PLAN OF REORGANIZATION
Exhibit
2.1
THIS
AGREEMENT made as of this 14th day of January, 2008, among ENB FINANCIAL CORP, a
Pennsylvania business corporation (the "Holding Company"), THE EPHRATA NATIONAL
BANK, Ephrata, Pennsylvania, a national banking association (the "Bank"), and
THE EPHRATA INTERIM NATIONAL BANK (In Organization), a national banking
association and a subsidiary of the Holding Company (the "Interim
Bank"),
WITNESSETH:
WHEREAS,
the Holding Company, the Bank, and the Interim Bank desire to effect the
formation of a bank holding company whereby Bank and the Interim Bank will be
merged, the surviving bank will become a wholly-owned subsidiary of the Holding
Company, and the present shareholders of the Bank (except for those who perfect
dissenters' rights) will become shareholders of the Holding Company on the terms
and conditions hereinafter set forth;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein and intending to be legally bound hereby, the parties agree as
follows:
SECTION 1.
MERGER.
1.1. Agreement
to Merge. Subject to the terms and conditions hereinafter set forth, the
parties hereto agree to effect a merger of the Bank and the Interim Bank (the
"Merger") pursuant to the provisions of the Bank Merger Act of 1966, 12 U.S.C.
Section 215a, (the "Bank Merger Act") in accordance with the Agreement and Plan
of Merger attached hereto as Exhibit A and made a part hereof (the "Plan of
Merger").
1.2. Holding
Company Common Stock. The Holding Company shall
make available to the Bank and the Interim Bank a sufficient number of shares of
the Holding Company's Common Stock to effect the Merger pursuant to the Plan of
Merger.
SECTION
2. SHARES OF THE HOLDING COMPANY AND OF THE SURVIVING BANK.
2.1. Conversion
of Shares. The manner of converting the shares of Capital Stock of the
Bank into shares of Common Stock of the Holding Company and the shares of
Capital Stock of the Interim Bank into shares of Capital Stock of the surviving
bank in the Merger shall be as set forth in Section 7 of the Plan of
Merger.
SECTION 3. REPRESENTATIONS AND
WARRANTIES OF THE HOLDING COMPANY.
The
Holding Company represents, warrants and agrees as follows:
3.1. Organization
and Standing. The Holding Company is a corporation duly organized and
validly existing under the Pennsylvania Business Corporation Law of 1988, as
amended.
3.2. Capitalization.
The Holding Company is authorized to issue Twelve Million (12,000,000) shares of
Common Stock, par value Twenty Cents ($.20) per share, of which one (1) share is
issued and outstanding. There are no outstanding options, warrants, calls,
convertible securities, subscriptions or other commitments or rights of any
nature with respect to the Common Stock of the Holding Company.
3.3. Authority
Relative to this Agreement. The execution, delivery, and performance of
this Agreement have been duly authorized by the Board of Directors of the
Holding Company. Subject to appropriate shareholder and regulatory approvals,
neither the execution and delivery of this Agreement nor the consummation of the
transactions provided for herein will violate any agreement to which the Holding
Company is a party or by which it is bound; any law, order or decree; or any
provision of its Articles of Incorporation or By-laws.
3.4. Absence
of Liabilities.
Prior to the effective time of the Merger, the Holding Company will have engaged
only in the transactions contemplated by this Agreement and the Plan of Merger,
will have no material liabilities, and will have incurred no material
obligations except in connection with its performance of the transactions
provided for in this Agreement and in the Plan of Merger.
SECTION
4. REPRESENTATIONS AND WARRANTIES OF THE BANK.
The Bank
represents, warrants, and agrees as follows:
4.1. Organization
and Standing. The Bank is a national banking association duly organized
and validly existing under the National Bank Act.
4.2. Capitalization. The Bank is
authorized to issue Twelve Million (12,000,000) shares of Capital Stock, par
value Twenty Cents ($.20) per share, of which 2,858,216.301 shares are issued
and outstanding as of December 12, 2007. There are no outstanding options,
warrants, calls, convertible securities, subscriptions or other commitments or
rights of any nature with respect to the Capital Stock of Bank.
4.3. Authority
Relative to this Agreement. The execution, delivery, and performance of
this Agreement and the Plan of Merger have been duly authorized by the Board of
Directors of the Bank. Subject to appropriate shareholder and regulatory
approvals, neither the execution and delivery of this Agreement or the Plan of
Merger nor the consummation of the transactions provided for herein or therein
will violate any agreement to which the Bank is a party or by which it is bound;
any law, order, or decree; or any provision of its Articles of Association or
By-laws.
