EXHIBIT 2.1
AGREEMENT AND PLAN
OF CONSOLIDATION
between
BCB FINANCIAL SERVICES CORPORATION
and
HERITAGE BANCORP, INC.
November 18, 1997
AGREEMENT
TABLE OF CONTENTS
Page
BACKGROUND.................................................. 1
AGREEMENT................................................... 1
ARTICLE I
THE CONSOLIDATION
Section 1.01 Definitions................................... 2
Section 1.02 The Consolidation............................. 7
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF Heritage
Section 2.01 Organization.................................. 15
Section 2.02 Capitalization................................ 16
Section 2.03 Authority; No Violation....................... 17
Section 2.04 Consents...................................... 18
Section 2.05 Financial Statements.......................... 19
Section 2.06 Taxes......................................... 19
Section 2.07 No Material Adverse Effect.................... 20
Section 2.08 Contracts..................................... 20
Section 2.09 Ownership of Property; Insurance Coverage..... 21
Section 2.10 Legal Proceedings............................. 22
Section 2.11 Compliance With Applicable Law................ 23
Section 2.12 Information to be Supplied.................... 23
Section 2.13 ERISA......................................... 24
Section 2.14 Brokers, Finders and Financial Advisors....... 25
Section 2.15 Securities Documents.......................... 25
Section 2.16 Environmental Matters......................... 25
Section 2.17 Allowance for Loan Losses..................... 26
Section 2.18 Related Party Transactions.................... 26
Section 2.19 Loans......................................... 26
Section 2.20 Accounting for the Consolidation;
Reorganization................................ 26
Section 2.21 Fairness Opinion.............................. 26
Section 2.22 Quality of Representations.................... 27
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BCB
Section 3.01 Organization.................................. 27
Section 3.02 Capitalization................................ 28
Section 3.03 Authority; No Violation....................... 29
Section 3.04 Consents...................................... 30
Section 3.05 Financial Statements.......................... 30
Section 3.06 Taxes......................................... 31
Section 3.07 No Material Adverse Effect.................... 31
Section 3.08 Contracts..................................... 31
Section 3.09 Ownership of Property; Insurance Coverage..... 33
Section 3.10 Legal Proceedings............................. 34
Section 3.11 Compliance With Applicable Law................ 34
Section 3.12 Information to be Supplied.................... 34
Section 3.13 ERISA......................................... 35
Section 3.14 Brokers, Finders and Financial Advisors....... 36
Section 3.15 Securities Documents.......................... 36
Section 3.16 Environmental Matters......................... 37
Section 3.17 Allowance for Loan Losses..................... 37
Section 3.18 Related Party Transactions.................... 37
Section 3.19 Loans......................................... 37
Section 3.20 Accounting for the Consolidation;
Reorganization................................ 38
Section 3.21 Fairness Opinion.............................. 38
Section 3.22 Quality of Representations.................... 38
ARTICLE IV
COVENANTS OF THE PARTIES
Section 4.01 Conduct of Business.......................... 38
Section 4.02 Access; Confidentiality...................... 43
Section 4.03 Regulatory Matters and Consents.............. 43
Section 4.04 Taking of Necessary Action................... 44
Section 4.05 Indemnification; Insurance................... 45
Section 4.06 No Other Bids and Related Matters............ 46
Section 4.07 Duty to Advise; Duty to Update Disclosure
Schedule..................................... 47
Section 4.08 Current Information.......................... 47
Section 4.09 Undertakings by BCB and Heritage............. 48
Section 4.10 Employee Benefits............................ 49
Section 4.11 Nasdaq Listing............................... 54
Section 4.12 Affiliate Letters............................ 54
Section 4.13 Employment and Change in Control Agreements.. 54
Section 4.14 Severance and Vacation Pay................... 55
Section 4.15 Transition Committee......................... 55
Section 4.16 Voting of Heritage Common Stock Held by
Heritage National Bank as Fiduciary.......... 56
ARTICLE V
CONDITIONS
Section 5.01 Mutual Conditions to the Obligations of Heritage
and BCB under this Agreement................. 56
ARTICLE VI
TERMINATION, WAIVER AND AMENDMENT
Section 6.01 Termination.................................. 58
Section 6.02 Effect of Termination........................ 59
ARTICLE VII
MISCELLANEOUS
Section 7.01 Expenses..................................... 60
Section 7.02 Non-Survival of Representations and
Warranties................................... 60
Section 7.03 Amendment, Extension and Waiver.............. 60
Section 7.04 Entire Agreement............................. 60
Section 7.05 No Assignment................................ 61
Section 7.06 Notices...................................... 61
Section 7.07 Captions..................................... 62
Section 7.08 Counterparts................................. 62
Section 7.09 Severability................................. 62
Section 7.10 Governing Law................................ 62
Exhibit 1-A Heritage's Affiliate Agreement
Exhibit 1-B BCB's Affiliate Agreement
Exhibit 2 Heritage Stock Option Agreement
Exhibit 3 BCB Stock Option Agreement
Exhibit 4 Articles of Consolidation
Exhibit 5 Holding Company Bylaws
Exhibit 6 Form of Opinion of BCB's Counsel
Exhibit 7 Form of Opinion of Heritage's Counsel
Exhibit 8 Matters to be Covered in Tax Opinion of
Counsel to BCB
AGREEMENT
THIS AGREEMENT AND PLAN OF CONSOLIDATION, dated as of
November 18, 1997, is made by and between BCB FINANCIAL SERVICES
CORPORATION ("BCB"), a Pennsylvania corporation, having its
principal place of business in Reading, Pennsylvania, and
HERITAGE BANCORP, INC. ("Heritage"), a Pennsylvania corporation,
having its principal place of business in Pottsville,
Pennsylvania.
BACKGROUND
1. BCB and Heritage desire to consolidate into a new
as yet to be named Pennsylvania business corporation (the
"Holding Company"), in accordance with the applicable laws of the
Commonwealth of Pennsylvania, and in accordance with the plan of
consolidation set forth herein.
2. BCB and Heritage desire that the consolidation of
BCB and Heritage constitute a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as
amended, and be accounted for as a pooling-of-interests under
generally accepted accounting principles.
3. As an inducement to BCB's willingness to enter
into this Agreement, (a) certain directors and certain officers
of Heritage are concurrently executing a Letter Agreement in the
form attached hereto as Exhibit 1-A, and (b) Heritage is
concurrently granting to BCB an option to acquire, under certain
circumstances, Heritage's common stock (the "BCB Lock-Up Option")
pursuant to a Stock Option Agreement between BCB and Heritage in
the form attached hereto as Exhibit 2.
4. As an inducement to Heritage's willingness to
enter into this Agreement, (a) certain directors and certain
officers of BCB are concurrently executing a Letter Agreement in
the form attached hereto as Exhibit 1-B, and (b) BCB is
concurrently granting to Heritage an option to acquire, under
certain circumstances, BCB's common stock (the "Heritage Lock-Up
Option") pursuant to a Stock Option Agreement between Heritage
and BCB in the form attached hereto as exhibit 3.
5. BCB and Heritage desire to provide the terms and
conditions governing the transactions contemplated herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants, agreements, representations and warranties
herein contained, the parties hereto, intending to be legally
bound, do hereby agree as follows:
ARTICLE I
THE CONSOLIDATION
Section 1.01 Definitions. As used in this Agreement,
the following terms shall have the indicated meanings (such
meanings to be equally applicable to both the singular and plural
forms of the terms defined):
Affiliate means, with respect to any Person, any
Person who directly, or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under
common control with, such Person and, without limiting the
generality of the foregoing, includes any executive officer
or director of such Person and any Affiliate of such
executive officer or director.
Agreement means this agreement, and any amendment
or supplement hereto, which constitutes a "plan of
consolidation" between BCB and Heritage.
Applications means the applications for regulatory
approval which are required by the transactions contemplated
hereby.
Articles of Consolidation means the articles of
consolidation to be executed by BCB and Heritage and to be
filed in the PDS, in accordance with the applicable laws of
the Commonwealth of Pennsylvania in the form attached hereto
as Exhibit 4.
BCB Common Stock has the meaning given to that
term in Section 3.02(a) of this Agreement.
BCB Disclosure Schedule means a disclosure
schedule delivered by BCB to Heritage pursuant to
Article III of this Agreement.
BCB Exchange Ratio shall have the meaning given to
such term in Section 1.02(e)(i)(A).
BCB Financials means (i) the audited consolidated
financial statements of BCB as of December 31, 1996 and for
the three years ended December 31, 1996, including the notes
thereto, and (ii) the unaudited interim consolidated
financial statements of BCB as of each calendar quarter
thereafter included in Securities Documents filed by BCB.
BCB Market Price means, as of any date, the
average between the closing high bid and low asked prices of
a share of BCB Common Stock on the Nasdaq National Market
System (as reported in The Wall Street Journal, or if not
reported therein, in another authoritative source).
BCB Market Value means the average of the BCB
Market Prices for the twenty (20) consecutive trading days
ending on the trading day preceding the Determination Date.
BCB Lock-Up Option means the option granted to BCB
to acquire shares of Heritage Common Stock referenced in the
recitals to this Agreement.
BCB Options means options to purchase shares of
BCB Common Stock granted pursuant to the BCB Stock Option
Plans.
BCB Regulatory Reports means the annual and
quarterly reports of BCB filed with the FRB since
December 31, 1996 through the Closing Date, and the
financial reports of Berks County Bank and accompanying
schedules for each calendar quarter, beginning with the
quarter ended December 31, 1996, through the Closing Date.
BCB Stock Option Plans means the BCB 1988 Stock
Option Plan, the BCB 1989 Stock Option Plan, the BCB 1994
Stock Option Plan and the BCB 1996 Stock Option Plan.
BCB Subsidiaries means any corporation, 50% or
more of the capital stock of which is owned, either directly
or indirectly, by BCB, except any corporation the stock of
which is held in the ordinary course of the lending
activities of a bank.
BCL means the Pennsylvania Business Corporation
Law of 1988, as amended.
BHCA means the Bank Holding Company Act of 1956,
as amended.
Closing Date means the later of April 1, 1998 or
the fifth business day following the satisfaction or waiver,
to the extent permitted hereunder, of the conditions to the
consummation of the Consolidation specified in Article V of
this Agreement (other than the delivery of certificates,
opinions and other instruments and documents to be delivered
at the Closing), or such other date as BCB and Heritage may
mutually agree.
Consolidation means the consolidation of BCB and
Heritage into the Holding Company, contemplated by this
Agreement.
Dissenting Shares shall have the meaning set forth
in Section 1.02(e)(i)(E) and Section 1.02(e)(ii)(E) hereof.
DOJ means the United States Department of Justice.
Effective Date means the date upon which the
Articles of Consolidation shall be filed in the PDS, and
shall be the same as the Closing Date.
Environmental Law means any federal, state, local
or foreign law, statute, ordinance, rule, regulation, code,
license, permit, authorization, approval, consent, order,
judgment, decree, injunction or agreement with any
Regulatory Authority relating to (i) the protection,
preservation or restoration of the environment (including,
without limitation, air, water vapor, surface water,
groundwater, drinking water supply, surface soil, subsurface
soil, plant and animal life or any other natural resource),
and/or (ii) the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling,
production, release or disposal of any substance presently
listed, defined, designated or classified as hazardous,
toxic, radioactive or dangerous, or otherwise regulated,
whether by type or by quantity, including any material
containing any such substance as a component.
ERISA means the Employee Retirement Income
Security Act of 1974, as amended.
Exchange Act means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
from time to time thereunder.
FDIA means the Federal Deposit Insurance Act, as
amended.
FDIC means the Federal Deposit Insurance
Corporation.
FRB means the Board of Governors of the Federal
Reserve System.
GAAP means generally accepted accounting
principles as in effect at the relevant date.
Heritage Common Stock means the common stock of
Heritage described in Section 2.02(a).
Heritage Disclosure Schedule means a disclosure
schedule delivered by Heritage to BCB pursuant to Article II
of this Agreement.
Heritage DRIP means the Heritage Dividend
Reinvestment and Stock Purchase Plan.
Heritage ESOP means the Heritage Employee Stock
Ownership Plan with 401(k) Provisions.
Heritage Exchange Ratio shall have the meaning
given to such term in Section 1.02(e)(ii)(A).
Heritage Financials means (i) the audited
consolidated financial statements of Heritage as of
December 31, 1996 and for the three years ended December 31,
1996, including the notes thereto, and (ii) the unaudited
interim consolidated financial statements of Heritage as of
each calendar quarter thereafter included in Securities
Documents filed by Heritage.
Heritage Market Price means, as of any date, the
average between the closing high bid and low asked prices of
a share of Heritage Common Stock on the Nasdaq National
Market System (as reported in The Wall Street Journal, or if
not reported therein, in another authoritative source).
Heritage Market Value means the average of the
Heritage Market Prices for the twenty (20) consecutive
trading days ending on the trading day preceding the
Determination Date.
Heritage Lock-Up Option means the option granted
to Heritage to acquire shares of BCB Common Stock referenced
in the recitals to this Agreement.
Heritage Options means options to purchase shares
of Heritage Common Stock granted pursuant to the Heritage
Stock Option Plans.
Heritage Regulatory Reports means the annual and
quarterly reports of Heritage filed with the FRB since
December 31, 1996 through the Closing Date, and the
financial reports of Heritage National Bank to the OCC and
accompanying schedules for each calendar quarter, beginning
with the quarter ended December 31, 1996, through the
Closing Date.
Heritage Stock Option Plans means the 1995 Stock
Incentive Plan and the 1995 Stock Option Plan for Non-
Employee Directors and the outstanding options assumed by
Heritage that were issued under option plans of Bankers'
Financial Services Corporation.
Heritage Subsidiaries means any corporation, 50%
or more of the capital stock of which is owned, either
directly or indirectly, by Heritage, except any corporation
the stock of which is held in the ordinary course of the
lending activities of Heritage National Bank.
Holding Company Common Stock means the common
stock, $1.00 par value, of the Holding Company.
IRC means the Internal Revenue Code of 1986, as
amended.
IRS means the Internal Revenue Service.
Material Adverse Effect shall mean, with respect
to BCB or Heritage, respectively, any effect that is
material and adverse to its assets, financial condition or
results of operations on a consolidated basis, provided,
however, that Material Adverse Effect shall not be deemed to
include (a) any change in the value of the respective
investment and loan portfolios of BCB or Heritage resulting
from a change in interest rates generally, (b) any change
occurring after the date hereof in any federal or state law,
rule or regulation or in GAAP, which change affects banking
institutions generally, including any changes affecting the
Bank Insurance Fund and (c) actions or omissions of a party
(or any of its Subsidiaries) taken with the prior informed
written consent of the other party in contemplation of the
transactions contemplated hereby.
NASD means the National Association of Securities
Dealers, Inc.
OCC means the Office of the Comptroller of the
Currency.
PDS means the Department of State of the
Commonwealth of Pennsylvania.
Person means any individual, corporation,
partnership, joint venture, association, trust or "group"
(as that term is defined in Section 13(d)(3) of the Exchange
Act).
Prospectus/Proxy Statement means the prospectus/
proxy statement, together with any amendments and
supplements thereto, to be transmitted to holders of
Heritage Common Stock and BCB Common Stock in connection
with the transactions contemplated by this Agreement.
Registration Statement means the registration
statement on Form S-4, including any pre-effective or
post-effective amendments or supplements thereto, as filed
with the SEC under the Securities Act with respect to the
Holding Company Common Stock to be issued in connection with
the transactions contemplated by this Agreement.
Regulatory Agreement has the meanings given to
that term in Sections 2.11 and 3.11 of this Agreement.
Regulatory Authority means any banking agency or
department of any federal or state government, including
without limitation the FRB, the FDIC, the OCC, or the
respective staffs thereof.
Rights means warrants, options, rights,
convertible securities and other capital stock equivalents
which obligate an entity to issue its securities.
SEC means the Securities and Exchange Commission.
Securities Act means the Securities Act of 1933,
as amended, and the rules and regulations promulgated from
time to time thereunder.
Securities Documents means all registration
statements, schedules, statements, forms, reports, proxy
material, and other documents required to be filed under the
Securities Laws.
Securities Laws means the Securities Act, the
Exchange Act, the Investment Company Act of 1940, as
amended, the Investment Advisors Act of 1940, as amended,
the Trust Indenture Act of 1939, as amended, and in each
case the rules and regulations promulgated from time to time
thereunder.
Subsidiary means any corporation or partnership,
50% or more of the capital stock or partnership interests of
which is owned, either directly or indirectly, by another
entity, except any corporation or partnership the stock or
partnership interests of which is held in the ordinary
course of the lending activities of a bank.
Section 1.02 The Consolidation.
(a) Closing. The closing will take place at
10:00 a.m. on the Closing Date at the offices of ▇▇▇▇▇▇▇ & ▇▇▇,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, unless another
time and place are agreed to by the parties hereto; provided, in
any case, that all conditions to closing set forth in Article V
(other than the delivery of certificates, opinions and other
instruments and documents to be delivered at the Closing) have
been satisfied or waived at or prior to the Closing Date. On the
Closing Date, Heritage and BCB shall cause the Articles of
Consolidation to be duly executed and to be filed in the PDS.
