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Exhibit 2.1
STANDSTILL AGREEMENT
THIS AGREEMENT, dated this 26th day of November, 2001, by and between
NORTHEAST PENNSYLVANIA FINANCIAL CORP. (together with its direct and indirect
subsidiaries, the "Corporation"), a Delaware corporation, Jewelcor Management,
Inc. ("Jewelcor") and Xxxxxxx Xxxxxxxx ("Xxxxxxxx").
RECITALS
WHEREAS, the Corporation, Jewelcor and Xxxxxxxx have agreed that it is
in their mutual interests to enter into this Agreement as hereinafter described.
NOW THEREFORE, in consideration of the Recitals and the
representations, warranties, covenants and agreements contained herein and other
good and valuable consideration, the parties hereto mutually agree as follows:
1. Representations and Warranties of Jewelcor and Xxxxxxxx. Jewelcor
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and Xxxxxxxx hereby represent and warrant to the Corporation, as follows:
(i) Jewelcor and Xxxxxxxx have fully disclosed in Exhibit A
the total number of shares of the capital stock of the Corporation in
which they, directly or indirectly, have, or has a right to acquire, a
beneficial ownership interest and neither Jewelcor nor Xxxxxxxx have a
right to vote or direct the voting of any shares of the capital stock
of the Corporation other than those disclosed in Exhibit A.
(ii) Jewelcor and Xxxxxxxx have full and complete authority to
enter into this Agreement and to bind the entire number of shares of
the capital stock of the Corporation in which they have or have a right
to acquire a beneficia1 ownership interest to the terms of this
Agreement and this Agreement constitutes a valid and binding agreement
of Jewelcor and Xxxxxxxx.
(iii) There are no arrangements, agreements, or understandings
between Jewelcor and Xxxxxxxx and any other person regarding ownership
or voting of shares of capital stock of the Corporation.
(iv) There are no arrangements, agreements or understandings
between Jewelcor, Xxxxxxxx and the Corporation other than as set forth
in this Agreement.
2. Representations and Warranties of the Corporation. The
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Corporation hereby represents and warrants to Jewelcor and Xxxxxxxx, as follows:
(i) The Corporation has full power and authority to enter into
and perform its obligations under this Agreement, and the execution and
delivery of this Agreement by the Corporation regarding the
consummation of the transactions contemplated hereby has been duly
authorized by the Board of Directors of the Corporation and requires no
other
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Board of Directors or stockholder action. This Agreement constitutes a valid and
binding obligation of the Corporation and the performance of its terms shall not
constitute a violation of its Certificate of Incorporation or Bylaws.
(ii) There are no arrangements, agreements or understandings
between Xxxxxxxx and the Corporation other than as set forth in this
Agreement.
3. Covenants of Jewelcor and Xxxxxxxx. Jewelcor and Xxxxxxxx
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covenant and agree that during the term of this Agreement:
(i) They shall not hereafter acquire, or offer or agree to
acquire, or act in concert with any affiliate, group or other person to
acquire, directly or indirectly (other than through stock splits or
stock dividends or other corporate reorganizations), beneficial
ownership of, or the right to vote, any shares of capital stock of the
Corporation or any securities convertible into such capital stock if,
after such acquisition, Jewelcor and Xxxxxxxx would beneficially own
more than 9.99% of the Corporation's voting shares. Notwithstanding the
above, if a bona fide proposal by a third party is made to the
Corporation or its stockholders to acquire 10% or more of the
Corporation's stock or assets, this restriction shall not apply.
(ii) They shall not hereafter transfer or sell, or offer or
agree to transfer or sell, or act in concert with any affiliate, group
or other person to transfer or sell, directly or indirectly, other than
in open market transactions, through a broker, where they and the
broker have no knowledge that the buyer will beneficially own more than
4.0% of the Corporation's shares, beneficial ownership of, or the right
to vote any shares of capital stock of the Corporation except with the
express approval of the Board of Directors of the Corporation, which
approval shall not be unreasonably withheld.
