EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
dated as of November 29, 2007
between
CCFNB BANCORP, INC.
and
COLUMBIA FINANCIAL CORPORATION
TABLE OF CONTENTS
Page
----
RECITALS
A CCFNB 1
B Columbia County Farmers National Bank 1
C CFC 1
D First Columbia Bank & Trust Co. 1
E Intentions of the Parties 1
F Approvals 1
ARTICLE I
THE MERGER
1.1 The Merger 1
1.2 Effective Time 2
1.3 Closing 2
1.4 Bank Merger 2
ARTICLE II
Conversion or Cancellation of Shares
2.1 Conversion or Cancellation of Shares 2
2.2 Fractional Shares 3
2.3 Exchange of Old Certificates for New Certificates 3
2.4 Adjustment of Consideration 5
2.5 Withholding Rights 5
2.6 Dissenting Shares 5
ARTICLE III
Conduct of Business Pending Merger
3.1 Forbearances 5
ARTICLE IV
Representations
4.1 Disclosure Schedules 8
4.2 Standard 8
4.3 Representations 9
ARTICLE V
Covenants
5.1 Reasonable Best Efforts; Financial Statements 21
5.2 Shareholder Approvals 21
5.3 Registration Statement/Proxy Statement 22
5.4 Press Releases 22
5.5 Access; Information 23
5.6 Acquisition Proposals 23
5.7 Directors and Employment Agreements 24
5.8 Takeover Laws and Provisions 25
5.9 Regulatory Applications 25
5.10 Options 26
5.11 Indemnification and Insurance 26
5.12 Benefit Plans 27
5.13 Notification of Certain Matters 28
5.14 Regulatory Compliance 28
5.15 Exemption from Liability Under Section 16(b) 28
5.16 Additional Actions 29
ARTICLE VI
Conditions
6.1 Conditions to Each Party's Obligation to Effect the Merger 29
6.2 Conditions to Obligation of CCFNB 30
6.3 Conditions to Obligation of CFC 30
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ARTICLE VII
Termination
7.1 Termination by Mutual Consent 31
7.2 Termination by CCFNB 31
7.3 Termination by CFC 32
7.4 Effect of Termination and Abandonment 33
7.5 Termination Fee 33
ARTICLE VIII
Miscellaneous
8.1 Survival 34
8.2 Modification or Amendment 34
8.3 Waiver of Conditions 34
8.4 Counterparts 34
8.5 Governing Law 34
8.6 Notices 34
8.7 Entire Agreement, Etc. 35
8.8 Definition of "subsidiary" and "affiliate"; Covenants with
Respect to Subsidiaries and Affiliates 35
8.9 Expenses 35
8.10 Interpretation; Effect 35
8.11 Severability 36
8.12 No Third Party Beneficiaries 36
8.13 Waiver of Jury Trial 36
8.14 Submission to Jurisdiction; Selection of Forum 37
SCHEDULES
Schedule 5.7(d), Releases for Existing Employment Agreements 39
Schedule 5.16, Other Actions 47
Schedule 6.2(c), Form of Opinion of CFC Counsel 52
Schedule 6.3(c), Form of Opinion of CCFNB Counsel 54
ANNEXES
A Bank Merger Agreement 56
B Affiliate Agreement 60
C Voting Agreement 63
D Non-Solicitation Agreement 66
E Option Cancellation and Standstill Agreement 69
F Employment Agreement of ▇▇▇▇▇ ▇. ▇▇▇▇▇ 70
G Employment Agreement of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 80
H Employment Agreement of ▇▇▇▇▇▇▇ ▇. Alters 89
I Employment Agreement of ▇▇▇▇ ▇. Page 98
J Statutory Provisions Relating to Dissenters' Rights 107
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INDEX OF DEFINED TERMS
TERM LOCATION OF DEFINITION
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Acquisition Proposal 5.6(a)
Affiliate 8.8
Approvals 5.9(a)
Articles of Merger 1.2(a)
Bank Merger 1.4
Benefit Plans 4.3(m)(1)
CCFNB Preamble
CCFNB Bank 5.11(a)
CCFNB Common Stock Recital A
CCFNB Disclosure Schedule 4.1
CCFNB Material Contract 4.3(k)(7)
CCFNB Meeting 5.2(a)
CCFNB Preferred Stock Recital A
CFC Preamble
CFC Common Stock Recital B
CFC Disclosure Schedule 4.1
CFC Insiders 5.15
CFC Material Contract 4.3(k)(7)
CFC Meeting 5.2(a)
CFC Option(s) 5.10(a)
CFC Preferred Stock Recital B
CFC Section 16 Information 5.15
Chosen Courts 8.14
Closing 1.3
Closing Date 1.3
Code Recital C
Confidentiality Agreement 5.5(c)
Dissenting Shares 6.2(g)
Effective Time 1.2(a)
Employees 4.3(m)(1)
Environmental Laws 4.3(o)
ERISA 4.3(m)(1)
ERISA Affiliate 4.3(m)(3)
ERISA Plans 4.3(m)(2)
Exception Share 2.1(d)
Exchange Act 4.3(g)(1)
Exchange Fund 2.3(a)
Failing Party 7.5(d)
Governing Documents 3.1(h)
Governmental Entity 4.3(f)(1)
Indemnified Liabilities 5.11(a)
Indemnified Party 5.11(a)
Insurance Amount 5.11(b)
IRS 4.3(m)(2)
Liens 4.3(c)(2)
Material Adverse Effect 4.2(a)
Material Contract 4.3(k)
Materially Burdensome Regulatory Condition 5.9(a)
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Measurement Price 2.2
Merger 1.1(a)
Multiemployer Plan 4.3(m)(2)
New Certificate 2.3(a)
New Share 2.3(a)
Notice of Termination 7.5(c)
Old Certificate 2.1(c)
Old Share 2.1(c)
Option Consideration 5.10(a)
PBCL 1.1(b)
Pension Plan 4.3(m)(2)
Per Share Stock Consideration 2.1(a)
Person 2.3(e)
Plan Preamble
Previously Disclosed 3.1
Proxy Statement 5.3(a)
Registration Statement 5.3(a)
Regulatory Approvals 4.3(f)(2)
Regulatory Authorities 4.3(i)(1)
Regulatory Filings 4.3(g)(1)
Representatives 5.6(a)
Rights 4.3(b)(3)
SEC 4.3(f)(1)
Securities Act 4.3(g)(1)
Signing Exchange Ratio 2.1(a)
Subsidiary 8.8
Surviving Corporation 1.1(a)
Takeover Laws 4.3(s)
Takeover Provisions 4.3(s)
Tax 4.3(p)(4)
Tax Returns 4.3(p)(1)
Termination Date 7.2(b)
v
AGREEMENT AND PLAN OF REORGANIZATION, dated as of November 29, 2007, (this
"Plan"), between CCFNB Bancorp, Inc. ("CCFNB") and Columbia Financial
Corporation ("CFC").
RECITALS
A. CCFNB. CCFNB is a Pennsylvania business corporation with its principal
executive offices located in Bloomsburg, Pennsylvania. As of November 29, 2007,
CCFNB has (i) 5,000,000 authorized shares of common stock, par value $1.25 per
share ("CCFNB Common Stock"), of which not more than 1,226,266 shares are
outstanding; and (ii) 1,000,000 authorized shares of preferred stock, par value
$1.25 per share ("CCFNB Preferred Stock"), of which no shares are outstanding.
B. Columbia County Farmers National Bank. Columbia County Farmers National
Bank is a national bank and trust company with its principal executive offices
located in Bloomsburg, Pennsylvania. As of November 29, 2007, Columbia County
Farmers National Bank has 5,000,000 authorized shares of common stock, par value
$1.25 per share, of which not more than 1,382,433 shares are outstanding.
C. CFC. CFC is a Pennsylvania business corporation with its principal
executive offices located in Bloomsburg, Pennsylvania. As of the date hereof,
CFC has (i) 4,000,000 authorized shares of common stock, no par value ("CFC
Common Stock"), of which not more than 1,431,120 shares are outstanding; and
(ii) 1,000,000 authorized shares no par value preferred stock ("CFC Preferred
Stock"), of which no shares are outstanding.
D. First Columbia Bank & Trust Co. First Columbia Bank & Trust Co. is a
Pennsylvania bank and trust company with its principal executive offices located
in Bloomsburg, Pennsylvania. As of the date hereof, First Columbia Bank & Trust
Co. has 100,000 authorized shares of common stock, par value $10.00 per share,
of which not more than 100,000 shares are outstanding.
E. Intention of the Parties. Each of the parties to this Plan intends that
the Merger (as hereinafter defined) shall qualify as a reorganization under
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
and that this Plan shall constitute a "plan of reorganization" for purposes of
Sections 354 and 361 of the Code.
F. Approvals. The board of directors of each of CCFNB and CFC has (1)
determined that this Plan and the transactions contemplated hereby are advisable
and in the best interests of CCFNB and CFC, respectively; and (2) authorized and
approved this Plan.
NOW, THEREFORE, in consideration of their mutual promises and obligations,
the parties, intending to be legally bound hereby, adopt and make this Plan and
prescribe the terms and conditions hereof and the manner and mode of carrying it
into effect, which are as follows:
ARTICLE I
THE MERGER
1.1 The Merger. (a) Subject to the terms and conditions of this Plan, at
the Effective Time (as hereinafter defined), CFC shall merge with and into CCFNB
(the "Merger"), and the separate corporate existence of CFC shall thereupon
cease. CCFNB shall be the surviving corporation in the Merger (hereinafter
sometimes referred to as the "Surviving Corporation") and shall continue to be
governed by the laws of the Commonwealth of Pennsylvania.
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(b) The Merger shall have the effects specified in this Plan and the
Business Corporation Law of the Commonwealth of Pennsylvania (the "PBCL").
(c) At the Effective Time, the Restated Articles of Incorporation of CCFNB,
as then in effect, shall be the articles of incorporation of the Surviving
Corporation and the Amended By-Laws of CCFNB, as then in effect, shall be the
By-Laws of the Surviving Corporation.
(d) The name of the Surviving Corporation shall be CCFNB Bancorp, Inc.
1.2 Effective Time.
(a) Subject to the terms and conditions of this Plan, on or before the
Closing Date, the parties will execute and CCFNB will cause articles of merger
to be filed with the Department of State of the Commonwealth of Pennsylvania as
provided in Sections 1926 and 1927 of the PBCL (the "Articles of Merger"). The
Merger shall become effective at such time as the Articles of Merger has been
filed, or at such other time as may be specified therein. The date and time at
which the Merger becomes effective is herein referred to as the "Effective
Time".
(b) CCFNB and CFC will each cause the Effective Time to occur not later
than the first day of the fiscal quarter of CCFNB succeeding the satisfaction or
waiver of all of the conditions to closing set forth in Article VI.
Notwithstanding anything to the contrary in this Section 1.2(b), CCFNB and CFC
may cause the Effective Time to occur on such earlier or later day following the
satisfaction or waiver of such conditions as they may agree, consistent with the
provisions of the PBCL. If the last of the conditions set forth in Article VI
are satisfied or waived during the last [two] weeks immediately prior to the end
of a calendar quarter of CCFNB, then the parties may mutually agree to postpone
the Effective Time until the [first full week after the end of that fiscal
quarter].
1.3 Closing. The closing of the Merger (the "Closing") shall take place at
such time and place as CCFNB and CFC shall agree, on the date when the Effective
Time is to occur (the "Closing Date").
1.4 Bank Merger. As an inducement for each of the parties to enter into
this Plan, Columbia County Farmers National Bank and First Columbia Bank & Trust
Co. shall enter simultaneously into the agreement set forth at Annex A hereto
(the "Bank Merger Agreement"), pursuant to which Columbia County Farmers
National Bank will merge with and into First Columbia Bank & Trust Co. (the
"Bank Merger"). The surviving bank to this Bank Merger shall be First Columbia
Bank & Trust Co. The parties intend that the Bank Merger will become effective
simultaneously with or immediately following the Effective Time.
ARTICLE II
CONVERSION OR CANCELLATION OF SHARES
2.1 Conversion or Cancellation of Shares. At the Effective Time, by virtue
of the Merger and without any action on the part of any shareholder:
(a) CFC Common Stock. Each share of CFC Common Stock issued and outstanding
immediately prior to the Effective Time, other than Exception Shares (as
hereinafter defined) and Dissenting CFC Shares, shall be converted into the
right to receive, but subject to Section 2.2 and possible adjustment as set
forth in Section 2.4, 0.7200 (the "Signing Exchange Ratio") fully paid and
nonassessable shares of CCFNB Common Stock (the "Per Share Stock
Consideration").
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(b) CCFNB Common Stock. Each share of CCFNB Common Stock issued and
outstanding immediately prior to the Effective Time, other than Dissenting CCFNB
Shares, shall remain outstanding as one share of common stock of the Surviving
Corporation, except that shares of CCFNB Common Stock owned by CFC (other than
in a bona fide fiduciary or agency capacity or in satisfaction of a debt
previously contracted in good faith) shall become treasury stock of CCFNB..
(c) Cancellation of Old Shares. Each share of CFC Common Stock issued and
outstanding immediately prior to the Effective Time, other than Exception
Shares, is hereinafter defined as an "Old Share". Old Shares shall cease to be
outstanding, shall be canceled and retired and shall cease to exist, and each
holder of a certificate (an "Old Certificate") formerly representing Old Shares
shall thereafter cease to have any rights with respect to such shares, except
the right to receive, without interest, upon exchange of such Old Certificate in
accordance with Section 2.3, the Per Share Stock Consideration and any cash for
a fractional share in accordance with Section 2.2.
(d) Exception Shares. At the Effective Time, each Exception Share owned by
CCFNB or CFC shall be cancelled and retired and shall cease to exist and no
consideration shall be delivered in exchange thereof. "Exception Share" means a
share of CFC Common Stock owned or held, other than in a bona fide fiduciary or
agency capacity or in satisfaction of a debt previously contracted in good
faith, by CCFNB, by CFC as treasury shares or by any subsidiary of either.
2.2 Fractional Shares. Notwithstanding any other provision of this Article
II, no fractional shares of CCFNB Common Stock will be issued pursuant to the
Merger. Instead, CCFNB will pay or cause to be paid to the holder of any Old
Shares that would, pursuant to paragraph 2.1, otherwise be entitled to receive
fractional shares of CCFNB Common Stock an amount in cash, rounded to the
nearest cent and without interest, equal to the product of (i) the fraction of a
share to which such holder would otherwise have been entitled and (ii) the
Measurement Price. As used in this Plan, the term "Measurement Price" means the
average of the daily high and low per share sales prices of CCFNB Common Stock,
or, if none, the average of the daily high bid and low offer quotations for a
share of CCFNB Common Stock, as reported on the National Association of Security
Dealers, Inc.'s OTC Bulletin Board Service, for the last twenty (20) trading
days immediately prior to the Closing Date. If no bid or offer quotations are
available for any date, then the Measurement Price for such date shall be the
price of the last trade report and for shares of CCFNB Common Stock on the OTC
Bulletin Board Service as of such date.
2.3 Exchange of Old Certificates for New Certificates.
(a) Exchange Agent. At or before the Effective Time, CCFNB shall (i)
appoint an Exchange Agent, (ii) make available or cause to be made available to
the Exchange Agent certificates or, at CCFNB's option, evidence of shares in
book entry form (each, a "New Certificate"), representing the shares of CCFNB
Common Stock (each, a "New Share") sufficient to allow the Exchange Agent to
make all deliveries of New Certificates that will be required in exchange for
Old Certificates pursuant to this Article II; and (iii) deposit with the
Exchange Agent, in trust for the benefit of holders of CFC Common Stock that
would otherwise be entitled to receive fractional shares of CCFNB Common Stock,
sufficient cash to make all payments that may be required pursuant to Section
2.2 (collectively, the "Exchange Fund"). Any portion of the Exchange Fund that
remains unclaimed by the shareholders of CFC as of the first anniversary of the
Effective Time may, to the extent permitted by applicable law, be paid to CCFNB.
In such event, any holder of Old Certificates who has not theretofore exchanged
his or her Old Certificates for New Certificates shall thereafter be entitled to
look exclusively to CCFNB for the shares of CCFNB Common Stock to which he or
she may be entitled upon exchange of such Old Certificates pursuant to this
Article II, in each case, without any interest thereon. In the event that any
Old Certificates are not surrendered for exchange within two (2) years of the
Effective Time, CCFNB may sell such unclaimed New Shares of CCFNB
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Common Stock, in which event the sole right of the holders of the unsurrendered
Old Certificates shall be the right to collect the net sale proceeds held for
their account by CCFNB. Notwithstanding the foregoing, neither the Exchange
Agent nor any party hereto, shall be liable to any holder of Old Certificates
for any shares of CCFNB Common Stock or the proceeds from the sale of unclaimed
New Shares properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
(b) Exchange Procedures. As promptly as reasonably practicable following
the Effective Time (and in any case no later than five (5) days thereafter),
CCFNB shall cause the Exchange Agent to mail or deliver to each person who was,
immediately prior to the Effective Time, a holder of record of CFC Common Stock,
a form of letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to Old Certificates shall pass, only upon
proper delivery of such certificates to the Exchange Agent) containing
instructions for use in effecting the surrender of Old Certificates in exchange
for the shares of CCFNB Common Stock and any cash payment in lieu of a
fractional share to which such person may be entitled pursuant to this Section
2.2. Upon surrender of an Old Certificate to the Exchange Agent together with
such letter of transmittal duly executed and completed in accordance with the
instructions thereto, and such other documents as may reasonably be required by
the Exchange Agent, the holder of such Old Certificate shall be entitled to
receive in exchange therefore (i) a certificate representing, in the aggregate,
the whole number of shares of CCFNB Common Stock that such holder has the right
to receive pursuant to Section 2.1(a) and/or (ii) a check in the amount equal to
the aggregate amount of cash that such holder has the right to receive pursuant
to Section 2.2. No interest will be paid or will accrue on any cash payment
pursuant to Section 2.2. In the event of a transfer of ownership of CFC Common
Stock which is not registered in the transfer records of CFC, a certificate
representing, in the aggregate, the proper number of shares of CCFNB Common
Stock pursuant to Section 2.1(a) and/or a check in the proper amount pursuant to
Section 2.2 may be issued with respect to such CFC Common Stock, as the case may
be, to such a transferee if the Old Certificate formerly representing such
shares of CFC Common Stock is presented to the Exchange Agent, accompanied by
all documents required to evidence and effect such transfer and to evidence that
any applicable stock transfer taxes have been paid.
(c) Distributions with Respect to Unexchanged Shares. No dividends or other
distributions with respect to CCFNB Common Stock having a record date after the
Effective Time will be paid to any holder of CFC Common Stock until such holder
has surrendered the Old Certificate representing such stock as provided herein.
Subject to the effect of applicable law, following surrender of any such Old
Certificates, there shall be paid to the holder of New Certificates issued in
exchange therefor, without interest, the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to the whole shares of CCFNB Common Stock represented thereby. To the
extent permitted by law, holders of CFC Common Stock who receive CCFNB Common
Stock in the Merger shall be entitled to vote after the Effective Time at any
meeting of CCFNB shareholders the number of whole shares of CCFNB Common Stock
into which their respective shares of CFC Common Stock are converted, regardless
of whether such holders of CFC Common Stock have exchanged their Old
Certificates for New Certificates in accordance with the provisions of this
Plan, but beginning 30 days after the Effective Time no such holder shall be
entitled to vote on any matter until such holder surrenders such Old Certificate
for exchange as provided in Section 2.3(b).
(d) Transfers. At or after the Effective Time, there shall be no transfers
on the stock transfer books of the Surviving Corporation of Old Shares.
(e) Lost, Stolen or Destroyed Certificates. If any Old Certificate shall
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the individual, bank, corporation, partnership, trust, association or
other entity or organization (any of the foregoing, a "Person") claiming such
Old Certificate to be lost, stolen or destroyed and, if required by the
Surviving
4
Corporation or the Exchange Agent, the posting by such Person of a bond in such
reasonable amount as the Surviving Corporation or the Exchange Agent may direct
as indemnity against any claim that may be made against it with respect to such
Old Certificate, the Surviving Corporation or the Exchange Agent shall, in
exchange for such lost, stolen or destroyed Old Certificate, issue or cause to
be issued a New Certificate and pay or cause to be paid the cash amount for any
fractional share, and any dividends or other distributions on shares of CCFNB
Common Stock to which the holders thereof are entitled, deliverable in respect
to the Old Shares formerly represented by such Old Certificate pursuant to this
Article II.
2.4 Adjustment of Consideration. If, prior to the Closing Date, CCFNB or
CFC changes (or the board of directors of CCFNB or CFC sets a related record
date that will occur before the Effective Time for a change in) the number or
kind of shares of CCFNB or CFC Common Stock outstanding by way of a stock split,
stock dividend, recapitalization, reclassification, reorganization or similar
transaction, the Signing Exchange Ratio will be adjusted proportionately to
account for such change. (By way of illustration, if CCFNB declares a stock
dividend of 7% payable with respect to a record date on or prior to the Closing
Date, the Signing Exchange Ratio shall be adjusted upward by 7%).
2.5 Withholding Rights. Each of CCFNB, the Surviving Corporation and the
Exchange Agent shall be entitled to deduct and withhold from the consideration
otherwise payable to any Person pursuant to this Agreement such amounts as it is
required to deduct and withhold under the Code and the rules and regulations
promulgated thereunder, or any provision of state, local or foreign tax law. To
the extent that amounts are so deducted or withheld by CCFNB, the Surviving
Corporation or the Exchange Agent, as the case may be, such withheld amounts
shall be treated for all purposes of this Plan as having been paid to the Person
in respect to which such deduction and withholding was made.
2.6 Dissenting Shares.
(a) Dissenting CFC Shares. Notwithstanding anything to the contrary
contained in this Plan, any holder of CFC Common Stock who shall be entitled to
be paid the "fair value" of such holder's "dissenting shares" of CFC Common
Stock ("Dissenting CFC Shares"), as provided in Sections 1571 et seq. of the
PBCL, shall not be entitled to the consideration to which such holder would
otherwise have been entitled pursuant to Sections 2.1 and 2.2 of this Plan,
unless and until such holder shall have failed to perfect or shall have
withdrawn or lost such holder's rights as a dissenter. Such holder shall only be
entitled to receive the payment as is provided under Sections 1571 et seq. of
the PBCL.
(b) Dissenting CCFNB Shares. Any holder of CCFNB Common Stock who shall be
entitled to be paid the "fair value" of such holder's "dissenting shares" of
CCFNB Common Stock ("Dissenting CCFNB Shares"), as provided in Sections 1571 et
seq. of the PBCL, shall only be entitled to receive such payment.
ARTICLE III
CONDUCT OF BUSINESS PENDING MERGER
3.1 Forbearances. Each of CCFNB and CFC agree that from the date hereof
until the Effective Time, except as expressly contemplated by this Plan or as
set forth in the corresponding paragraph of its Disclosure Schedule ("Previously
Disclosed"), without the prior written consent of the other party (which consent
shall not be unreasonably withheld, delayed or conditioned), it will not, and
will cause each of its subsidiaries not to:
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(a) Ordinary Course. Conduct its business and the business of its
subsidiaries other than in the ordinary and usual course consistent with past
practices and policies or fail to use reasonable efforts to preserve intact
their business organizations and assets and maintain their rights, franchises
and existing relations and goodwill with customers, suppliers, employees and
business associates, or take any action reasonably likely to materially impair
its ability to perform its obligations under this Plan or to consummate the
transactions contemplated hereby and thereby.
(b) Capital Stock. (1) Issue, sell or otherwise permit to become
outstanding, or dispose of or encumber or pledge or authorize or propose the
creation of, any additional shares of its stock other than pursuant to Rights
outstanding on the date hereof; (2) enter into any agreement with respect to the
foregoing; or (3) permit any additional shares of its stock to become subject to
new grants, other Rights or similar stock-based employee rights.
(c) Dividends, Etc. Except for ordinary and usual periodic quarterly cash
dividends out of current earnings, not to exceed $0.23 per share in the case of
CCFNB and $0.17 in the case of CFC, (1) make, declare, pay or set aside for
payment any dividend (other than dividends from its direct or indirect wholly
owned subsidiaries to it) or other distribution in respect of its capital stock
or (2) directly or indirectly adjust, split, combine, redeem, reclassify,
purchase or otherwise acquire, any shares of its capital stock; except that
CCFNB may continue its open market purchases of CCFNB Common Stock in the usual
and ordinary course.
(d) Compensation; Employment Agreements; Etc. Enter into or amend or renew
any employment, change of control, retention, consulting, severance or similar
agreements or arrangements with any of its directors, officers or employees or
those of its subsidiaries or grant any increase in, set aside assets to fund or
accelerate the payment or vesting of, compensation or benefits or pay or provide
any compensation or benefits not required to be paid or provided, including,
without limitation, any severance or termination pay (other than pursuant to
existing written policies and agreements) except (1) for normal individual
increases in annual base salary or hourly pay rate to employees who are not
directors or executive officers, at times, in amounts and on other terms and
conditions in the ordinary course of business consistent with past practice; (2)
for other changes that are required by applicable law or as appropriate to
effectuate amendments with respect to Section 409A of the Code (including but
not limited to qualify for the short-term deferral exception to Section 409A),
provided that such amendments with respect to Section 409A do not materially
increase the cost to CCFNB of CFC, as the case may be, of such arrangements
(provided that for this purpose a change in payment form to a lump sum payment
shall not be considered a material increase in cost); and (3) to satisfy
Previously Disclosed contractual obligations.
(e) Benefit Plans. Enter into, establish, adopt or amend any Benefit Plan,
except (1) as may be required by applicable law or as appropriate to effectuate
amendments with respect to Section 409A of the Code (including but not limited
to qualify for the short-term deferral exception to Section 409A), provided that
such amendments with respect to Section 409A do not materially increase the cost
to CCFNB or CFC, as the case may be, of such arrangements (provided that for
this purpose a change in payment form to a lump sum payment shall not be
considered a material increase in cost); (2) to satisfy Previously Disclosed
contractual obligations; (3) for technical amendments that are immaterial to the
parties and any participant; or (4) as required by the Benefit Plan or this
Plan.
(f) Dispositions. Sell, transfer, mortgage, encumber or otherwise dispose
of or discontinue any of its assets, deposits, business or properties except for
sales, transfers, mortgages, encumbrances or other dispositions or
discontinuances in the ordinary course of business consistent with past practice
and in a transaction that, together with other such transactions, is not
material to it and its subsidiaries, taken as a whole.
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(g) Acquisitions. Acquire (other than by way of foreclosures or
acquisitions of control in a fiduciary or similar capacity or in satisfaction of
debts previously contracted in good faith, in each case in the ordinary and
usual course of business consistent with past practice) all or any portion of
the assets, business, deposits or properties of any other entity except in the
ordinary course of business consistent with past practice and in a transaction
that, together with other such transactions, is not material to it and its
subsidiaries, taken as a whole.
(h) Governing Documents. Amend its articles of incorporation, bylaws or
similar governing documents ("Governing Documents") or the Governing Documents
of any of its subsidiaries, except as contemplated by this Plan.
(i) Accounting Methods. Implement or adopt any change in its accounting
principles, practices or methods, other than as may be required by generally
accepted accounting principles, applicable regulatory accounting requirements or
applicable law.
(j) Contracts. Enter into, renew or terminate any contract or agreement or
amendment thereof, other than loans, funding arrangements and other transactions
made in the ordinary course of the banking business, that calls for aggregate
annual payments of $25,000 or more and which is not terminable on 60 days or
less notice without payment of a premium or penalty, provided that no such
contract or agreement or amendment thereof shall contain (1) any non-competition
or exclusive dealing obligations or other obligation which purports to limit or
restrict in any respect the ability of CCFNB and CFC or their subsidiaries to
solicit customers or the manner in which, or the localities in which, all or any
portion of the business of CCFNB and CFC or their subsidiaries (or, following
consummation of the transactions contemplated hereby, the ability of CCFNB or
any of its subsidiaries) is or would be conducted; (2) any agreement that grants
any right of first refusal or right of first offer or similar right or that
limits or purports to limit the ability of CCFNB and CFC or any of their
subsidiaries (or, following consummation of the transactions contemplated
hereby, the ability of CCFNB or any of its subsidiaries) to own, operate, sell,
transfer, pledge or otherwise dispose of any assets or business; or (3) any
provision whereby the consummation of the transactions contemplated hereby would
(A) constitute a breach or violation of, or a default under, or give rise to any
Lien, any acceleration of remedies or, any right of termination or the loss of
any benefit under, such contract or agreement or (B) require any consent or
approval under any such contract or agreement. In the event that either party
desires to take any of the actions contemplated by this Section 3.1(j), such
party shall give written notice of such intent to the other party. The other
party shall then have five (5) business days within which to provide written
notice that it objects to the proposed action. If no written objection is made,
or if the written objection is untimely, such party shall be deemed to have
consented to such action and the subsequent taking of such action by the other
party shall not be deemed a violation of this Section 3.1(j).
(k) Claims. Settle any claim, action or proceeding against it, except for
settlements involving only monetary remedies in the ordinary course of business
consistent with past practice not in excess of $10,000 individually or $25,000
in the aggregate for all such settlements effected after the date hereof and
would not create precedent for claims that are reasonably likely to be material
to CCFNB and CFC or their subsidiaries or, after the Effective Time, CCFNB or
its subsidiaries.
(l) Adverse Actions. Notwithstanding anything herein to the contrary, (1)
take any action or knowingly fail to take any reasonable action that would, or
is reasonably likely to, prevent, impede or delay the Merger from qualifying as
a reorganization within the meaning of Section 368(a) of the Code or (2) take
any action that is reasonably likely to result in (A) any of the conditions to
the Merger set forth in Article VI not being satisfied in a timely manner or (B)
a material violation of any provision of this Plan except, in each case, as may
be required by applicable law or regulation.
7
(m) Capital Expenditures. Other than in the ordinary course of business,
make any capital expenditures in excess of (1) $10,000 per project or related
series of projects or (2) $50,000 in the aggregate.
(n) Certain Tax Matters. Make, change or revoke any material Tax election,
change any material method of Tax accounting, adopt or change any taxable year
or period, enter into any closing agreement with respect to Taxes, file any
material amended Tax Return, settle or compromise any material claim for Taxes,
or surrender any material claim for a refund of Taxes.
(o) Branch Leases. Make application for the opening, relocation or closing
of any, or open or close any, branch or automated banking facility.
(p) Investment Portfolio. Purchase any security for its investment
portfolio not rated "A" or higher by either Standard & Poor's Corporation or
▇▇▇▇▇'▇ Investor Services, Inc. or otherwise alter, in any material respect, the
mix, maturity, credit or interest rate risk profile of its portfolio of
investment securities or its portfolio of mortgage-backed securities.
(q) Affiliate Transactions. Except in the ordinary course of business
consistent with past practice, enter into, renew, extend or modify any
transaction with any Affiliate other than deposit and loan transactions in the
ordinary course of business and which are in compliance with applicable laws and
regulations.
(r) Swap Agreements. Enter into any interest rate swap or similar
commitment, agreement or arrangement.
(s) Commitments. Agree or commit to do any of the foregoing.
ARTICLE IV
REPRESENTATIONS
4.1 Disclosure Schedules. On or prior to the date hereof, each of CCFNB and
CFC have delivered to the other party a schedule (respectively, each schedule a
"CCFNB Disclosure Schedule" or "CFC Disclosure Schedule", as the case may be)
setting forth, among other things, items the disclosure of which is necessary or
appropriate either in response to an express disclosure requirement contained in
a provision hereof or as an exception to one or more representations contained
in Section 4.3 or to one or more of its covenants contained herein; provided
that the mere inclusion of an item in a respective disclosure schedule as an
exception to a representation shall not be deemed an admission by a party that
such item was required to be disclosed therein.
4.2 Standard. (a) For all purposes of this Plan, no representation of CCFNB
or CFC contained in Section 4.3 (other than the representations contained in
Section 4.3(b)(1), which shall be true and correct in all material respects, and
in Section 4.3(g)(4), which shall be true and correct in all respects) shall be
deemed untrue and no party hereto shall be deemed to have breached a
representation, as a consequence of the existence of any fact, event or
circumstance unless such fact, circumstance or event, individually or taken
together with all other facts, events or circumstances inconsistent with any
representation contained in Section 4.3 (read for this purpose without regard to
any individual reference to "materiality" or "Material Adverse Effect" set forth
therein) has had or is reasonably likely to have a Material Adverse Effect with
respect to CCFNB or CFC, as the case may be.
(b) The term "Material Adverse Effect" means an effect which (1) is
materially adverse to the business, financial condition or results of operations
of CCFNB or CFC, as the context may dictate, and their subsidiaries, taken as a
whole, or (2) materially impairs the ability of CCFNB or CFC to
8
consummate the Merger; provided, however, that in determining whether a Material
Adverse Effect has occurred under clause (1) there shall be excluded any effect
to the extent attributable to or resulting from (A) any changes in laws,
regulations or interpretations of laws or regulations generally affecting the
banking or bank holding company businesses, but not uniquely relating to CCFNB
or CFC; (B) any change in generally accepted accounting principles or regulatory
accounting requirements, generally affecting the banking or bank holding company
businesses, but not uniquely relating to CCFNB or CFC; (C) events, conditions or
trends in economic, business or financial conditions generally or affecting the
banking or bank holding company businesses generally (including changes in
interest rates and changes in the markets for securities), except to the extent
any such events, conditions or trends in economic, business or financial
conditions have a disproportionate adverse effect upon such party; (D) changes
in national or international political or social conditions including the
engagement by the United States in hostilities, whether or not pursuant to the
declaration of a national emergency or war, or the occurrence of any military or
terrorist attack upon or within the United States, or any of its territories,
possessions or diplomatic or consular offices or upon any military installation,
equipment or personnel of the United States; (E) actions or omissions of CCFNB
or CFC taken with the prior written consent of the other party in contemplation
of the transactions contemplated hereby or actions that are taken by the
parties, consistent with the terms hereof, to consummate the transactions
contemplated hereby; or (F) the announcement of this Plan and the transactions
contemplated hereby.
4.3 Representations. Except as Previously Disclosed, each of CCFNB and CFC
hereby represents and warrants to the other party to the extent applicable, in
each case with respect to itself and its subsidiaries, as follows:
(a) Organization, Standing and Authority.
(1) It is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. It is duly
qualified to do business and is in good standing in the states of the United
States and any foreign jurisdictions where its ownership or leasing of property
or assets or the conduct of its business requires it to be so qualified. CCFNB
is a financial holding company, and CFC a bank holding company, both duly
registered under the Bank Holding Company Act of 1956, as amended.
(2) The respective minute books of the party, as well as its
subsidiaries, accurately record, in all material respects, all material
corporate actions of its shareholders and board of directors (including
committees).
(3) Prior to the date hereof, each party has caused to be delivered
true and correct copies of its articles of incorporation and bylaws, as well as
those pertaining to each of its subsidiaries, each as in effect as of the date
hereof.
(b) Capital Stock.
(1) The information in Recitals A and B, in the case of CCFNB and its
subsidiary, and in Recitals C and D, in the case of CFC and its subsidiary, is
true and correct.
(2) Its outstanding shares of common stock have been duly authorized
and are validly issued and outstanding, fully paid and nonassessable, not
subject to any preemptive rights and were not issued in violation of any
preemptive rights.
(3) Except as set forth in this Plan or as Previously Disclosed, it
does not have any commitment to authorize, issue or sell any of its common stock
or Rights, except pursuant to this Plan, outstanding options to purchase its
common stock and the Benefit Plans. As used herein, "Rights"
9
means, with respect to any Person, securities or obligations convertible into or
exercisable or exchangeable for, or giving any Person any right to subscribe for
or acquire, or any options, calls or commitments relating to, or any stock
appreciation right or other instrument the value of which is determined in whole
or in part by reference to the market price or value of, shares of capital stock
or earnings of such Person. In the case of CFC, no stock option granted has any
"reload" feature nor does any Person have any right to be granted a stock option
with such a feature. In the case of CFC, no subsidiary of CFC owns shares of
CCFNB Common Stock.
(4) In the case of CCFNB, any shares of CCFNB Common Stock to be
issued in connection with the Merger have been duly authorized and will be
validly issued and outstanding, fully paid and nonassessable, not subject to any
preemptive rights and not issued in violation of any preemptive rights.
(5) To the best of its knowledge, no person or "group" (as that term
is used in Section 13(d)(3) of the Exchange Act), is the beneficial owner (as
defined in Section 13(d) of the Exchange Act) of 5% or more of the outstanding
shares of its common stock.
(c) Subsidiaries.
(1) Neither party has any subsidiaries, except those identified on its
respective Disclosure Schedule.
