PLAN OF REORGANIZATION AND ACQUISITION
Pursuant to Section 26B of Chapter 172
of the General Laws of Massachusetts
This Plan of Reorganization and Acquisition (the "Plan") is dated as of
February 17, 1999 and made between Ipswich Savings Bank, a Massachusetts savings
bank (the "Bank"), and Ipswich Bancshares, Inc., a Massachusetts corporation
(the "Holding Company").
The Bank is a stock savings bank, duly organized and validly existing
under the laws of The Commonwealth of Massachusetts, with its principal office
at 00 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000. The authorized capital stock
of the Bank consists of (i) 12,000,000 shares of common stock, par value $.10
per share (the "Bank Common Stock"), of which 2,392,286 shares are issued and
outstanding as of the date hereof, and (ii) 1,000,000 shares of preferred stock,
par value $.10 per share, none of which are issued and outstanding as of the
date hereof.
The Holding Company is a corporation, duly organized and validly
existing under the laws of Massachusetts, with its principal office at 00 Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000. The authorized capital stock of the
Holding Company consists of 12,000,000 shares of common stock, par value $.10
per share (the "Holding Company Common Stock"), of which 100 shares are issued
and outstanding as of the date hereof, all of which are held by the Bank, and
1,000,000 shares of preferred stock, par value $.10 per share, none of which are
issued and outstanding as of the date hereof.
The Bank and the Holding Company have agreed that the Holding Company
will acquire all of the issued and outstanding shares of Bank Common Stock in
exchange for shares of Holding Company Common Stock pursuant to the provisions
of Section 26B of Chapter 172 of the General Laws of Massachusetts and of this
Plan. This Plan has been adopted and approved by a vote of a majority of all of
the members of the Board of Directors of the Bank, and by a vote of a majority
of all the members of the Board of Directors of the Holding Company. The
officers of the Bank and of the Holding Company whose respective signatures
appear below have been duly authorized to execute and deliver this Plan.
NOW, THEREFORE, in consideration of the premises, the Bank and the
Holding Company agree as follows:
SECTION 1. Approval and Filing of Plan
1.1. The Plan shall be submitted for approval by the holders of Bank
Common Stock at a meeting to be called and held in accordance with the
applicable provisions of law. Notice of such meeting shall be published at least
once a week for two successive weeks in a newspaper of general circulation in
the County of Essex, The Commonwealth of Massachusetts. Both of
said publications of notice of such meeting shall be at least fifteen days prior
to the date of the meeting.
1.2. Upon approval of the Plan by vote of the holders of two-thirds of
the outstanding shares of Bank Common Stock as required by law, the Bank and the
Holding Company shall submit the Plan to the Commissioner of Banks of The
Commonwealth of Massachusetts (the "Bank Commissioner") for his approval and
filing in accordance with the provisions of Section 26B of Chapter 172 of the
General Laws of Massachusetts. The Plan shall be accompanied by such
certificates of the respective officers of the Bank and the Holding Company as
may be required by law.
SECTION 2. Definition of Effective Time
2.1. The Plan shall become effective at 12:01 a.m. on the date
specified in the written notice filed by the Bank and the Holding Company with
the Bank Commissioner stating (i) that all the conditions precedent to the Plan
becoming effective specified in Section 4 have been satisfied and (ii) that the
Plan has not been abandoned by the Bank or the Holding Company in accordance
with the provisions of Section 5. Such time is hereafter called the "Effective
Time".
SECTION 3. Actions at the Effective Time
3.1. At the Effective Time, the Holding Company shall, without any
further action on its part or on the part of the holders of Bank Common Stock,
automatically and by operation of law acquire and become the owner for all
purposes of all of the then issued and outstanding shares of Bank Common Stock
and shall be entitled to have issued to it by the Bank a certificate or
certificates representing such shares. Thereafter, the Holding Company shall
have full and exclusive power to vote such shares of Bank Common Stock, to
receive dividends thereon and to exercise all rights of an owner thereof.
3.2. At the Effective Time, the shares of Holding Company stock which
are outstanding will be cancelled.
