Exhibit 2.1
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, dated as of September
12, 2002 ("Agreement"), among Laurel Capital Group, Inc.
("Laurel"), a Pennsylvania corporation, Laurel Savings Bank (the
"Bank"), a Pennsylvania-chartered savings bank and a wholly-
owned subsidiary of Laurel, SFSB Holding Company ("SFSB"), a
Pennsylvania corporation, and Xxxxxxx Federal Savings Bank
("Xxxxxxx Savings"), a federally-chartered savings bank and
wholly-owned subsidiary of SFSB.
WITNESSETH:
WHEREAS, the Boards of Directors of Laurel, the Bank, SFSB
and Xxxxxxx Savings have determined that it is in the best
interests of their respective companies and their stockholders to
consummate the business combination transactions provided for
herein; and
WHEREAS, the parties desire to provide for certain
undertakings, conditions, representations, warranties and
covenants in connection with the transactions contemplated
hereby; and
WHEREAS, as a condition and inducement to the willingness of
Laurel to enter into this Agreement, the directors and executive
officers of SFSB (the "FSB Stockholders") are concurrently
entering into a Stockholder Agreement with Laurel (the
"Stockholder Agreement"), in substantially the form attached
hereto as Exhibit A, pursuant to which, among other things, such
directors agree to vote their shares of SFSB Common Stock (as
defined below) in favor of this Agreement and the transactions
contemplated hereby.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants, representations, warranties and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.01 The Merger. Subject to the terms and conditions of
this Agreement and subject to and in accordance with an Agreement
of Merger, a copy of which is attached hereto as Exhibit B (the
"Agreement of Merger"), between SFSB and SFSB Acquisition Corp.
(Interim), a Pennsylvania corporation to be formed as a wholly-
owned subsidiary of Laurel in connection with the transactions
contemplated hereby, at the Effective Time (as defined in Section
1.05 hereof), Interim shall be merged with and into SFSB in
accordance with Chapter 19, Subchapter C of the Pennsylvania
Business Corporation Law ("PBCL") (the "Merger"), with SFSB as
the surviving corporation (hereinafter sometimes called the
"Surviving Corporation"). Simultaneously with or immediately
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following consummation of the Merger, the parties hereto will
cause Xxxxxxx Savings to be merged with and into the Bank, with
the Bank as the resulting institution (the Bank Merger).
Simultaneously with or as soon as practicable after the Bank
Merger, the Surviving Corporation shall be merged with and
liquidated into Laurel (the "Liquidation") in accordance with a
Plan of Complete Liquidation, the form of which is attached
hereto as Exhibit C.
1.02 Effect of the Merger. As of the Effective Time
(as defined in Section 1.05 hereof), the Surviving Corporation
shall be considered the same business and corporate entity as
each of SFSB and Interim and thereupon and thereafter, all the
property, rights, powers and franchises of each of SFSB and
Interim shall vest in the Surviving Corporation and the Surviving
Corporation shall be subject to and be deemed to have assumed all
of the debts, liabilities, obligations and duties of each of SFSB
and Interim and shall have succeeded to all of each of their
relationships, fiduciary or otherwise, as fully and to the same
extent as if such property rights, privileges, powers,
franchises, debts, obligations, duties and relationships had been
originally acquired, incurred or entered into by the Surviving
Corporation. In addition, any reference to either of SFSB and
Interim in any contract or document, whether executed or taking
effect before or after the Effective Time, shall be considered a
reference to the Surviving Corporation if not inconsistent with
the other provisions of the contract or document; and any pending
action or other judicial proceeding to which either of SFSB and
Interim is a party, shall not be deemed to have abated or to have
discontinued by reason of the Merger, but may be prosecuted to
final judgment, order or decree in the same manner as if the
Merger had not been made; or the Surviving Corporation may be
substituted as a party to such action or proceeding, and any
judgment, order or decree may be rendered for or against it that
might have been rendered for or against either of SFSB and
Interim if the Merger had not occurred. At the Effective Time,
the directors and officers of the Surviving Corporation shall be
the persons designated in Section 1.04.
1.03 Articles of Incorporation and Bylaws. As of the
Effective Time, the Articles of Incorporation and Bylaws of SFSB
shall be the Articles of Incorporation and Bylaws of the
Surviving Corporation until otherwise amended as provided by law.
1.04 Directors and Officers. As of the Effective Time, the
directors and officers of Interim shall become the directors and
officers of the Surviving Corporation. If requested by Laurel,
the directors of SFSB and/or Xxxxxxx Savings shall resign as of
the Effective Time.
1.05 Effective Time. The Merger shall become effective upon the
occurrence of the filing of Articles of Merger with the Secretary of
State of the Commonwealth of Pennsylvania pursuant to Section 1927
of the PBCL unless a later date and time is specified as the effective
time in such Articles of Merger ("Effective Time"). A closing (the
"Closing") shall take place immediately prior to the Effective Time
at 10:00 a.m., on the fifth business day following the receipt of all
necessary regulatory or governmental approvals and consents and the
expiration of all statutory waiting periods in respect thereof and
the satisfaction or waiver, to the extent permitted hereunder, of the
conditions to the consummation of the Merger specified in Article V of
this Agreement (other than the delivery of certificates and other
instruments and documents to be delivered at the Closing), at the
offices of Laurel or at such other place, at such other time, or on
such other date as the parties may mutually
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agree upon. At the Closing, there shall be delivered to Laurel, the
Bank, SFSB and Xxxxxxx Savings the certificates and other documents
required to be delivered under Article V hereof.
1.06 Modification of Structure. Notwithstanding any
provision of this Agreement to the contrary, Laurel, with the
prior written consent of SFSB, which consent shall not be
unreasonably withheld, may elect, subject to the filing of all
necessary applications and the receipt of all required regulatory
approvals, to modify the structure of the transactions
contemplated hereby so long as (i) there are no adverse federal
income tax consequences to the stockholders of SFSB as a result
of such modification, (ii) the consideration to be paid to
holders of SFSB Common Stock (as defined below) under this
Agreement is not thereby changed in kind or reduced in amount
solely because of such modification and (iii) such modification
will not be likely to materially delay or jeopardize receipt of
any required regulatory approvals or impair or prevent the
satisfaction of any conditions to the Closing.
1.07 Conversion of SFSB Common Stock and Options. As of
the Effective Time, each share of common stock, par value $0.10
per share, of SFSB (the "SFSB Common Stock"), issued and
outstanding immediately prior to the Effective Time (other than
shares (i) as to which dissenters rights have been asserted and
duly perfected in accordance with the PBCL ("Dissenting Shares"),
(ii) under the Xxxxxxx Federal Savings Bank Restricted Stock Plan
("RSP") which have not been allocated and (iii) held by SFSB
(including treasury shares) or Laurel or the Bank other than in a
fiduciary capacity, which shares shall be cancelled) shall, by
virtue of the Merger and without any action on the part of the
holder thereof, be cancelled and by operation of law be converted
into and represent the right to receive from Laurel, $19.05 in
cash (the "Merger Consideration") in accordance with Section 1.08
hereof. At or immediately prior to the Effective Time, each
outstanding option to purchase SFSB Common Stock issued by SFSB
and as described on Disclosure Schedule 2.02 ("SFSB Option"),
shall be cancelled, and each holder of any such SFSB Option,
whether or not then vested or exercisable, shall be entitled to
receive from SFSB immediately prior to the Effective Time for
each SFSB Option an amount determined by multiplying (i) the
excess of the Merger Consideration over the applicable exercise
price per share of such option by (ii) the number of shares of
SFSB Common Stock subject to such SFSB Option (Option
Consideration). The payment of the Option Consideration referred
to in the immediately preceding sentence to holders of SFSB
Options shall be subject to the execution by any such holder of
such instruments of cancellation as SFSB and Laurel may
reasonably deem appropriate. SFSB may make necessary tax
withholdings from the Option Consideration as it deems
appropriate. The aggregate consideration to be paid for the
conversion of all outstanding shares of SFSB Common Stock is
hereinafter referred to as the "Aggregate Merger Consideration."
All awards under the RSP outstanding immediately prior to
the Effective Time shall be canceled and exchanged for a payment
to be made to the recipient or holder thereof by Xxxxxxx Savings
not later than the Effective Time in an amount equal to the
Merger Consideration, less any cash which must be withheld under
federal and state income and employment tax requirements;
provided that such recipient or holder shall deliver to Xxxxxxx
Savings a cancellation agreement in form and substance reasonably
satisfactory to Laurel prior to receipt of such payment.
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1.08 Exchange Procedures
(a) Immediately prior to the Effective Time, Laurel shall
deposit in trust with an exchange agent designated by Laurel and
reasonably acceptable to SFSB (the "Exchange Agent") cash in an
amount equal to the Aggregate Merger Consideration. No later
than five business days following the Effective Time, Laurel
shall cause the Exchange Agent to mail or make available to each
holder of record of a certificate or certificates which
immediately prior to the Effective Time represented issued and
outstanding shares of SFSB Common Stock a notice and letter of
transmittal (which shall specify that delivery shall be effected
and risk of loss and title to the certificates theretofore
representing shares of SFSB Common Stock shall pass only upon
proper delivery of such certificates to the Exchange Agent)
advising such holder of the effectiveness of the Merger and the
procedure for surrendering to the Exchange Agent such certificate
or certificates which immediately prior to the Effective Time
represented issued and outstanding shares of SFSB Common Stock in
exchange for the consideration set forth in Section 1.07 hereof
deliverable in respect thereof pursuant to this Agreement.
Within five business days following receipt of surrendered
certificates and a properly completed letter of transmittal, the
Exchange Agent shall deliver the Merger Consideration to each
former SFSB stockholder. The Exchange Agent shall accept such
certificates upon compliance with such reasonable terms and
conditions as the Exchange Agent may impose to effect an orderly
exchange thereof in accordance with normal exchange practices.
(b) Each outstanding certificate which prior to the
Effective Time represented SFSB Common Stock (other than
Dissenting Shares) and which is not surrendered to the Exchange
Agent in accordance with the procedures provided for herein
shall, except as otherwise herein provided, until duly
surrendered to the Exchange Agent, be deemed to evidence the
right to receive the Merger Consideration. After the Effective
Time, there shall be no further transfer on the records of SFSB
of certificates representing shares of SFSB Common Stock and if
such certificates are presented to SFSB for transfer, they shall
be cancelled against delivery of the Merger Consideration as
hereinabove provided.
(c) Laurel shall not be obligated to deliver the Merger
Consideration to which a holder of SFSB Common Stock would
otherwise be entitled as a result of the Merger until such holder
surrenders the certificate or certificates representing the
shares of SFSB Common Stock for exchange as provided in this
Section 1.08, or, in lieu thereof, an appropriate affidavit of
loss and indemnity agreement and/or a bond as may be required in
each case by Laurel. If payment of the Merger Consideration is
to be made in a name other than that in which the certificate
evidencing SFSB Common Stock surrendered in exchange therefor is
registered, it shall be a condition of the issuance thereof that
the certificate so surrendered shall be properly endorsed or
accompanied by an executed form of assignment separate from the
certificate and otherwise in proper form for transfer and that
the person requesting such payment pay to the Exchange Agent in
advance, any transfer or other tax required by reason of the
payment in any name other than that of the registered holder of
the certificate surrendered or otherwise establish to the
satisfaction of the Exchange Agent that such tax has been paid or
is not payable.
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(d) Any portion of the Merger Consideration delivered to
the Exchange Agent by Laurel pursuant to Section 1.07 that
remains unclaimed by the stockholders of SFSB for six months
after the Effective Time (as well as any proceeds from any
investment thereof) shall be delivered by the Exchange Agent to
Laurel. Any stockholders of SFSB who have not exchanged their
shares of SFSB Common Stock for the Merger Consideration in
accordance with this Agreement shall thereafter look only to
Laurel for the consideration deliverable in respect of each share
of SFSB Common Stock such stockholder holds as determined
pursuant to this Agreement without any interest thereon. If
outstanding certificates for shares of SFSB Common Stock are not
surrendered or the payment for them is not claimed prior to the
date on which payment of the Merger Consideration would otherwise
escheat to or become the property of any governmental unit or
agency, the unclaimed items shall, to the extent permitted by
abandoned property and any other applicable law, become the
property of Laurel (and to the extent not in its possession shall
be delivered to it), free and clear of all claims or interest of
any person previously entitled to such property. Neither the
Exchange Agent nor any party to this Agreement shall be liable to
any holder of stock represented by any certificate for any
consideration paid to a public official pursuant to applicable
abandoned property, escheat or similar laws. Laurel and the
Exchange Agent shall be entitled to rely upon the stock transfer
books of SFSB to establish the identity of those persons entitled
to receive the Merger Consideration specified in this Agreement,
which books shall be conclusive with respect thereto. In the
event of a dispute with respect to ownership of stock represented
by any certificate, Laurel and the Exchange Agent shall be
entitled to deposit any consideration represented thereby in
escrow with an independent third party and thereafter be relieved
with respect to any claims thereto.
1.09 Withholding Rights. Laurel (through the Exchange
Agent, if applicable) shall be entitled to deduct and withhold
from any amounts otherwise payable pursuant to this Agreement to
any holder of shares of SFSB Common Stock such amounts as Laurel
is required under the Internal Revenue Code of 1986, as amended
("Code"), or any provision of state, local or foreign tax law to
deduct and withhold with respect to the making of such payment.
Any amounts so withheld shall be treated for all purposes of this
Agreement as having been paid to the holder of SFSB Common Stock
in respect of which such deduction and withholding was made by
Laurel, provided that Laurel or the Exchange Agent shall timely
file such withheld funds with the appropriate taxing authorities.
1.10 Dissenting Shares. Each outstanding share of SFSB
Common Stock the holder of which has perfected his right to
dissent under the PBCL and has not effectively withdrawn or lost
such rights as of the Effective Time shall not be converted into
or represent a right to receive the Merger Consideration, and the
holder thereof shall be entitled only to such rights as are
granted by the PBCL. SFSB shall give Laurel prompt notice upon
receipt by SFSB of any such written demands for payment of their
fair value of such shares of SFSB Common Stock and of withdrawals
of such demands and any other instruments provided pursuant to
the PBCL (any stockholder duly making such demand being
hereinafter called a "Dissenting Stockholder"). Any payments made
in respect of Dissenting Shares shall be made by Laurel. If any
Dissenting Stockholder shall effectively withdraw or lose
(through failure to perfect or otherwise) his right to such
payment at or prior to the Effective Time, such holders shares of
SFSB Common Stock shall be converted into a right to receive the
Merger Consideration in accordance with the applicable provisions
of this Agreement.
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1.11 Additional Actions. If at any time after the Effective
Time the Surviving Corporation shall consider that any further
assignments or assurances in law or any other acts are necessary
or desirable to (i) vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation its rights, title or
interest in, to or under any of the rights, properties or assets
of SFSB acquired or to be acquired by the Surviving Corporation
as a result of, or in connection with, the Merger, or (ii)
otherwise carry out the purposes of this Agreement, SFSB and its
proper officers and directors shall be deemed to have granted to
the Surviving Corporation an irrevocable power of attorney to
execute and deliver all such proper deeds, assignments and
assurances in law and to do all acts necessary or proper to vest,
perfect or confirm title to and possession of such rights,
properties or assets in the Surviving Corporation and otherwise
to carry out the purposes of this Agreement; and the proper
officers and directors of the Surviving Corporation are fully
authorized in the name of SFSB or otherwise to take any and all
such action.
