EXHIBIT 2.2
AGREEMENT AND PLAN OF MERGER
between
KEYSTONE SAVINGS BANK
and
FIRST COLONIAL GROUP, INC.
dated as of March 5, 2003
(Appendixes Omitted)
AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS............................................... 1
ARTICLE II THE MERGER................................................ 6
2.1 The Merger................................................ 6
2.2 Effective Time; Closing................................... 7
2.3 Treatment of Capital Stock................................ 7
2.4 Shareholder Rights; Stock Transfers....................... 8
2.5 Fractional Shares......................................... 8
2.6 Options................................................... 8
2.7 Exchange Procedures....................................... 9
2.8 Additional Actions........................................ 10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY............. 11
3.1 Capital Structure......................................... 11
3.2 Organization, Standing and Authority of the Company....... 11
3.3 Ownership of the Company Subsidiaries..................... 11
3.4 Organization, Standing and Authority of
the Company Subsidiaries................................ 12
3.5 Authorized and Effective Agreement........................ 12
3.6 Securities Documents and Regulatory Reports............... 13
3.7 Financial Statements...................................... 14
3.8 Material Adverse Change................................... 14
3.9 Environmental Matters..................................... 14
3.10 Tax Matters............................................... 15
3.11 Legal Proceedings......................................... 16
3.12 Compliance with Laws...................................... 16
3.13 Certain Information....................................... 16
3.14 Employee Benefit Plans.................................... 17
3.15 Certain Contracts......................................... 18
3.16 Brokers and Finders....................................... 19
3.17 Insurance................................................. 19
3.18 Properties................................................ 19
3.19 Labor..................................................... 19
3.20 Affiliates................................................ 19
3.21 Allowance for Loan Losses................................. 20
3.22 Fairness Opinion.......................................... 20
3.23 Disclosures............................................... 20
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF KEYSTONE................ 20
4.1 Capital Structure......................................... 20
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4.2 Organization, Standing and Authority of Keystone and the
Holding Company ........................................ 20
4.3 Ownership of the Keystone Subsidiaries.................... 21
4.4 Organization, Standing and Authority
of the Keystone Subsidiaries............................ 21
4.5 Authorized and Effective Agreement........................ 21
4.6 Regulatory Reports........................................ 23
4.7 Financial Statements...................................... 23
4.8 Material Adverse Change................................... 23
4.9 Environmental Matters..................................... 23
4.10 Tax Matters............................................... 24
4.11 Legal Proceedings......................................... 25
4.12 Compliance with Laws...................................... 25
4.13 Certain Information....................................... 25
4.14 Employee Benefit Plans.................................... 26
4.15 Certain Contracts......................................... 27
4.16 Brokers and Finders....................................... 28
4.17 Insurance................................................. 28
4.18 Properties................................................ 28
4.19 Labor..................................................... 28
4.20 Ownership of Company Common Stock......................... 28
4.21 Allowance for Losses on Loans............................. 29
4.22 Disclosures............................................... 29
ARTICLE V COVENANTS................................................. 29
5.1 Reasonable Best Efforts................................... 29
5.2 Shareholder and Depositor Meetings........................ 29
5.3 Regulatory Matters........................................ 30
5.4 Investigation and Confidentiality......................... 31
5.5 Press Releases............................................ 31
5.6 Business of the Parties................................... 32
5.7 Certain Actions........................................... 34
5.8 Current Information....................................... 36
5.9 Indemnification; Insurance................................ 36
5.10 Directors and Executive Officers.......................... 38
5.11 Employees and Employee Benefit Plans...................... 38
5.12 Bank Merger............................................... 40
5.13 Organization of the Holding Company....................... 41
5.14 Shareholder and Depositor Agreements...................... 41
5.15 Integration of Policies................................... 41
5.16 Disclosure Supplements.................................... 41
5.17 Failure to Fulfill Conditions............................. 42
5.18 Section 16 Matters........................................ 42
ARTICLE VI CONDITIONS PRECEDENT...................................... 42
6.1 Conditions Precedent - Keystone and the Company........... 42
6.2 Conditions Precedent - The Company........................ 43
6.3 Conditions Precedent - Keystone........................... 44
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ARTICLE VII TERMINATION, WAIVER AND AMENDMENT......................... 45
7.1 Termination............................................... 45
7.2 Effect of Termination..................................... 46
7.3 Survival of Representations, Warranties
and Covenants........................................... 46
7.4 Waiver.................................................... 47
7.5 Amendment or Supplement................................... 47
ARTICLE VIII MISCELLANEOUS................................................ 47
8.1 Expenses; Termination Fees................................ 47
8.2 Entire Agreement.......................................... 48
8.3 No Assignment............................................. 49
8.4 Notices................................................... 49
8.5 Alternative Structure..................................... 50
8.6 Interpretation............................................ 50
8.7 Counterparts.............................................. 50
8.8 Governing Law............................................. 50
Appendix A Form of Shareholder Agreement
Appendix B Form of Depositor Agreement
Appendix C Articles of Incorporation of KNBT Bancorp, Inc.
Appendix D Bylaws of KNBT Bancorp, Inc.
Appendix E Form of Employment Agreement with Xxxxx X. Xxxxxx
Appendix F Form of Employment Agreement with Xxxxxx X. Xxxxx
Appendix G Form of Accession to Agreement
Appendix H Form of Affiliate's Letter
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AGREEMENT AND PLAN OF MERGER
Agreement and Plan of Merger (the "Agreement"), dated as of March 5,
2003, between Keystone Savings Bank ("Keystone"), a Pennsylvania-chartered
mutual savings bank, and First Colonial Group, Inc. (the "Company"), a
Pennsylvania corporation.
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Keystone and the Company have
determined to consummate the business combination transactions provided for
herein, subject to the terms and conditions set forth herein;
WHEREAS, the parties desire to provide for certain undertakings,
conditions, representations, warranties and covenants in connection with the
transactions contemplated hereby;
WHEREAS, as an inducement to Keystone to enter into this Agreement and
simultaneously with the execution of this Agreement, each director of the
Company and the Bank is entering into an agreement (the "Shareholder
Agreement"), in the form of Appendix A hereto pursuant to which they have
agreed, among other things, to vote their shares of Company Common Stock in
favor of this Agreement; and
WHEREAS, as an inducement to the Company to enter into this Agreement
and simultaneously with the execution of this Agreement, each Trustee of
Keystone is entering into an agreement (the "Depositor Agreement"), in the form
of Appendix B hereto, pursuant to which they have agreed to vote, to the extent
they are depositors of Keystone eligible to vote on the Plan of Conversion, in
favor of the Plan of Conversion.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto do hereby agree as
follows:
ARTICLE I
DEFINITIONS
The following terms shall have the meanings ascribed to them for all
purposes of this Agreement.
"Acquisition Proposal" means any proposal or offer with respect to any
of the following (other than the transactions contemplated hereunder) involving
the Company or any of its Subsidiaries: (i) any merger, consolidation, share
exchange, business combination or other similar transaction; (ii) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of 20% or more
of its consolidated assets in a single transaction or series of transactions;
(iii) any tender offer or exchange offer for 20% or more of the outstanding
shares of its capital stock or the filing of a registration statement under the
Securities Act in connection therewith; or (iv) any public announcement of a
proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing.
"Acquisition Transaction" means any of the following (other than the
transaction contemplated hereunder) involving the Company or any of its
Subsidiaries: (i) any merger, consolidation, share exchange, business
combination or other similar transaction; (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of 20% or more of its
consolidated assets in a single transaction or series of transactions; or (iii)
any tender offer or exchange offer for 20% or more of the outstanding shares of
its capital stock or the filing of a registration statement under the Securities
Act in connection therewith.
"Application for Conversion" shall mean the application submitted by
Keystone to the FDIC and the Department pursuant to the regulations of the FDIC
and the Banking Law and the regulations, if any, promulgated thereunder in
connection with the Conversion, as amended and supplemented.
"Bank" shall mean Nazareth National Bank and Trust Company, a national
bank and a wholly owned subsidiary of the Company.
"Banking Law" shall mean the Pennsylvania Banking Code of 1965, as
amended.
"Bank Merger" shall have the meaning set forth in Section 5.12 hereof.
"Bank Merger Agreement" shall have the meaning set forth in Section
5.12 hereof.
"BCL" shall mean the Business Corporation Law of the Commonwealth of
Pennsylvania, as amended.
"BIF" shall mean the Bank Insurance Fund administered by the FDIC or
any successor thereto.
"Certificate of Merger" shall have the meaning set forth in Section 2.2
hereof.
"Closing" shall have the meaning set forth in Section 2.2 hereof.
"Closing Date" shall have the meaning set forth in Section 2.2 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" shall mean the Securities and Exchange Commission.
"Company Affiliate" shall mean any person who is deemed, for purposes
of Rule 145 under the Securities Act, to be an "affiliate" of the Company.
"Company Common Stock" shall mean the common stock, par value $5.00 per
share, of the Company.
"Company Employee Plans" shall have the meaning set forth in Section
3.14(a) hereof.
"Company Financial Statements" shall mean (i) the consolidated
statements of financial condition (including related notes and schedules, if
any) of the Company as of December 31, 2001 and 2000 and the consolidated
statements of income, changes in shareholders' equity and cash flows (including
related notes and schedules, if any) of the Company for each of the three years
ended December 31, 2001, 2000 and 1999 as filed by the Company in its Securities
Documents, and (ii) the consolidated statements of financial condition of the
Company (including related notes and schedules, if any) and the consolidated
statements of income, changes in shareholders' equity and cash flows (including
related notes and schedules, if any) of the Company included in the Securities
Documents filed by the Company with respect to the periods ended subsequent to
December 31, 2001.
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"Company Options" shall mean options to purchase shares of Company
Common Stock granted pursuant to the Company Option Plans.
"Company Option Plan" shall mean each of the following stock option
plans of the Company, as amended and as in effect as of the date hereof: the
First Colonial Group, Inc. Stock Option Plan, the 1994 Stock Option Plan for
Non-Employee Directors, the 1996 Stock Option Plan and the 2001 Stock Option
Plan (collectively, the "Company Option Plans").
"Company Preferred Stock" shall mean the shares of preferred stock, par
value $5.00 per share, of the Company.
"Conversion" shall mean (i) the amendment of Keystone's Articles of
Incorporation to authorize the issuance of capital stock and otherwise to
conform to the requirements of a stock savings bank chartered under the laws of
the Commonwealth of Pennsylvania, (ii) the issuance of Holding Company Common
Stock to eligible depositors of Keystone and others in connection therewith and
(iii) the purchase by the Holding Company of all of the capital stock of
Keystone to be sold by Keystone in connection with its conversion from mutual to
stock form.
"Department" means the Pennsylvania Department of Banking.
"DOJ" shall mean the United States Department of Justice.
"Effective Time" shall mean the date and time specified pursuant to
Section 2.2 hereof as the effective time of the Merger.
"Environmental Claim" means any written notice from any Governmental
Entity or third party alleging potential liability (including, without
limitation, potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries or penalties) arising out of, based on, or resulting from the
presence, or release into the environment, of any Materials of Environmental
Concern.
"Environmental Laws" means any federal, state or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization, approval,
consent, order, judgment, decree, injunction or agreement with any governmental
entity relating to (i) the protection, preservation or restoration of the
environment (including, without limitation, air, water vapor, surface water,
groundwater, drinking water supply, surface soil, subsurface soil, plant and
animal life or any other natural resource), and/or (ii) the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Materials of Environment Concern.
The term Environmental Law includes without limitation (i) the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
Section 9601, et seq; the Resource Conservation and Recovery Act, as amended, 42
U.S.C. Section 6901, et seq; the Clean Air Act, as amended, 42 U.S.C. Section
7401, et seq; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
Section 1251, et seq; the Toxic Substances Control Act, as amended, 15 U.S.C.
Section 9601, et seq; the Emergency Planning and Community Right to Know Act, 42
U.S.C. Section 1101, et seq; the Safe Drinking Water Act, 42 U.S.C. Section
300f, et seq; and all comparable state and local laws, and (ii) any common law
(including without limitation common law that may impose strict liability) that
may impose liability or obligations for injuries or damages due to, or
threatened as a result of, the presence of or exposure to any Materials of
Environmental Concern.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
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"ESOP" shall mean the Bank's Employee Stock Ownership Plan and Trust.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Ratio" shall have the meaning set forth in Section 2.3
hereof.
"FDIA" shall mean the Federal Deposit Insurance Act, as amended.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor thereto.
"FHLB" shall mean Federal Home Loan Bank.
"Final Purchase Price" shall mean the price per share at which Holding
Company Common Stock is ultimately sold by the Holding Company to eligible
depositors of Keystone and others in connection with the Conversion.
"FRB" shall mean the Board of Governors of the Federal Reserve System.
"Form S-1" shall mean the registration statement on Form S-1 (or on any
successor or other appropriate form) to be filed by the Holding Company in
connection with the issuance of shares of Holding Company Common Stock in
connection with the Merger and the Conversion, as amended and supplemented.
"Governmental Entity" shall mean any federal or state court,
administrative agency or commission or other governmental authority or
instrumentality.
"Holding Company" shall mean KNBT Bancorp, Inc., a business corporation
which shall be organized by Keystone under the BCL for the purposes of becoming
the holding company of Keystone upon consummation of the Conversion and
acquiring the Company pursuant to the terms of this Agreement.
"Holding Company Common Stock" shall mean the common stock, par value
$.01 per share, of the Holding Company.
"Holding Company Preferred Stock" shall mean the preferred stock, par
value $.01 per share, of the Holding Company.
"Keystone Employee Plans" shall have the meaning set forth in Section
4.14(a) hereof.
"Keystone Financial Statements" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any) of
Keystone as of December 31, 2001 and 2000 and the consolidated statements of
income, retained income and cash flows (including related notes and schedules,
if any) of Keystone for each of the three years ended December 31, 2001, 2000
and 1999, and (ii) the consolidated statements of condition of Keystone
(including related notes and schedules, if any) and the consolidated statements
of income, retained income and cash flows (including related notes and
schedules, if any) of Keystone with respect to the periods ended subsequent to
December 31, 2001.
"Material Adverse Effect" shall mean, (i) with respect to the Company,
any effect that is material and adverse to the financial condition, results of
operations or business of the Company and its Subsidiaries taken as whole, (ii)
with respect to Keystone, any effect that is material and adverse to the
financial condition, results of operations, or business of Keystone and its
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Subsidiaries taken as a whole, or (iii) materially impairs the ability of either
the Company or the Bank, on the one hand, or the Holding Company or Keystone, on
the other hand, to consummate the Merger or any of the other transactions
contemplated by this Agreement, provided, however, that Material Adverse Effect
shall not be deemed to include the impact of (a) changes in laws and regulations
or interpretations thereof that are generally applicable to the banking or
savings industries, (b) changes in generally accepted accounting principles or
regulatory accounting requirements that are generally applicable to the banking
or savings industries, (c) expenses incurred in connection with the transactions
contemplated hereby, (d) actions or omissions of a party (or any of its
Subsidiaries) taken with the prior written consent of the other party or parties
in contemplation of the transactions contemplated hereby or (e) changes
attributable to or resulting from changes in general economic conditions,
including changes in the prevailing level of interest rates.
"Materials of Environmental Concern" means pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products and any other
materials regulated under Environmental Laws.
"Merger" shall have the meaning set forth in Section 2.1(a) hereof.
"Merger Consideration" shall have the meaning set forth in Section
2.3(iii) hereof.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"OCC" shall mean the Office of the Comptroller of the Currency of the
U.S. Department of the Treasury or any successor thereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Party" shall mean either Keystone or the Company, whichever is
applicable.
"Person" shall mean any individual, bank, corporation, partnership,
association, joint stock company, business trust, limited liability company or
unincorporated organization.
"Plan of Conversion" shall mean the written plan adopted by the Board
of Trustees of Keystone pursuant to which the Conversion will be
effected.
"Previously Disclosed" shall mean disclosed (i) in a disclosure
schedule dated the date hereof delivered from the disclosing party to the other
party specifically referring to the appropriate section of this Agreement and
describing in reasonable detail the matters contained therein, or (ii) a
supplement to the disclosure schedule dated after the date hereof from the
disclosing party specifically referring to this Agreement and describing in
reasonable detail the matters contained therein and delivered by the other party
pursuant to Section 5.16 hereof.
"Prospectus" shall mean the prospectus to be delivered to (i)
shareholders of the Company in connection with the offering of Holding Company
Common Stock in connection with the Merger pursuant to this Agreement and (ii)
eligible depositors of Keystone and others in connection with the offering of
Holding Company Common Stock in connection with the Conversion, as amended and
supplemented.
"Proxy Statements" shall mean the proxy statements to be delivered to
(i) shareholders of the Company in connection with the solicitation of their
approval of this Agreement and the transactions contemplated hereby and (ii)
depositors of Keystone in connection with the
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solicitation of their approval of the Conversion and the transactions
contemplated thereby, as amended and supplemented.
"Rights" shall mean warrants, options, rights, convertible securities
and other arrangements or commitments which obligate an entity to issue or
dispose of any of its capital stock or other ownership interests.
"SAIF" shall mean the Savings Association Insurance Fund administered
by the FDIC or any successor thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Documents" shall mean all reports, offering circulars,
proxy statements, registration statements and all similar documents filed, or
required to be filed, pursuant to the Securities Laws.
"Securities Laws" shall mean the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of 1940,
as amended; the Trust Indenture Act of 1939, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Subsidiary" and "Significant Subsidiary" shall have the meanings set
forth in Rule 1-02 of Regulation S-X of the Commission.
"Surviving Bank" shall have the meaning set forth in section 5.12
hereof.
Other terms used herein are defined in the preamble and elsewhere in
this Agreement.
