EXHIBIT 99.1
PLAN OF REORGANIZATION AND ACQUISITION
Pursuant to Section 26B of Chapter 172 of the General Laws of
Massachusetts:
This Plan of Reorganization and Acquisition (the "Plan") is dated as of
August 13, 1998, and made between Central Co-operative Bank, a Massachusetts co-
operative bank (the "Bank"), and Central Bancorp, Inc., a Massachusetts
corporation (the "Holding Company"), pursuant to Section 26B of Chapter 172 of
the General Laws of Massachusetts (the "MGL").
The Bank is a stock co-operative bank, duly organized and validly existing
under the laws of the Commonwealth of Massachusetts, with its principal office
at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000. The authorized capital
stock of the Bank consists of (1) 15,000,000 shares of common stock, par value
$1.00 per share (the "Bank Common Stock"), of which 1,965,000 shares are issued
and outstanding as of the date hereof, and (2) 5,000,000 shares of serial
preferred stock, par value $1.00 per share, none of which shares are issued and
outstanding as of the date hereof.
The Holding Company is a corporation, duly organized and validly existing
under the laws of the State of Massachusetts, with its principal office at 000
Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000. The authorized capital stock
of the Holding Company consists of 15,000,000 shares of common stock, par value
$1.00 per share (the "Holding Company Common Stock"), none of which shares are
issued and outstanding as of the date hereof, and 5,000,000 shares of serial
preferred stock, par value $1.00 per share, none of which shares are issued and
outstanding as of the date hereof.
The Bank and the Holding Company have agreed that the Holding Company will
acquire all of the issued and outstanding shares of Bank Common Stock in
exchange for shares of Holding Company Common Stock pursuant to the provisions
of Section 26B of Chapter 172 of the General Laws of Massachusetts and of this
Plan. The Plan has been adopted and approved by a vote of a majority of all of
the members of the board of directors of the Bank, and by a vote of a majority
of all the members of the board of directors of the Holding Company. The
officers of the Bank and of the Holding Company whose respective signatures
appear below have been duly authorized to execute and deliver this Plan.
1
NOW, THEREFORE, in consideration of the premises, the Bank and the Holding
Company agree as follows:
Section 1. Approval and Filing of Plan
---------------------------------------
1.1 The Plan shall be submitted for approval by the holders of Bank Common
Stock at a meeting to be called and held in accordance with the Bank's bylaws
and the provisions of Section 26B of Chapter 172 of the General Laws of
Massachusetts. Notice of such meeting shall be published at least once a week
for two successive weeks in a newspaper of general circulation in the County of
Middlesex, Commonwealth of Massachusetts. Both of said publications shall be at
least fifteen days prior to the date of the meeting.
1.2 Upon approval of the Plan by a vote of the holders of two-thirds of
the outstanding shares of Bank Common Stock as required by law, the Bank and the
Holding Company shall submit the Plan to the Commissioner of Banks of the
Commonwealth of Massachusetts (the "Bank Commissioner") for his approval and
filing in accordance with the provisions of Section 26B of Chapter 172 of the
General Laws of Massachusetts. The Plan shall be accompanied by such
certificates of the respective officers of the Bank and the Holding Company as
may be required by law and a written request by the Bank that the Plan not be
filed by the Bank Commissioner until such future time as the Bank Commissioner
shall have received from the Bank and the Holding Company the written notice
described in Subsection 2.1.
Section 2. Definition of Effective Time
----------------------------------------
2.1 The Plan shall become effective at 12:01 A.M. on the first business
day following the date on which the Bank and the Holding Company advise the Bank
Commissioner in writing (i) that all conditions precedent to the Plan becoming
effective specified in Section 5 have been satisfied and (ii) that the Plan has
not been abandoned by the Bank or the Holding Company in accordance with the
provisions of Section 6. Such time is hereinafter called the "Effective Time."
Section 3. Actions at the Effective Time
-----------------------------------------
3.1 At the Effective Time, the Holding Company shall, without any further
action on its part or on the part of the holders of Bank Common Stock,
automatically and by operation of law acquire and become the owner for all
purposes of all of the then issued and outstanding shares of Bank Common Stock
and shall be entitled to have issued to it by the Bank a certificate or
certificates representing such shares. Thereafter, the Holding Company shall
have full
2
and exclusive power to vote such shares of Bank Common Stock, to receive
dividends thereon and to exercise all rights of an owner thereof.