1.12 Interim Shares. Each outstanding share of common stock
of Interim, $.01 par value per share ("Interim Common Stock"), on
the Effective Time shall be converted automatically and without
any action on the part of the holder thereof into an equal number
of shares of the Surviving Corporation, which shall constitute
all of the outstanding common stock of the Surviving Corporation.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SFSB
AND XXXXXXX SAVINGS
References to "SFSB Disclosure Schedules" shall mean all of
the disclosure schedules required by this Article II and Article
IV hereof, dated as of the date hereof and referenced to the
specific sections and subsections of this Agreement, which have
been delivered by SFSB to Laurel. SFSB and Xxxxxxx Savings
hereby represent and warrant to Laurel and the Bank as follows as
of the date hereof:
2.01 Corporate Organization.
(a) SFSB is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of
Pennsylvania. SFSB has the corporate power and authority to own
or lease all of its properties and assets and to carry on its
business as it is now being conducted and is duly licensed or
qualified to do business and is in good standing in each
jurisdiction in which the nature of the business conducted by it
or the character or location of the properties and assets owned
or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed, qualified or in good
standing would not have a Material Adverse Effect (as defined
below). SFSB is registered as a savings and loan holding company
under the Home Owners Loan Act ("HOLA"). SFSB Disclosure Schedule
2.01(a) sets forth true and complete copies of the Articles of
Incorporation and Bylaws of SFSB as in effect on the date hereof.
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For the purposes of this Agreement, the term "Material
Adverse Effect" shall mean any effect that (i) is material and
adverse to the financial condition, results of operations or
business of SFSB and Xxxxxxx Savings, either individually or
considered as one enterprise or (ii) materially impairs the
ability of SFSB and/or Xxxxxxx Savings to consummate the
transactions contemplated by this Agreement and the Agreement of
Merger, provided, however, that the term "Material Adverse Effect"
shall not be deemed to include (i) the impact of changes in (a)
laws, regulations, or policies of any Federal or state court,
administrative agency, commission or other governmental authority
or interpretations thereof; or (b) generally accepted accounting
principles, that in each case are generally applicable to the
banking industry, (ii) actions taken or to be taken by SFSB or
Xxxxxxx Savings upon the written request of Laurel pursuant to
this Agreement or the Agreement of Merger, (iii) actions or
payments contemplated by this Agreement, including as set forth
in the SFSB Disclosure Schedules or (iv) changes attributable to
or resulting from changes in general economic conditions,
including changes in the prevailing level of interest rates.
(b) The only direct or indirect subsidiary of SFSB is
Xxxxxxx Savings. Disclosure Schedule 2.01(b)(i) sets forth true
and complete copies of the Charter and Bylaws of Xxxxxxx Savings
as in effect on the date hereof. Xxxxxxx Savings (i) is duly
organized, validly existing and in good standing under the laws
of the United States of America, (ii) has the corporate power and
authority to own or lease all of its properties and assets, and
(iii) is duly licensed or qualified to do business and is in good
standing in each jurisdiction in which the nature of the business
conducted by it or the character or location of the properties
and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so
licensed, qualified or in good standing would not have a Material
Adverse Effect. SFSB and Xxxxxxx Savings have satisfied in all
material respects all commitments, financial or otherwise, as may
have been agreed upon with their state and/or federal regulatory
agencies. Other than Xxxxxxx Savings and except as set forth in
SFSB Disclosure Schedule 2.01(b)(ii), SFSB does not own or
control, directly or indirectly, greater than a 5% equity
interest in any corporation, company, association, partnership,
joint venture or other entity.
2.02 Capitalization. The authorized capital stock of SFSB
consists of 4,000,000 shares of SFSB Common Stock, of which
494,485 are issued and outstanding as of the date hereof, and
1,000,000 shares of preferred stock, of which no shares are issued
and outstanding. The 494,485 shares of SFSB Common Stock issued and
outstanding as of the date hereof include 11,500 unallocated shares of
SFSB Common Stock held in the RSP which shares shall be cancelled as
of the Effective Time. All issued and outstanding shares of capital
stock of SFSB have been duly authorized and validly issued and are fully
paid, nonassessable and free of preemptive rights. Except for an aggregate
of 53,724 shares of SFSB Common Stock issuable upon exercise of stock
options ("SFSB Options") granted pursuant to SFSBs 1998 Stock Option
Plan (the "Stock Option Plan") SFSB does not have and is not bound by any
outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the transfer, purchase or issuance
of any shares of capital stock of SFSB or any securities representing the
right to purchase or otherwise receive any shares of such capital stock or
any securities convertible into or representing the right to purchase
or subscribe for any such stock. Disclosure Schedule 2.02 lists
each SFSB Option outstanding as of the date hereof under the
Stock Option Plan, as well as the name of the grantee, the date
of grant and the respective exercise price with respect thereto.
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2.03 Authority; No Violation.
(a) Subject to the approval of this Agreement by the
stockholders of SFSB, SFSB and Xxxxxxx Savings have full
corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby
in accordance with the terms hereof. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly approved by the
boards of directors of SFSB and Xxxxxxx Savings. Except for the
adoption by SFSB's stockholders of this Agreement, no other
corporate proceedings on the part of SFSB or Xxxxxxx Savings are
necessary to consummate the Merger. This Agreement has been duly
and validly executed and delivered by SFSB and Xxxxxxx Savings
and constitutes the valid and binding obligation of SFSB and
Xxxxxxx Savings, enforceable against them in accordance with and
subject to its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, and except that the
availability of equitable remedies (including, without
limitation, specific performance) is within the discretion of the
appropriate court.
(b) Subject to the approval of this Agreement by the
stockholders of SFSB, SFSB has full corporate power and authority
to execute and deliver the Agreement of Merger and to consummate
the transactions contemplated thereby in accordance with the
terms thereof. The execution and delivery of the Agreement of
Merger by SFSB and the consummation of the transactions
contemplated thereby have been duly and validly approved by the
Board of Directors of SFSB. The Agreement of Merger, upon its
execution and delivery by SFSB, will constitute a valid and
binding obligation of SFSB, enforceable against it in accordance
with and subject to its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally, and except
that the availability of equitable remedies (including, without
limitation, specific performance) is within the discretion of the
appropriate court.
(c) None of the execution and delivery of this Agreement by
SFSB and Xxxxxxx Savings, the execution and delivery of the
Agreement of Merger by SFSB, the consummation by SFSB and Xxxxxxx
Savings of the transactions contemplated hereby in accordance
with the terms hereof, the consummation by SFSB of the
transactions contemplated by the Agreement of Merger in
accordance with the terms thereof, compliance by SFSB and Xxxxxxx
Savings with any of the terms or provisions hereof or compliance
by SFSB with any terms or provisions of the Agreement of Merger,
will (i) violate any provision of the Articles of Incorporation,
Charter or Bylaws of SFSB or Xxxxxxx Savings, (ii) assuming that
the consents and approvals set forth below are duly obtained,
violate any statute, code, ordinance, rule, regulation, judgment,
order, writ, decree or injunction applicable to SFSB or Xxxxxxx
Savings or any of their respective properties or assets, or (iii)
except as disclosed in Disclosure Schedule 2.03(c), violate,
conflict with, result in a breach of any provisions of,
constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, result in the
termination of, accelerate the performance required by, or result
in the creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of SFSB or
Xxxxxxx Savings under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which SFSB or
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Xxxxxxx Savings are a party, or by which any of their
respective properties or assets may be bound or affected, except,
with respect to (ii) and (iii) above, such as individually or in
the aggregate will not have a Material Adverse Effect and which
will not prevent or delay the consummation of the transactions
contemplated hereby. Except as set forth in Disclosure Schedule
2.03(c) and for any consents and approvals of or filings or
registrations with or notices to the Federal Deposit Insurance
Corporation ("FDIC"), the Secretary of State of the Commonwealth
of Pennsylvania, the Office of Thrift Supervision ("OTS") and the
stockholders of SFSB, no consents or approvals of or filings or
registrations with or notices to any federal, state, municipal or
other governmental or regulatory commission, board, agency, or
non-governmental third party are required on behalf of SFSB in
connection with (a) the execution and delivery of this Agreement
by SFSB and Xxxxxxx Savings or the execution and delivery of the
Agreement of Merger by SFSB, and (b) the completion by SFSB and
Xxxxxxx Savings of the transactions contemplated hereby or the
completion by SFSB of the transactions contemplated by the
Agreement of Merger.
(d) As of the date hereof, neither SFSB nor Xxxxxxx Savings
is aware of any reasons relating to SFSB or Xxxxxxx Savings why
all consents and approvals shall not be procured from all
regulatory agencies having jurisdiction over the transactions
contemplated by this Agreement as shall be necessary for
consummation of the transactions contemplated hereby.
2.04 Financial Statements.
(a) SFSB has previously delivered to Laurel copies of the
consolidated balance sheet of SFSB as of December 31, 2001 and
2000 and the related consolidated statements of income, changes
in stockholders' equity, and cash flows for the years ended
December 31, 2001, 2000 and 1999, in each case accompanied by the
audit report of S.R. Xxxxxxxxx, X.X., independent public
accountants, as well as the unaudited consolidated balance sheet
of SFSB as of June 30, 2002 and the related unaudited
consolidated statements of income, changes in stockholders'
equity, and cash flows for the six months ended June 30, 2002 and
2001. The consolidated balance sheets of SFSB referred to
herein, as well as the financial statements to be delivered
pursuant to Section 4.04 hereof, (including the related notes,
where applicable) fairly present or will fairly present, in all
material respects, as the case may be, the consolidated financial
condition of SFSB as of the respective dates set forth therein,
and the related consolidated statements of income, changes in
stockholders' equity and cash flows (including the related notes,
where applicable) fairly present or will fairly present, as the
case may be, the results of the consolidated income, changes in
stockholders' equity and cash flows of SFSB for the respective
periods or as of the respective dates set forth therein (it being
understood that SFSB's interim financial statements are not
audited and are not prepared with all related notes but have
been, or will be, prepared in compliance with all applicable
legal and regulatory accounting requirements and reflect all
adjustments which are, in the opinion of SFSB, necessary for a
fair presentation of such financial statements).
(b) Each of the financial statements referred to in this
Section 2.04 (including the related notes, where applicable) has
been prepared in accordance with generally accepted accounting
principles consistently applied during the periods involved. The
books and records of SFSB are being maintained in material
compliance with applicable legal and accounting requirements.
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(c) Except to the extent reflected, disclosed or reserved
against in the consolidated financial statements referred to in
the first sentence of Section 2.04(a) or the notes thereto, and
except for liabilities incurred since June 30, 2002 in the
ordinary course of business and consistent with past practice,
SFSB does not have any obligation or liability, whether absolute,
accrued, contingent or otherwise, material to the business,
results of operations, assets or financial condition of SFSB and
Xxxxxxx Savings taken as a whole.
2.05 Absence of Certain Changes or Events. Except as set
forth in SFSB Disclosure Schedule 2.09, since June 30, 2002, (i)
SFSB and Xxxxxxx Savings have conducted their businesses in the
ordinary and usual course and (ii) no event has occurred or
circumstances arisen that, individually or in the aggregate, has
had or is reasonably likely to have a Material Adverse Effect.
2.06 Legal Proceedings. Except as disclosed in SFSB
Disclosure Schedule 2.06, neither SFSB nor Xxxxxxx Savings is a
party to any, and there are no pending or, to the best knowledge
of SFSB and Xxxxxxx Savings, threatened legal, administrative,
arbitration or other proceedings, claims, actions or governmental
investigations of any nature against SFSB or Xxxxxxx Savings,
except such proceedings, claims, actions or governmental
investigations which in the good faith judgment of SFSB and
Xxxxxxx Savings will not have a Material Adverse Effect. Neither
SFSB nor Xxxxxxx Savings is a party to any order, judgment or
decree which has or could reasonably be expected to have a
Material Adverse Effect.
2.07 Taxes and Tax Returns.
(a) SFSB and Xxxxxxx Savings have duly filed (and until the
Effective Time will so file) all returns, declarations, reports,
information returns and statements ("Returns") required to be
filed or sent by or with respect to them in respect of any Taxes
(as hereinafter defined), and have duly paid (and until the
Effective Time will so pay) all Taxes due and payable other than
Taxes or other charges which (i) are being contested in good
faith (and disclosed in writing to Laurel) and (ii) have not
finally been determined. SFSB has established (and until the
Effective Time will establish) on its books and records reserves
that are adequate for the payment of all Taxes not yet due and
payable for periods ending on or prior to the Effective Time,
whether or not disputed or accrued. Except as set forth in SFSB
Disclosure Schedule 2.07(a), (i) the federal income tax returns
of SFSB have been examined by the Internal Revenue Service
("IRS") (or are closed to examination due to the expiration of
the applicable statute of limitations), and (ii) the Pennsylvania
income tax returns of SFSB have been examined by applicable
authorities (or are closed to examination due to the expiration
of the statute of limitations), and in the case of both (i) and
(ii) no deficiencies were asserted as a result of such
examinations which have not been resolved and paid in full.
There are no audits or other administrative or court proceedings
presently pending nor any other disputes pending, or claims
asserted for, Taxes or assessments upon SFSB or Xxxxxxx Savings,
nor has SFSB given any currently outstanding waivers or
comparable consents regarding the application of the statute of
limitations with respect to any Taxes or Returns.
10
(b) Except as set forth in SFSB Disclosure Schedule
2.07(b), SFSB (i) has not requested any extension of time within
which to file any Return which Return has not since been filed,
(ii) is not a party to any agreement providing for the allocation
or sharing of Taxes, (iii) is not required to include in income
any adjustment pursuant to Section 481(a) of the Code, by reason
of a voluntary change in accounting method initiated by SFSB (nor
does SFSB have any knowledge that the IRS has proposed any such
adjustment or change of accounting method), or (iv) has not filed
a consent pursuant to Section 341(f) of the Code or agreed to
have Section 341(f)(2) of the Code apply.
(c) For purposes of this Agreement, "Taxes" shall mean all
taxes, charges, fees, levies or other assessments, including,
without limitation, all net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment (including withholding, payroll
and employment taxes required to be withheld with respect to
income paid to employees), excise, estimated, severance, stamp,
occupation, property or other taxes, customs duties, fees,
assessments or charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional
amounts imposed by any taxing authority (domestic or foreign)
upon SFSB and/or Xxxxxxx Savings.
11
2.08 Employee Benefit Plans.
(a) SFSB Disclosure Schedule 2.08(a) sets forth all benefit
and compensation plans, contracts, policies or arrangements
covering current or former employees of SFSB and Xxxxxxx Savings
(the "Employees") and current or former directors of SFSB and
Xxxxxxx Savings including, but not limited to, "employee benefit
plans" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and
deferred compensation, stock option, stock purchase, stock
appreciation rights, stock-based, incentive and bonus plans (the
"Benefits Plans"). True and complete copies of all Benefit Plans
including, but not limited to, any trust instruments and
insurance contracts forming a part of any Benefit Plans and all
amendments thereto have been provided to Laurel.
(b) All Benefits Plans other than "multiemployer plans"
within the meaning of Section 3(37) of ERISA, covering Employees,
to the extent subject to ERISA, are in compliance with ERISA.