ARTICLE II
THE MERGER
2.1 The Merger
(a) Subject to the terms and conditions of this Agreement, at the
Effective Time (as defined in Section 2.2 hereof), the Company shall be merged
with and into the Holding Company (the "Merger") in accordance with the
provisions of Section 1921 et. seq. of the BCL. The Holding Company shall be the
surviving corporation (hereinafter sometimes called the "Surviving Corporation")
of the Merger, and shall continue its corporate existence under the laws of the
Commonwealth of Pennsylvania. The name of the Surviving Corporation shall be
"KNBT Bancorp, Inc." as stated in the Articles of Incorporation of the Holding
Company immediately prior to the Effective Time. Upon consummation of the
Merger, the separate corporate existence of the Company shall terminate.
(b) From and after the Effective Time, the Merger shall have the
effects set forth in Section 1929 of the BCL.
(c) The Articles of Incorporation and Bylaws of the Holding
Company in the forms attached hereto as Appendices C and D hereto, respectively,
as in effect as of the Effective Time, shall be the Articles of Incorporation
and Bylaws of the Surviving Corporation, respectively, until altered, amended or
repealed in accordance with their terms and applicable law.
(d) The authorized capital stock of the Surviving Corporation
shall be as stated in the
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Articles of Incorporation of the Holding Company immediately prior to the
Effective Time.
(e) The directors and officers of the Holding Company immediately
prior to the Effective Time, together with the directors and officers elected
pursuant to Section 5.10 hereof, shall be the directors and officers of the
Surviving Corporation, each to hold office in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation as well as the provisions
hereof.
2.2 Effective Time; Closing
The Merger shall become effective upon the occurrence of the filing of
articles of merger with the Secretary of State of the Commonwealth of
Pennsylvania (the "Articles of Merger"), unless a later date and time is
specified as the effective time in such Articles of Merger (the "Effective
Time"). The Effective Time will occur simultaneously with, or immediately after,
the consummation of the Conversion. A closing (the "Closing") shall take place
immediately prior to the Effective Time at 10:00 a.m., Eastern Time, following
the satisfaction or waiver, to the extent permitted hereunder, of the conditions
to the consummation of the Merger specified in Article VI of this Agreement
(other than the delivery of certificates, opinions and other instruments and
documents to be delivered at the Closing) (the "Closing Date"), at such place
and at such time as the parties may mutually agree upon. At the Closing, there
shall be delivered to Keystone and the Holding Company, on the one hand, and the
Company, on the other hand, the opinions, certificates and other documents
required to be delivered under Article VI hereof.
2.3 Treatment of Capital Stock
Subject to the provisions of this Agreement, at the Effective Time,
automatically by virtue of the Merger and without any action on the part of any
shareholder:
(i) each share of Holding Company Common Stock issued and
outstanding immediately prior to the Effective Time (consisting of
shares issued or to be issued by the Holding Company in connection with
the Conversion or contributed to the charitable foundation to be
established by Keystone in connection with the Conversion) shall be
unchanged and shall remain issued and outstanding;
(ii) each share of Company Common Stock owned by the
Company (including treasury shares) or the Holding Company or any of
their respective Subsidiaries (other than shares held in a fiduciary
capacity for the benefit of third parties or as a result of debts
previously contracted) shall be cancelled and retired and shall not
represent capital stock of the Holding Company and shall not be
exchanged for shares of Holding Company Common Stock, or other
consideration; and
(iii) each share of Company Common Stock which under the
terms of Section 2.7 hereof is to be converted into the right to
receive shares of Holding Company Common Stock shall, subject to
Section 2.5 hereof, be converted into and become the right to receive a
number of shares of Holding Company Common Stock equal to the quotient
(calculated to the nearest one-thousandth) determined by dividing
$37.00 by the Final Purchase Price (or 3.7 shares assuming an Final
Purchase Price of $10.00 per share) (the "Merger Consideration" or the
"Exchange Ratio").
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2.4 Shareholder Rights; Stock Transfers
At the Effective Time, holders of Company Common Stock shall cease to
be and shall have no rights as shareholders of the Company, other than to
receive the consideration provided under Sections 2.3 and 2.5 hereof. After the
Effective Time, there shall be no transfers on the stock transfers books of the
Company or the Surviving Corporation of shares of Company Common Stock and if
certificates evidencing such shares are presented for transfer after the
Effective Time, they shall be cancelled against delivery of certificates for
whole shares of Holding Company Common Stock (plus cash in lieu of any
fractional share interest) as herein provided.
2.5 Fractional Shares
Notwithstanding any other provision hereof, no fractional shares of
Holding Company Common Stock shall be issued to holders of Company Common Stock.
In lieu thereof, each holder of shares of Company Common Stock entitled to a
fraction of a share of Holding Company Common Stock shall, at the time of
surrender of the certificate or certificates representing such holder's shares,
receive an amount of cash (without interest) equal to the amount determined by
multiplying the fractional share interest to which such holder would otherwise
be entitled by the Final Purchase Price. No such holder shall be entitled to
dividends, voting rights or any other rights in respect of fractional shares.
2.6 Options
(a) At the Effective Time, each Company Option which is then
outstanding, whether or not exercisable, shall cease to represent a right to
acquire shares of Company Common Stock and shall be converted automatically into
a right to purchase shares of Holding Company Common Stock, and the Holding
Company shall assume each Company Option, in accordance with the terms of the
applicable Company Option Plan and stock option or other agreement by which it
is evidenced, except that from and after the Effective Time, (i) the Holding
Company and either its Board of Directors or a committee consisting solely of
two or more Non-Employee Directors, as defined in Rule 16b-3(b)(3) under the
Exchange Act, shall be substituted for the Company and the committee of the
Company's Board of Directors (including, if applicable, the entire Board of
Directors of the Company) administering such Company Option Plan, (ii) the
number of shares of Holding Company Common Stock subject to such Company Option
shall be equal to the number of shares of Company Common Stock subject to such
Company Option immediately prior to the Effective Time multiplied by the
Exchange Ratio, provided that any fractional shares of Holding Company Common
Stock resulting from such multiplication shall be rounded up or down, as the
case may be, to the nearest whole share, and (iii) the per share exercise price
under each such Company Option shall be adjusted by dividing the per share
exercise price under each such Company Option by the Exchange Ratio, provided
that such exercise price shall be rounded up to the nearest cent.
Notwithstanding clauses (ii) and (iii) of the preceding sentence, each Company
Option which is an "incentive stock option" shall be adjusted as required by
Section 424 of the Code, and the regulations promulgated thereunder, so as not
to constitute a modification, extension or renewal of the option within the
meaning of Section 424(h) of the Code. The Holding Company and the Company shall
take all necessary steps to effect the foregoing provisions of this Section
2.6(a).
(b) As soon as practicable after the Effective Time, the Holding
Company shall deliver to each participant in each Company Option Plan an
appropriate notice setting forth such participant's rights pursuant thereto and
the grants subject to such Company Option Plan shall
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continue in effect on the same terms and conditions, including without
limitation the duration thereof, subject to the adjustments required by Section
2.6(a) hereof after giving effect to the Merger. Within 30 days after the
Effective Time, the Holding Company shall file a registration statement on Form
S-8 (or any successor or other appropriate forms), with respect to the shares of
Holding Company Common Stock subject to such Company Options and shall maintain
the current status of the prospectus or prospectuses contained therein for so
long as such options remain outstanding.
2.7 Exchange Procedures
(a) The Holding Company shall designate an exchange agent,
reasonably acceptable to the Company, to act as agent (the "Exchange Agent") for
purposes of conducting the exchange procedure as described herein. No later than
seven business days following the Effective Time, the Holding Company shall
cause the Exchange Agent to mail or make available to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented issued and outstanding shares of Company Common Stock (i) a notice
and letter of transmittal (which shall specify that delivery shall be effected
and risk of loss and title to the certificates theretofore representing shares
of Company Common Stock shall pass only upon proper delivery of such
certificates to the Exchange Agent) advising such holder of the effectiveness of
the Merger and the procedure for surrendering to the Exchange Agent such
certificate or certificates which immediately prior to the Effective Time
represented issued and outstanding shares of Company Common Stock in exchange
for the consideration set forth in Section 2.3 hereof deliverable in respect
thereof pursuant to this Agreement.
(b) At the Effective Time, the Holding Company shall issue to the
Exchange Agent the number of shares of Holding Company Common Stock issuable in
the Merger, which shall be held by the Exchange Agent in trust for the holders
of Company Common Stock, as well as an amount of cash sufficient to fund any
amounts to be distributed pursuant to Section 2.5 hereof. The Exchange Agent
shall promptly distribute Holding Company Common Stock (and cash in lieu of
fractional shares pursuant to Section 2.5 hereof) as provided herein. The
Exchange Agent shall not be entitled to vote or exercise any rights of ownership
with respect to the shares of Holding Company Common Stock held by it from time
to time hereunder, except that it shall receive and hold all dividends or other
distributions paid or distributed with respect to such shares for the account of
the persons entitled thereto.
(c) Each holder of an outstanding certificate or certificates
which prior thereto represented shares of Company Common Stock who surrenders
such certificate or certificates to the Exchange Agent will, upon acceptance
thereof by the Exchange Agent, be entitled to a certificate or certificates
representing the number of full shares of Holding Company Common Stock into
which the aggregate number of shares of company Common Stock previously
represented by such certificate or certificates surrendered shall have been
converted pursuant to this Agreement and any other distribution theretofore paid
with respect to Holding Company Common Stock issuable in the Merger, in each
case without interest. The Exchange Agent shall accept such certificates upon
compliance with such reasonable terms and conditions as the Exchange Agent may
impose to effect an orderly exchange thereof in accordance with normal exchange
practices. Each outstanding certificate which prior to the Effective Time
represented Company Common Stock and which is not surrendered to the Exchange
Agent in accordance with the procedures provided for herein shall, except as
otherwise herein provided, until duly surrendered to the Exchange Agent be
deemed to evidence ownership of the number of shares of Holding Company Common
Stock into which the aggregate number of shares of Company Common Stock
previously represented by such certificate shall have been converted pursuant to
the terms of this Agreement. After the Effective Time, there shall be no further
transfer on the
9
records of the Company of certificates representing shares of Company Common
Stock and if such certificates are presented to the Company for transfer, they
shall be cancelled against delivery of certificates for Holding Company Common
Stock and cash as hereinabove provided. No dividends which have been declared
will be remitted to any person entitled to receive shares of Holding Company
Common Stock under this Section 2.7 until such person surrenders the certificate
or certificates representing Company Common Stock, at which time such dividends
shall be remitted to such person, without interest.
(d) The Holding Company shall not be obligated to deliver a
certificate or certificates representing shares of Holding Company Common Stock
to which a holder of Company Common Stock would otherwise be entitled as a
result of the Merger until such holder surrenders the certificate or
certificates representing the shares of Company Common Stock for exchange as
provided in this Section 2.7, or, in default thereof, an appropriate affidavit
of loss and indemnity agreement and/or a bond as may be required in each case by
the Holding Company. If any certificates evidencing shares of Holding Company
Common Stock are to be issued in a name other than that in which the certificate
evidencing Company Common Stock surrendered in exchange therefor is registered,
it shall be a condition of the issuance thereof that the certificate so
surrendered shall be properly endorsed or accompanied by an executed form of
assignment separate from the certificate and otherwise in proper form for
transfer and that the person requesting such exchange pay to the Exchange Agent
any transfer or other tax required by reason of the issuance of a certificate
for shares of Holding Company Common Stock in any name other than that of the
registered holder of the certificate surrendered or otherwise establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(e) Any portion of the shares of Holding Company Common Stock
delivered to the Exchange Agent by the Holding Company pursuant to Section
2.7(b) that remains unclaimed by the shareholders of Company for six months
after the Effective Time shall be delivered by the Exchange Agent to the Holding
Company. Any shareholders of the Company who have not theretofore complied with
Section 2.7(c) shall thereafter look only to the Holding Company for the
consideration deliverable in respect of each share of Company Common Stock such
shareholder holds as determined pursuant to this Agreement without any interest
thereon. If outstanding certificates for shares of Company Common Stock are not
surrendered or the payment for them is not claimed prior to the date on which
such shares of Holding Company Common Stock or cash would otherwise escheat to
or become the property of any governmental unit or agency, the unclaimed items
shall, to the extent permitted by abandoned property and any other applicable
law, become the property of the Holding Company (and to the extent not in its
possession shall be delivered to it), free and clear of all claims or interest
of any person previously entitled to such property. Neither the Exchange Agent
nor any party to this Agreement shall be liable to any holder of Company Common
Stock represented by any certificate for any consideration paid to a public
official pursuant to applicable abandoned property, escheat or similar laws. The
Holding Company and the Exchange Agent shall be entitled to rely upon the stock
transfer books of the Company to establish the identity of those persons
entitled to receive consideration specified in this Agreement, which books shall
be conclusive with respect thereto. In the event of a dispute with respect to
ownership of stock represented by any certificate, the Holding Company and the
Exchange Agent shall be entitled to deposit any consideration represented
thereby in escrow with an independent third party and thereafter be relieved
with respect to any claims thereto.
2.8 Additional Actions
If, at any time after the Effective Time, the Surviving Corporation
shall consider that any further assignments or assurances in law or any other
acts are necessary or desirable to (i) vest,
10
perfect or confirm, of record or otherwise, in the Surviving Corporation its
right, title or interest in, to or under any of the rights, properties or assets
of the Company acquired or to be acquired by the Surviving Corporation as a
result of, or in connection with, the Merger, or (ii) otherwise carry out the
purposes of this Agreement, the Company and its proper officers and directors
shall be deemed to have granted to the Surviving Corporation an irrevocable
power of attorney to execute and deliver all such proper deeds, assignments and
assurances in law and to do all acts necessary or proper to vest, perfect or
confirm title to and possession of such rights, properties or assets in the
Surviving Corporation and otherwise to carry out the purposes of this Agreement;
and the proper officers and directors of the Surviving Corporation are fully
authorized in the name of the Company or otherwise to take any and all such
action.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Keystone as follows, except as
Previously Disclosed:
3.1 Capital Structure
The authorized capital stock of the Company consists of 10,000,000
shares of Company Common Stock and 500,000 shares of Company Preferred Stock. As
of the date hereof, 2,224,239 shares of Company Common Stock are issued and
outstanding, no shares of Company Common Stock are held in treasury, and no
shares of Company Preferred Stock are issued and outstanding. All outstanding
shares of Company Common Stock have been duly authorized and validly issued and
are fully paid and nonassessable, and none of the outstanding shares of Company
Common Stock has been issued in violation of the preemptive rights of any
person, firm or entity. Except for Company Options to acquire not more than
304,600 shares of Company Common Stock as of the date hereof and grants of
restricted shares of Company Common Stock covering 8,400 shares, a schedule of
each of which has been Previously Disclosed, there are no Rights authorized,
issued or outstanding with respect to the capital stock of the Company.
3.2 Organization, Standing and Authority of the Company
The Company is a corporation duly organized and, validly existing under
the laws of the Commonwealth of Pennsylvania with full corporate power and
authority to own or lease all of its properties and assets and to carry on its
business as now conducted and the Company is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which its ownership or
leasing of property or the conduct of its business requires such licensing or
qualification, except where the failure to be so licensed, qualified or in good
standing would not have a Material Adverse Effect on the Company. The Company is
duly registered as a bank holding company under the Bank Holding Company Act of
1956, as amended, and the regulations of the FRB thereunder. The Company has
heretofore delivered to Keystone true and complete copies of the Articles of
Incorporation and Bylaws of the Company as in effect as of the date hereof.
3.3 Ownership of the Company Subsidiaries
The Company has Previously Disclosed the name, jurisdiction of
incorporation and percentage ownership of each direct or indirect Company
Subsidiary and identified the Bank as its only Significant Subsidiary. Except
for (x) capital stock of the Company Subsidiaries, (y)
11
securities and other interests held in a fiduciary capacity and beneficially
owned by third parties or taken in consideration of debts previously contracted
and (z) securities and other interests which are Previously Disclosed, the
Company does not own or have the right to acquire, directly or indirectly, any
outstanding capital stock or other voting securities or ownership interests of
any corporation, bank, savings association, savings bank, partnership, joint
venture or other organization, other than investment securities representing not
more than 5% of any entity. The outstanding shares of capital stock or other
ownership interests of each Company Subsidiary have been duly authorized and
validly issued, are fully paid and nonassessable, and are directly or indirectly
owned by the Company free and clear of all liens, claims, encumbrances, charges,
pledges, restrictions or rights of third parties of any kind whatsoever. No
rights are authorized, issued or outstanding with respect to the capital stock
or other ownership interests of the Company Subsidiaries and there are no
agreements, understandings or commitments relating to the right of the Company
to vote or to dispose of such capital stock or other ownership interests.
3.4 Organization, Standing and Authority of the Company Subsidiaries
Each of the Company Subsidiaries is a corporation or partnership duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized. Each of the Company Subsidiaries (i) has
full power and authority to own or lease all of its properties and assets and to
carry on its business as now conducted, and (ii) is duly licensed or qualified
to do business and is in good standing in each jurisdiction in which its
ownership or leasing of property or the conduct of its business requires such
qualification, except where the failure to be so licensed, qualified or in good
standing would not have a Material Adverse Effect on the Company. The deposit
accounts of the Bank are insured by the BIF to the maximum extent permitted by
the FDIA and the Bank has paid all deposit insurance premiums and assessments
required by the FDIA and the regulations thereunder. The Company has heretofore
delivered or made available to Keystone true and complete copies of the Articles
of Association and Bylaws of the Bank as in effect as of the date hereof.