(2) Each party (A) owns, directly or indirectly, all the issued and
outstanding equity securities of each of its subsidiaries; (B) no equity
securities of any of its subsidiaries are or may become required to be issued
(other than to it or its wholly owned subsidiaries) by reason of any Right or
otherwise; (C) there are no contracts, commitments, understandings or
arrangements by which any of its subsidiaries is or may be bound to sell or
otherwise transfer any equity securities of any its subsidiaries (other than to
it or its wholly owned subsidiaries); (D) there are no contracts, commitments,
understandings, or arrangements relating to its rights to vote or to dispose of
such securities; and (E) all the equity securities of each subsidiary held by it
or its subsidiaries have been duly authorized and are validly issued and
outstanding, fully paid and nonassessable (except as provided in 12 U.S.C.
Section 55 or comparable state laws) and are owned by it or its subsidiaries
free and clear of all liens, pledges, security interests, claims, provisions,
preemptive or subscriptive rights or other encumbrances or restrictions of any
kind or Rights ("Liens").
(3) Each party's subsidiaries have been duly organized and are validly
existing in good standing under the laws of the jurisdiction of its
organization, and are duly qualified to do business and in good standing in the
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified. The deposits, if any, of each party's
subsidiaries are insured by the Federal Deposit Insurance Corporation ("FDIC")
to the fullest extent provided in the Federal Deposit Insurance Act, as amended.
(d) Corporate Power. Each party and each of its subsidiaries has the
corporate or other power and authority to carry on its business as it is now
being conducted and to own all its properties and assets; and it has the
corporate power and authority to execute, deliver and perform its obligations
under this Plan and the Bank Merger Agreement set forth in Annex A and to
consummate the transactions contemplated hereby and thereby.
(e) Corporate Authority.
10
(1) Subject to receipt of the shareholder approval described in this
Section 4.3, this Plan and the Bank Merger Agreement and the transactions
contemplated hereby and thereby have been authorized by all necessary corporate
action. This Plan is its valid and legally binding obligation, enforceable in
accordance with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors' rights
or by general equity principles).
(2) In the case of CCFNB, the affirmative vote of two thirds of the
outstanding shares of CCFNB Common Stock to adopt this Plan is the only vote of
the holders of any class or series of CCFNB's capital stock necessary to approve
and adopt this Plan and the transactions contemplated hereby.
(3) In the case of CFC, the affirmative vote to adopt this Plan by at
least a majority of the votes cast by all shareholders entitled to vote is the
only vote of the holders of any class or series of CFC's capital stock necessary
to approve and adopt this Plan and the transactions contemplated hereby.
(f) Regulatory Approvals; No Defaults.
(1) No consents or approvals of, or filings or registrations with, any
governmental or regulatory authority, agency, court, commission or other entity,
domestic or foreign ("Governmental Entity") or with any third party are required
to be made or obtained by it or any of its subsidiaries in connection with the
execution, delivery or performance by it of this Plan or to consummate the
Merger except for (A) filings and approvals of applications with and by federal
and state banking authorities as Previously Disclosed; (B) filings with the
Securities and Exchange Commission ("SEC") and state securities authorities; (C)
the shareholder approval described in Section 5.2(a); and (D) the filing of
Articles of Merger with the Department of State of the Commonwealth of
Pennsylvania pursuant to the PBCL, with respect to the Merger, and the
Pennsylvania Banking Code of 1965, with respect to the Bank Merger.
(2) Subject to receipt of the regulatory approvals referred to in the
preceding paragraph (the "Regulatory Approvals"), and the expiration of related
waiting periods, and required filings under federal and state securities laws,
the execution, delivery and performance of this Plan and the consummation of the
transactions contemplated hereby do not and will not (A) constitute a breach or
violation of, or a default under, or give rise to any Lien, any acceleration of
remedies, any right of termination or the loss of any benefit under, any law,
rule or regulation or any judgment, decree, order, governmental permit or
license, or material agreement, indenture or instrument of it or of any of its
subsidiaries or to which it or any of its subsidiaries or properties is subject
or bound; (B) constitute a breach or violation of, or a default under, its
Governing Documents; or (C) require any consent or approval under any such law,
rule, regulation, judgment, decree, order, governmental permit or license,
material agreement, indenture or instrument.
(3) As of the date hereof, it (a) knows of no reason why (1) all
Regulatory Approvals from any Governmental Entity required for the consummation
of the transactions contemplated by this Plan should not be obtained on a timely
basis or (2) the opinion of tax counsel referred to, in the case of CCFNB, in
Section 6.2(c) and, in the case of CFC, in Section 6.3(c) should not be obtained
on a timely basis and (b) has no reason to believe that the Merger will fail to
qualify as a reorganization under Section 368(a) of the Code.
(g) Financial Reports and Regulatory Documents; Material Adverse Effect.
11
(1) With respect to CCFNB, its Annual Report on Form 10-K for the
fiscal year ended December 31, 2006, and all other reports, registration
statements, definitive proxy statements or information statements required to be
filed by it subsequent to December 31, 2006 under the Securities Act of 1933, as
amended ("Securities Act"), or under Section 13(a), 13(c), 14 or 15(d) of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act") or under
the securities regulations of the SEC, in the form filed (collectively, its
"Regulatory Filings") with the SEC as of the date filed, (A) complied in all
material respects as to form with the applicable requirements under the
Securities Act or the Exchange Act, as the case may be and (B) did 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 therein, in
the light of the circumstances under which they were made, not misleading; and
each of the balance sheets or statements of condition contained in or
incorporated by reference into any such Regulatory Filing (including the related
notes and schedules thereto) fairly presented in all material respects its
consolidated financial position as of its date, and each of the statements of
income and changes in shareholders' equity and cash flows or equivalent
statements in such Regulatory Filings (including any related notes and schedules
thereto) fairly presented in all material respects, the consolidated results of
operations, changes in shareholders' equity and changes in cash flows, as the
case may be, for the periods to which they relate, in each case in accordance
with GAAP consistently applied during the periods involved, except in each case
as may be noted therein, subject to normal year-end audit adjustments in the
case of unaudited statements. At the date of each balance sheet, no liabilities,
obligations or loss contingencies of any nature of a type required to be
reflected in balance sheets or in footnotes are not fully reflected, reserved
against, or fully disclosed in a footnote.
(2) With respect to CFC, its audited annual financial statements for
the years ended December 31, 2006 and 2005, (A) complied in all material
respects as to form and substance with generally accepted accounting principles
("GAAP") applied on a consistent basis and (B) did 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 therein, in light of the
circumstances under which they were made, not misleading, and each balance sheet
or statement of condition contained in such financial statements (including the
related notes and schedules thereto) fairly presented in all material respects
its consolidated financial position as of its date, and each of the statements
of income and consolidated statements of stockholders' equity and cash flows or
equivalent statements in such annual reports (including any related notes and
schedules thereto) fairly presented in all material respects, the consolidated
results of operations, changes in stockholders' equity and changes in cash
flows, as the case may be, for the periods to which they relate, in each case in
accordance with GAAP consistently applied during the periods involved, except in
each case as may be noted therein, subject to normal year-end adjustments in the
case of unaudited statements.
(3) In the case of both parties, each party has previously delivered
to the other the regulatory reports filed by its subsidiaries with any
Regulatory Authority (each such report, a "Regulatory Report") through October
31, 2007 and will deliver to the other the Regulatory Reports for any dates or
periods thereafter through the Closing Date as soon as they are available. The
Regulatory Reports, as amended (provided such amendments have been filed with
the appropriate Regulatory Authority) have been, or with respect to those not
yet prepared, will be, prepared in all material respects in accordance with
applicable regulatory accounting principles and practices, including, but not
limited to, all applicable rules, regulations and pronouncements of applicable
Regulatory Authorities, throughout the periods covered by such statements, and
fairly present, or with respect to those not yet prepared, will fairly present
in all material respects, the consolidated financial position, results of
operations and changes in shareholders' equity of such party or its subsidiary,
as the case may be, as of and for the periods ended on the dates thereof, in
accordance with applicable regulatory accounting principles, including, but not
limited to, all applicable rules, regulations and pronouncements of applicable
Regulatory Authorities, applied on a consistent basis. The term "Regulatory
Authority" shall mean any banking agency or department of any federal or state
12
government, including without limitation the Office of the Comptroller of the
Currency ("OCC"), the FDIC, the Pennsylvania Department of Banking ("PDB") or
the respective staffs thereof.
(4) Since January 1, 2004 neither party nor any of its subsidiaries
have incurred any liability other than in the ordinary course of business
consistent with past practice.
(5) Since January 1, 2004 (A) both parties and their subsidiaries have
conducted their businesses in the ordinary and usual course consistent with past
practice (excluding the incurrence of expenses related to this Plan and the
transactions contemplated hereby) and (B) no event has occurred or circumstance
arisen that, individually or taken together with all other facts, circumstances
and events (described in any paragraph of Section 4.3 or otherwise), has had or
is reasonably likely to have a Material Adverse Effect with respect to it.
(6) Since January 1, 2004 no event has occurred or circumstance arisen
that, individually or taken together with all other facts, circumstances and
events (described in any paragraph of Section 4.3 or otherwise), has had or is
reasonably likely to have a Material Adverse Effect with respect to either
party.
(h) Litigation. Except as Previously Disclosed, there is no suit, action or
proceeding pending against either party or, to the knowledge of it, threatened
against or affecting it or any of its subsidiaries (and it is not aware of any
basis for any such suit, action or proceeding) (1) that, individually or in the
aggregate, is material to it and its subsidiaries, taken as a whole, or (2) that
is reasonably likely to prevent or delay it in any material respect from
performing its obligations under, or consummating the transactions contemplated
by, this Plan.
(i) Regulatory Matters.
(1) Except as Previously Disclosed, neither party nor any of its
subsidiaries is a party to or is subject to any written order, decree,
agreement, memorandum of understanding or similar arrangement with, or a
commitment letter or similar submission to, or extraordinary supervisory letter
from, any Governmental Entity charged with the supervision or regulation of
financial institutions or issuers of securities or engaged in the insurance of
deposits or the supervision or regulation of it or any of its subsidiaries
(collectively, the "Regulatory Authorities").
(2) Except as Previously Disclosed, neither party nor any of its
subsidiaries has been advised by any Regulatory Authority that such Regulatory
Authority is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such written order, decree,
agreement, memorandum of understanding, commitment letter, supervisory letter or
similar submission. Except as Previously Disclosed, there are no formal or
informal investigations relating to any material regulatory matters pending
before any Governmental Entity with respect to it or its subsidiaries.
(j) Compliance with Laws. Except as Previously Disclosed, both parties and
each of its subsidiaries:
(1) conducts its business in compliance with all applicable federal,
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders or decrees applicable thereto or to the employees conducting
such businesses, including, without limitation, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002,
the Equal Credit Opportunity Act, the Fair Housing Act, the Community
Reinvestment Act, the Home Mortgage Disclosure Act, the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT) Act of 2001, the Bank Secrecy
13
Act and all other applicable fair lending laws and other laws relating to
discriminatory business practices; and
(2) has all permits, licenses, authorizations, orders and approvals
of, and has made all filings, applications and registrations with, all
Governmental Entities that are required in order to permit them to own or lease
their properties and to conduct their businesses as presently conducted; all
such permits, licenses, certificates of authority, orders and approvals are in
full force and effect and, to its knowledge, no suspension or cancellation of
any of them is threatened.
(k) Material Contracts; Defaults. Except for those agreements and other
documents filed as exhibits to its Regulatory Filings in the case of CCFNB or as
Previously Disclosed in the case of CFC, as of the date hereof, neither party
nor any of its subsidiaries, as the case may be, is a party to, bound by or
subject to any agreement, contract, arrangement, commitment or understanding:
(1) that is a "material contract" within the meaning of Item
601(b)(10) of the SEC's Regulation S-K;
(2) that contains (x) any non-competition or exclusive dealing
agreements or other agreement or obligation which purports to limit or restrict
in any respect the ability of the party or its subsidiaries, as the case may be,
to solicit customers or the manner in which, or the localities in which, all or
any portion of the business of the parties and their subsidiaries, as the case
may be, is or would be conducted or (y) any agreement that grants any right of
first refusal or right of first offer or similar right or that limits or
purports to limit the ability of the parties or their subsidiaries, as the case
may be, to own, operate, sell, transfer, pledge or otherwise dispose of any
assets or business,
(3) that involves performance of services or delivery of goods or
materials to, or expenditures by, either party or any of its subsidiaries of an
amount or value in excess of $25,000 over its remaining term, other than loans,
funding arrangements and other transactions made in the ordinary course of the
banking business, or any such agreement, contract, arrangement, commitment or
understanding that is terminable on 60 days or less notice without payment of
any termination fee or penalty,
(4) with respect to the employment of any directors, officers,
employees or consultants, other than in the ordinary course of business
consistent with past practice,
(5) with or to a labor union or guild (including any collective
bargaining agreement),
(6) containing a "most favored nation" clause or other similar term
providing preferential pricing or treatment to a party that is material to
either it or its subsidiaries,
(7) providing for the indemnification by either party or its
subsidiaries of any Person (other than customary agreements with vendors
providing goods or services to either party or its subsidiaries where the
potential indemnity obligations thereunder are not reasonably expected to be
material to CCFNB or CFC or their subsidiaries, as the case may be),
(8) which relates to the leasing of real estate,
(9) which by its terms limits the payment of dividends by it or any of
its subsidiaries,
14
(10) which evidences or is related to indebtedness for borrowed money
whether directly or indirectly, by way of purchase money obligation, conditional
sale, lease purchase, guaranty or otherwise, in respect of which it or any of
its subsidiaries is an obligor to any person, which instrument evidences or
relates to indebtedness other than deposits, repurchase agreements, bankers
acceptances and "treasury tax and loan" accounts established in the ordinary
course of business and transactions in "federal funds," or which contains
financial covenants or other restrictions (other than those relating to the
payment of principal and interest when due) which would become applicable on or
after the Closing Date to CCFNB or any CCFNB subsidiary, or
(11) relating to the acquisition of any business that has not been
fully performed, including where contingent compensation remains to be paid.
Each agreement, contract, arrangement, commitment or understanding of the type
described in this Section 4.3(k), whether or not Previously Disclosed, is
referred to as a "CCFNB Material Contract" or "CFC Material Contract", as the
case may be. Neither party nor any of its subsidiaries is in default under any
CCFNB Material Contract or CFC Material Contract, as the case may be, and there
has not occurred any event that, with the lapse of time or the giving of notice
or both, would constitute such a default.
(l) No Brokers; Fairness Opinion.
(1) No action has been taken by either party that would give rise to
any claim against any party hereto for a brokerage commission, finder's fee or
other like payment with respect to the transactions contemplated by this Plan,
except as Previously Disclosed.
(2) Prior to the execution of this Plan, CCFNB and CFC have received
an opinion from ▇▇▇▇▇▇▇▇▇ Capital, LLC and The ▇▇▇▇▇▇▇▇ Group, Inc.,
respectively, to the effect that as of the date thereof and subject to the
matters set forth therein, the Per Share Stock Consideration is fair, from a
financial point of view, to the holders of CCFNB Common Stock and CFC Common
Stock, respectively. Such opinion has not been amended or rescinded as of the
date of this Plan.
(m) Employee Benefit Plans. In the case of both parties,
(1) All benefit, employment, severance, change in control and other
compensation and benefits plans, contracts, agreements, policies or arrangements
covering current or former employees of the party and each of its subsidiaries
(the "Employees") and its current or former directors, including, but not
limited to, "employee benefit plans" within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
supplemental pension and executive retirement, qualified and non-qualified
deferred compensation, rabbi trust, stock option, stock purchase, stock
appreciation rights, stock based, incentive and bonus plans and agreements (the
"Benefit Plans"), other than Benefit Plans that are not material, are Previously
Disclosed. Copies of all Benefit Plans and all amendments thereto, all summary
plan descriptions, the most recently filed Form 5500 and the most recent IRS
determination letter have been made available to the other party.
(2) All Benefit Plans, other than "multiemployer plans" within the
meaning of Section 3(37) of ERISA (each a "Multiemployer Plan") are in
substantial compliance with ERISA, the Code and other applicable laws. Each
Benefit Plan which is subject to ERISA (the "ERISA Plans") that is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA ("Pension
Plan"), and that is intended to be qualified under Section 401(a) of the Code
has received a favorable determination letter from the Internal Revenue Service
(the "IRS"), and it is not aware of any
15
circumstances that are reasonably likely to result in the loss of the
qualification of such plan under Section 401(a) of the Code.
(3) Except as previously disclosed, neither party nor its subsidiaries
maintains or has during the past five years maintained a pension plan which is a
defined benefit plan. Neither party, its subsidiaries nor any entity which is
considered one employer with it under Section 4001 of ERISA ("ERISA Affiliate")
has contributed to a Multiemployer Plan within the past five years.
(4) All material contributions required to be made under each Benefit
Plan have been timely made and all obligations to make contributions in respect
of each Benefit Plan have been properly accrued and reflected in the Regulatory
Filings as of the date of such filings.
(5) As of the date hereof, there is no material pending or, to the
knowledge of either party, threatened, litigation relating to the Benefit Plans.
Neither party nor any of its subsidiaries has any obligations for retiree health
and life benefits under any ERISA Plan or collective bargaining agreement.
(6) Except as previously disclosed, neither the execution of this Plan
and the Bank Merger Agreement, shareholder approval of this Plan nor the
consummation of the transactions contemplated hereby and thereby will (w)
entitle any of its employees or any of its subsidiaries to severance pay or any
increase in severance pay upon any termination of employment after the date
hereof, (x) accelerate the time of payment or vesting or result in any payment
or funding (through a grantor trust or otherwise) of compensation or benefits
under, increase the amount payable or result in any other obligation pursuant
to, any of the Benefit Plans, or (y) result in payments under any of the Benefit
Plans which would not be deductible under Section 162(m) or Section 280G of the
Code.
(n) Labor Matters. Neither party nor any of its subsidiaries is a party to
or is bound by any collective bargaining agreement, contract or other agreement
or understanding with a labor union or labor organization, nor is either party
or any of its subsidiaries the subject of a proceeding asserting that the party
or any such subsidiary has committed an unfair labor practice (within the
meaning of the National Labor Relations Act) or seeking to compel either party
or any of its subsidiaries to bargain with any labor organization as to wages or
conditions of employment, nor is there any strike or other material labor
dispute involving either party or any of its subsidiaries pending or, to either
party's knowledge, threatened, nor to either party's knowledge is there any
activity involving its or any of its subsidiaries' employees seeking to certify
a collective bargaining unit or engaging in other organizational activity. There
are no legal, administrative, arbitration or other proceedings, demands, claims,
notices, audits or investigations (including, without limitation, notices,
demand letters or requests for information from any federal, state or local
commission, agency or board) instituted, or pending, or, to the knowledge of the
party, threatened, relating to the liability of it or any of its subsidiaries
under any Labor and Employment Law. For the purposes of this provision, the term
Labor and Employment Law shall mean any federal, state, local, or foreign law,
statute, ordinance, executive order, rule, regulation, code, consent, order,
judgment, decree, injunction or any agreement with any regulatory authority
relating to (i) employment discrimination or affirmative action, (ii) labor
relations, (iii) employee compensation or benefits, (iv) safety and health, (v)
wrongful or retaliatory discharge, and/or (vi) any other aspect of the
employment relationship. Such laws shall include, but not be limited to, Title
VII of the Civil Rights Act of 1964 as amended, the Age Discrimination in
Employment Act, the Americans with Disabilities Act, the Family and Medical
Leave Act, the Employee Retirement Income Security Act, the Occupational Safety
and Health Act, the Fair Labor Standards Act, the Fair Credit Collection Act,
the Worker Adjustment and Retraining Notification Act, Executive Order 11246,
the Employee Polygraph Protection Act, the Equal Pay Act, the National Labor
Relations Act, the Older Worker Benefit Protection Act, the Rehabilitation Act,
the Vietnam Era Veterans Readjustment Assistance Act, as well as any and all
state fair employment practices
16
laws, any and all state labor relations laws, any and all state wage and hour
laws, any and all state wage payment and collection laws, any and all state
statutes regarding wrongful or retaliatory discharge, and federal and state
common law regarding employment discrimination or affirmative action, labor
relations, employee compensation or benefits, safety and health and/or wrongful
or retaliatory discharge and/or related tort claims.
(o) Environmental Matters. To either party's knowledge, neither its conduct
nor its operation or the conduct or operation of its subsidiaries nor any
condition of any property presently or previously owned, leased or operated by
any of them (including, without limitation, in a fiduciary or agency capacity),
violates or violated Environmental Laws and no condition has existed or event
has occurred with respect to any of them or any such property that, with notice
or the passage of time, or both, is reasonably likely to result in liability
under Environmental Laws. To either party's knowledge, no property on which it
or any of its subsidiaries holds a Lien, violates or violated Environmental Laws
and no condition has existed or event has occurred with respect to any such
property that, with notice or the passage of time, or both, is reasonably likely
to result in liability under Environmental Laws. Neither party nor any of its
subsidiaries has received any written notice from any person or entity that it
or its subsidiaries or the operation or condition of any property ever owned,
leased, operated, or held as collateral or in a fiduciary capacity by any of
them are or were in violation of or otherwise are alleged to have liability
under any Environmental Law, including, but not limited to, responsibility (or
potential responsibility) for the cleanup or other remediation of any
pollutants, contaminants, or hazardous or toxic wastes, substances or materials
at, on, beneath, or originating from, any such property. "Environmental Laws"
means all applicable local, state and federal environmental, health and safety
laws and regulations, including the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation, and Liability Act, the Clean
Water Act, the Federal Clean Air Act, and the Occupational Safety and Health
Act, each as amended, regulations promulgated thereunder, and state
counterparts.
(p) Tax Matters.
(1) (A) All returns, amended returns or other reports (including
elections, declarations, disclosures, schedules, estimates and information
returns) with respect to Taxes (as hereinafter defined) ("Tax Returns") that are
required to be filed (taking into account any extensions of time within which to
file) by or with respect to either party and its subsidiaries have been duly and
timely filed, and all such Tax Returns are complete and accurate; (B) all Taxes
shown to be due on the Tax Returns referred to in clause (A) have been paid in
full; (C) all Taxes that either party or any of its subsidiaries is obligated to
withhold from amounts owing to any employee, creditor or third party have been
paid over to the proper Governmental Entity in a timely manner, to the extent
due and payable; and (D) neither party nor any of its subsidiaries has taken or
agreed to take any action or is aware of any fact or circumstance that would
prevent or impede, or would be reasonably likely to prevent or impede, the
Merger from qualifying as a reorganization under Section 368(a) of the Code.
(2) In the case of both parties, where the party has or had been
notified of an examination or more documentation has or had been requested for a
settlement review, (A) the Tax years for the application Tax Returns referred to
in clause (A) of subsection (p)(1) which were under examination or settlement
review have been closed or settled by the Internal Revenue Service or the
appropriate Tax authority or the period for assessment of the Taxes in respect
of which such Tax Returns were required to be filed has expired; (B) all
deficiencies asserted or assessments made as a result of such examinations have
been paid in full; (C) no issues that have been raised by the relevant taxing
authority in connection with the examination of any of the Tax Returns referred
to in clause (A) of subsection (p)(1) are currently pending; and (D) no
extensions or waivers of statutes of limitation have been given by or requested
with respect to any of its Taxes or those of its subsidiaries.
17
(3) In the case of both parties, (A) it has made available to the
other party true and correct copies of the U.S. federal income Tax Returns filed
by it and its subsidiaries for each of the three most recent fiscal years ended;
(B) it has made provision in accordance with GAAP, in the financial statements
included in the Regulatory Filings filed prior to the date hereof, for all Taxes
that accrued on or before the end of the most recent period covered by its
Regulatory Filings filed prior to the date hereof; (C) neither it nor any of its
subsidiaries is a party to any Tax allocation or sharing agreement, is or has
been a member of an affiliated group filing consolidated or combined Tax returns
(other than a group of which CCFNB or CFC, as the case may be, is or was the
common parent) or otherwise has any liability for the Taxes of any person (other
than its own Taxes and those of its subsidiaries); (D) neither it nor any of its
subsidiaries has participated in a "listed transaction" as defined in Treasury
Regulation Section 1.6011-4; (E) no Liens for Taxes exist with respect to any of
its assets or properties or those of its subsidiaries, except for statutory
Liens for Taxes not yet due and payable or that are being contested in good
faith and reserved for in accordance with GAAP; (F) neither it nor any of its
subsidiaries has been a party to any distribution occurring during the last
three years in which the parties to such distribution treated the distribution
as one to which Section 355 of the Code applied; (G) no Tax is required to be
withheld pursuant to Section 1445 of the Code as a result of the transfer
contemplated by this Plan; and (H) no governmental entity has made contact with
it or any of its subsidiaries requesting completion of a business activities
questionnaire.
(4) As used herein, "Tax" and "Taxes" means all federal, state, local
or foreign taxes, charges, fees, levies or other assessments, however
denominated, including, without limitation, all net income, gross income, gains,
gross receipts, sales, use, ad valorem, goods and services, capital, production,
transfer, franchise, windfall profits, license, withholding, payroll,
employment, disability, employer health, excise, estimated, severance, stamp,
occupation, property, environmental, unemployment or other taxes, custom duties,
fees, assessments or charges of any kind whatsoever, together with any interest
and any penalties, additions to tax or additional amounts imposed by any taxing
authority whether arising before, on or after the Closing Date.
(q) Derivative Instruments. In the case of both parties, all interest rate
swaps, caps, floors, option agreements, futures and forward contracts and other
similar risk management arrangements, whether entered into for its own account,
or for the account of one or more of its subsidiaries or their customers, if
any, were entered into (1) in accordance with prudent business practices and all
applicable laws, rules, regulations and regulatory policies and (2) with
counterparties believed to be financially responsible at the time; and each of
them constitutes the valid and legally binding obligation of such party or one
of its subsidiaries, enforceable in accordance with its terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general equity
principles), and are in full force and effect. Neither party nor its
subsidiaries, nor to its knowledge, any other party thereto, is in breach of any
of its obligations under any such agreement or arrangement.
(r) Insurance. Each party and its subsidiaries are insured with reputable
insurers against such risks and in such amounts as its management reasonably has
determined to be prudent in accordance with industry practices. All of the
insurance policies, binders, or bonds maintained by the party or its
subsidiaries are in full force and effect; each party and its subsidiaries are
not in material default thereunder. There are no material claims pending under
such policies of insurance and, within the past three (3) years, there have been
no denials of indemnification for any material claims submitted under any
insurance policy.
(s) Takeover Laws and Provisions. Each party has taken all action required
to be taken by it in order to exempt this Plan and the transactions contemplated
hereby from, and this Plan and the transactions contemplated hereby are exempt
from, the requirements of any "moratorium", "control share", "fair price",
"affiliate transaction", "business combination" or other antitakeover laws and
18
regulations of any state (collectively, "Takeover Laws"). It has taken all
action required to be taken by it in order to make this Plan and the
transactions contemplated hereby comply with, and this Plan and the transactions
contemplated hereby comply with, the requirements of any Articles, Sections or
provisions of its Governing Documents concerning "business combinations", "fair
price", "voting requirements", "constituency requirements" or other related
provisions (collectively, "Takeover Provisions").
(t) Available Funds. In the case of CCFNB, CCFNB has or will have available
to it all funds necessary to satisfy all of its obligations hereunder and in
connection with the Merger and the other transactions contemplated by this Plan.
(u) Transactions with Affiliates. In the case of both parties, there are no
outstanding amounts payable to or receivable from, or advances by CCFNB or CFC,
as the case may be, or any of its subsidiaries, and neither party nor any of its
subsidiaries is otherwise a creditor or debtor to, any present or former
director or executive officer of it or any of its subsidiaries, other than as
part of the normal and customary terms of such Persons' respective employment or
service as a director with it or any of its subsidiaries. Neither party nor any
subsidiary of it is a party to any transaction or agreement with any present or
former director or executive officer of it, other than the terms of such
Person's respective employment or service as a director with it or any of its
subsidiaries. Neither party nor any of its subsidiaries is a party to any
transaction (including any loan or other credit accommodation, but excluding
deposits in the ordinary course of business) with any present or former director
or executive officer of such party or any of such party's subsidiaries, except
transactions (i) made in the ordinary course of business, (ii) made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other Persons, (iii) do
not involve more than the normal risk of collectability or present other risks
or unfavorable features, and are reflected in the financial statements
referenced under Section 4.3(g) and, (iv) to the extent required by GAAP,
disclosed in the footnotes of such financial statements referenced under Section
4.3(g). No loan or credit accommodation currently being extended to any present
or former director or executive officer of such party or any of its subsidiaries
is presently in default or, during the three (3) year period prior to the date
of this Agreement, has been in default or has been restructured, modified or
extended. Neither it nor any of its subsidiaries has been notified that
principal and interest with respect to any such loan or other credit
accommodation will not be paid when due or that the loan grade classification
accorded such loan or credit accommodation by it or any of its subsidiaries is
inappropriate.
(v) Ownership of Property. (1) In the case of both parties, it or any of
its subsidiaries has, or will have as to property acquired after the date
hereof, good and, as to real property, marketable title to all assets and
properties owned by it or any such subsidiary in the conduct of its business,
whether such assets and properties are real or personal, tangible or intangible,
including assets and property reflected in the balance sheets contained in its
Regulatory Filings, if any, and in the financial statements referenced in
Section 4.3(g) or acquired subsequent thereto (except to the extent that such
assets and properties have been disposed of for fair value, in the ordinary
course of business, since the date of such balance sheets), subject to no
encumbrances, liens, mortgages, security interests or pledges, except (i)
statutory liens for amounts not yet delinquent or which are being contested in
good faith and (ii) items permitted under Article III. Each party or any of its
subsidiaries, as lessee, has the right under valid and subsisting leases of real
and personal properties used by it in the conduct of its business to occupy or
use all such properties as presently occupied and used by each of them. Such
existing leases and commitments to lease constitute or will constitute operating
leases for both tax and financial accounting purposes and the lease expense and
minimum rental commitments with respect to such leases and lease commitments are
as disclosed in the notes to the financials referenced in Section 4.3(g).
19
(2) With respect to all agreements pursuant to which such party or any
of its subsidiaries has purchased securities subject to an agreement to resell,
if any, such party or such subsidiary, as the case may be, has a valid,
perfected first lien or security interest in the securities or other collateral
securing the repurchase agreement, and the value of such collateral equals or
exceeds the amount of the debt secured thereby.
(w) Allowance for Losses. The allowance for loan and lease losses shown on
each party's consolidated statement of financial condition as of September 30,
2007 and included in a Regulatory Report filed with a Regulatory Authority and,
in the case of CCFNB, a Regulatory Filing filed by CCFNB with the SEC, was, and
the allowance for loan and lease losses to be shown on such party's consolidated
statement of financial condition as of December 31, 2007 and for periods ending
after the date of this Plan, as included in a Regulatory Report and, in the case
of CCFNB, in a Regulatory Filing filed by CCFNB with the SEC, will be, in the
reasonable opinion of such party's management, adequate as of the date thereof
in accordance with GAAP and all other applicable regulatory requirements for all
losses reasonably anticipated as of the date thereof, based on information
available as of such date.
(x) Schedule of Termination Benefits. In the case of both parties,
Disclosure Schedule 4.3(x) for such party includes a schedule of the maximum
amount of termination benefits and related payments which currently are or would
be payable to the individuals identified thereon, under any and all employment
agreements, special termination agreements, supplemental executive retirement
plans, deferred bonus plans, deferred compensation plans, salary continuation
plans, or any other pension benefit or welfare benefit plan maintained by such
party or any of its subsidiaries for the benefit of executive officers or
directors of such party or any of its subsidiaries (the "Benefits Schedule"),
assuming that the Closing Date would have occurred on December 31, 2007 and that
the employment of such individuals already has or will terminate immediately
thereafter. No other individuals are entitled to benefits under any such plans.
Except as set forth in such Disclosure Schedule 4.3(x), as of the date of this
Plan, no director or executive officer of such party or any of its subsidiaries
had deferred any compensation accrued by such party or such subsidiary.
(y) Loans. (1) In the case of both parties, and except as disclosed on each
party's Disclosure Schedule 4.3(y), each loan reflected as an asset in the
financial statements referenced in Section 4.3(g): (a) is evidenced by notes,
agreements or other evidences of indebtedness which are true, genuine and
correct, (b) to the extent secured, has been secured by valid liens and security
interests which have been duly perfected, and (c) 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, in each case other than loans as to which the failure
to satisfy the foregoing standards, individually or in the aggregate, would not
have a Material Adverse Effect on such party.
(2) Disclosure Schedule 4.3(y) includes a list of: (a) all outstanding
commercial relationships, i.e., commercial loans, commercial loan commitments
and commercial letters of credit, of such party's subsidiaries in excess of
$250,000, (b) all loans of such subsidiary classified by such subsidiary or any
Regulatory Authority as "Special Mention," "Substandard," "Doubtful" or "Loss,"
or other classifications of similar import (c) all commercial and mortgage loans
of such subsidiary classified as "non-accrual," and (d) all commercial loans of
such subsidiary classified as "in substance foreclosed."
(z) Securities Documents. The Regulatory Filings filed or to be filed by
CCFNB under the Exchange Act at any time since December 31, 2004, as amended,
complied at the time filed, or will comply when filed with the SEC, in all
respects, with the Exchange Act and all applicable rules and regulations of the
SEC.
20
(aa) Regulatory Capital. In the case of both parties, such party and each
of its subsidiaries, as applicable, meet all applicable regulatory capital
requirements, and each party is deemed at least "adequately capitalized" under
such regulatory requirements.
(bb) Quality of Representations. In the case of both parties, the
representations made by such party in this Plan are true, correct and complete
in all material respects, and do not omit statements necessary to make them not
misleading under all facts and circumstances.
ARTICLE V
COVENANTS
5.1 Reasonable Best Efforts; Financial Statements. (a) Subject to the terms
and conditions of this Plan, CCFNB and CFC agree to use reasonable best efforts
in good faith to take, or cause to be taken, all actions, and to do, or cause to
be done, all things necessary, proper or desirable, or advisable under
applicable laws, so as to permit consummation of the Merger and the Bank Merger
as soon as possible and otherwise to enable consummation of the transactions
contemplated hereby and thereby and shall cooperate fully with the other party
hereto to that end.
(b) CCFNB and CFC agree to use reasonable best efforts in good faith to
restate, complete or provide, as applicable, such financial statements or such
other financial and other information, including the audit opinion of its
outside independent accountants, as shall be necessary, after giving effect to
any waivers that may be obtained, to cause the Registration Statement to be
declared effective by the SEC and the Proxy Statement to be cleared with the SEC
as soon as practicable.
5.2 Shareholder Approvals.
(a) CCFNB and CFC agree to take, in accordance with applicable law and its
Governing Documents, all action necessary to convene a meeting of its respective
shareholders (including any adjournment or postponement, the "CCFNB Meeting" and
"CFC Meeting", respectively), as promptly as practicable, to consider and vote
upon the adoption and approval of this Plan, as well as any other matters
required to be approved by its respective shareholders for consummation of the
Merger.
(b) The board of directors of CCFNB and CFC have adopted resolutions
recommending to the shareholders of their respective companies the adoption of
this Plan and the other matters required to be approved or adopted in order to
carry out the intentions of this Plan. Notwithstanding the foregoing, the board
of directors of CCFNB and CFC may withdraw, modify, condition or refuse to
recommend the adoption of this Plan and the other matters required to be
approved or adopted in order to carry out the intentions of this Plan if the
board of directors of CCFNB and CFC determine, in good faith after consultation
with its respective outside financial and legal advisors, that the failure to
take such action would breach its fiduciary obligations under applicable law.
Notwithstanding the foregoing, this Plan and such other matters shall be
submitted to the shareholders of CCFNB and CFC at the respective CCFNB Meeting
and the CFC Meeting for the purpose of approving the Plan and such other matters
and nothing contained herein shall be deemed to relieve CCFNB and CFC of such
obligation, provided, however, that if the board of directors of CCFNB or CFC,
as the case may be, shall have withdrawn, modified, conditioned or refused to
recommend the adoption of this Plan and such other matters in accordance with
the terms of this Plan, then in submitting this Plan to CCFNB's or CFC's
shareholders, the board of directors of CCFNB or CFC may submit this Plan to
CCFNB's or CFC's shareholders, as the case may be, without recommendation
(although the resolutions adopting this Plan as of the date hereof may not be
rescinded or amended), in which event the board of directors of CCFNB or CFC, as
the case may be, may communicate the basis for its lack of a recommendation
21
to its shareholders in the Proxy Statement (as defined in Section 5.3(a)) or an
appropriate amendment or supplement thereto to the extent required by applicable
law.
