividend
if it results in a meaningful reduction in the U.S. holders deemed percentage of stock ownership of OceanFirst. The IRS has ruled that a minority stockholder in a publicly held
corporation whose relative stock interest is minimal and who exercises no control with respect to corporate affairs is considered to have experienced a meaningful reduction if the stockholder has at least a relatively minor reduction in
such stockholders percentage of stock ownership under the above analysis. In applying the above tests, the U.S. holder may, under the constructive ownership rules, be deemed to own stock that is owned by other persons or otherwise in addition
to the stock the U.S. holder actually owns or owned.
OceanFirsts authorized capital stock consists of 55,000,000 shares of common stock, $0.01 par value per share, and 5,000,000 shares of preferred stock,
$0.01 par value per share.
OceanFirsts certificate of incorporation currently authorizes the issuance of up to 55,000,000 shares of common stock. As of the OceanFirst record date,
there were (i) 25,850,956 shares of OceanFirst common stock issued and outstanding, including 154,445 shares of OceanFirst common stock issued in respect of outstanding awards of restricted OceanFirst common stock under OceanFirst equity plans
(or in the former Cape equity plans that were assumed by OceanFirst in the Cape acquisition (which we refer to as the Cape equity plans)), (ii) 7,715,816 shares of OceanFirst common stock held in treasury and (iii) 2,627,468 shares
of OceanFirst common stock reserved for issuance upon the exercise of outstanding stock options to purchase shares of OceanFirst common stock granted under such OceanFirst equity plans or the Cape equity plans.
OceanFirst common stock is currently listed for quotation on the NASDAQ under the symbol OCFC.
OceanFirsts common stock does not have preemptive rights, redemption rights, conversion rights, sinking fund or redemption provisions.
The holders of OceanFirst common stock
have exclusive voting rights in OceanFirst. They elect the OceanFirst board and act on other matters as are required to be presented to them under Delaware law or as are otherwise presented to them by the OceanFirst board. Generally, each holder of
common stock is entitled to one vote per share and will not have any right to cumulate votes in the election of directors. OceanFirsts certificate of incorporation provides that stockholders who beneficially own in excess of 10% of the then
outstanding shares of OceanFirst common stock are not entitled to any vote with respect to the shares held in excess of the 10% limit. A person or entity is deemed to beneficially own shares that are owned by an affiliate as well as persons acting
in concert with such person or entity. If OceanFirst issues shares of preferred stock, holders of the preferred stock may also possess voting rights. Certain matters require an 80% stockholder vote, which is calculated after giving effect to the
provision in OceanFirsts certificate of incorporation limiting voting rights as described above.
In the event of OceanFirsts liquidation, dissolution or winding up, holders of common stock would be entitled to receive, after payment or provision for
payment of all its debts and liabilities, all of the assets of OceanFirst available for distribution. If preferred stock is issued, the holders thereof may have a priority over the holders of
the common stock in the event of liquidation or dissolution. In the event of any liquidation, dissolution or winding up of OceanFirst Bank, OceanFirst, as the holder of 100% of OceanFirst
Banks capital stock, would be entitled to receive, after payment or provision for payment of all debts and liabilities of OceanFirst Bank, including all deposit accounts and accrued interest thereon, and after distribution of the balance in
the special liquidation account to eligible account holders and supplemental eligible account holders, all assets of OceanFirst Bank available for distribution.
Holders of OceanFirst common stock are
entitled to receive ratably such dividends as may be declared by the OceanFirst board out of legally available funds. The ability of the OceanFirst board to declare and pay dividends on OceanFirst common stock is subject to the terms of applicable
Delaware law and banking regulations. If OceanFirst issues shares of preferred stock, the holders thereof may have a priority over the holders of the common stock with respect to dividends. For more information regarding OceanFirsts ability to
pay dividends, see the sections of this joint proxy statement/prospectus entitled The Transactions Dividend Policy beginning on page 92 and Where You Can Find More Information beginning on page 140.
OceanFirsts principal source of income is dividends that are declared and paid by OceanFirst Bank on its capital stock. Therefore, OceanFirsts ability to pay dividends is dependent upon the receipt of dividends from OceanFirst Bank.
Insured depository institutions such as OceanFirst Bank are prohibited from making capital distributions, including the payment of dividends, if, after making such distribution, the institution would become undercapitalized, as such term
is defined in the applicable law and regulations. In the future, any declaration and payment of cash dividends will be subject to the OceanFirst boards evaluation of OceanFirsts operating results, financial condition, future growth
plans, general business and economic conditions, and tax and other relevant considerations. The payment of cash dividends by OceanFirst in the future will also be subject to certain other legal and regulatory limitations and ongoing review by the
OceanFirsts banking regulators.
HOLA requires any savings and loan holding company, as defined in HOLA, to obtain the approval of the Federal Reserve Board before acquiring 5% or
more of OceanFirst common stock. Any person, other than a savings and loan holding company, is required to obtain the approval of the Federal Reserve Board before acquiring 10% or more of OceanFirst common stock under the Change in Bank Control Act.
Any person who (a) owns, controls or has the power to vote 25% or more of any class of OceanFirsts voting securities; (b) has the ability to elect or appoint a majority of the OceanFirst board; or (c) otherwise exercises a controlling
influence over OceanFirst, is subject to regulation as a savings and loan holding company under HOLA.
OceanFirsts certificate of incorporation authorizes the OceanFirst board, without further stockholder action, to issue up to 5,000,000 shares of
preferred stock. OceanFirsts certificate of incorporation further authorizes the OceanFirst board, subject to any limitations prescribed by law, to provide for the issuance of the shares of preferred stock in series, and by filing a
certificate pursuant to the applicable law of the State of Delaware, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series
and any qualifications, limitations or restrictions thereof. As of the OceanFirst record date, there were no shares of OceanFirst preferred stock outstanding. Preferred stock may be issued with preferences and designations as the OceanFirst board
may from time to time determine. The OceanFirst board may, without stockholder approval, issue shares of preferred stock with voting, dividend, liquidation and conversion rights that could dilute the voting strength of the holders of OceanFirst
common stock and may assist management in impeding an unfriendly takeover or attempted change in control.
The accompanying unaudited pro forma condensed combined balance sheet as of June 30, 2016 presents the pro forma consolidated financial position of OceanFirst
giving effect to the Transactions. The accompanying unaudited pro forma condensed combined income statements for the periods ending December 31, 2015 and June 30, 2016 present the pro forma results of operations of OceanFirst giving effect to each
of the OceanFirst business combinations (with separate columns to present the pro forma effect of the Transactions and the Cape acquisition) assuming that each OceanFirst business combination became effective on January 1, 2015. These unaudited pro
forma condensed combined financial statements are derived from and should be read in conjunction with the following historical financial statements, after giving effect to the applicable OceanFirst business combination, and the adjustments described
in the following footnotes, and are intended to reflect the impact of the applicable OceanFirst business combination on OceanFirst:
The accompanying unaudited pro forma condensed combined financial statements
are presented for illustrative purposes only and do not reflect the realization of potential cost savings, revenue synergies or any potential restructuring costs. Certain cost savings and revenue synergies may result from the Transactions. However,
there can be no assurance that these cost savings or revenue synergies will be achieved. Cost savings, if achieved, could result from, among other things, the reduction of operating expenses, changes in corporate infrastructure and governance, the
elimination of duplicative operating systems and the combination of regulatory and financial reporting requirements under one federally-chartered bank. The pro forma information is not necessarily indicative of what the financial position or results
of operations actually would have been had the Transactions been completed at the dates indicated. In addition, the unaudited pro forma combined financial information does not purport to project the future financial position or operating results of
the combined company after completion of the Transactions.
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements below for additional
information.
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements below for additional
information.
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements below for additional
information.
On July 12,
2016, OceanFirst and Ocean Shore publicly announced that they had entered into the merger agreement pursuant to which, (i) Merger Sub will merge with and into Ocean Shore, with Ocean Shore surviving; (ii) immediately thereafter, Ocean Shore will
merge with and into OceanFirst, with OceanFirst surviving; and (iii) immediately thereafter, Ocean Shore Bank will merge with and into OceanFirst Bank, with OceanFirst Bank surviving.
If the first-step merger is completed, each outstanding share of Ocean Shore common stock, except for certain shares of Ocean Shore common stock owned by
Ocean Shore or OceanFirst, will be converted into the right to receive the merger consideration. OceanFirst will not issue any fractional shares of OceanFirst common stock in the first-step merger. Ocean Shore stockholders who would otherwise be
entitled to receive a fraction of a share of OceanFirst common stock upon the completion of the first-step merger will instead be entitled to receive an amount in cash, rounded to the nearest cent, determined by multiplying the fraction of a share
(rounded to the nearest thousandth when expressed as a decimal form) of OceanFirst common stock to which the holder would otherwise be entitled by the average closing-sale price per share of OceanFirst common stock on the NASDAQ (as reported by The
Wall Street Journal
) for the five full trading days ending on the day preceding the day on which the first-step merger is completed.
On May 2, 2016,
OceanFirst completed its acquisition of Cape. Pursuant to the terms of the definitive agreement governing the Cape acquisition, (i) a wholly-owned subsidiary of OceanFirst merged with and into Cape, with Cape surviving; (ii) immediately thereafter,
Cape merged with and into OceanFirst, with OceanFirst surviving; and (iii) immediately thereafter, Cape Bank merged with and into OceanFirst Bank, with OceanFirst Bank surviving. As reported in OceanFirsts Quarterly Report on Form 10-Q for the
period ending June 30, 2016, the total consideration paid by OceanFirst in the Cape acquisition was $196.4 million, including cash consideration of $30.5 million.
The unaudited pro forma
condensed combined financial statements included herein have been prepared pursuant to the rules and regulations of the SEC. Certain information and certain footnote disclosures normally included in financial statements prepared in accordance with
GAAP have been omitted pursuant to such rules and regulations. However, management believes that the disclosures are adequate to make the information presented not misleading.
The unaudited pro forma condensed combined financial statements have been prepared based upon available information and certain assumptions that OceanFirst
and Ocean Shore believe are reasonable under the circumstances. A final determination of the fair value of the assets acquired and liabilities assumed, which could not be made at the time that this document was prepared, may differ materially from
the preliminary estimates. The final valuation may change the purchase price allocation, which could affect the fair value assigned to the assets acquired and liabilities assumed and could result in a change to the unaudited pro forma combined
financial statements.
With respect to the Transactions, the unaudited pro forma condensed combined financial information assumes that the Transactions will be accounted for under
the acquisition method of accounting with OceanFirst treated as
the acquirer. Under the acquisition method of accounting, the identifiable assets and identifiable liabilities of Ocean Shore, as of the effective date of the Transactions, will be recorded by
OceanFirst at their respective estimated fair values and the excess of the merger consideration over the fair value of Ocean Shores net identifiable assets will be allocated to goodwill.
The unaudited pro forma condensed combined statement of financial condition as of June 30, 2016 reflects the Transactions as if they had been completed as of
June 30, 2016. The unaudited pro forma condensed combined statement of financial condition has been adjusted to reflect the preliminary allocation of the estimated purchase price to identifiable net assets acquired in the Transactions. The
estimated purchase price was calculated based upon $18.96 per share, the closing trading price of OceanFirst common stock on August 9, 2016, which was the latest practicable trading date before the date of this document. The final allocation of the
purchase price will be determined after the completion of the Transactions. This allocation is dependent upon certain valuations and other studies that have not progressed to a stage where sufficient information is available to make a definitive
allocation. The purchase price allocation adjustments and related amortization reflected in the unaudited pro forma combined financial statements are preliminary and have been made solely for the purpose of preparing these statements. The final
allocation of the purchase price will be determined after the Transactions are completed and after completion of a thorough analysis to determine the fair value of Ocean Shores tangible and identifiable intangible assets and liabilities as of
the date that the Transactions are completed.
The unaudited pro forma condensed combined income statements for the periods ending December 31, 2015 and
June 30, 2016 reflect the results of operations of OceanFirst giving effect to the Transactions as if they had been consummated at the beginning of the periods presented and combines OceanFirsts historical results for both such periods with
the historical results of Ocean Shore.
OceanFirst expects to incur costs associated with integrating Ocean Shore. Unless indicated otherwise, the
unaudited pro forma condensed combined financial statements do not reflect nonrecurring transaction costs, the cost of any integration activities or the benefits that may result from synergies that may be derived from any integration activities.
The Cape
acquisition, which was consummated on May 2, 2016, was accounted for under the acquisition method of accounting with OceanFirst treated as the acquiror. Under the acquisition method of accounting, the consideration paid by OceanFirst has been
allocated to the assets acquired and liabilities assumed of Cape based upon their estimated fair values, net of tax. The excess of consideration paid over the fair values of net assets acquired has been recorded as goodwill.
The unaudited pro forma condensed combined statements of income reflects the Cape acquisition as if it had been consummated at the beginning of the periods
presented and combines OceanFirsts historical results for the year ended December 31, 2015 and the six months ended June 30, 2016 with historical results for the same periods for Cape.
OceanFirst has incurred and expects to continue incurring costs associated with integrating Cape. Unless indicated otherwise, the unaudited pro forma
condensed combined statements of income do not reflect nonrecurring transaction costs, the cost of any integration activities or the benefits that may result from synergies that may be derived from any integration activities.
On July 12, 2016, the last full trading day before the public announcement of the Transactions, the high and low sales prices
of shares of OceanFirst common stock as reported on the NASDAQ were $18.88 and $18.59, respectively. On October 14, 2016, the last practicable trading day prior to the printing of this joint proxy statement/prospectus, the high and low sales
prices of shares of OceanFirst common stock as reported on the NASDAQ were $19.29 and $19.10, respectively.
On July 12, 2016, the last full trading day
before the public announcement of the Transactions, the high and low sales prices of shares of Ocean Shore common stock as reported on the NASDAQ were $17.03 and $16.95, respectively. On October 14, 2016, the last practicable trading day prior
to printing of this joint proxy statement/prospectus, the high and low sales prices of shares of Ocean Shore common stock as reported on the NASDAQ were $22.74 and $22.41, respectively.
As of the OceanFirst record date, there were approximately 1,679 registered holders of OceanFirst common stock and, as of the Ocean Shore record date, there
were approximately 528 registered holders of Ocean Shore common stock.
Each of the OceanFirst stockholders and the Ocean Shore stockholders are advised
to obtain current market quotations for OceanFirst common stock and Ocean Shore common stock. The market price of OceanFirst common stock and Ocean Shore common stock will fluctuate between the date of this joint proxy statement/prospectus and the
date of completion of the Transactions. No assurance can be given concerning the market price of OceanFirst common stock or Ocean Shore common stock before or after the effective date of the first-step merger. Changes in the market price of
OceanFirst common stock prior to the completion of the Transactions will affect the market value of the stock portion of the merger consideration that Ocean Shore stockholders will be entitled to receive upon completion of the Transactions.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT OF OCEANFIRST
The following
table provides information as of September 27, 2016 with respect to the persons known by OceanFirst to be the beneficial owners of more than 5% of its outstanding stock. A person is considered to beneficially own any shares of common stock over
which he or she has, directly or indirectly, sole or shared voting or investment power.
|
|
|
|
|
|
|
|
|
Name and Address Of Beneficial Owner
|
|
Number of Shares Owned
|
|
|
Percent of Common
Stock Outstanding
(1)
|
|
OceanFirst Bank,
Employee Stock Ownership Plan (the OceanFirst ESOP)
975 Hooper Avenue
Toms River, New Jersey 08754-2009
|
|
|
1,583,869
|
(2)
|
|
|
6.1
|
%
|
|
|
|
EJF Capital LLC
2107 Wilson Boulevard
Suite 410
Arlington, VA 22201
|
|
|
1,519,119
|
(3)
|
|
|
5.9
|
%
|
|
|
|
Wellington Management Company, LLP
280 Congress Street
Boston, Massachusetts 02210
|
|
|
1,350,095
|
(4)
|
|
|
5.2
|
%
|
(1)
|
Percentages with respect to each person have been calculated on the basis of 25,839,744 shares of OceanFirst common stock, the number of shares of OceanFirst common stock outstanding and entitled to vote as of August 4,
2016.
|
(2)
|
Under the terms of the OceanFirst ESOP, the trustee will vote all shares held in the OceanFirst ESOP in accordance with the instructions of the participants.
|
(3)
|
Based on SEC Schedule 13G filed on September 27, 2016.
|
(4)
|
Based on SEC Schedule 13G Amendment No. 6 filed on February 11, 2016.
|
134
The following table provides information as of September 27, 2016, about the shares of OceanFirst common stock
that may be considered to be beneficially owned by (i) each director and each named executive officer of OceanFirst as of such date and (ii) all OceanFirst directors and executive officers as a group. This information has been provided by each of
the directors and executive officers at OceanFirsts request or derived from statements filed with the SEC. Beneficial ownership of securities means the possession directly or indirectly, through any formal or informal arrangement, either
individually or in a group, of voting or investment power (which includes the power to dispose of, or to direct the disposition of, such security). Unless otherwise indicated, to OceanFirsts knowledge, the beneficial owner has sole voting and
dispositive power over the shares.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Number of Shares
Owned (excluding
options)
(2)
|
|
|
Number of Shares
That May Be
Acquired Within 60
Days by Exercising
Options
|
|
|
Total Number of
Shares Beneficially
Owned
|
|
|
Percent of Common
Stock Outstanding
(3)
|
|
Directors
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph J. Burke
(4)
|
|
|
19,038
|
|
|
|
18,686
|
|
|
|
37,724
|
|
|
|
*
|
|
Angelo Catania
(4)
|
|
|
21,017
|
|
|
|
18,686
|
|
|
|
39,703
|
|
|
|
*
|
|
Michael D. Devlin
|
|
|
195,776
|
|
|
|
173,419
|
|
|
|
369,195
|
|
|
|
1.4
|
%
|
Jack M. Farris
(5)
|
|
|
3,440
|
|
|
|
|
|
|
|
3,440
|
|
|
|
*
|
|
John R. Garbarino
(5)(6)
|
|
|
399,622
|
|
|
|
455,843
|
|
|
|
855,465
|
|
|
|
3.3
|
%
|
Christopher D. Maher
(7)(8)
|
|
|
36,061
|
|
|
|
47,886
|
|
|
|
83,947
|
|
|
|
*
|
|
Donald E. McLaughlin
(4)(9)
|
|
|
42,145
|
|
|
|
18,686
|
|
|
|
60,831
|
|
|
|
*
|
|
Diane F. Rhine
(4)
|
|
|
41,397
|
|
|
|
18,686
|
|
|
|
60,083
|
|
|
|
*
|
|
Mark G. Solow
(4)
|
|
|
17,864
|
|
|
|
4,900
|
|
|
|
22,764
|
|
|
|
*
|
|
John E. Walsh
(4)
|
|
|
26,354
|
|
|
|
18,686
|
|
|
|
45,040
|
|
|
|
*
|
|
Named Executive Officers who are not also Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael J. Fitzpatrick
(8)(10)
|
|
|
190,962
|
|
|
|
152,283
|
|
|
|
343,245
|
|
|
|
1.3
|
%
|
Joseph J. Lebel, III
(8)(11)
|
|
|
31,278
|
|
|
|
76,738
|
|
|
|
108,016
|
|
|
|
*
|
|
Joseph R. Iantosca
(8)(11)
|
|
|
39,668
|
|
|
|
76,076
|
|
|
|
115,744
|
|
|
|
*
|
|
Steven J. Tsimbinos
(8)(12)
|
|
|
23,214
|
|
|
|
42,600
|
|
|
|
65,814
|
|
|
|
*
|
|
All directors and executive officers as a group (15 persons)
|
|
|
1,097,243
|
|
|
|
1,125,425
|
|
|
|
2,222,668
|
|
|
|
8.2
|
%
|
(1)
|
Each director and executive officer maintains a mailing address at 975 Hooper Avenue, Toms River, New Jersey 08753. None of the above directors or executive officers have pledged any shares of OceanFirst.
|
(2)
|
Each person effectively exercises sole (or shared with spouse or other immediate family members) voting power as to shares reported as of September 27, 2016.
|
(3)
|
Percentages with respect to each person or group of persons have been calculated on the basis of 25,850,956 shares of OceanFirst common stock, the number of shares of OceanFirst common stock outstanding and entitled to
vote as of September 27, 2016, plus the number of shares of OceanFirst common stock which such person or group of persons has the right to acquire within 60 days of September 27, 2016 by the exercise of stock options.
|
(4)
|
Includes 4,765 unvested shares. Each non-employee director, other than Messrs. Farris, Garbarino and Devlin, was awarded 681 restricted shares in February 2012, 713 restricted shares in February 2013, 1,880 restricted
shares in March 2014, 1,850 restricted shares in March 2015 and 1,740 restricted shares in March 2016. Each such award vests at a rate of 20% per year commencing on March 1 of the year following the grant.
|
(5)
|
Includes 3,220 unvested shares. Messrs. Farris and Garbarino were awarded 1,850 restricted shares in March 2015 and 1,740 restricted shares in March 2016. Each such award vests at a rate of 20% per year commencing on
March 1 of the year following the grant.
|
(6)
|
Includes 105,057 shares held by a trust for which Mr. Garbarino serves as trustee, 14,445 shares owned by Mr. Garbarinos wife, and 9,584 shares held by Mr. Garbarino and his wife as co-trustees.
|
(7)
|
Includes 11,016 unvested shares. Mr. Maher was awarded 4,566 restricted shares in June 2013, 5,165 in March 2015 and 5,060 in March 2016. Such awards vest at a rate of 20% per year commencing on March 1 of the year
following the grant.
|
(8)
|
Includes the following shares that have been allocated and are held in trust pursuant to the OceanFirst ESOP as of September 27, 2016: Mr. Maher: 1,001; Mr. Fitzpatrick: 78,294; Mr. Lebel: 7,189; Mr. Iantosca: 11,536;
and Mr. Tsimbinos 1,984. Such persons have sole voting power, but no investment power, except in limited circumstances, as to such shares.
|
(9)
|
Includes 5,321 shares owned by Mr. McLaughlins wife.
|
(10)
|
Includes 4,434 unvested shares. Mr. Fitzpatrick was awarded 1,946 restricted shares in February 2012, 1,529 restricted shares in February 2013, 1,760 restricted shares in March 2014, 1,540 restricted shares in March
2015, and 1,145 restricted shares in March 2016. Each such award vests at a rate of 20% per year commencing on March 1 of the year following the grant.
|
(11)
|
Includes 5,436 unvested shares for each of Mr. Lebel and Mr. Iantosca. Each of Mr. Lebel and Mr. Iantosca was awarded 657 restricted shares in February 2012, 764 restricted shares in February 2013, 761 shares in June
2013, 1,910 restricted shares in March 2014, 2,055 restricted shares in March 2015, and 1,910 restricted shares in March 2016. Each such award vests at a rate of 20% per year commencing on March 1 of the year following the grant.
|
(12)
|
Includes 12,457 unvested shares. Mr. Tsimbinos was awarded 657 restricted shares in February 2012, 764 restricted shares in February 2013, 1,030 restricted shares in March 2014, 7,575 restricted shares in March 2015,
and 5,345 restricted shares in March 2016. Each such award vests at a rate of 20% per year commencing on March 1 of the year following the grant.
|
135
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT OF OCEAN SHORE
The following
table provides information as of September 23, 2016 about the persons known to Ocean Shore to be the beneficial owners of more than 5% of Ocean Shores outstanding common stock. A person may be considered to beneficially own any shares of
common stock over which he, she or it has, directly or indirectly, sole or shared voting or investing power.
|
|
|
|
|
|
|
|
|
Name and Address
|
|
Number of Shares Owned
|
|
|
Percent of Common Stock
Outstanding
|
|
Bay Pond Partners, L.P.
c/o Wellington Management Company LLP
280 Congress Street
Boston, Massachusetts 02210
|
|
|
357,200
|
(1)
|
|
|
5.6
|
%
|
|
|
|
Chicago Capital Management, LLC
Steven R. Gerbel
311 South Wacker Drive
Suite 6025
Chicago, Illinois 60606
|
|
|
330,116
|
(2)
|
|
|
5.1
|
%
|
|
|
|
M3 Funds, LLC
M3 Partners, LP
M3F, Inc.
Jason A. Stock
William C. Waller
10 Exchange Place, Suite 510
Salt Lake City, Utah 84111
|
|
|
433,609
|
(3)
|
|
|
6.8
|
%
|
|
|
|
Rangeley Capital, LLC
Rangeley Capital Partners, LP
Christopher DeMuth, Jr.
3 Forest Street
New Canaan, Connecticut 06840
|
|
|
582,562
|
(4)
|
|
|
9.1
|
%
|
|
|
|
Ocean Shore Bank Employee Stock Ownership Plan
1001 Asbury Avenue
Ocean City, New Jersey 08226
|
|
|
553,334
|
(5)
|
|
|
8.6
|
%
|
(1)
|
Based on information contained in Schedule 13G filed with the SEC on August 1, 2016.
|
(2)
|
Based on information contained in Schedule 13G filed with the SEC on August 9, 2016.
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(3)
|
Based on information contained in a Schedule 13G/A filed with the SEC on January 29, 2016. Includes 703 shares beneficially owned by William C. Waller over which he has sole voting and dispositive power.
|
(4)
|
Based on information contained in a Schedule 13G/A filed with the SEC on February 1, 2016.
|
(5)
|
Based on information contained in a Schedule 13G/A filed with the SEC on February 8, 2016.
|
136
The following table provides information as of September 23, 2016 about the shares of Ocean Shore common stock
that may be considered to be beneficially owned by each director, each executive officer named therein and all directors and executive officers of Ocean Shore as a group. A person may be considered to beneficially own any shares of common stock over
which he, she or it has, directly or indirectly, sole or shared voting or investment power. Unless otherwise indicated, each of the named individuals has sole voting power and sole investment power with respect to the number of shares shown.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
(1)
|
|
Common Stock
(2)
|
|
|
Options
Exercisable Within
60 Days
|
|
|
Total
|
|
|
Percent of
Common Stock
Outstanding
|
|
Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven E. Brady
|
|
|
145,582
|
(3)
|
|
|
61,456
|
|
|
|
207,038
|
|
|
|
3.2
|
%
|
Frederick G. Dalzell, MD
|
|
|
65,260
|
(4)
|
|
|
13,600
|
|
|
|
78,860
|
|
|
|
1.2
|
%
|
John L. Van Duyne, Jr.
|
|
|
45,558
|
(5)
|
|
|
13,600
|
|
|
|
59,158
|
|
|
|
*
|
|
Christopher J. Ford
|
|
|
40,665
|
|
|
|
13,600
|
|
|
|
54,265
|
|
|
|
*
|
|
Dorothy F. McCrosson
|
|
|
7,944
|
|
|
|
7,100
|
|
|
|
15,044
|
|
|
|
*
|
|
Robert A. Previti, Ed.D
|
|
|
45,542
|
(6)
|
|
|
13,600
|
|
|
|
59,142
|
|
|
|
*
|
|
Samuel R. Young
|
|
|
27,053
|
|
|
|
13,600
|
|
|
|
40,653
|
|
|
|
*
|
|
Named Executive Officers Who Are Not Also Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Janet M. Bossi
|
|
|
52,886
|
(7)
|
|
|
4,600
|
|
|
|
57,486
|
|
|
|
*
|
|
Kim M. Davidson
|
|
|
54,703
|
(8)
|
|
|
10,455
|
|
|
|
65,158
|
|
|
|
1.0
|
%
|
Donald F. Morgenweck
|
|
|
51,583
|
|
|
|
10,291
|
|
|
|
61,874
|
|
|
|
1.0
|
%
|
Anthony J. Rizzotte
|
|
|
47,429
|
(9)
|
|
|
2,233
|
|
|
|
49,662
|
|
|
|
*
|
|
All directors and executive officers as a group (12 persons)
|
|
|
609,013
|
|
|
|
165,335
|
|
|
|
774,348
|
|
|
|
11.7
|
%
|
(1)
|
Each director and executive officer maintains a mailing address at 1001 Asbury Avenue Ocean City, New Jersey 08226. Other than as set forth below, none of the above directors or executive officers have pledged any
shares of Ocean Shore.
|
(2)
|
This column includes the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Held in
Trust and
Awarded under
Ocean Shores
Equity Incentive
Plan
|
|
|
Shares Held in
Trust Pursuant to
Ocean Shores
Deferred
Compensation
Plan
|
|
|
Shares Held in
Trust and
Allocated Under
Ocean Shore
ESOP and ESOP
SERP
|
|
|
Shares Held in
Trust and
Credited Under
the Ocean Shore
401(k) Plan
|
|
Mr. Brady
|
|
|
6,000
|
|
|
|
3,393
|
|
|
|
23,732
|
|
|
|
34,284
|
|
Dr. Dalzell
|
|
|
|
|
|
|
7,944
|
|
|
|
|
|
|
|
|
|
Mr. Van Duyne, Jr.
|
|
|
|
|
|
|
17,535
|
|
|
|
|
|
|
|
|
|
Mr. Ford
|
|
|
|
|
|
|
4,162
|
|
|
|
|
|
|
|
|
|
Ms. McCrosson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr. Previti
|
|
|
|
|
|
|
7,703
|
|
|
|
|
|
|
|
|
|
Mr. Young
|
|
|
|
|
|
|
3,019
|
|
|
|
|
|
|
|
|
|
Ms. Bossi
|
|
|
4,500
|
|
|
|
1,202
|
|
|
|
8,121
|
|
|
|
21,920
|
|
Ms. Davidson
|
|
|
4,500
|
|
|
|
1,323
|
|
|
|
8,786
|
|
|
|
23,083
|
|
Mr. Morgenweck
|
|
|
3,900
|
|
|
|
1,440
|
|
|
|
8,845
|
|
|
|
9,167
|
|
Mr. Rizzotte
|
|
|
4,500
|
|
|
|
2,595
|
|
|
|
12,003
|
|
|
|
23,604
|
|
(3)
|
Includes 78,173 shares pledged as security.
|
(4)
|
Includes 3,429 shares held by Dr. Dalzells spouse and 23,189 shares held by a limited liability company in which Dr. Dalzell has sole voting power. Also, includes 18,904 shares pledged as security.
|
(5)
|
Includes 28,023 shares pledged as security.
|
(6)
|
Includes 87 shares held by Dr. Previtis son. Also, includes 18,904 shares pledged as security.
|
(7)
|
Includes 16,077 shares pledged as security.
|
(8)
|
Includes 17,011 shares pledged as security.
|
(9)
|
Includes 922 shares pledged as security.
|
137
LEGAL MATTERS
The validity of the OceanFirst common stock to be issued in connection with the first-step merger will be passed upon for OceanFirst by Skadden, Arps, Slate,
Meagher & Flom LLP (New York, New York). Certain U.S. federal income tax consequences relating to the integrated mergers will be passed upon for OceanFirst by Skadden, Arps, Slate, Meagher & Flom LLP (New York, New York) and for Ocean Shore
by Kilpatrick Townsend & Stockton LLP (Washington, D.C.).
EXPERTS
OceanFirst
The consolidated
financial statements of OceanFirst as of December 31, 2015 and 2014, and for each of the years in the three-year period ended December 31, 2015, and managements assessment of the effectiveness of internal control over financial reporting as of
December 31, 2015, have been incorporated by reference herein in reliance upon the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and
auditing.
Ocean Shore
The consolidated financial statements of Ocean Shore incorporated in this joint proxy statement/prospectus by reference from Ocean Shores Annual Report
on Form 10-K for the year ended December 31, 2015, and the effectiveness of Ocean Shores internal control over financial reporting have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in
their reports, which are incorporated herein by reference. Such consolidated financial statements have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.
Cape
The consolidated
financial statements of Cape as of December 31, 2015 and 2014 and for each of the three years in the period ended December 31, 2015 and the effectiveness of Capes internal control over financial reporting as of December 31, 2015 have been
audited by Crowe Horwath LLP, an independent registered public accounting firm, as set forth in the report of Crowe Horwath LLP appearing in Capes Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated in this joint
proxy statement/prospectus by reference. Such consolidated financial statements have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
138
DEADLINES FOR SUBMITTING STOCKHOLDER PROPOSALS
OceanFirst
OceanFirst held
its 2016 annual meeting of stockholders on June 2, 2016 and began mailing its proxy statement for such meeting on or about April 26, 2016.
To be
considered for inclusion in the OceanFirst sponsored proxy materials for OceanFirsts 2017 annual meeting of stockholders, proposals by OceanFirst stockholders must comply with Rule 14a-8 under the Exchange Act. In order to comply with Rule
14a-8, among other requirements, any such proposal must be received in writing by OceanFirsts Corporate Secretary at 975 Hooper Avenue, Toms River, New Jersey 08753 no later than December 27, 2016. If OceanFirsts 2017 annual meeting of
stockholders is held on a date more than 30 calendar days from June 2, 2017, a stockholder proposal must be received by a reasonable time before OceanFirst begins to print and mail its proxy solicitation material for such meeting. Any stockholder
proposals will be subject to the requirements of the proxy rules adopted by the SEC.
OceanFirst stockholders may also make proposals and director
nominations that are not intended to be included in OceanFirsts proxy statement for its 2017 annual meeting of OceanFirst stockholders, so long as the proposals or nominations comply with OceanFirsts bylaws. Based on the requirements set
forth in OceanFirsts bylaws, in order to make proposals for business to be brought before OceanFirsts 2017 annual meeting of stockholders or nominations for the election of directors at such meeting, any OceanFirst stockholder must
deliver notice of such proposal or nomination to OceanFirsts Corporate Secretary no later 90 days before the date of such meeting; provided that if less than 100 days notice or prior public disclosure of the date of such annual meeting
is given to OceanFirst stockholders, such notice must be delivered not later than the close of the tenth day following the day on which notice of the date of such annual meeting was mailed to stockholders or prior public disclosure of the meeting
date was made.
Ocean Shore
Ocean Shore held its 2016 annual meeting of stockholders on May 25, 2016 and began mailing its proxy statement for such meeting on or about April 19, 2016.
Ocean Shore will not hold a 2017 annual meeting of Ocean Shore stockholders if the first-step merger is completed. However, if the first-step merger is not completed for any reason, Ocean Shore will hold an annual meeting of its stockholders in
2017.
To be considered for inclusion in the Ocean Shore sponsored proxy materials for Ocean Shores 2017 annual meeting of stockholders, proposals
by Ocean Shore stockholders must comply with Rule 14a-8 under the Exchange Act. In order to comply with Rule 14a-8, among other requirements, any such proposal must be received in writing by Ocean Shores Corporate Secretary at 1001 Asbury
Avenue, Ocean City, New Jersey 08226 no later than December 20, 2016. If Ocean Shores 2017 annual meeting of stockholders is held on a date more than 30 calendar days from May 25, 2017, a stockholder proposal must be received by a reasonable
time before Ocean Shore begins to print and mail its proxy solicitation materials for such meeting. Any stockholder proposals will be subject to the requirements of the proxy rules adopted by the SEC.
