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Exhibit 2
Agreement and Plan of Reorganization
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AGREEMENT AND PLAN OF REORGANIZATION
Agreement and Plan of Reorganization, dated as of September 18, 1996 (the
"Agreement"), by and between Pennwood Savings Bank ("Pennwood Savings" or the
"Surviving Bank"), a Pennsylvania-chartered savings bank, and Pennwood Interim
Savings Bank ("Interim"), a Pennsylvania-chartered interim savings bank which
will be organized for the sole purpose of consummating the reorganization
provided for herein, and Pennwood Bancorp, Inc. ("Company"), a Pennsylvania
corporation.
WITNESSETH:
WHEREAS, the Board of Directors of Pennwood Savings has determined that it
is in the best interests of Pennwood Savings and its stockholders for Pennwood
Savings to be reorganized into a holding company form of ownership; and
WHEREAS, Pennwood Savings has caused the Company to be organized under
Pennsylvania law as a wholly-owned subsidiary for the purpose of becoming the
holding company of Pennwood Saving; and
WHEREAS, the formation of a holding company by Pennwood Savings will be
facilitated by causing the Company to become the sole stockholder of a
newly-formed interim Pennsylvania-chartered stock savings bank, and then
merging the interim savings bank with and into Pennwood Savings, so that as
part of the merger all of the outstanding shares of common stock of Pennwood
Savings will be converted automatically into and become shares of common stock
of the Company, which would then become the sole stockholder of Pennwood
Savings ("Merger"); and
WHEREAS, Interim is being organized by Pennwood Savings as an interim
Pennsylvania-chartered stock savings bank with the Company as its sole
stockholder in order to effect the Merger; and
WHEREAS, Pennwood Savings and Interim (the "Constituent Banks") desire to
provide for the terms and conditions of the Merger.
NOW, THEREFORE, Pennwood Savings, Interim and the Company hereby agree as
follows:
1. EFFECTIVE DATE. The Merger shall become effective as of the date of
the filing of the articles of merger relating to the Merger filed with the
Department of State of the Commonwealth of Pennsylvania pursuant to 7 P.S.
Section 1609(g), or any successor thereto (the "Effective Date").
2. THE MERGER AND EFFECT THEREOF. Subject to the terms and conditions set
forth herein, including, without limitation, the prior approval of the
Department of Banking of
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the Commonwealth of Pennsylvania ("Department") and the Board of Governors of
the Federal Reserve System ("Federal Reserve Board") and the expiration of all
applicable waiting periods, Interim shall merge with and into Pennwood Savings,
which shall be the Surviving Bank. Upon consummation of the Merger, the
Surviving Bank shall be considered the same business and corporate entity as
each of the Constituent Banks and thereupon and thereafter all the property,
rights, powers and franchises of each of the Constituent Banks shall vest in
the Surviving Bank and the Surviving Bank shall be subject to and be deemed to
have assumed all of the debts, liabilities, obligations and duties of each of
the Constituent Banks and shall have succeeded to all of each of their
relationships, fiduciary or otherwise, as fully and to the same extent as if
such property, rights, privileges, powers, franchises, debts, obligations,
duties and relationships had been originally acquired, incurred or entered into
by the Surviving Bank. In addition, any reference to either of the Constituent
Banks in any contract, will or document, whether executed or taking effect
before or after the Effective Date, shall be considered a reference to the
Surviving Bank if not inconsistent with the other provisions of the contract,
will or document; and any pending action or other judicial proceeding to which
either of the Constituent Banks is a party shall not be deemed to have abated
or to have been discontinued by reason of the Merger, but may be prosecuted to
final judgment, order or decree in the same manner as if the Merger had not
occurred or the Surviving Bank may be substituted as a party to such action or
proceeding, and any judgment, order or decree may be rendered for or against it
that might have been rendered for or against either of the Constituent Banks if
the Merger had not occurred.
3. CONVERSION OF STOCK.
(a) On the Effective Date, (i) each share of common stock, par value
$.01 per share, of Pennwood Savings ("Pennwood Savings Common Stock") issued
and outstanding immediately prior to the Effective Date shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into one share of common stock, par value $.01 per share, of the Company
("Company Common Stock"), (ii) each share of common stock, par value $.01 per
share, of Interim ("Interim Common Stock") issued and outstanding immediately
prior to the Effective Date shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into one share of
Pennwood Savings Common Stock, and (iii) each share of Company Common Stock
issued and outstanding immediately prior to the Effective Date shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
cancelled. By voting in favor of this Agreement, the Company, as the sole
stockholder of Interim, shall have agreed (i) to issue shares of Company Common
Stock in accordance with the terms hereof and (ii) to cancel all previously
issued and outstanding shares of Company Common Stock upon the effectiveness of
the Merger.
