EXHIBIT 2.1
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APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION ("Reorganization Agreement") dated as of
January __, 2001, by and among THE PENNSYLVANIA CAPITAL BANK ("Pennsylvania
Capital"), a Pennsylvania banking institution having its registered office at
The Times Building, 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, and THREE
RIVERS BANCORP, INC. ("Three Rivers"), a Pennsylvania corporation, having its
principal executive office at 0000 Xxxxxxx Xxxxxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxx
00000-0000 and THREE RIVERS BANK AND TRUST COMPANY ("Three Rivers Bank"), a
Pennsylvania banking institution having its registered office at 0000 Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, the stock of which is wholly
owned by Three Rivers.
WITNESSETH
WHEREAS, the parties hereto desire that Pennsylvania Capital shall be
merged with and into Three Rivers Bank ("Merger") pursuant to an Agreement and
Plan of Merger substantially in the form attached hereto as Annex A ("Plan of
Merger") pursuant to which the shareholders of Pennsylvania Capital will receive
cash and shares of Three Rivers Common Stock in exchange for their shares of
Pennsylvania Capital Stock (both Pennsylvania Capital Common and Pennsylvania
Capital Class A Stock); and
WHEREAS, the parties hereto desire to provide for certain undertakings,
conditions, representations, warranties and covenants in connection with the
transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained and intending to be
legally bound hereby, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1. "Bank Holding Company Act" shall mean the Bank Holding Company
Act of 1956, as amended.
1.2. "Closing Date" shall mean the date specified pursuant to Section
4.9 hereof as the date on which the parties hereto shall close the transactions
contemplated herein.
1.3. "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.4. "Commission" or "SEC" shall mean the Securities and Exchange
Commission.
1.5. "Competing Transaction" shall mean any of the following involving
Pennsylvania Capital (other than the transactions contemplated by this
Reorganization Agreement): (a) any merger, consolidation, share exchange for a
controlling interest, business combination or other similar transaction; (b) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition of 15% or
more of the assets of Pennsylvania Capital in a single transaction or series of
transactions to the same person, entity or group, or (c) any public announcement
by Pennsylvania Capital of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing.
1.6. "Deal Price" shall mean the Initial Deal Price or Adjusted Deal
Price as defined in Article V of the Plan of Merger, as applicable.
1.7. "Department of Banking" shall mean the Pennsylvania Department of
Banking.
1.8. "Effective Date" shall mean the date specified pursuant to
Section 4.9 hereof as the effective date of the Merger.
1.9. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.10. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.11. "FDIA" shall mean the Federal Deposit Insurance Act.
1.12. "FDIC" shall mean the Federal Deposit Insurance Corporation.
1.13. "Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System.
1.14. "Investment Company Act" means, the Investment Company Act of
1940, as amended.
1.15. The term "knowledge" means, with respect to a party hereto,
actual knowledge of Xxxxxx X. Xxxxx, Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxxx and
Xxxxxx X. Xxxxxx in the case of Pennsylvania Capital and Xxxxx X. Xxxxxx,
Xxxxxxxx X. Xxxx and Xxxxxxx X. X. Xxxxx in the case of Three Rivers and Three
Rivers Bank.
1.16. "Nasdaq" means the electronic securities market that is operated
by the Nasdaq Stock Market, Inc. which is a wholly-owned subsidiary of the
National Association of Securities Dealers, Inc.
1.17. "Nasdaq National Market" means a tier of the Nasdaq Stock Market
comprised of securities meeting the specific requirements of a Nasdaq National
Market security.
1.18. "Pennsylvania Banking Code" shall mean the Pennsylvania Banking
Code of 1965, as amended.
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1.19. "Pennsylvania Capital Financial Statements" shall mean (i) the
unaudited balance sheets of Pennsylvania Capital as of September 30, 2000 and
December 31, 2000 and the respective related statements of cash flows and
changes in shareholder's equity (including related notes, if any) and the income
statements for the periods then ending, (ii) the audited consolidated balance
sheets of Pennsylvania Capital as of December 31, 1999, 1998 and 1997 and the
related statements of cash flows and changes in shareholders' equity for each of
these years (including related notes, if any) and the income statements for each
of the three years ended December 31, 1999, 1998 and 1997 and (iii) the balance
sheets of Pennsylvania Capital and related statements of income (including
statements of cash flows and changes in shareholders' equity and related notes,
if any) with respect to quarterly or annual periods ended subsequent to
September 30, 2000.
1.20. "Previously Disclosed" shall mean disclosed prior to the
execution hereof in a detailed letter or schedule, for which any and all
representations, warranties and covenants are hereby qualified by such letter or
schedule and which such letter or schedule shall identify the appropriate
provision of this Reorganization Agreement to which it relates dated of even
date herewith and delivered to (i) Pennsylvania Capital by Three Rivers, the
receipt of which shall be acknowledged in writing by Pennsylvania Capital, or
(ii) Three Rivers by Pennsylvania Capital, the receipt of which shall be
acknowledged in writing by Three Rivers.
1.21. "Proxy Statement" shall mean the joint proxy statement/prospectus
(or similar documents), together with any post-effective amendments thereto,
sent to the shareholders of Three Rivers and Pennsylvania Capital, respectively,
to solicit their votes in connection with this Reorganization Agreement and the
Plan of Merger.
1.22 "Re-evaluation Date" shall have the meaning found in Article V of
the Plan of Merger.
1.23. "Registration Statement" shall mean the registration statement,
and any post-effective amendments thereto, with respect to the Three Rivers
Common Stock to be issued in connection with the Merger as declared effective by
the Commission under the Securities Act.
1.24. "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, and stock appreciation rights,
performance units and other similar stock-based rights whether they obligate the
issuer thereof to issue stock or other securities or to pay cash.
1.25. "SEC Documents" shall mean all reports and registration
statements filed, or required to be filed, by a party hereto pursuant to the
Securities Laws.
1.26. "Securities Act" shall mean the Securities Act of 1933, as
amended.
1.27. "Securities Laws" shall mean: the Securities Act; the Exchange
Act; the Investment Company Act; 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.
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1.28. "Three Rivers Financial Statements" shall mean (i) the unaudited
balance sheets of Three Rivers Bank as of September 30, 2000 and December 31,
2000 and the related statements of cash flows and changes in shareholder's
equity (including related notes, if any) and the income statements for the
periods then ending, (ii) the audited consolidated balance sheets of Three
Rivers as of December 31, 1999, 1998 and 1997 and the related consolidated
statements of income, cash flows and changes in shareholders' equity (including
related notes, if any) for each of the three years ended December 31, 1999, 1998
and 1997 as filed by Three Rivers in SEC Documents and (iii) the consolidated
balance sheets of Three Rivers and related consolidated statements of income,
cash flows and changes in shareholders' equity (including related notes, if any)
as filed by Three Rivers in SEC Documents with respect to quarterly or annual
periods ended subsequent to September 30, 2000; provided, however, that all
financial statements shall be prepared on a pro forma basis for periods during
which Three Rivers Bank was a wholly-owned subsidiary of USBANCORP, Inc. prior
to the April 3, 2000 tax-free spin-off of Three Rivers to the shareholders of
USBANCORP, Inc. on pursuant to Section 355 of the Code.
1.29. "Tax" or "Taxes" shall mean all (i) income, gross receipts,
gains, sales, use, employment, franchise, profits, excise, property, value
added, commercial rent or other taxes, (ii) fees, stamp taxes and duties,
assessments or charges of any kind whatsoever (whether payable directly or by
withholding), together with any interest and penalties, or (iii) additions to
tax, or additional amounts with respect thereto, imposed by any taxing
authority.
1.30. "Tax Returns" shall mean all federal, state, local and foreign
tax returns including, without limitation, estimated tax returns, returns
required under Sections 1441-1446 and 6031-6060 of the Code and any regulations
thereunder, and any comparable state and local laws and regulations, withholding
tax returns, FICA and FUTA returns and back-up withholding returns required
under Section 3406 of the Code and the regulations thereunder, and any
comparable state and local laws and regulations.
Other terms used herein are defined in the preamble and the recitals to
this Reorganization Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF PENNSYLVANIA CAPITAL
Pennsylvania Capital hereby represents and warrants to Three Rivers as
follows:
2.1. CAPITAL STRUCTURE OF PENNSYLVANIA CAPITAL
(a) As of the date hereof, the authorized capital stock of Pennsylvania
Capital consists of 5,000,000 shares of Common Stock, par value $1.00 per share
("Pennsylvania Capital Common"), 100,000 shares of Class A Common Stock, par
value $1.00 per share ("Pennsylvania Capital Class A Stock") and 1,000,000
shares of Preferred Stock, par value $1.00 per share ("Pennsylvania Capital
Preferred Stock"). ("Pennsylvania Capital Common" and "Pennsylvania Capital
Class A Stock" are sometimes collectively herein referred to as "Pennsylvania
Capital Stock"). As of the date hereof, 404,777 shares of Pennsylvania Capital
Common, 36,675 shares of Pennsylvania Capital Class A Stock and no shares of
Pennsylvania Capital Preferred Stock are
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issued and outstanding. All outstanding shares of Pennsylvania Capital Stock
have been duly issued and are validly outstanding, fully paid and nonassessable.
None of the shares of Pennsylvania Capital Stock has been issued in violation of
the preemptive rights of any person.
(b) Except as Previously Disclosed, there are no Rights authorized,
issued or outstanding with respect to the Pennsylvania Capital Stock.
2.2. NO SUBSIDIARIES
Pennsylvania Capital does not own, directly or indirectly, 5% or more
of the outstanding capital stock or other voting securities of any corporation,
bank, savings association or other organization.
2.3. ORGANIZATION, STANDING AND AUTHORITY OF PENNSYLVANIA CAPITAL
Pennsylvania Capital is a duly organized Pennsylvania banking
institution, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. Pennsylvania Capital has full power and authority
to carry on its business as now conducted. Pennsylvania Capital is not required
to be qualified to do business in any other State of the United States or any
foreign jurisdiction except the State of Ohio in which an application for a
license as a foreign corporation may be necessary. Pennsylvania Capital has all
material federal, state and local governmental authorizations necessary for it
to own or lease its properties and assets and to carry on its business as it is
now being conducted.
2.4. AUTHORIZED AND EFFECTIVE REORGANIZATION AGREEMENT
(a) Pennsylvania Capital has all requisite corporate power and
authority to enter into and perform all of its obligations under this
Reorganization Agreement. The execution and delivery of this Reorganization
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 Pennsylvania Capital, subject to approval thereof by the
shareholders of Pennsylvania Capital to the extent required by applicable law,
and the Articles of Incorporation and By-Laws of Pennsylvania Capital.
(b) Upon the execution of the Plan of Merger and at all times
thereafter until the Closing Date, Pennsylvania Capital will have all requisite
corporate power and authority to enter into and perform all of its obligations
under the Plan of Merger, and the execution and delivery of the Plan of Merger
and the consummation of the transactions contemplated thereby (at the time of
such execution) will have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Pennsylvania Capital, except
that the affirmative vote of the holders of at least 66-2/3% of the outstanding
shares of Pennsylvania Capital Common and Pennsylvania Capital Class A Stock,
voting together as a class, is required to approve the Plan of Merger pursuant
to the Articles of Incorporation of Pennsylvania Capital and the Pennsylvania
Banking Code.
(c) This Reorganization Agreement constitutes a legal, valid and
binding obligation of Pennsylvania Capital and the Plan of Merger, upon the
authorization, execution and delivery thereof by the parties thereto, will
constitute a legal, valid and binding obligation of
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Pennsylvania Capital, in each case enforceable against it in accordance with
their respective terms, subject to receipt of shareholder approval and, as to
enforceability, subject to bankruptcy, insolvency, fraudulent conveyance and
other laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(d) Except as Previously Disclosed, neither the execution and delivery
of this Reorganization Agreement or the Plan of Merger, nor consummation of the
transactions contemplated hereby or thereby, nor compliance by Pennsylvania
Capital with any of the provisions hereof or thereof shall (i) conflict with or
result in a breach of any provision of the Articles of Incorporation or By-laws
of Pennsylvania Capital, (ii) constitute or result in a breach of any material
term, condition or provision of, or 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 Pennsylvania Capital pursuant to, any material note, bond, mortgage,
indenture, license, agreement or other instrument or obligation, or (iii)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Pennsylvania Capital (provided approval is obtained by appropriate
federal and state regulatory authorities) except for such violations which,
either individually or in the aggregate, would not have a material adverse
effect on Pennsylvania Capital.
2.5 REGULATORY FILINGS
Pennsylvania Capital has filed all reports required by statute or
regulation to be filed with any federal or state bank regulatory agency and such
reports were prepared, in all material respects, in accordance with the
applicable statutes, regulations and instructions in existence as of the date of
filing of such reports. Except as Previously Disclosed, there are no unresolved
violations, criticisms or exceptions by the FDIC or other federal or state
regulatory agency with respect to any filings made by Pennsylvania Capital.
