Exhibit 2.2
AGREEMENT OF MERGER
This Agreement of Merger (this "Agreement"), made as of September 30,
1999, by and between THE PEOPLE'S BUILDING, LOAN AND SAVINGS COMPANY, a mutual
deposit savings and loan association organized and existing under the laws of
the State of Ohio ("Peoples"), and THE OAKLEY IMPROVED BUILDING & LOAN COMPANY,
a mutual deposit savings and loan association organized and existing under the
laws of the State of Ohio ("Oakley");
WITNESSETH:
WHEREAS, the Board of Directors of each of Peoples and Oakley
(collectively, the "Constituent Associations") has determined that the merger of
the Constituent Associations is in the best interests of the Constituent
Associations;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Constituent Associations
hereby agree that the terms of the merger contemplated by this Agreement (the
"Merger") and the mode of carrying the Merger into effect shall be as follows:
ARTICLE ONE
SECTION 1.01. THE MERGER. At the time when the Merger shall become
effective in accordance with Section 10.01 of this Agreement (the "Effective
Date"), Oakley shall merge with and into Peoples. Peoples shall be the
continuing, surviving and resulting association in the Merger, shall exist at
such time as a mutual deposit savings and loan association under the laws of the
State of Ohio and shall be the only one of the Constituent Associations to
continue its separate corporate existence after the Effective Date. The term
"Resulting Association" as used hereinafter refers to Peoples at and after the
Effective Date.
SECTION 1.02. NAME OF RESULTING ASSOCIATION. The name of the
Resulting Association shall be "The People's Building, Loan and Savings
Company."
SECTION 1.03. ARTICLES OF INCORPORATION OF RESULTING ASSOCIATION. The
Articles of Incorporation of Peoples existing at the Effective Date shall be the
Articles of Incorporation of the Resulting Association until amended in
accordance with law.
SECTION 1.04. CONSTITUTION OF RESULTING ASSOCIATION. The Constitution
of Peoples existing at the Effective Date shall be the Constitution of the
Resulting Association until amended in accordance with law.
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SECTION 1.05. BYLAWS OF RESULTING ASSOCIATION. The Bylaws of Peoples
existing at the Effective Date shall be the Bylaws of the Resulting Association
until amended in accordance with law.
SECTION 1.06. OFFICES OF RESULTING ASSOCIATION. At and after the
Effective Date, until changed in accordance with law, the home office of Peoples
at 11 S. Broadway, Lebanon, Xxxxxx County, Ohio, shall be the home office and
principal place of business of the Resulting Association, and the office of
Oakley at 3924 Xxxxxxxx, Cincinnati, Xxxxxxxx County, Ohio, shall be a branch
office of the Resulting Association.
SECTION 1.07. DIRECTORS OF RESULTING ASSOCIATION. At and after the
Effective Date, and until changed in accordance with law, the number of members
of the Board of Directors of the Resulting Association shall be ten, each of
whom shall serve until the annual meeting of members of the Resulting
Association in the year indicated in the table set forth immediately below, and
the names and residence addresses of whom are as follows:
Name Residence Address Term Expires
---- ----------------- ------------
Xxxx X. Xxxxxxxxxxx 000 XxXxxxxx Xxxxx 0000
Xxxxxxx, XX 00000
Xxxxx X. Xxxxxxxx 000 Xxxxx Xxxxxxxx 0000
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxxx 0000 Xxxxxxx Xxx 0000
Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxxx 00000 Xxxxxxx-Xxxxxx Xxxx 0000
Xxxxxxxxxxx, XX 00000
Xxxx X. Xxxxx 0 Xxxxxxxx Xxxxxxx 0000
Xxxxxxx, XX 00000
Xxxx X. Xxxxxxxx 0000 Xxxxxxx Xxxxx 0000
Xxxxxxx, XX 00000
Xxxxxx X. Xxxxx 000 Xxxxxx Xxxxxx 0000
Xxxxxxx, XX 00000
Xxxxxxxx X. Xxxxxx 0000 X. Xxxxx Xxxx Xxxx 0000
Xxxxxxxx, XX 00000
Xxxxx X. Van DeGrift 0000 X. Xxxxx Xxxxx 000 0000
Xxxxxxx, XX 00000
Xxxxxx X. Xxx 0000 Xxxxxxxxxxxxx Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
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SECTION 1.08. OFFICERS OF RESULTING ASSOCIATION. At and after the
Effective Date, and until changed in accordance with law, the persons whose
names and residence addresses are set forth immediately below shall be the
officers of the Resulting Association and shall hold the offices set forth
beside their respective names:
Office Name Residence Address
------ ---- -----------------
Chairman of the Board Xxxx X. Xxxxxxxxxxx 000 XxXxxxxx Xxxxx
Xxxxxxx, XX 00000
President and Chief Xxxxx X. Xxxxxxxx 000 Xxxxx Xxxxxxxx
Xxxxxxxxx Xxxxxxx Xxxxxxx, XX 00000
Executive Vice President Xxxxxx X. Xxxxxx 0000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Chief Financial Officer Xxxxxx X. Xxx 0000 Xxxxxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Treasurer Xxxx X. Xxxxxxxxxx 000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Secretary Xxxxx X. Xxxx 0000 Xxxxx Xxxx
Xxxxxxx, XX 00000
SECTION 1.09. ADVISORY BOARD. At the time when the Merger shall become
effective and as a result thereof, there shall be created, automatically and
without further act of the Constituent Associations, an advisory board (the
"Advisory Board") of the Resulting Association. All present board members of
Oakley as of the date hereof, other than Xxxxxx X. Xxx, shall serve as the
members of the Advisory Board for a one-year period commencing with the
Effective Date and, subject to review on each annual anniversary date of the
Effective Date, shall be re-appointed to two additional one-year terms to such
Advisory Board. The members of the Advisory Board shall perform such duties as
may be assigned by the Board of Directors of the Resulting Association in
exchange for which such members shall receive an annual advisory board fee of
$6,900. In addition, Peoples will grant to each advisory board member options to
acquire not less than 2,000 shares of common stock of the holding company (the
"Holding Company") to be formed in connection with Peoples proposed conversion
to stock form (the "Conversion"). The grant of options hereby is subject to
corporate, regulatory and stockholder approval.
