Exhibit 10.3
February 4, 1997
ML Bancorp, Inc.
Two Aldwyn Center
Villanova, PA 19085
Gentlemen:
The undersigned understands that ML Bancorp, Inc. ("Bancorp") is about to
enter into an Agreement and Plan of Merger (the "Merger Agreement", as amended
-- see amendments attached hereto) with Penncore Financial Services Corporation
("Penncore"). The Merger Agreement provides for the merger of Penncore into
Bancorp (the "Merger") and the conversion of outstanding shares of Penncore
Common Stock into Bancorp Common Stock and cash in accordance with the formula
therein set forth.
In order to induce Bancorp to enter into the Merger Agreement, and
intending to be legally bound hereby, the undersigned represents, warrants and
agrees that at the Penncore Shareholders' meeting contemplated by Section 4.3 of
the Agreement and Plan of Merger and any adjournment thereof the undersigned
wi11, in person or by proxy, vote or cause to be voted in favor of the Merger
Agreement and the Merger the shares of Penncore Common Stock beneficially owned
by the undersigned individually or, to the extent of the undersigned's
proportionate voting interest, jointly with other persons, as wel1 as (to the
extent of the undersigned's proportionate voting interest) any other shares of
Penncore Common Stock over which the undersigned may hereafter acquire
beneficia1 ownership in such capacities (collectively, the "Shares"). Subject to
the final paragraph of this agreement, the undersigned further agrees that it
will use its best efforts to cause any other shares of Penncore Common Stock
over which it has or shares voting power to be voted in favor of the Merger
Agreement and the Merger.
The undersigned further represents, warrants and agrees that until the
earlier of (i) the consummation of the Merger or (ii) the termination of the
Merger Agreement in accordance with its terms, the undersigned will not,
directly or indirectly:
(a) vote any of the Shares, or cause or permit any of the Shares to be
voted, in favor of any other merger, consolidation, plan of liquidation, sale of
assets, reclassification or other transaction involving Penncore or its
subsidiary Commonwealth State Bank ("Commonwealth") which would have the effect
of any person other than Bancorp or an affiliate acquiring control over
Penncore, Commonwealth or any substantial
portion of the assets of Penncore or Commonwealth (as used herein, the term
"control" means (1) the ability to direct the voting of 10% or more of the
outstanding voting securities of a person having ordinary voting power in the
election of directors or in the election of any other body having similar
functions or (2) the ability to direct the management and policies of a person,
whether through ownership of securities, through any contract, arrangement or
understanding or otherwise); or
(b) sell or otherwise transfer any of the Shares, or cause or permit any of
the Shares to be sold or otherwise transferred (i) pursuant to any tender offer,
exchange offer or similar proposal made by any person other than Bancorp or an
affiliate, (ii) to any person seeking to obtain control of Penncore,
Commonwealth or any substantial portion of the assets of Penncore or
Commonwealth or to any other person (other than Bancorp or an affiliate) under
circumstances where such sale or transfer may reasonably be expected to assist a
person seeking to obtain such control or (iii) for the principal purpose of
avoiding the obligations of the undersigned under this agreement.
(c) It is understood and agreed that this agreement relates solely to the
capacity of the undersigned as a shareholder or other beneficial owner of the
Shares and is not in any way intended to affect the exercise by the undersigned
of the undersigned's responsibilities as a director or officer of Penncore or
Commonwealth. It is further understood and agreed that the term "Shares" shall
not include any securities beneficially owned by the undersigned as a trustee or
fiduciary, and that this agreement is not in any way intended to affect the
exercise by the undersigned of the undersigned's fiduciary responsibility in
respect of any such securities.
Very truly yours,
NATIONAL PENN INVESTMENT CO. INC.
/s/
----------------------------------------
Accepted and Agreed to:
ML BANCORP, INC.
By: _______________________________
Title: ____________________________
-2-
manner and basis of carrying it into effect, which shall be as follows:
ARTICLE I
THE MERGERS
1.1 The Merger. Subject to the terms and conditions of this Agreement, on
the Effective Date (as defined in Article VII), Penncore shall merge with and
into Bancorp (the "Merger") with Bancorp being the surviving entity, in
accordance with the provisions of, and with the effect provided in, the
Pennsylvania Business Corporation Law (the "PBCL"). At the Effective Time (as
defined in Article VII), the articles of incorporation and the bylaws of the
corporation surviving the merger shall be the articles of incorporation and the
bylaws of Bancorp in effect immediately prior to the Effective Time. At the
Effective Time, the directors and officers of the surviving corporation shall be
the directors and officers of Bancorp; provided, that at the Effective Time
Bancorp shall cause Xxxx X. Xxxxxxx, Xx. to become a member of the Board of
Directors of Bancorp and Main Line.