2.6. FINANCIAL STATEMENTS; BOOKS AND RECORDS; MINUTE BOOKS
The Pennsylvania Capital Financial Statements fairly present the
financial position of Pennsylvania Capital as of the dates indicated and the
results of operations (and changes in shareholders' equity and cash flows for
audited periods) of Pennsylvania Capital for the periods then ended in
conformity with generally accepted accounting principles (in all material
respects for unaudited periods) applied on a consistent basis except as
disclosed therein. Except as Previously Disclosed, (i) the books and records of
Pennsylvania Capital fairly reflect in all material respects the transactions to
which it is a party or by which its properties are subject or bound, (ii) such
books and records have been properly kept and maintained and are in compliance
in all material respects with all applicable legal and accounting requirements
and (iii) the minute books of Pennsylvania Capital contain accurate records of
all corporate actions of its shareholders and Board of Directors (including
committees of its Board of Directors).
2.7. MATERIAL ADVERSE CHANGE
Except as Previously Disclosed, Pennsylvania Capital has not suffered
any material adverse change in its financial condition, results of operations or
business since September 30, 2000.
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2.8. ABSENCE OF UNDISCLOSED LIABILITIES
Pennsylvania Capital has no liability (contingent or otherwise) that is
material to Pennsylvania Capital, or that, when combined with all similar
liabilities, would be material to Pennsylvania Capital, except as disclosed in
the Pennsylvania Capital Financial Statements as of the date of this
Reorganization Agreement or as Previously Disclosed.
2.9. PROPERTIES
Except as Previously Disclosed, Pennsylvania Capital has good and
marketable title free and clear of all liens, encumbrances, charges, defaults or
equitable interests to all of the properties and assets, real and personal,
reflected on the Pennsylvania Capital Financial Statements as being owned by
Pennsylvania Capital as of September 30, 2000 or acquired after such date,
except (i) liens for taxes not yet due and payable, (ii) pledges to secure
deposits and other liens incurred in the ordinary course of its business
including security interests or pledges to secure advances from the Federal Home
Loan Bank, or other funding sources disclosed, and collateral securing deposits
of the City of Pittsburgh, (iii) such imperfections of title, easements and
encumbrances, if any, as are not material in character, amount or extent and
(iv) dispositions and encumbrances for reasonably adequate consideration in the
ordinary course of business. All leases pursuant to which Pennsylvania Capital,
as lessee, leases real or personal property are valid and subsisting in
accordance with their respective terms. Pennsylvania Capital has Previously
Disclosed a true, complete and correct list of all personal property owned by
officers or directors of Pennsylvania Capital and located on the premises of
Pennsylvania Capital or used in the business of Pennsylvania Capital.
2.10 LOANS
Except as Previously Disclosed, and to the knowledge of Pennsylvania
Capital, each loan reflected as an asset in the Pennsylvania Capital Financial
Statements as of September 30, 2000 and as of December 31, 2000 and each loan
entered into subsequent thereto, (i) is evidenced in all material respects by
notes, agreements or other evidences of indebtedness which are true, genuine and
what they purport to be, (ii) to the extent secured, has been secured by valid
liens and security interests which have been perfected except for such invalid
or unperfected security interests which would not reasonably be expected to have
a material effect on Pennsylvania Capital, or any transaction contemplated by
this Reorganization Agreement or the Plan of Merger, and (iii) is the legal,
valid and binding obligation of the obligor named therein, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles. Except as Previously
Disclosed, as of December 31, 2000, Pennsylvania Capital is not a party to any
loan, including any loan guaranty, with any director, executive officer or 5%
shareholder of Pennsylvania Capital or any person, corporation or enterprise
controlling, controlled by or under common control with any of the foregoing.
2.11. ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses reflected on the Pennsylvania Capital
Financial Statements, as of their respective dates, is adequate in all material
respects under the requirements of
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generally accepted accounting principles to provide for reasonably anticipated
losses on outstanding loans and is in conformity with all applicable banking
regulatory procedures and requirements.
2.12. TAX MATTERS
(a) Pennsylvania Capital has timely filed all federal income tax
returns required to be filed by it for each year through December 31, 1999 and
has timely filed, or caused to be filed, all other federal, state, local and
foreign Tax Returns required to be filed with respect to Pennsylvania Capital.
(b) All Taxes due in respect of any tax periods have been paid or
adequate reserves have been established for the payment of such Taxes and, as of
the Closing Date, all Taxes due or to become due in respect of any tax periods
ending on or prior to the Closing Date will have been paid or adequate reserves
or accruals will have been established for the payment thereof. Pennsylvania
Capital will not have any material liability for any Taxes in excess of the
amounts so paid or reserves or accruals so established. No audit examination or
deficiency or refund litigation is pending with respect to tax periods of
Pennsylvania Capital ending on or prior to the Closing Date.
(c) All federal, state and local (and, if applicable, foreign) Tax
Returns filed by Pennsylvania Capital are complete and accurate in all material
respects. Pennsylvania Capital is not delinquent in the payment of any Tax,
assessment or governmental charge, and Pennsylvania Capital has not requested
any extension of time within which to file any Tax Returns in respect of any
taxable year or portion thereof which have not since been filed. To the
knowledge of Pennsylvania Capital, no deficiencies for any Tax, assessment or
governmental charge have been proposed, asserted or assessed (tentatively or
otherwise) against Pennsylvania Capital that have not been settled and paid.
There are currently no agreements in effect with respect to Pennsylvania Capital
to extend the period of limitations for the assessment or collection of any Tax.
(d) Termination of the employment of any employees of Pennsylvania
Capital, or contemplated payment to any employees or officers of Pennsylvania
Capital, either before or following consummation of the transactions
contemplated hereby, will not cause Pennsylvania Capital or Three Rivers Bank to
make or to be required to make any "excess parachute payment" as that term is
defined in Section 280(G) of the Code.
(e) Pennsylvania Capital has no reason to believe that any conditions
exist that might prevent or impede this transaction from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
2.13. EMPLOYEE BENEFIT PLANS
(a) Pennsylvania Capital has Previously Disclosed true and complete
copies of all qualified pension or profit-sharing plans, any deferred
compensation, consulting, bonus or group insurance contract or any other
incentive, welfare or employee benefit plan or agreement maintained for the
benefit of employees or former employees of Pennsylvania Capital, and will make
available to Three Rivers (i) the most recent actuarial and financial reports
prepared with
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respect to any plans qualified under Section 401(a) of the Code, (ii) the most
recent annual reports filed with any government agency and (iii) all rulings and
determination letters and any open requests for rulings or letters that pertain
to any plan qualified under Section 401(a) of the Code.
(b) Neither Pennsylvania Capital (nor any pension plan maintained by
it) has incurred or reasonably expects to incur any material liability to the
Internal Revenue Service with respect to any plan qualified under Section 401(a)
of the Code. Except as Previously Disclosed, Pennsylvania Capital has never
sponsored, participated in or maintained any defined benefit pension plan.
Pennsylvania Capital has never participated in a "multiemployer plan" as such
term is defined in Section 3(37) of ERISA.
(c) As Previously Disclosed, a favorable determination letter has been
issued by the Internal Revenue Service with respect to each "employee pension
plan" (as defined in Section 3(2) of ERISA) of Pennsylvania Capital which is
intended to be a qualified plan to the effect that such plan is qualified under
Section 401 of the Code and tax exempt under Section 501 of the Code. No such
letter has been revoked or has been threatened to be revoked and Pennsylvania
Capital does not know of any ground on which such revocation may be based. Such
plans have been operated in all material respects in accordance with their terms
and applicable law.
(d) No prohibited transaction (which shall mean any transaction
prohibited by Section 406 of ERISA and not exempt under Section 408 of ERISA)
has occurred with respect to any "employee benefit plan" (as defined in Section
3(3) of ERISA) maintained by Pennsylvania Capital which would result in the
imposition, directly or indirectly, of an excise tax under Section 4975 of the
Code or the correction of which would have a material adverse effect on the
financial condition, results of operations or business of Pennsylvania Capital.
2.14. CERTAIN CONTRACTS
(a) Except as Previously Disclosed, Pennsylvania Capital is neither a
party to, nor is it bound by, (i) any material agreement, arrangement or
commitment whether or not made in the ordinary course of business (other than
loans or loan commitments made in the ordinary course of the banking business of
Pennsylvania Capital), (ii) any agreement, indenture or other instrument
relating to the borrowing of money by Pennsylvania Capital or the guarantee by
Pennsylvania Capital of any such obligation, other than instruments relating to
transactions entered into in the ordinary course of the banking business of
Pennsylvania Capital and reflected in the Pennsylvania Capital Financial
Statements, (iii) any agreement, arrangement or commitment relating to the
employment of a consultant or the employment, election, retention in office or
severance of any present or former director or officer or (iv) any contract,
agreement or understanding with a labor union, in each case whether written or
oral.
(b) Pennsylvania Capital is not in default under any material
agreement, commitment, arrangement, lease, insurance policy or other instrument
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 giving of notice or both, would constitute such a default.
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(c) Since December 31, 1999, Pennsylvania Capital has neither incurred
nor paid any obligation or liability that would be material to Pennsylvania
Capital, except obligations incurred or paid in connection with transactions in
the ordinary course of business of Pennsylvania Capital consistent with its past
practices or except as Previously Disclosed or reflected in the Pennsylvania
Capital Financial Statements.
(d) Except as Previously Disclosed, Pennsylvania Capital is not a party
to any transaction (other than agreements Previously Disclosed in connection
with Section 2.13(a) and 2.14(a) hereof) with (i) any person who has been an
executive officer or a director of Pennsylvania Capital since January 1, 1999,
(ii) any spouse of any such officer or director, (iii) any parent, child,
brother, sister, or other family relation of any such officer or director who
has the same home as such officer or director, (iv) any corporation or other
entity of which any such officer or director or any such family relation is an
officer, director, partner, or greater than 5% shareholder (based on percentage
ownership of voting stock) or (v) any "affiliate" or "associate" of any such
persons or entities (as such terms are defined in the rules and regulations
promulgated under the Securities Act), including, without limitation, (x) any
transaction involving a contract, agreement, or other arrangement providing for
the employment of, furnishing of materials, products or services by, rental of
real or personal property from, or otherwise requiring payments to, any such
person or entity, and (y) loans (including any loan guaranty) outstanding at the
date hereof, but not (z) deposit accounts maintained at Pennsylvania Capital in
the ordinary course of its banking business.
2.15. LEGAL PROCEEDINGS
Except as Previously Disclosed, there are no actions, suits or
proceedings instituted, pending or, to the knowledge of Pennsylvania Capital,
threatened against Pennsylvania Capital or against any asset, interest or right
of Pennsylvania Capital that would, if determined adversely to Pennsylvania
Capital, have a material adverse effect on Pennsylvania Capital. To the
knowledge of Pennsylvania Capital, there are no actual or threatened actions,
suits or proceedings which present a claim to restrain or prohibit the
transactions contemplated herein or to impose upon Three Rivers, Pennsylvania
Capital or any of their respective subsidiaries or affiliates any material cost
or obligation in connection therewith. Except as Previously Disclosed, there are
no actions, suits or proceedings instituted, pending or, to the knowledge of
Pennsylvania Capital, threatened against any present or former director or
executive officer of Pennsylvania Capital that might give rise to a claim for
indemnification that would, if determined adversely to Pennsylvania Capital,
have a material adverse effect on Pennsylvania Capital, and, to the knowledge of
Pennsylvania Capital, there is no reasonable basis for any such action, suit or
proceeding.
2.16. COMPLIANCE WITH LAWS
Except as Previously Disclosed, Pennsylvania Capital is in compliance
in all material respects with all statutes and regulations applicable to the
conduct of its business, and neither Pennsylvania Capital nor, to the knowledge
of Pennsylvania Capital, any director or officer thereof received notification
from any agency or department of federal, state or local government (i)
asserting a material violation of any such statute or regulation, (ii)
threatening to revoke any license, franchise, permit or government authorization
or (iii) restricting or in any way limiting
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its operations. Pennsylvania Capital is not subject to any regulatory or
supervisory cease and desist order, agreement, directive, memorandum of
understanding or commitment, and it has not received any communication
requesting that it enter into any of the foregoing. Without limiting the
generality of the foregoing, Pennsylvania Capital is in material compliance with
the filing requirements for all currency transaction reports required to be
filed and taken all other material actions required under the Currency and
Foreign Transactions Reporting Act, codified at 31 U.S.C. ss. 5301 et seq., and
its implementing regulations.
2.17. BROKERS AND FINDERS
Neither Pennsylvania Capital nor any of its officers, directors or
employees has employed any broker, finder or financial advisor or incurred any
liability for any fees or commissions in connection with the transactions
contemplated by this Reorganization Agreement or the Plan of Merger, except that
Pennsylvania Capital has engaged and will pay a fee to Xxxxxxxxx Associates,
Inc. in connection with a fairness opinion regarding the Merger.