3.2 At the Effective Time, the holders of the then issued and outstanding
shares of Bank Common Stock shall, without any further action on their part or
on the part of the Holding Company, automatically and by operation of law cease
to own such shares and shall instead become owners of one share of Holding
Company Common Stock for each share of Bank Common Stock theretofore held by
them. Thereafter, such persons shall have full and exclusive power to vote such
shares of Holding Company Common Stock, to receive dividends thereon and to
exercise all rights of an owner thereof. Notwithstanding any of the foregoing,
any Dissenting Stockholder, as defined in Subsection 8.1, shall have such rights
as are provided by Subsection 8.2 and by the laws of the Commonwealth of
Massachusetts.
3.3 At the Effective Time, all previously issued and outstanding
certificates representing shares of Bank Common Stock (the "Old Certificates")
shall automatically and by operation of law cease to represent shares of Bank
Common Stock or any interest therein and each Old Certificate shall instead
represent the ownership by the holder thereof of an equal number of shares of
Holding Company Common Stock. No holder of an Old Certificate shall be entitled
to vote the shares of Bank Common Stock formerly represented by such
certificate, or to receive dividends thereon, or to exercise any other rights of
ownership in respect thereof.
Section 4. Action After the Effective Time
-------------------------------------------
4.1 From and after the Effective Time, each holder of an Old Certificate
or Certificates shall, upon surrender of the same to the transfer agent for the
Bank and the Holding Company, be entitled to receive, in exchange therefor, a
certificate or certificates representing the aggregate number of shares of
Holding Company Common Stock (the "New Certificates") to which said shareholders
shall be entitled. Until so surrendered, each Old Certificate shall be deemed,
for all corporate purposes, to evidence the ownership of the number of shares of
Holding Company Common Stock into which the shares of Bank Common Stock formerly
represented by such Old Certificate shall have been converted.
Section 5. Conditions Precedent
--------------------------------
This Plan and the acquisition provided for herein shall not become
effective unless all of the following first shall have occurred:
3
5.1 The Plan shall have been approved by a vote of the holders of two-
thirds of the outstanding shares of Bank Common Stock at a meeting of such
stockholders held for such purpose.
5.2 The Plan shall have been approved by the Bank Commissioner and a copy
of the Plan with his approval endorsed xxxxxxx shall have been filed in his
office, all as provided in Section 26B of Chapter 172 of the General Laws of
Massachusetts.
5.3 The Board of Governors of the Federal Reserve System, acting pursuant
to Section 3(a)(1) of the Bank Holding Company Act of 1956, as amended, and (S)
225.17 of Regulation Y shall have approved the notice filed by the Holding
Company with the Federal Reserve Bank of Boston to become a bank holding
company, and a period of thirty days shall have elapsed after receipt of such
notice by the Federal Reserve Bank of Boston.
5.4 The Bank shall have received either a (1) a favorable ruling from the
Internal Revenue Service or (2) a favorable opinion from its tax advisor,
satisfactory in form and substance to the Bank, with respect to the federal
income tax consequences of the Plan and the acquisition contemplated thereby.
5.5 The Holding Company shall have complied with all applicable state
securities or "blue sky" laws relating to the issuance of the Holding Company
Common Stock.
5.6 The number of shares of Bank Common Stock which have elected to
exercise dissenters rights of appraisal shall not exceed 10% of the outstanding
shares.
5.7 The Bank and the Holding Company shall have obtained all other
consents, permissions and approvals and shall have taken all actions required by
law or agreement, or deemed necessary, by the Bank or the Holding Company, prior
to the consummation of the acquisition provided for by the Plan and to the
Holding Company's having and exercising all rights of ownership with respect to
all of the outstanding shares of Bank Common Stock acquired by it thereunder.
Section 6. Termination of Plan
------------------------------
6.1 The Plan may be terminated by either the Bank or the Holding Company
at any time before the Effective Time in the event that:
4
(a) The number of shares of Bank Common Stock owned by Dissenting
Stockholders, as hereinafter defined, shall make consummation of the acquisition
contemplated by the Plan ill-advised in the opinion of the Bank or the Holding
Company;
(b) Any action, suit, proceeding or claim has been instituted, made
or threatened relating to the Plan that shall make consummation of the
acquisition inadvisable in the opinion of the Bank or the Holding Company; or
(c) For any other reason consummation of the acquisition contemplated
by the Plan is inadvisable in the opinion of the Bank or the Holding Company.