5.3 Registration Statement/Proxy Statement.
(a) Subject to Section 5.1(b), the parties agree jointly to prepare and
file with the SEC a registration statement on Form S-4 or other applicable form
(the "Registration Statement") to be filed by CCFNB with the SEC in connection
with the issuance of CCFNB Common Stock in the Merger as soon as reasonably
possible (including the proxy statement and prospectus and other proxy
solicitation materials of CCFNB and CFC constituting a part thereof (the "Proxy
Statement") and all related documents). The parties agree to cooperate in the
preparation of the Registration Statement and the Proxy Statement. Subject to
Section 5.1(b), CCFNB and CFC agree to use all reasonable best efforts to cause
the Registration Statement to be declared effective under the Securities Act as
promptly as reasonably practicable after filing thereof, and shall thereafter
mail or deliver the Proxy Statement to its shareholders; provided, however, that
the parties will coordinate the timing of the mailing of the Proxy Statement so
as to minimize the impact of limitations under applicable law relating to share
repurchases that might apply with respect thereto. CCFNB also agrees to use all
reasonable best efforts to obtain all necessary state securities law or "Blue
Sky" permits and approvals required to carry out the transactions contemplated
by this Plan. CCFNB and CFC agree to furnish all information concerning it, its
subsidiaries, officers, directors and shareholders as may be reasonably
requested in connection with the foregoing.
(b) CCFNB and CFC agree (1) as to itself and its subsidiaries, that none of
the information supplied or to be supplied by it for inclusion or incorporation
by reference in (a) the Registration Statement will, at the time the
Registration Statement and each amendment or supplement thereto, if any, becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (b) the Proxy
Statement and any amendment or supplement thereto will, at the date of mailing
to shareholders and at the time of the CCFNB Meeting and CFC Meeting contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which such statement was made, not misleading and (2)
that the Registration Statement and Proxy Statement shall comply with all
applicable laws as they relate to them. CCFNB and CFC further agree that, if
either shall become aware prior to the Effective Date of any information
furnished by it that would cause any of the statements in the Proxy Statement or
the Registration Statement to be false or misleading with respect to any
material fact, or to omit to state any material fact necessary to make the
statements therein not false or misleading, to promptly inform the other party
thereof and to take the necessary steps to correct the Proxy Statement or the
Registration Statement.
(c) CCFNB agrees to advise CFC, promptly after CCFNB receives notice
thereof, of the time when the Registration Statement has become effective or any
supplement or amendment has been filed, of the issuance of any stop order or the
suspension of the qualification of CCFNB Common Stock for offering or sale in
any jurisdiction, of the initiation or threat of any proceeding for any such
purpose, or of any request by the SEC for the amendment or supplement of the
Registration Statement or for additional information.
5.4 Press Releases. CCFNB and CFC shall consult with each other before
issuing any press release with respect to the Merger or this Plan and shall not
issue any such press release or make any such public statement without the prior
consent of the other party, which shall not be unreasonably withheld; provided,
however, that a party may, without the prior written consent of the other party
(but after prior consultation, to the extent practicable in the circumstances)
issue such press release or make such public statement as may upon the advice of
counsel be required by law or the
22
rules and regulations of the SEC. CCFNB and CFC shall cooperate to develop all
public announcement materials and make appropriate management available at
presentations related to the transactions contemplated by this Plan as
reasonably requested by the other party.
5.5 Access; Information.
(a) CCFNB and CFC agree that upon reasonable notice and subject to
applicable laws relating to the exchange of information, it shall afford the
other party, and the other party's officers, employees, counsel, accountants and
other authorized representatives, such access during normal business hours
throughout the period prior to the Effective Time to the books, records
(including, without limitation, tax returns and work papers of independent
auditors), properties, personnel and to such other information as any party may
reasonably request and, during such period, it shall furnish promptly to such
other party (1) a copy of each material report, schedule and other document
filed by it pursuant to the requirements of federal or state securities or
banking laws, and (2) all other information concerning the business, properties
and personnel of it as the other may reasonably request; provided that the
foregoing shall not require CCFNB or CFC (A) to permit any inspection, or to
disclose any information, that in the reasonable judgment of CCFNB or CFC, as
the case may be, would result in disclosure of any trade secrets of third
parties or violate any of its obligations with respect to confidentiality if
CCFNB or CFC, as the case may be, shall have used reasonable efforts to obtain
the consent of such third party to such inspection or disclosure or (B) to
disclose any privileged information of CCFNB or CFC, as the case may be, or any
of its subsidiaries. All requests for information made pursuant to this Section
5.5 shall be directed to an executive officer of CCFNB or CFC, as the case may
be, or such Person as may be designated by either of their executive officers,
as the case may be.
(b) Each party agrees that it will not, and will cause its representatives
not to, use any information obtained pursuant to this Section 5.5 (as well as
any other information obtained prior to the date hereof in connection with the
entering into of this Plan) for any purpose unrelated to the consummation of the
transactions contemplated by this Plan. Subject to the requirements of law, each
party will keep confidential, and will cause its representatives to keep
confidential, all information and documents obtained pursuant to this Section
5.5 (as well as any other information obtained prior to the date hereof in
connection with the entering into of this Plan) unless such information (1) was
already known to such party; (2) becomes available to such party from other
sources not known by such party to be bound by a confidentiality obligation; (3)
is disclosed with the prior written approval of the providing party; or (4) is
or becomes readily ascertainable from publicly available sources. If this Plan
is terminated or the transactions contemplated by this Plan shall otherwise fail
to be consummated, each party shall promptly cause all copies of documents or
extracts thereof containing information and data as to the other party to be
returned to the other party, except to the extent such action would be
inconsistent with applicable law, regulation, legal process, or the applicable
party's internal policies and procedures.
(c) In addition to the confidentiality arrangements contained in this Plan,
all information provided or obtained in connection with the transactions
contemplated by this Plan (including pursuant to clause (a) above) will be held
by CCFNB or CFC, as the case may be in accordance with and subject to the terms
of the Confidentiality Agreement, dated November 5, 2007 between CCFNB and CFC
(the "Confidentiality Agreement"). In the event of a conflict or inconsistency
between the terms of this Plan and the Confidentiality Agreement, the terms of
this Plan will govern.
5.6 Acquisition Proposals.
(a) Each of CCFNB and CFC agree that after the date hereof neither it nor
any of its subsidiaries nor any of its respective officers and directors or the
officers and directors of any of its
23
subsidiaries shall, and it shall direct and use all reasonable best efforts to
cause its employees and agents, including any investment banker, attorney or
accountant retained by it or by any of its subsidiaries (collectively, its
"Representatives") not to, initiate, solicit or encourage, directly or
indirectly, any inquiries or the making or implementation of any Acquisition
Proposal, or, except to the extent that the board of directors of CCFNB or CFC
determines, in good faith, after consultation with its outside financial and
legal advisors and the receipt of written advice of counsel, that such action is
required in order for the board of directors of CCFNB or CFC, as the case may
be, to comply with its fiduciary duties, engage in any negotiations concerning,
or provide any confidential information or data to, or have any discussions
with, any Person relating to an Acquisition Proposal or otherwise facilitate any
effort or attempt to implement or make an Acquisition Proposal (and in any
event, the parties shall not provide any confidential information or data to any
Person in connection with an Acquisition Proposal unless such Person shall have
executed a confidentiality agreement on terms at least as favorable as those
contained in the Confidentiality Agreement). "Acquisition Proposal" means any
proposal or offer with respect to the following involving CCFNB or CFC or any of
its subsidiaries, respectively: (1) any merger, consolidation, share exchange,
business combination or other similar transaction; (2) any sale, lease,
exchange, pledge, transfer or other disposition of 25% or more of its
consolidated assets or liabilities in a single transaction or series of
transactions; (3) any tender offer or exchange offer for, or other acquisition
of, 25% or more of the outstanding shares of its capital stock; or (4) any
public announcement of a proposal, plan or intention to do any of the foregoing
or any agreement to engage in any of the foregoing, other than the Merger
provided for in this Plan. Notwithstanding anything in this Plan to the
contrary, the parties shall (i) promptly (but in no event later than 24 hours)
advise the other party, orally and in writing, of (x) the receipt by it (or any
of the other persons referred to above) of any Acquisition Proposal, or any
inquiry which could reasonably be expected to lead to an Acquisition Proposal,
or any material modification of or material amendment to any Acquisition
Proposal, or any request for nonpublic information relating to it or any of its
subsidiaries or for access to the properties, books or records of it or any
subsidiary by any Person or entity that informs its board of directors or any
subsidiary that it is considering making, or has made, an Acquisition Proposal;
(y) the material terms and conditions of such proposal or inquiry (whether
written or oral) or modification or amendment to an Acquisition Proposal; and
(z) the identity of the person making any such proposal or inquiry and (ii) keep
the other party fully informed of the status and details of any such proposal or
inquiry and any developments with respect thereto. The parties shall use their
reasonable best efforts to enforce any existing confidentiality agreement in
accordance with the terms thereof, and shall immediately take all steps
necessary to terminate any approval that may have been heretofore given under
any such provisions authorizing any Person to make an Acquisition Proposal.
(b) The parties and their subsidiaries shall immediately cease and cause to
be terminated any existing discussions or negotiations with any Persons (other
than the other) conducted heretofore with respect to any of the foregoing, and
shall use reasonable best efforts to cause all Persons other than the other
party who have been furnished confidential information regarding it or its
subsidiaries in connection with the solicitation of or discussions regarding an
Acquisition Proposal within the 12 months prior to the date hereof promptly to
return or destroy such information. Neither CCFNB or CFC nor the board of
directors of CCFNB or CFC, respectively, shall approve or take any action to
render inapplicable to any Acquisition Proposal any applicable Takeover Laws or
Takeover Provisions.
5.7 Directors and Employment Agreements.
(a) CFC shall use its reasonable best efforts to cause each director,
executive officer and other person who is an "affiliate" (for purposes of Rule
145 under the Securities Act) of CFC to deliver to CCFNB, as soon as practicable
after the date of this Plan, an executed Affiliates Agreement substantially in
the form as set forth in Annex B and use its reasonable best efforts to cause
each director to deliver to CCFNB, as soon as practicable after the date of this
Plan, an executed Voting
24
Agreement and Non-Solicitation Agreement substantially in the form as set forth
in Annexes C and D, respectively. CCFNB shall use its reasonable best efforts to
cause each director to deliver to CCFNB, as soon as practicable after the date
of this Plan, an executed Voting Agreement and Non-Solicitation Agreement
substantially in the form as set forth in Annexes C and D, respectively.
(b) CCFNB and CFC shall, as soon as practicable after the date of this
Plan: (i) execute and/or cause its respective bank subsidiary to execute, as
applicable, an Employment Agreement for each of ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. Alters and ▇▇▇▇ ▇. Page, substantially in the forms as set forth in
Annexes F, G, H and I, respectively (collectively, the "Employment Agreements");
(ii) use its reasonable best efforts to cause, in the case of CCFNB, ▇▇▇▇▇ ▇.
▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, and in the case of CFC, ▇▇▇▇▇▇▇ ▇. Alters and ▇▇▇▇ ▇.
Page, each to execute and deliver their respective Employment Agreement to CCFNB
and CFC, respectively; and (iii) deliver to the other party fully executed
original copies of such Employment Agreements.
(c) CCFNB shall, as soon as practicable after the date of this Plan: (i)
execute and/or cause its bank subsidiary to execute, as applicable, a waiver
under and for certain Supplemental Executive Retirement Plan Agreements for each
of ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇, substantially in the form as
set forth on Schedule 5.16 (collectively, the "Waivers"); (ii) use its
reasonable best efforts to cause ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, and ▇▇▇▇▇
▇▇▇▇▇ each to execute and deliver their respective Waiver to CCFNB; and (iii)
deliver to CFC fully executed original copies of such Waivers.
(d) CCFNB shall, as soon as practicable after the date of this Plan: (i)
execute and/or cause its bank subsidiary to execute, as applicable, a Release
for each of ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, substantially in the form as set
forth on Schedule 5.7(d) (collectively, the "Releases"); (ii) use its reasonable
best efforts to cause ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ each to execute and
deliver their respective Release to CCFNB; and (iii) deliver to CFC fully
executed original copies of such Releases.
(e) CFC shall, as soon as practicable after the date of this Plan: (i) use
its reasonable best efforts to cause each person who is a holder of CFC Options
to execute and deliver to CFC an Option Cancellation and Standstill Agreement,
substantially in the form as set forth in Annex E with respect to unexercised
CFC Options; and (ii) deliver to CCFNB fully executed original copies of such
Option Cancellation and Standstill Agreements.
Each document executed pursuant Section 5.7(b) through (e) shall be made to
become effective as of the Effective Time.
5.8 Takeover Laws and Provisions. No party hereto shall take any action
that would cause the transactions contemplated by this Plan to be subject to
requirements imposed by any Takeover Law and each of them shall take all
necessary steps within its control to exempt (or ensure the continued exemption
of) the transactions contemplated by this Plan from, or if necessary challenge
the validity or applicability of, any applicable Takeover Law, as now or
hereafter in effect. No party hereto shall take any action that would cause the
transactions contemplated by this Plan not to comply with any Takeover
Provisions and each of them shall take all necessary steps within its control to
make the transactions contemplated by this Plan comply with (or continue to
comply with) the Takeover Provisions.
5.9 Regulatory Applications.
(a) CCFNB and CFC shall cooperate and use their respective reasonable best
efforts to prepare as promptly as possible all documentation, to effect all
filings and to obtain all permits, consents, approvals and authorizations of all
third parties and Governmental Entities necessary to
25
consummate the transactions contemplated by this Plan, and CCFNB and CFC shall
make all necessary regulatory filings as soon as reasonably possible after the
date hereof. CCFNB and CFC shall each have the right to review in advance, and
to the extent practicable each will consult with the other, in each case subject
to applicable laws relating to the exchange of information, with respect to all
material written information submitted to any third party or any Governmental
Entity in connection with the transactions contemplated by this Plan. In
exercising the foregoing right, each of the parties hereto agrees to act
reasonably and as promptly as practicable. Each party hereto agrees that it will
consult with the other party hereto with respect to the obtaining of all
material permits, consents, approvals and authorizations (collectively,
"Approvals") of all third parties and Governmental Entities necessary or
advisable to consummate the transactions contemplated by this Plan and the Bank
Merger Agreement and each party will keep the other party appraised of the
status of material matters relating to such Approvals and completion of the
transactions contemplated hereby or thereby. Notwithstanding the foregoing,
nothing contained herein shall be deemed to require a party to take any action,
or commit to take any action, or agree to any condition or restriction, in
connection with obtaining the foregoing permits, consents, approvals and
authorizations, that would reasonably be expected to have a material adverse
effect (measured on a scale relative to a party and its subsidiaries taken as a
whole) on CCFNB, CFC or the Surviving Corporation to this Plan and the Bank
Merger (a "Materially Burdensome Regulatory Condition").
(b) Each party agrees, upon request, to furnish the other party with all
information concerning itself, its subsidiaries, directors, officers and
shareholders and such other matters as may be reasonably necessary or advisable
in connection with any filing, notice or application made by or on behalf of
such other party or any of its subsidiaries with or to any third party or
Governmental Entity.
5.10 Options.
(a) Treatment of Options. At the Effective Time, each option granted by CFC
to purchase shares of CFC Common Stock that is outstanding and unexercised under
any employee stock option or equity compensation plan or arrangement of CFC (any
such option to purchase CFC Common Stock being referred to as a "CFC Option" or
the "CFC Options"), whether or not vested or exercisable, shall be converted at
the Effective Time into cash in an amount equal to the Measurement Price
multiplied by the Signing Exchange Ratio minus the CFC Option exercise price
(the "Option Consideration"). Such cash payment shall be remitted to the holder
of the CFC Options at the Effective Time upon prior receipt by CCFNB of an
Option Cancellation and Standstill Agreement substantially in the form as set
forth in Annex E.
(b) Actions. Prior to the Effective Time, CFC may, after consultation with
CCFNB, take any actions it determines are warranted (but without expenditure of
any funds) to give effect to the transactions contemplated by Section 5.10(a).
5.11 Indemnification and Insurance.
(a) Following the Effective Time, CCFNB, as the surviving corporation to
this Plan, shall indemnify, defend and hold harmless and advance expenses to the
present and former directors and officers of CFC and Columbia County Farmers
National Bank ("CCFNB Bank"), and any such person presently or formerly serving
at the request of CFC or CCFNB Bank or any of its subsidiaries as a director,
officer, employee, agent, trustee or fiduciary of another corporation,
partnership, joint venture, trust or other enterprise or under or with respect
to any employee benefit plan (each, an "Indemnified Party" and collectively, the
"Indemnified Parties") against all costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages, penalties, amounts
paid in settlement or other liabilities (collectively, "Indemnified
Liabilities") incurred in connection
26
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of actions or omissions
occurring at or prior to the Effective Time (including the transactions
contemplated by this Plan), whether asserted or claimed prior to, at or after
the Effective Time (x) to the same extent as such persons are indemnified or
have the right to advancement of expenses pursuant to the Governing Documents
and indemnification agreements, if any, in effect on the date of this Plan with
CFC and CCFNB Bank or any of its subsidiaries and, in the case of the directors
and executive officers of CFC and CCFNB Bank (y) without limitation of, and in
addition to, clause (x), to the fullest extent permitted by law. In the event of
any such Indemnified Liabilities, (i) CCFNB shall pay the reasonable fees and
expenses of counsel selected by an Indemnified Party promptly after statements
therefor are received and shall otherwise advance to such Indemnified Party upon
request reimbursement of documented expenses reasonably incurred and (ii) CCFNB
and the applicable Indemnified Parties shall cooperate in the defense of such
matter. If any Indemnified Party is required to bring any action to enforce
rights or to collect moneys due under this Plan and is successful in obtaining a
decision that it is entitled to enforcement of any right or collection of any
money in such action, CCFNB shall reimburse such Indemnified Party for all of
its expenses reasonably incurred in connection with bringing and pursuing such
action including, without limitation, reasonable attorneys' fees and costs.
(b) For a period of six years from the Effective Time, CCFNB shall use its
reasonable best efforts to provide directors' and officers' liability insurance
(including excess coverage) and fiduciary liability insurance that serves to
reimburse the present and former officers and directors of CFC and CCFNB Bank
with respect to claims against such directors and officers arising from facts or
events occurring at or prior to the Effective Time (including, without
limitation, the transactions contemplated by this Plan) which insurance shall
contain at least the same coverage and amounts, and contain terms and conditions
no less advantageous, as that coverage currently provided by CFC and CCFNB Bank,
provided that in no event shall CCFNB be required to expend annually in the
aggregate an amount in excess of 250% of the annual premiums currently paid by
CFC (which current amount has been Previously Disclosed) for such insurance (the
"Insurance Amount"), and provided further that if CCFNB is unable to maintain
such policy (or such substitute policy) as a result of the preceding proviso,
CCFNB shall obtain as much comparable insurance as is available for the
Insurance Amount.
(c) Any Indemnified Party wishing to claim indemnification under Section
5.11(a), upon learning of any claim, action, suit, proceeding or investigation
described above, shall notify CCFNB thereof; provided that the failure to so
notify shall not affect the obligations of CCFNB under Section 5.11(a) unless
and to the extent that CCFNB is actually and materially prejudiced as a result
of such failure. CCFNB hereby acknowledges notice of all matters Previously
Disclosed.
(d) If CCFNB or any of its successors or assigns shall consolidate with or
merge into any other entity and shall not be the continuing or surviving entity
of such consolidation or merger or shall transfer all or substantially all of
its assets or deposits to any other entity, or engage in any similar
transaction, then and in each case, CCFNB shall cause proper provision to be
made so that the successors and assigns of CCFNB shall assume the obligations
set forth in this Section 5.11.
(e) The provisions of this Section 5.11 are intended to be for the benefit
of, and shall be enforceable by, each Indemnified Party and his or her heirs and
representatives. The indemnification rights granted in this Section 5.11 are in
addition to, and not in substitution for, any other rights to indemnification or
contribution that any Indemnified Party may have by contract or otherwise.
5.12 Benefit Plans. (a) CCFNB shall from and after the Effective Time,
become the plan sponsor to each CFC Benefit Plan, whether a Benefit Plan of CFC
or any subsidiary of CFC. CCFNB shall, promptly after the Effective Time, review
all Benefit Plans of CFC and CCFNB in order to establish the Benefit Plans to be
made available to CCFNB employees after the Effective Time.
27
CCFNB's review shall take into consideration benefits that were provided to
employees under the CCFNB and CFC Benefit Plans and benefits provided by peer
institutions in the establishment of the new and/or amended Benefit Plans
provided by CCFNB to employees after the Effective Time. CCFNB shall: (1)
provide its employees credit for all years of service with CCFNB or CFC or any
of its subsidiaries and their predecessors, as the case may be, prior to the
Effective Time for the purpose of eligibility and vesting; (2) cause any and all
pre-existing condition limitations (to the extent such limitations did not apply
to a pre-existing condition under Benefit Plans prior to the Effective Time) and
eligibility waiting periods under group health plans to be waived with respect
to their employees who remain as employees of CCFNB or its subsidiaries (and
their eligible dependents) after the Effective Time; and (3) cause to be
credited any deductibles or out-of-pocket expenses incurred by CFC employees and
their beneficiaries and dependents during the portion of the calendar year prior
to their participation in CCFNB's health plans after the Effective Time with the
objective that there be no double counting during the year in which the Closing
Date occurs of such deductibles or out-of-pocket expenses. CCFNB and CFC agree
to honor, or to cause to be honored, in accordance with their terms, all vested
or accrued benefit obligations to, and contractual rights of their current and
former employees, including, without limitation, any benefits or rights arising
as a result of the transactions contemplated by this Plan (either alone or in
combination with any other event). In order to accomplish the foregoing, CCFNB
may amend, freeze, merge or terminate any Benefit Plan of CFC or CCFNB in order
to establish the Benefit Plans to be made available to CCFNB employees after the
Effective Time.
(b) This Section 5.12 shall inure exclusively to the benefit of and be
binding upon the parties hereto and their respective successors, assigns,
executors and legal representatives. Without limiting the generality of Section
8.12, nothing in this Section 5.12, express or implied: (i) is intended to
confer on any person other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations or liabilities under or
by reason of this Plan; or (ii) shall require CCFNB to maintain any specific
Benefit Plan or to guarantee employment of any employee for any period of time
after the Effective Time.
5.13 Notification of Certain Matters. CCFNB and CFC shall give prompt
notice to the other of any fact, event or circumstance known to it that (1) is
reasonably likely, individually or taken together with all other facts, events
and circumstances known to it, to result in any Material Adverse Effect with
respect to it or (2) would cause or constitute a material breach of any of its
representations, covenants or agreements contained herein. Within fifteen (15)
days of the end of each month, each party shall provide the other with a written
list of (i) all loans classified by such party or any regulatory authority as
"Special Mention," "Substandard," "Doubtful," "Loss," or any other
classification of similar import; (ii) all commercial and mortgage loans
classified as "non-accrual," and (iii) all commercial loans classified as "in
substance foreclosed."
5.14 Regulatory Compliance. CCFNB and CFC shall each cause its respective
bank subsidiary to continue to develop and implement policies, procedures and
internal controls to achieve full and timely compliance with the provisions of
the Bank Secrecy Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, and such other similar
laws and regulations applicable to their respective operations, and shall
promptly address any weaknesses or deficiencies noted by its primary federal
regulator in such policies or procedures.
5.15 Exemption from Liability Under Section 16(b). CCFNB and CFC agree
that, in order to most effectively compensate and retain CFC Insiders (as
defined below) in connection with the Merger, both prior to and after the
Effective Time, it is desirable that the CFC Insiders not be subject to a risk
of liability under Section 16(b) of the Exchange Act to the fullest extent
permitted by applicable law. Assuming that CFC delivers to CCFNB the CFC Section
16 Information (as defined below) in a timely fashion prior to the Effective
Time, the board of directors of CCFNB, or a committee of non-employee directors
thereof (as such term is defined for purposes of Rule 16b-3(d)
28
under the Exchange Act), shall reasonably promptly thereafter and in any event
prior to the Effective Time adopt a resolution providing in substance that the
receipt by CFC Insiders (as defined below) of CCFNB Common Stock in exchange for
shares of CFC Common Stock pursuant to the transactions contemplated hereby and
to the extent such securities are listed in the CFC Section 16 Information, are
intended to be exempt from liability pursuant to Section 16(b) under the
Exchange Act to the fullest extent permitted by applicable law. "CFC Section 16
Information" shall mean information accurate in all material respects regarding
the identity of CFC Insiders, the number of shares of CFC Common Stock held by
each such CFC Insider and expected to be exchanged for CCFNB Common Stock in the
Merger, and the number and description of the options to purchase shares of CFC
Common Stock held by each such CFC Insider and expected to be converted into
cash in connection with the Merger; provided that the requirement for a
description of any CFC Options shall be deemed to be satisfied if copies of all
plans, and forms of agreements, under which such Options have been granted have
been made available to CCFNB. "CFC Insiders" shall mean those present or former
officers and directors of CFC who are subject to the reporting requirements of
Section 16(a) of the Exchange Act and who are listed in CFC Section 16
Information.
5.16 Additional Actions. Schedule 5.16 is incorporated herein by reference.
ARTICLE VI
CONDITIONS
6.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of CCFNB and CFC to consummate the Merger is subject to
the fulfillment or written waiver by CCFNB and CFC prior to the Effective Time
of each of the following conditions:
(a) Shareholder Approval. This Plan and the Merger shall have been duly
adopted and approved by the requisite votes of the shareholders of CCFNB and
CFC.
(b) Governmental and Regulatory Consents. All statutory waiting periods
applicable to the consummation of the Merger shall have expired or been
terminated, and, other than the filing provided for in Section 1.2(a), all
notices, reports and other filings required to be made prior to the Effective
Time by CCFNB or CFC or any of their respective subsidiaries with, and all
regulatory consents, registrations, approvals, permits and authorizations
required to be obtained prior to the Effective Time by CCFNB or CFC or any of
their respective subsidiaries from, any Governmental Entity in connection with
the consummation of the Merger, the Bank Merger and the other transactions
contemplated hereby by CCFNB and CFC shall have been made or obtained (as the
case may be) and become final, unless the failure to obtain any such consent or
approval would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on CCFNB (measured on a scale relative to
CFC and its subsidiaries, taken as a whole) or CFC, and, in the case of the
obligations of CCFNB and the surviving bank to the Bank Merger, no such consent,
registration, approval, permit or authorization shall have resulted in the
imposition of any Materially Burdensome Regulatory Condition.
(c) No Prohibitions. No United States or state court or other Governmental
Entity of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any law, statute, rule, regulation, judgment, decree,
injunction or other order (whether temporary, preliminary or permanent) which is
in effect and prohibits consummation of the Merger and the Bank Merger
(d) Registration Statement. The Registration Statement shall have become
effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall
29
have been issued and no proceedings for that purpose shall have been initiated
or threatened by the SEC or any other Governmental Entity.
(e) Blue Sky Approvals. All permits and other authorizations under the
Securities Laws (other than that referred to in Section 6.1(d)) and other
authorizations necessary to consummate the Merger and to issue the shares of
CCFNB Common Stock to be issued in the Merger shall have been received and be in
full force and effect.
6.2 Conditions to Obligation of CCFNB. The obligation of CCFNB to
consummate the Merger is also subject to the fulfillment, or the written waiver
by CCFNB prior to the Effective Time, of each of the following conditions:
(a) Representations. The representations of CFC set forth in this Plan
shall be, giving effect to Sections 4.1 and 4.2, true and correct as of the date
of this Plan and as of the Effective Time as though made at and as of the
Effective Time (except that representations that by their terms speak
specifically as of the date of this Plan or some other date shall be true and
correct as of such date) and CCFNB shall have received a certificate, dated the
Closing Date, signed on behalf of CFC by the Chairman of the Board and the Chief
Financial Officer of CFC to such effect.
(b) Performance of Obligations of CFC. CFC shall have performed all
obligations required to be performed by it under this Plan at or prior to the
Effective Time in all material respects, and CCFNB shall have received a
certificate, dated the same date as the Closing Date, signed on behalf of CFC by
the Chairman of the Board and the Chief Financial Officer of CFC to such effect.
(c) Opinion of Counsel for CFC. CCFNB shall have received an opinion dated
the Closing Date from ▇▇▇▇▇▇ & Sinon, LLP, counsel to CFC, in substantially the
form of Schedule 6.2(c) hereto.
(d) Opinion of Tax Counsel. CCFNB shall have received an opinion from
Saidis Flower & Lindsay, special counsel to CCFNB, dated the same date as the
Closing Date, to the effect that, on the basis of the facts, representations and
assumptions set forth or referred to in such opinion, (1) the Merger will be
treated for federal income tax purposes as a reorganization within the meaning
of Section 368(a) of the Code and (2) CCFNB and CFC will be a party to that
reorganization within the meaning of Section 368(b) of the Code. In rendering
its opinion, Saidis, Flower & ▇▇▇▇▇▇▇ ▇▇▇ require and rely upon representations
contained in letters from each of CCFNB and CFC.
6.3 Conditions to Obligation of CFC. The obligation of CFC to consummate
the Merger is also subject to the fulfillment, or the written waiver by CFC,
prior to the Effective Time of each of the following conditions:
(a) Representations. The representations of CCFNB set forth in this Plan
shall be, giving effect to Sections 4.1 and 4.2, true and correct as of the date
of this Plan and as of the Effective Time as though made at and as of the
Effective Time (except that representations that by their terms speak
specifically as of the date of this Plan or some other date shall be true and
correct as of such date); and CFC shall have received a certificate, dated the
same date as the Closing Date, signed on behalf of CCFNB by the Chief Executive
Officer and the Chief Operating Officer of CCFNB to such effect.
(b) Performance of Obligations of CCFNB. CCFNB shall have performed all
obligations required to be performed by it under this Plan at or prior to the
Effective Time in all material respects, and CFC shall have received a
certificate, dated the same date as the Closing Date, signed on behalf of CCFNB
by the Chief Executive Officer and the Chief Operating Officer of CCFNB to such
effect.
30
(c) Opinion of Counsel for CCFNB. CFC shall have received an opinion dated
the Closing Date from Saidis, Flower & Lindsay, counsel to CCFNB, in
substantially the form of Schedule 6.3(c) hereto.
(d) Opinion of Tax Counsel. CFC shall have received an opinion of ▇▇▇▇▇▇ &
▇▇▇▇▇, special counsel to CFC, dated the same date as the Closing Date, to the
effect that on the basis of the facts, representations and assumptions set forth
or referred to in such opinion, (1) the Merger will be treated for federal
income tax purposes as a reorganization within the meaning of Section 368(a) of
the Code, and (2) CCFNB and CFC will be a party to that reorganization within
the meaning of Section 368(b) of the Code. In rendering its opinion, ▇▇▇▇▇▇ &
Sinon may require and rely upon representations contained in letters from each
of CCFNB and CFC.
ARTICLE VII
TERMINATION
7.1 Termination by Mutual Consent. This Plan may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (whether or not
the shareholders of CCFNB Common Stock and CFC Common Stock have adopted and
approved this Plan), upon the mutual consent of CCFNB and CFC, by action of
their respective boards of directors.
7.2 Termination by CCFNB. This Plan may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, whether before or after the
approval by shareholders of CCFNB referred to in Section 6.1(a), by action of
the board of directors of CCFNB:
(a) if there has been a breach of any representation, covenant or agreement
made by CFC in this Plan, or any such representation shall have become untrue
after the date of this Plan, such that Section 6.2(a) or 6.2(b) would not be
satisfied and such breach or condition: (i) would have a Material Adverse Effect
as defined in Section 4.2(b), and (ii) is not curable or, if curable, is not
cured within 30 days after written notice thereof is given by CCFNB to CFC, but
not if on such date such breach no longer causes a Material Adverse Effect;
(b) if the Merger shall not have been consummated by October 31, 2008 (the
"Termination Date"), provided that the right to terminate this Plan shall not be
available if CCFNB has breached in any material respect its obligations under
this Plan in any manner that shall have proximately and substantially
contributed to the occurrence of the failure of the Merger to be consummated on
or before the Termination Date;
(c) if the approval of CCFNB's or CFC's shareholders required by Section
6.1(a) shall not have been obtained at its shareholders' meeting or at any
adjournment or postponement thereof, provided a period of at least thirty (30)
days elapsed between the date of mailing of the Proxy Statement and such meeting
and that a quorum was present at such meeting;
(d) if any order permanently restraining, enjoining or otherwise
prohibiting consummation of the Merger shall become final and non-appealable
(whether before or after the approval by the shareholders of CCFNB), provided
that the right to terminate this Plan shall not be available if CCFNB has
breached in any material respect its obligations under this Plan in any manner
that shall have proximately and substantially contributed to the issuance of
such order;
(e) if CFC or First Columbia Bank & Trust Co. enters into any letter of
intent, agreement, plan or similar instrument with a view to being acquired by,
or effecting a business combination with, any other Person; or any agreement to
merge, consolidate, to combine or to sell a material portion of
31
its assets or to be acquired in any other manner by any other Person or to
acquire a material amount of assets or a material equity position in any other
Person, whether financial or otherwise;
(f) if CCFNB enters into any transaction described in Section 7.2(e) after
receipt of written advice of counsel that failure to do so would constitute a
breach of fiduciary duty by CCFNB's directors under applicable law; or
(g) if (1) the board of directors of CFC has failed to recommend that the
shareholders of CFC vote in favor of this Plan and the transactions contemplated
hereby or has withdrawn, modified or qualified such recommendation in a manner
adverse to CCFNB (or has resolved to take such action); (2) CFC has failed to
substantially comply with its obligations under Section 5.2 or 5.6; (3) the
board of directors of CFC has publicly recommended or endorsed an Acquisition
Proposal other than the Merger (or has resolved to take such action); (4) CFC
shall have failed to approve the Bank Plan of Merger as the sole shareholder of
First Columbia Bank & Trust Co. by the Closing Date; or (5) the board of
directors of First Columbia Bank & Trust Co. shall have failed to approve the
Bank Merger Agreement by the Closing Date.
7.3 Termination by CFC. This Plan may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, whether before or after the
approval by shareholders of CFC referred to in Section 6.1(a), by action of the
board of directors of CFC:
(a) if there has been a breach of any representation, covenant or agreement
made by CCFNB in this Plan, or any such representation shall have become untrue
after the date of this Plan, such that Section 6.3(a) or 6.3(b) would not be
satisfied and such breach or condition: (i) would have a Material Adverse Effect
as defined in Section 4.2(b), and (ii) is not curable or, if curable, is not
cured within 30 days after written notice thereof is given by CFC to CCFNB, but
not if on such date such breach no longer causes a Material Adverse Effect;
(b) if the Merger shall not have been consummated by the Termination Date;
provided that the right to terminate this Plan pursuant to this clause (a) shall
not be available if CFC has breached in any material respect its obligations
under this Plan in any manner that shall have proximately and substantially
contributed to the occurrence of the failure of the Merger to be consummated on
or before the Termination Date;
(c) if the approval of CFC's or CCFNB's shareholders required by Section
6.1(a) shall not have been obtained at its shareholders' meeting or at any
adjournment or postponement thereof, provided a period of at least thirty (30)
days elapsed between the date of mailing of the Proxy Statement and such meeting
and that a quorum was present at such meeting;
(d) if any order permanently restraining, enjoining or otherwise
prohibiting consummation of the Merger shall become final and non-appealable
(whether before or after the approval by the shareholders of CFC), provided that
the right to terminate this Plan shall not be available if CFC has breached in
any material respect its obligations under this Plan in any manner that shall
have proximately and substantially contributed to the issuance of such order;
(e) if CCFNB or Columbia County Farmers National Bank enters into any
letter of intent, agreement, plan or similar instrument with a view to being
acquired by, or effecting a business combination with, any other Person; or any
agreement to merge, consolidate, to combine or to sell a material portion of its
assets or to be acquired in any other manner by any other Person or to acquire a
material amount of assets or a material equity position in any other Person,
whether financial or otherwise;
32
(f) if CFC enters into any transaction described in Section 7.3(e) after
receipt of written advice of counsel that failure to do so would constitute a
breach of fiduciary duty by CFC's directors under applicable law; or
(g) if (1) the board of directors of CCFNB has failed to recommend that the
shareholders of CCFNB vote in favor of this Plan and the transactions
contemplated hereby or has withdrawn, modified or qualified such recommendation
in a manner adverse to CFC (or has resolved to take such action); (2) CCFNB has
failed to substantially comply with its obligations under Section 5.2 or 5.6;
(3) the board of directors of CCFNB has publicly recommended or endorsed an
Acquisition Proposal other than the Merger (or has resolved to take such
action); (4) CCFNB shall have failed to approve the Bank Plan of Merger as the
sole shareholder of Columbia County Farmers National Bank by the Closing Date;
or (5) the board of directors of Columbia County Farmers National Bank shall
have failed to approve the Bank Merger Agreement by the Closing Date.
7.4 Effect of Termination and Abandonment. In the event of termination of
this Plan and the abandonment of the Merger pursuant to this Article VII, this
Plan (other than as set forth in Sections 5.5(b) and (c), 7.5 ) shall become
void and of no effect with no liability on the part of any party hereto (or of
any of its directors, officers, employees, agents, legal and financial advisors
or other representatives).