Each Benefit Plan which is an "employee pension benefit plan"
within the meaning of Section 3(2) of ERISA ("Pension Plan") and
which is intended to be qualified under Section 401(a) of the
Code, has received a favorable determination letter from the IRS,
and SFSB is not aware of any circumstances likely to result in
revocation of any such favorable determination letter or the loss
of the qualification of such Pension Plan under Section 401(a) of
the Code. There is no material pending or, to SFSBs knowledge,
threatened litigation relating to the Benefits Plans. Neither
SFSB nor Xxxxxxx Savings has engaged in a transaction with
respect to any Benefit Plan or Pension Plan that, assuming the
taxable period of such transaction expired as of the date hereof,
could subject SFSB or Xxxxxxx Savings to a tax or penalty imposed
by either Section 4975 of the Code or Section 502(i) of ERISA in
an amount which would have a Material Adverse Effect upon SFSB or
Xxxxxxx Savings.
(c) No liability under Subtitle C or D of Title IV of ERISA
has been or is expected to be incurred by SFSB or Xxxxxxx Savings
with respect to any ongoing, frozen or terminated single-employer
plan, within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any of them, or the "single-
employer plan" of any entity which is considered one employer with
SFSB under Section 4001 of ERISA or Section 414 of the Code (an
"ERISA Affiliate"). Neither SFSB nor Xxxxxxx Savings has incurred,
and neither expects to incur, any withdrawal liability with
respect to a multiemployer plan under Subtitle E of Title IV of
ERISA (regardless of whether based on contributions of an ERISA
Affiliate). No notice of a "reportable event", within the meaning
of Section 4043 of ERISA for which the 30-day reporting
requirement has not been waived, has been required to be filed
for any Pension Plan or by any ERISA Affiliate within the
12-month period ending on the date hereof or will be required to
be filed in connection with the transactions contemplated by this
Agreement.
(d) All contributions required to be made under the terms
of any Benefit Plan have been timely made or have been reflected
on the financial statements of SFSB. Neither any Pension Plan
nor any single-employer plan of an ERISA Affiliate has an
"accumulated funding deficiency" (whether or not waived) within the
meaning of Section 412 of the Code or Section 302 of ERISA and no
ERISA Affiliate has an outstanding funding waiver. Neither SFSB
nor Xxxxxxx Savings has
12
provided, or is required to provide, security to any Pension Plan
or to any single-employer plan of an ERISA Affiliate pursuant to
Section 401(a)(29) of the Code.
(e) Under each Pension Plan which is a single-employer
plan, as of the last day of the most recent plan year ended prior
to the date hereof, the actuarially determined present value of
all "benefit liabilities", within the meaning of Section
4001(a)(16) of ERISA (as determined on the basis of the actuarial
assumptions contained in the Pension Plans most recent actuarial
valuation), did not exceed the then current value of the assets
of such Pension Plan, and there has been no material change in
the financial condition of such Pension Plan since the last day
of the most recent plan year.
(f) Neither SFSB nor Xxxxxxx Savings has any obligations
for retiree health and life benefits under any Benefit Plan other
than as may be required under Section 4980B of the Code or Part 6
of Title I of ERISA, or under the continuation of coverage
provisions of the laws of any state or locality. SFSB or Xxxxxxx
Savings may amend or terminate any such Benefit Plan at any time
without incurring any liability thereunder.
(g) Except as set forth on SFSB Disclosure Schedule
2.08(g), none of the execution of this Agreement, stockholder
approval of this Agreement or consummation of the transactions
contemplated hereby will (A) entitle any employees of SFSB or
Xxxxxxx Savings to severance pay or any increase in severance pay
upon any termination of employment after the date hereof, (B)
accelerate the time of payment or vesting or trigger any payment
or funding (through a grantor trust or otherwise) of compensation
or benefits under, increase the amount payable or trigger any
other material obligation pursuant to, any of the Benefit Plans,
(C) result in any breach or violation of, or a default under, any
of the Benefit Plans or (D) result in any payment that would be a
"parachute payment" to a "disqualified individual" as those terms are
defined in Section 280G of the Code, without regard to whether
such payment is reasonable compensation for personal services
performed or to be performed in the future.
2.09 Securities Documents and Regulatory Reports.
(a) SFSB has previously delivered or made available to
Laurel a complete copy of each final registration statement,
prospectus, annual, quarterly or current report and definitive
proxy statement or other communication (other than general
advertising materials) filed pursuant to the Securities Act of
1933, as amended ("1933 Act"), or the Securities Exchange Act of
1934, as amended ("1934 Act"), or mailed by SFSB to its
stockholders as a class since January 1, 1999, and each such
final registration statement, prospectus, annual, quarterly or
current report and definitive proxy statement or other
communication, as of its date, complied in all material respects
with all applicable statutes, rules and regulations and did not
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the
circumstances under which they were made, not misleading;
provided that information as of a later date shall be deemed to
modify information as of an earlier date.
(b) Since January 1, 1999, SFSB and Xxxxxxx Savings have
duly filed with the OTS, in materially correct form the monthly,
quarterly and annual reports required to be filed under
13
applicable laws and regulations, and SFSB has delivered or made
available to Laurel accurate and complete copies of such reports.
SFSB Disclosure Schedule 2.09 lists all examinations of SFSB or
Xxxxxxx Savings conducted by the applicable regulatory
authorities since January 1, 1999 and the dates of any responses
thereto submitted by SFSB or Xxxxxxx Savings. Except as set
forth in SFSB Disclosure Schedule 2.09, in connection with the
most recent examinations of SFSB or Xxxxxxx Savings by the
applicable regulatory authorities, neither SFSB nor Xxxxxxx
Savings were required to correct or change any action, procedure
or proceeding which SFSB or Xxxxxxx Savings believe has not been
now corrected or changed as required other than corrections or
changes which, if not made, either individually or in the
aggregate, would not have a Material Adverse Effect.
2.10 Compliance with Applicable Law.
(a) SFSB and Xxxxxxx Savings have all permits, licenses,
certificates of authority, orders and approvals of, and have made
all filings, applications and registrations with, federal, state,
local and foreign governmental or regulatory bodies that are
required in order to permit them to carry on their respective
businesses as they are presently being conducted and the absence
of which could reasonably be expected to have a Material Adverse
Effect; all such permits, licenses, certificates of authority,
orders and approvals are in full force and effect; and to the
best knowledge of SFSB and Xxxxxxx Savings, no suspension or
cancellation of any of the same is threatened.
(b) Neither SFSB nor Xxxxxxx Savings is in violation of its
Articles of Incorporation, Charter or Bylaws, or of any
applicable federal, state or local law or ordinance or any order,
rule or regulation of any federal, state, local or other
governmental agency or body (including, without limitation, all
banking, securities, municipal securities, safety, health,
zoning, anti-discrimination, antitrust, and wage and hour laws,
ordinances, orders, rules and regulations), or in default with
respect to any order, writ, injunction or decree of any court, or
in default under any order, license, regulation or demand of any
governmental agency, any of which violations or defaults could
reasonably be expected to have a Material Adverse Effect, and
neither SFSB nor Xxxxxxx Savings has received any notice or
communication from any federal, state or local governmental
authority asserting that SFSB or Xxxxxxx Savings is in violation
of any of the foregoing which could reasonably be expected to
have a Material Adverse Effect. Neither SFSB nor Xxxxxxx Savings
is subject to any regulatory or supervisory cease and desist
order, agreement, written directive, memorandum of understanding
or written commitment (other than those of general applicability
to all commercial banks issued by governmental authorities), and
has not received any written communication requesting that it
enter into any of the foregoing.
2.11 Deposit Insurance. The deposit accounts of Xxxxxxx
Savings are insured by the Savings Association Insurance Fund
administered by the Federal Deposit Insurance Corporation
("FDIC") to the maximum extent permitted by the Federal Deposit
Insurance Act, as amended ("FDIA"), and Xxxxxxx Savings has paid
all premiums and assessments required by the FDIA and the
regulations thereunder.
14
2.12 Certain Contracts.
(a) Except as disclosed in SFSB Disclosure Schedule
2.12(a), neither SFSB nor Xxxxxxx Savings is a party to, is bound
by, receives, or is obligated to pay benefits under, (i) any
agreement, arrangement or commitment, including without
limitation, any agreement, indenture or other instrument relating
to the borrowing of money by SFSB or Xxxxxxx Savings (other than
in the case of deposits, federal funds purchased and securities
sold under agreements to repurchase in the ordinary course of
business) or the guarantee by SFSB or Xxxxxxx Savings of any
obligation, (ii) any agreement, arrangement or commitment
relating to the employment of a consultant or the employment,
election or retention in office of any present or former director
or officer of SFSB or Xxxxxxx Savings, (iii) any contract,
agreement or understanding with a labor union, (iv) any
agreement, arrangement or understanding pursuant to which any
payment (whether of severance pay or otherwise) became or may
become due to any director, officer or employee of SFSB or
Xxxxxxx Savings upon execution of this Agreement and the
Agreement of Merger or upon or following consummation of the
transactions contemplated by this Agreement or the Agreement of
Merger (either alone or in connection with the occurrence of any
additional acts or events), (v) any agreement, arrangement or
understanding to which SFSB or Xxxxxxx Savings is a party or by
which any of the same is bound which limits the freedom of SFSB
or Xxxxxxx Savings to compete in any line of business or with any
person, or (vi) any other agreement, arrangement or understanding
to which SFSB or Xxxxxxx Savings is a party and which is material
to the business, results of operations, assets or financial
condition of SFSB and Xxxxxxx Savings taken as a whole (excluding
loan agreements or agreements relating to deposit accounts), in
each of the foregoing cases whether written or oral.
(b) Neither SFSB nor Xxxxxxx Savings is in default or in
non-compliance under any contract, agreement, commitment,
arrangement, lease, insurance policy or other instrument to which
it is a party or by which its assets, business or operations may
be bound or affected, whether entered into in the ordinary course
of business or otherwise and whether written or oral, which
default or non-compliance would have a Material Adverse Effect,
and there has not occurred any event that with the lapse of time
or the giving of notice, or both, would constitute such a default
or non-compliance.
(c) Neither SFSB nor Xxxxxxx Savings is a party or has
agreed to enter into an exchange traded or over-the-counter
equity, interest rate, foreign exchange or other swap, forward,
future, option, cap, floor or collar or any other contract that
is not included in SFSBs audited financial statements at and for
December 31, 2001 and is a derivatives contract (including
various combinations thereof) (each, a Derivatives Contract) or
owns securities that are referred to generically as "structured
notes", "high risk mortgage derivatives", "capped floating rate
notes" or "capped floating rate mortgage derivatives."
15
2.13 Properties and Insurance.
(a) All real and personal property owned by SFSB or Xxxxxxx
Savings or presently used by them in their respective businesses
is in adequate condition (ordinary wear and tear excepted) and is
sufficient to carry on the business of SFSB and Xxxxxxx Savings
in the ordinary course of business consistent with their past
practices. SFSB and Xxxxxxx Savings have good and, as to owned
real property, marketable title to all material assets and
properties, whether real or personal, tangible or intangible,
reflected in SFSB's consolidated balance sheet as of June 30,
2002, or owned and acquired subsequent thereto (except to the
extent that such assets and properties have been disposed of for
fair value in the ordinary course of business since June 30,
2002), subject to no encumbrances, liens, mortgages, securities
interests or pledges, except (i) those items that secure
liabilities that are reflected in said consolidated balance sheet
or the notes thereto or have been incurred in the ordinary course
of business after the date of such consolidated balance sheet,
(ii) statutory liens for current taxes not yet due, (iii) such
encumbrances, liens, mortgages, securities interests, pledges and
title imperfections that are not in the aggregate material to the
business, results of operations, assets or financial condition of
SFSB and Xxxxxxx Savings taken as a whole, and (iv) with respect
to owned real property, title imperfections noted in title
reports prior to the date hereof. SFSB and Xxxxxxx Savings as
lessees have the right under valid and subsisting leases to
occupy, use, possess and control all property leased by them in
all material respects as presently occupied, used, possessed and
controlled by SFSB and Xxxxxxx Savings and the consummation of
the transactions contemplated hereby and by the Agreement of
Merger will not affect any such right in a way that would have a
Material Adverse Effect. SFSB Disclosure Schedule 2.13(a) sets
forth an accurate listing of each lease pursuant to which SFSB or
Xxxxxxx Savings act as lessor or lessee, including the expiration
date and the terms of any renewal options which relate to the
same.
(b) The business operations and all insurable properties
and assets of SFSB and Xxxxxxx Savings are insured for its
benefit against all risks which, in the reasonable judgment of
the management of SFSB and Xxxxxxx Savings, should be insured
against, in each case under valid, binding and enforceable
policies or bonds issued by insurers of recognized
responsibility, in such amounts with such deductibles and against
such risks and losses as are in the opinion of the management of
SFSB and Xxxxxxx Savings adequate for the business engaged in by
SFSB and Xxxxxxx Savings. As of the date hereof, neither SFSB
nor Xxxxxxx Savings has received any notice of cancellation or
notice of a material amendment of any such insurance policy or
bond or is in material default under such policy or bond, no
coverage thereunder is being disputed and all material claims
thereunder have been filed in a timely fashion.
2.14 Environmental Matters. For purposes of this Agreement,
the following terms shall have the indicated meaning:
"Environmental Law" means any federal, state or local law,
statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree,
injunction or agreement with any governmental entity relating to
(1) the protection, preservation or restoration of the
environment (including, without limitation, air, water vapor,
surface water,
16
groundwater, drinking water supply, surface soil,
subsurface soil, plant and animal life or any other natural
resource), and/or (2) the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling,
production, release or disposal of Hazardous Substances. The
term Environmental Law includes without limitation (1) the
Comprehensive Environmental Response, Compensation and Liability
Act, as amended, 42 U.S.C. Section 9601, et seq; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901,
et seq; the Clean Air Act, as amended, 42 U.S.C. Section 7401, et seq;
the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section
1251, et seq; the Toxic Substances Control Act, as amended, 15 U.S.C.
Section 9601, et seq; the Emergency Planning and Community Right to
Know Act, 42 U.S.C. Section 11001, et seq; the Safe Drinking Water Act,
42 U.S.C. Section 300f, et seq; and all comparable state and local laws,
and (2) any common law (including without limitation common law that
may impose strict liability) that may impose liability or obligations
for injuries or damages due to, or threatened as a result of, the presence
of or exposure to any Hazardous Substance.
"Hazardous Substance" means any substance presently listed,
defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, under any
Environmental Law, whether by type or by quantity, including any
regulated material containing any such substance as a component.
Hazardous Substances include without limitation petroleum
(including crude oil or any fraction thereof), asbestos,
radioactive material, and polychlorinated biphenyls.
"Loan Portfolio Properties" means those properties which
serve as collateral for loans owned by SFSB or Xxxxxxx Savings.
"Other Properties Owned" means those properties owned,
leased or operated by SFSB or Xxxxxxx Savings which are not Loan
Portfolio Properties.
(a) Except as set forth in SFSB Disclosure Schedule
2.14(a), to the knowledge of SFSB and Xxxxxxx Savings, neither
SFSB nor Xxxxxxx Savings has been and are not in violation of or
liable under any Environmental Law.
(b) None of the Other Properties Owned is the subject of
liability under, or, to the knowledge of SFSB and Xxxxxxx
Savings, has been in violation of, any Environmental Law except
any such violations or liabilities which would not, individually
or in the aggregate, have a Material Adverse Effect.
(c) To the knowledge of SFSB and Xxxxxxx Savings, none of
the Loan Portfolio Properties has been in violation of, or is the
subject of liability under, any Environmental Law except any
such violations or liabilities which would not, individually or
in the aggregate, have a Material Adverse Effect.