(iii) They shall not directly or indirectly solicit, or act in
concert with any affiliate, group or other person to solicit,
"proxies," or directly or indirectly become a "participant" or
otherwise engage in any "solicitation" (as such terms are defined in
Regulation 14A under the Securities Exchange Act of 1934, as amended)
with respect to any matter not recommended or approved by the
Corporation's Board of Directors or engage in any of the foregoing
activities on behalf of any nominee for election as a director who is
not supported or was not nominated by the Corporation's Board of
Directors.
(iv) They shall not directly or indirectly submit or encourage
the submission of any nomination for election as director or any
stockho1der proposal for business at a meeting of the Corporation's
stockholders.
(v) They shall vote, and shall require any affiliate, group or
other person acting in concert with either or both of them to vote, all
shares beneficially owned (a) in favor of any proposal or nominee for
election as director submitted by the Corporation's Board of Directors,
(b) against any proposal or nominee for election as director opposed by
the Corporation's Board of Directors and (c) in accordance with the
recommendations
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of the Corporation's Board of Directors on all procedural matters.
Furthermore, they shall not, nor shall they act in concert with any
affiliate, group or other person to (A) join with or assist any person
or entity, directly or indirectly in opposing, or make any statement in
opposition to, any proposal or director nomination submitted by the
Corporation's Board of Directors to a vote of the Corporation's
stockholders or (B) join with or assist any person or entity, directly
or indirectly, in supporting or endorsing (including supporting,
requesting or joining in any request for a meeting of stockholders in
connection with), or make any statement in favor of, any proposal
submitted to a vote of the Corporation's stockholders that is opposed
by Corporation's Board of Directors. Notwithstanding any other
statement in this section to the contrary, in the event that a proposal
not involving i) the sale or merger of the Corporation (or the
solicitation of bids or the hiring of an investment banker to explore
methods to maximize shareholder value or similar proposals), (ii) the
hiring of an investment banker or the establishment of a committee or
other mechanism to explore the Corporation's strategic options or (iii)
the election of directors, is properly introduced for consideration at
a meeting of the Corporation's stockholders and such proposal is not
approved by the Corporation's Board of Directors, they shall have the
right, at their discretion, to vote (or cause to be voted) an amount of
voting shares in favor of such proposal equal to the total shares held
by Jewelcor and Xxxxxxxx multiplied by the following fraction:
The number of shares not held (of record or beneficially) by
Jewelcor and Xxxxxxxx voted in favor of the proposal
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The total number of shares voted
with respect to such proposal
Nothing contained in this Section 3(v) is intended to prevent Xxxxxxxx,
in his position as a director of the Corporation, from exercising his fiduciary
duties as a member of the board of directors of the Corporation.
(vi) They shall not directly or indirectly solicit or initiate
any communication regarding, or act in concert with any affiliate,
group or other person to solicit or initiate any communication
regarding, any acquisition offers for the Corporation (or any
affiliates thereof), and if any offer or inquiry concerning such an
offer shall be received they shall refer such offer or inquiry directly
and solely to the Chairman of the Board of Directors and/or to the
Chief Executive Officer of the Corporation.
(vii) They shall not directly or indirectly participate or act
in concert with any affiliate, group or other person to participate, by
encouragement or otherwise, in any litigation against or derivatively
on behalf of the Corporation (or any affiliates thereof), except for
testimony which may be required by law, and except as may occur in the
ordinary course of business with respect to any loan, deposit or other
transaction where Jewelcor, Xxxxxxxx or an affiliate is dealing with
the Corporation (or any affiliates thereof) as a customer.
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(viii) They shall not provide, nor shall they act in concert
with any person to provide, any funds, services or facilities, to any
person in support of any activity by such person that would be a
violation of his covenants under the provisions of this paragraph 3 if
undertaken by Jewelcor or Xxxxxxxx, individually or together.
(ix) They shall not form, join or in any way participate in a
"group" (as such term is used in Section 13d(3) of the Exchange Act) or
act in concert with other persons with respect to any securities of the
Corporation or any of its affiliates in connection with any action or
matter otherwise prohibited by the terms of this Agreement.