7.5 Termination Fee.
(a) In the event that CCFNB terminates this Plan pursuant to Sections
7.2(a), then CFC shall pay CCFNB a fee equal to $1,350,000 by wire transfer of
same day funds no later than the fifth (5th) business day after receipt by CFC
of a CCFNB Notice of Termination (as defined below). In the event that CCFNB
terminates this Plan pursuant to Sections 7.2(e) or 7.2(g), or CFC terminates
this Plan pursuant to Section 7.3(f), then CFC shall pay CCFNB a fee equal to
$2,700,000 by wire transfer of same day funds no later than the fifth (5th)
business day after receipt by CFC of a CCFNB Notice of Termination.
(b) In the event that CFC terminates this Plan pursuant to Section 7.3(a),
then CCFNB shall pay CFC a fee equal to $1,350,000 by wire transfer of same day
funds no later than the fifth (5th) business day after receipt by CCFNB of a CFC
Notice of Termination. In the event that CFC terminates this Plan pursuant to
Sections 7.3(e) or 7.3(g), or CCFNB terminates this Plan pursuant to Section
7.2(f), then CCFNB shall pay CFC a fee equal to $2,700,000 by wire transfer of
same day funds no later than the fifth (5th) business day after receipt by CCFNB
of a CFC Notice of Termination.
(c) For purposes of this Section 7.5, a "Notice of Termination" shall be in
writing and state the section of this Plan pursuant to which a termination is
made; the amount of termination fee claimed; wire transfer instructions for
payment of such fee; and a statement of the reason the party has terminated this
Plan pursuant to the section delineated in such notice. Delivery of a Notice of
Termination shall be made by hand delivery to the executive offices of the
receiving party and a written acknowledgment of receipt shall be executed by an
officer of the receiving party.
(d) The parties acknowledge that the agreements contained in this Section
7.5 are an integral part of the transactions contemplated by this Plan, and
that, without these agreements, the parties would not enter into this Plan;
accordingly, if a party fails promptly to pay the amount due pursuant to this
Section 7.5 (the "Failing Party"), and, in order to obtain such payment, the
other party commences a legal action which results in a judgment against the
Failing Party for the fee set forth in this Section 7.5, the Failing Party shall
pay to the other party its costs and expenses (including attorneys' fees and
expenses) in connection with such legal action, together with interest on the
33
amount of the fee at the rate on six-month U.S. Treasury obligations plus 300
basis points in effect on the date such payment was required to be made.
ARTICLE VIII
MISCELLANEOUS
8.1 Survival. Except for the agreements and covenants contained in Articles
I and II, Sections 5.10, 5.11, 5.12, 5.14, 5.15, 5.16 and 7.5 and this Article
VIII, the representations, agreements and covenants contained in this Plan shall
be deemed only to be conditions of the Merger and shall not survive the
Effective Time.
8.2 Modification or Amendment. Subject to applicable law, at any time prior
to the Effective Time, the parties hereto may modify or amend this Plan, by
written agreement executed and delivered by duly authorized officers of the
respective parties.
8.3 Waiver of Conditions. The conditions to each party's obligation to
consummate the Merger are for the sole benefit of such party and may be waived
by such party as a whole or in part to the extent permitted by applicable law.
No waiver shall be effective unless it is in a writing signed by a duly
authorized officer of the waiving party that makes express reference to the
provision or provisions subject to such waiver.
8.4 Counterparts. For the convenience of the parties hereto, this Plan may
be executed in any number of separate counterparts, each such counterpart being
deemed to be an original instrument, and all such counterparts shall together
constitute the same agreement. The execution and delivery of this Plan may be
effected by telecopier.
8.5 Governing Law. This Plan shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania applicable to
contracts made and to be performed entirely within the Commonwealth of
Pennsylvania.
8.6 Notices. Any notice, request, instruction or other document to be given
hereunder by any party to the other shall be in writing and shall be deemed to
have been duly given (a) on the date of delivery if delivered personally, or by
facsimile, upon confirmation of receipt; (b) on the first business day following
the date of dispatch if delivered by a recognized next-day courier service; or
(c) on the third business day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid. All
notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such
notice.
TO CCFNB: TO CFC:
▇▇▇▇▇ ▇. ▇▇▇▇▇, President and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Chief Executive Officer Chairman of the Board
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Financial Corporation
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
34
WITH COPIES TO: WITH COPIES TO:
Saidis, Flower & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇ and Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇ Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
8.7 Entire Agreement, Etc. This Plan (including the Disclosure Schedules)
and the Confidentiality Agreement constitute the entire agreement, and
supersedes all other prior agreements, understandings, representations, both
written and oral, between the parties, with respect to the subject matter
hereof, and this Plan shall not be assignable by operation of law or otherwise
(any attempted assignment in contravention of this Section 8.7 being null and
void).
8.8 Definition of "subsidiary" and "affiliate"; Covenants with Respect to
Subsidiaries and Affiliates. (a) When a reference is made in this Plan to a
subsidiary of a Person, the term "subsidiary" (or "Subsidiary") has the meaning
ascribed to that term in Rule 1-02 of Registration S-X under the Exchange Act.
When a reference is made in this Plan to an affiliate of a Person, the term
"affiliate" (or "Affiliate") means those other Persons that, directly or
indirectly, control, are controlled by, or are under common control with, such
Person.
(b) Insofar as any provision of this Plan shall require a subsidiary or an
affiliate of a party to take or omit to take any action, such provision shall be
deemed a covenant by CCFNB or CFC, as the case may be, to cause such action or
omission to occur.
8.9 Expenses. Each party will bear all expenses incurred by it in
connection with this Plan and the transactions contemplated hereby, except that
CCFNB shall bear and pay all of the costs (excluding the fees and disbursements
of counsel, financial advisors and accountants) incurred in connection with the
copying, printing and distributing of the Registration Statement and the Proxy
Statement for the approval of the Merger, and CFC shall bear and pay all of the
costs (excluding the fees and disbursements of counsel, financial advisors and
accountants) incurred in connection with the copying, printing and filing of
regulatory applications submitted to bank regulatory authorities.
8.10 Interpretation; Effect.
(a) In this Plan, except as context may otherwise require, references:
(1) to the Preamble, Recitals, Sections, Annexes or Schedules are to
the Preamble to, a Recital or Section of, or Annex or Schedule to, this Plan;
(2) to this Plan are to this Plan, and the Annexes and Schedules to
it, taken as a whole;
(3) to the "transactions contemplated hereby" includes the
transactions provided for in this Plan including the Merger;
(4) to any agreement (including this Plan), contract, statute or
regulation are to the agreement, contract, statute or regulation as amended,
modified, supplemented, restated or replaced from time to time (in the case of
an agreement or contract, to the extent permitted by the terms thereof); and to
any section of any statute or regulation include any successor to the section;
35
(5) to any Governmental Entity includes any successor to that
Governmental Entity; and
(6) to the Bank Merger Agreement refers to the Plan of Merger at Annex
A hereto;
(b) The words "hereby", "herein", "hereof", "hereunder" and similar terms
are to be deemed to refer to this Plan as a whole and not to any specific
Section.
(c) The words "include", "includes" or "including" are to be deemed
followed by the words "without limitation".
(d) The word "party" is to be deemed to refer to CFC or CCFNB.
(e) The word "person" is to be interpreted broadly to include any
individual, savings association, bank, trust company, corporation, limited
liability company, partnership, association, joint-stock company, business trust
or unincorporated organization.
(f) The table of contents and article and section headings are for
reference purposes only and do not limit or otherwise affect any of the
substance of this Plan.
(g) This Plan is the product of negotiation by the parties, having the
assistance of counsel and other advisers. The parties intend that this Plan not
be construed more strictly with regard to one party than with regard to the
other.
(h) The disclosure in any Section of a Disclosure Schedule shall apply only
to the indicated section of this Plan except to the extent that it is reasonably
apparent that such disclosure is relevant to another section of this Plan.
8.11 Severability. The provisions of this Plan shall be deemed severable
and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof. If any provision of
this Plan, or the application thereof to any Person or entity or any
circumstance, is found by a court or other Governmental Entity of competent
jurisdiction to be invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Plan and the application of such
provision to other Persons, entities or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
8.12 No Third Party Beneficiaries. Nothing contained in this Plan,
expressed or implied, is intended to confer upon any Person, other than the
parties hereto, any benefit, right or remedies except that the provisions of
Sections 5.11 and 5.15 shall inure to the benefit of the Persons referred to
therein.
8.13 Waiver of Jury Trial. Each party hereto acknowledges and agrees that
any controversy which may arise under this Plan is likely to involve complicated
and difficult issues, and therefore each party hereby irrevocably and
unconditionally waives any right such party may have to a trial by jury in
respect of any litigation, directly or indirectly, arising out of, or relating
to, this Plan, or the transactions contemplated by this Plan. Each party
certifies and acknowledges that (a) no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such other party would
not, in the event of litigation, seek to enforce the foregoing waiver; (b) each
party
36
understands and has considered the implications of this waiver; (c) each party
makes this waiver voluntarily; and (d) each party has been induced to enter into
this Plan by, among other things, the mutual waivers and certifications in this
Section 8.13.
8.14 Submission to Jurisdiction; Selection of Forum. Each party hereto
agrees that it shall bring any action or proceeding in respect of any claim
arising out of or related to this Plan or the Merger exclusively in the United
States District Court for the Middle District of Pennsylvania or the Court of
Common Pleas of Columbia County, Commonwealth of Pennsylvania (the "Chosen
Courts"), and solely in connection with claims arising under this Plan or the
Merger that are the subject of this Plan (a) irrevocably submits to the
exclusive jurisdiction of the Chosen Courts; (b) waives any objection to laying
venue in any such action or proceeding in the Chosen Courts; (c) waives any
objection that the Chosen Courts are an inconvenient forum or do not have
jurisdiction over any party hereto; and (d) agrees that service of process upon
such party in any such action or proceeding shall be effective if notice is
given in accordance with Section 8.6 of this Plan.
[SIGNATURE PAGE FOLLOWS]
37
IN WITNESS WHEREOF, this Plan has been duly executed and delivered by the duly
authorized officers of the parties hereto as of the date first above written.
CCFNB BANCORP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Executive
Officer
COLUMBIA FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chairman of the Board
38
SCHEDULE 5.7(D)
RELEASE
READ IT CAREFULLY
NOTICE TO ▇▇▇▇▇ ▇. ▇▇▇▇▇:
THIS IS A VERY IMPORTANT LEGAL DOCUMENT, AND YOU SHOULD CAREFULLY REVIEW
AND UNDERSTAND THE TERMS AND EFFECT OF THIS DOCUMENT BEFORE SIGNING IT. BY
SIGNING THIS RELEASE ("RELEASE"), YOU ARE AGREEING TO COMPLETELY RELEASE
COLUMBIA COUNTY FARMERS NATIONAL BANK, CCFNB BANCORP, INC. AND FIRST
COLUMBIA BANK & TRUST CO., AS SUCCESSOR UNDER THE BANK MERGER, AS DEFINED
HEREIN, AND THEIR SUBSIDIARIES, AFFILIATES, DIRECTORS AND OFFICERS.
THEREFORE, YOU SHOULD CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE.
YOU HAVE TWENTY-ONE (21) DAYS FROM THE DAY OF RECEIPT OF THIS DOCUMENT TO
CONSIDER THE RELEASE. THE TWENTY-ONE (21) DAYS WILL BEGIN TO RUN ON THE DAY
AFTER RECEIPT. IF YOU CHOOSE TO SIGN THE RELEASE, YOU WILL HAVE AN
ADDITIONAL SEVEN (7) DAYS FOLLOWING THE DATE OF YOUR SIGNATURE TO REVOKE
THE RELEASE, AND THE RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE
UNTIL THE REVOCATION PERIOD HAS EXPIRED.
This Release is to be effective on the Effective Times of the Plan and Bank
Merger, as those terms are defined in such agreements, by and among CCFNB
Bancorp, Inc. ("CCFNB"), Columbia County Farmers National Bank ("CCFNB Bank"),
First Columbia Bank & Trust Co. ("First Columbia") and ▇▇▇▇▇ ▇. ▇▇▇▇▇
("Executive").
WHEREAS, Executive, CCFNB and CCFNB Bank have entered into an employment
agreement dated January 1, 2003, (the "Current Agreement");
WHEREAS, CCFNB and Columbia Financial Corporation, ("CFC") will enter into
an Agreement and Plan of Reorganization dated November 29, 2007 (the "Plan")
whereby CFC will be merged with and into CCFNB and simultaneously CCFNB Bank
will be merged with and into First Columbia (the "Bank Merger");
WHEREAS, the Plan sets forth, among other things, the agreement of CCFNB
and First Columbia to retain Executive as its Chief Executive Officer and
President and enter into an Employment Agreement with Executive (the "New
Agreement");
WHEREAS, CCFNB and CFC are only willing to enter into the Plan on the
condition that Executive executes this Release and the New Agreement with CCFNB
and First Columbia.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, it is agreed as follows:
1. Consideration. At the Effective Time of the Plan, as defined in the
Plan, in full satisfaction of the benefits that would otherwise be payable under
the Current Agreement, CCFNB and First Columbia agree to enter into the terms of
the New Agreement set forth at Annex F of the Plan.
39
2. Release and Waiver.
(a) Executive hereby agrees that the entering into this New Agreement will
be in full satisfaction of all obligations of CCFNB and CCFNB Bank or First
Columbia, as the case may be, under the Current Agreement.
(b) Executive, on behalf of himself, his heirs and assigns, irrevocably and
unconditionally releases CCFNB, CCFNB Bank and First Columbia, as successor
under the Bank Merger, from all claims, controversies, liabilities, demands,
causes of action, debts, obligations, promises, acts, agreements, and damages of
whatever kind or nature, whether known or unknown, suspected or unsuspected,
foreseen or unforeseen, liquidated or contingent, aspects of the Employment
Agreement, including but no limited to, any and all claims for breach of express
or implied contract or covenant of good faith and fair dealing (whether written
or oral), all claims for retaliation or violation of public policy, breach of
promise, detrimental reliance or tort (e.g., intentional infliction of emotional
distress, defamation, wrongful termination, interference with contractual or
advantageous relationship, etc.), whether based on common law or otherwise; all
claims arising under Title VII of the Civil Rights Act of 1964, as amended; the
Age Discrimination in Employment Act; the Americans with Disabilities Act;
claims for emotional distress, mental anguish, personal injury, loss of
consortium; any and all claims that may be asserted on Executive's behalf by
others (including the Equal Employment Opportunity Commission); or any other
federal, state or local laws or regulations relating to employment or benefits
associated with employment. The foregoing list is meant to be illustrative
rather than inclusive.
(c) Executive waives the rights and claims to the extent set forth above,
and he also agrees not to institute, or have instituted, a lawsuit against
CCFNB, CCFNB Bank and First Columbia, based on any such waived claims or rights.
(d) EXECUTIVE ACKNOWLEDGES AND AGREES THAT THIS RELEASE IS A FULL AND FINAL
BAR TO ANY AND ALL CLAIMS(S) OF ANY TYPE THAT HE MAY NOW HAVE AGAINST CCFNB,
CCFNB BANK AND FIRST COLUMBIA TO THE EXTENT PROVIDED ABOVE BUT THAT IT DOES NOT
RELASE ANY CLAIMS THAT MAY ARISE AFTER THE DATE OF THIS RELEASE.
3. Acceptance Period.
The following notice is included in this Release as required by the
Older Workers Benefit Protection Act:
YOU HAVE UP TO TWENTY-ONE (21) DAYS FROM THE DATE OF RECEIPT OF THIS
RELEASE TO ACCEPT THE TERMS OF THIS RELEASE, ALTHOUGH YOU MAY ACCEPT IT AT
ANY TIME WITHIN THOSE TWENTY-ONE (21) DAYS. YOU ARE ADVISED TO CONSULT WITH
AN ATTORNEY REGARDING THIS RELEASE.
The twenty-one (21) day period will begin to run on the day after Executive
receives this Release. It will then run for a full twenty-one (21) calendar days
and expire at the end of the twenty-first day (the "Acceptance Period"). In
order to accept this Release, Executive must sign his name and date his
signature at the end of this letter and return it to ▇▇▇▇ ▇. ▇▇▇▇▇, Esquire,
Saidis, Flower & Lindsay, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, special
counsel to CCFNB and CCFNB Bank. If the twenty-first day of the Acceptance
Period falls on a Saturday, a Sunday, or a legal holiday, ▇▇. ▇▇▇▇▇ must receive
the acceptance by the close of business on the next business day immediately
following such Saturday, Sunday or legal holiday to effect a timely acceptance
of this Release.
40
4. Revocation Period. Executive has the right to revoke this Release at any
time within seven (7) days from the date Executive signs and delivers this
Release to ▇▇. ▇▇▇▇▇ (the "Revocation Period"), and this Release will not become
effective and enforceable until the Revocation Period has expired. (NOTE: The
Revocation Period will begin on the day after the day on which Executive has
signed this Release and delivered it to ▇▇. ▇▇▇▇▇ and, as indicated by the date
Executive affixes to his signature at the end of this Release. It will then run
for seven calendar days and expire at the end of the seventh day.) In order to
revoke this Release, Executive must notify ▇▇. ▇▇▇▇▇ in writing of his decision
to revoke the Release. Executive must ensure that CCFNB and CCFNB Bank (via ▇▇.
▇▇▇▇▇, at the address indicated in Paragraph 3 above) receives his written
notice of revocation at his office in Carlisle, Pennsylvania within the
aforementioned Revocation Period. If the seventh day of the Revocation Period
falls on a Saturday, a Sunday, or a legal holiday, ▇▇. ▇▇▇▇▇'▇ receipt of the
revocation by the close of business on the next business day immediately
following such Saturday, Sunday or legal holiday will be sufficient to effect a
timely revocation of this Release. Provided that the Revocation Period expires
without his having revoked this Release, this Release shall take effect on the
next day following the Revocation Period, and such next day shall constitute the
Effective Date hereof.
5. Severability. Should any provision(s) of this Release be determined, in
a proceeding to enforce or interpret this Release, to be invalid or
unenforceable, then, provided that the provision(s) deemed to be invalid or
unenforceable do not constitute all or substantially all of the undertakings by
Executive, CCFNB, CCNFB Bank, or First Columbia, as the case may be, the
remainder of this Release shall continue in full force and effect.
6. Notices. Unless otherwise provided in this Release, any notice required
or permitted to be given under this Release shall be deemed properly given if in
writing and if mailed by registered or certified mail, postage prepaid with
return receipt requested, to Executive's residence, in the case of notices to
Executive, and to the principal executive offices of CCFNB and CCFNB Bank, or
First Columbia, as the case may be, in the case of notices to CCFNB and CCFNB
Bank, or First Columbia, as the case may be.
7. Choice of Law. This Release shall be governed by, construed under and
enforced pursuant to the laws of the Commonwealth of Pennsylvania.
8. Binding on Successors and Assigns. This Release shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
successors and assigns.
9. Counterparts. This Release may be executed in multiple counterparts, and
shall be fully valid, legally binding and enforceable whether executed in a
single document or in such counterparts.
10. Termination. This Release shall terminate upon a termination of the
Plan in accordance with its terms.
[Signatures page follows]
41
IN WITNESS WHEREOF, the parties have executed this Release as of the date
first above written.
ATTEST: CCFNB BANCORP, INC.
By: Date: November 29, 2007
------------------------------------- ----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of the Board
COLUMBIA COUNTY FARMERS
NATIONAL BANK
By: Date: November 29, 2007
------------------------------------- ----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of the Board
FIRST COLUMBIA BANK & TRUST CO.
By: Date: November 29, 2007
------------------------------------- ----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Chairman of the Board
WITNESS: EXECUTIVE
By: Date: November 29, 2007
------------------------------------- ----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
42
RELEASE
READ IT CAREFULLY
NOTICE TO ▇▇▇▇▇ ▇. ▇▇▇▇▇▇:
THIS IS A VERY IMPORTANT LEGAL DOCUMENT, AND YOU SHOULD CAREFULLY REVIEW
AND UNDERSTAND THE TERMS AND EFFECT OF THIS DOCUMENT BEFORE SIGNING IT. BY
SIGNING THIS RELEASE ("RELEASE"), YOU ARE AGREEING TO COMPLETELY RELEASE
COLUMBIA COUNTY FARMERS NATIONAL BANK, CCFNB BANCORP, INC. AND FIRST
COLUMBIA BANK & TRUST CO., AS SUCCESSOR UNDER THE BANK MERGER, AS DEFINED
HEREIN, AND THEIR SUBSIDIARIES, AFFILIATES, DIRECTORS AND OFFICERS.
THEREFORE, YOU SHOULD CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE.
YOU HAVE TWENTY-ONE (21) DAYS FROM THE DAY OF RECEIPT OF THIS DOCUMENT TO
CONSIDER THE RELEASE. THE TWENTY-ONE (21) DAYS WILL BEGIN TO RUN ON THE DAY
AFTER RECEIPT. IF YOU CHOOSE TO SIGN THE RELEASE, YOU WILL HAVE AN
ADDITIONAL SEVEN (7) DAYS FOLLOWING THE DATE OF YOUR SIGNATURE TO REVOKE
THE RELEASE, AND THE RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE
UNTIL THE REVOCATION PERIOD HAS EXPIRED.
This Release is to be effective on the Effective Times of the Plan and Bank
Merger, as those terms are defined in such agreements, by and among CCFNB
Bancorp, Inc. ("CCFNB"), Columbia County Farmers National Bank ("CCFNB Bank"),
First Columbia Bank & Trust Co. ("First Columbia") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
("Executive").
WHEREAS, Executive, CCFNB and CCFNB Bank have entered into an employment
agreement dated January 1, 2003, (the "Current Agreement");
WHEREAS, CCFNB and Columbia Financial Corporation, ("CFC") will enter into
an Agreement and Plan of Reorganization dated November 29, 2007 (the "Plan")
whereby CFC will be merged with and into CCFNB and simultaneously CCFNB Bank
will be merged with and into First Columbia (the "Bank Merger");
WHEREAS, the Plan sets forth, among other things, the agreement of CCFNB
and First Columbia to retain Executive as its Chief Operating Officer and enter
into an Employment Agreement with Executive (the "New Agreement");
WHEREAS, CCFNB and CFC are only willing to enter into the Plan on the
condition that Executive executes this Release and the New Agreement with CCFNB
and First Columbia.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, it is agreed as follows:
1. Consideration. At the Effective Time of the Plan, as defined in the
Plan, in full satisfaction of the benefits that would otherwise be payable under
the Current Agreement, CCFNB and First Columbia agree to enter into the terms of
the New Agreement set forth at Annex G of the Plan.
43
2. Release and Waiver.
(a) Executive hereby agrees that the entering into this New Agreement will
be in full satisfaction of all obligations of CCFNB and CCFNB Bank or First
Columbia, as the case may be, under the Current Agreement.
(b) Executive, on behalf of himself, his heirs and assigns, irrevocably and
unconditionally releases CCFNB, CCFNB Bank and First Columbia, as successor
under the Bank Merger, from all claims, controversies, liabilities, demands,
causes of action, debts, obligations, promises, acts, agreements, and damages of
whatever kind or nature, whether known or unknown, suspected or unsuspected,
foreseen or unforeseen, liquidated or contingent, aspects of the Employment
Agreement, including but no limited to, any and all claims for breach of express
or implied contract or covenant of good faith and fair dealing (whether written
or oral), all claims for retaliation or violation of public policy, breach of
promise, detrimental reliance or tort (e.g., intentional infliction of emotional
distress, defamation, wrongful termination, interference with contractual or
advantageous relationship, etc.), whether based on common law or otherwise; all
claims arising under Title VII of the Civil Rights Act of 1964, as amended; the
Age Discrimination in Employment Act; the Americans with Disabilities Act;
claims for emotional distress, mental anguish, personal injury, loss of
consortium; any and all claims that may be asserted on Executive's behalf by
others (including the Equal Employment Opportunity Commission); or any other
federal, state or local laws or regulations relating to employment or benefits
associated with employment. The foregoing list is meant to be illustrative
rather than inclusive.
(c) Executive waives the rights and claims to the extent set forth above,
and he also agrees not to institute, or have instituted, a lawsuit against
CCFNB, CCFNB Bank and First Columbia, based on any such waived claims or rights.
(d) EXECUTIVE ACKNOWLEDGES AND AGREES THAT THIS RELEASE IS A FULL AND FINAL
BAR TO ANY AND ALL CLAIMS(S) OF ANY TYPE THAT HE MAY NOW HAVE AGAINST CCFNB,
CCFNB BANK AND FIRST COLUMBIA TO THE EXTENT PROVIDED ABOVE BUT THAT IT DOES NOT
RELASE ANY CLAIMS THAT MAY ARISE AFTER THE DATE OF THIS RELEASE.
3. Acceptance Period.
The following notice is included in this Release as required by the
Older Workers Benefit Protection Act:
YOU HAVE UP TO TWENTY-ONE (21) DAYS FROM THE DATE OF RECEIPT OF THIS
RELEASE TO ACCEPT THE TERMS OF THIS RELEASE, ALTHOUGH YOU MAY ACCEPT IT AT
ANY TIME WITHIN THOSE TWENTY-ONE (21) DAYS. YOU ARE ADVISED TO CONSULT WITH
AN ATTORNEY REGARDING THIS RELEASE.
The twenty-one (21) day period will begin to run on the day after Executive
receives this Release. It will then run for a full twenty-one (21) calendar days
and expire at the end of the twenty-first day (the "Acceptance Period"). In
order to accept this Release, Executive must sign his name and date his
signature at the end of this letter and return it to ▇▇▇▇ ▇. ▇▇▇▇▇, Esquire,
Saidis, Flower & Lindsay, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, special
counsel to CCFNB and CCFNB Bank. If the twenty-first day of the Acceptance
Period falls on a Saturday, a Sunday, or a legal holiday, ▇▇. ▇▇▇▇▇ must receive
the acceptance by the close of business on the next business day immediately
following such Saturday, Sunday or legal holiday to effect a timely acceptance
of this Release.
44
4. Revocation Period. Executive has the right to revoke this Release at any
time within seven (7) days from the date Executive signs and delivers this
Release to ▇▇. ▇▇▇▇▇ (the "Revocation Period"), and this Release will not become
effective and enforceable until the Revocation Period has expired. (NOTE: The
Revocation Period will begin on the day after the day on which Executive has
signed this Release and delivered it to ▇▇. ▇▇▇▇▇ and, as indicated by the date
Executive affixes to his signature at the end of this Release. It will then run
for seven calendar days and expire at the end of the seventh day.) In order to
revoke this Release, Executive must notify ▇▇. ▇▇▇▇▇ in writing of his decision
to revoke the Release. Executive must ensure that CCFNB and CCFNB Bank (via ▇▇.
▇▇▇▇▇, at the address indicated in Paragraph 3 above) receives his written
notice of revocation at his office in Carlisle, Pennsylvania within the
aforementioned Revocation Period. If the seventh day of the Revocation Period
falls on a Saturday, a Sunday, or a legal holiday, ▇▇. ▇▇▇▇▇'▇ receipt of the
revocation by the close of business on the next business day immediately
following such Saturday, Sunday or legal holiday will be sufficient to effect a
timely revocation of this Release. Provided that the Revocation Period expires
without his having revoked this Release, this Release shall take effect on the
next day following the Revocation Period, and such next day shall constitute the
Effective Date hereof.
5. Severability. Should any provision(s) of this Release be determined, in
a proceeding to enforce or interpret this Release, to be invalid or
unenforceable, then, provided that the provision(s) deemed to be invalid or
unenforceable do not constitute all or substantially all of the undertakings by
Executive, CCFNB, CCNFB Bank, or First Columbia, as the case may be, the
remainder of this Release shall continue in full force and effect.
6. Notices. Unless otherwise provided in this Release, any notice required
or permitted to be given under this Release shall be deemed properly given if in
writing and if mailed by registered or certified mail, postage prepaid with
return receipt requested, to Executive's residence, in the case of notices to
Executive, and to the principal executive offices of CCFNB and CCFNB Bank, or
First Columbia, as the case may be, in the case of notices to CCFNB and CCFNB
Bank, or First Columbia, as the case may be.
7. Choice of Law. This Release shall be governed by, construed under and
enforced pursuant to the laws of the Commonwealth of Pennsylvania.
8. Binding on Successors and Assigns. This Release shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
successors and assigns.
9. Counterparts. This Release may be executed in multiple counterparts, and
shall be fully valid, legally binding and enforceable whether executed in a
single document or in such counterparts.
10. Termination. This Release shall terminate upon a termination of the
Plan in accordance with its terms.
[Signatures page follows]
45
IN WITNESS WHEREOF, the parties have executed this Release as of the date
first above written.
ATTEST: CCFNB BANCORP, INC.
By: Date: November 29, 2007
------------------------------------- ----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of the Board
COLUMBIA COUNTY FARMERS
NATIONAL BANK
By: Date: November 29, 2007
------------------------------------- ----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of the Board
FIRST COLUMBIA BANK & TRUST CO.
By: Date: November 29, 2007
------------------------------------- ----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Chairman of the Board
WITNESS: EXECUTIVE
By: Date: November 29, 2007
------------------------------------- ----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
46
SCHEDULE 5.16
AGREEMENT AND PLAN OF REORGANIZATION
dated as of November 29, 2007
between
CCFNB BANCORP, INC.
and
COLUMBIA FINANCIAL CORPORATION
1. At the Effective Time, the following directors shall be appointed to the
CCFNB Board of Directors as set forth below:
Class 1 Director whose term expires in 2011:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Class 2 Director whose term expires in 2009:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Class 3 Director whose term expires in 2010:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
2. At the Effective Time, the following persons shall be appointed as
officers of CCFNB, conditioned upon their prior execution of the respective
employment agreements substantially set forth at the delineated Annex:
Name Position(s) Annex
---- ----------- -----
▇▇▇▇▇ ▇. ▇▇▇▇▇ President and Chief Executive Officer F
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Chief Operating Officer G
▇▇▇▇▇▇▇ ▇. Alters Chief Financial Officer H
3. After the Effective Time, CCFNB Board of Directors shall appoint ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇ as Chairman of the Board of Directors and will cause the Board of
Directors of the Surviving Bank to the Bank Merger to appoint ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
as its Chairman of the Board.
47
4. After the Effective Time, CCFNB Board of Directors will amend its bylaws
at Section 204 to exempt ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, a current member of the Board of
Directors of CFC, from the mandatory retirement age of 72 years.
5. After the Effective Time, CCFNB Board of Directors shall adopt a stock
option plan for submission to its stockholders for approval at the first annual
meeting of CCFNB stockholders after the Effective Time.
6. Subject to applicable regulatory restrictions relating to the payment of
dividends, the CCFNB Board of Directors shall approve a change in CCFNB's
dividend payout policy to increase the quarterly cash dividend from $0.21 per
share of CCFNB Common Stock to $0.23, to be effective with respect to the first
quarterly cash dividend having a record date occurring after the Effective Time.
7. CCFNB shall cause each of ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇ to enter into a form of acknowledgment and waiver under certain
Supplemental Executive Retirement Plan Agreements between these named
individuals and Columbia County Farmers National Bank substantially as set forth
in the following form:
a. For ▇▇▇▇▇ ▇. ▇▇▇▇▇:
Acknowledgement and Waiver of Certain Rights
under and for the
Supplemental Executive Retirement Plan Agreement
by and between
Columbia County Farmers National Bank ("CCFNB Bank")
and ▇▇▇▇▇ ▇. ▇▇▇▇▇
dated as of April 15, 2003, as amended on May 2, 2003,
as further amended on March 30, 2006 (the "SERP")
This Acknowledgement and Waiver is dated as of November 29, 2007,
and is made in order to clarify the intent of the parties to the SERP
that the contemplated merger of Columbia Financial Corporation with
and into CCFNB Bancorp, Inc. under the Agreement and Plan of
Organization dated November 29, 2007 (the "Plan") and the related
merger of Columbia County Farmers National Bank with and into First
Columbia Bank & Trust Co. (the "Bank Merger") shall not be deemed to
constitute a "change of control" as that term is defined under the
SERP (together the "Merger of Equals Transactions").
▇▇▇▇▇ ▇. ▇▇▇▇▇, intending to be legally bound hereby,
acknowledges that the Merger of Equals Transactions is a transaction
that was not contemplated by him and CCFNB Bank as to be the type of
business combination that should be considered a Change of Control as
that term is defined under the SERP and, therefore, waives any and all
rights he may have to claim the Change of Control Benefit of Section
2.3 of the SERP on and after the Effective Times of the Plan and the
Bank Merger pursuant to the Merger of Equals Transaction.
Furthermore, CCFNB Bancorp Inc., and First Columbia Bank & Trust
Co., intending to be legally bound hereby, agree that
48
they shall be the surviving companies to the Plan and Bank Merger,
respectively, and will fully honor, enforce and observe the terms and
provisions of the SERP after the Effective Times of the Plan and Bank
Merger.
First Columbia Bank & Trust Co. Columbia County
Farmers National Bank
------------------------------------- ------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of the Board Chairman of the Board
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
b. For ▇▇▇▇▇ ▇. ▇▇▇▇▇▇:
Acknowledgement and Waiver of Certain Rights
under and for the
Supplemental Executive Retirement Plan Agreement
by and between
Columbia County Farmers National Bank ("CCFNB Bank")
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
dated as of April 1, 2003, as amended on May 2, 2003,
as further amended on March 30, 2006 (the "SERP")
This Acknowledgement and Waiver is dated as of November 29, 2007,
and is made in order to clarify the intent of the parties to the SERP
that the contemplated merger of Columbia Financial Corporation with
and into CCFNB Bancorp, Inc. under the Agreement and Plan of
Organization dated November 29, 2007 (the "Plan") and the related
merger of Columbia County Farmers National Bank with and into First
Columbia Bank & Trust Co. (the "Bank Merger") shall not be deemed to
constitute a "change of control" as that term is defined under the
SERP (together the "Merger of Equals Transactions").
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, intending to be legally bound hereby,
acknowledges that the Merger of Equals Transactions is a transaction
that was not contemplated by him and CCFNB Bank as to be the type of
business combination that should be considered a Change of Control as
that term is defined under the SERP and, therefore, waives any and all
rights he may have to claim the Change of Control Benefit of Section
2.3 of the SERP on and after the Effective Times of the Plan and the
Bank Merger pursuant to the Merger of Equals Transaction.
49
Furthermore, CCFNB Bancorp Inc., and First Columbia Bank & Trust
Co., intending to be legally bound hereby, agree that they shall be
the surviving companies to the Plan and Bank Merger, respectively, and
will fully honor, enforce and observe the terms and provisions of the
SERP after the Effective Times of the Plan and Bank Merger.
First Columbia Bank & Trust Co. Columbia County
Farmers National Bank
------------------------------------- ----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of the Board Chairman of the Board
----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
c. For ▇▇▇▇▇ ▇▇▇▇▇:
Acknowledgement and Waiver of Certain Rights
under and for the
Supplemental Executive Retirement Plan Agreement
by and between
Columbia County Farmers National Bank ("CCFNB Bank")
and ▇▇▇▇▇ ▇▇▇▇▇
dated as of April 15, 2003, as amended on March 30, 2006, (the
"SERP")
This Acknowledgement and Waiver is dated as of November 29, 2007,
and is made in order to clarify the intent of the parties to the SERP
that the contemplated merger of Columbia Financial Corporation with
and into CCFNB Bancorp, Inc. under the Agreement and Plan of
Organization dated November 29, 2007 (the "Plan") and the related
merger of Columbia County Farmers National Bank with and into First
Columbia Bank & Trust Co. (the "Bank Merger") shall not be deemed to
constitute a "change of control" as that term is defined under the
SERP (together the "Merger of Equals Transactions").
▇▇▇▇▇ ▇▇▇▇▇, intending to be legally bound hereby, acknowledges
that the Merger of Equals Transactions is a transaction that was not
contemplated by him and CCFNB Bank as to be the type of business
combination that should be considered a Change of Control as that term
is defined under the SERP and,
50
therefore, waives any and all rights he may have to claim the Change
of Control Benefit of Section 2.3 of the SERP on and after the
Effective Times of the Plan and the Bank Merger pursuant to the Merger
of Equals Transaction.
Furthermore, CCFNB Bancorp Inc., and First Columbia Bank & Trust
Co., intending to be legally bound hereby, agree that they shall be
the surviving companies to the Plan and Bank Merger, respectively, and
will fully honor, enforce and observe the terms and provisions of the
SERP after the Effective Times of the Plan and Bank Merger.
First Columbia Bank & Trust Co. Columbia County
Farmers National Bank
------------------------------------- ----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of the Board Chairman of the Board
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
51
SCHEDULE 6.2(C)
AGREEMENT AND PLAN OF REORGANIZATION
dated as of November 29, 2007
between
CCFNB BANCORP, INC.
and
COLUMBIA FINANCIAL CORPORATION
FORM OF OPINION OF CFC COUNSEL
CCFNB shall have received from counsel to CFC an opinion, dated as of the
Closing Date, substantially to the effect that, subject to customary exceptions
and qualifications:
1. CFC has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the Commonwealth of Pennsylvania.
2. CFC has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Proxy Statement.
3. First Columbia Bank & Trust Co. is a validly existing Pennsylvania bank
and trust company organized and in good standing under the laws of the
Commonwealth of Pennsylvania, and is duly authorized to own, lease and operate
its properties and to conduct its business as described in the Proxy Statement.