(d) There are no actions, suits, demands, notices, claims,
investigations or proceedings pending or, to the knowledge of
SFSB and Xxxxxxx Savings, threatened relating to the liability of
the Loan Portfolio Properties and Other Properties Owned under
any Environmental Law, including
17
without limitation any notices, demand letters or requests for
information from any federal or state environmental agency relating
to any such liabilities under or violations of Environmental Law,
except such which would not have or result in a Material Adverse Effect.
(e) SFSB Disclosure Schedule 2.14(e) lists (i) any
environmental studies which have been undertaken by, or on behalf
of, SFSB or Xxxxxxx Savings with respect to the Other Properties
Owned and (ii) and correspondence known to SFSB or Xxxxxxx
Savings with respect to the Other Properties Owned and issues
related to Environmental Laws.
2.15 Allowance for Loan Losses and Real Estate Owned. The
allowance for loan losses reflected on SFSB's consolidated
balance sheets included in the consolidated financial statements
referred to in Section 2.04 hereof is, in the opinion of SFSB's
management, adequate in all material respects as of their
respective dates under the requirements of generally accepted
accounting principles to provide for reasonably anticipated
losses on outstanding loans net of recoveries. The real estate
owned reflected on the consolidated balance sheets included in
the consolidated financial statements referred to in Section 2.04
hereof is carried at the lower of cost or fair value, or the
lower of cost or net realizable value, as required by generally
accepted accounting principles.
2.16 Minute Books. Since January 1, 1998, the minute books
of SFSB and Xxxxxxx Savings contain complete and accurate records
of all meetings and other corporate action held or taken by their
Boards of Directors (including committees of its Board of
Directors) and stockholders in all material respects.
2.17 Broker Fees. Except as set forth in SFSB Disclosure
Schedule 2.17, neither SFSB nor Xxxxxxx Savings or any of the
respective directors or officers of such companies has employed
any consultant, broker or finder or incurred any liability for
any consultant's, broker's or finder's fees or commissions in
connection with any of the transactions contemplated by this
Agreement.
2.18 Proxy Statement Information. None of the information
relating to it which is included in the proxy statement
distributed by SFSB to its stockholders in order to solicit their
approval of this Agreement and the transactions contemplated
hereby ("Proxy Statement"), as of the date such Proxy Statement is
mailed to its stockholders and up to and including the date of
the meeting of its stockholders to which such Proxy Statement
relates, will contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading, provided that information as of a later
date shall be deemed to modify information as of an earlier date.
2.19 Transactions with Affiliates. Except as set forth in
SFSB Disclosure Schedule 2.19, there are no existing or pending
transactions, nor are there any agreements or understandings,
with any directors, officers or employees of SFSB or Xxxxxxx
Savings or any person or entity affiliated with it (collectively,
"Affiliates"), relating to, arising from or affecting SFSB and
Xxxxxxx Savings, including, without limitation, any transactions,
arrangements or understandings relating to the purchase or sale
of goods or services, the lending of monies or the sale, lease or
use of any assets of SFSB or Xxxxxxx Savings.
18
2.20 Required Vote; Inapplicability of Antitakeover
Statutes; Fairness Opinion.
(a) This Agreement and the transactions contemplated
hereby are required to be approved on behalf of SFSB by the
affirmative vote of the holders of at least a majority of the
votes cast of SFSB Common Stock at a meeting called for such
purpose. No other vote of the stockholders of SFSB is required
by law, SFSB's Articles of Incorporation, SFSB's Bylaws or
otherwise to approve this Agreement and the transactions
contemplated hereby.
(b) SFSB has received a written opinion of RP Financial,
LC, dated the date hereof, with respect to the fairness of the
Merger Consideration to be received by the stockholders of SFSB
pursuant to this Agreement from a financial point of view.
2.21 Disclosures. No representation or warranty contained
in Article II of this Agreement, and no statement contained in
the SFSB Disclosure Schedules, contains any untrue statement of a
material fact or omits to state a material fact necessary in
order to make the statements herein or therein not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF LAUREL AND THE BANK
References to "Laurel Disclosure Schedules" shall mean all
of the disclosure schedules required by this Article III, dated
as of the date hereof and referenced to the specific sections and
subsections of Article III of this Agreement, which have been
delivered by Laurel to SFSB. Laurel and the Bank hereby
represent and warrant to SFSB and Xxxxxxx Savings as follows as
of the date hereof:
3.01 Corporate Organization.
(a) Laurel is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth
of Pennsylvania. Laurel has the corporate power and authority to
own or lease all of its properties and assets and to carry on its
business as it is now being conducted and is duly licensed or
qualified to do business and is in good standing in each
jurisdiction in which the nature of the business conducted by it
or the character or location of the properties and assets owned
or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed, qualified or in good
standing would not have a material adverse effect on the ability
of Laurel to consummate the transactions contemplated hereby.
Laurel is registered as a bank holding company under the Bank
Holding Company Act of 1956.
(b) The Bank is duly organized, validly existing and in
good standing under the laws of the Commonwealth of Pennsylvania
and is a wholly-owned subsidiary of Laurel. The Bank has the
corporate power and authority to own or lease all of its
properties and assets and to conduct its
19
business as it is now being conducted and is duly licensed or qualified
to do business and is in good standing in each jurisdiction in which
the nature of the business conducted by it or the character or location
of the properties and assets owned or leased by it makes such
licensing or qualification necessary, except where the failure to
be so licensed, qualified or in good standing would not have a
material adverse effect on the ability of Laurel and the Bank to
consummate the transactions contemplated hereby.
(c) Interim will be at the Effective Time an interim stock
corporation duly organized, validly existing and in good standing
under the laws of the Commonwealth of Pennsylvania. Interim will
not engage in any business other than in connection with the
transactions contemplated by this Agreement and the Agreement of
Merger and Interim will have no material obligations or
liabilities other than its obligations hereunder.
3.02 Authority; No Violation.
(a) Laurel and the Bank have full corporate power and
authority to execute and deliver this Agreement and to consummate
the transactions contemplated hereby in accordance with the terms
hereof. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly and validly approved by the Board of Directors of Laurel and
the Bank, and no other corporate proceedings on the part of
Laurel or the Bank are necessary to consummate the transactions
so contemplated. This Agreement has been duly and validly
executed and delivered by Laurel and the Bank and constitutes a
valid and binding obligation of Laurel and the Bank, enforceable
against them in accordance with and subject to its terms, except
as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally, and except that the availability of equitable remedies
(including, without limitation, specific performance) is within
the discretion of the appropriate court.
(b) At the Effective Time, Interim will have full corporate
power and authority to execute and deliver the Agreement of
Merger and to consummate the transactions contemplated thereby in
accordance with the terms thereof. At the Effective Time, the
execution and delivery of the Agreement of Merger by Interim and
the consummation of the transactions contemplated thereby will
have been duly and validly approved by the Board of Directors of
Interim and by Bank as the sole stockholder of Interim, and no
other corporate proceedings on the part of Interim are necessary
to consummate the transactions so contemplated. The Agreement of
Merger, upon its execution and delivery by Interim, will
constitute a valid and binding obligation of Interim, enforceable
against it in accordance with and subject to its terms, except as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally, and except that the availability of equitable remedies
(including, without limitation, specific performance) is within
the discretion of the appropriate court.
(c) None of the execution and delivery of this Agreement by
Laurel and the Bank, the execution and delivery of the Agreement
of Merger by Interim, the consummation by Laurel and the Bank of
the transactions contemplated hereby in accordance with the terms
hereof, the consummation by Interim of the transactions
contemplated by the Agreement of Merger, compliance
20
by Laurel or the Bank with any of the terms or provisions hereof or
compliance by Interim with any terms or provisions of the Agreement
of Merger, will (i) violate any provision of the Articles of
Incorporation, Charter or Bylaws of Laurel, the Bank or Interim,
(ii) assuming that the consents and approvals set forth below are
duly obtained, violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction
applicable to Laurel, the Bank or Interim or any of their
respective properties or assets, or (iii) violate, conflict with,
result in a breach of any provisions of, constitute a default (or
an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of,
accelerate the performance required by, or result in the creation
of any lien, security interest, charge or other encumbrance upon
any of the respective properties or assets of Laurel, the Bank or
Interim under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which Laurel, the
Bank or Interim is a party, or by which any of their respective
properties or assets may be bound or affected, except, with
respect to (ii) and (iii) above, such as individually or in the
aggregate will not have a material adverse effect on the
business, operations, assets or financial condition of Laurel and
the Bank taken as a whole and which will not prevent or delay the
consummation of the transactions contemplated hereby. Except for
consents and approvals of or filings or registrations with or
notices to the Secretary of State of the Commonwealth of
Pennsylvania, the FDIC, the Pennsylvania Department of Banking
and the Board of Governors of the Federal Reserve System
("Board"), no consents or approvals of or filings or
registrations with or notices to any federal, state, municipal or
other governmental or regulatory commission, board, agency or non-
governmental third party are required on behalf of Laurel, the
Bank and Interim in connection with (a) the execution and
delivery of this Agreement by Laurel and the Bank or the
execution and delivery of the Agreement of Merger by Interim and
(b) the completion by Laurel and the Bank of the transactions
contemplated hereby or the completion by Interim of the
transactions contemplated by the Agreement of Merger.
(d) As of the date hereof, neither Laurel nor the Bank is
aware of any reasons relating to Laurel or the Bank why all
consents and approvals shall not be procured from all regulatory
agencies having jurisdiction over the transactions contemplated
by this Agreement as shall be necessary for consummation of the
transactions contemplated hereby. The Bank's most recent
Community Reinvestment Act rating is not less than satisfactory.
21
3.03 Financial Statements.
(a) Laurel has previously delivered to SFSB copies of the
consolidated statements of financial condition of Laurel as of
June 30, 2002 and 2001, and the related consolidated statements
of earnings, comprehensive income, stockholders' equity and cash
flows for the years ended June 30, 2002, 2001 and 2000, in each
case accompanied by the audit report of KMPG LLP, independent
certified public accountants. The consolidated statements of
financial condition of Laurel referred to herein, as well as the
financial statements to be delivered pursuant to Section 4.04
hereof (including the related notes, where applicable) fairly
present or will fairly present, as the case may be, the
consolidated financial condition of Laurel as of the respective
dates set forth therein, and the related consolidated statements
of earnings, stockholders' equity and cash flows (including the
related notes, where applicable) fairly present or will fairly
present, as the case may be, the results of the consolidated
earnings, stockholders' equity and cash flows of Laurel for the
respective periods or as of the respective dates set forth
therein (it being understood that Laurel's interim financial
statements are not audited and are not prepared with all related
notes but reflect all adjustments which are, in the opinion of
Laurel, necessary for a fair presentation of such financial
statements).
(b) Each of the financial statements referred to in this
Section 3.03 (including the related notes, where applicable) has
been or will be, as the case may be, prepared in accordance with
generally accepted accounting principles consistently applied
during the periods involved. The books and records of Laurel and
the Bank are being maintained in material compliance with
applicable legal and accounting requirements and reflect only
actual transactions.
(c) Except to the extent reflected, disclosed or reserved
against in the consolidated financial statements referred to in
the first sentence of this Section 3.03 or the notes thereto or
liabilities incurred since June 30, 2002 in the ordinary course
of business and consistent with past practice, neither Laurel nor
the Bank has any obligation or liability, whether absolute,
accrued, contingent or otherwise, which would have a material
adverse effect on the ability of Laurel and the Bank to
consummate the transactions contemplated hereby.
3.04 Absence of Certain Changes or Events. Since June 30,
2002, (i) Laurel and the Bank have conducted their businesses in
the ordinary and usual course and (ii) no event has occurred or
circumstances arisen that, individually or in the aggregate, has
had or is reasonably likely to have a Material Adverse Effect.
3.05 Ability to Pay Merger Consideration. Laurel will have
available to it, immediately prior to the Effective Time
sufficient cash to pay the Aggregate Merger Consideration to
stockholders of SFSB as set forth in Section 1.07.
3.06 Legal Proceedings. Neither Laurel nor the Bank is a
party to any, and there are no pending or, to the best knowledge
of Laurel and the Bank, threatened legal, administrative,
arbitration or other proceedings, claims, actions or governmental
investigations of any nature against Laurel or the Bank, except
such proceedings, claims actions or governmental investigations
which in
22
the good faith judgment of Laurel and the Bank will not have a
material adverse effect on the ability of Laurel and the Bank
to consummate the transactions contemplated hereby.
3.07 Broker Fees. Other than fees payable to Xxxxxx &
Company, Inc., neither Laurel nor the Bank, nor any of their
respective directors or officers, has employed any consultant,
broker or finder or incurred any liability for any consultant's,
broker's or finder's fees or commissions in connection with any
of the transactions contemplated by this Agreement.
3.08 Certain Information. None of the information relating
to Laurel or the Bank supplied or to be supplied by Laurel to
SFSB expressly for inclusion in the Proxy Statement, as of the
date such Proxy Statement is mailed to shareholders of SFSB and
up to and including the date of the meeting of shareholders to
which such Proxy Statement relates, will contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3.09 Disclosures. No representation or warranty contained
in Article III of this Agreement, and no statement contained in
the Laurel Disclosure Schedules, contains any untrue statement of
a material fact or omits to state a material fact necessary in
order to make the statements herein or therein not misleading.
3.10 Deposit Insurance. The deposit accounts of the Bank
are insured by the Savings Association Insurance Fund
administered by the FDIC to the maximum extent permitted by the
Federal Deposit Insurance Act, as amended ("FDIA"), and the Bank
has paid all premiums and assessments required by the FDIA and
the regulations thereunder.
ARTICLE IV
COVENANTS OF THE PARTIES
4.01 Conduct of the Business of SFSB and Xxxxxxx Savings.
During the period from the date hereof to the Effective Time,
SFSB and Xxxxxxx Savings shall conduct their respective
businesses and engage in transactions permitted hereunder or only
in the ordinary course and consistent with past practice. SFSB
and Xxxxxxx Savings shall use all reasonable efforts to (i)
preserve their business organization intact, (ii) keep available
for themselves, Laurel and the Bank the present services of the
employees of SFSB and Xxxxxxx Savings, and (iii) preserve for
themselves, Laurel and the Bank the goodwill of their customers
and others with whom business relationships exist.