2.18. INSURANCE
Pennsylvania Capital has Previously Disclosed a complete and accurate
summary of all insurance policies and bonds maintained by Pennsylvania Capital.
Except as Previously Disclosed, Pennsylvania Capital has not received any notice
of a premium increase or cancellation with respect to any of its insurance
policies or bonds and, within the last three years, Pennsylvania Capital has not
been refused any insurance coverage sought or applied for, and Pennsylvania
Capital has no reason to believe that existing insurance coverage cannot be
renewed as and when the same shall expire, upon terms and conditions as
favorable as those presently in effect, other than possible increases in
premiums or unavailability in coverage that have not resulted from any
extraordinary loss experience of Pennsylvania Capital.
2.19. DEPOSIT INSURANCE
Except as Previously Disclosed, Pennsylvania Capital is an insured bank
as defined in the FDIA, and Pennsylvania Capital has paid all assessments and
filed all reports required by the FDIA.
2.20. ENVIRONMENTAL LIABILITY
Except as Previously Disclosed, there is no legal, administrative,
arbitral or other proceeding to which Pennsylvania Capital is a party, or, to
the knowledge of Pennsylvania Capital, claim, action, cause of action, or
governmental investigation of any nature seeking to impose, or that could result
in the imposition, on Pennsylvania Capital of any liability arising under any
local, state or federal environmental statute, regulation or ordinance
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, pending or, to the knowledge
of Pennsylvania Capital, threatened against Pennsylvania Capital, which
liability might have a material adverse effect on the financial condition,
results of operations or business of Pennsylvania Capital; except as Previously
Disclosed, to the knowledge of Pennsylvania Capital, there is no reasonable
basis for any such proceeding, claim, action or governmental investigation that
would impose any such liability; and Pennsylvania Capital is not subject to any
agreement, order, judgment, decree or
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memorandum by or with any court, governmental authority, regulatory agency or
third party imposing any such liability.
2.21. CERTAIN INFORMATION
At the time the Proxy Statement is mailed to shareholders of
Pennsylvania Capital, up to and including the time of the later of the
Pennsylvania Capital shareholders' meeting held to vote upon the Merger or the
Three Rivers shareholders' meeting held to vote upon the Merger, the information
provided by Pennsylvania Capital and contained in the Proxy Statement (i) shall
comply in all material respects with the applicable provisions of the
regulations of the Securities Laws, and (ii) shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements contained therein not
misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THREE RIVERS
Three Rivers and, where appropriate, Three Rivers Bank, jointly and
severally hereby represent and warrant to Pennsylvania Capital as follows:
3.1. CAPITAL STRUCTURE OF THREE RIVERS
As of the date hereof, the authorized capital stock of Three Rivers
consists of (i) 5,000,000 shares of preferred stock, no par value, none of which
has been issued and (ii) 20,000,000 shares of common stock, par value $0.01 per
share ("Three Rivers Common Stock"), of which 6,675,212 shares are issued and
outstanding. All outstanding shares of Three Rivers' capital stock have been
duly issued and are validly outstanding, fully paid and nonassessable. Except as
Previously Disclosed, there are no Rights authorized, issued or outstanding with
respect to the capital stock of Three Rivers. None of the shares of Three
Rivers' capital stock has been issued in violation of the preemptive rights of
any person. The shares of Three Rivers Common Stock to be issued in connection
with the Merger have been duly authorized and, when issued in accordance with
the terms of this Reorganization Agreement and the Plan of Merger, will be
validly issued, fully paid, nonassessable and free and clear of any preemptive
rights. As of the date hereof, no shares of Three Rivers Common Stock were
reserved for issuance.
3.2. ORGANIZATION, STANDING AND AUTHORITY OF THREE RIVERS
Each of Three Rivers and its wholly-owned banking subsidiary, Three
Rivers Bank, is a duly organized corporation, validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania, with full corporate
power and authority to carry on its business as now conducted. Three Rivers is
registered as a bank holding company under the Bank Holding Company Act. Three
Rivers and its subsidiaries have all material federal, state and local
government authorizations necessary for them to own or lease their properties
and assets and to carry on their business as it is now being conducted.
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3.3. AUTHORIZED AND EFFECTIVE REORGANIZATION AGREEMENT
(a) Each of Three Rivers and Three Rivers Bank has all requisite
corporate power and authority to enter into and perform all of its obligations
under this Reorganization Agreement. The execution and delivery of this
Reorganization 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 Three Rivers and Three Rivers Bank.
(b) Upon the execution of the Plan of Merger, and at all times
thereafter until the Closing Date, each of Three Rivers and Three Rivers Bank
will have all requisite corporate power and authority to enter into and perform
all of its obligations under the Plan of Merger, and the execution and delivery
of the Plan of Merger and the consummation of the transactions contemplated
thereby (at the time of such execution) will have been duly and validly
authorized by all necessary corporate action in respect thereof on the part of
Three Rivers and Three Rivers Bank, except that the affirmative vote of the
holders of a majority of the outstanding shares of Three Rivers Common Stock is
required to authorize the issuance of Three Rivers Common Stock pursuant to this
Reorganization Agreement and Plan of Merger in accordance with Nasdaq
requirements.
(c) The Board of Directors of Three Rivers has directed that this
Reorganization Agreement and the Plan of Merger be submitted to Three Rivers'
stockholders for approval at a regular meeting to be held as soon as
practicable.
(d) This Reorganization Agreement constitutes a legal, valid and
binding obligation of Three Rivers and Three Rivers Bank and the Plan of Merger,
upon the authorization, execution and delivery thereof by the parties thereto,
will constitute a legal, valid and binding obligation of Three Rivers and Three
Rivers Bank, enforceable against them in accordance with their respective terms,
subject to receipt of shareholder approval and, as to enforceability, subject to
bankruptcy, insolvency, fraudulent conveyance and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(e) Neither the execution and delivery of this Reorganization Agreement
or the Plan of Merger, nor consummation of the transactions contemplated hereby
or thereby, nor compliance by Three Rivers or Three Rivers Bank with any of the
provisions hereof or thereof shall (i) conflict with or result in a breach of
any provision of the Articles of Incorporation, charter or By-laws of Three
Rivers or Three Rivers Bank, (ii) constitute or result in a breach of any
material term, condition or provision of, or 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 Three Rivers or Three Rivers Bank pursuant to, any note, bond,
mortgage, indenture, license, agreement or other instrument or obligation or
(iii) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Three Rivers or Three Rivers Bank except for such violations
which, either individually or in the aggregate would not have a material adverse
effect on Three Rivers.
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3.4. SEC DOCUMENTS; REGULATORY FILINGS
(a) Three Rivers has timely filed all SEC Documents together with any
required amendments thereto, that it was required to file with the SEC. All such
filings by Three Rivers complied in all material respects with all of the
Securities Laws and are true, accurate and complete. There are no unresolved
violations, criticisms or exceptions by the SEC with respect to any filings made
by Three Rivers.
(b) Three Rivers and each Three Rivers subsidiary has filed all reports
required by statute or regulation to be filed with any federal or state bank
regulatory agency and such reports were prepared, in all material respects, in
accordance with the applicable statutes, regulations and instructions in
existence as of the date of filing of such reports.
3.5. FINANCIAL STATEMENTS; BOOKS AND RECORDS; MINUTE BOOKS
The Three Rivers Financial Statements fairly present the consolidated
financial position of Three Rivers as of the dates indicated and the results of
operations, changes in shareholders' equity and cash flows of Three Rivers for
the periods then ended in conformity with generally accepted accounting
principles (in all material respects for unaudited periods) applied on a
consistent basis except as disclosed therein. For periods prior to April 1, 2000
such statements have been prepared on a pro forma basis. Except as Previously
Disclosed (i) the books and records of Three Rivers fairly reflect in all
material respects the transactions to which it is a party or by which its
properties are subject or bound, (ii) such books and records have been properly
kept and maintained and are in compliance in all material respects with all
applicable legal and accounting requirements, and (iii) minute books of Three
Rivers contain accurate records of all corporate actions of its shareholders and
Board of Directors (including committees of its Board of Directors).
3.6. MATERIAL ADVERSE CHANGE
Neither Three Rivers nor Three Rivers Bank has suffered any material
adverse change in its financial condition, results of operations or business
since September 30, 2000.
3.7. ABSENCE OF UNDISCLOSED LIABILITIES
Three Rivers has no liability (contingent or otherwise) that is
material to Three Rivers, or that, when combined with all similar liabilities,
would be material to Three Rivers, except as disclosed in the Three Rivers
Financial Statements or as Previously Disclosed.
3.8. ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses reflected on the Three Rivers Financial
Statements, as of their respective dates, is adequate in all material respects
under the requirements of generally accepted accounting principles to provide
for reasonably anticipated losses on outstanding loans and is in conformity with
all applicable banking regulatory procedures and requirements.
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3.9. TAX MATTERS
(a) Three Rivers has timely filed, or caused to be filed, all federal,
state, local and foreign Tax Returns required to be filed with respect to Three
Rivers.
(b) All Taxes due in respect of any tax periods have been paid or
adequate reserves have been established for the payment of such Taxes and, as of
the Closing Date, all Taxes due or to become due in respect of any tax periods
ending on or prior to the Closing Date will have been paid or adequate reserves
or accruals will have been established for the payment thereof. Three Rivers
will not have any material liability for any Taxes in excess of the amounts so
paid or reserves or accruals so established. No audit examination or deficiency
or refund litigation is pending with respect to tax periods of Three Rivers
ending on or prior to the Closing Date.
(c) All federal, state and local (and, if applicable, foreign) Tax
Returns filed by Three Rivers are complete and accurate in all material
respects. Three Rivers is not delinquent in the payment of any Tax, assessment
or governmental charge, and Three Rivers has not requested any extension of time
within which to file any Tax Returns in respect of any taxable year or portion
thereof which have not since been filed. To the knowledge of Three Rivers, no
deficiencies for any Tax, assessment or governmental charge have been proposed,
asserted or assessed (tentatively or otherwise) against Three Rivers that have
not been settled and paid. There are currently no agreements in effect with
respect to Three Rivers to extend the period of limitations for the assessment
or collection of any Tax.
(d) Neither Three Rivers nor any of its subsidiaries has any reason to
believe that any conditions exist that might prevent or impede this transaction
from qualifying as a reorganization within the meaning of Section 368(a) of the
Code.
3.10. LEGAL PROCEEDINGS
Except as Previously Disclosed, there are no actions, suits or
proceedings instituted, pending or, to the knowledge of Three Rivers or Three
Rivers Bank, threatened against Three Rivers, Three Rivers Bank or against any
asset, interest or right of Three Rivers or Three Rivers Bank that would, if
determined adversely to Three Rivers or Three Rivers Bank, have a material
adverse effect on Three Rivers or Three Rivers Bank. Except as Previously
Disclosed, there are no actual or threatened actions, suits or proceedings
which, to the knowledge of Three Rivers or Three Rivers Bank, present a claim to
restrain or prohibit the transactions contemplated herein or to impose upon
Three Rivers or Three Rivers Bank, Pennsylvania Capital or any of their
respective subsidiaries or affiliates any material cost or obligation in
connection therewith. Except as Previously Disclosed, there are no actions,
suits or proceedings instituted, pending or, to the knowledge of Three Rivers or
Three Rivers Bank, threatened against any present or former director or
executive officer of Three Rivers or Three Rivers Bank that might give rise to a
claim for indemnification that would, if determined adversely to Three Rivers or
Three Rivers Bank, have a material adverse effect on Three Rivers or Three
Rivers Bank, and, to the knowledge of Three Rivers and Three Rivers Bank, there
is no reasonable basis for any such action, suit or proceeding.
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3.11. COMPLIANCE WITH LAWS
Except as Previously Disclosed, each of Three Rivers and its
subsidiaries is in compliance in all material respects with all statutes and
regulations applicable to the conduct of its business, and none of Three Rivers,
its subsidiaries or, to the knowledge of Three Rivers, any director or executive
officer of Three Rivers or any of its subsidiaries has received notification
from any agency or department of federal, state or local government (i)
asserting a material violation of any such statute or regulation, (ii)
threatening to revoke any license, franchise, permit or government authorization
or (iii) restricting or in any way limiting its operations. None of Three Rivers
or any subsidiary of Three Rivers is subject to any regulatory or supervisory
cease and desist order, agreement, directive, memorandum of understanding or
commitment, and none of them has received any communication requesting that they
enter into any of the foregoing.
3.12. BROKERS AND FINDERS
Neither Three Rivers, its subsidiaries, nor any of their officers,
directors or employees, has employed any broker, finder or financial advisor or
incurred any liability for any fees or commissions in connection with the
transactions contemplated by this Reorganization Agreement or the Plan of
Merger, except that Three Rivers has engaged and will pay a fee or commission to
Sandler X'Xxxxx & Partners, L.P.
3.13. DEPOSIT INSURANCE
Three Rivers Bank is an insured bank as defined in the FDIA, and Three
Rivers Bank has paid all assessments and filed all reports required by the FDIA.