SECTION
5. REPRESENTATIONS AND WARRANTIES OF THE INTERIM BANK.
The
Interim Bank represents, warrants, and agrees as follows:
5.1. Organization
and Standing. The Interim Bank is a national banking association in the
process of formation under the National Bank
Act.
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5.2. Capitalization. Upon formation, the
Interim Bank will be authorized to issue Twelve Million (12,000,000) shares of
Capital Stock, par value Twenty Cents ($.20) per share, of which 2,858,216.301
shares will be issued and outstanding and owned by the Holding Company and five
(5) organizers immediately prior to the Merger.
5.3. Authority
Relative to this Agreement. The execution, delivery, and performance of
this Agreement and the Plan of Merger have been duly authorized by the Board of
Directors of the Interim Bank. Subject to appropriate shareholder and regulatory
approvals, neither the execution and delivery of this Agreement or the Plan of
Merger nor the consummation of the transactions provided for herein or therein
will violate any agreement to which the Interim Bank is a party or by which it
is bound; any law, order, decree; or any provision of its Articles of
Association or By-laws.
5.4. Absence
of Liabilities. Prior to the effective time of the Merger, the Interim
Bank will have engaged only in the transactions contemplated by this Agreement
and the Plan of Merger, will have no material liabilities, and will have
incurred no material obligations except in connection with its performance of
the transactions provided for in this Agreement and in the Plan of
Merger.
SECTION 6. COVENANTS OF THE HOLDING
COMPANY.
The
Holding Company agrees that between the date hereof and the effective time of
the Merger:
6.1. Capitalization
of the Interim Bank. The Holding Company shall purchase a total of
2,833,216.301 shares of Capital Stock, par value Twenty Cents ($.20) per share
of Interim Bank for Twenty Cents ($.20) per share. And the Holding Company shall
cause the Interim Bank to do all things necessary to obtain a charter as a
national banking association pursuant to the National Bank Act so as to permit
the consummation of the Merger provided for in the Plan of Merger. The Holding
Company may also purchase the subscription rights of the Organizers of the
Interim Bank for their twenty-five thousand (25,000) shares of Capital Stock
prior to the Merger. Such shares of the Organizers shall be purchased at Twenty
Cents ($.20) per share.
6.2. Approval
of Merger. The
Holding Company, as a shareholder of the Interim Bank, shall approve this
Agreement and the Plan of Merger in accordance with applicable law.
6.3. Reasonable
Efforts. The Holding Company will make Reasonable Efforts, as defined
below, to take, or cause to be taken, all actions or do, or cause to be done,
all things necessary, proper, or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this Agreement
and the Plan of Merger. The preceding covenant, however, is subject
to the requisite vote of the shareholders of the Bank in accordance with the
requirements of the Bank Merger Act and applicable law. “Reasonable
Efforts” means, with respect to a given goal, the efforts that a reasonable
person in the position of the promisor would make so as to achieve that goal as
expeditiously as possible.
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SECTION
7. COVENANTS OF THE BANK.
The Bank
agrees that between the date hereof and the effective time of the
Merger:
7.1. Shareholders'
Meeting. The Bank
shall submit this Agreement and the Plan of Merger to the vote of its
shareholders as provided by the Bank Merger Act and other applicable laws at a
meeting of shareholders to be held as soon as practicable and any adjournment or
postponement thereof.
7.2. Reasonable
Efforts. The Bank will make Reasonable Efforts, as defined in Section 6.3
above, to take, or cause to be taken, all actions or do, or cause to be done,
all things necessary, proper, or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this Agreement
and the Plan of Merger. The preceding covenant, however, is subject
to the requisite vote of the shareholders of the Bank in accordance with the
requirements of the Bank Merger Act and applicable law or the Holding Company
shall avail itself from registration under 3(a)(12) of the Securities Act of
1933.
SECTION
8. COVENANTS OF THE INTERIM BANK.
The
Interim Bank agrees that between the date hereof and the effective time of the
Merger:
8.1. Shareholder
Approval. The Interim Bank shall submit this Agreement and the Plan of
Merger to its shareholder(s) for approval and adoption as provided by the Bank
Merger Act and other applicable laws.
8.2. Reasonable
Efforts. The Interim Bank will make Reasonable Efforts, as defined in
Section 6.3 above, to take, or cause to be taken, all actions or do, or cause to
be done, all things necessary, proper, or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement and the Plan of Merger. The preceding covenant,
however, is subject to the requisite vote of the shareholder(s) of the Interim
Bank in accordance with the requirements of the Bank Merger Act and applicable
law.