(b) The Consolidation. Subject to the terms and
conditions of this Agreement, on the Effective Date, Heritage and
BCB shall consolidate into the Holding Company in accordance with
the provisions of the BCL. The Holding Company shall be the
corporation formed as a result of the Consolidation, shall
continue its corporate existence under the laws of the
Commonwealth of Pennsylvania and shall have its headquarters at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (the "BCB Operations
Center") or such other location in Reading, Pennsylvania as the
parties may agree. From and after the Effective Date, the
Consolidation shall have the effects set forth in Section 1929 of
the BCL.
(c) Holding Company's Articles of Incorporation
and Bylaws. On and after the Effective Date, the articles of
incorporation of the Holding Company shall be as set forth in the
Articles of Consolidation and the Bylaws of the Holding Company
shall be adopted on the Effective Date by the Holding Company's
Board of Directors and shall be in the form attached hereto as
Exhibit 5 until thereafter altered, amended or repealed.
(d) Board of Directors and Officers of the
Holding Company, Heritage National Bank and Berks County Bank
Board of Directors and Officers.
(i) On the Effective Date, the Board of
Directors of the Holding Company, as the continuing corporation
as a result of the Consolidation, shall consist of thirteen (13)
directors to be identified in the Articles of Consolidation,
seven of whom shall be appointed by the BCB Board of Directors
and six of whom shall be appointed by the Heritage Board of
Directors. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall be the Chairman of the Board
of Directors of the Holding Company and a designee of Heritage
shall be appointed Vice Chairman of the Board of Directors of the
Holding Company. Non-employee directors of the Holding Company
shall be paid an annual retainer of $2,000, a fee of $600 per
meeting attended and a fee of $300 per committee meeting
attended. In addition, any nonemployee Vice Chairman shall be
entitled to an additional annual retainer of $1,000 per year.
(ii) On the Effective Date, the executive
officers of the Holding Company shall be:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ - Chairman and Chief
Executive Officer
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ - President & Chief
Operating Officer
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. - Executive Vice President
and Chief Financial
Officer
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ - Executive Vice President
and Chief Administrative
Officer
(iii) The Board of Directors and officers of
Heritage National Bank shall remain unchanged except that
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall become an officer and member of the Board
of Directors of Heritage National Bank with the title of Vice
Chairman and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall become the Executive Vice
President & Chief Financial Officer of Heritage National Bank.
Non-employee directors of Heritage National Bank shall be paid an
annual retainer of $2,000 (unless such director receives a
retainer for service as a director of the Holding Company), a fee
of $600 per meeting attended and a fee of $300 per committee
meeting attended.
(iv) The Board of Directors and officers of
Berks County Bank shall remain unchanged except that a designee
of Heritage shall become an officer (if such designee is an
employee) and a member of the Board of Directors of Berks County
Bank with the title of Vice Chairman and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall
become an Executive Vice President of Berks County Bank.
Non-employee directors of Berks County Bank shall be paid an
annual retainer of $2,000 (unless such director receives a
retainer for service as a director of the Holding Company), a fee
of $600 per meeting attended and a fee of $300 per committee
meeting attended.
(e) Conversion of Shares.
(i) BCB Common Stock.
(A) Subject to the provisions of
subparagraphs (B), (C), (D) and (E) of this
Section 1.02(e)(i), each share of BCB Common Stock issued
and outstanding immediately prior to the Effective Date
(other than shares of BCB Common Stock, if any, then owned
by BCB or Heritage or any BCB Subsidiary) shall, on the
Effective Date, by reason of the Consolidation and without
any action on the part of the holder thereof, be converted
into and become a right to receive 1.3335 shares of fully
paid and nonassessable shares of Holding Company Common
Stock. The exchange ratio set forth in this Section
1.02(e)(i)(A) is hereinafter referred to as the "BCB
Exchange Ratio".
(B) Each share of BCB Common Stock
(other than trust account shares or shares acquired in
connection with debts previously contracted ("DPC shares"))
owned by Heritage or a Heritage Subsidiary on the Effective
Date, if any, shall be cancelled.
(C) Each share of BCB Common Stock
issued and held in the treasury of BCB or owned by any BCB
Subsidiary (other than trust account shares or DPC shares)
as of the Effective Date, if any, shall be cancelled, and no
cash, stock or other property shall be delivered in exchange
therefor.
(D) No fraction of a whole share of
Holding Company Common Stock and no scrip or certificates
therefor shall be issued in connection with the
Consolidation. Any former holder of BCB Common Stock who
would otherwise be entitled to receive a fraction of a share
of Holding Company Common Stock shall receive, in lieu
thereof, cash in an amount equal to such fraction of a share
multiplied by the closing price of the Holding Company
Common Stock on the Nasdaq National Market System on the
first day Holding Company Common Stock is traded after the
Effective Date.
(E) Each outstanding share of BCB
Common Stock the holder of which has perfected his right to
dissent under the BCL and has not effectively withdrawn or
lost such right as of the Effective Date shall not be
converted into or represent a right to receive shares of
Holding Company Common Stock hereunder, and the holder
thereof shall be entitled only to such rights as are granted
by the BCL. BCB shall give Heritage prompt notice upon
receipt by BCB of any such written demands for payment of
the fair value of such shares of BCB Common Stock
("Dissenting Shares") and of withdrawals of such demands and
any other instruments provided pursuant to the BCL (any
shareholder duly making such demand being hereinafter called
a "BCB Dissenting Shareholder"). If any BCB Dissenting
Shareholder shall effectively withdraw or lose (through
failure to perfect or otherwise) his right to such payment
at any time, such holder's shares of BCB Common Stock shall
be converted into the right to receive Holding Company
Common Stock in accordance with Section 1.02(e)(i)(A) of
this Agreement. Any payments made in respect of Dissenting
Shares shall be made by the Holding Company, as the
continuing corporation after the Consolidation.
(ii) Heritage Common Stock.
(A) Subject to the provisions of
subparagraphs (B), (C), (D) and (E) of this
Section 1.02(e)(ii), each share of Heritage Common Stock
issued and outstanding immediately prior to the Effective
Date (other than shares of Heritage Common Stock, if any,
then owned by Heritage or BCB or any Heritage Subsidiary)
shall, on the Effective Date, by reason of the Consolidation
and without any action on the part of the holder thereof, be
converted into and become a right to receive 1.05 shares of
fully paid and nonassessable shares of Holding Company
Common Stock. The exchange ratio set forth in this Section
1.02(e)(ii)(A) is hereinafter referred to as the "Heritage
Exchange Ratio".
(B) Each share of Heritage Common Stock
(other than trust account shares or DPC shares) owned by BCB
or a BCB Subsidiary on the Effective Date, if any, shall be
cancelled.
(C) Each share of Heritage Common Stock
issued and held in the treasury of Heritage or owned by any
Heritage Subsidiary (other than trust account shares or DPC
shares) as of the Effective Date, if any, shall be
cancelled, and no cash, stock or other property shall be
delivered in exchange therefor.
(D) No fraction of a whole share of
Holding Company Common Stock and no scrip or certificates
therefor shall be issued in connection with the
Consolidation. Any former holder of Heritage Common Stock
who would otherwise be entitled to receive a fraction of a
share of Holding Company Common Stock shall receive, in lieu
thereof, cash in an amount equal to such fraction of a share
multiplied by the closing price of the Holding Company
Common Stock on the Nasdaq National Market System on the
first day Holding Company Common Stock is traded after the
Effective Date.
(E) Each outstanding share of Heritage
Common Stock the holder of which has perfected his right to
dissent under the BCL and has not effectively withdrawn or
lost such right as of the Effective Date shall not be
converted into or represent a right to receive shares of
Holding Company Stock hereunder, and the holder thereof
shall be entitled only to such rights as are granted by the
BCL. Heritage shall give BCB prompt notice upon receipt by
Heritage of any such written demands for payment of the fair
value of such shares of Heritage Common Stock ("Dissenting
Shares") and of withdrawals of such demands and any other
instruments provided pursuant to the BCL (any shareholder
duly making such demand being hereinafter called a "Heritage
Dissenting Shareholder"). If any Heritage Dissenting
Shareholder shall effectively withdraw or lose (through
failure to perfect or otherwise) his right to such payment
at any time, such holder's shares of Heritage Common Stock
shall be converted into the right to receive Holding Company
Common Stock in accordance with Section 1.02(e)(ii) of this
Agreement. Any payments made in respect of Dissenting
Shares shall be made by the Holding Company, as the
continuing corporation after the Consolidation.
(f) Stock Options.
(i) On the Effective Date, each Heritage
Option and each BCB Option which is then outstanding,
whether or not exercisable, shall cease to represent a right
to acquire shares of Heritage Common Stock or BCB Common
Stock, as the case may be, and shall be converted
automatically into an option to purchase shares of Holding
Company Common Stock, and the Holding Company shall assume
each Heritage Option and BCB Option, in accordance with the
terms of the applicable Heritage Stock Option Plan or BCB
Stock Option Plan, as the case may be, and the stock option
agreement by which it is evidenced, except that from and
after the Effective Date, (i) the Holding Company and its
Board of Directors or a duly authorized committee thereof
shall be substituted for Heritage, BCB or their respective
Boards of Directors or duly authorized committee thereof
administering such Heritage Stock Option Plan or BCB Stock
Option Plan, as the case may be, (ii) each Heritage Option
and BCB Option assumed by the Holding Company may be
exercised solely for shares of the Holding Company Common
Stock, (iii) the number of shares of Holding Company Common
Stock subject to each BCB Option shall be equal to the
number of shares of BCB Common Stock subject to such BCB
Option immediately prior to the Effective Date multiplied by
the BCB Exchange Ratio, provided that any fractional shares
of Holding Company Common Stock resulting from such
multiplication shall be rounded down to the nearest share,
and (iv) the per share exercise price under each such BCB
Option shall be adjusted by dividing the per share exercise
price under each such BCB Option by the BCB Exchange Ratio,
provided that such exercise price shall be rounded up to the
nearest cent, (v) the number of shares of Holding Company
Common Stock subject to each Heritage Option shall be equal
to the number of shares of Heritage Common Stock subject to
such Heritage Option immediately prior to the Effective Date
multiplied by the Heritage Exchange Ratio, provided that any
fractional shares of Holding Company Common Stock resulting
from such multiplication shall be rounded down to the
nearest share, and (vi) the per share exercise price under
each such Heritage Option shall be adjusted by dividing the
per share exercise price under each such Heritage Option by
the Heritage Exchange Ratio, provided that such exercise
price shall be rounded up to the nearest cent.
Notwithstanding clauses (iii), (iv), (v) and (vi) of the
preceding sentence, each BCB Option or Heritage Option which
is an "incentive stock option" shall be adjusted as required
by Section 424 of the IRC, and the regulations promulgated
thereunder, so as not to constitute a modification,
extension or renewal of the option within the meaning of
Section 424(h) of the IRC. BCB and Heritage agree to take
all necessary steps to effect the foregoing provisions of
this Section 1.02(f).
(ii) As soon as practicable after the
Effective Date, the Holding Company shall deliver to each
participant in each Heritage Stock Option Plan and each BCB
Stock Option Plan an appropriate notice setting forth such
participant's rights pursuant thereto and the grants subject
to such Heritage Stock Option Plan or BCB Stock Option Plan
shall continue in effect on the same terms and conditions,
including without limitation the duration thereof, subject
to the adjustments required by Section 1.02(f)(i) hereof
after giving effect to the Consolidation. Within 30 days
after the Effective Date, the Holding Company shall file a
registration statement on Form S-3 or Form S-8, as the case
may be (or any successor or other appropriate forms), with
respect to the shares of Holding Company Common Stock
subject to such options and shall use its reasonable best
efforts to maintain the current status of the prospectus or
prospectuses contained therein for so long as such options
remain outstanding.
(g) Surrender and Exchange of Heritage and BCB
Stock Certificates.
(i) Exchange of Certificates. Each holder
of shares of Heritage Common Stock or BCB Common Stock who
surrenders to the Holding Company (or its agent) the
certificate or certificates representing such shares will be
entitled to receive, as soon as practicable after the
Effective Date, in exchange therefor a certificate or
certificates for the number of whole shares of Holding
Company Common Stock into which such holder's shares of
Heritage Common Stock or BCB Common Stock have been
converted pursuant to the Consolidation, together with a
check for cash in lieu of any fractional share in accordance
with Section 1.02(e)(i)(D) or Section 1.02(e)(ii)(D) hereof,
as the case may be.
(ii) Rights Evidenced by Certificates. Each
certificate for shares of Holding Company Common Stock
issued in exchange for certificates for Heritage Common
Stock or BCB Common Stock pursuant to Section 1.02(g)(i)
hereof will be dated the Effective Date and be entitled to
dividends and all other rights and privileges pertaining to
Holding Company Common Stock from and after the Effective
Date. Until surrendered, each certificate theretofore
evidencing shares of Heritage Common Stock or BCB Common
Stock, from and after the Effective Date, will evidence
solely the right to receive certificates for shares of
Holding Company Common Stock pursuant to Section 1.02(g)(i)
hereof and a check for cash in lieu of any fractional share
in accordance with Section 1.02(e)(i)(D) or Section
1.02(e)(ii)(D), as the case may be. If certificates for
shares of Heritage Common Stock or BCB Common Stock are
exchanged for Holding Company Common Stock at a date
following one or more record dates for the payment of
dividends or of any other distribution on the shares of
Holding Company Common Stock, the Holding Company will pay
cash in an amount equal to dividends theretofore payable on
such Holding Company Common Stock and pay or deliver any
other distribution to which holders of shares of Holding
Company Common Stock have theretofore become entitled. Upon
surrender of certificates for shares of Heritage Common
Stock or BCB Common Stock in exchange for certificates for
Holding Company Common Stock, the Holding Company also shall
pay any dividends to which such holder of Heritage Common
Stock, in the case of a holder of BCB Common Stock, may be
entitled as a result of the declaration of a dividend on the
Heritage Common Stock or BCB Common Stock by Heritage or BCB
in accordance with the terms of this Agreement with a record
date prior to the Effective Date and a payment date after
the Effective Date. No interest will accrue or be payable
in respect of dividends or cash otherwise payable under this
Section 1.02(g) upon surrender of certificates for shares of
Heritage Common Stock or BCB Common Stock. Notwithstanding
the foregoing, no party hereto will be liable to any holder
of Heritage Common Stock or any holder of BCB Common Stock,
for any amount paid in good faith to a public official or
agency pursuant to any applicable abandoned property,
escheat or similar law. Until such time as certificates for
shares of Heritage Common Stock or BCB Common Stock are
surrendered by a BCB or Heritage shareholder to the Holding
Company for exchange, the Holding Company shall have the
right to withhold dividends or any other distributions on
the shares of Holding Company Common Stock issuable to such
shareholder.
(iii) Exchange Procedures. Each certificate
for shares of Heritage Common Stock delivered for exchange
under this Section 1.02(g) must be endorsed in blank by the
registered holder thereof or be accompanied by a power of
attorney to transfer such shares endorsed in blank by such
holder. If more than one certificate is surrendered at one
time and in one transmittal package for the same shareholder
account, the number of whole shares of Holding Company
Common Stock for which certificates will be issued pursuant
to this Section 1.02(g) will be computed on the basis of the
aggregate number of shares represented by the certificates
so surrendered. If shares of Holding Company Common Stock
or payments of cash are to be issued or made to a person
other than the one in whose name the surrendered certificate
is registered, the certificate so surrendered must be
properly endorsed in blank, with signature(s) guaranteed, or
otherwise in proper form for transfer, and the person to
whom certificates for shares of Holding Company Common Stock
is to be issued or to whom cash is to be paid shall pay any
transfer or other taxes required by reason of such issuance
or payment to a person other than the registered holder of
the certificate for shares of Heritage Common Stock or BCB
Common Stock which are surrendered. As promptly as
practicable after the Effective Date, the Holding Company
shall send or cause to be sent to each shareholder of record
of Heritage Common Stock or BCB Common Stock transmittal
materials for use in exchanging certificates representing
Heritage Common Stock for certificates representing Holding
Company Common Stock into which the Heritage Common Stock or
BCB Common Stock have been converted in the Consolidation.
Certificates representing shares of Holding Company Common
Stock and checks for cash in lieu of fractional shares shall
be mailed to former shareholders of Heritage and BCB as soon
as reasonably possible but in no event later than thirty
(30) business days following the receipt of certificates
representing former shares of Heritage Common Stock or BCB
Common Stock duly endorsed or accompanied by the materials
referenced herein and delivered by certified mail, return
receipt requested (but in no event earlier than the second
business day following the Effective Date).
(iv) Closing of Stock Transfer Books;
Cancellation of Heritage and BCB Certificates. Upon the
Effective Date, the stock transfer books for Heritage Common
Stock and BCB Common Stock will be closed and no further
transfers of shares of Heritage Common Stock or BCB Common
Stock will thereafter be made or recognized. All
certificates for shares of Heritage Common Stock and BCB
Common Stock surrendered pursuant to this Section 1.02(g)
will be cancelled by the Holding Company.
(h) Anti-Dilution Provisions. If, Heritage or
BCB has, at any time after the date hereof and before the
Effective Date, (A) issued a dividend in shares of Heritage
Common Stock or BCB Common Stock, (B) combined the outstanding
shares of Heritage Common Stock or BCB Common Stock into a
smaller number of shares, (C) subdivided the outstanding shares
of Heritage Common Stock or BCB Common Stock, or (D) reclassified
the shares of Heritage Common Stock or BCB Common Stock, then the
number of shares of Holding Company Common Stock to be delivered
to Heritage or BCB shareholders who are entitled to receive
shares of Holding Company Common Stock in exchange for shares of
Heritage Common Stock or BCB Common Stock shall be adjusted so
that each Heritage or BCB shareholder shall be entitled to
receive such number of shares of Holding Company Common Stock as
such shareholder would have been entitled to receive if the
Effective Date had occurred prior to the happening of such event.