(b) On and after the Effective Date, there shall be no registrations
of transfers on the stock transfer books of Interim or Pennwood Savings of
shares of Interim Common Stock or Pennwood Savings Common Stock which were
outstanding immediately prior to the Effective Date.
4. EXCHANGE OF SHARES.
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(a) At or after the Effective Date, each holder of a certificate or
certificates theretofore evidencing issued and outstanding shares of Pennwood
Savings Common Stock, upon surrender of the same to an agent, duly appointed by
the Company ("Exchange Agent"), shall be entitled to receive in exchange
therefor a certificate or certificates representing the number of full shares
of Company Common Stock for which the shares of Pennwood Savings Common Stock
theretofore represented by the certificate or certificates so surrendered shall
have been converted as provided in Section 3 hereof. The Exchange Agent shall
mail to each holder of record of an outstanding certificate which immediately
prior to the Effective Date evidenced shares of Pennwood Savings Common Stock,
and which is to be exchanged for Company Common Stock as provided in Section 3
hereof, a form of letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to such certificate shall pass,
only upon delivery of such certificate to the Exchange Agent) advising such
holder of the terms of the exchange effected by the Merger and of the procedure
for surrendering to the Exchange Agent such certificate in exchange for a
certificate or certificates evidencing Company Common Stock.
(b) After the Effective Date, certificates representing shares of
Pennwood Savings Common Stock shall be treated as evidencing ownership of the
number of full shares of Company Common Stock into which the shares of Pennwood
Savings Common Stock represented by such certificates shall have been converted
by virtue of the Merger, notwithstanding the failure on the part of the holder
thereof to surrender such certificates.
(c) If any certificate evidencing shares of Company Common Stock is
to be issued in a name other than that in which the certificate evidencing
Pennwood Savings 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 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 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.
(d) If, between the date hereof and the Effective Date, the shares of
Pennwood Savings Common Stock shall be changed into a different number or class
of shares by reason of any reclassification, recapitalization, split-up,
combination, exchange of shares or readjustment, or a stock dividend thereon
shall be declared with a record date within said period, the exchange ratio
specified in Section 3(a) hereof shall be adjusted accordingly.
5. DISSENTING SHARES. Subject to the provisions of 7 P.S. Section 1607 of
the Pennsylvania Banking Code ("Banking Code") and Subchapter D of the
Pennsylvania Business Corporation Law ("BCL"), or any successors thereto,
holders of shares of Pennwood Savings Common Stock shall have dissenter or
appraisal rights in connection with the Merger at set forth in the BCL.
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6. NAME OF SURVIVING BANK. The name of the Surviving Bank shall be
"Pennwood Savings Bank."
7. DIRECTORS OF THE SURVIVING BANK. Upon and after the Effective Date,
until changed in accordance with the Amended and Restated Articles of
Incorporation and Bylaws of the Surviving Bank and applicable law, the number
of directors of the Surviving Bank shall be eight. The names and addresses of
those persons who, upon and after the Effective Date, shall be directors of the
Surviving Bank are set forth in Schedule A hereto, which is hereby incorporated
herein by reference. Each such director shall serve for the term which expires
at the annual meeting of stockholders of the Surviving Bank in the year set
forth after his or her respective name in Schedule A, and until a successor is
elected and qualified.
8. OFFICERS OF THE SURVIVING BANK. Upon and after the Effective Date,
until changed in accordance with the Amended and Restated Articles of
Incorporation and Bylaws of the Surviving Bank and applicable law, the officers
of Pennwood Savings immediately prior to the Effective Date shall be the
officers of the Surviving Bank.
9. OFFICES. Upon the Effective Date, all offices of Pennwood Savings and
Interim (which shall have no offices) shall be offices of the Surviving Bank.
As of the Effective Date, the home office of the Surviving Bank shall remain at
000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000 and the location of the
other offices of the Surviving Bank shall be as set forth in Schedule B hereto,
which is hereby incorporated herein by reference, except for the addition of
offices authorized or the deletion of offices closed subsequent to the date
hereof and the Effective Date.
10. ARTICLES OF INCORPORATION AND BYLAWS. On and after the Effective Date,
the Amended and Restated Articles of Incorporation and Bylaws of Pennwood
Savings as in effect immediately prior to the Effective Date shall be the
Amended and Restated Articles of Incorporation and Bylaws of the Surviving Bank
until amended in accordance with the terms thereof and applicable law.
11. SAVINGS ACCOUNTS. Upon the Effective Date, all savings accounts of
Pennwood Savings, without reissue, shall be and become savings accounts of the
Surviving Bank without change in their respective terms, including, without
limitation, maturity, minimum required balances or withdrawal value.
12. STOCK COMPENSATION PLANS. By voting in favor of this Agreement, the
Company shall have approved adoption of Pennwood Savings' existing Employee
Stock Ownership Plan (the "Plan") as a plan of the Company.