Ocean Shore stockholders may also make proposals and director nominations that are not intended to be included in the Ocean Shore sponsored proxy materials
for its 2017 annual meeting of stockholders, if held, so long as the proposals and nominations comply with Ocean Shores bylaws. In order to comply with Ocean Shores bylaws, among other requirements, any Ocean Shore stockholder proposals
or nominations must be delivered to the Secretary of Ocean Shore not less than 60 calendar days prior to the date of such meeting and not more than 90 calendar days prior to the date of such meeting. If less than 71 days notice or prior public
disclosure of the date of the 2017 annual meeting of Ocean Shore stockholders is given to the Ocean Shore stockholders, then, in order to comply with Ocean Shores bylaws, among other requirements, any Ocean Shore stockholder proposals or
nominations must be delivered to Ocean Shore not later than the close of the tenth day following such notice or public disclosure.
139
WHERE YOU CAN FIND MORE INFORMATION
OceanFirst is filing with the SEC this registration statement under the Securities Act of 1933, as amended, to register the issuance of the shares of
OceanFirst common stock to be issued in connection with the first-step merger. This joint proxy statement/prospectus is a part of that registration statement and constitutes the prospectus of OceanFirst in addition to being a proxy statement for
OceanFirst stockholders and Ocean Shore stockholders. The registration statement, including this joint proxy statement/prospectus and the attached annexes and exhibits, contains additional relevant information about OceanFirst, including information
about OceanFirsts common stock.
OceanFirst and Ocean Shore also file reports, proxy statements and other information with the SEC under the
Exchange Act. You may read and copy this information at the Public Reference Room of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the SECs Public Reference Room by calling the
SEC at 1-800-SEC-0330. You may also obtain copies of this information by mail from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates, or from commercial document retrieval services.
The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, such as OceanFirst and Ocean Shore,
who file electronically with the SEC. The address of the site is http://www.sec.gov. The reports, proxy statements and other information filed by OceanFirst with the SEC are also available at OceanFirsts website at www.oceanfirstonline.com
under the tab Investor Relations, and then under the heading SEC Filings. The reports, proxy statements and other information filed by Ocean Shore with the SEC are available at Ocean Shores website at
www.ochome.com/home under the tab Investor Relations, and then under the heading SEC Filings. The web addresses of the SEC, OceanFirst and Ocean Shore are included as inactive textual references only. Except as specifically
incorporated by reference into this joint proxy statement/prospectus, information on those web sites is not part of this joint proxy statement/prospectus.
The SEC allows OceanFirst and Ocean Shore to incorporate by reference information in this joint proxy statement/prospectus. This means that OceanFirst and
Ocean Shore can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be a part of this joint proxy statement/prospectus, except for any
information that is superseded by information that is included directly in this joint proxy statement/prospectus.
140
This joint proxy statement/prospectus incorporates by reference the documents listed below that OceanFirst and
Ocean Shore previously filed with the SEC. They contain important information about the companies and their financial condition.
|
|
|
OceanFirst SEC Filings
(SEC File No. 001-11713)
|
|
Period or Date Filed
|
Annual Report on Form 10-K
|
|
Year ended December 31, 2015
|
Annual Report on Form 11-K
|
|
Filed on June 24, 2016
|
Quarterly Reports on Form 10-Q
|
|
Quarters ended March 31, 2016 and June 30, 2016
|
|
|
Current Reports on Form 8-K
|
|
Filed on January 6, 2016, January 8, 2016, January 22, 2016, February 18, 2016, March 28, 2016, April 22, 2016, April 26, 2016, May 2, 2016, May 18, 2016, May 20, 2016, June 3, 2016, June 21, 2016, June 23, 2016, July 13, 2016,
July 14, 2016, July 15, 2016, July 29, 2016, August 1, 2016, August 2, 2016 and September 21, 2016 (other than those portions of the documents deemed to be furnished and not filed)
|
|
|
Definitive Proxy Statement on Schedule 14A
|
|
Filed April 26, 2016
|
|
|
The description of OceanFirst common stock set forth in its registration statement on Form 8-A, as amended, filed on May 8, 1996, including any amendment or report filed with the SEC for the purpose of updating this
description.
|
|
|
|
|
Ocean Shore SEC Filings
(SEC File No. 0- 53856)
|
|
Period or Date Filed
|
Annual Report on Form 10-K
|
|
Year ended December 31, 2015
|
Annual Report on Form 11-K
|
|
Filed on June 16, 2016
|
Quarterly Reports on Form 10-Q
|
|
Quarters ended March 31, 2016 and June 30, 2016
|
|
|
Current Reports on Form 8-K
|
|
Filed on January 26, 2016, April 26, 2016, May 27, 2016, July 13, 2016, July 14, 2016 and July 26, 2016 (other than those portions of the documents deemed to be furnished and not filed)
|
|
|
Definitive Proxy Statement on Schedule 14A
|
|
Filed on April 19, 2016
|
|
|
The description of Ocean Shore common stock set forth in the Ocean Shores Form 8-K12G3, as filed with the SEC on December 21, 2009, including any amendment or report filed with the SEC for the purpose of updating this
description.
|
|
|
The historical audited consolidated financial statements of Cape (SEC File No. 001-33934) as of December 31, 2015 and 2014 and
for the years in the three-year period ended December 31, 2015 and the related notes thereto are also incorporated by reference in this joint proxy statement/prospectus from Capes Annual Report on Form 10-K for the fiscal year ended December
31, 2015. The historical unaudited consolidated financial statements of Cape as of and for the three months ended March 31, 2016 and the related notes thereto are also incorporated by reference in this joint proxy statement/prospectus from
Capes Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2016 and 2015. These reports of Cape are is available at http://www.SEC.gov.
In addition, OceanFirst and Ocean Shore also incorporate by reference additional documents filed with the SEC under Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act between the date of this joint proxy statement/
141
prospectus and, in the case of OceanFirst, the date of the OceanFirst special meeting, and, in the case of Ocean Shore, the date of the Ocean Shore special meeting, provided that OceanFirst and
Ocean Shore are not incorporating by reference any information furnished to, but not filed with, the SEC.
Except where the context otherwise indicates,
OceanFirst has supplied all information contained or incorporated by reference in this joint proxy statement/prospectus relating to OceanFirst, and Ocean Shore has supplied all information contained or incorporated by reference relating to Ocean
Shore.
Documents incorporated by reference are available from OceanFirst and Ocean Shore without charge, excluding any exhibits to those documents unless
the exhibit is specifically incorporated by reference as an exhibit in this joint proxy statement/prospectus. You can obtain documents incorporated by reference in this joint proxy statement/prospectus by requesting them in writing or by telephone
from the appropriate company at the following address and phone number:
|
|
|
OceanFirst Financial Corp.
975 Hooper Avenue
Toms River, New
Jersey 08753
Attention: Investor Relations
Telephone: (732) 240-4500
|
|
Ocean Shore Holding Co.
1001 Asbury Avenue
Ocean City, New
Jersey 08226
Attention: Investor Relations
Telephone: (609) 399-0012
|
OceanFirst stockholders and Ocean Shore stockholders requesting documents must do so by November 15, 2016 to receive them before their respective special
meetings. You will not be charged for any of these documents that you request. If you request any incorporated documents from OceanFirst or Ocean Shore, then OceanFirst and Ocean Shore, respectively, will mail them to you by first class mail, or
another equally prompt means, within one business day after receiving your request.
Neither OceanFirst nor Ocean Shore has authorized anyone to give
any information or make any representation about the Transactions or the companies that is different from, or in addition to, that contained in this joint proxy statement/prospectus or in any of the materials that have been incorporated in this
joint proxy statement/prospectus. Therefore, if anyone does give you information of this sort, you should not rely on it. If you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the
securities offered by this joint proxy statement/prospectus or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this joint proxy
statement/prospectus does not extend to you. The information contained in this joint proxy statement/prospectus speaks only as of the date of this joint proxy statement/prospectus unless the information specifically indicates that another date
applies.
142
Annex A
EXECUTION VERSION
AGREEMENT AND PLAN OF MERGER
by and among
OCEANFIRST FINANCIAL CORP.,
MASTERS MERGER SUB CORP.
and
OCEAN SHORE
HOLDING CO.
Dated as of July 12, 2016
TABLE OF CONTENTS
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Page
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Article I
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|
THE INTEGRATED MERGERS
|
|
|
|
|
1.1
|
|
The Integrated Mergers; Effective Time
|
|
|
A-1
|
|
1.2
|
|
Closing
|
|
|
A-2
|
|
1.3
|
|
Effects of the Integrated Mergers
|
|
|
A-2
|
|
1.4
|
|
Effects of First-Step Merger on Merger Sub Capital Stock
|
|
|
A-2
|
|
1.5
|
|
Conversion of Company Common Stock in the First-Step Merger
|
|
|
A-2
|
|
1.6
|
|
Effects of Second-Step Merger on Parent and Company Common Stock
|
|
|
A-3
|
|
1.7
|
|
Treatment of Company Equity Awards
|
|
|
A-3
|
|
1.8
|
|
Certificate of Incorporation of Surviving Corporation
|
|
|
A-4
|
|
1.9
|
|
Bylaws of Surviving Corporation
|
|
|
A-4
|
|
1.10
|
|
Directors; Officers
|
|
|
A-4
|
|
1.11
|
|
Tax Consequences
|
|
|
A-5
|
|
1.12
|
|
Bank Merger
|
|
|
A-5
|
|
|
Article II
|
|
|
EXCHANGE OF SHARES
|
|
|
|
|
2.1
|
|
Parent to Make Merger Consideration Available
|
|
|
A-5
|
|
2.2
|
|
Exchange of Shares
|
|
|
A-5
|
|
|
Article III
|
|
|
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
|
|
|
|
3.1
|
|
Corporate Organization
|
|
|
A-7
|
|
3.2
|
|
Capitalization
|
|
|
A-9
|
|
3.3
|
|
Authority; No Violation
|
|
|
A-9
|
|
3.4
|
|
Consents and Approvals
|
|
|
A-10
|
|
3.5
|
|
Reports
|
|
|
A-11
|
|
3.6
|
|
Financial Statements
|
|
|
A-11
|
|
3.7
|
|
Brokers Fees
|
|
|
A-12
|
|
3.8
|
|
Absence of Certain Changes or Events
|
|
|
A-12
|
|
3.9
|
|
Legal Proceedings
|
|
|
A-13
|
|
3.10
|
|
Taxes and Tax Returns
|
|
|
A-13
|
|
3.11
|
|
Employees
|
|
|
A-14
|
|
3.12
|
|
SEC Reports
|
|
|
A-17
|
|
3.13
|
|
Compliance with Applicable Law
|
|
|
A-17
|
|
3.14
|
|
Certain Contracts
|
|
|
A-18
|
|
3.15
|
|
Agreements with Regulatory Agencies
|
|
|
A-19
|
|
3.16
|
|
Risk Management Instruments
|
|
|
A-19
|
|
3.17
|
|
Environmental Matters
|
|
|
A-19
|
|
3.18
|
|
Investment Securities and Commodities
|
|
|
A-20
|
|
3.19
|
|
Real Property
|
|
|
A-20
|
|
3.20
|
|
Intellectual Property
|
|
|
A-20
|
|
3.21
|
|
Related Party Transactions
|
|
|
A-21
|
|
3.22
|
|
Takeover Protections
|
|
|
A-21
|
|
3.23
|
|
Opinion
|
|
|
A-21
|
|
3.24
|
|
Company Information
|
|
|
A-21
|
|
3.25
|
|
Loan Portfolio
|
|
|
A-22
|
|
A-i
|
|
|
|
|
|
|
3.26
|
|
Insurance
|
|
|
A-23
|
|
3.27
|
|
No Other Representations or Warranties
|
|
|
A-23
|
|
|
Article IV
|
|
|
REPRESENTATIONS AND WARRANTIES OF PARENT
|
|
|
|
|
4.1
|
|
Corporate Organization
|
|
|
A-23
|
|
4.2
|
|
Capitalization
|
|
|
A-24
|
|
4.3
|
|
Authority; No Violation
|
|
|
A-25
|
|
4.4
|
|
Consents and Approvals
|
|
|
A-26
|
|
4.5
|
|
Reports
|
|
|
A-26
|
|
4.6
|
|
Financial Statements
|
|
|
A-26
|
|
4.7
|
|
Brokers Fees
|
|
|
A-28
|
|
4.8
|
|
Absence of Certain Changes or Events
|
|
|
A-28
|
|
4.9
|
|
Legal Proceedings
|
|
|
A-28
|
|
4.10
|
|
Taxes and Tax Returns
|
|
|
A-28
|
|
4.11
|
|
Employees
|
|
|
A-29
|
|
4.12
|
|
SEC Reports
|
|
|
A-29
|
|
4.13
|
|
Compliance with Applicable Law
|
|
|
A-30
|
|
4.14
|
|
Agreements with Regulatory Agencies
|
|
|
A-30
|
|
4.15
|
|
Certain Contracts
|
|
|
A-31
|
|
4.16
|
|
Environmental Matters
|
|
|
A-31
|
|
4.17
|
|
Insurance
|
|
|
A-31
|
|
4.18
|
|
Loan Portfolio
|
|
|
A-32
|
|
4.19
|
|
Takeover Protections
|
|
|
A-32
|
|
4.20
|
|
Opinion
|
|
|
A-32
|
|
4.21
|
|
Parent Information
|
|
|
A-32
|
|
4.22
|
|
No Other Representations or Warranties
|
|
|
A-32
|
|
|
Article V
|
|
|
COVENANTS RELATING TO CONDUCT OF BUSINESS
|
|
|
|
|
5.1
|
|
Conduct of Business of the Company Prior to the Effective Time
|
|
|
A-33
|
|
5.2
|
|
Company Forbearances
|
|
|
A-33
|
|
5.3
|
|
Parent Forbearances
|
|
|
A-36
|
|
5.4
|
|
Tax-free Reorganization
|
|
|
A-36
|
|
Article VI
|
|
|
ADDITIONAL AGREEMENTS
|
|
|
|
|
6.1
|
|
Regulatory Matters
|
|
|
A-36
|
|
6.2
|
|
Access to Information; Confidentiality
|
|
|
A-37
|
|
6.3
|
|
Shareholders Approvals
|
|
|
A-39
|
|
6.4
|
|
Legal Conditions to Merger
|
|
|
A-40
|
|
6.5
|
|
Stock Exchange Listing
|
|
|
A-41
|
|
6.6
|
|
Employee Matters
|
|
|
A-41
|
|
6.7
|
|
Indemnification; Directors and Officers Insurance
|
|
|
A-42
|
|
6.8
|
|
Additional Agreements
|
|
|
A-43
|
|
6.9
|
|
Advice of Changes
|
|
|
A-43
|
|
6.10
|
|
Litigation and Claims
|
|
|
A-44
|
|
6.11
|
|
Dividends
|
|
|
A-44
|
|
6.12
|
|
Corporate Governance
|
|
|
A-44
|
|
6.13
|
|
Acquisition Proposals
|
|
|
A-44
|
|
6.14
|
|
Board of Directors and Committee Meetings
|
|
|
A-46
|
|
A-ii
|
|
|
|
|
|
|
6.15
|
|
Public Announcements
|
|
|
A-46
|
|
6.16
|
|
Change of Method
|
|
|
A-46
|
|
6.17
|
|
Restructuring Efforts
|
|
|
A-46
|
|
6.18
|
|
Takeover Statutes
|
|
|
A-46
|
|
6.19
|
|
Exemption from Liability Under Section 16(b)
|
|
|
A-47
|
|
|
Article VII
|
|
|
CONDITIONS PRECEDENT
|
|
|
|
|
7.1
|
|
Conditions to Each Partys Obligation To Effect the Integrated Mergers
|
|
|
A-47
|
|
7.2
|
|
Conditions to Obligations of Parent
|
|
|
A-48
|
|
7.3
|
|
Conditions to Obligations of the Company
|
|
|
A-48
|
|
|
Article VIII
|
|
|
TERMINATION AND AMENDMENT
|
|
|
|
|
8.1
|
|
Termination
|
|
|
A-49
|
|
8.2
|
|
Effect of Termination
|
|
|
A-51
|
|
8.3
|
|
Amendment
|
|
|
A-52
|
|
8.4
|
|
Extension; Waiver
|
|
|
A-52
|
|
Article IX
|
|
|
GENERAL PROVISIONS
|
|
|
|
|
9.1
|
|
Nonsurvival of Representations, Warranties and Agreements
|
|
|
A-53
|
|
9.2
|
|
Expenses
|
|
|
A-53
|
|
9.3
|
|
Notices
|
|
|
A-53
|
|
9.4
|
|
Interpretation
|
|
|
A-54
|
|
9.5
|
|
Counterparts
|
|
|
A-54
|
|
9.6
|
|
Entire Agreement
|
|
|
A-54
|
|
9.7
|
|
Governing Law; Jurisdiction
|
|
|
A-54
|
|
9.8
|
|
Waiver of Jury Trial
|
|
|
A-55
|
|
9.9
|
|
Assignment; Third Party Beneficiaries
|
|
|
A-55
|
|
9.10
|
|
Specific Performance
|
|
|
A-55
|
|
9.11
|
|
Severability
|
|
|
A-55
|
|
9.12
|
|
Delivery by Facsimile or Electronic Transmission
|
|
|
A-56
|
|
Exhibit A Amended and Restated Certificate of Incorporation of the Company
Exhibit B Bank Merger Agreement
A-iii
INDEX OF DEFINED TERMS
|
|
|
|
|
|
|
Page
|
|
Acquisition Proposal
|
|
|
A-45
|
|
Advisory Board
|
|
|
A-44
|
|
affiliate
|
|
|
A-51
|
|
Agreement
|
|
|
A-1
|
|
Bank Merger
|
|
|
A-5
|
|
Bank Merger Agreement
|
|
|
A-5
|
|
Bank Merger Certificate
|
|
|
A-5
|
|
BCA
|
|
|
A-1
|
|
Cash Consideration
|
|
|
A-2
|
|
Chosen Courts
|
|
|
A-55
|
|
Closing
|
|
|
A-2
|
|
Closing Date
|
|
|
A-2
|
|
Code
|
|
|
A-1
|
|
Company
|
|
|
A-1
|
|
Company Bank
|
|
|
A-5
|
|
Company Benefit Plans
|
|
|
A-14
|
|
Company Bylaws
|
|
|
A-8
|
|
Company Certificate
|
|
|
A-8
|
|
Company Common Stock
|
|
|
A-2
|
|
Company Contract
|
|
|
A-18
|
|
Company Deferred Stock Unit
|
|
|
A-4
|
|
Company Disclosure Schedule
|
|
|
A-7
|
|
Company Equity Awards
|
|
|
A-4
|
|
Company Equity Plan
|
|
|
A-3
|
|
Company ERISA Affiliate
|
|
|
A-14
|
|
Company ESOP
|
|
|
A-41
|
|
Company Indemnified Parties
|
|
|
A-42
|
|
Company Insiders
|
|
|
A-47
|
|
Company Leased Properties
|
|
|
A-20
|
|
Company Meeting
|
|
|
A-39
|
|
Company Owned Properties
|
|
|
A-20
|
|
Company Qualified Plans
|
|
|
A-15
|
|
Company Real Property
|
|
|
A-20
|
|
Company Regulatory Agreement
|
|
|
A-19
|
|
Company Reports
|
|
|
A-17
|
|
Company Restricted Stock Award
|
|
|
A-4
|
|
Company Stock Option
|
|
|
A-3
|
|
Company Subsidiary
|
|
|
A-8
|
|
Confidentiality Agreement
|
|
|
A-38
|
|
Continuing Employees
|
|
|
A-41
|
|
Converted Company Option
|
|
|
A-3
|
|
Delaware Secretary
|
|
|
A-2
|
|
Derivative Contract
|
|
|
A-19
|
|
Determination Date
|
|
|
A-51
|
|
DGCL
|
|
|
A-2
|
|
DOL
|
|
|
A-14
|
|
Effective Time
|
|
|
A-1
|
|
Enforceability Exceptions
|
|
|
A-10
|
|
Environmental Laws
|
|
|
A-19
|
|
A-iv
|
|
|
|
|
ERISA
|
|
|
A-14
|
|
ESOP Termination Date
|
|
|
A-41
|
|
Exception Shares
|
|
|
A-2
|
|
Exchange Act
|
|
|
A-10
|
|
Exchange Agent
|
|
|
A-5
|
|
Exchange Fund
|
|
|
A-5
|
|
Exchange Ratio
|
|
|
A-2
|
|
FDIC
|
|
|
A-8
|
|
Federal Reserve Board
|
|
|
A-8
|
|
FHLB
|
|
|
A-8
|
|
Final Index Price
|
|
|
A-51
|
|
First-Step Merger
|
|
|
A-1
|
|
First-Step Merger Certificate
|
|
|
A-1
|
|
GAAP
|
|
|
A-8
|
|
Governmental Entity
|
|
|
A-10
|
|
HOLA
|
|
|
A-8
|
|
Index
|
|
|
A-51
|
|
Index Ratio
|
|
|
A-51
|
|
Initial Index Price
|
|
|
A-51
|
|
Initial Parent Market Value
|
|
|
A-51
|
|
Integrated Mergers
|
|
|
A-1
|
|
Intellectual Property
|
|
|
A-20
|
|
IRS
|
|
|
A-14
|
|
Joint Proxy Statement
|
|
|
A-10
|
|
Laws
|
|
|
A-17
|
|
Liens
|
|
|
A-9
|
|
Loan Participation
|
|
|
A-22
|
|
Loans
|
|
|
A-22
|
|
Material Adverse Effect
|
|
|
A-8
|
|
Materially Burdensome Regulatory Condition
|
|
|
A-37
|
|
Merger Consideration
|
|
|
A-2
|
|
Merger Sub
|
|
|
A-1
|
|
Merger Sub Bylaws
|
|
|
A-4
|
|
Merger Sub Certificate
|
|
|
A-4
|
|
Multiemployer Plan
|
|
|
A-15
|
|
Multiple Employer Plan
|
|
|
A-15
|
|
NASDAQ
|
|
|
A-6
|
|
New Certificates
|
|
|
A-3
|
|
New Jersey Secretary
|
|
|
A-1
|
|
New Plans
|
|
|
A-14
|
|
OCC
|
|
|
A-10
|
|
Old Certificate
|
|
|
A-2
|
|
Parent
|
|
|
A-1
|
|
Parent Bank
|
|
|
A-5
|
|
Parent Benefit Plans
|
|
|
A-29
|
|
Parent Bylaws
|
|
|
A-4
|
|
Parent Certificate
|
|
|
A-4
|
|
Parent Common Stock
|
|
|
A-2
|
|
Parent Confidential Information
|
|
|
A-38
|
|
Parent Contract
|
|
|
A-31
|
|
Parent Disclosure Schedule
|
|
|
A-23
|
|
Parent Equity Awards
|
|
|
A-24
|
|
A-v
|
|
|
|
|
Parent ERISA Affiliate
|
|
|
A-29
|
|
Parent Market Value
|
|
|
A-51
|
|
Parent Meeting
|
|
|
A-39
|
|
Parent Regulatory Agreement
|
|
|
A-31
|
|
Parent Reports
|
|
|
A-29
|
|
Parent Restricted Stock Awards
|
|
|
A-24
|
|
Parent Share Issuance
|
|
|
A-25
|
|
Parent Subsidiary
|
|
|
A-24
|
|
PBGC
|
|
|
A-14
|
|
Permitted Encumbrances
|
|
|
A-20
|
|
person
|
|
|
A-54
|
|
Premium Cap
|
|
|
A-43
|
|
Regulatory Agencies
|
|
|
A-11
|
|
Representatives
|
|
|
A-44
|
|
Requisite Company Vote
|
|
|
A-10
|
|
Requisite Parent Vote
|
|
|
A-25
|
|
Requisite Regulatory Approvals
|
|
|
A-37
|
|
Restrictive Covenant
|
|
|
A-17
|
|
S-4
|
|
|
A-10
|
|
Sarbanes-Oxley Act
|
|
|
A-12
|
|
SEC
|
|
|
A-10
|
|
Second-Step Merger
|
|
|
A-1
|
|
Second-Step Merger Certificates
|
|
|
A-2
|
|
Securities Act
|
|
|
A-17
|
|
Stock Consideration
|
|
|
A-2
|
|
Subsidiary
|
|
|
A-8
|
|
Superior Proposal
|
|
|
A-45
|
|
Surviving Corporation
|
|
|
A-1
|
|
Takeover Statutes
|
|
|
A-21
|
|
Tax
|
|
|
A-14
|
|
Tax Return
|
|
|
A-14
|
|
Taxes
|
|
|
A-14
|
|
Terminated Plan
|
|
|
A-41
|
|
Termination Date
|
|
|
A-50
|
|
Termination Fee
|
|
|
A-51
|
|
Voting Agreements
|
|
|
A-1
|
|
A-vi
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of July 12, 2016 (this
Agreement
), is by and among
OceanFirst Financial Corp., a Delaware corporation (
Parent
), Masters Merger Sub Corp., a New Jersey corporation and a wholly-own Subsidiary of Parent (
Merger Sub
), and Ocean Shore Holding Co., a New Jersey
corporation (the
Company
).
W
I
T
N
E
S
S
E
T
H
:
WHEREAS, the Boards of Directors of Parent and the Company have determined that it is in the best interests of their
respective companies and their shareholders to consummate the strategic business combination transaction provided for herein, pursuant to which (i) Merger Sub will, subject to the terms and conditions set forth herein, merge with and into the
Company (the
First-Step Merger
), so that the Company is the surviving corporation in the First-Step Merger and a wholly-owned Subsidiary of Parent and (ii) immediately thereafter, the Company, as the surviving corporation in
the First-Step Merger, will merge (the
Second-Step Merger
, and together with the First-Step Merger, the
Integrated Mergers
) with and into Parent, with Parent being the surviving corporation (hereinafter
sometimes referred to in such capacity as the
Surviving Corporation
);
WHEREAS, for U.S. federal income
tax purposes, it is intended that the Integrated Mergers shall together be treated as a single integrated transaction that qualifies as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the
Code
), and this Agreement is intended to be, and is adopted as, a plan of reorganization for purposes of Sections 354, 361 and 368 of the Code and within the meaning of Treasury regulation section 1.368-2(g);
WHEREAS, concurrently with the execution and delivery of this Agreement, as a condition and an inducement for Parent to enter
into this Agreement, certain shareholders of the Company have simultaneously herewith entered into separate voting agreements with Parent (collectively, the
Voting Agreements
) in connection with the First-Step Merger; and
WHEREAS, the parties desire to make certain representations, warranties and agreements in connection with the Integrated
Mergers and also to prescribe certain conditions to the Integrated Mergers.
NOW, THEREFORE, in consideration of the
mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the parties agree as follows:
ARTICLE I
THE
INTEGRATED MERGERS
1.1
The Integrated Mergers; Effective Time
.
(a) Subject to the terms and conditions of this Agreement, in accordance with the New Jersey Business
Corporation Act (the
BCA
), at the Effective Time, Merger Sub shall merge with and into the Company. The Company shall be the surviving corporation in the First-Step Merger, and shall continue its corporate existence under the laws
of the State of New Jersey. Upon consummation of the First-Step Merger, the separate corporate existence of Merger Sub shall terminate. On or before the Closing Date, Parent and the Company, respectively, shall cause to be filed a certificate of
merger with the Secretary of State of the State of New Jersey (the
New Jersey Secretary
) in accordance with the BCA (the
First-Step Merger Certificate
). The First-Step Merger shall become effective as of the
date and time specified in the First-Step Merger Certificate (such date and time, the
Effective Time
).
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(b) Immediately following the Effective Time, subject to
the terms and conditions of this Agreement, in accordance with the Delaware General Corporation Law (the
DGCL
) and the BCA, the Company, as the surviving corporation in the First-Step Merger, shall merge with and into Parent.
Parent shall be the Surviving Corporation in the Second-Step Merger, and shall continue its corporate existence under the laws of the State of Delaware. Upon consummation of the Second-Step Merger, the separate corporate existence of the Company
shall terminate. On or before the Closing Date, Parent and the Company, respectively, shall cause to be filed a certificate of ownership and merger with the Secretary of State of the State of Delaware (the
Delaware Secretary
) in
accordance with the DGCL and a certificate of merger with the New Jersey Secretary in accordance with the BCA (collectively, the
Second-Step Merger Certificates
). The Second-Step Merger shall become effective as of the date and
time specified in the Second-Step Merger Certificates.
1.2
Closing
. Subject to the
terms and conditions of this Agreement, the closing of the Integrated Mergers (the
Closing
) will take place at 10:00 a.m., New York City time, at the offices of Skadden, Arps, Slate, Meagher and Flom LLP, on the last business day
of the month in which the conditions set forth in Article VII hereof have been satisfied or, if permitted by applicable law, waived (other than those conditions that by their nature can only be satisfied at the Closing, but subject to the
satisfaction or waiver thereof), unless another date, time or place is agreed to in writing by Parent and the Company. The date on which the Closing occurs is referred to in this Agreement as the
Closing Date
.
1.3
Effects of the Integrated Mergers
. At and after the Effective Time, the First-Step
Merger shall have the effects set forth in the applicable provisions of the BCA. At and after the effective time of the Second-Step Merger, the Second-Step Merger shall have the effects set forth in the applicable provisions of the DGCL and the BCA.
1.4
Effects of First-Step Merger on Merger Sub Capital Stock
. At and after the
Effective Time, each share of the capital stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one newly and validly issued, fully paid and nonassessable share of the capital stock of
the Company.
1.5
Conversion of Company Common Stock in the First-Step Merger
. At the
Effective Time, by virtue of the First-Step Merger and without any action on the part of Parent, Merger Sub or the Company or the holder of any of the following securities:
(a) Subject to
Section 2.2(e)
, each share of the common stock, par value $0.01 per share,
of the Company (the
Company Common Stock
) issued and outstanding immediately prior to the Effective Time, except for shares of Company Common Stock owned by the Company as treasury stock or owned by the Company or Parent (in each
case, other than shares of Company Common Stock held in any Company Benefit Plans or related trust accounts, or otherwise held in a fiduciary or agency capacity or as a result of debts previously contracted (collectively, the
Exception
Shares
)), shall be converted, in accordance with the procedures set forth in this Agreement, into the right to receive the following, without interest:
(i) $4.35 in cash (the
Cash
Consideration
); and
(ii) 0.9667 (the
Exchange Ratio
) validly issued, fully paid and nonassessable shares of common stock, par value $0.01 per share, of Parent (such common stock, the
Parent Common Stock
and such shares of Parent Common Stock, the
Stock Consideration
and, together with the Cash Consideration, the
Merger Consideration
).
(b) All of the shares of Company Common Stock converted into the right to receive the Merger
Consideration pursuant to this
Article I
shall no longer be outstanding and shall automatically be cancelled and shall cease to exist as of the Effective Time, and each certificate (each, an
Old Certificate
,
it
being
understood
that any reference herein to Old Certificate shall be deemed to include reference to book-entry account statements relating to the ownership of shares of Company Common Stock) previously representing any
such
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shares of Company Common Stock shall thereafter represent only the right to receive (i) the Merger Consideration in accordance with, and subject to,
Section 1.5(a)
,
(ii) cash in lieu of fractional shares which the shares of Company Common Stock represented by such Old Certificate have been converted into the right to receive pursuant to this
Section 1.5
and
Section 2.2(e)
, without
any interest thereon, and (iii) any dividends or distributions which the holder thereof has the right to receive pursuant to
Section 2.2(b)
. Old Certificates previously representing shares of Company Common Stock shall be exchanged
for evidence of shares in book entry form or, at Parents option, certificates (collectively referred to herein as
New Certificates
), representing the Stock Consideration (together with any dividends or distributions with
respect thereto and cash in lieu of fractional shares issued in consideration therefor) and the Cash Consideration upon the surrender of such Old Certificates in accordance with
Section 2.2
, without any interest thereon. If, prior to the
Effective Time, the outstanding shares of Parent Common Stock or Company Common Stock shall have been increased, decreased, or changed into or exchanged for a different number or kind of shares or securities, in any such case as a result of a
reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, or other similar change in capitalization, or there shall be any extraordinary dividend or distribution, an appropriate and proportionate
adjustment shall be made to the Merger Consideration to give holders of Company Common Stock the same economic effect as contemplated by this Agreement prior to such event.
(c) Notwithstanding anything in this Agreement to the contrary, at the Effective Time, all shares of
Company Common Stock that are owned by the Company or Parent (in each case, other than the Exception Shares) shall be cancelled and shall cease to exist and neither the Merger Consideration nor any other consideration shall be delivered in exchange
therefor.
1.6
Effects of Second-Step Merger on Parent and Company Common Stock
. At
the effective time of the Second-Step Merger, each share of (a) Parent Common Stock issued and outstanding immediately prior to such time shall remain issued and outstanding and shall not be affected by the Second-Step Merger and
(b) capital stock of the Company, as the surviving corporation in the First-Step Merger, issued and outstanding immediately prior to such time, shall be cancelled and shall cease to exist and neither the Merger Consideration nor any other
consideration shall be delivered in exchange therefor.
1.7
Treatment of Company Equity
Awards
.
(a) At the Effective Time, each option granted by the Company to purchase shares of
Company Common Stock under the Ocean Shore Holding Co. 2005 Equity Incentive Plan and the Ocean Shore Holding Co. 2010 Equity Incentive Plan (each, a
Company Equity Plan
), whether vested or unvested, that is outstanding and
unexercised immediately prior to the Effective Time (each, a
Company Stock Option
) shall, without any further action on the part of any holder thereof, be assumed and converted into an option to purchase from Parent, on the same
terms and conditions as were applicable under such Company Stock Option immediately prior to the Effective Time, a number of shares of Parent Common Stock (rounded down to the nearest whole share) determined by multiplying (x) the number of
shares of Company Common Stock subject to such Company Stock Option immediately prior to the Effective Time by (y) 1.2084, at a per share exercise price (rounded up to the nearest whole cent) equal to the quotient obtained by dividing
(i) the per share exercise price for each share of Company Common Stock subject to such Company Stock Option by (ii) 1.2084 (each, as so adjusted, a
Converted Company Option
). All rounding described in this
Section 1.7(a)
shall be done on an aggregate basis such that a single rounding of shares and exercise price shall be applied to each Converted Company Option.
(b) The Converted Company Options shall have the same vesting schedule (including any acceleration of
vesting as provided in the applicable Company Equity Plan) as the Company Stock Options and otherwise shall have the same terms and conditions as such Company Stock Options;
provided
, that Parent shall convert the Company Stock Options into
Converted Company Options in a manner consistent with the requirements of Sections 409A and 424(a) of the Code, as applicable. After such assumption and conversion, the Converted Company Options shall be subject to all of the terms and conditions of
the plan and grant agreements under which the Company Stock Options were originally issued (including any applicable change in control or
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other accelerated vesting provisions, and this transaction shall constitute a change in control for all relevant provisions).
(c) At the Effective Time, each restricted stock award in respect of shares of Company Common Stock
granted under any Company Equity Plan that is outstanding immediately prior to the Effective Time (a
Company Restricted Stock Award
and, together with the Company Stock Options, the
Company Equity Awards
) shall
be or become fully vested and the restrictions thereon shall lapse, and each holder thereof shall be entitled to receive the Merger Consideration in exchange therefor in accordance with
Section 1.5
of this Agreement. The Company or
Parent will be entitled to deduct and withhold such amounts as may be required to be deducted and withheld under the Code and any applicable state or local Tax laws as allowed under the applicable Company Equity Plan.