The deposits of First Columbia Bank & Trust Co. are insured by the Federal
Deposit Insurance Corporation in accordance with the Federal Deposit Insurance
Act.
4. Each of CFC and First Columbia Bank & Trust Co. has full corporate power
to carry out the transactions contemplated in the Plan and the Bank Plan of
Merger, respectively. The execution and delivery of the Plan and the Bank Plan
of Merger and the consummation of the transactions contemplated thereunder have
been duly and validly authorized by all necessary corporate action on the part
of CFC and First Columbia Bank & Trust Co., as the case may be, and the Plan and
the Bank Plan of Merger constitute valid and legally binding obligations, in
accordance with their respective terms, of CFC and First Columbia Bank & Trust
Co., respectively, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium, receivership, conversatorship, and other laws
affecting creditors' rights generally and institutions the deposits of which are
insured by the FDIC, and as may be limited by the exercise of judicial
discretion in applying principles of equity.
5. To our knowledge, all authorizations and approvals required to be
received from the federal and state banking and holding company regulators for
CFC in order for CFC to consummate the transactions contemplated by the Plan
have been received and to our knowledge no action has been taken, or is pending
or threatened, to revoke any such authorization or approval.
6. Subject to satisfaction of the conditions set forth in the Plan, neither
the transactions contemplated in the Plan and the Bank Plan of Merger, nor
compliance by CFC or First Columbia
52
Bank & Trust Co. with any of the respective provisions thereof, will (i)
conflict with or result in a breach or default under (A) the articles of
association or bylaws of CFC or First Columbia Bank & Trust Co., or (B) based
solely on certificates of officers and without independent verification, to the
knowledge of such counsel, any note, bond, mortgage, indenture, license,
agreement or other instrument or obligation to which CFC or First Columbia Bank
& Trust Co. is a party; or (ii) based solely on certificates of officers, to the
knowledge of such counsel, result in the creation or imposition of any material
lien, instrument or encumbrance upon the property of CFC or First Columbia Bank
& Trust Co., except such material lien, instrument or obligation that has been
disclosed to CCFNB pursuant to the Plan, or (iii) violate in any material
respect any order, writ, injunction, or decree known to such counsel, or the
Pennsylvania Banking Code of 1965, the Bank Merger Act, the Bank Holding Company
Act and the regulations promulgated under such Acts, or any other federal or
state statute, rule or regulation applicable to CFC or First Columbia Bank &
Trust Co. which, in the experience of such counsel, is typically applicable to
transactions of the type contemplated by the Plan.
53
SCHEDULE 6.3(C)
AGREEMENT AND PLAN OF REORGANIZATION
dated as of November 29, 2007
between
CCFNB BANCORP, INC.
and
COLUMBIA FINANCIAL CORPORATION
FORM OF OPINION OF CCFNB COUNSEL
CFC shall have received from counsel to CCFNB an opinion, dated as of the
Closing Date, substantially to the effect that, subject to customary exceptions
and qualifications:
1. CCFNB has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the Commonwealth of Pennsylvania.
2. CCFNB has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Proxy Statement.
3. Columbia County Farmers National Bank is a validly existing national
bank and trust company organized and in good standing under the laws of the
United States of America, and is duly authorized to own, lease and operate its
properties and to conduct its business as described in the Proxy Statement. The
deposits of Columbia County Farmers National Bank are insured by the Federal
Deposit Insurance Corporation in accordance with the Federal Deposit Insurance
Act.
4. The shares of common stock of CCFNB being issued to the shareholders of
CFC upon the consummation of the Merger are duly authorized, validly issued,
fully paid and non-assessable.
5. Each of CCFNB and Columbia County Farmers National Bank has full
corporate power to carry out the transactions contemplated in the Plan and the
Bank Plan of Merger, respectively. The execution and delivery of the Plan and
the Bank Plan of Merger and the consummation of the transactions contemplated
thereunder have been duly and validly authorized by all necessary corporate
action on the part of CCFNB and Columbia County Farmers National Bank, as the
case may be, and the Plan and the Bank Plan of Merger constitute valid and
legally binding obligations, in accordance with their respective terms, of CCFNB
and Columbia County Farmers National Bank, respectively, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium, receivership,
conversatorship, and other laws affecting creditors' rights generally and
institutions the deposits of which are insured by the FDIC, and as may be
limited by the exercise of judicial discretion in applying principles of equity.
6. To our knowledge, all authorizations and approvals required to be
received from the federal and state banking and holding company regulators for
CCFNB in order for CCFNB to consummate the transactions contemplated by the Plan
have been received and to our knowledge no action has been taken, or is pending
or threatened, to revoke any such authorization or approval.
54
7. Based upon advice received from the Securities and Exchange Commission,
the registration statement for the issuance of the common stock of CCFNB to the
shareholders of CFC is effective under the Securities Act and no stop order
suspending the effectiveness has been issued under the Securities Act or
proceedings therefore initiated by the Securities and Exchange Commission or, to
our knowledge, any state securities commissions or administrators.
8. Subject to satisfaction of the conditions set forth in the Plan, neither
the transactions contemplated in the Plan and the Bank Plan of Merger, nor
compliance by CCFNB or Columbia County Farmers National Bank with any of the
respective provisions thereof, will (i) conflict with or result in a breach or
default under (A) the articles of association or bylaws of CCFNB or Columbia
County Farmers National Bank, or (B) based solely on certificates of officers
and without independent verification, to the knowledge of such counsel, any
note, bond, mortgage, indenture, license, agreement or other instrument or
obligation to which CCFNB or Columbia County Farmers National Bank is a party;
or (ii) based solely on certificates of officers, to the knowledge of such
counsel, result in the creation or imposition of any material lien, instrument
or encumbrance upon the property of CCFNB or Columbia County Farmers National
Bank, except such material lien, instrument or obligation that has been
disclosed to CFC pursuant to the Plan, or (iii) violate in any material respect
any order, writ, injunction, or decree known to such counsel, or the National
Bank Act, the Bank Merger Act, the Bank Holding Company Act and the regulations
promulgated under such Acts, or any other federal or state statute, rule or
regulation applicable to CCFNB or Columbia County Farmers National Bank which,
in the experience of such counsel, is typically applicable to transactions of
the type contemplated by the Plan.
55
ANNEX A
PLAN OF MERGER
dated as of November 29, 2007
between
COLUMBIA COUNTY FARMERS NATIONAL BANK
and
FIRST COLUMBIA BANK & TRUST CO.
This Plan of Merger made as of this 29th day of November, 2007, between
Columbia County Farmers National Bank, a national banking association ("CCFNB
Bank") and First Columbia Bank & Trust Co., a Pennsylvania banking institution
("First Columbia") (the two parties sometimes collectively referred to as the
"Constituent Banks").
WHEREAS, CCFNB Bancorp, Inc., a Pennsylvania business corporation, of which
CCFNB Bank is a wholly-owned subsidiary, and Columbia Financial Corporation, a
Pennsylvania business corporation, of which First Columbia is a wholly-owned
subsidiary, have entered into an Agreement and Plan of Merger of even date
herewith ("Plan of Reorganization"), providing, among other things, for the
execution of this Plan of Merger and the merger (the "Bank Merger") of CCFNB
Bank and First Columbia, in accordance with the terms and conditions hereinafter
set forth.
NOW, THEREFORE, the Constituent Banks, intending to be legally bound
hereby, agree to effect the Bank Merger in accordance with the terms and
conditions hereinafter set forth.
SECTION 1. GENERAL.
1.1 The Merger. On the Effective Date, as hereinafter defined , CCFNB Bank
shall be merged with and into First Columbia under the provisions of the
Pennsylvania Banking Code of 1965, as amended (the "Banking Code"); the separate
existence of CCFNB Bank shall cease; and First Columbia shall be the surviving
bank (the "Surviving Bank"), in accordance with this Plan of Merger. The
Effective Date shall be the date of the filing of the Articles of Merger with
the Pennsylvania Department of State or the date as specified in such articles
as the effective date of the Bank Merger, as the case may be.
1.2. Name. The name of the Surviving Bank shall be "First Columbia Bank &
Trust Co." and the location of its principal office shall be ▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
1.3 Articles of Incorporation. At the Effective Date, the Articles of
Incorporation of First Columbia, as in effect immediately prior to the Effective
Date, shall be the Articles of Incorporation of the Surviving Bank.
56
1.4 By-laws. At the Effective Date, the By-laws of First Columbia, as in
effect immediately prior to the Effective Date, shall be the By-laws of the
Surviving Bank.
1.5 Effect of Bank Merger. On the Effective Date, the Surviving Bank shall
succeed, without further act or deed to all of the property, rights, powers,
duties and obligations of the Constituent Banks in accordance with the Banking
Code. Any claim existing or action pending by or against the Constituent Banks
may be prosecuted to judgment as if the Bank Merger had not taken place, and the
Surviving Bank may be substituted in its place.
1.6 Continuation in Business. The Surviving Bank shall continue in business
with the assets and liabilities of each of the Constituent Banks. The Surviving
Bank shall be a banking institution organized and having perpetual existence
under the laws of the Commonwealth of Pennsylvania. Any branch offices of the
Surviving Bank shall consist of CCFNB Bank's and First Columbia's present branch
offices and any other branch office or offices that the Constituent Banks may be
authorized to have as of the Effective Date.
1.7. Directors. The Boards of Directors of the Constituent Banks
immediately prior to the consummation of the Bank Merger shall serve as the
Board of Directors of the Surviving Bank from and after the Effective Date and
until such time as their successors have been elected. The following directors
of CCFNB Bank shall be appointed as directors of the Surviving Bank:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
W. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇.
1.8 Officers. Except as set forth below, the persons who are officers of
the Constituent Banks immediately prior to the consummation of the Bank Merger
shall serve as the officers of the Surviving Bank from and after the Effective
Date and until such time as the Board of Directors of the Surviving Bank shall
otherwise determine. Subject to the execution of their respective employment
agreements, the following persons shall be the executive officers of the
Surviving Bank from and after the Effective Date and until such time as the
Board of Directors of the Surviving Bank shall otherwise determine:
▇▇▇▇▇ ▇. ▇▇▇▇▇ - President and Chief Executive Officer
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ - Chief Operating Officer
▇▇▇▇▇▇▇ ▇. Alters - Chief Financial Officer
▇▇▇▇ ▇. Page - Chief Lending Officer
1.9 Employees. On the Effective Date, all persons who are employees of
CCFNB Bank and First Columbia shall become employees of the Surviving Bank.
Notwithstanding the foregoing, the Board of Directors of the Surviving Bank
shall have the right and responsibility to reorganize the workforce at the
Surviving Bank and therefore make such changes in titles, reporting
responsibilities and places of work as it deems necessary to establish an
efficient operation.
SECTION 2. CONVERSION OF SHARES.
57
The manner and basis of converting shares of Common Stock of the
Constituent Banks Shall be as follows:
2.1 Stock of First Columbia. The shares of Common Stock of First Columbia,
no par value, issued and outstanding immediately prior to the Effective Date
shall continue to be issued and outstanding shares of the Surviving Bank. From
and after the Effective Date, each certificate that, prior to the Effective
Date, represented shares of First Columbia shall evidence ownership of shares of
the Surviving Bank on the basis hereinbefore set forth.
2.2 Stock of CCFNB Bank. Each share of Common Stock, par value $1.25 per
share, of CCFNB Bank issued and outstanding immediately prior to the Effective
Date shall, on the Effective Date, by virtue of the Bank Merger and without any
action on the part of the holder thereof, be cancelled and have no further
effect.
2.3 Treasury Stock. Each share of Common Stock, par value $1.25 per share,
of CCFNB Bank held as a treasury share immediately prior to the Effective Date,
if any, shall thereupon and without notice be canceled.
2.4 Dissenter' Rights. Shareholders of the Constituent Banks shall be
entitled to exercise the rights, if any, provided in Subchapter D of Chapter 15
of the Pennsylvania Business Corporation Law of 1988 with respect to this Plan
of Merger.
SECTION 3. MISCELLANEOUS.
3.1 Conditions. The obligations of CCFNB Bank and First Columbia to effect
the Bank Merger shall be subject to all of the terms and conditions contained in
the Plan of Reorganization.
3.2. Termination and Agreement. This Plan of Merger may be terminated or
amended prior to the Effective Date in the manner and upon the conditions set
forth in the Plan of Reorganization. If the Plan of Reorganization is terminated
pursuant to the terms thereof, this Plan of Merger shall terminate
simultaneously, and the Bank Merger shall be abandoned without further action of
the parties hereto.
[signature page follows]
58
IN WITNESS WHEREOF, this Plan of Merger has been executed on the day and
year first above mentioned.
Attest: COLUMBIA COUNTY FARMERS
NATIONAL BANK
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------- ------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇, President and Chief
Executive Officer
Attest: FIRST COLUMBIA BANK & TRUST CO.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------- ------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chairman of the
Board
59
ANNEX B
AFFILIATE AGREEMENT
__________, 2007
CCFNB Bancorp, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I have been advised that I may be deemed an "affiliate" of Columbia
Financial Corporation, a Pennsylvania business corporation ("CFC") as an
"affiliate" is defined in Rule 144 and used in Rule 145 promulgated by the
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "Securities Act"). I understand that pursuant to the terms of
the Agreement and Plan of Reorganization, dated as of November 29, 2007 (the
"Plan"), between CCFNB Bancorp, Inc., a Pennsylvania business corporation
("CCFNB") and CFC, CFC plans to merge with and into CCFNB (the "Merger").
I further understand that as a result of the Merger, I will be entitled to
receive shares of common stock, par value $1.25 per share, of CCFNB ("CCFNB
Common Stock") in exchange for shares of common stock, no par value, of CFC
("CFC Common Stock").
I have carefully read this letter and reviewed the Plan, discussed its
requirements and other applicable limitations upon my ability to sell, transfer
or otherwise dispose of CCFNB Common Stock, to the extent I felt necessary, with
my counsel or counsel for CFC.
I represent, warrant and covenant with and to CCFNB with respect to the
shares of CCFNB Common Stock I receive as a result of the Merger:
I shall not make any sale, transfer or other disposition of such shares of
CCFNB Common Stock unless (i) such sale, transfer or other disposition has been
registered under the Securities Act; (ii) such sale, transfer or other
disposition is made in conformity with the provisions of Rule 145 under the
Securities Act; or (iii) in the opinion of counsel in form and substance
reasonably satisfactory to CCFNB or under a "no-action" letter obtained by me
from the staff of the SEC, such sale, transfer or other disposition will not
violate the registration requirements of, or is otherwise exempt from
registration under, the Securities Act.
I understand that CCFNB is under no obligation to register the sale,
transfer or other disposition of shares of CCFNB Common Stock by me or on my
behalf under the Securities Act or to take any other action necessary in order
to make compliance with an exemption from such registration available.
I understand that stop transfer instructions will be given to CCFNB's
transfer agent with respect to shares of CCFNB Common Stock issued to me as a
result of the Merger and that there will be placed on the certificates for such
shares, or any substitutions therefor, a legend stating in substance:
"The shares represented by this certificate were issued as a result of
the merger of Columbia Financial Corporation with and into CCFNB
Bancorp, Inc. on ______________________, 2008 in a transaction to
which Rule 145 promulgated under the Securities Act of 1933 applies.
The shares represented
60
by this certificate may be transferred only in accordance with the
terms of a letter agreement between the registered holder hereof and
CCFNB Bancorp, Inc., a copy of which agreement is on file at the
principal offices of CCFNB Bancorp, Inc."
I understand that, unless transfer by me of the CCFNB Common Stock issued
to me as a result of the Merger has been registered under the Securities Act or
such transfer is made in conformity with the provisions of Rule 145(d) under the
Securities Act, CCFNB reserves the right, in its sole discretion, to place the
following legend on the certificates issued to my transferee:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933 and were acquired from [SHAREHOLDER]
who, in turn, received such shares as a result of the merger of
Columbia Financial Corporation with and into CCFNB Bancorp, Inc. on
_________, 2008 in a transaction to which Rule 145 under the
Securities Act of 1933 applies. The shares have been acquired by the
holder not with a view to, or for resale in connection with, any
distribution thereof within the meaning of the Securities Act of 1933
and may not be offered, sold, pledged or otherwise transferred except
in accordance with an exemption from the registration requirements of
the Securities Act of 1933."
It is understood and agreed that the legends set forth above shall be
removed by delivery of substitute certificates without such legends if I shall
have delivered to CCFNB (i) a copy of a "no action" letter from the staff of the
SEC, or an opinion of counsel in form and substance reasonably satisfactory to
CCFNB, to the effect that such legend is not required for purposes of the
Securities Act, or (ii) evidence or representations satisfactory to CCFNB that
the CCFNB Common Stock represented by such certificates is being or has been
sold in conformity with the provisions of Rule 145(d).
I further understand and agree that the provisions of Rule 145 shall apply
to all shares of CCFNB Common Stock that (i) my spouse, (ii) any relative of
mine or my spouse occupying my home, (iii) any trust or estate in which I, my
spouse or any such relative owns at least a 10% beneficial interest or of which
any of us serves as trustee, executor or in any similar capacity and (iv) any
corporation or other organization in which I, my spouse or any such relative
owns at least 10% of any class of equity securities or of the equity interest.
By acceptance hereof, CCFNB agrees that, so long as it is obligated to file
reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended, it will use its reasonable best efforts to timely file such reports
so that the public information requirements of Rule 144(c) promulgated under the
Securities Act are satisfied and the resale provisions of Rule 145(d)(1) and (2)
are therefor available to me in the event I desire to transfer any CCFNB Common
Stock issued to me in the Merger.
It is understood and agreed that this letter shall terminate and be of no
further force and effect if the Plan is terminated in accordance with its terms.
Execution of this letter should not be construed as an admission on my part
that I am an "affiliate" of CFC as described in the first paragraph of this
letter or as a waiver of any rights I might have to object to any claim that I
am such an affiliate on or after the date of this letter.
61
Very truly yours,
----------------------------------------
Name:
Acknowledged this __________ day of __________, 2007.
CCFNB BANCORP, INC.
By:
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President and
Chief Executive Officer
62
ANNEX C
VOTING AGREEMENT
____________, 2007
CCFNB Bancorp, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
CCFNB Bancorp, Inc. (CCFNB) and Columbia Financial Corporation have entered
into an Agreement and Plan of Reorganization dated as of November 29, 2007 (the
"Plan") whereby CFC will merge with and into CCFNB (the "Reorganization"). CFC's
shareholders will receive shares of CCFNB, or in the case of fractional shares,
cash. All defined terms used but not defined herein shall have the meanings
ascribed thereto in the Plan.
A condition to CCFNB's obligations under the Plan is that I execute and
deliver this Letter Agreement to CCFNB.
Intending to be legally bound hereby, I irrevocably agree and represent as
follows:
(a) I agree to vote or cause to be voted for approval and adoption of
the Plan and the transactions contemplated thereby at the CFC shareholder
meeting all shares of CFC common stock over which I have or share voting power,
individually or, to the extent of my proportionate interest, jointly with other
persons, and will use my reasonable best efforts to cause any shares of CFC
common stock over which I share voting power to be voted for approval and
adoption of the Plan and the transactions contemplated thereby. Beneficial
ownership shall have the meaning assigned to it under the Securities Exchange
Act of 1934. I agree to vote all shares for which I am a Trustee of a voting
trust for approval and adoption of the Plan and the transactions contemplated
thereby.
(b) I agree not to offer, sell, transfer or otherwise dispose of, or
to permit the offer, sale, transfer or other disposition of, any shares of CFC
common stock over which I have sole or shared voting power and beneficial
ownership, except to the extent that I may be permitted under law to make
charitable gifts or as permitted by paragraph (g) hereof.
(c) I have sole or shared beneficial ownership over the number of
shares of CFC common stock, and hold stock options for the number of shares of
CFC common stock, if any, set forth below opposite my name.
(d) I agree that CFC shall not be bound by any attempted sale of any
shares of CFC common stock over which I have sole voting power, and CFC's
transfer agent shall be given appropriate stop transfer orders and shall not be
required to register any such attempted sale, unless the sale has been effected
in compliance with the terms of this Letter Agreement.
(e) I agree that, I shall not exercise any options to purchase CFC
common stock after the date hereof.
(f) I represent that I have the capacity to enter into this Letter
Agreement and that it is a valid and binding obligation enforceable against me
in accordance with its terms, subject to bankruptcy, insolvency and other laws
affecting creditors' rights and general equitable principles.
63
(g) I may transfer any or all of the shares of CFC common stock over
which I have sole or shared beneficial ownership to my spouse, ancestors or
descendants; provided, however, that in any such case, prior to and as a
condition to the effectiveness of such transfer, each person to which any of
such shares or any interest in any of such shares is or may be transferred shall
have executed and delivered to CCFNB an agreement to be bound by the terms of
this Letter Agreement. In addition, I may sell, transfer or assign shares of CFC
common stock to the extent and on behalf of trusts or estates of which I am not
a beneficiary in order to comply with fiduciary obligations or legal
requirements, except for shares held in a voting trust.
I am signing this Letter Agreement solely in my capacity as a shareholder
or other beneficial owner of shares of CFC and not in any other capacity, such
as a director or officer of CFC or as a fiduciary of any trusts in which I am
not a beneficiary, except for voting trusts. Notwithstanding anything herein to
the contrary: (a) I make no agreement or understanding herein in any capacity
other than in my capacity as a beneficial owner of CFC common stock and (b)
nothing herein shall be construed to limit or affect any action or inaction by
me or any of my representatives, as applicable, serving on CFC's Board of
Directors or as an officer of CFC, acting in my capacity as a director, officer
or fiduciary of CFC or as fiduciary of any trust of which I am not a
beneficiary, except for voting trusts.
This Letter Agreement shall be effective upon acceptance by CCFNB.
This Letter Agreement shall terminate and be of no further force and effect
concurrently with, and automatically upon, the earlier to occur of (a) the
consummation of the Merger, and (b) any termination of the Plan in accordance
with its terms, except that any such termination pursuant to this clause (b)
shall be without prejudice to CCFNB's rights arising out of my willful breach of
any covenant or representation contained herein occurring prior to such
termination.
Very truly yours,
----------------------------------------
[Name]
Number of Shares, and Shares Subject to Stock Options, Held:
Shares:
[____________________ shares held individually]
Options:
64
Acknowledged and Agreed:
COLUMBIA FINANCIAL CORPORATION
By:
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Chairman of the Board
CCFNB BANCORP, INC
By:
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief Executive
Officer
65
ANNEX D
NON-SOLICITATION AGREEMENT
This Non-Solicitation Agreement (this "Agreement") is entered into as of
this ____ day of ___________, 2007, by and between CCFNB Bancorp, Inc. ("CCFNB")
and undersigned director (the "Director").
WHEREAS, CCFNB contemplates the consummation of a merger (the "Merger")
pursuant to an Agreement and Plan of Reorganization dated as of November 29,
2007 by and between CCFNB and Columbia Financial Corporation ("CFC"), (the
"Plan"); and
WHEREAS, the Director is a well respected business person in the local
business community and counties contiguous thereto and acknowledges that his or
her position with CCFNB or CFC, as the case may be, gives CCFNB or CFC
significant presence in that community and is an important factor in the ability
of CCFNB or CFC to attract customers; and
WHEREAS, as a condition to CCFNB's willingness to enter into the Plan,
CCFNB wants to protect the community relationships of CCFNB or CFC by requiring
that the Director execute this Agreement;
NOW, THEREFOR, in consideration of the premises and covenants contained in
this Agreement and intending to be legally bound hereby, the parties agree as
follows:
1. Term.
This Agreement will commence on the date of consummation of the Merger and
end on the second anniversary of such date (the "Term").
2. Non-Competition.
(a) For purposes of this Agreement, the term "Competitive Enterprise" means
any bank holding company or insured depository institution, including an
institution in the organizational stage or in the process of applying for
or receiving appropriate regulatory approval, including, without
limitation, any federal or state chartered bank, savings bank or savings
and loan association.
(b) During the Term, the Director shall not:
(i) accept a position as director or employee of any Competitive
Enterprise that is located in Columbia County and counties contiguous
thereto during the Term.
(ii) directly or indirectly acquire an ownership interest in a
Competitive Enterprise that enables the Director to, directly or
indirectly, in a substantial manner, control, direct, influence,
affect for impact the operations, services or business activities of
the Competitive Enterprise in Columbia County and counties contiguous
thereto during the Term, provided, however, that this restriction
shall not apply to the direct or indirect beneficial ownership of up
to Three Percent (3%) of a class of securities of a Competitive
Enterprise, so long as the Director is not a director or officer of
such Competitive Enterprise.
3. Non-Solicitation.
66
During the Term, the Director shall not:
(a) Directly or indirectly, for the purpose of selling any product or
service that competes with a product or service offered by CCFNB and CFC or
their present subsidiaries or affiliates, solicit, divert, or entice any
customer of CCFNB and CFC or their respective subsidiaries to transfer such
business to a Competitive Enterprise. Provided, however, that any business
activity or business pursuit that is currently undertaken or provided by a
director or his or her controlled entities or affiliates shall not be
deemed a Competitive Enterprise or a violation of this Agreement. In
addition, this Agreement shall not prohibit a director or his or her
controlled entities or affiliates from providing any service or product
that he or she or his or her controlled entities or affiliates has provided
prior to the date hereof or that may be provided in the future as part of
the Director's or his or her controlled entities' or affiliates' historical
business pursuits.
(b) Employ or assist in employing any present employee of CCFNB and CFC or
their subsidiaries to perform services for any Competitive Enterprise.
4. Confidentiality.
(a) For purposes of this Agreement, "Proprietary Information" shall mean
any information relating to the business of CCFNB and CFC or any of its
present subsidiaries that has not previously been publicly released by
CCFNB and CFC or their representatives, and shall include, but shall not be
limited to, information encompassed in all marketing and business plans,
financial information, fees, pricing information, customer and client lists
and relationships between CCFNB and CFC and their customers and clients and
others who have business dealings with CCFNB and CFC.
(b) The Director agrees to maintain the confidentiality of all Proprietary
Information that has been disclosed to the Director in the course of
his/her service as a director of CCFNB or CFC, as the case may be, on or
before the date of consummation of the Merger. The Director shall not,
without written authorization from CCFNB, use for the Director's benefit or
purposes, nor disclose to others, at any time during the Term, any
Proprietary Information. This prohibition shall not apply after the
Proprietary Information has been voluntarily disclosed to the public,
independently developed and disclosed by others, or otherwise enters the
public domain through lawful means.
5. Remedies.
In addition to any other rights and remedies CCFNB may have if the Director
violates this Agreement, the Director agrees that a breach or threatened breach
by the Director of his or her covenants set out in Sections 2 and 3 of this
Agreement is likely to cause CFC and CCFNB as CFC's successor irreparable injury
and damage, and the Director hereby expressly agrees that CCFNB as CFC's
successor shall be entitled to the remedies of injunction, specific performance
and other equitable relief to prevent a breach or threatened breach of Sections
2 and 3 of this Agreement by the Director. This provision shall not, however, be
construed as a waiver of any of the remedies which CCFNB may have for damages or
otherwise.
6. Successors, Assigns, Etc.
This Agreement shall be binding upon, and shall inure to the benefit of,
CCFNB and its successors and assigns.
67
7. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania, without giving effect to its conflicts
of laws principles.
8. Termination.
This Agreement shall terminate and be of no further force or effect
concurrently with and automatically upon the termination of the Plan in
accordance with its terms.
IN WITNESS WHEREOF, CCFNB and the Director hereto have executed this
Agreement to be effective as of the date of consummation of the Merger.
CCFNB BANCORP, INC
By:
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief Executive Officer
DIRECTOR
-----------------------------------------
Name:
------------------------------------
▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ FINANCIAL CORPORATION
STOCK OPTION CANCELLATION AND STANDSTILL AGREEMENT
In connection with the Agreement and Plan of Reorganization, dated as of
November 29, 2007 (the "Plan"), between CCFNB Bancorp, Inc. ("CCFNB") and
Columbia Financial Corporation ("CFC"), under which CFC will merge with and into
CCFNB and pursuant to Section 5.10 of the Plan by which Option Consideration
will be paid, I hereby agree that upon receipt by me of Option Consideration as
provided in Section 5.10 of the Plan (minus any applicable withholding taxes),
for the number of CFC Options I hold at the Effective Time, any and all CFC
Options between CFC and me shall be cancelled, terminated, and of no further
force or effect as of the Effective Time.
Further, I hereby agree that upon receipt of the Option Consideration that
I shall have no right, and hereby expressly waive any rights, to CFC Common
Stock, CCFNB Common Stock, the Signing Exchange Ratio or the Per Share Stock
Consideration as defined in the Plan with respect to the CFC Options between CFC
and me.
I also agree not to exercise any CFC Options or any other rights to
purchase CFC Common Stock that I have, hold, own, acquire, control, or may have
beneficial or legal ownership of or rights over, from date of this Agreement
until the earlier of the termination of the Plan or the day before the
expiration date of such CFC Option in accordance with its terms and as it may be
amended.
The terms of this Agreement shall have the definitions and meanings as
provided in the Plan.
IN WITNESS WHEREOF, in consideration of the parties entering into the Plan,
and intending to be legally bound hereby I have executed this Agreement this
____ day of ___________, 2007.
----------------------------------------
Name
Acknowledged and Agreed:
COLUMBIA FINANCIAL CORPORATION
By:
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Chairman of the Board
CCFNB BANCORP, INC
By:
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief Executive
Officer
69
ANNEX F
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT, (this "Agreement"), is made this 29th
day of November, 2007 among First Columbia Bank & Trust Co., a Pennsylvania
banking institution, (the "Bank"), CCFNB BANCORP, INC., a Pennsylvania business
corporation (the "Corporation"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇, an adult individual (the
"Executive"). The Bank and the Corporation are sometimes hereinafter referred to
collectively as the "Employers".
WHEREAS, the Corporation and Columbia Financial Corporation, a Pennsylvania
business corporation, the parent company of the Bank, ("CFC"), have entered into
an Agreement and Plan of Reorganization, dated as of November 29, 2007 (the
"Plan"), whereby CFC will be merged with and into the Corporation with the
Corporation being the surviving company to this merger (the "Company Merger");
WHEREAS, Columbia County Farmers National Bank, ("CCFNB Bank"), a wholly
owned subsidiary of the Corporation, and the Bank have entered into a Plan of
Merger ("the Bank Plan"), dated as of November 29, 2007, which is an integral
part of the Plan, whereby, simultaneously with the Company Merger, CCFNB Bank
will be merged with and into the Bank with the Bank being the surviving
institution to this merger (the "Bank Merger");
WHEREAS, the Executive is currently the Chief Executive Officer and
President of the Corporation and CCFNB Bank and the parties to the Plan and the
Bank Plan desire the Executive to continue as the Chief Executive Officer and
President of the Corporation and Bank and to assume the title, role and
responsibilities of the Chief Executive Officer and President of the Corporation
and Bank after the Effective Times of the Company and Bank Mergers (as those
Effective Times are defined in the Plan and the Bank Plan) under the terms and
conditions set forth herein;
WHEREAS, the Executive desires to serve the Employers in an executive
capacity under the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and intending to be legally bound hereby, the parties agree as
follows;
1. EMPLOYMENT AND EMPLOYMENT TERM. The Employers hereby shall employ the
Executive and the Executive hereby accepts employment with the Employers for a
term of twenty-four (24) months commencing on the Effective Times of the Company
and Bank Mergers, and ending on the last day of the 24th month following such
Effective Times ("Termination Date"), unless sooner terminated as hereinafter
provided. On the Termination Date, while the Executive is employed by the
Employers, the terms of the Executive's employment shall be automatically
extended for successive additional terms of one year each, unless Executive or
the Employers give written notice to the other on or before the first day of the
fourth month prior to the Termination Date of the then current term of intention
not to renew. Notwithstanding the foregoing, the term of Executive's employment
can be terminated pursuant to the provisions of Paragraph 11 herein; provided,
however, the parties agree that in no event shall the term of Executive's
employment hereunder extend beyond December 31 in the calendar year in which
Executive's 65th birthday occurs.
2. POSITION, DUTIES, AND PLACE OF EMPLOYMENT. The Executive shall serve as the
Chief Executive Officer and President of the Corporation and the Bank, reporting
only to the Board of Directors of the Employers, and shall have supervision and
control over, and responsibility for, the general management and operation of
the Employers, and shall have such other powers and duties as may from time to
time be prescribed by the Board of Directors of the Employers, provided that
such
70
duties are consistent with the Executive's position as the Chief Executive
Officer and President in charge of the general management of the Employers. The
Executive's primary office shall be located at such place as the Board of
Directors shall determine.
3. ENGAGEMENT IN OTHER EMPLOYMENT. The Executive shall devote all his ability
and attention to the business of the Employers during the term of this
Agreement. The Executive shall, during the term of this Agreement, notify the
Bank Board in writing and receive written approval from the Bank before the
Executive engages in any other business or commercial activities, duties or
pursuits, including, but not limited to, directorships of other companies. Under
no circumstance, during the term of this Agreement, may the Executive engage in
any business or commercial activities, duties or pursuits which compete with the
business or commercial activities of the Employers, nor may the Executive serve
as a director or officer or in any other capacity in a company which competes
with the Employers. Executive shall not be precluded, however, from engaging in
voluntary or philanthropic endeavors, from engaging in activities designed to
maintain and improve his professional skills, or from engaging in activities
incident or necessary to personal investments, so long as they are, in the Bank
Board's reasonable opinion, not in conflict with or detrimental to the
Executive's rendition of services on behalf of the Employers. Executive shall
not serve as fiduciary in connection with the administration of any trust,
estate, agency or other fiduciary relationship without the prior approval from
the Bank's Board, other than as a fiduciary on behalf of, or in connection with
the settlement of an estate of, a member of the Executive's immediate family
(i.e., spouse, parent, child, or sibling).
4. COMPENSATION.
(a) Annual Base Salary. As compensation for services rendered to the
Employers under this Agreement, the Executive shall be entitled to receive from
the Bank an annual base salary of not less than $150,000 dollars per year, (the
"Annual Base Salary") payable in substantially equal bi-weekly installments (or
such other intervals as established by the Bank's payroll policy) prorated for
any partial employment period. The Annual Base Salary shall be reviewed
annually, no later than December 15 of the then calendar year and shall be
subject to such annual change (but not reduced below $150,000 without the
Executive's written consent, except in cases of national financial depression or
emergency when compensation reduction has been implemented by the Board of
Directors for all of the Employers' executive staff) as may be set by the Bank's
Board, taking into account the position and duties of the Executive and the
performance of the Corporation and the Bank under the Executive's leadership.
The Executive agrees to serve as the President and Chief Executive Officer of
the Corporation for no additional remuneration or benefits.
(b) Bonus. The Board in its sole discretion may provide for payment of a
periodic bonus to the Executive in such an amount or nature as it may deem
appropriate based on Executive's performance, the financial performance of the
Bank and other relevant factors.
5. FRINGE BENEFITS, VACATION, EXPENSES AND PERQUISITES.
(a) Benefit Plans. The Executive shall be entitled to participate in or
receive benefits under all Bank employee benefit plans including, but not
limited to, any pension plan, profit-sharing plan, savings plan, life insurance
plan or disability insurance plan, as made available by the Bank to its
employees, subject to and on a basis consistent with terms, conditions and
overall administration of such plans and arrangements, and provided, further
that such participation does not violate any state or federal law, rule or
regulation.
(b) Business Expenses. During the term of his employment hereunder, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him (in accordance with the policies and procedures
established by the Bank Board of Directors for its senior executive
71
officers) in performing services hereunder, provided that the Executive properly
accounts therefore in accordance with Corporation and Bank policy.
(c) Vacation, Holiday, Sick Days and Personal Days. The Executive shall be
entitled to the number of paid vacation days in each calendar year determined by
the Bank from time to time for its senior executive officers, but not less than
twenty (20) business days per calendar year (prorated in any calendar year
during which the Executive is employed hereunder for less than the entire such
year in accordance with the number of days in such calendar year during which he
is so employed). The Executive shall also be entitled to all paid holidays, sick
days and personal days provided to the Bank to its regular full-time employees
and senior executive officers.
(d) Auto. The Executive shall be entitled to the use of an automobile
provided the Bank, and the Bank shall pay all expenses relating thereto,
including, fuel, oil, maintenance and insurance. The use of said automobile
shall be limited to the Executive, his spouse, authorized personnel of the
Employers, or designated driver in the event of an emergency.
6. POSITIONS. If elected, or appointed thereto, the Executive agrees to serve
with no additional compensation in one or more offices of the Corporation and
Bank, and/or in one or more offices of any of the Corporation's and the Bank's
subsidiaries. Notwithstanding the foregoing, the Executive shall be entitled to
compensation as a director for attendance at meetings of the full Board of
Directors of the Employers. Executive's compensation as a director shall not
apply to attendance at meetings of committees of the Board of Directors of the
Employers. In the event Executive's employment under this Agreement would be
terminated by the Employers for Cause (as hereinafter defined) or by Executive
without Good Reason (hereinafter defined), Executive agrees to resign, effective
as of the date of termination and in writing from all officer and director
positions then held by him under this paragraph 6.
