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EXHIBIT 2(a)
AGREEMENT AND PLAN OF MERGER
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THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made as of
March 11, 0000, xxxxxxx XXX XXXX FINANCIAL, INC., a corporation chartered under
the law of Ohio ("Oak Hill Financial"), and Towne Financial Corporation, a
corporation that is chartered under the law of Ohio ("Towne"). (Oak Hill
Financial and Towne are collectively referred to herein as the "Constituent
Corporations.")
RECITALS
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A. Oak Hill Financial is a corporation organized and existing under
the laws of Ohio and is authorized to issue 5,000,000 shares of common stock,
without par value ("Oak Hill Financial Common"), of which 4,367,765 shares were
issued and outstanding as of December 31, 1998 (excluding treasury shares) and
200,000 reserved for issuance upon exercise of existing stock option, and (ii)
1,500,000 voting shares of preferred stock, without par value, and 1,500,000
non-voting shares of preferred stock, without par value, of which there are no
shares issued and outstanding as of the date hereof.
X. Xxxxx is a corporation organized and existing under the laws of
Ohio and is authorized to issue 2,250,000 shares of common stock, with $1 par
value ("Towne Common"), of which 210,500 shares are issued and outstanding as of
the date hereof, exclusive of treasury shares, and is authorized to issue
250,000 shares of preferred stock, with $1 par value, of which there are no
shares issued and outstanding as of the date hereof. An additional 36,500 shares
may be issued pursuant to outstanding stock options previously granted
(collectively, the "Towne Stock Options" and individually, a "Towne Stock
Option") under the 1992 Stock Option Plan and 1997 Stock Option Plans (the
"Towne Stock Option Plans").
C. The respective Boards of Directors of Oak Hill Financial and Towne
have approved the merger of Towne into Oak Hill Financial substantially on the
terms and conditions contained in this Agreement.
AGREEMENT
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In consideration of the foregoing and the mutual promises contained
herein, the parties agree as follows:
1. MERGER. Subject to the terms and conditions hereof, and the terms
and conditions contained in a certain Supplemental Agreement, of even date
herewith, between Oak Hill Financial, and Towne (the "Supplemental Agreement"),
which is incorporated herein by reference, at the "Effective Time" (as such term
is defined in Section 2 hereof), Towne shall be merged into Oak Hill Financial
(the "Merger"). Oak Hill Financial shall be the surviving corporation in the
Merger (the "Surviving Corporation"), which shall continue its corporate
existence under the laws of Ohio following the consummation of the Merger. At
the Effective Time, the separate existence and corporate organization of Towne
shall cease.
2. EFFECTIVE TIME; EFFECTIVE DATE. The Merger shall be effective at
11:59 p.m., local Ohio time (the "Effective Time"), on (i) the day on which this
Agreement and the related Certificate of Merger have been filed in accordance
with the requirements of the laws of Ohio, or (ii) such later date as may be
specified in such Certificate of Merger (the "Effective Date").
3. NAME. The name of the Surviving Corporation shall be "Oak Hill
Financial, Inc.".
4. CHARTER. The Articles of Incorporation of Oak Hill Financial in
effect at the Effective Time shall be the articles of incorporation of the
Surviving Corporation, until amended in accordance with law.
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5. DIRECTORS. The directors of the Surviving Corporation shall Xxxx X.
Xxxxx, 0000 Xxxxxx Xxxx, Xxx Xxxx, Xxxx 00000; Xxxx X. Xxxx, 0000 Xxxx Xxxxxx
Xxxx, Xxxxxxx, Xxxx 00000; D. Xxxxx Xxxx, 000 X. Xxxxxx Xxxxxx, XxXxxxxx, Xxxx
00000; Xxxxxxx X. XxXxxxx, 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxx 00000; Xxxxx X.
Xxxxxx, 000 X. Xxxxxxx Xxxxxx, Xxx Xxxxxx, Xxxx 00000; Xxxx X. XxXxxxx, 0000
Xxxxxxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxx 00000; Xxxxxx X. Xxxxxxxx, 00 Xxxxx Xxxx
Xxxxx, Xxxxxxxxxxx, Xxxx 00000; C. Xxxxxxx Xxxxxxx, 000 Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx 00000; and H. Xxxxx Xxxxxxxxxx, 0000 Xxxxxx Xxxx, Xxxxxxxx,
Xxxx 00000; to serve until their successors are duly elected and qualified in
accordance with the Code of Regulations of the Surviving Corporation and the
laws of Ohio.
6. REGULATIONS. The Code of Regulations of Oak Hill Financial in
effect at the Effective Time shall be the regulations of the Surviving
Corporation, until amended in accordance with law.