(d) At or prior to the Effective Time, the Company, the Board of Directors of the Company and its
compensation committee, as applicable, shall adopt any resolutions and take any actions that are necessary, including obtaining any consents, to (i) effectuate the provisions of this
Section 1.7
, (ii) ensure that following the
Effective Time, there are no obligations with respect to the Company Equity Awards other than as set forth in this
Section 1.7
, (iii) ensure that each deferred stock unit issued in respect of shares of Company Common Stock granted
under the Ocean City Home Bank Stock-Based Deferred Compensation Plan (a
Company Deferred Stock Unit
) is equitably converted into the right to receive Parent Common Stock in accordance with the terms of the Ocean City Home Bank
Stock-Based Deferred Compensation Plan and the related trust agreement and (iv) solely for purposes of granting new Company Equity Awards, terminate each Company Equity Plan effective as of the Effective Time; provided, that no action taken by
the Company shall be required to be irrevocable until immediately prior to the Effective Time. On or prior to the Effective Time, Parent shall reserve for future issuance a number of shares of Parent Common Stock at least equal to the number of
shares of Parent Common Stock that will be subject to Converted Company Options as a result of the actions contemplated by Section 1.7(a). Immediately following the Effective Time, Parent shall file a post-effective amendment to the
Form S-4 or a registration statement on Form S-8 (or other applicable form) with respect to the shares of Parent Common Stock subject to such Converted Company Options, shall distribute a prospectus relating to such Form S-8, if
applicable, and shall use reasonable best efforts to maintain the effectiveness of such registration statement for so long as such Converted Company Options remain outstanding.
1.8
Certificate of Incorporation of Surviving Corporation
. At the Effective Time, the
Certificate of Incorporation of the Company, as the surviving corporation in the First-Step Merger, shall be the Certificate of Incorporation of Merger Sub (the
Merger Sub Certificate
), as in effect immediately prior to the
Effective Time and attached hereto as
Exhibit A
, until such Certificate of Incorporation is thereafter amended in accordance with its terms and applicable law. At the effective time of the Second-Step Merger, the Certificate of Incorporation
of the Surviving Corporation shall be the Certificate of Incorporation of Parent (the
Parent Certificate
), as in effect immediately prior to the Effective Time, until thereafter amended in accordance with its terms and applicable
law.
1.9
Bylaws of Surviving Corporation
. At the Effective Time, the Bylaws of the
Company, as the surviving corporation in the First-Step Merger, shall be the Bylaws of Merger Sub (the
Merger Sub Bylaws
), as in effect immediately prior to the Effective Time, until thereafter amended in accordance with their
terms and applicable law. At the effective time of the Second-Step Merger, the Bylaws of the Surviving Corporation shall be the Bylaws of Parent (the
Parent Bylaws
), as in effect immediately prior to the Effective Time, until
thereafter amended in accordance with their terms and applicable law.
1.10
Directors;
Officers
. At and immediately after the Effective Time, the directors and officers of the Company, as the surviving corporation in the First-Step Merger, shall consist of the directors and officers of Merger Sub in office immediately prior to the
Effective Time until their respective successors are duly elected or appointed and qualified. Subject to
Section 6.12
, the directors and officers of the Surviving Corporation in the Second-Step Merger shall be the directors and officers
of Parent in office immediately prior to the effective time of the Second-Step Merger.
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1.11
Tax Consequences
. For U.S. federal
income Tax purposes, (a) the parties intend that (i) the Integrated Mergers shall together be treated as a single integrated transaction that qualifies as a reorganization within the meaning of Section 368(a) of the Code
and (ii) Parent, Merger Sub and the Company shall each be a party to such reorganization within the meaning of Section 368(b) of the Code, and (b) this Agreement is intended to be, and is hereby adopted as, a plan of
reorganization for purposes of Sections 354, 361 and 368 of the Code and within the meaning of Treasury regulation Section 1.368-2(g).
1.12
Bank Merger
. Immediately following the consummation of the Integrated Mergers, Ocean
City Home Bank, a federal savings bank and a wholly-owned Subsidiary of the Company (
Company Bank
), will merge (the
Bank Merger
) with and into OceanFirst Bank, a federal savings bank and a wholly-owned
Subsidiary of Parent (
Parent Bank
), pursuant to the agreement and plan of merger attached hereto as
Exhibit B
, dated as of the date hereof, by and between Company Bank and Parent Bank (the
Bank Merger
Agreement
). Parent Bank shall be the surviving bank in the Bank Merger and, following the Bank Merger, the separate corporate existence of Company Bank shall cease. The parties agree that the Bank Merger shall become effective immediately
after the effective time of the Second-Step Merger. Prior to the Effective Time, the Company shall cause Company Bank, and Parent shall cause Parent Bank, to execute such articles of combination and such other documents and certificates as are
necessary to make the Bank Merger effective (the
Bank Merger Certificate
) immediately following the effective time of the Second-Step Merger.
ARTICLE II
EXCHANGE
OF SHARES
2.1
Parent to Make Merger Consideration Available
. At or prior to
the Effective Time, Parent shall deposit, or shall cause to be deposited, with a bank or trust company designated by Parent and reasonably acceptable to the Company (the
Exchange Agent
), for the benefit of the holders of Old
Certificates, for exchange in accordance with this
Article II
, (a) New Certificates representing the aggregate Stock Consideration to be issued pursuant to
Section 1.5
and exchanged pursuant to
Section 2.2(a)
, and
(b) cash in an amount sufficient to pay (i) the aggregate Cash Consideration payable to holders of Company Common Stock and (ii) cash in lieu of any fractional shares of Parent Common Stock (such cash and New Certificates described in
the foregoing
clauses (a)
and
(b)
, together with any dividends or distributions with respect thereto (after giving effect to
Section 6.11
), being hereinafter referred to as the
Exchange Fund
). The
Exchange Agent shall invest any cash included in the Exchange Fund as directed by Parent, provided that no such investment or losses thereon shall affect the amount of Merger Consideration payable to the holders of Old Certificates. Any interest and
other income resulting from such investments shall be paid to Parent.
2.2
Exchange of
Shares
.
(a) As promptly as practicable after the Effective Time, but in no event later than
five (5) business days thereafter, Parent shall cause the Exchange Agent to mail to each holder of record of one or more Old Certificates representing shares of Company Common Stock immediately prior to the Effective Time that have been
converted at the Effective Time into the right to receive the Merger Consideration pursuant to
Article I
, 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 proper delivery of the Old Certificates to the Exchange Agent) and instructions for use in effecting the surrender of the Old Certificates in exchange for the Merger Consideration which such holder shall have become entitled to
receive in accordance with, and subject to,
Section 1.5(a)
, and any cash in lieu of fractional shares which the shares of Company Common Stock represented by such Old Certificate or Old Certificates shall have been converted into the
right to receive pursuant to this Agreement as well as any dividends or distributions to be paid pursuant to
Section 2.2(b)
. From and after the Effective Time, upon proper surrender of an Old Certificate or Old Certificates for exchange
and cancellation to the Exchange Agent, together with such properly completed letter of transmittal duly executed, the holder of such Old
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Certificate or Old Certificates shall be entitled to receive in exchange therefor, as applicable, (i) a New Certificate representing the Stock Consideration to which such holder of Company
Common Stock shall have become entitled to receive in accordance with, and subject to,
Section 1.5(a)
, and (ii) a check representing the amount of (1) the Cash Consideration which such holder has the right to receive in respect
of the surrendered Old Certificate or Old Certificates in accordance with, and subject to,
Section 1.5(a)
, (2) any cash in lieu of fractional shares which such holder has the right to receive in respect of the surrendered Old
Certificate or Old Certificates pursuant to
Section 2.2(e)
and (3) any dividends or distributions which the holder thereof has the right to receive pursuant to
Section 2.2(b)
, and the Old Certificate or Old Certificates
so surrendered shall forthwith be cancelled. No interest will be paid or accrued on the Cash Consideration, any cash in lieu of fractional shares payable to holders of Old Certificates or any dividends payable under
Section 2.2(b)
. Until
surrendered as contemplated by this
Section 2.2
, each Old Certificate shall be deemed at any time after the Effective Time to represent only the right to receive, upon surrender, the Merger Consideration and any cash in lieu of
fractional shares or in respect of dividends or distributions as contemplated by this
Section 2.2
.
(b) No dividends or other distributions declared with respect to Parent Common Stock shall be paid to
the holder of any unsurrendered Old Certificate until the holder thereof shall surrender such Old Certificate in accordance with this
Article II
. After the surrender of an Old Certificate in accordance with this
Article II
, the
record holder thereof shall be entitled to receive any such dividends or other distributions, without any interest thereon, which theretofore had become payable with respect to the Stock Consideration which the shares of Company Common Stock
represented by such Old Certificate have been converted into the right to receive (after giving effect to
Section 6.11
).
(c) If any New Certificate representing shares of Parent Common Stock is to be issued in a name other
than that in which the Old Certificate or Old Certificates surrendered in exchange therefor is or are registered, it shall be a condition of the issuance thereof that the Old Certificate or Old Certificates so surrendered shall be properly endorsed
(or accompanied by an appropriate instrument of transfer) and otherwise in proper form for transfer, and that the person requesting such exchange shall pay to the Exchange Agent in advance any transfer or other similar Taxes required by reason of
the issuance of a New Certificate representing shares of Parent Common Stock in any name other than that of the registered holder of the Old Certificate or Old Certificates surrendered, or required for any other reason, or shall establish to the
satisfaction of the Exchange Agent that such Tax has been paid or is not payable.
(d) After the
Effective Time, there shall be no transfers on the stock transfer books of the Company of the shares of Company Common Stock that were issued and outstanding immediately prior to the Effective Time. If, after the Effective Time, Old Certificates
representing such shares are presented for transfer to the Exchange Agent, they shall be cancelled and exchanged for the Merger Consideration, cash in lieu of fractional shares and dividends or distributions that the holder presenting such Old
Certificates is entitled to, as provided in this
Article II
.
(e) Notwithstanding anything
to the contrary contained herein, no New Certificates or scrip representing fractional shares of Parent Common Stock shall be issued upon the surrender for exchange of Old Certificates, no dividend or distribution with respect to Parent Common Stock
shall be payable on or with respect to any fractional share, and such fractional share interests shall not entitle the owner thereof to vote or to any other rights of a shareholder of Parent. In lieu of the issuance of any such fractional share,
Parent shall pay to each former shareholder of the Company who otherwise would be entitled to receive such fractional share an amount in cash (rounded to the nearest cent) determined by multiplying (i) the average of the closing-sale prices of
Parent Common Stock on The Nasdaq Global Select Market (
NASDAQ
) (as reported by
The Wall Street Journal
) for the five (5) full trading days ending on the last trading day preceding the Closing Date by (ii) the
fraction of a share (rounded to the nearest thousandth when expressed in decimal form) of Parent Common Stock which such holder would otherwise be entitled to receive pursuant to
Section 1.5
.
(f) Any portion of the Exchange Fund that remains unclaimed by the shareholders of the Company for
one (1) year after the Effective Time shall be paid to the Surviving Corporation. Any former
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shareholders of the Company who have not theretofore complied with this
Article II
shall thereafter look only to the Surviving Corporation for payment of the Merger Consideration, cash in
lieu of any fractional shares and any unpaid dividends and distributions on the Parent Common Stock deliverable in respect of each former share of Company Common Stock such shareholder holds as determined pursuant to this Agreement, in each case,
without any interest thereon. Notwithstanding the foregoing, none of Parent, the Company, the Surviving Corporation, the Exchange Agent or any other person shall be liable to any former holder of shares of Company Common Stock for any amount
delivered in good faith to a public official pursuant to applicable abandoned property, escheat or similar laws.
(g) Each of Parent and Merger Sub shall be entitled to deduct and withhold, or cause the Exchange
Agent to deduct and withhold, from the Merger Consideration, any cash in lieu of fractional shares of Parent Common Stock, cash dividends or distributions payable pursuant to this
Section 2.2
or any other amounts otherwise payable
pursuant to this Agreement to any holder of Company Common Stock such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or foreign Tax law. To the extent that
amounts are so withheld by Parent, Merger Sub or the Exchange Agent, as the case may be, and paid over to the appropriate governmental authority, the withheld amounts shall be treated for all purposes of this Agreement as having been paid to the
holder of Company Common Stock in respect of which the deduction and withholding was made by Parent, Merger Sub or the Exchange Agent, as the case may be.
(h) In the event any Old Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Old Certificate to be lost, stolen or destroyed and, if requested by Parent, the posting by such person of a bond in such amount as Parent may determine is reasonably necessary as indemnity against
any claim that may be made against it with respect to such Old Certificate, the Exchange Agent or Parent, as applicable, will issue in exchange for such lost, stolen or destroyed Old Certificate the Merger Consideration and any cash in lieu of
fractional shares deliverable in respect thereof pursuant to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (i) as disclosed in the disclosure schedule delivered by the Company to Parent concurrently herewith (the
Company Disclosure Schedule
);
provided
, that (a) no such item is required to be set forth as an exception to a representation or warranty if its absence would not result in the related representation or warranty being
deemed untrue or incorrect, (b) the mere inclusion of an item in the Company Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission by the Company 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 and (c) any disclosures made with respect to a section of
Article III
shall be deemed to qualify (1) any other section of
Article III
specifically referenced or cross-referenced and (2) other sections of
Article III
to the extent it is reasonably apparent on its face (notwithstanding the absence of a specific cross-reference) from a reading of
the disclosure that such disclosure applies to such other sections or (ii) as disclosed in any Company Reports publicly filed by the Company since December 31, 2014, and prior to the date hereof (but disregarding risk factor disclosures
contained under the heading Risk Factors, or disclosures of risks set forth in any forward-looking statements disclaimer or any other statements that are similarly non-specific or cautionary, predictive or forward-looking in
nature), the Company hereby represents and warrants to Parent as follows:
3.1
Corporate
Organization
.
(a) The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of New Jersey, and is a savings and loan holding company duly registered with the Board of
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Governors of the Federal Reserve System (the
Federal Reserve Board
) under the Home Owners Loan Act of 1933, as amended (
HOLA
). The Company has the corporate
power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted. The Company is duly licensed or qualified to do business in each jurisdiction in which the nature of the business
conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified would not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the Company. As used in this Agreement, the term
Material Adverse Effect
means, with respect to Parent, the Company or the Surviving Corporation, as the case
may be, a material adverse effect on (i) the business, properties, assets, liabilities, results of operations or financial condition of such party and its Subsidiaries taken as a whole (
provided
,
however
, that, with respect to
this
clause (i)
, Material Adverse Effect shall not be deemed to include the impact of (A) changes, after the date hereof, in U.S. generally accepted accounting principles (
GAAP
) or applicable regulatory accounting
requirements, (B) changes, after the date hereof, in laws, rules or regulations of general applicability to companies in the industries in which such party and its Subsidiaries operate, or interpretations thereof by courts or Governmental
Entities, (C) changes, after the date hereof, in global, national or regional political conditions (including the outbreak of war or acts of terrorism) or in economic or market conditions affecting the financial services industry generally and
not specifically relating to such party or its Subsidiaries, (D) public disclosure of the transactions contemplated hereby or actions expressly required by this Agreement or actions or omissions that are taken with the prior written consent of
the other party in contemplation of the transactions contemplated hereby; except, with respect to
subclauses (A)
,
(B)
and
(C)
, to the extent that the effects of such changes are materially disproportionately adverse to the
business, properties, assets, liabilities, results of operations or financial condition of such party and its Subsidiaries, taken as a whole, as compared to other companies in the industry in which such party and its Subsidiaries operate) or
(ii) the ability of such party to timely consummate the transactions contemplated hereby. As used in this Agreement, the word
Subsidiary
when used with respect to any person, means any corporation, partnership, limited
liability company, bank or other organization, whether incorporated or unincorporated, or person of which (i) such first person directly or indirectly owns or controls at least a majority of the securities or other interests having by their
terms ordinary voting power to elect a majority of the board of directors or others performing similar functions or (ii) such first person is or directly or indirectly has the power to appoint a general partner, manager or managing member or
others performing similar functions. True and complete copies of the Certificate of Incorporation of the Company (the
Company Certificate
) and the Bylaws of the Company (the
Company Bylaws
), as in effect as of
the date of this Agreement, have previously been made available by the Company to Parent.
(b)
Company Bank is a federal savings bank duly organized, validly existing and in good standing under the laws of the United States. The deposits of Company Bank are insured by the Federal Deposit Insurance Corporation (the
FDIC
)
through the Deposit Insurance Fund to the fullest extent permitted by law, all premiums and assessments required to be paid in connection therewith have been paid when due, and no proceedings for the termination of such insurance are pending or
threatened. Company Bank is a member in good standing of the Federal Home Loan Bank of New York (the
FHLB
) and owns the requisite amount of stock therein. Without duplication of the representations made by the Company in each of
the foregoing sentences of this
Section 3.1(b)
, each Subsidiary of the Company (each, a
Company Subsidiary
), (i) is duly organized and validly existing under the laws of its jurisdiction of organization,
(ii) is duly qualified to do business and, where such concept is recognized under applicable law, is in good standing in all jurisdictions (whether federal, state, local or foreign) where its ownership or leasing of property or the conduct of
its business requires it to be so qualified and in which the failure to be so qualified or in good standing would reasonably be expected to have a Material Adverse Effect on the Company and (iii) has all requisite corporate power and authority
to own or lease its properties and assets and to carry on its business as now conducted. There are no restrictions on the ability of any Subsidiary of the Company to pay dividends or distributions except, in the case of a Subsidiary that is a
regulated entity, for restrictions on dividends or distributions generally applicable to all such regulated entities.
Section 3.1(b)
of the Company Disclosure Schedule sets forth a true and complete list of all Subsidiaries of the
Company as of the date hereof.
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3.2
Capitalization
.
(a) The authorized capital stock of the Company consists of 25,000,000 shares of Company Common Stock
and 5,000,000 shares of preferred stock, $0.01 par value, of which no shares of preferred stock are issued or outstanding. As of the date of this Agreement, there are (i) 6,412,678 shares of Company Common Stock issued and outstanding, which
number includes 25,620 shares of Company Common Stock granted in respect of outstanding Company Restricted Stock Awards and 58,993 shares of Company Common Stock held by the Company in trust for issuance pursuant to outstanding Company Deferred
Stock Units (which shares satisfy in full the Companys obligation with respect to the Company Deferred Stock Units), (ii) 894,912 shares of Company Common Stock held in treasury, (iii) 368,627 shares of Company Common Stock reserved
for issuance upon the exercise of the outstanding Company Stock Options and (iv) no other shares of capital stock or other equity securities of the Company issued, reserved for issuance or outstanding. All of the issued and outstanding shares
of Company Common Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. There are no bonds, debentures, notes or other
indebtedness that have the right to vote on any matters on which shareholders of the Company may vote. There are no trust preferred or subordinated debt securities of the Company or any of its Subsidiaries issued or outstanding. Other than the
Company Stock Options, the Company Restricted Stock Awards and the Company Deferred Stock Units, in each case issued prior to the date of this Agreement, there are no outstanding subscriptions, options, warrants, puts, calls, rights, exchangeable or
convertible securities or other commitments or agreements obligating the Company to issue, transfer, sell, purchase, redeem or otherwise acquire, any such securities. There are no voting trusts, shareholder agreements, proxies or other agreements in
effect with respect to the voting or transfer of Company Common Stock or other equity interests of the Company, other than the Voting Agreements.
Section 3.2(a)
of the Company Disclosure Schedule sets forth a true, correct and complete
list of all the Company Equity Awards and Company Deferred Stock Units issued and outstanding under any Company Equity Plan as of the date hereof, specifying, on a holder-by-holder basis, (A) the name of each holder, (B) the number of
shares subject to each such award, (C) the grant date of each such award, (D) the vesting schedule for each such award, (E) the exercise price for each such award that is a Company Stock Option, and (F) the expiration date for
each such award that is a Company Stock Option. Other than the Company Equity Awards and Company Deferred Stock Units, no equity-based awards (including any cash awards where the amount of payment is determined in whole or in part based on the price
of any capital stock of the Company or any of its Subsidiaries) are outstanding.
(b) The Company
owns, directly or indirectly, all of the issued and outstanding shares of capital stock or other equity ownership interests of each of the Company Subsidiaries, free and clear of any liens, pledges, charges, encumbrances and security interests
whatsoever (
Liens
), and all of such shares or equity ownership interests are duly authorized and validly issued and are fully paid, nonassessable (except, with respect to bank Subsidiaries, as provided under 12 U.S.C. § 55 or
any comparable provision of applicable federal or state law) and free of preemptive rights, with no personal liability attaching to the ownership thereof. No Company Subsidiary has or is bound by any outstanding subscriptions, options, warrants,
calls, rights, commitments or agreements of any character calling for the purchase or issuance of any shares of capital stock or any other equity security of such Subsidiary or any securities representing the right to purchase or otherwise receive
any shares of capital stock or any other equity security of such Subsidiary.
3.3
Authority; No Violation
.
(a) The Company 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 Integrated Mergers have been duly and validly approved by the Board of Directors of the
Company by a vote of at least two-thirds of the entire Board of Directors of the Company. The Board of Directors of the Company has determined that the Integrated Mergers, on the terms and conditions set forth in this Agreement, are advisable and in
the best interests of the Company and its shareholders, has adopted this Agreement and has directed that this Agreement and the transactions contemplated hereby be submitted to the
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Companys shareholders for approval at a meeting of such shareholders and has adopted a resolution to the foregoing effect. Except for the approval of this Agreement by the affirmative vote
of a majority of votes cast by the holders of the shares of Company Common Stock entitled to vote at the Company Meeting (the
Requisite Company Vote
), no other corporate proceedings or approvals on the part of the Company are
necessary to approve this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company and (assuming due authorization, execution and delivery by Parent) constitutes
a 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 bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
the rights of creditors generally and the availability of equitable remedies (the
Enforceability Exceptions
)).
(b) 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 the Company with any of the terms or provisions hereof, will (i) violate any provision of the Company Certificate or the Company Bylaws or (ii) assuming that the consents
and approvals referred to in
Section 3.4
are duly obtained, (x) violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to the Company or any of its Subsidiaries or any of their
respective properties or assets or (y) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default)
under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of the Company or any of its
Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any of its Subsidiaries is a party, or by which
they or any of their respective properties or assets may be bound, except (in the case of
clause (y)
above) for such violations, conflicts, breaches or defaults which, either individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on the Company.
(c) The Board of Directors of Company
Bank has adopted the Bank Merger Agreement. The Company, as the sole shareholder of Company Bank, has approved the Bank Merger Agreement, and the Bank Merger Agreement has been duly executed by Company Bank.
3.4
Consents and Approvals
. Except for (a) the filing of applications, filings and
notices, as applicable, with NASDAQ, and the approval of the listing on the NASDAQ of the shares of Parent Common Stock pursuant to this Agreement, (b) the filing of applications, filings and notices, as applicable, with the Federal Reserve
Board under the HOLA and approval of such applications, filings and notices, (c) the filing of applications, filings and notices, as applicable, with the Office of the Comptroller of the Currency (the
OCC
), and approval of
such applications, filings and notices, (d) the filing with the Securities and Exchange Commission (the
SEC
) of (i) any filings that are necessary under applicable requirements of the Securities Exchange Act of 1934, as
amended (the
Exchange Act
), including the filing of a joint proxy statement in definitive form relating to the meetings of the Companys and Parents shareholders to be held in connection with this Agreement and the
transactions contemplated hereby (including any amendments or supplements thereto, the
Joint Proxy Statement
), and (ii) the registration statement on Form S-4 in which the Joint Proxy Statement will be included as a
prospectus, to be filed with the SEC by Parent in connection with the transactions contemplated by this Agreement (the
S-4
) and declaration of effectiveness of the S-4, (e) the filing of the First-Step Merger Certificate with
the New Jersey Secretary pursuant to the BCA, (f) the filing of the Second-Step Merger Certificates with the Delaware Secretary and the New Jersey Secretary in accordance with the DGCL and the BCA, respectively, (g) the filing of the Bank
Merger Certificate and (h) such filings and approvals as are required to be made or obtained under the securities or Blue Sky laws of various states in connection with the issuance of shares of Parent Common Stock pursuant to this
Agreement, no consents or approvals of or filings or registrations with any court, administrative agency or commission or other governmental authority or instrumentality or any self-regulatory organization (each, a
Governmental
Entity
) or any third party are necessary in connection with (A) the execution and delivery by the Company of this Agreement or (B) the
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consummation by the Company of the Integrated Mergers and the other transactions contemplated hereby (including the Bank Merger).
3.5
Reports
. The Company and each of its Subsidiaries have timely filed all reports,
registrations and statements, together with any amendments required to be made with respect thereto, that they were required to file since January 1, 2013 with (a) any state regulatory authority, (b) the SEC, (c) the Federal
Reserve Board, (d) the FDIC, (e) the OCC, (f) any foreign regulatory authority and (g) any self-regulatory organization ((a) (g), collectively
Regulatory Agencies
), including, without limitation, any
report, registration or statement required to be filed pursuant to the laws of the United States, any state, any foreign entity, or any Regulatory Agency, and have paid in full all fees and assessments due and payable in connection therewith, except
where the failure to file such report, registration or statement or to pay such fees and assessments, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company. Except as set forth in
Section 3.5
of the Company Disclosure Schedule and for normal examinations conducted by a Regulatory Agency in the ordinary course of business of the Company and its Subsidiaries, (i) no Regulatory Agency has initiated or has
pending any proceeding or, to the knowledge of the Company, investigation into the business or operations of the Company or any of its Subsidiaries since January 1, 2013, except where such proceedings or investigation would not reasonably be
expected to be, either individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole, (ii) there is no unresolved violation, criticism, or exception by any Regulatory Agency with respect to any report or
statement relating to any examinations or inspections of the Company or any of its Subsidiaries and (iii) there has been no formal or informal inquiries by, or disagreements or disputes with, any Regulatory Agency with respect to the business,
operations, policies or procedures of the Company or any of its Subsidiaries since January 1, 2013, in each case, which would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company. The
Company and its Subsidiaries have fully resolved all matters requiring attention, matters requiring immediate attention or similar items as identified by any such Regulatory Agency.
3.6
Financial Statements
.
(a) The financial statements of the Company and its Subsidiaries included (or incorporated by
reference) in the Company Reports (including the related notes, where applicable) (i) have been prepared from, and are in accordance with, the books and records of the Company and its Subsidiaries, (ii) fairly present in all material
respects the consolidated results of operations, cash flows, changes in shareholders equity and consolidated financial position of the Company and its Subsidiaries for the respective fiscal periods or as of the respective dates therein set
forth (subject in the case of unaudited statements to year-end audit adjustments normal in nature and amount), (iii) complied, as of their respective dates of filing with the SEC, in all material respects with applicable accounting requirements
and with the published rules and regulations of the SEC with respect thereto, and (iv) have been prepared in accordance with GAAP consistently applied during the periods involved, except, in each case, as indicated in such statements or in the
notes thereto. The books and records of the Company and its Subsidiaries have been, and are being, maintained in all material respects in accordance with GAAP and any other applicable legal and accounting requirements and reflect only actual
transactions. Deloitte & Touche LLP has not resigned (or informed the Company that it intends to resign) or been dismissed as independent public accountants of the Company as a result of or in connection with any disagreements with the
Company on a matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.
(b) Except as would not reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect on the Company, neither the Company nor any of its Subsidiaries has any liability of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due), except for those liabilities
that are reflected or reserved against on the consolidated balance sheet of the Company included in its Quarterly Report on
Form 10-Q
for the fiscal quarter ended March 31, 2016 (including any notes
thereto) and for liabilities incurred in the ordinary course of business consistent with past practice since March 31, 2016, or in connection with this Agreement and the transactions contemplated hereby.
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(c) The records, systems, controls, data and information
of the Company and its Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of
the Company or its Subsidiaries or their accountants (including all means of access thereto and therefrom), except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have a Material Adverse Effect on the
Company. The Company (x) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) to ensure that material information relating to the Company, including its Subsidiaries, is made
known to the chief executive officer and the chief financial officer of the Company by others within those entities as appropriate to allow timely decisions regarding required disclosures and to make the certifications required by the Exchange Act
and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 (the
Sarbanes-Oxley Act
), and (y) has disclosed, based on its most recent evaluation prior to the date hereof, to the Companys outside auditors and the audit
committee of the Companys Board of Directors (i) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are
reasonably likely to adversely affect the Companys ability to record, process, summarize and report financial information, and (ii) any fraud, whether or not material, that involves management or other employees who have a significant
role in the Companys internal controls over financial reporting. These disclosures were made in writing by management to the Companys auditors and audit committee and a copy has previously been made available to Parent. As of the date of
this Agreement, there is no reason to believe that the Companys outside auditors and its chief executive officer and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and
regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act, without qualification, when next due.
(d)
Since January 1, 2013, (i) neither the Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any director, officer, auditor, accountant or representative of the Company or any of its
Subsidiaries, has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods (including
with respect to loan loss reserves, write-downs, charge-offs and accruals) of the Company or any of its Subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company
or any of its Subsidiaries has engaged in questionable accounting or auditing practices, and (ii) no attorney representing the Company or any of its Subsidiaries, whether or not employed by the Company or any of its Subsidiaries, has reported
evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by the Company or any of its officers, directors, employees or agents to the Board of Directors of the Company or any committee thereof or to the
knowledge of the Company, to any director or officer of the Company.
3.7
Brokers
Fees
. With the exception of the engagement of Sandler ONeill & Partners, L.P., neither the Company nor any Company Subsidiary nor any of their respective officers or directors has employed any broker, finder or financial advisor
or incurred any liability for any brokers fees, commissions or finders fees in connection with the Integrated Mergers or related transactions contemplated by this Agreement. The Company has disclosed to Parent as of the date hereof the
aggregate fees provided for in connection with the engagement by the Company of Sandler ONeill & Partners, L.P., related to the Integrated Mergers and the other transactions contemplated hereunder.
3.8
Absence of Certain Changes or Events
.
(a) Since December 31, 2015, no event or events have occurred that have had or would reasonably
be expected to have, either individually or in the aggregate, a Material Adverse Effect on the Company.
(b)
Since December 31, 2015, except with respect to (i) matters set forth in
Section 3.8(b)
of the Company Disclosure Schedule and (ii) the transactions contemplated hereby, the Company and its
Subsidiaries have carried on their respective businesses in all material respects in the ordinary course.
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3.9
Legal Proceedings
.
(a) Neither the Company nor any of its Subsidiaries is a party to any, and there are no pending or, to
the Companys knowledge, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any material nature against the Company or any of its Subsidiaries or any of their
current or former directors or executive officers or challenging the validity or propriety of the transactions contemplated by this Agreement.
(b) There is no injunction, order, judgment, decree, or regulatory restriction imposed upon the
Company, any of its Subsidiaries or the assets of the Company or any of its Subsidiaries (or that, upon consummation of the Integrated Mergers, would apply to the Surviving Corporation or any of its affiliates), that would reasonably be expected to
be material to the Company and its Subsidiaries, taken as a whole.
3.10
Taxes and Tax Returns
.
(a) Each of the Company and its Subsidiaries has duly and timely filed or caused to be filed
(giving effect to all applicable extensions) all material Tax Returns required to be filed by any of them, and all such Tax Returns are true, correct, and complete in all material respects.
(b) All material Taxes of the Company and its Subsidiaries that are due have been fully and timely
paid or adequate reserves therefor have been made on the financial statements of the Company and its Subsidiaries included (or incorporated by reference) in the Company Reports (including the related notes, where applicable). Each of the Company and
its Subsidiaries has withheld and paid to the relevant Governmental Entity on a timely basis all material Taxes required to have been withheld and paid in connection with amounts paid or owing to any person.
(c) No claim has been made in writing by any Governmental Entity in a jurisdiction where the Company
or any of its Subsidiaries does not file Tax Returns that the Company or such subsidiary is or may be subject to taxation by that jurisdiction.
(d) There are no material Liens for Taxes on any of the assets of the Company or any of its
Subsidiaries other than Liens for Taxes not yet due and payable.
(e) Neither the Company nor any
of its Subsidiaries has received written notice of assessment or proposed assessment in connection with any material amount of Taxes, and there are no threatened in writing or pending disputes, claims, audits, examinations, investigations, or other
proceedings regarding any material Tax of the Company and its Subsidiaries or the assets of the Company and its Subsidiaries which have not been paid, settled or withdrawn or for which adequate reserves have not been established.
(f) Neither the Company nor any of its Subsidiaries will be required to include any item of income
in, or exclude any item of deduction from, taxable income for any taxable year (or portion thereof) ending after the Closing Date as a result of any (i) intercompany transaction or excess loss account described in Treasury regulations
promulgated under Section 1502 of the Code (or any corresponding or similar provision of state, local, or non- U.S. Tax law), (ii) installment sale or open transaction made on or prior to the Closing Date or (iii) prepaid amount
received on or prior to the Closing Date.
(g) Neither the Company nor any of its Subsidiaries is
a party to or is bound by any Tax sharing, allocation or indemnification agreement or arrangement (other than such an agreement or arrangement exclusively between or among the Company and its Subsidiaries). Neither the Company nor any of its
Subsidiaries (i) has been a member of an affiliated group filing a consolidated federal income Tax Return (other than a group of which the Company was the common parent) or (ii) has any liability for the Taxes of any person (other than the
Company or any of its Subsidiaries) arising from the application of Treasury regulation Section 1.1502-6, or any similar provision of state, local or foreign law, as a transferee or successor, by contract or otherwise.
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(h) Neither the Company nor any of its Subsidiaries has
distributed stock to another Person, or has had its stock distributed by another Person during the two-year period ending on the date hereof that was intended to be governed in whole or in part by Section 355 of the Code.
(i) Neither the Company nor any of its Subsidiaries has taken any action, or knows of any fact or
circumstance, that could reasonably be expected to prevent the Integrated Mergers, taken together, from being treated as an integrated transaction that qualifies as a reorganization within the meaning of Section 368(a) of the Code.
(j) Neither the Company nor any of its Subsidiaries has engaged in any reportable
transaction within the meaning of Treasury Regulation section 1.6011-4(b)(1).
(k) Neither
the Company nor any of its Subsidiaries has undergone an ownership change within the meaning of Section 382(g) of the Code within the past five years.
(l) As used in this Agreement, the term
Tax
or
Taxes
means all
U.S. federal, state and local, and foreign taxes, fees assessments or other charges of a similar nature (whether imposed directly or through withholding), including any interest, additions to tax or penalties related thereto.
(m) As used in this Agreement, the term
Tax Return
means any return, declaration,
report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof, supplied or required to be supplied to a Governmental Entity.
3.11
Employees
.
(a)
Section 3.11(a)
of the Company Disclosure Schedule lists all Company Benefit Plans.
For purposes of this Agreement,
Company Benefit Plans
mean all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (
ERISA
)), whether or not
subject to ERISA, whether funded or unfunded, and all pension, benefit, retirement, bonus, stock option, stock purchase, restricted stock, stock-based, performance award, phantom equity, incentive, deferred compensation, retiree medical or life
insurance, supplemental retirement, severance, retention, employment, consulting, termination, change in control, salary continuation, accrued leave, sick leave, vacation, paid time off, health, medical, disability, life, accidental death and
dismemberment, insurance, welfare, fringe benefit and other similar plans, programs, policies, practices or arrangements or other contracts or agreements (and any amendments thereto) to or with respect to which the Company or any Subsidiary or any
trade or business of the Company or any of its Subsidiaries, whether or not incorporated, all of which together with the Company would be deemed a single employer within the meaning of Section 4001 of ERISA (a
Company ERISA
Affiliate
), is a party or has any current or future obligation or that are sponsored, maintained, contributed to or required to be contributed to by the Company or any of its Subsidiaries or any Company ERISA Affiliate for the benefit of
any current or former employee, officer, director, consultant or independent contractor (or any spouse or dependent of such individual) of the Company or any of its Subsidiaries or any Company ERISA Affiliate.