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ARTICLE TWO
SECTION 2.01. DEPOSIT ACCOUNTS. At the Effective Date, each Oakley
deposit account then existing shall, automatically and without further act of
the Constituent Associations or the holder thereof, become a fully paid and
non-assessable outstanding deposit account of the Resulting Association having
the same withdrawal value and terms and conditions as immediately prior to the
Effective Date. In addition, members of Oakley shall have priority subscription
rights and liquidation rights in the Conversion to the same extent as similar
members of Peoples.
ARTICLE THREE
SECTION 3.01. TAX CONSEQUENCES. This Agreement is intended by the
Constituent Associations to be a Plan of Reorganization under Section 368 of the
Internal Revenue Code of 1996, as amended (the "Code"), to be effectuated in the
manner set forth herein.
ARTICLE FOUR
SECTION 4.01. EFFECTS OF MERGER. On and after the Effective Date, the
separate existence of Oakley shall cease; provided, however, that whenever a
conveyance, assignment, transfer, deed or other instrument or act is necessary
to vest property or rights in the Resulting Association, the officers of Oakley
shall execute, acknowledge and deliver such instruments, and do such acts. For
such purposes, the existence of Oakley and the authority of its officers and
directors shall be continued, notwithstanding the Merger.
SECTION 4.02. RIGHTS AND LIABILITIES OF RESULTING ASSOCIATION. On and
after the Effective Date, the Resulting Association shall possess all of the
assets and property of every description, and every interest therein, wherever
located, and the rights, privileges, immunities, powers, franchises and
authority, of a public as well as of a private nature, of each of the
Constituent Associations, and all liabilities of and obligations belonging to or
due to each of the Constituent Associations, all of which are vested in the
Resulting Association without further act or deed. Title to any real estate or
any interest therein vested in any Constituent Association shall not revert or
in any way be impaired by reason of the Merger.
ARTICLE FIVE
Peoples hereby represents and warrants to Oakley as follows:
SECTION 5.01. ORGANIZATION AND GOOD STANDING. Peoples is a mutual
deposit savings and loan association duly organized, validly existing and in
good standing under the laws of the State of Ohio. Peoples has the corporate
power and authority to own or lease all of its properties and assets and to
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carry on its business as it is now being conducted and is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by Peoples or the character or location of the properties and
assets owned or leased by Peoples makes such licensing or qualification
necessary, except where the failure to be so licensed or qualified would not
have a material adverse effect on Peoples. The deposits of Peoples are insured
by the Savings Association Insurance Fund (the "SAIF") of the Federal Deposit
Insurance Corporation (the "FDIC") to the maximum extent permitted by the
applicable rules and regulations of the FDIC.
SECTION 5.02. CORPORATE POWER AND AUTHORITY. Peoples has full corporate
power and authority to execute and deliver this Agreement and, subject to the
receipt of the approval of the Ohio Superintendent of Financial Institutions
(the "Superintendent") and the Office of Thrift Supervision (the "OTS") and the
amendment of its Constitution to increase the number of directors, to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly approved by the affirmative vote of at least two-thirds of the
members of the Board of Directors of Peoples. This Agreement has been duly and
validly executed and delivered by Peoples and constitutes the valid and binding
agreement of Peoples, enforceable against Peoples in accordance with its terms.
SECTION 5.03. FINANCIAL STATEMENTS.
(a) The statements of financial condition as of June 30, 1999
and 1998 of Peoples and the related statements of earnings, retained earnings
and changes in cash flows for each of the years ended June 30, 1999, 1998 and
1997, examined and reported upon by Kennedy, Kraft, Xxxxxx & Xxx, independent
certified public accountants, complete copies of which have previously been
delivered to Oakley (the "Peoples Audited Financials"), have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis and fairly present the financial position of Peoples at such dates and the
results of its operations and changes in cash flows for such periods.