13. STOCKHOLDER APPROVAL. The affirmative vote of the holders of
two-thirds of the issued and outstanding Pennwood Savings Common Stock shall be
required to approve this Agreement on behalf of Pennwood Savings and the
approval of the Company, as the sole holder of Interim Common Stock, shall be
required to approve this Agreement on behalf of Interim.
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14. REGISTRATION; OTHER APPROVALS. In addition to the approvals set forth
in Section 2 hereof, the parties' obligations to consummate the Merger shall be
subject to (i) the Company Common Stock to be issued hereunder in exchange for
Pennwood Savings Common Stock being registered under the Securities Act of 1933
and registered or qualified under applicable state securities laws, except in
each case to the extent that the Company relies on an applicable exemption
therefrom, and (ii) the receipt of all other approvals, consents or waivers as
the parties may deem necessary or advisable.
15. INCOME TAX MATTERS. The parties hereto shall have received an opinion
of counsel, satisfactory to them in form and substance, with respect to the
federal income tax consequences of the Agreement and the formation of a holding
company, as contemplated therein.
16. ABANDONMENT OF AGREEMENT. This Agreement may be abandoned by each of
Pennwood Savings, Interim or the Company at any time before the Effective Date
in the event that (a) any action, suit, proceeding or claim has been
instituted, made or threatened relating to the Agreement which shall make
consummation of the transaction contemplated hereby inadvisable in the opinion
of Pennwood Savings, Interim or the Company, or (b) for any other reason
consummation of the transaction contemplated hereby is inadvisable in the
opinion of Pennwood Savings, Interim or the Company. Such abandonment shall be
effected by written notice by Pennwood Savings, Interim or the Company to the
others, authorized or approved by the Board of Directors of the party giving
such notice. Upon the giving of such notice, this Agreement shall be
terminated and there shall be no liability hereunder or on account of such
termination on the part of Pennwood Savings, Interim or the Company or the
directors, officers, employees, agents or stockholders of each of them. In the
event of abandonment of this Agreement, Pennwood Savings shall pay the fees and
expenses incurred by itself, Interim and the Company in connection with this
Agreement and the Merger.
17. AMENDMENTS. To the extent permitted by law, this Agreement may be
amended by a subsequent writing signed by the parties hereto upon the approval
of the Board of Directors of each of the parties hereto; provided, however that
the provisions of Section 3 hereto relating to the consideration to be
exchanged for shares of Pennwood Savings Common Stock shall not be amended
after the meeting of stockholders of Pennwood Savings at which this Agreement
is considered so as to decrease the amount of change the form of such
consideration without the approval of such stockholders.
18. SUCCESSORS. This Agreement shall be binding on the successors of
Pennwood Savings, Interim and the Company.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts.
20. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the United States of America and, to the extent not
governed by such laws, the laws of the Commonwealth of Pennsylvania.
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IN WITNESS WHEREOF, Pennwood Savings, Interim and the Company have caused
this Agreement to be executed by their duly authorized officers as of the day
and year first above written.
PENNWOOD SAVINGS BANK
Attest:
/s/ Xxxxx X. Xxxx By: /s/ Xxxx X. Xxxxxxx
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Xxxxx X. Xxxx Xxxx X. Xxxxxxx
Secretary President and Chief Executive Officer
PENNWOOD BANCORP, INC.
Attest:
/s/ Xxxxx X. Xxxx By: /s/ Xxxx X. Xxxxxxx
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Xxxxx X. Xxxx Xxxx X. Xxxxxxx
Secretary President and Chief Executive Officer
PENNWOOD INTERIM SAVINGS BANK
(In Organization)
Attest:
/s/ Xxxxx X. Xxxx By: /s/ Xxxx X. Xxxxxxx
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Xxxxx X. Xxxx Xxxx X. Xxxxxxx
Secretary President and Chief Executive Officer
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SCHEDULE A
DIRECTORS OF THE SURVIVING BANK
Terms
Name Residence Address Expires
---- ----------------- -------
Xxxxxxx X. Xxxxx 000 Xxxxxxx Xxxxxx 1998
Apartment 4
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Xxxx X. Xxxxx 000 Xxxxxxx Xxxxxx 1996
Apartment 4
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Xxxx X. Xxxxxxx 0000 Xxxxxxxxx Xxxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Xxxx X. Xxxxxx 8575 Xxxxxxx Boulevard 1996
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
C. Xxxxxx Xxxxxxx 0000 Xxxxxxxx Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Xxxxxx X. Xxxxxx 0000 X. Xxxxxxxx Xxxx 0000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Xxxxxxx Xxxxx 0000 Xxxxxxxx Xxxx 0000
Xxx Xxxxxxxxxx, Xxxxxxxxxxxx 00000
X. X. Xxxxxx 0000 Xxxxxxxxx Xxxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
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SCHEDULE B
OFFICES OF THE SURVIVING BANK
HOME XXXXXX
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx, 00000
OTHER OFFICES
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
0 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
