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EXHIBIT 99.1
STOCK DISPOSITION AGREEMENT, DATED SEPTEMBER 6, 2001,
BY AND BETWEEN XXXXXX X. XXXXX, XX. AND
STERLING FINANCIAL CORPORATION
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STOCK DISPOSITION AGREEMENT
This Stock Disposition Agreement is made this 6th day of September, 2001
(the "Effective Date") by and between STERLING FINANCIAL CORPORATION, a
Pennsylvania corporation and a registered financial holding company (the
"Company"), and XXXXXX X. XXXXX, XX., an adult individual having an address of
000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxx 00000 ("Xxxxx"), the Company
and Xxxxx being referred to herein as the "Parties."
WITNESSETH:
WHEREAS, the Parties entered into a letter agreement dated June 30, 1994,
and the Parties hereby desire to clarify the terms and the circumstances whereby
the Company may acquire some or all of Xxxxx'x shares of the Company's common
stock after his death.
NOW, THEREFORE, in consideration of the premises, and the representations,
warranties, covenants and agreements contained herein, and intending to be
legally bound hereby, the Parties hereby agree as follows:
1. Number of Shares of Stock.
Upon the death of Xxxxx, the Company shall have the option and
right, but not the obligation, to purchase from Xxxxx'x estate or any entity or
trust containing or controlling said shares, any and all shares of the Company's
common stock beneficially owned by Xxxxx at the time of his death (the "Stock"),
that may be subsequently sold or offered for sale, in the open market, in
private transactions, or otherwise, free and clear of any lien, pledge,
mortgage, security interest, charge, claim, restriction, option or encumbrance
of any kind or nature whatsoever. Fractional shares, if any, shall be rounded to
the nearest whole number.
2. Right of First Refusal.
Within ten days after Xxxxx'x death, the legal representative of his
estate shall provide notice to the Company of Xxxxx'x death and notice of the
appointment of the authorized legal representative of his estate, entity or
trust having dispositive power and authority over said Stock. After Xxxxx'x
death, before any shares of the Stock registered in Xxxxx'x name or in the name
of Xxxxx'x estate, entity or trust may be sold or offered for sale in the open
market, in private transactions, or otherwise, such shares of Stock shall first
be offered to the Company, which shall have the right, but not the obligation,
to purchase all or any part of such shares of Stock ("Right of First Refusal"),
in the following manner:
2.1 Sale Notice.
Prior to any proposed sale or offer to sell the shares of
Stock in the open market, in private transactions or
otherwise, Xxxxx'x legal representative shall first give
written notice (the "Sale Notice") to the Company. The Sale
Notice shall identify the entity proposing to sell the shares
and the number of shares to be sold or offered for sale. The
Sale Notice shall be signed by Xxxxx'x legal representative
and delivered to the Company at its corporate headquarters at
North Pointe Banking Center, 000 Xxxxx Xxxxxx Xxxxxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxx 00000.
2.2 Exercise of Right of First Refusal.
The Company shall have 30 days from the date that the Sale
Notice is delivered to the Company to exercise the Right of
First Refusal. If the Company exercises the Right of First
Refusal, the parties shall consummate the sale of shares of
Stock on the terms set forth in Section 3.
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3. Purchase Price and Payment.
3.1 Purchase Price for Stock.
For purposes of this Agreement, the "Per Share Purchase Price"
for the Stock shall be the arithmetic average of the average
of the per share closing bid and asked prices reported for the
Company's common stock for the 15 trading days immediately
preceding the date on which the Sale Notice to the Company was
received by the Company, as reported on the NASDAQ/NMS. In the
event that the NASDAQ/NMS shall fail to report a closing bid
and asked price for the Company's common stock for any trading
day during the 15 trading day period, the closing bid and
asked price reported for that day shall be equal to the
arithmetic average of the closing bid and asked prices as
reported: (i) by Xxxxxx Xxxxx, Xxxxx Inc. and by X. X.
Xxxxxxxxx & Co. or, in the event that neither of these firms
is then making a market in the Company's common stock, (ii) by
two brokerage firms then making a market in the Company's
common stock to be selected by the Company and approved by
Xxxxx'x legal representative.
The "Purchase Price" for the Stock shall be the Per Share
Purchase Price multiplied by the number of shares of Stock for
which the Company has exercised its Right of First Refusal
under Section 2 hereof.
3.2 Payment for Stock.
Payment of the Purchase Price for the Stock for which the
Company exercises its Right of First Refusal shall be made in
cash by bank check to Xxxxx'x Estate or trust or entity
beneficially owning or controlling the Stock at the corporate
offices of the Company at North Pointe Banking Center, 000
Xxxxx Xxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000 within
ten days after the Company's exercise of the Right of First
Refusal, at which time Xxxxx'x legal representative on behalf
of the Xxxxx Estate or an entity or trust controlling said
shares of Stock shall deliver to the Company duly executed
stock certificates representing that number of shares of Stock
for which the Company has exercised its Right of First
Refusal.