(By way of illustration, if BCB or Heritage shall declare a stock
dividend of 7% payable with respect to a record date on or prior
to the Effective Date and the conditions set forth above are
satisfied, the BCB Exchange Ratio or the Heritage Exchange Ratio,
as the case may be, shall be adjusted downward by 7%).
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF Heritage
Heritage hereby represents and warrants to BCB that,
except as specifically set forth in the Heritage Disclosure
Schedule delivered to BCB by Heritage on the date hereof:
Section 2.01 Organization.
(a) Heritage is a corporation duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. Heritage is a bank holding company
duly registered under the BHCA. Heritage has the corporate power
and authority to carry on its business and operations as now
being conducted and to own and operate the properties and assets
now owned and being operated by it. Each Heritage Subsidiary is
duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation and each possesses
full corporate power and authority to carry on its respective
business and to own, lease and operate its properties as
presently conducted. Neither Heritage nor any Heritage
Subsidiary is required by the conduct of its business or the
ownership or leasing of its assets to qualify to do business as a
foreign corporation in any jurisdiction other than the
Commonwealth of Pennsylvania, except where the failure to be so
qualified would not have a Material Adverse Effect on Heritage.
(b) Heritage National Bank is a national bank
duly organized and validly existing under the laws of the United
States. Heritage National Bank has the corporate power and
authority to carry on its business and operations as now being
conducted and to own and operate the properties and assets now
owned and being operated by it.
(c) There are no Heritage Subsidiaries other than
Heritage National Bank.
(d) The deposits of Heritage National Bank are
insured by the FDIC to the extent provided in the FDIA.
(e) The respective minute books of Heritage and
Heritage National Bank and each other Heritage Subsidiary
accurately record, in all material respects, all material
corporate actions of their respective shareholders and boards of
directors (including committees).
(f) Prior to the date of this Agreement, Heritage
has delivered to BCB true and correct copies of the articles of
incorporation and bylaws of Heritage and the charter and bylaws
of Heritage National Bank as in effect on the date hereof.
Section 2.02 Capitalization.
(a) The authorized capital stock of Heritage
consists of (a) 10,000,000 shares of common stock, $5.00 par
value ("Heritage Common Stock"), of which, at the date of this
agreement, 243,135 shares were issued and held by Heritage as
treasury stock, 4,758,999 shares are outstanding, validly issued,
fully paid and nonassessable and free of preemptive rights, and
(b) 10,000,000 shares of preferred stock, $25.00 par value, none
of which are issued or outstanding. Neither Heritage nor
Heritage National Bank nor any other Heritage Subsidiary has or
is bound by any subscription, option, warrant, call, commitment,
agreement, plan or other Right of any character relating to the
purchase, sale or issuance or voting of, or right to receive
dividends or other distributions on any shares of Heritage Common
Stock, Heritage preferred stock or any other security of Heritage
or any securities representing the right to vote, purchase or
otherwise receive any shares of Heritage Common Stock, Heritage
preferred stock or any other security of Heritage, other than
(i) shares issuable under the BCB Option, (ii) 93,052 shares of
Heritage Common Stock issuable under the Heritage Stock Option
Plans, and (iii) pursuant to the Heritage ESOP and the Heritage
DRIP.
(b) The authorized capital stock of Heritage
National Bank consists of 270,000 shares of common stock, par
value $5.00 per share ("Heritage Bank Common Stock"), of which
270,000 shares are outstanding, validly issued, fully paid,
nonassessable, free of preemptive rights and owned by Heritage.
Either Heritage or Heritage National Bank owns all of the
outstanding shares of capital stock of each Heritage Subsidiary
free and clear of all liens, security interests, pledges,
charges, encumbrances, agreements and restrictions of any kind or
nature.
(c) Except as set forth in the Heritage
Disclosure Schedule, neither (i) Heritage, (ii) Heritage National
Bank nor (iii) any other Heritage Subsidiary, owns any equity
interest, directly or indirectly, other than treasury stock, in
any other company or controls any other company, except for
equity interests held in the investment portfolios of Heritage
Subsidiaries, equity interests held by Heritage Subsidiaries in a
fiduciary capacity, and equity interests held in connection with
the commercial loan activities of Heritage Subsidiaries. Except
as set forth in the Heritage Disclosure Schedule, there are no
subscriptions, options, warrants, calls, commitments, agreements
or other Rights outstanding and held by Heritage or Heritage
National Bank with respect to any other company's capital stock
or the equity of any other person.
(d) To the best of Heritage's knowledge, except
as disclosed in Heritage's proxy statement dated March 10, 1997,
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 Heritage Common Stock.
Section 2.03 Authority; No Violation.
(a) Heritage has full corporate power and
authority to execute and deliver this Agreement and to complete
the transactions contemplated hereby. The execution and delivery
of this Agreement by Heritage and the completion by Heritage of
the transactions contemplated hereby have been duly and validly
approved by the Board of Directors of Heritage and, except for
approval by the shareholders of Heritage as required under the
BCL, Heritage's articles of incorporation and bylaws and Nasdaq
requirements applicable to it, no other corporate proceedings on
the part of Heritage are necessary to complete the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by Heritage and, subject to approval of
the shareholders of Heritage and receipt of the required
approvals from Regulatory Authorities described in Section 3.04
hereof, constitutes the valid and binding obligation of Heritage,
enforceable against Heritage in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity.
(b) (A) The execution and delivery of this
Agreement by Heritage, (B) subject to receipt of approvals from
the Regulatory Authorities referred to in Section 3.04 hereof and
Heritage's and BCB's compliance with any conditions contained
therein, the completion of the transactions contemplated hereby,
and (C) compliance by Heritage with any of the terms or
provisions hereof, will not (i) conflict with or result in a
breach of any provision of the articles of incorporation or other
organizational document or bylaws of Heritage or any Heritage
Subsidiary; (ii) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction
applicable to Heritage or any Heritage Subsidiary or any of their
respective properties or assets; or (iii) violate, conflict with,
result in a breach of any provisions of, constitute a default (or
an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of,
accelerate the performance required by, or result in a right of
termination or acceleration or the creation of any lien, security
interest, charge or other encumbrance upon any of the properties
or assets of Heritage or any Heritage Subsidiary under, any of
the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement, commitment
or other instrument or obligation to which Heritage or any
Heritage Subsidiary is a party, or by which they or any of their
respective properties or assets may be bound or affected, except
for such violations, conflicts, breaches or defaults under
clause (ii) or (iii) hereof which, either individually or in the
aggregate, will not have a Material Adverse Effect on Heritage.
Section 2.04 Consents. Except for the consents,
approvals, filings and registrations from or with the Regulatory
Authorities referred to in Section 3.04 hereof and compliance
with any conditions contained therein, and the approval of this
Agreement by the shareholders of Heritage and except as disclosed
in the Heritage Disclosure Schedule, no consents or approvals of,
or filings or registrations with, any public body or authority
are necessary, and no consents or approvals of any third parties
are necessary, or will be, in connection with (a) the execution
and delivery of this Agreement by Heritage, and (b) the
completion by Heritage of the transactions contemplated hereby.
As of the date hereof, Heritage has no reason to believe that
(i) any required consents or approvals will not be received or
will be received with conditions, limitations or restrictions
unacceptable to it or which would adversely impact Heritage's
ability to complete the transactions contemplated by this
Agreement or that (ii) any public body or authority, the consent
or approval of which is not required or any filing with which is
not required, will object to the completion of the transactions
contemplated by this Agreement.
Section 2.05 Financial Statements.
(a) Heritage has made the Heritage Regulatory
Reports available to BCB for inspection. The Heritage Regulatory
Reports have been, or will be, prepared in all material respects
in accordance with applicable regulatory accounting principles
and practices throughout the periods covered by such statements,
and fairly present, or will fairly present in all material
respects, the financial position, results of operations and
changes in shareholders' equity of Heritage as of and for the
periods ended on the dates thereof, in accordance with applicable
regulatory accounting principles applied on a consistent basis.
(b) Heritage has previously delivered, or will
deliver, to BCB the Heritage Financials. The Heritage Financials
have been, or will be, prepared in accordance with GAAP applied
on a consistent basis throughout the periods covered by such
statements, except as noted therein, and fairly present, or will
fairly present, the consolidated financial position, results of
operations and cash flows of Heritage as of and for the periods
ending on the dates thereof, in accordance with GAAP applied on a
consistent basis, except as noted therein.
(c) At the date of each balance sheet included in
the Heritage Financials or the Heritage Regulatory Reports,
neither Heritage nor Heritage National Bank (as the case may be)
had, or will have any liabilities, obligations or loss
contingencies of any nature (whether absolute, accrued,
contingent or otherwise) of a type required to be reflected in
such Heritage Financials or Heritage Regulatory Reports or in the
footnotes thereto which are not fully reflected or reserved
against therein or fully disclosed in a footnote thereto, except
for liabilities, obligations and loss contingencies which are not
material in the aggregate and which are incurred in the ordinary
course of business, consistent with past practice and except for
liabilities, obligations and loss contingencies which are within
the subject matter of a specific representation and warranty
herein and subject, in the case of any unaudited statements, to
normal, recurring audit adjustments and the absence of footnotes.
Section 2.06 Taxes.
(a) Heritage and the Heritage Subsidiaries are
members of the same affiliated group within the meaning of IRC
Section 1504(a). Heritage has duly filed, and will file, all
federal, state and local tax returns required to be filed by or
with respect to Heritage and all Heritage Subsidiaries on or
prior to the Closing Date (all such returns being accurate and
correct in all material respects) and has duly paid or will pay,
or made or will make, provisions for the payment of all federal,
state and local taxes which have been incurred by or are due or
claimed to be due from Heritage and any Heritage Subsidiary by
any taxing authority or pursuant to any tax sharing agreement or
arrangement (written or oral) on or prior to the Closing Date
other than taxes which (i) are not delinquent or (ii) are being
contested in good faith.
(b) No consent pursuant to IRC Section 341(f) has
been filed (or will be filed prior to the Closing Date) by or
with respect to Heritage or any Heritage Subsidiary.
Section 2.07 No Material Adverse Effect. Heritage has
not suffered any Material Adverse Effect since September 30,
1997.
Section 2.08 Contracts.
(a) Except as described in Heritage's proxy
statement dated March 10, 1997, and Annual Reports on Form 10-K
for the years ended December 31, 1994, 1995 and 1996, previously
delivered to BCB, in the footnotes to the audited consolidated
financial statements of Heritage as of December 31, 1996, and for
the three years ended December 31, 1996, or in the Heritage
Disclosure Schedule, neither Heritage nor any Heritage Subsidiary
is a party to or subject to: (i) any employment, consulting or
severance contract or arrangement with any past or present
officer, director or employee of Heritage or any Heritage
Subsidiary, except for "at will" arrangements; (ii) any plan,
arrangement or contract providing for bonuses, pensions, options,
deferred compensation, retirement payments, profit sharing or
similar arrangements for or with any past or present officers,
directors or employees of Heritage or any Heritage Subsidiary;
(iii) any collective bargaining agreement with any labor union
relating to employees of Heritage or any Heritage Subsidiary;
(iv) any agreement which by its terms limits the payment of
dividends by any Heritage Subsidiary; (v) any instrument
evidencing or 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 Heritage or any Heritage Subsidiary is an
obligor to any person, which instrument evidences or relates to
indebtedness other than deposits, repurchase agreements, Federal
Home Loan Bank advances, 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 be
applicable on or after the Closing Date to the Holding Company or
any Holding Company Subsidiary; or (vi) any contract (other than
this Agreement) limiting the freedom of any Heritage Subsidiary
to engage in any type of banking or bank-related business
permissible under law.
(b) True and correct copies of agreements, plans,
arrangements and instruments referred to in Section 2.08(a),
described in the Heritage proxy statement dated March 10, 1997 or
in a footnote to the Heritage Financials, have been provided or
been made available to BCB on or before the date hereof, and are
in full force and effect on the date hereof and neither Heritage
nor any Heritage Subsidiary (nor, to the knowledge of Heritage,
any other party to any such contract, plan, arrangement or
instrument) has breached any provision of, or is in default in
any respect under any term of, any such contract, plan,
arrangement or instrument which breach has resulted in or will
result in a Material Adverse Effect with respect to Heritage.
Except as set forth in the Heritage Disclosure Schedule, no party
to any material contract, plan, arrangement or instrument will
have the right to terminate any or all of the provisions of any
such contract, plan, arrangement or instrument as a result of the
transactions contemplated by this Agreement. Except as set forth
in the Heritage Disclosure Schedule, none of the employees
(including officers) of Heritage or any Heritage Subsidiary
possess the right to terminate their employment as a result of
the execution of this Agreement. Except as set forth in the
Heritage Disclosure Schedule, no plan, employment agreement,
termination agreement, or similar agreement or arrangement to
which Heritage or any Heritage Subsidiary is a party or under
which Heritage or any Heritage Subsidiary may be liable contains
provisions which permit an employee or independent contractor to
terminate it without cause and continue to accrue future benefits
thereunder. Except as set forth in the Heritage Disclosure
Schedule, no such agreement, plan or arrangement (i) provides for
acceleration in the vesting of benefits or payments due
thereunder upon the occurrence of a change in ownership or
control of Heritage or any Heritage Subsidiary absent the
occurrence of a subsequent event; (ii) provides for benefits
which may cause the disallowance of a federal income tax
deduction under IRC Section 280G; or (iii) requires Heritage or
any Heritage Subsidiary to provide a benefit in the form of
Heritage Common Stock or determined by reference to the value of
Heritage Common Stock.
Section 2.09 Ownership of Property; Insurance
Coverage.
(a) Heritage and the Heritage Subsidiaries have
good and, as to real property, marketable title to all assets and
properties owned by Heritage or any Heritage Subsidiary in the
conduct of their businesses, whether such assets and properties
are real or personal, tangible or intangible, including assets
and property reflected in the balance sheets contained in the
Heritage Regulatory Reports and in the Heritage Financials 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) those items which secure
repurchase agreements and liabilities for borrowed money,
(ii) statutory liens for amounts not yet delinquent or which are
being contested in good faith and (iii) items permitted under
Article IV. Heritage and the Heritage Subsidiaries, as lessee,
have the right under valid and subsisting leases of real and
personal properties used by Heritage and its Subsidiaries in the
conduct of their businesses 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 Heritage Financials.
(b) With respect to all agreements pursuant to
which Heritage or any Heritage Subsidiary has purchased
securities subject to an agreement to resell, if any, Heritage or
such Heritage 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.
(c) Heritage and the Heritage Subsidiaries
currently maintain insurance considered by Heritage to be
reasonable for their respective operations and similar in scope
and coverage to that maintained by other businesses similarly
engaged. Neither Heritage nor any Heritage Subsidiary has
received notice from any insurance carrier that (i) such
insurance will be cancelled or that coverage thereunder will be
reduced or eliminated, or (ii) premium costs with respect to such
policies of insurance will be substantially increased. There are
presently no material claims pending under such policies of
insurance and no notices have been given by Heritage or Heritage
National Bank under such policies. All such insurance is valid
and enforceable and in full force and effect, and within the last
three years Heritage has received each type of insurance coverage
for which it has applied and during such periods has not been
denied indemnification for any material claims submitted under
any of its insurance policies.
Section 2.10 Legal Proceedings. Except as disclosed
in the Heritage Disclosure Schedule, neither Heritage nor any
Heritage Subsidiary is a party to any, and there are no pending
or, to the best of Heritage's knowledge, threatened legal,
administrative, arbitration or other proceedings, claims (whether
asserted or unasserted), actions or governmental investigations
or inquiries of any nature (i) against Heritage or any Heritage
Subsidiary, (ii) to which Heritage or any Heritage Subsidiary's
assets are or may be subject, (iii) challenging the validity or
propriety of any of the transactions contemplated by this
Agreement, or (iv) which could adversely affect the ability of
Heritage to perform under this Agreement, except for any
proceedings, claims, actions, investigations or inquiries
referred to in clauses (i) or (ii) which, if adversely
determined, individually or in the aggregate, could not be
reasonably expected to have a Material Adverse Effect on
Heritage.
Section 2.11 Compliance With Applicable Law.
(a) Heritage and Heritage Subsidiaries hold all
licenses, franchises, permits and authorizations necessary for
the lawful conduct of their businesses under, and have complied
in all material respects with, applicable laws, statutes, orders,
rules or regulations of any federal, state or local governmental
authority relating to them, other than where such failure to hold
or such noncompliance will neither result in a limitation in any
material respect on the conduct of their businesses nor otherwise
have a Material Adverse Effect on Heritage.
(b) Except as disclosed in the Heritage
Disclosure Schedule, neither Heritage nor any Heritage Subsidiary
has received any notification or communication from any
Regulatory Authority (i) asserting that Heritage or any Heritage
Subsidiary is not in compliance with any of the statutes,
regulations or ordinances which such Regulatory Authority
enforces; (ii) threatening to revoke any license, franchise,
permit or governmental authorization which is material to
Heritage or any Heritage Subsidiary; (iii) requiring or
threatening to require Heritage or any Heritage Subsidiary, or
indicating that Heritage or any Heritage Subsidiary may be
required, to enter into a cease and desist order, agreement or
memorandum of understanding or any other agreement restricting or
limiting, or purporting to restrict or limit, in any manner the
operations of Heritage or any Heritage Subsidiary, including
without limitation any restriction on the payment of dividends;
or (iv) directing, restricting or limiting, or purporting to
direct, restrict or limit, in any manner the operations of
Heritage or any Heritage Subsidiary, including without limitation
any restriction on the payment of dividends (any such notice,
communication, memorandum, agreement or order described in this
sentence is hereinafter referred to as a "Regulatory Agreement").