Such termination shall be effected by written notice by either the Bank or
the Holding Company to the other of them, authorized or approved by the board of
directors of the party giving such notice. Upon the giving of such notice, this
Plan shall be terminated and there shall be no liability hereunder or on account
of such termination on the part of the Bank or the Holding Company or the
directors, officers, employees, agents or stockholders of either of them. In the
event of the termination of the Plan, the Bank shall pay the fees and expenses
incurred by itself and the Holding Company in connection with the Plan and the
proposed acquisition. If either party hereto gives written notice of
termination to the other party pursuant to this section, the party giving such
written notice shall simultaneously furnish a copy thereof to the Bank
Commissioner.
Section 7. Amendment of Plan
-----------------------------
7.1 The Plan may be amended or modified at any time by mutual agreement of
the boards of directors of the Holding Company and the Bank (i) prior to the
approval hereof by the stockholders of the Bank, in any respect, and (ii)
subsequent to such approval, in any respect provided that the Bank Commissioner
shall approve of such amendment or modification.
Section 8. Rights of Dissenting Stockholders
---------------------------------------------
8.1 "Dissenting Stockholders" shall mean those holders of Bank Common
Stock who file a written objection to the Plan, with the Bank before the taking
of the vote on the Plan, pursuant to Section 86 of Chapter 156B of the General
Laws of Massachusetts, stating that they intend to demand payment for their
shares of Bank Common Stock if the Plan is consummated and whose shares are not
voted in favor of the Plan.
5
8.2 Each Dissenting Stockholder who complies with the provisions of
Sections 86 to 98, inclusive, of Chapter 156B of the General Laws of
Massachusetts and all other applicable provisions of law shall be entitled to
receive from the Bank payment of the fair value of his shares of Bank Common
Stock upon surrender by such holder of the certificates that previously
represented shares of Bank Common Stock. Certificates so obtained by the Bank,
upon payment of the fair value of such shares as provided by law, shall be
canceled. Shares of Holding Company Common Stock, to which Dissenting
Stockholders would have been entitled had they not dissented, shall be deemed to
constitute authorized but unissued shares of Holding Company Common Stock and
may be sold or otherwise disposed of by the Holding Company at the discretion
of, and on such terms as may be fixed by, its board of directors.
Section 9. Stock Options
-------------------------
9.1 By voting in favor of this Plan, the Holding Company shall have
approved adoption of the Central Co-operative Bank 1986 Stock Option Plan (the
"Stock Option Plan") of the Bank as the stock option plan of the Holding Company
and shall have agreed to issue Holding Company Common Stock in lieu of Bank
Common Stock pursuant to options currently outstanding, or to be issued, under
the existing Stock Option Plan of the Bank. As of the Effective Time, the Stock
Option Plan shall automatically, by operation of law, be continued as and become
the stock option plan of the Holding Company. Each option to purchase shares of
Bank Common Stock under the Stock Option Plan outstanding at the Effective Time
shall automatically be converted into an identical option, with identical price,
terms and conditions, to purchase an identical number of shares of Holding
Company Common Stock in lieu of shares of Bank Common Stock. The Holding
Company and the Bank may make appropriate amendments to the Stock Option Plan to
reflect the adoption of the Stock Option Plan as the stock option plan of the
Holding Company, without adverse effect upon the options outstanding at the
Effective Time under the Stock Option Plan.
Section 10. Governing Law
--------------------------
10.1 The Plan shall take effect as a sealed instrument and shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts.
6
Section 11. Counterparts
-------------------------
11.1 The Plan may be executed in several identical counterparts, each of
which when executed by the parties hereto and delivered shall be an original,
but all of which together shall constitute a single instrument. In making proof
of the Plan, it shall not be necessary to produce or account for more than one
such counterpart.
7
IN WITNESS WHEREOF, the parties hereto have caused this Plan of
Reorganization and Acquisition to be duly executed this 13/th/ day of August,
1998, and their corporate seals to be hereunto affixed.
CENTRAL BANCORP, INC.
Corporate Seal By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Xxxx X. Xxxxxxx
Attest: On Behalf of Central Bancorp, Inc.
as Incorporator
/s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxxx
On Behalf of Central Bancorp, Inc.
CENTRAL CO-OPERATIVE BANK
Corporate Seal By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Xxxx X. Xxxxxxx
Attest: President and Chief
Executive Officer
/s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxxx
Clerk
I hereby approve this Plan of Reorganization and Acquisition.
December 31, 1998 /s/ Xxxxxx X. Xxxxx
------------------------------------ -----------------------------------
Date Xxxxxx X. Xxxxx
Commissioner of Xxxxx
8