(b) The Company has heretofore made available to Parent true, correct and complete copies of the
following documents with respect to each of the Company Benefit Plans, to the extent applicable, (i) all plans and trust agreements, (ii) all summary plan descriptions, amendments, modifications or material supplements to any Company
Benefit Plan, (iii) where any Company Benefit Plan has not been reduced to writing, a written summary of all the material plan terms, (iii) the annual report (Form 5500), if any, filed with the Internal Revenue Service (the
IRS
) for the last three (3) plan years and summary annual reports, with schedules and financial statements attached, (iv) the most recently received IRS determination letter, if any, relating to any Company Benefit Plan,
(v) the most recently prepared actuarial report for each Company Benefit Plan (if applicable) for each of the last three (3) years and (vi) copies of material notices, letters or other correspondence with the IRS, U.S. Department of
Labor (the
DOL
) or Pension Benefit Guarantee Corporation (the
PBGC
).
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(c) Each Company Benefit Plan has been established,
operated and administered in all material respects in accordance with its terms and the requirements of all applicable laws, including ERISA and the Code. Neither the Company nor any of its Subsidiaries has taken any action to take corrective action
or made a filing under any voluntary correction program of the IRS, the DOL or any other Governmental Entity with respect to any Company Benefit Plan, and neither the Company nor any of its Subsidiaries has any knowledge of any plan defect that
would qualify for correction under any such program.
(d)
Section 3.11(d)
of the
Company Disclosure Schedule identifies each Company Benefit Plan that is intended to be qualified under Section 401(a) of the Code (the
Company Qualified Plans
). The IRS has issued a favorable determination letter with
respect to each Company Qualified Plan and the related trust, which letter has not been revoked (nor has revocation been threatened), and, to the knowledge of the Company, there are no existing circumstances and no events have occurred that could
adversely affect the qualified status of any Company Qualified Plan or the exempt status of the related trust or increase the costs relating thereto. No trust funding any Company Benefit Plan is intended to meet the requirements of
Section 501(c)(9) of the Code.
(e) Each Company Benefit Plan that is subject to
Section 409A of the Code has been administered and documented in compliance with the requirements of Section 409A of the Code, except where any non-compliance has not and cannot reasonably be expected to result in material liability to the
Company or any of its Subsidiaries or any employee of the Company or any of its Subsidiaries.
(f)
With respect to each Company Benefit Plan that is subject to Title IV or Section 302 of ERISA or Sections 412, 430 or 4971 of the Code: (i) no such plan is in at-risk status for purposes of
Section 430 of the Code, (ii) the present value of accrued benefits under such Company Benefit Plan, based upon the actuarial assumptions used for funding purposes in the most recent actuarial report prepared by such Company Benefit
Plans actuary with respect to such Company Benefit Plan, did not, as of its latest valuation date, exceed the then current fair market value of the assets of such Company Benefit Plan allocable to such accrued benefits, (iii) no
reportable event within the meaning of Section 4043(c) of ERISA for which the 30-day notice requirement has not been waived has occurred, (iv) all premiums to the PBGC have been timely paid in full, (v) no liability (other than for
premiums to the PBGC) under Title IV of ERISA has been or is expected to be incurred by the Company or any of its Subsidiaries, and (vi) the PBGC has not instituted proceedings to terminate any such Company Benefit Plan.
(g) None of the Company, its Subsidiaries nor any Company ERISA Affiliate has, at any time during the
last six years, contributed to or been obligated to contribute to any plan that is a multiemployer plan within the meaning of Section 4001(a)(3) of ERISA (a
Multiemployer Plan
) or a plan that has two or more
contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA (a
Multiple
Employer Plan
), and none of the Company and its Subsidiaries nor any Company ERISA
Affiliate has incurred any liability to a Multiemployer Plan or Multiple Employer Plan as a result of a complete or partial withdrawal (as those terms are defined in Part 1 of Subtitle E of Title IV of ERISA) from a Multiemployer Plan or Multiple
Employer Plan.
(h) Neither the Company nor any of its Subsidiaries sponsors, has sponsored or
has any obligation with respect to any employee benefit plan that provides for any post-employment or post-retirement health or medical or life insurance benefits for retired, former or current employees or beneficiaries or dependents thereof,
except as required by Section 4980B of the Code.
(i) All contributions required to be made
to any Company Benefit Plan by applicable law or by any plan document or other contractual undertaking, and all premiums due or payable with respect to insurance policies funding any Company Benefit Plan, for any period through the date hereof, have
been timely made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fully reflected on the books and records of the Company.
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(j) There are no pending or threatened claims (other
than claims for benefits in the ordinary course), lawsuits or arbitrations that have been asserted or instituted, and, to the Companys knowledge, no set of circumstances exists that may reasonably be expected to give rise to a claim, lawsuit
or arbitration, against the Company Benefit Plans, any fiduciaries thereof with respect to their duties to the Company Benefit Plans or the assets of any of the trusts under any of the Company Benefit Plans that could reasonably be expected to
result in any material liability of the Company or any of its Subsidiaries to the PBGC, the IRS, the DOL, any Multiemployer Plan, a Multiple Employer Plan, any participant in any Company Benefit Plan, or any other party.
(k) None of the Company and its Subsidiaries nor any Company ERISA Affiliate nor any other person,
including any fiduciary, has engaged in any prohibited transaction (as defined in Section 4975 of the Code or Section 406 of ERISA), which could subject any of the Company Benefit Plans or their related trusts, the Company, any
of its Subsidiaries, any Company ERISA Affiliate or any person that the Company or any of its Subsidiaries has an obligation to indemnify, to any material tax or penalty imposed under Section 4975 of the Code or Section 502 of ERISA.
(l) Neither the execution and delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (either alone or in conjunction with any other event) result in, cause the vesting, exercisability, delivery or funding of, or increase in the amount or value of, any payment, compensation (including stock or stock-based),
right or other benefit to any employee, officer, director, independent contractor, consultant or other service provider of the Company or any of its Subsidiaries, or result in any limitation on the right of the Company or any of its Subsidiaries to
amend, merge, terminate or receive a reversion of assets from any Company Benefit Plan or related trust. Without limiting the generality of the foregoing, no amount paid or payable (whether in cash, in property, or in the form of benefits) by the
Company or any of its Subsidiaries in connection with the transactions contemplated hereby (either solely as a result thereof or as a result of such transactions in conjunction with any other event) will be an excess parachute payment
within the meaning of Section 280G of the Code. Neither the Company nor any of its Subsidiaries maintains or contributes to a rabbi trust or similar funding vehicle, and the transactions contemplated by this Agreement will not cause or require
the Company or any of its affiliates to establish or make any contribution to a rabbi trust or similar funding vehicle.
(m) No Company Benefit Plan provides for the gross-up or reimbursement of Taxes under
Section 409A or 4999 of the Code, or otherwise. The Company has made available to Parent true, correct and complete copies of Section 280G calculations (whether or not final) with respect to any disqualified individual in connection with
the transactions contemplated hereby.
(n) Neither the Company nor its Subsidiaries remain
subject to any compensation-related limitations or restrictions imposed by or related to Section 111 of the Emergency Economic Stabilization Act of 2008, as amended.
(o) There are no pending or, to the Companys knowledge, threatened material labor grievances or
material unfair labor practice claims or charges against the Company or any of its Subsidiaries, or any strikes or other material labor disputes against the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries are
party to or bound by any collective bargaining or similar agreement with any labor organization, or work rules or practices agreed to with any labor organization or employee association applicable to employees of the Company or any of its
Subsidiaries and, to the knowledge of the Company, there are no organizing efforts by any union or other group seeking to represent any employees of the Company or any of its Subsidiaries and no employees of the Company or any of its Subsidiaries
are represented by any labor organization.
(p) To the knowledge of the Company, no current or
former employee or independent contractor of the Company or any of its Subsidiaries is in violation in any material respect of any term of any restrictive covenant obligation, including any non-compete, non-solicit, non-interference,
non-disparagement or
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confidentiality obligation (
Restrictive Covenant
) or any employment or consulting contract, common law nondisclosure obligation, fiduciary duty, or other obligation:
(i) to the Company or any of its Subsidiaries or (ii) to a former employer or engager of any such individual relating (A) to the right of any such individual to work for the Company or any of its Subsidiaries or (B) to the
knowledge or use of trade secrets or proprietary information.
(q) To the knowledge of the
Company, no employee of the Company or any of its Subsidiaries with annual compensation in excess of $100,000 intends to terminate his or her employment relationship.
3.12
SEC Reports
. The Company has previously made available to Parent an accurate and complete copy of each
communication mailed by the Company to its shareholders since December 31, 2013. No such communication or any final registration statement, prospectus, report, schedule and definitive proxy statement filed with or furnished to the SEC since
December 31, 2013 by the Company pursuant to the Securities Act of 1933, as amended (the
Securities Act
), or the Exchange Act (the
Company Reports
), as of the date thereof (and, in the case of registration
statements and proxy statements, on the dates of effectiveness and the dates of the relevant meetings, respectively), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances in which they were made, not misleading, except that information publicly filed or furnished as of a later date (but before the date of this Agreement) shall be deemed to modify
information as of an earlier date. Since December 31, 2013, as of their respective dates, all the Company Reports filed under the Securities Act and the Exchange Act complied in all material respects with the published rules and regulations of
the SEC with respect thereto. None of the Company Subsidiaries is required to file periodic reports with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. No executive officer of the Company has failed in any respect to make the
certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act. There are no outstanding comments from or unresolved issues raised by the SEC with respect to any of the Company Reports.
3.13
Compliance with Applicable Law
. The Company and each of its Subsidiaries hold, and have at all
times since December 31, 2013, held, all licenses, franchises, permits and authorizations necessary for the lawful conduct of their respective businesses and ownership of their respective properties, rights and assets under and pursuant to each
(and have paid in full all fees and assessments due and payable in connection therewith), except where neither the cost of failure to hold nor the cost of obtaining and holding such license, franchise, permit or authorization (nor the failure to pay
any fees or assessments) would, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company, and to the knowledge of the Company no suspension or cancellation of any such necessary license,
franchise, permit or authorization is threatened. The Company and each of its Subsidiaries have complied in all material respects with and are not in material default or violation under any applicable federal, state, local or foreign law, statute,
order, decree, rule, regulation, policy, permit, or authorization (
Laws
) of any Governmental Entity relating to the Company or any of its Subsidiaries, including without limitation all Laws related to data protection or privacy,
the USA Patriot Act, the Bank Secrecy Act, the Equal Credit Opportunity Act and Regulation B, the Fair Housing Act, the Community Reinvestment Act, the Fair Credit Reporting Act, the Truth in Lending Act and Regulation Z, the Home Mortgage
Disclosure Act, the Fair Debt Collection Practices Act, the Electronic Fund Transfer Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, any regulations promulgated by the Consumer Financial Protection Bureau, the Interagency Policy
Statement on Retail Sales of Nondeposit Investment Products, the SAFE Mortgage Licensing Act of 2008, the Real Estate Settlement Procedures Act and Regulation X, and any other Law relating to bank secrecy, discriminatory lending, financing or
leasing practices, money laundering prevention, Sections 23A and 23B of the Federal Reserve Act, the Sarbanes-Oxley Act, the Federal Deposit Insurance Corporation Improvement Act, and all agency requirements relating to the origination, sale and
servicing of mortgage and consumer loans. Company Bank has a Community Reinvestment Act rating of satisfactory or better. Without limitation, none of the Company, or its Subsidiaries, or to the knowledge of the Company, any director,
officer, employee, agent or other person acting on behalf of the Company or any of its Subsidiaries has, directly or indirectly, (a) used any funds of the Company or any of its Subsidiaries for unlawful contributions, unlawful gifts, unlawful
entertainment or other expenses relating to political activity, (b) made any
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unlawful payment to foreign or domestic governmental officials or employees or to foreign or domestic political parties or campaigns from funds of the Company or any of its Subsidiaries,
(c) violated any provision that would result in the violation of the Foreign Corrupt Practices Act of 1977, as amended, or any similar Law, (d) established or maintained any unlawful fund of monies or other assets of the Company or any of
its Subsidiaries, (e) made any fraudulent entry on the books or records of the Company or any of its Subsidiaries, or (f) made any unlawful bribe, unlawful rebate, unlawful payoff, unlawful influence payment, unlawful kickback or other
unlawful payment to any person, private or public, regardless of form, whether in money, property or services, to obtain favorable treatment in securing business to obtain special concessions for the Company or any of its Subsidiaries, to pay for
favorable treatment for business secured or to pay for special concessions already obtained for the Company or any of its Subsidiaries, or is currently subject to any United States sanctions administered by the Office of Foreign Assets Control of
the United States Treasury Department.
3.14
Certain Contracts
.
(a) Except as set forth in
Section 3.14(a)
of the Company Disclosure Schedule, as of the
date hereof, neither the Company nor any of its Subsidiaries is a party to or bound by any contract, arrangement, commitment or understanding (whether written or oral) (i) with respect to the employment of any directors, officers, employees,
independent contractors or consultants, (ii) which, upon the execution or delivery of this Agreement, shareholder adoption of this Agreement or the consummation of the transactions contemplated by this Agreement will (either alone or upon the
occurrence of any additional acts or events) result in any payment (whether of severance pay or otherwise) becoming due from Parent, the Company, the Surviving Corporation, or any of their respective Subsidiaries to any officer or employee thereof,
(iii) which is a material contract (as such term is defined in Item 601(b)(10) of Regulation S-K under the Securities Act), (iv) which contains a non-compete or client or customer non-solicit requirement or any other
provision that materially restricts the conduct of any line of business by the Company or any of its affiliates or upon consummation of the Integrated Mergers will materially restrict the ability of the Surviving Corporation or any of its affiliates
to engage in any line of business, (v) with or to a labor union or guild (including any collective bargaining agreement), (vi) any of the benefits of which contract, arrangement, commitment or understanding (including any stock option
plan, stock appreciation rights plan, restricted stock plan or stock purchase plan) will be increased, or the vesting of the benefits of which will be accelerated, by the occurrence of the execution and delivery of this Agreement, shareholder
adoption of this Agreement or the consummation of any of the transactions contemplated by this Agreement, or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement,
(vii) that relates to the incurrence of indebtedness by the Company or any of its Subsidiaries (other than deposit liabilities, trade payables, federal funds purchased, advances and loans from the FHLB and securities sold under agreements to
repurchase, in each case incurred in the ordinary course of business consistent with past practice) in the principal amount of $500,000 or more including any sale and leaseback transactions, capitalized leases and other similar financing
transactions, (viii) that grants any right of first refusal, right of first offer or similar right with respect to any material assets, rights or properties of the Company or its Subsidiaries, (ix) that is a consulting agreement or data
processing, software programming or licensing contract involving the payment of more than $100,000 per annum (other than any such contracts which are terminable by the Company or any of its Subsidiaries on sixty (60) days or less notice without
any required payment or other conditions, other than the condition of notice), or (x) which involves aggregate payments or receipts by or to the Company or any of its Subsidiaries in excess of $100,000 in any twelve-month period, other than
those terminable on sixty (60) days or less notice without payment by the Company or any Subsidiary of the Company of any material penalty. Each contract, arrangement, commitment or understanding of the type described in this
Section 3.14(a)
, whether or not set forth in the Company Disclosure Schedule, is referred to herein as a
Company Contract
, and neither the Company nor any of its Subsidiaries knows of, or has received notice of, any
material violation of the above by any of the other parties thereto.
(b) Each Company Contract
is valid and binding on the Company or one of its Subsidiaries, as applicable, and in full force and effect, except as, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company. The
Company and each of its Subsidiaries has in all
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material respects performed all obligations required to be performed by it under each Company Contract. To the Companys knowledge each third-party counterparty to each Company Contract has
in all material respects performed all obligations required to be performed by it under such Company Contract, and no event or condition exists which constitutes or, after notice or lapse of time or both, will constitute, a material default on the
part of the Company or any of its Subsidiaries under any such Company Contract.
3.15
Agreements with
Regulatory Agencies
. Neither the Company nor any of its Subsidiaries is subject to any cease-and-desist or other order or enforcement action issued by, or is a party to any written agreement, consent agreement or memorandum of understanding
with, or is a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or has been ordered to pay any civil money penalty by, or has been since January 1, 2013, a recipient of any supervisory letter
from, or since January 1, 2013, has adopted any policies, procedures or board resolutions at the request or suggestion of any Regulatory Agency or other Governmental Entity that currently restricts in any material respect the conduct of its
business or that in any material manner relates to its capital adequacy, its ability to pay dividends, its credit or risk management policies, its management or its business (each, whether or not set forth in the Company Disclosure Schedule, a
Company Regulatory Agreement
), nor has the Company or any of its Subsidiaries been advised since January 1, 2013, by any Regulatory Agency or other Governmental Entity that it is considering issuing, initiating, ordering, or
requesting any such Company Regulatory Agreement. The Company and each of its Subsidiaries are in compliance in all material respects with each Regulatory Agreement, if any, to which it is a party or is subject. The Company and its Subsidiaries have
not received any notice from any Governmental Entity indicating that the Company or its Subsidiaries is not in compliance in any material respect with any Regulatory Agreement to which the Company or any of its Subsidiaries is a party or is subject.
3.16
Risk Management Instruments
. All interest rate swaps, caps, floors, option agreements,
futures and forward contracts and other similar derivative transactions and risk management arrangements (each, a
Derivative Contract
), whether entered into for the account of the Company, any of its Subsidiaries or for the
account of a customer of the Company or one of its Subsidiaries, were entered into in the ordinary course of business and in accordance with applicable rules, regulations and policies of any Regulatory Agency and with counterparties believed to be
financially responsible at the time and are legal, valid and binding obligations of the Company or one of its Subsidiaries enforceable in accordance with their terms (except as may be limited by the Enforceability Exceptions), and are in full force
and effect. The Company and each of its Subsidiaries have duly performed in all material respects all of their material obligations under each Derivative Contract to the extent that such obligations to perform have accrued, and, to the
Companys knowledge, there are no material breaches, violations or defaults or allegations or assertions of such by any party thereunder. Each such Derivative Contract has been reflected in the books and records of the Company and such
Subsidiaries in accordance with GAAP consistently applied. Each Derivative Contract is evidenced by customary and appropriate documentation (including an ISDA master agreement and long-form confirmation).
3.17
Environmental Matters
. Except as would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company, the Company and its Subsidiaries are in compliance, and have complied, with all Laws relating to: (a) the protection or restoration of the environment, health and safety as it relates to
hazardous substance exposure or natural resource damages, (b) the handling, use, presence, disposal, release or threatened release of, or exposure to, any hazardous substance, or (c) noise, odor, wetlands, indoor air, pollution,
contamination or any injury to persons or property from exposure to any hazardous substance (collectively,
Environmental Laws
). There are no legal, administrative, arbitral or other proceedings, claims or actions, or to the
knowledge of the Company any private environmental investigations or remediation activities or governmental investigations of any nature seeking to impose, or that could reasonably be expected to result in the imposition, on the Company or any of
its Subsidiaries of any liability or obligation arising under any Environmental Law, pending or threatened against the Company, which liability or obligation would reasonably be expected to have, either individually or in the aggregate, a Material
Adverse Effect on the Company. To the knowledge of the Company, there is no reasonable basis for any such proceeding, claim, action or governmental investigation that would impose any liability or obligation that would reasonably be expected to
have, either
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individually or in the aggregate, a Material Adverse Effect on the Company. The Company is not subject to any agreement, order, judgment, decree, letter agreement or memorandum of understanding
by or with any court, governmental authority, regulatory agency or third party imposing any liability or obligation with respect to the foregoing that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse
Effect on the Company.
3.18
Investment Securities and Commodities
.
(a) Each of the Company and its Subsidiaries has good title to all securities and commodities owned by
it (except those sold under repurchase agreements), free and clear of any Lien, except to the extent such securities or commodities are pledged in the ordinary course of business to secure obligations of the Company or its Subsidiaries. Such
securities and commodities are valued on the books of the Company in accordance with GAAP.
(b)
The Company and its Subsidiaries and their respective businesses employ investment, securities, commodities, risk management and other policies, practices and procedures that the Company believes are prudent and reasonable in
the context of such businesses. Prior to the date of this Agreement, the Company has made available to Parent the terms of such policies, practices and procedures.
3.19
Real Property
. The Company and each Company Subsidiary has good and marketable title to all the
real property reflected in the latest audited balance sheet included in the Company Reports as being owned by the Company or any such Company Subsidiary or acquired after the date thereof (except properties sold or otherwise disposed of since the
date thereof in the ordinary course of business) (the
Company Owned Properties
), free and clear of all material Liens, except statutory Liens securing payments not yet due, Liens for real property Taxes not yet due and payable,
easements, rights of way, and other similar encumbrances that do not materially affect the value or use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties and such
imperfections or irregularities of title or Liens as do not materially affect the value or use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties (collectively,
Permitted Encumbrances
), and is the lessee of all leasehold estates reflected in the latest audited financial statements included in such Company Reports or acquired after the date thereof (except for leases that have expired by
their terms since the date thereof) (the
Company Leased Properties
and, collectively with the Company Owned Properties, the
Company Real Property
), free and clear of all Liens of any nature whatsoever, except
for Permitted Encumbrances, and is in possession of the properties purported to be leased thereunder, and each such lease is valid without default thereunder by the lessee or, to the Companys knowledge, the lessor. There are no pending or, to
the knowledge of the Company, threatened condemnation proceedings against the Company Real Property.
3.20
Intellectual Property
. The Company and each of its Subsidiaries owns, or is licensed to use (in
each case, free and clear of any material Liens), all Intellectual Property necessary for the conduct of its business as currently conducted. Except as would not reasonably be expected to have a Material Adverse Effect on the Company:
(a) (i) the use of any Intellectual Property by the Company and its Subsidiaries does not infringe, misappropriate or otherwise violate the rights of any person and is in accordance with any applicable license pursuant to which the Company
or any Company Subsidiary acquired the right to use any Intellectual Property, and (ii) no person has asserted to the Company that the Company or any of its Subsidiaries has infringed, misappropriated or otherwise violated the Intellectual
Property rights of such person, (b) no person is challenging, infringing on or otherwise violating any right of the Company or any of its Subsidiaries with respect to any Intellectual Property owned by and/or licensed to the Company or its
Subsidiaries, and (c) neither the Company nor any Company Subsidiary has received any notice of any pending claim with respect to any Intellectual Property owned by the Company or any Company Subsidiary, and the Company and its Subsidiaries
have taken commercially reasonable actions to avoid the abandonment, cancellation or unenforceability of all Intellectual Property owned or licensed, respectively, by the Company and its Subsidiaries. For purposes of this Agreement,
Intellectual Property
means trademarks, service marks, brand names, internet domain names,
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logos, symbols, certification marks, trade dress and other indications of origin, the goodwill associated with the foregoing and registrations in any jurisdiction of, and applications in any
jurisdiction to register, the foregoing, including any extension, modification or renewal of any such registration or application; inventions, discoveries and ideas, whether patentable or not, in any jurisdiction; patents, applications for patents
(including divisions, continuations, continuations in part and renewal applications), all improvements thereto, and any renewals, extensions or reissues thereof, in any jurisdiction; nonpublic information, trade secrets and know-how, including
processes, technologies, protocols, formulae, prototypes and confidential information and rights in any jurisdiction to limit the use or disclosure thereof by any person; writings and other works, whether copyrightable or not and whether in
published or unpublished works, in any jurisdiction; and registrations or applications for registration of copyrights in any jurisdiction, and any renewals or extensions thereof; and any similar intellectual property or proprietary rights.
3.21
Related Party Transactions
. Except as set forth in
Section 3.21
of the Company
Disclosure Schedule, there are no transactions or series of related transactions, agreements, arrangements or understandings, nor are there any currently proposed transactions or series of related transactions, between the Company or any of its
Subsidiaries, on the one hand, and any current or former director or executive officer (as defined in
Rule 3b-7
under the Exchange Act) of the Company or any of its Subsidiaries or any person
who beneficially owns (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) 5% or more of the outstanding Company Common Stock (or any of such persons immediate family members or affiliates), on the other hand, except those of a type
available to employees of the Company or its Subsidiaries generally.
3.22
Takeover Protections
.
(a) No moratorium, fair price, business combination,
control share acquisition, interested stockholder, affiliate transactions, or similar provision of any state anti-takeover (any such laws,
Takeover Statutes
) is applicable to this Agreement, the
Integrated Mergers or any of the other transactions contemplated by this Agreement under the BCA or federal law.
(b)
Article VI of the Company Certificate is not applicable to this Agreement, the Integrated Mergers or any of the other transactions contemplated by this Agreement and neither Parent nor Merger Sub will be deemed to be an
Interested Stockholder (as defined in the Company Certificate) as result of Parent entering into the Voting Agreements or otherwise. The Board of Directors of the Company has taken or caused to be taken all action necessary to ensure
that neither Parent nor Merger Sub will be prohibited from engaging in a Business Combination (as defined in the Company Certificate) with the Company or any of its affiliates under the provisions of the Company Certificate.
3.23
Opinion
. Prior to the execution of this Agreement, the Board of Directors of the Company has
received an opinion (which, if initially rendered verbally, has been or will be confirmed by a written opinion, dated the same date) of Sandler ONeill & Partners, L.P. to the effect that, as of the date of such opinion, and based upon
and subject to the factors, assumptions, and limitations set forth therein, the Merger Consideration pursuant to this Agreement is fair from a financial point of view to the holders of Company Common Stock. Such opinion has not been amended or
rescinded as of the date of this Agreement.
3.24
Company Information
. The information relating
to the Company and its Subsidiaries which is provided by the Company or its representatives for inclusion in the Joint Proxy Statement and the S-4, or in any other document filed with any other Regulatory Agency in connection herewith, will not
contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading. The Joint Proxy Statement (except for such portions
thereof that relate only to Parent or any of its Subsidiaries) will comply in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder.
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3.25
Loan Portfolio
.
(a) As of the date hereof, except as set forth in
Section 3.25(a)
of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party to any written or oral (i) loan, loan agreement, note or borrowing arrangement (including leases, credit enhancements, commitments, guarantees and interest-bearing
assets) (collectively,
Loans
) in which the Company or any Subsidiary of the Company is a creditor which as of March 31, 2016, had an outstanding balance of $100,000 or more and under the terms of which the obligor was, as of
March 31, 2016, over 90 days or more delinquent in payment of principal or interest, or (ii) Loans with any director, executive officer or 5% or greater shareholder of the Company or any of its Subsidiaries, or to the knowledge of the
Company, any affiliate of any of the foregoing. Set forth in
Section 3.25(a)
of the Company Disclosure Schedule is a true, correct and complete list of (A) all of the Loans of the Company and its Subsidiaries that, as of
March 31, 2016, were classified by the Company as Other Loans Specially Mentioned, Special Mention, Substandard, Doubtful, Loss, Classified, Criticized,
Credit Risk Assets, Concerned Loans, Watch List or words of similar import, together with the principal amount of and accrued and unpaid interest on each such Loan and the identity of the borrower thereunder,
together with the aggregate principal amount of and accrued and unpaid interest on such Loans, by category of Loan (e.g., commercial, consumer, etc.), together with the aggregate principal amount of such Loans by category and (B) each asset of
the Company or any of its Subsidiaries that, as of March 31, 2016, is classified as Other Real Estate Owned and the book value thereof.
(b) Set forth in
Section 3.25(b)
of the Company Disclosure Schedule is a true, correct
and complete list, as of March 31, 2016, of each Loan of the Company or any of its Subsidiaries that is structured as a participation interest in a Loan originated by another person (each, a
Loan Participation
), including
with respect to each such Loan Participation, the originating lender of the related Loan, the outstanding principal balance of the related Loan, the amount of the outstanding principal balance represented by the Loan Participation and the identity
of the borrower of the related Loan.
(c) Except as would not reasonably be expected to have a
Material Adverse Effect on the Company, each Loan of the Company and its Subsidiaries (i) is evidenced by notes, agreements or other evidences of indebtedness that are true, genuine and what they purport to be, (ii) to the extent carried
on the books and records of the Company and its Subsidiaries as secured Loans, has been secured by valid charges, mortgages, pledges, security interests, restrictions, claims, liens or encumbrances, as applicable, which have been perfected and
(iii) is the legal, valid and binding obligation of the obligor named therein, enforceable in accordance with its terms, subject to the Enforceability Exceptions.
(d) Each outstanding Loan of the Company and its Subsidiaries (including Loans held for resale to
investors) was solicited and originated, and is and has been administered and, where applicable, serviced, and the relevant Loan files are being maintained, in all material respects in accordance with the relevant notes or other credit or security
documents, the written underwriting standards of the Company and its Subsidiaries (and, in the case of Loans held for resale to investors, the underwriting standards, if any, of the applicable investors) and with all applicable federal, state and
local laws, regulations and rules.
(e) None of the agreements pursuant to which the Company or
any of its Subsidiaries has sold Loans or pools of Loans or participations in Loans or pools of Loans contains any obligation to repurchase such Loans or interests therein solely on account of a payment default by the obligor on any such Loan.
(f) There are no outstanding Loans made by the Company or any of its Subsidiaries to any
executive officer or other insider (as each such term is defined in Regulation O promulgated by the Federal Reserve Board) of the Company or its Subsidiaries, other than Loans that are subject to and that were made and
continue to be in compliance with Regulation O or that are exempt therefrom.
(g) Neither the
Company nor any of its Subsidiaries is now nor has it ever been since December 31, 2013, subject to any fine, suspension, settlement or other contract or other administrative
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agreement or sanction by, or any reduction in any loan purchase commitment from, any Governmental Entity or Regulatory Agency relating to the origination, sale or servicing of mortgage or
consumer Loans.
3.26
Insurance
. The Company and its Subsidiaries are insured with reputable
insurers against such risks and in such amounts as the management of the Company reasonably has determined to be prudent and consistent with industry practice, and the Company and its Subsidiaries are in compliance in all material respects with
their insurance policies, each of which is listed in
Section 3.26
of the Company Disclosure Schedule and are not in default under any of the terms thereof, each such policy is outstanding and in full force and effect and, except for
policies insuring against potential liabilities of officers, directors and employees of the Company and its Subsidiaries, the Company or the relevant Subsidiary thereof is the sole beneficiary of such policies, and all premiums and other payments
due under any such policy have been paid, and all claims thereunder have been filed in due and timely fashion.
3.27
No Other Representations or Warranties
.
(a) Except for the representations and warranties made by the Company in this
Article III
,
neither the Company nor any other person makes any express or implied representation or warranty with respect to the Company, its Subsidiaries, or their respective businesses, operations, assets, liabilities, conditions (financial or otherwise) or
prospects, and the Company hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither the Company nor any other person makes or has made any representation or warranty to Parent
or any of its affiliates or representatives with respect to (i) any financial projection, forecast, estimate, budget or prospective information relating to the Company, any of its Subsidiaries or their respective businesses, or (ii) except
for the representations and warranties made by the Company in this
Article III
, any oral or written information presented to Parent or any of its affiliates or representatives in the course of their due diligence investigation of the Company,
the negotiation of this Agreement or in the course of the transactions contemplated hereby.
(b)
The Company acknowledges and agrees that neither Parent nor any other person has made or is making any express or implied representation or warranty other than those contained in
Article IV
.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
Except (i) as disclosed in the disclosure schedule delivered by Parent to the Company concurrently herewith (the
Parent Disclosure Schedule
);
provided
, that (a) no such item is required to be set forth as an exception to a representation or warranty if its absence would not result in the related representation or warranty being
deemed untrue or incorrect, (b) the mere inclusion of an item in the Parent Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission by Parent 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, and (c) any disclosures made with respect to a section of
Article IV
shall be deemed to qualify (1) any other section of
Article
IV
specifically referenced or cross-referenced and (2) other sections of
Article IV
to the extent it is reasonably apparent on its face (notwithstanding the absence of a specific cross-reference) from a reading of the disclosure that
such disclosure applies to such other sections or (ii) as disclosed in any Parent Reports publicly filed by Parent since December 31, 2014, and prior to the date hereof (but disregarding risk factor disclosures contained under the heading
Risk Factors, or disclosures of risks set forth in any forward-looking statements disclaimer or any other statements that are similarly non-specific or cautionary, predictive or forward-looking in nature), Parent hereby
represents and warrants to the Company as follows:
4.1
Corporate Organization
.
(a) Parent is a corporation duly organized, validly existing and in good standing under the laws of
the State of Delaware and is a savings and loan holding company duly registered with the Federal Reserve
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Board under the HOLA. Parent has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted. Parent is duly
licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except
where the failure to be so licensed or qualified would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent. True and complete copies of the Merger Sub Certificate, the Merger Sub Bylaws,
the Parent Certificate and the Parent Bylaws, as in effect as of the date of this Agreement, have previously been made available by Parent to the Company.
(b) Parent Bank is a federal savings bank duly organized, validly existing and in good standing under
the laws of the United States. The deposits of Parent Bank are insured by the FDIC through the Deposit Insurance Fund to the fullest extent permitted by law, all premiums and assessments required to be paid in connection therewith have been paid
when due, and no proceedings for the termination of such insurance are pending or threatened. Without duplication of each of the foregoing sentences of this
Section 4.1(b)
and the representations and warranties set forth in
Section 4.1(c)
, each Subsidiary of Parent (a
Parent Subsidiary
) (i) is duly organized and validly existing under the laws of its jurisdiction of organization, (ii) is duly qualified to do business and, where
such concept is recognized under applicable law, is in good standing in all jurisdictions (whether federal, state, local or foreign) where its ownership or leasing of property or the conduct of its business requires it to be so qualified and in
which the failure to be so qualified or in good standing would reasonably be expected to have a Material Adverse Effect on Parent, and (iii) has all requisite corporate power and authority to own or lease its properties and assets and to carry
on its business as now conducted. There are no restrictions on the ability of any Subsidiary of Parent to pay dividends or distributions except, in the case of a Subsidiary that is a regulated entity, for restrictions on dividends or distributions
generally applicable to all such regulated entities.
Section 4.1(b)
of the Parent Disclosure Schedule sets forth a true and complete list of all Subsidiaries of Parent as of the date hereof.
(c) Merger Sub is a corporation duly organized, validly existing and in good standing under the laws
of the State of New Jersey and is a wholly-owned Subsidiary of Parent. Merger Sub has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, and is duly licensed
or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the
failure to be so licensed or qualified would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent. True and complete copies of the Merger Sub Certificate and Merger Sub Bylaws, as in effect
as of the date of this Agreement, have previously been made available by Parent to the Company.
4.2
Capitalization
.