Neither Heritage nor any Heritage Subsidiary has consented to or
entered into any Regulatory Agreement, except as heretofore
disclosed to BCB.
Section 2.12 Information to be Supplied. The
information to be supplied by Heritage for inclusion in the
Registration Statement (including the Prospectus/Proxy Statement)
will not, at the time the Registration Statement is declared
effective pursuant to the Securities Act and as of the date the
Prospectus/Proxy Statement is mailed to shareholders of BCB and
Heritage and up to and including the date(s) of the meetings of
shareholders of Heritage and BCB to which such Prospectus/Proxy
Statement relates, contain any untrue statement of a material
fact or omit to state any material fact necessary in order to
make the statements therein not misleading. The information
supplied, or to be supplied, by Heritage for inclusion in the
Applications will, at the time such documents are filed with any
Regulatory Authority and up to and including the date(s) of the
obtainment of any required regulatory approvals or consents, be
accurate in all material aspects.
Section 2.13 ERISA. Heritage has previously delivered
or made available to BCB true and complete copies of all employee
pension benefit plans which it currently maintains within the
meaning of ERISA Section 3(2), including profit sharing plans,
employee stock ownership plans, deferred compensation and
supplemental income plans, supplemental executive retirement
plans, severance plans, policies and agreements, group insurance
plans, and all other employee welfare benefit plans within the
meaning of ERISA Section 3(1) (including, if applicable, vacation
pay, sick leave, short-term disability, long-term disability, and
medical plans) and all other employee benefit plans, policies,
agreements and arrangements, all of which are set forth in the
Heritage Disclosure Schedule, maintained or contributed to for
the benefit of the employees or former employees (including
retired employees) and any beneficiaries thereof or directors or
former directors of Heritage or any Heritage Subsidiary, together
with (i) the most recent actuarial (if any) and financial reports
relating to those plans which constitute "qualified plans" under
IRC Section 401(a), (ii) the most recent annual reports relating
to such plans filed by them, respectively, with any government
agency, and (iii) all rulings and determination letters which
pertain to any such plans. To the best of Heritage's knowledge,
neither Heritage, any Heritage Subsidiary nor any pension plan
maintained by Heritage or any Heritage Subsidiary, has incurred,
directly or indirectly, within the past six (6) years any
liability under Title IV of ERISA (including to the Pension
Benefit Guaranty Corporation) or to the IRS with respect to any
pension plan qualified under IRC Section 401(a) which liability
has resulted in or will result in a Material Adverse Effect with
respect to Heritage, except liabilities to the Pension Benefit
Guaranty Corporation pursuant to ERISA Section 4007, all of which
have been fully paid, nor has any reportable event under ERISA
Section 4043 occurred with respect to any such pension plan.
With respect to each of such plans that is subject to Title IV of
ERISA, the fair market value of the assets under such plan
exceeds the present value of the accrued benefits liability as of
the end of the most recent plan year with respect to such plan
calculated on the basis of the actual assumptions used in the
most recent actuarial valuation for such plan. Neither Heritage
nor any Heritage Subsidiary has incurred or is subject to any
liability under ERISA Section 4201 for a complete or partial
withdrawal from a multi-employer plan. To the best of Heritage's
knowledge, all "employee benefit plans," as defined in ERISA
Section 3(3), comply and within the past six (6) years have
complied in all material respects with (i) relevant provisions of
ERISA and (ii) in the case of plans intended to qualify for
favorable income tax treatment, provisions of the IRC relevant to
such treatment. To the best of Heritage's knowledge, no
prohibited transaction (which shall mean any transaction
prohibited by ERISA Section 406 and not exempt under ERISA
Section 408 or any transaction prohibited under IRC Section 4975)
has occurred within the past six (6) years with respect to any
employee benefit plan maintained by Heritage or any Heritage
Subsidiary that would result in the imposition, directly or
indirectly, of an excise tax under IRC Section 4975 or other
penalty under ERISA or the IRC, which, individually or in the
aggregate, has resulted in or will result in a Material Adverse
Effect with respect to Heritage. Heritage and the Heritage
Subsidiaries comply with the continuation coverage rules
applicable to its group health plan(s) for covered employees and
"qualified beneficiaries" of covered employees (as defined in IRC
Section 4980B(g)) in accordance with the provisions of IRC
Section 4980B(f). Such group health plans are in compliance with
Section 1862(b)(1) of the Social Security Act. Neither Heritage
nor any Heritage Subsidiary is aware of any existing or
contemplated audit of any of its employee benefit plans by the
Internal Revenue Service or U.S. Department of Labor.
Section 2.14 Brokers, Finders and Financial Advisors.
Except for Heritage's engagement of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇,
Inc., in connection with the transactions contemplated by this
Agreement, neither Heritage nor any Heritage Subsidiary, nor any
of their respective officers, directors, employees or agents, has
employed any broker, finder or financial advisor in connection
with the transactions contemplated by this Agreement or in
connection with any transaction other than the Consolidation, or,
except for its commitments disclosed in the Heritage Disclosure
Schedule, incurred any liability or commitment for any fees or
commissions to any such person in connection with the
transactions contemplated by this Agreement or in connection with
any transaction other than the Consolidation, which has not been
reflected in the Heritage Financials. The Heritage Disclosure
Schedule shall contain as an exhibit the engagement letter
between Heritage and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇, Inc.
Section 2.15 Securities Documents. Heritage has
delivered to BCB copies of its (i) annual reports on SEC
Form 10-K for the years ended December 31, 1996, 1995 and 1994,
(ii) a quarterly report on SEC Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997, and (iii) proxy materials used
in connection with its meetings of shareholders held in 1997,
1996 and 1995. Such reports and such proxy materials complied,
at the time filed with the SEC, in all material respects, with
the Exchange Act and all applicable rules and regulations of the
SEC.
Section 2.16 Environmental Matters. To the knowledge
of Heritage, neither Heritage nor any Heritage Subsidiary, nor
any properties owned or operated by Heritage or any Heritage
Subsidiary has been or is in violation of or liable under any
Environmental Law which violation or liability, individually or
in the aggregate, resulted in, or will result, in a Material
Adverse Effect with respect to Heritage. There are no actions,
suits or proceedings, or demands, claims, notices or
investigations (including without limitation notices, demand
letters or requests for information from any environmental
agency) instituted or pending, or to the knowledge of Heritage,
threatened, relating to the liability of any property owned or
operated by Heritage or any Heritage Subsidiary under any
Environmental Law.
Section 2.17 Allowance for Loan Losses. The allowance
for loan losses reflected, and to be reflected, in the Heritage
Regulatory Reports, and shown, and to be shown, on the balance
sheets contained in the Heritage Financials have been, and will
be, established in accordance with the requirements of GAAP and
all applicable regulatory criteria.
Section 2.18 Related Party Transactions. Except as
disclosed (i) in the Heritage Disclosure Schedule, (ii) in the
Heritage proxy statement dated March 10, 1997 or (iii) in the
footnotes to the Heritage Financials, Heritage is not a party to
any transaction (including any loan or other credit accommodation
but excluding deposits in the ordinary course of business) with
any Affiliate of Heritage (except an Heritage Subsidiary); and
all such transactions (a) were made in the ordinary course of
business, (b) were made on substantially the same terms,
including interest rates and collateral, as those prevailing at
the time for comparable transactions with other Persons, and
(c) did not involve more than the normal risk of collectability
or present other unfavorable features. Except as set forth on
the Heritage Disclosure Schedule, no loan or credit accommodation
to any Affiliate of Heritage is presently in default or, during
the three year period prior to the date of this Agreement, has
been in default or has been restructured, modified or extended.
Neither Heritage nor Heritage National Bank 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 Heritage National Bank is inappropriate.
Section 2.11 Loans. Each loan reflected as an asset
in the Heritage Financial Statements (i) is evidenced by notes,
agreements or other evidences of indebtedness which are true,
genuine and correct (ii) to the extent secured, has been secured
by valid liens and security interests which have been perfected,
and (ii) 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 would not have a Material Adverse Effect on Heritage.
Section 2.20 Accounting for the Consolidation;
Reorganization. As of the date hereof, Heritage does not have
any reason to believe that the Consolidation will fail to qualify
(i) for pooling-of-interests accounting treatment under GAAP, or
(ii) as a reorganization under Section 368(a) of the IRC.
Section 2.21 Fairness Opinion. Heritage has received
an oral opinion from ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, Inc., to the
effect that, as of the date hereof, the exchange ratio to be
received by shareholders of Heritage pursuant to this Agreement
is fair, from a financial point of view, to such shareholders.
Section 2.22 Quality of Representations. The
representations made by Heritage in this Agreement 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 III
REPRESENTATIONS AND WARRANTIES OF BCB
BCB hereby represents and warrants to Heritage that,
except as set forth in the BCB Disclosure Schedule delivered by
BCB to Heritage on or prior to the date hereof:
Section 3.01 Organization.
(a) BCB is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth
of Pennsylvania. BCB is a bank duly registered under the BHCA.
BCB has the corporate power and authority to carry on its
business and operations as now being conducted and to own and
operate the properties and assets now owned and being operated by
it. Each BCB Subsidiary is duly organized, validly existing, and
in good standing under the laws of the jurisdiction of its
incorporation and each possesses full corporate power and
authority to carry on its respective business and to own, lease
and operate its properties as presently conducted. Neither BCB
nor any BCB Subsidiary is required by the conduct of its business
or the ownership or leasing of its assets to qualify to do
business as a foreign corporation in any jurisdiction other than
the Commonwealth of Pennsylvania, except where the failure to be
so qualified would not have a Material Adverse Effect on BCB.
(b) Berks County Bank is a state-chartered bank,
duly organized and validly existing under the laws of the
Commonwealth of Pennsylvania. Berks County Bank has the
corporate power and authority to carry on its business and
operations as now being conducted and to own and operate the
properties and assets now owned and being operated by it.
(c) There are no BCB Subsidiaries other than
Berks County Bank and Berks Mortgage Company.
(d) The deposits of Berks County Bank are insured
by the FDIC to the extent provided in the FDIA.
(e) The respective minute books of BCB and Berks
County Bank and each other BCB Subsidiary accurately record, in
all material respects, all material corporate actions of their
respective shareholders and boards of directors (including
committees).
(f) Prior to the date of this Agreement, BCB has
delivered to Heritage true and correct copies of the articles of
incorporation and the bylaws of BCB and Berks County Bank,
respectively, as in effect on the date hereof.
Section 3.02 Capitalization.
(a) The authorized capital stock of BCB consists
of (a) 20,000,000 shares of common stock, $2.50 par value ("BCB
Common Stock"), of which, at the date of this Agreement, no
shares were issued and held by BCB as treasury stock and
3,469,930 shares are outstanding, validly issued, fully paid and
nonassessable and free of preemptive rights. Neither BCB nor
Berks County Bank nor any other BCB Subsidiary has or is bound by
any subscription, option, warrant, call, commitment, agreement,
plan or other Right of any character relating to the purchase,
sale or issuance or voting of, or right to receive dividends or
other distributions on any shares of BCB Common Stock or any
other security of BCB or any securities representing the right to
vote, purchase or otherwise receive any shares of BCB Common
Stock or any other security of BCB, other than (i) the shares
issuable under the Heritage Option, (ii) options to acquire
138,942 shares of BCB Common Stock under BCB Stock Option Plans
and (iii) the BCB dividend reinvestment and stock purchase plan.
(b) The authorized capital stock of Berks County
Bank consists of 3,000,000 shares of common stock, par value
$5.00 per share ("BCB Bank Common Stock"), of which 1,407,098
shares are outstanding, validly issued, fully paid,
nonassessable, free of preemptive rights and owned by BCB.
Either BCB or Berks County Bank owns all of the outstanding
shares of capital stock of each BCB Subsidiary free and clear of
all liens, security interests, pledges, charges, encumbrances,
agreements and restrictions of any kind or nature.
(c) Except as set forth in the BCB Disclosure
Schedule, neither (i) BCB, (ii) Berks County Bank nor (iii) any
other BCB Subsidiary, owns any equity interest, directly or
indirectly, other than treasury stock, in any other company or
controls any other company, except for equity interests held in
the investment portfolios of BCB Subsidiaries, equity interests
held by BCB Subsidiaries in a fiduciary capacity, and equity
interests held in connection with the commercial loan activities
of BCB Subsidiaries. There are no subscriptions, options,
warrants, calls, commitments, agreements or other Rights
outstanding and held by BCB or Berks County Bank with respect to
any other company's capital stock or the equity of any other
person.
(d) To the best of BCB's knowledge, except as
disclosed in BCB's proxy statement dated March 14, 1997, 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 BCB Common Stock.
Section 3.03 Authority; No Violation.
(a) BCB has full corporate power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement by BCB and the completion by BCB of the
transactions contemplated hereby have been duly and validly
approved by the Board of Directors of BCB and, except for
approval of the shareholders of BCB as required by the BCL, BCB's
articles of incorporation and bylaws and Nasdaq requirements
applicable to it, no other corporate proceedings on the part of
BCB are necessary to complete the transactions contemplated
hereby. This Agreement has been duly and validly executed and
delivered by BCB and, subject to approval by the shareholders of
BCB and receipt of the required approvals of Regulatory
Authorities described in Section 3.04 hereof, constitutes the
valid and binding obligation of BCB, enforceable against BCB in
accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally
and subject, as to enforceability, to general principles of
equity.
(b) (A) The execution and delivery of this
Agreement by BCB, (B) subject to receipt of approvals from the
Regulatory Authorities referred to in Section 3.04 hereof and
Heritage's and BCB's compliance with any conditions contained
therein, the completion of the transactions contemplated hereby,
and (C) compliance by BCB with any of the terms or provisions
hereof, will not (i) conflict with or result in a breach of any
provision of the articles of incorporation or other
organizational document or bylaws of BCB or any BCB Subsidiary;
(ii) violate any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to BCB or
any BCB Subsidiary or any of their respective properties or
assets; or (iii) violate, conflict with, result in a breach of
any provisions of, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default),
under, result in the termination of, accelerate the performance
required by, or result in a right of termination or acceleration
or the creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of BCB or any
BCB Subsidiary under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other investment or obligation to which BCB
or any BCB Subsidiary is a party, or by which they or any of
their respective properties or assets may be bound or affected,
except for such violations, conflicts, breaches or defaults under
clause (ii) or (iii) hereof which, either individually or in the
aggregate, will not have a Material Adverse Effect on BCB.
Section 3.04 Consents. Except for consents,
approvals, filings and registrations from or with the FRB, the
DOJ, the SEC, the PDS, the NASD and state "blue sky" authorities,
and compliance with any conditions contained therein, and the
approval of this Agreement by the shareholders of BCB, and except
as disclosed in the BCB Disclosure Schedule, no consents or
approvals of, or filings or registrations with, any public body
or authority are necessary, and no consents or approvals of any
third parties are necessary, or will be, in connection with
(a) the execution and delivery of this Agreement by BCB, and
(b) the completion by BCB of the transactions contemplated
hereby. As of the date hereof, BCB has no reason to believe that
(i) any required consents or approvals will not be received or
will be received with conditions, limitations or restrictions
unacceptable to it or which would adversely impact BCB's ability
to complete the transactions contemplated by this Agreement or
that (ii) any public body or authority, the consent or approval
of which is not required or any filing with which is not
required, will object to the completion of the transactions
contemplated by this Agreement.
Section 3.05 Financial Statements.
(a) BCB has made the BCB Regulatory Reports
available to Heritage for inspection. The BCB Regulatory Reports
have been, or will be, prepared in all material respects in
accordance with applicable regulatory accounting principles and
practices throughout the periods covered by such statements, and
fairly present, or will fairly present in all material respects,
the financial position, results of operations, and changes in
shareholders' equity of BCB as of and for the periods ended on
the dates thereof, in accordance with applicable regulatory
accounting principles applied on a consistent basis.
(b) BCB has previously delivered, or will
deliver, to Heritage the BCB Financials. The BCB Financials have
been, or will be, prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered by such
statements, except as noted therein, and fairly present, or will
fairly present, the consolidated financial position, results of
operations and cash flows of BCB as of and for the periods ending
on the dates thereof, in accordance with GAAP applied on a
consistent basis, except as noted therein.
(c) At the date of each balance sheet included in
the BCB Financials or BCB Regulatory Reports, neither BCB or
Berks County Bank did not have any liabilities, obligations or
loss contingencies of any nature (whether absolute, accrued,
contingent or otherwise) of a type required to be reflected in
such BCB Financials or BCB Regulatory Reports or in the footnotes
thereto which are not fully reflected or reserved against therein
or disclosed in a footnote thereto, except for liabilities,
obligations or loss contingencies which are not material in the
aggregate and which are incurred in the ordinary course of
business, consistent with past practice, and except for
liabilities, obligations or loss contingencies which are within
the subject matter of a specific representation and warranty
herein and subject, in the case of any unaudited statements, to
normal recurring audit adjustments and the absence of footnotes.
