EXHIBIT 2
PEOPLES HOME SAVINGS BANK
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, dated as of May 21, 1998, by
and among PEOPLES HOME SAVINGS BANK, a Pennsylvania chartered stock savings bank
(the "Savings Bank"); PHS BANCORP, INC., a to-be-formed Pennsylvania corporation
(the "Holding Company"); and PEOPLES HOME INTERIM SAVINGS BANK, a to-be-formed
interim stock savings institution ("Interim").
The parties hereto desire to enter into an Agreement and Plan of
Reorganization whereby the corporate structure of the Savings Bank will be
reorganized into the stock holding company form of ownership (the
"Reorganization"). The result of the Reorganization will be that, immediately
after the Effective Date (as defined herein), all of the issued and outstanding
shares of Common Stock of the Savings Bank will be held by the Holding Company
and the holders of the issued and outstanding shares of Common Stock of the
Savings Bank (i.e., the mutual holding company, PHS Bancorp, M.H.C., and the
minority public stockholders) will become the holders of the issued and
outstanding shares of Common Stock of the Holding Company.
The Reorganization of the Savings Bank will be accomplished by the
following steps: (1) the formation by the Savings Bank of a wholly-owned
subsidiary of the Savings Bank, PHS Bancorp, Inc., incorporated under the laws
of the Commonwealth of Pennsylvania for the primary purpose of becoming the sole
stockholder of a newly-formed interim stock savings institution, and
subsequently becoming the sole stockholder of the Common Stock of the Savings
Bank, which formation will include the issuance of up to 100,000 shares of the
Holding Company Common Stock to the Savings Bank for a price of $10 per share
($1,000,000) for the purpose of initially capitalizing the Holding Company; (2)
the formation of an interim Pennsylvania-chartered savings institution,
"Interim," which will be wholly-owned by the Holding Company; and (3) the merger
of Interim into the Savings Bank (the "Merger"), with the Savings Bank as the
surviving entity. Pursuant to such Merger: (i) all of the issued and outstanding
shares of Common Stock of the Holding Company held by the Savings Bank will be
canceled; (ii) all of the issued and outstanding shares of Common Stock of the
Savings Bank will automatically be converted by operation of law on a
one-for-one basis into issued and outstanding shares of Common Stock of the
Holding Company; (iii) all of the issued and outstanding shares of Common Stock
of Interim will automatically be converted by operation of law on a one-for-one
basis into an equal number of issued and outstanding shares of Common Stock of
the Savings Bank, which will be all of the issued and outstanding stock of the
Savings Bank.
NOW, THEREFORE, in order to consummate this Agreement and Plan of
Reorganization (the "Agreement"), and in consideration of the mutual covenants
herein set forth, the parties agree as follows:
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ARTICLE I
MERGER OF INTERIM INTO THE SAVINGS BANK
AND RELATED MATTERS
1.1 On the Effective Date, Interim will be merged with and into the
Savings Bank and the separate existence of Interim shall cease, and
all assets and property (real, personal and mixed, tangible and
intangible, chooses in action, rights and credits) then owned by
Interim, or which would inure to it, shall immediately and
automatically, by operation of law and without any conveyance,
transfer, or further action, become the property of the Savings Bank.
The Savings Bank shall be deemed to be a continuation of Interim, and
the Savings Bank shall succeed to the rights and obligations of
Interim.
1.2 Following the Merger, the existence of the Savings Bank shall continue
unaffected and unimpaired by the Merger, with all the rights,
privileges, immunities and powers, and subject to all of the duties
and liabilities, of a corporation organized under the laws of
Pennsylvania. The Articles and Bylaws of the Savings Bank, as
presently in effect, shall continue in full force and effect and shall
not be changed in any manner whatsoever by the Merger.
1.3 From and after the Effective Date, and subject to the actions of the
Board of Trustees of the Savings Bank, the business presently
conducted by the Savings Bank (whether directly or through its
subsidiaries) will continue to be conducted by it, as a wholly-owned
subsidiary of the Holding Company, and the present trustees and
officers of the Savings Bank will continue in their present positions.
The home office and branch offices of the Savings Bank in existence
immediately prior to the Effective Date shall continue to be the home
office and branch offices of the Savings Bank from and after the
Effective Date.
1.4 The Reorganization will have no effect on the corporate structure of
the Mutual Holding Company, PHS Bancorp, M.H.C., which will continue
to operate under its current certificate and bylaws, and the present
trustees and officers of the Mutual Holding Company will continue in
their present positions.