3.3. At the Effective Time, the holders of the then issued and
outstanding shares of Bank Common Stock shall, without any further action on
their part or on the part of the Holding Company, automatically and by operation
of law cease to own such shares and shall instead become owners of one share of
Holding Company Common Stock for each share of Bank Common Stock held by them
immediately prior to the Effective Time. Thereafter, such persons shall have
full and exclusive power to vote such shares of Holding Company Common Stock, to
receive dividends thereon, except as provided herein, and to exercise all rights
of an owner thereof.
3.4. At the Effective Time, all previously issued and outstanding
certificates representing shares of Bank Common Stock (the "Old Certificates")
shall automatically and by operation of law cease to represent shares of Bank
Common Stock or any interest therein and
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each Old Certificate shall instead represent the ownership by the holder thereof
of an equal number of shares of Holding Company Common Stock. No holder of an
Old Certificate shall be entitled to vote the shares of Bank Common Stock
formerly represented by such certificate, or to receive dividends thereon, or to
exercise any other rights of ownership in respect thereof.
3.5. Notwithstanding any of the foregoing, any dissenting stockholder,
as defined in Subsection 7.1, shall have such rights as are provided by
Subsection 7.2 and by the laws of The Commonwealth of Massachusetts.
SECTION 4. Conditions Precedent
The Plan shall not become effective unless all of the following first
shall have occurred:
4.1. The Plan shall have been approved by a vote of two-thirds of the
outstanding Bank Common Stock at a meeting of the holders of the Bank Common
Stock held for such purpose.
4.2. The Plan shall have been approved by the Bank Commissioner and a
copy of the Plan with his approval endorsed thereon shall have been filed in his
office, all as provided in Section 26B of Chapter 172 of the General Laws of
Massachusetts.
4.3. The acquisition of the Bank by the Holding Company shall have been
reviewed without objection by any appropriate federal agency.
4.4. The Bank shall have received a favorable opinion from its counsel,
satisfactory in form and substance to the Bank, with respect to the federal
income tax consequences of the Plan and the acquisition contemplated thereby.
4.5. The Bank shall have received a favorable letter from its
independent public accountants, satisfactory in form and substance to the Bank,
with respect to the accounting treatment of the transaction.
4.6. The shares of Holding Company Common Stock to be issued to the
holders of Bank Common Stock pursuant to the Plan shall have been registered or
shall be exempt from registration under the Securities Act of 1933, as amended,
and all applicable state securities laws.
4.7. The Bank and the Holding Company shall have obtained all other
consents, permissions, opinions and approvals and taken all actions required by
law or agreement, or deemed necessary by the Bank or the Holding Company, to
enable the Holding Company to have and exercise all rights of ownership with
respect to all of the outstanding shares of Bank Common Stock acquired by it
under the Plan.
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SECTION 5. Abandonment of Plan
5.1. The Plan may be abandoned by either the Bank or the Holding
Company at any time before the Effective Time in the event that:
(a) The number of shares of Bank Common Stock owned by
Dissenting Stockholders, as defined in Section 7.1, shall make
consummation of the acquisition contemplated by the Plan inadvisable in
the opinion of the Bank or the Holding Company;
(b) Any action, suit, proceeding or claim has been instituted,
made or threatened relating to the Plan which shall make consummation
of the acquisition contemplated by the Plan inadvisable in the opinion
of the Bank or the Holding Company; or
(c) For any other reason consummation of the acquisition
contemplated by the Plan is inadvisable in the opinion of the Bank or
the Holding Company.
Such abandonment shall be effected by written notice by either the Bank
or the Holding Company to the other of them, and shall be authorized or approved
by the Board of Directors of the party giving such notice. Upon the giving of
such notice, the Plan shall be terminated and there shall be no liability
hereunder or on account of such termination on the party of the Bank or the
Holding Company or the Directors, officers, employees, agents or stockholders of
either of them. In the event of abandonment of the Plan, the Bank shall pay the
fees and expenses incurred by itself and the Holding Company in connection with
the Plan and the proposed acquisition. If either party hereto gives written
notice of termination to the other party pursuant to this section, the party
giving such written notice shall simultaneously furnish a copy thereof to the
Bank Commissioner.
SECTION 6. Amendment of Plan
6.1. The Plan may be amended or modified at any time by written
agreement approved by the Boards of Directors of the Holding Company and the
Bank (i) prior to the approval hereof by the stockholders of the Bank, in any
respect, and (ii) subsequent to such approval, in any respect, provided that the
Bank Commissioner shall approve of such amendment or modification.