(b) The OTS Quarterly Financial Report of Peoples dated June
30, 1999 together with the schedules and supplements attached thereto, as filed
with the OTS, a copy of which was previously delivered to Oakley (the "Peoples
OTS Quarterly Report"), has been prepared in accordance with accounting
practices permitted by the OTS applied on a consistent basis and fairly presents
the financial position of Peoples at such date.
(c) The Peoples Audited Financials and the Peoples OTS
Quarterly Report did not as of the dates thereof, contain any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(d) Except as disclosed in the Peoples Audited Financials and
the Peoples OTS Quarterly Report, as of the date of this Agreement, Peoples had
no liabilities or obligations material
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to the business condition (financial or otherwise) of Peoples, whether accrued,
absolute, contingent or otherwise and whether due or to become due.
(e) Peoples has devised and maintained systems of internal
accounting controls sufficient to provide reasonable assurances that: (I)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit the
preparation of financial statements in conformity with generally accepted
accounting principles or any other criteria applicable to such statements, and
to maintain proper accountability for items; (iii) access is permitted only in
accordance with managements general or specific authorization; and (iv) the
recorded accountability for items is compared with the actual levels at
reasonable intervals and appropriate action is taken with respect to any
differences.
SECTION 5.04. MATERIAL ADVERSE CHANGE. There has not been any material
adverse change in the business, operations, properties, assets or financial
condition of Peoples since June 30, 1999. No fact or condition exists which
Peoples has reason to believe will cause any such material adverse change in the
foreseeable future.
SECTION 5.05. AGREEMENTS WITH REGULATORY AUTHORITIES. Peoples is not a
party to any written agreement or memorandum of understanding with any federal
or state governmental authority charged with the supervision or regulation of
thrift institutions or engaged in the insurance of thrift deposits which
restricts the conduct of the business of Peoples or in any manner relates to the
capital adequacy, credit policies or management of Peoples.
SECTION 5.06. LEGAL PROCEEDINGS. There are no legal or governmental
proceedings pending to which Peoples is a party, or to which any property of
Peoples is subject, which may reasonably be anticipated to result, either
individually or in the aggregate, in a material adverse effect on Peoples and,
to Peoples's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or by others.
SECTION 5.07. TAXES AND TAX RETURNS. Peoples has duly and timely filed
all tax returns required to be filed by Peoples on or before the date hereof and
has duly paid or made provision for the payment of all taxes which have been
incurred or are due or claimed to be due from Peoples by any taxing authorities
on or before the date hereof. No reserves need to be established for the payment
of any taxes for which Peoples may be liable in its own right or as transferee
of the assets of, or successor to, any corporation, person, association,
partnership, joint venture or other entity. There are no disputes pending with
respect to, or claims asserted for, taxes or audits or investigations of
outstanding matters under discussion with federal, state or local authorities
with respect to the payment of taxes by Peoples, nor has Peoples given or been
requested to give any currently effective waivers extending the statutory period
of limitation applicable to any tax return for any period.
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SECTION 5.08. EMPLOYEE BENEFIT PLANS; ERISA.
(a) Exhibit A contains a true and complete list of all
qualified pension or profit-sharing plans or deferred compensation, consulting,
bonus or group insurance plans or agreements and all other incentive, welfare or
employee benefit plans or agreements maintained for the benefit of employees or
former employees of Peoples. Copies of such plans and agreements, together with
rulings and determination letters and any open requests for rulings or letters
that pertain to any qualified plan, have been delivered or been made available
to Oakley.
(b) Peoples does not maintain and, since 1982, has not
maintained any defined benefit pension plan subject to Title IV of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or any other
retirement plan subject to mandatory employer funding under Section 412 of the
Code. Peoples does not participate in and has never participated in a
multiemployer plan, as defined in Section 3(37) of ERISA. Except as required by
Section 4980B of the Code and Sections 601 through 608 of ERISA (COBRA), Peoples
does not maintain or contribute to any plan or arrangement which provides or has
any liability to provide any retiree health or medical benefits to former
employees.
(c) No prohibited transaction (which shall mean any
transaction prohibited by Section 406 of ERISA and not exempt under Section 409
of ERISA) has occurred with respect to any employee benefit plan maintained by
Peoples (I) which would result in the imposition, directly or indirectly, of a
material excise tax under Section 4975 of the Code or (ii) the correction of
which would have a material adverse effect on the financial condition, results
of operations or business of Peoples.
(d) Each plan and agreement listed on Exhibit A has been
maintained in compliance with its terms and with the requirements prescribed by
any and all statutes, orders, rules and regulations, including but not limited
to ERISA and the Code, which are applicable to such plan or agreement.
SECTION 5.09. PEOPLES INFORMATION. Peoples has filed all reports,
registrations and statements, together with any amendments required to be made
with respect thereto, required to be filed with federal or state regulatory
authorities. All such documents, as of their respective dates, complied in all
material respects with all the statutes, rules and regulations enforced or
promulgated by the regulatory authority with which they were filed. None of such
documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
SECTION 5.10. COMPLIANCE WITH APPLICABLE LAW.
