1
Exhibit 2(b)
SUPPLEMENTAL AGREEMENT
THIS SUPPLEMENTAL AGREEMENT (this "Agreement") is made as of April 28,
1997, among OAK HILL FINANCIAL, INC., an Ohio corporation ("Oak Hill
Financial"), OAK HILL BANKS, a banking corporation chartered under the law of
Ohio ("Oak Hill Banks"), and UNITY SAVINGS BANK, a savings bank corporation
chartered under the law of Ohio ("Unity Savings").
RECITALS
A. Oak Hill Financial, Inc. is a registered bank holding company under
the Bank Holding Company Act of 1956, as amended. Oak Hill Banks is a wholly
owned subsidiary of Oak Hill Financial.
B. Unity Savings is a savings bank corporation chartered under the law
of Ohio.
C. Concurrently with the execution and delivery of this Agreement,
Unity Savings and Oak Hill Banks are entering into an Agreement and Plan of
Merger (the "Merger Agreement"), which provides for the merger of Unity Savings
into Oak Hill Banks in accordance with the terms and conditions contained in
the Merger Agreement and in this Agreement (the "Merger").
D. The parties hereto desire to enter into this Agreement for the
purpose of setting forth certain representations, warranties, and covenants
made by each party as an inducement to the other parties to execute and deliver
the Merger Agreement and to consummate the Merger and to set forth certain
additional terms and conditions applicable to the Merger.
AGREEMENT
In consideration of the foregoing and of the mutual promises contained
herein, the parties agree as follows:
SECTION 1. DEFINITIONS
1.01 DEFINITIONS CONTAINED ELSEWHERE IN THIS AGREEMENT. For the
purposes of this Agreement, the following terms shall have the meanings
assigned to them in the preamble and Recitals of this Agreement:
(a) this "Agreement";
(b) "Unity Savings";
(c) "Oak Hill Banks";
(d) "Oak Hill Financial";
(e) the "Merger"; and
(f) the "Merger Agreement".
1.02 DEFINITIONS CONTAINED IN THE MERGER AGREEMENT. For the
purposes of this Agreement, the following terms shall have the meanings
assigned to them in the Merger Agreement:
(a) the "Effective Date";
(b) the "Effective Time";
2
(c) the "Exchange Agent";
(d) the "Dissenters' Rights Law";
(e) "Unity Savings Common";
(f) "Dissenting Share";
(g) "Oak Hill Banks Common"; and
(h) "Oak Hill Financial Common".
1.03 OTHER DEFINITIONS. For the purposes of this Agreement,
certain other terms shall be defined as follows:
(a) the "Accord" means the Legal Opinion Accord of the
American Bar Association Section of Business Law (1991);
(b) an "Acquisition Proposal" means an inquiry received from,
or an offer or proposal made by or on behalf of, any other corporation, firm,
association, person, or other entity relating to (i) the possible acquisition
of more than 25 percent of the shares of the capital stock of Unity Savings,
including, but not limited to, an exchange or tender offer therefor, (ii) the
possible acquisition of a majority of the assets of Unity Savings, (iii) a
merger or consolidation involving Unity Savings, other than a transaction in
which Unity Savings will be the owner of all of the stock of the surviving
corporation following the transaction, or (iv) a merger or consolidation
involving Unity Savings, other than a transaction in which Unity Savings will
be the surviving corporation and the current shareholders of Unity Savings will
be the owners of a majority of the stock of the surviving corporation following
the transaction;
(c) an "Affiliate" of a party means a director, officer,
employee, agent, or adviser of such party;
(d) the "Audited Financial Statements" mean the consolidated
financial statements of Unity Savings, consisting of balance sheets as of
December 31, 1996 and December 31, 1995, and statements of income, cash flows,
and changes in stockholders' equity for the fiscal years ended December 31,
1996 and December 31, 1995, with the report thereon of Norman, Jones, Xxxxx and
Co., certified public accountants;
(e) "Average Closing Price" shall mean the average of the
daily average of the closing bid and asked prices of Oak Hill Financial Common
as reported on the Nasdaq National Market System (as reported in a mutually
agreed upon authoritative source) for the twenty most recent full trading days
in which such shares are traded on the Nasdaq National Market System ending at
the closing of trading on the date three days prior to the Closing Date.
(f) "CERCLA" means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended;
(g) the "Code" means the Internal Revenue Code of 1986;
(h) "CRA" means the Community Reinvestment Act of 1977, as
amended;
(i) "Confidential Information" of or relating to a party
means any and all information received from or on behalf of such party or their
Affiliates concerning the Merger, the terms of this Agreement or the Merger
Agreement, or the assets, business, operations, or financial condition of such
party or their Affiliates, unless and to the extent that any such information
is in the public domain;
2
3
(j) the "Division of Financial Institutions " means the
Division of Financial Institutions, Ohio Department of Commerce;
(k) "Employee Benefit Plans" means any and all "employee
benefit plans" or "welfare benefit plans" as defined in ERISA;
(l) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended;
(m) "Environmental Law" means CERCLA, the Resource
Conservation and Recovery Act, the Hazardous Materials Transportation Act, the
Toxic Substances Control Act, the Federal Water Pollution Control Act, the
Clean Water Act, the Clean Air Act, regulations promulgated thereunder, and any
other federal, state, county, municipal, local, foreign, provincial, or other
statute, law, ordinance, or regulation which may relate to or deal with human
health or the environment, all as may be amended from time to time;
(n) "FDIC" means the Federal Deposit Insurance
Corporation;
(o) the "Federal Reserve Board" means the Board of
Governors of the Federal Reserve System, or its delegate;
(p) "Hazardous Substances" means (i) any "hazardous
substance" as defined in Section 101(14) of CERCLA or regulations promulgated
thereunder; (ii) any "solid waste," "hazardous waste," or "infectious waste,"
as such terms are defined in any other Environmental Law; (iii) asbestos,
urea-formaldehyde, polychlorinated biphenyls (PCBs), nuclear fuel or material,
chemical waste, radioactive material, explosives, known carcinogens, petroleum
products and by-products, and other dangerous, toxic, or hazardous pollutants,
contaminants, chemicals, materials, or substances listed or identified in, or
regulated by, any Environmental Law; and (iv) any other substances or materials
which are classified or considered to be hazardous or toxic under any
Environmental Law;
(q) "Index Group" shall mean the group of bank holding
companies listed in the SNL Securities All Bank Index;
(r) "Index Value" on a given date shall mean the
market-capitalization-weighted average (weighted pursuant to the SNL Securities
All Bank Index) of the closing prices of the companies composing the Index
Group;
(s) the "1934 Act" means the Securities Exchange Act of
1934, as amended;
(t) the "1933 Act" means the Securities Act of 1933, as
amended;
(u) "Knowledge" as used herein shall mean those facts that
are known or should reasonably have been known after due inquiry by the
President, or any Senior or Executive Vice President of any party hereto;
(v) the "Oak Hill Disclosure Memorandum" means a certain
Disclosure Memorandum, dated April __, 1997, which has been previously
delivered by Oak Hill Financial and Oak Hill Banks to Unity Savings, as the
same has been amended and supplemented through the date of this Agreement, and
as the same may subsequently be amended prior to the Effective Date;
(w) "Oak Hill Financial Stock Option Plan" means the Oak
Hill Financial 1995 Stock Option Plan as presently existing or hereafter
amended;
(x) a "Principal Shareholder" of a party means a person who
owns five percent or more of the outstanding shares of any class of the capital
stock of such party;
3
4
(y) the "Real Property" means any and all real property
owned or leased by Unity Savings or Oak Hill Banks, as appropriate, as of the
date of this Agreement or acquired at any time after the date of this Agreement
and prior to the Effective Time, together with any and all improvements thereon;
(z) the "Registration Statement" means the registration
statement on the appropriate form filed or to be filed by Oak Hill Financial
with the SEC under the provisions of the 1933 Act for the purpose of
registering the shares of Oak Hill Financial Common to be issued by Oak Hill
Financial pursuant to the terms of the Merger Agreement, including, but not
limited to, the prospectus and proxy statement to be included therein as a part
thereof;
(aa) "SAIF" means the Savings Association Insurance Fund of
the FDIC;
(bb) the "SEC" means the Securities and Exchange
Commission;
(cc) "Starting Date" shall mean the date of this Agreement;
(dd) "Starting Price" shall mean the average of the daily
average of bid and asked closing prices of Oak Hill Financial Common as
reported on the Nasdaq National Market System (as reported in a mutually agreed
upon authoritative source) for the twenty most recent full trading days in
which such shares are traded on the Nasdaq National Market System ending on the
Starting Date;
(ee) the "Unity Disclosure Memorandum" means a certain
Disclosure Memorandum, dated April __, 1997, which has been previously
delivered by Unity Savings to Oak Hill Financial, as the same has been amended
and supplemented through the date of this Agreement, and as the same may
subsequently be amended prior to the Effective Date; and
(ff) an "Unsolicited Acquisition Proposal" means a written
Acquisition Proposal that is received by Unity Savings or made public by or on
behalf of the proponent of such Acquisition Proposal without any solicitation
of such proposal by any director, officer, Principal Shareholder, employee,
agent, or other person acting on behalf of Unity Savings.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF UNITY SAVINGS
Unity Savings represents and warrants to Oak Hill Financial and Oak
Hill Banks that, except as set forth in the Unity Disclosure Memorandum:
2.01 ORGANIZATION AND AUTHORITY. Unity Savings is a savings bank
corporation duly organized, validly existing, and in good standing under the
laws of the State of Ohio, is duly qualified to do business and is in good
standing in all jurisdictions where its ownership or leasing of property or the
conduct of its business requires it to be so qualified, and has the corporate
power and authority to own its properties and assets, to carry on its business
as it is presently being conducted, and, subject to the approval of its
shareholders, and to the filing of all requisite regulatory applications and
notices and the receipt of all requisite regulatory approvals, to enter into and
carry out its obligations under this Agreement and under the Merger Agreement.
2.02 CAPITALIZATION. The authorized capital stock of Unity Savings
consists of 2,000,000 shares of Unity Savings Common, of which 93,250 shares
were issued and outstanding as of the date of this Agreement. All of the
outstanding shares of Unity Savings Common are duly and validly authorized,
issued, and outstanding and are fully paid and nonassessable. There are no
existing options, warrants, or commitments of any kind which might require the
issuance by Unity Savings of any additional shares of Unity Savings Common or
other equity securities of Unity Savings.
2.03 SUBSIDIARIES. The Unity Disclosure Memorandum lists all
corporations in which Unity Savings owns, directly or indirectly, five percent
or more of any class of capital stock as of the date of this Agreement, and
indicates,
4
5
with respect to the equity securities of each such corporation as of such date,
the number of shares of each class authorized, the number of shares
outstanding, and the number of shares owned or controlled directly or
indirectly by Unity Savings. Unity Savings does not own, directly or
indirectly, more than fifty percent (50%) of the capital stock of any other
corporation. There are no options, contracts, commitments, understandings, or
arrangements by which Unity Savings is bound to issue additional shares of its
equity securities. Unity Savings is a member of the Federal Home Loan Bank
System and its deposits are insured up to the applicable limits by the SAIF.