3.14. ENVIRONMENTAL LIABILITY
Except as Previously Disclosed, there is no legal, administrative,
arbitral or other proceeding to which Three Rivers or any of its subsidiaries is
a party, or, to the knowledge of Three Rivers, claim, action, cause of action,
or governmental investigation of any nature seeking to impose, or that could
result in the imposition, on Three Rivers or any of its subsidiaries of any
liability arising under any local, state or federal environmental statute,
regulation or ordinance including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
pending or, to the knowledge of Three Rivers, threatened against Three Rivers or
any of its subsidiaries, which liability might have a material adverse effect on
the financial condition, results of operations or business of Three Rivers or
any of its subsidiaries. Except as Previously Disclosed, to the knowledge of
Three Rivers, there is no reasonable basis for any such proceeding, claim,
action or governmental investigation that would impose any such liability and
neither Three Rivers nor any of its subsidiaries are subject to any agreement,
order, judgment, decree or memorandum by or with any court, governmental
authority, regulatory agency or third party imposing any such liability.
3.15. CERTAIN INFORMATION
(a) The information provided by Three Rivers for use in the Proxy
Statement, at the time the Proxy Statement is mailed to shareholders of
Pennsylvania Capital and at all subsequent
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times, up to and including the time of the latter of the Pennsylvania Capital
shareholders' meeting to vote upon the Merger or the Three Rivers shareholders'
meeting to vote upon the Merger, shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading.
(b) When the Registration Statement or any post-effective amendment
thereto shall become effective, and at all times subsequent to such
effectiveness up to and including the time of the later of the Pennsylvania
Capital shareholders' meeting to vote upon the Merger or the Three Rivers
shareholders' meeting to vote upon the Merger, such Registration Statement and
all amendments or supplements thereto, with respect to all information set forth
therein furnished by Three Rivers relating to Three Rivers and its subsidiaries,
(i) shall comply in all material respects with the applicable provisions of the
Securities Laws, and (ii) shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements contained therein not misleading.
ARTICLE 4
COVENANTS
4.1. SHAREHOLDERS' MEETINGS
Three Rivers and Pennsylvania Capital shall submit this Reorganization
Agreement and the Plan of Merger and, in the case of Three Rivers, the issuance
of Three Rivers Common Stock thereunder, to their respective shareholders for
approval at special meetings to be held as soon as practicable after the
execution of this Reorganization Agreement and after the Registration Statement
is declared effective. Subject to the fiduciary duties of the respective Boards
of Directors of Three Rivers and Pennsylvania Capital as determined by each
after consultation with such Board's counsel, the Boards of Directors of Three
Rivers and Pennsylvania Capital shall recommend at the respective shareholders'
meetings that the shareholders vote in favor of such approval.
4.2. PROXY STATEMENT; REGISTRATION STATEMENT
As promptly as practicable after the date hereof, Three Rivers and
Pennsylvania Capital shall cooperate in the preparation of the Proxy Statement
to be mailed to the shareholders of Three Rivers and Pennsylvania Capital in
connection with the Merger and the transactions contemplated thereby and to be
filed by Three Rivers as part of the Registration Statement with the SEC and
with the FDIC by Pennsylvania Capital. Provided that Pennsylvania Capital has
complied with the requirements of this Reorganization Agreement, Three Rivers
will file the Registration Statement with the SEC as promptly as practicable
following the preparation of the Proxy Statement. Three Rivers will advise
Pennsylvania Capital, after it receives notice thereof, of the time when the
Registration Statement or any post-effective amendment thereto has become
effective or any supplement or amendment has been filed, of the issuance of any
stop order, of the suspension of qualification of the Three Rivers Common Stock
issuable in connection with the Merger for offering or sale in any jurisdiction,
or the initiation or threat of any proceeding for any such purpose, or of any
request by the SEC for the amendment or
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supplement of the Registration Statement or for additional information. Three
Rivers shall take all actions necessary to register or qualify the shares of
Three Rivers Common Stock to be issued in the Merger pursuant to all applicable
state "blue sky" or securities laws and shall maintain such registrations or
qualifications in effect for all purposes hereof. Three Rivers shall apply for
approval to have the shares of Three Rivers Common Stock authorized for trading
on the Nasdaq National Market prior to the Effective Date.
Each of Pennsylvania Capital and Three Rivers agrees that if, prior to
the Effective Date, it shall become aware of any information that would cause
any of the statements contained in the Proxy Statement to be false or misleading
with respect to a material fact, or the omission of which would cause any of the
statements contained in the Proxy Statement to be false or misleading with
respect to a material fact, it will promptly inform the other party of such
information and take all necessary steps to correct the Proxy Statement and to
inform its shareholders of such corrected information.
4.3. PLAN OF MERGER
The terms of the Plan of Merger are incorporated herein by reference.
Pennsylvania Capital shall execute and deliver the Plan of Merger as soon as
practicable following Three Rivers' request therefor.
4.4. APPLICATIONS
As promptly as practicable after the date hereof, Three Rivers shall
submit any requisite applications for prior approval or notice of the
transactions contemplated herein and in the Plan of Merger to (i) the FDIC
pursuant to 12 U.S.C. ss. 1828(c)(2), (ii) the Department of Banking pursuant to
Section 1603 of the Pennsylvania Banking Code, and (iii) the Federal Reserve
Board pursuant to 12 C.F.R. ss. 225.12(d)(2) and each of the parties hereto
shall submit any additional applications, notices or other filings to any other
state or federal government agency, department or body the approval of which is
required for consummation of the Merger. Each of Three Rivers and Pennsylvania
Capital represents and warrants to the other that all information concerning it
and its directors, officers and shareholders included (or submitted for
inclusion) in any such application and furnished by it shall be true, correct
and complete in all material respects.
Each of Three Rivers and Pennsylvania Capital, subject to applicable
laws relating to information exchange, shall have the right to advance review
of, and the right to consult with the other in regard to, all written
information submitted to any (i) third party, (ii) governmental authority or
(iii) self-regulatory organization in connection with the transactions
contemplated by this Reorganization Agreement and the Plan of Merger. In
exercising this right, each party agrees to act reasonably and promptly. Each
party further agrees that it will consult with the other party with respect to
the obtaining of all permits, consents, approvals and authorizations of all
third parties, governmental authorities and self-regulatory organizations
necessary or advisable to consummate the transactions contemplated by the
Reorganization Agreement and the Plan of Merger. Each party further agrees to
keep the other apprised of the status of the completion of transactions
contemplated by this paragraph.
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4.5. BEST EFFORTS; CERTAIN NOTICES AND INFORMATION
(a) Three Rivers and Pennsylvania Capital shall each use its best
efforts in good faith to (i) furnish such information as may be required in
connection with the preparation of the documents referred to in Sections 4.2 and
4.4 above and (ii) take or cause to be taken all action necessary or desirable
on its part so as to permit consummation of the Merger at the earliest possible
date, including, without limitation, (1) obtaining the consent or approval of
each individual, partnership, corporation, association or other business or
professional entity whose consent or approval is required for consummation of
the transactions contemplated hereby except where failure to obtain consent
would not have a material adverse effect on the consummation of the transactions
contemplated by this Reorganization Agreement and the Plan of Merger, provided
that Pennsylvania Capital shall not agree to make any payments or modifications
to agreements in connection therewith without the prior written consent of Three
Rivers, except in the ordinary course of business and where such payment or
modification would not have a material adverse effect on Pennsylvania Capital,
and (2) requesting the delivery of appropriate opinions, consents and letters
from its counsel and independent auditors. No party hereto shall take or fail to
take, or to the best of its ability permit to be taken or omit to be taken by
any third persons, any action that would substantially impair the prospects of
completing the Merger pursuant to this Reorganization Agreement and the Plan of
Merger, that would materially delay such completion, or that would adversely
affect the qualification of the Merger as a reorganization within the meaning of
Section 368(a) of the Code.
(b) Pennsylvania Capital shall give prompt notice to Three Rivers, and
Three Rivers shall give prompt notice to Pennsylvania Capital, of (i) the
occurrence, or failure to occur, of any event which occurrence or failure would
be likely to cause any representation or warranty contained in this
Reorganization Agreement to be untrue or inaccurate in any material respect at
any time from the date hereof to the Closing Date and (ii) any material failure
of Three Rivers or Pennsylvania Capital, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder, and each party shall use all reasonable efforts to remedy such
failure.
(c) Each party shall provide and shall request its auditors to provide
the other party with such historical financial information regarding it (and
related audit reports and consents) as the other party may reasonably request
for securities disclosure purposes.
4.6. INVESTIGATION AND CONFIDENTIALITY
Pennsylvania Capital and Three Rivers will each keep the other advised
of all material developments relevant to its business and to the consummation of
the transactions contemplated herein. Pennsylvania Capital and Three Rivers may
make or cause to be made such investigation of the financial and legal condition
of the other as such party reasonably deems necessary or advisable in connection
with the transactions contemplated herein and in the Plan of Merger, provided,
however, that such investigation shall be reasonably related to such
transactions and shall not interfere unnecessarily with normal operations.
Pennsylvania Capital and Three Rivers agree to furnish the other and the other's
advisors with such financial data and other information with respect to its
business and properties as such other party shall from time to time reasonably
request. No investigation pursuant to this Section 4.6 shall affect or be deemed
to modify any
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representation or warranty made by, or the conditions to the obligations to
consummate the Merger of, any party hereto. Each party shall, and shall cause
its directors, officers, attorneys and advisors to, maintain the confidentiality
of all information obtained in such investigation which is not otherwise
publicly disclosed by the other party, said undertaking with respect to
confidentiality to survive any termination of this Agreement pursuant to Section
6.1 hereof. In the event of termination of this Reorganization Agreement, each
party shall return to the furnishing party or destroy and certify the
destruction of all information previously furnished in connection with the
transactions contemplated by this Reorganization Agreement.
4.7. PRESS RELEASES
Pennsylvania Capital and Three Rivers shall agree with each other, in
advance, as to the form and substance of any press release related to this
Reorganization Agreement and the Plan of Merger or the transactions contemplated
hereby or thereby, and shall consult each other as to the form and substance of
other public disclosures related thereto, provided, however, that nothing
contained herein shall prohibit either party, following notification to the
other party, from making any disclosure which its counsel deems necessary or
appropriate under applicable law.
4.8. COVENANTS OF PENNSYLVANIA CAPITAL
(a) Prior to the Closing Date, and except as otherwise provided for by
this Reorganization Agreement, the Plan of Merger or except as consented to or
approved by Three Rivers, Pennsylvania Capital shall use its reasonable efforts
to preserve its properties, business and relationships with customers, employees
and other persons.
(b) Except with the prior written consent of Three Rivers, which
consent shall not be unreasonably withheld, between the date hereof and the
Effective Date, Pennsylvania Capital shall not:
(1) carry on its business other than in the usual, regular and
ordinary course in substantially the same manner as heretofore
conducted;
(2) declare, set aside, make or pay any dividend or other
distribution in respect of its capital stock;
(3) issue any shares of its capital stock or permit any
treasury shares to become outstanding, incur any additional debt
obligation or other obligation for borrowed money, other than in the
ordinary course of business of Pennsylvania Capital consistent with
past practice;
(4) issue, grant or authorize any Rights or effect any
recapitalization, reclassification, stock dividend, stock split or like
change in capitalization;
(5) amend its charter or by-laws;
(6) (i) merge with any other corporation, savings association
or bank, (ii) permit any other corporation, savings association or bank
to merge into it or consolidate with any other corporation, savings
association or bank, (iii) acquire control over any
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other firm, bank, corporation, savings association or organization, or
(iv) create any subsidiary;
(7) (i) fail to comply in any material respect with any
material laws, regulations, ordinances or governmental actions
applicable to it and to the conduct of its business, (ii) enter into
any material swap, hedge or other similar off-balance sheet
transaction, (iii) except to the extent determined in the good faith
judgment of the Board of Directors of Pennsylvania Capital to be in the
best interests of Pennsylvania Capital, waive or release any material
right or cancel or compromise any material debt or claim, (iv)
restructure, extend or modify any loan Previously Disclosed pursuant to
the second sentence of Section 2.10 hereof except as may occur in the
ordinary course of its business, (v) waive or release any right or
cancel or compromise any debt or claim in connection with any such
loan, or (vi) make any new loan except as may occur in the ordinary
course of its business;
(8) (i) liquidate, sell or dispose of any material assets or
acquire any material assets other than in the ordinary course of its
business, (ii) make any capital expenditures in excess of $50,000 in
the aggregate, (iii) establish new branches or other similar
facilities, (iv) or enter into or modify any leases or other contracts
that involve annual payments by Pennsylvania Capital that exceed
$25,000 in any instance or $50,000 in the aggregate;
(9) except as Previously Disclosed or mutually agreed upon,
(i) increase the rate of compensation of, pay or agree to pay any bonus
to, or provide any other employee benefit or incentive to, any of its
directors, officers or employees except in accordance with Pennsylvania
Capital's standard compensation and benefits practices, (ii) enter
into, modify or extend any employment or severance contracts with any
of its present or former directors, officers or employees, or (iii)
enter into or substantially modify (except as may be required by
applicable law) any pension, retirement, stock option, stock purchase,
stock appreciation right, savings, profit sharing, deferred
compensation, 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 other employees;
(10) change its lending, investment, asset/liability
management or other material banking policies in any material respect
except as may be required by changes in applicable law, regulation or
regulatory directives;
(11) change its methods of accounting in effect at December
31, 1999, except as required by changes in generally accepted
accounting principles concurred in by its independent certified public
accountants, 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 returns for the year ended
December 31, 1999, except as required by changes in law or applicable
regulations;
(12) (i) solicit, encourage or initiate inquiries or proposals
with respect to any acquisition or purchase of all or a substantial
portion of the assets of, or a substantial
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equity interest in, Pennsylvania Capital or any business combination
with Pennsylvania Capital, or, subject to the fiduciary duties of its
directors as advised by counsel, furnish any information relating to or
in connection with any such inquiries or proposals, other than as
contemplated by this Reorganization Agreement, (ii) or authorize or
permit any officer, director, agent or affiliate of it to do any of the
above, or (iii) fail to notify Three Rivers immediately if any such
inquiries or proposals are received by, any such information is
required from, or any such negotiations or discussions are sought to be
initiated with Pennsylvania Capital; or
(13) agree to do any of the foregoing.