(a) Peoples has complied with, and is not in default in any
respect under, any applicable laws, statutes (including environmental laws),
orders, rules or regulations or any
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applicable policies or guidelines of, or agreements with, any federal, state or
local governmental authority, except to the extent that failure to be in
compliance, or being in default, would not have a material adverse effect on
Peoples. Peoples has not received notice of any violation (or claim of
violation) of, and does not know of any violations of, any of such laws,
statutes, orders, rules, regulations, policies, guidelines or agreements.
(b) To the knowledge of Peoples, there is no claim of
violation of any environmental law pending or threatened (I) against Peoples,
(ii) against any person or entity whose liability for any such claim has or may
have been retained or assumed by Peoples either contractually or by operation of
law, or (iii) against any real or personal property which Peoples owns, leases
or manages, or supervises or participates in the management of, or in which
Peoples holds a security interest in connection with a loan or loan
participation, other than such as would not, either individually or in the
aggregate, have a material adverse effect on Peoples.
(c) There are no present or, to the knowledge of Peoples, past
activities, conditions or incidents, including, without limitation, the release
or disposal of any material of environmental concern, that could reasonably form
the basis of any environmental claim against Peoples or against any person or
entity whose liability for any environmental claim has or may have been retained
or assumed by Peoples, either contractually or by operation of law, other than
such as would not, either individually or in the aggregate, have a material
adverse effect on Peoples.
SECTION 5.11 PROPERTY RIGHTS. Peoples has marketable title to, or valid
binding and enforceable leasehold interests in, all real properties and good
title to all other property and assets, tangible and intangible, reflected in
the Peoples Audited Financials or purported to have been acquired or leased by
Peoples since the date thereof, free and clear of all liens, security interests
and encumbrances, except for liens for taxes or assessments not delinquent or
being contested in good faith, pledges to secure deposits and such other liens
and encumbrances and imperfections of title as are not individually or in the
aggregate material to Peoples, or which do not materially interfere with or
impair the present and continued use of any such property or asset material to
Peoples.
SECTION 5.12. DISCLOSURES. No representation or warranty contained in
this Agreement, and no statement contained in any certificate, list or other
writing furnished by Peoples to Oakley pursuant to the provisions hereof,
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.
No information material to the transaction contemplated by this Agreement and
which is necessary to make the representations and warranties herein contained
not misleading, has been withheld by Peoples from, or has not been made
available to, Oakley.
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ARTICLE SIX
Oakley hereby represents and warrants to Peoples as follows:
SECTION 6.01. ORGANIZATION AND GOOD STANDING. Oakley is a mutual
deposit savings and loan association duly organized, validly existing and in
good standing under the laws of the State of Ohio. Oakley 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 in each jurisdiction in which the nature of the
business conducted by Oakley or the character or location of the properties and
assets owned or leased by Oakley makes such licensing or qualification
necessary, except where the failure to be so licensed or qualified would not
have a material adverse effect on Oakley. The deposits of Oakley are insured by
the SAIF to the maximum extent permitted by the applicable rules and regulations
of the FDIC.
SECTION 6.02. CORPORATE POWER AND AUTHORITY. Oakley has full corporate
power and authority to execute and deliver this Agreement and, subject to the
receipt of the approval of the Superintendent and the OTS, to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly approved by the affirmative vote of at least two-thirds of the members
of the Board of Directors of Oakley. This Agreement has been duly and validly
executed and delivered by Oakley and constitutes the valid and binding agreement
of Oakley, enforceable against Oakley in accordance with its terms.
SECTION 6.03. FINANCIAL STATEMENTS.
(a) The statements of financial condition as of June 30, 1999
and 1998 of Oakley and the related statements of earnings, retained earnings and
changes in cash flows for each of the years ended June 30, 1999, 1998 and 1997,
examined and reported upon by Kennedy, Kraft, Xxxxxx & Xxx, independent
certified public accountants, complete copies of which have previously been
delivered to Peoples (the "Oakley Audited Financials"), have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis and fairly present the financial position of Oakley at such dates and the
results of its operations and changes in cash flows for such periods.
(b) The OTS Quarterly Financial Report of Oakley dated June
30, 1999, together with the schedules and supplements attached thereto, as filed
with the OTS, a copy of which was previously delivered by Oakley to Peoples (the
"Oakley OTS Quarterly Report"), has been prepared in accordance with accounting
practices permitted by the OTS applied on a consistent basis and fairly presents
the financial position of Oakley at such date.
(c) The Oakley Audited Financials and the Oakley OTS Quarterly
Report did not, as of the dates thereof, contain any untrue statement of a
material fact or omit to state any material
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fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(d) Except as disclosed in the Oakley Audited Financials and
the Oakley OTS Quarterly Report as of the date of this Agreement, Oakley had no
liabilities or obligations material to the business condition (financial or
otherwise) of Oakley, whether accrued, absolute, contingent or otherwise and
whether due or to become due.
(e) Oakley has devised and maintained systems of internal
accounting controls sufficient to provide reasonable assurances that: (I)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit the
preparation of financial statements in conformity with generally accepted
accounting principles or any other criteria applicable to such statements, and
to maintain proper accountability for items; (iii) access is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for items is compared with the actual levels at
reasonable intervals and appropriate action is taken with respect to any
differences.