Section 3.06 Taxes.
(a) BCB and the BCB Subsidiaries are members of
the same affiliated group within the meaning of IRC Section
1504(a). BCB has duly filed, and will file, all federal, state
and local tax returns required to be filed by or with respect to
BCB and all BCB Subsidiaries on or prior to the Closing Date (all
such returns being accurate and correct in all material respects)
and has duly paid or will pay, or made or will make, provisions
for the payment of all federal, state and local taxes which have
been incurred by or are due or claimed to be due from BCB and any
BCB Subsidiary by any taxing authority or pursuant to any tax
sharing agreement or arrangement (written or oral) on or prior to
the Closing Date other than taxes which (i) are not delinquent or
(ii) are being contested in good faith.
(b) No consent pursuant to IRC Section 341(f) has
been filed (or will be filed prior to the Closing Date) by or
with respect to BCB or any BCB Subsidiary.
Section 3.07 No Material Adverse Effect. BCB has not
suffered any Material Adverse Effect since September 30, 1997.
Section 3.08 Contracts.
(a) Except as described in BCB's proxy statement
dated March 14, 1997 and Annual Reports on Form 10-KSB for the
years ended December 31, 1994, 1995 and 1996, previously
delivered to Heritage, in the footnotes to the audited
consolidated financial statements of BCB as of December 31, 1996,
and for the three years ended December 31, 1996, or in the BCB
Disclosure Schedule, neither BCB nor any BCB Subsidiary is a
party to or subject to: (i) any employment, consulting or
severance contract or arrangement with any past or present
officer, director or employee of BCB or any BCB Subsidiary,
except for "at will" arrangements; (ii) any plan, arrangement or
contract providing for bonuses, pensions, options, deferred
compensation, retirement payments, profit sharing or similar
arrangements for or with any past or present officers, directors
or employees of BCB or any BCB Subsidiary; (iii) any collective
bargaining agreement with any labor union relating to employees
of BCB or any BCB Subsidiary; (iv) any agreement which by its
terms limits the payment of dividends by any BCB Subsidiary;
(v) any instrument evidencing or 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 BCB or any BCB Subsidiary is an
obligor to any person, which instrument evidences or relates to
indebtedness other than deposits, repurchase agreements, Federal
Home Loan Bank advances, 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 be
applicable on or after the Closing Date to the Holding Company or
any Holding Company Subsidiary; or (vi) any contract (other than
this Agreement) limiting the freedom of any BCB Subsidiary to
engage in any type of banking or bank-related business
permissible under law.
(b) True and correct copies of agreements, plans,
arrangements and instruments referred to in Section 3.08(a),
described in the BCB proxy statement dated March 14, 1997 or in a
footnote to the BCB Financials, have been provided or been made
available to Heritage on or before the date hereof, and are in
full force and effect on the date hereof and neither BCB nor any
BCB Subsidiary (nor, to the knowledge of Heritage, any other
party to any such contract, plan, arrangement or instrument) has
breached any provision of, or is in default in any respect under
any term of, any such contract, plan, arrangement or instrument
which breach has resulted in or will result in a Material Adverse
Effect with respect to BCB. Except as set forth in the BCB
Disclosure Schedule, no party to any material contract, plan,
arrangement or instrument will have the right to terminate any or
all of the provisions of any such contract, plan, arrangement or
instrument as a result of the transactions contemplated by this
Agreement. Except as set forth in the BCB Disclosure Schedule,
none of the employees (including officers) of BCB or any BCB
Subsidiary possess the right to terminate their employment as a
result of the execution of this Agreement. Except as set forth
in the BCB Disclosure Schedule, no plan, employment agreement,
termination agreement, or similar agreement or arrangement to
which BCB or any BCB Subsidiary is a party or under which BCB or
any BCB Subsidiary may be liable contains provisions which permit
an employee or independent contractor to terminate it without
cause and continue to accrue future benefits thereunder. Except
as set forth in the BCB Disclosure Schedule, no such agreement,
plan or arrangement (i) provides for acceleration in the vesting
of benefits or payments due thereunder upon the occurrence of a
change in ownership or control of BCB or any BCB Subsidiary
absent the occurrence of a subsequent event; (ii) provides for
benefits which may cause the disallowance of a federal income tax
deduction under IRC Section 280G; or (iii) requires BCB or any
BCB Subsidiary to provide a benefit in the form of BCB Common
Stock or determined by reference to the value of BCB Common
Stock.
Section 3.09 Ownership of Property; Insurance
Coverage.
(a) BCB and the BCB Subsidiaries have good and,
as to real property, marketable title to all assets and
properties owned by BCB or any of its Subsidiaries in the conduct
of their businesses, whether such assets and properties are real
or personal, tangible or intangible, including assets and
property reflected in the balance sheets contained in the BCB
Regulatory Reports and in the BCB Financials 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) those items that secure repurchase
agreements and liabilities for borrowed money, (ii) statutory
liens for amounts not yet delinquent or which are being contested
in good faith, and (iii) items permitted under Article IV. BCB
and the BCB Subsidiaries, as lessee, have the right under valid
and subsisting leases of real and personal properties used by BCB
and its Subsidiaries in the conduct of their businesses to occupy
and use all such properties as presently occupied and used by
each of them. Except as set forth in the BCB Disclosure
Schedule, 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 BCB Financials.
(b) With respect to all agreements pursuant to
which BCB or any BCB Subsidiary has purchased securities subject
to an agreement to resell, if any, BCB or such BCB 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.
(c) BCB and the BCB Subsidiaries currently
maintain insurance in amounts considered by BCB to be reasonable
for their respective operations, and such insurance is similar in
scope and coverage to that maintained by other businesses
similarly engaged. Neither BCB nor any BCB Subsidiary has
received notice from any insurance carrier that (i) such
insurance will be cancelled or that coverage thereunder will be
reduced or eliminated or (ii) premium costs with respect to such
insurance will be substantially increased. There are presently
no material claims pending under such policies of insurance and
no notices have been given by BCB or Berks County Bank under such
policies. All such insurance is valid and enforceable and in
full force and effect, and within the last three years BCB has
received each type of insurance coverage for which it has applied
and during such periods has not been denied indemnification for
any material claims submitted under any of its insurance
policies.
Section 3.10 Legal Proceedings. Except as set forth
in the BCB Disclosure Schedule, neither BCB nor any BCB
Subsidiary is a party to any, and there are no pending or, to the
best of BCB's knowledge, threatened legal, administrative,
arbitration or other proceedings, claims, actions or governmental
investigations or inquiries of any nature (i) against BCB or any
BCB Subsidiary, (ii) to which BCB's or any BCB Subsidiary's
assets are or may be subject, (iii) challenging the validity or
propriety of any of the transactions contemplated by this
Agreement, or (iv) which could adversely affect the ability of
BCB to perform under this Agreement, except for any proceedings,
claims, actions, investigations or inquiries referred to in
clauses (i) or (ii) which, individually or in the aggregate,
could not be reasonably expected to have a Material Adverse
Effect on BCB.
Section 3.11 Compliance With Applicable Law.
(a) BCB and the BCB Subsidiaries hold all
licenses, franchises, permits and authorizations necessary for
the lawful conduct of their businesses under, and have complied
in all material respects with, applicable laws, statutes, orders,
rules or regulations of any federal, state or local governmental
authority relating to them, other than where such failure to hold
or such noncompliance will neither result in a limitation in any
material respect on the conduct of their businesses nor otherwise
have a Material Adverse Effect on BCB.
(b) Neither BCB nor any BCB Subsidiary has
received any notification or communication from any Regulatory
Authority (i) asserting that BCB or any BCB Subsidiary is not in
compliance with any of the statutes, regulations or ordinances
which such Regulatory Authority enforces; (ii) threatening to
revoke any license, franchise, permit or governmental
authorization which is material to BCB or any BCB Subsidiary;
(iii) requiring or threatening to require BCB or any BCB
Subsidiary, or indicating that BCB or any BCB Subsidiary may be
required, to enter into a cease and desist order, agreement or
memorandum of understanding or any other agreement restricting or
limiting, or purporting to restrict or limit, in any manner the
operations of BCB or any BCB Subsidiary, including without
limitation any restriction on the payment of dividends; or
(iv) directing, restricting or limiting, or purporting to direct,
restrict or limit, in any manner the operations of BCB or any BCB
Subsidiary, including without limitation any restriction on the
payment of dividends (any such notice, communication, memorandum,
agreement or order described in this sentence is hereinafter
referred to as a "Regulatory Agreement"). Neither BCB nor any
BCB Subsidiary has consented to or entered into any Regulatory
Agreement, except as heretofore disclosed to Heritage.
Section 3.12 Information to be Supplied. The
information to be supplied by BCB for inclusion in the
Registration Statement (including the Prospectus/Proxy Statement)
will not, at the time the Registration Statement is declared
effective pursuant to the Securities Act and as of the date the
Prospectus/Proxy Statement is mailed to shareholders of BCB and
Heritage and up to and including the date(s) of the meetings of
shareholders of BCB and Heritage to which such Prospectus/Proxy
Statement relates, contain any untrue statement of a material
fact or omit to state any material fact necessary in order to
make the statements therein not misleading. The information
supplied, or to be supplied, by BCB for inclusion in the
Applications will, at the time such documents are filed with any
Regulatory Authority and up to and including the date(s) of the
obtainment of any required regulatory approvals or consents, be
accurate in all material aspects.
Section 3.13 ERISA. BCB has previously delivered or
made available to Heritage true and complete copies of the
employee pension benefit plans which it currently maintains
within the meaning of ERISA Section 3(2), including profit
sharing plans, stock purchase plans, deferred compensation and
supplemental income plans, supplemental executive retirement
plans, severance plans, policies and agreements, group insurance
plans, and all other employee welfare benefit plans within the
meaning of ERISA Section 3(1) (including, if applicable, vacation
pay, sick leave, short-term disability, long-term disability, and
medical plans), and all other employee benefit plans, policies,
agreements and arrangements, all of which are set forth on the
BCB Disclosure Schedule, maintained or contributed to for the
benefit of the employees or former employees (including retired
employees) and any beneficiaries thereof or directors or former
directors of BCB or any BCB Subsidiary, together with (i) the
most recent actuarial (if any) and financial reports relating to
those plans which constitute "qualified plans" under IRC Section
401(a), (ii) the most recent annual reports relating to such
plans filed by them, respectively, with any government agency,
and (iii) all rulings and determination letters which pertain to
any such plans. To the best of BCB's knowledge, neither BCB, any
BCB Subsidiary, nor any pension plan maintained by BCB or any BCB
Subsidiary, has incurred, directly or indirectly, within the past
six (6) years any liability under Title IV of ERISA (including to
the Pension Benefit Guaranty Corporation) or to the IRS with
respect to any pension plan qualified under IRC Section 401(a)
which liability has resulted in or will result in a Material
Adverse Effect with respect to BCB, except liabilities to the
Pension Benefit Guaranty Corporation pursuant to ERISA Section
4007, all of which have been fully paid, nor has any reportable
event under ERISA Section 4043 occurred with respect to any such
pension plan. With respect to each of such plans that is subject
to Title IV of ERISA, the fair market value of the assets under
such plan exceeds the present value of the accrued benefits
liability as of the end of the most recent plan year with respect
to such plan calculated on the basis of the actual assumptions
used in the most recent actuarial valuation for such plan.
Neither BCB nor any BCB Subsidiary has incurred or is subject to
any liability under ERISA Section 4201 for a complete or partial
withdrawal from a multi-employer plan. To the best of BCB's
knowledge, all "employee benefit plans," as defined in ERISA
Section 3(3), comply and within the past six (6) years have
complied in all material respects with (i) relevant provisions of
ERISA, and (ii) in the case of plans intended to qualify for
favorable income tax treatment, provisions of the IRC relevant to
such treatment. To the best of BCB's knowledge, no prohibited
transaction (which shall mean any transaction prohibited by ERISA
Section 406 and not exempt under ERISA Section 408 or any
transaction prohibited under IRC Section 4975) has occurred
within the past six (6) years with respect to any employee
benefit plan maintained by BCB or any BCB Subsidiary that would
result in the imposition, directly or indirectly, of an excise
tax under IRC Section 4975 or other penalty under ERISA or the
IRC, which individually or in the aggregate, has resulted in or
will result in a Material Adverse Effect with respect to BCB.
BCB and the BCB Subsidiaries comply with the continuation
coverage rules applicable to its group health plan(s) for covered
employees and "qualified beneficiaries" of covered employees (as
defined in IRC Section 4980B(g)), in accordance with the
provisions of IRC Section 4980B(f). Such group health plans are
in compliance with Section 1862(b)(1) of the Social Security Act.
Neither BCB nor any BCB Subsidiary is aware of any existing or
contemplated audit of any of its employee benefit plans by the
Internal Revenue Service or U.S. Department of Labor.
Section 3.14 Brokers, Finders and Financial Advisors.
Except for BCB's engagement of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. in
connection with the transactions contemplated by this Agreement,
neither BCB nor any BCB Subsidiary, nor any of their respective
officers, directors, employees or agents, has employed any
broker, finder or financial advisor in connection with the
transactions contemplated by this Agreement or in connection with
any transaction other than the Consolidation, or, except for its
commitments disclosed in the BCB Disclosure Schedule, incurred
any liability or commitment for any fees or commissions to any
such person in connection with the transactions contemplated by
this Agreement or in connection with any transaction other than
the Consolidation, which has not been reflected in the BCB
Financials. The BCB Disclosure Schedule shall contain as an
exhibit the engagement letter between BCB and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ Inc.
Section 3.15 Securities Documents. BCB has delivered
to Heritage copies of its (i) annual reports on SEC Form 10-KSB
for the years ended December 31, 1996, 1995 and 1994,
(ii) quarterly reports on SEC Form 10-QSB for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997 and
(iii) proxy materials used in connection with its annual meetings
of shareholders held in 1997, 1996 and 1995. Such reports and
such proxy materials complied, at the time filed with the SEC, in
all material respects, with the Exchange Act and the applicable
rules and regulations of the SEC.
Section 3.16 Environmental Matters. To the knowledge
of BCB, neither BCB nor any BCB Subsidiary, nor any properties
owned or operated by BCB or any BCB Subsidiary has been or is in
violation of or liable under any Environmental Law which
violation or liability, individually or in the aggregate,
resulted in or will result in a Material Adverse Effect with
respect to BCB. There are no actions, suits or proceedings, or
demands, claims, notices or investigations (including without
limitation notices, demand letters or requests for information
from any environmental agency) instituted or pending, or to the
knowledge of BCB, threatened, relating to the liability of any
property owned or operated by BCB or any BCB Subsidiary under any
Environmental Law.
Section 3.17 Allowance for Loan Losses. The allowance
for loan losses reflected, and to be reflected, in the BCB
Regulatory Reports, and shown, and to be shown, on the balance
sheets contained in the BCB Financials have been, and will be,
established in accordance with the requirements of GAAP and all
applicable regulatory criteria.
Section 3.18 Related Party Transactions. Except as
disclosed (i) in the BCB Disclosure Schedule, (ii) in the BCB
proxy statement dated March 14, 1997 or (iii) in the footnotes to
the BCB Financials, BCB is not a party to any transaction
(including any loan or other credit accommodation but excluding
deposits in the ordinary course of business) with any Affiliate
of BCB (except a BCB Subsidiary); and all such transactions
(a) were made in the ordinary course of business, (b) were made
on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with other Persons, and (c) did not involve more
than the normal risk of collectability or present other
unfavorable features. Except as set forth on the BCB Disclosure
Schedule, no loan or credit accommodation to any Affiliate of BCB
is presently in default or, during the three year period prior to
the date of this Agreement, has been in default or has been
restructured, modified or extended. Neither BCB nor Berks County
Bank 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 BCB Bank is inappropriate.
Section 3.19 Loans. Each loan reflected as an asset
in the BCB Financial Statements (i) is evidenced by notes,
agreements or other evidences of indebtedness which are true,
genuine and correct (ii) to the extent secured, has been secured
by valid liens and security interests which have been perfected,
and (ii) 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 would not have a Material Adverse Effect on BCB.
Section 3.20 Accounting for the Consolidation;
Reorganization. As of the date hereof, BCB does not have any
reason to believe that the Consolidation will fail to qualify
(i) for pooling-of-interests treatment under GAAP, or (ii) as a
reorganization under Section 368(a) of the IRC.
Section 3.21 Fairness Opinion. BCB has received an
oral opinion from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. to the effect
that, as of the date hereof, the exchange ratio to be received by
shareholders of BCB pursuant to this Agreement is fair, from a
financial point of view, to such shareholders.
Section 3.22 Quality of Representations. The
representations made by BCB in this Agreement are true, correct
and complete in all material respects and do not omit statements
necessary to make the representations not misleading under the
circumstances.
ARTICLE IV
COVENANTS OF THE PARTIES
Section 4.01 Conduct of Business.
(a) From the date of this Agreement to the
Closing Date, Heritage and BCB and their respective Subsidiaries
will conduct their business and engage in transactions, including
extensions of credit, only in the ordinary course and consistent
with past practice and policies, except as otherwise required or
contemplated by this Agreement or with the written consent of the
other party. Heritage and BCB will use their reasonable good
faith efforts, and will cause each of the Subsidiaries to use its
reasonable good faith efforts, to (i) preserve its business
organizations intact, (ii) maintain good relationships with
employees, and (iii) preserve for itself the goodwill of its
customers and others with whom business relationships exist.
