Form of Letter Agreement for Executives
Exhibit
10.3
Form
of Letter Agreement for Executives
,
2006
Community
Banks, Inc.
000
Xxxx
Xxxx Xxxxx
Xxxxxxxxxx,
XX 00000
Ladies
and Gentlemen:
Community
Banks, Inc. (“CMTY”) and BUCS Financial Corp (“BFC”) are considering entering
into an Agreement (the “Merger Agreement”), pursuant to which, and subject to
the terms and conditions set forth therein: (a) CMTY will acquire BFC by a
merger of BFC with and into CMTY; (b) stockholders of BFC will receive
shares of CMTY common stock and/or cash in exchange for their shares of BFC
common stock owned on the closing date; and (c) option holders of BFC will
receive cash in exchange for options exercisable for common stock of BFC
outstanding on the closing date (the foregoing, collectively, the
“Transactions”).
I
have
been advised that I may be deemed to be an “affiliate” of BFC for purposes of
certain rules issued by the Securities and Exchange Commission (the “SEC”) under
the Securities Act of 1933.
I
understand that CMTY is requiring, as a condition to its execution and delivery
to BFC of the Agreement, that I execute and deliver to CMTY this Letter
Agreement. Intending to be legally bound hereby, I irrevocably agree and
represent as follows:
1.
I
agree to vote or cause to be voted for approval of the Merger Agreement all
shares of BFC common stock over which I exercise sole or shared voting power
(other than shares held in a fiduciary capacity) as of the record date of the
BFC shareholder meeting at which the Merger Agreement will be presented for
approval.
2.
Through the conclusion of the Transactions, I agree not to offer, sell,
exercise, transfer or otherwise dispose of, or to permit the offer, sale,
transfer or other disposition of, any shares of BFC common stock over which
I
exercise sole or shared voting power (other than shares held in a fiduciary
capacity) or any options that I hold to acquire shares of BFC common stock.
3.
I have
sole or shared voting power (other than shares held in a fiduciary capacity)
over the number of shares of BFC common stock, and hold stock options for the
number of shares of BFC common stock, if any, set forth below opposite my
signature line. CMTY recognizes that with respect to any such shares which
have
been pledged to a third party (which are specifically identified below), I
will
not be able to control the voting or disposition of such shares in the event
of
a default.
4.
I
agree not to offer, sell, transfer or otherwise dispose of any shares of CMTY
common stock received pursuant to the Transactions, except:
1
(a) at
such time as a registration statement under the Securities Act of 1933, as
amended (“Securities Act”), covering sales of such CMTY common stock is
effective and a prospectus is made available under the Securities
Act;
(b) within
the limits, and in accordance with the applicable provisions of, Rule 145
under the Securities Act (“Rule 145”); or
(c) in
a transaction which, in an opinion of counsel satisfactory to CMTY or as
described in a “no-action” or interpretive letter from the staff of the SEC (a
“No Action Letter”), is not required to be registered under the Securities
Act;
and
I
acknowledge and agree that CMTY is under no obligation to register the sale,
transfer or other disposition of CMTY common stock by me or on my behalf, or
to
take any other action necessary to make an exemption from registration
available.
5.
CMTY
shall take all steps necessary to ensure that CMTY is in compliance with all
those requirements of Rule 145 and Rule 144 with which CMTY must comply in
order for the resale provisions of Rule 145(d) to be available to
me.
6.
I
agree that CMTY shall not be bound by any attempted sale of any shares of CMTY
common stock acquired by me pursuant to the Transactions, and CMTY’s transfer
agent shall be given appropriate stop transfer orders and shall not be required
to register any such attempted sale, unless the sale has been effected in
compliance with the terms of this Letter Agreement; and I further agree that
the
certificate representing shares of CMTY common stock acquired by me pursuant
to
the Transactions by me may be endorsed with a restrictive legend consistent
with
the terms of this Letter Agreement, stating in substance as
follows:
“THE
SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION TO WHICH
RULE 145 APPLIES AND MAY ONLY BE TRANSFERRED (A) IN CONFORMITY WITH RULE
145(d), OR (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (C) IN ACCORDANCE WITH A WRITTEN
OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER IN FORM AND SUBSTANCE,
THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933,
AS AMENDED.”
The
undersigned understands and hereby further acknowledges that the legend set
forth above will be removed from any such certificate (by delivery of a
substitute certificate without such legend) and CMTY will instruct its transfer
agent to remove such legend from any such certificate, if the undersigned
delivers to CMTY (i) satisfactory written evidence that the shares of CMTY
common stock represented by any such certificate have been sold in compliance
with Rule 145(d) (as such rule may be hereafter amended) (in which case, the
substitute certificate will be issued in the name of the transferee), (ii)
a No
Action Letter, or (iii) an opinion of counsel, in form and substance
reasonably satisfactory to CMTY, to the effect that public sale of shares
represented by such certificate by the holder thereof is no longer subject
to
the restrictions imposed by Rule 145.
2
7.
I
represent that I have the capacity to enter into this Letter Agreement and
that
it is a valid and binding obligation enforceable against me in accordance with
its terms, subject to bankruptcy, insolvency and other laws affecting creditors’
rights and general equitable principles.
I
am
signing this Letter Agreement in my capacity as a shareholder of BFC and not
in
any other capacity (including as a director or Executive). This Letter Agreement
shall be effective upon acceptance by CMTY.
Execution
of this Agreement by the undersigned is not an admission by the undersigned
that
he or she is an “affiliate” for purposes of the Rule 145 of the Securities
Act.
This
Letter Agreement shall terminate concurrently with, and automatically upon,
any
termination of the Merger Agreement in accordance with its terms, except that
any such termination shall be without prejudice to CMTY’s rights arising out of
any willful breach of any covenant or representation contained
herein.
Very
truly yours,
|
||
Name:
|
||
Witness
|
Number
of shares held:
|
||||
Sole
voting power:
|
_______
|
Shared
voting power:
|
_______
|
|
Number
of pledged
|
||||
shares:
|
_______
|
Accepted:
COMMUNITY
BANKS, INC.
By:
Name:
Xxxxx X. Xxxxxxxxxxxx, Chairman, President and CEO
3