7. NON-DISCLOSURE TRADE/SECRET. During the term of his employment hereunder, or
at any later time, the Executive shall not, without the written consent of the
Bank Board or a person authorized thereby, knowingly disclose to any person,
other than an employee of the Employers, or to a person to whom disclosure is
reasonable necessary or appropriate in connection with the performance by the
Executive of his duties as an executive of the Employers, any confidential
information obtained by the Executive while in the employ of the Employers with
respect to any of the Employers' services, products, improvements, formulas,
designs or styles, processes, customers, methods of business or any business
practices, the disclosure of which could be or will be materially damaging to
the Employers, provided, however, that confidential information shall not
include any information known generally to the public (other than as a result of
unauthorized disclosure by the Executive or any person with the assistance,
consent or direction of the Executive) or any information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that conducted by the Employers or any information that must
be disclosed as required by law. This provision shall survive termination of the
Executive's employment under this Agreement and/or termination of this
Agreement.
8. RESTRICTIVE COVENANT. The Executive covenants and agrees as follows: the
Executive shall not directly or indirectly, within the marketing area of the
Employers (defined as the area within a thirty (30) mile radius of Bloomsburg,
Pennsylvania) enter into or engage generally in direct or indirect competition
with the Employers or any subsidiary of the Employers, either as an individual
on his own or as a partner or joint venturer, or as director, officer,
shareholder, employment, agent, independent contractor, lessor or creditor of or
for any person, for a period of two (2) years after the date of termination of
his employment, whether voluntary or involuntary. The foregoing restriction
shall not be construed to prohibit the ownership by Executive of not more than
five (5%) percent of any class of securities of any corporation which is in
competition with the Employers, provided that such ownership represents a
passive investment and that neither Executive nor any group of persons
72
including Executive in any way, either, directly or indirectly, manages or
exercises control of any such corporation, guarantees any of its financial
obligations, otherwise takes any part its business, other than exercising his
rights as a shareholder, or seek to do any of the foregoing. The existence of
any claim or cause of actions of the Executive against the Employers, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Employers of this covenant. The Executive agrees that the
restrictions set forth in this Agreement do not unreasonably interfere with his
ability to obtain employment in his chosen field. The Executive also agrees that
any breach of the restrictions set forth in Paragraphs 7, 8, and 9 will result
in irreparable injury to the Employers for which they shall have no adequate
remedy at law and the Employers shall been titled to injunctive relief in order
to enforce the provisions hereof. In the event that this Paragraph shall be
determined by any court of competent jurisdiction to be unenforceable in part by
reason of it being too great a period of time or covering too great a
geographical area, it shall be in full force and effect as to that period of
time or geographical area determined to be reasonable by the court.
9. NON-SOLICITATION. Executive covenants and agrees that while employed by the
Employers and for a period of two (2) years after the termination of Executive's
employment, either voluntarily or involuntarily, Executive shall not, either
directly or indirectly in any capacity whatsoever, (a) obtain, solicit, divert,
appeal to, attempt to obtain, attempt to solicit, attempt to divert, attempt to
appeal to any customers, clients or referral sources of the Employers to divert
their business from the Employers; (b) solicit any person who was employed by
the Employers to leave the employ of the Employers or Bank. For purposes of this
covenant, "customers, clients, and referral sources" shall include all persons
who are or were customers, clients or referral sources of the Employers at any
time during the employment of Executive by the Employers. The non-solicitation
covenant set forth in this Paragraph 9 shall not be construed to prohibit a
general advertising or marketing program directed toward the marketing area of
the Employers by any subsequent employer of Executive. The existence of any
claim by Executive, whether predicated upon this Agreement or otherwise, shall
not constitute defense to the Employers' enforcement of or attempts to enforce
this provision.
10. NOTIFICATION OF A NON-DISCLOSURE/TRADE SECRET, RESTRICTIVE COVENANT AND
NON-SOLICITATION PROVISIONS. During his employment and for a period of two (2)
years following termination of his employment with the Employers, Executive
agrees to inform any prospective employer of existence of the
Non-Disclosure/Trade Secret, Restrictive Covenant and Non-Solicitation
provisions of this Agreement.
11. TERMINATION AND PAYMENTS UPON TERMINATION.
(a) Death of Executive. The Executive's employment hereunder shall
terminate upon his death. Upon his death, the Bank shall pay Executive's then
current Annual Base Salary (minus applicable taxes and withholdings) prorated
through the date of death, together with the dollar value of any accrued
vacation and the amount of any unreimbursed business expenses as of the date of
termination, and the Employers shall have no further obligation to the Executive
under this Agreement.
(b) Executive Disability. Executive's employment shall be subject to
termination by the Employers upon (30) days advance written notice in the event
of Executive's disability as defined herein. For purposes of this Agreement,
"disability" shall mean a physical or mental condition of the Executive (a) that
shall have prevented Executive from performance of his duties as Chief Executive
Officer and President on a full-time basis (i.e., for purposes hereof, an
average of no less than thirty-five (35) hours per week) during a period of
ninety (90) consecutive days, and (b) that, in the opinion, stated to a
reasonable degree of medical certainty, of a physician licensed to practice in
the Commonwealth of Pennsylvania, is likely to continue to prevent Executive
from the performance of his duties on a full-time basis for an additional six
months or more. Executive waives physician-patient privilege and consents to and
authorizes the release of his medical records to the Employers in
73
the event Executive has not been able to work full-time for a period of ninety
(90) consecutive days. In addition, in such event, Executive (a) authorizes any
physician treating Executive to discuss Executive's condition with authorized
representatives of the Employers and to express opinions as to the prognosis for
Executive's recovery, and (b) consents to such medical examinations by licensed
physicians as the Employers may reasonably require in order to evaluate
Executive's condition and prospects for resumption of his duties on a full-time
basis. If Executive's employment shall be terminated by reason of his
disability, the Bank shall pay Executive his then current Annual Base Salary
(minus applicable taxes and withholdings) prorated through the date of
termination, together with the dollar value of any accrued vacation and the
amount of any unreimbursed business expenses as of the date of termination, and
the Employers shall have no further obligation to the Executive under this
Agreement.
(c) For Cause Termination. The Employers may terminate the Executive's
employment hereunder for Cause. For purposes of this Agreement, the Employers
shall have "Cause" to terminate the Executive's employment hereunder upon (1)
the repeated failure by the Executive to substantially perform his duties
hereunder following written notice to Executive specifying the nature of his
deficient performance and the failure by Executive to correct such deficiency
within thirty (30) days of said notice; or (2) the engaging by the Executive in
serious misconduct injurious to the Employers; or (3) the violation by the
Executive of the provisions of Paragraphs 3, 7, 8, or 9 hereof after written
notice from the Employers and a failure to cure such violation within thirty
(30) days of said notice; or (4) the dishonesty or gross negligence of the
Executive in the performance of his duties under this Agreement; or (5) the
breach of Executive's fiduciary duty to the Employers involving personal profit;
or (6) the violation of any law, rule or regulation covering banks or bank
officers or any final and unappealable cease and desist order issued by a bank
regulatory authority, any of which, directly and materially ▇▇▇▇▇ the business
of the Employers; or (7) moral turpitude or other serious misconduct on the part
of the Executive which brings material public discredit to the Employers. Any
termination for Cause must be approved by: (1) the affirmative vote of a
majority of the directors then in office of each of the Employers, prior to a
change in control, or (ii) the affirmative vote of not less than eighty (80%)
percent of the directors then in office of each of the Employers, following a
change in control.
If the Executive's employment shall be terminated for cause, the Bank shall
pay the Executive his full Annual Base Salary (minus applicable taxes and
withholdings) prorated through the date of the termination at the rate in effect
at the time of termination, together with the dollar value of any accrued
vacation and the amount of any unreimbursed business expenses as of the date of
termination, and the Employers shall have no further obligation to the Executive
under this Agreement.
(d) Resignation by Executive. The Executive may terminate his employment
hereunder upon one hundred twenty (120) days written notice. Upon Executive's
resignation, the Bank shall pay Executive his Annual Base Salary, (minus
applicable taxes and withholding) prorated through the date of termination at
the rate then in effect at the time of the termination, together with the dollar
value of any accrued vacation and the amount of any unreimbursed business
expenses as of the date of termination, and the Employers shall have no further
obligation to the Executive under this Agreement.
(e) Termination Without Cause. At any time while the Executive is employed
under this Agreement, the Employers may terminate the Executive's employment
without cause and without advance notice. Upon such termination, the Bank shall
pay Executive his then current Annual Base Salary (minus applicable taxes and
withholdings) prorated through the date of termination, together with the dollar
value of any accrued vacation and the amount of any unreimbursed business
expenses as of the date of termination, plus (i) an amount equal to one times
Executive's Annual Base Salary (minus applicable taxes and withholdings), unless
(ii) the termination occurs within twelve (12) months after the occurrence of a
Change in Control (as defined herein), in which case the Bank shall
74
pay the Executive an amount equal to 2.99 times the Executive's Annual Base
Salary (minus applicable taxes and withholdings), subject to any limitation
under paragraph 12 of this Agreement. Payment of the amount due pursuant to
clause (i) of this paragraph shall be paid over a twelve (12) month period,
prorated in equal installments on the Bank's regular paydays. Payment of the
amount due pursuant to clause (ii) of this paragraph shall be in a lump sum
within thirty (30) days after the date of termination. Executive also will be
entitled to the continuation of life insurance, health and dental plans and
other employee benefits made available to and on a cost basis consistent with
all employees of the Employers for one (1) year after termination, unless such
termination occurs within twelve (12) months after the occurrence of a Change in
Control, in which event it shall be for three (3) years. The Employers shall
have no further obligation to the Executive under this Agreement.
(f) Termination by Executive for Good Reason. The Executive may terminate
his employment hereunder for Good Reason, in each case after notice from the
Executive to the Employers within ninety (90) days after the initial existence
of any such condition that such action or limitation of the Employers
constitutes Good Reason and the failure of the Employers to cure such situation
within forty-five (45) days after such notice. The term "Good Reason" shall mean
(i) any assignment to the Executive, without his consent, of any duties other
than those contemplated by, or any limitations of the powers of the Executive
not contemplated by, Paragraphs 2 and 6 hereof; or (ii) any other breach by
Employers of their obligations under this Agreement.
If Executive shall terminate his employment for Good Reason, as defined
herein, the Bank shall pay the Executive his then current Annual Base Salary
(minus applicable taxes and withholdings) prorated through the date of
termination, together with the dollar value of any accrued vacation and the
amount of any unreimbursed business expenses as of the date of termination, plus
(i) an amount equal to one (1) times his then current Annual Base Salary (minus
applicable taxes and withholdings), unless (ii) the termination occurs within
twelve (12) months after the occurrence of a Change in Control, in which event
the Bank shall pay the Executive the amount equal to 2.99 times the Executive's
Annual Base Salary (minus applicable taxes and withholdings), subject to any
limitation under Paragraph 12 of this Agreement. Payment of the amount due
pursuant to clause (i) of this paragraph shall be paid over a twelve (12) month
period, prorated in equal installments on the Bank's regular paydays. Payment of
the amount due pursuant to clause (ii) of this paragraph shall be in a lump sum
within thirty (30) days after the date of termination. Executive also will be
entitled to the continuation of life insurance, health and dental plans and
other employee benefits made available to and on a cost basis consistent with
all employees of the Employer for one (1) year after termination, unless such
termination occurs within twelve (12) months after the occurrence of a Change in
Control, in which event it shall be three (3) years. The Employers shall have no
further obligation to the Executive under this Agreement.
(g) Non-Renewal by the Employers. The Employers may terminate the
Executive's employment pursuant to an election not to renew this Agreement as
provided under Paragraph 1 above. Upon such termination, the Bank shall pay
Executive his current Annual Base Salary (minus applicable taxes and
withholdings) for a one (1) year period at the rate then in effect at the time
of termination, together with the dollar value of any accrued vacation and the
amount of any unreimbursed business expenses as of the date of termination, and
the Employers shall have no further obligation to Executive under this
Agreement; provided, however, that in the case of an election not to renew made
by the Employers within twelve (12) months after the occurrence of a Change in
Control, Executive shall be treated as though he had terminated his employment
for Good Reason following a Change in Control and shall be entitled to receive a
payment equal to 2.99 times his then current Annual Base Salary (minus
applicable taxes and withholdings), subject to any limitation set forth in
Paragraph 12. In the case of an election not to renew made by the Employers
prior to a Change in Control, the foregoing severance payments shall be made
over a twelve (12) month period commencing on the effective date of termination
prorated in equal installments on the Bank's regular paydays. In the case of an
election not to renew made by the Employers within twelve (12) months
75
after the occurrence of a Change in Control, the amount owing to Executive shall
be paid in a lump sum within thirty (30) days following the date of termination.
The Employers shall have no further obligation to the Employee under this
Agreement.
(h) Non-Renewal by Executive. The Executive may terminate his employment
pursuant to an election not to renew this Agreement as provided under Paragraph
1 above. Upon such termination, the Bank shall pay Executive his current Annual
Base Salary (minus applicable taxes and withholdings) prorated through the date
of termination at the rate then in effect at the time of termination, together
with the dollar value of any accrued vacation and the amount of any unreimbursed
business expenses as of the date of termination, and the Employers shall have no
further obligation to the Executive under this Agreement.
12. SECTION 280G LIMITATION. If any severance or salary continuation payments
are to be made under the terms of Paragraph 11 herein (together with any other
payments which the Executive has the right to receive from the Employers as a
result of the termination of Executive without cause by the Employers or both or
the termination by Executive for Good Reason), and those payments shall be
determined by the Employers' or their successors', as the case may be,
independent certified public accountants to constitute a "golden-parachute
payment" under Section 280G of the Internal Revenue Code of 1986 ("Code") and
the regulations thereunder, and any successor code section and regulations
thereunder; then the Executive agrees that such aggregate amount shall be
reduced in order to avoid the excise tax imposed by Section 4999 of the Code.
All such amounts hereunder shall be determined by the Employers' or their
successors' as the case may be, independent certified public accounts, whose
determination shall be final and binding upon the parties and their successors
to this Agreement.
13. AUTOMATIC TERMINATION.
(a) The parties agree that Executive's employment under this Agreement
shall not extend beyond the 31st day of December in the calendar year in which
Executive's 65th birthday occurs. Upon Executive's termination of employment
under this provision, the Bank shall pay Executive his current Annual Base
Salary (minus applicable taxes and withholdings) prorated through the date of
termination, together with the dollar value of any accrued vacation and the
amount of any unreimbursed business expenses as of the date of termination, and
Employers shall have no further obligation to Executive under this Agreement.
(b) This Agreement shall be automatically terminated upon the termination
of the Plan without any action on the part of the Employers or the Executive,
and the Employers and the Employee shall have no further obligations under this
Agreement.
14. DAMAGES FOR BREACH OF CONTRACT. In the event of a breach of this Agreement
by either Employers or the Executive resulting in damages to another party to
this Agreement, that party may recover from the party breaching the Agreement
only those damages as set forth herein. In no event shall any party be entitled
to the recovery of attorney's fees or costs, except as provided in the last
sentence of this Paragraph 14.
Notwithstanding the above, the attorney's fees and costs incurred by Executive
in connection with the enforcement of his rights under this Agreement after a
Change in Control shall be paid by the Employers, or their successors, as the
case may be, unless Executive is judicially determined to have acted in bad
faith.
15. DEFINITION OF CHANGE AND CONTROL. For the purposes of this Agreement, the
terms "Change of Control" shall mean: a change in control of a nature that would
be required to be reported in response to Item 6(e) of schedule 14A of
Regulation 14A and any successor rule or regulation
76
promulgated under the Securities Exchange Act of ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇");
provided that, without limitation, such a change in control shall be deemed to
have occurred if (a) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than the Corporation or any "person" who on
the date hereof is a director or officer of the Corporation, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing twenty-five (25)
percent or more of the combined voting power of the Corporation's then
outstanding securities; (b) during any period of two (2) consecutive years
during the term of this Agreement, individuals who at the beginning of such
period constitute the Board of Directors of the Bank or Corporation cease for
any reason to constitute at least a majority thereof, unless the election of
each director who was not a director at the beginning of such period has been
approved in advance by directors representing at least two-thirds (2/3) of the
directors then in office who were directors at the beginning of the period; or
(c) the sale, exchange or transfer of all or substantially all of the Bank's or
Corporation's assets.
16. DEFINITION OF DATE OF CHANGE OF CONTROL. For purposes of this Agreement, the
date of Change of Control shall mean:
(a) the first date on which a single person and/or entity, or group of
affiliated persons and/or entities, acquire the beneficial ownership of
twenty-five (25%) percent or more of the Corporation's voting securities;
(b) the date of the transfer of all or substantially all of the Bank's or
Corporation's assets;
(c) the date on which a merger, consolidation or combination is
consummated, as applicable; or
(d) the date on which individuals who formerly constituted a majority of
the Board of Directors of the Bank or Corporation under Paragraph 15, above,
ceased to be a majority.
Notwithstanding anything contained herein to the contrary, if Executive's
employment is terminated and he reasonable concludes that such termination : (i)
was effected at the request of a third party who has expressed an intention to
effect a Change in Control, or (ii) otherwise occurred in connection with or in
anticipation of an actual or attempted Change in Control, then in such event a
Change in Control shall be deemed to have occurred on the date immediately prior
to the date of termination of Executive's employment. Furthermore, the parties
hereto agree that all actions to be effected under the Plan and Bank Plan shall
not constitute a Change of Control under this Agreement.
17. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be writing and shall be
deemed to have been duly given when hand-delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Bank: First Columbia Bank & Trust Co.
Chairman, Board of Directors
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
77
If to the Corporation: CCFNB Bancorp, Inc.
Chairman, Board of Directors
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
18. SUCCESSORS. This Agreement shall inure to the benefit of and be binding upon
the Executive, the Employers and any of their successors or assigns, provided
however, that the Executive may not commute, anticipate, encumber, dispose or
assign any payment. The Employers are jointly and severally liable for the
obligations of the Employers hereunder.
19. SEVERABILITY. If any provision of this Agreement is declared unenforceable
for any reason, the remaining provisions of this Agreement shall be unaffected
and shall remain in full force and effect.
20. AMENDMENT. This Agreement may be amended or canceled only by mutual
agreement of the parties in writing.
21. PAYMENT OF MONEY DUE DECEASED EXECUTIVE. In the event of Executive's death,
any moneys that may be due him from the Employers under this Agreement as of the
date of death shall be paid to the person designated by him in writing for this
purpose, or in the absence of any such designation to: (i) his spouse if she
survives him, or (ii) his estate if his spouse does not survive him.
22. LAW GOVERNING. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
23. ENTIRE AGREEMENT. This Agreement supersedes any and all agreements, either
oral or in writing, between the parties with respect to the employment of the
Executive by the Employers, and this Agreement contains all the covenants and
agreements between the parties with respect to such employment.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement to be duly executed in their respective names
and in the case of the Corporation and the Bank, by its authorized
representatives, the day and year above mentioned.
ATTEST: CCFNB BANCORP, INC.
November 29, 2007
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Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of the Board
ATTEST: FIRST COLUMBIA BANK & TRUST CO.
November 29, 2007
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Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Chairman of the Board
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WITNESS:
November 29, 2007
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▇▇▇▇▇ ▇. ▇▇▇▇▇
79
ANNEX G
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT, (this "Agreement"), is made this 29th
day of November, 2007 among First Columbia Bank & Trust Co., a Pennsylvania
banking institution, (the "Bank"), CCFNB BANCORP, INC., a Pennsylvania business
corporation (the "Corporation") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an adult individual (the
"Executive"). The Bank and the Corporation are sometimes hereinafter referred to
collectively as the "Employers".
WHEREAS, the Corporation and Columbia Financial Corporation, a Pennsylvania
business corporation, the parent company of the Bank, ("CFC"), have entered into
an Agreement and Plan of Reorganization, dated as of November 29, 2007 (the
"Plan"), whereby CFC will be merged with and into the Corporation with the
Corporation being the surviving company to the merger (the "Company Merger");
WHEREAS, Columbia County Farmers National Bank, ("CCFNB Bank"), a wholly
owned subsidiary of the Corporation and the Bank have entered into a Plan of
Merger ("the Bank Plan"), dated as of November 29, 2007, which is an integral
part of the Plan, whereby, simultaneously with the Company Merger, CCFNB Bank
will be merged with and into the Bank with the Bank being the surviving
institution to this merger (the "Bank Merger");
WHEREAS, the Executive is currently the Chief Operating Officer of the
Corporation and CCFNB Bank and the parties to the Plan and the Bank Plan desire
the Executive to continue as the Chief Operating Officer of the Corporation and
to assume the title, role and responsibilities of the Chief Operating Officer of
the Bank and the Corporation after the Effective Times of the Company and Bank
Mergers (as those Effective Times are defined in the Plan and the Bank Plan)
under the terms and conditions set forth herein;
WHEREAS, the Executive desires to serve the Employers in an executive
capacity under the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and intending to be legally bound hereby, the parties agree as
follows;
1. EMPLOYMENT AND EMPLOYMENT TERM. The Employers hereby shall employ the
Executive and the Executive hereby accepts employment with the Employers for a
term of twenty-four (24) months commencing on the Effective Times of the Company
and Bank Mergers and ending on the last day of the 24th month following such
Effective Times ("Termination Date"), unless sooner terminated as hereinafter
provided. On the Termination Date, while the Executive is employed by the
Employers, the terms of the Executive's employment shall be automatically
extended for successive additional terms of one year each, unless Executive or
the Employers give written notice to the other on or before the first day of the
fourth month prior to the Termination Date of the then current term of intention
not to renew. Notwithstanding the foregoing, the term of Executive's employment
can be terminated pursuant to the provisions of Paragraph 10 herein; provided,
however, the parties agree that in no event shall the term of Executive's
employment hereunder extend beyond December 31 in the calendar year in which
Executive's 65th birthday occurs.
2. POSITION, DUTIES, AND PLACE OF EMPLOYMENT. The Executive shall serve as the
Chief Operating Officer of the Employers, reporting only to the President and
Chief Executive Officer of the Employers and the Board of Directors of the
Employers, and shall have responsibilities of the Chief Operating Officer as set
forth in the job description thereof, as the same may be modified from time to
time by the Board of Directors of the Employers. The Executive shall have such
other powers
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and duties as may from time to time be prescribed by the Board of Directors of
the Employers, provided such duties are consistent with the Executive's position
as the Chief Operating Officer of the Employers. The Executive's primary office
shall be located at such place as the Bank Board shall determine.
3. ENGAGEMENT IN OTHER EMPLOYMENT. The Executive shall devote all his ability
and attention to the business of the Employers during the term of this
Agreement. The Executive shall, during the term of this Agreement, notify the
Bank Board in writing and receive written approval from the Bank before the
Executive engages in any other business or commercial activities, duties or
pursuits, including, but not limited to, directorships of other companies. Under
no circumstance, during the term of this Agreement, may the Executive engage in
any business or commercial activities, duties or pursuits which compete with the
business or commercial activities of the Employers, nor may the Executive serve
as a director or officer or in any other capacity in a company which competes
with the Employers. Executive shall not be precluded, however, from engaging in
voluntary or philanthropic endeavors, from engaging in activities designed to
maintain and improve his professional skills, or from engaging in activities
incident or necessary to personal investments, so long as they are, in the Bank
Board's reasonable opinion, not in conflict with or detrimental to the
Executive's rendition of services on behalf of the Employers. Executive shall
not serve as fiduciary in connection with the administration of any trust,
estate, agency or other fiduciary relationship without the prior approval from
the Bank's Board, other than as a fiduciary on behalf of, or in connection with
the settlement of an estate of, a member of the Executive's immediate family
(i.e., spouse, parent, child, or sibling).
4. COMPENSATION.
(a) Annual Base Salary. As compensation for services rendered to the
Employers under this Agreement, the Executive shall be entitled to receive from
the Bank an annual base salary of not less than $125,000 dollars per year, (the
"Annual Base Salary") payable in substantially equal bi-weekly installments (or
such other intervals as established by the Bank's payroll policy) prorated for
any partial employment period. The Annual Base Salary shall be reviewed
annually, no later than December 15 of the then calendar year and shall be
subject to such annual change (but not reduced below $125,000 without the
Executive's written consent, except in cases of national financial depression or
emergency when compensation reduction has been implemented by the Board of
Directors for all of the Employers' executive staff) as may be set by the Bank's
Board, taking into account the position and duties of the Executive and the
performance of the Corporation and the Bank. The Executive agrees to serve as
the Chief Operating Officer of the Corporation for no additional remuneration or
benefits.
(b) Bonus. The Bank's Board in its sole discretion may provide for payment
of a periodic bonus to the Executive in such an amount or nature as it may deem
appropriate based on Executive's performance, the financial performance of the
Corporation and Bank and other relevant factors.
5. FRINGE BENEFITS, VACATION, EXPENSES AND PERQUISITES.
(a) Benefit Plans. The Executive shall be entitled to participate in or
receive benefits under all Bank employee benefit plans including, but not
limited to, any pension plan, profit-sharing plan, savings plan, life insurance
plan or disability insurance plan, as made available by the Bank to its
employees, subject to and on a basis consistent with terms, conditions and
overall administration of such plans and arrangements, and provided, further
that such participation does not violate any state or federal law, rule or
regulation.
(b) Business Expenses. During the term of his employment hereunder, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him (in accordance
81
with the policies and procedures established by the Bank Board for its senior
executive officers) in performing services hereunder, provided that the
Executive properly accounts therefore in accordance with Bank policy.
(c) Vacation, Holiday, Sick Days and Personal Days. The Executive shall be
entitled to the number of paid vacation days in each calendar year determined by
the Bank from time to time for its senior executive officers, but not less than
twenty (20) business days per calendar year (prorated in any calendar year
during which the Executive is employed hereunder for less than the entire such
year in accordance with the number of days in such calendar year during which he
is so employed). The Executive shall also be entitled to all paid holidays, sick
days and personal days provided to the Bank to its regular full-time employees
and senior executive officers.
6. NON-DISCLOSURE TRADE/SECRET. During the term of his employment hereunder, or
at any later time, the Executive shall not, without the written consent of the
Bank Board or a person authorized thereby, knowingly disclose to any person,
other than an employee of the Employers, or to a person to whom disclosure is
reasonable necessary or appropriate in connection with the performance by the
Executive of his duties as an executive of the Employers, any confidential
information obtained by the Executive while in the employ of the Employers with
respect to any of the Employers' services, products, improvements, formulas,
designs or styles, processes, customers, methods of business or any business
practices, the disclosure of which could be or will be materially damaging to
the Employers, provided, however, that confidential information shall not
include any information known generally to the public (other than as a result of
unauthorized disclosure by the Executive or any person with the assistance,
consent or direction of the Executive) or any information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that conducted by the Employers or any information that must
be disclosed as required by law. This provision shall survive termination of the
Executive's employment under this Agreement and/or termination of this
Agreement.
7. RESTRICTIVE COVENANT. The Executive covenants and agrees as follows: the
Executive shall not directly or indirectly, within the marketing area of the
Employers (defined as the area within a thirty (30) mile radius of Bloomsburg,
Pennsylvania) enter into or engage generally in direct or indirect competition
with the Employers or any subsidiary of the Employers, either as an individual
on his own or as a partner or joint venturer, or as director, officer,
shareholder, employment, agent, independent contractor, lessor or creditor of or
for any person, for a period of one (1) year after the date of termination of
his employment, whether voluntary or involuntary. The foregoing restriction
shall not be construed to prohibit the ownership by Executive of not more than
five (5%) percent of any class of securities of any corporation which is in
competition with the Employers, provided that such ownership represents a
passive investment and that neither Executive nor any group of persons including
Executive in any way, either, directly or indirectly, manages or exercises
control of any such corporation, guarantees any of its financial obligations,
otherwise takes any part its business, other than exercising his rights as a
shareholder, or seek to do any of the foregoing. The existence of any claim or
cause of actions of the Executive against the Employers, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Employers of this covenant. The Executive agrees that the restrictions
set forth in this Agreement do not unreasonably interfere with his ability to
obtain employment in his chosen field. The Executive also agrees that any breach
of the restrictions set forth in Paragraphs 6, 7, and 8 will result in
irreparable injury to the Employers for which they shall have no adequate remedy
at law and the Employers shall been titled to injunctive relief in order to
enforce the provisions hereof. In the event that this Paragraph shall be
determined by any court of competent jurisdiction to be unenforceable in part by
reason of it being too great a period of time or covering too great a
geographical area, it shall be in full force and effect as to that period of
time or geographical area determined to be reasonable by the court.
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8. NON-SOLICITATION. Executive covenants and agrees that while employed by the
Employers and for a period of one (1) year after the termination of Executive's
employment, either voluntarily or involuntarily, Executive shall not, either
directly or indirectly in any capacity whatsoever, (a) obtain, solicit, divert,
appeal to, attempt to obtain, attempt to solicit, attempt to divert, attempt to
appeal to any customers, clients or referral sources of the Employers to divert
their business from the Employers; (b) solicit any person who was employed by
the Employers to leave the employ of the Employers. For purposes of this
covenant, "customers, clients, and referral sources" shall include all persons
who are or were customers, clients or referral sources of the Employers at any
time during the employment of Executive by the Employers. The non-solicitation
covenant set forth in this Paragraph 8 shall not be construed to prohibit a
general advertising or marketing program directed toward the marketing area of
the Employers by any subsequent employer of Executive. The existence of any
claim by Executive, whether predicated upon this Agreement or otherwise, shall
not constitute defense to the Employers' enforcement of or attempts to enforce
this provision.
9. NOTIFICATION OF A NON-DISCLOSURE/TRADE SECRET, RESTRICTIVE COVENANT AND
NON-SOLICITATION PROVISIONS. During his employment and for a period of one (1)
year following termination of his employment with the Employers, Executive
agrees to inform any prospective employer of existence of the
Non-Disclosure/Trade Secret, Restrictive Covenant and Non-Solicitation
provisions of this Agreement.
10. TERMINATION AND PAYMENTS UPON TERMINATION.
(a) Death of Executive. The Executive's employment hereunder shall
terminate upon his death. Upon his death, the Bank shall pay Executive's then
current Annual Base Salary (minus applicable taxes and withholdings) prorated
through the date of death, together with the dollar value of any accrued
vacation and the amount of any unreimbursed business expenses as of the date of
termination, and the Employers shall have no further obligation to the Executive
under this Agreement.
(b) Executive Disability. Executive's employment shall be subject to
termination by the Employers upon (30) days advance written notice in the event
of Executive's disability as defined herein. For purposes of this Agreement,
"disability" shall mean a physical or mental condition of the Executive (a) that
shall have prevented Executive from performance of his duties as Chief Operating
Officer on a full-time basis (i.e., for purposes hereof, an average of no less
than thirty-five (35) hours per week) during a period of ninety (90) consecutive
days, and (b) that, in the opinion, stated to a reasonable degree of medical
certainty, of a physician licensed to practice in the Commonwealth of
Pennsylvania, is likely to continue to prevent Executive from the performance of
his duties on a full-time basis for an additional six months or more. Executive
waives physician-patient privilege and consents to and authorizes the release of
his medical records to the Employers in the event Executive has not been able to
work full-time for a period of ninety (90) consecutive days. In addition, in
such event, Executive (a) authorizes any physician treating Executive to discuss
Executive's condition with authorized representatives of the Employers and to
express opinions as to the prognosis for Executive's recovery, and (b) consents
to such medical examinations by licensed physicians as the Employers may
reasonably require in order to evaluate Executive's condition and prospects for
resumption of his duties on a full-time basis. If Executive's employment shall
be terminated by reason of his disability, the Employers shall pay Executive his
then current Annual Base Salary (minus applicable taxes and withholdings)
prorated through the date of termination, together with the dollar value of any
accrued vacation and the amount of any unreimbursed business expenses as of the
date of termination, and the Employers shall have no further obligation to the
Executive under this Agreement.
(c) For Cause Termination. The Employers may terminate the Executive's
employment hereunder for Cause. For purposes of this Agreement, the Employers
shall have "Cause" to terminate
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the Executive's employment hereunder upon (1) the repeated failure by the
Executive to substantially perform his duties hereunder following written notice
to Executive specifying the nature of his deficient performance and the failure
by Executive to correct such deficiency within thirty (30) days of said notice;
or (2) the engaging by the Executive in serious misconduct injurious to the
Employers; or (3) the violation by the Executive of the provisions of Paragraphs
3, 6, 7, or 8 hereof after written notice from the Employers and a failure to
cure such violation within thirty (30) days of said notice; or (4) the
dishonesty or gross negligence of the Executive in the performance of his duties
under this Agreement; or (5) the breach of Executive's fiduciary duty to the
Employers involving personal profit; or (6) the violation of any law, rule or
regulation covering banks or bank officers or any final and unappealable cease
and desist order issued by a bank regulatory authority, any of which, directly
and materially ▇▇▇▇▇ the business of the Employers; or (7) moral turpitude or
other serious misconduct on the part of the Executive which brings material
public discredit to the Employers. Any termination for Cause must be approved
by: (1) the affirmative vote of a majority of the directors then in office of
each of the Employers, prior to a change in control, or (ii) the affirmative
vote of not less than eighty (80%) percent of the directors then in office of
each of the Employers, following a change in control.
If the Executive's employment shall be terminated for cause, the Bank shall
pay the Executive his full Annual Base Salary (minus applicable taxes and
withholdings) prorated through the date of the termination at the rate in effect
at the time of termination, together with the dollar value of any accrued
vacation and the amount of any unreimbursed business expenses as of the date of
termination, and the Employers shall have no further obligation to the Executive
under this Agreement.
(d) Resignation by Executive. The Executive may terminate his employment
hereunder upon one hundred twenty (120) days written notice. Upon Executive's
resignation, the Bank shall pay Executive his Annual Base Salary, (minus
applicable taxes and withholding) prorated through the date of termination at
the rate then in effect at the time of the termination, together with the dollar
value of any accrued vacation and the amount of any unreimbursed business
expenses as of the date of termination, and the Employers shall have no further
obligation to the Executive under this Agreement.
(e) Termination Without Cause. At any time while the Executive is employed
under this Agreement, the Employers may terminate the Executive's employment
without cause and without advance notice. Upon such termination, the Bank shall
pay Executive his then current Annual Base Salary (minus applicable taxes and
withholdings) prorated through the date of termination, together with the dollar
value of any accrued vacation and the amount of any unreimbursed business
expenses as of the date of termination, plus an amount equal to one times
Executive's Annual Base Salary (minus applicable taxes and withholdings),
subject to any limitation under Paragraph 11 of this Agreement. Payment of the
amount due pursuant to this paragraph shall be paid over a twelve (12) month
period, prorated in equal installments on the Bank's regular paydays, unless the
termination occurs within the twelve (12) months after a Change in Control, as
defined herein, in which case payment of the amount due pursuant to this
paragraph shall be in a lump sum within thirty (30) days after the date of
termination. Executive also will be entitled to the continuation of life
insurance, health and dental plans and other employee benefits made available to
and on a cost basis consistent with all employees of the Employers for one (1)
year after termination. The Employers shall have no further obligation to the
Executive under this Agreement.
(f) Termination by Executive for Good Reason. The Executive may terminate
his employment hereunder for Good Reason, in each case after notice from the
Executive to the Employers within ninety (90) days after the initial existence
of any such condition that such action or limitation of the Employers
constitutes Good Reason and the failure of the Employers to cure such situation
within forty-five (45) days after such notice. The term "Good Reason" shall mean
(i) any assignment to the Executive, without his consent, of any duties other
than those contemplated by, or
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any limitations of the powers of the Executive not contemplated by Paragraph 2
hereof, or (ii) any other breach by Employers of their obligations under this
Agreement.
If Executive shall terminate his employment for Good Reason, the Bank shall
pay the Executive his then current Annual Base Salary (minus applicable taxes
and withholdings) prorated through the date of termination, together with the
dollar value of any accrued vacation and the amount of any unreimbursed business
expenses as of the date of termination, plus an amount equal to one (1) times
his then current Annual Base Salary (minus applicable taxes and withholdings),
subject to any limitation under Paragraph 11 of this Agreement. Payment of the
amount due pursuant to this paragraph shall be paid over a twelve (12) month
period, prorated in equal installments on the Bank's regular paydays, unless the
termination occurs within the twelve (12) months after a Change in Control, as
defined herein, in which case payment of the amount due pursuant to this
paragraph shall be in a lump sum within thirty (30) days after the date of
termination. Executive also will be entitled to the continuation of life
insurance, health and dental plans and other employee benefits made available to
and on a cost basis consistent with all employees of the Employers for one (1)
year after termination. The Employers shall have no further obligation to the
Executive under this Agreement.