From the date hereof to the Closing Date, except as otherwise
consented to or approved by the other party in writing or as
permitted or required by this Agreement, neither Heritage or BCB
will, or will permit any Subsidiary to:
(i) amend or change any provision of its
certificate or articles of incorporation, charter, or
bylaws;
(ii) change the number of authorized or
issued shares of its capital stock or issue any shares or
issue or grant any option, warrant, call, commitment,
subscription, Right or agreement of any character relating
to its authorized or issued capital stock or any securities
convertible into shares of such stock, or split, combine or
reclassify any shares of capital stock, or declare, set
aside or pay any dividend or other distribution in respect
of capital stock, or redeem or otherwise acquire any shares
of capital stock, except that (A) Heritage may issue up to
an aggregate of 93,052 shares of Heritage Common Stock upon
the valid exercise of Heritage Options, (B) Heritage may
grant in 1998 Heritage Options for up to an aggregate of
48,000 shares of Heritage Common Stock and may issue shares
(out of Treasury or new stock) upon the valid exercise
thereof, (C) Heritage may issue (out of Treasury or new
stock) or acquire shares of Heritage Common Stock in
connection with the Heritage ESOP consistent with past
practice, (D) Heritage may acquire shares of Heritage Common
Stock in connection with the payment of all or part of the
exercise price or tax withholdings of Heritage Stock Options
in connection with the valid exercise thereof, (E) Heritage
may issue shares of Heritage Common Stock pursuant to the
Heritage DRIP consistent with past practice, (F) Heritage
may issue shares of Heritage Common Stock pursuant to the
BCB Lock-Up Option, (G) Heritage may pay a quarterly cash
dividend not to exceed $0.14 per share of Heritage Common
Stock outstanding, (H) BCB may issue up to an aggregate of
138,942 shares of BCB Common Stock upon the valid exercise
of BCB Options, (I) BCB may acquire shares of BCB Common
Stock in connection with the payment of all or part of the
exercise price or tax withholdings of BCB Stock Options in
connection with the valid exercise thereof, (J) BCB may
issue shares of BCB Common Stock consistent with past
practice, pursuant to the BCB dividend reinvestment plan
consistent with past practice, (K) BCB may issue shares of
BCB Common Stock pursuant to the Heritage Lock-Up Option,
and (L) BCB may pay a quarterly cash dividend not to exceed
$.08 per share of BCB Common Stock outstanding; it being the
intent of the parties that, after the Effective Date, the
Holding Company pay a quarterly dividend of not less than
$.14 per quarter. Heritage and BCB agree to coordinate (on
a mutually agreeable basis) the declaration of dividends
(and the record of payment dates therefor) payable during
the period preceding and including the quarter in which the
Effective Date occurs so that shareholders of Heritage and
BCB will receive fair dividends and in no event shall
shareholders of either Heritage or BCB fail to receive a
fair dividend during any quarter up to and including the
quarter immediately following the Effective Date. Nothing
contained in this Section 4.01(a)(ii) or in any other
Section of this Agreement shall be construed to permit
Heritage or BCB shareholders to receive two dividends in any
quarter or to deny or prohibit them from receiving one
dividend in any quarter. Nothing contained herein shall be
deemed to affect the ability of an Heritage or BCB
Subsidiary to pay dividends on its capital stock subject to
applicable regulatory restrictions.
(iii) grant any severance or termination pay
(other than pursuant to written policies or written
agreements in effect on the date hereof and provided to the
other party prior to the date hereof) to, or, except as
expressly contemplated by this Agreement, enter into any new
or amend any existing employment agreement with, or increase
the compensation of, any employee, officer or director
except for routine periodic increases, that individually and
in the aggregate do not exceed 10% and that are otherwise in
accordance with past practice; provided, however, that
nothing herein shall prevent Heritage from establishing a
bonus pool in the aggregate amount of $100,000 to be paid to
certain officers and employees solely for the purpose of
inducing such officer or employee to continue working for
Heritage or the Holding Company through a date not more than
six (6) months after the Effective Date.
(iv) merge or consolidate any Subsidiary
with any other corporation; sell or lease all or any
substantial portion of the assets or business; make any
acquisition of all or any substantial portion of the
business or assets of any other person, firm, association,
corporation or business organization other than in
connection with the collection of any loan or credit
arrangement; enter into a purchase and assumption
transaction with respect to deposits and liabilities; permit
the revocation or surrender by any Subsidiary of its
certificate of authority to maintain, or file an application
for the relocation of, any existing branch office;
(v) sell or otherwise dispose of the capital
stock or sell or otherwise dispose of any of its assets or
the assets of any Subsidiary other than in the ordinary
course of business consistent with past practice; subject
any of its assets to a lien, pledge, security interest or
other encumbrance (other than in connection with government
deposits, repurchase agreements, bankers acceptances,
"treasury tax and loan" accounts established in the ordinary
course of business and transactions in Federal Home Loan
Bank advances and "federal funds" and the satisfaction of
legal requirements in the exercise of trust powers) other
than in the ordinary course of business consistent with past
practice; incur any indebtedness for borrowed money (or
guarantee any indebtedness for borrowed money), except in
the ordinary course of business consistent with past
practice;
(vi) take any action which would result in
any of its representations and warranties set forth in this
Agreement becoming untrue as of any date after the date
hereof except as otherwise contemplated or permitted by this
Agreement, or in any of the conditions set forth in
Article V hereof not being satisfied, except in each case as
may be required by applicable law;
(vii) change any method, practice or
principle of accounting, except as may be required from time
to time by GAAP (without regard to any optional early
adoption date) or any Regulatory Authority;
(viii) waive, release, grant or transfer any
rights of value or modify or change in any material respect
any existing material agreement to which it or any
Subsidiary is a party, other than in the ordinary course of
business consistent with past practice;
(ix) implement any pension, retirement,
profit sharing, bonus, welfare benefit or similar plan or
arrangement that was not in effect on the date of this
Agreement (except that BCB and Heritage each may adopt its
annual bonus plan in 1998 consistent with past practice),
or, except as required by law and except as set forth in
Section 4.10, materially amend any existing plan or
arrangement except to the extent such amendments do not
result in an increase in cost; provided, however, that
(A) Heritage may contribute to the Heritage pension plan an
amount not to exceed the minimum amount required under ERISA
or the IRC if such amount is usual and ordinary and
consistent with past practice and (B) Heritage may establish
the bonus pool contemplated by 4.01(a)(iii) and may continue
its company-wide bonus program for 1998 on a pro rata basis
through June 30, 1998 for all employees not selected to
participate in the Holding Company bonus plan for 1998
provided that such selected employees shall also participate
unless they participate in the Holding Company bonus plan on
a full year basis.
(x) purchase any security for its investment
portfolio not rated "AAA" or higher by Standard & Poor's
Corporation or "Aaa" by ▇▇▇▇▇'▇ Investor Services, Inc.;
(xi) amend or otherwise modify the
underwriting and other lending guidelines and policies in
effect as of the date hereof or otherwise fail to conduct
its lending activities in the ordinary course of business
consistent with past practice;
(xii) enter into, renew, extend or modify
any other transaction with any Affiliate, other than deposit
and loan transactions in the ordinary course of business and
which are in compliance with the requirements of applicable
laws and regulations;
(xiii) enter into any interest rate swap,
floor or cap or similar commitment, agreement or
arrangement;
(xiv) except for the execution of this
Agreement, take any action that would give rise to a right
of payment to any individual under any employment agreement;
(xv) take any action that would preclude the
Consolidation from qualifying (A) for pooling-of-interests
accounting treatment under GAAP or (B) as a reorganization
within the meaning of Section 368 of the IRC, provided,
however, that nothing contained herein shall limit the
ability of either to comply with its obligations under the
BCB Option or the Heritage Option; or
(xvi) agree to do any of the foregoing.
For purposes of this Section 4.01, it shall not be
considered in the ordinary course of business for either party to
do any of the following: (i) except for expenditures associated
with new branches and the BCB Operations Center, make any capital
expenditure of $100,000 or more not disclosed on the Heritage or
BCB Disclosure Schedule, without the prior written consent of the
other party; (ii) make any sale, assignment, transfer, pledge,
hypothecation or other disposition of any assets having a book or
market value, whichever is greater, in the aggregate in excess of
$250,000, other than pledges of assets to secure Federal Home
Loan Bank advances or government deposits, to exercise trust
powers, sales of assets received in satisfaction of debts
previously contracted in the normal course of business, issuance
and sales of loans, or transactions in the investment securities
portfolio or repurchase agreements, in each case, in the ordinary
course of business; or (iii) except for expenditures associated
with new branches and the BCB Operations Center, undertake or
enter any lease, contract or other commitment for its account,
other than in the normal course of providing credit to customers
as part of its banking business, involving a payment of more than
$250,000 annually, or containing a material financial commitment
and extending beyond 12 months from the date hereof.
Notwithstanding the foregoing, BCB shall consult with Heritage
concerning proposed expenditures associated with new branches and
the BCB Operations Center.
Notwithstanding anything to the contrary contained
elsewhere in this Agreement, Heritage shall not be prohibited or
restricted in any way from taking any of the following actions:
(i) granting up to 48,000 additional Heritage Stock Options under
the Heritage Stock Option Plans; (ii) making Employer
contributions to the ESOP as provided by Section 4.10;
(iii) establishing the special bonus pool contemplated by
4.01(a)(iii) and continuing its company-wide bonus program for
1998 on a pro rata basis through June 30, 1998 as contemplated by
4.01(a)(ix).
Section 4.02 Access; Confidentiality.
(a) From the date of this Agreement through the
Closing Date, Heritage or BCB, as the case may be, shall afford
to, and shall cause each Heritage Subsidiary or BCB Subsidiary to
afford to, the other party and its authorized agents and
representatives, complete access to their respective properties,
assets, books and records and personnel, at reasonable hours and
after reasonable notice; and the officers of Heritage and BCB
will furnish any person making such investigation on behalf of
the other party with such financial and operating data and other
information with respect to the businesses, properties, assets,
books and records and personnel as the person making such
investigation shall from time to time reasonably request.
(b) Heritage and BCB each agree to conduct such
investigation and discussions hereunder in a manner so as not to
interfere unreasonably with normal operations and customer and
employee relationships of the other party.
(c) All information furnished to BCB by Heritage
or by Heritage to BCB previously in connection with the
transactions contemplated by this Agreement or pursuant hereto
shall be held in confidence to the extent required by, and in
accordance with, the confidentiality agreements, dated
September 8, 1997, between Heritage and BCB (the "Confidentiality
Agreement").
Section 4.03 Regulatory Matters and Consents.
(a) Heritage and BCB shall promptly prepare a
Prospectus/Proxy Statement to be mailed to their respective
shareholders in connection with the meetings of their respective
shareholders and transactions contemplated hereby, and to be
filed by BCB and Heritage on behalf of the Holding Company with
the SEC in the Registration Statement, which Prospectus/Proxy
Statement shall conform to all applicable legal requirements.
BCB shall, as promptly and as practicable following the
preparation thereof, file the Registration Statement with the SEC
and Heritage and BCB shall use all reasonable efforts to have the
Registration Statement declared effective under the Securities
Act as promptly and as practicable after such filing. BCB will
advise Heritage, promptly after BCB 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 the
shares of capital stock issuable pursuant to the Registration
Statement, or 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. BCB shall use its reasonable best efforts to
obtain, prior to the effective date of the Registration
Statement, all necessary state securities laws or "Blue Sky"
permits and approvals required to carry out the transactions
contemplated by this Agreement. BCB will provide Heritage with
as many copies of such Registration Statement and all amendments
thereto promptly upon the filing thereof as Heritage may
reasonably request.
(b) BCB and Heritage will prepare all
Applications to Regulatory Authorities and make all filings for,
and use their reasonable best efforts to obtain as promptly as
practicable after the date hereof, all necessary permits,
consents, approvals, waivers and authorizations of all Regulatory
Authorities necessary or advisable to consummate the transactions
contemplated by this Agreement.
(c) Each party will furnish the other with all
information concerning itself and its Subsidiaries as may be
reasonably necessary or advisable in connection with the
Registration Statement and any Application or filing made to any
Regulatory Authority in connection with the transactions
contemplated by this Agreement.
(d) BCB and Heritage shall have the right to
review in advance, and each will consult with the other on, all
information which appears in any filing made with or written
materials submitted to the SEC, any Regulatory Authority or any
third party in connection with the transactions contemplated by
this Agreement. In exercising the foregoing right, each of the
parties hereto shall act reasonably and as promptly as
practicable. The parties hereto agree that they will consult
with each other with respect to the obtaining of all permits,
consents, approvals and authorizations of the SEC, Regulatory
Authorities and third parties necessary or advisable to
consummate the transactions contemplated by this Agreement and
each party will keep the other apprised of the status of matters
relating to completion of the transactions contemplated hereby
and thereby.
(e) Each party will promptly furnish the other
with copies of all Applications and other written communications
to, or received from, any Regulatory Authority in respect of the
transactions contemplated hereby.
Section 4.04 Taking of Necessary Action. BCB and
Heritage shall each use its reasonable best efforts in good
faith, and each of them shall cause its Subsidiaries to use their
reasonable best efforts in good faith, to take or cause to be
taken all action necessary or desirable on its part so as to
permit completion of the Consolidation as soon as practicable
after the date hereof, including, without limitation,
(A) obtaining the consent or approval of each individual,
partnership, corporation, association or other business or
professional entity whose consent or approval is required or
desirable for consummation of the transactions contemplated
hereby (including assignment of leases without any change in
terms), provided that neither party or its Subsidiaries shall
agree to make any payments or modifications to agreements in
connection therewith without the prior written consent of the
other party, and (B) requesting the delivery of appropriate
opinions, consents and letters from its counsel and independent
auditors. No party hereto shall take, or cause, or to the best
of its ability permit to be taken, any action that would
substantially impair the prospects of completing the
Consolidation pursuant to this Agreement; provided that nothing
herein contained shall preclude BCB or Heritage from exercising
its rights under this Agreement or the Heritage Lock-Up Option or
BCB Lock-Up Option.
Section 4.05 Indemnification; Insurance.
(a) Indemnification. In the event of any
threatened or actual claim, action, suit, proceeding or
investigation, whether civil, criminal or administrative, in
which any person who is now, or has been at any time prior to the
date of this Agreement, or who becomes prior to the Effective
Date, a director or officer or employee of either party or any of
their respective Subsidiaries (the "Indemnified Parties") is, or
is threatened to be, made a party to a suit based in whole or in
part on, or arising in whole or in part out of, or pertaining to
(i) the fact that he is or was a director, officer or employee of
either party, any of their respective Subsidiaries or any of
their respective predecessors or (ii) this Agreement or any of
the transactions contemplated hereby, whether in any case
asserted or arising before or after the Effective Date, the
parties hereto agree to cooperate and use their best efforts to
defend against and respond thereto to the extent permitted by the
BCL and the Articles of Incorporation and Bylaws of such party.
On or after the Effective Date, the Holding Company shall
indemnify, defend and hold harmless all prior and then-existing
directors and officers of Heritage, BCB or their respective
Subsidiaries, against (i) all losses, claims, damages, costs,
expenses, liabilities or judgments or amounts that are paid in
settlement (with the prior approval of the Holding Company) of or
in connection with any claim, action, suit, proceeding or
investigation based in whole or in part on or arising in whole or
in part out of the fact that such person is or was a director,
officer or employee of Heritage, BCB or their respective
Subsidiaries, whether pertaining to any matter existing or
occurring at or prior to the Effective Date and whether asserted
or claimed prior to, or at or after, the Effective Date
("Indemnified Liabilities") and (ii) all Indemnified Liabilities
based in whole or in part on, or arising in whole or in part out
of, or pertaining to this Agreement or the transactions
contemplated hereby, to the same extent as such officer, director
or employee may be indemnified by Heritage, BCB or their
respective Subsidiaries, as the case may be, as of the date
hereof including the right to advancement of expenses, provided,
however, that any such officer, director or employee may not be
indemnified by the Holding Company if such indemnification is
prohibited by applicable law.
(b) Insurance. The Holding Company shall
maintain a directors' and officers' liability insurance policy
providing coverage amounts not less than the greater of coverage
amounts provided under the Heritage or BCB directors and
officers' liability insurance policy and on terms generally no
less favorable, including Heritage or BCB's existing policy if it
meets the foregoing standard. Such policy shall cover persons
who are currently covered by the Heritage and BCB insurance
policies for a period of six years after the Effective Date.
(c) Assumption. In the event that the Holding
Company or any of its respective successors or assigns
(i) consolidates with or merges into any other person and shall
not be the continuing or surviving corporation or entity of such
consolidation or consolidation or (ii) transfers all or
substantially all of its properties and assets to any Person,
then, and in each such case the successors and assigns of such
entity shall assume the obligations set forth in this
Section 4.05.
Section 4.06 No Other Bids and Related Matters. So
long as this Agreement remains in effect, neither party shall and
shall not authorize or permit any of its directors, officers,
employees or agents, to directly or indirectly (i) respond to,
solicit, initiate or encourage any inquiries relating to, or the
making of any proposal which relates to, an Acquisition
Transaction (as defined below), (ii) recommend or endorse an
Acquisition Transaction, (iii) participate in any discussions or
negotiations regarding an Acquisition Transaction, (iv) provide
any third party (other than the other party to this Agreement or
an affiliate of such party) with any nonpublic information in
connection with any inquiry or proposal relating to an
Acquisition Transaction or (v) enter into an agreement with any
other party with respect to an Acquisition Transaction.