4. Registration Rights and Registration of Shares.
Within 90 days after Xxxxx'x death, if the Company has not exercised
its Right of First Refusal for all of the Stock after the Sale Notice has been
given to the Company as provided herein, then no later than 90 days after
Xxxxx'x death, the Company shall, if permitted by Securities and Exchange
Commission ("SEC") rules or regulations, prepare, file and keep current a
registration statement under the Securities Act of 1933, as amended (the "1933
Act") covering the remaining Stock (or a lesser number of shares of Stock if
both Company and Xxxxx'x legal representative mutually agree on a lesser number,
provided however, in no event shall that number be less than 25% of those shares
of Stock held by Xxxxx'x Estate or any entity or trust containing or controlling
said Stock). Company shall use its best efforts to cause such registration
statement to become effective and remain current for a period of not more than
245 days. Company will use its reasonable best efforts to effect the
registration of such shares of Stock under the 1933 Act as quickly as possible.
The Company shall in no way be restricted from registering, issuing, selling or
exchanging other equity or debt securities, or derivatives thereof, nor shall
the Company be obligated to make effective more than one registration statement
pursuant to this Section 4. Said registration statement shall comply with the
1933 Act, and the rules and regulations of the SEC promulgated thereunder.
Provided, however, that if the Company fails to exercise the Right of First
Refusal for all of the Stock and the Company and Xxxxx'x legal
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representative mutually agree, then the Stock may be sold in the open market or
in privately negotiated transactions. Company will pay all costs and expenses
associated with the registration statement
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except for underwriting fees, discounts and commissions. Nothing in this Section
4 shall limit the Company's Right of First Refusal as provided herein.
5. Consent of Parties.
Xxxxx shall obtain all consents, take all actions necessary and
execute all documents necessary for this Agreement to be binding upon Xxxxx'x
estate, and any entity or trust containing or having dispositive power and
authority over said Stock.
6. Warranties and Representations.
In connection with the Right of First Refusal relating to the Stock,
Xxxxx hereby agrees, represents and warrants to the Company as follows:
6.1 Delivery to the Company of the certificate or certificates
representing the shares of Stock, duly endorsed for transfer
to the Company, will transfer to the Company good, valid and
marketable title to the shares, free and clear of any and all
liens and encumbrances.
6.2 Xxxxx has the full power, legal capacity and authority to
execute and deliver this Agreement. This Agreement, when
executed in Xxxxx'x individual capacity and delivered by
Xxxxx, will constitute, the legal, valid and binding
obligation of Xxxxx, enforceable against Xxxxx, Groff's Estate
and any entity or trust controlling or owning the Stock, in
accordance with its terms and the execution, delivery and
performance of this Agreement will not result in a violation
of, or constitute a default under, any will, trust, agreement
or other instrument to which Xxxxx is a party or is bound.
7. Covenants.
In connection with the Right of First Refusal relating to the Stock,
the Company hereby covenants to Xxxxx as follows:
The Company has the requisite corporate power and authority, and
legal right, and has taken all corporate action necessary in order
to execute and deliver this Agreement and to consummate the
transactions applicable to Xxxxx contemplated hereby. This Agreement
has been duly and validly executed and delivered by the Company and
constitutes the valid and binding obligations of the Company
enforceable against the Company, in accordance with its terms,
except to the extent enforcement is limited by bankruptcy,
insolvency and other similar laws affecting creditors' rights or the
application by a court of equitable principles.
8. Successors and Assigns.
This Agreement shall inure to the benefit of, and be binding upon,
the successors and assigns of each party, including, without limitation, in the
case of Xxxxx, Groff's heirs, executors, administrators, successors and assigns.
It is expressly agreed that this Agreement shall be binding on Xxxxx'x Estate,
personal representatives, and any trust governing the Stock.
9. Entire Agreement; Amendments.
This Agreement, together with the Exhibits hereto, shall be
construed under the laws of the Commonwealth of Pennsylvania (as it applies to
agreements between Pennsylvania residents, entered into and to be performed
entirely within Pennsylvania), and constitutes the entire agreement of the
Parties with respect to the
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subject matter hereof superseding all prior written or oral agreements, and no
amendment or addition hereto shall be deemed effective unless agreed to in
writing by the Parties.
10. Separability.
If any provision of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
shall nevertheless continue in full force and effect without being impaired or
invalidated in any way and shall be construed in accordance with the purposes
and tenor and effect of this Agreement.
11. Indemnification and Releases.
Xxxxx and Groff's legal representative hereby agree to indemnify the
Company, its officers, directors, affiliates and other representatives from all
damages, liabilities and expenses for any breach or alleged breach of Xxxxx'x or
Xxxxx'x legal representative's representations, warranties, covenants or
agreements in this Agreement or for any misstatements of material fact or
omissions of material information provided to the Company to be included in the
registration statement under Section 4.
The Company hereby agrees to indemnify Xxxxx and Groff's legal
representative from all damages, liabilities and expenses for any breach or
alleged breach of the Company's representations, warranties, covenants or
agreements in this Agreement.
12. Specific Performance.
If either party willfully fails or refuses to perform its
obligations hereunder or to consummate the transactions contemplated by this
Agreement, the defaulting party shall be required to reimburse the
non-defaulting party immediately upon demand for all reasonable costs and
expenses (including fees and disbursements of counsel) incurred by the
non-defaulting party as a direct result of the default, and the non-defaulting
party shall retain all other rights and remedies it may have at law or equity,
including the right to specific performance.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
WITNESS:
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxx, Xx.
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Xxxxxx X. Xxxxx, Xx.
Number of Shares of
Sterling Financial Corporation
Common Stock Owned 945,016
ATTEST: STERLING FINANCIAL CORPORATION
/s/ J. Xxxxx Xxxxx, Xx. By /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, President
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