SECTION 7. Rights of Dissenting Stockholders
7.1. "Dissenting Stockholders" shall mean those holders of Bank Common
Stock who file with the Bank before the taking of the vote on the Plan written
objection to the Plan, pursuant to Chapter 156B of the General Laws of
Massachusetts, stating that they intend to demand payment for their shares of
Bank Common Stock if the Plan is consummated and whose shares are not voted in
favor of the Plan.
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7.2. Dissenting Stockholders who comply with the provisions of Sections
86 to 98, inclusive, of Chapter 156B of the General Laws of Massachusetts and
all other applicable provisions of law shall be entitled to receive from the
Bank payment of the fair value of their shares of Bank Common Stock upon
surrender by such holders of the certificates which previously represented
shares of Bank Common Stock. Certificates so obtained by the Bank, upon payment
of the fair value of such shares of provided by law, shall be cancelled. Shares
of Holding Company Common Stock to which Dissenting Stockholders would have been
entitled had they not dissented shall be deemed to constitute authorized but
unissued shares of Holding Company Common Stock and may be sold or otherwise
disposed of by the Holding Company at the discretion of, and on such terms as
may be fixed by, its Board of Directors.
SECTION 8. Stock Option Plans
By consummation of the acquisition contemplated by the Plan, the
Holding Company shall have approved its adoption of the Bank's existing 1996
Stock Incentive Plan and 1992 Incentive and Nonqualified Stock Option Plan and,
if adopted by the Bank's stockholders, of the 1998 Stock Incentive Plan
(collectively, the "Stock Option Plans") as the Stock Option Plans of the
Holding Company and shall have agreed to issue Holding Company Common Stock in
lieu of Bank Common Stock pursuant to options currently outstanding under the
existing Stock Option Plans of the Bank. As of the Effective Time, the
unexercised portion of the options outstanding under the existing Stock Option
Plans of the Bank shall be assumed by the Holding Company and thereafter shall
be exercisable only for shares of Holding Company Common Stock, with each such
option being exercisable for a number of shares of Holding Company Common Stock
equal to the number of shares of Bank Common Stock that were available
thereunder immediately prior to the Effective Time, and with no change in the
option exercise price or any other term or condition of such option. The Holding
Company and the Bank shall make appropriate amendments to the existing Stock
Option Plans to reflect the adoption of the Stock Option Plans as the Stock
Option Plans of the Holding Company without adverse effect upon the options
outstanding under the existing Stock Option Plans of the Bank.
SECTION 9. Directors' Deferred Compensation Plan
By consummation of the acquisition contemplated by the Plan, the
Holding Company shall have approved its adoption of the existing Deferred
Compensation Plan for Directors of Ipswich Savings Bank and shall have agreed to
issue Holding Company Stock in lieu of Bank Common Stock in payment of stock
units allocated to a Director's account pursuant to the Deferred Compensation
Plan (each such stock unit, as allocated, a "Stock Unit). At the Effective Time,
each Stock Unit shall represent one share of Holding Company Stock.
SECTION 10. Governing Law
The Plan shall take effect as a sealed instrument and shall be governed
by and construed in accordance with the laws of The Commonwealth of
Massachusetts.
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SECTION 11. Counterparts
The Plan may be executed in several identical counterparts, each of
which when executed and delivered by the parties hereto shall be an original,
but all of which together shall constitute a single instrument. In making proof
of the Plan, it shall not be necessary to produce or account for more than one
such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Plan of
Reorganization and Acquisition to be duly executed as of the date first set
forth above and their corporate seals to be hereunto affixed.
[SEAL] IPSWICH SAVINGS BANK
Attest:
/s/ Xxxxxxx Xxxxx By: /s/ Xxxxx X. Xxxx
------------------------------ ------------------------------
Xxxxxxx Xxxxx, Clerk Xxxxx X. Xxxx, President
and Chief Executive Officer
[SEAL] IPSWICH BANCSHARES, INC.
Attest:
/s/ Xxxxxxx Xxxxx By: /s/ Xxxxx X. Xxxx
------------------------------ ------------------------------
Xxxxxxx Xxxxx, Clerk Xxxxx X. Xxxx, President
and Chief Executive Officer
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