Item 1.01.
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Entry Into a Material Definitive Agreement
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On November 26, 2018, BSB Bancorp, Inc. (
BSB Bancorp
) entered into an Agreement and Plan of Merger (the
Merger
Agreement
) with Peoples United Financial, Inc. (
Peoples United
). The Merger Agreement provides that upon the terms and subject to the conditions set forth therein, BSB Bancorp will merge with and into
Peoples United, with Peoples United as the surviving corporation (the
Merger
). At the effective time of the Merger (the
Effective Time
), each outstanding share of BSB Bancorp common stock, par value
$0.01 per share (
BSB Bancorp Common Stock
), will be converted into the right to receive 2.0 shares (the
Exchange Ratio
) of Peoples United common stock, par value $0.01 per share (
Peoples
United Common Stock
).
At the Effective Time, each outstanding option granted by BSB Bancorp to purchase shares of BSB Bancorp Common Stock
under the BSB Bancorp stock incentive plans (the
BSB Bancorp Options
), whether vested or unvested, will be cancelled and converted automatically into the right to receive a number of shares of Peoples United Common Stock
equal to the quotient of (i) the product of (A) the number of shares of BSB Bancorp Common Stock subject to such BSB Bancorp Option multiplied by (B) the excess, if any, of (1) the product of (x) the Exchange Ratio and
(y) the Peoples United Share Closing Price (as defined below) (the
Per Share Stock Consideration
) over (2) the exercise price per share of BSB Bancorp Common Stock subject to such BSB Bancorp Option, divided by
(ii) the average closing price of the Peoples United Common Stock for the five full trading days preceding the effective date of the Merger (the
Peoples United Share Closing Price
), net of applicable tax
withholdings.
Furthermore, at the Effective Time, each other outstanding equity-based award granted by BSB Bancorp under the BSB Bancorp stock incentive
plans that is not a BSB Bancorp Stock Option (the
Other BSB Bancorp Equity Awards
), whether vested or unvested, will be cancelled and converted automatically into the right to receive a number of shares of Peoples United
Common Stock equal to the product of (i) the number of BSB Bancorp Common Stock subject to such Other BSB Bancorp Equity Award multiplied by (ii) the Exchange Ratio, net of applicable tax withholdings.
Following the Merger, Belmont Savings Bank, a Massachusetts-chartered savings bank and a wholly owned subsidiary of BSB Bancorp, will merge with and into
Peoples United Bank, National Association, a national banking association and a wholly owned subsidiary of Peoples United, with Peoples United Bank, National Association surviving.
The Merger Agreement contains customary representations and warranties from both Peoples United and BSB Bancorp, and each party has agreed to customary
covenants, including, among others, covenants relating to the conduct of BSB Bancorps and Peoples Uniteds businesses during the interim period between the execution of the Merger Agreement and the Effective Time and, in the case of
BSB Bancorp, its obligation to call a meeting of its stockholders to adopt the Merger Agreement, its obligation, subject to certain exceptions, to recommend that its stockholders approve the Merger Agreement and the Merger, and its
non-solicitation
obligations relating to alternative acquisition proposals.