2.04 DIRECTORS, OFFICERS, AND PRINCIPAL SHAREHOLDERS. The Unity
Disclosure Memorandum contains a true and complete list of all directors,
executive officers, and Principal Shareholders of Unity Savings.
2.05 AUTHORIZATION. The execution, delivery, and performance of
this Agreement and the Merger Agreement by Unity Savings, and the consummation
of the transactions contemplated hereby and thereby have been duly approved by
the Board of Directors of Unity Savings, subject to the adoption of the Merger
Agreement and this Agreement by the shareholders of Unity Savings; and subject
to the adoption of the Merger Agreement and this Agreement by the shareholders
of Oak Hill Financial, and subject to applicable regulatory approvals and
expiration of waiting periods, if any.
2.06 ABSENCE OF DEFAULTS. Neither the execution and delivery of
this Agreement or the Merger Agreement, nor the consummation of the Merger, nor
compliance by Unity Savings with any provisions hereof or thereof will conflict
with or result in a breach of any provisions of the articles or certificate of
incorporation, regulations, bylaws, or other charter documents of Unity Savings
or result in a material breach or termination of, or accelerate the performance
required by, any note, bond, mortgage, lease, agreement, or other instrument to
which Unity Savings is a party or by which Unity Savings may be bound.
2.07 FINANCIAL STATEMENTS. Unity Savings has delivered the Audited
Financial Statements to Oak Hill Financial. The Audited Financial Statements
fairly present the financial position, results of operations, and cash flows of
Unity Savings at the dates shown and for the periods indicated in conformity
with generally accepted accounting principles applied on a consistent basis.
There are no obligations or liabilities, whether absolute, accrued, or
contingent (including, without limiting the generality of the foregoing,
liabilities for taxes), of Unity Savings which are required in conformity with
generally accepted accounting principles to be reflected or disclosed in the
Audited Financial Statements which have not been or will not be so reflected or
disclosed.
2.08 TITLE TO PROPERTIES.
(a) The Unity Disclosure Memorandum sets forth a complete and
correct list of all of the Real Property. Unity Savings has good and marketable
title to all of the Real Property listed as owned by it in the Unity Disclosure
Memorandum and valid leasehold interests in all of the Real Property listed as
leased by it in the Unity Disclosure Memorandum, free and clear of any liens
and encumbrances except taxes and assessments not delinquent and utility and
other easements that do not interfere with the use of the property for the
business being conducted thereon. The Real Property and the present use thereof
by Unity Savings do not violate any local zoning or similar land use laws, any
governmental regulations, or any restrictive covenants. To the knowledge of
Unity Savings, after reasonable investigation, (i) the Real Property and the
use thereof by Unity Savings do not encroach upon any property owned by any
other person, and (ii) no property owned by any other person encroaches upon
any of the Real Property.
(b) Complete and correct copies of all deeds and leases
relating to the Real Property are included in the Unity Disclosure Memorandum.
(c) Each item of the personal property owned by Unity
Savings, including without limitation all contractual rights and assets
reflected in the Audited Financial Statements or acquired after December 31,
1996 (except for assets sold or otherwise disposed of in the ordinary course of
business since such date or assets which, either individually or in the
aggregate, are not material to the operations or financial condition of Unity
Savings), is owned by Unity Savings, free and clear of any lien or encumbrance,
except for assets securing loans from the Federal Home Loan Bank of Cincinnati
and assets pledged for public deposits.
5
6
2.09 ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent
reflected or reserved against on the Audited Financial Statements, Unity
Savings has no liabilities, whether absolute, accrued, contingent, or
otherwise, due or to become due, including without limitation any liabilities
as guarantor under any guaranty or liabilities for taxes, except liabilities
and taxes incurred in the ordinary course of business, which have had or will
have a material adverse effect on the business, financial condition, or results
of operations of Unity Savings.
2.10 ABSENCE OF CERTAIN CHANGES. Since December 31, 1996, Unity
Savings has not:
(a) made or permitted to be made any changes in its capital
or corporate structure, certificate or articles of incorporation, regulations,
bylaws, or other charter documents;
(b) merged with any other corporation or bank, or permitted
any other corporation or bank to merge into or consolidate with either of them;
acquired control over any other firm, bank, corporation, or organization; or
created any subsidiaries;
(c) issued, sold, delivered, or agreed to issue, sell, or
deliver any additional shares of its capital stock or any options, warrants, or
rights to acquire any such capital stock, or securities convertible into or
exchangeable for such capital stock, except for capital stock issued pursuant
to the exercise of stock options previously issued, in accordance with their
respective terms;
(d) purchased, sold, transferred, or otherwise acquired or
disposed of, or agreed to purchase, sell, transfer, acquire, or dispose of, any
capital stock or other securities of any kind, or options or other rights to
acquire any such securities, of any other entity (including, but not limited
to, any such transactions involving Unity Savings with respect to the capital
stock or other securities), other than in the ordinary course of business;
(e) incurred any indebtedness, obligations, or liabilities,
whether absolute, accrued, contingent, or otherwise, including, without
limitation, liabilities as guarantor under any guaranty, other than
indebtedness, obligations, and liabilities incurred in the ordinary course of
its business or incurred under the contracts and commitments referred to in
Section 2.18 hereof;
(f) issued as borrower any promissory notes, guarantees,
or other evidences of indebtedness, other than in the ordinary course of
business;
(g) forgiven or cancelled any indebtedness or contractual
obligation, other than in the ordinary course of business;
(h) mortgaged, pledged, or subjected to any lien or lease any
of its assets, tangible or intangible, or permitted or suffered any such asset
to be subjected to any lien or lease, other than in the ordinary course of
business;
(i) purchased, sold, transferred, liquidated, or otherwise
acquired or disposed of any assets or properties, or entered into any contract
for any such purchase, sale, transfer, liquidation, acquisition, or
disposition, other than in the ordinary course of business;
(j) entered into any lease of real or personal property,
other than in the ordinary course of business;
(k) declared, paid, made, or set apart any sum or property
for, any dividend or other distribution, or otherwise paid or transferred any
funds or property to its shareholders, except for a semi-annual cash dividend
to be paid by Unity Savings to its shareholders in June, 1997 in the amount of
$1.00 per share; and a quarterly cash dividend of $.50 to be paid in September,
1997. An additional dividend of $.50 per share may be paid if Unity
shareholders would not receive the quarterly dividend of Oak Hill Financial
payable in the last calendar quarter of 1997;
(l) increased the wages, salaries, compensation, pension or
other fringe benefits, or perquisites payable to any executive officer by more
than eight percent of the amount thereof in effect as of December 30, 1996,
6
7
or granted any severance or termination pay, or entered into any contract to
make or grant any severance or termination pay, or entered into any employment
or consulting contract which is not terminable by Unity Savings, without cause
and without penalty, upon notice of 30 days or less, provided, no later than
Closing, Unity Savings may pay a cash bonus of up to ten percent (10%) of base
salary to all employees in accordance with past practices relating to calendar
year-end bonuses, provided such bonuses shall be prorated based upon the number
of calendar months of 1997, or any portion of a month, which have passed by the
Closing Date;
(m) made any loans or loan commitments, other than in the
ordinary course of business, to any director, officer, or Principal Shareholder
(or any person or business entity controlled by or affiliated with such
director, officer, or Principal Shareholder);
(n) modified, altered, amended, terminated, or withdrawn from
participation in any Employee Benefit Plan or any other plan or benefit
provided to one or more employees, or paid or distributed any sum from any such
plan except to participants in the ordinary course of the operation of the
plan, or made any payment or contribution to any such plan except as required
by the terms of such plan or consistent with past practices, but, in any event,
not to exceed eight percent (8%) of eligible salaries, in the aggregate, on an
annual basis;
(o) entered into any transaction involving the expenditure of
more than $50,000, other than in the ordinary course of business, except
pursuant to and in accordance with the terms of the contracts and commitments
referred to in Section 2.18 hereof;
(p) adopted any change in any accounting policy or method;
(q) revalued any asset or adjusted any reserve other than
in the ordinary course of business;
(r) failed to keep in full force and effect insurance and
bonds at least equal in amount and scope of coverage to the insurance and bonds
carried on December 31, 1996;
(s) suffered any material adverse change in its business,
financial condition, income, assets, or liabilities;
(t) suffered any damage, destruction, or loss (whether or not
covered by insurance) which has had a material adverse effect, in any case or
in the aggregate, on its business, financial condition, operations, projects,
properties, or assets;
(u) suffered any strike, work stoppage, slow-down, or
other labor disturbance; or
(v) suffered any loss of employees or customers which has had
a material adverse effect on its business, operations, or prospects.
2.11 TAXES. Unity Savings has filed or caused to be filed all
federal and other tax returns which are required to be filed and have paid or
made provision for payment of all taxes shown as due on such returns. No
deficiencies for any tax, assessment, or governmental charge have been proposed,
asserted, or assessed against Unity Savings that have not been settled and paid.
The federal income tax returns of Unity Savings have not been examined by the
Internal Revenue Service for any of the ten years preceding the date of this
Agreement.
2.12 LABOR MATTERS. Unity Savings is not a party to any
collective bargaining or other union agreement with any of its employees, or is
involved in any labor dispute.
2.13 LITIGATION. There is no action, suit, proceeding, or claim by
any governmental agency or other person or entity nor any investigation by any
governmental agency pending or, to the Knowledge of Unity Savings, threatened
against (i) Unity Savings, (ii) the assets, business, or goodwill of Unity
Savings, or (iii) any director, officer, or Principal Shareholder of Unity
Savings, in relation to the business of Unity Savings or any such person's
capacity as a director,
7
8
officer, or Principal Shareholder of Unity Savings. Unity Savings knows of no
basis or grounds for any such action, suit, proceeding, claim, or
investigation. Unity Savings is not subject to any supervisory agreement,
consent order or decree, cease and desist order, or other restriction on the
business or assets of Unity Savings.
2.14 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of Unity Savings, Unity Savings is and
has been at all times in substantial compliance with all applicable
Environmental Laws and Unity Savings has not engaged in any activity resulting
in a material violation of any applicable Environmental Law. No orders,
hearings, actions, or other proceedings by or before any court or governmental
agency in which Unity Savings is a party are pending or, to the Knowledge of
Unity Savings, threatened in connection with any alleged violation of any
applicable Environmental Law (i) by Unity Savings or (ii) in relation to any
part of the Real Property and Unity Savings has no Knowledge of any
investigations or inquiries with respect to any such alleged violation. No
claims have been made or, to the Knowledge of Unity Savings, threatened at any
time by any third party against Unity Savings relating to damage, contribution,
cost recovery, compensation, loss, or injury resulting from any Hazardous
Substance. To the Knowledge of Unity Savings, Unity Savings has not caused or
permitted any Hazardous Substance to be integrated into the Real Property or
any component thereof in such manner or quantity as may reasonably be expected
to or in fact would pose a threat to human health or the value of the Real
Property. None of the Real Property has been used by Unity Savings for the
storage or disposal of Hazardous Substances nor to the Knowledge of Unity
Savings, is any of the Real Property contaminated by any Hazardous Substance.