3.5 Authorized and Effective Agreement
(a) The Company has all requisite corporate power and authority to
enter into this Agreement and (subject to receipt of all necessary governmental
approvals and the approval of the Company's shareholders of this Agreement) to
perform all of its obligations under this Agreement. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action in
respect thereof on the part of the Company, except for the approval of this
Agreement by the Company's shareholders. This Agreement has been duly and
validly executed and delivered by the Company and, assuming due authorization,
execution and delivery by Keystone, constitutes a legal, valid and binding
obligation of the Company which is enforceable against the Company in accordance
with its terms, subject, as to enforceability, to bankruptcy, insolvency and
other laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(b) Neither the execution and delivery of this Agreement, nor
consummation of the transactions contemplated hereby (including the Merger and
the Bank Merger), nor compliance by the Company with any of the provisions
hereof (i) does or will conflict with or result in a breach of any provisions of
the Articles of Incorporation or Bylaws of the Company or the equivalent
documents of any Company Subsidiary, (ii) violate, conflict with or result in a
breach of any term, condition or provision of, or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a default)
under, or give rise to any right of termination, cancellation or acceleration
with respect to, or result in the creation of any lien, charge or
12
encumbrance upon any property or asset of the Company or a Company Subsidiary
pursuant to, any material note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which the Company
or a Company Subsidiary is a party, or by which any of their respective
properties or assets may be bound or affected, or (iii) subject to receipt of
all required governmental and shareholder approvals, violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company or a
Company Subsidiary.
(c) To the best knowledge of the Company, except for (i) the
filing of applications with and the approvals of the FDIC, FRB and the
Department, (ii) the filing and effectiveness of the Form S-1 and the Proxy
Statement relating to the meeting of shareholders of the Company to be held
pursuant to Section 5.2 hereof with the Commission, (iii) the approval of this
Agreement by the requisite vote of the shareholders of the Company, (iv) the
filing of the Articles of Merger with the Secretary of Commonwealth of
Pennsylvania pursuant to the BCL in connection with the Merger and, (v) the
filing of Articles of Merger with the Department and a notice with the OCC in
connection with the Bank Merger, (vi) review of the Merger by the DOJ under
federal antitrust laws, no consents or approvals of or filings or registrations
with any Governmental Entity or with any third party are necessary on the part
of the Company or the Bank in connection with (x) the execution and delivery by
the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby and (y) the execution and delivery by the Bank
of the Bank Merger Agreement and the consummation of the transactions
contemplated thereby.
(d) As of the date hereof, neither the Company nor the Bank is
aware of any reasons relating to the Company or the Bank (including without
limitation Community Reinvestment Act compliance) why all consents and approvals
shall not be procured from all regulatory agencies having jurisdiction over the
transactions contemplated by this Agreement and the Bank Merger Agreement as
shall be necessary for (i) consummation of the transactions contemplated by this
Agreement and the Bank Merger Agreement and (ii) the continuation by the Holding
Company and Keystone after the Effective Time of the business of the Company and
the Bank, respectively, as such business is carried on immediately prior to the
Effective Time, free of any conditions or requirements which in the reasonable
opinion of the Company could have a Material Adverse Effect on the Company or
the Bank or materially impair the value of the Company and the Bank to the
Holding Company and Keystone, respectively.
3.6 Securities Documents and Regulatory Reports
(a) Since January 1, 2000, the Company has timely filed with the
Commission and the NASD all Securities Documents required by the Securities Laws
and such Securities Documents complied in all material respects with the
Securities Laws and did not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(b) Since January 1, 2000, each of the Company and the Bank has
duly filed with the OCC and any other applicable federal or state banking
authority, as the case may be, the reports required to be filed under applicable
laws and regulations and such reports were in all material respects complete and
accurate and in compliance with the requirements of applicable laws and
regulations. In connection with the most recent examinations of the Company and
the Bank by the OCC, neither the Company nor the Bank was required to correct or
change any action, procedure or proceeding which the Company or the Bank
believes has not been corrected or changed as required as of the date hereof and
which could have a Material Adverse Effect on the Company.
13
3.7 Financial Statements
(a) The Company has previously delivered or made available to
Keystone accurate and complete copies of the Company Financial Statements which,
in the case of the consolidated statements of financial condition of the Company
as of December 31, 2001 and 2000 and the consolidated statements of income,
changes in shareholders' equity and cash flows for each of the three years ended
December 31, 2001, 2000 and 1999, are accompanied by the audit reports of Xxxxx
Xxxxxxxx LLP, independent certified public accountants with respect to the
Company. The Company Financial Statements referred to herein, as well as the
Company Financial Statements to be delivered pursuant to Section 5.8 hereof,
fairly present or will fairly present, as the case may be, the consolidated
financial condition of the Company as of the respective dates set forth therein,
and the consolidated income, changes in stockholders' equity and cash flows of
the Company for the respective periods or as of the respective dates set forth
therein.
(b) Each of the Company Financial Statements referred to in
Section 3.7(a) has been or will be, as the case may be, prepared in accordance
with generally accepted accounting principles consistently applied during the
periods involved, except as stated therein. The audits of the Company and the
Company Subsidiaries have been conducted in all material respects in accordance
with generally accepted auditing standards. The books and records of the Company
and the Company Subsidiaries are being maintained in material compliance with
applicable legal and accounting requirements, and such books and records
accurately reflect in all material respects all dealings and transactions in
respect of the business, assets, liabilities and affairs of the Company and its
Subsidiaries.
(c) Except as Previously Disclosed or to the extent (i) reflected,
disclosed or provided for in the consolidated statement of financial condition
of the Company as of December 31, 2001 (including related notes), (ii) of
liabilities incurred since December 31, 2001 in the ordinary course of business
and (iii) of liabilities incurred in connection with consummation of the
transactions contemplated by this Agreement, neither the Company nor any Company
Subsidiary has any liabilities, whether absolute, accrued, contingent or
otherwise, material to the financial condition, results of operations or
business of the Company on a consolidated basis.
3.8 Material Adverse Change
Since September 30, 2002, (i) the Company and its Subsidiaries have
conducted their respective businesses in the ordinary and usual course
(excluding the incurrence of expenses in connection with this Agreement and the
transactions contemplated hereby) and (ii) no event has occurred or circumstance
arisen that, individually or in the aggregate, has had or is reasonably likely
to have a Material Adverse Effect on the Company.
3.9 Environmental Matters
(a) To the best of the Company's knowledge, the Company and its
Subsidiaries are in compliance with all Environmental Laws, except for any
violations of any Environmental Law which would not, singly or in the aggregate,
have a Material Adverse Effect on the Company. Neither the Company nor a Company
Subsidiary has received any communication alleging that the Company or a Company
Subsidiary is not in such compliance and, to the best knowledge of the Company,
there are no present circumstances that would prevent or interfere with the
continuation of such compliance.
(b) To the best of the Company's knowledge, none of the properties
owned, leased or operated by the Company or a Company Subsidiary has been or is
in violation of or liable under
14
any Environmental Law, except any such violations or liabilities which would not
singly or in the aggregate have a Material Adverse Effect on the Company.
(c) To the best of the Company's knowledge, there are no past or
present actions, activities, circumstances, conditions, events or incidents that
could reasonably form the basis of any Environmental Claim or other claim or
action or governmental investigation that could result in the imposition of any
liability arising under any Environmental Law against the Company or a Company
Subsidiary or against any person or entity whose liability for any Environmental
Claim the Company or a Company Subsidiary has or may have retained or assumed
either contractually or by operation of law, except such which would not have a
Material Adverse Effect on the Company.
(d) The Company has not conducted any environmental studies during
the past five years with respect to any properties owned by it or a Company
Subsidiary as of the date hereof.
3.10 Tax Matters
(a) The Company and its Subsidiaries have timely filed all
federal, state and local (and, if applicable, foreign) income, franchise, bank,
excise, real property, personal property and other tax returns required by
applicable law to be filed by them (including, without limitation, estimated tax
returns, income tax returns, information returns and withholding and employment
tax returns) and have paid, or where payment is not required to have been made,
have set up an adequate reserve or accrual for the payment of, all taxes
required to be paid in respect of the periods covered by such returns and, as of
the Effective Time, will have paid, or where payment is not required to have
been made, will have set up an adequate reserve or accrual for the payment of,
all material taxes for any subsequent periods ending on or prior to the
Effective Time. Neither the Company nor a Company Subsidiary will have any
material liability for any such taxes in excess of the amounts so paid or
reserves or accruals so established.
(b) All federal, state and local (and, if applicable, foreign)
income, franchise, bank, excise, real property, personal property and other tax
returns filed by the Company and its Subsidiaries are complete and accurate in
all material respects. Neither the Company nor any Company Subsidiary is
delinquent in the payment of any tax, assessment or governmental charge or has
requested any extension of time within which to file any tax returns in respect
of any fiscal year or portion thereof which have not since been filed. The
federal, state and local income tax returns of the Company and its Subsidiaries
have been examined by the applicable tax authorities (or are closed to
examination due to the expiration of the applicable statute of limitations) and
no deficiencies for any tax, assessment or governmental charge have been
proposed, asserted or assessed (tentatively or otherwise) against the Company or
a Company Subsidiary as a result of such examinations or otherwise which have
not been settled and paid. There are currently no agreements in effect with
respect to the Company or a Company Subsidiary to extend the period of
limitations for the assessment or collection of any tax. As of the date hereof,
no audit, examination or deficiency or refund litigation with respect to such
return is pending or, to the best of the Company's knowledge, threatened.
(c) Neither the Company nor any Company Subsidiary (i) is a party
to any agreement providing for the allocation or sharing of taxes, (ii) is
required to include in income any adjustment pursuant to Section 481(a) of the
Code by reason of a voluntary change in accounting method initiated by the
Company or a Company Subsidiary (nor does the Company have any knowledge that
the Internal Revenue Service has proposed any such adjustment or change of
accounting method) or (iii) has filed a consent pursuant to Section 341(f) of
the Code or agreed to have Section 341(f)(2) of the Code apply.
15
3.11 Legal Proceedings
There are no actions, suits, claims, governmental investigations or
proceedings instituted, pending or, to the best knowledge of the Company,
threatened against the Company or a Company Subsidiary or against any asset,
interest or right of the Company or a Company Subsidiary, or against any
officer, director or employee of any of them that in any such case, if decided
adversely, would have a Material Adverse Effect on the Company. Neither the
Company nor any Company Subsidiary is a party to any order, judgment or decree
which has or could reasonably be expected to have a Material Adverse Effect on
the Company.
3.12 Compliance with Laws
(a) Each of the Company and the Company Subsidiaries has all
permits, licenses, certificates of authority, orders and approvals of, and has
made all filings, applications and registrations with, federal, state, local and
foreign governmental or regulatory bodies that are required in order to permit
it to carry on its business as it is presently being conducted and the absence
of which could reasonably be expected to have a Material Adverse Effect on the
Company; all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect; and to the best knowledge of the
Company, no suspension or cancellation of any of the same is threatened.
(b) Neither the Company nor any Company Subsidiary is in violation
of its respective Articles of Incorporation, Articles of Association or Bylaws,
or of any applicable federal, state or local law or ordinance or any order, rule
or regulation of any federal, state, local or other governmental agency or body
(including, without limitation, all banking (including all regulatory capital
requirements), securities, municipal securities, safety, health, environmental,
zoning, anti-discrimination, antitrust, and wage and hour laws, ordinances,
orders, rules and regulations), or in default with respect to any order, writ,
injunction or decree of any court, or in default under any order, license,
regulation or demand of any governmental agency, any of which violations or
defaults could reasonably be expected to have a Material Adverse Effect on the
Company; and neither the Company nor any Company Subsidiary has received any
notice or communication from any federal, state or local governmental authority
asserting that the Company or any Company Subsidiary is in violation of any of
the foregoing which could reasonably be expected to have a Material Adverse
Effect on the Company. Neither the Company nor a Company Subsidiary is subject
to any regulatory or supervisory cease and desist order, agreement, written
directive, memorandum of understanding or written commitment (other than those
of general applicability to national banks or holding companies thereof issued
by governmental authorities), and neither of them has received any written
communication requesting that it enter into any of the foregoing.
3.13 Certain Information
None of the information relating to the Company and its Subsidiaries
supplied or to be supplied by them for inclusion in (i) the Form S-1, including
the Prospectus, at the time the Form S-1 and any amendment thereto becomes
effective under the Securities Act, will contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, (ii) the Application for Conversion, at the time the Application for
Conversion and any amendment thereto is not objected to by the FDIC under the
regulations thereof and approved by the Department under the Banking Law and the
regulations, if any, promulgated thereunder, will contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading,
16
and (iii) the Proxy Statements, as of the date or dates such Proxy Statements
are mailed to shareholders of the Company and depositors of Keystone and up to
and including the date or dates of the meetings of shareholders and depositors
to which such Proxy Statements relate, will contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, provided that information as of a later date shall be deemed to
modify information as of an earlier date.
3.14 Employee Benefit Plans
(a) The Company has Previously Disclosed all stock option,
restricted stock, employee stock purchase and stock bonus plans, qualified
pension or profit-sharing plans, any deferred compensation, consultant, bonus or
group insurance contract or any other incentive, health and welfare or employee
benefit plan or agreement maintained for the benefit of employees or former
employees of the Company or any Company Subsidiary (the "Company Employee
Plans"), whether written or oral, and the Company has previously furnished or
made available to Keystone accurate and complete copies of the same together
with, in the case of qualified plans, (i) the most recent actuarial and
financial reports prepared with respect thereto, (ii) the most recent annual
reports filed with any governmental agency with respect thereto, and (iii) all
rulings and determination letters and any open requests for rulings or letters
that pertain thereto.
(b) None of the Company, any Company Subsidiary, any Company
Employee Plan constituting an "employee pension benefit plan" within the meaning
of Section 3(2) of ERISA ("Company Pension Plan") or, to the best of the
Company's knowledge, any fiduciary of such Company Pension Plan, has incurred
any material liability to the PBGC or the Internal Revenue Service with respect
to any such Company Pension Plan. To the best of the Company's knowledge, no
reportable event under Section 4043(b) of ERISA has occurred with respect to any
Company Pension Plan.
(c) Except as Previously Disclosed, neither the Company nor any
Company Subsidiary participates in or has incurred any liability under Section
4201 of ERISA for a complete or partial withdrawal from a multiemployer plan (as
such term is defined in ERISA).
(d) A favorable determination letter has been issued by the
Internal Revenue Service with respect to each Company Pension Plan which is
intended to qualify under Section 401 of the Code to the effect that such
Company Pension Plan is qualified under Section 401 of the Code, and the trust
associated with such Company Pension Plan is tax exempt under Section 501 of the
Code. No such letter has been revoked or, to the best of the Company's
knowledge, is threatened to be revoked, and the Company does not know of any
ground on which such revocation may be based. Neither the Company nor any
Company Subsidiary has any liability under any such Company Pension Plan that is
not reflected on the consolidated statement of financial condition of the
Company at December 31, 2001 or the notes thereto included in the Company
Financial Statements, other than liabilities incurred in the ordinary course of
business in connection therewith subsequent to the date thereof.
(e) To the best of the Company's knowledge, no prohibited
transaction (which shall mean any transaction prohibited by Section 406 of ERISA
and not exempt under Section 408 of ERISA or Section 4975 of the Code) has
occurred with respect to any Company Employee Plan which would result in the
imposition, directly or indirectly, of a material excise tax under Section 4975
of the Code or otherwise have a Material Adverse Effect on the Company.
17
(f) Full payment has been made (or proper accruals have been
established) of all contributions which are required for periods prior to the
date hereof, and full payment will be so made (or proper accruals will be so
established) of all contributions which are required for periods after the date
hereof and prior to the Effective Time, under the terms of each Company Employee
Plan or ERISA; no accumulated funding deficiency (as defined in Section 302 of
ERISA or Section 412 of the Code), whether or not waived, exists with respect to
any Company Pension Plan, and there is no "unfunded current liability" (as
defined in Section 412 of the Code) with respect to any Company Pension Plan.
(g) To the best of the Company's knowledge, the Company Employee
Plans have been operated in compliance in all material respects with the
applicable provisions of ERISA, the Code, all regulations, rulings and
announcements promulgated or issued thereunder and all other applicable
governmental laws and regulations.
(h) There are no pending or, to the best knowledge of the Company,
threatened claims (other than routine claims for benefits) by, on behalf of or
against any of the Company Employee Plans or any trust related thereto or any
fiduciary thereof.
3.15 Certain Contracts
(a) Neither the Company nor a Company Subsidiary is a party to, is
bound or affected by, receives, or is obligated to pay, benefits under (i) any
agreement, arrangement or commitment, including without limitation any
agreement, indenture or other instrument, relating to the borrowing of money by
the Company or a Company Subsidiary (other than in the case of the Bank
deposits, FHLB advances, federal funds purchased and securities sold under
agreements to repurchase in the ordinary course of business) or the guarantee by
the Company or a Company Subsidiary of any obligation, other than by the Bank in
the ordinary course of its banking business, (ii) any agreement, arrangement or
commitment relating to the employment of a consultant or the employment,
election or retention in office of any present or former director, officer or
employee of the Company or a Company Subsidiary, (iii) any agreement,
arrangement or understanding pursuant to which any payment (whether of severance
pay or otherwise) became or may become due to any director, officer or employee
of the Company or a Company Subsidiary upon execution of this Agreement or upon
or following consummation of the transactions contemplated by this Agreement
(either alone or in connection with the occurrence of any additional acts or
events); (iv) any agreement, arrangement or understanding pursuant to which the
Company or a Company Subsidiary is obligated to indemnify any director, officer,
employee or agent of the Company or a Company Subsidiary; (v) any agreement,
arrangement or understanding to which the Company or a Company Subsidiary is a
party or by which any of the same is bound which limits the freedom of the
Company or a Company Subsidiary to compete in any line of business or with any
person, (vi) any assistance agreement, supervisory agreement, memorandum of
understanding, consent order, cease and desist order or condition of any
regulatory order or decree with or by the Department, the FDIC, the FRB, the OCC
or any other regulatory agency, or (vii) any other agreement, arrangement or
understanding which would be required to be filed as an exhibit to the Company's
Annual Report on Form 10-K under the Exchange Act and which has not been so
filed.