(g) Non-Renewal by the Employers. The Employers may terminate the
Executive's employment pursuant to an election not to renew this Agreement as
provided under Paragraph 1 above. Upon such termination, the Bank shall pay
Executive his current Annual Base Salary (minus applicable taxes and
withholdings) for a one (1) year period at the rate then in effect at the time
of termination, together with the dollar value of any accrued vacation and the
amount of any unreimbursed business expenses as of the date of termination,
subject to any limitation under Paragraph 11 of this Agreement. The foregoing
severance payments shall be made over a twelve (12) month period commencing on
the effective date of termination prorated in equal installments on the Bank's
regular paydays, except in the case of an election not to renew made by the
Employers within twelve (12) months after the occurrence of a Change in Control,
the amount owing to Executive shall be paid in a lump sum within thirty (30)
days following the date of termination. The Employers shall have no further
obligation to the Employee under this Agreement.
(h) Non-Renewal by Executive. The Executive may terminate his employment
pursuant to an election not to renew this Agreement as provided under Paragraph
1 above. Upon such termination, the Employers shall pay Executive his current
Annual Base Salary (minus applicable taxes and withholdings) prorated through
the date of termination at the rate then in effect at the time of termination,
together with the dollar value of any accrued vacation and the amount of any
unreimbursed business expenses as of the date of termination, and the Employers
shall have no further obligation to the Executive under this Agreement.
11. SECTION 280G LIMITATION. If any severance or salary continuation payments
are to be made under the terms of Paragraph 10 herein (together with any other
payments which the Executive has the right to receive from the Employers as a
result of the termination of Executive without cause by the Employers or both or
the termination by Executive for Good Reason), and those payments shall be
determined by the Employers' or their successors', as the case may be,
independent certified public accountants to constitute a "golden-parachute
payment" under Section 280G of the Internal Revenue Code of 1986 ("Code") and
the regulations thereunder and any successor code section and regulations
thereunder; then the Executive agrees that such aggregate amount shall be
reduced in order to avoid the excise tax imposed by Section 4999 of the Code.
All such amounts hereunder shall be determined by the Employers' or their
successors', as the case may be, independent certified public accounts, whose
determination shall be final and binding upon the parties and their successors
to this Agreement.
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12. AUTOMATIC TERMINATION.
(a) The parties agree that Executive's employment under this Agreement
shall not extend beyond the 31st day of December in the calendar year in which
Executive's 65th birthday occurs. Upon Executive's termination of employment
under this provision, the Bank shall pay Executive his current Annual Base
Salary (minus applicable taxes and withholdings) prorated through the date of
termination, together with the dollar value of any accrued vacation and the
amount of any unreimbursed business expenses as of the date of termination, and
Employers shall have no further obligation to Executive under this Agreement.
(b) This Agreement shall be automatically terminate upon the termination of
the Plan without any action on the part of the Employers or the Executive, and
the Employers and the Employee shall have no further obligations under this
Agreement.
13. DAMAGES FOR BREACH OF CONTRACT. In the event of a breach of this Agreement
by either Employers or the Executive resulting in damages to another party to
this Agreement, that party may recover from the party breaching the Agreement
only those damages as set forth herein. In no event shall any party be entitled
to the recovery of attorney's fees or costs, except as provided in the last
sentence of this Paragraph 13.
Notwithstanding the above, the attorney's fees and costs incurred by Executive
in connection with the enforcement of his rights under this Agreement after a
Change in Control shall be paid by the Employers, or their successors, as the
case may be, unless Executive is judicially determined to have acted in bad
faith.
14. DEFINITION OF CHANGE AND CONTROL. For the purposes of this Agreement, the
terms "Change of Control" shall mean: a change in control of a nature that would
be required to be reported in response to Item 6(e) of schedule 14A of
Regulation 14A and any successor rule or regulation promulgated under the
Securities Exchange Act of ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇"); provided that, without
limitation, such a change in control shall be deemed to have occurred if (a) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act),
other than the Corporation or any "person" who on the date hereof is a director
or officer of the Corporation, is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Corporation representing twenty-five (25) percent or more of the combined
voting power of the Corporation's then outstanding securities; (b) during any
period of two (2) consecutive years during the term of this Agreement,
individuals who at the beginning of such period constitute the Board of
Directors of the Bank or Corporation cease for any reason to constitute at least
a majority thereof, unless the election of each director who was not a director
at the beginning of such period has been approved in advance by directors
representing at least two-thirds (2/3) of the directors then in office who were
directors at the beginning of the period; or (c) the sale, exchange or transfer
of all or substantially all of the Bank's or Corporation's assets.
15. DEFINITION OF DATE OF CHANGE OF CONTROL. For purposes of this Agreement, the
date of Change of Control shall mean:
(a) the first date on which a single person and/or entity, or group of
affiliated persons and/or entities, acquire the beneficial ownership of
twenty-five (25%) percent or more of the Corporation's voting securities;
(b) the date of the transfer of all or substantially all of the Bank's or
Corporation's assets;
(c) the date on which a merger, consolidation or combination is
consummated, as applicable; or
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(d) the date on which individuals who formerly constituted a majority of
the Board of Directors of the Bank or Corporation under Section 14, above,
ceased to be a majority.
Notwithstanding anything contained herein to the contrary, if Executive's
employment is terminated and he reasonable concludes that such termination : (i)
was effected at the request of a third party who has expressed an intention to
effect a Change in Control, or (ii) otherwise occurred in connection with or in
anticipation of an actual or attempted Change in Control, then in such event a
Change in Control shall be deemed to have occurred on the date immediately prior
to the date of termination of Executive's employment. Furthermore, the parties
hereto agree that all actions to be effected under the Plan and Bank Plan shall
not constitute a Change in Control under this Agreement.
16. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be writing and shall be
deemed to have been duly given when hand-delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Bank: First Columbia Bank & Trust Co.
President and CEO
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Corporation: CCFNB Bancorp, Inc.
President and CEO
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
17. SUCCESSORS. This Agreement shall inure to the benefit of and be binding upon
the Executive, the Employers and any of their successors or assigns, provided
however, that the Executive may not commute, anticipate, encumber, dispose or
assign any payment. The Employers are jointly and severally liable for the
obligations of the Employers hereunder.
18. SEVERABILITY. If any provision of this Agreement is declared unenforceable
for any reason, the remaining provisions of this Agreement shall be unaffected
and shall remain in full force and effect.
19. AMENDMENT. This Agreement may be amended or canceled only by mutual
agreement of the parties in writing.
20. PAYMENT OF MONEY DUE DECEASED EXECUTIVE. In the event of Executive's death,
any moneys that may be due him from the Employers under this Agreement as of the
date of death shall be paid to the person designated by him in writing for this
purpose, or in the absence of any such designation to: (i) his spouse if she
survives him, or (ii) his estate if his spouse does not survive him.
21. LAW GOVERNING. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
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22. ENTIRE AGREEMENT. This Agreement supersedes any and all agreements, either
oral or in writing, between the parties with respect to the employment of the
Executive by the Employers, and this Agreement contains all the covenants and
agreements between the parties with respect to such employment.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement to be duly executed in their respective names
and in the case of the Corporation and the Bank, by its authorized
representatives, the day and year above mentioned.
ATTEST: CCFNB BANCORP, INC.
November 29, 2007
------------------------------------- --------------------------------
Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of the Board
ATTEST: FIRST COLUMBIA BANK & TRUST CO.
November 29, 2007
------------------------------------- --------------------------------
Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Chairman of the Board
WITNESS:
November 29, 2007
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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ANNEX H
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT, (this "Agreement"), is made this 29th
day of November, 2007 among First Columbia Bank & Trust Co., a Pennsylvania
banking institution, (the "Bank"), CCFNB BANCORP, INC., a Pennsylvania business
corporation (the "Corporation") and ▇▇▇▇▇▇▇ ▇. ALTERS, an adult individual (the
"Executive"). The Bank and the Corporation are sometimes hereinafter referred to
collectively as the "Employers".
WHEREAS, the Corporation and Columbia Financial Corporation, a Pennsylvania
business corporation, the parent company of the Bank, ("CFC"), have entered into
an Agreement and Plan of Reorganization, dated as of November 29, 2007 (the
"Plan"), whereby CFC will be merged with and into the Corporation with the
Corporation being the surviving company to the merger (the "Company Merger");
WHEREAS, Columbia County Farmers National Bank, ("CCFNB Bank"), a wholly
owned subsidiary of the Corporation and the Bank have entered into a Plan of
Merger ("the Bank Plan "), dated as of November 29, 2007, which is an integral
part of the Plan, whereby, simultaneously with the Company Merger, CCFNB Bank
will be merged with and into the Bank with the Bank being the surviving
institution to this merger (the "Bank Merger");
WHEREAS, the Executive is currently the Chief Financial Officer of CFC and
the Bank and the parties to the Plan and the Bank Plan desire the Executive to
continue as the Chief Financial Officer of the Bank and to assume the title,
role and responsibilities of the Chief Financial Officer of the Corporation
after the Effective Times of the Company and Bank Mergers (as those Effective
Times are defined in the Plan and the Bank Plan) under the terms and conditions
set forth herein;
WHEREAS, the Executive desires to serve the Employers in an executive
capacity under the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and intending to be legally bound hereby, the parties agree as
follows;
1. EMPLOYMENT AND EMPLOYMENT TERM. The Employers hereby shall employ the
Executive and the Executive hereby accepts employment with the Employers for a
term of twenty-four (24) months commencing on the Effective Times of the Company
and Bank Mergers and ending on the last day of the 24th month following such
Effective Times ("Termination Date"), unless sooner terminated as hereinafter
provided. On the Termination Date, while the Executive is employed by the
Employers, the terms of the Executive's employment shall be automatically
extended for successive additional terms of one (1) year each, unless Executive
or the Employers give written notice to the other on or before the first day of
the fourth month prior to the Termination Date of the then current term of
intention not to renew. Notwithstanding the foregoing, the term of Executive's
employment can be terminated pursuant to the provisions of Paragraph 10 herein;
provided, however, the parties agree that in no event shall the term of
Executive's employment hereunder extend beyond December 31 in the calendar year
in which Executive's 65th birthday occurs.
2. POSITION, DUTIES, AND PLACE OF EMPLOYMENT. The Executive shall serve as the
Chief Financial Officer of the Employers, reporting only to the President and
Chief Executive Officer of the Employers and the Board of Directors of the
Employers, and shall have responsibilities of the Chief Financial Officer as set
forth in the job description thereof, as the same may be modified from time to
time by the Board of Directors of the Employers. The Executive shall have such
other powers and duties as may from time to time be prescribed by the Board of
Directors of the Employers,
89
provided such duties are consistent with the Executive's position as the Chief
Financial Officer of the Employers. The Executive's primary office shall be
located at such place as the Bank Board shall determine.
3. ENGAGEMENT IN OTHER EMPLOYMENT. The Executive shall devote all her working
time, ability and attention to the business of the Employers during the term of
this Agreement. The Executive shall, during the term of this Agreement, notify
the Bank Board in writing and receive written approval from the Bank before the
Executive engages in any other business or commercial activities, duties or
pursuits, including, but not limited to, directorships of other companies. Under
no circumstance, during the term of this Agreement, may the Executive engage in
any business or commercial activities, duties or pursuits which compete with the
business or commercial activities of the Employers, nor may the Executive serve
as a director or officer or in any other capacity in a company which competes
with the Employers. Executive shall not be precluded, however, from engaging in
voluntary or philanthropic endeavors, from engaging in activities designed to
maintain and improve her professional skills, or from engaging in activities
incident or necessary to personal investments, so long as they are, in the Bank
Board's reasonable opinion, not in conflict with or detrimental to the
Executive's rendition of services on behalf of the Employers. Executive shall
not serve as fiduciary in connection with the administration of any trust,
estate, agency or other fiduciary relationship without the prior approval from
the Bank's Board, other than as a fiduciary on behalf of, or in connection with
the settlement of an estate of, a member of the Executive's immediate family
(i.e., spouse, parent, child, or sibling).
4. COMPENSATION.
(a) Annual Base Salary. As compensation for services rendered to the
Employers under this Agreement, the Executive shall be entitled to receive from
the Bank an annual base salary of not less than $120,000 dollars per year, (the
"Annual Base Salary") payable in substantially equal bi-weekly installments (or
such other intervals as established by the Bank's payroll policy) prorated for
any partial employment period. The Annual Base Salary shall be reviewed
annually, no later than December 15 of the then calendar year and shall be
subject to such annual change (but not reduced below $120,000 without the
Executive's written consent, except in cases of national financial depression or
emergency when compensation reduction has been implemented by the Board of
Directors for all of the Employers' executive staff) as may be set by the Bank's
Board, taking into account the position and duties of the Executive and the
performance of the Corporation and the Bank. The Executive agrees to serve as
the Chief Financial Officer of the Corporation for no additional remuneration or
benefits.
(b) Bonus. The Bank's Board in its sole discretion may provide for payment
of a periodic bonus to the Executive in such an amount or nature as it may deem
appropriate based on Executive's performance, the financial performance of the
Corporation and Bank and other relevant factors.
5. FRINGE BENEFITS, VACATION, EXPENSES AND PERQUISITES.
(a) Benefit Plans. The Executive shall be entitled to participate in or
receive benefits under all Bank employee benefit plans including, but not
limited to, any pension plan, profit-sharing plan, savings plan, life insurance
plan or disability insurance plan, as made available by the Bank to its
employees, subject to and on a basis consistent with terms, conditions and
overall administration of such plans and arrangements, and provided, further
that such participation does not violate any state or federal law, rule or
regulation.
(b) Business Expenses. During the term of her employment hereunder, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by her (in accordance with the policies and procedures
established by the Bank Board for its senior executive officers) in
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performing services hereunder, provided that the Executive properly accounts
therefore in accordance with Bank policy.
(c) Vacation, Holiday, Sick Days and Personal Days. The Executive shall be
entitled to the number of paid vacation days in each calendar year determined by
the Bank from time to time for its senior executive officers, but not less than
twenty (20) business days per calendar year (prorated in any calendar year
during which the Executive is employed hereunder for less than the entire such
year in accordance with the number of days in such calendar year during which he
is so employed). The Executive shall also be entitled to all paid holidays, sick
days and personal days provided to the Bank to its regular full-time employees
and senior executive officers.
6. NON-DISCLOSURE TRADE/SECRET. During the term of her employment hereunder, or
at any later time, the Executive shall not, without the written consent of the
Bank Board or a person authorized thereby, knowingly disclose to any person,
other than an employee of the Employers, or to a person to whom disclosure is
reasonable necessary or appropriate in connection with the performance by the
Executive of her duties as an executive of the Employers, any confidential
information obtained by the Executive while in the employ of the Employers with
respect to any of the Employers' services, products, improvements, formulas,
designs or styles, processes, customers, methods of business or any business
practices, the disclosure of which could be or will be materially damaging to
the Employers, provided, however, that confidential information shall not
include any information known generally to the public (other than as a result of
unauthorized disclosure by the Executive or any person with the assistance,
consent or direction of the Executive) or any information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that conducted by the Employers or any information that must
be disclosed as required by law. This provision shall survive termination of the
Executive's employment under this Agreement and/or termination of this
Agreement.
7. RESTRICTIVE COVENANT. The Executive covenants and agrees as follows: the
Executive shall not directly or indirectly, within the marketing area of the
Employers (defined as the area within a thirty (30) mile radius of Bloomsburg,
Pennsylvania) enter into or engage generally in direct or indirect competition
with the Employers or any subsidiary of the Employers, either as an individual
on her own or as a partner or joint venturer, or as director, officer,
shareholder, employment, agent, independent contractor, lessor or creditor of or
for any person, for a period of one (1) year after the date of termination of
her employment, whether voluntary or involuntary. The foregoing restriction
shall not be construed to prohibit the ownership by Executive of not more than
five (5%) percent of any class of securities of any corporation which is in
competition with the Employers, provided that such ownership represents a
passive investment and that neither Executive nor any group of persons including
Executive in any way, either, directly or indirectly, manages or exercises
control of any such corporation, guarantees any of its financial obligations,
otherwise takes any part its business, other than exercising her rights as a
shareholder, or seek to do any of the foregoing. The existence of any claim or
cause of actions of the Executive against the Employers, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Employers of this covenant. The Executive agrees that the restrictions
set forth in this Agreement do not unreasonably interfere with her ability to
obtain employment in her chosen field. The Executive also agrees that any breach
of the restrictions set forth in Paragraphs 6, 7, and 8 will result in
irreparable injury to the Employers for which they shall have no adequate remedy
at law and the Employers shall been titled to injunctive relief in order to
enforce the provisions hereof. In the event that this Paragraph shall be
determined by any court of competent jurisdiction to be unenforceable in part by
reason of it being too great a period of time or covering too great a
geographical area, it shall be in full force and effect as to that period of
time or geographical area determined to be reasonable by the court.
8. NON-SOLICITATION. Executive covenants and agrees that while employed by the
Employers and for a period of one (1) year after the termination of Executive's
employment, either voluntarily or
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involuntarily, Executive shall not, either directly or indirectly in any
capacity whatsoever, (a) obtain, solicit, divert, appeal to, attempt to obtain,
attempt to solicit, attempt to divert, attempt to appeal to any customers,
clients or referral sources of the Employers to divert their business from the
Employers; (b) solicit any person who was employed by the Employers to leave the
employ of the Employers. For purposes of this covenant, "customers, clients, and
referral sources" shall include all persons who are or were customers, clients
or referral sources of the Employers at any time during the employment of
Executive by the Employers. The non-solicitation covenant set forth in this
Paragraph 8 shall not be construed to prohibit a general advertising or
marketing program directed toward the marketing area of the Employers by any
subsequent employer of Executive. The existence of any claim by Executive,
whether predicated upon this Agreement or otherwise, shall not constitute
defense to the Employers' enforcement of or attempts to enforce this provision.
9. NOTIFICATION OF A NON-DISCLOSURE/TRADE SECRET, RESTRICTIVE COVENANT AND
NON-SOLICITATION PROVISIONS. During her employment and for a period of one (1)
year following termination of her employment with the Employers, Executive
agrees to inform any prospective employer of existence of the
Non-Disclosure/Trade Secret, Restrictive Covenant and Non-Solicitation
provisions of this Agreement.
10. TERMINATION AND PAYMENTS UPON TERMINATION.
(a) Death of Executive. The Executive's employment hereunder shall
terminate upon her death. Upon her death, the Bank shall pay Executive's then
current Annual Base Salary (minus applicable taxes and withholdings) prorated
through the date of death, together with the dollar value of any accrued
vacation and the amount of any unreimbursed business expenses as of the date of
termination, and the Employers shall have no further obligation to the Executive
under this Agreement.
(b) Executive Disability. Executive's employment shall be subject to
termination by the Employers upon (30) days advance written notice in the event
of Executive's disability as defined herein. For purposes of this Agreement,
"disability" shall mean a physical or mental condition of the Executive (a) that
shall have prevented Executive from performance of her duties as Chief Financial
Officer on a full-time basis (i.e., for purposes hereof, an average of no less
than thirty-five (35) hours per week) during a period of ninety (90) consecutive
days, and (b) that, in the opinion, stated to a reasonable degree of medical
certainty, of a physician licensed to practice in the Commonwealth of
Pennsylvania, is likely to continue to prevent Executive from the performance of
her duties on a full-time basis for an additional six months or more. Executive
waives physician-patient privilege and consents to and authorizes the release of
her medical records to the Employers in the event Executive has not been able to
work full-time for a period of ninety (90) consecutive days. In addition, in
such event, Executive (a) authorizes any physician treating Executive to discuss
Executive's condition with authorized representatives of the Employers and to
express opinions as to the prognosis for Executive's recovery, and (b) consents
to such medical examinations by licensed physicians as the Employers may
reasonably require in order to evaluate Executive's condition and prospects for
resumption of her duties on a full-time basis. If Executive's employment shall
be terminated by reason of her disability, the Employers shall pay Executive her
then current Annual Base Salary (minus applicable taxes and withholdings)
prorated through the date of termination, together with the dollar value of any
accrued vacation and the amount of any unreimbursed business expenses as of the
date of termination, and the Employers shall have no further obligation to the
Executive under this Agreement.
(c) For Cause Termination. The Employers may terminate the Executive's
employment hereunder for Cause. For purposes of this Agreement, the Employers
shall have "Cause" to terminate the Executive's employment hereunder upon (1)
the repeated failure by the Executive to substantially perform her duties
hereunder following written notice to Executive specifying the nature of her
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deficient performance and the failure by Executive to correct such deficiency
within thirty (30) days of said notice; or (2) the engaging by the Executive in
serious misconduct injurious to the Employers; or (3) the violation by the
Executive of the provisions of Paragraphs 3, 6, 7, or 8 hereof after written
notice from the Employers and a failure to cure such violation within thirty
(30) days of said notice; or (4) the dishonesty or gross negligence of the
Executive in the performance of her duties under this Agreement; or (5) the
breach of Executive's fiduciary duty to the Employers involving personal profit;
or (6) the violation of any law, rule or regulation covering banks or bank
officers or any final and unappealable cease and desist order issued by a bank
regulatory authority, any of which, directly and materially ▇▇▇▇▇ the business
of the Employers; or (7) moral turpitude or other serious misconduct on the part
of the Executive which brings material public discredit to the Employers. Any
termination for Cause must be approved by: (1) the affirmative vote of a
majority of the directors then in office of each of the Employers, prior to a
change in control, or (ii) the affirmative vote of not less than eighty (80%)
percent of the directors then in office of each of the Employers, following a
change in control.
If the Executive's employment shall be terminated for cause, the Bank shall
pay the Executive her full Annual Base Salary (minus applicable taxes and
withholdings) prorated through the date of the termination at the rate in effect
at the time of termination, together with the dollar value of any accrued
vacation and the amount of any unreimbursed business expenses as of the date of
termination, and the Employers shall have no further obligation to the Executive
under this Agreement.
(d) Resignation by Executive. The Executive may terminate her employment
hereunder upon one hundred twenty (120) days written notice. Upon Executive's
resignation, the Bank shall pay Executive her Annual Base Salary, (minus
applicable taxes and withholding) prorated through the date of termination at
the rate then in effect at the time of the termination, together with the dollar
value of any accrued vacation and the amount of any unreimbursed business
expenses as of the date of termination, and the Employers shall have no further
obligation to the Executive under this Agreement.
(e) Termination Without Cause. At any time while the Executive is employed
under this Agreement, the Employers may terminate the Executive's employment
without cause and without advance notice. Upon such termination, the Bank shall
pay Executive her then current Annual Base Salary (minus applicable taxes and
withholdings) prorated through the date of termination, together with the dollar
value of any accrued vacation and the amount of any unreimbursed business
expenses as of the date of termination, plus an amount equal to one times
Executive's Annual Base Salary (minus applicable taxes and withholdings),
subject to any limitation under Paragraph 11 of this Agreement. Payment of the
amount due pursuant to this paragraph shall be paid over a twelve (12) month
period, prorated in equal installments on the Bank's regular paydays, unless the
termination occurs within twelve (12) months after a Change in Control, as
defined herein, in which case payment of the amount due pursuant to this
paragraph shall be in a lump sum within thirty (30) days after the date of
termination. Executive also will be entitled to the continuation of life
insurance, health and dental plans and other employee benefits made available to
and on a cost basis consistent with all employees of the Employers for one (1)
year after termination. The Employers shall have no further obligation to the
Executive under this Agreement.
(f) Termination by Executive for Good Reason. The Executive may terminate
her employment hereunder for Good Reason, in each case after notice from the
Executive to the Employers within ninety (90) days after the initial existence
of any such condition that such action or limitation of the Employers
constitutes Good Reason and the failure of the Employers to cure such situation
within forty-five (45) days after such notice. The term "Good Reason" shall mean
(i) any assignment to the Executive, without her consent, of any duties other
than those contemplated by, or any limitations of the powers of the Executive
not contemplated by Paragraph 2 hereof, or (ii) any other breach by Employers of
their obligations under this Agreement.
93
If Executive shall terminate her employment for Good Reason, the Bank shall
pay the Executive an amount equal to her then current Annual Base Salary (minus
applicable taxes and withholdings) prorated through the date of termination,
together with the dollar value of any accrued vacation and the amount of
unreimbursed business expenses as of the date of termination, plus an amount
equal to one (1) times her then current Annual Base Salary (minus applicable
taxes and withholdings), subject to any limitation under Paragraph 11 of this
Agreement. Payment of the amount due pursuant to this Paragraph shall be paid
over a twelve (12) month period, prorated in equal installments on the
Employer's regular pay days, unless the termination occurs within twelve (12)
months after a Change in Control, as defined herein, in which case any amount
due pursuant to this Paragraph shall be paid in a lump sum within thirty (30)
days following the date of termination. Executive also will be entitled to the
continuation of life insurance, health and dental plans and other employee
benefits made available to and on a cost basis consistent with all employees of
the Employers for one (1) year after termination. The Employers shall have no
further obligation to Employee under this Agreement.
(g) Non-Renewal by the Employers. The Employers may terminate the
Executive's employment pursuant to an election not to renew this Agreement as
provided under Paragraph 1 above. Upon such termination, the Bank shall pay
Executive her Annual Base Salary (minus applicable taxes and withholdings) for a
one (1) year period at the rate then in effect at the time of termination,
together with the dollar value of any accrued vacation and the amount of any
unreimbursed business expenses as of the date of termination, subject to any
limitation under Paragraph 11 of this Agreement. The foregoing severance
payments shall be made over a twelve (12) month period commencing on the
effective date of termination prorated in equal installments on the Bank's
regular paydays, except in the case of an election not to renew made by the
Employers within twelve (12) months after the occurrence of a Change in Control,
the amount owing to Executive shall be paid in a lump sum within thirty (30)
days following the date of termination. The Employers shall have no further
obligation to the Employee under this Agreement.
(h) Non-Renewal by Executive. The Executive may terminate her employment
pursuant to an election not to renew this Agreement as provided under Paragraph
1 above. Upon such termination, the Employers shall pay Executive her current
Annual Base Salary (minus applicable taxes and withholdings) prorated through
the date of termination at the rate then in effect at the time of termination,
together with the dollar value of any accrued vacation and the amount of any
unreimbursed business expenses as of the date of termination, and the Employers
shall have no further obligation to the Executive under this Agreement.
11. SECTION 280G LIMITATION. If any severance or salary continuation payments
are to be made under the terms of Paragraph 10 herein (together with any other
payments which the Executive has the right to receive from the Employers as a
result of the termination of Executive without cause by the Employers or both or
the termination by Executive for Good Reason), and those payments shall be
determined by the Employers' or their successors', as the case may be,
independent certified public accountants to constitute a "golden-parachute
payment" under Section 280G of the Internal Revenue Code of 1986 ("Code") and
the regulations thereunder and any successor code section and regulations
thereunder; then the Executive agrees that such aggregate amount shall be
reduced in order to avoid the excise tax imposed by Section 4999 of the Code.
All such amounts hereunder shall be determined by the Employers' or their
successors', as the case may be, independent certified public accounts, whose
determination shall be final and binding upon the parties and their successors
to this Agreement.
12. AUTOMATIC TERMINATION.
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(a) The parties agree that Executive's employment under this Agreement
shall not extend beyond the 31st day of December in the calendar year in which
Executive's 65th birthday occurs. Upon Executive's termination of employment
under this provision, the Bank shall pay Executive her current Annual Base
Salary (minus applicable taxes and withholdings) prorated through the date of
termination, together with the dollar value of any accrued vacation and the
amount of any unreimbursed business expenses as of the date of termination, the
Employers shall have no further obligation to Executive under this Agreement.
(b) This Agreement shall be automatically terminate upon the termination of
the Plan without any action on the part of the Employers or the Executive, and
the Employers and the Employee shall have no further obligation under this
Agreement.
13. DAMAGES FOR BREACH OF CONTRACT. In the event of a breach of this Agreement
by either Employers or the Executive resulting in damages to another party to
this Agreement, that party may recover from the party breaching the Agreement
only those damages as set forth herein. In no event shall any party be entitled
to the recovery of attorney's fees or costs, except as provided in the last
sentence of this Paragraph 13.
Notwithstanding the above, the attorney's fees and costs incurred by Executive
in connection with the enforcement of her rights under this Agreement after a
Change in Control shall be paid by the Employers, or their successors, as the
case may be, unless Executive is judicially determined to have acted in bad
faith.
14. DEFINITION OF CHANGE AND CONTROL. For the purposes of this Agreement, the
terms "Change of Control" shall mean: a change in control of a nature that would
be required to be reported in response to Item 6(e) of schedule 14A of
Regulation 14A and any successor rule or regulation promulgated under the
Securities Exchange Act of ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇"); provided that, without
limitation, such a change in control shall be deemed to have occurred if (a) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act),
other than the Corporation or any "person" who on the date hereof is a director
or officer of the Corporation, is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Corporation representing twenty-five (25) percent or more of the combined
voting power of the Corporation's then outstanding securities; (b) during any
period of two (2) consecutive years during the term of this Agreement,
individuals who at the beginning of such period constitute the Board of
Directors of the Bank or Corporation cease for any reason to constitute at least
a majority thereof, unless the election of each director who was not a director
at the beginning of such period has been approved in advance by directors
representing at least two-thirds (2/3) of the directors then in office who were
directors at the beginning of the period; or (c) the sale, exchange or transfer
of all or substantially all of the Bank's or Corporation's assets.
15. DEFINITION OF DATE OF CHANGE OF CONTROL. For purposes of this Agreement, the
date of Change of Control shall mean:
(a) the first date on which a single person and/or entity, or group of
affiliated persons and/or entities, acquire the beneficial ownership of
twenty-five (25%) percent or more of the Corporation's voting securities;
(b) the date of the transfer of all or substantially all of the Bank's or
Corporation's assets;
(c) the date on which a merger, consolidation or combination is
consummated, as applicable; or
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(d) the date on which individuals who formerly constituted a majority of
the Board of Directors of the Bank or Corporation under Paragraph 14, above,
ceased to be a majority.
Notwithstanding anything contained herein to the contrary, if Executive's
employment is terminated and he reasonable concludes that such termination : (i)
was effected at the request of a third party who has expressed an intention to
effect a Change in Control, or (ii) otherwise occurred in connection with or in
anticipation of an actual or attempted Change in Control, then in such event a
Change in Control shall be deemed to have occurred on the date immediately prior
to the date of termination of Executive's employment. Furthermore, the parties
hereto agree that all actions to be effected under the Plan and Bank Plan shall
not constitute a Change in Control under this Agreement.
16. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be writing and shall be
deemed to have been duly given when hand-delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: ▇▇▇▇▇▇▇ ▇. ALTERS
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇. ▇▇ ▇▇▇▇▇
If to the Bank: First Columbia Bank & Trust Co.
President and CEO
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Corporation: CCFNB Bancorp, Inc.
President and CEO
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
17. SUCCESSORS. This Agreement shall inure to the benefit of and be binding upon
the Executive, the Employers and any of their successors or assigns, provided
however, that the Executive may not commute, anticipate, encumber, dispose or
assign any payment. The Employers are jointly and severally liable for the
obligations of the Employers hereunder.
18. SEVERABILITY. If any provision of this Agreement is declared unenforceable
for any reason, the remaining provisions of this Agreement shall be unaffected
and shall remain in full force and effect.
19. AMENDMENT. This Agreement may be amended or canceled only by mutual
agreement of the parties in writing.
20. PAYMENT OF MONEY DUE DECEASED EXECUTIVE. In the event of Executive's death,
any moneys that may be due her from the Employers under this Agreement as of the
date of death shall be paid to the person designated by her in writing for this
purpose, or in the absence of any such designation to: (i) her spouse if she
survives him, or (ii) her estate if her spouse does not survive her.
21. LAW GOVERNING. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
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22. ENTIRE AGREEMENT. This Agreement supersedes any and all agreements, either
oral or in writing, between the parties with respect to the employment of the
Executive by the Employers, and this Agreement contains all the covenants and
agreements between the parties with respect to such employment.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have caused this Agreement to be duly executed in their respective names and in
the case of the Corporation and the Bank, by its authorized representatives, the
day and year above mentioned.
ATTEST: CCFNB BANCORP, INC.
November 29, 2007
------------------------------------- --------------------------------
Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of the Board
ATTEST: FIRST COLUMBIA BANK & TRUST CO.
November 29, 2007
------------------------------------- --------------------------------
Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Chairman of the Board
WITNESS:
November 29, 2007
------------------------------------- --------------------------------
▇▇▇▇▇▇▇ ▇. ALTERS
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ANNEX I
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT, (this "Agreement"), is made this 29th
day of November, 2007 among First Columbia Bank & Trust Co., a Pennsylvania
banking institution, (the "Bank"), and ▇▇▇▇ ▇. PAGE, an adult individual (the
"Executive").
WHEREAS, CCFNB Bancorp, Inc., a Pennsylvania business corporation (the
"Corporation") and Columbia Financial Corporation, a Pennsylvania business
corporation, the parent company of the Bank, ("CFC"), have entered into an
Agreement and Plan of Reorganization, dated as of November 29, 2007 (the
"Plan"), whereby CFC will be merged with and into the Corporation with the
Corporation being the surviving company to the merger (the "Company Merger");
WHEREAS, Columbia County Farmers National Bank, ("CCFNB Bank"), a wholly
owned subsidiary of the Corporation and the Bank have entered into a Plan of
Merger ("the Bank Plan"), dated as of November 29, 2007, which is an integral
part of the Plan, whereby, simultaneously with the Company Merger, CCFNB Bank
will be merged with and into the Bank with the Bank being the surviving
institution to this merger (the "Bank Merger"). The Bank and the Corporation are
sometimes hereinafter referred to collectively as the "Employers";
WHEREAS, the Executive is currently the Chief Lending Officer of the Bank
and the parties to the Plan and the Bank Plan desire the Executive to continue
as the Chief Lending Officer of the Bank after the Effective Times of the
Company and Bank Mergers (as those Effective Times are defined in the Plan and
the Bank Plan) under the terms and conditions set forth herein;
WHEREAS, the Executive desires to serve the Bank in an executive capacity
under the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and intending to be legally bound hereby, the parties agree as
follows;
1. EMPLOYMENT AND EMPLOYMENT TERM. The Bank hereby shall employ the Executive
and the Executive hereby accepts employment with the Bank for a term of
twenty-four (24) months commencing on the Effective Times of the Company and
Bank Mergers and ending on the last day of the 24th month following such
Effective Times ("Termination Date"), unless sooner terminated as hereinafter
provided. On the Termination Date, while the Executive is employed by the Bank,
the terms of the Executive's employment shall be automatically extended for
successive additional terms of one year, unless Executive or the Bank give
written notice to the other on or before the first day of the fourth month prior
to the Termination Date of the then current term of intention not to renew.
Notwithstanding the foregoing, the term of Executive's employment can be
terminated pursuant to the provisions of Paragraph 10 herein; provided, however,
the parties agree that in no event shall the term of Executive's employment
hereunder extend beyond December 31 in the calendar year in which Executive's
65th birthday occurs.
2. POSITION, DUTIES, AND PLACE OF EMPLOYMENT. The Executive shall serve as the
Chief Lending Officer of the Bank, reporting only to the President and Chief
Executive Officer of the Bank, and shall have responsibilities of the Chief
Lending Officer as set forth in the job description thereof, as the same may be
modified from time to time by the Bank Board. The Executive shall have such
other powers and duties as may from time to time be prescribed by the Bank
Board, provided such duties are consistent with the Executive's position as the
Chief Lending Officer of the Bank. The Executive's primary office shall be
located at such place as the Bank Board shall determine.
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3. ENGAGEMENT IN OTHER EMPLOYMENT. The Executive shall devote all his ability
and attention to the business of the Bank during the term of this Agreement. The
Executive shall, during the term of this Agreement, notify the Bank Board in
writing and receive written approval from the Bank before the Executive engages
in any other business or commercial activities, duties or pursuits, including,
but not limited to, directorships of other companies. Under no circumstance,
during the term of this Agreement, may the Executive engage in any business or
commercial activities, duties or pursuits which compete with the business or
commercial activities of the Employers, nor may the Executive serve as a
director or officer or in any other capacity in a company which competes with
the Employers. Executive shall not be precluded, however, from engaging in
voluntary or philanthropic endeavors, from engaging in activities designed to
maintain and improve his professional skills, or from engaging in activities
incident or necessary to personal investments, so long as they are, in the Bank
Board's reasonable opinion, not in conflict with or detrimental to the
Executive's rendition of services on behalf of the Bank. Executive shall not
serve as fiduciary in connection with the administration of any trust, estate,
agency or other fiduciary relationship without the prior approval from the
Bank's Board, other than as a fiduciary on behalf of, or in connection with the
settlement of an estate of, a member of the Executive's immediate family (i.e.,
spouse, parent, child, or sibling).