SECTION
9. CONDITIONS TO OBLIGATIONS OF THE PARTIES.
The
obligations of the parties to consummate this Agreement and the Plan of Merger
shall be subject to the following conditions:
9.1. Representations
and Warranties.
Performance of Covenants. The representations and warranties and covenants
contained in Sections 3, 4, 5, 6, 7 and 8 hereof shall be true as of and at the
effective time of the Merger. And each party shall have performed all
obligations required hereby to be performed by it prior to the effective time of
the Merger.
9.2. Bank
Shareholder Approval. The shareholders of Bank shall have duly approved
this Agreement and the Plan of Merger in accordance with applicable
laws.
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9.3. Regulatory
Approvals. Any federal or state regulatory agency having jurisdiction
(banking or otherwise) shall have granted any necessary consent or approval to
the extent that any consent or approval is required by applicable laws or
regulations for the consummation of this Agreement and the Plan of
Merger.
9.4
Registration
Statement. The registration statement (the “Registration Statement”)
filed by the Holding Company if required pursuant to the Securities Act of 1933,
as amended, covering the shares of the Holding Company’s Common Stock to be
issued pursuant to the Plan of Merger shall have been declared effective by the
Securities and Exchange Commission. Furthermore, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall have been initiated or, to the
knowledge of the Holding Company, shall be contemplated or threatened by the
Securities and Exchange Commission or the Holding Company shall avail itself
from registration under 3(a)(12) of the Securities Act of 1933.
9.5. Litigation. There shall be no
litigation or proceeding pending or threatened for the purpose of enjoining,
restraining, or preventing the consummation of the Merger, this Agreement, the
Plan of Merger, or otherwise claiming that such consummation is improper.
9.6. Tax
Opinion. A tax opinion shall have been obtained from Xxxxx Xxxxxxxx LLP
of Lemoyne, Pennsylvania, Special Counsel to the Bank that the conversion of
Bank's Capital Stock into the Holding Company's Common Stock will be tax free
for federal income tax purposes. The requirements of this Section 9.6, however,
may be waived by the affirmative vote of a majority of the Board of Directors of
each of the parties hereto.
SECTION
10. TERMINATION, WAIVER, AND AMENDMENT.
10.1.
Circumstances
of Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement and the Plan of Merger may be terminated at any
time before the effective time of the Merger (whether before or after action
with respect thereto by the Bank's shareholders) only:
(a) by
the mutual consent of the Board of Directors of the Bank, the Interim Bank, and
the Holding Company evidenced by an instrument in writing signed on behalf of
each and by any two of their respective officers; or
(b) by
the Board of Directors of the Bank if in its sole judgment the Merger would be
inadvisable because of the number of shareholders of the Bank who perfect their
dissenter's rights in accordance with applicable law and the Plan of Merger or
if, in the sole judgment of such Board, the Merger would not be in the best
interests of the Bank or its employees, depositors or shareholders for any
reason whatsoever.
10.2 Effect of
Termination. In the event of the termination and abandonment hereof, this
Agreement and the Plan of Merger shall become void and have no effect without
any liability on the part of any of the parties, their directors, officers, or
shareholders except as set forth in Section 11 hereof.
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10.3. Waiver.
Any of the terms or conditions of this Agreement and the Plan of Merger may be
waived in writing at any time by the Bank by action taken by its Board of
Directors whether before or after action by the Bank's
shareholders. Such action, however, shall be taken only if, in the
judgment of the Board of Directors, such waiver will not have a materially
adverse effect on the benefits intended to be granted hereunder to the
shareholders of the Bank.
10.4. Amendment.
Anything herein or elsewhere to the contrary notwithstanding and to the extent
permitted by law, this Agreement and the Plan of Merger may be amended at any
time by the affirmative vote of a majority of the Board of Directors of each of
the Bank, the Holding Company, and the Interim Bank whether before or after
action with respect thereto by the Bank's shareholders and without further
approval of such amendment by the shareholders of the parties
hereto. Section 2.1 of this Agreement and Section 7 of the Plan of
Merger may not, however, be amended after the meeting of the Bank's shareholders
referred to in Section 7.1 hereof except by the vote of Bank shareholders
required for the approval and adoption of the Merger by such
shareholders.