To the Knowledge of Unity Savings, none of the Real Property has in the past
contained or presently contains any underground storage tanks. To the Knowledge
of Unity Savings, Unity Savings has no interest, direct or indirect, in any
property owned by a third party which has been contaminated by Hazardous
Substances (excluding any property as to which the sole interest of Unity
Savings is that of a lien holder or mortgagee, but including any property as to
which title has been taken by Unity Savings pursuant to mortgage foreclosure or
similar proceeding and any property as to which Unity Savings has participated
in the financial management to a degree sufficient to influence the property's
treatment of Hazardous Substances).
(b) To the Knowledge of Unity Savings, the representations
set forth in paragraph (a) above are also true and correct in relation to any
and all real property owned or leased by it at any time prior to the date of
this Agreement, together with any improvements located thereon.
2.15 COMMUNITY REINVESTMENT ACT COMPLIANCE. Unity Savings is in
compliance with the applicable provisions of the CRA and the regulations
promulgated thereunder, and has received a CRA rating of satisfactory or better
from the FDIC. Unity Savings knows of no fact or circumstance or set of facts
or circumstances which would cause Unity Savings to fail to comply with such
provisions or to cause the CRA rating of Unity Savings to fall below
satisfactory.
2.16 COMPLIANCE WITH LAWS. Unity Savings holds all permits,
licenses, certificates of authority, orders, and approvals of, and have made all
filings, applications, and registrations with, all governmental or regulatory
bodies that are required in order to permit them to carry on their respective
businesses as they are presently conducted. To the Knowledge of Unity Savings,
Unity Savings has conducted its businesses so as to comply in all material
respects with all applicable statutes, regulations, rules, and orders.
2.17 INFORMATION PROVIDED BY UNITY SAVINGS. None of the information
supplied or to be supplied by Unity Savings for inclusion in the Registration
Statement, the application for approval, or any other document to be filed with
the FDIC, the Federal Reserve Board, the Division of Financial Institutions, the
SEC, or any other federal or state regulatory authority in connection with the
transactions contemplated herein or in the Merger Agreement is or will be false
or misleading with respect to any material fact, or omits or will omit any
material fact necessary in order to make the statements therein not misleading.
8
9
2.18 MATERIAL CONTRACTS.
(a) The Unity Disclosure Memorandum contains a complete and
correct list of all written or oral agreements, leases, and other obligations
and commitments of the following types, to which either Unity Savings is a
party, by which Unity Savings or any of its property is bound, or which has
been authorized by Unity Savings:
(i) promissory notes, guaranties, mortgages, security
agreements, or other evidences of indebtedness of Unity Savings;
(ii) partnership or joint venture agreements;
(iii) employment, bonus, compensation, severance, or
consulting agreements;
(iv) collective bargaining agreements;
(v) Employee Benefit Plans and any other plans, benefits,
programs of benefits, or deferred compensation arrangements for the benefit of
directors, employees, or former or retired employees;
(vi) agreements or commitments for sale (other than in the
ordinary course of business) of assets exceeding $50,000 in the aggregate;
(vii) agreements or commitments for capital expenditures in
excess of $50,000 in the aggregate;
(viii) agreements or other documents creating liens or
security interests relating to any real or personal property owned, rented, or
leased by Unity Savings and used in connection with the business of such entity;
(ix) leases of, commitments to lease, and other agreements
relating to the lease or rental of, real or personal property by Unity Savings
and used in connection with the business of such entity;
(x) all policies of insurance and fidelity bonds of Unity
Savings;
(xi) all direct or indirect loans or guaranties of loans
to any director, officer, or Principal Shareholder of Unity Savings or their
spouses or children or any partnership, corporation, or other entity in which
any such director, officer, or Principal Shareholder or their spouses or
children, have a significant (ten percent or more) interest; and
(xii) all other contracts and commitments not made in the
ordinary course of business.
(b) The Unity Disclosure Memorandum includes complete and
correct copies of all written agreements, leases and commitments, except loan
commitments less than $500,000, together with all amendments thereto, listed in
the Unity Disclosure Memorandum and a complete and correct written description
of all oral agreements listed in the Unity Disclosure Memorandum.
(c) As of and through the date of this Agreement: (i) each
agreement, lease, and commitment of Unity Savings is valid and subsisting and
in full force and effect in all material respects; (ii) Unity Savings has in
all material respects performed all obligations required to be performed by it
to date under such agreements, leases, and
9
10
commitments; and (iii) no event or condition exists which constitutes or, after
notice or lapse of time, would constitute, a material default on the part of
Unity Savings under any agreement, lease, or commitment.
2.19 EMPLOYEE BENEFIT PLANS.
(a) All Employee Benefit Plans maintained by Unity Savings
comply in all material respects with the requirements of ERISA and the Code and
all such plans have been administered to date in compliance with the
requirements of ERISA, the Code, and subsequent legislation regulating ERISA
plans. Each of such plans that is an employee pension benefit plan within the
meaning of Section 3(2) of ERISA that is intended to be a qualified plan under
Section 401(a) of the Code has been amended to comply in all material respects
with current law as required or the remedial amendment period for such
amendment under Section 401(b) of the Code has not expired and Unity Savings
has obtained favorable determination letters with respect to all such plans. As
of the date hereof, Unity Savings has no liability on account of any
accumulated funding deficiency (as defined in Section 412 of the Code) or on
account of any failure to make contributions to or pay benefits under any such
plan nor is Unity Savings aware of any claim pending or threatened to be
brought by any party regarding such matters. No prohibited transaction has
occurred with respect to any such plan that would result, directly or
indirectly, in the imposition of any excise tax under Section 4975 of the Code;
nor has any reportable event under Section 4043 of ERISA occurred with respect
to any such plan. Unity Savings is not a defendant in any lawsuit or criminal
action concerning such entity's conduct as a fiduciary, party-in-interest, or
disqualified person with respect to any plan, nor is either of them engaged in
litigation or a continuing controversy with, or, to the knowledge of Unity
Savings, under investigation or examination by, the Department of Labor,
Internal Revenue Service, Justice Department, or Pension Benefit Guaranty
Corporation involving compliance with ERISA or the provisions of the Code
relating to employee benefit plans. All reporting and disclosure requirements
of ERISA and the Code have been met in all respects by all such plans. Unity
Savings is not required to contribute to an Employee Benefit Plan that is a
"multiemployer plan" within the meaning of Section 3(37) of ERISA.
(b) The Unity Disclosure Memorandum lists all Employee
Benefit Plans and any and all other benefit plans or programs currently in
effect for employees, former employees, and retired employees of Unity Savings
including, without limitation, those providing any form of medical, health, and
dental insurance, severance pay and benefits continuation, relocation
assistance, vacation pay, tuition aid, and matching gifts for charitable
contributions to educational or cultural institutions, whether or not subject
to ERISA. The Unity Disclosure Memorandum includes complete and correct copies
of all such plans or programs, including each trust or other agreement under
which any trustee or custodian holds funds or property of the plan and all
current financial and actuarial reports, all current reporting and disclosure
documents and filings, and currently effective Internal Revenue Service rulings
or determination letters in respect thereof. If any of the Employee Benefit
Plans listed in the Unity Disclosure Memorandum has not been amended to comply
with the Tax Reform Act of 1986 and subsequent legislation, Unity Savings will
also deliver to Oak Hill Financial and Oak Hill Banks information and
documentation regarding such plan's operation during the remedial amendment
period which is sufficient to enable Oak Hill Financial and Oak Hill Banks to
amend such plans to comply with the Tax Reform Act of 1986 and subsequent
legislation.
2.20 INSURANCE POLICIES. The Unity Disclosure Memorandum contains a
complete and correct list of the insurance policies and fidelity bonds currently
maintained by Unity Savings. The Unity Disclosure Memorandum includes complete
and correct copies of all such policies and bonds currently in effect together
with all riders and amendments thereto. All premiums due thereon have been paid
and Unity Savings has complied in all respects with the provisions of such
policies and bonds. Unity Savings has not failed to give any notice or present
any claim under any insurance policy or fidelity bond in due and timely fashion.
2.21 CAPITAL REQUIREMENTS. Unity Savings is in compliance with all
currently applicable capital requirements and guidelines prescribed by all
appropriate federal regulatory agencies.
2.22 LOAN LOSS RESERVES. Since December 31, 1996, Unity Savings has
not incurred any unusual or extraordinary loan losses. The allowance for loan
losses reflected on the financial statements of Unity Savings has been
determined in accordance with generally accepted accounting principles and in
accordance with all applicable regulations of all appropriate regulatory
agencies and is adequate in all material respects under requirements of GAAP
10
11
to provide for reasonably anticipated losses on outstanding loans. Unity
Savings has no knowledge of any potential losses that have not been considered
in establishing the current allowance for loan losses.
2.23 BROKERS; CERTAIN FEES. Unity Savings, nor any of its
respective officers, directors, or employees, has employed any broker or finder
or incurred any liability for any financial advisory fees, brokerage fees,
commissions, or finder's fees in connection with this Agreement or the Merger
Agreement, or the transactions contemplated herein or therein, except that Unity
Savings has retained XxXxxxxx & Company Securities, Inc. to perform various
investment banking services in connection with the Merger. The Unity Disclosure
Memorandum contains a complete and correct list as of the date of this Agreement
of all written or oral agreements between Unity Savings and XxXxxxxx & Company
Securities, Inc. The Unity Disclosure Memorandum includes complete and correct
copies of all written agreements between Unity Savings and XxXxxxxx & Company
Securities, Inc., together with amendments thereto, listed in the Unity
Disclosure Memorandum and a complete and correct written description of all oral
agreements between Unity Savings and XxXxxxxx & Company Securities, Inc. listed
in the Unity Disclosure Memorandum.
2.24 MATERIAL FACTS. Neither this Agreement, the Merger Agreement,
the Unity Disclosure Memorandum, nor any list, schedule, or certificate
furnished to Oak Hill Financial by or on behalf of Unity Savings contains any
untrue statement of a material fact or omits a material fact necessary in order
to make the statements contained therein not misleading in light of the
circumstances in which made; provided, however, that the scope of this
representation does not extend to any information relating to or furnished by
Oak Hill Financial or Oak Hill Banks.
2.25 TAX TREATMENT OF THE MERGER. Neither Unity Savings nor any
Affiliate thereof has taken any action or has any Knowledge of any fact or
circumstance that is reasonably likely to prevent the transactions contemplated
hereby, including the Merger, from qualifying as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code.
2.26 TAX TREATMENT OF CERTAIN PAYMENTS. Neither Unity Savings nor
any Affiliate thereof has taken any action or has any Knowledge of any fact or
circumstance that is reasonably likely to result in the treatment of any
payments to any Unity Savings Affiliate which are contemplated hereby or in
connection with the amendment or termination of two Salary Continuation Plans
executed by Xxxxxx X. Xxxx and D. Xxxxx Xxxx on December 7, 1994, to be
characterized as excess parachute payments within the meaning of Section 280G of
the Internal Revenue Code.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF OAK HILL FINANCIAL
Oak Hill Financial and Oak Hill Banks represent and warrant, as the
case may be, to Unity Savings that, except as set forth in the Oak Hill
Disclosure Memorandum:
3.01 ORGANIZATION AND AUTHORITY OF OAK HILL FINANCIAL. Oak Hill
Financial is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Ohio, is duly qualified to do business
and is in good standing in all jurisdictions where its ownership or leasing of
property or the conduct of its business requires it to be so qualified, and has
the corporate power and authority to own its properties and assets, to carry on
its business as it is presently being conducted, and to enter into and carry out
its obligations under this Agreement.