(a) The authorized capital stock of Parent consists of 55,000,000 shares of Parent Common Stock and
5,000,000 shares of preferred stock, $0.01 par value, of which no shares of preferred stock are issued or outstanding. As of the date of this Agreement, there are (i) 25,748,898 shares of Parent Common Stock issued and outstanding, which number
includes 157,579 shares of Parent Common Stock granted in respect of outstanding awards of restricted Parent Common Stock (
Parent Restricted Stock Awards
) granted under Parents 2011 Stock Incentive Plan, (ii) 7,817,874
shares of Parent Common Stock held in treasury, (iii) 2,902,017 shares of Parent Common Stock reserved for issuance upon the exercise of stock options granted under Parents 2011 Stock Incentive Plan, Parents 2006 Stock Incentive
Plan, the Cape Bancorp, Inc. 2008 Equity Incentive Plan or the Colonial Financial Services, Inc. 2011 Equity Incentive Plan, as applicable (such stock options, together with the Parent Restricted Stock Awards, the
Parent Equity
Awards
), and (iv) no other shares of capital stock or other voting securities of Parent issued, reserved for issuance or outstanding. All of the issued and outstanding shares of Parent Common Stock have been duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. There are no bonds, debentures, notes or other indebtedness that have the right to vote on any matters on
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which shareholders of Parent may vote. As of the date of this Agreement, no trust preferred or subordinated debt securities of Parent are issued or outstanding. Other than the Parent Equity
Awards issued prior to the date of this Agreement, as of the date of this Agreement there are no outstanding subscriptions, options, warrants, puts, calls, rights, exchangeable or convertible securities or other commitments or agreements obligating
Parent to issue, transfer, sell, purchase, redeem or otherwise acquire, any such securities. There are no voting trusts, shareholder agreements, proxies or other agreements in effect with respect to the voting or transfer of the Parent Common Stock
or other equity interests of Parent.
(b) Parent owns, directly or indirectly, all of the issued
and outstanding shares of capital stock or other equity ownership interests of each of the Parent Subsidiaries, free and clear of any Liens, and all of such shares or equity ownership interests are duly authorized and validly issued and are fully
paid, nonassessable (except, with respect to bank Subsidiaries, as provided under 12 U.S.C. § 55 or any comparable provision of applicable federal or state law) and free of preemptive rights, with no personal liability attaching to the
ownership thereof. No Parent Subsidiary has or is bound by any outstanding subscriptions, options, warrants, calls, rights, commitments or agreements of any character calling for the purchase or issuance of any shares of capital stock or any other
equity security of such Subsidiary or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security of such Subsidiary.
4.3
Authority; No Violation
.
(a) Each of Parent and Merger Sub 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, the consummation of the Integrated Mergers and the issuance of shares of Parent Common Stock in connection with the First-Step Merger
(such issuance, the
Parent Share Issuance
), have been duly and validly approved by the Board of Directors of Parent, and the execution and delivery of this Agreement and the consummation of the First-Step Merger have been duly and
validly approved by the Board of Directors of Merger Sub. The Board of Directors of Parent has directed that the Parent Share Issuance be submitted to Parents shareholders for approval at a meeting of such shareholders and has adopted a
resolution to the foregoing effect. Except for the affirmative vote of a majority of the votes cast by the holders of the shares of Parent Common Stock at the Parent Meeting to approve the Parent Share Issuance (the
Requisite Parent
Vote
), no other corporate proceedings or approvals on the part of Parent are necessary to approve this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by
Parent and Merger Sub and (assuming due authorization, execution and delivery by the Company) constitutes a valid and binding obligation of Parent and Merger Sub, enforceable against Parent and Merger Sub in accordance with its terms (except in all
cases as such enforceability may be limited by the Enforceability Exceptions). The shares of Parent Common Stock to be issued in the First-Step Merger have been validly authorized (subject to the attainment of the Requisite Parent Vote), and when
issued in accordance with the terms of this Agreement, will be validly issued, fully paid and nonassessable, and no current or past shareholder of Parent will have any preemptive right or similar rights in respect thereof.
(b) Neither the execution and delivery of this Agreement by Parent or Merger Sub, nor the
consummation by Parent or Merger Sub of the transactions contemplated hereby, nor compliance by Parent or Merger Sub with any of the terms or provisions hereof, will (i) violate any provision of the Parent Certificate, the Parent Bylaws, the
Merger Sub Certificate or the Merger Sub Bylaws, or (ii) assuming that the consents and approvals referred to in
Section 4.4
are duly obtained, (x) violate any statute, code, ordinance, rule, regulation, judgment, order, writ,
decree or injunction applicable to Parent, any of its Subsidiaries or any of their respective properties or assets or (y) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or
an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any Lien
upon any of the respective properties or assets of Parent or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation
to which Parent or any of its Subsidiaries is a
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party, or by which they or any of their respective properties or assets may be bound, except (in the case of
clause
(y)
above) for such violations, conflicts, breaches or
defaults which either individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on Parent.
(c) The Board of Directors of Parent Bank has adopted the Bank Merger Agreement. Parent, as the sole
shareholder of Parent Bank, has approved the Bank Merger Agreement, and the Bank Merger Agreement has been duly executed by Parent Bank.
4.4
Consents and Approvals
. Except for (a) the filing of applications, filings and
notices, as applicable, with the NASDAQ, and the approval of the listing on the NASDAQ of the shares of Parent Common Stock pursuant to this Agreement, (b) the filing of applications, filings and notices, as applicable, with the Federal Reserve
Board under the HOLA and approval of such applications, filings and notices, (c) the filing of applications, filings and notices, as applicable, with the OCC, and approval of such applications, filings and notices, (d) the filing with the
SEC of (i) any filings under applicable requirements of the Exchange Act, including the filing of the Joint Proxy Statement and (ii) the S-4 and declaration of effectiveness of the S-4, (e) the filing of the First-Step Merger
Certificate with the New Jersey Secretary pursuant to the BCA, (f) the filing of the Second-Step Merger Certificates with the Delaware Secretary and the New Jersey Secretary in accordance with the DGCL and the BCA, respectively, (g) the
filing of the Bank Merger Certificate, and (h) such filings and approvals as are required to be made or obtained under the securities or Blue Sky laws of various states in connection with the issuance of shares of Parent Common
Stock pursuant to this Agreement, no consents or approvals of or filings or registrations with any Governmental Entity or any third party are necessary in connection with (A) the execution and delivery by Parent of this Agreement or
(B) the consummation by Parent of the Integrated Mergers and the other transactions contemplated hereby (including the Bank Merger).
4.5
Reports
. Parent and each of its Subsidiaries have timely filed all reports,
registrations and statements, together with any amendments required to be made with respect thereto, that they were required to file since January 1, 2013 with any Regulatory Agencies, including, without limitation, any report, registration or
statement required to be filed pursuant to the laws, rules or regulations of the United States, any state, any foreign entity, or any Regulatory Agency, and have paid in full all fees and assessments due and payable in connection therewith, except
where the failure to file such report, registration or statement or to pay such fees and assessments, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Parent. Except for normal
examinations conducted by a Regulatory Agency in the ordinary course of business of Parent and its Subsidiaries, (i) no Regulatory Agency has initiated or has pending any proceeding or, to the knowledge of Parent, investigation into the
business or operations of Parent or any of its Subsidiaries since January 1, 2013, except where such proceedings or investigation would not reasonably be expected to be, either individually or in the aggregate, material to Parent and its
Subsidiaries, taken as a whole, (ii) there is no unresolved violation, criticism, or exception by any Regulatory Agency with respect to any report or statement relating to any examinations or inspections of Parent or any of its Subsidiaries,
and (iii) there has been no formal or informal inquiries by, or disagreements or disputes with, any Regulatory Agency with respect to the business, operations, policies or procedures of Parent or any of its Subsidiaries since January 1,
2013, in each case, which would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Parent. Parent and its Subsidiaries have fully resolved all matters requiring attention, matters
requiring immediate attention or similar items as identified by any such Regulatory Agency, except for such failures to so resolve such matters or similar items that would not impede or materially delay the ability of Parent to consummate the
transactions contemplated hereby.
4.6
Financial Statements
.
(a) The financial statements of Parent and its Subsidiaries included (or incorporated by reference) in
the Parent Reports (including the related notes, where applicable) (i) have been prepared from, and are in accordance with, the books and records of Parent and its Subsidiaries, (ii) fairly present in all material respects the consolidated
results of operations, cash flows, changes in shareholders equity and consolidated financial position of Parent and its Subsidiaries for the respective fiscal periods or as of the respective dates
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therein set forth (subject in the case of unaudited statements to year-end audit adjustments normal in nature and amount), (iii) complied, as of their respective dates of filing with the
SEC, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, and (iv) have been prepared in accordance with GAAP consistently applied during the periods
involved, except, in each case, as indicated in such statements or in the notes thereto. The books and records of Parent and its Subsidiaries have been, and are being, maintained in all material respects in accordance with GAAP and any other
applicable legal and accounting requirements and reflect only actual transactions. KPMG LLP has not resigned (or informed Parent that it intends to resign) or been dismissed as independent public accountants of Parent as a result of or in connection
with any disagreements with Parent on a matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.
(b) Except as would not reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect on Parent, neither Parent nor any of its Subsidiaries has any liability of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due), except for those liabilities that are
reflected or reserved against on the consolidated balance sheet of Parent included in its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2016 (including any notes thereto) and for liabilities incurred in the ordinary
course of business consistent with past practice since March 31, 2016, or in connection with this Agreement and the transactions contemplated hereby.
(c) The records, systems, controls, data and information of Parent and its Subsidiaries are recorded,
stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of Parent or its Subsidiaries or accountants (including
all means of access thereto and therefrom), except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have a Material Adverse Effect on Parent. Parent (x) has implemented and maintains disclosure
controls and procedures (as defined in
Rule 13a-15(e)
of the Exchange Act) to ensure that material information relating to Parent, including its Subsidiaries, is made known to the chief executive officer
and the chief financial officer of Parent by others within those entities as appropriate to allow timely decisions regarding required disclosures and to make the certifications required by the Exchange Act and Sections 302 and 906 of the
Sarbanes-Oxley Act, and (y) has disclosed, based on its most recent evaluation prior to the date hereof, to Parents outside auditors and the audit committee of Parents Board of Directors (i) any significant deficiencies and
material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect Parents ability to record, process, summarize and
report financial information, and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in Parents internal controls over financial reporting. These disclosures were made in
writing by management to Parents auditors and audit committee and a copy has previously been made available to the Company. As of the date of this Agreement, there is no reason to believe that Parents outside auditors and its chief
executive officer and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act, without qualification, when
next due.
(d) Since January 1, 2013, (i) neither Parent nor any of its Subsidiaries,
nor, to the knowledge of Parent, any director, officer, auditor, accountant or representative of Parent or any of its Subsidiaries, has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim,
whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods (including with respect to loan loss reserves, write-downs, charge-offs and accruals) of Parent or any of its Subsidiaries or their
respective internal accounting controls, including any material complaint, allegation, assertion or claim that Parent or any of its Subsidiaries has engaged in questionable accounting or auditing practices, and (ii) no attorney representing
Parent or any of its Subsidiaries, whether or not employed by Parent or any of its Subsidiaries, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by Parent or any of its officers,
directors, employees or agents to the Board of Directors of Parent or any committee thereof or to the knowledge of Parent, to any director or officer of Parent.
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4.7
Brokers Fees
. With the exception
of the engagement of Piper Jaffray & Co., neither Parent nor any Parent Subsidiary nor any of their respective officers or directors has employed any broker, finder or financial advisor or incurred any liability for any brokers fees,
commissions or finders fees in connection with the Integrated Mergers or related transactions contemplated by this Agreement.
4.8
Absence of Certain Changes or Events
. Since December 31, 2015, no event or
events have occurred that have had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Parent.
4.9
Legal Proceedings
.
(a) Neither Parent nor any of its Subsidiaries is a party to any, and there are no pending or, to
Parents knowledge, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations (i) of any material nature against Parent or its Subsidiaries or any of their current or
former directors or executive officers or (ii) challenging the validity or propriety of the transactions contemplated by this Agreement.
(b) There is no injunction, order, judgment, decree, or regulatory restriction imposed upon Parent,
any of its Subsidiaries or the assets of Parent or any of its Subsidiaries (or that, upon consummation of the Integrated Mergers, would apply to Parent or any of its affiliates) that would reasonably be expected to be material to Parent and its
Subsidiaries, taken as a whole.
4.10
Taxes and Tax Returns
.
(a) Each of Parent and its Subsidiaries has duly and timely filed or caused to be filed (giving effect
to all applicable extensions) all material Tax Returns required to be filed by any of them, and all such Tax Returns are true, correct, and complete in all material respects.
(b) All material Taxes of Parent and its Subsidiaries that are due have been fully and timely paid or
adequate reserves therefor have been made on the financial statements of Parent and its Subsidiaries included (or incorporated by reference) in the Parent Reports (including the related notes, where applicable). Each of Parent and its Subsidiaries
has withheld and paid to the relevant Governmental Entity on a timely basis all material Taxes required to have been withheld and paid in connection with amounts paid or owing to any person.
(c) No claim has been made in writing by any Governmental Entity in a jurisdiction where Parent or
any of its Subsidiaries does not file Tax Returns that Parent or such subsidiary is or may be subject to taxation by that jurisdiction.
(d) There are no material Liens for Taxes on any of the assets of Parent or any of its Subsidiaries.
(e) Neither Parent nor any of its Subsidiaries has received written notice of assessment or
proposed assessment in connection with any material amount of Taxes, and there are no threatened in writing or pending disputes, claims, audits, examinations, investigations, or other proceedings regarding any material Tax of Parent and its
Subsidiaries or the assets of Parent and its Subsidiaries which have not been paid, settled or withdrawn or for which adequate reserves have not been established.
(f) Neither Parent nor any of its Subsidiaries has taken any action, or knows of any fact or
circumstance, that could reasonably be expected to prevent the Integrated Mergers, taken together, from being treated as an integrated transaction that qualifies as a reorganization within the meaning of Section 368(a) of the Code.
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4.11
Employees
.
(a) Each Parent Benefit Plan has been established, operated and administered in all material respects
in accordance with its terms and the requirements of all applicable laws, including ERISA and the Code. For purposes of this Agreement,
Parent Benefit Plans
mean all employee benefit plans (as defined in Section 3(3) of
ERISA, whether or not subject to ERISA, whether funded or unfunded, and all pension, benefit, retirement, bonus, stock option, stock purchase, restricted stock, stock-based, performance award, phantom equity, incentive, deferred compensation,
retiree medical or life insurance, supplemental retirement, severance, retention, employment, consulting, termination, change in control, salary continuation, accrued leave, sick leave, vacation, paid time off, health, medical, disability, life,
accidental death and dismemberment, insurance, welfare, fringe benefit and other similar plans, programs, policies, practices or arrangements or other contracts or agreements (and any amendments thereto) to or with respect to which Parent or any
Subsidiary or any trade or business of Parent or any of its Subsidiaries, whether or not incorporated, all of which together with Parent would be deemed a single employer within the meaning of Section 4001 of ERISA (a
Parent ERISA Affiliate
), is a party or has any current or future obligation or that are sponsored, maintained, contributed to or required to be contributed to by Parent or any of its Subsidiaries or any Parent ERISA Affiliate for
the benefit of any current or former employee, officer, director, consultant or independent contractor (or any spouse or dependent of such individual) of Parent or any of its Subsidiaries or any Parent ERISA Affiliate.
(b) With respect to each Parent Benefit Plan that is subject to Title IV or Section 302 of ERISA
or Sections 412, 430 or 4971 of the Code: (i) no such plan is in at-risk status for purposes of Section 430 of the Code, (ii) the present value of accrued benefits under such Parent Benefit Plan, based upon the actuarial
assumptions used for funding purposes in the most recent actuarial report prepared by such Parent Benefit Plans actuary with respect to such Parent Benefit Plan, did not, as of its latest valuation date, exceed the then current fair market
value of the assets of such Parent Benefit Plan allocable to such accrued benefits, (iii) no reportable event within the meaning of Section 4043(c) of ERISA for which the 30-day notice requirement has not been waived has occurred,
(iv) all premiums to the PBGC have been timely paid in full, (v) no liability (other than for premiums to the PBGC) under Title IV of ERISA has been or is expected to be incurred by Parent or any of its Subsidiaries, and (vi) the PBGC
has not instituted proceedings to terminate any such Parent Benefit Plan.
(c) There are no
pending or threatened claims (other than claims for benefits in the ordinary course), lawsuits or arbitrations that have been asserted or instituted, and, to Parents knowledge, no set of circumstances exists that may reasonably be expected to
give rise to a claim or lawsuit, against the Parent Benefit Plans, any fiduciaries thereof with respect to their duties to the Parent Benefit Plans or the assets of any of the trusts under any of the Parent Benefit Plans that could reasonably be
expected to result in any material liability of Parent or any of its Subsidiaries to the PBGC, the IRS, the DOL, any Multiemployer Plan, a Multiple Employer Plan, any participant in any Parent Benefit Plan, or any other party.
(d) There are no pending or, to Parents knowledge, threatened material labor grievances or
material unfair labor practice claims or charges against Parent or any of its Subsidiaries, or any strikes or other material labor disputes against Parent or any of its Subsidiaries. Neither Parent nor any of its Subsidiaries are party to or bound
by any collective bargaining or similar agreement with any labor organization, or work rules or practices agreed to with any labor organization or employee association applicable to employees of Parent or any of its Subsidiaries and, to the
knowledge of Parent, there are no organizing efforts by any union or other group seeking to represent any employees of Parent or any of its Subsidiaries and no employees of Parent or any of its Subsidiaries are represented by any labor organization.
4.12
SEC Reports
. Parent has previously made available to the Company an accurate and complete
copy of each communication mailed by Parent to its shareholders since December 31, 2013. No such communication or any final registration statement, prospectus, report, schedule and definitive proxy statement filed with or furnished to the SEC
since December 31, 2013 by Parent pursuant to the Securities Act or the Exchange Act (the
Parent Reports
) as of the date thereof (and, in the case of registration statements and proxy statements, on the dates of effectiveness
and the dates of the relevant meetings, respectively), contained any
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untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances in
which they were made, not misleading, except that information publicly filed or furnished as of a later date (but before the date of this Agreement) shall be deemed to modify information as of an earlier date. Since December 31, 2013, as of
their respective dates, all Parent Reports filed under the Securities Act and the Exchange Act complied in all material respects with the published rules and regulations of the SEC with respect thereto. No executive officer of Parent has failed in
any respect to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act. There are no outstanding comments from or unresolved issues raised by the SEC with respect to any of the Parent Reports.
4.13
Compliance with Applicable Law
. Parent and each of its Subsidiaries hold, and have at all times
since December 31, 2013, held, all licenses, franchises, permits and authorizations necessary for the lawful conduct of their respective businesses and ownership of their respective properties, rights and assets under and pursuant to each (and
have paid in full all fees and assessments due and payable in connection therewith), except where neither the cost of failure to hold nor the cost of obtaining and holding such license, franchise, permit or authorization (nor the failure to pay any
fees or assessments) would, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent, and to the knowledge of Parent no suspension or cancellation of any such necessary license, franchise, permit or
authorization is threatened. Parent and each of its Subsidiaries have complied in all material respects with and are not in material default or violation under any, applicable Laws, including without limitation all Laws related to data protection or
privacy, the USA PATRIOT Act, the Bank Secrecy Act, the Equal Credit Opportunity Act and Regulation B, the Fair Housing Act, the Community Reinvestment Act, the Fair Credit Reporting Act, the Truth in Lending Act and Regulation Z, the Home Mortgage
Disclosure Act, the Fair Debt Collection Practices Act, the Electronic Fund Transfer Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, any regulations promulgated by the Consumer Financial Protection Bureau, the Interagency Policy
Statement on Retail Sales of Nondeposit Investment Products, the SAFE Mortgage Licensing Act of 2008, the Real Estate Settlement Procedures Act and Regulation X, and any other Law relating to bank secrecy, discriminatory lending, financing or
leasing practices, money laundering prevention, Sections 23A and 23B of the Federal Reserve Act, the Sarbanes-Oxley Act, the Federal Deposit Insurance Corporation Improvement Act and all agency requirements relating to the origination, sale and
servicing of mortgage and consumer loans. Each of the Subsidiaries of Parent that is an insured depository institution has a Community Reinvestment Act rating of satisfactory or better. Without limitation, none of Parent, or its
Subsidiaries, or to the knowledge of Parent, any director, officer, employee, agent or other person acting on behalf of Parent or any of its Subsidiaries has, directly or indirectly, (a) used any funds of Parent or any of its Subsidiaries for
unlawful contributions, unlawful gifts, unlawful entertainment or other expenses relating to political activity, (b) made any unlawful payment to foreign domestic governmental officials or employees or to foreign or domestic political parties
or campaigns from funds of Parent or any of its Subsidiaries, (c) violated any provision that would result in the violation of the Foreign Corrupt Practices Act of 1977, as amended, or any similar Law, (d) established or maintained any
unlawful fund of monies or other assets of Parent or any of its Subsidiaries, (e) made any fraudulent entry on the books or records of Parent or any of its Subsidiaries, or (f) made any unlawful bribe, unlawful rebate, unlawful payoff,
unlawful influence payment, unlawful kickback or other unlawful payment to any person, private or public, regardless of form, whether in money, property or services, to obtain favorable treatment in securing business to obtain special concessions
for Parent or any of its Subsidiaries, to pay for favorable treatment for business secured or to pay for special concessions already obtained for Parent or any of its Subsidiaries, or is currently subject to any United States sanctions administered
by the Office of Foreign Assets Control of the United States Treasury Department.
4.14
Agreements
with Regulatory Agencies
. Except as set forth in
Section 4.14
of the Parent Disclosure Schedule, neither Parent nor any of its Subsidiaries is subject to any cease-and-desist or other order or enforcement action issued by, or is a
party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or has been ordered to pay any civil money penalty
by, or has been since January 1, 2013, a recipient of any supervisory letter from, or since January 1, 2013, has adopted any policies, procedures or board
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resolutions at the request or suggestion of any Regulatory Agency or other Governmental Entity that currently restricts in any material respect the conduct of its business or that in any material
manner relates to its capital adequacy, its ability to pay dividends, its credit or risk management policies, its management or its business (each, whether or not set forth in the Parent Disclosure Schedule, a
Parent Regulatory
Agreement
), nor has Parent or any of its Subsidiaries been advised since January 1, 2013, by any Regulatory Agency or other Governmental Entity that it is considering issuing, initiating, ordering or requesting any such Parent
Regulatory Agreement.
4.15
Certain Contracts
.
(a) Each contract, arrangement, commitment or understanding (whether written or oral) which is a
material contract (as such term is defined in Item 601(b)(10) of Regulation S-K under the Securities Act) to which Parent or any of its Subsidiaries is a party or by which Parent or any of its Subsidiaries is bound as of the date
hereof has been filed as an exhibit to the most recent Annual Report on Form 10-K filed by Parent, or a Quarterly Report on Form 10-Q or Current Report on Form 8-K subsequent thereto (each, a
Parent Contract
) and neither Parent
nor any of its Subsidiaries knows of, or has received notice of, any material violation of the above by any of the other parties thereto.
(b) Each Parent Contract is valid and binding on Parent or one of its Subsidiaries, as applicable,
and in full force and effect, except as, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Parent. Parent and each of its Subsidiaries has in all material respects performed all
obligations required to be performed by it under each Parent Contract. To Parents knowledge, each third-party counterparty to each Parent Contract has in all material respects performed all obligations required to be performed by it under such
Parent Contract, and no event or condition exists which constitutes or, after notice or lapse of time or both, will constitute, a material default on the part of Parent or any of its Subsidiaries under any such Parent Contract.
4.16
Environmental Matters
. Except as would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on Parent, Parent and its Subsidiaries are in compliance, and have complied, with all Environmental Laws. There are no legal, administrative, arbitral or other proceedings, claims or actions, or to the
knowledge of Parent any private environmental investigations or remediation activities or governmental investigations of any nature seeking to impose, or that could reasonably be expected to result in the imposition, on Parent or any of its
Subsidiaries of any liability or obligation arising under any Environmental Law, pending or threatened against Parent, which liability or obligation would reasonably be expected to have, either individually or in the aggregate, a Material Adverse
Effect on Parent. To the knowledge of Parent, there is no reasonable basis for any such proceeding, claim, action or governmental investigation that would impose any liability or obligation that would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect on Parent. Parent is not subject to any agreement, order, judgment, decree, letter agreement or memorandum of understanding by or with any court, governmental authority, regulatory agency
or third party imposing any liability or obligation with respect to the foregoing that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Parent.
4.17
Insurance
. Parent and its Subsidiaries are insured with reputable insurers against such risks
and in such amounts as the management of Parent reasonably has determined to be prudent and consistent with industry practice, and Parent and its Subsidiaries are in compliance in all material respects with their insurance policies, are not in
default under any of the terms thereof, each such policy is outstanding and in full force and effect and, except for policies insuring against potential liabilities of officers, directors and employees of Parent and its Subsidiaries, Parent or the
relevant Subsidiary thereof is the sole beneficiary of such policies, and all premiums and other payments due under any such policy have been paid, and all claims thereunder have been filed in due and timely fashion.
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4.18
Loan Portfolio
.
(a) Except as would not reasonably be expected to have a Material Adverse Effect on Parent, each Loan
of Parent and its Subsidiaries (i) is evidenced by notes, agreements or other evidences of indebtedness that are true, genuine and what they purport to be, (ii) to the extent carried on the books and records of Parent and its Subsidiaries
as secured Loans, has been secured by valid charges, mortgages, pledges, security interests, restrictions, claims, liens or encumbrances, as applicable, which have been perfected and (iii) is the legal, valid and binding obligation of the
obligor named therein, enforceable in accordance with its terms, subject to the Enforceability Exceptions.
(b)
Each outstanding Loan of Parent and its Subsidiaries (including Loans held for resale to investors) was solicited and originated, and is and has been administered and, where applicable, serviced, and the relevant Loan files
are being maintained, in all material respects in accordance with the relevant notes or other credit or security documents, the written underwriting standards of Parent and its Subsidiaries (and, in the case of Loans held for resale to investors,
the underwriting standards, if any, of the applicable investors) and with all applicable federal, state and local laws, regulations and rules.
(c) There are no outstanding Loans made by Parent or any of its Subsidiaries to any executive
officer or other insider (as each such term is defined in Regulation O promulgated by the Federal Reserve Board) of Parent or its Subsidiaries, other than Loans that are subject to and that were made and continue to be in
compliance with Regulation O or that are exempt therefrom.
(d) Neither Parent nor any of its
Subsidiaries is now nor has it ever been since December 31, 2013, subject to any fine, suspension, settlement or other contract or other administrative agreement or sanction by, or any reduction in any loan purchase commitment from, any
Governmental Entity or Regulatory Agency relating to the origination, sale or servicing of mortgage or consumer Loans.
4.19
Takeover Protections
. No Takeover Statute is applicable to this Agreement, the Integrated
Mergers or any of the other transactions contemplated by this Agreement under the DGCL.
4.20
Opinion
. Prior to the execution of this Agreement, the Board of Directors of Parent has received an opinion (which, if initially rendered verbally, has been or will be confirmed by a written opinion, dated the same date) of Piper
Jaffray & Co. to the effect that, as of the date of such opinion, and based upon and subject to the factors, assumptions and limitations set forth therein, the Merger Consideration is fair from a financial point of view to Parent. Such
opinion has not been amended or rescinded as of the date of this Agreement.
4.21
Parent
Information
. The information relating to Parent and its Subsidiaries to be contained in the Joint Proxy Statement and the S-4, and the information relating to Parent and its Subsidiaries that is provided by Parent or its representatives for
inclusion in any other document filed with any other Regulatory Agency in connection herewith, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading. The Joint Proxy Statement (except for such portions thereof that relate only to the Company or any of its Subsidiaries) will comply in all material respects with the provisions of the Exchange
Act and the rules and regulations thereunder. The S-4 (except for such portions thereof that relate only to the Company or any of its Subsidiaries) will comply in all material respects with the provisions of the Securities Act and the rules and
regulations thereunder.
4.22
No Other Representations or Warranties
.
(a) Except for the representations and warranties made by Parent in this
Article IV
, neither
Parent nor any other person makes any express or implied representation or warranty with respect to Parent, its Subsidiaries, or their respective businesses, operations, assets, liabilities, conditions (financial or otherwise) or
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prospects, and Parent hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither Parent nor any other person makes or has
made any representation or warranty to the Company or any of its affiliates or representatives with respect to (i) any financial projection, forecast, estimate, budget or prospective information relating to Parent, any of its Subsidiaries or
their respective businesses, or (ii) except for the representations and warranties made by Parent in this
Article IV
, any oral or written information presented to the Company or any of its affiliates or representatives in the course of
their due diligence investigation of Parent, the negotiation of this Agreement or in the course of the transactions contemplated hereby.
(b) Parent acknowledges and agrees that neither the Company nor any other person has made or is
making any express or implied representation or warranty other than those contained in
Article III
.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 Conduct of
Business of the Company Prior to the Effective Time
. During the period
from the date of this Agreement to the Effective Time or the earlier termination of this Agreement, except as expressly contemplated by this Agreement (including as set forth in the Company Disclosure Schedule), required by law or as consented to in
writing by Parent, the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course in all material respects, use reasonable best efforts to maintain and preserve intact its business organization,
employees, independent contractors and advantageous business relationships, and take no action that would reasonably be expected to adversely affect or delay the ability to obtain any necessary approvals of any Regulatory Agency or other
Governmental Entity required for the transactions contemplated hereby or to perform the Companys covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis.
5.2
Company Forbearances
. During the period from the date of this Agreement to the
Effective Time or the earlier termination of this Agreement, except as set forth in the Company Disclosure Schedule, as expressly contemplated by this Agreement or as required by law, the Company shall not, and shall not permit any of its
Subsidiaries to, without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed:
(a) other than in the ordinary course of business consistent with past practice, incur any
indebtedness for borrowed money (other than indebtedness of the Company or any of its wholly-owned Subsidiaries to the Company or any of its other Subsidiaries), assume, guarantee, endorse or otherwise as an accommodation become responsible for the
obligations of any other individual, corporation or other entity;
(b)
(i) adjust, split, combine or reclassify any capital stock;
(ii) make, declare or pay any dividend, or make any other distribution on, or
directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain
events) into or exchangeable for any shares of its capital stock (except (A) regular quarterly cash dividends by the Company at a rate not in excess of $0.06 per share of Company Common Stock, (B) dividends paid by any of the Subsidiaries
of the Company to the Company or any of its wholly-owned Subsidiaries, or (C) the acceptance of shares of Company Common Stock as payment for the exercise price of the Company Stock Options or for withholding taxes incurred in connection with
the exercise of the Company Stock Options or the vesting or settlement of the Company Equity Awards, in each case, in accordance with past practice and the terms of the applicable award agreements);
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(iii) grant any stock options, stock
appreciation rights, performance shares, restricted stock units, restricted shares or other equity or equity-based awards or interests, or grant any individual, corporation or other entity any right to acquire any shares of its capital stock; or
(iv) issue, sell or otherwise permit to become outstanding (including by issuing
any shares of Company Common Stock that are held as treasury shares as of the date of this Agreement) any additional shares of capital stock or securities convertible or exchangeable into, or exercisable for, any shares of its capital
stock or any options, warrants, or other rights of any kind to acquire any shares of capital stock, except pursuant to the exercise of stock options or the settlement of equity compensation awards outstanding as of the date hereof in accordance with
their terms;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of its material
properties or assets or any business to any individual, corporation or other entity other than a wholly-owned Subsidiary of the Company, or cancel, release or assign any indebtedness to any such person or any claims held by any such person, in each
case, other than in the ordinary course of business consistent with past practice;
(d) except for
transactions in the ordinary course of business, make any material investment either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any other individual, corporation or
other entity other than a wholly-owned Subsidiary of the Company;
(e) terminate, materially
amend, or waive any material provision of, any Company Contract, or make any change in any instrument or agreement governing the terms of any of its securities, or material lease or contract, other than normal renewals of contracts and leases
without material adverse changes of terms with respect to the Company, or enter into any contract that would constitute a Company Contract if it were in effect on the date of this Agreement;
(f) except as required under applicable law or the terms of any Company Benefit Plan existing as of
the date hereof, (i) enter into, adopt or terminate any employee benefit or compensation plan, program, practice, policy, contract or arrangement for the benefit or welfare of any current or former employee, officer, director, independent
contractor or consultant (or any spouse or dependent of such individual), (ii) amend (whether in writing or through the interpretation of) any Company Benefit Plan, (iii) increase the compensation or benefits payable to any current or
former employee, officer, director, independent contractor or consultant (or any spouse or dependent of such individual), except for annual base salary or wage increases for employees (other than directors or executive officers) in the ordinary
course of business consistent with past practice, that do not exceed, with respect to any individual, two percent (2%) of such individuals base salary or wage rate in effect as of the date hereof, (iv) pay or award, or commit to pay
or award, any bonuses or incentive compensation, (v) grant or accelerate the vesting of any equity or equity-based awards or other compensation, (vi) negotiate or enter into any new, or amend any existing, employment, severance, change in
control, retention, bonus guarantee, collective bargaining agreement or similar agreement or arrangement, (vii) fund any rabbi trust or similar arrangement, (viii) terminate the employment or services of any officer or any employee whose
target total annual compensation is greater than $100,000, other than for cause (as determined in the ordinary course of business and consistent with past practice), (ix) hire or promote any officer, employee, independent contractor or
consultant who has target total annual compensation greater than $100,000 or (x) waive, release or limit any Restrictive Covenant obligation of any current or former employee or contractor of the Company or any of its Subsidiaries;
(g) settle any material claim, suit, action or proceeding, except in the ordinary course of business
in an amount and for consideration not in excess of $50,000 individually or in the aggregate and that would not impose any material restriction on the business of it or its Subsidiaries or the Surviving Corporation;
(h) take any action, or knowingly fail to take any action, where such action or failure to act could
reasonably be expected to prevent the Integrated Mergers, taken together, from being treated as an integrated transaction that qualifies as a reorganization within the meaning of Section 368(a) of the Code;
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(i) amend the Company Certificate, Company Bylaws or
comparable governing document of any of its Subsidiaries;
(j) merge or consolidate itself or any
of its Subsidiaries with any other person, or restructure, reorganize or completely or partially liquidate or dissolve it or any of its Subsidiaries;
(k) materially restructure or materially change its investment securities or derivatives portfolio or
its interest rate exposure, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported or purchase any security rated below investment grade;
(l) take any action that is intended or expected to result in any of its representations and
warranties set forth in this Agreement being or becoming untrue in any material respect, or in any of the conditions to the Integrated Mergers set forth in
Article VII
not being satisfied or in a violation of any provision of this Agreement,
except, in every case, as may be required by applicable law;
(m) implement or adopt any change
in its accounting principles, practices or methods, other than as may be required by GAAP;
(n)
(i) enter into any new line of business or change in any material respect its lending, investment, underwriting, originating, acquiring, selling, risk and asset liability management and other banking and operating,
securitization and servicing policies or practices (including any change in the maximum ratio or similar limits as a percentage of its capital exposure applicable with respect to its loan portfolio or any segment thereof), except as required by
applicable law, regulation or policies imposed by any Governmental Entity; (ii) make any loans or extensions of credit except in the ordinary course of business consistent with past practice; or (iii) make any individual unsecured loan or
extension of credit that is not as of the date of this Agreement approved and committed (a schedule of which approved and committed loans and extensions of credit has been made available to Parent) in excess of $500,000 or any individual secured
loan or extension of credit in excess of $2,000,000, with respect to residential mortgage loans, and $1,000,000 with respect to all other secured loans or extensions of credit, provided that Parent shall have been deemed to have consented to any
loan or extension of credit in excess of such amounts or otherwise not permitted by this section if Parent does not object to any such proposed loan or extension of credit within three business days of receipt by Parent of a request by the Company
to exceed such limit along with all financial or other data that Parent may reasonably request in order to evaluate such loan or extension of credit;
(o) change in any material respect its hedging practices and policies, except as required by law or
requested by a Regulatory Agency;
(p) make, or commit to make, any capital expenditures in
excess of $100,000 in the aggregate;
(q) make, change or revoke any Tax election, adopt or
change any Tax accounting method, file any amended Tax Return, settle or compromise any Tax Liability, claim or assessment or agree to an extension or waiver of the limitation period to any material Tax claim or assessment, grant any power of
attorney with respect to material Taxes, surrender any right to claim a refund of material Taxes, enter into any closing agreement with respect to any material Tax or refund or amend any material Tax Return;
(r) make application for the opening, relocation or closing of any, or open, relocate or close any,
branch office, loan production office or other significant office or operations facility of it or its Subsidiaries;
(s)
materially reduce the amount of insurance coverage or fail to renew any material existing insurance policy, in each case, with respect to the properties or assets of the Company or any of its Subsidiaries; or
(t) agree to take, make any commitment to take, or adopt any resolutions of its Board of Directors or
similar governing body in support of, any of the actions prohibited by this
Section 5.2
.