4.02 Negative Covenants. SFSB agrees that from the date
hereof to the Effective Time, except as otherwise approved by
Laurel in writing or as permitted or required by this Agreement,
SFSB will not and SFSB will not permit Xxxxxxx Savings to:
23
(i) amend or change any provision of its Articles of
Incorporation, Charter or Bylaws; unless such amendment shall be
necessary to complete the Merger, Bank Merger or Liquidation;
(ii) change the number of shares of its authorized or issued
capital stock (except upon the exercise of SFSB Options as set
forth in SFSB Disclosure Schedule 2.02) or issue or grant any
option, warrant, call, commitment, subscription, award, right to
purchase or agreement of any character relating to the authorized
or issued capital stock of SFSB, or any securities convertible
into shares of such capital stock, or split, combine or
reclassify any shares of its capital stock, or redeem or
otherwise acquire any shares of such capital stock;
(iii) declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any
combination thereof) in respect of the capital stock of SFSB;
provided however, that if the closing occurs after Xxxxx 00,
0000, XXXX may pay a cash dividend per share of SFSB Common Stock
determined as follows: the sum of (i) $.90 divided by 365
multiplied by (ii) the number of days between March 31, 2003 and
the date of the Closing;
(iv) grant any severance or termination pay (other than
pursuant to binding contracts, plans, or policies of SFSB or
Xxxxxxx Savings in effect on the date hereof and disclosed to
Laurel on SFSB Disclosure Schedule 2.12(a)) to, or enter into or
amend any employment, consulting or compensation agreement with,
any of its directors, officers or employees; or award any
increase in compensation or benefits to its directors, officers
or employees except for salary increases and bonuses payable in
the ordinary course of business and consistent with past
practices as set forth in SFSB Disclosure Schedule 4.02(iv);
(v) enter into or modify (except as may be required by
applicable law or as may be required by Section 4.12 hereof, with
the prior written consent of Laurel, which shall not be
unreasonably withheld) any pension, retirement, stock option,
stock purchase, stock grant, stock appreciation right, savings,
profit sharing, deferred compensation, consulting, bonus, group
insurance or other employee benefit, incentive or welfare
contract, plan or arrangement, or any trust agreement related
thereto, in respect of any of its directors, officers or
employees; or make any contributions to any defined contribution
plan or any defined benefit pension or retirement plan other than
in the ordinary course of business consistent with past practice
and policies;
(vi) purchase or otherwise acquire, or sell or otherwise
dispose of, any assets or incur any liabilities other than in the
ordinary course of business consistent with past practice and
policies;
(vii) enter into any new capital commitments or make any
capital expenditures in excess of $25,000 each, and $75,000 in
the aggregate, other than pursuant to binding commitments
existing on the date hereof and expenditures necessary to
maintain existing assets in good repair;
(viii) file any applications or make any contract with
respect to branching or site location or relocation;
24
(ix) make any material change in its accounting methods or
practices, other than changes required by changes in applicable
laws or regulations or generally accepted accounting principles,
or change any of its methods of reporting income and deductions
for federal income tax purposes, except as required by changes in
applicable laws or regulations;
(x) change its lending, investment, deposit or asset and
liability management or other banking policies in any material
respect except as may be required by applicable law or
regulations;
(xi) enter into any futures contract, option or other
agreement or take any other action for purposes of hedging the
exposure of its interest-earning assets and interest-bearing
liabilities to changes in market rates of interest;
(xii) incur any liability for borrowed funds (other than
in the case of deposits, federal funds purchased, securities sold
under agreements to repurchase and FHLB advances in the ordinary
course of business) or place upon or permit any lien or
encumbrance upon any of its properties or assets, except liens of
the type permitted in the exceptions to Section 2.13(a).
(xiii) acquire in any manner whatsoever (other than to
realize upon collateral for a defaulted loan) any business or
entity;
(xiv) engage in any transaction with an Affiliate;
(xv) discharge or satisfy any material lien or encumbrance
or pay any material obligation or liability (absolute or
contingent) other than at scheduled maturity or in the ordinary
course of business;
(xvi) enter or agree to enter into any agreement or
arrangement granting any preferential right to purchase any of
its assets or rights or requiring the consent of any party to the
transfer and assignment of any such assets or rights;
(xvii) invest in any investment securities other than
United States government agencies and insured certificates of
deposit with a maturity of two (2) years or less or federal
funds;
(xviii) make or commit to make any commercial real estate
loan to any one person or entity (together with "affiliates of
such person or entity) in excess of $300,000 in the aggregate;
(xix) take any action that would result in any of its
representations and warranties contained in Article II of this
Agreement not being true and correct in any material respect at
the Effective Time; or
(xx) agree to do any of the foregoing.
4.03 No Solicitation. SFSB and Xxxxxxx Savings agree that
neither they nor any of their respective officers or directors
shall, and that they shall direct and use their reasonable best
efforts to
25
cause each of their employees, agents and representatives not to,
directly or indirectly, initiate, solicit, encourage or otherwise
facilitate any inquiries or the making of any proposal or offer with
respect to a merger, reorganization, share exchange, consolidation or
similar transaction involving, or any purchase of all or substantially
all of the assets of SFSB or more than 9.9% of the outstanding
equity securities of SFSB or Xxxxxxx Savings (any such proposal
or offer being hereinafter referred to as an "Acquisition
Proposal"). SFSB and Xxxxxxx Savings further agree that neither
SFSB nor Xxxxxxx Savings nor any of their respective officers and
directors shall, and that they shall direct and use their
reasonable best efforts to cause their employees, agents and
representatives not to, directly or indirectly, engage in any
negotiations concerning, or provide any confidential information
or data to, or have any discussions with, any person relating to
an Acquisition Proposal, or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal; provided,
however, that nothing contained in this Agreement shall prevent
SFSB or Xxxxxxx Savings from (A) complying with its disclosure
obligations under federal or state law; (B) providing information
in response to a request therefor by a person who has made an
unsolicited bona fide written Acquisition Proposal if SFSB
receives from the person so requesting such information an
executed confidentiality agreement; (C) engaging in any
negotiations or discussions with any person who has made an
unsolicited bona fide written Acquisition Proposal or (D)
recommending such an Acquisition Proposal to the stockholders of
SFSB, if and only to the extent that, (i) in each such case
referred to in clauses (B), (C) or (D) above, the SFSB Board of
Directors determines in good faith (after consultation with
outside legal counsel) that such action would be required in
order for its directors to comply with their respective fiduciary
duties under applicable law and (ii) in the case referred to in
clause (D) above, the SFSB Board of Directors determines in good
faith (after consultation with its financial advisor) that such
Acquisition Proposal, if accepted, is reasonably likely to be
consummated, taking into account all legal, financial and
regulatory aspects of the proposal and the person making the
proposal and would, if consummated, result in a transaction more
favorable to SFSBs stockholders from a financial point of view
than the Merger. SFSB and Xxxxxxx Savings agree that they will
immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties
conducted heretofore with respect to any Acquisition Proposals.
SFSB and Xxxxxxx Savings agree that they will notify Laurel
immediately if any such inquiries, proposals or offers are
received by, any such information is requested from, or any such
discussions or negotiations are sought to be initiated or
continued with, any of its representatives, and the substance
thereof and will keep Laurel informed of any developments with
respect thereto immediately following the occurrence thereof.
4.04 Current Information. During the period from the date hereof
to the Effective Time, each party will cause one or more of its designated
representatives to confer from time to time, as either party may reasonably
request, with representatives of the other party regarding its business,
operations, prospects, assets and financial condition and matters relating
to the completion of the transactions contemplated hereby. Within 25 days
after the end of each month, each party shall provide the other party with
a statement of financial condition and a statement of earnings, without
related notes, for such month prepared in accordance with past practices
as presented to its Board of Directors. On a monthly basis, SFSB and Xxxxxxx
Savings shall xxxxxxx Xxxxxx with a report, in such detail as reasonably
requested by Laurel, indicating all loans which have been originated,
purchased or sold during such period as well as all applications for loans
which have been received for
26
processing ("pipeline report") subject to SFSB and Xxxxxxx Savings
maintaining the confidentiality of the parties associated with such
applications.
4.05 Access to Properties and Records; Confidentiality.
(a) SFSB and Xxxxxxx Savings shall permit Laurel and its
representatives reasonable access, upon advance notice, to their
properties, and shall disclose and make available to Laurel all
books, papers and records relating to the assets, stock
ownership, properties, operations, obligations and liabilities of
SFSB and Xxxxxxx Savings, including, but not limited to, all
books of account (including the general ledger), tax records,
minute books of directors' and stockholders' meetings (excluding
minutes related to the transactions contemplated by this
Agreement or other Acquisition Proposals), organizational
documents, bylaws, material contracts and agreements, filings
with any regulatory authority, accountants' work papers,
litigation files, plans affecting employees, and any other
business activities or prospects in which Laurel may have a
reasonable interest. SFSB and Xxxxxxx Savings shall not be
required to provide access to or to disclose information where
such access or disclosure would violate or prejudice the rights
of any customer or would contravene any law, rule, regulation,
order or judgment. SFSB and Xxxxxxx Savings will use their best
efforts to obtain waivers of any such restriction and in any
event make appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence
apply. SFSB and Xxxxxxx Savings shall make its directors,
officers, employees and agents and authorized representatives
(including counsel and independent public accountants) available
to confer with Laurel and its representatives, provided that such
access shall be reasonably related to the transactions
contemplated hereby and not unduly interfere with normal
operations.
(b) All information furnished previously in connection with
the transactions contemplated by this Agreement or pursuant
hereto shall be treated as the sole property of the party
furnishing the information until consummation of the Merger and,
if such Merger shall not occur, the party receiving the
information shall, at the request of the party which furnished
such information, either return to the party which furnished such
information or destroy all documents or other materials
containing, reflecting or referring to such information; shall
use its best effort to keep confidential all such information;
shall use such information only for the purpose of consummating
the transactions contemplated by this Agreement; and shall not
directly or indirectly use such information for any competitive
or commercial purposes. The obligation to keep such information
confidential shall continue for three years from the date the
proposed Merger is abandoned but shall not apply to (i) any
information which (A) the party receiving the information can
establish by convincing evidence was already in its possession
prior to the disclosure thereof to it by the party furnishing the
information; (B) was then generally known to the public; (C)
became known to the public through no fault of the party
receiving the information; or (D) was disclosed to the party
receiving the information by a third party not bound by an
obligation of confidentiality; or (ii) disclosures pursuant to a
legal requirement or in accordance with an order of a court of
competent jurisdiction.
(c) No investigation by either of the parties hereto or
their respective representatives shall affect the representations,
warranties, covenants or agreements of the other party set forth
herein.
27
4.06 Regulatory Matters.
(a) Each of SFSB, Xxxxxxx Savings, Laurel and the Bank
shall cooperate with each other and use their best efforts to
prepare all necessary documentation to effect all necessary
filings and to obtain all necessary permits, consents, approvals
and authorizations of all third parties and governmental bodies
necessary to consummate the transactions contemplated by this
Agreement as soon as practicable. The parties shall each have
the right to review and approve in advance all information
relating to the other, as the case may be, and any of their
respective subsidiaries, which appears in any filing made with,
or written material submitted to, any third party or governmental
body in connection with the transactions contemplated by this
Agreement.
(b) Each of the parties will furnish each other with all
information concerning themselves, their directors, officers and
stockholders and such other matters as may be necessary or
advisable in connection with any statement or application made by
or on behalf of them to any governmental body in connection with
the Merger and the other transactions, applications or filings
contemplated by this Agreement.
(c) Each of the parties will promptly furnish each other
with copies of written communications received by them from, or
delivered by any of the foregoing to, any governmental body in
connection with the Merger and the other transactions,
applications or filings contemplated by this Agreement.
(d) Each of SFSB and Laurel agrees that if such party shall
become aware prior to the mailing date of the Proxy Statement of
any information furnished by such party that would cause any of
the statements in the Proxy Statement to be false or misleading
with respect to any material fact, or to omit to state any
material fact necessary to make the statements therein not false
or misleading, to promptly inform the other parties thereof and
to take the necessary steps to correct the Proxy Statement.
4.07 Approval of Stockholders. SFSB will (a) take all steps
necessary to duly call, give notice of, convene and hold a
meeting of its stockholders as soon as reasonably practicable,
but in no event later than January 31, 2003, for the purposes of
securing the adoption of such stockholders of this Agreement and
the Agreement of Merger, (b) unless the Board of Directors of
SFSB makes a good faith determination, upon consideration of the
advice of outside counsel that such recommendation would be
deemed to constitute a breach of their fiduciary duties under
applicable Pennsylvania law, recommend to its stockholders the
approval of this Agreement and the Agreement of Merger and the
transactions contemplated hereby and thereby, and use its best
efforts to obtain, as promptly as practicable, such approvals,
and (c) cooperate and consult with Laurel and the Bank with
respect to the foregoing matters.
4.08 Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to
use its best efforts to take, or cause to be taken, all
reasonable action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and
regulations to satisfy the conditions to closing contained herein
and to consummate and make
28
effective the transactions contemplated by this Agreement and the
Agreement of Merger. In case, at any time after the Effective Time,
any further action is necessary or desirable to carry out the purposes
of this Agreement, the proper officers and directors of each party to
this Agreement shall take all such necessary action. Nothing in
this section shall be construed to require any party to
participate in any threatened or actual legal, administrative or
other proceedings (other than proceedings, actions or
investigations to which it is a party or subject or threatened to
be made a party or subject) in connection with consummation of
the transactions contemplated by this Agreement unless such party
shall consent in advance and in writing to such participation and
the other party agrees to reimburse and indemnify such party for
and against any and all costs and damages related thereto.
4.09 Disclosure Supplements. From time to time prior to the
Effective Time, each party will promptly supplement or amend its
respective Disclosure Schedules delivered pursuant hereto with
respect to any matter hereafter arising which, if existing,
occurring or known as of the date hereof, would have been
required to be set forth or described in such Schedules or which
is necessary to correct any information in such Schedules which
has been rendered inaccurate thereby. No supplement or amendment
to such Schedules shall have any effect for the purpose of
determining satisfaction of the conditions set forth in Article V
or the compliance by SFSB and Xxxxxxx Savings with the covenants
set forth in Section 4.01 hereof.
4.10 Public Announcements. The parties hereto shall approve
in advance the substance of and cooperate with each other in the
development and distribution of all news releases and other
public disclosures with respect to this Agreement or any of the
transactions contemplated hereby, except as may be otherwise
required by law or regulation and as to which the parties
releasing such information have used their best efforts to
discuss with the other parties in advance.
4.11 Failure to Fulfill Conditions. In the event that
either of the parties hereto determines that a condition to its
respective obligations to consummate the transactions
contemplated hereby cannot be fulfilled and that it will not
waive that condition, it will promptly notify the other party.
Laurel and SFSB will promptly inform the other of any facts
applicable to them, or their respective directors or officers,
that would be likely to prevent or materially delay approval of
the Merger by any governmental authority or which would otherwise
prevent or materially delay completion of the Merger.
4.12 Certain Post-Merger Agreements.
The parties hereto agree to the following arrangements
following the Effective Time:
(a) Transferred Employees. Subject to the provisions of
this Section 4.12, all Employees immediately prior to the
Effective Time who are employed by Laurel or the Bank immediately
following the Effective Time ("Transferred Employees") will be
covered by the employee benefit plans of Laurel and/or the Bank
on substantially the same basis as any employee of Laurel and/or
the Bank in a comparable position. Notwithstanding the
foregoing, Laurel may determine to continue any of the SFSB or
Xxxxxxx Savings Benefits Plans for Transferred Employees in lieu
of offering
29
participation in the benefit plans of Laurel and/or the Bank providing
similar benefits (e.g., medical and hospitalization benefits), to
terminate any of the SFSB or Xxxxxxx Savings' Benefits Plans, or to
merge any such Benefits Plans with the benefit plans of Laurel and/or
the Bank, provided the result is the provision of benefits to Transferred
Employees that are substantially similar to the benefits provided to
the employees of Laurel and/or the Bank generally. Except as
specifically provided in this Section 4.12 and as otherwise
prohibited by law, Transferred Employees service with SFSB or
Xxxxxxx Savings shall be recognized as service with Laurel or the
Bank for purposes of eligibility to participate and vesting, if
applicable (but not for purposes of benefit accrual) under the
benefit plans of Laurel and/or the Bank subject to applicable
break-in-service rules.