Notwithstanding the foregoing, (i) the Board of Directors of
Heritage or BCB may respond to unsolicited inquiries relating to
an Acquisition Transaction or (ii) the Board of Directors of
Heritage or BCB may recommend or endorse an Acquisition
Transaction, in each case, if it receives an unqualified written
opinion of outside counsel that the failure to do so would
constitute a breach of their fiduciary duty. Each party hereto
will immediately cease and cause to be terminated any existing
activities, discussions or negotiations previously conducted with
any parties other than the other party hereto with respect to any
of the foregoing, and will take all actions necessary or
advisable to inform the appropriate individuals or entities
referred to in this sentence of the obligations undertaken in
this Section 4.06. Each party hereto will notify the other party
hereto orally (within one day) and in writing (as promptly as
practicable) if any inquiries or proposals relating to an
Acquisition Transaction are received or any such negotiations or
discussions are sought to be initiated or continued. As used in
this Agreement, "Acquisition Transaction" shall mean one of the
following transactions with a party other than the other party
hereto (i) a merger or consolidation, or any similar transaction,
(ii) a purchase, lease or other acquisition of all or a
substantial portion of the assets or liabilities of a party
hereto or (iii) a purchase or other acquisition (including by way
of share exchange, tender offer, exchange offer or otherwise) of
a substantial interest in any class or series of its equity
securities (other than as permitted by Section 4.01(a)(ii)
hereof) or its Subsidiary.
Section 4.07 Duty to Advise; Duty to Update Disclosure
Schedule. Each party shall promptly advise the other party of
any change or event having a Material Adverse Effect on it or
which it believes would or would be reasonably likely to cause or
constitute a material breach of any of its representations,
warranties or covenants set forth herein. Each party shall
update its respective Disclosure Schedule as promptly as
practicable after the occurrence of an event or fact which, if
such event or fact had occurred prior to the date of this
Agreement, would have been disclosed in such Disclosure Schedule.
The delivery of such updated Disclosure Schedule shall not
relieve a party from any breach or violation of this Agreement
and shall not have any effect for the purposes of determining the
satisfaction of the condition set forth in Section 5.01(c).
Section 4.08 Current Information.
(a) Ongoing Communications. During the period
from the date of this Agreement to the Effective Date, each party
shall, upon the request of the other party, cause one or more of
its designated representatives to confer on a monthly or more
frequent basis with representatives of the other party regarding
its financial condition, operations and business and matters
relating to the completion of the transactions contemplated
hereby. As soon as reasonably available, but in no event more
than 45 days after the end of each calendar quarter ending after
the date of this Agreement (other than the last quarter of each
fiscal year ending December 31) Heritage and BCB will deliver to
the other party its quarterly report on Form 10-Q under the
Exchange Act, and, as soon as reasonably available, but in no
event more than 90 days after the end of each fiscal year ended
December 31, Heritage and BCB will deliver to the other party its
Annual Report on Form 10-K.
(b) Board Minutes. Each party shall provide to
the other party a copy of the minutes of any meeting of the Board
of Directors of such party or any Subsidiary thereof, or any
committee thereof, or any senior management committee, promptly
after such minutes are approved at a subsequent meeting of the
board or committee, but in any event within 40 days of the
meeting of such board or committee to which such minutes relate,
except that with respect to any meeting held within 30 days of
the Closing Date, such minutes shall be provided prior to the
Closing Date.
Section 4.09 Undertakings by BCB and Heritage. From
and after the date of this Agreement, each party shall:
(a) Phase I Environmental Audit. Permit the
other party, if such party elects to do so, at its own expense,
to cause a "phase I environmental audit" to be performed at any
physical location owned or occupied by it or any of its
Subsidiaries on the date hereof;
(b) Timely Review. If requested by the other
party at the other party's sole expense, cause its independent
certified public accountants to perform a review of its unaudited
consolidated financial statements as of the end of any calendar
quarter, in accordance with Statement of Auditing Standards No.
71, and to issue its report on such financial statements as soon
as is practicable thereafter;
(c) Outside Service Bureau Contracts. If
requested to do so by the other party, use its reasonable best
efforts to obtain an extension of any contract with an outside
service bureau or other vendor of services or any Subsidiary, on
terms and conditions mutually acceptable to each party;
(d) List of Nonperforming Assets. Provide each
party, within fifteen (15) days after the monthly meeting of its
Loan Review Committee, a written list of nonperforming assets as
of the end of such month; and
(e) Shareholders Meetings. Take all action
necessary to properly call and convene a special meeting of its
shareholders as soon as practicable after the date hereof to
consider and vote upon this Agreement and the transactions
contemplated hereby. Subject to the provisions of Section 4.06,
the Board of Directors of Heritage and the Board of Directors of
BCB will recommend that the shareholders of Heritage (including
Heritage National Bank, in its fiduciary capacity) and BCB,
respectively, approve this Agreement and the transactions
contemplated hereby. If required by the other party, a party
shall retain a proxy solicitor in connection with the
solicitation of the approval of its shareholders of this
Agreement and the transactions contemplated hereby.
(f) Public Announcements. Cooperate and cause
its respective officers, directors, employees and agents to
cooperate in good faith, consistent with their respective legal
obligations, in the preparation and distribution of, and agree
upon the form, substance and timing of, any press release related
to this Agreement and the transactions contemplated hereby, and
any other public disclosures related thereto, including without
limitation, communications to shareholders and internal
announcements and customer disclosures, but nothing contained
herein shall prohibit either party from making any disclosure
which its counsel deems necessary under applicable law;
(g) Maintenance of Insurance. Maintain, and
cause their respective Subsidiaries to maintain, insurance in
such amounts as are reasonable to cover such risks as are
customary in relation to the character and location of its
properties and the nature of its business;
(h) Maintenance of Books and Records. Maintain,
and cause their respective Subsidiaries to maintain, books of
account and records in accordance with GAAP applied on a basis
consistent with those principles used in preparing the financial
statements heretofore delivered;
(i) Delivery of Securities Documents. Deliver to
the other, copies of all Securities Documents simultaneously with
the filing thereof; and
(j) Taxes. File all federal, state, and local
tax returns required to be filed by them or their respective
Subsidiaries on or before the date such returns are due
(including any extensions) and pay all taxes shown to be due on
such returns on or before the date such payment is due.
Section 4.10 Employee Benefits.
(a) Employee Benefits. On and after the
Effective Date, the fringe benefits (including miscellaneous
benefits) and welfare benefit plans (other than the welfare plans
set forth in subsection 4.10(b) below) of BCB and Heritage may,
at the Holding Company's election and subject to the requirements
of the IRC and any other laws applicable to such benefit plans,
continue to be maintained separately or consolidated. With
respect to pension benefit (retirement) plans and other plans as
described below, the following provisions and guidelines shall
apply:
(i) Heritage ESOP (Containing 401(k)
Provisions).
(A) At some time after the execution of
this Agreement but prior to the Effective Date, as
determined by Heritage, Heritage will take action,
through its Board of Directors, to terminate the IRC
Section 4975 employee stock ownership plan portion of
the Heritage ESOP, effective as of the Effective Date.
Any action to terminate the IRC Section 4975 portion of
the Heritage ESOP will be specifically conditioned upon
successful consummation of the Consolidation. The
termination of the Heritage ESOP will apply to the IRC
Section 4975 employee stock ownership plan portion of
the Heritage ESOP, and assets related thereto, only.
The portion of the Heritage ESOP subject to IRC
Section 401(k) (salary reduction contributions) and IRC
Section 401(m) (employer matching contributions), and
the assets related thereto, shall be handled as set
forth in subparagraph (D) below. Each participant in
the Heritage ESOP not fully vested will, in accordance
with the termination of the Heritage ESOP, become fully
vested in all of his or her Heritage ESOP accounts as
of the date of the effective date of the termination of
the Heritage ESOP. Heritage shall be responsible for
taking all appropriate action, including possible
amendments to the Heritage ESOP, in order to provide
for the termination of the IRC Section 4975 employee
stock ownership plan portion of the Heritage ESOP and
the transfer of the IRC Section 401(k) (salary
reduction) and IRC Section 401(m) (employer matching)
portion of the Heritage ESOP. Heritage and BCB agree
that, subject to the conditions described herein, as
soon as practicable after the termination of the IRC
Section 4975 employee stock ownership plan portion of
the Heritage ESOP, participants in the Heritage ESOP
shall be entitled, at their election, to have their
Heritage ESOP employer discretionary contribution
employee stock ownership plan accounts either
distributed to them in a lump sum or directly
transferred to another tax-qualified plan (including
the Holding Company plan(s)) or to an individual
retirement account. Participants who request a direct
transfer to the Holding Company's plan(s) will be
permitted to transfer employer stock and will be
permitted to hold employer stock in the Holding Company
plan(s).
(B) The actions relating to
effectuating termination distributions from the
Heritage ESOP will be conditioned upon receiving a
favorable determination letter from the Internal
Revenue Service ("IRS") with regard to the
qualification of the termination of the IRC
Section 4975 employer stock ownership plan portion of
the Heritage ESOP. Heritage and the Holding Company
will cooperate in submitting appropriate requests for
any such determination letter to the IRS and will use
their best efforts to seek the issuance of such letter
as soon as practicable following the effective date of
the termination of the Heritage ESOP. Heritage and the
Holding Company will adopt such additional amendments
to the Heritage ESOP as may be reasonably required by
the IRS as a condition to granting such determination
letter, provided that such amendments do not
(i) substantially change the terms outlined herein,
(ii) have a Material Adverse Effect on Heritage or
(iii) result in an additional material liability to the
Holding Company.
(C) As of and following the Effective
Date, the terminated Heritage ESOP will not be made
available to any employees other than persons who were
participants or beneficiaries of the Heritage ESOP as
of the effective date of the termination.
(D) As soon as practicable after the
consummation of the Consolidation, the Holding Company
and Heritage will take appropriate action to effectuate
a plan merger of the IRC Section 401(k) and IRC
Section 401(m) portions, including the assets related
thereto, of the Heritage ESOP with and into the BCB
401(k) Plan. Such plan merger will involve the
transfer of IRC Section 401(k) contribution assets (and
related earnings) and IRC Section 401(m) contribution
assets (and related earnings) in the Heritage ESOP to
the BCB 401(k) Plan.
(E) Heritage will make an employer
discretionary contribution to the Heritage ESOP for the
1997 Heritage ESOP Plan Year in an amount not to exceed
$100,000. After 1997 and up to the termination
effective date of the IRC Section 4975 employee stock
ownership plan portion of the Heritage ESOP, Heritage
shall make an employer discretionary contribution to
the Heritage ESOP in an amount not to exceed $8,500 for
each complete calendar month in 1998 through the
Effective Date. The 1998 employer discretionary
contribution to the Heritage ESOP is conditioned upon
successful consummation of the Consolidation.
(ii) Heritage Pension Plan. At a date
following the execution of this Agreement but prior to the
Effective Date, as determined by Heritage, the Heritage
Board of Directors shall take the following actions, all
subject to successful consummation of the Consolidation,
with respect to the Heritage Bancorp, Inc. Employee
Retirement Plan ("Heritage Pension Plan"):
(A) Approve an amendment to the
Heritage Pension Plan to provide for the freezing of
benefit accruals (cessation of future benefit accruals)
as of the Effective Date.
(B) Approve an amendment to the
Heritage Pension Plan to provide for the allocation of
excess assets upon plan termination for the benefit of
active plan participants with accrued benefits under
the Heritage Pension Plan.
(C) Approve the termination of the
Heritage Pension Plan.
Heritage and the Holding Company shall cooperate in effectuating
the distribution of appropriate notices to affected Heritage
Pension Plan participants and in the submission of the terminated
Heritage Pension Plan to the Pension Benefit Guaranty Corporation
(PBGC) and the IRS. No distributions shall be made to any
participants from the Heritage Pension Plan, prior to the
successful expiration of the 60 day PBGC review period and the
receipt of a favorable determination letter from the IRS;
provided, however, employee participants who qualify for a
retirement pension under the Heritage Pension Plan and retire
from Heritage prior to the completion of the submissions to the
PBGC and the IRS, shall be able to receive their basic accrued
benefit. Heritage Pension Plan participants shall be entitled,
at their election, to elect a direct transfer of their benefit
(if a lump sum) to another tax-qualified plan (including any
plan(s) of the Holding Company) or to an ▇▇▇ or to request that
their benefit be paid to them in an annuity form or lump sum
form.
(b) Retirement Plans Provided to Employees
Commencing Upon the Effective Date.
(i) BCB 401(k) Plan. As of the
Effective Date, employees of Heritage shall be
eligible to participate in the BCB 401(k) Plan. No
later than the Effective Date, the BCB 401(k) Plan
shall be amended to provide for prior Heritage service
credit, for eligibility and vesting purposes. The BCB
401(k) Plan shall also be amended no later than the
Effective Date to provide for the participation of
eligible Heritage employees in the BCB 401(k) Plan as
of the Effective Date. A 75% employer matching
contribution up to 6% of employee IRC Section 401(k)
deferrals formula shall be applied under the BCB 401(k)
Plan for a period of five BCB 401(k) Plan years after
the Effective Date with the 1998 plan year constituting
the first BCB 401(k) plan year for purposes of the five
year period described above. No reduction in the above
described formula will be made for the five year period
described above. No later than the Effective Date, the
BCB 401(k) Plan shall also be amended to provide for
100% immediate vesting on all employer matching
contributions. On and after the Effective Date the BCB
401(k) Plan shall continue to make available an
employer stock-based investment option, and shall
consider making available to all participants in the
BCB 401(k) Plan the participant directed investment
options currently offered to Heritage employees under
the Heritage ESOP. No amendment shall be made to the
BCB 401(k) Plan regarding full 100% vesting on employer
matching contributions for the same five year period
described above.
(ii) Money Purchase Pension Plan. As
of the Effective Date, employees of Heritage and BCB
shall be eligible to participate in a new money
purchase pension plan to be established by the Holding
Company, subject to successful consummation of the
Consolidation. The money purchase plan shall contain
eligibility provisions requiring an employee to be at
least 21 years of age and have at least one year of
service, with entry dates of at least January 1 and
July 1; provided, however, the Holding Company may
establish eligibility provisions which are more liberal
than age 21 and one year of service. The money
purchase pension plan shall provide for a fixed
employer contribution equal to 3% of an eligible
employee's base salary, shall provide for prior
Heritage and BCB service credit for eligibility and
vesting, shall contain a vesting schedule which shall
provide 20% vesting for each year of service up to 100%
vesting upon completion of five years of service and
shall permit participants to direct the investment of
their account balances in the money purchase plan in
investment options similar to those offered under the
BCB 401(k) Plan. In lieu of the adoption of a new
money purchase plan by the Holding Company, to the
extent permitted by the IRC, the Holding Company may
cause the BCB 401(k) Plan to be amended, as of the
Effective Date, to provide for a fixed employer
contribution in the same amount and subject to the same
provisions as are set forth in the preceding sentence.
The fixed 3% employer contribution formula which shall
be provided in either a new money purchase plan or in
the BCB 401(k) Plan shall not be reduced for the same
five year period described in subparagraph (A) above.
(iii) Welfare Benefit Plans. Following the
Consolidation, the Holding Company will adopt the Heritage
Blue Cross/Blue Shield Plan, the Heritage short-term and
long-term disability plans and the BCB group life insurance
plan. The Holding Company shall also adopt a Flexible
Benefits (IRC Section 125) Plan similar to the existing
Heritage Flexible Benefit Plan. With respect to any other
welfare benefit plans of BCB and Heritage, the Holding
Company shall undertake a study, in consultation with
appropriate professional advisors, with a view toward the
possible combination of some or all of such plans (other
than the welfare plans described above) or the benefits
provided thereunder. Following such study, the Holding
Company shall take such action with respect to such plans
(which may include the implementation of new benefits,
reduction or elimination of some benefits, and/or the
alteration of the respective cost allocation between
employer and employee) as it deems appropriate under the
circumstances.
(iv) Bonus Plans and Arrangements. Heritage
and BCB may continue to administer such bonus programs and
arrangements as are disclosed pursuant to this Agreement
through the Effective Date, with such equitable
modifications as may be appropriate to take into account the
circumstances of the Consolidation and the timing thereof.
(v) Other Plans. From the date of this
Agreement through the Effective Date of the Consolidation,
without the prior written consent of the other party or
except as otherwise expressly permitted by this Agreement,
no further benefits, grants or awards shall be made
available under any Heritage or BCB plans to employees or
directors, including, without limitation, the granting of
stock options, stock appreciation rights, restricted stock,
and performance shares except that BCB may make its annual
grant of 1,000 shares of BCB Common Stock to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ and 992 shares of BCB Common Stock to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇.
Section 4.11 Nasdaq Listing. BCB shall use all
reasonable efforts to cause the shares of the Holding Company
Common Stock to be issued in connection with the Consolidation to
be approved for quotation on the Nasdaq Stock Market's National
Market, subject to official notice of issuance, as of or prior to
the Effective Date.
Section 4.12 Affiliate Letters.
(a) Each party has provided to the other party a
schedule of each person that, to the best of its knowledge, is
deemed to be an "Affiliate" of it, as that term is used in Rule
145 under the Securities Act or Accounting Series Releases 130
and 135 of the Commission.