3.02 ORGANIZATION AND AUTHORITY OF OAK HILL BANKS. Oak Hill Banks
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Ohio, is duly qualified to do business and is in good
standing in all jurisdictions where its ownership or leasing of property or the
conduct of its business requires it to be so qualified, and has the corporate
power and authority to own its properties and assets, to carry on its business
as it is presently being conducted, and to enter into and carry out its
obligations under this Agreement and the Merger Agreement.
3.03 CAPITALIZATION. The authorized capital stock of Oak Hill
Financial consists of (i) 5,000,000 shares of common stock, without par value,
of which 2,884,700 shares were issued and outstanding as of December 31, 1996
(including treasury shares) and 200,000 reserved for issuance upon exercise of
existing stock option, and (ii) 1,500,000
11
12
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. All the outstanding shares of Oak
Hill Financial Common are duly and validly authorized, issued, and outstanding
and are fully paid and nonassessable. All of the shares of Oak Hill Financial
Common to be issued pursuant to the Merger Agreement will, when so issued, be
duly and validly authorized, issued, and outstanding, fully paid and
nonassessable, and the issuance of such shares will not be subject to any
preemptive or similar rights.
3.04 AUTHORIZATION OF OAK HILL FINANCIAL. The execution, delivery,
and performance of this Agreement by Oak Hill Financial, and the consummation of
the transactions contemplated hereby, have been duly approved by the Board of
Directors of Oak Hill Financial. As soon as practicable and, in any event,
within ten (10) business days after the SEC has declared the Registration
Statement effective, Oak Hill Financial will call and mail notice of a meeting
of its shareholders for the purpose of adopting the Merger Agreement and this
Agreement, which meeting shall be held not more than 45 days from the date the
notice is mailed, and the Board of Directors of Oak Hill Financial will
recommend to the shareholders that they vote their shares in favor of the
Merger.
3.05 AUTHORIZATION OF OAK HILL BANKS. The execution, delivery, and
performance of this Agreement and the Merger Agreement by Oak Hill Banks, and
the consummation of the transactions contemplated hereby and thereby, have been
duly approved by the Board of Directors of Oak Hill Banks, and by Oak Hill
Financial in its capacity as the sole shareholder of Oak Hill Banks.
3.06 ABSENCE OF DEFAULTS. Neither the execution and delivery of
this Agreement, nor the consummation of the Merger, nor compliance by Oak Hill
Financial with any of the provisions hereof will conflict with or result in a
breach of any provision of the charter or bylaws of Oak Hill Financial or result
in a material breach or termination of, or accelerate the performance required
by, any material note, bond, mortgage, lease, agreement, or other instrument to
which Oak Hill Financial is a party or to which Oak Hill Financial may be bound.
Neither the execution and delivery of this Agreement or the Merger Agreement,
nor the consummation of the Merger, nor compliance by Oak Hill Banks with any of
the provisions hereof or thereof will conflict with or result in a breach of any
provision of the articles of incorporation or regulations of Oak Hill Banks or
result in a material breach or termination of, or accelerate the performance
required by, any material note, bond, mortgage, lease, agreement, or other
instrument to which Oak Hill Banks is a party or by which Oak Hill Banks may be
bound.
3.07 INFORMATION PROVIDED BY OAK HILL FINANCIAL. None of the
information supplied or to be supplied by Oak Hill Financial for inclusion in
the Registration Statement, application for approval, or any other document to
be filed with the FDIC, the Federal Reserve Board, the Division of Financial
Institutions, the SEC, or any other federal or state regulatory authority in
connection with the transactions contemplated herein or in the Merger Agreement
is or will be false or misleading with respect to any material fact, or omits or
will omit any material fact necessary in order to make the statements therein
not misleading.
3.08 MATERIAL FACTS. Neither this Agreement nor the Merger
Agreement contains any untrue statement of a material fact or omits a material
fact necessary in order to make the statements contained therein not misleading
in light of the circumstances in which made; provided, however, that the scope
of this representation does not extend to any information relating to or
furnished by Unity Savings.
3.09 FILING OF REPORTS. Oak Hill Financial Common is registered
pursuant to Section 12 of the 0000 Xxx. Xxx Xxxx Financial has been subject to
the reporting requirements of Section 13 of the 1934 Act for a period of at
least 90 days prior to the date hereof and has filed all reports required to be
filed thereunder during the twelve months preceding the date hereof. Since
January 1, 1996, Oak Hill Financial has filed with the SEC all documents and
reports (including all amendments, exhibits, and schedules thereto and documents
incorporated by reference therein) required to be filed by Oak Hill Financial
under the 1934 Act and the 1933 Act, and the rules and regulations promulgated
by the SEC thereunder. None of such documents or reports, as of their respective
dates and as amended through the date hereof, contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in view of the
circumstances under which they were made, not misleading.
12
13
3.10 INSURANCE OF ACCOUNTS. The deposits of Oak Hill Banks are
insured up to the applicable limits by the Bank Insurance Fund ("BIF").
3.11 ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent
reflected or reserved against on the Oak Hill Disclosure Memorandum, Oak Hill
Banks has no liabilities, whether absolute, accrued, contingent, or otherwise,
due or to become due, including without limitation any liabilities as guarantor
under any guaranty or liabilities for taxes, except liabilities and taxes
incurred in the ordinary course of business, which have had or will have a
material adverse effect on the business, financial condition, or results of
operations of Oak Hill Banks.
3.12 ABSENCE OF CERTAIN CHANGES. Except as provided in the Oak
Hill Disclosure Memorandum, since December 31, 0000, Xxx Xxxx Financial and Oak
Hill Banks have not:
(a) made or permitted to be made any changes in their capital
or corporate structures, certificates or articles of incorporation,
regulations, bylaws, or other charter documents;
(b) merged with any other corporation or bank, or permitted
any other corporation or bank to merge into or consolidate with either of them;
acquired control over any other firm, bank, corporation, or organization; or
created any subsidiaries;
(c) issued, sold, delivered, or agreed to issue, sell, or
deliver any additional shares of their capital stock or any options, warrants,
or rights to acquire any such capital stock, or securities convertible into or
exchangeable for such capital stock, and except for capital stock issued
pursuant to the exercise of stock options previously issued, in accordance with
their respective terms;
(d) purchased, sold, transferred, or otherwise acquired or
disposed of, or agreed to purchase, sell, transfer, acquire, or dispose of, any
capital stock or other securities of any kind, or options or other rights to
acquire any such securities, of any other entity (including, but not limited
to, any such transactions involving either of Oak Hill Banks or Oak Hill
Financial with respect to the capital stock or other securities of the other of
them), other than in the ordinary course of business;
(e) incurred any indebtedness, obligations, or liabilities,
whether absolute, accrued, contingent, or otherwise, including, without
limitation, liabilities as guarantor under any guaranty, other than
indebtedness, obligations, and liabilities incurred in the ordinary course of
their business;
(f) adopted any change in any accounting policy or method;
(g) revalued any asset or adjusted any reserve, other than
in the ordinary course of business;
(h) failed to keep in full force and effect insurance and
bonds at least equal in amount and scope of coverage to the insurance and bonds
carried on December 31, 1996;
(i) suffered any material adverse change in their
business, financial condition, income, assets, or liabilities; and
(j) made no material increase in dividends until the
Effective Date of this Agreement.
3.13 TAXES. Oak Hill Banks and Oak Hill Financial have filed or
caused to be filed all federal and other tax returns which are required to be
filed and have paid or made provision for payment of all taxes shown as due on
such returns. No deficiencies for any tax, assessment, or governmental charge
have been proposed, asserted, or assessed against Oak Hill Banks or Oak Hill
Financial that have not been settled and paid. The federal income tax returns of
Oak Hill Banks and Oak Hill Financial have not been examined by the Internal
Revenue Service for any of the ten years preceding the date of this Agreement.
13
14
3.14 LITIGATION. There is no action, suit, proceeding, or claims by
any governmental agency or other person or entity nor any investigation by any
governmental agency pending or, to the Knowledge of Oak Hill Banks or Oak Hill
Financial, threatened against (i) Oak Hill Banks, (ii) Oak Hill Financial, (iii)
the assets, business or goodwill of Oak Hill Banks or Oak Hill Financial, or
(iv) any director, officer, or Principal Shareholder of Oak Hill Banks or Oak
Hill Financial, in relation to the business of Oak Hill Banks or Oak Hill
Financial or any such person's capacity as a director, officer, or Principal
Shareholder of Oak Hill Banks or Oak Hill Financial.
3.15 COMPLIANCE WITH LAWS. Oak Hill Banks and Oak Hill Financial
hold all permits, licenses, certificates of authority, orders, and approvals of,
and have made all filings, applications, and registrations with, all
governmental or regulatory bodies that are required in order to permit them to
carry on their respective businesses as they are presently conducted. To the
Knowledge of Oak Hill Banks and Oak Hill Financial, Oak Hill Banks and Oak Hill
Financial have conducted their businesses so as to comply in all material
respects with all applicable statutes, regulations, rules, and orders.
3.16 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of Oak Hill Banks, Oak Hill Banks is and
has been at all times in substantial compliance with all applicable
Environmental, and Oak Hill Banks has not engaged in any activity resulting in
a material violation of any applicable Environmental Law. No orders, hearings,
actions, or other proceedings by or before any court or governmental agency in
which Oak Hill Banks is a party are pending or, to the Knowledge of Oak Hill
Banks, threatened in connection with any alleged violation of any applicable
Environmental Law (i) by Oak Hill Banks or (ii) in relation to any part of the
Real Property, and Oak Hill Banks has no Knowledge of any investigations or
inquiries with respect to any such alleged violation. No claims have been made
or, to the Knowledge of Oak Hill Banks, threatened at any time by any third
party against Oak Hill Banks relating to damage, contribution, cost recovery,
compensation, loss, or injury resulting from any Hazardous Substance. To the
Knowledge of Oak Hill Banks, Oak Hill Banks has not caused or permitted any
Hazardous Substance to be integrated into the Real Property or any component
thereof in such manner or quantity as may reasonably be expected to or in fact
would pose a threat to human health or the value of the Real Property. None of
the Real Property has been used by Oak Hill Banks for the storage or disposal
of Hazardous Substances nor to the Knowledge of Oak Hill Banks, is any of the
Real Property contaminated by any Hazardous Substance. To the Knowledge of Oak
Hill Banks, none of the Real Property has in the past contained or presently
contains any underground storage tanks. To the Knowledge of Oak Hill Banks, Oak
Hill Banks has no interest, direct or indirect, in any property owned by a
third party which has been contaminated by Hazardous Substances (excluding any
property as to which the sole interest of Oak Hill Banks is that of a lien
holder or mortgagee, but including any property as to which title has been
taken by Oak Hill Banks pursuant to mortgage foreclosure or similar proceeding
and any property as to which Oak Hill Banks has participated in the financial
management to a degree sufficient to influence the property's treatment of
Hazardous Substances).
(b) To the Knowledge of Oak Hill Banks, the representations
set forth in paragraph (a) above are also true and correct in relation to any
and all real property owned or leased by it at any time prior to the date of
this Agreement, together with any improvements located thereon.