(c) As soon as practicable, Pennsylvania Capital shall cause (i)
financial statements to be prepared in conformity with generally accepted
accounting principles for whatever full fiscal year periods are necessary to
comply with the requirements of Form S-4 under the Securities Act, with respect
to this transaction, and with the other requirements of the rules and
regulations under the Securities Act and the Exchange Act as may be applicable
to Three Rivers, (ii) its independent public accountants to perform an audit of
such financial statements in conformity with generally accepted auditing
standards, and (iii) its independent public accountants to consent to the use of
their opinion with respect to such financial statements in registration
statements filed by Three Rivers under the Securities Act.
4.9. CLOSING; ARTICLES OF MERGER
The transactions contemplated by this Reorganization Agreement and the
Plan of Merger shall be consummated at a closing to be held at such location as
the parties may agree, on the fifth business day following satisfaction or
waiver of the conditions to consummation of the Merger set forth in Article 5
hereof or such later date within 30 days thereafter as reasonably may be
specified by Three Rivers, with the Merger to be consummated after such
intermediate steps as Three Rivers reasonably may specify. The Merger shall be
effective at the time and date specified in the Articles of Merger.
4.10. PENNSYLVANIA CAPITAL EMPLOYEES; BOARD OF DIRECTORS
(a) Certain employees of Pennsylvania Capital as of the Effective Date
shall become employees of Three Rivers Bank or a subsidiary of Three Rivers.
Nothing in this Reorganization Agreement shall give any employee of Pennsylvania
Capital a right to continuing employment with Three Rivers after the Effective
Date. As soon as practicable after the Effective Date, Three Rivers shall
provide or cause to be provided to employees of Pennsylvania Capital who remain
employed by Three Rivers with compensation and benefits which in the aggregate
is no less favorable than that generally afforded to other Three Rivers or Three
Rivers Bank employees holding similar positions, provided that for purposes of
determining eligibility for and vesting of such benefits service with
Pennsylvania Capital prior to the Effective Date shall be treated as service to
the same extent as if such persons had been employees of Three Rivers or
affiliates of Three Rivers, and provided further that this Section 4.10(a) shall
not be construed (i) to limit the ability of Three Rivers and its affiliates to
terminate the employment of any employee or to review its employee benefits
programs from time to time and to make such changes as they deem
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appropriate or (ii) to require Three Rivers or its affiliates to provide
employees or former employees with post-retirement medical benefits.
(b) On the Effective Date, all issued and outstanding employee stock
options ("Rights") issued by Pennsylvania Capital under its Stock Option Plan
(not exceeding Rights to purchase 93,637 shares of Pennsylvania Capital Stock)
shall be terminated in exchange for a cash payment by Three Rivers to each
holder of such options in an amount equal to the Initial Deal Price less the
applicable exercise price per share for Pennsylvania Capital Stock covered by
any such option agreement multiplied by the number of shares of Pennsylvania
Capital Stock covered by such option agreement. Pennsylvania Capital shall use
its best efforts to cause all persons having outstanding Rights to exchange
their Right to purchase Pennsylvania Capital Stock for cash pursuant to this
Section 4.10(b).
(c) Three Rivers and Three Rivers Bank shall take all requisite action
as soon as practicable after the Effective Date to elect, as members of the
Board of Directors, Xxxxxx X. Xxxxx and Xxxxxxx X. Xxxxxx for terms of three (3)
and two (2) years, respectively. Xxxxxx X. Xxxxx shall be appointed to serve as
Vice-Chairman of the boards of directors of both Three Rivers and Three Rivers
Bank. At the first Annual Meeting of the shareholders of Three Rivers and Three
Rivers Bank following the Effective Date, an additional member of the Board of
Directors of Three Rivers and Three Rivers Bank may be nominated jointly by
Xxxxxx X. Xxxxx and Xxxxxxx X. Xxxxxx. The appointment of such additional member
shall be subject to approval by the Boards of Directors of Three Rivers and
Three Rivers Bank which approval shall not be unreasonably withheld.
Additionally, Xxxxxx X. Xxxxx and Xxxxxxx X. Xxxxxx shall be appointed to any
now existing or hereafter created executive committee of the Board of Directors
of Three Rivers or Three Rivers Bank until their successors have been elected
and qualified.
4.11. AFFILIATES
(a) Three Rivers and Pennsylvania Capital shall cooperate and use their
best efforts to identify those persons who may be deemed to be "affiliates" of
Pennsylvania Capital and Three Rivers within the meaning of Rule 145 promulgated
by the Commission under the Securities Act. Pennsylvania Capital shall use its
best efforts to cause each Pennsylvania Capital affiliate so identified to
deliver to Three Rivers no later than 30 days prior to the Effective Date, a
written agreement providing that such person will not dispose of Three Rivers
Common Stock received in the Merger except in compliance with the Securities
Act, the rules and regulations promulgated thereunder.
(b) Three Rivers shall use its best efforts to publish, no later than
90 days after the end of the first month after the Effective Date in which there
are at least 30 days of post-Merger combined operations (which month may be the
month in which the Effective Date occurs), combined sales and net income figures
as contemplated by and in accordance with the terms of SEC Accounting Series
Release No. 135.
4.12. NASDAQ APPLICATION
Three Rivers shall use its best efforts to authorize the shares of
Three Rivers Common Stock that may be issued pursuant to this Reorganization
Agreement and the Plan of Merger and
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shall apply to have such shares authorized for trading on the Nasdaq National
Market System prior to the Effective Date.
4.13. INDEMNIFICATION
(a) Following the Effective Date and for a period of 6 years
thereafter, Three Rivers shall indemnify, defend and hold harmless the present
and former directors and officers of Pennsylvania Capital (each an "Indemnified
Party") against all costs or expenses (including reasonable attorney's fees),
judgments, fines, losses, claims, damages or liabilities (collectively "Costs")
incurred in connection with any claim, action, suit, or proceeding arising out
of actions occurring prior to the Effective Date (including the transactions
contemplated by this Reorganization Agreement and the Plan of Merger), whether
asserted or claimed prior to, on or after the Effective Date, to the fullest
extent permitted under applicable law, Pennsylvania Capital's Articles of
Incorporation and By-laws as in effect on the date hereof.
(b) For a period of two (2) years from the Effective Date, Three Rivers
shall use its best efforts to provide director's and officer's liability
insurance to indemnify the present and former officers and directors of
Pennsylvania Capital (determined as of the Effective Date) with respect to
claims against such directors and officers arising from facts or events which
occurred before the Effective Date the coverage, amounts, terms and conditions
of which shall be determined by the Board of Directors of Three Rivers
subsequent to the Merger.
ARTICLE 5
CONDITIONS PRECEDENT
5.1. CONDITIONS PRECEDENT - THREE RIVERS AND PENNSYLVANIA CAPITAL
The respective obligations of Pennsylvania Capital, Three Rivers, or
Three Rivers Bank to effect the Merger, shall be subject to satisfaction or
waiver of the following conditions at or prior to the Closing Date:
(a) All corporate action necessary to authorize the execution, delivery
and performance of this Reorganization Agreement and the Plan of Merger and
consummation of the transactions contemplated hereby and thereby shall have been
duly and validly taken, including without limitation the approvals of the
shareholders of Pennsylvania Capital and Three Rivers in accordance with
applicable law;
(b) The parties hereto shall have received all regulatory approvals
required or deemed necessary in connection with the transactions contemplated by
this Reorganization Agreement and the Plan of Merger, all notice periods and
waiting periods required after the granting of any such approvals shall have
passed and all conditions contained in any such approval required to have been
satisfied prior to consummation of such transactions shall have been satisfied,
provided, however, that no such approval shall have imposed any condition or
requirement which, in the reasonable opinion of the Board of Directors of Three
Rivers materially and adversely affects the anticipated economic and business
benefits to Three Rivers of the transactions contemplated by this Reorganization
Agreement taken as a whole;
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(c) The Registration Statement, including any post-effective amendment
thereto, shall be effective under the Securities Act, and no proceeding shall be
pending or to the knowledge of Three Rivers threatened by the Commission to
suspend the effectiveness of such Registration Statement, and Three Rivers shall
have received all state securities or "blue sky" permits or other
authorizations, or confirmations as to the availability of an exemption from
registration requirements as may be necessary;
(d) None of the parties hereto or to the Plan of Merger shall be
subject to any order, decree or injunction of a court or agency of competent
jurisdiction that enjoins or prohibits the consummation of the transactions
contemplated by this Reorganization Agreement and the Plan of Merger;
(e) The shares of Three Rivers Common Stock that may be issued in the
Merger shall have been authorized for trading on the Nasdaq National Market
System; and
(f) Three Rivers and Pennsylvania Capital shall have received an
opinion of Xxxxxxxxxxx & Xxxxxxxx LLP substantially to the effect that, on the
basis of facts, representations and assumptions set forth in such opinion, (i)
the Merger will constitute a reorganization within the meaning of Section 368(a)
of the Code and (ii) no gain or loss will be recognized by a shareholder of
Pennsylvania Capital who exchanges Pennsylvania Capital Stock for Three Rivers
Common Stock in the Merger (except with respect to cash received in exchange for
such stock as contemplated in the Plan of Merger and for cash received in lieu
of a fractional share interest in Three Rivers Common Stock).
5.2. CONDITIONS PRECEDENT - PENNSYLVANIA CAPITAL
The obligations of Pennsylvania Capital to effect the Merger shall be
subject to satisfaction of the following additional conditions at or prior to
the Closing Date unless waived by Pennsylvania Capital pursuant to Section 6.4
hereof:
(a) The representations and warranties of Three Rivers set forth in
Article 3 hereof shall be true and correct in all material respects as of the
date of this Reorganization 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 any
representation and warranty which specifically relates to an earlier date),
except (i) as otherwise contemplated by this Reorganization Agreement or
consented to in writing by Pennsylvania Capital and (ii) insofar as the failure
of any representation and warranty to be true and correct does not have, and is
not reasonably likely to have, a material adverse effect on Three Rivers;
(b) Three Rivers and Three Rivers Bank shall have in all material
respects performed all obligations and complied with all covenants required by
this Reorganization Agreement and the Plan of Merger;
(c) Three Rivers and Three Rivers Bank each shall have delivered to
Pennsylvania Capital a certificate, dated the Closing Date and signed by its
Chief Executive Officer or Executive Vice President to the effect that the
conditions set forth in paragraphs (a) and (b) of this section have been
satisfied;
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(d) The shares of Three Rivers Common Stock to be received by the
shareholders of Pennsylvania Capital pursuant to the Merger shall be freely
tradable by the recipients thereof, subject to restrictions upon resale imposed
by virtue of Rule 145 under the Securities Act, as agreed to in the written
agreements provided pursuant to Section 4.11(a) hereof;
(e) Pennsylvania Capital shall have received an opinion from Xxxxxxxxx
Associates, Inc. dated the date of the Proxy Statement that the consideration to
be received by the shareholders of Pennsylvania Capital pursuant to this
Reorganization Agreement is fair from a financial point of view to the
shareholders of Pennsylvania Capital;
(f) Following the completion of the audit of the Three Rivers Financial
Statements for the period ending December 31, 2000, the pretax income figure as
reported on the audited Financial Statements will not be less than 90% of the
pretax income figure as reported on the Previously Disclosed unaudited Three
Rivers Financial Statements for this same period.