SECTION 6.04. MATERIAL ADVERSE CHANGE. There has not been any material
adverse change in the business, operations, properties, assets or financial
condition of Oakley since June 30, 1999. No fact or condition exists which
Oakley has reason to believe will cause any such material adverse change in the
foreseeable future.
SECTION 6.05. AGREEMENTS WITH REGULATORY AUTHORITIES. Oakley is not a
party to any written agreement or memorandum of understanding with any federal
or state governmental authority charged with the supervision or regulation of
thrift institutions or engaged in the insurance of thrift deposits which
restricts the conduct of the business of Oakley or in any manner relates to the
capital adequacy, credit policies or management of Oakley.
SECTION 6.06. LEGAL PROCEEDINGS. There are no legal or governmental
proceedings pending to which Oakley is a party, or to which any property of
Oakley is subject, which may reasonably be anticipated to result, either
individually or in the aggregate, in a material adverse effect on Oakley and to
Oakley's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or by others.
SECTION 6.07. TAXES AND TAX RETURNS. Oakley has duly and timely filed
all tax returns required to be filed by Oakley on or before the date hereof and
has duly paid or made provision for the payment of all taxes which have been
incurred or are due or claimed to be due from Oakley by any taxing authorities
on or before the date hereof. No reserves need to be established for the payment
of any taxes for which Oakley may be liable in its own right or as transferee of
the assets of, or successor to, any corporation, person, association,
partnership, joint venture or other entity. There are no disputes pending with
respect to, or claims asserted for, taxes or audits or investigations of
outstanding matters under discussion with federal, state or local authorities
with respect to the
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payment of taxes by Oakley, nor has Oakley given or been requested to give
any currently effective waivers extending the statutory period of limitation
applicable to any tax return for any period.
SECTION 6.08 EMPLOYEE BENEFIT PLANS; ERISA.
(a) Exhibit B contains a true and complete list of all
qualified pension or profit-sharing plans or deferred compensation, consulting,
bonus or group insurance plans or agreements and all other incentive, welfare or
employee benefit plans or agreements maintained for the benefit of employees or
former employees of Oakley. Copies of such plans and agreements, together with
rulings and determination letters and any open requests for rulings or letters
that pertain to any qualified plan, have been delivered or been made available
to Oakley.
(b) Oakley does not maintain and, since 1982, has not
maintained any defined benefit pension plan subject to Title IV of ERISA, or any
other retirement plan subject to mandatory employer funding under Section 412 of
the Code. Oakley does not participate in and has never participated in a
multiemployer plan, as defined in Section 3(37) of ERISA. Except as required by
Section 4980B of the Code and Sections 601 through 608 of ERISA (COBRA), Oakley
does not maintain or contribute to any plan or arrangement which provides or has
any liability to provide any retiree health or medical benefits to former
employees.
(c) No prohibited transaction (which shall mean any
transaction prohibited by Section 406 of ERISA and not exempt under Section 409
of ERISA) has occurred with respect to any employee benefit plan maintained by
Oakley (I) which would result in the imposition, directly or indirectly, of a
material excise tax under Section 4975 of the Code or (ii) the correction of
which would have a material adverse effect on the financial condition, results
of operations or business of Oakley.
(d) Each plan and agreement listed on Exhibit B has been
maintained in compliance with its terms and with the requirements prescribed by
any and all statutes, orders, rules and regulations, including but not limited
to ERISA and the Code, which are applicable to such plan or agreement.
SECTION 6.09. OAKLEY INFORMATION. Oakley has filed all reports,
registrations and statements, together with any amendments required to be made
with respect thereto, required to be filed with federal or state regulatory
authorities. All such documents, as of their respective dates, complied in all
material respects with all the statutes, rules and regulations enforced or
promulgated by the regulatory authority with which they were filed. None of such
documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
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SECTION 6.10. COMPLIANCE WITH APPLICABLE LAW.
(a) Oakley has complied with, and is not in default in any
respect under, any applicable laws, statutes (including environmental laws),
orders, rules or regulations or any applicable policies or guidelines of, or
agreements with, any federal, state or local governmental authority except to
the extent that failure to be in compliance, or being in default, would not have
a material adverse effect on Oakley. Oakley has not received notice of any
violation (or claim of violation) of, and does not know of any violations of,
any of such laws, statutes, orders, rules, regulations, policies, guidelines or
agreements.
(b) To the knowledge of Oakley, there is no claim of violation
of any environmental law pending or threatened (I) against Oakley, (ii) against
any person or entity whose liability for any such claim has or may have been
retained or assumed by Oakley either contractually or by operation of law, or
(iii) against any real or personal property which Oakley owns, leases or
manages, or supervises or participates in the management of, or in which Oakley
holds a security interest in connection with a loan or loan participation, other
than such as would not, either individually or in the aggregate, have a material
adverse effect on Oakley.
(c) There are no present or, to the knowledge of Oakley, past
activities, conditions or incidents, including, without limitation the release
or disposal of any material of environmental concern, that could reasonably form
the basis of any environmental claim against Oakley or against any person or
entity whose liability for any environmental claim has or may have been retained
or assumed by Oakley, either contractually or by operation of law, other than
such as would not, either individually or in the aggregate, have a material
adverse effect on Oakley.