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5.3
Parent Forbearances
. During the period
from the date of this Agreement to the Effective Time or the earlier termination of this Agreement, except as set forth in the Parent Disclosure Schedule, as expressly contemplated by this Agreement or as required by law, Parent shall not, and shall
not permit any of its Subsidiaries to, without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed:
(a) amend the Parent Certificate or Parent Bylaws in a manner that would adversely affect the
economic benefits of the Integrated Mergers to the holders of Company Common Stock;
(b) (i)
adjust, split, combine or reclassify any capital stock of Parent or (ii) make, declare or pay any dividend, or make any other distribution on, any shares of its capital stock or any securities or obligations convertible (whether currently
convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock (except regular quarterly cash dividends, including any increase in such quarterly cash dividends
or dividends paid by any of the Subsidiaries of Parent to Parent or any of its wholly owned Subsidiaries);
(c)
take any action that is intended to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect, or in any of the conditions to the Integrated Mergers set
forth in
Article VII
not being satisfied or in a violation of any provision of this Agreement, except, in every case, as may be required by applicable law;
(d) take any action, or knowingly fail to take any action, where such action or failure to act would
reasonably be expected to prevent the Integrated Mergers, taken together, from being treated as an integrated transaction that qualifies as a reorganization within the meaning of Section 368(a) of the Code;
(e) take any action that would reasonably be expected to adversely affect or delay in any material
respect the ability to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform Parents covenants and agreements under this Agreement or to consummate
the transactions contemplated hereby on a timely basis; or
(f) agree to take, make any commitment
to take, or adopt any resolutions of its Board of Directors or similar governing body in support of, any of the actions prohibited by this
Section 5.3
.
5.4
Tax-free Reorganization
. Officers of Parent, Merger Sub and the Company shall execute
and deliver to Skadden, Arps, Slate, Meagher & Flom LLP and to Kilpatrick Townsend & Stockton LLP, respectively, certificates containing appropriate representations and covenants, reasonably satisfactory in form and substance to
such counsel, at such time or times as may be reasonably requested by such counsel, including the effective date of the Joint Proxy Statement and the Closing Date, in connection with such counsels deliveries of opinions with respect to the Tax
treatment of the Integrated Mergers.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1
Regulatory Matters
.
(a) Parent and the Company shall promptly prepare and file with the SEC, no later than 30 business
days after of the date of this Agreement, the Joint Proxy Statement and Parent shall promptly prepare and file with the SEC the S-4, in which the Joint Proxy Statement will be included as a prospectus. Each of Parent and the Company shall cooperate
in respect of the form and content of any other communication with shareholders of the Company. Each of Parent and the Company shall use their reasonable best efforts to have the S-4 declared effective under the Securities Act as promptly as
practicable after such filing, and Parent and the
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Company shall thereafter mail or deliver the Joint Proxy Statement to their respective shareholders. Parent shall also use its reasonable best efforts to obtain all necessary state securities law
or Blue Sky permits and approvals required to carry out the transactions contemplated by this Agreement, and the Company shall furnish all information concerning the Company and the holders of Company Common Stock as may be reasonably
requested in connection with any such action.
(b) The parties hereto shall cooperate with each
other and use their respective reasonable best efforts to promptly (and in the case of the regulatory applications to the Federal Reserve Board and the OCC within 30 business days of the date of this Agreement) prepare and file all necessary
documentation, to effect all applications, notices, petitions and filings, to obtain as promptly as practicable all permits, consents, approvals and authorizations of all third parties and Governmental Entities which are necessary or advisable to
consummate the transactions contemplated by this Agreement (including, without limitation, the Integrated Mergers and the Bank Merger), and to comply with the terms and conditions of all such permits, consents, approvals and authorizations of all
such third parties and Governmental Entities. Parent and the Company shall have the right to review in advance, and, to the extent practicable, each will consult with the other on, in each case subject to applicable laws relating to the exchange of
information (and subject to necessary redactions relating to confidential or sensitive information), all the information relating to the Company or Parent, as the case may be, and any of their respective Subsidiaries, which appears in any filing
made with, or written materials submitted to, any third party or any Governmental Entity in connection with the transactions contemplated by this Agreement. In exercising the foregoing right, each of the parties hereto shall act reasonably and as
promptly as practicable. The parties hereto agree that they will consult with each other with respect to the obtaining of all permits, consents, approvals and authorizations of all third parties and Governmental Entities necessary or advisable to
consummate the transactions contemplated by this Agreement and each party will keep the other apprised of the status of matters relating to completion of the transactions contemplated herein. Notwithstanding the foregoing or anything to the contrary
in this Agreement, nothing contained herein shall be deemed to require Parent or the Company to take any action, or commit to take any action, or agree to any condition or restriction, in connection with obtaining the foregoing permits, consents,
approvals and authorizations of Governmental Entities that would reasonably be expected to have a Material Adverse Effect (measured on a scale relative to the Company) on any of Parent, the Company or the Surviving Corporation, after giving effect
to the Integrated Mergers (a
Materially Burdensome Regulatory Condition
).
(c)
Parent and the Company shall, upon request, furnish each other with all information concerning themselves, their Subsidiaries, directors, officers and shareholders and such other matters as may be reasonably necessary or
advisable in connection with the Joint Proxy Statement, the S-4 or any other statement, filing, notice or application made by or on behalf of Parent, the Company or any of their respective Subsidiaries to any Governmental Entity in connection with
the Integrated Mergers, the Bank Merger and the other transactions contemplated by this Agreement.
(d)
Parent and the Company shall promptly advise each other upon receiving any communication from any Governmental Entity whose consent or approval is required for consummation of the transactions contemplated by this Agreement
that causes such party to believe that there is a reasonable likelihood that any Requisite Regulatory Approval will not be obtained or that the receipt of any such approval will be materially delayed. As used in this Agreement, the
Requisite Regulatory Approvals
shall mean all regulatory authorizations, consents, orders or approvals from (x) the Federal Reserve Board and the OCC and (y) any other approvals set forth in
Sections 3.4
and
4.4
which are necessary to consummate the transactions contemplated by this Agreement, including the Integrated Mergers and the Bank Merger or those the failure of which to be obtained would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Surviving Corporation.
6.2
Access to
Information; Confidentiality
.
(a) Upon reasonable notice and subject to applicable laws, each
of Parent and the Company, for the purposes of enabling each of them to verify the representations and warranties of the other and prepare for the
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Integrated Mergers and the other matters contemplated by this Agreement, shall, and shall cause each of their respective Subsidiaries to, afford to the officers, employees, accountants, counsel,
advisors and other representatives of the other party, access, during normal business hours during the period from the date of this Agreement to the Effective Time, to all of the its properties, books, contracts, commitments, personnel, information
technology systems and records (excluding Parents tax returns and related work papers), and each shall cooperate with the other party in preparing to execute after the Effective Time conversion or consolidation of systems and business
operations generally, and, during such period, each of Parent and the Company shall, and shall cause its respective Subsidiaries to, make available to the other party (i) a copy of each report, schedule, registration statement and other
document filed or received by it during such period pursuant to the requirements of federal securities laws or federal or state banking laws (other than reports or documents which it is not permitted to disclose under applicable law), and
(ii) all other information concerning its business, properties and personnel as the other party may reasonably request. Neither Parent nor the Company nor any of their respective Subsidiaries shall be required to provide access to or to
disclose information where such access or disclosure would violate or prejudice the rights of Parents or the Companys, as the case may be, customers, jeopardize the attorney-client privilege of the institution in possession or control of
such information (after giving due consideration to the existence of any common interest, joint defense or similar agreement between the parties) or contravene any law, rule, regulation, order, judgment, decree, fiduciary duty or binding agreement
entered into prior to the date of this Agreement. The parties hereto will make appropriate substitute disclosure arrangements under circumstances in which the restrictions of the preceding sentence apply.
(b) Parent shall hold all information furnished by or on behalf of the Company or any of the
Companys Subsidiaries or representatives pursuant to
Section 6.2(a)
in confidence to the extent required by, and in accordance with, the provisions of the confidentiality agreement, dated April 5, 2016, between Parent and the
Company (the
Confidentiality Agreement
).
(c) Unless otherwise agreed to
in writing by Parent, the Company agrees (i) not to, and to cause its Subsidiaries and representatives not to, use any Parent Confidential Information for any purpose other than verifying the representations and warranties of Parent and
preparing for the Integrated Mergers and the other matters contemplated by this Agreement and (ii) that, except as otherwise permitted by this
Section 6.2(c)
, to hold all Parent Confidential Information in confidence and not to
disclose or reveal in any manner whatsoever any Parent Confidential Information to any person other than the Companys representatives who are actively and directly participating in the Integrated Mergers or otherwise need to know the Parent
Confidential Information for the purpose of verifying the representations and warranties of Parent and who have been advised by the Company of, and have agreed to be bound by, the terms and conditions of this
Section 6.2(c)
. The Company
shall make reasonable, necessary and appropriate efforts to safeguard the Parent Confidential Information from disclosure to any person other than as permitted by this
Section 6.2(c)
and the Company shall be responsible for any breach of
the terms of this
Section 6.2(c)
by the Company, any of its Subsidiaries or any of its representatives. In the event that the Company, any of its Subsidiaries or any of its representatives are requested pursuant to, or required by,
applicable law or regulation or by legal process to disclose any Parent Confidential Information, the Company, any such Subsidiary or any such representatives may disclose such Parent Confidential Information as so compelled provided that the
Company shall promptly notify Parent in writing of such request(s) or requirement(s) to enable Parent to seek an appropriate protective order, waive compliance with the provisions of this
Section 6.2(c)
or take other appropriate action
to the extent not prohibited by such applicable law, regulation or legal process. The Company shall use reasonable commercial efforts, at Parents sole expense, to assist Parent, Parents Subsidiaries and Parents representatives in
obtaining such a protective order. If, in the absence of a protective order or the receipt of a waiver hereunder, the Company or any of its Subsidiaries or any of its representatives are nonetheless, in the reasonable opinion of the Companys
counsel, legally compelled to disclose the Parent Confidential Information to any tribunal or else stand liable for contempt or suffer other censure or significant penalty, the Company or such representative, after notice to Parent, may disclose to
such tribunal only such Parent Confidential Information that such counsel advises is legally required to be disclosed. As used in this
Section 6.2(c)
,
Parent Confidential Information
means all information furnished by
or on behalf of Parent or any of Parents Subsidiaries or representatives pursuant to
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Section 6.2(a)
and shall include all information concerning Parent, its business strategies and operations obtained or ascertained by the Company or any of its representatives as a
result of any visit to any facility occupied by Parent, or furnished to the Company or its representatives by the Parent or its representatives, whether prepared by Parent, its representatives or otherwise and whether obtained or furnished before or
after the date hereof and regardless of the manner in which it is furnished, together with all reports, analyses, compilations, memoranda, notes, studies or other documents or records or electronic media prepared by the Company or its
representatives that contain or otherwise reflect or are generated from such information, but does not include information which (i) is or becomes generally available to the public other than as a result of a disclosure by the Company or its
representatives, (ii) was available to the Company or its representatives on a non-confidential basis prior to its disclosure to the Company by Parent or its representatives, or (iii) becomes available to the Company or its representatives
on a non-confidential basis from a person other than Parent or its representatives who is not otherwise known to the Company upon due inquiry to be bound not to disclose such information pursuant to a contractual, legal or fiduciary obligation.
(d) No investigation by either of the parties or their respective representatives shall affect or be
deemed to modify or waive the representations and warranties of the other set forth herein. Nothing contained in this Agreement shall give either party, directly or indirectly, the right to control or direct the operations of the other party prior
to the Effective Time. Prior to the Effective Time, each party shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries respective operations.
6.3
Shareholders Approvals
.
(a) Each of Parent and the Company shall call, give notice of, convene and hold a meeting of its
shareholders (the
Parent Meeting
and the
Company Meeting
, respectively) to be held as soon as reasonably practicable after the S-4 is declared effective for the purpose of obtaining the Requisite Company Vote
and the Requisite Parent Vote required in connection with this Agreement, the First-Step Merger and the Parent Share Issuance and, if so desired and mutually agreed, upon other matters of the type customarily brought before a special meeting of
shareholders to approve a merger agreement or otherwise approve the transactions contemplated hereby, and each shall use its reasonable best efforts to cause such meetings to occur as promptly as reasonably practicable and on the same date.
(b) Subject to
Section 6.3(c)
and
Section 6.3(d)
, as applicable, the Board of
Directors of each of Parent and the Company shall use its reasonable best efforts to obtain from the shareholders of Parent and the Company, as the case may be, the Requisite Parent Vote, in the case of Parent, and the Requisite Company Vote, in the
case of the Company, including by communicating to its respective shareholders its recommendation (and including such recommendation in the Joint Proxy Statement) that such shareholders approve (i) this Agreement and the transactions
contemplated hereby, in the case of the Company, and (ii) the Parent Share Issuance, in the case of Parent.
(c)
Subject to
Section 8.1
and
Section 8.2
, if the Board of Directors of Parent, after receiving the advice of its outside counsel and, with respect to financial matters, its financial advisors, determines
in good faith that it would be reasonably likely to result in a violation of its fiduciary duties under applicable law to continue to recommend approval of the Parent Share Issuance, then in submitting the Parent Share Issuance to its shareholders,
the Board of Directors of Parent may (but shall not be required to) submit the Parent Share Issuance to Parents shareholders without recommendation (although the resolutions approving this Agreement as of the date hereof may not be rescinded
or amended), in which event the Board of Directors of Parent may communicate the basis for its lack of a recommendation to Parents shareholders in the Joint Proxy Statement or an appropriate amendment or supplement thereto to the extent
required by law.
(d) Subject to
Section 8.1
and
Section 8.2
, if the
Board of Directors of the Company, after receiving the advice of its outside counsel and, with respect to financial matters, its financial advisors, determines
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in good faith that it would be reasonably likely to result in a violation of its fiduciary duties under applicable law to continue to recommend this Agreement, then in submitting this Agreement
to its shareholders, the Board of Directors of the Company may (but shall not be required to) submit this Agreement to the Companys shareholders without recommendation (although the resolutions approving this Agreement as of the date hereof
may not be rescinded or amended), in which event the Board of Directors may communicate the basis for its lack of a recommendation to the Companys shareholders in the Joint Proxy Statement or an appropriate amendment or supplement thereto to
the extent required by law;
provided
, that the Board of Directors of the Company may not take any actions under this
Section 6.3(d)
unless (i) if such action is taken in response to an Acquisition Proposal, such Acquisition
Proposal did not result from a breach by the Company of
Section 6.13
and such Acquisition Proposal constitutes a Superior Proposal; (ii) the Company gives Parent at least three (3) business days prior written notice of
its intention to take such action and a reasonable description of the event or circumstances giving rise to its determination to take such action (including, if such action is taken in response to an Acquisition Proposal, its basis for determining
that such Acquisition Proposal constitutes a Superior Proposal (including the latest material terms and conditions of, and the identity of the third party making, any such Acquisition Proposal, or any amendment or modification thereof, or describe
in reasonable detail such other event or circumstances)) and (iii) at the end of such notice period, the Board of Directors of the Company takes into account any amendment or modification to this Agreement proposed by Parent (
it
being
understood
that Parent shall not have any obligation to propose any adjustments, modifications or amendments to the terms and conditions of this Agreement), and after receiving the advice of its outside counsel and, with respect
to financial matters, its financial advisors, again determines in good faith that it would nevertheless be reasonably likely to result in a violation of its fiduciary duties under applicable law to continue to recommend this Agreement (and, if such
action is taken in response to an Acquisition Proposal, that such Acquisition Proposal constitutes a Superior Proposal). Any material amendment to any Acquisition Proposal will be deemed to be a new Acquisition Proposal for purposes of this
Section 6.3(d)
and will require a new determination and notice period as referred to in this
Section 6.3(d)
.
(e) Parent or the Company shall adjourn or postpone the Parent Meeting or the Company Meeting, as the
case may be, if, as of the time for which such meeting is originally scheduled there are insufficient shares of Parent Common Stock or Company Common Stock, as the case may be, represented (either in person or by proxy) to constitute a quorum
necessary to conduct the business of such meeting, or if on the date of such meeting Parent or the Company, as applicable, has not received proxies representing a sufficient number of shares necessary to obtain the Requisite Parent Vote or the
Requisite Company Vote (
it
being
understood
that, (i) if Parent, pursuant to
Section 6.3(c)
, submits the Parent Share Issuance to Parents shareholders without recommendation, or if (ii) the Company,
pursuant to
Section 6.3(d)
, submits this Agreement to Companys shareholders without recommendation, an adjournment or postponement of the Parent Meeting or the Company Meeting, as applicable, due to an insufficient quorum or the
failure to obtain the Requisite Parent Vote or the Requisite Company Vote, as applicable, shall not be required by this
Section 6.3(e)
). Notwithstanding anything to the contrary herein, unless this Agreement has been terminated in
accordance with its terms, each of the Parent Meeting and the Company Meeting shall be convened and this Agreement shall be submitted to the shareholders of each of Parent and the Company at the Parent Meeting and the Company Meeting, respectively,
for the purpose of voting on the adoption of this Agreement and the Parent Share Issuance, as applicable, and the other matters contemplated hereby, and nothing contained herein shall be deemed to relieve either Parent or the Company of such
obligation.
6.4
Legal Conditions to Merger
. Subject in all respects to
Section 6.1
of this Agreement, each of Parent and the Company shall, and shall cause its Subsidiaries to, use their reasonable best efforts (a) to take, or cause to be taken, all actions necessary, proper or advisable to comply
promptly with all legal requirements that may be imposed on such party or its Subsidiaries with respect to the Integrated Mergers and the Bank Merger and, subject to the conditions set forth in
Article VII
hereof, to consummate the
transactions contemplated by this Agreement, and (b) to obtain (and to cooperate with the other party to obtain) any material consent, authorization, order or approval of, or any exemption by, any Governmental Entity and any other third party
that
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is required to be obtained by the Company or Parent or any of their respective Subsidiaries in connection with the Integrated Mergers, the Bank Merger and the other transactions contemplated by
this Agreement.
6.5
Stock Exchange Listing
. Parent shall cause the shares of Parent
Common Stock to be issued in the First-Step Merger to be approved for listing on the NASDAQ, subject to official notice of issuance, prior to the Effective Time.
6.6
Employee Matters
.
(a) During the period commencing at the Effective Time and ending on the first anniversary thereof,
Parent shall or shall cause the Surviving Corporation to provide the employees of the Company and its Subsidiaries who continue to be employed by Parent or its Subsidiaries (including, for the avoidance of doubt, the Surviving Corporation and its
Subsidiaries) immediately following the Effective Time (the
Continuing Employees
), while employed by Parent or its Subsidiaries after the Effective Time, with base salaries, wages and employee benefits (excluding equity and equity
based compensation) that are substantially comparable in the aggregate to the base salaries, wages and employee benefits provided to similarly situated employees of Parent and its Subsidiaries;
provided
that Parent may satisfy its obligation
under this
Section 6.6(a)
by providing or causing the Surviving Corporation to provide such Continuing Employees with base salaries, wages and employee benefits that are substantially comparable in the aggregate to the base salaries,
wages and employee benefits provided by the Company or its Subsidiaries to such Continuing Employees immediately prior to the Effective Time.
(b) With respect to any employee benefit plans of Parent or its Subsidiaries in which any Continuing
Employees become eligible to participate on or after the Effective Time (the
New Plans
), Parent shall or shall cause the Surviving Corporation to use reasonable best efforts to: (i) waive all exclusions and waiting periods
with respect to participation and coverage requirements applicable to such employees and their eligible dependents under any New Plans, (ii) provide each such employee and their eligible dependents with credit for any co-payments and
deductibles paid prior to the Effective Time under a Company Benefit Plan (to the same extent that such credit was given under the analogous Company Benefit Plan prior to the Effective Time) in satisfying any applicable deductible or out-of-pocket
requirements under any New Plans, and (iii) recognize all service of such employees with the Company and its Subsidiaries for all purposes in any New Plan to the same extent that such service was taken into account under the analogous Company
Benefit Plan prior to the Effective Time;
provided
that the foregoing service recognition shall not apply (A) to the extent it would result in duplication of benefits for the same period of services, (B) for purposes of any defined
benefit pension plan or benefit plan that provides retiree welfare benefits, or (C) to any benefit plan that is a frozen plan or provides grandfathered benefits.
(c) Unless Parent requests otherwise in writing, effective prior to the Closing, the Company shall
terminate the Ocean City Home Bank Savings and Investment Plan (the
Terminated Plan
). Prior to the Effective Time, the Company shall provide Parent with resolutions adopted by the Companys Board of Directors terminating the
Terminated Plan, the form and substance of which shall be subject to the prior written approval of Parent, which will not be unreasonably withheld. As soon as practicable following the Effective Time, with respect to the Terminated Plan, Parent
shall permit or cause its Subsidiaries (including Parent Bank) to permit the Continuing Employees to roll over their account balances and outstanding loan balances, if any, thereunder into an eligible retirement plan within the meaning
of Section 402(c)(8)(B) of the Code maintained by Parent or its Subsidiaries (including Parent Bank).
(d)
The Board of Directors of the Company Bank shall, effective no later than immediately prior to the Effective Time (the
ESOP Termination Date
) and contingent upon the consummation of the Integrated Mergers,
adopt such necessary resolutions and Company Bank shall, effective no later than the ESOP Termination Date and contingent upon the consummation of the Integrated Mergers, enter into such necessary amendments to the Ocean City Home Bank Employee
Stock Ownership Plan (the
Company ESOP
), in each
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case, to (i) provide for the conversion into the right to receive the Merger Consideration of all shares of Company Common Stock held in the Company ESOP trust in accordance with
Section 2.2
of this Agreement, (ii) direct the Company ESOP trustee to deliver a sufficient amount of cash and unallocated shares of Parent Common Stock held in the Company ESOPs suspense account to the Company as required to
repay in full any outstanding Company ESOP loan at the Effective Time and (iii) provide that no new participants shall be admitted to the Company ESOP on or after the ESOP Termination Date. The form and substance of such resolutions and any
necessary amendments shall be subject to the review and prior written approval of Parent, which shall not be unreasonably withheld. The Company shall deliver to Parent an executed copy of such resolutions and any necessary amendments promptly
following their adoption by the Board of Directors of Company Bank and shall fully comply with such resolutions and any necessary amendments. The accounts of all participants and beneficiaries in the Company ESOP as of the ESOP Termination Date
shall become fully vested as of the ESOP Termination Date. Any cash or unallocated shares of Parent Common Stock held in the Company ESOPs suspense account after repayment of the Company ESOP loan shall be allocated as earnings to the accounts
of the Company ESOP participants who are employed as of the ESOP Termination Date based on their account balances under the Company ESOP as of the ESOP Termination Date. Promptly following the date of this Agreement, the Company shall file or cause
to be filed all necessary documents with the IRS for a determination letter for termination of the Company ESOP and shall deliver to Parent an as-filed copy of such determination letter promptly following the filling thereof by the Company with the
IRS. Promptly following the receipt of a favorable determination letter from the IRS regarding the qualified status of the Company ESOP upon its termination, the account balances in the Company ESOP shall either be distributed to participants and
beneficiaries or transferred to an eligible tax-qualified retirement plan or individual retirement account as a participant or beneficiary may direct. Parent agrees to permit the Company ESOP participants who become employees of Parent or any of its
Subsidiaries to roll over their account balances in the Company ESOP to the OceanFirst Bank Employee Stock Ownership Plan.
(e) Nothing in this Agreement shall confer upon any employee, officer, director, independent
contractor or consultant of the Company or any of its Subsidiaries or affiliates any right to continue in the employ or service of the Surviving Corporation, the Company, Parent or any Subsidiary or affiliate thereof, or shall interfere with or
restrict in any way the rights of the Surviving Corporation, the Company, Parent or any Subsidiary or affiliate thereof to discharge or terminate the services of any employee, officer, director or consultant of the Company or any of its Subsidiaries
or affiliates at any time for any reason whatsoever, with or without cause. Nothing in this Agreement shall be deemed to (i) establish, amend, or modify any Company Benefit Plan, New Plan or any other benefit or employment plan, program,
agreement or arrangement, or (ii) alter or limit the ability of the Surviving Corporation or any of its Subsidiaries or affiliates to amend, modify or terminate any particular Company Benefit Plan, New Plan or any other benefit or employment
plan, program, agreement or arrangement after the Effective Time. Without limiting the generality of the third sentence of
Section 9.9
, nothing in this Agreement, express or implied, is intended to or shall confer upon any person,
including without limitation any current or former employee, officer, director, independent contractor or consultant (or any spouse or dependent of such individual) of the Company or any of its Subsidiaries or affiliates, any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
(f) Effective as of, and
contingent upon the occurrence of, the Effective Time, Parent shall, or shall cause the Surviving Corporation, to assume and honor all Company Benefit Plans in accordance with their terms, including terms related to the amendment or termination
thereof. Parent hereby acknowledges that a change in control (or similar phrase) within the meaning of the Company Benefit Plans will occur at the Effective Time.
6.7
Indemnification; Directors and Officers Insurance
.
(a) From and after the Effective Time, each of Parent and the Surviving Corporation shall indemnify
and hold harmless each present and former director, officer or employee of the Company and its Subsidiaries (in each case, when acting in such capacity) (collectively, the
Company Indemnified Parties
)
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against any costs or expenses (including reasonable attorneys fees), judgments, fines, losses, damages or liabilities incurred in connection with any threatened or actual claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative or investigative, whether arising before or after the Effective Time, arising out of the fact that such person is or was a director, officer or employee of the Company or any
of its Subsidiaries and pertaining to matters existing or occurring at or prior to the Effective Time, including the transactions contemplated by this Agreement to the same extent as such persons are indemnified as of the date of this Agreement by
the Company pursuant to the Company Certificate, the Company Bylaws, the governing or organizational documents of any Subsidiary of the Company; and Parent and the Surviving Corporation shall also advance expenses as incurred by such Company
Indemnified Party to the same extent as such persons are entitled to advancement of expenses as of the date of this Agreement by the Company pursuant to the Company Certificate, the Company Bylaws, the governing or organizational documents of any
Subsidiary of the Company;
provided
, that, if required, the Company Indemnified Party to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such Company Indemnified Party is not
entitled to indemnification.
(b) For a period of six (6) years after the Effective Time,
the Surviving Corporation shall cause to be maintained in effect the current policies of directors and officers liability insurance maintained by the Company (
provided
, that the Surviving Corporation may substitute therefor
policies with a substantially comparable insurer of at least the same coverage and amounts containing terms and conditions which are no less advantageous to the insured) with respect to claims arising from facts or events which occurred at or before
the Effective Time;
provided
,
however
, that the Surviving Corporation shall not be obligated to expend, on an annual basis, an amount in excess of 200% of the current annual premium paid as of the date hereof by the Company for such
insurance (the
Premium Cap
), and if such premiums for such insurance would at any time exceed the Premium Cap, then the Surviving Corporation shall cause to be maintained policies of insurance which, in the Surviving
Corporations good faith determination, provide the maximum coverage available at an annual premium equal to the Premium Cap. In lieu of the foregoing, the Company, in consultation with, but only upon the prior written consent of Parent, may
(and at the request of Parent, the Company shall use its reasonable best efforts to) obtain at or prior to the Effective Time a six-year tail policy under the Companys existing directors and officers insurance policy providing
equivalent coverage to that described in the preceding sentence if and to the extent that the same may be obtained for an amount that, in the aggregate, does not exceed 300% of the current annual premium paid as of the date hereof by the Company for
such insurance.
(c) The provisions of this
Section 6.7
shall survive the Effective
Time and are intended to be for the benefit of, and shall be enforceable by, each Company Indemnified Party and his or her heirs and representatives. If the Surviving Corporation or any of its successors or assigns will consolidate with or merge
into any other entity and not be the continuing or surviving entity of such consolidation or merger, transfer all or substantially all of its assets or deposits to any other entity or engage in any similar transaction, then in each case, the
Surviving Corporation will cause proper provision to be made so that the successors and assigns of the Surviving Corporation will expressly assume the obligations set forth in this
Section 6.7
.
6.8
Additional Agreements
. In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this Agreement (including, without limitation, any merger between a Subsidiary of Parent, on the one hand, and a Subsidiary of the Company, on the other hand) or to vest the Surviving
Corporation with full title to all properties, assets, rights, approvals, immunities and franchises of any of the parties to the Integrated Mergers, the proper officers and directors of each party to this Agreement and their respective Subsidiaries
shall take all such necessary action as may be reasonably requested by Parent.
6.9
Advice of Changes
. Parent and the Company shall each promptly (but in no event more than 24 hours) advise the other party of any change or event (i) that has had or is reasonably likely to have a Material Adverse Effect on it or
(ii) which it believes would or would be reasonably likely to cause or constitute a material breach of any of its representations, warranties or covenants contained herein or that reasonably could be expected to give rise, individually or in
the aggregate, to the failure of any condition in
Article VII
;
provided
, that
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any failure to give notice in accordance with the foregoing with respect to any breach shall not be deemed to constitute a violation of this
Section 6.9
or the failure of any
condition set forth in
Sections 7.2
or
7.3
to be satisfied, or otherwise constitute a breach of this Agreement by the party failing to give such notice, in each case unless the underlying breach would independently result in a failure
of the conditions set forth in
Sections 7.2
or
7.3
to be satisfied. The delivery and content of any such notice shall not limit or otherwise affect any right or remedy under this Agreement (including under
Article VII
) of the
party receiving such notice.
6.10
Litigation and Claims
. Each of the Company and Parent shall
promptly notify the other party in writing of any action, arbitration, audit, hearing, investigation, litigation, suit, dispute, proceeding, subpoena or summons issued, commenced, brought, conducted or heard by or before, or otherwise involving, any
Governmental Entity or arbitrator pending or, to the knowledge of either such party, threatened against the Company, Parent or any of their respective Subsidiaries that (a) questions or would reasonably be expected to question the validity of
this Agreement, the Bank Merger Agreement or the transactions contemplated hereby or thereby or any actions taken or to be taken by Parent, the Company or their respective Subsidiaries with respect hereto or thereto, or (b) seeks to enjoin,
restrain or prohibit the transactions contemplated hereby or thereby. The Company shall give Parent the opportunity to participate at Parents own expense in the defense or settlement of any shareholder litigation against the Company and/or its
directors, officers or affiliates relating to the transactions contemplated by this Agreement, and the Company shall not agree to any such settlement without Parents prior written consent.
6.11
Dividends
. After the date of this Agreement, each of Parent and the Company shall coordinate
with the other the declaration of any dividends in respect of Parent Common Stock and Company Common Stock and the record dates and payment dates relating thereto, it being the intention of the parties hereto that holders of Company Common Stock
shall not receive two dividends, or fail to receive one dividend, in any quarter with respect to their shares of Company Common Stock and any shares of Parent Common Stock any such holder receives in exchange therefor in the First-Step Merger.
6.12
Corporate Governance
.
(a) Effective as of the Effective Time, Parent shall, and shall cause Parent Bank to,
(i) increase the size of the Board of Directors of Parent and Parent Bank to thirteen (13) members and (ii) appoint Steven E. Brady and two (2) other current members of the Board of Directors of the Company, to be selected
by the Leadership Committee of Parent in consultation with the Board of Directors of Parent and the Board of Directors of the Company, to the Boards of Directors of Parent and Parent Bank, with one such appointee being appointed to each of the three
classes of the Boards of Directors of Parent and Parent Bank.
(b) Effective as of the Effective
Time, Parent shall create an advisory board (the
Advisory Board
) the purpose of which shall be to advise Parent with respect to the integration of the Companys business, as well as to maintain and develop customer and other
stakeholder relationships in the Companys market area. The Advisory Board shall consist of Steven E. Brady and the four (4) current members of the Board of Directors of the Company who are not selected for appointment to the Board of
Directors of Parent in accordance with
Section 6.12(a)
. The members of the Advisory Board shall be appointed to the Advisory Board for a term ending on the second anniversary of the Effective Time. As consideration for serving as a
member of the Advisory Board and performing the duties required by such membership, each member of the Advisory Board shall be entitled to receive the compensation set forth in
Section 6.12(b)
of the Parent Disclosure Schedule.
6.13
Acquisition Proposals
.
(a) The Company agrees that it will not, and will cause its Subsidiaries and its and their officers,
directors, agents, advisors and representatives (collectively,
Representatives
) not to, directly or indirectly, (i) initiate, solicit, knowingly encourage or knowingly facilitate inquiries or proposals with respect to,
(ii) engage or participate in any negotiations with any person concerning, or (iii) provide any confidential or nonpublic
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information or data to, or have or participate in any discussions with, any person relating to, any Acquisition Proposal, except to notify such person of the existence of the provisions of this
Section 6.13(a)
;
provided
, that, prior to the date of the Company Meeting, in the event the Company receives an unsolicited bona fide written Acquisition Proposal that did not result from a breach of this
Section 6.13(a)
, it may, and may permit its Subsidiaries and its and its Subsidiaries Representatives to, furnish or cause to be furnished nonpublic information or data and participate in such negotiations or discussions to the
extent that its Board of Directors concludes in good faith (after receiving the advice of its outside counsel, and with respect to financial matters, its financial advisors) that (1) such Acquisition Proposal constitutes or is reasonably likely
to lead to a Superior Proposal and (2) failure to take such actions would be reasonably likely to result in a violation of its fiduciary duties under applicable law;
provided
,
further
, that, prior to providing any nonpublic
information or data permitted pursuant to the foregoing proviso, the Company shall have provided such information or data to Parent and shall have entered into a confidentiality agreement with such third party on terms no less favorable to it than
the Confidentiality Agreement, which confidentiality agreement shall not provide such person with any exclusive right to negotiate with the Company. The Company will, and will cause its Representatives to, immediately cease and cause to be
terminated any activities, discussions or negotiations conducted before the date of this Agreement with any person other than Parent with respect to any Acquisition Proposal and will use its reasonable best efforts, subject to applicable law, to
(x) enforce any confidentiality, standstill or similar agreement relating to an Acquisition Proposal and (y) within ten (10) business days after the date hereof, request and confirm the return or destruction of any confidential
information provided to any person (other than Parent) pursuant to such agreement. The Company will promptly (and in any event within twenty-four (24) hours) advise Parent following receipt of any Acquisition Proposal or any inquiry which could
reasonably be expected to lead to an Acquisition Proposal, and the substance thereof (including the terms and conditions of and the identity of the person making such inquiry or Acquisition Proposal, copies of any written Acquisition Proposal), and
will keep Parent apprised of any related developments, discussions and negotiations on a current basis, including any amendments to or revisions of the terms of such inquiry or Acquisition Proposal.