SECTION
11. EXPENSES.
11.1. General. Each party hereto
will pay its own expenses incurred in connection with this Agreement and the
Plan of Merger whether or not the transactions contemplated herein are
effected.
11.2. Special
Dividend. Upon
the effective time of the Merger, the surviving bank shall pay a special
dividend to the Holding Company in an amount equal to the sum of:
(a) any
expenses of the Holding Company in connection with the transactions contemplated
herein;
(b) the
principal amount of any loan that the Holding Company shall have obtained to
purchase shares of Capital Stock of the Interim Bank as provided in 6.1 hereof;
and
(c) the
amount of any interest incurred by the Holding Company on account of any loans
obtained by it for the purchase shares of Capital Stock of the Interim Bank as
provided in Section 6.1 hereof.
SECTION
12. MISCELLANEOUS.
12.1. Restrictions
on Affiliates. The Holding Company may cause stock certificates
representing any shares issued to any shareholder who may be deemed to be an
affiliate of the Bank within the meaning of Rule 145 under the Securities Act of
1933, as amended, to bear a legend setting forth any applicable restrictions on
transfer thereof under Rule 145. The Holding Company may cause
stop-transfer orders to be entered with its transfer agent with respect to any
such certificates.
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12.2. No
Brokers. Each of the parties represents to the other that it has not
incurred and will not incur any liability for brokerage fees or agents'
commissions in connection with this Agreement, the Plan of Merger, and the
transactions contemplated hereby.
12.3. Right to
Withhold Dividends. The Board of Directors of
the Holding Company reserves the right to withhold dividends from any former
shareholder of the Bank who fails to exchange certificates representing the
shares of the Bank for certificates representing the shares of the Holding
Company in accordance with Section 7 of the Plan of Merger.
12.4. Failure
to Surrender Certificates. Shareholders of the Holding Company shall
surrender certificates representing the shares of the Bank for certificates
representing the shares of the Holding Company within two (2) years of the date
of the letter of transmittal as provided in Section 7 of the Plan of Merger. In
the event that any certificates are not surrendered for exchange within such two
(2) year period, the shares represented by appropriate certificates of the
Holding Company that would otherwise have been delivered in exchange for the
unsurrendered certificates may be sold. And the net proceeds of such
sale shall be held for the shareholders of the unsurrendered certificates to be
paid to them upon surrender of their outstanding certificates. From and after
such sale, the sole right of the holders of the unsurrendered outstanding
certificates shall be the right to collect the net sales proceeds held for their
account.
12.5. Entire
Agreement. This Agreement including the Plan of Merger
attached as an exhibit hereto contain the entire agreement among the parties
with respect to the subject matter hereof and supersedes all prior agreements,
written or oral, with respect thereto.
12.6. Captions. Descriptive
headings are for convenience only and shall not control or affect the meaning or
construction of any provisions of the Agreement or the Plan of
Merger.
12.7. Applicable
Law. The Agreement and the Plan of Merger shall be governed by the laws
of the Commonwealth of Pennsylvania applicable to contracts executed in and to
be performed exclusively within the Commonwealth of Pennsylvania regardless of
where they are executed.
12.8. Counterparts. This Agreement may be
executed in any number of counterparts, and each such counterpart shall be
deemed to be an original instrument; all such counterparts together shall
constitute but one agreement.
[Signature
Page Follows]
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IN WITNESS WHEREOF, this
Agreement has been executed as of the day and year first above
mentioned.
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ATTEST:
/s/ Xxxx X.
Xxxxxxxx
Xxxx
X. Xxxxxxxx
Vice
President and Secretary
(SEAL)
|
/s/ Xxxxx X. Xxxxx,
Xx.
Xxxxx
X. Xxxxx, Xx.
President
and Chief Executive Officer
|
|
ATTEST:
/s/ Xxxx X.
Xxxxxxxx
Xxxx
X. Xxxxxxxx
Executive
Vice President and
Corporate
Secretary
(SEAL)
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THE
EPHRATA NATIONAL BANK
/s/ Xxxxx X. Xxxxx,
Xx.
Xxxxx
X. Xxxxx, Xx.
President
and Chief Executive Officer
|
|
ATTEST:
/s/ Xxxx X.
Xxxxxxxx
Xxxx
X. Xxxxxxxx
Vice
President and Secretary
(SEAL)
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THE
EPHRATA INTERIM NATIONAL
BANK
/s/ Xxxxx X. Xxxxx,
Xx.
Xxxxx
X. Xxxxx, Xx.
President
and Chief Executive Officer
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