(b) Neither the Company nor any Company Subsidiary is in default
or in non-compliance, which default or non-compliance could reasonably be
expected to have a Material Adverse Effect on the Company, under any contract,
agreement, commitment, arrangement, lease, insurance policy or other instrument
to which it is a party or by which its assets, business or operations may be
bound or affected, whether entered into in the ordinary course of business
18
or otherwise and whether written or oral, and there has not occurred any event
that with the lapse of time or the giving of notice, or both, would constitute
such a default or non-compliance.
3.16 Brokers and Finders
Except for The Xxxxxxxx Group, Inc., neither the Company nor any
Company Subsidiary nor any of their respective directors, officers or employees,
has employed any broker or finder or incurred any liability for any broker or
finder fees or commissions in connection with the transactions contemplated
hereby.
3.17 Insurance
Each of the Company and its Subsidiaries is insured for reasonable
amounts with financially sound and reputable insurance companies against such
risks as companies engaged in a similar business would, in accordance with good
business practice, customarily be insured and has maintained all insurance
required by applicable laws and regulations.
3.18 Properties
All real and personal property owned by the Company or its Subsidiaries
or presently used by any of them in its respective business is in an adequate
condition (ordinary wear and tear excepted) and is sufficient to carry on the
business of the Company and its Subsidiaries in the ordinary course of business
consistent with their past practices. The Company has good and marketable title
free and clear of all liens, encumbrances, charges, defaults or equities (other
than equities of redemption under applicable foreclosure laws) to all of its
material properties and assets, real and personal, except (i) liens for current
taxes not yet due or payable (ii) pledges to secure deposits and other liens
incurred in the ordinary course of its banking business, (iii) such
imperfections of title, easements and encumbrances, if any, as are not material
in character, amount or extent and (iv) as reflected on the consolidated
statement of condition of the Company as of September 30, 2002 included in the
Company Financial Statements. All real and personal property which is material
to the Company's business on a consolidated basis and leased or licensed by the
Company or a Company Subsidiary is held pursuant to leases or licenses which are
valid and enforceable in accordance with their respective terms and such leases
will not terminate or lapse prior to the Effective Time.
3.19 Labor
No work stoppage involving the Company or a Company Subsidiary is
pending or, to the best knowledge of the Company, threatened. Neither the
Company nor a Company Subsidiary is involved in or affected by, or, to the best
knowledge of the Company, threatened with any labor dispute, arbitration,
lawsuit or administrative proceeding involving the employees of the Company or a
Company Subsidiary which could have a Material Adverse Effect on the Company.
Employees of the Company and the Company Subsidiaries are not represented by any
labor union nor are any collective bargaining agreements otherwise in effect
with respect to such employees, and to the best of the Company's knowledge,
there have been no efforts to unionize or organize any employees of the Company
or any of the Company Subsidiaries during the past five years.
3.20 Affiliates
The Company has Previously Disclosed to Keystone a schedule of each
person that, to the best of its knowledge, is deemed to be a Company Affiliate.
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3.21 Allowance for Loan Losses
The allowance for possible loan losses reflected on the Company's
consolidated statements of financial condition included in the September 30,
2002 Company Financial Statements is, or will be in the case of subsequently
delivered Company Financial Statements, as the case may be, in the opinion of
the Company's management, adequate in all material respects as of their
respective dates under the requirements of generally accepted accounting
principles to provide for reasonably anticipated losses on outstanding loans net
of recoveries. The other real estate owned reflected on the consolidated
statements of financial condition included in the September 30, 2002 Company
Financial Statements is, or will be in the case of subsequently delivered
Company Financial Statements, as the case may be, carried at the lower of cost
or fair value, less estimated costs to sell, as required by generally accepted
accounting principles.
3.22 Fairness Opinion
The Company has received the opinion from The Xxxxxxxx Group, Inc. to
the effect that, as of the date hereof, the consideration to be received by
shareholders of the Company pursuant to this Agreement is fair, from a financial
point of view, to such shareholders.
3.23 Disclosures
None of the representations and warranties of the Company or any of the
written information or documents furnished or to be furnished by the Company to
Keystone in connection with or pursuant to this Agreement or the consummation of
the transactions contemplated hereby, when considered as a whole, contains or
will contain any untrue statement of a material fact, or omits or will omit to
state any material fact required to be stated or necessary to make any such
information or document, in light of the circumstances, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF KEYSTONE
Keystone represents and warrants to the Company as follows, except as
Previously Disclosed:
4.1 Capital Structure
As of the date hereof, Keystone is a Pennsylvania-chartered savings
bank in mutual form and, as a result, has no authorized or outstanding capital
stock. Upon consummation of the Conversion, Keystone will be a duly organized
Pennsylvania-chartered savings bank in stock form and will have authorized
capital stock as set forth in its Articles of Incorporation.
4.2 Organization, Standing and Authority of Keystone and the Holding
Company
(a) Keystone is a savings bank duly organized, validly existing
and in good standing under the laws of the Commonwealth of Pennsylvania, with
full corporate power and authority to own or lease all of its properties and
assets and to carry on its business as now conducted, and Keystone is duly
licensed or qualified to do business and is in good standing in each
jurisdiction in which its ownership or leasing of property or the conduct of its
business requires such licensing or qualification, except where the failure to
be so licensed, qualified or in good standing would not have a Material Adverse
Effect on Keystone. The deposit accounts of Keystone are
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insured by the SAIF to the maximum extent permitted by the FDIA, and Keystone
has paid all deposit insurance premiums and assessments required by the FDIA and
the regulations thereunder. Keystone has heretofore delivered to the Company
true and complete copies of the Articles of Incorporation and Bylaws of Keystone
as in effect as of the date hereof.
(b) At the Effective Time, the Holding Company will be duly
organized, and validly existing under the BCL.
4.3 Ownership of the Keystone Subsidiaries
Keystone has Previously Disclosed the name, jurisdiction of
incorporation and percentage ownership of each direct or indirect Keystone
Subsidiary. Except for (x) capital stock of the Keystone Subsidiaries, (y)
securities and other interests held in a fiduciary capacity and beneficially
owned by third parties or taken in consideration of debts previously contracted
and (z) securities and other interests which are Previously Disclosed, Keystone
does not own or have the right to acquire, directly or indirectly, any
outstanding capital stock or other voting securities or ownership interests of
any corporation, bank, savings association, savings bank, partnership, joint
venture or other organization, other than investment securities representing not
more than 5% of any entity. The outstanding shares of capital stock or other
ownership interests of each Keystone Subsidiary have been duly authorized and
validly issued, are fully paid and nonassessable, and are directly owned by
Keystone free and clear of all liens, claims, encumbrances, charges, pledges,
restrictions or rights of third parties of any kind whatsoever.
4.4 Organization, Standing and Authority of the Keystone Subsidiaries
Each of the Keystone Subsidiaries is a corporation or partnership duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized. Each of the Keystone Subsidiaries (i) has
full power and authority to own or lease all of its properties and assets and to
carry on its business as now conducted, and (ii) is duly licensed or qualified
to do business and is in good standing in each jurisdiction in which its
ownership or leasing of property or the conduct of its business requires such
qualification, except where the failure to be so licensed, qualified or in good
standing would not have a Material Adverse Effect on Keystone.
4.5 Authorized and Effective Agreement
(a) Keystone has, and following its organization the Holding
Company will have, all requisite corporate power and authority to enter into
this Agreement and (subject to receipt of all necessary governmental approvals
and the approval of the Conversion by the depositors of Keystone) to perform all
of its respective obligations under this Agreement. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action in
respect thereof on the part of Keystone, except for the approval of the
Conversion by the depositors of Keystone, and promptly following organization of
the Holding Company and its execution and delivery of an instrument of accession
pursuant to Section 5.13 of this Agreement, the execution and delivery of this
Agreement by the Holding Company and the consummation of the transactions
contemplated hereby will have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of the Holding Company. This
Agreement has been duly and validly executed and delivered by Keystone and upon
its execution and delivery of an instrument of accession pursuant to Section
5.13 of this Agreement, this Agreement will have been duly and validly executed
and delivered by the Holding Company and, assuming due authorization, execution
and delivery by the Company, this Agreement constitutes or will constitute, as
applicable, a legal, valid and binding obligation of Keystone and the Holding
Company which is enforceable against
21
Keystone and the Holding Company in accordance with its terms, subject, as to
enforceability, to bankruptcy, insolvency and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(b) Neither the execution and delivery of this Agreement, nor
consummation of the transactions contemplated hereby (including the Merger and
the Bank Merger) nor compliance by Keystone or upon its organization the Holding
Company with any of the provisions hereof (i) does or will conflict with or
result in a breach of any provisions of the Articles of Incorporation, Bylaws or
similar organizational documents of Keystone, any Keystone Subsidiary or upon
its organization the Holding Company, except that Keystone will not be
authorized to issue capital stock until consummation of the Conversion, (ii)
violate, conflict with or result in a breach of any term, condition or provision
of, or constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or give rise to any right of
termination, cancellation or acceleration with respect to, or result in the
creation of any lien, charge or encumbrance upon any property or asset of
Keystone, any Keystone Subsidiary or upon its organization the Holding Company
pursuant to, any material note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which Keystone,
any Keystone Subsidiary or upon its organization the Holding Company is a party,
or by which any of their respective properties or assets may be bound or
affected, or (iii) subject to receipt of all required governmental and depositor
approvals, violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Keystone, any Keystone Subsidiary or upon its
organization the Holding Company.
(c) To the best knowledge of Keystone, except for (i) the filing
of applications and notices with and the approvals of the Department, the FDIC
and the FRB, (ii) the filing and effectiveness of the Form S-1 with the
Commission, (iii) compliance with applicable state securities or "blue sky" laws
and the NASD Bylaws in connection with the issuance of Holding Company Common
Stock in connection with the Merger and the Conversion, (iv) the approval of the
Conversion by the requisite vote of the depositors of Keystone, (v) the filing
of the Articles of Merger with the Secretary of State of the Commonwealth of
Pennsylvania pursuant to the BCL in connection with the Merger, (vi) review of
the Merger by the DOJ under federal antitrust laws and (vii) the filing of
Articles of Merger with the Department and notice with the OCC in connection
with the Bank Merger, no consents or approvals of or filings or registrations
with any Governmental Entity or with any third party are necessary on the part
of Keystone or the Holding Company in connection with the (x) execution and
delivery by Keystone of this Agreement, the execution and delivery by the
Holding Company of an instrument of accession to this Agreement pursuant to
Section 5.13 hereof and the consummation by Keystone and the Holding Company of
the transactions contemplated hereby and (y) the execution and delivery by
Keystone of the Bank Merger Agreement and the consummation by Keystone of the
transactions contemplated thereby.
(d) As of the date hereof, Keystone is not aware of any reasons
relating to Keystone (including without limitation Community Reinvestment Act
compliance) why all consents and approvals shall not be procured from all
regulatory agencies having jurisdiction over the transactions contemplated by
this Agreement and the Bank Merger Agreement as shall be necessary for (i)
consummation of the transactions contemplated by this Agreement and the Bank
Merger Agreement and (ii) the continuation by the Holding Company and Keystone
after the Effective Time of the business of each of the Company and the Bank as
such business is carried on immediately prior to the Effective Time, free of any
conditions or requirements which in the reasonable opinion of Keystone could
have a Material Adverse Effect on the Holding Company or Keystone or materially
impair the value of the Company and the Bank to the Holding Company and
Keystone, respectively.
22
4.6 Regulatory Reports
Since January 1, 2000, Keystone has duly filed with the FDIC and the
Department the reports required to be filed under applicable laws and
regulations and such reports were in all material respects complete and accurate
and in compliance with the requirements of applicable laws and regulations. In
connection with the most recent examinations of Keystone by the FDIC and the
Department, Keystone was not required to correct or change any action, procedure
or proceeding which Keystone believes has not been corrected or changed as
required as of the date hereof and which could have a Material Adverse Effect on
Keystone.
4.7 Financial Statements
(a) Keystone has previously delivered or made available to the
Company accurate and complete copies of the Keystone Financial Statements, which
are accompanied by the audit reports of Xxxxx Xxxxxxxx LLP, independent
certified public accountants with respect to Keystone. The Keystone Financial
Statements, as well as the Keystone Financial Statements to be delivered
pursuant to Section 5.8 hereof, fairly present or will fairly present, as the
case may be, the consolidated financial condition of Keystone as of the
respective dates set forth therein, and the consolidated income, changes in
retained income and cash flows of Keystone for the respective periods or as of
the respective dates set forth therein.
(b) Each of the Keystone Financial Statements and the Keystone
Financial Statements to be delivered pursuant to Section 5.8 hereof has been or
will be, as the case may be, prepared in accordance with generally accepted
accounting principles consistently applied during the periods involved, except
as stated therein. The audits of Keystone and the Keystone Subsidiaries have
been conducted in all material respects in accordance with generally accepted
auditing standards. The books and records of Keystone and the Keystone
Subsidiaries are being maintained in material compliance with applicable legal
and accounting requirements, and all such books and records accurately reflect
in all material respects all dealings and transactions in respect of the
business, assets, liabilities and affairs of Keystone and the Keystone
Subsidiaries.
(c) Except as Previously Disclosed or to the extent (i) reflected,
disclosed or provided for in the consolidated statement of condition of Keystone
as of December 31, 2001 (including related notes), (ii) of liabilities incurred
since December 31, 2001 in the ordinary course of business and (iii) of
liabilities in connection with consummation of the transactions contemplated by
this Agreement, neither Keystone nor any Keystone Subsidiary has any
liabilities, whether absolute, accrued, contingent or otherwise, material to the
financial condition, results of operations or business of Keystone on a
consolidated basis.
4.8 Material Adverse Change
Since September 30, 2002, (i) Keystone and its Subsidiaries have
conducted their respective businesses in the ordinary and usual course
(excluding the incurrence of expenses in connection with the Conversion and with
this Agreement and the transactions contemplated hereby) and (ii) no event has
occurred or circumstance arisen that, individually or in the aggregate, has had
or is reasonably likely to have a Material Adverse Effect on Keystone.
4.9 Environmental Matters
(a) To the best of Keystone's knowledge, Keystone and its
Subsidiaries are in compliance with all Environmental Laws, except for any
violations of any Environmental Law which would not, singly or in the aggregate,
have a Material Adverse Effect on Keystone.
23
Neither Keystone nor any of its Subsidiaries have received any communication
alleging that Keystone or any of is Subsidiaries is not in such compliance and,
to the best knowledge of Keystone, there are no present circumstances that would
prevent or interfere with the continuation of such compliance.
(b) To the best of Keystone's knowledge, none of the properties
owned, leased or operated by Keystone or any of its Subsidiaries has been or is
in violation of or liable under any Environmental Law, except any such
violations or liabilities which would not singly or in the aggregate have a
Material Adverse Effect on Keystone.
(c) To the best of Keystone's knowledge, there are no past or
present actions, activities, circumstances, conditions, events or incidents that
could reasonably form the basis of any Environmental Claim or other claim or
action or governmental investigation that could result in the imposition of any
liability arising under any Environmental Law against Keystone or any of its
Subsidiaries or against any person or entity whose liability for any
Environmental Claim Keystone and its Keystone Subsidiaries has or may have
retained or assumed either contractually or by operation of law, except such
which would not have a Material Adverse Effect on Keystone.
(d) Keystone has not conducted any environmental studies during
the past five years with respect to any properties owned by it or a Keystone
Subsidiary as of the date hereof.
4.10 Tax Matters
(a) Keystone and its Subsidiaries have timely filed all federal,
state and local (and, if applicable, foreign) income, franchise, bank, excise,
real property, personal property and other tax returns required by applicable
law to be filed by them (including, without limitation, estimated tax returns,
income tax returns, information returns and withholding and employment tax
returns) and have paid, or where payment is not required to have been made, have
set up an adequate reserve or accrual for the payment of, all taxes required to
be paid in respect of the periods covered by such returns and, as of the
Effective Time, will have paid, or where payment is not required to have been
made, will have set up an adequate reserve or accrual for the payment of, all
material taxes for any subsequent periods ending on or prior to the Effective
Time. Neither Keystone nor any of its Subsidiaries will have any material
liability for any such taxes in excess of the amounts so paid or reserves or
accruals so established.
(b) All federal, state and local (and, if applicable, foreign)
income, franchise, bank, excise, real property, personal property and other tax
returns filed by Keystone and its Subsidiaries are complete and accurate in all
material respects. Neither Keystone nor any of its Subsidiaries is delinquent in
the payment of any tax, assessment or governmental charge or has requested any
extension of time within which to file any tax returns in respect of any fiscal
year or portion thereof which have not since been filed. The federal, state and
local income tax returns of Keystone and its Subsidiaries have been examined by
the applicable tax authorities (or are closed to examination due to the
expiration of the applicable statute of limitations) and no deficiencies for any
tax, assessment or governmental charge have been proposed, asserted or assessed
(tentatively or otherwise) against Keystone or any of its Subsidiaries as a
result of such examinations or otherwise which have not been settled and paid.
There are currently no agreements in effect with respect to Keystone or any of
its Subsidiaries to extend the period of limitations for the assessment or
collection of any tax. As of the date hereof, no audit, examination or
deficiency or refund litigation with respect to such return is pending or, to
the best of Keystone's knowledge, threatened.