3.17 EMPLOYEE BENEFIT PLANS. All Employee Benefit Plans maintained
by Oak Hill Banks or Oak Hill Financial comply in all material respects with the
requirements of ERISA and the Code and all such plans have been administered to
date in compliance with the requirements of ERISA, the Code, and subsequent
legislation regulating ERISA plans. Each of such plans that is an employee
pension benefit plan within the meaning of Section 3(2) of ERISA that is
intended to be a qualified plan under Section 401(a) of the Code has been
amended to comply in all material respects with current law as required or the
remedial amendment period for such amendment under Section 401(b) of the Code
has not expired and Oak Hill Banks or Oak Hill Financial has obtained favorable
determination letters with respect to all such plans. As of the date hereof, Oak
Hill Banks or Oak Hill Financial has no liability on account of any accumulated
funding deficiency (as defined in Section 412 of the Code) or on account of any
failure to make contributions to or pay benefits under any such plan nor is Oak
Hill Banks or Oak Hill Financial aware of any claim pending or threatened to be
brought by any party regarding such matters. No prohibited transaction has
occurred with respect to any such plan that would result, directly or
indirectly, in the imposition of any excise tax under Section 4975
14
15
of the Code; nor has any reportable event under Section 4043 of ERISA occurred
with respect to any such plan. Neither Oak Hill Banks nor Oak Hill Financial is
a defendant in any lawsuit or criminal action concerning such entity's conduct
as a fiduciary, party-in-interest, or disqualified person with respect to any
plan, nor is either of them engaged in litigation or a continuing controversy
with, or, to the Knowledge of Oak Hill Banks or Oak Hill Financial, under
investigation or examination by, the Department of Labor, Internal Revenue
Service, Justice Department, or Pension Benefit Guaranty Corporation involving
compliance with ERISA or the provisions of the Code relating to employee
benefit plans. All reporting and disclosure requirements of ERISA and the Code
have been met in all respects by all such plans. Neither Oak Hill Banks nor Oak
Hill Financial is required to contribute to an Employee Benefit Plan that is a
"multiemployer plan" within the meaning of Section 3(37) of ERISA.
3.18 CAPITAL REQUIREMENTS. Oak Hill Financial and Oak Hill Banks
are in compliance with all currently applicable capital requirements and
guidelines prescribed by all appropriate federal regulatory agencies.
3.19 LOAN LOSS RESERVES. Since December 31, 1996, Oak Hill Banks
has not incurred any unusual or extraordinary loan losses. The allowance for
loan losses reflected on the financial statements of Oak Hill Banks has been
determined in accordance with generally accepted accounting principles and in
accordance with all applicable regulations of all appropriate regulatory
agencies and is adequate in all material respects under requirements of GAAP to
provide for reasonably anticipated losses on outstanding loans. Oak Hill Banks
has no Knowledge of any potential losses that have not been considered in
establishing the current allowance for loan losses.
3.20 TAX TREATMENT OF THE MERGER. Neither Oak Hill Banks nor Oak
Hill Financial has taken any action or has any knowledge of any fact or
circumstance that is reasonably likely to prevent the transactions contemplated
hereby, including the Merger, from qualifying as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code.
SECTION 4. COVENANTS OF UNITY SAVINGS
Unity Savings covenants and agrees as follows:
4.01 APPLICATIONS FOR REGULATORY APPROVALS; REGISTRATION STATEMENT.
Unity Savings will cooperate, and will cause its respective directors, officers,
employees, agents, and advisers to cooperate, to the extent reasonably
necessary, with Oak Hill Financial and its advisers in connection with the
preparation of the Registration Statement and the applications for regulatory
approvals described in Section 5.02 hereof.
4.02 SHAREHOLDERS' MEETING. As soon as practicable and, in any
event, within ten business days after the SEC has declared the Registration
Statement effective, Unity Savings will call and mail notice of a meeting of its
shareholders for the purpose of adopting the Merger Agreement and this
Agreement, which meeting shall be held not more than 45 days from the date the
notice is mailed, and the Board of Directors of Unity Savings will to the extent
consistent with their fiduciary duty recommend to the shareholders that they
vote their shares in favor of the Merger.
4.03 CONDUCT OF BUSINESS. From the date of this Agreement until the
Effective Time, except as provided herein or as consented to by Oak Hill
Financial in writing, Unity Savings will conduct its respective operations only,
and shall not take any action except, in the ordinary and usual course of
business, and Unity Savings will use its best efforts to preserve intact its
business organization, assets, prospects, and business relationships, to keep
available the services of their officers and employees, and to maintain existing
relationships with other entities. Without limiting the generality of the
foregoing, subject to the exceptions stated above, during such period, Unity
Savings will not except as provided herein:
(a) enter into any agreement or commitment of the
character referred to in subsections 2.18(a)(i) through (xii) hereof; or
(b) take or permit to be taken any action of a character
which is listed in subsections (a) through (q) of Section 2.10 hereof;
provided, however, that, after prior consultation with Oak Hill Financial,
Unity Savings may
15
16
take or permit such of those actions as may be required pursuant to any change
in applicable accounting rules or standards, or by law or any applicable rules
or regulations of any governmental authority.
4.04 ACCESS TO INFORMATION. Unity Savings shall give
representatives of Oak Hill Financial full access, during normal business hours
and upon reasonable notice, to all assets, properties, books, records,
agreements, and commitments of Unity Savings, provided that such access shall
not unreasonably interfere with the operations of Unity Savings, and shall
furnish to representatives of Oak Hill Financial all such information concerning
its and their affairs as Oak Hill Financial may reasonably request. It is
expressly understood that no investigation by Oak Hill Financial or Oak Hill
Banks pursuant to this Section 4.04 or otherwise shall affect any representation
or warranty made herein.
4.05 PRESS RELEASES. Unity Savings shall consult in advance with
Oak Hill Financial as to the form and substance of any press release, written
communication with its shareholders, or other public disclosure of matters
related to the Merger Agreement, this Agreement, or the Merger, and shall not
issue any such press release, written communication, or public disclosure
without the prior written consent of Oak Hill Financial; provided, however, that
nothing contained herein shall prohibit Unity Savings from making any disclosure
(after consultation with Oak Hill Financial with respect thereto) which its
counsel deems necessary under applicable law.
4.06 BEST EFFORTS. Unity Savings shall use its best efforts to take
or cause to be taken all actions necessary, proper, or advisable to consummate
the Merger, including such actions as Oak Hill Financial may reasonably request
in writing.
4.07 ACQUISITION PROPOSALS. Unless and until this Agreement shall
have been terminated by either party pursuant to Section 11 hereof, Unity
Savings shall not (i) directly or indirectly, through any of its officers,
directors, agents, or affiliates, solicit, encourage, initiate, entertain,
consider, or participate in any negotiations or discussions with respect to any
Acquisition Proposal, or (ii) disclose any information not customarily disclosed
to any person or entity or provide access to its properties, books, or records
or otherwise assist or encourage any person or entity in connection with any
Acquisition Proposal; provided, however, that Unity Savings shall be entitled to
entertain, consider, and participate in negotiations and discussions regarding
an Unsolicited Acquisition Proposal, and to disclose such information and
provide such access in connection with such an Unsolicited Acquisition Proposal,
to the extent that the Board of Directors of Unity Savings determines in good
faith, after consultation with XxXxxxxx & Company Securities, Inc., as financial
advisor to Unity Savings, with respect to the financial aspects of the
Unsolicited Acquisition Proposal and the Merger, and with legal counsel to Unity
Savings, that failure to so consider or participate in such negotiations or
discussions would be inconsistent with the fiduciary obligations of the
directors of Unity Savings to the shareholders of Unity Savings. Unity Savings
shall give Oak Hill Financial prompt notice of any such Acquisition Proposals.
4.08 ADVICE OF CHANGES. Between the date hereof and the Effective
Date, Unity Savings shall advise Oak Hill Financial promptly, in writing, of any
fact which, if existing or known on the date hereof, would have been required to
be set forth or disclosed in or pursuant to this Agreement and any fact which,
if existing or known on the date hereof, would have made any of the
representations contained herein untrue. Prior to the Effective Date, Unity
Savings shall deliver to Oak Hill Financial a supplement to the Unity Disclosure
Memorandum, which shall contain a description of any and all such matters.
4.09 CONFIDENTIALITY. From and after the date of this Agreement,
Unity Savings shall, and shall cause its respective Affiliates to, treat all
Confidential Information of Oak Hill Financial and Oak Hill Banks, as
confidential, and Unity Savings shall, and shall cause its respective Affiliates
to, not use any such Confidential Information for any purpose except in
furtherance of the transactions contemplated hereby. In the event this Agreement
is terminated pursuant to Section 11 hereof, Unity Savings shall, and shall
cause its respective Affiliates to, promptly return to Oak Hill Financial all
documents and workpapers, and all copies thereof, containing any such
Confidential Information of Oak Hill Financial or Oak Hill Banks. The covenants
of Unity Savings contained in this Section 4.09 are of the essence and shall
survive any termination of this Agreement and the closing of the transactions
contemplated hereby.
4.10 COORDINATION OF DIVIDENDS. Unity Savings agrees to cooperate
with Oak Hill Financial to ensure that the shareholders of Unity Savings receive
a regular quarterly dividend from either Unity Savings or Oak Hill Financial
16
17
during the quarter in which the Effective Date occurs, but that they do not
receive dividends from both Unity Savings and Oak Hill Financial during such
quarter.
4.11 TAX REPRESENTATIONS. Unity Savings will use its reasonable
efforts to cause the Merger, and will take no action which would cause the
Merger not to qualify for treatment as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code for federal income tax purposes.
4.12 POOLING. The accounting firm of Norman, Jones, Xxxxx and Co.
has reviewed the proposed Merger and knows of no reason why the Merger would not
qualify as a "pooling of interest" for accounting purposes. Unity Savings shall
not intentionally take or cause to be taken any action, whether before or after
the Effective Date, which would disqualify the Merger as a "pooling of
interests" for accounting purposes or as a "reorganization" within the meaning
of Section 368(a) of the Code.
SECTION 5. COVENANTS OF OAK HILL FINANCIAL AND OAK HILL BANKS
Oak Hill Financial and Oak Hill Banks covenant and agree as follows:
5.01 ISSUANCE OF OAK HILL FINANCIAL COMMON; PAYMENT FOR FRACTIONAL
SHARES. At the Effective Time, Oak Hill Financial shall (i) issue all of the
shares of Oak Hill Financial Common into which shares of Unity Savings Common
are to be converted in the Merger and will deliver the certificates for such
shares, or cause the same to be delivered, to the Exchange Agent; and (ii)
deliver to the Exchange Agent the amount of cash to be paid in lieu of issuing
fractional shares of Oak Hill Financial Common in accordance with subsections
8(b)(ii) and 9(a) of the Merger Agreement.
5.02 APPLICATIONS FOR REGULATORY APPROVALS. As soon as reasonably
practicable after the execution of this Agreement, Oak Hill Financial shall
prepare and file such applications with the FDIC, the Federal Reserve Board,
the Division of Financial Institutions, and any other regulatory authorities
having jurisdiction as may be required to secure all necessary regulatory
approvals of the Merger and shall use its best efforts to secure such
approvals. Oak Hill Financial shall deliver a draft or drafts of such
regulatory applications to Unity Savings and provide Unity Savings a reasonable
opportunity to review such draft or drafts prior to filing the same.