1.2 Consideration; Effect on Outstanding Shares.
(a) On the Effective Time, by virtue of the Merger and without
any further action on the part of Bancorp or Penncore, each share of Penncore
Common Stock issued and outstanding immediately prior to the Effective Time
(other than shares of Penncore Common Stock to be cancelled pursuant to Section
1.2(k)) shall be converted, as the case may be, into:
(i) the right to receive $36.56 cash without interest (the
"Per Share Cash Amount");
(ii) the right to receive 2.50 shares of Bancorp Common
Stock (the "Exchange Ratio"); or
(iii) the right to receive a combination of cash and shares
of Bancorp Common Stock determined in accordance with this Section
1.2;
provided, however, that no such conversion shall be made in respect of any share
of Penncore Common Stock the holder of which, pursuant to the PBCL, is entitled
to receive payment of the fair value of such share, and such holder shall have
only the rights provided in the PBCL (such shares of Penncore Common Stock in
respect of which the holders thereof have perfected their rights under the PBCL
being hereinafter referred to as "Dissenting Shares").
If the Average Price (as defined in Section 8.1(h) hereof) of Bancorp
Common Stock exceeds $16.75, the Exchange Ratio shall be decreased from 2.5 to a
number equal to $41.875 divided by the Average Price (calculated to the nearest
1/1000); provided, however, that there shall be no such adjustment in the
Exchange Ratio if prior to the Averaging Period (as defined in Section 8.1(h)
hereof) there has been any public announcement of the proposed acquisition or
sale of all or Bancorp's Common Stock or substantially all of Bancorp's assets.
(b) The number of shares of Penncore Common Stock to be converted into
the right to receive Bancorp Common Stock in the
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(h) By Penncore, if Penncore's Board of Directors so determines in the
event that the Average Price (as hereinafter defined) of Bancorp's Common Stock
is less than $12.50, unless the Bancorp Exchange Ratio Option (as hereinafter
described) is exercised by Bancorp. The Average Price equals the average of the
last reported sale prices of Bancorp's Common Stock (as reported by NASDAQ) for
the 10 trading days ending on the 11th day before the Effective Date (the
"Averaging Period"). Bancorp shall have the option (the "Bancorp Exchange Ratio
Option") to increase the Exchange Ratio to a number equal to $31.25 divided by
the Average Price (calculated to the nearest 1/1000). If Penncore elects to
terminate pursuant to this Section 8.1(h), it shall give written notice to
Bancorp prior to the fifth business day before the Effective Date, and Bancorp
shall thereupon have five business days from receipt of such notice in which to
exercise the Bancorp Exchange Ratio Option, such exercise to be by written
notice to Penncore. Upon exercise of the Bancorp Exchange Ratio Option, this
Agreement shall remain in full force and effect and Penncore's notice of
termination under this Section 8.1(h) shall be null and void.
8.2 Approval by Board of Directors. Any termination of this Agreement as
provided in Sections 8.1(a) through 8.1(h) must be approved by the Board of
Directors of the party seeking termination.
8.3 Effect of Termination. In the event of termination of this Agreement as
provided in Sections 8.1 through 8.9, this Agreement shall forthwith become null
and void and there shall be no liability or obligation on the part of Bancorp or
Penncore or their respective officers or directors, except that nothing herein
shall relieve any party hereto from any liability for willful breach of this
Agreement, and except for (a) the agreements and representations of the parties
contained in this Section 8.3 and Sections 9.3, 9.4, 9.7 and 9.9; (b) the
obligations of confidentiality contained in Section 9.6; and (c) the obligations
of the parties and liabilities contained in Section 9.5, all of which
agreements, representations, obligations and liabilities shall survive any such
termination.
ARTICLE IX
OTHER MATTERS
9.1 Survival. If the Effective Time occurs, the agreements of the parties
contained in Sections 1.1, 9.4, 9.5, 9.11, 9.12, 9.13 and 9.14 shall survive the
Effective Time; all other representations, warranties, agreements and covenants
contained in this Agreement shall not survive the Effective Time.
9.2 Waiver; Amendment. Prior to the Effective Date, any provision of this
Agreement may be (I) waived by the party benefitted by the provision, or (ii)
amended or modified at any time (including the structure of the transaction), by
an agreement
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