(b) Health Plans. Laurel will use its best efforts to
cause any pre-existing condition, limitation or exclusion in its
medical, long-term disability and life insurance plans to not
apply to Transferred Employees or their covered dependents who
are covered under a medical or hospitalization indemnity plan
maintained by SFSB or Xxxxxxx Savings on the Effective Time and
who then change coverage to the Laurels or the Banks medical or
hospitalization indemnity health plan at the time such
Transferred Employees are first given the option to enroll.
(c) Employment, Severance and Change in Control Agreements.
Any officer or employee of SFSB or Xxxxxxx Savings who has an
employment, severance or change in control agreement ("Executive
Agreements") with SFSB or Xxxxxxx Savings (each a "Contract Officer")
which is disclosed on SFSB Disclosure Schedule 2.12(a) shall receive
from SFSB or Xxxxxxx Savings as of the Effective Time, the severance
or termination payments provided for in their respective agreements
("Contract Payments") and as described and quantified in reasonable
detail on SFSB Disclosure Schedule 4.12(c). As a condition to receiving
their Contract Payments, each Contract Officer shall sign and deliver to
SFSB and Laurel a release agreement in the form reasonably requested by
Laurel. Notwithstanding anything contained herein to the contrary, (i)
SFSB represents and warrants that the amounts set forth in SFSB Disclosure
Schedule 4.12(c) (A) have been calculated in a manner consistent with, and
according to, the provisions of the Executive Agreements (copies of which
have been furnished by SFSB to Laurel) and (B) represent good faith estimates
of the amounts payable as of the future date specified therein based upon
assumptions regarding interest rates, compensation or the assumed Effective
Time, which have been set forth in SFSB Disclosure Schedule 4.12(c), and
(ii) the amounts payable under such Executive Agreements will not exceed,
individually or in the aggregate, the amounts set forth in SFSB Disclosure
Schedule 4.12(c) (except to the extent that any good faith estimates set
forth in SFSB Disclosure Schedule 4.12(c) change due to changes in interest
rates, compensation or the assumed Effective Time). To the extent that an
employee of SFSB or Xxxxxxx Savings is entitled to the continued receipt of
health insurance, life insurance, disability insurance, automobile allowance
or other similar fringe benefits pursuant to an Executive Agreement, and
such employee becomes a director, officer, employee or consultant of Laurel
or the Bank following the Effective Time and as a result becomes entitled to
receive the same fringe benefits in his or her capacity as a director,
officer, employee or consultant of Laurel or the Bank, then the fringe
benefits provided to such person shall be deemed to be provided in connection
with such person's service as a director, officer, employee or consultant of
Laurel or the Bank for so long as such person serves in such capacity and
shall be in lieu of, and not in addition to (and for the sole purpose to
avoid duplication of benefits), the same fringe benefits that would have
otherwise
30
been provided pursuant to the Executive Agreement.
(d) SFSB ESOP. (i) Each participant in the SFSB Employee
Stock Ownership Plan ("SFSB ESOP") not fully vested will become
fully vested in his or her SFSB ESOP account as of the Effective
Time. As soon as practicable after the execution of this
Agreement, to the extent necessary, SFSB, Xxxxxxx Savings and
Laurel will cooperate to cause the SFSB ESOP to be amended and
other action taken in a manner reasonably acceptable to SFSB and
Laurel to provide that the SFSB ESOP will terminate upon the
Effective Time in accordance with its terms in effect as of the
date of this Agreement. Upon the repayment of the SFSB ESOP
loan, the remaining shares in the Loan Suspense Account will be
allocated (to the extent permitted by Sections 401(a), 415 or
4975 of the Code and the applicable laws and regulations
including, without limitation, the applicable provisions of
ERISA) to SFSB ESOP participants (as determined under the terms
of the SFSB ESOP). Between the date hereof and the Effective
Time, the existing SFSB ESOP indebtedness shall be paid in the
ordinary course of business consistent with past practice and
SFSB or Xxxxxxx Savings shall make such contributions to the SFSB
ESOP as necessary to fund such payments. Any indebtedness of the
SFSB ESOP remaining as of the Effective Time shall be repaid from
the Trust associated with the SFSB ESOP through application of
the Merger Consideration received by the SFSB ESOP. SFSB and
Laurel agree that, subject to the conditions described herein, as
soon as practicable after the Effective Time and repayment of the
SFSB ESOP loan, participants in the SFSB ESOP will receive lump
sum distributions of their SFSB ESOP accounts.
(ii) Following the date of this Agreement, SFSB and Xxxxxxx
Savings shall file a request for a favorable determination letter
upon SFSB ESOP Plan termination with the IRS with regard to the
qualification of the SFSB ESOP. SFSB and Laurel will cooperate
in submitting appropriate requests for any such determination
letter to the IRS and will use their best efforts to seek the
issuance of such letter as soon as practicable following the date
hereof. SFSB and Laurel will adopt such additional amendments to
the SFSB ESOP as may be reasonably required by the IRS as a
condition to granting such determination letter provided that
such amendments do not substantially change the terms outlined
herein or would result in a material adverse change in the
business, operations, assets, financial condition or prospects of
SFSB or Xxxxxxx Savings or result in an additional material
liability to Laurel or the Bank.
(iii) As of and following the Effective Time, Laurel
shall cause the SFSB ESOP to be maintained for the exclusive
benefit of employees and other persons who were participants or
beneficiaries therein prior to the Effective Time and proceed
with termination of the SFSB ESOP through distribution of its
assets in accordance with its terms subject to the amendments
described herein and as otherwise may be required to comply with
applicable law or to obtain a favorable determination from the
IRS as to the continuing qualified status of the SFSB ESOP,
provided, however, that no such distributions of the SFSB ESOP
shall occur until a favorable termination ruling has been
received from the IRS.
(e) Advisory Board of Directors. At the Effective Time,
the five directors of SFSB as of the date hereof will be
appointed to a newly created Advisory Board for Laurel for a
period of one
31
year. Each advisory board member shall be compensated for their
services in an amount of $750 per month.
(f) Employee Severance. Any person who is currently
serving as an employee of either SFSB or Xxxxxxx Savings and
continues as such immediately prior to the Effective Time (other
than those employees covered by a written employment or severance
agreement set forth in SFSB Disclosure Schedule 4.12(c)) whose
employment is discontinued by Laurel or the Bank within one year
after the Effective Time (unless termination of such employment
is for Cause (as defined below)) shall be entitled to a severance
payment from the Bank in an amount equal to their then current
salary of two weeks for every year of service at SFSB or Xxxxxxx
Savings, up to a maximum severance of twenty-six (26) weeks.
Notwithstanding the foregoing, SFSB or Xxxxxxx Savings shall make
such severance payments to any such employees as of the Effective
Time in the event that Laurel or the Bank notifies SFSB or
Xxxxxxx Savings that such notified employees shall not be
employed after the Effective Time. For purposes of this Section
4.12(f), "Cause" shall mean termination because of the employee's
personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to
perform stated duties or willful violation or any law, rule or
regulation (other than traffic violations or similar offenses).
(g) Consulting Agreements. Effective as of the Effective
Time, Laurel agrees that either it and/or the Bank will enter
into consulting agreements as set forth in Exhibit 4.12(g) with
each of Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxxxxx providing for
(i) consulting fees payable to each individual as set forth in
SFSB Disclosure Schedule 4.12(g) for a period of one year in
equal monthly installments, and (ii) medical and dental benefits
at no cost to the aforementioned individuals for a period of
three years for Xxxxxxx X. Xxxxxx and a period of one year for
Xxxxxx X. Xxxxxxxxx, and, to the extent permissible, continued
eligibility to participate in such medical and dental programs
thereafter until attainment of age 65 at her own expense in the
case of Xx. Xxxxxx.
(h) Retention Bonuses. Following execution of this
Agreement in order to insure an orderly Closing and transition
period, SFSB shall identify individual employees of SFSB (other
than employees who have an Executive Agreement) who will be
entitled to receive a "retention" bonus in the event that such
employee remains an employee and satisfactorily fulfills the
duties and responsibilities of his or her position through the
Effective Time, to be paid by SFSB immediately prior to the
Effective Time provided, however, that such bonus payments shall
not exceed with respect to a given individual $10,000 and $50,000
in the aggregate.
(i) SERP. Immediately prior to the Effective Time, Xxxxxxx
Savings shall terminate the Supplemental Executive Retirement
Plan (the "SERP") and make the payments to each of Xx. Xxxxxx and
Xx. Xxxxxxxxx set forth on SFSB Disclosure Schedule 4.12(i).
SFSB Disclosure Schedule 4.12(i) details all amounts payable
pursuant to the SERP. Except as indicated on SFSB Disclosure
Schedule 4.12(i), amounts payable under the SERP are accrued on
SFSB's financial statements to the extent required by generally
accepted accounting principles.
(j) Directors Retirement Plan. Immediately prior to the
Effective Time, Xxxxxxx Savings shall terminate the Xxxxxxx
Savings Directors Consultation and Retirement Plan ("Retirement
Plan")
32
and make a lump sum payment as of the Effective Time to
each of SFSB's directors equal to the present value of future
benefits due thereunder payable based on the yield on the two-
year U.S. Treasury Xxxx five (5) business days prior to the
Effective Time as reported in the Wall Street Journal, Eastern
Edition ("Calculation Rate"). SFSB Disclosure Schedule 4.12(j)
details the methodology for determining such payments.
Notwithstanding anything contained herein to the contrary, (i)
SFSB represents and warrants that the amounts set forth in SFSB
Disclosure Schedule 4.12(j) (A) have been calculated in a manner
consistent with, and according to, the provisions of the
Retirement Plan (a copy of which has been furnished by SFSB to
Laurel) and (B) represent good faith estimates of the amounts
payable as of the future date specified therein based upon
assumptions regarding the Calculation Rate or the assumed
Effective Time, which have been set forth in SFSB Disclosure
Schedule 4.12(j), and (ii) the amounts payable under the
Retirement Plan will not exceed, individually or in the
aggregate, the amounts set forth in SFSB Disclosure Schedule
4.12(j) (except to the extent that any good faith estimates set
forth in SFSB Disclosure Schedule 4.12(j) change due to changes
in the Calculation Rate or the assumed Effective Time).
(k) Indemnification. From and after the Effective Time
through the sixth anniversary of the Effective Time, Laurel shall
indemnify and hold harmless each present and former director, officer
and employee of SFSB and Xxxxxxx Savings determined as of the Effective
Time (the "Indemnified Parties") against any costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages or
liabilities (collectively, "Costs") incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of matters existing or occurring
at or prior to the Effective Time, whether asserted or claimed prior to,
at or after the Effective Time (collectively, "Claims"), to the fullest
extent to which such Indemnified Parties were entitled under Pennsylvania
law, the Articles of Incorporation, Charter and Bylaws of SFSB and
Xxxxxxx Savings as in effect on the date hereof, provided, however, that
all rights to indemnification in respect to any claim asserted or made
within such period shall continue until the final disposition of such claim.
Any Indemnified Party wishing to claim indemnification under
this Section 4.12(k), upon learning of any such claim, action,
suit, proceeding or investigation, shall promptly notify Laurel,
but the failure to so notify shall not relieve Laurel of any
liability it may have to such Indemnified Party if such failure
does not materially prejudice Laurel. In the event of any such
claim, action, suit, proceeding or investigation (whether arising
before or after the Effective Time), (i) Laurel shall have the
right to assume the defense thereof and Laurel shall not be
liable to such Indemnified Parties for any legal expenses of
other counsel or any other expenses subsequently incurred by such
Indemnified Parties in connection with the defense thereof,
except that if Laurel elects not to assume such defense or
counsel for the Indemnified Parties advises that there are issues
which raise conflicts of interest between Laurel and the
Indemnified Parties, the Indemnified Parties may retain counsel
which is reasonably satisfactory to Laurel, and Laurel shall pay,
promptly as statements therefor are received, the reasonable fees
and expenses of such counsel for the Indemnified Parties (which
may not exceed one firm in any jurisdiction unless the use of one
counsel for such Indemnified Parties would present such counsel
with a conflict of interest), (ii) the Indemnified Parties will
cooperate in the defense of any such matter, and (iii) Laurel
shall not be liable for any settlement effected without its prior
written consent, which consent shall not be withheld unreasonably.
33
In the event that Laurel or any of its respective successors
or assigns (i) consolidates with or merges into any other person
and shall not be the continuing or surviving corporation or
entity of such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any person,
then, and in each such case, the successors and assigns of such
entity shall assume the obligations set forth in this Section
4.12(k), which obligations are expressly intended to be for the
irrevocable benefit of, and shall be enforceable by, each of the
Indemnified Parties.
(l) Insurance. Laurel and the Bank shall maintain a
directors' and officers' liability insurance policy covering the
Indemnified Parties' Costs in connection with any Claims for a
period of three (3) years after the Effective Time at annual
premiums no greater than 150% of the annual premium of the
directors and officers liability insurance maintained by SFSB and
Xxxxxxx Savings as of the date hereof. With the prior written
consent of Laurel, such insurance policy may be acquired by SFSB
prior to the Effective Time.
(m) SFSB Options and Restricted Stock. Immediately upon the
Effective Time, all SFSB Options and shares of SFSB Common Stock
awarded under the RSP shall immediately vest and be canceled and
exchanged for a payment to be made to the recipient in accordance
with Section 1.07.
4.13 Vacation. Xx. Xxxxxx and Xx. Xxxxxxxxx shall be paid
by Xxxxxxx Savings for all unused vacation leave as of the
Effective Time, in accordance with SFSB Disclosure Schedule 4.13.
4.14. Certain Policies. Prior to the Effective Time, each
of SFSB and Xxxxxxx Savings shall, consistent with generally
accepted accounting principles, the rules and regulations of the
Securities and Exchange Commission and applicable banking laws
and regulations, modify or change its loan, real estate owned,
accrual, reserve, tax, litigation and real estate valuation
policies and practices (including loan classifications and levels
of reserves) so as to be applied on a basis that is consistent
with that of Laurel and the Bank; provided, however, that no such
modifications or changes need be made prior to the satisfaction
of the conditions set forth in Section 5.02; and further provided
that in any event, no accrual or reserve made by SFSB or Xxxxxxx
Savings pursuant to this Section 4.13 shall constitute or be
deemed to be a Material Adverse Effect or breach, violation of or
failure to satisfy any representation, warranty, covenant,
agreement, condition or other provision of this Agreement or
otherwise be considered in determining whether any such Material
Adverse Effect or breach, violation or failure to satisfy shall
have occurred; and provided, further, that any such changes shall
not result in SFSB's filing of materially inconsistent documents
or reports with the Securities and Exchange Commission or any
other governmental authority. The recording of any such
adjustments shall not be deemed to imply any misstatement of
previously furnished financial statements or information and
shall not be construed as concurrence of the SFSB or its
management with any such adjustments.
34
ARTICLE V
CLOSING CONDITIONS
5.01 Conditions to the Parties' Obligations Under This
Agreement. The respective obligations of the parties under this
Agreement shall be subject to the fulfillment at or prior to the
Effective Time of the following conditions:
(a) All necessary regulatory, governmental or third party
approvals, waivers, clearances, authorizations and consents
(including without limitation the requisite approval and/or non-
objection, if any, of the Board, the FDIC, the Department and the
OTS required to consummate the transactions contemplated hereby)
shall have been obtained without any term or condition which, in
the reasonable opinion of Laurel, would materially impair the
value of SFSB and Xxxxxxx Savings to Laurel and the Bank or
materially adversely affect the terms of the Merger as they
relate to the stockholders of SFSB; all conditions required to be
satisfied prior to the Effective Time by the terms of such
approvals and consents shall have been satisfied; and all waiting
periods in respect thereof shall have expired.