SECTION 6.11. PROPERTY RIGHTS. Oakley has marketable title to, or valid
binding and enforceable leasehold interests in, all real properties and good
title to all other property and assets, tangible and intangible, reflected in
the Oakley Audited Financials or purported to have been acquired or leased by
Oakley since the date thereof, free and clear of all liens, security interests
and encumbrances, except for liens for taxes or assessments not delinquent or
being contested in good faith, pledges to secure deposits and such other liens
and encumbrances and imperfections of title as are not individually or in the
aggregate material to Oakley, or which do not materially interfere with or
impair the present and continued use of any such property or asset material to
Oakley.
SECTION 6.12. DISCLOSURES. No representation or warranty contained in
this Agreement, and no statement contained in any certificate, list or other
writing furnished by Oakley to Peoples pursuant to the provisions hereof,
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.
No information material to the transaction contemplated by this Agreement and
which is necessary to make the representations and warranties herein contained
not misleading, has been withheld by Oakley from, or has not been made available
to, Peoples.
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ARTICLE SEVEN
SECTION 7.01. CONDUCT OF BUSINESS. From the date of this Agreement
until the Effective Date, Oakley and Peoples each shall continue to conduct its
business in the ordinary and usual course and, without limiting the generality
of the foregoing, each shall not, without the prior written consent of the
other:
(a) amend its Articles of Incorporation, Constitution or
Bylaws;
(b) alter the terms of its existing deposit accounts or the
terms upon which deposit accounts are accepted by it, other than in response to
market conditions;
(c) except as previously disclosed, enter into any material
contracts, agreements or commitments or enter into any securities transaction or
investments involving in excess of $25,000, whether oral or written, except in
the ordinary and usual course of its business;
(d) enter into any lease, contract or commitment for the
purchase, sale or improvement of any real estate;
(e) incur any indebtedness or refinance any existing
indebtedness except, in each case, in the ordinary and usual course of its
business;
(f) declare or pay any bonus, extra dividend, or extra
interest to members or depositors;
(g) except as previously disclosed, execute any employment
contract with any employee or increase the remuneration paid to any director,
officer, employee or agent, or agree to do so, except for normal merit and cost
of living increases for employees;
(h) make any material change in its historic accounting
methods;
(i) employ or make any agreement or commitment to employ any
additional officer, employee (other than tellers to be employed by Peoples) or
agent or appoint any additional person as director or nominate any person as a
candidate for election as a director who is not currently a director;
(j) waive any rights or cancel any debts or claims of material
value, whether considered individually or in the aggregate;
(k) incur any material obligation or liability, except in the
ordinary course of business;
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(l) establish any new lending programs or make any changes in
its policies concerning which persons may approve loans;
(m) make any advance secured by an open end mortgage except
the original loan amount secured by such a mortgage;
(n) make or commit to make any material capital expenditure;
or
(o) except as previously disclosed, negotiate or participate
with anyone, other than each other, in respect of the merger or consolidation of
Oakley or Peoples or the acquisition of all or any part of the business or
assets of Oakley or Peoples.
SECTION 7.02. REGULATORY FILINGS.
(a) As soon as practicable after the date of this Agreement,
Peoples and Oakley will submit to the Superintendent and to the OTS such
documents as are required to be filed in connection with the Merger.
(b) As soon as practicable after the receipt of the necessary
approvals from the Superintendent and the OTS, Peoples and Oakley will prepare
and submit to the Superintendent and the OTS such final Merger documents as are
required by the Superintendent and the OTS to be filed in order to consummate
the Merger, and will take all such additional action as may be necessary or
desirable to consummate the Merger.
SECTION 7.03. NOTIFICATION OF MATERIAL CHANGES. At all times from the
date of this Agreement until the Effective Time, each party shall promptly
notify the other in writing of any materially adverse business conditions, other
than general economic conditions, threatening its normal business operations or
of the occurrence of any event or the failure of any event to occur which might
reasonably be expected to result in a breach of or a failure to comply with any
representation, warranty, covenant, condition or agreement contained in this
Agreement or of the commencement of any action, suit, proceeding or
investigation against it.
SECTION 7.04. ACCESS. Until the Effective Time, Peoples shall afford to
Oakley, and Oakley shall afford to Peoples, and to their respective officers and
representatives (including, without limitation, counsel, financial advisers and
independent accountants), reasonable access to their properties, personnel,
books, records and affairs. Such access shall include, but shall not be limited
to, (I) permitting verification, by audit or otherwise, of any representation or
warranty made hereunder; (ii) authorizing release of any information (including
the work papers of such independent auditors) and financial consultants; (iii)
consistent with applicable regulations or procedures, furnishing regular and
special examination reports since the date of this Agreement; and (iv)
delivering copies of all documents or reports or correspondence filed and any
correspondence with any federal regulatory or supervisory agency from the date
of this Agreement. Each party shall
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furnish the other party with such additional financial and operating data and
other information regarding its businesses and properties as may be reasonably
requested.