(x) They shall not deposit any capital stock of the
Corporation in a voting trust or subject any shares of capital stock of
the Corporation to a voting agreement or other arrangement of similar
effect.
(xi) Promptly upon execution of this Agreement, Jewelcor
agrees that its notice of intent dated September 24, 2001 to nominate a
slate of directors for the January 2002 Annual Meeting shall be deemed
to be, and shall be, withdrawn.
(xii) Unless this Agreement is terminated, Jewelcor and
Xxxxxxxx shall fully support the independence of the Corporation and
otherwise support the decisions made by the Board of Directors.
(xiii) They shall not make any public statement critical of
the Corporation or any of its affiliates, its board of directors or its
management.
4. Agreement of the Corporation. Upon his request the Corporation
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agrees that its Board of Directors will appoint Xxxxxxxx to the Board of
Directors of Northeast Pennsylvania Financial Corp. and no later than March 31,
2002 to the class of directors whose term expires at the Corporation's annual
meeting of stockholders in January 2003. Also, the Corporation agrees not to
remove him as a director, other than for cause, during the term of this
Agreement.
5. Remedies. The Corporation, Jewelcor and Xxxxxxxx acknowledge
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and agree that a breach or threatened breach by either party may give rise to
irreparable injury inadequately compensable in damages, and accordingly each
party shall be entitled to injunctive relief to prevent a breach of the
provisions hereof and to enforce specifically the terms and provisions hereof in
any state or federal court having jurisdiction, in addition to any other remedy
to which such aggrieved party may be entitled to at law or in equity. In the
event either party institutes any legal action to enforce such party's rights
under, or recover damages for breach of, this Agreement, the prevailing party or
parties in such action shall be entitled to recover from the other party or
parties all costs and expenses, including but not limited to actual attorneys
fees, court costs, witness fees, disbursements and any other expenses of
litigation or negotiation incurred by such prevailing party or parties.
6. Term. This Standstill Agreement shall remain in effect until
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October 1, 2002. Thereafter, none of the terms or provisiosn of this Agreement
shall apply.
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7. Publicity. Any press release or other publicity with respect
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to this Agreement or any provisions hereof shall be jointly prepared and issued
by the parties hereto. During the term of this Agreement, no party to this
Agreement shall cause, discuss, cooperate or otherwise aid in the preparation of
any press release or other publicity concerning any other party to this
Agreement or its operations without prior approval of such other party.
8. Notices. All notice requirements and other communications
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shall be deemed given when delivered or on the third succeeding business day
after being mailed by registered or certified mail, return receipt requested,
addressed to Xxxxxxxx, Jewelcor and the Corporation below:
Xxxxxxxx: Xxxxxxx Xxxxxxxx
00 Xxxxxx Xxxxx
Xxxxxx-Xxxxx, XX 00000
With a copy to:
Jewelcor Management, Inc.: Xxxxxxx Xxxxxxxx
Chairman
Jewelcor Management, Inc.
000 X. Xxxxxx-Xxxxx Xxxx.
0xx Xxxxx
Xxxxxx-Xxxxx, XX 00000
With a copy to:
Northeast Pennsylvania Financial Corp.: E. Xxx Xxxxx
President and Chief Executive Officer
Northeast Pennsylvania Financial Corp.
00 X. Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
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With a copy to: Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxxx X. Xxxxxxx, Esq.
Xxxxxxx Xxxxxx & Xxxxxxxx LLP
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
9. Governing Law and Choice of Forum. Delaware law, unless
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applicable federal law or regulation is deemed controlling, shall govern the
construction and enforceability of this Agreement. Any and all actions
concerning any dispute arising hereunder shall be filed and maintained in a
state or federal court, as appropriate, sitting in the State of Delaware.