7. STATUTORY AGENT. The name and address of the agent upon whom any
process, notice, or demand against any Constituent Corporation or the Surviving
Corporation may be served is H. Xxxxx Xxxxxxxxxx, 00 Xxxxx Xxxx Xxxxxx, Xxxxx
0000, Xxxxxxxx, Xxxx 00000.
8. CONVERSION OF SHARES.
(a) All shares of Oak Hill Financial Common that are issued and
outstanding immediately prior to the Effective Time shall continue to be issued
and outstanding shares of Oak Hill Financial Common at and after the Effective
Time.
(b) At the Effective Time, the shares of Towne Common issued and
outstanding immediately prior to the Effective Time (exclusive of treasury
shares, if any, which shall be cancelled, and any shares as to which statutory
dissenters' rights are properly sought) shall be converted, by virtue of the
Merger and without further action on the part of the holders thereof, into the
right to receive shares of the common stock, without par value, of Oak Hill
Financial ("Oak Hill Financial Common"), as follows:
(i) Each outstanding share of Towne Common shall be
converted into the right to receive 4.125 shares of Oak Hill Financial
Common (the "Exchange Ratio"), provided, that if the Average Closing
Price is greater than 115% of the Starting Price, then each
outstanding share shall be converted into the right to receive such
number of shares as is equal to the product of multiplying 4.125 by a
fraction, the numerator of which is 115% of the Starting Price and the
denominator of which is the Average Closing Price. The Exchange Ratio
set forth in the preceding sentence shall be adjusted to reflect any
non-cash distribution, stock splits or stock dividends on Oak Hill
Financial Common occurring or having a record date after the date
hereof and prior to the Effective Time. Provided however that if prior
to the Effective Time of the merger, Oak Hill Financial publicly
announces that it has agreed to a transaction in which Oak Hill
Financial will be acquired by another company, the Exchange Ratio
shall be 4.125.
(ii) If the Average Closing Price of Oak Hill Financial
Common shall be less than 85% of the Starting Price, Towne Financial
shall have no obligation to consummate this Merger; provided however,
that this condition precedent to the obligation of Towne Financial to
consummate the Merger shall be satisfied if, when the Average Closing
Price of Oak Hill Financial Common shall be less than 85% of the
Starting Price, Oak Hill Financial, in conjunction with the Closing,
shall add to the number of shares of Oak Hill Financial Common in to
which Towne Financial Common shall be converted as otherwise
determined by application of Section 8(b)(i) above the number of
shares required to make the total dollar value of all of the shares of
Oak Hill Financial Common into which shares of Towne Financial are to
be converted, equal to the total dollar value of the shares of Oak
Hill Financial computed by multiplying the number of outstanding
shares of Towne Financial times the Exchange Ratio times 85% of the
Starting Price.
(iii) No fractional shares of Oak Hill Financial Common
shall be issued. Each holder of Towne Common who would otherwise be
entitled to receive a fractional part of a share of Oak Hill Financial
Common shall instead be entitled to receive cash in an amount equal to
the
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product resulting from multiplying such fraction by the Average
Closing Price Per Share of Oak Hill Financial Common. No interest
shall be payable with respect to such cash payment.
(c) Each outstanding share of Towne Common held by a person who has
demanded and perfected a right to relief as a dissenting shareholder under
Section 1701.85 of the Ohio Revised Code (the "Dissenters' Rights Law") and who
has not effectively withdrawn or lost such right ("Dissenting Shares") shall not
be converted into or represent a right to receive shares of Oak Hill Financial
Common pursuant to subsection 8(b) hereof, but the holder thereof shall be
entitled only to such rights as are granted by the Dissenters' Rights Law. Each
holder of Dissenting Shares who becomes entitled to relief as a dissenting
shareholder under the Dissenters' Rights Law with respect to such holder's
shares of Towne Common shall receive payment therefor from Oak Hill Financial in
accordance with the provisions of the Dissenters' Rights Law. If any holder of
Towne Common who demands relief as a dissenting shareholder under the
Dissenters' Rights Law with respect to such holder's shares of Towne Common
shall effectively withdraw or lose (through failure to perfect or otherwise),
the right to such relief, each share of Towne Common held by such holder shall
automatically be converted into the right to receive shares of Oak Hill
Financial Common pursuant to subsection 8(b) hereof.