5.03 REGISTRATION STATEMENT. As soon as reasonably practicable
after the execution of this Agreement, Oak Hill Financial shall prepare and file
the Registration Statement with the SEC, shall use its best efforts to cause the
Registration Statement to become effective, and shall take such action as may be
required to register or qualify for exemption such shares under the securities
laws of the states where registration or an exemption from registration may be
required. Oak Hill Financial shall deliver a draft or drafts of the Registration
Statement to Unity Savings and provide Unity Savings a reasonable opportunity to
review such draft or drafts prior to filing the same.
5.04 SHAREHOLDERS' MEETING. As soon as practicable and, in any
event, within ten business days after the SEC has declared the Registration
Statement effective, Oak Hill Financial will call and mail notice of a meeting
of its shareholders for the purpose of adopting the Merger Agreement and this
Agreement, which meeting shall be held not more than 45 days from the date the
notice is mailed, and the Board of Directors of Oak Hill Financial will to the
extent consistent with their fiduciary duty recommend to the shareholders that
they vote their shares in favor of the Merger.
5.05 PRESS RELEASES. Oak Hill Financial shall consult in advance
with Unity Savings as to the form and substance of any press release, written
communication with its shareholders, or other public disclosure of matters
related to this Agreement, the Merger Agreement, or the Merger.
5.06 BEST EFFORTS. Oak Hill Financial will use its best efforts
to take or cause to be taken all actions necessary, proper, or advisable to
consummate the Merger.
5.07 CONFIDENTIALITY. From and after the date of this Agreement,
Oak Hill Financial and Oak Hill Banks shall, and shall cause their respective
Affiliates to, treat all Confidential Information of Unity Savings as
confidential,
17
18
and Oak Hill Financial and Oak Hill Banks shall, and shall cause their
respective Affiliates to, not use any such Confidential Information for any
purpose except in furtherance of the transactions contemplated hereby. In the
event this Agreement is terminated pursuant to Section 11 hereof, Oak Hill
Financial and Oak Hill Banks shall, and shall cause their respective Affiliates
to, promptly return to Unity Savings all documents and workpapers, and all
copies thereof, containing any such Confidential Information of Unity Savings.
The covenants of Oak Hill Financial and Oak Hill Banks contained in this
Section 5.07 are of the essence and shall survive any termination of this
Agreement, but shall terminate as of the closing of the transactions
contemplated hereby.
5.08 COORDINATION OF DIVIDENDS. Oak Hill Financial agrees to
cooperate with Unity Savings to ensure that the shareholders of Unity Savings
receive a regular quarterly dividend from either Unity Savings or Oak Hill
Financial during the quarter in which the Effective Date occurs, but that they
do not receive dividends from both Unity Savings and Oak Hill Financial during
such quarter.
5.09 INDEMNIFICATION OF DIRECTORS AND OFFICERS. Oak Hill Banks
acknowledges that, by operation of law, at the Effective Time, Oak Hill Banks
will assume any and all legally enforceable obligations of Unity Savings to
indemnify and defend the directors and officers of Unity Savings pursuant to, to
the extent of, and in accordance with the terms and conditions of any such
obligations that Unity Savings had to indemnify and defend such persons in
effect immediately prior to the Effective Time, in connection with such persons'
status or services as directors and officers of Unity Savings, whether by
contractual right or by any provision of the articles of incorporation or code
of regulations of Unity Savings, with respect to any claim asserted or made
prior to or at any time after the Effective Time. All such rights to
indemnification with respect to any such claim shall continue until the final
disposition of such claim regardless of when such claim was made or asserted;
provided, however, that nothing contained herein shall increase or lengthen the
duration of Oak Hill Banks' obligations with respect to such indemnification
over that to which Unity Savings would have been subject had the Merger not been
consummated. Oak Hill Banks agrees to use its reasonable best efforts to cover
directors and officers of Unity Savings in insurance policies.
5.10 EMPLOYEE BENEFIT AND WELFARE BENEFIT PLANS.
(a) Oak Hill Financial and Oak Hill Banks agree to use their
reasonable best efforts to coordinate the conversion of any pension Employee
Benefit Plans, practices, or policies of Unity Savings into similar plans of
Oak Hill Financial, to the extent that such plans may exist, and to give credit
to any and all employees of Unity Savings who become employees of Oak Hill
Banks following the consummation of the Merger for all service with Unity
Savings prior to the Effective Time for purposes of eligibility, vesting, and
all other purposes for which such service is taken into account or recognized,
to the extent feasible and permissible under all applicable laws and
regulations and the applicable terms of Oak Hill Financial's pension Employee
Benefit Plans.
(b) Oak Hill Financial and Oak Hill Banks agree to use their
reasonable best efforts, including when permitted by law the amendment of
existing plans, to coordinate the maintenance of or conversion into similar
plans of Oak Hill Financial and Oak Hill Banks of any welfare Employee Benefit
Plan, practice, or policy of Unity Savings, to the extent feasible and
permissible under all applicable laws and regulations and the applicable terms
of Oak Hill Financial's or Oak Hill Banks' plans. Furthermore, the former
officers and employees of Unity Savings (and their spouses and dependents, if
applicable) who are under a Unity Savings plan on the Effective Date, may, upon
the cessation of their participation in a Unity Savings plan being maintained
by Oak Hill Banks after the Effective Date, immediately participate in the
corresponding benefit plan maintain by Oak Hill Banks without regard to
pre-existing conditions or waiting periods to the extent then-permitted by law.
5.11 ADVISORY BOARD. The present Board of Directors of Unity
Savings shall continue for one year as an advisory board of directors to Oak
Hill Banks and shall be paid for such service in accordance with the prior
practice of Unity Savings for such period.
5.12 EMPLOYEES OF UNITY SAVINGS. Upon satisfactory review of
employment files, all of Unity Savings' employees will continue to be employed
by Oak Hill Banks, subject to the employment practices and procedures of Oak
Hill Banks.
18
19
5.13 POOLING. The accounting firm of Xxxxx Xxxxxxxx LLP has
reviewed the proposed Merger and determined that the Merger qualifies as a
"pooling of interests" for accounting purposes. Neither Oak Hill Financial nor
Oak Hill Banks shall intentionally take or cause to be taken any action, whether
before or after the Effective Date, which would disqualify the Merger as a
"pooling of interests" for accounting purposes or as a "reorganization" within
the meaning of Section 368(a) of the Code.
SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF ALL PARTIES
The obligations of each of the parties hereto to consummate the Merger
are subject to the fulfillment, on or before the Closing Date, of the following
conditions precedent:
6.01 SHAREHOLDER APPROVAL. The Merger shall have been approved by
the affirmative vote of the holders of at least two-thirds of the issued and
outstanding shares of Unity Savings Common, and by the affirmative vote of the
holders of a majority of the issued and outstanding shares of Oak Hill
Financial.
6.02 REGULATORY APPROVALS. The Merger and the acquisition of
greater than ten percent of the total of the outstanding number of Oak Hill
Financial Common by Xxxxxx Xxxx, Jr. and D. Xxxxx Xxxx, on a combined basis,
shall have been approved by the FDIC, the Federal Reserve Board, the Division of
Financial Institutions, and any other governmental authority having
jurisdiction, and any applicable waiting periods shall have expired, with no
such approval or authorization containing any provision which would be
materially adverse to the business of Unity Savings, Oak Hill Financial or Oak
Hill Banks, either prior to or subsequent to the proposed merger of Unity
Savings and Oak Hill Banks.
6.03 LITIGATION. No suit, action, investigation by any governmental
body, or legal or administrative proceeding shall have been brought or
threatened which materially questions the validity or legality of the
transactions contemplated hereunder or under the Merger Agreement. For purposes
hereof, advisory opinions or written requests for information which could be
used in connection with such suit, investigation, or proceeding given by
governmental agencies may be deemed to constitute such a threat.
6.04 FAIRNESS OPINIONS. Unity Savings shall have received a
fairness opinion from XxXxxxxx & Company Securities, Inc. dated as of the date
of the proxy statement relating to the Merger stating that the exchange ratio is
fair to the shareholders of Unity Savings, as of such date, from a financial
point of view and Oak Hill Financial shall have received a fairness opinion from
Trident Financial Corporation dated as of the date of the proxy statement
relating to the Merger stating that the contemplated merger of Unity Savings and
Oak Hill Banks is fair to the shareholders of Oak Hill Financial, as of such
date, from a financial standpoint.
6.05 TAX OPINION. Oak Hill Financial, Oak Hill Banks, and Unity
Savings shall have received an opinion of Porter, Wright, Xxxxxx & Xxxxxx
substantially to the effect that:
(a) the Merger will constitute a reorganization within the
meaning of Section 368(a)(1)(A) and Section 368(a)(2)(D) of the Code and Unity
Savings, Oak Hill Financial, and Oak Hill Banks will each be a party to the
reorganization within the meaning of Section 368(b) of the Code;
(b) the basis of the assets of Unity Savings acquired by Oak
Hill Banks will be the same in the hands of Oak Hill Banks as the basis of
those assets in the hands of Unity Savings immediately prior to the Merger;
(c) the holding period of the assets of Unity Savings
received by Oak Hill Banks will, in each instance, include the period for which
such assets were held by Unity Savings;
(d) no gain or loss will be recognized by either Oak Hill
Financial or Oak Hill Banks (except for the inclusion in income of amounts
resulting from any required changes in accounting methods or similar items)
upon the consummation of the Merger;
19
20
(e) no gain or loss will be recognized by Unity Savings
(except for the inclusion in income of amounts resulting from any required
changes in accounting methods or similar items) upon consummation of the
Merger;
(f) no gain or loss will be recognized by the shareholders of
Unity Savings who exchange their shares of Unity Savings Common for shares of
Oak Hill Financial Common, except to the extent of any cash received in lieu of
a fractional share of Oak Hill Financial Common;
(g) the basis of the shares of Oak Hill Financial Common to
be received by shareholders of Unity Savings who receive solely shares of Oak
Hill Financial Common will be the same as the basis of the shares of Unity
Savings Common surrendered in exchange therefor;
(h) the holding period of the shares of Oak Hill Financial
Common received by shareholders of Unity Savings will include the holding
period of the shares of Unity Savings Common surrendered in exchange therefor,
provided that the Unity Savings Common was held as a capital asset in the hands
of the shareholder of Unity Savings on the Effective Date;
(i) where solely cash is received by a shareholder of Unity
Savings in exchange for his or her shares of Unity Savings Common pursuant to
the exercise of dissenters' rights, the cash will be treated as having been
received by such shareholder as a distribution in redemption of his Oak Hill
Financial Corporation Common shares received in connection with this
transaction, subject to the provisions and limitations of Section 302 of the
Code, and where, as a result of such distribution, a shareholder owns no shares
of Oak Hill Financial Common either directly or through the application of
Section 318(a) of the Code, the redemption will be a complete termination of
interest within the meaning of Section 302(b)(3) of the Code and such cash will
be treated as a distribution in full payment in exchange for his or her shares
of Unity Savings Common, as provided in Section 302(a) of the Code; and under
Section 1001 of the Code, gain or (subject to the limitations of Section 267 of
the Code) loss will be realized and recognized to such shareholders in an
amount equal to the difference between the amount of such cash and the adjusted
basis of the Unity Savings Common shares surrendered, as determined under
Section 1011 of the Code; and
(j) the payment of cash in lieu of fractional shares of Oak
Hill Financial Common will be treated for federal income tax purposes as if the
fractional shares were distributed as part of the exchange and then were
redeemed by Oak Hill Financial; such cash payments will be treated as having
been received as distributions in full payment in exchange for the stock
redeemed subject to the conditions and limitations of Section 302 of the Code.