ARTICLE II
CONVERSION OF STOCK
2.1 The terms and conditions of the Merger, the mode of carrying the same
into effect, and the manner and basis of converting the Common Stock
of the parties to this Agreement shall be as follows:
A. On the Effective Date, all shares of Common Stock of the Holding
Company held by the Savings Bank shall be canceled and shall no
longer be deemed to be issued or outstanding for any purpose.
B. On the Effective Date, each share of Common Stock, $.10 par
value, of the Savings Bank ("Savings Bank Common Stock') issued
and outstanding immediately prior to the Effective Date shall
automatically by operation of law
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be converted into and shall become one share of Common Stock,
$.10 par value, of the Holding Company ("Holding Company Common
Stock"), with the rights, privileges, preferences and voting
power incident to each share of Savings Bank Common Stock prior
to such Effective Date. Each share of Common Stock of Interim
issued and outstanding immediately prior to the Effective Date
shall, on the Effective Date, automatically by operation of law
be converted into and become one share of Common Stock, $.10 par
value, of the Savings Bank and shall not be further converted
into shares of the Holding Company Common Stock, so that from and
after the Effective Date, all of the issued and outstanding
shares of Common Stock of the Savings Bank shall be held by the
Holding Company.
C. From and after the Effective Date, each holder of an outstanding
certificate or certificates, which, prior thereto, represented
shares of Savings Bank Common Stock, shall, upon surrender of the
same to the Savings Bank or the designated agent of the Savings
Bank ("Exchange Agent"), be entitled to receive, in exchange
therefor, a certificate or certificates representing the number
of whole shares of Holding Company Common Stock into which the
shares theretofore represented by the certificate or certificates
to be surrendered shall have been converted, as provided in the
foregoing provisions of this Section. Until so surrendered, each
such outstanding certificate which, prior to the Effective Date,
represented shares of Savings Bank Common Stock shall be deemed
for all corporate purposes to evidence the ownership of the
number of whole shares of Holding Company Common Stock into which
the shares of the Common Stock of the Savings Bank shall have
been so converted.
D. All shares of Holding Company Common Stock into which shares of
Savings Bank Common Stock shall have been converted pursuant to
this Article shall be deemed to have been issued in full
satisfaction of all rights pertaining to such converted shares.
E. On the Effective Date, the holders of certificates formerly
representing Savings Bank Common Stock outstanding on the
Effective Date shall cease to have any rights with respect to
Savings Bank Common Stock, and their sole rights shall be with
respect to the Holding Company Common Stock into which their
shares of Savings Bank Common Stock shall have been converted by
the Merger.
ARTICLE III
CONDITIONS
3.1 The obligations of the Savings Bank, the Holding Company and Interim
to effect the Merger and otherwise consummate the transactions which
are the subject matter hereof shall be subject to satisfaction of the
following conditions:
A. To the extent required by applicable law, rules, and regulations,
the holders of the outstanding shares of Savings Bank Common
Stock shall, at a meeting of the stockholders of the Savings Bank
duly called, have approved this Agreement by
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the affirmative vote of a majority of the outstanding shares of
Savings Bank Common Stock.
B. The shares of Holding Company Common Stock to be issued to the
Savings Bank stockholders pursuant to the Merger shall have been,
if required by law, duly registered pursuant to the Securities
Act of 1933, as amended, and the Savings Bank shall have complied
with all applicable state securities or "blue sky" laws relating
to the issuance of the Holding Company Common Stock.
C. Any and all approvals from the Pennsylvania Department of Banking
(the "PDB"), the Federal Deposit Insurance Corporation, the Board
of Governors of the Federal Reserve System ("FRB"), the
Securities and Exchange Commission and any other governmental
agency having jurisdiction necessary for the lawful consummation
of the Merger and the issuance and delivery of the Holding
Company Common Stock as contemplated by this Agreement shall have
been obtained.
D. The Savings Bank shall have received either (i) a ruling from the
Internal Revenue Service or (ii) an opinion from its legal
counsel, to the effect that the Reorganization will be treated as
a non-taxable transaction under applicable provisions of the
Internal Revenue Code and that no gain or loss will be recognized
by the stockholders of the Savings Bank upon the exchange of
Savings Bank Stock held by them for Holding Company Stock.