5.3. CONDITIONS PRECEDENT - THREE RIVERS
The obligations of Three Rivers and Three Rivers Bank to effect the
Merger shall be subject to satisfaction of the following additional conditions
at or prior to the Closing Date unless waived by Three Rivers pursuant to
Section 6.4 hereof:
(a) The representations and warranties of Pennsylvania Capital set
forth in Article 2 hereof shall be true and correct in all material respects as
of the date of this Reorganization 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 any representation and warranty which specifically relates to an earlier
date), except (i) as otherwise contemplated by this Reorganization Agreement or
consented to in writing by Three Rivers and (ii) insofar as the failure of any
representation and warranty to be true and correct does not have, and is not
reasonably likely to have, a material adverse effect on Pennsylvania Capital.
(b) Pennsylvania Capital shall have in all material respects performed
all obligations and complied with all covenants required by this Reorganization
Agreement and the Plan of Merger;
(c) Pennsylvania Capital shall have delivered to Three Rivers a
certificate, dated the Closing Date and signed by its Chief Executive Officer or
other appropriate officer to the effect that the conditions set forth in
paragraphs (a) and (b) of this section have been satisfied;
(d) Three Rivers shall have received a "comfort" letter from KPMG, LLP
dated not more than five days prior to (i) the effective date of the
Registration Statement and (ii) the Closing Date, with respect to certain
financial information regarding Pennsylvania Capital, in form and in substance
which is customary in transactions of the nature contemplated by this
Reorganization Agreement;
(e) Three Rivers shall have received an opinion from Sandler X'Xxxxx &
Partners, L.P. dated the date of the Proxy Statement that the consideration to
be paid by Three Rivers to the shareholders of Pennsylvania Capital pursuant to
this Reorganization Agreement is fair from a financial point of view to the
shareholders of Three Rivers;
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(f) Not more than 10% of the shareholders of Pennsylvania Capital will
exercise dissenter's rights pursuant to Section 1222 of the Pennsylvania Banking
Code; and
(g) Following the completion of the audit of the Pennsylvania Capital
Financial Statements for the period ending December 31, 2000, the pretax income
figure as reported on the audited Financial Statements will not be less than 90%
of the pretax income figure as reported on the Previously Disclosed unaudited
Pennsylvania Capital Financial Statements for this same period.
ARTICLE 6
TERMINATION, WAIVER AND AMENDMENT
6.1. TERMINATION
This Reorganization Agreement and the Plan of Merger may be terminated,
either before or after approval by the shareholders of Pennsylvania Capital:
(a) At any time on or prior to the Effective Date, by the mutual
consent in writing of the parties hereto;
(b) At any time on or prior to the Closing Date, by Three Rivers in
writing, if Pennsylvania Capital has, or by Pennsylvania Capital in writing, if
Three Rivers has, in any material respect, breached (i) any covenant or
agreement contained herein or in the Plan of Merger or (ii) any representation
or warranty contained herein if the failure of any such representation and
warranty to be true and correct has, or is reasonably likely to have, a material
adverse effect upon Three Rivers or Pennsylvania Capital, and in either case if
such breach 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 Closing Date;
(c) On the Closing Date, by either party hereto in writing, if any of
the conditions precedent set forth in Article 5 hereof with respect to such
party have not been satisfied or fulfilled;
(d) At any time, by either party hereto in writing, if the applications
for prior approval referred to in Section 4.4 hereof have been denied, and the
time period for appeals and requests for reconsideration has run;
(e) At any time, by either party hereto in writing, if the shareholders
of Three Rivers or Pennsylvania Capital do not approve the transactions
contemplated herein at the annual or special meetings duly called for that
purpose;
(f) At any time, by either party in writing, if such party determines
in good faith that any condition precedent to such party's obligations to
consummate the Merger is or would be impossible to satisfy, provided that the
terminating party has given the other party written notice with respect thereto
at least 10 days prior to such termination and has given the other party a
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reasonable opportunity to discuss the matter with a view to achieving a mutually
acceptable resolution;
(g) By Pennsylvania Capital pursuant to Article IX of the Agreement and
Plan of Merger; or
(h) By either party hereto in writing, if the Closing Date has not
occurred within twelve months of the date hereof.
6.2. EFFECT OF TERMINATION
In the event this Reorganization Agreement or the Plan of Merger is
terminated pursuant to Section 6.1 hereof, this Reorganization Agreement and the
Plan of Merger shall become void and have no effect, except that the provisions
relating to confidentiality, expenses and liquidated damages set forth in
Sections 4.6 and 7.1 hereof shall survive any such termination.
6.3. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
All representations, warranties and covenants in this Reorganization
Agreement and the Plan of Merger or in any instrument delivered pursuant hereto
or thereto shall expire on, and be terminated and extinguished at, the Effective
Date other than covenants that by their terms are to survive or be performed
after the Effective Date, provided that no such representations, warranties or
covenants shall be deemed to be terminated or extinguished so as to deprive
Three Rivers or Pennsylvania Capital (or any director, officer or controlling
person thereof) of any defense in law or equity which otherwise would be
available against the claims of any person, including, without limitation, any
shareholder or former shareholder of either Three Rivers or Pennsylvania
Capital, the aforesaid representations, warranties and covenants being material
inducements to the consummation by Three Rivers, Three Rivers Bank and
Pennsylvania Capital of the transactions contemplated herein.
6.4. WAIVER
Except with respect to any required shareholder or regulatory approval,
Three Rivers and Pennsylvania Capital, respectively, by written instrument
signed by Xxxxxx X. Xxxxx or other officer designated by the Board of Directors
of Pennsylvania Capital and by Xxxxx X. Xxxxxx or other officer designated by
the Board of Directors of Three Rivers, may at any time (whether before or after
approval of this Reorganization Agreement and the Plan of Merger by the
shareholders of Three Rivers and Pennsylvania Capital) extend the time for the
performance of any of the obligations or other acts of Pennsylvania Capital, on
the one hand, Three Rivers or Three Rivers Bank, on the other hand, and may
waive (i) any inaccuracies of such parties in the representations or warranties
contained in this Reorganization Agreement, the Plan of Merger or any document
delivered pursuant hereto or thereto, (ii) compliance with any of the covenants,
undertakings or agreements of such parties, or satisfaction of any of the
conditions precedent to its obligations, contained herein or in the Plan of
Merger or (iii) the performance by such party of any of its obligations set out
herein or therein; provided, however, that no such waiver executed after
approval of this Reorganization Agreement and the Plan of Merger by the
shareholders of Three Rivers or Pennsylvania Capital shall change the number of
shares of Three Rivers
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Common Stock or the payment of cash into which each share of Pennsylvania
Capital Common Stock shall be converted pursuant to the Merger.
6.5. AMENDMENT OR SUPPLEMENT
This Reorganization Agreement and the Plan of Merger may be amended or
supplemented at any time by mutual agreement of the parties hereto, in the case
of this Reorganization Agreement, or thereto, in the case of the Plan of Merger.
Any such amendment or supplement must be in writing and approved by their
respective boards of directors and/or officers authorized thereby and shall be
subject to the proviso in Section 6.4 hereof.
ARTICLE 7
MISCELLANEOUS
7.1. EXPENSES AND LIQUIDATED DAMAGES
(a) Each party hereto shall bear and pay all costs and expenses
incurred by it in connection with the transactions contemplated in this
Reorganization Agreement and the Plan of Merger, including fees and expenses of
its own financial consultants, accountants and counsel, except that Three Rivers
shall bear and pay all costs and expenses incurred in connection with printing
the Registration Statement and joint Proxy Statement and prospectus of Three
Rivers and Pennsylvania Capital.
(b) Pennsylvania Capital and Three Rivers each acknowledge that the
other has spent, and will be required to spend, substantial time and effort in
examining the business, properties, affairs, financial condition and prospects
of the other, has incurred, and will continue to incur, substantial fees and
expenses in connection with such examination, the preparation of this
Reorganization Agreement and the accomplishment of the transactions contemplated
hereby, and will be unable to evaluate and, possibly, make investments in or
acquire other entities due to the limited number of personnel available for such
purpose and the constraints of time. Therefore, to induce Three Rivers to enter
into this Reorganization Agreement, (A) if Three Rivers terminates this
Reorganization Agreement pursuant to Section 6.1(b) or (c) by reason of
Pennsylvania Capital's failure to meet any condition contained in Section 5.3(a)
or (b) due to Pennsylvania Capital's knowing and intentional misrepresentation
or knowing and intentional breach of warranty or breach of any covenant or
agreement, and within 9 months from the date of termination a Competing
Transaction is consummated or Pennsylvania Capital shall have entered into an
agreement or an agreement in principle which if consummated would constitute a
Competing Transaction, or (B) if Pennsylvania Capital terminates this
Reorganization Agreement pursuant to Section 6.1(e) because the Board of
Directors of Pennsylvania Capital has withdrawn its recommendation as referred
to in Section 4.1, or has modified or changed such recommendation in a manner
that would be adverse to Three Rivers or Three Rivers Bank and this
Reorganization Agreement did not receive the requisite vote of Pennsylvania
Capital shareholders and within 9 months from the date of termination (other
than a termination pursuant to Article IX of the Plan of Merger) a Competing
Transaction is consummated or Pennsylvania Capital shall have entered into an
agreement which if consummated would constitute a Competing Transaction, or (C)
if Pennsylvania Capital elects to terminate this Reorganization
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Agreement for any reason whatsoever, other than as a result of Three Rivers'
failure to meet any condition contained in Section 5.1 or 5.2 or pursuant to the
termination provisions found in Sections 6.1(b), (g) and (h), or other than as a
result of a breach by Three Rivers of any obligation of it arising under this
Reorganization Agreement or the Plan of Merger and pursuant to the termination
provision found in Section 6.1(b), whether or not a Competing Transaction is
consummated by Pennsylvania Capital, then Pennsylvania Capital shall pay to
Three Rivers a fee in the amount of $500,000, under any of clauses (A)(B) or (C)
above which is applicable, but not more than one such fee, not as a penalty but
as full and complete liquidated damages. Upon payment of such fee, Pennsylvania
Capital shall have no further liability to Three Rivers at law or equity. The
fee shall be payable to Three Rivers notwithstanding that any action taken by
the Board of Directors of Pennsylvania Capital which may give rise to the
obligation to pay the fee may have been taken in accordance with the fiduciary
duties of the Board of Directors. Any payment required pursuant to this Section
7.l(b) shall be made as promptly as practicable, but in no event later than five
business days after the date it becomes payable hereunder and shall be made by
wire transfer of immediately available funds to an account designated by Three
Rivers. In the event that Three Rivers is entitled to the fee, Pennsylvania
Capital shall also pay Three Rivers interest at the rate of 6% per year on any
amounts that are not paid when due, plus all reasonable costs and expenses in
connection with or arising out of the enforcement of the obligation of
Pennsylvania Capital to pay the fee or such interest.
(c) In the event Three Rivers elects to terminate this Reorganization
Agreement for any reason whatsoever, other than (i) as a result of Pennsylvania
Capital's failure to meet any condition contained in Sections 5.1 or 5.3 and
pursuant to the termination provisions found in Sections 6.1(b), (e) and (h), or
(ii) as a result of a breach by Pennsylvania Capital of any obligation of it
arising under this Reorganization Agreement or the Plan of Merger and pursuant
to the termination provision found in Section 6.1(b), Three Rivers shall pay to
Pennsylvania Capital a fee in the amount of $500,000 not as a penalty but as
full and complete liquidated damages. Upon payment of such fee, Three Rivers
shall have no further liability to Pennsylvania Capital at law or equity. The
fee shall be payable to Pennsylvania Capital notwithstanding that any action
taken by the Board of Directors of Three Rivers which may give rise to the
obligation to pay the fee may have been taken in accordance with the fiduciary
duties of the Board of Directors. Any payment required pursuant to Section
7.1(c) shall be made as promptly as practicable, but in no event later than five
business days after the date it becomes payable hereunder and shall be made by
wire transfer of immediately available funds to an account designated by
Pennsylvania Capital. In the event that Pennsylvania Capital is entitled to the
fee, Three Rivers shall also pay Pennsylvania Capital interest at the rate of 6%
per year on any amounts that are not paid when due, plus all reasonable costs
and expenses in connection with or arising out of the enforcement of the
obligation of Three Rivers to pay the fee or such interest.
7.2. ENTIRE AGREEMENT
This Reorganization Agreement and the Plan of Merger contain the entire
agreement between the parties with respect to the transactions contemplated
hereunder and thereunder and supersede all prior arrangements or understandings
with respect thereto, written or oral, other than documents referred to herein
or therein. The terms and conditions of this Reorganization Agreement and the
Plan of Merger shall inure to the benefit of and be binding upon the parties
hereto and thereto and their respective successors. Nothing in this
Reorganization Agreement or
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the Plan of Merger, expressed or implied, is intended to confer upon any party,
other than the parties hereto and thereto, and their respective successors, any
rights, remedies, obligations or liabilities; provided, however, that (i) the
persons to be elected pursuant to Section 410(c), (ii) the persons entitled to
indemnification pursuant to Section 4.13, and (iii) holders of options for
Pennsylvania Capital Stock, all of whom shall be third-party beneficiaries of
such Sections.