(b) All corporate action necessary to authorize the
execution and delivery of this Agreement and the Agreement of
Merger and consummation of the transactions contemplated hereby
and thereby shall have been duly and validly taken by Laurel, the
Bank, SFSB and Xxxxxxx Savings, including approval by the
requisite vote of the stockholders of SFSB of this Agreement and
the Agreement of Merger.
(c) No order, judgment or decree shall be outstanding
against a party hereto or a third party that would have the
effect of preventing completion of the Merger; no suit, action or
other proceeding shall be pending or threatened by any
governmental body in which it is sought to restrain or prohibit
the Merger; and no suit, action or other proceeding shall be
pending before any court or governmental agency in which it is
sought to restrain or prohibit the Merger or obtain other
substantial monetary or other relief against one or more of the
parties hereto in connection with this Agreement and which
Laurel, the Bank, SFSB or Xxxxxxx Savings determines in good
faith, based upon the advice of their respective counsel, makes
it inadvisable to proceed with the Merger because any such suit,
action or proceeding has a significant potential to be resolved
in such a way as to deprive the party electing not to proceed of
any of the material benefits to it of the Merger.
5.02. Conditions to the Obligations of Laurel and the
Bank Under This Agreement. The obligations of Laurel and the
Bank under this Agreement shall be further subject to the
satisfaction, at or prior to the Effective Time, of the following
conditions, any one or more of which may be waived by Laurel and
the Bank:
(a) Each of the obligations of SFSB and Xxxxxxx Savings
required to be performed by them at or prior to the Closing
pursuant to the terms of this Agreement shall have been duly
performed and complied with in all material respects and the
representations and warranties of SFSB and Xxxxxxx Savings
contained in this Agreement shall have been true and correct as
of the date
35
hereof and as of the Effective Time as though made at
and as of the Effective Time, except (i) as to any representation
or warranty which specifically relates to an earlier date, or
(ii) where the facts which caused the failure of any
representation or warranty to be so true and correct would not,
either individually or in the aggregate, constitute a Material
Adverse Effect, and Laurel and the Bank shall have received a
certificate to that effect signed by the President of SFSB and
Xxxxxxx Savings.
(b) SFSB and Xxxxxxx Savings shall have furnished Laurel
and the Bank with such certificates of its officers or others and
such other documents to evidence fulfillment of the conditions
set forth in this Section 5.02 as Laurel and the Bank may
reasonably request.
5.03 Conditions to the Obligations of SFSB and Xxxxxxx
Savings Under this Agreement. The obligations of SFSB and
Xxxxxxx Savings under this Agreement shall be further subject to
the satisfaction, at or prior to the Effective Time, of the
following conditions, any one or more of which may be waived by
SFSB and Xxxxxxx Savings:
(a) Each of the obligations of Laurel and the Bank required
to be performed by them at or prior to the Closing pursuant to
the terms of this Agreement shall have been duly performed and
complied with in all material respects and the representations
and warranties of Laurel and the Bank contained in this Agreement
shall have been true and correct as of the date hereof and as of
the Effective Time as though made at and as of the Effective
Time, except (i) as to any representation or warranty which
specifically relates to an earlier date or (ii) where the facts
which caused the failure of any representation or warranty to be
so true and correct would not, either individually or in the
aggregate, constitute a material adverse change in the business,
operations, assets or financial condition of Laurel and the Bank
taken as a whole, and SFSB and Xxxxxxx Savings shall have
received a certificate to that effect signed by the President and
Chief Executive Officer of Laurel and the Bank.
(b) Laurel and the Bank shall have furnished SFSB and
Xxxxxxx Savings with such certificates of its officers or others
and such other documents to evidence fulfillment of the
conditions set forth in this Section 5.03 as SFSB and Xxxxxxx
Savings may reasonably request.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER, ETC.
6.01 Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after
approval of this Agreement and the Agreement of Merger by the
stockholders of SFSB:
(a) by mutual written consent of the parties hereto;
(b) by Laurel, the Bank, SFSB or Xxxxxxx Savings (i) if the
Effective Time shall not have occurred on or prior to June 30,
2003, or (ii) if a vote of the stockholders of SFSB is taken and
such
36
stockholders fail to approve this Agreement and the Agreement of Merger
at the meeting of stockholders (or any adjournment thereof) of SFSB
contemplated by Section 4.07 hereof; unless the failure of such occurrence
shall be due to the failure of the party seeking to terminate this Agreement
to perform or observe its agreements in all material respects set forth
herein to be performed or observed by such party at or before the
Effective Time;
(c) by Laurel or SFSB upon written notice to the other 30 or more days
after the date upon which any application for a regulatory or governmental
approval necessary to consummate the Merger and the other transactions
contemplated hereby shall have been denied or withdrawn at the request or
recommendation of the applicable regulatory agency or governmental authority,
unless within such 30-day period a petition for rehearing or an amended
application is filed or noticed, or 30 or more days after any petition for
rehearing or amended application is denied;
(d) by Laurel or the Bank in writing if SFSB or Xxxxxxx Savings has, or
by SFSB or Xxxxxxx Savings in writing if Laurel or the Bank has, breached (i)
any covenant or undertaking contained herein or in the Agreement of Merger,
or (ii) any representation or warranty contained herein, which, in the case
of either (i) or (ii), breach would have a Material Adverse Effect on the
business, operations, assets or financial condition of SFSB and Xxxxxxx
Savings taken as a whole or Laurel and the Bank taken as a whole, or upon
the consummation of the transactions contemplated hereby, in any case if
such breach has not been cured by the earlier of 30 days after the date on
which written notice of such breach is given to the party committing such
breach or the Effective Time;
(e) by Laurel or SFSB in writing, if any of the applications for prior
approval referred to in Section 4.06 hereof are denied or are approved
contingent upon the satisfaction of any condition or requirement which, in
the reasonable opinion of the Board of Directors of Laurel or SFSB as
applicable, would materially impair the value of SFSB and Xxxxxxx Savings
taken as a whole to Laurel, or would materially adversely affect the terms of
the Merger as they relate to the stockholders of SFSB and the time period for
appeals and requests for reconsideration has run;
(f) By Laurel if (i) at any time prior to the meeting of stockholders
of SFSB to consider the Agreement, SFSB shall have breached Section 4.03,
(ii) SFSB's Board of Directors shall have failed to make its recommendation
referred to in Section 4.07, withdrawn such recommendation or modified or
changed such recommendation in a manner adverse in any respect to the
interests of Laurel and SFSB stockholders fail to approve this Agreement and
the Agreement of Merger at the meeting of stockholders of SFSB contemplated
by Section 4.07 or (iii) SFSB shall have materially breached its obligations
under Section 4.07 by failing to call, give notice of, convene and hold a
meeting of SFSB's stockholders in accordance with Section 4.07; and
(g) By Laurel if a tender offer or exchange offer for 20% or more of
the outstanding shares of SFSB Common Stock is commenced (other than by
Laurel or the Bank), and the SFSB Board of Directors (i) recommends that
the stockholders of SFSB tender their shares in such tender or exchange
offer within the 10 business day period ("Recommendation Period") specified
in Rule 14e-2(a) under the Exchange Act or (ii) fails to recommend that
such stockholders reject such tender offer or exchange offer within the
Recommendation Period and such stockholders fail to approve this
37
Agreement and the Agreement of Merger at the meeting of stockholders of
SFSB contemplated by Section 4.07.
6.02 Effect of Termination. In the event of termination of
this Agreement by Laurel, the Bank, SFSB or Xxxxxxx Savings as
provided above, this Agreement shall forthwith become void (other
than Sections 4.05(b) and 7.01 hereof, which shall remain in full
force and effect) and there shall be no further liability on the
part of the parties or their respective officers or directors
except for the liability of the parties under Sections 4.05(b)
and 7.01 hereof and except for liability for any breach of this
Agreement.
6.03 Amendment, Extension and Waiver. Subject to applicable
law, at any time prior to the consummation of the Merger, whether
before or after approval thereof by the stockholders of SFSB, the
parties may (a) amend this Agreement and the Agreement of Merger,
(b) extend the time for the performance of any of the obligations
or other acts of the other parties hereto, (c) waive any
inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto, or (d) waive
compliance with any of the agreements or conditions contained
herein; provided, however, that after any approval of the Merger
by the stockholders of SFSB, there may not be, without further
approval of such stockholders, any amendment or waiver of this
Agreement or the Agreement of Merger which modifies the amount of
the Merger Consideration to be delivered to stockholders of SFSB.
This Agreement and the Agreement of Merger may not be amended
except by an instrument in writing signed on behalf of each of
the parties hereto. Any agreement on the part of a party hereto
to any extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party, but such
waiver or failure to insist on strict compliance with such
obligation, covenant, agreement or condition shall not operate as
a waiver of, or estoppel with respect to, any subsequent or other
failure.
ARTICLE VII
MISCELLANEOUS
7.01 Expenses; Termination Fee.
(a) Each party hereto shall bear and pay all costs and
expenses incurred by it in connection with the transactions
contemplated by this Agreement, including fees and expenses of
its own financial consultants, accountants and counsel, provided
that in the event of a termination of this Agreement resulting
from a willful breach of a representation, warranty, covenant or
undertaking, the party committing such breach shall be liable for
$200,000 to the other party, plus the reasonable expenses of the
other party without prejudice to any other rights or remedies as
may be available to the non-breaching party, including without
limitation any rights under Section 7.01(b) hereof.
(b) Notwithstanding anything to the contrary herein, SFSB
shall pay Laurel the sum of $454,000 (the "Termination Fee") if
this Agreement is terminated as follows:
38
(i) if this Agreement is terminated by Laurel pursuant
to Section 6.01(f)(i) and (iii) or (g); or
(ii) if this Agreement is terminated by (A) Laurel
pursuant to Section 6.01(d) or (B) by either Laurel or SFSB
pursuant to Section 6.01(b)(i) or 6.01(f)(ii) and with
respect to such termination events under this Section
7.01(b)(ii) an Acquisition Proposal shall have been publicly
announced or otherwise communicated or made known to the
senior management of SFSB or the SFSB Board of Directors (or
any person shall have publicly announced, communicated or
made known an intention, whether or not conditional, to make
an Acquisition Proposal) at any time after the date of this
Agreement and prior to the date of termination; or
(iii) if this Agreement is terminated by either
Laurel or SFSB pursuant to Section 6.01(b)(ii) and an
Acquisition Proposal shall have been publicly announced or
otherwise communicated or made known to the senior
management of SFSB or the SFSB Board of Directors (or any
person shall have publicly announced, communicated or made
known an intention, whether or not conditional, to make an
Acquisition Proposal) at any time after the date of this
Agreement and prior to the taking of the vote of the
stockholders of SFSB at a meeting thereof to consider this
Agreement as contemplated by Section 4.07.
Any amount that becomes payable pursuant to Section 7.01(b)(i) or
(ii) shall be paid by wire transfer of immediately available
funds to an account designated by Laurel no later than the second
Business Day following such termination. With respect to the
Termination Fee that becomes payable pursuant to Section
7.01(b)(iii), $250,000 shall be paid by wire transfer of
immediately available funds to an account designated by Laurel no
later than the second Business Day following such termination and
the remaining $204,000 shall not be paid unless and until such
time that SFSB executes a definitive agreement related to an
Acquisition Proposal within eighteen months of the termination of
this Agreement.
(c) SFSB and Laurel agree that the agreement contained in
paragraph (b) of this Section 7.01 is an integral part of the
transactions contemplated by this Agreement, that without such
agreement Laurel and the Bank would not have entered into this
Agreement and that such amounts do not constitute a penalty or
liquidated damages in the event of a breach of this Agreement by
SFSB and Xxxxxxx Savings. If SFSB or Xxxxxxx Savings fail to pay
Laurel the amounts due under paragraph (b) above within the time
periods specified therein, SFSB shall pay the costs and expenses
(including reasonable legal fees and expenses) incurred by Laurel
in connection with any action in which Laurel prevails, including
the filing of any lawsuit, taken to collect payment of such
amounts, together with interest on the amount of any such unpaid
amounts at the prime lending rate prevailing during such period
as published in The Wall Street Journal, calculated on a daily
basis from the date such amounts were required to be paid until
the date of actual payment.
(d) If this Agreement is terminated by Laurel pursuant to
Section 6.01(f)(ii) and no Acquisition Proposal has been made
prior to such termination, SFSB shall pay to Laurel, reasonable
39
documented fees and expenses, but in no event in excess of
$200,000, within five Business Days after written demand for
payment is made by Laurel.
(e) Amounts paid pursuant to Section 7.01(a) or (d) shall
not be in addition to the amounts paid pursuant to Section
7.01(b). The maximum amount payable to Laurel pursuant to this
Agreement shall be $454,000.
(f) Due to the expenses, direct and indirect, incurred by
SFSB in negotiating this Agreement and in taking steps to effect
the transactions contemplated hereby, the loss by it of other
opportunities, and as a material inducement for SFSB agreeing to
enter into this Agreement, Laurel shall pay to SFSB, reasonable
documented fees and expenses, but in no event in excess of
$200,000, within five Business Days after written demand for
payment is made by SFSB, following the occurrence of termination
of this Agreement by either party if required regulatory
approvals are not received on or before June 30, 2003, provided
such failure to receive such regulatory approvals is not either a
result of any breach by SFSB or Xxxxxxx Savings or a consequence
of facts or circumstances relating to SFSB or Xxxxxxx Savings.
If demand for payment of fees and expenses is made pursuant
to this Section 7.01(e) and payment is timely made, then SFSB
will not have any other rights or claims against Laurel under
this Agreement, it being agreed that the acceptance of fees and
expenses under this Section 7.01(e) will constitute the sole and
exclusive remedy of SFSB against Laurel.
7.02 Survival. The respective representations, warranties
and covenants of the parties to this Agreement shall not survive
the Effective Time but shall terminate as of the Effective Time,
except for the provisions of Sections 1.07, 1.08, 4.12 and 7.01
hereof.
7.03 Notices. All notices or other communications hereunder
shall be in writing and shall be deemed given if delivered
personally, sent by overnight express or mailed by prepaid
registered or certified mail (return receipt requested) or by
cable, telegram or telex addressed as follows:
(a) If to Laurel, to:
Laurel Capital Group, Inc.
0000 Xxxxx Xxx Xxxx
Xxxxxxx Xxxx, Xxxxxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxx
President and Chief Executive Officer
Copy to:
Elias, Matz, Xxxxxxx and Xxxxxxx L.L.P.
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx X. Xxxxx, Esq.
Xxxxx X. Xxxxxxxx, Esq.
40
(b) If to SFSB, to:
SFSB Holding Company
000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
President
Copy to:
Xxxxxxx Spidi & Xxxxx, PC
0000 Xxx Xxxx Xxxxxx, XX
Xxxxx 000 Xxxx
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxx Xxxxx, Esq.
or such other address as shall be furnished in writing by any
party, and any such notice or communication shall be deemed to
have been given as of the date so mailed.
7.04 Parties in Interest. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns; provided, however, that
neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any party hereto
without the prior written consent of the other party and, except
as provided in Section 4.12 hereof or as otherwise expressly
provided herein, that nothing in this Agreement is intended to
confer, expressly or by implication, upon any other person any
rights or remedies under or by reason of this Agreement.