SECTION 7.05. PRESS RELEASES. Peoples and Oakley shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to the Merger and shall not issue any such press release
or make any such public statement without obtaining the prior consent of the
other party, except as may be required by law.
ARTICLE EIGHT
SECTION 8.01. MERGER-RELATED FEES. No director, officer, agent or
employee of Peoples or of Oakley shall receive any fee, commission, compensation
or other valuable consideration whatsoever solely for aiding, promoting or
assisting the Merger, except that accountants and attorneys retained by Peoples
or Oakley shall receive reasonable fees for their professional services.
SECTION 8.02. AMENDMENT OF AGREEMENT. At any time prior to the
Effective Date, this Agreement may be amended from time to time by an agreement
in writing executed in the same manner as this Agreement, after authorization of
such action by the Board of Directors of each of Peoples and Oakley.
SECTION 8.03. MISCELLANEOUS. No officer, employee or agent of Peoples
or of Oakley is authorized to make any representation, warranty or promise not
contained in this Agreement. No change, termination or attempted waiver of any
of the provisions of this Agreement shall be binding on any party hereto unless
duly executed in writing in accordance with the provisions of Section 8.02 of
this Agreement.
SECTION 8.04. CERTAIN POST-MERGER AGREEMENTS.
The parties hereto agree to the following arrangements following the
Effective Date:
(a) Effective as of the Effective Date, the number of
directors of Peoples shall be increased by one, and Peoples shall appoint Xxxxxx
X. Xxx as a director of Peoples to serve as a director for a three-year term.
(b) Peoples will retain all persons who are officers and
employees of Oakley as of both the date of this Agreement and the Effective Date
except in the event of termination for cause. To the extent an employee
terminates his or her employment with Peoples within one year from the Effective
Date such employee will be entitled to severance pay equal to two weeks for each
full year employed by Oakley with a minimum of twelve weeks of severance pay and
a maximum of fifty two weeks of severance pay.
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(c) Peoples will honor in accordance with their terms all of
Oakley's retirement and benefit plans disclosed on Exhibit B. All employees of
Oakley immediately prior to the Effective Date who are employed by Peoples
immediately following the Effective Date ("Transferred Employees") will be
covered by the Peoples employee benefit plans on substantially the same basis as
any employee of Peoples with a comparable salary. Notwithstanding the foregoing,
Peoples may determine to continue any of the Oakley benefit plans for
Transferred Employees in lieu of offering participation in Peoples' benefit
plans providing similar benefits (e.g., medical and hospitalization benefits),
to terminate any of Oakley's benefit plans, or to merge any such benefit plans
with the Peoples benefit plans, provided the result is the provision of benefits
to Transferred Employees that are substantially similar to the benefits provided
to the Peoples' employees generally. Service to Oakley by a Transferred Employee
prior to the Effective Date shall be recognized as service to Peoples for
purposes of eligibility to participate under Peoples' sick leave policies, paid
vacation policies, and medical, long-term disability and life insurance plans.
Peoples agrees that any pre-existing condition, limitation or exclusion in its
medical, long-term disability and life insurance plans shall not apply to
Transferred Employees or their covered dependents who are covered under a
medical or hospitalization indemnity plan maintained by Oakley on the Effective
Date and who then change coverage to Peoples' medical or hospitalization
indemnity health plan at the time such Transferred Employees are first given the
option to enroll. In addition, all Transferred Employees will be eligible to
participate in all stock based compensation plans implemented by Peoples or the
Holding Company in connection with the Conversion based upon the same criteria
as the other employees of Peoples.
(d) Peoples shall maintain a directors' and officers'
liability insurance policy covering the directors and officers of Oakley for a
period of three years after the Effective Date on terms generally no less
favorable than the Oakley policy in effect on the date of this Agreement,
provided however, that the annual cost of such insurance shall not exceed 150%
of the amount currently expended by Oakley.
ARTICLE NINE
SECTION 9.01. CONDITIONS TO OBLIGATIONS OF PEOPLES. The obligations of
Peoples hereunder shall be subject to the satisfaction of each of the following
conditions precedent:
(a) The representations warranties of Oakley set forth in
Article Six of this Agreement shall be true in all material respects on the
Effective Date as if made on the Effective Date. A Certificate of the President
of Oakley, dated as of the Effective Date, shall be delivered to Peoples and
shall certify that the representations and warranties set forth in Article Six
of this Agreement are true in all material respects;
(b) Oakley shall have conformed to the limitations imposed by
Section 7.01 in all material respects from the date of this Agreement until the
Effective Date. A Certificate of the
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President of Oakley, dated as of the Effective Date, shall be delivered to
Peoples and shall certify that the limitations in Section 7.01 have been
complied with in all material respects;
(c) Peoples shall have received all necessary regulatory or
governmental approvals or consents required to consummate the transactions
contemplated hereby;
(d) There shall not have occurred any material adverse change
in the business, operations, properties or financial condition of Oakley from
that disclosed in the Oakley Audited Financials;
(e) All action required to be taken by, or on the part of,
Oakley to authorize the execution, delivery and performance of this Agreement by
Oakley and the consummation by Oakley of the transactions contemplated hereby
shall have been duly and validly taken by the Board of Directors of Oakley; and
(f) None of the consents, waivers, clearances, approvals or
authorizations from governmental bodies or third parties shall contain any term
or condition which, in the reasonable judgment of Peoples, individually or in
the aggregate, would have a material adverse effect on the business, operations,
properties, assets or financial position of Oakley or Peoples or otherwise
materially reduce or impair the value of Oakley to Peoples.