7.3. NO ASSIGNMENT
No party hereto may assign any of its rights or obligations under this
Reorganization Agreement to any other person without the prior written consent
of the other parties hereto and any assignment in violation of this Section 7.3
shall be null and void and shall have no legal effect.
7.4. NOTICES
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered personally or sent by
facsimile transmission or overnight express or by registered or certified mail,
postage prepaid, addressed as follows:
If to Pennsylvania Capital:
Pennsylvania Capital Bank
The Times Building
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Vice Chairman
Facsimile No.: (000) 000-0000
With a required copy to:
Xxxxxxxx, German & Xxxxx, P.C.
00xx Xxxxx
Xxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. German, Esq.
Facsimile No.: (000) 000-0000
If to Three Rivers or Three Rivers Bank:
Three Rivers Bancorp, Inc.
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
Chief Executive Officer
Facsimile No.: (000) 000-0000
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With a required copy to:
Xxxxxxxxxxx & Xxxxxxxx LLP
Xxxxx X. Xxxxxx Building
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: J. Xxxxxx Xxx Xxxx, Esq.
Facsimile No.: (000) 000-0000
7.5. CAPTIONS
The captions contained in this Reorganization Agreement are for
reference purposes only and are not part of this Reorganization Agreement.
7.6. COUNTERPARTS
This Reorganization 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.
7.7. GOVERNING LAW
This Reorganization 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, except to
the extent federal law may be applicable.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Reorganization 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.
Attest THE PENNSYLVANIA CAPITAL BANK
/s/ Xxxxxxx Xxxxxx By:/s/ Xxxxxx X. Xxxxxx
----------------------------- -------------------------------
Xxxxxxx Xxxxxx Xxxxxx X. Xxxxxx
Assistant Secretary President
(SEAL)
Attest THREE RIVERS BANCORP, INC.
/s/ Xxxxxxx X. X. Xxxxx By:/s/ Xxxxx X. Xxxxxx
----------------------------- -------------------------------
Xxxxxxx X. X. Xxxxx Xxxxx X. Xxxxxx
Vice-President Chairman,
Chief Financial Officer Chief Executive Officer
(SEAL)
Attest THREE RIVERS BANK
/s/ Xxxxxxx X. X. Xxxxx By:/s/ Xxxxx X. Xxxxxx
----------------------------- -------------------------------
Xxxxxxx X. X. Xxxxx Xxxxx X. Xxxxxx
Vice-President Chairman,
Chief Financial Officer Chief Executive Officer
(SEAL)
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ANNEX A
AGREEMENT AND PLAN OF MERGER OF
THE PENNSYLVANIA CAPITAL BANK
WITH AND INTO
THREE RIVERS BANK
AGREEMENT AND PLAN OF MERGER ("Plan of Merger") dated as of
_______________, 2001, adopted and made by and between THE PENNSYLVANIA CAPITAL
BANK ("Pennsylvania Capital"), a Pennsylvania banking institution having its
registered office at The Times Building, 000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000, and THREE RIVERS BANK, Pennsylvania banking institution
having its registered office at 0000 Xxxxxxx Xxxxxxxxx, Xxxxxxxxxxx,
Xxxxxxxxxxxx 00000-0000, each acting pursuant to resolutions adopted by the vote
of a majority of its board of directors in accordance with Section 1603 of the
Pennsylvania Banking Code, and joined in by THREE RIVERS BANCORP, INC. ("Three
Rivers"), a Pennsylvania corporation having its principal executive office at
0000 Xxxxxxx Xxxxxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000.
WITNESSETH
WHEREAS, Pennsylvania Capital is a Pennsylvania banking institution
organized and existing under the laws of the Commonwealth of Pennsylvania, the
authorized capital stock of which consists of 5,000,000 shares of Common Stock,
par value $1.00 per share ("Pennsylvania Capital Common"), 100,000 shares of
Class A Common Stock, par value $1.00 per share ("Pennsylvania Capital Class A
Stock") and 1,000,000 shares of Preferred Stock, par value $1.00 per share
("Pennsylvania Capital Preferred Stock") ("Pennsylvania Capital Common" and
"Pennsylvania Capital Class A Stock" are sometimes collectively herein referred
to as "Pennsylvania Capital Stock"). As of the date hereof, 404,777 shares of
Pennsylvania Capital Common, 36,675 shares of Pennsylvania Capital Class A Stock
and no shares of Pennsylvania Capital Preferred Stock are issued and
outstanding;
WHEREAS, Three Rivers Bank is a Pennsylvania banking institution
organized and existing under the laws of the Commonwealth of Pennsylvania, the
authorized capital stock of which consists of _________ shares of common stock,
par value $____ per share, ______ of which shares are issued and outstanding on
the date hereof;
WHEREAS, Three Rivers is a corporation organized and existing under the
laws of the Commonwealth of Pennsylvania that is duly registered as a bank
holding company pursuant to the Bank Holding Company Act of 1956, as amended,
the authorized capital stock of which consists at September 30, 2000 of (i)
5,000,000 shares of preferred stock, no par value, none of which has been issued
and (ii) 20,000,000 shares of common stock, par value $0.01 per share
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("Three Rivers Common Stock"), of which 6,675,212 shares were issued and
outstanding as of the date hereof; and
WHEREAS, Three Rivers and Pennsylvania Capital have entered into an
Agreement and Plan of Reorganization ("Reorganization Agreement") that
contemplates the merger of Pennsylvania Capital with and into Three Rivers Bank;
WHEREAS, the respective Boards of Directors of Three Rivers and Three
Rivers Bank and Pennsylvania Capital deem the merger of Pennsylvania Capital
with and into Three Rivers Bank, under and pursuant to the terms and conditions
herein set forth or referred to, desirable and in the best interests of the
respective institutions and their respective shareholders, and the respective
Boards of Directors of Three Rivers and Three Rivers Bank and Pennsylvania
Capital have adopted resolutions approving this Plan of Merger and each of the
Boards of Directors of Three Rivers and Pennsylvania Capital has directed that
this Plan of Merger be submitted to their respective shareholders for approval;
and
WHEREAS, approval of this Plan of Merger requires the affirmative vote
of the holders of at least two-thirds of the outstanding shares of Pennsylvania
Capital Stock and Pennsylvania Class A Stock, each voting as a separate class,
the holders of at least two-thirds of the outstanding shares of the capital
stock of Three Rivers Bank and the holders of at least a majority of the
outstanding shares of Three Rivers Common Stock .
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained and intending to be legally bound hereby, the
parties hereto do hereby agree as follows:
ARTICLE I
THE MERGER
Subject to the terms and conditions of this Plan of Merger, on the
Effective Date (as hereinafter defined), Pennsylvania Capital shall be merged
with and into Three Rivers Bank pursuant to the provisions of, and with the
effect provided in, Sections 1601-1607 of the Pennsylvania Banking Code (said
transaction being hereinafter referred to as the "Merger"). On the Effective
Date, the separate existence of Pennsylvania Capital shall cease and Three
Rivers Bank shall continue its existence as the surviving entity unaffected and
unimpaired by the Merger, and shall be liable for all of the liabilities of
Pennsylvania Capital existing at the Effective Date (Three Rivers Bank as
existing on and after the Effective Date being hereinafter sometimes referred to
as the "Surviving Bank").
ARTICLE II
ARTICLES OF INCORPORATION AND BY-LAWS
The Articles of Incorporation and the By-Laws of the Surviving Bank in
effect immediately prior to the Effective Date shall be the Articles of
Incorporation and the By-Laws of the Surviving Bank, in each case until amended
in accordance with applicable law.
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ARTICLE III
BOARD OF DIRECTORS AND OFFICERS
On the Effective Date, the Board of Directors of the Surviving Bank
shall consist of those persons serving as directors of the Surviving Bank
immediately prior to the Effective Date. As soon as practicable after the
Effective Date, the Surviving Bank shall take all requisite action to elect as
members of the Board of Directors Xxxxxx X. Xxxxx and Xxxxxxx X. Xxxxxx and
Xxxxxx X. Xxxxx shall be appointed to serve as Vice-Chairman of the Board of
Directors. At the first Annual Meeting of the Board of Directors of Three Rivers
and Three Rivers Bank following the Effective Date, an additional member of the
Board of Directors of Three Rivers and Three Rivers Bank may be nominated
jointly by Xxxxxx X. Xxxxx and Xxxxxxx X. Xxxxxx. The appointment of such
additional member shall be subject to approval by the Boards of Directors of
Three Rivers and Three Rivers Bank which approval shall not be unreasonably
withheld. Additionally, Xxxxxx X. Xxxxx and Xxxxxxx X. Xxxxxx shall be appointed
to any now existing or hereafter created executive committee of the Board of
Directors of the Surviving Bank until such time as successors are elected and
qualified.
The Officers of Three Rivers Bank immediately prior to the Effective
Date shall continue as the officers of the Surviving Bank until such time as
successors are elected and qualified.
ARTICLE IV
CAPITAL
Each share of capital stock of Three Rivers Bank issued and outstanding
immediately prior to the Effective Date shall, on the Effective Date, continue
to be issued and outstanding.
ARTICLE V
CONVERSION AND EXCHANGE OF PENNSYLVANIA CAPITAL SHARES
1. On the Effective Date, each share of Pennsylvania Capital Stock
outstanding immediately prior to the Effective Date (except as provided in
Paragraphs 3, 6 and 8 of this Article V) shall by virtue of the Merger be
converted into shares of Three Rivers Common Stock and cash as determined
pursuant to the following formulation:
The Initial Deal Price shall initially be $41.50. 10% of such Deal
Price shall be paid in cash (rounded to the nearest one-hundredth of a fraction)
and 90% of such Deal Price shall be paid in shares of Three Rivers Common Stock
valued at the Three Rivers Deemed Stock Price, subject to adjustment by the
Adjustment Factor. The Deal Price will change by reason of the Adjustment Factor
(defined below) based upon the percentage of the outstanding 93,637 Rights which
are exercised prior to the Effective Date, as the Initial Value Exchange Ratio
will be reduced by .01 for each 4% of said Rights which are exercised. An
example of this adjustment is shown below in EXAMPLE TWO.
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The following are illustrative EXAMPLES of the foregoing
formula used to determine the number of shares of Three Rivers
Common Stock and the amount of cash into which each share of
Pennsylvania Capital Stock outstanding immediately prior to the
Effective Date is to be converted:
EXAMPLE ONE
-----------
If, Three Rivers Deemed Stock Price is $9.00 per share, and
---------------
assuming no rights are exercised,
--------------------------------
Then, each share of Pennsylvania Capital Stock shall be
converted into
(i) $4.15 cash (Initial Deal Price of $41.50 x 10%),
and
(ii) 4.1500 shares of Three Rivers Common Stock (Initial
Deal Price of $41.50 x 90% / Three Rivers Deemed
Stock Price of $9.00 = 4.1500 shares)
EXAMPLE TWO
-----------
If Three Rivers Deemed Stock Price is $9.00 per share, and
---------------
12% of the 93,637 Rights have been exercised prior to the Effective
----------------- ---------------------------
Date, then the Initial Value Exchange Ratio (4.6111, i.e., $41.50 /
----
$9.00 Three Rivers Deemed Stock Price) will be adjusted to an Adjusted
Value Exchange Ratio of 4.5811 (4.6111 - .03). As a consequence
------
thereof, the Initial Stock Exchange Ratio (4.1500) (90% of Initial
Value Exchange Ratio) will be adjusted to an Adjusted Stock Exchange
Ratio of 4.1230 (90% of Adjusted Value Exchange Ratio of 4.5811)
------
Then, each share of Pennsylvania Capital Stock shall be
converted into
(i) $4.12 cash (Adjusted Deal Price of $41.230 x 10%),
and
(ii) 4.1230 shares of Three Rivers Common Stock
(Adjusted Deal Price of $41.230 x 90% / Three Rivers
Deemed Stock Price of $9.00 = 4.1230 shares)
FOR PURPOSES OF THIS ARTICLE V AND ARTICLE IX HEREOF, THE FOLLOWING TERMS SHALL
HAVE THE MEANINGS INDICATED:
"Adjustment Factor" shall mean an adjustment to the number of shares of
Three Rivers Common Stock and cash to be issued in exchange for
Pennsylvania Capital Stock based upon the formula that for every 4% of the
93,637 issued and outstanding Stock Options of Pennsylvania Capital
("Rights") that are exercised following the date of the Reorganization
Agreement and prior to the Effective Date the Initial Value Exchange Ratio
shall be reduced by .01. EXAMPLE TWO above shows the application of the
Adjustment Factor and the attached SCHEDULE "1" shows the effect of the
Adjustment Factor for each 4% increment of Rights exercised.
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"Initial Cash Exchange" shall be equal to 10% of the Initial Deal Price
or the Adjusted Deal Price, as the case may be. If the Initial Cash
Exchange is subject to adjustment by the Adjustment Factor it shall
thereafter be referred to as the "Adjusted Cash Price."
"Initial Deal Price" shall mean $41.50, but shall be adjusted based
upon the Adjustment Factor such that it shall thereafter be referred to as
"Adjusted Deal Price."