7.05 Complete Agreement. This Agreement and the Agreement
of Merger, including the documents and other writings referred to
herein or therein or delivered pursuant hereto or thereto,
contain the entire agreement and understanding of the parties
with respect to their subject matter and shall supersede all
prior agreements and understandings between the parties, both
written and oral, with respect to such subject matter. There are
no restrictions, agreements, promises, representations,
warranties, covenants or undertakings between the parties other
than those expressly set forth herein or therein.
7.06 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the
same agreement and each of which shall be deemed an original.
7.07 Governing Law. This Agreement shall be governed by the
laws of the Commonwealth of Pennsylvania, without giving effect
to the principles of conflicts of laws thereof.
7.08 Headings. The Article and Section headings contained
in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement.
41
IN WITNESS WHEREOF, Laurel, the Bank, SFSB and Xxxxxxx
Savings have caused this Agreement to be executed by their duly
authorized officers as of the day and year first above written.
LAUREL CAPITAL GROUP, INC.
Attest:
By:
-------------------- ----------------------------------------
Xxxx X. Xxxxxx, Xx. Xxxxx X. Xxxx
Secretary President and Chief Executive Officer
LAUREL SAVINGS BANK
Attest:
By:
-------------------- ----------------------------------------
Xxxx X. Xxxxxx, Xx. Xxxxx X. Xxxx
Secretary President and Chief Executive Officer
SFSB HOLDING COMPANY
Attest:
By:
------------------- ------------------------------------
Xxxxxx X. Xxxxxxxxx Xxxxxxx X. Xxxxxx
Secretary President
XXXXXXX FEDERAL SAVINGS BANK
Attest:
By:
------------------- ------------------------------------
Xxxxxx X. Xxxxxxxxx Xxxxxxx X. Xxxxxx
Secretary President
42
EXHIBIT A
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT, dated as of _______, 2002, by and
among Laurel Capital Group, Inc. (the "Acquiror"), a Pennsylvania
corporation, and certain stockholders of SFSB Holding Company
(the "Company"), a Pennsylvania corporation, named on Schedule I
hereto in their capacity as individuals (collectively the
"Stockholders").
WITNESSETH:
WHEREAS, the Acquiror and the Company have entered into an
Agreement and Plan of Reorganization, dated as of the date hereof
(the "Agreement"), which is being executed simultaneously with
the execution of this Stockholder Agreement and provides for,
among other things, the merger of SFSB Acquisition Corp.
("Interim"), a to-be-formed wholly owned subsidiary of the
Acquiror, with and into the Company (the "Merger"); and
WHEREAS, in order to induce the Acquiror to enter into the
Agreement, each of the Stockholders agrees to, among other
things, vote in favor of the Agreement in his or her capacity as
a stockholder of the Company.
NOW, THEREFORE, in consideration of the premises, the mutual
covenants and agreements set forth herein and other good and
valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Ownership of Company Common Stock. Each Stockholder
represents and warrants that the Stockholder has or shares the
right to vote and dispose of the number of shares of common stock
of the Company, par value $0.10 per share ("Company Common
Stock"), set forth opposite such Stockholder's name on Schedule I
hereto.
2. Agreements of the Stockholders. Each Stockholder
covenants and agrees that:
(a) such Stockholder shall, at any meeting of the
Company's stockholders called for the purpose of approving
and adopting the Agreement, vote, or cause to be voted, all
shares of Company Common Stock in which such Stockholder has
the right to vote, excluding shares held in a fiduciary
capacity, (whether owned as of the date hereof or hereafter
acquired) in favor of the Agreement and the related
Agreement of Merger between Interim and the Company;
(b) except as otherwise expressly permitted hereby,
such Stockholder shall not, prior to the meeting of the
Company's stockholders referred to in Section 2(a) hereof or
the earlier termination of the Agreement in accordance with
its terms, sell, pledge, transfer or otherwise dispose of
the Stockholder's shares of Company Common Stock, excluding
shares held in a fiduciary capacity or shares transferred by
gift; and
(c) such Stockholder shall use his reasonable best
efforts to take or cause to be taken all action, and to do
or cause to be done all things, necessary, proper or
advisable under
A-1
applicable laws and regulations to consummate and make
effective the agreements contemplated by this Stockholder
Agreement.
Each Stockholder further agrees that the Company's transfer
agent shall be given an appropriate stop transfer order and shall
not be required to register any attempted transfer of shares of
Company Common Stock held by each Stockholder, unless the
transfer has been effected in compliance with the terms of this
Stockholder Agreement.
3. Successors and Assigns. A Stockholder may sell,
pledge, transfer, gift or otherwise dispose of his shares of
Company Common Stock, excluding shares held in a fiduciary
capacity, provided that, with respect to any sale, transfer or
disposition which would occur on or before the meeting of the
Company's stockholders referred to in Section 2(a) hereof, such
Stockholder obtains the prior written consent of the Acquiror and
that any acquiror of such Company Common Stock expressly agrees
in writing to be bound by the terms of this Stockholder
Agreement.
4. Termination. The parties agree and intend that this
Stockholder Agreement be a valid and binding agreement
enforceable against the parties hereto and that damages and other
remedies at law for the breach of this Stockholder Agreement are
inadequate. This Stockholder Agreement may be terminated at any
time prior to the consummation of the Merger by mutual written
consent of the parties hereto and shall be automatically
terminated in the event that the Agreement is terminated in
accordance with its terms.
5. Notices. Notices may be provided to the Company and
the Stockholders in the manner specified in Section 7.03 of the
Agreement, with all notices to the Stockholders being provided to
them at the Company in the manner specified in such section.
6. Governing Law. This Stockholder Agreement shall be
governed by the laws of the Commonwealth of Pennsylvania without
giving effect to the principles of conflicts of laws thereof.
7. Counterparts. This Stockholder Agreement may be
executed in one or more counterparts, all of which shall be
considered one and the same and each of which shall be deemed an
original.
8. Headings and Gender. The Section headings contained
herein are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Stockholder
Agreement. Use of the masculine gender herein shall be
considered to represent the masculine, feminine or neuter gender
whenever appropriate.
A-2
IN WITNESS WHEREOF, the Acquiror by a duly authorized
officer, and each of the Stockholders have caused this
Stockholder Agreement to be executed as of the day and year first
above written.
LAUREL CAPITAL GROUP, INC.
By:
---------------------------------------------
Name: Xxxxx X. Xxxx
Title: President and Chief Executive Officer
COMPANY STOCKHOLDERS:
------------------------------------------------
Xxxxxx X. Xxxxxxxxx
------------------------------------------------
Xxxxxx X. Xxxxxxxxxx
------------------------------------------------
Xxxx Xxxx Xxxxxx
------------------------------------------------
Xxxxxxx X. Xxxxx
------------------------------------------------
Xxxxxxx X. Xxxxxx
A-3
SCHEDULE I
Number of Shares of
Company Common Stock
Name of Stockholder Beneficially Owned
----------------------------- ------------------------
Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxxx
Xxxx Xxxx Xxxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
A-4
EXHIBIT B
AGREEMENT OF MERGER OF SFSB ACQUISITION CORP.
INTO
SFSB HOLDING COMPANY
AGREEMENT OF MERGER, dated as of ____ _____, 2002, by and
between SFSB Acquisition Corp. ("Interim"), a Pennsylvania
corporation formed by Laurel Capital Group, Inc. ("Laurel"), a
Pennsylvania corporation, solely to facilitate the transactions
contemplated by the Reorganization Agreement, defined below, and
SFSB Holding Company ("SFSB"), a Pennsylvania corporation.
Interim and SFSB are hereinafter sometimes collectively referred
to as the "Merging Corporations."
This Plan of Merger is being entered into pursuant to an
Agreement and Plan of Reorganization, dated as of __, 2002 (the
"Reorganization Agreement") by and among Laurel, Laurel Savings
Bank ("Bank"), SFSB and Xxxxxxx Savings Bank ("Xxxxxxx Savings").
In consideration of the premises, and the mutual covenants
and agreements herein contained, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
Except as otherwise provided herein, the capitalized terms
set forth below shall have the following meanings:
1.1 "Effective Time" shall mean the time at which the
Merger contemplated by this Plan of Merger becomes effective as
provided in Section 1.01 and 1.05 of the Reorganization
Agreement.
1.2 "Interim Common Stock" shall mean the common stock, par
value $.01 per share, of Interim owned by the Bank.
1.3 "SFSB Common Stock" shall mean the common stock, par
value $0.10 per share, of SFSB.
1.4 The "Merger" shall refer to the merger of Interim with
and into SFSB as provided in Section 2.1 of this Plan of Merger.
1.5 "Surviving Corporation" shall refer to SFSB as the
surviving corporation of the Merger.
B-1
ARTICLE II
TERMS OF THE MERGER
2.1 The Merger. Subject to the terms and conditions set
forth in the Reorganization Agreement, at the Effective Time,
Interim shall be merged with and into SFSB pursuant and subject
to the Pennsylvania Business Corporation Law ("PBCL"). SFSB shall
be the Surviving Corporation of the Merger and shall continue to
be governed by the laws of the Commonwealth of Pennsylvania. At
the Effective Time, the Surviving Corporation shall be considered
the same business and corporate entity as each of the Merging
Corporations and thereupon and thereafter, all the property,
rights, powers, and franchises of each of the Merging
Corporations shall vest in the Surviving Corporation and the
Surviving Corporation shall be subject to and be deemed to have
assumed all of the debts, liabilities, obligations and duties of
each of the Merging Corporations and shall have succeeded to all
of each of their relationships, fiduciary or otherwise, as fully
and to the same extent as if such property, rights, privileges,
powers, franchises, debts, obligations, duties and relationships
had been originally acquired, incurred or entered into by the
Surviving Corporation. In addition, any reference to either of
the Merging Corporations in any contract or document, whether
executed or taking effect before or after the Effective Time,
shall be considered a reference to the Surviving Corporation if
not inconsistent with the other provisions of the contract or
document; and any pending action or other judicial proceeding to
which either of the Merging Corporations is a party, shall not be
deemed to have abated or to have discontinued by reason of the
Merger, but may be prosecuted to final judgment, order or decree
in the same manner as if the Merger had not been made; or the
Surviving Corporation may be substituted as a party to such
action or proceeding, and any judgment, order or decree may be
rendered for or against it that might have been rendered for or
against either of the Merging Corporations if the Merger had not
occurred.
2.2 Articles of Incorporation and Bylaws. As of the
Effective Time, the Articles of Incorporation and Bylaws of SFSB
shall be the Articles of Incorporation and Bylaws of the
Surviving Corporation until otherwise amended as provided by law.
2.3 Directors and Officers of the Surviving Corporation.
The directors and officers of Interim shall become the directors
and officers of the Surviving Corporation as of the Effective
Time, each to hold office in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation.
B-2
ARTICLE III
CONVERSION OF SHARES
3.1 Conversion of SFSB Common Stock.
As of the Effective Time, each share of SFSB Common Stock
issued and outstanding immediately prior to the Effective Time
(other than shares held by SFSB (including treasury shares) or
Laurel or the Bank other than in a fiduciary capacity, as well as
unallocated shares of SFSB Common Stock under the Xxxxxxx Federal
Savings Bank Restricted Stock Plan, which shares shall be
cancelled) shall, by virtue of the Merger and without any action
on the part of the holder thereof, be converted into the right to
receive the Merger Consideration set forth in the Reorganization
Agreement.
3.2 Exchange of Shares. The obligations of Laurel to
effectuate the exchange of the Merger Consideration for the
shares of SFSB Common Stock shall be as set forth in Section 1.08
of the Reorganization Agreement.
3.3 Interim Common Stock. Each share of Interim Common
Stock which is issued and outstanding immediately prior to the
Effective Time shall be converted automatically and without any
action on the part of the holder thereof into an equal number of
issued and outstanding shares of common stock of the Surviving
Corporation.
ARTICLE IV
MISCELLANEOUS
4.1 Conditions Precedent. The respective obligations of
each party under this Plan of Merger shall be subject to the
satisfaction, or waiver by the party permitted to do so, of the
conditions set forth in Article V of the Reorganization
Agreement.
4.2 Termination. This Plan of Merger shall be terminated
upon the termination of the Reorganization Agreement in
accordance with Article VI thereof.
4.3 Amendments. To the extent permitted by law and the
Reorganization Agreement, this Plan of Merger may be amended by a
subsequent writing signed by all of the parties hereto upon the
approval of the Board of Directors of each of the parties hereto.
4.4 Successors. This Plan of Merger shall be binding on
the successors of Interim and SFSB.
B-3
IN WITNESS WHEREOF, Interim and SFSB have caused this Plan
of Merger to be executed by their duly authorized officers and
their corporate seals to be hereunto affixed as of the date first
above written.
SFSB ACQUISITION CORP.
Attest:
By:
---------------- ---------------------------------------
Xxxxx X. Xxxx
President and Chief Executive Officer
SFSB HOLDING COMPANY
Attest:
By:
---------------- ---------------------------------------
Xxxxxxx X. Xxxxxx
President
B-4
EXHIBIT C
PLAN OF COMPLETE LIQUIDATION
AND DISSOLUTION OF SFSB HOLDING COMPANY
This Plan of Complete Liquidation and Dissolution (the
"Plan") shall effect the complete liquidation and dissolution of
SFSB Holding Company (the "Company"), a Pennsylvania corporation
and wholly owned subsidiary of Laurel Capital Group, Inc. a
Pennsylvania corporation, ("Laurel"), in accordance with Section
332 of the Internal Revenue Code of 1986, as amended (the
"Code"), and applicable provisions of the Pennsylvania Business
Corporation Law ("PBCL").
1. Adoption of Plan. As of the date hereof, by unanimous
written consent of Laurel, the sole stockholder of the Company,
liquidation of the Company in accordance with this plan and
pursuant to applicable provisions of the PBCL, has been approved
and this Plan has been adopted.
2. Filing of Forms. The officers of Laurel are authorized
and directed to execute and file, or cause the Company to execute
and file, a United States Treasury Form 966 pursuant to Section
6043 of the Code within thirty (30) days after the adoption of
this Plan in accordance with Section 1 hereof and such additional
or other forms and reports with and to the Internal Revenue Serve
as may be necessary, desirable or appropriate in connection with
the implementation of this Plan.
3. Dissolution. Laurel shall execute and file a
Certificate of Dissolution for the Company in accordance with the
PBCL. After dissolution, the Company shall carry on no business
except for the purpose of winding up its affairs in accordance
with the PBCL.
4. Authorization to Officers. The officers of Laurel are
authorized to execute and deliver such agreements, conveyances,
assignments, transfers, certificates and other documents and to
take such other actions as such officers may deem necessary,
appropriate or desirable in order to carry out the provisions of
this Plan and effect a complete liquidation and dissolution of
the Company in accordance with Section 332 of the Code and the
applicable provisions of the PBCL.
* * *
Adopted by the duly authorized vote of the Board of
Directors of Laurel this ____ day of __________, 2002.
C-1
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement and Plan of Merger and Liquidation to be executed by
their respective duly authorized officers as of the day and year
first above written.
LAUREL CAPITAL GROUP, INC.
Attest:
By:
---------------- --------------------------------------
Xxxxx X. Xxxx
President and
Chief Executive Officer
SFSB HOLDING COMPANY
Attest:
By:
---------------- --------------------------------------
President and Chief
Executive Officer
C-2