24
(c) Neither Keystone nor any of its Subsidiaries (i) is a party to
any agreement providing for the allocation or sharing of taxes, (ii) is required
to include in income any adjustment pursuant to Section 481(a) of the Code by
reason of a voluntary change in accounting method initiated by Keystone or any
of its Subsidiaries (nor does Keystone have any knowledge that the Internal
Revenue Service has proposed any such adjustment or change of accounting method)
or (iii) has filed a consent pursuant to Section 341(f) of the Code or agreed to
have Section 341(f)(2) of the Code apply.
4.11 Legal Proceedings
There are no actions, suits, claims, governmental investigations or
proceedings instituted, pending or to the best knowledge of Keystone threatened
against Keystone or any of its Subsidiaries or against any asset, interest or
right of Keystone or any of its Subsidiaries, or against any officer, director
or employee of them that in any such case, if decided adversely, would have a
Material Adverse Effect on Keystone. Neither Keystone nor any Keystone
Subsidiary is a party to any order, judgment or decree which has or could
reasonably be expected to have a Material Adverse Effect on Keystone.
4.12 Compliance with Laws
(a) Keystone and each of its Subsidiaries have all permits,
licenses, certificates of authority, orders and approvals of, and has made all
filings, applications and registrations with, federal, state, local and foreign
governmental or regulatory bodies that are required in order to permit them to
carry on their business as it is presently being conducted and the absence of
which could reasonably be expected to have a Material Adverse Effect on
Keystone; all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect; and to the best knowledge of Keystone,
no suspension or cancellation of any of the same is threatened.
(b) Neither Keystone nor any of its Subsidiaries is in violation
of its Articles of Incorporation or Bylaws, or of any applicable federal, state
or local law or ordinance or any order, rule or regulation of any federal,
state, local or other governmental agency or body (including, without
limitation, all banking (including all regulatory capital requirements),
securities, municipal securities, safety, health, environmental, zoning,
anti-discrimination, antitrust, and wage and hour laws, ordinances, orders,
rules and regulations), or in default with respect to any order, writ,
injunction or decree of any court, or in default under any order, license,
regulation or demand of any governmental agency, any of which violations or
defaults could reasonably be expected to have a Material Adverse Effect on
Keystone; and neither Keystone nor any of its Subsidiaries has received any
notice or communication from any federal, state or local governmental authority
asserting that Keystone or any of its Subsidiaries is in violation of any of the
foregoing which could reasonably be expected to have a Material Adverse Effect
on Keystone. Neither Keystone nor any of its Subsidiaries is subject to any
regulatory or supervisory cease and desist order, agreement, written directive,
memorandum of understanding or written commitment (other than those of general
applicability to all savings banks, savings associations or holding companies
thereof, as applicable, issued by governmental authorities), and neither
Keystone nor any of its Subsidiaries have received any written communication
requesting that it enter into any of the foregoing.
4.13 Certain Information
None of the information relating to Keystone or the Holding Company
supplied by them and to be included in (i) the Form S-1, including the
Prospectus, will, at the time the Form S-1 and any amendment thereto becomes
effective under the Securities Act, contain any untrue
25
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, (ii) the Application for Conversion, at the time the
Application for Conversion and any amendment thereto is not objected to by the
FDIC under the regulations thereof and approved by the Department under the
Banking Law and the regulations, if any, promulgated thereunder, will contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (iii) the Proxy Statements, as of the
date or dates such Proxy Statements are mailed to shareholders of the Company
and depositors of Keystone and up to and including the date or dates of the
meetings of shareholders and depositors to which such Proxy Statements relate,
will contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, provided that information as of a
later date shall be deemed to modify information as of an earlier date.
4.14 Employee Benefit Plans
(a) Keystone has Previously Disclosed all qualified pension or
profit-sharing plans, any deferred compensation, consultant, bonus or group
insurance contract or any other incentive, health and welfare or employee
benefit plan or agreement maintained for the benefit of employees or former
employees of Keystone or any of its Subsidiaries(the "Keystone Employee Plans"),
whether written or oral.
(b) None of Keystone, any of its Subsidiaries, any Keystone
Employee Plan constituting an "employee pension benefit plan" within the meaning
of Section 3(2) of ERISA ("Keystone Pension Plan") or to the best of Keystone's
knowledge, any fiduciary of a Keystone Pension Plan has incurred any material
liability to the PBGC or the Internal Revenue Service with respect to any such
Keystone Pension Plan. To the best of Keystone's knowledge, no reportable event
under Section 4043(b) of ERISA has occurred with respect to any Keystone Pension
Plan.
(c) Except as Previously Disclosed, neither Keystone nor any of
its Subsidiaries participate in and have not incurred any liability under
Section 4201 of ERISA for a complete or partial withdrawal from a multi-employer
plan (as such term is defined in ERISA).
(d) A favorable determination letter has been issued by the
Internal Revenue Service with respect to each Keystone Pension Plan which is
intended to qualify under Section 401 of the Code to the effect that the
Keystone Pension Plan is qualified under Section 401 of the Code and the trust
associated with such Keystone Pension Plan is tax exempt under Section 501 of
the Code. No such letter has been revoked or, to the best of Keystone's
knowledge, is threatened to be revoked and Keystone does not know of any ground
on which such revocation may be based. Neither Keystone nor any of its
Subsidiaries have any liability under any such Keystone Pension Plan that is not
reflected on the statement of condition of Keystone at December 31, 2001 or the
notes thereto included in the Keystone Financial Statements, other than
liabilities incurred in the ordinary course of business in connection therewith
subsequent to the date thereof.
(e) To the best of Keystone's knowledge, no prohibited transaction
(which shall mean any transaction prohibited by Section 406 of ERISA and not
exempt under Section 408 of ERISA or Section 4975 of the Code) has occurred with
respect to any Employee Plan which would result in the imposition, directly or
indirectly, of a material excise tax under Section 4975 of the Code or otherwise
have a Material Adverse Effect on Keystone.
26
(f) Except as Previously Disclosed, full payment has been made (or
proper accruals have been established) of all contributions which are required
for periods prior to the date hereof, and full payment will be so made (or
proper accruals will be so established) of all contributions which are required
for periods after the date hereof and prior to the Effective Time, under the
terms of each Keystone Employee Plan or ERISA; no accumulated funding deficiency
(as defined in Section 302 of ERISA or Section 412 of the Code), whether or not
waived, exists with respect to any Keystone Pension Plan, and there is no
"unfunded current liability" (as defined in Section 412 of the Code) with
respect to any Keystone Pension Plan. Keystone has not incurred and does not
expect to incur any withdrawal liability with respect to a multiemployer plan
under Subtitle of Title IV of ERISA.
(g) To the best of Keystone's knowledge, the Keystone Employee
Plans have been operated in compliance in all material respects with the
applicable provisions of ERISA, the Code, all regulations, rulings and
announcements promulgated or issued thereunder and all other applicable
governmental laws and regulations.
(h) There are no pending or, to the best knowledge of Keystone,
threatened claims (other than routine claims for benefits) by, on behalf of or
against any of the Keystone Employee Plans or any trust related thereto or any
fiduciary thereof.
4.15 Certain Contracts
(a) Neither Keystone nor a Keystone Subsidiary is a party to, is
bound or affected by, receives, or is obligated to pay, benefits under (i) any
agreement, arrangement or commitment, including without limitation any
agreement, indenture or other instrument, relating to the borrowing of money by
Keystone or a Keystone Subsidiary (other than in the case of Keystone deposits,
FHLB advances, federal funds purchased and securities sold under agreements to
repurchase in the ordinary course of business) or the guarantee by Keystone or a
Keystone Subsidiary of any obligation, other than by Keystone in the ordinary
course of its banking business, (ii) any agreement, arrangement or commitment
relating to the employment of a consultant or the employment, election or
retention in office of any present or former director, officer or employee of
Keystone or a Keystone Subsidiary, (iii) any agreement, arrangement or
understanding pursuant to which any payment (whether of severance pay or
otherwise) became or may become due to any director, officer or employee of
Keystone or a Keystone Subsidiary upon execution of this Agreement or upon or
following consummation of the transactions contemplated by this Agreement
(either alone or in connection with the occurrence of any additional acts or
events); (iv) any agreement, arrangement or understanding pursuant to which
Keystone or a Keystone Subsidiary is obligated to indemnify any director,
officer, employee or agent of Keystone or a Keystone Subsidiary; (v) any
agreement, arrangement or understanding to which Keystone or a Keystone
Subsidiary is a party or by which any of the same is bound which limits the
freedom of Keystone or a Keystone Subsidiary to compete in any line of business
or with any person, (vi) any assistance agreement, supervisory agreement,
memorandum of understanding, consent order, cease and desist order or condition
of any regulatory order or decree with or by the Department, the FDIC or any
other regulatory agency, or (vii) any other agreement, arrangement or
understanding which would be required to be filed as an exhibit to the Annual
Report on Form 10-K under the Exchange Act (assuming Keystone was required to
file such reports under the Exchange Act).
(b) Neither Keystone nor any of its Subsidiaries is in default or
in non-compliance, which default or non-compliance could reasonably be expected
to have a Material Adverse Effect on Keystone, under any contract, agreement,
commitment, arrangement, lease, insurance policy or other instrument to which it
is a party or by which its assets, business or operations may be
27
bound or affected, whether entered into in the ordinary course of business or
otherwise and whether written or oral, and there has not occurred any event that
with the lapse of time or the giving of notice, or both, would constitute such a
default or non-compliance.
4.16 Brokers and Finders
Except Sandler X'Xxxxx & Partners, L.P., none of Keystone, any of its
Subsidiaries, the Holding Company, nor any of their respective directors,
officers or employees, has employed any broker or finder or incurred any
liability for any broker or finder fees or commissions in connection with the
transactions contemplated hereby.
4.17 Insurance
Keystone and each of its Subsidiaries is insured for reasonable amounts
with financially sound and reputable insurance companies against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured and has maintained all insurance required by
applicable laws and regulations.
4.18 Properties
All real and personal property owned by Keystone or any of its
Subsidiaries or presently used by them in their business is in an adequate
condition (ordinary wear and tear excepted) and is sufficient to carry on their
respective business in the ordinary course of business consistent with its past
practices. Keystone has good and marketable title free and clear of all liens,
encumbrances, charges, defaults or equities (other than equities of redemption
under applicable foreclosure laws) to all of its material properties and assets,
real and personal, except (i) liens for current taxes not yet due or payable
(ii) pledges to secure deposits and other liens incurred in the ordinary course
of its banking business, (iii) such imperfections of title, easements and
encumbrances, if any, as are not material in character, amount or extent and
(iv) as reflected on the statement of condition of Keystone as of September 30,
2002 included in the Keystone Financial Statements. All real and personal
property which is material to Keystone's business on a consolidated basis and
leased or licensed by Keystone or any of its Subsidiaries is held pursuant to
leases or licenses which are valid and enforceable in accordance with their
respective terms and such leases will not terminate or lapse prior to the
Effective Time.
4.19 Labor
No work stoppage involving Keystone or any of its Subsidiaries is
pending or, to the best knowledge of Keystone, threatened. Neither Keystone nor
any of its Subsidiaries is involved in or to the best knowledge of Keystone
threatened with or affected by, any labor dispute, arbitration, lawsuit or
administrative proceeding involving the employees of Keystone or any of its
Subsidiaries which could have a Material Adverse Effect on Keystone. Employees
of Keystone and its Subsidiaries are not represented by any labor union nor are
any collective bargaining agreements otherwise in effect with respect to such
employees, and to the best of Keystone's knowledge, there have been no efforts
to unionize or organize any employees of Keystone or any of its Subsidiaries
during the past five years.
4.20 Ownership of Company Common Stock
As of the date hereof, neither Keystone nor, to its best knowledge, any
of its affiliates or associates (as such terms are defined under the Exchange
Act), (i) beneficially own, directly or indirectly, or (ii) are parties to any
agreement, arrangement or understanding for the purpose of
28
acquiring, holding, voting or disposing of, in each case, shares of Company
Common Stock which in the aggregate represent 5% or more of the outstanding
shares of Company Common Stock (other than shares held in a fiduciary capacity
and beneficially owned by third parties or shares taken in consideration of
debts previously contracted).
4.21 Allowance for Losses on Loans
The allowance for losses on loans reflected on Keystone's consolidated
statements of condition included in the September 30, 2002 Keystone Financial
Statements is, or will be in the case of subsequently delivered Keystone
Financial Statements, as the case may be, in the opinion of Keystone's
management adequate in all material respects as of their respective dates under
the requirements of generally accepted accounting principles to provide for
reasonably anticipated losses on outstanding loans, net of recoveries. The other
real estate owned reflected on the consolidated statements of condition included
in the September 30, 2002 Keystone Financial Statements is, or will be in the
case of subsequently delivered Keystone Financial Statements, as the case may
be, carried at the lower of cost or fair value, less estimated costs to sell, as
required by generally accepted accounting principles.
4.22 Disclosures
None of the representations and warranties of Keystone or any of the
written information or documents furnished or to be furnished by Keystone to the
Company in connection with or pursuant to this Agreement or the consummation of
the transactions contemplated hereby, when considered as a whole, contains or
will contain any untrue statement of a material fact, or omits or will omit to
state any material fact required to be stated or necessary to make any such
information or document, in light of the circumstances, not misleading.
ARTICLE V
COVENANTS
5.1 Reasonable Best Efforts
Subject to the terms and conditions of this Agreement, each of the
Company and Keystone (i) shall use its reasonable best efforts in good faith to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary or advisable under applicable laws and regulations so as to
permit and otherwise enable consummation of the Conversion and the Merger as
promptly as reasonably practicable, it being the intention of the parties that
the Conversion be consummated prior to the Effective Time and that the Bank
Merger be consummated immediately following the Effective Time in accordance
with Section 5.12 hereof, and (ii) shall cooperate fully with each other to that
end.
5.2 Shareholder and Depositor Meetings
(a) The Company agrees to take, in accordance with applicable law
and the Company's Articles and Incorporation and Bylaws, all action necessary to
convene as soon as reasonably practicable an annual or a special meeting of its
shareholders to consider and vote upon the approval of this Agreement and any
other matters required to be approved by the Company's shareholders for
consummation of the transactions contemplated hereby (including any adjournment
or postponement, the "Company Meeting"). Except with the prior approval of
Keystone, no other matters shall be submitted for the approval of the Company
shareholders at the Company Meeting except, if the Company Meeting is an annual
meeting, the election of directors. The Company Board shall at all times prior
to and during such meeting recommend
29
such approval and shall take all reasonable lawful action to solicit such
approval by its shareholders; provided that nothing in this Agreement shall
prevent the Company Board from withholding, withdrawing, amending or modifying
its recommendation if the Company Board determines, after consultation with its
outside counsel, that such action is legally required in order for the directors
to comply with their fiduciary duties to the Company shareholders under
applicable law; provided, further, that Section 5.7 shall govern the
withholding, withdrawing, amending or modifying of such recommendation in the
circumstances described therein.
(b) Keystone shall take all action necessary to properly call and
convene a meeting of its depositors as soon as practicable to consider and vote
upon the Conversion and the transactions contemplated thereby after receipt of
all necessary approvals or non-objections of Governmental Entities. The Board of
Directors of Keystone will recommend that the depositors of Keystone approve the
Conversion and the transactions contemplated thereby.
5.3 Regulatory Matters
(a) The parties hereto shall promptly cooperate with each other in
the preparation and filing of the Form S-1, the Prospectus and the Proxy
Statements relating to the meetings of shareholders of the Company and the
depositors of Keystone to be held pursuant to Section 5.2 of this Agreement (the
"Company Proxy Statement" and the "Keystone Proxy Statement," respectively)
under the Securities Act and the Exchange Act, as applicable. Each of the
Holding Company, Keystone and the Company shall use its reasonable best efforts
to have the Form S-1 declared effective under the Securities Act, the Company
Proxy Statement approved for mailing in definitive form under the Exchange Act
and the Keystone Proxy Statement approved or not objected to under the Banking
Law and the regulations of the FDIC as promptly as practicable after such
filings and the receipt of non-objection or approval, as the case may be, of the
Application for Conversion by the FDIC and the Department, and thereafter the
Company shall promptly mail to its shareholders the Company Proxy Statement and
Prospectus and Keystone shall promptly mail, or in the case of the Prospectus
make available, to its depositors the Keystone Proxy Statement and the
Prospectus. The Holding Company also shall use its reasonable best efforts to
obtain all necessary state securities law or "blue sky" permits and approvals
required to carry out the issuance of Holding Company Common Stock in connection
with the Merger and the Conversion. The Company shall furnish all information
concerning the Company and the holders of the Company Common Stock as may be
reasonably requested in connection with any of the foregoing actions. In the
event that the Company has issued any securities, through its employee benefits
plans or otherwise, in any offering which should have been registered or
qualified under Federal or state securities laws which were not so registered or
qualified, the Company shall promptly take such action as the parties hereto
mutually agree in order to eliminate, reduce or mitigate, to the extent
possible, any contingent or other liability which the Company may have as a
result of such offering.
(b) The parties hereto shall cooperate with each other and use
their reasonable best efforts to promptly prepare and file all necessary
documentation, to effect all applications, notices, petitions and filings, and
to obtain as promptly as practicable all permits, consents, approvals and
authorizations of all Governmental Entities and third parties which are
necessary or advisable to consummate the transactions contemplated by this
Agreement (including without limitation the Conversion, the Merger and the Bank
Merger). Keystone and the Company shall have the right to review in advance, and
to the extent practicable each will consult with the other on, in each case
subject to applicable laws relating to the exchange of information, all the
information which appears in any filing made with or written materials submitted
to any third party or any Governmental Entity in connection with the
transactions contemplated by this Agreement. In exercising the foregoing right,
each of the parties hereto shall act reasonably and
30
as promptly as practicable. The parties hereto agree that they will consult with
each other with respect to the obtaining of all permits, consents, approvals and
authorizations of all third parties and Governmental Entities necessary or
advisable to consummate the transactions contemplated by this Agreement and each
party will keep the other apprised of the status of matters relating to
completion of the transactions contemplated herein.