SECTION 9.02. CONDITION TO OBLIGATIONS OF OAKLEY. The obligations of
Oakley hereunder shall be subject to the satisfaction of each of the following
conditions precedent:
(a) The representations and warranties of Peoples set forth in
Article Five of this Agreement shall be true in all material respects on the
Effective Date as if made on the Effective Date. A Certificate of the President
of Peoples, dated as of the Effective Date, shall be delivered to Oakley and
shall certify that the representations and warranties set forth in Article Five
of this Agreement are true in all material respects;
(b) Peoples shall have conformed to the limitations imposed by
Section 7.01 in all material respects from the date of this Agreement until the
Effective Date. A Certificate of the President of Peoples, dated as of the
Effective Date, shall be delivered to Oakley and shall certify that the
limitations in Section 7.01 have been complied with in all material respects;
(c) Oakley shall have received all necessary regulatory or
governmental approvals or consents required to consummate the transactions
contemplated hereby;
(d) There shall not have occurred any material adverse change
in the business, operations, properties, assets or financial condition of
Peoples from that disclosed in the Peoples Audited Financials;
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(e) All action required to be taken by, or on the part of,
Peoples to authorize the execution, delivery and performance of this Agreement
by Peoples and the consummation by Peoples of the transactions contemplated
hereby shall have been duly and validly taken by the Board of Directors of
Peoples; and
(f) All action required to be taken in connection with the
consummation of the Conversion and the acquisition of Harvest Home Financial
Corporation and Harvest Home Savings Bank by Peoples and the Holding Company
(the "Acquisition") shall have been taken and all necessary regulatory or
governmental approvals or consents to consummate the Conversion and the
Acquisition shall have been received.
SECTION 9.03. TERMINATION OF AGREEMENT. This Agreement may be
terminated:
(a) By the mutual consent of the Board of Directors of each of
Oakley and of Peoples at any time;
(b) By the Board of Directors of Peoples if the conditions
precedent to its obligations provided for in Section 9.01 of this Agreement
shall not have been satisfied or waived on or before September 30, 2000;
(c) By the Board of Directors of Oakley if any of the
conditions precedent to its obligations provided for in Section 9.02 of this
Agreement shall not have been satisfied or waived on or before September 30,
2000; or
(d) By the Board of Directors of Peoples or Oakley if the
Effective Date shall not have occurred on or before September 30, 2000.
In the event of any termination pursuant to Section 9.03, the
terminating party shall give written notice thereof forthwith to the other party
hereto, and, upon the giving of such notice, such termination shall
automatically occur and no party hereto shall have any liability or obligation
under this Agreement, except as stated in Section 8.0l hereof.
ARTICLE TEN
SECTION 10.01. CLOSING. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at a time and place mutually
agreed upon by Peoples and Oakley. On the day of the Closing, a Certificate of
Merger prepared in accordance with Section 1701.81 of the Ohio Revised Code
shall be filed with the Superintendent. The Merger shall become effective at the
close of business on the date on which the Superintendent files such Certificate
of Merger in the office of the Secretary of State of Ohio.
SECTION 10.02. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in one or more counterparts, each of which shall be deemed to be a
duplicate original.
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IN WITNESS WHEREOF, the Constituent Associations have caused this
Agreement to be executed by their respective officers as of the day and year
first above written.
ATTEST: THE PEOPLES BUILDING, LOAN AND
SAVINGS COMPANY
/s/Xxxxx X. Xxxx By: /s/Xxxxx X. Xxxxxxxx
---------------------------------- --------------------------------
Xxxxx X. Xxxx, Secretary Xxxxx X. Xxxxxxxx, President
ATTEST: THE OAKLEY IMPROVED BUILDING &
LOAN COMPANY
/s/Xxxxxx Xxxxxxxx By: /s/Xxxxxx X. Xxx
---------------------------------- --------------------------------
Xxxxxx Xxxxxxxx, Secretary Xxxxxx X. Xxx, Managing Officer
STATE OF OHIO )
) SS:
COUNTY OF XXXXXXXX
The foregoing instrument was acknowledged before me this 30th day of
September, 1999, by Xxxxxx X. Xxx, the Managing Officer, and Xxxxxx Xxxxxxxx,
the Secretary of The Oakley Improved Building & Loan Company.
/s/ Xxxx X. Xxxxxxxx
------------------------------
Notary Public
STATE OF OHIO )
) SS:
COUNTY OF XXXXXX
The foregoing instrument was acknowledged before me this 30th day of
September, 1999, by Xxxxx X. Xxxxxxxx, the President, and Xxxxx X. Xxxx, the
Secretary of The People's Building Loan and Savings Company.
/s/ Xxxxxx X. Xxxxxx
------------------------------
Notary Public
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