"Initial Stock Exchange Ratio" shall be equal to 90% of the Initial
Value Exchange Ratio or the Adjusted Value Exchange Ratio, as the case may
be. If the Initial Stock Exchange Ratio is adjusted by the Adjustment
Factor, it shall thereafter be referred to as the "Adjusted Stock Exchange
Ratio."
"Initial Value Exchange Ratio" shall mean the number determined by
dividing the Three Rivers Deemed Stock Price into the Initial Deal Price,
but shall be subject to adjustment based upon the Adjustment Factor
depending on the number of Rights which may be exercised prior to the
Effective Date and such ratio shall thereafter be referred to as the
"Adjusted Value Exchange Ratio."
"Re-evaluation Date" shall mean the date which is the fifth trading day
immediately preceding the Effective Date.
"Re-evaluation Price" shall mean the average of the daily average of
the high and low sale prices of Three Rivers Common Stock as reported on
the Nasdaq National Market System (as reported by The Wall Street Journal
or, if not reported therein, as reported in a mutually agreed upon
alternative source) for the twenty (20) consecutive full trading days in
which such shares are traded on the Nasdaq National Market System ending at
the close of trading on the Re-evaluation Date.
"Three Rivers Deemed Stock Price" shall mean $9.00 per share of Three
Rivers Common Stock.
2. On the Effective Date, all then issued and outstanding stock options
("Rights") issued by Pennsylvania Capital under its Stock Option Plans shall be
terminated in exchange for a cash payment by Three Rivers to each holder of such
options in an amount equal to the Deal Price less the applicable exercise price
per share for Pennsylvania Capital Stock covered by any such option agreement
multiplied by the number of shares of Pennsylvania Capital Stock covered by such
option agreement.
3. On the Effective Date, all shares of Pennsylvania Capital Stock held
in the treasury of Pennsylvania Capital or owned beneficially by Pennsylvania
Capital other than in a fiduciary capacity or in connection with a debt
previously contracted and all shares of Pennsylvania Capital Stock owned by
Three Rivers or owned beneficially by any subsidiary or affiliate of Three
Rivers other than in a fiduciary capacity or in connection with a debt
previously contracted shall be cancelled and no cash, stock or other property
shall be delivered in exchange therefor.
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4. On and after the Effective Date, each holder of a certificate or
certificates theretofore representing outstanding shares of Pennsylvania Capital
Stock (any such certificate being hereinafter referred to as a "Certificate")
may surrender the same to Three Rivers or its agent for cancellation and each
such holder shall be entitled upon such surrender to receive in exchange
therefor certificate(s) representing the number of shares of Three Rivers Common
Stock and a check in an amount equal to the amount of cash, without interest, to
which such holder is entitled as provided herein and, if applicable, a check in
an amount equal to the amount of cash, without interest, to be paid pursuant to
Paragraph 8 of this Article V to which such holder is entitled. Promptly after
the Effective Date, Three Rivers shall mail to former Pennsylvania Capital
shareholders instructions for the surrender of certificates formerly
representing Pennsylvania Capital Stock in exchange for the merger consideration
of cash and Three Rivers Common Stock. Until surrendered, each Certificate shall
be deemed for all purposes to evidence ownership of the number of shares of
Three Rivers Common Stock and cash, without interest, into which the shares
represented by such Certificates have been changed or converted as aforesaid. No
dividends or other distributions declared after the Effective Date with respect
to Three Rivers Common Stock shall be paid to the holder of any unsurrendered
Certificate until the holder thereof shall surrender such Certificate in
accordance with this Article V. After the surrender of a Certificate in
accordance with this Article V, the record holder thereof shall be entitled to
receive any such dividends or other distributions, without any interest thereon,
which theretofore had become payable with respect to shares of Three Rivers
Common Stock represented by such Certificate. Certificates surrendered for
exchange by any person who is an "affiliate" of Pennsylvania Capital for
purposes of Rule 145(c) under the Securities Act of 1933, as amended, shall not
be exchanged for certificates representing shares of Three Rivers Common Stock
until Three Rivers has received the written agreement of such person
contemplated by Section 4.11(a) of the Reorganization Agreement. If any
certificate for shares of Pennsylvania Capital Common Stock is to be issued in a
name other than that in which a certificate surrendered for exchange is issued,
the certificate so surrendered shall be properly endorsed and otherwise in
proper form for transfer and the person requesting such exchange shall affix any
requisite stock transfer tax stamps to the certificate surrendered or provide
funds for their purchase or establish to the reasonable satisfaction of Three
Rivers or its agent that such taxes are not payable.
5. Upon the Effective Date, the stock transfer books of Pennsylvania
Capital shall be closed and no transfer of Pennsylvania Capital Stock shall
thereafter be made or recognized. Any other provision of this Plan of Merger
notwithstanding, neither Three Rivers or its agent nor any party to the Merger
shall be liable to a holder of Pennsylvania Capital Stock for any amount paid or
property delivered in good faith to a public official pursuant to any applicable
abandoned property, escheat or similar law.
6. No conversion under Paragraph 1 of this Article V shall be made in
respect of any share of Pennsylvania Capital Stock as to which a Pennsylvania
Capital shareholder has elected to exercise dissenters' rights pursuant to
Section 1222 of the Pennsylvania Banking Code, if any, until such time as such
shareholder shall have effectively lost dissenters' rights.
7. In the event that prior to the Effective Date the outstanding shares
of Three Rivers Common Stock shall have been increased, decreased, or changed
into or exchanged for a different number or kind of shares or securities by
reorganization, recapitalization,
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reclassification, stock dividend, stock split, or other like changes in Three
Rivers' capitalization, all without Three Rivers receiving consideration
therefor, then an appropriate and proportionate adjustment shall be made in the
number and kind of shares of Three Rivers Common Stock to be thereafter
delivered pursuant to this Plan of Merger.
8. Notwithstanding any other provision of this Article V, each holder
of shares of Pennsylvania Capital Stock who would otherwise have been entitled
to receive a fraction of a share of Three Rivers Common Stock (after taking into
account all Certificates delivered by such holder) shall receive, in lieu
thereof, cash in an amount equal to such fractional part of a share of Three
Rivers Common Stock multiplied by the market value of such Common Stock. The
market value of one share of Three Rivers Common Stock on the Effective Date
shall be the last sale price of such Common Stock as quoted in the Nasdaq
National Market System (as reported by The Wall Street Journal or other
authoritative source) on the last business day preceding such date. No such
holder shall be entitled to dividends, voting rights or any other shareholder
right in respect of any fractional share.
ARTICLE VI
EFFECTIVE DATE OF THE MERGER
The Merger shall be effective at the time and on the date specified in
the certificate of merger (such date and time being herein referred to as the
"Effective Date").
ARTICLE VII
FURTHER ASSURANCES
If at any time the Surviving Bank shall consider or be advised that any
further assignments, conveyances or assurances are necessary or desirable to
vest, perfect or confirm in the Surviving Bank title to any property or rights
of Pennsylvania Capital, or otherwise carry out the provisions hereof, the
proper officers and directors of Pennsylvania Capital, as of the Effective Date,
and thereafter the officers of the Surviving Bank acting on behalf of
Pennsylvania Capital, shall execute and deliver any and all proper assignments,
conveyances and assurances, and do all things necessary or desirable to vest,
perfect or confirm title to such property or rights in the Surviving Bank and
otherwise carry out the provisions hereof.
ARTICLE VIII
CONDITIONS PRECEDENT
The obligations of Three Rivers, Three Rivers Bank and Pennsylvania
Capital to effect the Merger as herein provided shall be subject to
satisfaction, unless duly waived, of the conditions set forth in the
Reorganization Agreement.
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ARTICLE IX
TERMINATION
Anything contained in this Plan of Merger to the contrary
notwithstanding, and notwithstanding adoption hereof by the shareholders of
Three Rivers, Three Rivers Bank and Pennsylvania Capital, this Plan of Merger
may be terminated and the Merger abandoned as provided in the Reorganization
Agreement; provided however, that the Plan of Merger may also be terminated, and
the Merger may be abandoned by Pennsylvania Capital, if its Board of Directors
so determines by a vote of a majority of the members of its entire Board of
Directors, at any time during the three-day period commencing two days after the
Re-evaluation Date, if the Re-evaluation Price shall be less than $7.50 per
share as determined under the provisions of Paragraph 1, Article V hereof.
If Pennsylvania Capital elects to exercise its termination right
pursuant to the immediately preceding sentence, it shall give prompt written
notice to Three Rivers provided that such notice of election to terminate may be
withdrawn at any time within the aforementioned three-day period.
As an option to termination of this Plan of Merger by Pennsylvania
Capital as above provided in this Article IX, if its Board of Directors so
determines by a vote of the majority of the members of its entire Board of
Directors at any time during the aforementioned three-day period commencing two
days after the Re-evaluation Date, Pennsylvania Capital may elect to consummate
this Plan of Merger except that (as provided under Paragraph 1 of Article V
hereof) the Initial Stock Exchange Ratio shall be increased by .25 SHARE of
Three Rivers Common Stock and all other provisions of the formulation to
determine the number of shares of Three Rivers Common Stock and cash shall be
the same as provided in said Paragraph 1 of Article V. As an explanatory EXAMPLE
of the option referred to in this paragraph, if the Re-evaluation Price shall be
less than $7.50 per share, then the exchange ratios referred to in EXAMPLE ONE
under Paragraph 1 of Article V hereof would be adjusted so that each share of
Pennsylvania Capital Stock would be converted into $4.15 cash and 4.4000 shares
of Three Rivers Common Stock (4.1500 shares plus .25 shares), subject to the
effect of any required Adjustment Factor referred to in Paragraph 1 of Article
V.
In the event the Reorganization Agreement is terminated pursuant to the
terms thereof, this Plan of Merger shall become void and have no effect.
ARTICLE X
MISCELLANEOUS
1. This Plan of Merger may be amended or supplemented at any time by
mutual agreement of Three Rivers, Three Rivers Bank and Pennsylvania Capital.
Any such amendment or supplement must be in writing and approved by their
respective Boards of Directors.
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2. The headings of the several Articles herein are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Plan of Merger.
3. This Plan of Merger may be executed in several counterparts, each of
which shall be deemed the original, but all of which together shall constitute
one and the same instrument.
4. This Plan of Merger 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, except to the extent that
federal law may be applicable.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Plan of Merger to be executed in counterparts by their
duly authorized officers and their corporate seals to be hereunto affixed and
attested by their officers thereunto duly authorized, all as of the day and year
first above written.
Attest THE PENNSYLVANIA CAPITAL BANK
By:
------------------------------- -----------------------------------
(SEAL)
Attest THREE RIVERS BANK
By:
------------------------------ -----------------------------------
(SEAL)
Attest THREE RIVERS BANCORP, INC.
By:
------------------------------- -----------------------------------
(SEAL)
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SCHEDULE 1
-------
DEEMED STOCK PRICE $9.000
=======
------------------------------------------------------------------------------------------------------------
INITIAL VALUE INITIAL STOCK INITIAL PER SHARE
Intial Deal Price Exchange Ratio Exchange Ratio Cash Exchange Value
$41.50 4.6111 4.1500 $4.150 $41.500
------------------------------------------------------------------------------------------------------------
OPTIONS ADJUSTED VALUE ADJUSTED STOCK ADJUSTED ADJUSTED
Exercised Exchange Ratio Exchange Ratio Cash Price Deal Price
4.00% 4.6011 4.1410 $4.141 $41.410
8.00% 4.5911 4.1320 $4.132 $41.320
12.00% 4.5811 4.1230 $4.123 $41.230
16.00% 4.5711 4.1140 $4.114 $41.140
20.00% 4.5611 4.1050 $4.105 $41.050
24.00% 4.5511 4.0960 $4.096 $40.960
28.00% 4.5411 4.0870 $4.087 $40.870
32.00% 4.5311 4.0780 $4.078 $40.780
36.00% 4.5211 4.0690 $4.069 $40.690
40.00% 4.5111 4.0600 $4.060 $40.600
44.00% 4.5011 4.0510 $4.051 $40.510
48.00% 4.4911 4.0420 $4.042 $40.420
52.00% 4.4811 4.0330 $4.033 $40.330
56.00% 4.4711 4.0240 $4.024 $40.240
60.00% 4.4611 4.0150 $4.015 $40.150
64.00% 4.4511 4.0060 $4.006 $40.060
68.00% 4.4411 3.9970 $3.997 $39.970
72.00% 4.4311 3.9880 $3.988 $39.880
76.00% 4.4211 3.9790 $3.979 $39.790
80.00% 4.4111 3.9700 $3.970 $39.700
84.00% 4.4011 3.9610 $3.961 $39.610
88.00% 4.3911 3.9520 $3.952 $39.520
92.00% 4.3811 3.9430 $3.943 $39.430
96.00% 4.3711 3.9340 $3.934 $39.340
100.00% 4.3611 3.9250 $3.925 $39.250