In rendering such tax opinion, Porter, Wright, Xxxxxx &
Xxxxxx shall be entitled to rely upon representations of Unity Savings'
officers, directors and those shareholders of Unity Savings who own one percent
or more of the outstanding shares of Unity Savings Common and officers of Oak
Hill Financial reasonably satisfactory in form and substance to Porter, Wright,
Xxxxxx & Xxxxxx.
6.06 MEDICAL/HEALTH INSURANCE COORDINATION. Oak Hill Financial and
Oak Hill Banks shall have received a written affirmation of Medical Mutual of
Ohio fka Blue Cross Blue Shield of Ohio Health Pool ("Health Pool") and Unity
Savings shall have received a written affirmation of Ohio League Trust ("Ohio
League") for medical/health insurance coverage that after the Effective Date,
Oak Hill Financial and Oak Hill Banks may implement one or more of the following
option or options:
(a) Health Pool will allow coverage of Oak Hill Financial's and
Oak Hill Banks' employees (including former Unity Savings
employees) under the Health Pool plan at an acceptable cost
to Oak Hill Financial and Oak Hill Banks;
(b) Health Pool will allow Oak Hill Financial and Oak Hill Banks
to offer more than one medical/health coverage plan to
employees of Oak Hill Financial and Oak Hill Banks (including
former Unity Savings employees), which other plan or plans
may be in addition to coverage under a plan sponsored by
Health Pool;
20
21
(c) Ohio League will allow coverage of Oak Hill Financial's and
Oak Hill Banks' employees (including former Unity Savings
employees) under the Ohio League plan at an acceptable cost
to Oak Hill Financial and Oak Hill Banks; or
(d) Ohio League will allow Oak Hill Financial or Oak Hill Banks
to offer more than one medical/health coverage plan to
employees of Oak Hill Financial and Oak Hill Banks (including
former Unity Savings employees), which other plan or plans
may be in addition to coverage under a plan sponsored by Ohio
League.
SECTION 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF UNITY SAVINGS
The obligations of Unity Savings to consummate the Merger are subject
to the fulfillment on or before the Closing Date of the following additional
conditions precedent:
7.01 REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by Oak Hill Financial herein shall be true and correct in all
material respects on the Effective Date with the same force and effect as though
such representations and warranties had been made on and as of such date; Oak
Hill Financial and Oak Hill Banks shall have performed in all material respects
their obligations hereunder and under the Merger Agreement to be performed on or
before the Closing Date; and an executive officer of Oak Hill Financial shall
have executed and delivered to Unity Savings a certificate or certificates,
dated as of the Closing Date, in respect of the foregoing matters and in respect
of such other matters as Unity Savings shall reasonably request.
7.02 OPINION OF COUNSEL. Unity Savings shall have received a
favorable opinion dated as of the Closing Date from Porter, Wright, Xxxxxx &
Xxxxxx, counsel for Oak Hill Financial, to the effect that:
(a) Oak Hill Financial and Oak Hill Banks are corporations
duly organized, validly existing, and in good standing under the laws of the
State of Ohio; Oak Hill Financial and Oak Hill Banks have the corporate power
and authority to own all of their properties and assets and to carry on their
businesses as presently conducted in all jurisdictions in which such ownership
exists or such business is conducted; and Oak Hill Banks has the corporate
power and authority to merge with Unity Savings pursuant to this Agreement and
the Merger Agreement;
(b) the execution and delivery of this Agreement and the
Merger Agreement did not, and the consummation of the Merger will not, conflict
with any provision of the articles or certificate of incorporation,
regulations, bylaws, or other charter documents of Oak Hill Financial or Oak
Hill Banks;
(c) the execution and delivery of this Agreement and the
Merger Agreement and the consummation of the Merger have been authorized by all
necessary corporate action of Oak Hill Financial and Oak Hill Banks; and this
Agreement and the Merger Agreement are valid and binding agreements of Oak Hill
Financial and Oak Hill Banks enforceable in accordance with their terms, except
as may be limited by bankruptcy, insolvency, or other similar laws affecting
enforcement of creditors' rights generally and except that the enforceability
of the obligations of Oak Hill Financial and Oak Hill Banks is subject to
general principles of equity;
(d) the shares of Oak Hill Financial Common to be issued by
Oak Hill Financial in the Merger have been authorized and, upon issuance, will
be fully paid and nonassessable and will not be subject to the preemptive
rights of any shareholder of Oak Hill Financial;
(e) all necessary regulatory approvals have been received
and all applicable waiting periods have expired;
(f) Oak Hill Financial is a duly and validly registered
Bank Holding Company;
(g) Oak Hill Banks is a state-chartered bank; and
21
22
(h) Oak Hill Banks deposit accounts are insured by BIF to the
fullest extent permitted by law.
Such opinion may be governed by the Accord. In giving such opinion,
such counsel may rely as to matters of fact, without independent investigation,
to the extent such counsel deems such reliance to be customary, reasonable, and
appropriate, on certificates of federal, state, or local government officials
and on certificates of officers and directors of Oak Hill Financial or Oak Hill
Banks. Such counsel may expressly exclude any opinions as to choice of law
matters and antitrust matters and may add such other qualifications and
explanations of the basis of its opinions as are consistent with the Accord.
7.03 EFFECTIVENESS OF THE REGISTRATION STATEMENT; NASD LISTING.
Unity Savings shall have received a certificate from a duly authorized officer
of Oak Hill Financial to the effect that the Registration Statement has become
effective by an order of the SEC, the Oak Hill Financial Common to be exchanged
in the Merger has been qualified or is exempt under all applicable state
securities laws, and there has been no stop order issued or threatened by the
SEC that suspends or would suspend the effectiveness of the Registration
Statement, and no proceeding has been commenced or overtly threatened for such
purpose. The shares of Oak Hill Financial Common to be issued to Unity Savings
shareholders pursuant to the Merger Agreement shall have been authorized for
listing on the NASDAQ National Market upon official notice of issuance.
7.04 MATERIAL ADVERSE CHANGE. Since December 31, 1996, there shall
not have occurred any material adverse change in the results of operation,
financial condition, properties, or business of Oak Hill Financial on a
consolidated basis.
7.05 AVERAGE CLOSING PRICE. Neither of the following shall have
occurred:
(a) Both of the following conditions are satisfied: (1) the
Average Closing Price on the Closing Date of shares of Oak Hill
Financial Common shall be less than 85% of the Starting Price; and (2)
the Index Price on the Closing Date shall be greater than the product
of 0.85 and the Index Price on the Starting Date; or
(b) the Average Closing Price on the Closing Date of shares
of Oak Hill Financial Common shall be less than 80% of the Starting
Price.
SECTION 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF OAK HILL FINANCIAL AND
OAK HILL BANKS
The obligations of Oak Hill Financial and Oak Hill Banks to consummate
the Merger are subject to the fulfillment on or before the Closing Date of the
following additional conditions precedent:
8.01 REGULATORY APPROVAL OF THE SUBSIDIARY MERGER. The Merger shall
have been approved by the FDIC, the Federal Reserve Board, the Division of
Financial Institutions, and any other governmental authority having
jurisdiction, and any applicable waiting periods shall have expired, with no
such approval or authorization containing any provision which would be
materially adverse to the business of Oak Hill Financial or Oak Hill Banks.
8.02 REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by Unity Savings herein shall be true and correct in all
material respects on the Closing Date with the same force and effect as though
such representations and warranties had been made on and as of such date; Unity
Savings shall have performed in all material respects its obligations hereunder
and under the Merger Agreement to be performed on or before the Closing Date;
and the chief executive officer and principal financial officer of Unity
Savings shall have executed and delivered to Oak Hill Financial certificates,
dated as of the Closing Date, in respect of the foregoing matters and in
respect of such other matters as Oak Hill Financial shall reasonably request.
22
23
8.03 OPINION OF COUNSEL. Oak Hill Financial shall have received a
favorable opinion dated as of the Effective Date from Vorys, Xxxxx, Xxxxxxx and
Xxxxx, as counsel for Unity Savings, reasonably acceptable to Oak Hill
Financial, to the effect that:
(a) Unity Savings is a state chartered savings bank, duly
organized, validly existing, and in good standing under the laws Ohio; Unity
Savings is a member in good standing of the FHLB of Cincinnati; all eligible
accounts of deposit in Unity Savings is insured by the SAIF to the fullest
extent permitted by law; all corporate action required to be taken by the
directors and shareholders of Unity Savings to authorize the transactions
contemplated by this Agreement and the Merger Agreement have been taken; and
Unity Savings has the corporate power to effect the Merger in accordance with
the terms of this Agreement and the Merger Agreement;
(b) the execution and delivery of this Agreement and the
Merger Agreement did not, and the consummation of the Merger will not, conflict
with any provision of the articles or certificate of incorporation,
regulations, bylaws, or other charter documents of Unity Savings; and
(c) the execution and delivery of this Agreement and the
Merger Agreement and the consummation of the Merger have been authorized by all
necessary corporate action of Unity Savings; and this Agreement and the Merger
Agreement are valid and binding agreements of Unity Savings enforceable in
accordance with their terms, except as may be limited by bankruptcy,
insolvency, reorganization, or similar laws affecting enforcement of creditors'
rights generally and except that the enforceability of the obligations of Unity
Savings may be subject to general principles of equity.
Such opinion may be governed by the Accord. In giving such opinion, such
counsel may rely as to matters of fact, without independent investigation, to
the extent such counsel deems such reliance to be customary, reasonable, and
appropriate, on certificates of federal, state, or local government officials
and on certificates of officers and directors of Unity Savings. Such counsel
may expressly exclude any opinions as to choice of law matters and antitrust
matters and may add such other qualifications and explanations of the basis of
its opinions as are consistent with the Accord.
8.04 AGREEMENTS OF AFFILIATES. Each director and their
"affiliates," for purposes of Rule 145 under the 1933 Act, shall deliver to Oak
Hill Financial prior to the Effective Date a written agreement, providing that
such person will not sell the shares of Oak Hill Financial Common to be received
by such person in the Merger unless such sales are pursuant to an effective
registration statement under the 1933 Act or pursuant to Rule 145 of the SEC or
another exemption from the registration requirements under the 0000 Xxx.
8.05 DISSENTING SHAREHOLDERS. The total number of shares of Unity
Savings Common, if any, as to which the right to dissent has been asserted under
Section 1701.85 of the Ohio Revised Code shall not exceed five percent (5%) of
the total number of outstanding shares of Unity Savings Common.
8.06 MATERIAL ADVERSE CHANGE. Since December 31, 1996, there shall
not have occurred any material adverse change in the consolidated results of
operations, financial condition, properties, or business of Unity Savings, other
than any such change attributable to or resulting from (i) changes in law,
regulation, or generally accepted accounting principles of general application
to the banking or thrift industries, (ii) changes in economic conditions that
affect the banking and thrift industries generally, including changes in the
general level of interest rates, or (iii) any matter or matters relating to
Unity Savings which have been disclosed in the Unity Disclosure Memorandum as of
the date of this Agreement.