(b) As used in this Agreement,
(i)
Acquisition Proposal
shall mean, other than the transactions contemplated by this Agreement, any offer, proposal or inquiry relating to, or any third party indication of interest in, (i) any acquisition or purchase, direct or indirect, of 25% or more of the
consolidated assets of the Company and its Subsidiaries or 25% or more of any class of equity or voting securities of the Company or its Subsidiaries whose assets, individually or in the aggregate, constitute more than 25% of the consolidated assets
of the Company, (ii) any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in such third party beneficially owning 25% or more of any class of equity or voting securities of the Company or its
Subsidiaries whose assets, individually or in the aggregate, constitute more than 25% of the consolidated assets of the Company, or (iii) a merger, consolidation, share exchange, business combination, reorganization, recapitalization,
liquidation, dissolution or other similar transaction involving the Company or its Subsidiaries whose assets, individually or in the aggregate, constitute more than 25% of the consolidated assets of the Company; and
(ii)
Superior Proposal
shall
mean any bona fide written offer or proposal made by a third party to consummate an Acquisition Proposal that the Companys Board of Directors determines in good faith (after receiving the advice of its outside counsel and, with respect to
financial matters, its financial advisors) (1) would, if consummated, result in the acquisition of all, but not less than all, of the issued and outstanding shares of Company Common Stock or all, or substantially all, of the assets of the
Company; (2) would result in a transaction that (A) involves consideration to the holders of the shares of Company Common Stock that is more favorable, from a financial point of view, than the consideration to be paid to the shareholders
of the Company pursuant to this Agreement, considering, among other things, the nature of the consideration being offered and any material regulatory approvals or other risks associated with the timing of the proposed transaction beyond, or in
addition to, those specifically contemplated hereby, and which proposal is not conditioned upon obtaining financing and (B) is, in light of the other terms of such proposal, more favorable to the shareholders of the Company than the Integrated
Mergers and
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the transactions contemplated by this Agreement; and (3) is reasonably likely to be completed on the terms proposed, in each case, taking into account all legal, financial, regulatory and
other aspects of the Acquisition Proposal.
(c) Nothing contained in this Agreement shall prevent
the Company or its Board of Directors from complying with Rule 14d-9 and Rule 14e-2 under the Exchange Act with respect to an Acquisition Proposal;
provided
, that such Rules will in no way eliminate or modify the effect that any action
pursuant to such Rules would otherwise have under this Agreement.
6.14
Board of Directors and
Committee Meetings
. Following the receipt of the Requisite Regulatory Approvals, the Company shall permit representatives of Parent and Parent Bank to attend any meeting of its Board of Directors or the executive and loan committees thereof as
an observer, subject to the Confidentiality Agreement;
provided
,
that
the Company shall not be required to permit such representatives to remain present during any confidential discussions of this Agreement and the transactions
contemplated hereby or any Acquisition Proposal or during any other matter (a) that the Board of Directors of the Company has reasonably determined to be confidential with respect to the participation of Parent or Parent Bank or (b) that
the Company would not be required to disclose under
Section 6.2
of this Agreement.
6.15
Public Announcements
. The Company and Parent shall each use their reasonable best efforts to develop a joint communications plan, to ensure that all press releases and other public statements with respect to the transactions contemplated
hereby shall be consistent with such joint communications plan, and except in respect of any announcement required by applicable law, or by obligations pursuant to any listing agreement with or rules of any securities exchange, to consult with each
other before issuing any press release or, to the extent practical, otherwise making any public statement with respect to this Agreement or the transactions contemplated hereby.
6.16
Change of Method
. The Company and Parent shall be empowered, upon their mutual agreement, at any
time prior to the Effective Time, to change the method or structure of effecting the combination of the Company and Parent (including the provisions of
Article I
), if and to the extent they both deem such change to be necessary, appropriate
or desirable;
provided
,
however
, that no such change shall (i) alter or change the amount or kind of the Merger Consideration provided for in this Agreement, (ii) adversely affect the Tax treatment of the Companys
shareholders or Parents shareholders pursuant to this Agreement, (iii) adversely affect the Tax treatment of the Company or Parent pursuant to this Agreement or (iv) materially impede or delay the consummation of the transactions
contemplated by this Agreement in a timely manner. The Parties agree to reflect any such change in an appropriate amendment to this Agreement executed by both parties in accordance with
Section 8.3
.
6.17
Restructuring Efforts
. If either the Company or Parent shall have failed to obtain the Requisite
Company Vote or the Requisite Parent Vote at the duly convened Company Meeting or Parent Meeting, as applicable, or any adjournment or postponement thereof, each of the parties shall in good faith use its reasonable best efforts to negotiate a
restructuring of the transaction provided for herein (
it
being
understood
that neither party shall have any obligation to alter or change any material terms, including the amount or kind of the consideration to be issued to
holders of the capital stock of the Company as provided for in this Agreement, in a manner adverse to such party or its shareholders) and/or resubmit this Agreement or the transactions contemplated hereby (or as restructured pursuant to this
Section 6.17
) to its respective shareholders for approval.
6.18
Takeover Statutes
.
None of the Company, Parent or their respective Boards of Directors shall take any action that would cause any Takeover Statute to become applicable to this Agreement, the Integrated Mergers, or any of the other transactions contemplated hereby, and
each shall take all necessary steps to exempt (or ensure the continued exemption of) the Integrated Mergers and the other transactions contemplated hereby from any applicable Takeover Statute now or hereafter in effect. If any Takeover Statute may
become, or may purport to be, applicable to the transactions contemplated hereby, each of Parent and the Company and the
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members of their respective Boards of Directors will grant such approvals and take such actions as are necessary so that the transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated hereby and otherwise act to eliminate or minimize the effects of any Takeover Statute on any of the transactions contemplated by this Agreement, including, if necessary, challenging the validity or
applicability of any such Takeover Statute.
6.19
Exemption from Liability Under
Section 16(b)
. The Company and Parent agree that, in order to most effectively compensate and retain the Company Insiders (as defined below), both prior to and after the Effective Time, it is desirable that the Company Insiders not be
subject to a risk of liability under Section 16(b) of the Exchange Act to the fullest extent permitted by applicable law in connection with the conversion of shares of Company Common Stock and the Company Equity Awards in the First-Step Merger,
and for that compensatory and retentive purpose agree to the provisions of this
Section 6.19
. Assuming the Company delivers to Parent in a reasonably timely fashion prior to the Effective Time accurate information regarding those
officers and directors of the Company subject to the reporting requirements of Section 16(a) of the Exchange Act (the
Company Insiders
), the Board of Directors of Parent and of the Company, or a committee of non-employee
directors thereof (as such term is defined for purposes of Rule 16b-3(d) under the Exchange Act), shall reasonably promptly thereafter, and in any event prior to the Effective Time, take all such steps as may be required to cause (in the case of the
Company) any dispositions of Company Common Stock or the Company Equity Awards by the Company Insiders, and (in the case of Parent) any acquisitions of Parent Common Stock by any Company Insiders who, immediately following the Integrated Mergers,
will be officers or directors of the Surviving Corporation subject to the reporting requirements of Section 16(a) of the Exchange Act, in each case pursuant to the transactions contemplated by this Agreement, to be exempt from liability
pursuant to
Rule 16b-3
under the Exchange Act to the fullest extent permitted by applicable law.
ARTICLE VII
CONDITIONS PRECEDENT
7.1
Conditions to Each Partys Obligation To Effect the Integrated Mergers
. The
respective obligations of the parties to effect the Integrated Mergers shall be subject to the satisfaction at or prior to the Effective Time of the following conditions:
(a)
Shareholder Approval
. The Requisite Parent Vote and the Requisite Company Vote shall have
been obtained.
(b)
NASDAQ Listing
. The shares of Parent Common Stock that shall be
issuable pursuant to this Agreement shall have been authorized for listing on the NASDAQ, subject to official notice of issuance.
(c)
Requisite Regulatory Approvals
. All Requisite Regulatory Approvals 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 Requisite Regulatory Approval shall have resulted in the imposition of any Materially Burdensome Regulatory
Condition.
(d)
S-4
. The S-4 shall have become effective under the Securities Act and no
stop order suspending the effectiveness of the S-4 shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC and not withdrawn.
(e)
No Injunctions or Restraints; Illegality
. No order, injunction or decree issued by any
court or agency of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Integrated Mergers or any of the other transactions contemplated by this Agreement shall be in effect. No statute, rule, regulation,
order, injunction or decree shall have been enacted, entered, promulgated or enforced by any Governmental Entity which prohibits or makes illegal consummation of the Integrated Mergers.
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7.2
Conditions to Obligations of Parent
. The
obligation of Parent to effect the Integrated Mergers is also subject to the satisfaction or waiver by Parent at or prior to the Effective Time, of the following conditions:
(a)
Representations and Warranties
. The representations and warranties of the Company set
forth in
Sections 3.2(a)
,
3.7
,
3.8(a)
and
3.22(b)
(in each case after giving effect to the lead in to
Article III
) shall be true and correct (other than, in the case of
Section 3.2(a)
, such failures to
be true and correct as are de minimis) in each case as of the date of this Agreement and (except to the extent such representations and warranties speak as of an earlier date, in which case such representations and warranties shall be so true and
correct as of such earlier date) as of the Closing Date as though made on and as of the Closing Date, and the representations and warranties of the Company set forth in
Sections 3.1(a)
,
3.1(b)
,
3.2(b)
, and
3.3(a)
(in each
case, after giving effect to the lead in to
Article III
) shall be true and correct in all material respects as of the date of this Agreement and (except to the extent such representations and warranties speak as of an earlier date, in which
case such representations and warranties shall be so true and correct as of such earlier date) as of the Closing Date as though made on and as of the Closing Date. All other representations and warranties of the Company set forth in this Agreement
(read without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties but, in each case, after giving effect to the lead in to
Article III
) shall be true and correct in
all respects as of the date of this Agreement and (except to the extent such representations and warranties speak as of an earlier date, in which case such representations and warranties shall be so true and correct as of such earlier date) as of
the Closing Date as though made on and as of the Closing Date;
provided
,
however
, that for purposes of this sentence, such representations and warranties shall be deemed to be true and correct unless the failure or failures of such
representations and warranties to be so true and correct, either individually or in the aggregate, and without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties, has had
or would reasonably be expected to have a Material Adverse Effect on the Company or the Surviving Corporation. Parent shall have received a certificate, dated as of the Closing Date, signed on behalf of the Company by the Chief Executive Officer and
the Chief Financial Officer of the Company to the foregoing effect.
(b)
Performance of
Obligations of the Company
. The Company shall have performed in all material respects the obligations required to be performed by it under this Agreement at or prior to the Closing Date, and Parent shall have received a certificate, dated as of
the Closing Date, signed on behalf of the Company by the Chief Executive Officer and the Chief Financial Officer of the Company to such effect.
(c)
Tax Opinion
. Parent shall have received the written opinion of Skadden, Arps, Slate,
Meagher & Flom LLP, in form and substance reasonably satisfactory to Parent, dated as of the Closing Date, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, that are
consistent with the state of facts existing in the Effective Time, the Integrated Mergers shall together be treated as an integrated transaction that qualifies as a reorganization within the meaning of Section 368(a) of the Code. In
rendering such opinion, Skadden, Arps, Slate, Meagher & Flom LLP may rely upon the certificates, representations and covenants referred to in
Section 5.4
.
(d)
FIRPTA Certificate
. The Company shall have delivered to Parent a duly executed
certificate, dated as of the Closing Date, in form and substance as prescribed by Treasury regulations promulgated under Section 1445 of the Code, stating that the Company is not, and has not been, during the relevant period specified in
Section 897(c)(1)(A)(ii) of the Code, a United States real property holding corporation within the meaning of Section 897(c) of the Code.
7.3
Conditions to Obligations of the Company
. The obligation of the Company to effect the
Integrated Mergers is also subject to the satisfaction or waiver by the Company at or prior to the Effective Time of the following conditions:
(a)
Representations and Warranties
. The representations and warranties of Parent set forth in
Sections 4.2(a)
,
4.7
and
4.8
(in each case, after giving effect to the lead in to
Article IV
) shall be true and correct
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(other than, in the case of
Section 4.2(a)
, such failures to be true and correct as are de minimis) in each case as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date, in which case such representations and warranties shall be so true and correct as of such earlier date) as of the Closing Date as though made on and as of the Closing Date, and the
representations and warranties of Parent set forth in
Sections 4.1(a)
,
4.1(b)
,
4.2(b)
and
4.3(a)
(in each case, after giving effect to the lead in to
Article IV
) shall be true and correct in all material respects
as of the date of this Agreement and (except to the extent such representations and warranties speak as of an earlier date, in which case such representations and warranties shall be so true and correct as of such earlier date) as of the Closing
Date as though made on and as of the Closing Date. All other representations and warranties of Parent set forth in this Agreement (read without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such
representations or warranties but, in each case, after giving effect to the lead in to
Article IV
) shall be true and correct in all respects as of the date of this Agreement and (except to the extent such representations and warranties
speak as of an earlier date, in which case such representations and warranties shall be so true and correct as of such earlier date) as of the Closing Date as though made on and as of the Closing Date,
provided
,
however
, that for
purposes of this sentence, such representations and warranties shall be deemed to be true and correct unless the failure or failures of such representations and warranties to be so true and correct, either individually or in the aggregate, and
without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties, has had or would reasonably be expected to have a Material Adverse Effect on Parent. The Company shall have
received a certificate, dated as of the Closing Date, signed on behalf of Parent by the Chief Executive Officer and the Chief Financial Officer of Parent to the foregoing effect.
(b)
Performance of Obligations of Parent
. Parent shall have performed in all material respects
the obligations required to be performed by it under this Agreement at or prior to the Closing Date, and the Company shall have received a certificate, dated as of the Closing Date, signed on behalf of Parent by the Chief Executive Officer and the
Chief Financial Officer of Parent to such effect.
(c)
Tax Opinion
. The Company
shall have received the written opinion of Kilpatrick Townsend & Stockton LLP, in form and substance reasonably satisfactory to the Company, dated as of the Closing Date, to the effect that, on the basis of facts, representations and
assumptions set forth or referred to in such opinion, that are consistent with the state of facts existing in the Effective Time, the Integrated Mergers shall together be treated as an integrated transaction that qualifies as a
reorganization within the meaning of Section 368(a) of the Code. In rendering such opinion, Kilpatrick Townsend & Stockton LLP may rely upon the certificates, representations and covenants referred to in
Section 5.4
.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1
Termination
. This Agreement may be terminated at any time prior to the Effective
Time, whether before or after the receipt of the Requisite Company Vote or the Requisite Parent Vote:
(a) by mutual consent of Parent and the Company in a written instrument, if the Board of Directors of
each so determines by a vote of a majority of the members of its entire Board;
(b) by either the
Board of Directors of Parent or the Board of Directors of the Company if any Governmental Entity that must grant a Requisite Regulatory Approval has denied approval of the Integrated Mergers or the other transactions contemplated hereby and such
denial has become final and nonappealable or any Governmental Entity of competent jurisdiction shall have issued a final nonappealable order permanently enjoining or otherwise prohibiting or making illegal the consummation of the transactions
contemplated by this Agreement, unless the failure to obtain a Requisite Regulatory Approval shall be due to the failure of the party seeking to terminate this Agreement to perform or observe the covenants and agreements of such party set forth
herein;
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(c) by either the Board of Directors of Parent or the
Board of Directors of the Company if the Integrated Mergers shall not have been consummated on or before the one (1) year anniversary of the date of this Agreement (the
Termination Date
), unless the failure of the Integrated
Mergers to be so consummated by such date shall be due to the failure of the party seeking to terminate this Agreement to perform or observe the covenants and agreements of such party set forth herein;
(d) by either the Board of Directors of Parent or the Board of Directors of the Company
(
provided
, that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained herein) if there shall have been a breach of any of the covenants or agreements or any of the
representations or warranties (or any such representation or warranty shall cease to be true) set forth in this Agreement on the part of the Company, in the case of a termination by Parent, or Parent, in the case of a termination by the Company,
which breach or failure to be true, either individually or in the aggregate with all other breaches by such party (or failures of such representations or warranties to be true), would constitute, if occurring or continuing on the Closing Date, the
failure of a condition set forth in
Section 7.2
, in the case of a termination by Parent, or
Section 7.3
, in the case of a termination by the Company, and which is not cured within 45 days following written notice to the
Company, in the case of a termination by Parent, or Parent, in the case of a termination by the Company, or by its nature or timing cannot be cured during such period (or such fewer days as remain prior to the Termination Date);
(e) by the Board of Directors of the Company, prior to the time the Requisite Parent Vote is
obtained, if the Board of Directors of Parent shall have (i) failed to recommend in the Joint Proxy Statement that the shareholders of Parent approve the Parent Share Issuance, or withdrawn, modified or qualified such recommendation in a manner
adverse to the Company, or resolved to do so, or failed to reaffirm such recommendation within two (2) business days after the Company requests in writing that such action be taken, or (ii) breached its obligations under
Section 6.3
in any material respect;
(f) by the Board of Directors of Parent, prior
to the time the Requisite Company Vote is obtained, if the Board of Directors of the Company shall have (i) failed to recommend in the Joint Proxy Statement that the shareholders of the Company adopt this Agreement, or withdrawn, modified or
qualified such recommendation in a manner adverse to Parent, or resolved to do so, or failed to reaffirm such recommendation within two (2) business days after Parent requests in writing that such action be taken, or failed to recommend against
acceptance of a tender offer or exchange offer for outstanding Company Common Stock that has been publicly disclosed (other than by Parent or an affiliate of Parent) within ten (10) business days after the commencement of such tender or
exchange offer, in any such case whether or not permitted by the terms hereof, (ii) recommended or endorsed an Acquisition Proposal, or (iii) breached its obligations under
Sections 6.3
or
6.13
in any material respect; or
(g) by the Company, if its Board of Directors so determines within a five (5) day period
commencing on the Determination Date, if both of the following conditions are satisfied, such termination to be effective on the tenth (10th) day following the Determination Date: (i) the Parent Market Value on the Determination Date is
less than $14.46 and (ii) the number obtained by dividing the Parent Market Value on the Determination Date by the Initial Parent Market Value is less than the number obtained by dividing (x) the Final Index Price by (y) the Initial
Index Price minus 0.15. If the Company elects to exercise its termination right pursuant to this
Section 8.1(g)
, it shall promptly (and in any event no later than the last day of the five (5) day period commencing on the
Determination Date) notify Parent in writing of such election. The right of the Company to terminate this Agreement pursuant to this
Section 8.1(g)
is subject to the following two sentences. During the five (5) day period commencing
with Parents receipt of any notice duly delivered by or on behalf of the Company electing to exercise the Companys right to terminate this Agreement under this
Section 8.1(g)
, Parent shall have the option to increase the
Exchange Ratio to equal the lesser of (x) a quotient, the numerator of which is equal to the product of the Initial Parent Market Value, the Exchange Ratio (as then in effect), and the Index Ratio minus 0.15 and the denominator of which is
equal to the Parent Market Value on the Determination Date; or (y) the quotient determined by dividing the Initial Parent Market Value by the Parent Market Value on
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the Determination Date, and multiplying such quotient by the product of the Exchange Ratio (as then in effect) and 0.80. If within such five (5) day period, Parent delivers written notice to
the Company that it intends to proceed with the Integrated Mergers by paying such additional consideration as contemplated by the preceding sentence, and notifies the Company of the revised Exchange Ratio, then no termination by the Company shall be
permitted by, or shall have occurred pursuant to, this
Section 8.1(g)
, and this Agreement shall remain in full force and effect in accordance with its terms (except that the Exchange Ratio shall have been so modified). If Parent declares
or effects a stock dividend, reclassification, recapitalization, split-up, combination, exchange of shares or similar transaction between the date of this Agreement and the Determination Date, the prices for the Parent Common Stock shall be
appropriately adjusted for the purposes of applying this
Section 8.1(g)
. For purposes of this Agreement, the following terms shall have the following meanings:
(i) the
Determination Date
means the first date on which all
Requisite Regulatory Approvals (and waivers, if applicable) necessary for consummation of the Integrated Mergers have been received (disregarding any waiting period);
(ii) the
Final Index Price
means the average of the daily closing
value of the Index, for the ten (10) consecutive trading days immediately preceding the Determination Date;
(iii) the
Index
means the NASDAQ Bank Index or, if such Index is
not available, such substitute or similar Index as substantially replicates the NASDAQ Bank Index;
(iv) the
Index Ratio
means the Final Index Price divided by
the Initial Index Price;
(v) the
Initial Index
Price
means the closing value of the Index on the date of this Agreement;
(vi)
the
Initial Parent Market Value
means $18.08, adjusted as indicated in the penultimate sentence of
Section 8.1(g)
; and
(vii) the
Parent Market Value
means, as of any specified date, the
average of the daily closing sales prices of a share of Parent Common Stock as reported on the NASDAQ for the ten (10) consecutive trading days immediately preceding such specified date.
8.2
Effect of Termination
.
(a) In the event of termination of this Agreement by either Parent or the Company as provided in
Section 8.1
, this Agreement shall forthwith become void and have no effect, and none of Parent, the Company, any of their respective Subsidiaries or any of the officers or directors of any of them shall have any liability of any nature
whatsoever hereunder, or in connection with the transactions contemplated hereby, except that (i)
Section 6.2(b)
and this
Section 8.2
and
Article IX
shall survive any termination of this Agreement, and
(ii) notwithstanding anything to the contrary contained in this Agreement, neither Parent nor the Company shall be relieved or released from any liabilities or damages arising out of its fraud or knowing, intentional and material breach of any
provision of this Agreement.
(b) In the event that after the date of this Agreement and prior to
the termination of this Agreement, (i) a bona fide Acquisition Proposal shall have been made known to senior management or the Board of Directors of the Company or has been made directly to its shareholders generally or any person shall have
publicly announced (and not withdrawn) an Acquisition Proposal with respect to the Company, (ii) (A) thereafter this Agreement is terminated by either Parent or the Company pursuant to
Section 8.1(c)
without the Requisite
Company Vote having been obtained or (B) thereafter this Agreement is terminated by Parent pursuant to
Section 8.1(d)
, and (iii) on or prior to the date that is twelve (12) months after the date of such termination, the
Company enters into a definitive agreement or consummates a transaction with respect to an Acquisition Proposal (whether or not the same Acquisition Proposal as that referred to above), then the Company shall, on the earlier of the date it enters
into such definitive agreement and the date of consummation of such transaction, pay Parent, by wire transfer of same day funds, a fee equal to $5,720,000.00 (the
Termination Fee
).
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(c) In the event that this Agreement is terminated by
Parent pursuant to
Section 8.1(f)
, then the Company shall, on the date of termination, pay Parent, by wire transfer of same day funds, a fee equal to the Termination Fee.
(d) In the event that this Agreement is terminated by the Company pursuant to
Section 8.1(e)
, then Parent shall, on the date of termination, pay the Company, by wire transfer of same day funds, a fee equal to the Termination Fee.
(e) Each of Parent and the Company acknowledges that the agreements contained in this
Section 8.2
are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, the other party would not enter into this Agreement. In the event that the Termination Fee becomes payable and is
paid by the Company or Parent, as applicable, pursuant to this
Section 8.2
, the Termination Fee shall, subject to Section 8.2(a)(ii), constitute liquidated damages and not a penalty and shall be the sole monetary remedy of the party
receiving such payment (with Parent and its Subsidiaries, and the Company and its Subsidiaries, as applicable, being deemed to be one party for such purposes)
it
being
understood
that this sentence shall not limit the ability of
any party hereto to enforce such partys rights under
Section 9.10
prior to the valid termination of this Agreement under
Section 8.1
; accordingly, if Parent or the Company fails promptly to pay the amount due pursuant
to this
Section 8.2
, and, in order to obtain such payment, the other party commences a suit which results in a judgment against the non-paying party for the Termination Fee, such non-paying party shall pay the costs and expenses of the
other party (including attorneys fees and expenses) in connection with such suit. In addition, if Parent or the Company fails to pay the amounts payable pursuant to this
Section 8.2
, then such party shall pay interest on such
overdue amounts at a rate per annum equal to the prime rate (as announced by JPMorgan Chase & Co. or any successor thereto) in effect on the date on which such payment was required to be made for the period commencing as of the
date that such overdue amount was originally required to be paid.
8.3
Amendment
.
Subject to compliance with applicable law, this Agreement may be amended by the parties hereto, by action taken or authorized by their respective Boards of Directors, at any time before or after approval of the matters presented in connection with
the Integrated Mergers by the shareholders of Parent and the shareholders of the Company;
provided
,
however
, that after adoption of this Agreement by the shareholders of the Company or the approval of the Parent Share Issuance by the
shareholders of Parent, there may not be, without further approval of such shareholders, any amendment of this Agreement that requires further approval under applicable law. This Agreement may not be amended except by an instrument in writing signed
on behalf of each of the parties hereto.
8.4
Extension
; Waiver
. At any time
prior to the Effective Time, the parties hereto, by action taken or authorized by their respective Boards of Directors, may, to the extent legally permitted, extend the time for the performance of any of the obligations or other acts of the other
parties hereto, waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto, and waive compliance with any of the agreements or satisfaction of any conditions contained herein;
provided
,
however
, that after adoption of this Agreement by the shareholders of the Company or the approval of the Parent Share Issuance by the shareholders of Parent, there may not be, without further approval of such shareholders,
any extension or waiver of this Agreement or any portion thereof that requires further approval under applicable law. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party, but such extension or waiver or failure to insist on strict compliance with an obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure to comply with an obligation, covenant, agreement or condition.
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ARTICLE IX
GENERAL PROVISIONS
9.1
Nonsurvival of Representations, Warranties and Agreements
. None of the
representations, warranties, covenants and agreements in this Agreement or in any instrument delivered pursuant to this Agreement (other than the Confidentiality Agreement, which shall survive in accordance with its terms) shall survive the
Effective Time, except for
Section 6.7
and for those other covenants and agreements contained herein and therein which by their terms apply in whole or in part after the Effective Time.
9.2
Expenses
. Except as expressly provided herein, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expense;
provided
,
however
, that the costs and expenses of printing and mailing the Joint Proxy Statement shall be borne
proportionately by Parent and the Company based on the number of shareholders of such party and all filing and other fees paid to the SEC in connection with the Integrated Mergers shall be borne equally by Parent and the Company.
9.3
Notices
. All notices and other communications hereunder shall be in writing and shall
be deemed given if delivered personally, telecopied or emailed (with confirmation), mailed by registered or certified mail (return receipt requested) or delivered by an express courier (with confirmation) to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
if to the Company, to:
Ocean Shore Holding Co.
1001 Asbury Avenue
Ocean City, New Jersey 08226
Attention: Steven E. Brady
Facsimile: (609) 399-3614
Email: sbrady@ochome.com
With a copy (which shall not constitute notice) to:
Kilpatrick Townsend & Stockton LLP
607 14th Street, NW, Suite 900
Washington, D.C. 20015
Attention: Aaron M. Kaslow
Facsimile: (202) 204-5600
Email: Akaslow@kilpatricktownsend.com
and
if to Parent, to:
OceanFirst Financial Corp.
975 Hooper Avenue
Toms River, New Jersey 08753
Attention: Christopher D. Maher
Facsimile: (732) 349-5070
Email: cmaher@oceanfirst.com
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With a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: David C. Ingles
Facsimile: (917) 777-2697
Email: David.Ingles@skadden.com
9.4
Interpretation
. The parties have participated jointly in negotiating and drafting
this Agreement. In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any provision of this Agreement. When a reference is made in this Agreement to Articles, Sections, Exhibits or Schedules, such reference shall be to an Article or Section of or Exhibit or Schedule to this
Agreement unless otherwise indicated. The table of contents, defined term index and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation 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. References to
business day
shall mean any day
other than a Saturday, a Sunday or a day on which banks in New York, New York or New Jersey are authorized or obligated by law to close. References to
the date hereof
shall mean the date of this Agreement. As used in this
Agreement, the
knowledge of the Company
means the actual knowledge (after due inquiry) of any of the officers of the Company, and the
knowledge of Parent
means the actual knowledge (after due inquiry) of any of
the officers of Parent. As used herein, (i) the term
person
means any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association,
organization, Governmental Entity or other entity of any kind or nature, (ii) an
affiliate
of a specified person is any person that directly or indirectly controls, is controlled by, or is under common control with, such
specified person, (iii) unless the context otherwise requires, the term
party
means a party to this agreement irrespective of whether such term is followed by the word hereto or the words to this
Agreement and (iv) the term
made available
means any document or other information that was (a) provided in writing by one party or its representatives to the other party and its representatives prior to the date
hereof, (b) included in the virtual data room of a party prior to the date hereof or (c) filed by a party with the SEC and publicly available on EDGAR prior to the date hereof. The Company Disclosure Schedule and the Parent Disclosure
Schedule, as well as all other schedules and all exhibits hereto, shall be deemed part of this Agreement and included in any reference to this Agreement.
9.5
Counterparts
. This Agreement may be executed (including in any manner permitted by
Section 9.12
of this Agreement) in counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other parties, it
being understood that all parties need not sign the same counterpart.
9.6
Entire
Agreement
. This Agreement (including the documents and the instruments referred to herein) together with the Confidentiality Agreement constitute the entire agreement among the parties and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof.
9.7
Governing Law; Jurisdiction
.
(a) This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware, without regard to any applicable conflicts of law (except that the matters relating to the fiduciary duties of the Board of Directors of the Company shall be subject to the laws of the State of New
Jersey).
(b) Each party agrees that it will bring any action or proceeding in respect of any
claim arising out of or related to this Agreement or the transactions contemplated hereby exclusively in any federal or state
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court sitting in the State of Delaware (the
Chosen Courts
), and, solely in connection with claims arising under this Agreement or the transactions that are the subject of this
Agreement, (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in any such action or proceeding in the Chosen Courts, (iii) waives any objection that the Chosen Courts
are an inconvenient forum or do not have jurisdiction over any party and (iv) agrees that service of process upon such party in any such action or proceeding will be effective if notice is given in accordance with
Section 9.3
.
9.8
Waiver of Jury Trial
. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW AT THE TIME OF INSTITUTION OF THE
APPLICABLE LITIGATION, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 9.8
.
9.9
Assignment; Third Party Beneficiaries
. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other party. Any purported assignment in
contravention hereof shall be null and void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns. Except as otherwise
specifically provided in
Section 6.7
, this Agreement (including the documents and instruments referred to herein) is not intended to, and does not, confer upon any person other than the parties hereto any rights or remedies hereunder,
including the right to rely upon the representations and warranties set forth herein. The representations and warranties in this Agreement are the product of negotiations among the parties hereto and are for the sole benefit of the parties. Any
inaccuracies in such representations and warranties are subject to waiver by the parties hereto in accordance herewith without notice or liability to any other person. In some instances, the representations and warranties in this Agreement may
represent an allocation among the parties hereto of risks associated with particular matters regardless of the knowledge of any of the parties hereto. Consequently, persons other than the parties may not rely upon the representations and warranties
in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.
9.10
Specific Performance
. The parties hereto agree that irreparable damage would occur if any
provision of this Agreement were not performed in accordance with the terms hereof and, accordingly, that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the
performance of the terms and provisions hereof (including the parties obligation to consummate the Integrated Mergers), in addition to any other remedy to which they are entitled at law or in equity. Each of the parties hereby further waives
(a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any law to post security or a bond as a prerequisite to obtaining equitable relief.
9.11
Severability
. Whenever possible, each provision or portion of any provision of this Agreement
shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule
in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other
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provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction such that the invalid, illegal or unenforceable
provision or portion thereof shall be interpreted to be only so broad as is enforceable.
9.12
Delivery by Facsimile or Electronic Transmission
. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments or waivers hereto or thereto, to the extent signed and delivered by
means of a facsimile machine or by e-mail delivery of a .pdf format data file, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were
the original signed version thereof delivered in person. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or e-mail delivery of a .pdf format data file to deliver a signature to this
Agreement or any amendment hereto or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or e-mail delivery of a .pdf format data file as a defense to the
formation of a contract and each party hereto forever waives any such defense.
[
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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement
to be executed by their respective officers thereunto duly authorized as of the date first above written.
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OCEANFIRST FINANCIAL CORP.
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By:
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/s/ Christopher Maher
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Name: Christopher Maher
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Title: President & CEO
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MASTERS MERGER SUB CORP.
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By:
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/s/ Christopher Maher
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Name: Christopher Maher
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Title: President & CEO
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OCEAN SHORE HOLDING CO.
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By:
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/s/ Steven E. Brady
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Name: Steven E. Brady
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Title: President & CEO
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[
Signature Page to
Agreement and Plan of Merger
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Annex B
EXECUTION VERSION
VOTING AGREEMENT
This VOTING AGREEMENT, dated as of July 12, 2016 (this
Agreement
), is by and between OceanFirst
Financial Corp., a Delaware corporation (
Parent
), and the undersigned shareholder (the
Shareholder
) of Ocean Shore Holding Co., a New Jersey corporation (the
Company
). Capitalized terms used
herein and not defined shall have the meanings specified in the Merger Agreement (as defined below).
WHEREAS,
concurrently with the execution of this Agreement, the Company, Parent and Masters Merger Sub Corp., a New Jersey corporation (
Merger Sub
), are entering into an Agreement and Plan of Merger (the
Merger
Agreement
) pursuant to which, among other transactions, (i) Merger Sub will merge with and into the Company on the terms and conditions set forth therein, with the Company surviving such merger (the
First-Step
Merger
) and (ii) immediately thereafter, the Company will merge with and into Parent, with Parent being the surviving corporation (collectively with the First-Step Merger, the
Integrated Mergers
) and, in connection
therewith, the shares of common stock, par value $0.01 per share, of the Company (
Company Common Stock
) issued and outstanding immediately prior to the Effective Time will, without any further action on the part of the holder
thereof, be automatically converted into the right to receive the Merger Consideration as set forth in the Merger Agreement, subject to the terms and conditions set forth therein;
WHEREAS, as of the date hereof, the Shareholder is the record and beneficial owner of, has the sole right to dispose of and,
subject to Article III, Section 3.04 of the Company Certificate, has the sole right to vote, the number of shares of Company Common Stock set forth below the Shareholders signature on the signature page hereto (such Company Common Stock,
together with any other capital stock of the Company acquired by the Shareholder after the execution of this Agreement, whether acquired directly or indirectly, upon the exercise of options, conversion of convertible securities or otherwise, and any
other securities issued by the Company that are entitled to vote on the approval the Merger Agreement held or acquired by the Shareholder (whether acquired heretofore or hereafter), being collectively referred to herein as the
Shares
);
WHEREAS, obtaining the Requisite Company Vote is a condition to the consummation of the
transactions contemplated by the Merger Agreement; and
WHEREAS, as an inducement to Parent to enter into the Merger
Agreement and incur the obligations set forth therein, Parent has required that the Shareholder enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
Section 1.