(c) Keystone and the Company shall, upon request, furnish each
other with all information concerning themselves, their respective Subsidiaries,
directors and officers and shareholders of the Company and such other matters as
may be reasonably necessary or advisable in connection with the Form S-1 or any
other statement, filing, notice or application made by or on behalf of Keystone,
the Holding Company, the Company or the Bank to any Governmental Entity in
connection with the Conversion, the Merger, the Bank Merger and the other
transactions contemplated hereby.
(d) Keystone and the Company shall promptly furnish each other
with copies of written communications received by Keystone or the Company, as
the case may be, or any of their respective Subsidiaries from, or delivered by
any of the foregoing to, any Governmental Entity in respect of the transactions
contemplated hereby.
5.4 Investigation and Confidentiality
(a) Each party shall permit the other party and its
representatives reasonable access to its properties and personnel, and shall
disclose and make available to such other party all books, papers and records
relating to the assets, stock ownership, properties, operations, obligations and
liabilities of it and its Subsidiaries, including, but not limited to, all books
of account (including the general ledger), tax records, minute books of meetings
of boards of directors (and any committees thereof) and shareholders,
organizational documents, bylaws, material contracts and agreements, filings
with any regulatory authority, accountants' work papers, litigation files, loan
files, plans affecting employees, and any other business activities or prospects
in which the other party may have a reasonable interest, provided that such
access shall be reasonably related to the transactions contemplated hereby and,
in the reasonable opinion of the respective parties providing such access, not
unduly interfere with normal operations. Each party and its Subsidiaries shall
make their respective directors, officers, employees and agents and authorized
representatives (including counsel and independent public accountants) available
to confer with the other party and its representatives, provided that such
access shall be reasonably related to the transactions contemplated hereby and
shall not unduly interfere with normal operations.
(b) All information furnished previously in connection with the
transactions contemplated by this Agreement or pursuant hereto shall be treated
as the sole property of the party furnishing the information until consummation
of the transactions contemplated hereby and, if such transactions shall not
occur, the party receiving the information shall either destroy or return to the
party which furnished such information all documents or other materials
containing, reflecting or referring to such information, shall use its best
efforts to keep confidential all such information, and shall not directly or
indirectly use such information for any competitive or other commercial
purposes. The obligation to keep such information confidential shall continue
for five years from the date the proposed transactions are abandoned but shall
not apply to (i) any information which (x) the party receiving the information
can establish was already in its possession prior to the disclosure thereof by
the party furnishing the information; (y) was then generally known to the
public; or (z) became known to the public through no fault of the party
receiving the information; or (ii) disclosures pursuant to a legal requirement
or in accordance with an order of a court of competent jurisdiction, provided
that the party which is the subject of any such legal requirement or order shall
use its best efforts to give the other party
31
at least ten business days prior notice thereof.
5.5 Press Releases
Keystone and the Company shall agree with each other as to the form and
substance of any press release related to this Agreement or the transactions
contemplated hereby, and consult with each other as to the form and substance of
other public disclosures which may relate to the transactions contemplated by
this Agreement, provided, however, that nothing contained herein shall prohibit
either party, following prior notification to the other party, from making any
disclosure which is required by law or regulation.
5.6 Business of the Parties
(a) During the period from the date of this Agreement and
continuing until the Effective Time, except as expressly contemplated or
permitted by this Agreement or with the prior written consent of the other
Party, each Party shall carry on their respective businesses in the ordinary
course consistent with past practice. During such period, each Party also will
use, and will cause each of is subsidiaries to use, all reasonable efforts to
(x) preserve its business organization intact, (y) keep available to itself and
the other Party the present services of its respective employees and (z)
preserve for itself and the other Party the goodwill of its respective customers
and others with whom business relationships exist. Without limiting the
generality of the foregoing, except as Previously Disclosed or with the prior
written consent of the other Party hereto, between the date hereof and the
Effective Time, the Parties shall not, and shall cause each of their respective
Subsidiaries not to:
(i) declare, set aside, make or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of the Company Common Stock, except for regular
quarterly cash dividends at a rate per share of Company Common Stock
not in excess of $.19 per share and except, in the event the Effective
Time occurs more than 45 days after the commencement of any calendar
quarter but prior to the normal dividend payment date for such calendar
quarter, a pro rata cash dividend based on the Company's normal
quarterly cash dividend rate; provided, however, that nothing contained
herein shall be deemed to affect the ability of a Company Subsidiary to
pay dividends on its capital stock to the Company;
(ii) issue any shares of its capital stock, other than upon
exercise of the Company Options referred to in Section 3.1 hereof, or
issue, grant, modify or authorize any Rights; purchase any shares of
Company Common Stock; or effect any recapitalization, reclassification,
stock dividend, stock split or like change in capitalization;
(iii) amend its Articles of Incorporation, Articles of
Association, Bylaws or similar organizational documents; impose, or
suffer the imposition, on any share of stock or other ownership
interest held by a Party in a Party Subsidiary of any lien, charge or
encumbrance or permit any such lien, charge or encumbrance to exist; or
waive or release any material right or cancel or compromise any
material debt or claim;
(iv) increase the rate of compensation of any of its
directors, officers or employees, or pay or agree to pay any bonus or
severance to, or provide any other new employee benefit or incentive
to, any of its directors, officers or employees,
32
except (i) as may be required pursuant to Previously Disclosed
commitments existing on the date hereof, (ii) as may be required by law
and (iii) merit increases in accordance with past practices, normal
cost-of-living increases and normal increases related to promotions or
increased job responsibilities;
(v) enter into or, except as may be required by law,
modify any pension, retirement, stock option, stock purchase, stock
appreciation right, savings, profit sharing, deferred compensation,
supplemental retirement, consulting, bonus, group insurance or other
employee benefit, incentive or welfare contract, plan or arrangement,
or any trust agreement related thereto, in respect of any of its
directors, officers or employees; or make any contributions to any of
the Company's or Keystone's Pension Plans or the Company's ESOP (other
than as required by law or regulation or in a manner and amount
consistent with past practices) and except as specifically provided
herein;
(vi) enter into (w) any transaction, agreement, arrangement
or commitment not made in the ordinary course of business, (x) any
agreement, indenture or other instrument relating to the borrowing of
money by the Party or a Party Subsidiary or guarantee by a Party or any
Party Subsidiary of any such obligation, except in the case of the Bank
or Keystone for deposits, FHLB advances, federal funds purchased and
securities sold under agreements to repurchase in the ordinary course
of business consistent with past practice, (y) any agreement,
arrangement or commitment relating to the employment of an employee or
consultant, or amend any such existing agreement, arrangement or
commitment, provided that the Company, the Bank and Keystone may employ
an employee or consultant in the ordinary course of business if the
employment of such employee or consultant is terminable by the Company,
the Bank or Keystone, as the case may be, at will without liability,
other than as required by law; or (z) any contract, agreement or
understanding with a labor union;
(vii) change its method of accounting in effect for the year
ended December 31, 2001, except as required by changes in laws or
regulations or generally accepted accounting principles, or change any
of its methods of reporting income and deductions for federal income
tax purposes from those employed in the preparation of its federal
income tax return for such year, except as required by changes in laws
or regulations;
(viii) make any capital expenditures in excess of $75,000
individually or $150,000 in the aggregate, other than pursuant to
binding commitments existing on the date hereof and other than
expenditures necessary to maintain existing assets in good repair; or
enter into any new lease of real property or any new lease of personal
property providing for annual payments exceeding $50,000;
(ix) file any applications or make any contract with
respect to branching or site location or relocation;
(x) acquire in any manner whatsoever (other than to
realize upon collateral for a defaulted loan) control over or any
equity interest in any business or entity, except for investments in
marketable equity securities in the ordinary course of business and not
exceeding 5% of the outstanding shares of any class;
(xi) enter or agree to enter into any agreement or
arrangement granting
33
any preferential right to purchase any of its assets or rights or
requiring the consent of any party to the transfer and assignment of
any such assets or rights;
(xii) change or modify in any material respect any of its
lending or investment policies, except to the extent required by law or
an applicable regulatory authority;
(xiii) take any action that would prevent or impede the
Merger or the Conversion from qualifying as a reorganization within the
meaning of Section 368 of the Code;
(xiv) enter into any futures contract, option contract,
interest rate caps, interest rate floors, interest rate exchange
agreement or other agreement for purposes of hedging the exposure of
its interest-earning assets and interest-bearing liabilities to changes
in market rates of interest;
(xv) take any action that would result in any of the
representations and warranties contained in this Agreement not to be
true and correct in any material respect at the Effective Time or that
would cause any of the conditions of Sections 6.1, 6.2 or 6.3 hereof
not to be satisfied;
(xvi) materially increase or decrease the rate of interest
paid on time deposits, or certificates of deposit, except in a manner
and pursuant to policies consistent with past practices, or
(xvii) agree to do any of the foregoing.
(b) Each of the Company and Keystone shall promptly notify the
other Party in writing of the occurrence of any matter or event known to and
directly involving it or any of its Subsidiaries, other than any changes in
conditions that affect the banking or savings institution industry generally,
that would have, either individually or in the aggregate, a Material Adverse
Effect on it.
5.7 Certain Actions
(a) The Company agrees that neither it nor any of its Subsidiaries
shall, and that it shall direct and use its reasonable best efforts to cause its
and each such Subsidiary's directors, officers, employees, agents and
representatives not to, directly or indirectly, initiate, solicit, knowingly
encourage or otherwise facilitate any inquiries or the making of any proposal or
offer with respect to an Acquisition Proposal. The Company further agrees that
neither the Company nor any of its Subsidiaries shall, and that it shall direct
and use its reasonable best efforts to cause its and each such Subsidiary's
directors, officers, employees, agents and representatives not to, directly or
indirectly, engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any Person relating to an
Acquisition Proposal, or otherwise knowingly facilitate any effort or attempt to
make or implement an Acquisition Proposal; provided, however, that nothing
contained in this Agreement shall prevent the Company or the Board of Directors
of the Company from (A) complying with its disclosure obligations under federal
or state law; (B) providing information in response to a request therefor by a
Person who has made an unsolicited bona fide written Acquisition Proposal if the
Board of Directors of the Company receives from the Person so requesting such
information an executed confidentiality agreement the terms of which are
substantially identical to those of the confidentiality agreement entered into
by the Company and Keystone dated December 31, 2002;
34
(C) engaging in any negotiations or discussions with any Person who has made an
unsolicited bona fide written Acquisition Proposal or (D) recommending such an
Acquisition Proposal to the shareholders of the Company, if and only to the
extent that, in each such case referred to in clause (B), (C) or (D) above, (i)
the Company Board determines in good faith (after consultation with outside
legal counsel) that such action would be required in order for its directors to
comply with their respective fiduciary duties under applicable law and (ii) the
Board of Directors of the Company determines in good faith (after consultation
with its financial advisor) that such Acquisition Proposal, if accepted, is
reasonably likely to be consummated, taking into account all legal, financial
and regulatory aspects of the proposal and the Person making the proposal and
would, if consummated, result in a transaction more favorable to the Company's
shareholders from a financial point of view than the Merger. An Acquisition
Proposal which is received and considered by the Company in compliance with this
Section 5.7 and which meets the requirements set forth in clause (D) of the
preceding sentence is herein referred to as a "Superior Proposal." The Company
agrees that it will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any Acquisition Proposals. The Company agrees that it will
notify Keystone immediately if any such inquiries, proposals or offers are
received by, any such information is requested from, or any such discussions or
negotiations are sought to be initiated or continued with, the Company or any of
its representatives.
(b) In the event that the Board of Directors of the Company
determines in good faith, after consultation with its financial advisor and upon
advice from outside counsel, that it has received a Superior Proposal, it shall
notify Keystone in writing of its intent to terminate this Agreement and
concurrently with or after such termination cause the Company to enter into an
acquisition agreement with respect to, or recommend acceptance of, the Superior
Proposal. Such notice shall specify all of the terms and conditions of such
Superior Proposal and identify the Person making such Superior Proposal.
Keystone shall have five business days to evaluate and respond to the Company's
notice. If Keystone notifies the Company in writing prior to the expiration of
the five business day period provided above that it shall increase the Merger
Consideration to an amount at least equal to that of such Superior Proposal (the
"Keystone Proposal"), then the Company shall not be permitted to enter into an
acquisition agreement with respect to, or permit its Board to recommend
acceptance to its shareholders of, such Superior Proposal. Such notice by
Keystone shall specify the new Merger Consideration. The Company shall have five
business days to evaluate the Keystone Proposal.
(c) In the event the Superior Proposal involves consideration to
the Company's shareholders consisting of securities, in whole or in part, a
Keystone Proposal shall be deemed to be at least equal to the Superior Proposal,
if the Keystone Proposal offers Merger Consideration that equals or exceeds the
consideration being offered to the Company's shareholders in the Superior
Proposal valuing any securities forming a part of the Superior Proposal at its
cash equivalent based upon (a) the average trading price of such securities for
the 20 trading days immediately preceding the date of the Keystone Proposal or
(b) the written valuation of such securities by a nationally recognized
investment banking firm selected if such securities are not traded on a
nationally recognized exchange or will be newly issued securities that are not
of a class then trading on a nationally recognized exchange. Any written
valuation shall be attached as an exhibit to the Keystone Proposal.
(d) In the event that the Board of the Company determines in good
faith, upon the advice of its financial advisor and outside counsel, that the
Keystone Proposal is not at least equal to the Superior Proposal, the Company
can terminate this Agreement in order to execute an acquisition agreement with
respect to, or to allow its Board to adopt a resolution recommending acceptance
to the Company's shareholders of, the Superior
35
Proposal as provided in Section 7.1(h).
5.8 Current Information
During the period from the date of this Agreement to the Effective
Time, each of Keystone and the Company shall, upon the request of the other
party, cause one or more of its designated representatives to confer on a
monthly or more frequent basis with representatives of the other party regarding
its financial condition, operations and business and matters relating to the
completion of the transactions contemplated hereby. As soon as reasonably
available, but in no event more than 45 days after the end of each calendar
quarter ending after the date of this Agreement, the Company will deliver to
Keystone its quarterly report on Form 10-Q under the Exchange Act, and, as soon
as reasonably available, but in no event more than 90 days after December 31,
2002, the Company will deliver to Keystone its Annual Report on Form 10-K for
2002. As soon as reasonably available, but in no event more than 90 days after
December 31, 2002, Keystone will deliver to the Company audited statements of
condition (including related notes and schedules, if any) of Keystone as of
December 31, 2002 and 2001 and statements of income, changes in retained income
and cash flows (including related notes and schedules, if any) of Keystone for
each of the years in the three-year period ended December 31, 2002. Keystone
also will deliver to the Company each Call Report report filed by Keystone with
the FDIC concurrently with the filing of such call report. Within 25 days after
the end of each month, the Company and Keystone will deliver to the other party
an unaudited consolidated statement of condition and an unaudited consolidated
statement of income, without related notes, for such month prepared in
accordance with generally accepted accounting principles.
5.9 Indemnification; Insurance
(a) From and after the Effective Time, the Holding Company (the
"Indemnifying Party") shall provide indemnification to any present or former
director, officer or employee of the Company and each Company Subsidiary, in
each case determined as of the Effective Time (the "Indemnified Parties"), with
respect to any costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages or liabilities incurred in connection
with any claim, action, suit, proceeding or investigation, whether, civil,
criminal, administrative or investigative, arising out of matters existing or
occurring at or prior to the Effective Time, if first asserted or claimed prior
to the date hereof and Previously Disclosed, if first asserted or claimed
between the date hereof and the Effective Time and disclosed pursuant to Section
5.16 hereof or if first asserted or claimed after the Effective Time, to the
fullest extent, if any, that such Indemnified Party would have been entitled to
indemnification by the Company or any Company Subsidiary under the Articles of
Incorporation, Articles of Association or Bylaws of the Company or any Company
Subsidiary as Previously Disclosed, provided, however, that all rights to
indemnification in respect of any claim asserted or made within such period
shall continue until the final disposition of such claim, and provided, further,
that nothing contained herein shall extend or be deemed a waiver of any
applicable statute of limitations in respect of any claim or claim for
indemnification. Without limiting the foregoing, all limitations of liability
existing in favor of the Indemnified Parties in the Articles of Incorporation,
Articles of Association or Bylaws of the Company or any Company Subsidiary,
arising out of matters existing or occurring at or prior to the Effective Time
shall survive the Merger and shall continue in full force and effect.
(b) Any Indemnified Party wishing to claim indemnification under
Section 5.9(a), upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify the Indemnifying Party, but the failure to
so notify shall not relieve the Indemnifying Party of any
36
liability it may have to such Indemnified Party if such failure does not
materially prejudice the Indemnifying Party. In the event of any such claim,
action, suit, proceeding or investigation (whether arising before or after the
Effective Time), (i) the Indemnifying Party shall have the right to assume the
defense thereof and the Indemnifying Party shall not be liable to such
Indemnified Parties for any legal expenses of other counsel or any other
expenses subsequently incurred by such Indemnified Parties in connection with
the defense thereof, except that if the Indemnifying Party elects not to assume
such defense or counsel for the Indemnified Parties advises that there are
issues which raise conflicts of interest between the Indemnifying Party and the
Indemnified Parties, the Indemnified Parties may retain counsel which is
reasonably satisfactory to the Indemnifying Party, and the Indemnifying Party
shall pay, promptly as statements therefor are received, the reasonable fees and
expenses of such counsel for the Indemnified Parties (which may not exceed one
firm in any jurisdiction unless the use of one counsel for such Indemnified
Parties would present such counsel with a conflict of interest) in accordance
with the obligations set forth in Section 5.9(a) hereof, (ii) the Indemnified
Parties will cooperate in the defense of any such matter, (iii) the Indemnifying
Party shall not be liable for any settlement effected without its prior written
consent, which consent shall not be unreasonably withheld, and (iv) the
Indemnifying Party shall have no obligation hereunder in the event a federal
banking agency or a court of competent jurisdiction shall ultimately determine,
and such determination shall have become final and nonappealable, that
indemnification of an Indemnified Party in the manner contemplated hereby is
prohibited by applicable law.