(d) Each unexercised Towne Stock Option that is outstanding
immediately prior to the Effective Time shall be converted automatically at the
Effective Time into an option to purchase shares of Oak Hill Financial Common
under the Oak Hill Financial 1995 Stock Option Plan or similar Oak Hill
Financial plan (a "Oak Hill Financial Stock Option"), with the number of shares
of Oak Hill Financial Common to be subject to a particular Oak Hill Financial
Stock Option to be determined by converting the number of shares of Towne Common
subject to the Towne Stock Option into a number of Oak Hill Financial Common
shares in accordance with the procedure for converting outstanding Towne Common
shares into Oak Hill Financial Common shares as set forth in subsection 8(b)
hereof, except that all fractional shares will be rounded to the nearest whole
share, and with the exercise price for each share of Oak Hill Financial Common
subject to a particular Oak Hill Financial Stock Option to be equal to the
exercise price per Towne Common share under the Towne Stock Option divided by
the Exchange Ratio determined in accordance with subsection 8(b)(i) above;
provided, however, that, in the case of any Towne Stock Option to which Section
421 of the Internal Revenue Code of 1986, as amended (the "Code"), applies by
reason of its qualification under Section 422 of the Code, the terms of the Oak
Hill Financial Stock Option into which such Towne Stock Option is to be
converted, including the option price, the number of shares of Oak Hill
Financial Common purchasable pursuant to such option, and the terms and
conditions of exercise of such option, shall be determined so as to comply with
Section 424(a) of the Code. Upon such conversion, all rights under any and all
stock options and stock option plans previously granted or adopted by Towne
shall terminate.
9. EXCHANGE OF CERTIFICATES; PAYMENT FOR FRACTIONAL SHARES.
(a) On the Effective Date, Oak Hill Financial shall deliver to The
Fifth Third Bank (the "Exchange Agent") the amount of cash necessary to pay for
all fractional shares of Oak Hill Financial Common in accordance with subsection
8(b)(ii) hereof.
(b) As promptly as practicable after the Effective Date, Oak Hill
Financial shall cause the Exchange Agent to prepare and mail to each holder of
record on the Effective Date of any shares of Towne Common a letter of
transmittal containing instructions for the surrender of all certificates for
shares of Towne Common. Upon the surrender by such holder of a certificate or
certificates for shares of Towne Common standing in such holder's name to the
Exchange Agent in accordance with the instructions set forth in the letter of
transmittal, such holder shall be entitled to receive in exchange therefor a
certificate representing the number of whole shares of Oak Hill Financial Common
into which the shares represented by the certificate or certificates so
surrendered shall have been converted and, if applicable, a check payable to
such holder in the amount necessary to pay for any fractional shares of Oak Hill
Financial Common which such holder would otherwise have been entitled to
receive, in accordance with subsection 8(b)(ii) hereof. No interest shall be
payable with respect to either the whole shares of Oak Hill Financial Common or
the cash payable in lieu of fractional shares. Immediately after the third
anniversary of the Effective Date, the Exchange Agent shall deliver to the
Surviving
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Corporation any unclaimed balance of cash owing with respect to fractional
shares and such cash shall be retained by, and become the property of the
Surviving Corporation, free and clear of any claims whatsoever.
(c) Neither Oak Hill Financial, the Surviving Corporation, nor the
Exchange Agent, shall be obligated to deliver a certificate for Oak Hill
Financial Common or a check for cash in lieu of fractional shares to a former
shareholder of Towne until such former shareholder surrenders the certificate or
certificates representing shares of Towne Common standing in such former
shareholder's name or, if such former shareholder is unable to locate such
certificate or certificates, an appropriate affidavit of loss and indemnity
agreement and bond as may be required by Oak Hill Financial. Until so
surrendered, each outstanding certificate for shares of Towne Common shall be
deemed for all corporate purposes (except the payment of dividends) to evidence
ownership of the number of whole shares of Oak Hill Financial Common into which
the shares of Towne Common represented thereby shall have been converted.
(d) After the Effective Date and until the outstanding certificates
formerly representing shares of Towne Common are so surrendered, no dividends or
distributions payable to holders of record of Oak Hill Financial Common shall be
paid to the holders of such outstanding Towne certificates in respect thereof.
Promptly upon surrender of such outstanding certificates there shall be paid to
the holders of the certificates for Oak Hill Financial Common issued in exchange
therefor the amount of dividends and other distributions, if any, which
theretofore became payable with respect to such full shares of Oak Hill
Financial Common, but which have not theretofore been paid on such stock. No
interest shall be payable with respect to the payment of any dividends or other
distributions. All such dividends or other distributions unclaimed at the end of
one year from the Effective Date shall, to the extent such dividends have been
previously paid to the Exchange Agent, be repaid by the Exchange Agent to Oak
Hill Financial, and thereafter the holders of such outstanding certificates for
Towne Common shall look, subject to applicable escheat, unclaimed funds, and
other laws, only to Oak Hill Financial as general creditors for payment thereof.