ARTICLE IV
EFFECTIVE DATE OF MERGER
Upon satisfaction or waiver (in accordance with the provisions of this
Agreement) of each of the conditions set forth herein, the parties hereto shall
execute and cause to be filed Articles of Combination, and/or such certificates
or further documents as shall be required by the PDB, the Office of the
Secretary of the PDB, and with such other federal or state regulatory agencies
as may be required. Upon approval by the PDB, and endorsement of such
certificates, the Merger and other transactions contemplated by this Agreement
shall become effective. The Effective Date for all purposes hereunder shall be
the date of such endorsement.
ARTICLE V
AMENDMENT AND TERMINATION
5.1 The Savings Bank, the Holding Company and Interim, by mutual consent
of their respective Boards of Trustees or Incorporators, as the case
may be, to the extent permitted by law, may amend, modify, supplement
and interpret this Agreement in such manner as may be mutually agreed
upon by them at any time before or after the approval and adoption
thereof by the stockholders of the Savings Bank; provided, however,
that no such amendment, modification, supplement or interpretation
shall have a materially adverse impact on the Savings Bank or its
stockholders except with the approval of the stockholders of the
Savings Bank.
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5.2 This Agreement may be terminated at the election of any of the parties
hereto if any one or more of the conditions to the obligations of any
of them hereunder shall have been satisfied and become incapable of
fulfillment and shall have not been waived. This Agreement may also be
terminated at any time prior to the Effective Date by the mutual
consent of the respective Boards of Trustees of the parties.
5.3 In the event of the termination of this Agreement pursuant to any of
the foregoing provisions, no party shall have any further liability or
obligation of any nature to any other party under this Agreement.
ARTICLE VI
MISCELLANEOUS
6.1 This Agreement incorporates and adopts any restrictions that may be
(or have been) imposed on the Holding Company or the Mutual Holding
Company, relating to the waver of dividends by the Mutual Holding
Company, the repurchase of stock by the Holding Company or the Mutual
Holding Company or the conversion of the Mutual Holding Company to
stock form.
6.2 Any of the terms or conditions of this Agreement (other than the
necessary approvals of stockholders and government authorities) may be
waived at any time by any party hereto which is entitled to the
benefit thereof, by action taken by its Board of Trustees; provided,
however, that such action shall be taken only if, in the judgment of
the Board of Trustees taking the action, such waiver will not have a
materially adverse effect on the benefits intended under this
Agreement to be afforded to the stockholders of the Savings Bank.
6.3 This Agreement embodies the entire agreement among the parties and
there have been and are no agreements, representations or warranties
among the parties other than those set forth or provided for herein.
6.4 Any number of counterparts hereof may be executed and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one instrument.
6.5 Any notice or waiver to be given to any party shall be in writing and
shall be deemed to have been duly given if delivered, mailed, or sent
by prepaid telegram, addressed to such party at 000 Xxxxxxxx Xxxx,
Xxxxxx Xxxxx, Xxxxxxxxxxxx 00000.
6.6 The captions contained in this Agreement are solely for convenient
reference and shall not be deemed to affect the meaning or
interpretation of any paragraph hereof.
6.7 The Savings Bank will pay all fees and expenses incurred in connection
with the transactions contemplated by this Agreement. After the
Reorganization, the Holding Company will incur certain expenses that
arise from its creation for the purpose of serving as, and continued
existence as, the holding company of the Savings Bank, such
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as the costs associated with the filing of reports with the PDB,
holding of trustees and stockholders meetings and maintaining
relations with and providing reports to stockholders. The Savings Bank
agrees that it will reimburse the Holding Company for such ordinary
and usual expenses when and as payable by the Holding Company.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement and Plan of Reorganization as of the date first above written.
PEOPLES HOME SAVINGS BANK
BY: /s/ Xxxxx X. Xxxxxx, Xx.
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Xxxxx X. Xxxxxx, Xx., President
ATTEST: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, Corporate Secretary
PHS BANCORP, INC. (In Formation)
BY: /s/ Xxxxx X. Xxxxxx, Xx.
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Xxxxx X. Xxxxxx, Xx., President
ATTEST: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, Corporate Secretary
PEOPLES HOME INTERIM SAVINGS BANK
(In Formation)
BY: /s/ Xxxxx X. Xxxxxx, Xx.
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Xxxxx X. Xxxxxx, Xx., President
ATTEST: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, Corporate Secretary