4. COMPENSATION.
(a) Annual Base Salary. As compensation for services rendered to the Bank
under this Agreement, the Executive shall be entitled to receive from the Bank
an annual base salary of not less than $120,000 dollars per year, (the "Annual
Base Salary") payable in substantially equal bi-weekly installments (or such
other intervals as established by the Bank's payroll policy) prorated for any
partial employment period. The Annual Base Salary shall be reviewed annually, no
later than December 15 of the then calendar year and shall be subject to such
annual change (but not reduced below $120,000 without the Executive's written
consent, except in cases of national financial depression or emergency when
compensation reduction has been implemented by the Bank Board for all of the
Banks' executive staff) as may be set by the Bank's Board, taking into account
the position and duties of the Executive and the performance of the Corporation
and the Bank.
(b) Bonus. The Bank's Board in its sole discretion may provide for payment
of a periodic bonus to the Executive in such an amount or nature as it may deem
appropriate based on Executive's performance, the financial performance of the
Corporation and Bank and other relevant factors.
5. FRINGE BENEFITS, VACATION, EXPENSES AND PERQUISITES.
(a) Benefit Plans. The Executive shall be entitled to participate in or
receive benefits under all Bank employee benefit plans including, but not
limited to, any pension plan, profit-sharing plan, savings plan, life insurance
plan or disability insurance plan, as made available by the Bank to its
employees, subject to and on a basis consistent with terms, conditions and
overall administration of such plans and arrangements, and provided, further
that such participation does not violate any state or federal law, rule or
regulation.
(b) Business Expenses. During the term of his employment hereunder, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him (in accordance with the policies and procedures
established by the Bank Board for its senior executive officers) in performing
services hereunder, provided that the Executive properly accounts therefore in
accordance with Bank policy.
(c) Vacation, Holiday, Sick Days and Personal Days. The Executive shall be
entitled to the number of paid vacation days in each calendar year determined by
the Bank from time to time for its senior executive officers, but not less than
twenty (20) business days per calendar year (prorated in any calendar year
during which the Executive is employed hereunder for less than the entire such
year
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in accordance with the number of days in such calendar year during which he is
so employed). The Executive shall also be entitled to all paid holidays, sick
days and personal days provided to the Bank to its regular full-time employees
and senior executive officers.
6. NON-DISCLOSURE TRADE/SECRET. During the term of his employment hereunder, or
at any later time, the Executive shall not, without the written consent of the
Bank Board or a person authorized thereby, knowingly disclose to any person,
other than an employee of the Employers, or to a person to whom disclosure is
reasonable necessary or appropriate in connection with the performance by the
Executive of his duties as an executive of the Bank, any confidential
information obtained by the Executive while in the employ of the Bank with
respect to any of the Employers' services, products, improvements, formulas,
designs or styles, processes, customers, methods of business or any business
practices, the disclosure of which could be or will be materially damaging to
the Employers, provided, however, that confidential information shall not
include any information known generally to the public (other than as a result of
unauthorized disclosure by the Executive or any person with the assistance,
consent or direction of the Executive) or any information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that conducted by the Employers or any information that must
be disclosed as required by law. This provision shall survive termination of the
Executive's employment under this Agreement and/or termination of this
Agreement.
7. RESTRICTIVE COVENANT. The Executive covenants and agrees as follows: the
Executive shall not directly or indirectly, within the marketing area of the
Employers (defined as the area within a thirty (30) mile radius of Bloomsburg,
Pennsylvania) enter into or engage generally in direct or indirect competition
with the Employers or any subsidiary of the Employers, either as an individual
on his own or as a partner or joint venturer, or as director, officer,
shareholder, employment, agent, independent contractor, lessor or creditor of or
for any person, for a period of one (1) year after the date of termination of
his employment, whether voluntary or involuntary. The foregoing restriction
shall not be construed to prohibit the ownership by Executive of not more than
five (5%) percent of any class of securities of any corporation which is in
competition with the Employers, provided that such ownership represents a
passive investment and that neither Executive nor any group of persons including
Executive in any way, either, directly or indirectly, manages or exercises
control of any such corporation, guarantees any of its financial obligations,
otherwise takes any part its business, other than exercising his rights as a
shareholder, or seek to do any of the foregoing. The existence of any claim or
cause of actions of the Executive against the Bank, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Employers of this covenant. The Executive agrees that the restrictions set forth
in this Agreement do not unreasonably interfere with his ability to obtain
employment in his chosen field. The Executive also agrees that any breach of the
restrictions set forth in Paragraphs 6, 7, and 8 will result in irreparable
injury to the Employers for which they shall have no adequate remedy at law and
the Employers shall been titled to injunctive relief in order to enforce the
provisions hereof. In the event that this Paragraph shall be determined by any
court of competent jurisdiction to be unenforceable in part by reason of it
being too great a period of time or covering too great a geographical area, it
shall be in full force and effect as to that period of time or geographical area
determined to be reasonable by the court.
8. NON-SOLICITATION. Executive covenants and agrees that while employed by the
Bank and for a period of one (1) year after the termination of Executive's
employment, either voluntarily or involuntarily, Executive shall not, either
directly or indirectly in any capacity whatsoever, (a) obtain, solicit, divert,
appeal to, attempt to obtain, attempt to solicit, attempt to divert, attempt to
appeal to any customers, clients or referral sources of the Employers to divert
their business from the Employers; (b) solicit any person who was employed by
the Employers to leave the employ of the Employers. For purposes of this
covenant, "customers, clients, and referral sources" shall include all persons
who are or were customers, clients or referral sources of the Employers at any
time during the employment of Executive by the Bank. The non-solicitation
covenant set forth in this Paragraph 8
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shall not be construed to prohibit a general advertising or marketing program
directed toward the marketing area of the Employers by any subsequent employer
of Executive. The existence of any claim by Executive, whether predicated upon
this Agreement or otherwise, shall not constitute defense to the Employers'
enforcement of or attempts to enforce this provision.
9. NOTIFICATION OF A NON-DISCLOSURE/TRADE SECRET, RESTRICTIVE COVENANT AND
NON-SOLICITATION PROVISIONS. During his employment and for a period of one (1)
year following termination of his employment with the Bank, Executive agrees to
inform any prospective employer of existence of the Non-Disclosure/Trade Secret,
Restrictive Covenant and Non-Solicitation provisions of this Agreement.
10. TERMINATION AND PAYMENTS UPON TERMINATION.
(a) Death of Executive. The Executive's employment hereunder shall
terminate upon his death. Upon his death, the Bank shall pay Executive's then
current Annual Base Salary (minus applicable taxes and withholdings) prorated
through the date of death, together with the dollar value of any accrued
vacation and the amount of any unreimbursed business expenses as of the date of
termination, and the Employers shall have no further obligation to the Executive
under this Agreement.
(b) Executive Disability. Executive's employment shall be subject to
termination by the Bank upon (30) days advance written notice in the event of
Executive's disability as defined herein. For purposes of this Agreement,
"disability" shall mean a physical or mental condition of the Executive (a) that
shall have prevented Executive from performance of his duties as Chief Lending
Officer on a full-time basis (i.e., for purposes hereof, an average of no less
than thirty-five (35) hours per week) during a period of ninety (90) consecutive
days, and (b) that, in the opinion, stated to a reasonable degree of medical
certainty, of a physician licensed to practice in the Commonwealth of
Pennsylvania, is likely to continue to prevent Executive from the performance of
his duties on a full-time basis for an additional six months or more. Executive
waives physician-patient privilege and consents to and authorizes the release of
his medical records to the Bank in the event Executive has not been able to work
full-time for a period of ninety (90) consecutive days. In addition, in such
event, Executive (a) authorizes any physician treating Executive to discuss
Executive's condition with authorized representatives of the Bank and to express
opinions as to the prognosis for Executive's recovery, and (b) consents to such
medical examinations by licensed physicians as the Bank may reasonably require
in order to evaluate Executive's condition and prospects for resumption of his
duties on a full-time basis. If Executive's employment shall be terminated by
reason of his disability, the Bank shall pay Executive his then current Annual
Base Salary (minus applicable taxes and withholdings) prorated through the date
of termination, together with the dollar value of any accrued vacation and the
amount of any unreimbursed business expenses as of the date of termination, and
the Employers shall have no further obligation to the Executive under this
Agreement.
(c) For Cause Termination. The Bank may terminate the Executive's
employment hereunder for Cause. For purposes of this Agreement, the Bank shall
have "Cause" to terminate the Executive's employment hereunder upon (1) the
repeated failure by the Executive to substantially perform his duties hereunder
following written notice to Executive specifying the nature of his deficient
performance and the failure by Executive to correct such deficiency within
thirty (30) days of said notice; or (2) the engaging by the Executive in serious
misconduct injurious to the Employers; or (3) the violation by the Executive of
the provisions of Paragraphs 3, 6, 7, or 8 hereof after written notice from the
Bank and a failure to cure such violation within thirty (30) days of said
notice; or (4) the dishonesty or gross negligence of the Executive in the
performance of his duties under this Agreement; or (5) the breach of Executive's
fiduciary duty to the Employers involving personal profit; or (6) the violation
of any law, rule or regulation covering banks or bank officers or any final and
unappealable cease and desist order issued by a bank regulatory authority, any
of which, directly and
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materially ▇▇▇▇▇ the business of the Employers; or (7) moral turpitude or other
serious misconduct on the part of the Executive which brings material public
discredit to the Employers. Any termination for Cause must be approved by: (1)
the affirmative vote of a majority of the directors then in office of the Bank,
prior to a change in control, or (ii) the affirmative vote of not less than
eighty (80%) percent of the directors then in office of the Bank, following a
change in control.
If the Executive's employment shall be terminated for cause, the Bank shall
pay the Executive his full Annual Base Salary (minus applicable taxes and
withholdings) prorated through the date of the termination at the rate in effect
at the time of termination, together with the dollar value of any accrued
vacation and the amount of any unreimbursed business expenses as of the date of
termination, and the Bank shall have no further obligation to the Executive
under this Agreement.
(d) Resignation by Executive. The Executive may terminate his employment
hereunder upon one hundred twenty (120) days written notice. Upon Executive's
resignation, the Bank shall pay Executive his Annual Base Salary (minus
applicable taxes and withholding) prorated through the date of termination at
the rate then in effect at the time of the termination, together with the dollar
value of any accrued vacation and the amount of any unreimbursed business
expenses as of the date of termination, and the Bank shall have no further
obligation to the Executive under this Agreement.
(e) Termination Without Cause. At any time while the Executive is employed
under this Agreement, the Bank may terminate the Executive's employment without
cause and without advance notice. Upon such termination, the Bank shall pay
Executive his then current Annual Base Salary (minus applicable taxes and
withholdings) prorated through the date of termination, together with the dollar
value of any accrued vacation and the amount of any unreimbursed business
expenses as of the date of termination, plus an amount equal to one times
Executive's Annual Base Salary (minus applicable taxes and withholdings),
subject to any limitation under Paragraph 11 of this Agreement. Payment of the
amount due pursuant this paragraph shall be paid over a twelve (12) month
period, prorated in equal installments on the Bank's regular paydays, unless the
termination occurs within twelve (12) months after a Change in Control, as
defined herein, in which case payment of the amount due pursuant to this
paragraph shall be in a lump sum within thirty (30) days after the date of
termination. Executive also will be entitled to the continuation of life
insurance, health and dental plans and other employee benefits made available to
and on a cost basis consistent with all employees of the Bank for one (1) year
after termination. The Bank shall have no further obligation to the Executive
under this Agreement.
(f) Termination by Executive for Good Reason. The Executive may terminate
his employment hereunder for Good Reason, in each case after notice from the
Executive to the Bank within ninety (90) days after the initial existence of any
such condition that such action or limitation of the Bank constitutes Good
Reason and the failure of the Bank to cure such situation within forty-five (45)
days after such notice. The term "Good Reason" shall mean (i) any assignment to
the Executive, without his consent, of any duties other than those contemplated
by, or any limitations of the powers of the Executive not contemplated by
Paragraph 2 hereof, or (ii) any other breach by the Bank of their obligations
under this Agreement.
If Executive shall terminate his employment for Good Reason, the Bank shall
pay the Executive an amount equal to his then current Annual Base Salary (minus
applicable taxes and withholdings) prorated through the date of termination,
together with the dollar value of any accrued vacation and the amount of any
unreimbursed business expenses as of the date of termination, plus an amount
equal to one (1) times his then current Annual Base Salary (minus applicable
taxes and withholdings), subject to any limitation under Paragraph 11 of this
Agreement. Payment of the amount due pursuant to this Paragraph shall be paid
over a twelve (12) month period, prorated in equal installments on the
Employer's regular paydays, unless the termination occurs within twelve (12)
months after the occurrence of a Change in Control, as defined herein, in which
case any amount
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due under this Paragraph shall be paid in a lump sum within thirty (30) days
following the date of termination. Executive also will be entitled to the
continuation of life insurance, health and dental plans and other employee
benefits made available to and on a cost basis consistent with all employees of
the Bank for one (1) years after termination. The Bank shall have no further
obligation to the Executive under this Agreement.
(g) Non-Renewal by the Bank. The Bank may terminate the Executive's
employment pursuant to an election not to renew this Agreement as provided under
Paragraph 1 above. Upon such termination, the Bank shall pay Executive his
current Annual Base Salary (minus applicable taxes and withholdings) for a one
(1) year period at the rate then in effect at the time of termination, together
with the dollar value of any accrued vacation and the amount of any unreimbursed
business expenses as of the date of termination, subject to any limitation under
Paragraph 11 of this Agreement. The foregoing severance payments shall be made
over a twelve (12) month period commencing on the effective date of termination
prorated in equal installments of the Bank's regular paydays, except in the case
of an election not to renew made by the Bank within twelve (12) months after the
occurrence of a Change in Control, the amount owing to Executive shall be paid
in a lump sum within thirty (30) days following the date of termination. The
Bank shall have no further obligation to the Employee under this Agreement.
(h) Non-Renewal by Executive. The Executive may terminate his employment
pursuant to an election not to renew this Agreement as provided under Paragraph
1 above. Upon such termination, the Bank shall pay Executive his current Annual
Base Salary (minus applicable taxes and withholdings) prorated through the date
of termination at the rate then in effect at the time of termination, together
with the dollar value of any accrued vacation and the amount of any unreimbursed
business expenses as of the date of termination, and the Bank shall have no
further obligation to the Executive under this Agreement.
11. SECTION 280G LIMITATION. If any severance or salary continuation payments
are to be made under the terms of Paragraph 10 herein (together with any other
payments which the Executive has the right to receive from the Bank as a result
of the termination of Executive without cause by the Bank or the termination by
Executive for Good Reason), and those payments shall be determined by the Bank's
or its successor's, as the case may be, independent certified public accountants
to constitute a "golden-parachute payment" under Section 280G of the Internal
Revenue Code of 1986 ("Code") and the regulations thereunder and any successor
code section and regulations thereunder; then the Executive agrees that such
aggregate amount shall be reduced in order to avoid the excise tax imposed by
Section 4999 of the Code. All such amounts hereunder shall be determined by the
Bank's or its successor's, as the case may be, independent certified public
accounts, whose determination shall be final and binding upon the parties and
their successors to this Agreement.
12. AUTOMATIC TERMINATION.
(a) The parties agree that Executive's employment under this Agreement
shall not extend beyond the 31st day of December in the calendar year in which
Executive's 65th birthday occurs. Upon Executive's termination of employment
under this provision, the Bank shall pay Executive his current Annual Base
Salary (minus applicable taxes and withholdings) prorated through the date of
termination, together with the dollar value of any accrued vacation and the
amount of any unreimbursed business expenses as of the date of termination, and
Bank shall have no further obligation to Executive under this Agreement.
(b) This Agreement shall be automatically terminate upon the termination of
the Plan without any action on the part of the Bank or the Executive, and the
Bank and the Employee shall have no further obligation under this Agreement.
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13. DAMAGES FOR BREACH OF CONTRACT. In the event of a breach of this Agreement
by either Bank or the Executive resulting in damages to another party to this
Agreement, that party may recover from the party breaching the Agreement only
those damages as set forth herein. In no event shall any party be entitled to
the recovery of attorney's fees or costs, except as provided in the last
sentence of this Paragraph 13.
Notwithstanding the above, the attorney's fees and costs incurred by Executive
in connection with the enforcement of his rights under this Agreement after a
Change in Control shall be paid by the Bank, or its successor, as the case may
be, unless Executive is judicially determined to have acted in bad faith.
14. DEFINITION OF CHANGE AND CONTROL. For the purposes of this Agreement, the
terms "Change of Control" shall mean: a change in control of a nature that would
be required to be reported in response to Item 6(e) of schedule 14A of
Regulation 14A and any successor rule or regulation promulgated under the
Securities Exchange Act of ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇"); provided that, without
limitation, such a change in control shall be deemed to have occurred if (a) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act),
other than the Corporation or any "person" who on the date hereof is a director
or officer of the Corporation, is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Corporation representing twenty-five (25) percent or more of the combined
voting power of the Corporation's then outstanding securities; (b) during any
period of two (2) consecutive years during the term of this Agreement,
individuals who at the beginning of such period constitute the Board of
Directors of the Bank or Corporation cease for any reason to constitute at least
a majority thereof, unless the election of each director who was not a director
at the beginning of such period has been approved in advance by directors
representing at least two-thirds (2/3) of the directors then in office who were
directors at the beginning of the period; or (c) the sale, exchange or transfer
of all or substantially all of the Bank's or Corporation's assets.
15. DEFINITION OF DATE OF CHANGE OF CONTROL. For purposes of this Agreement, the
date of Change of Control shall mean:
(a) the first date on which a single person and/or entity, or group of
affiliated persons and/or entities, acquire the beneficial ownership of
twenty-five (25%) percent or more of the Corporation's voting securities;
(b) the date of the transfer of all or substantially all of the Bank's or
Corporation's assets;
(c) the date on which a merger, consolidation or combination is
consummated, as applicable; or
(d) the date on which individuals who formerly constituted a majority of
the Board of Directors of the Bank or Corporation under Paragraph 14, above,
ceased to be a majority.
Notwithstanding anything contained herein to the contrary, if Executive's
employment is terminated and he reasonable concludes that such termination : (i)
was effected at the request of a third party who has expressed an intention to
effect a Change in Control, or (ii) otherwise occurred in connection with or in
anticipation of an actual or attempted Change in Control, then in such event a
Change in Control shall be deemed to have occurred on the date immediately prior
to the date of termination of Executive's employment. Furthermore, the parties
hereto agree that all actions to be effected under the Plan and Bank Plan shall
not constitute a Change in Control under this Agreement.
16. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be writing and shall be
deemed to have been duly given when hand-delivered
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or mailed by United States certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive: ▇▇▇▇ ▇. PAGE
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Bank: First Columbia Bank & Trust Co.
President and CEO
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
17. SUCCESSORS. This Agreement shall inure to the benefit of and be binding upon
the Executive, the Bank and any of its successors or assigns, provided however,
that the Executive may not commute, anticipate, encumber, dispose or assign any
payment.
18. SEVERABILITY. If any provision of this Agreement is declared unenforceable
for any reason, the remaining provisions of this Agreement shall be unaffected
and shall remain in full force and effect.
19. AMENDMENT. This Agreement may be amended or canceled only by mutual
agreement of the parties in writing.
20. PAYMENT OF MONEY DUE DECEASED EXECUTIVE. In the event of Executive's death,
any moneys that may be due him from the Bank under this Agreement as of the date
of death shall be paid to the person designated by him in writing for this
purpose, or in the absence of any such designation to: (i) his spouse if she
survives him, or (ii) his estate if his spouse does not survive him.
21. LAW GOVERNING. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
22. ENTIRE AGREEMENT. This Agreement supersedes any and all agreements, either
oral or in writing, between the parties with respect to the employment of the
Executive by the Bank, and this Agreement contains all the covenants and
agreements between the parties with respect to such employment.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement to be duly executed in their respective names
and in the case of the Bank, by its authorized representatives, the day and year
above mentioned.
ATTEST: FIRST COLUMBIA BANK & TRUST CO.
November 29, 2007
------------------------------------- --------------------------------
Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Chairman of the Board
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WITNESS:
November 29, 2007
------------------------------------- --------------------------------
▇▇▇▇ ▇. PAGE
With respect to Paragraphs 3, 6, 7, 8, 9, 11, 13, 14 and 15, CCFNB Bancorp Inc.
intending to be ▇▇▇▇▇▇ bound hereby, joins in this agreement.
ATTEST: CCFNB BANCORP, INC.
November 29, 2007
------------------------------------- --------------------------------
Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇,
President and Chief Executive
Officer
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ANNEX J
STATUTORY PROVISIONS RELATING TO DISSENTERS' RIGHTS
PENNSYLVANIA BANKING CODE OF 1965, AS AMENDED
EXCERPT FROM CHAPTER 12
SECTION 1222. Rights of Dissenting Shareholders.
If a shareholder of an institution shall object to a proposed plan of
action of the institution authorized under a section of this act and such
section provides that the shareholder shall be entitled to rights and remedies
of a dissenting shareholder, the rights and remedies of such shareholder shall
be governed by the provisions of the Business Corporation Law (15 Pa.C.S.A.
Sections 1001, et.seq.) applicable to dissenting shareholders and shall be
subject to the limitations on such rights and remedies under those provisions.
Shares acquired by an institution as a result of the exercise of such rights by
a dissenting shareholder may be held and disposed of as treasury shares, or, in
the case of a merger or consolidation, as otherwise provided in the plan of
merger or consolidation.
EXCERPT FROM CHAPTER 16
SECTION 1607. Rights of Dissenting Shareholders.
(a) A shareholder of an institution which is a party to a plan in which the
proposed merger or consolidation will result in an institution subject to this
act who objects to the plan shall be entitled to the rights and remedies of a
dissenting shareholder provided under, and subject to compliance with, the
provisions of section 1222 of this act.
THE PENNSYLVANIA BUSINESS CORPORATION LAW OF 1988, AS AMENDED
EXCERPT FROM SUBCHAPTER 19C
SECTION 1930. Dissenters Rights.
(a) General Rule. If any shareholder of a domestic business corporation
that is to be a party to a merger or consolidation pursuant to a plan of merger
or consolidation objects to the plan of merger or consolidation and complies
with the provisions of Subchapter D of Chapter 15 (relating to dissenters
rights), the shareholder shall be entitled to the rights and remedies of
dissenting shareholders therein provided, if any. See also section 1906(c)
(relating to dissenters rights upon special treatment).
SUBCHAPTER 15D DISSENTERS RIGHTS
SECTION 1571. Application and Effect of Subchapter.
(a) General Rule. Except as otherwise provided in subsection (b), any
shareholder (as defined in section 1572 (relating to definitions) of a business
corporation shall have the right to dissent from, and to obtain payment of the
fair value of his shares in the event of, any corporate action, or to otherwise
obtain fair value for his shares, only where this part expressly provides that a
shareholder shall have the rights and remedies provided in this subchapter. See:
Section 1906(c) (relating to dissenters rights upon special treatment).
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Section 1930 (relating to dissenters rights).
Section 1931(d) (relating to dissenters rights in share exchanges).
Section 1932(c) (relating to dissenters rights in asset transfers).
Section 1952(d) (relating to dissenters rights in division).
Section 1962(c) (relating to dissenters rights in conversion).
Section 2104(b) (relating to procedure).
Section 2324 (relating to corporation option where a restriction on
transfer of a security is held invalid).
Section 2325(b) (relating to minimum vote requirement).
Section 2704(c) (relating to dissenters rights upon election).
Section 2705(d) (relating to dissenters rights upon renewal of election).
Section 2904(b) (relating to procedure).
Section 2907(a) (relating to proceedings to terminate breach of qualifying
conditions).
Section 7104(b) (3) (relating to procedure).
(b) Exceptions:
(1) Except as otherwise provided in paragraph (2), the holders of the
shares of any class or series of shares shall not have the right to dissent
and obtain payment of the fair value of the shares under this subchapter
if, on the record date fixed to determine the shareholders entitled to
notice of and to vote at the meeting at which a plan specified in any of
section 1930, 1931(d), 1932(c) or 1952(d) is to be voted on, or on the date
of the first public announcement that such a plan has been approved by the
shareholders by consent without a meeting, the shares are either:
(i) listed on a national securities exchange or designated as a
national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc.;
or
(ii) held beneficially or of record by more than 2,000 persons.
(2) Paragraph (1) shall not apply to and dissenters rights shall be
available without regard to the exception provided in that paragraph in the
case of:
(i) Repealed.
(ii) Shares of any preferred or special class or series unless
the articles, the plan or the terms of the transaction entitle
all shareholders of the class or series to vote thereon and
require for the adoption of the plan or the effectuation of the
transaction the affirmative vote of a majority of the votes cast
by all shareholders of the class or series.
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(iii) Shares entitled to dissenters rights under section 1906(c)
(relating to dissenters rights upon special treatment).
(3) The shareholders of a corporation that acquires by purchase,
lease, exchange or other disposition all or substantially all of the
shares, property or assets of another corporation by the issuance of
shares, obligations or otherwise, with or without assuming the liabilities
of the other corporation and with or without the intervention of another
corporation or other person, shall not be entitled to the rights and
remedies of dissenting shareholders provided in this subchapter regardless
of the fact, if it be the case, that the acquisition was accomplished by
the issuance of voting shares of the corporation to be outstanding
immediately after the acquisition sufficient to elect a majority or more of
the directors of the corporation.
(c) Grant of optional dissenters right. The bylaws or a resolution of the
board of directors may direct that all or a part of the shareholders shall have
dissenters rights in connection with any corporate action or other transaction
that would otherwise not entitle such shareholder to dissenters rights.
(d) Notice of dissenters rights. Unless otherwise provided by statute, if a
proposed corporate action that would give rise to dissenters rights under this
subpart is submitted to a vote at a meeting of shareholders, there shall be
included in or enclosed with the notice of meeting:
(1) a statement of the proposed action and a statement that the
shareholders have a right to dissent and obtain payment of the fair value
of their shares by complying with the terms of this subchapter; and
(2) a copy of this subchapter.
(e) Other statues. The procedures of this subchapter shall also be
applicable to any transaction described in any statute other than this part that
makes reference to this subchapter for the purpose of granting dissenters
rights.
(f) Certain provisions of articles ineffective. This subchapter may not be
relaxed by an provision of the articles.
(g) Computation of beneficial ownership. For purposes of subsection (b) (1)
(ii), shares that are held beneficially as joint tenants, tenants by the
entireties, tenants in common or in trust by two or more persons, as fiduciaries
or otherwise, shall be deemed to be held beneficially by one person.
(h) Cross references. See sections 1105 (relating to restriction on
equitable relief), 1904 (relating to de facto transaction doctrine abolished),
1763(c) (relating to determination of shareholders of record) and 2512 (relating
to dissenters rights procedure).
SECTION 1572. Definitions.
The following words and phrases when used in this subchapter shall have the
meanings given to them in this section unless the context clearly indicates
otherwise;
"Corporation." The issuer of the shares held or owned by the dissenter
before the corporate action or the successor by merger, consolidation, division,
conversion or otherwise of that issuer. A plan of division may designate which
one or more or the resulting corporations is the successor corporation for the
purposes of this subchapter. The designated successor corporation or
corporations
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in a division shall have sole responsibility for payments to dissenters and
other liabilities under this subchapter except as otherwise provided in the plan
of division.
"Dissenter." A shareholder or beneficial owner who is entitled to and does
assert dissenters rights under this subchapter and who has performed every act
required up to the time involved for the assertion of those rights.
"Fair Value." The fair value of shares immediately before the effectuation
of the corporate action to which the dissenter objects taking into account all
relevant factors, but excluding any appreciation or depreciation in anticipation
of the corporate action.
"Interest." Interest from the effective date of the corporate action until
the date of payment at such rate as is fair and equitable under all of the
circumstances, taking into account all relevant factors including the average
rate currently paid by the corporation on its principal bank loans.
"Shareholder." A shareholder as defined in section 1103 (relating to
definitions), or an ultimate beneficial owner of shares, including without
limitation a holder of depository receipts, where the beneficial interest owned
included an interest in the assets of the corporation upon dissolution.
SECTION 1573. Record and beneficial holders and owners.
(a) Record holders of shares. A record holder of shares of a business
corporation may assert dissenters rights as to fewer than all of the shares
registered in his name only if he dissents with respect to all the shares of the
same class or series beneficially owned by any one person and discloses the name
and address of the person or persons on whose behalf he dissents. In that event,
his rights shall be determined as if the shares as to which he has dissented and
his other shares were registered in the names of different shareholders.
(b) Beneficial owners of shares. A beneficial owner of shares of a business
corporation who is not the record holder may assert dissenters rights with
rights with respect to shares held on his behalf as shall be treated as a
dissenting shareholder under the terms of this subchapter if he submits to the
corporation not later than the assertion of dissenters rights a written consents
of the record holder. A beneficial owner may not dissent with respect to some
but less than all shares of the same class or series owned by the owner, whether
or not the shares so owned by him are registered in his name.
SECTION 1574. Notice of intention to dissent.
If the proposed corporate action is submitted to a vote at a meeting of
shareholders of a business corporation, any person who wishes to dissent and
obtain payment of the fair value of his shares must file with the corporation,
prior to the vote, a written notice of intention to demand that he be paid the
fair value of his shares if the proposed action is effectuated, must effect no
change in the beneficial ownership of his shares from the date of such filing
continuously through the effective date of the proposed action and must refrain
from voting his shares in approval of such action. A dissenter who fails in any
respect shall not acquire any right to payment of the fair value of his shares
under this subchapter. Neither a proxy nor a vote against the proposed corporate
action shall constitute the written notice required by this section.
SECTION 1575. Notice to demand payment.
(a) General rule. If the proposed corporate action is approved by the
required vote at a meeting of shareholders of a business corporation, the
corporation shall mail a further notice to all dissenters who gave due notice of
intention to demand payment of the fair value of their shares and
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who refrained from voting in favor of the proposed action. If the proposed
corporate action is to be taken without a vote of shareholders, the corporation
shall send to all shareholders who are entitled to dissent and demand payment of
the fair value of their shares a notice of the adoption of the plan or other
corporate action. In either case, the notice shall:
(1) State where and when a demand for payment must be sent and
certificates for certificated shares must be deposited in order to obtain
payment.
(2) Inform holders of uncertificated shares to what extent transfer of
shares will be restricted from the time that demand for payment is
received.
(3) Supply a form for demanding payment that includes a request for
certification of the date on which the shareholder, or the person on whose
beneficial shareholder dissents, acquired beneficial ownership of the
shares.
(4) Be accompanied by a copy of this subchapter.
(b) Time for receipt of demand for payment. The time set for receipt of the
demand and deposit of certificated shares shall be not less than 30 days from
the mailing of the notice.
SECTION 1576. Failure to comply with notice to demand payment, etc.
(a) Effect of failure of shareholder to act. A shareholder who fails to
timely demand payment, or fails (in the case of certificated shares) to timely
deposit certificates, as required by notice pursuant to section 1575 (relating
to notice demand payment) shall not have any right under this subchapter to
receive payment of the fair value of his shares.
(b) Restriction on uncertificated shares. If the shares are not represented
by certificates, the business corporation may restrict their transfer from the
time of receipt of demand for payment until effectuation of the proposed
corporate action or the release of restrictions under the terms of section 1577
(a) (relating to failure to effectuate corporate action).
(c) Rights retained by shareholder. The dissenter shall retain all other
rights of a shareholder until those rights are modified by effectuation of the
proposed corporate action.
SECTION 1577. Release of restrictions or payment for shares.
(a) Failure to effectuate corporate action. Within 60 days after the date
set for demanding payment and depositing certificates, if the business
corporation has not effectuated the proposed corporate action, it shall return
any certificates that have been deposited and release uncertificated shares from
any transfer restrictions imposed by reason of the demand for payment.
(b) Renewal of notice to demand payment. When uncertified shares have been
released from transfer restrictions and deposited certificates have been
returned, the corporation may at any later time send a new notice conforming to
the requirements of section 1575 (relating to notice to demand payment), with
like effect.
(c) Payment of fair value shares. Promptly after effectuation of the
proposed corporate action, or upon timely receipt of demand for payment of the
corporate action has already been effectuated, the corporation shall either
remit to dissenters who have made demand and (if their shares are certificated)
have deposited their certificates the amount that the corporation estimates to
be the fair value of the shares, or give written notice that no remittance under
this section will be made. The remittance or notice shall be accompanied by:
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(1) The closing balance sheet and statement of income of the issuer of the
shares held or owned by the dissenter for a fiscal year ending not more than 16
months before the date of remittance or notice together with the latest
available interim financial statements.
(2) A statement of the corporation's estimate of the fair value of the
shares.
(3) A notice of the right of the dissenter to demand payment or
supplemental payment, as the case may be, accompanied by a copy of this
subchapter.
(d) Failure to make payment. If the corporation does not remit the amount
of its estimate of the fair value of the shares as provided by subsection (c),
it shall return any certificates that have been deposited and release
uncertificated shares from any transfer restrictions imposed by reason of the
demand for payment. The corporation may make a notation on any such certificate
or on the records of the corporation relating to any such uncertificated shares
that such demand has been made. If shares with respect to which notation has
been so made shall be transferred, each new certificate issued therefore or the
records relating to any transferred uncertificated shares shall bear a similar
notation, together with the name of the original dissenting holder or owner of
such shares. A transferee of such shares shall not acquire by such transfer any
rights in the corporation other than those that the original dissenter had after
making demand for payment of their fair value.
SECTION 1578. Estimate by dissenter of fair value of shares.
(a) General rule. If the business corporation gives notice of its estimates
of the fair value of the shares, without remitting such amount, or remits
payment of its estimate of the fair value of a dissenter's shares as permitted
by section 1577(c) (relating to payment of fair value of shares) and the
dissenter believes that the amount stated or remitted is less than the fair
value of his shares, he may send to the corporation his own estimate of the fair
value of the shares, which shall be deemed a demand for payment of the amount of
deficiency.
(b) Effect of failure to file estimate. Where the dissenter does not file
his own estimate under subsection (a) within 30 days after the mailing by the
corporation of its remittance or notice, the dissenter shall be entitled to no
more than the amount stated in the notice or remitted to him by the corporation.
SECTION 1579. Valuation proceedings generally.
(a) General rule. Within 60 days after the latest of:
(1) effectuation of the proposed corporate action;
(2) timely receipt of any demands for payment under Section 1575
(relating to notice to demand payment); or
(3) timely receipt of any estimates pursuant to Section 1578 (relating
to estimate by dissenter of fair value of shares).
If any demands for payment remain unsettled, the business corporation may file
in court an application for relief requesting that the fair value of the shares
be determined by the court.
(b) Mandatory joinder of dissenters. All dissenters, wherever residing,
whose demands have not been settled shall be made parties to the proceeding as
in an action against their shares. A copy of the application shall be served on
each such dissenter. If a dissenter is a nonresident, the copy may be
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served on him in the manner provided or prescribed by or pursuant to 42 Pa C.S.
Ch.53 (relating to bases of jurisdiction and interstate and international
procedure).
(c) Jurisdiction of the court. The jurisdiction of the court shall be
plenary and exclusive. The court may appoint an appraiser to receive evidence
and recommend a decision on the issue of fair value
The appraiser shall have such power and authority as may be specified n the
order of appointment or in any amendment thereof.
(d) Measure of recovery. Each dissenter who is made a party shall be
entitled to recover the amount by which the fair value of his shares is found to
exceed the amount, if any, previously remitted, plus interest.
(e) Effect of corporation's failure to file application. If the corporation
fails to file an application as provided in subsection (a), any dissenter who
made a demand and who has not already settled his claim against the corporation
may do so in the name of the corporation at any time within 30 days after the
expiration of the 60-day period. If a dissenter does not file an application
within the 30-day period, each dissenter entitled to file an application shall
be paid the corporation's estimate of the fair value of the shares and not more,
and may bring an action to recover any amount not previously remitted.
SECTION 1580. Costs and expenses of valuation proceedings.
(a) General rule. The costs and expenses of any proceeding under section
1579 (relating to valuation proceedings generally) including the reasonable
compensation and expenses of the appraiser appointed by the court, shall be
determined by the court and assessed against the business corporation except
that any part of the costs and expenses may be apportioned and assessed as the
court deems appropriate against all or some of the dissenters who are parties
and whose action in demanding supplemental payment under section 1578 (relating
to estimate by dissenter of fair value of shares) the court finds to be
dilatory, obdurate, arbitrary, vexatious or in bad faith.
(b) Assessment of counsel fees and expert fees where lack of good faith
appears. Fees and expenses of counsel and of experts for the respective parties
may be assessed as the court deems appropriate against the corporation and in
favor of any or all dissenters if the corporation failed to comply substantially
with the requirements of this subchapter and may be assessed against either the
corporation or a dissenter in favor of any other party, if the court finds that
the party against whom the fees and expenses are assessed acted in bad faith or
in a dilatory, obdurate, arbitrary or vexatious manner in respect to the rights
provided by this subchapter
(c) Award of fees for benefits to other dissenters. If the court finds that
the services of counsel for any dissenter were of substantial benefit to other
dissenters similarly situated and should not be assessed against the
corporation, it may award to those counsel reasonable fees to be paid out of the
amounts awarded to the dissenters who were benefited.
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