(c) The Holding Company shall maintain the Company's existing
directors' and officers' liability insurance policy (or purchase an insurance
policy providing coverage on substantially the same terms and conditions) for
acts or omissions occurring prior to the Effective Time by persons who are
currently covered by such insurance policy maintained by the Company and the
Company Subsidiaries for a period of six years following the Effective Time,
provided, however, that in no event shall the Holding Company be required to
expend on an annual basis more than 150% of the amount paid by the Company and
the Company Subsidiaries as of the date hereof for such insurance coverage (the
"Insurance Amount") to maintain or procure such insurance coverage, and further
provided that if the Holding Company is unable to maintain or obtain the
insurance called for hereby, the Holding Company shall use all reasonable
efforts to obtain as much comparable insurance as is available for the Insurance
Amount. At the request of the Holding Company, the Company shall use reasonable
efforts to procure the insurance coverage referred to in the preceding sentence
prior to the Effective Time.
(d) In the event that the Holding Company or any of its respective
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then, and in each such case the successors
and assigns of such entity shall assume the obligations set forth in this
Section 5.9, which obligations are expressly intended to be for the irrevocable
benefit of, and shall be enforceable by, each director and officer covered
hereby and the heirs and estates thereof.
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5.10 Directors and Executive Officers
(a) On or prior to the Effective Time, each of Keystone and the
Holding Company agrees to take all action necessary to increase the size of
their respective Boards of Directors to 15 members, nine of whom shall be
selected by Keystone directors and six of whom shall be selected by the Company.
Furthermore, each of Keystone and the Holding Company shall take all action to
appoint or elect, effective as of the Effective Time such persons in the classes
as set forth below.
Class I Class II Class III
(Term expiring in 2004) (Term expiring in 2005) (Term expiring in 2006)
----------------------- ----------------------- -----------------------
R. Xxxxxxxx Xxxx, Jr. Xxxx X. Mountain Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxx Xxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxxx
R. Xxxxxxx Xxxxxx Xxxxxxx X. Xxxxxx Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxxxx Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxx Xxxxxxx Xxxxxxx, III
(b) On or prior to the Effective Time, each of Keystone and the
Holding Company agrees to take all action necessary to elect Xxxxxxx X. Xxxxxxx
as Chairman of the Board, Xxxxx X. Xxxxxx as the President and Chief Executive
Officer and Xxxxxx X. Xxxxx as the Senior Executive Vice President and Chief
Operating Officer of Keystone and the Holding Company.
5.11 Employees and Employee Benefit Plans
(a) All employees of the Company, the Bank or any other Company
Subsidiary as of the Effective Time (collectively, "Company Employees") shall
become employees of the Holding Company or a Holding Company Subsidiary as of
the Effective Time, provided that, other than as provided by Section 5.11(g)
hereof, the Holding Company or a Holding Company Subsidiary shall have no
obligation to continue the employment of any such person and nothing contained
in this Agreement shall give any employee of the Holding Company or a Holding
Company Subsidiary a right to continuing employment with the Holding Company or
a Holding Company Subsidiary after the Effective Time. To the extent that the
Holding Company or a Holding Company Subsidiary terminates the employment of any
Company, Bank or Keystone Employee (other than those employees, if any, who
receive payments pursuant to Section 5.11(d) hereof), other than for cause,
within six months following the Effective Time, the Holding Company shall, or
shall cause a Holding Company Subsidiary to, provide severance benefits in a
cash amount as mutually agreed to by Keystone and the Company, provided, however
that in no event shall the Holding Company or a Holding Company Subsidiary have
any obligation to provide severance benefits to any Company Employee whose
termination of employment occurs due to resignation or discharge for cause or
who is entitled to severance benefits or the equivalent thereof under the terms
of an individual contract with the Company or the Bank.
(b) With the exception of those individuals who are expected to
enter into new employment agreements pursuant to Section 5.11(g) hereof, each
Company Employee who remains employed by the Holding Company or a Holding
Company Subsidiary following the Effective Time (each, a "Continuing Employee")
shall be entitled to participate in (i) such of the employee benefit plans,
deferred compensation arrangements, bonus or incentive plans and other
compensation and benefit plans that the Holding Company or a Holding Company
Subsidiary may continue for the benefit of Continuing Employees following the
Effective Time and (ii)
38
whatever employee benefit plans and other compensation and benefit plans (other
than any stock option or restricted stock grant plan implemented by the Holding
Company) that the Holding Company or a Holding Company Subsidiary may maintain
for the benefit of its similarly situated employees on an equitably equivalent
basis, if such Continuing Employee is not otherwise then participating in a
similar plan described in Section 5.11(c) hereof. The parties hereto acknowledge
that Continuing Employees shall be eligible to participate in the stock option
plan implemented by the Holding Company within one year subsequent to the
Effective Time ("New Option Plan") (subject to receipt of necessary corporate,
regulatory and stockholder approval) based upon the same criteria as other
employees of Keystone or the Holding Company and the level of grants shall give
due regard to, among other factors, relative levels of title, duties, salary and
other compensation and benefits.
(c) (i) At the Effective Time, the Holding Company or a
Holding Company Subsidiary shall become the plan sponsor of each Company
Employee Plan. The Company agrees to take or cause to be taken such actions as
the Holding Company or a Holding Company Subsidiary may reasonably request to
give effect to such assumption. The Holding Company or a Holding Company
Subsidiary shall have the right and power at any time following the Effective
Time to amend or terminate or cease benefit accruals under any Company Employee
Plan or cause it to be merged with or its assets and liabilities to be
transferred to a similar plan maintained by it.
(ii) For purposes of its employee benefit plans, the
Holding Company and a Holding Company Subsidiary shall treat Continuing
Employees as new employees, but shall amend its plans to provide credit for
purposes of vesting and eligibility to participate (but not for benefit
accrual), for each Continuing Employee's service with the Company, the Bank and
any other Subsidiary of the Company to the extent that such service was
recognized for similar purposes under the Company Employee Plans immediately
prior to the Effective Time. Continuing Employees and their covered dependents
will not be deprived of any partial or complete coverage under any employee
benefit plan of the Holding Company or a Holding Company Subsidiary (which
provides the type of benefits similar to benefits under any Company Employee
Plan) because of any waiting period or pre-existing condition or previous
medical treatments, except to the extent that such pre-existing condition or
previous medical treatments were excluded from coverage under a Company Employee
Plan, in which case this Section 5.11(c)(ii) shall not require coverage for such
pre-existing condition or previous medical treatments to the same extent such
coverage was excluded under a Company Employee Plan. To the extent that the
initial period of coverage for Continuing Employees under any employee benefit
plan of the Holding Company or a Holding Company Subsidiary that is an "employee
welfare benefit plan" as defined in Section 3(1) of ERISA overlaps with the 12
months coverage period of an applicable Company Employee Plan, Continuing
Employees shall be given credit during the initial period of coverage for any
deductibles and coinsurance payments made by Continuing Employees under any
Company Employee Plan during any partial period.
(d) At and following the Effective Time, Keystone shall honor, and
the Holding Company shall continue to be obligated to perform, in accordance
with their terms, all benefit obligations to, and contractual rights of, current
and former employees of the Company and the Bank existing as of the Effective
Time, as well as all employment, severance, deferred compensation or
"change-in-control" agreements, plans or policies of the Company which are
Previously Disclosed. Keystone acknowledges that the consummation of the Merger
will constitute a "change-in-control" of the Company for purposes of any
employee benefit plans, agreements and arrangements of the Company and the Bank.
39
(e) The ESOP shall be terminated effective as of the Effective
Time. As soon as practicable after the Effective Time (but not prior to the
publication of financial results covering at least 30 days of combined
operations after the Merger), the trustees of the ESOP shall, if necessary,
convert to cash a portion of the Holding Company Common Stock received by the
ESOP in the Merger with respect to unallocated Company Common Stock in order to
repay the entire outstanding balances of the ESOP loans in accordance with
ERISA, the rules and regulations promulgated thereunder, the Code, the rules,
regulations promulgated thereunder, and any precedential rulings issued by the
Internal Revenue Service ("IRS"). As soon as practicable after the retirement of
the ESOP loans (but not later than 90 days after the publication of financial
results covering at least 30 days of combined operations after the Merger), the
trustees of the ESOP shall allocate the remaining Holding Company Common Stock
received by the ESOP in the Merger with respect to unallocated shares of Company
Common Stock to the accounts of all ESOP participants (whether or not such
participants are then actively employed) and beneficiaries in proportion to the
account balance of such participants and beneficiaries as they existed as of the
Effective Time (and, if required, to the accounts of former participants or
their beneficiaries) as investment earnings of the ESOP except as restricted by
applicable law. The Company and/or Keystone and the Holding Company shall
exercise best efforts to implement procedures that will assure the full
allocation of the remaining suspense account to such participants or their
beneficiaries. Upon the election of any participant, his or her benefit that
constitutes an "eligible rollover distribution" (as defined in Section
402(f)(2)(A) of the Code) under the ESOP may (i) in the sole discretion of
Keystone and the Holding Company, be rolled over to any qualified Keystone or
Holding Company (or any Subsidiary thereof) benefit plan, other than an employee
stock ownership plan of the Holding Company or Keystone, or (ii) be rolled over
to any individual retirement account and, provided further, that any such
distribution shall not occur until receipt of a favorable termination ruling
from the IRS.
The foregoing actions relating to termination of the ESOP will be
adopted conditioned upon the consummation of the Merger and upon receiving (i) a
favorable determination letter from the IRS with regard to the continued
qualification of the ESOP after any required amendments necessary to implement
the actions thereof set forth above and (ii) the receipt of a favorable
termination letter as to the termination of the ESOP. The Company, the Bank, and
the Holding Company will cooperate in submitting appropriate requests for any
such determination and termination letters to the IRS and will use their best
efforts to seek the issuance of such letters as soon as practicable following
the date hereof. The Bank and the Holding Company will adopt such additional
amendments to the ESOP as may be reasonably required by the IRS as a condition
to granting such favorable determination and termination letters provided that
such amendments do not substantially change the terms outlined herein or would
result in a material adverse change in the business, operations, assets,
financial condition or prospects of the Company or the Bank or result in an
additional material liability to the Holding Company or Keystone.
(g) Concurrently with the execution of this Agreement by Keystone
and the Company, Keystone shall enter into employment agreements with Messrs.
Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxx in the forms attached hereto as Appendices E
and F, respectively. Upon execution of the Accession Agreement (as hereinafter
defined) by the Holding Company, it shall join in the employment agreements with
Messrs. Fainor and Xxxxx.
5.12 Bank Merger
Keystone, the Holding Company and the Company shall take, and the
Company shall cause the Bank to take, all necessary and appropriate actions,
including causing the Bank and Keystone to enter into a merger agreement (the
"Bank Merger Agreement"), to cause the Bank to
40
merge with and into Keystone (the "Bank Merger") immediately after the Effective
Time in accordance with the requirements of all applicable laws of the
Commonwealth of Pennsylvania and regulations of the Department thereunder.
Keystone shall be the surviving corporation in the Bank Merger (the "Surviving
Bank"), and shall continue its corporate existence under the laws of the
Commonwealth of Pennsylvania as a wholly-owned subsidiary of the Holding
Company. The name of the Surviving Bank shall be "Keystone Nazareth Bank & Trust
Company." The directors and executive officers of the Surviving Bank upon
consummation of the Bank Merger shall be the directors and executive officers of
Keystone immediately prior to the consummation of the Bank Merger, except as
provided in Section 5.10 of this Agreement. Upon consummation of the Bank
Merger, the separate corporate existence of the Bank shall cease.
5.13 Organization of the Holding Company
Prior to the Effective Time, Keystone shall cause the Holding Company
to be organized under the BCL. Following the organization of the Holding Company
and prior to the Effective Time, the Board of Directors shall approve this
Agreement and the transactions contemplated hereby, and Keystone shall cause the
Holding Company to execute and deliver an appropriate instrument of accession to
this Agreement in the form attached hereto as Appendix G ("Accession
Agreement"), whereupon the Holding Company shall become a party to, and be bound
by, this Agreement.
5.14 Shareholder and Depositor Agreements
Shareholder Agreements, in the form attached as Appendix A hereto,
shall have been executed and delivered by each director of the Company and the
Bank in connection with the Company's execution and delivery of this Agreement.
Furthermore, the Company shall use its reasonable best efforts to cause such
person who is a Company Affiliate to execute and deliver to the Holding Company
within 60 days of the date hereof an agreement in the form of Appendix H hereto.
In addition, the Depositor Agreements, in the form attached as Appendix B
hereto, shall have been executed and delivered by each director of Keystone in
connection with Keystone's execution and delivery of this Agreement.
5.15 Integration of Policies
During the period from the date of this Agreement to the Effective
Time, the Company and the Bank shall, and shall cause their directors, officers
and employees to, cooperate and assist Keystone in the formulation of a plan of
integration for Keystone and the Company and the Bank with respect to their
combined operations subsequent to the Effective Time.
5.16 Disclosure Supplements
From time to time prior to the Effective Time, each party shall
promptly supplement or amend any materials Previously Disclosed and delivered to
the other party pursuant hereto with respect to any matter hereafter arising
which, if existing, occurring or known at the date of this Agreement, would have
been required to be set forth or described in materials Previously Disclosed to
the other party or which is necessary to correct any information in such
materials which has been rendered materially inaccurate thereby; no such
supplement or amendment to such materials shall be deemed to have modified the
representations, warranties and covenants of the parties for the purpose of
determining whether the conditions set forth in Article VI hereof have been
satisfied.
41
5.17 Failure to Fulfill Conditions
In the event that either of the Parties hereto determines that a
condition to its respective obligations to consummate the transactions
contemplated may not be fulfilled on or prior to the termination of this
Agreement, it will promptly notify the other party. Each Party will promptly
inform the other party of any facts applicable to it that would be likely to
prevent or materially delay approval of the Merger, the Conversion or any of the
other transactions contemplated hereby by any Governmental Entity or third party
or which would otherwise prevent or materially delay consummation of such
transactions.
5.18. Section 16 Matters.
Prior to the Effective Time, the Holding Company and the Company shall
take all such steps as may be required to cause any dispositions of Company
Common Stock (including derivative securities with respect to Company Common
Stock) or acquisitions of Holding Company Common Stock resulting from the
transactions contemplated by this Agreement by each individual who is subject to
the reporting requirements of Section 16(a) of the Exchange Act with respect to
the Company to be exempt under Rule 16b-3 promulgated under the Exchange Act.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent - Keystone and the Company
The respective obligations of Keystone and the Company to effect the
Merger shall be subject to satisfaction of the following conditions at or prior
to the Effective Time.
(a) All corporate action necessary to authorize the execution and
delivery of this Agreement and consummation of the Merger, the Bank Merger and
the other transactions contemplated hereby shall have been duly and validly
taken by Keystone, the Holding Company, and the Company, including without
limitation approval of this Agreement by the requisite vote of the shareholders
of the Company.
(b) All approvals and consents from any Governmental Entity the
approval or consent of which is required for the consummation of the Merger, the
Bank Merger and the other transactions contemplated hereby shall have been
received and all statutory waiting periods in respect thereof shall have
expired; and Keystone, the Holding Company, the Company and the Bank shall have
procured all other approvals, consents and waivers of each person (other than
the Governmental Entities referred to above) whose approval, consent or waiver
is necessary to the consummation of the Merger and the other transactions
contemplated hereby and the failure of which to obtain would have the effects
set forth in the following proviso clause; provided, however, that no approval
or consent referred to in this Section 6.1(b) shall be deemed to have been
received if it shall include any condition or requirement that, individually or
in the aggregate, would so materially reduce the economic or business benefits
of the transactions contemplated by this Agreement to Keystone that had such
condition or requirement been known, Keystone, in its reasonable judgment, would
not have entered into this Agreement.
(c) None of Keystone, the Holding Company, the Company or the Bank
shall be subject to any statute, rule, regulation, injunction or other order or
decree which shall have been enacted, entered, promulgated or enforced by any
governmental or judicial authority which prohibits, restricts or makes illegal
consummation of the Merger or the other transactions contemplated hereby.
42
(d) The Form S-1 shall have become effective under the Securities
Act, and Keystone shall have received all state securities laws or "blue sky"
permits and other authorizations or there shall be exemptions from registration
requirements necessary to issue the Holding Company Common Stock in connection
with the Merger, and neither the Form S-1 nor any such permit, authorization or
exemption shall be subject to a stop order or threatened stop order by the
Commission or any state securities authority.
(e) The shares of Holding Company Common Stock to be issued in
connection with the Merger and the Conversion shall have been approved for
listing on the Nasdaq Stock Market's National Market. In addition, Keystone and
the Holding Company shall use their reasonable best efforts to have the trading
symbol of the Holding Company Common Stock be "KNBT" or such other available
symbol mutually agreed to by the Parties and the Holding Company.
(f) Each of Keystone and the Company shall have received the
written opinion of Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P., in form and substance
reasonably satisfactory to both the Company and Keystone, dated as of the
Effective Time, substantially to the effect that, on the basis of the facts,
representations and assumptions set forth in such opinion which are consistent
with the state of facts existing at the Effective Time, the Merger will be
treated for Federal income tax purposes as constituting a reorganization within
the meaning of Section 368(a) of the Code. If such legal counsel does not render
such opinion, this condition may be satisfied if Xxxxx Xxxxxxxx LLP, independent
auditors of Keystone and the Company, renders such opinion, relying on such
facts, representations and assumptions. In rendering such opinion, such counsel
or auditors may require and rely upon representations and covenants, including
those contained in certificates of officers of Keystone, the Company and others,
reasonably satisfactory in form and substance to such counsel.