8.07 TITLE INSURANCE. For each parcel of the Real Property
described in the Unity Disclosure Memorandum as being owned by Unity Savings,
and for each lease for any parcel of the Real Property described in the Unity
Disclosure Memorandum as being leased by Unity Savings, Oak Hill Banks or Oak
Hill Financial shall have obtained a title insurance commitment (ALTA 1966 form
or its equivalent) for a fee owner's title insurance policy or leasehold owner's
title insurance policy, as appropriate, each in an amount equal to the carrying
cost of the premises or leasehold interest to be insured (including all
improvements thereon), on the books of Unity Savings as of December 31, 1996.
Each title insurance commitment shall show that marketable fee simple title to
the owned premises or that valid
23
24
leasehold title to the leased premises, as appropriate, is in the name of Unity
Savings, and that it is free and clear of any liens and encumbrances except
taxes and assessments not delinquent and utility and other easements that do
not interfere with the use of the property for the business being conducted
thereon. Each such commitment shall provide that such fee owner's policy
committed for therein shall be an ALTA 1970 form, revised in 1984, and each
leasehold owner's policy shall be an ALTA 1975 form, or other form acceptable
to Oak Hill Financial and Oak Hill Banks.
8.08 SURVEY. Oak Hill Financial or Oak Hill Banks shall have
obtained current land surveys of those parcels of the Real Property specifically
designated by Oak Hill Banks. Each survey to be conducted and prepared by a duly
licensed land surveyor, with such survey to be a duly certified ALTA/ACSM field
survey, which confirm that the Real Property is not subject to any easements,
restrictions, set backs, encroachments, or other limitations except utility and
other easements that do not interfere with the use of the Real Property for the
business then being conducted thereon, and that the Real Property is not located
in any flood hazard area.
8.09 PHASE I. For each parcel of the Real Property described in the
Unity Disclosure Memorandum as being leased or owned by Unity Savings, Oak Hill
Banks or Oak Hill Financial shall have completed a "Phase I" environmental site
assessment prepared by a licensed environmental engineering firm indicating that
there is no evidence of contamination with Hazardous Substances or other
violations of environmental Laws and concluding that no testing or additional
investigations appears to be warranted.
8.10 CONSENTS AND APPROVALS. Unity Savings shall have obtained any
and all consents or approvals that may be required under the terms of (i) any
contract, agreement, lease, or other obligation or commitment, including, but
not limited to, the types described in Section 2.18 hereof, to which either
Unity Savings is a party or by which either Unity Savings or any of their
property or assets is bound, or (ii) any license or permit of Unity Savings, in
order to avoid the occurrence of any breach or default which may result from the
consummation of the Merger and which, if not obtained, is reasonably likely to
have, individually or in the aggregate, a material adverse effect on Oak Hill
Financial, Oak Hill Banks or Unity Savings.
8.11 AGREEMENT TO VOTE. Oak Hill Financial shall have received from
each of Unity Savings' shareholders who own in excess of five percent (5%) of
the outstanding shares of Unity Savings Common an agreement, substantially in
the form attached hereto as EXHIBIT A, to vote in favor of the Merger all shares
of Unity Savings Common owned by them or over which they have the power to vote.
8.12 SHAREHOLDERS' EQUITY. The total shareholders' equity of Unity
Savings as of the end of the most recent calendar quarter preceding the Closing
Date and as of the Closing Date shall not be less than the total shareholders'
equity of Unity Savings as of December 31, 1996, except for Unity Savings'
expenses relating to the Merger and adjustments relating to the Merger and
requested by Oak Hill Financial.
8.13 EXECUTIVE COMPENSATION AGREEMENT. Unity Savings shall have
delivered to Oak Hill Financial and Oak Hill Banks, an executed copy of a
written release from Xxxxx Xxxxx Xxxx, satisfactory to Oak Hill Financial and
Oak Hill Banks, which provides that the liability and obligations of Unity
Savings as a party to a certain Executive Salary Continuation Agreement between
Unity Savings and Xxxxx Xxxxx Xxxx, dated December 7, 1994, are completely
extinguished by mutual agreement.
SECTION 9. CLOSING DATE
Unless the parties otherwise agree, the closing of the transactions
contemplated by this Agreement and the Merger Agreement ("Closing Date") shall
be held at 11:00 a.m. at the offices of Porter, Wright, Xxxxxx & Xxxxxx in
Columbus, Ohio, on the last business day of the month in which the conditions
specified in Sections 6.01 and 6.02 hereof have been satisfied.
24
25
SECTION 10. AMENDMENT
At any time prior to the Closing Date, the parties, subject to
paragraph 14 of the Merger Agreement, may modify, amend, or supplement this
Agreement by mutual agreement authorized by their respective boards of
directors and evidenced by an instrument in writing executed and delivered by
the parties hereto, whether before or after the shareholders of Unity Savings
has adopted this Agreement.
SECTION 11. TERMINATION
11.01 TERMINATION. This Agreement and the Merger Agreement shall
terminate on December 31, 1997, unless a later date is agreed upon in writing by
the parties, and may be terminated and the Merger may be abandoned at any time
prior to the Effective Time as follows:
(a) by the mutual consent, evidenced in writing, of the
boards of directors of Oak Hill Financial, Oak Hill Banks, and Unity Savings;
(b) by the board of directors of Oak Hill Financial, by
giving written notice thereof to Unity Savings, which notice shall specify in
reasonable detail the grounds therefor: (i) if any condition precedent to
performance by Oak Hill Financial and Oak Hill Banks has not been satisfied or
waived; (ii) if Unity Savings has not fully performed its obligations and
agreements hereunder and under the Merger Agreement; or (iii) if any of the
representations of Unity Savings set forth herein are untrue or incorrect in
any material respect; or
(c) by the board of directors of Unity Savings, by giving
written notice thereof to Oak Hill Financial, which notice shall specify in
reasonable detail the grounds therefor: (i) if any condition precedent to
performance by Unity Savings has not been satisfied or waived; (ii) if Oak Hill
Financial and Oak Hill Banks have not fully performed their obligations and
agreements hereunder and under the Merger Agreement; or (iii) if any of the
representations of Oak Hill Financial set forth herein are untrue or incorrect
in any material respect.
11.02 SURVIVAL OF CERTAIN PROVISIONS UPON TERMINATION. Upon a
termination of this Agreement as provided herein, this Agreement and the Merger
Agreement shall become void and there shall be no further obligation or
liability on the part of any party hereto or their respective shareholders,
directors, or officers, except pursuant to Sections 4.09, 5.07, 11.03, and 12
hereof, which shall survive a termination of this Agreement in accordance with
the express terms of such Sections.
11.03 TERMINATION FEE. During the term of this Agreement, if (i) an
Unsolicited Acquisition Proposal is submitted to and approved by the
shareholders of Unity Savings at any time prior to the Effective Time, or (ii)
an Unsolicited Acquisition Proposal is received by Unity Savings or is made
directly to the shareholders of Unity Savings at any time prior to the holding
of the meeting of the shareholders of Unity Savings to be called pursuant to
Section 4.02 hereof, the board of directors of Unity Savings fails to recommend
to the shareholders of Unity Savings approval of the Merger Agreement or this
Agreement, withdraws such recommendation previously made to the shareholders of
Unity Savings, or fails to solicit proxies of shareholders of Unity Savings to
approve the Merger, and the Merger Agreement and this Agreement are subsequently
rejected by the shareholders of Unity Savings at such meeting, then, in either
such event, Unity Savings shall pay to Oak Hill Financial, within five business
days after a termination of the Merger Agreement and this Agreement following
such an event, a cancellation fee in the amount of $325,000, as liquidated
damages, and not as a penalty, and, upon the payment in full thereof, Unity
Savings shall have no further liability under this Agreement or the Merger
Agreement. The obligations of Unity Savings under this Section 11.03 shall
survive a termination of this Agreement, provided that, at the time of such
termination, (1) an event described in Section 7.04 hereof has not occurred, and
(2) Unity Savings does not have the right to terminate this Agreement by virtue
of a material breach of this Agreement or the Merger Agreement by Oak Hill
Financial or Oak Hill Banks.
25
26
SECTION 12. EXPENSES
Except as otherwise expressly provided herein, all expenses incurred
by or on behalf of the parties hereto in connection with the authorization,
preparation, execution, and consummation of this Agreement and the Merger
Agreement, including, without limitation, all fees and expenses of agents,
representatives, printers, and counsel employed by the parties hereto, and
taxes, if any, shall be borne solely by the party which has or shall have
incurred the same. The covenants of the parties contained in this Section 12
shall survive a termination of this Agreement for any reason.
SECTION 13. NOTICES
All notices, requests, demands, and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
personally or sent by facsimile and confirmed by first-class, certified mail,
postage prepaid, addressed as indicated below, or at such other address as such
party may designate in writing to the other parties:
(a) If to Unity Savings, to:
D. Xxxxx Xxxx
President
Unity Savings Bank
000 Xxxx Xxxx Xxxxxx
X.X. Xxx 000
XxXxxxxx, Xxxx 00000
with a copy to:
Xxxxx Xxxxxxxx
Vorys, Xxxxx, Xxxxxxx and Xxxxx
000 X. 0xx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
(b) If to Oak Hill Financial or Oak Hill Banks, to:
Xxxx X. Xxxx
President
Oak Hill Financial, Inc.
00000 Xxxxx Xxxxx 00
Xxxxxxx, Xxxx 00000
with a copy to:
H. Xxxxx Xxxxxxxxxx, Esq.
Porter, Wright, Xxxxxx & Xxxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
SECTION 14. GENERAL PROVISIONS
14.01 ENTIRE AGREEMENT. This Agreement, together with the Merger
Agreement and the documents referred to or incorporated herein or therein,
reflect 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 any other party in any manner by any
representations, warranties, or covenants except as specifically set forth
herein or therein.
26
27
14.02 WAIVER. At any time on or prior to the Effective Date, any
party hereto may (i) waive any inaccuracies in the representations and
warranties of the other parties contained in this Agreement and the Merger
Agreement or in any document delivered pursuant hereto or thereto, or (ii) waive
compliance by the other parties with any of the conditions, covenants, and
agreements contained in this Agreement or the Merger Agreement.
14.03 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 party.
14.04 BENEFIT. Except as specifically provided herein, 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.
14.05 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.
14.06 GOVERNING LAW. This Agreement shall be construed and enforced
in accordance with the laws of the State of Ohio without regard to its conflicts
of laws principles.
14.07 INCORPORATION BY REFERENCE. The Merger Agreement, the
Disclosure Memoranda, and all Exhibits attached hereto are hereby incorporated
by reference herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
OAK HILL FINANCIAL, INC.
By: /s/ XXXX X. XXXX
-----------------------
Xxxx X. Xxxx, President
OAK HILL BANKS
By: /s/ XXXX X. XXXX
-----------------------
Xxxx X. Xxxx, President
UNITY SAVINGS BANK
By: /s/ D. XXXXX XXXX
------------------------
D. Xxxxx Xxxx, President
27