10. Severability. If any term, provision, covenant or restriction
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of this Agreement is held by any governmental or regulatory authority or a court
of competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
11. Successors and Assigns. This Agreement shall be binding upon
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and shall inure to the benefit of and be enforceable by the successors and
assigns, and transferees by operation of law, of the parties. Except as
otherwise expressly provided for herein, this Agreement shall not inure to the
benefit of, be enforceable by or create any right or cause of action in any
person, including any shareowner of the Corporation, other than the parties
hereto.
12. Amendments. This Agreement may not be modified, amended,
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altered or supplemented except upon the execution and delivery of a written
agreement executed by all of the parties hereto.
13. Definitions. As used in this Agreement, the following terms
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shall have the meanings indicated, unless the context otherwise requires:
(i) The term "acquire" means every type of acquisition,
whether effected by purchase, exchange, operation of law or otherwise.
(ii) The term "act in concert" or "acting in concert" means
(i) knowing participation in a joint activity or conscious parallel
action towards a common goal whether or not pursuant to an express
agreement, (ii) a combination of pooling of voting or other interests
in the securities of an issuer for a common purpose pursuant to any
contract, understanding, relationship, agreement or other arrangement,
whether written or otherwise, or (iii) other activity presumed to
constitute acting in concert for purposes of Part 574 of the Office of
Thrift Supervision Rules and Regulations ("OTS Regulations").
(iii) The term "affiliate" means a person or entity that
directly, or indirectly through one or more intermediaries, controls or
is controlled by, or is under common control with another person.
(iv) The terms "beneficial ownership" or "beneficially owned"
mean all capital stock of the Corporation owned or held, directly or
indirectly, by a person, or jointly with
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any other person; by any trust in which such person is a settlor,
trustee, or beneficiary; by any corporation in which such person is a
stockholder (owning, together with all affiliates of such person, more
than five percent (5%) of the outstanding voting power or beneficial
interests), director or officer; by any partnership in which such
person is a limited partner (owning, together with all affiliates of
such person, more than five percent (5%) of the outstanding beneficial
interests), or a general partner, employee or agent; by any other
entity in which such person holds, together with all affiliates of such
person, more than five percent (5%) of the outstanding beneficial
interests; or any other shares of capital stock of the Corporation
controlled by such person.
(v) The term "control" (including the terms "controlling,"
"controlled by," and "under common control with") means the possession,
direct or indirect, of the power to direct or cause the direction of
the management, activities or policies of a person or organization,
whether through the ownership of capital stock, by contract, or
otherwise; or any action that would be presumed to constitute control
for purposes of Part 574 of the OTS Regulations.
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(vi) The term "person" includes an individual, group acting in
concert, a corporation, a partnership, an association, a joint stock
company, a trust, an unincorporated organization or similar company, a
syndicate, or any other group formed for the purpose of acquiring,
holding or disposing of the equity securities of the Corporation.
(vii) The term "vote" means to vote in person or by proxy, or
to give or authorize the giving of any consent as a stockholder on any
matter.
14. Counterparts. This Agreement may be executed in counterparts,
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each of which shall be an original, but each of which together shall constitute
one and the same agreement.
15. Duty to Execute. Each party agrees to execute any and all
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documents, and to do and perform any and all acts and things necessary or proper
to effectuate or further evidence the terms and provisions of this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the undersigned or duly authorized officers thereof as of the day and year
first above written.
NORTHEAST PENNSYLVANIA FINANCIAL
CORP., a Delaware corporation
By:/s/ E. Xxx Xxxxx
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E. Xxx Xxxxx
Chief Executive Officer
JEWELCOR MANAGEMENT, INC.
By:/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx
Chairman
XXXXXXX XXXXXXXX
By:/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx
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EXHIBIT A
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SHARES OF
NORTHEAST PENNSYLVANIA FINANCIAL CORP.
CAPITAL STOCK
BENEFICIALLY OWNED(1)
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Xxxxxxx Xxxxxxxx 1,000
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Jewelcor Management, Inc. 119,100
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1. Includes all shares over which Jewelcor or Xxxxxxxx has sole or shared voting
or dispositive powers.
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