(g) The Conversion shall have been consummated.
6.2 Conditions Precedent - The Company
The obligations of the Company to effect the Merger shall be subject to
satisfaction of the following conditions at or prior to the Effective Time
unless waived by the Company pursuant to Section 7.4 hereof.
(a) The representations and warranties of Keystone set forth in
Article IV hereof shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Date as though made on and as of
the Closing Date, or on the date when made in the case of a representation and
warranty which specifically relates to an earlier date. Notwithstanding the
preceding sentence, except for the representations and warranties contained in
the first sentence of Section 4.13, any inaccuracies in the representations and
warranties of Keystone shall not prevent the satisfaction of the condition
contained in this Section 6.2(a) unless the cumulative effect of all such
inaccuracies, taken in the aggregate, represent a Material Adverse Effect on
Keystone. In applying the preceding sentence, the determination of whether a
representation and warranty of Keystone is inaccurate shall be made without
regard to any language in Article IV which would otherwise qualify such
representation and warranty individually by reference to materiality or a
Material Adverse Effect.
(b) Keystone shall have performed in all material respects all
obligations and complied with all covenants required to be performed and
complied with by it pursuant to this Agreement on or prior to the Effective
Time.
43
(c) Keystone shall have delivered to the Company a certificate,
dated the date of the Closing and signed by its Chairman and by its Chief
Financial Officer, to the effect that the conditions set forth in Sections
6.2(a) and 6.2(b) have been satisfied.
(d) No proceeding initiated by any Governmental Entity seeking an
order, injunction or decree issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition preventing the consummation
of the Merger or the other transactions contemplated hereby shall be pending.
(e) Keystone shall have furnished the Company with such
certificates of its respective officers or others and such other documents to
evidence fulfillment of the conditions set forth in Sections 6.1 and 6.2 as such
conditions relate to Keystone as the Company may reasonably request.
6.3 Conditions Precedent - Keystone
The obligations of Keystone to effect the Merger shall be subject to
satisfaction of the following conditions at or prior to the Effective Time
unless waived by Keystone pursuant to Section 7.4 hereof.
(a) The representations and warranties of the Company set forth in
Article III hereof shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Date as though made on and as of
the Closing Date, or on the date when made in the case of a representation and
warranty which specifically relates to an earlier date. Notwithstanding the
preceding sentence, except for the representations and warranties contained in
the second and fourth sentences of Section 3.1 and the first sentence of Section
3.13, any inaccuracies in the representations and warranties of the Company
shall not prevent the satisfaction of the condition contained in this Section
6.3(a) unless the cumulative effect of all such inaccuracies, taken in the
aggregate, represent a Material Adverse Effect on the Company. In applying the
preceding sentence, the determination of whether a representation and warranty
of the Company is inaccurate shall be made without regard to any language in
Article III which would otherwise qualify such representation and warranty
individually by reference to materiality or a Material Adverse Effect.
(b) The Company shall have performed in all material respects all
obligations and covenants required to be performed by it pursuant to this
Agreement on or prior to the Effective Time.
(c) The Company shall have delivered to Keystone a certificate,
dated the date of the Closing and signed by its President and Chief Executive
Officer and by its Chief Financial Officer, to the effect that the conditions
set forth in Sections 6.3(a) and 6.3(b) have been satisfied.
(d) No proceeding initiated by any Governmental Entity seeking an
order, injunction or decree issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition preventing the consummation
of the Merger or the other transactions contemplated hereby shall be pending.
(e) The Company shall have furnished Keystone with such
certificates of its officers or others and such other documents to evidence
fulfillment of the conditions set forth in Sections 6.1 and 6.3 as such
conditions relate to the Company as Keystone may reasonably request.
44
ARTICLE VII
TERMINATION, WAIVER AND AMENDMENT
7.1 Termination
This Agreement may be terminated:
(a) at any time on or prior to the Effective Time, by the mutual
consent in writing of the parties hereto;
(b) at any time on or prior to the Effective Time, by Keystone in
writing if the Company has, or by the Company in writing if Keystone has, in any
material respect, breached (i) any material covenant or undertaking contained
herein or (ii) any representation or warranty contained herein, in any case if
such breach would have a Material Adverse Effect on the party and has not been
cured by the earlier of 30 days after the date on which written notice of such
breach is given to the party committing such breach or the Effective Time;
(c) at any time, by either Keystone or the Company in writing, (i)
if any application for prior approval of a Governmental Entity which is
necessary to consummate the Merger, the Conversion or the other transactions
contemplated hereby is denied or withdrawn at the request or recommendation of
the Governmental Entity which must grant such approval, unless within the 25-day
period following such denial or withdrawal a petition for rehearing or an
amended application has been filed with the applicable Governmental Entity,
provided, however, that no party shall have the right to terminate this
Agreement pursuant to this Section 7(c)(i) if such denial or request or
recommendation for withdrawal shall be due to the failure of the party seeking
to terminate this Agreement to perform or observe the covenants and agreements
of such party set forth herein, or (ii) if any Governmental Entity of competent
jurisdiction shall have issued a final nonappealable order enjoining or
otherwise prohibiting the consummation of the Merger, the Conversion or the
other transactions contemplated by this Agreement;
(d) at any time, by either Keystone or the Company in writing, if
(i) the shareholders of the Company do not approve this Agreement after a vote
taken thereon at a meeting duly called for such purpose (or at any adjournment
thereof) or (ii) the depositors of Keystone do not approve the Conversion after
a vote taken thereon at a meeting duly called for such purpose (or at any
adjournment thereof), unless in either case the failure of such occurrence shall
be due to the failure of the party seeking to terminate to perform or observe in
any material respect its agreements set forth herein to be performed or observed
by such party at or before the Effective Time; and
(e) by either Keystone or the Company in writing if the Effective
Time has not occurred by the close of business on March 31, 2004, of the date
hereof, provided that this right to terminate shall not be available to any
party whose failure to perform an obligation in breach of such party's
obligations under this Agreement has been the cause of, or resulted in, the
failure of the Merger to be consummated by such date.
(f) At any time prior to the Company Meeting, by Keystone if (i)
the Company shall have breached Section 5.7, (ii) the Company Board shall have
failed to make its recommendation referred to in Section 5.2(a), withdrawn such
recommendation or modified or changed such recommendation in a manner adverse in
any respect to the interests of Keystone or (iii) the Company shall have
materially breached its obligations under Section 5.2(a) by failing to call,
give notice of, convene and hold the Company Meeting in accordance with Section
5.2(a).
45
(g) By Keystone if a tender offer or exchange offer for 20% or
more of the outstanding shares of Company Common Stock is commenced (other than
by Keystone or a Subsidiary thereof), and the Company Board recommends that the
shareholders of the Company tender their shares in such tender or exchange offer
or otherwise fails to recommend that such shareholders reject such tender offer
or exchange offer within the ten-Business Day period specified in Rule 14e-2(a)
under the Exchange Act.
(h) At any time prior to the Company Meeting, by the Company in
order to concurrently enter into an acquisition agreement or similar agreement
(each, an "Acquisition Agreement") with respect to a Superior Proposal which has
been received and considered by the Company and the Company Board in compliance
with Section 5.7 hereof, provided, however, that this Agreement may be
terminated by the Company pursuant to this Section 7.1(h) only after the fifth
Business Day following Keystone's receipt of written notice from the Company in
accordance with Section 5.7(b) advising Keystone that the Company is prepared to
enter into an Acquisition Agreement with respect to a Superior Proposal, and
only if, during such five-Business Day period, Keystone does not, in its sole
discretion, make an offer to the Company that the Company Board determines in
good faith, after consultation with its financial and legal advisors, is at
least equal to the Superior Proposal.
(i) At any time prior to the Depositor Meeting, by the Company if
(i) the Keystone Board shall have failed to make its recommendation referred to
in Section 5.2(b), withdrawn such recommendation or modified or changed such
recommendation in a manner adverse in any respect to the interests of the
Company or (ii) Keystone shall have materially breached its obligations under
Section 5.2(b) by failing to call, give notice of, convene and hold the
Depositor Meeting in accordance with Section 5.2(b).
For purposes of this Section 7.1, termination by Keystone also shall be
deemed to be a termination on behalf of the Holding Company.
7.2 Effect of Termination
In the event that this Agreement is terminated pursuant to Section 7.1
hereof, this Agreement shall become void and have no effect, except that (i) the
provisions relating to confidentiality set forth in Section 5.4(b) and expenses
and the termination fees set forth in Section 8.1, and this Section 7.2, shall
survive any such termination and (ii) a termination pursuant to Section 7.1(b),
(c), (d), (e), (f), (g) or (h) shall not relieve the breaching party from
liability for willful breach of any covenant, undertaking, representation or
warranty giving rise to such termination.
7.3 Survival of Representations, Warranties and Covenants
All representations, warranties and covenants in this Agreement or in
any instrument delivered pursuant hereto or thereto shall expire on, and be
terminated and extinguished at, the Effective Time other than covenants that by
their terms are to be performed after the Effective Time (including without
limitation the covenants set forth in Sections 5.9, 5.10, 5.11 and 5.12 hereof),
provided that no such representations, warranties or covenants shall be deemed
to be terminated or extinguished so as to deprive Keystone or the Company (or
any director, officer or controlling person of either thereof) of any defense at
law or in equity which otherwise would be available against the claims of any
person, including, without limitation, any shareholder or former shareholder of
either Keystone or the Company.
46
7.4 Waiver
Each party hereto by written instrument signed by an executive officer
of such party, may at any time (whether before or after approval of this
Agreement by the shareholders of the Company) extend the time for the
performance of any of the obligations or other acts of the other party hereto
and may waive (i) any inaccuracies of the other party in the representations or
warranties contained in this Agreement or any document delivered pursuant
hereto, (ii) compliance with any of the covenants, undertakings or agreements of
the other party, (iii) to the extent permitted by law, satisfaction of any of
the conditions precedent to its obligations contained herein or (iv) the
performance by the other party of any of its obligations set forth herein,
provided that any such waiver granted, or any amendment or supplement pursuant
to Section 7.5 hereof executed after shareholders of the Company have approved
this Agreement shall not modify either the amount or form of the consideration
to be provided hereby to the holders of Company Common Stock upon consummation
of the Merger or otherwise materially adversely affect such shareholders without
the approval of the shareholders who would be so affected.
7.5 Amendment or Supplement
This Agreement may be amended or supplemented at any time by mutual
agreement of the parties hereto, subject to the proviso to Section 7.4 hereof.
Any such amendment or supplement must be in writing and authorized by or under
the direction of their respective Boards of Directors.
ARTICLE VIII
MISCELLANEOUS
8.1 Expenses; Termination Fees
(a) Each party hereto shall bear and pay all costs and expenses
incurred by it in connection with the transactions contemplated by this
Agreement, including fees and expenses of its own financial consultants,
investment bankers, accountants and counsel, provided that notwithstanding
anything to the contrary contained in this Agreement, neither Keystone nor the
Company shall be released from any liabilities or damages arising out of its
willful breach of any provision of this Agreement.
(b) In recognition of the efforts, expenses and other
opportunities foregone by Keystone while structuring and pursuing the Merger,
the parties hereto agree that the Company shall pay to Keystone a termination
fee of $4.0 million (the "Termination Fee") in the manner set forth below if:
(i) this Agreement is terminated by Keystone pursuant to
Section 7.1(f) or (g);
(ii) this Agreement is terminated by (A) Keystone pursuant
to Section 7.1(b), (B) by either Keystone or the Company pursuant to
Section 7.1(e), or (C) by either Keystone or the Company pursuant to
Section 7.1(d)(i) (other than by reason of any breach by Keystone or
the Company, respectively), and in the case of any termination pursuant
to clause (A), (B) or (C) an Acquisition Proposal shall have been
publicly announced or otherwise communicated or made known to the
senior management of the Company or the Board of Directors of the
Company (or any Person shall have publicly announced, communicated or
made known an intention, whether or not conditional, to
47
make an Acquisition Proposal) at any time after the date of this
Agreement and prior to the taking of the vote of the shareholders of
the Company contemplated by this Agreement at the Company Meeting, in
the case of clause (C), or the date of termination of this Agreement,
in the case of clause (A) or (B); or
(iii) this Agreement is terminated by the Company pursuant
to Section 7.1(h).
In the event the Termination Fee shall become payable pursuant to
Section 8.1(b)(i) or (ii), (x) the Company shall pay to Keystone an amount equal
to $1.5 million on the first Business Day following termination of this
Agreement, and (y) if within 24 months after such termination the Company or a
Subsidiary of the Company enters into any agreement with respect to, or
consummates, any Acquisition Transaction, the Company shall pay to Keystone the
Termination Fee (net of any payment made pursuant to clause (x) above) on the
date of execution of such agreement or consummation of the Acquisition
Transaction. In the event the Termination Fee shall become payable pursuant to
Section 8.1(b)(iii), the Company shall pay to Keystone the entire Termination
Fee within two Business Days following the date of termination of this
Agreement. Any amount that becomes payable pursuant to this Section 8.1(b) shall
be paid by wire transfer of immediately available funds to an account designated
by Keystone.
(c) The Company and Keystone agree that the agreements contained
in paragraphs (b) and (d) of this Section 8.1 are an integral part of the
transactions contemplated by this Agreement, that without such agreement either
Party would not have entered into this Agreement and that such amounts do not
constitute a penalty or liquidated damages in the event of a breach of this
Agreement by either Party. If either Party fails to pay the other Party hereto
the amounts due thereto under paragraphs (b) and (d) above, as the case may be,
within the time periods specified therein, such Party shall pay the costs and
expenses (including reasonable legal fees and expenses) incurred by the other
Party in connection with any action in which the other Party prevails, including
the filing of any lawsuit, taken to collect payment of such amounts, together
with interest on the amount of any such unpaid amounts at the prime lending rate
prevailing during such period as published in The Wall Street Journal,
calculated on a daily basis from the date such amounts were required to be paid
until the date of actual payment.
(d) In the event that this Agreement is terminated by the Company
pursuant to Section 7.1(c), 7.1(d)(ii) or 7.1(i), then Keystone shall pay to the
Company, within five business days of such termination, a termination fee of
$1.0 million plus the documented out-of pocket expenses incurred by the Company
in connection with the transactions contemplated by this Agreement not to exceed
$1.0 million in the aggregate; provided, however, that Keystone shall not be
required to pay the termination fee or to reimburse the Company for such
expenses if at the time of such termination the Company had materially breached
its representations, warranties or covenants or if the failure to obtain such
approvals, waivers or authorizations of any Governmental Entity resulted as a
consequence of facts or circumstances relating to the Company or its
Subsidiaries.
8.2 Entire Agreement
This Agreement contains the entire agreement among the parties with
respect to the transactions contemplated hereby and supersedes all prior
arrangements or understandings with respect thereto, written or oral, other than
documents referred to herein and therein. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and thereto and their respective successors. Nothing in this Agreement,
expressed or implied, is intended to confer upon any party, other than the
parties hereto, and their respective
48
successors, any rights, remedies, obligations or liabilities other than as set
forth in Sections 5.9, 5.10 and 5.11 hereof.
8.3 No Assignment
None of the parties hereto may assign any of its rights or obligations
under this Agreement to any other person.
8.4 Notices
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered personally, telecopied
(with confirmation) or sent by overnight mail service or by registered or
certified mail (return receipt requested), postage prepaid, addressed as
follows:
If to Keystone:
Keystone Savings Bank
Xxxxx 000 xxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Chairman
Fax: (000) 000-0000
With a required copy to:
Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P.
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq. or Xxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
If to the Company:
First Colonial Group, Inc.
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
President and Chief Executive Officer
Fax: (000) 000-0000
With a required copy to:
Blank Rome LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
49
8.5 Alternative Structure
Notwithstanding any provision of this Agreement to the contrary,
Keystone may, with the written consent of the Company, which shall not be
unreasonably withheld, elect, subject to the filing of all necessary
applications and the receipt of all required regulatory approvals, to modify the
structure of the acquisition of the Company set forth herein, provided that (i)
such modification will not adversely affect the tax treatment of the Company's
shareholders as a result of receiving shares of Company Common Stock (ii)
consideration to be paid to the holders of the Company Common Stock is not
thereby changed in kind or reduced in amount as a result of such modification
and (iii) such modification will not materially delay or jeopardize receipt of
any required regulatory approvals or impair or prevent the satisfaction of any
other condition to the obligations of Keystone set forth in Sections 6.1 and 6.3
hereof.
8.6 Interpretation
The captions contained in this Agreement are for reference purposes
only and are not part of this Agreement.
8.7 Counterparts
This Agreement may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
8.8 Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania applicable to agreements made and
entirely to be performed within such jurisdiction. Any dispute arising hereunder
shall be brought before a court located in the Commonwealth of Pennsylvania.
Each of the Parties hereto waives all rights to a trial by jury in any action,
proceeding or counteraction related to or arising out of this Agreement and the
transactions contemplated hereby.
50
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers and their corporate
seal to be hereunto affixed and attested by their officers thereunto duly
authorized, all as of the day and year first above written.
KEYSTONE SAVINGS BANK
Attest:
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------- --------------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Corporate Secretary Title: Chairman of the Board
FIRST COLONIAL GROUP, INC
Attest:
/s/ Xxx Xxxx By: /s/ Xxxxx X. Xxxxxx
-------------------------- --------------------------------
Name: Xxx Xxxx Name: Xxxxx X. Xxxxxx
Title: Corporate Secretary Title: President and Chief Executive
Officer
51