Agreement to Vote; Restrictions on Voting and Dispositions
.
(a)
Agreement to Vote Company Common Stock
. The Shareholder hereby irrevocably and
unconditionally agrees that from the date hereof until the Expiration Time (as defined below), at any meeting (whether annual or special and each adjourned or postponed meeting) of the Companys shareholders, however called, the Shareholder
will (x) appear at such meeting or, subject to Article III, Section 3.04 of the Company Certificate, otherwise cause all of the Shareholders Shares to be counted as present thereat for purposes of establishing a quorum and
(y) subject to Article III, Section 3.04 of the Company Certificate, vote or cause to be voted all of such Shares, (1) in favor of the approval of the Merger Agreement, the First-Step Merger and the other transactions contemplated by
the Merger Agreement, (2) against any Acquisition Proposal, without regard to any recommendation to the shareholders of the Company by the Board of Directors of the Company
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concerning such Acquisition Proposal, and without regard to the terms of such Acquisition Proposal, or other proposal made in opposition to or that is otherwise in competition or inconsistent
with the transactions contemplated by the Merger Agreement, (3) against any agreement, amendment of any agreement (including the Company Certificate and the Company Bylaws), or any other action that is intended or would reasonably be expected
to prevent, impede, or interfere with, delay, postpone, or discourage the transactions contemplated by the Merger Agreement and (4) against any action, agreement, transaction or proposal that would reasonably be expected to result in a breach
of any representation, warranty, covenant, agreement or other obligation of the Company in the Merger Agreement.
(b)
Restrictions on Transfers
. The Shareholder hereby agrees that,
from the date hereof until the earlier of the receipt of the Requisite Company Vote or the Expiration Time, the Shareholder shall not, and shall not enter into any agreement, arrangement or understanding to, directly or indirectly, sell, offer to
sell, give, pledge, grant a security interest in, encumber, assign, grant any option for the sale of or otherwise transfer or dispose of (each, a
Transfer
) any Shares (i) other than in connection with bona fide estate
planning purposes to his or her affiliates or immediate family members;
provided
that as a condition to such Transfer, such affiliate or immediate family member, as applicable, shall be required to execute an agreement that is identical in
form and substance to this Agreement;
provided
,
further
, that the Shareholder shall remain jointly and severally liable for the breaches by any of his or her affiliates or immediate family members of the terms of such identical
agreement, (ii) except in connection with (A) the exercise of outstanding stock options in order to pay the exercise price of such stock options or satisfy any withholding taxes triggered by such exercise or (B) the withholding or
sale of the minimum number of shares necessary to satisfy withholding taxes triggered by the vesting of outstanding restricted stock awards; or (iii) by will or operation of law, in which case this Agreement shall bind the transferee. Any
Transfer in violation of this Section 1(b) shall be null and void. The Shareholder further agrees to authorize and request the Company to notify the Companys transfer agent that there is a stop transfer order with respect to all of the
Shares owned by the Shareholder.
(c)
Transfer of Voting Rights
.
The Shareholder hereby agrees that the Shareholder shall not deposit any Shares in a voting trust, grant any proxy or power of attorney or enter into any voting agreement or similar agreement, arrangement or understanding in contravention of the
obligations of the Shareholder under this Agreement with respect to any of the Shares.
(d)
Acquired Shares
. Any Shares or other voting securities of the
Company with respect to which beneficial ownership is acquired by the Shareholder or any of his or her affiliates, including, without limitation, by purchase, as a result of a stock dividend, stock split, recapitalization, combination,
reclassification, exchange or change of such Shares or upon exercise or conversion of any securities of the Company, if any, after the date hereof shall automatically become subject to the terms of this Agreement.
(e)
No Inconsistent Agreements
. The Shareholder hereby agrees that he or she
shall not enter into any agreement, arrangement or understanding with any person prior to the termination of this Agreement, directly or indirectly, to vote, grant a proxy or power of attorney or give instructions with respect to the voting of the
Shareholders Shares in any manner which is inconsistent with this Agreement.
Section 2.
Representations, Warranties and Covenants of the
Shareholder
.
(a)
Representations and Warranties
. The
Shareholder represents and warrants to Parent as follows:
(i)
Capacity; Consents
. The Shareholder is an individual and has all requisite capacity, power and authority to enter into and perform his or her obligations under this Agreement. No filing with, and no permit, authorization, consent or approval
of, a Governmental Entity is necessary on the part of the Shareholder for the execution, delivery and performance of this Agreement by the Shareholder or the consummation by the Shareholder of the transactions contemplated hereby.
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(ii)
Due Execution
.
This Agreement has been duly executed and delivered by the Shareholder.
(iii)
Binding Agreement
. Assuming the due authorization,
execution and delivery of this Agreement by Parent, this Agreement constitutes the valid and binding agreement of the Shareholder, enforceable against the Shareholder in accordance with its terms (except in all cases as such enforceability may be
limited by the Enforceability Exceptions.
(iv)
Non-Contravention
. The execution and delivery of this
Agreement by the Shareholder does not, and the performance by the Shareholder of his or her obligations hereunder and the consummation by the Shareholder of the transactions contemplated hereby will not, violate or conflict with, or constitute a
default under, any agreement, instrument, contract or other obligation or any order, arbitration award, judgment or decree to which the Shareholder is a party or by which the Shareholder or his or her property or assets is bound, or any statute,
rule or regulation to which the Shareholder or his or her property or assets is subject. Except as contemplated by this Agreement, neither the Shareholder nor any of his or her affiliates (1) has entered into any voting agreement or voting
trust with respect to any Shares or entered into any other contract relating to the voting, transfer or disposition of the Shares or (2) has appointed or granted a proxy or power of attorney with respect to any Shares.
(v)
Ownership of Shares
. Except for restrictions in favor of
Parent pursuant to this Agreement or voting restrictions contained in Article III, Section 3.04 of the Company Certificate, the Shareholder owns, beneficially and of record, all of the Shareholders Shares free and clear of any proxy or
voting restriction, and has sole voting power and sole power of disposition with respect to such Shares with no restrictions on the Shareholders rights of voting or disposition pertaining thereto, and no person other than the Shareholder has
any right to direct or approve the voting or disposition of any of the Shareholders Shares. As of the date hereof, the number of the Shareholders Shares is set forth below the Shareholders signature on the signature page hereto.
(vi)
Legal Actions
. There is no action, suit, investigation,
complaint or other proceeding pending against the Shareholder or, to the knowledge of the Shareholder, any other person or, to the knowledge of the Shareholder, threatened against the Shareholder or any other person that restricts or prohibits (or,
if successful, would restrict or prohibit) the exercise by Parent of its rights under this Agreement or the performance by any party of its obligations under this Agreement.
(b)
Covenants
. From the date hereof until the Expiration Time:
(i) The Shareholder agrees not to take any action that would make any
representation or warranty of the Shareholder contained herein untrue or incorrect or have the effect of preventing, impeding, delaying, interfering with or adversely affecting the performance by the Shareholder of his or her obligations under this
Agreement.
(ii) The Shareholder hereby agrees to promptly notify
Parent of the number of shares of Company Common Stock acquired by the Shareholder, if any, after the date hereof. Any such shares shall be subject to the terms of this Agreement as though owned by the Shareholder on the date hereof and shall be
deemed Shares for all purposes hereof.
(iii) The Shareholder
hereby authorizes Parent and the Company to publish and disclose in any announcement or disclosure required by applicable law and any proxy statement or prospectus filed in connection with the transactions contemplated by the Merger Agreement the
Shareholders identity and ownership of the Shares and the nature of the Shareholders obligation under this Agreement.
Section 3.
Further Assurances
. From time to time, at the request of Parent and
without further consideration, the Shareholder shall execute and deliver such additional documents and take all such further action as may be necessary to consummate and make effective the transactions contemplated by this Agreement.
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Section 4.
Termination
.
Other than this Section 4 and Section 5, which shall survive any termination of this Agreement, this Agreement will terminate upon the earlier of (a) the Effective Time and (b) the date of termination of the Merger Agreement in
accordance with its terms (the
Expiration Time
);
provided
that no such termination shall relieve any party hereto from any liability for any breach of this Agreement occurring prior to such termination.
Section 5.
Miscellaneous
.
(a)
Expenses
. All expenses incurred in connection with this
Agreement and the transactions contemplated by this Agreement shall be paid by the party incurring such expenses.
(b)
Notices
. Any notice required to be given hereunder shall be sufficient if in
writing, and sent by email or facsimile transmission (
provided
that any notice received by facsimile transmission or otherwise at the addressees location on any business day after 5:00 p.m. (addressees local time) shall be deemed
to have been received at 9:00 a.m. (addressees local time) on the next business day), by reliable overnight delivery service (with proof of service), hand delivery or certified or registered mail (return receipt requested and first-class
postage prepaid), addressed as follows:
(i) If to Parent,
to:
OceanFirst Financial Corp.
975 Hooper Avenue
Toms River, New Jersey 08753
Attention: Christopher D. Maher
Facsimile: (732) 349-5070
Email: cmaher@oceanfirst.com
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: David C. Ingles
Facsimile: (917) 777-2697
Email: David.Ingles@skadden.com
(ii) If to the Shareholder, to the address of the Shareholder set
forth below the Shareholders signature on the signature pages hereto.
(c)
Amendments, Waivers, Etc.
This Agreement may not be amended, changed, supplemented, waived or otherwise modified or terminated except by an instrument in writing signed by each of the parties hereto.
(d)
Successors and Assigns
. No party hereto may assign any of its rights or
delegate any of its obligations under this Agreement without the prior written consent of the other party hereto, except Parent may, without the consent of the Shareholder, assign any of Parents rights and delegate any of Parents
obligations under this Agreement to any affiliate of Parent. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the parties and their respective successors and assigns,
including without limitation any corporate successor by merger or otherwise. Notwithstanding any Transfer of shares of Company Common Stock consistent with this Agreement, the transferor shall remain liable for the performance of all obligations of
transferor under this Agreement.
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(e)
Third Party Beneficiaries
.
Nothing expressed or referred to in this Agreement will be construed to give any person, other than the parties to this Agreement and their respective successors and permitted assigns, any legal or equitable right, remedy or claim under or with
respect to this Agreement or any provision of this Agreement.
(f)
No Partnership,
Agency, or Joint Venture
. This Agreement is intended to create, and creates, a contractual relationship and is not intended to create, and does not create, any agency, partnership, group (as such term is used in Section 13(d) of
the Exchange Act), joint venture or any like relationship between the parties hereto.
(g)
Entire Agreement
. This Agreement embodies the entire agreement and
understanding among the parties hereto relating to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter.
(h)
Severability
. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule or law, or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.
(i)
Specific Performance; Remedies Cumulative
. The parties hereto acknowledge that
money damages are not an adequate remedy for breaches of this Agreement, that any breach of this Agreement would cause irreparable harm to the non-breaching party and that any party, in addition to any other rights and remedies which the parties may
have hereunder or at law or in equity, may, in its sole discretion, apply to a court of competent jurisdiction for specific performance or injunction or such other relief as such court may deem just and proper in order to enforce this Agreement or
prevent any violation hereof and, to the extent permitted by applicable law, each party waives any objection to the imposition of such relief. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at
law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any such right, power or remedy by any party shall not preclude the simultaneous or later exercise of any other such rights, powers or
remedies by such party.
(j)
No Waiver
. The failure of any party hereto to
exercise any right, power or remedy provided under this Agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such party of its right to exercise any such or other right, power or remedy or to demand such compliance.
(k)
Governing Law
. This Agreement and all disputes or controversies arising out of
or relating to this Agreement or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to any applicable conflicts of law principles.
(l)
Submission to Jurisdiction
. The parties hereto agree that any suit, action or
proceeding brought by either party to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in any federal or state court located in the State
of Delaware. Each of the parties hereto submits to the jurisdiction of any such court in any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of, or in connection with, this Agreement or the
transactions contemplated hereby, and hereby irrevocably waives the benefit of jurisdiction derived from present or future domicile or otherwise in such action or proceeding. Each party hereto irrevocably waives, to the fullest extent permitted by
law, any objection that it may now or hereafter have to the laying of the
B-5
venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
(m)
Waiver of Jury Trial
. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT
MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION, DIRECTLY OR INDIRECTLY, ARISING OUT OF, OR RELATING TO, THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER AND
(C) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
(n)
Drafting and Representation
. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement. No provision of this Agreement will be interpreted for or against any party because that party or its legal representative drafted the provision.
(o)
Name, Captions, Gender
. Section headings of this Agreement are for reference
purposes only and are to be given no effect in the construction or interpretation of this Agreement. Whenever the context may require, any pronoun used herein shall include the corresponding masculine, feminine or neuter forms.
(p)
Counterparts
. This Agreement may be executed by facsimile or other electronic
means and in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies each signed by less than all, but together signed
by all, the parties hereto.
[
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]
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the date and year first written above.
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OCEANFIRST FINANCIAL CORP.
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By:
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Name:
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Title:
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[
Signature Page to
Voting Agreement
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the date and year first written above.
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[SHAREHOLDER]
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By:
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Name:
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Title:
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Number of shares of Company Common
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Stock:
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Address:
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[
Signature Page to
Voting Agreement
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Annex C
July 12, 2016
Board of Directors
Ocean Shore Holding Co.
1001 Asbury Avenue
Ocean City, NJ 08226
Ladies and Gentlemen:
Ocean Shore Holding Co. (Company), OceanFirst Financial Corp. (Parent) and Masters Merger Sub Corp., a
wholly-owned subsidiary of Parent (Merger Sub), have entered into an Agreement and Plan of Merger (the Agreement) pursuant to which (i) Merger Sub will, subject to the terms and conditions set forth in the Agreement,
merge with and into Company with Company being the surviving corporation, and (ii) immediately thereafter, Company will merge with and into Parent with Parent being the surviving corporation (collectively, the Merger). Pursuant to
the terms of the Agreement, at the Effective Time of the Merger, each share of Company common stock, par value $0.01 per share, issued and outstanding immediately prior to the effective time of the Merger (Company Common Stock),
except for certain shares specified in the Agreement, shall be converted into the right to receive, without interest, (a) $4.35 in cash and (b) 0.9667 shares of Parent common stock, par value $0.01 per share (collectively, the
Merger Consideration). Capitalized terms used herein without definition shall have the meanings assigned to them in the Agreement. The other terms and conditions of the Merger are more fully set forth in the Agreement. You have requested
our opinion as to the fairness, from a financial point of view, of the Merger Consideration to the holders of Company Common Stock.
Sandler ONeill & Partners, L.P. (Sandler ONeill, we or our), as part
of its investment banking business, is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions. In connection with this opinion, we have reviewed
and considered, among other things: (i) the Agreement; (ii) certain publicly available financial statements and other historical financial information of Company that we deemed relevant; (iii) certain publicly available financial
statements and other historical financial information of Parent that we deemed relevant; (iv) the Companys budget for the year ending December 31, 2016 and publicly available consensus mean analyst earnings per share estimates
for Company for the years ending December 31, 2016 and December 31, 2017, as well as an estimated internal projected earnings growth rate for the years thereafter, as discussed with the senior management of Company; (v) publicly
available consensus mean analyst earnings per share estimates for Parent for the years ending December 31, 2016 and December 31, 2017 as well as an estimated internal projected earnings growth rate for the years thereafter, as
discussed with and confirmed by the senior management of Parent; (vi) the pro forma financial impact of the Merger on Parent based on certain assumptions relating to transaction expenses, purchase accounting adjustments, cost savings and a core
deposit intangible asset, as well as financial projections for Company for the years ending December 31, 2017 through December 31, 2020, as provided by and discussed with the senior management of Parent; (vii) the publicly reported
historical price and trading activity for Company and Parent common stock, including a comparison of certain stock market information for Company and Parent common stock and certain stock indices as well as publicly available information for certain
other similar companies, the securities of which are publicly traded; (viii) a comparison of certain financial information for Company and Parent with similar banks and thrifts for which information is publicly available; (ix) the
financial terms of certain recent mergers and business combinations in the bank and thrift industry (on a regional and national basis), to the extent publicly available; (x) the current market environment generally and
the banking environment in particular; and (xi) such other information, financial studies, analyses and investigations and financial, economic and market criteria as we considered relevant.
We also discussed with certain members of the senior management of Company the business, financial condition, results of operations and prospects of Company and held similar discussions with certain members of the senior management of Parent
regarding the business, financial condition, results of operations and prospects of Parent.
In performing our review, we
have relied upon the accuracy and completeness of all of the financial and other information that was available to and reviewed by us from public sources, that was provided to us by Company or Parent, or their respective representatives, or that was
otherwise reviewed by us and we have assumed such accuracy and completeness for purposes of rendering this opinion without any independent verification or investigation. We have further relied on the assurances of the respective managements of
Company and Parent that they are not aware of any facts or circumstances that would make any of such information inaccurate or misleading. We have not been asked to and have not undertaken an independent verification of any of such information and
we do not assume any responsibility or liability for the accuracy or completeness thereof. We did not make an independent evaluation or perform an appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or
otherwise) of Company or Parent, or any of their respective subsidiaries, nor have we been furnished with any such evaluations or appraisals. We render no opinion or evaluation on the collectability of any assets or the future performance of any
loans of Company or Parent. We did not make an independent evaluation of the adequacy of the allowance for loan losses of Company or Parent, or the combined entity after the Merger, and we have not reviewed any individual credit files relating to
Company or Parent. We have assumed, with your consent, that the respective allowances for loan losses for both Company and Parent are adequate to cover such losses and will be adequate on a pro forma basis for the combined entity.
In preparing its analyses, Sandler ONeill used publicly available consensus mean analyst earnings per share
estimates for Company for the years ending December 31, 2016 and December 31, 2017 as well as an estimated internal projected earnings growth rate for the years thereafter, as discussed with the senior management of Company, as well as
publicly available consensus mean analyst earnings per share estimates for Parent for the years ending December 31, 2016 and December 31, 2017 as well as an estimated internal projected earnings growth rate for the years thereafter,
as discussed with and confirmed by the senior management of Parent. Sandler ONeill also received and used in its pro forma analyses certain assumptions relating to transaction expenses, purchase accounting adjustments, cost savings and a core
deposit intangible asset, as well as financial projections for Company for the years ending December 31, 2017 through December 31, 2020, as provided by and discussed with the senior management of Parent. With respect to the foregoing
information, the respective managements of Company and Parent confirmed to us that such information reflected (or, in the case of the publicly available mean analyst earnings per share estimates referred to above, were consistent with) the best
currently available projections, estimates and judgments of those respective senior managements of the future financial performance of Company and Parent and we assumed that such performance would be achieved. We express no opinion as to such
projections, estimates or judgments, or the assumptions on which they are based. We have also assumed that there has been no material change in Companys or Parents assets, financial condition, results of operations, business or prospects
since the date of the most recent financial statements made available to us. We have assumed in all respects material to our analysis that Company and Parent will remain as going concerns for all periods relevant to our analyses.
In arriving at our opinion, we have assumed, with your consent, that (i) each of the parties to the Agreement will comply
in all material respects with all material terms and conditions of the Agreement and all related agreements, that all of the representations and warranties contained in such agreements are true and correct in all material respects, that each of the
parties to such agreements will perform in all material respects all of the covenants and other obligations required to be performed by such party under such agreements and that the conditions precedent in such agreements are not and will not be
waived, (ii) in the course of obtaining the necessary regulatory or third party approvals, consents and releases with respect to the Merger, no delay, limitation, restriction or condition will be imposed that would have an adverse effect on
Company, Parent or the
Page C-2
Merger or any related transaction, (iii) the Merger and any related transactions will be consummated in accordance with the terms of the Agreement without any waiver, modification or
amendment of any material term, condition or agreement thereof and in compliance with all applicable laws and other requirements, (iv) the Merger will be consummated without Companys rights under Section 8.1(g) of the Agreement
having been triggered, and (v) the Merger will qualify as a tax-free reorganization for federal income tax purposes. Finally, with your consent, we have relied upon the advice that Company has received from its legal, accounting and tax
advisors as to all legal, accounting and tax matters relating to the Merger and the other transactions contemplated by the Agreement.
Our analyses and opinion are necessarily based on financial, economic, market and other conditions as in effect on, and the
information made available to us as of, the date hereof. Events occurring after the date hereof could materially affect this opinion. We have not undertaken to update, revise, reaffirm or withdraw this opinion or otherwise comment upon events
occurring after the date hereof. We express no opinion as to the trading values of Company Common Stock or Parent common stock at any time or what the value of Parent common stock will be once it is actually received by the holders of Company Common
Stock.
We have acted as Companys financial advisor in connection with the Merger and will receive a fee for our
services, which fee is contingent upon consummation of the Merger. We will also receive a fee for rendering this opinion. The Company has also agreed to indemnify us against certain claims and liabilities arising out of our engagement and to
reimburse us for certain of our out-of-pocket expenses incurred in connection with our engagement. As we have previously advised you, in the two years preceding the date of this opinion, (i) we have provided certain investment banking services
to Parent and received fees for such services, and (ii) Sandler ONeill Mortgage Finance L.P., an affiliate of Sandler ONeill, has acted as introducing broker to Parent and has received fees for such services, and we and our
affiliates may provide to Parent, and receive compensation for, such services in the future, including during the pendency of the Merger. In the ordinary course of our business as a broker-dealer, we may purchase securities from and sell securities
to Company, Parent and their respective affiliates. We may also actively trade the equity and debt securities of Company and Parent or their respective affiliates for our own account and for the accounts of our customers.
This letter is directed to the Board of Directors of Company in connection with its consideration of the Agreement and Merger
and does not constitute a recommendation to any shareholder of Company as to how any such shareholder should vote at any meeting of shareholders called to consider and vote upon the Merger. Our opinion is directed only to the fairness, from a
financial point of view, of the Merger Consideration to the holders of Company Common Stock and does not address the underlying business decision of Company to engage in the Merger, the form or structure of the Merger and/or other transactions
contemplated in the Agreement, the relative merits of the Merger as compared to any other alternative transactions or business strategies that might exist for Company, or the effect of any other transaction in which Company might engage. We also do
not express any opinion as to the amount or nature of the compensation to be received in or as a result of the Merger, and/or other transactions contemplated by the Agreement, if any, by any Company or Parent officer, director or employee, or any
class of such persons, if any, relative to the amount of compensation to be received by any other shareholder. This opinion has been approved by Sandler ONeills fairness opinion committee. This opinion shall not be reproduced without
Sandler ONeills prior written consent;
provided
,
however,
Sandler ONeill will provide its consent for the opinion to be included in regulatory filings to be completed in connection with the Merger.
Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Merger Consideration is fair to
the holders of Company Common Stock from a financial point of view.
Very truly yours,
/s/ Sandler ONeill & Partners, L.P.
Page C-3
Annex D
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265 Franklin Street, Suite 710 Boston, MA 02110
Tel: 617 654-0700 | Fax: 617 654-0710
Piper Jaffray & Co Since 1895 Member SIPC and NYSE
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July 12, 2016
Board of Directors
OceanFirst
Financial Corp.
975 Hooper Avenue
Toms River, NJ 08753
Members of
the Board:
You have requested our opinion as to the fairness, from a financial point of view, to OceanFirst Financial
Corp. (the Company) of the Merger Consideration (as defined below) to be paid by the Company for the outstanding shares of common stock of Ocean Shore Holding Co. (the Target), par value $0.01, (the Target
Common Stock) pursuant to an Agreement and Plan of Merger (the Agreement) to be entered into by and among the Company, Masters Merger Sub Corp., a wholly-owned subsidiary of the Company (Merger Sub), and the Target. The
Agreement provides for, among other things, (i) the merger of Merger Sub with and into the Target, with the Target surviving (the First-Step Merger) and (ii) immediately thereafter, the merger (collectively with
the First-Step Merger, the Merger) of the Target with and into the Company, with the Company surviving. Upon the effective time of the Merger, each share of the Target Common Stock, issued and outstanding immediately prior
to the effective time of the Merger, except for certain shares of Target Common Stock as specified in the Agreement, shall be converted into the right to receive (a) $4.35 in cash (the Cash Consideration), and (b) 0.9667 shares of
Company common stock, $0.01 par value per share (the Stock Consideration and together with the Cash Consideration, the Merger Consideration). Cash will be paid in lieu of any fractional shares. The terms and
conditions of the Merger arc more fully set forth in the Agreement. Capitalized terms not otherwise defined in this letter have the meanings set forth in the Agreement.
Piper Jaffray & Co., as part of its investment banking business, is regularly engaged in the valuation of financial institutions
and their securities in connection with mergers and acquisitions and other corporate transactions. In arriving at our opinion, we have: (i) reviewed and analyzed the financial terms of a draft of the Agreement dated July 11, 2016;
(ii) reviewed and analyzed certain financial and other data with respect to the Company and the Target that was publicly available or made available to us by the Company and by the Target; (iii) reviewed and analyzed certain forward-looking
information relating to the Company and the Target that was publicly available, as well as that was furnished to us by the Company and the Target, including forecasts prepared or reviewed by the Company of the Companys and Targets
expected operating results on a stand-alone basis; (iv) reviewed and analyzed materials detailing the Merger prepared by the Company, the Target and their affiliates and by their respective legal and accounting
advisors, including the estimated amount and timing of the cost savings and related expenses and purchase accounting adjustments expected to result from the Merger (the Synergies); (v)
conducted discussions with members of senior management and representatives of the Company and the Target concerning the matters described in clauses (i), (ii), (iii) and (iv) above, as well as their respective businesses and prospects
before and after giving effect to the Merger and the Synergies; (vi) reviewed the current and historical reported prices and trading activity of Company common stock and Target Common Stock and similar information for
certain other publicly traded companies deemed by us to be comparable to the Company and the Target; (vii) compared the financial performance of the Company and the Target with that of certain other publicly traded companies that
we deemed relevant; (viii) performed certain financial analyses for the Company and the Target on a pro forma combined basis giving effect to the Merger reflecting certain assumptions relating to the Synergies; (ix) analyzed the
Merger Consideration relative to the Targets tangible book value, core deposits (deposits less all jumbo time deposits), last twelve months earnings as of March 31, 2016, projected earnings for the year ending 2016 and 2017 and projected
earnings for the year ending 2017 assuming the cost savings to be achieved have been fully phased in
Confidential
OceanFirst Financial Corp.
July 12, 2016
Page 2 of 4
as you project; (x) considered the current market environment generally and the depository banking environment in particular; and
(xi) reviewed the financial terms, to the extent publicly available, of certain business combination transactions in the depository banking industry that we deemed relevant. In addition,
we have conducted such other analyses, examinations and inquiries and considered such other financial, economic and market criteria as we have deemed necessary in arriving at our opinion.
In arriving at our opinion, we have relied upon and assumed, without assuming liability or responsibility for independent
verification, the accuracy and completeness of all information that was publicly available or was furnished, or otherwise made available, to us or discussed with or reviewed by us. We have further relied upon the assurances of the
management of the Company and the Target that the financial information provided has been prepared on a reasonable basis in accordance with industry practice, and that they are not aware of any information or facts that would make any
information provided to us incomplete or misleading. Without limiting the generality of the foregoing, for the purpose of this opinion, we have assumed that with respect to financial forecasts, estimates and other forward-looking information
(including the Synergies) reviewed by us, that such information has been reasonably prepared based on assumptions reflecting the best currently available estimates and judgments of the management of the Company and the
Target as to the expected future results of operations and financial condition of the Company and the Target, respectively, to which such financial forecasts, estimates and other forward-looking information (including
the Synergies) relate and we have assumed that such results would be achieved. We express no opinion as to any such financial forecasts, estimates or forward-looking information (including the Synergies) or the assumptions
on which they were based. We have further assumed that the Merger will qualify as a tax-free reorganization for United States federal income tax purposes. We express no opinion as to any of the legal, accounting and tax matters relating to the
Merger and any other transactions contemplated in connection therewith and have relied, with your consent, on advice of the outside legal counsel and the independent accountants to the Company, and on the assumptions of the management of
the Company and the Target, as to all accounting, legal, tax and financial reporting matters with respect to the Company, the Target and the Agreement.
In arriving at our opinion, we have assumed that the executed Agreement will be in all material respects identical to the last draft
reviewed by us. We have relied upon and assumed, with your consent, without independent verification, that (i) the representations and warranties of all parties to the Agreement and all other related documents and
instruments that are referred to therein are true and correct, (ii) each party to such agreements will fully and timely perform all of the covenants and agreements required to be performed by such party, (iii) the Merger will be
consummated pursuant to the terms of the Agreement without amendments thereto and (iv) all conditions to the consummation of the Merger will be satisfied without waiver by any party of any conditions or obligations thereunder. Additionally, we have
assumed that all the necessary regulatory approvals and consents required for the Merger will be obtained in a manner that will not adversely affect the Company, the Target or the contemplated benefits of the Merger.
In arriving at our opinion, we have not performed any appraisals or valuations of any specific assets or liabilities (fixed, contingent,
derivative, off-balance sheet, or other) of the Company or the Target, and have not been furnished or provided with any such appraisals or valuations, nor have we evaluated the solvency of the Company or the Target under any state or federal
law relating to bankruptcy, insolvency or similar matters. Accordingly, we express no opinion regarding the liquidation value of the Company, the Target or any other entity. We have assumed that there has been no material change in
the respective assets, financial condition, results of operations, business or prospects of the Company or the Target since the date of the most recent financial data made available to us. We have also assumed in all respects material to
our analysis that the Company and the Target would remain as a going concern for all periods relevant to our analysis. Without
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Confidential
OceanFirst Financial Corp.
July 12, 2016
Page 3 of 4
limiting the generality of the foregoing, we have not: (i) conducted a review of any individual credit files of the Company or the Target, nor
have we evaluated the adequacy of the loan or lease reserves of the Company or the Target, (ii) conducted a review of any credit mark that may be taken in connection with the Merger, nor have we evaluated the adequacy of any contemplated
credit mark to be so taken, or (iii) conducted a review of the collectability of any asset or the future performance of any loan of the Company or the Target. We have assumed, with your consent, that the
respective allowances for loan and lease losses for the Company and the Target, and the credit mark are adequate to cover such losses and will be adequate on a pro forma basis for the Company. Accordingly, we express no opinion with respect to the
foregoing. Again, without limiting the generality of the foregoing, we have undertaken no independent analysis of any pending or threatened litigation, regulatory action, possible unasserted claims or other contingent liabilities, to which the
Company or the Target is a party or may be subject, and at the direction of the Company and with your consent, our opinion makes no assumption concerning, and therefore does not consider, the possible assertion of claims, outcomes or
damages arising out of any such matters. We have also assumed that neither the Company nor the Target is party to any material pending transaction, including without limitation any financing, recapitalization, acquisition or merger, divestiture or
spin-off, other than the Merger and the merger of the principal banking subsidiaries of the Company and Target contemplated by the Agreement.
No company or transaction used in any analysis for purposes of comparison is identical to the Company, the Target or the Merger. Accordingly,
an analysis of the results of the comparisons is not solely mathematical; rather, it involves complex considerations and judgments about differences in the companies and transactions to which the Company, the Target and the Merger were compared
and other factors that could affect the public trading value or transaction value of the companies.
This opinion is necessarily
based on economic, market and other conditions and upon the information available to us and facts and circumstances as they exist and are subject to evaluation on the date hereof. Events occurring after the date hereof could materially affect the
assumptions used in preparing this opinion. We are not expressing any opinion herein as to the price at which shares of the Companys common stock or the Target Common Stock may trade following announcement of the Merger or at any future
time. We have not undertaken to reaffirm or revise this opinion or otherwise comment upon any events occurring after the date hereof and do not have any obligation to update, revise or reaffirm this opinion.
We have been engaged by the Company to act as its financial advisor in connection with the Merger and we will receive a transaction fee from
the Company for providing our services, a significant portion of which is contingent upon the consummation of the Merger. We will also receive a fee for rendering this opinion, which opinion fee will be credited in full
towards the transaction fee becoming payable to us upon closing of the Merger. Our opinion fee is not contingent upon the consummation of the Merger or the conclusions reached in our opinion. The Company has also agreed to indemnify us against
certain liabilities and reimburse us for certain expenses in connection with our services. The Piper Jaffray investment banking ream that advised the Company in connection with the Merger also advised the Company (while at a prior firm) in
connection with the Companys acquisition of Colonial American Bank, which acquisition closed in July 2015. In addition, in the ordinary course of our business, we and our affiliates may actively trade securities of the Company and
the Target for our own account or the account of our customers and, accordingly, may at any time hold a long or short position in such securities. We may also, in the future, provide investment banking and financial
advisory services to the Company or entities that are affiliated with the Company, for which we would expect to receive compensation.
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Confidential
OceanFirst Financial Corp.
July 12, 2016
Page 4 of 4
Consistent with applicable legal and regulatory requirements, Piper Jaffray has adopted policies and procedures to
establish and maintain the independence of its Research Department and personnel. As a result, Piper Jaffrays research analysts may hold opinions, make statements or recommendations, and/or publish research
reports with respect to the Company and the Merger and other participants in the Merger that differ from the views of Piper Jaffrays investment banking personnel.
This opinion is provided to the Board of Directors of the Company in connection with its consideration of the Merger and is
not intended to be and does not constitute a recommendation to any stockholder of the Company as to how such stockholder should act or vote with respect to the Merger or any other matter. Except with respect to the use
of this opinion in connection with the proxy statement relating to the Merger in accordance with our engagement letter with the Company, this opinion shall not be disclosed, referred to, published or otherwise used (in whole or in part), nor shall
any public references to us be made, without our prior written approval. This opinion has been approved for issuance by the Piper Jaffray Opinion Committee.
This opinion addresses solely the fairness, from a financial point of view, to the Company of the proposed Merger Consideration set forth in
the Agreement and does not address any other terms or agreement relating to the Merger or any other terms of the Agreement. We were not requested to opine as to, and this opinion does not address: (i) the basic business decision to proceed with
or effect the Merger; (ii) the merits of the Merger relative to any alternative transaction or business strategy that may be available to the Company; (iii) any other terms contemplated by the Agreement; or (iv) the fairness of the Merger to,
or any consideration received in connection therewith by, any creditor or other constituency of the Company. Furthermore, we express no opinion with respect to the amount or nature of compensation to be paid in the Merger to any officer, director or
employee of any party to the Merger, or any class of such persons, relative to the Merger Consideration to be paid to any other shareholder in the Merger or with respect to the fairness of any such
compensation, including whether such payments arc reasonable in the context of the Merger.
Based upon and
subject to the foregoing and based upon such other factors as we consider relevant, it is our opinion that the Merger Consideration is fair, from a financial point of view, to the Company as of the date hereof.
Sincerely,
/s/ Piper Jaffray
& Co.
PIPER JAFFRAY & CO.
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