(e) The stock transfer books of Towne shall be closed as of the
close of business on the day that is two business days prior to the Effective
Date.
(f) Oak Hill Financial is empowered to adopt additional reasonable
rules and regulations with respect to the matters referred to in this Section 9
not inconsistent with the provisions of this Agreement.
(g) Adoption of this Agreement by the shareholders of Towne shall
constitute ratification of the appointment of the Exchange Agent.
10. EFFECT OF THE MERGER.
(a) At the Effective Time, the effect of the Merger shall be as
provided by the applicable provisions of the laws of Ohio. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, the
separate existence of Towne shall cease; all assets and property (real,
personal, and mixed, tangible and intangible, choses in action, rights, and
credits) then owned by each Constituent Corporation, or which would inure to
either of them, shall immediately, by operation of law and without any
conveyance, transfer, or further action, become the assets and property of the
Surviving Corporation. All rights and obligations of the Constituent
Corporations shall remain unimpaired and the Surviving Corporation shall succeed
to all such rights and obligations.
(b) From time to time, as and when requested by the Surviving
Corporation or by its successors, the officers and directors of Towne in office
at the Effective Time shall execute and deliver such instruments and shall take
or cause to be taken such further or other action as shall be necessary in order
to vest or perfect in the Surviving Corporation, or to confirm of record or
otherwise, title to, and possession of, all the assets, property, interests,
rights, privileges, immunities, powers, franchises, and authority of Towne and
otherwise to carry out the purposes of this Agreement.
11. OFFICES. The principal executive offices of the Surviving
Corporation shall be located at 00000 Xxxxx Xxxxx 00, Xxxxxxx, Xxxx 00000.
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12. SHAREHOLDER APPROVAL. This Agreement shall be submitted to the
shareholders of Towne and of Oak Hill Financial for adoption as soon as
reasonably practicable following the execution of this Agreement.
13. ADDITIONAL AGREEMENTS.
(a) Subject to the terms and conditions provided in this Agreement,
the parties hereto shall use their reasonable best efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper, or advisable under applicable laws and regulations to consummate and
make effective, as soon as reasonably practicable, the transactions contemplated
by this Agreement, subject, however, to the adoption of this Agreement by the
shareholders of Towne and the receipt of all required regulatory approvals.
(b) Towne shall issue a warrant or warrants to Oak Hill Financial,
pursuant to the terms of a certain Warrant Purchase Agreement entered into or to
be entered into between Oak Hill Financial and Towne in accordance with the
terms of the Supplemental Agreement, granting to Oak Hill Financial or its
nominee the right to purchase certain shares of Towne Common under certain
conditions.
14. AMENDMENT. At any time prior to the Effective Time, the parties
hereto may amend, modify, or supplement this Agreement by mutual agreement
authorized by their respective boards of directors, whether before or after the
shareholders of Towne have adopted this Agreement, provided that the number of
shares of Oak Hill Financial Common into which shares of Towne Common are to be
converted as determined in Section 8 hereof shall not be changed after the
shareholders of Towne have adopted this Agreement without the approval of such
shareholders in the same manner as required for the adoption of this Agreement;
and provided, further, that this Agreement may not be amended, modified, or
supplemented, except by an instrument in writing executed and delivered by each
of the parties hereto.
15. TERMINATION. Unless extended by the mutual agreement of the
parties hereto, this Agreement may be terminated, notwithstanding the adoption
thereof by the shareholders of Towne, in the manner and under the circumstances
set forth in the Supplemental Agreement.
16. ENTIRE AGREEMENT. This Agreement, the Supplemental Agreement, and
any exhibits hereto or thereto constitute the entire agreement among the parties
with respect to the subject matter thereof and supersede all prior agreements
and understandings, oral or written, among the parties with respect to such
subject matter and no party shall be liable or bound to the others in any manner
by any covenants, representations, or warranties except as specifically set
forth herein or therein.
17. TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
18. ASSIGNMENT. Neither this Agreement nor any rights, interests, or
obligations hereunder shall be assigned or transferred by operation of law or
otherwise by any of the parties hereto without the prior written consent of the
other parties.
19. BENEFIT. Nothing in this Agreement, express or implied, is
intended to confer upon any person or entity other than the parties hereto and
their successors in interest any rights or remedies under or by reason of this
Agreement.
20. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original for all purposes, but
such counterparts taken together shall constitute one and the same instrument.
21. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Ohio without regard to its conflict of
laws principles.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
OAK HILL FINANCIAL, INC. TOWNE FINANCIAL CORPORATION
By: /s/ Xxxx X. Xxxx By: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxx, President Xxxx X. Xxxxxxxx, Chairman of the
Board
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