(b) Each of Heritage and BCB shall use its
reasonable efforts to cause each person who may be deemed to be
an Affiliate of Heritage and BCB respectively, to execute and
deliver to BCB as soon as practicable after the date of this
Agreement, and in any event prior to the date of the meetings of
shareholders of Heritage and BCB to be called pursuant to
Section 4.09(f) hereof, a written agreement in the form of
Exhibit 1-A and 1-B in the case of Affiliates of Heritage and
BCB, respectively.
Section 4.13 Employment and Change in Control
Agreements.
(a) Employment Agreements. On or before the
Effective Date, Heritage and Heritage National Bank, and BCB and
Berks County Bank, as applicable, shall use their best efforts to
amend the employment agreements of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ so that such
agreements, contain customary change in control provisions,
provide salaries and benefits comparable to salaries and benefits
payable to executive officers at companies that will be peer
companies of the Holding Company and otherwise will be
substantially identical in form.
(b) Change in Control Agreements. On or before
the Effective Date, Heritage and Heritage National Bank, and BCB
and Berks County Bank, as applicable, shall use their best
efforts to amend the existing employment or change in control
agreement, or enter into a new change in control agreement, with
the following individuals: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇ ▇▇▇▇▇▇. Such
change in control agreements shall be substantially identical in
form.
(c) Holding Company Assumption of Agreements. On
the Effective Date, each employment agreement or change in
control agreement, or any nonqualified retirement, deferred
compensation, "top hat," excess benefit or supplemental pension
plans, whether entered into before or after the date of this
Agreement, to which either Heritage or BCB is a party shall be
expressly assumed in writing by the Holding Company.
(d) Holding Company Assumption of Benefit Plans.
On the Effective Date, each employee benefit plan of Heritage or
BCB described in Section 4.10 shall be expressly assumed in
writing by the Holding Company and administered in the manner
contemplated by Section 4.10.
Section 4.14 Severance and Vacation Pay. After the
Effective Date (i) employees of Heritage or BCB or any of their
respective Subsidiaries who are involuntarily terminated, other
than for cause, within one year of the Effective Date, and
(ii) employees of Heritage or BCB (other than those holding a
title of Vice President or above) who, within one year of the
Effective Date, are asked, but decline to, relocate their
workplace to a location that increases their daily one-way
commute by more than 30 miles, in each case, shall be entitled to
severance benefits as follows: (i) one week of pay per year of
service, with a minimum of 2 weeks severance and a maximum of
20 weeks severance; (ii) medical insurance continuation until the
end of the severance period (or earlier if other coverage is
obtained); and (iii) payment of accrued vacation days for the
year of termination. In addition, through the end of calendar
year 1999, employees of BCB or Heritage who continue as employees
of the Holding Company or its Subsidiaries after the Effective
Date shall be provided with the greater of the days of annual
vacation and sick days to which they were entitled on the day
before the Effective Date or the days of annual vacation and sick
days to which similarly situated employees of the Holding Company
are then entitled.
Section 4.15 Transition Committee. Promptly after
execution of this Agreement, the parties shall establish a
transition committee consisting of not less than 4 or more than 6
members, including Messrs. Oswald, Kiefer, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ and
up to one director from each of BCB and Heritage. The function
of such committee shall be to determine the name for the Holding
Company, approve the form of employment and change in control
agreements referred to in Section 4.13 and to address such other
transitional matters as the Boards of Directors of Heritage and
BCB may direct.
Section 4.16 Voting of Heritage Common Stock Held by
Heritage National Bank as Fiduciary. Heritage shall direct the
full Board of Directors of Heritage National Bank, and not a
committee or other designee of the Board of Directors, to
exercise all voting rights as Heritage National Bank may possess
with respect to all shares of Heritage Common Stock held by
Heritage National Bank in a fiduciary capacity.
ARTICLE V
CONDITIONS
Section 5.01 Mutual Conditions to the Obligations of
Heritage and BCB under this Agreement. The obligations of
Heritage and BCB hereunder shall be subject to satisfaction at or
prior to the Closing Date of each of the following conditions,
unless waived by both parties pursuant to Section 7.03 hereof:
(a) Corporate Proceedings. All action required
to be taken by, or on the part of, each party to authorize the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement,
shall have been duly and validly taken and each party shall have
received certified copies of the resolutions of the other party
evidencing such authorizations;
(b) Covenants. The obligations and covenants of
each party required by this Agreement to be performed by each
party at or prior to the Closing Date shall have been duly
performed and complied with in all material respects;
(c) Representations and Warranties. The
representations and warranties of each party set forth in this
Agreement shall be true and correct, as of the date of this
Agreement, and as of the Closing Date as though made on and as of
the Closing Date, except as to any representation or warranty
(i) which specifically relates to an earlier date or (ii) where
the breach of the representation or warranty would not, either
individually or in the aggregate, constitute a Material Adverse
Effect;
(d) Approvals of Regulatory Authorities. The
parties shall have received all required approvals of Regulatory
Authorities of the Consolidation, without the imposition of any
term or condition that would have a Material Adverse Effect on
the Holding Company upon completion of the Consolidation and all
notice and waiting periods required thereunder shall have expired
or been terminated;
(e) No Injunction. There shall not be in effect
any order, decree or injunction of a court or agency of competent
jurisdiction which enjoins or prohibits consummation of the
transactions contemplated hereby;
(f) Officer's Certificate. Each party shall have
delivered to the other party a certificate, dated the Closing
Date and signed, without personal liability, by its chairman or
president, to the effect that the conditions set forth in
subsections (a) through (e) of this Section 5.01 have been
satisfied, to the best knowledge of the officer executing the
same;
(g) Opinions of Counsel. Heritage shall have
received an opinion of ▇▇▇▇▇▇▇ & ▇▇▇, counsel to BCB, dated the
Closing Date, in form and substance reasonably satisfactory to
Heritage and its counsel to the effect set forth on Exhibit 6
attached hereto and BCB shall have received an opinion of counsel
of ▇▇▇▇▇▇ and Sinon LLP counsel to Heritage, dated the Closing
Date, in form and substance reasonably satisfactory to BCB and
its counsel to the effect set forth in Exhibit 7 attached hereto;
(h) Registration Statement. The Registration
Statement shall be effective under the Securities Act and no
proceedings shall be pending or threatened by the SEC to suspend
the effectiveness of the Registration Statement; all required
approvals by state securities or "blue sky" authorities with
respect to the transactions contemplated by this Agreement, shall
have been obtained; and neither the Registration Statement nor
any such approval by state securities or "blue sky" authorities
shall be subject to a stop order or threatened stop order by the
SEC or any such authority;
(i) Tax Opinion. Each party shall have received
an opinion of ▇▇▇▇▇▇▇ & ▇▇▇ substantially to the effect set forth
on Exhibit 8 attached hereto;
(j) Pooling Letter. ▇▇▇▇▇ & Company shall have
issued a letter dated as of the Effective Date to Heritage and
BCB, to the effect that, based on a review of this Agreement and
related agreements and the facts and circumstances then known to
it, the Consolidation shall be accounted for as a pooling-of-
interests under GAAP, and BCB and Heritage shall have received
from the Affiliates of BCB and Heritage the agreements referred
to in Section 4.12(b) hereof to the extent necessary to ensure in
the reasonable judgment of Heritage and BCB that the
Consolidation shall be accounted for in such manner;
(k) Approval of Shareholders. This Agreement
shall have been approved by the shareholders of Heritage and BCB
by such vote as is required under the BCL, their respective
articles of incorporation and bylaws or under Nasdaq requirements
applicable to it;
(l) Nasdaq Listing. The Holding Company Common
Stock shall be approved for quotation on the Nasdaq National
Market System;
(m) Other. Each party shall have furnished the
other party with such certificates of its respective officers or
others and such documents to evidence fulfillment of the
conditions set forth in this Section 5.01 as each party may
reasonable request.
ARTICLE VI
TERMINATION, WAIVER AND AMENDMENT
Section 6.01 Termination. This Agreement may be
terminated on or at any time prior to the Closing Date:
(a) By the mutual written consent of the parties
hereto;
(b) By BCB or Heritage:
(i) if the Closing Date shall not have
occurred on or before July 31, 1998, unless the failure of
such occurrence shall be due to the failure of the party
seeking to terminate this Agreement to perform or observe in
any material respect its agreements set forth in this
Agreement required to be performed or observed by such party
on or before the Closing Date; or
(ii) if either party has received a final
unappealable administrative order from a Regulatory
Authority whose approval or consent has been requested that
such approval or consent will not be granted, will not be
granted absent the imposition of terms and conditions which
would permit satisfaction of the condition set forth at
Section 5.01(d) hereof, unless the failure of such
occurrence shall be due to the failure of the party seeking
to terminate this Agreement to perform or observe in any
material respect its agreements set forth herein required to
be performed or observed by such party on or before the
Closing Date; or
(c) (A) By BCB, in the event during a
thirty trading day period ended five trading days prior
to the Effective Date the average of the mean between
the closing high bid and low asked prices for Heritage
Common Stock for any consecutive ten day period
declines to a level 40% less than or equal to the Index
Value established for Heritage;
(B) By Heritage, in the event during a
thirty trading day period ended five trading days prior
to the Effective Date the average of the mean between
the closing high bid and low asked prices for BCB
Common Stock for any consecutive ten day period
declines to a level 30% less than or equal to the Index
Value established for BCB;
(C) For purposes of this
subparagraph (C), the Index Value for each of BCB and
Heritage shall be the average of the mean between the
closing high bid and low asked prices for Heritage or
BCB Common Stock, as reported by Nasdaq, for the
3 trading days beginning November 20, 1997.
(d) at any time on or prior to the Effective
Date, by Heritage in writing if BCB has, or by BCB in writing if
Heritage has, in any material respect, breached (i) any material
covenant or undertaking contained herein or (ii) any
representation or warranty contained herein, which in the case of
a breach by BCB would have a Material Adverse Effect on BCB or in
the case of a breach by Heritage would have a Material Adverse
Effect on Heritage, in any case, if such breach has not been
substantially cured by the earlier of 30 days after the date on
which written notice of such breach is given to the party
committing such breach or the Effective Date unless on such date
such breach no longer causes a Material Adverse Effect;
(e) by either the Board of Directors of BCB or
the Board of Directors of Heritage if the Board of Directors of
the other party shall have exercised its rights under
Section 4.06 or shall have otherwise withdrawn, modified or
changed in a manner adverse to the terminating party its approval
or recommendation of this Agreement and the transactions
contemplated hereby;
(f) by either the Board of Directors of BCB or
the Board of Directors of Heritage if their shareholders shall
have not approved this Agreement by the requisite vote; provided,
however, that no termination right shall exist hereunder if prior
to such shareholder vote the Board of Directors of the party
whose shareholders failed to approve this Agreement shall have
exercised its right under clause (ii) of the second sentence of
Section 4.06 or shall have otherwise withdrawn, modified or
changed in a manner adverse to the other party its approval or
recommendation of this Agreement and the transactions
contemplated thereby.
Section 6.02 Effect of Termination. If this Agreement
is terminated pursuant to Section 6.01 hereof, this Agreement
shall forthwith become void (other than Section 4.02(d) and
Section 7.01 hereof, which shall remain in full force and
effect), and there shall be no further liability on the part of
BCB or Heritage to the other, except for any liability arising
out of any uncured willful breach of any covenant or other
agreement contained in this Agreement, any fraudulent breach of a
representation or warranty, in this Agreement and any obligation
or liability arising under the Heritage Option or the BCB Option.
Nothing contained in this Section 6.02 shall be deemed to
prohibit BCB or Heritage from maintaining an action against a
third party for tortious interference or otherwise.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Expenses. Except for the cost of
printing and mailing the Proxy Statement/Prospectus which shall
be shared equally, each party hereto shall bear and pay all costs
and expenses incurred by it in connection with the transactions
contemplated hereby, including fees and expenses of its own
financial consultants, accountants and counsel.
Section 7.02 Non-Survival of Representations and
Warranties. All representations, warranties and, except to the
extent specifically provided otherwise herein, agreements and
covenants, other than those covenants that by their terms are to
be performed after the Effective Date, including without
limitation the covenants set forth in Sections 1.02(f) and (g),
4.05, 4.10 and 4.13(c) hereof, which will survive the
Consolidation, shall terminate on the Closing Date.
Section 7.03 Amendment, Extension and Waiver. Subject
to applicable law, at any time prior to the consummation of the
transactions contemplated by this Agreement, the parties may
(a) amend this Agreement, (b) extend the time for the performance
of any of the obligations or other acts of either party hereto,
(c) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto, or
(d) waive compliance with any of the agreements or conditions
contained in Articles IV and V hereof or otherwise, provided that
any amendment, extension or waiver granted or executed after
shareholders of Heritage or BCB have approved this Agreement
shall not modify either the amount or the form of the
consideration to be provided hereby to holders of Heritage Common
Stock or BCB Common Stock upon consummation of the Consolidation,
change any terms of the articles of Holding Company or otherwise
materially adversely affect the shareholders of Heritage or BCB
without the approval of the shareholders who would be so
affected. This Agreement may not be amended except by an
instrument in writing authorized by the respective Boards of
Directors and signed, by duly authorized officers, on behalf of
the parties hereto. Any agreement on the part of a party hereto
to any extension or waiver shall be valid only if set forth in an
instrument in writing signed by a duly authorized officer on
behalf of such party, but such waiver or failure to insist on
strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
Section 7.04 Entire Agreement. This Agreement,
including the documents and other writings referred to herein or
delivered pursuant hereto, contains the entire agreement and
understanding of the parties with respect to its subject matter.
This Agreement supersedes all prior arrangements and
understandings between the parties, both written or oral with
respect to its subject matter. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective successors; provided, however, that nothing in this
Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto and their respective
successors, any rights, remedies, obligations or liabilities
other than pursuant to Sections 1.02(f) and (g), 4.05, and
4.13(a), (b) and (c).
Section 7.05 No Assignment. Neither party hereto may
assign any of its rights or obligations hereunder to any other
person, without the prior written consent of the other party
hereto.
Section 7.06 Notices. All notices or other
communications hereunder shall be in writing and shall be deemed
given if delivered personally, mailed by prepaid registered or
certified mail (return receipt requested), or sent by telecopy,
addressed as follows:
(a) If to BCB, to:
BCB Financial Services Corporation
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman,
President and Chief Executive
Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
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One Glenhardie Corporate Center
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Heritage, to:
Heritage Bancorp, Inc.
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Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief
Executive Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ & Sinon LLP
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Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Section 7.07 Captions. The captions contained in this
Agreement are for reference purposes only and are not part of
this Agreement.
Section 7.08 Counterparts. This Agreement may be
executed in any number of counterparts, and each such counterpart
shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
Section 7.09 Severability. If any provision of this
Agreement or the application thereof to any person or
circumstance shall be invalid or unenforceable to any extent, the
remainder of this Agreement and the application of such
provisions to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent
permitted by law.
Section 7.10 Governing Law. This Agreement shall be
governed by and construed in accordance with the domestic
internal law (including the law of conflicts of law) of the
Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed by their duly authorized officers as of
the day and year first above written.
BCB FINANCIAL SERVICES CORPORATION
By/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman, President and
Chief Executive Officer
HERITAGE BANCORP, INC.
By/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief
Executive Officer
Exhibit 1-A
November 18, 1997
BCB Financial Services Corporation
The Madison Building
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Ladies and Gentlemen:
BCB Financial Services Corporation ("BCB") and Heritage
Bancorp, Inc. ("Heritage") desire to enter into an agreement
dated November 18, 1997 ("Agreement"), pursuant to which, subject
to the terms and conditions set forth therein, (a) a new
corporation with name to be determined will be formed by BCB and
Heritage (the "Holding Company"), (b) shareholders of BCB shall
receive shares of Holding Company common stock for shares of
common stock of BCB outstanding on the closing date, and
(c) shareholders of Heritage shall receive shares of Holding
Company common stock for shares of common stock of Heritage
outstanding on the closing date (the foregoing, collectively,
referred to herein as the "Consolidation").
BCB has requested, as an inducement to its execution and
delivery to Heritage of the Agreement, that the undersigned
execute and deliver to BCB this Letter Agreement.
In consideration of the foregoing, each of the undersigned
hereby irrevocably:
(a) Agrees (i) to be present (in person or by proxy)
at all meetings of shareholders of Heritage called to vote for
approval of the Agreement and the Consolidation so that all
shares of common stock of Heritage then owned by the undersigned
will be counted for the purpose of determining the presence of a
quorum at such meetings, and (ii) unless the undersigned has
voted against approval and adoption of the Agreement in his or
her capacity as a director of Heritage at a meeting of the Board
of Directors of Heritage or pursuant to Section 4.06 of the
Agreement has voted to recommend or endorse an Acquisition
Transaction, to vote or cause to be voted all shares owned by the
undersigned on any record date for any meeting of shareholders of
Heritage called to vote on the Consolidation in favor of approval
and adoption of the Agreement and the transactions contemplated
thereby (including any amendments or modifications of the terms
thereof approved by the Board of Directors of Heritage).
(b) Agrees not to offer, sell, transfer or otherwise
dispose of any shares of common stock of the Holding Company
received in the Consolidation, except (i) at such time as a
registration statement under the Securities Act of 1933, as
amended ("Securities Act") covering sales of such Holding Company
common stock is effective and a prospectus is made available
under the Securities Act, (ii) within the limits, and in
accordance with the applicable provisions of, Rule 145(d) under
the Securities Act, or (iii) in a transaction which, in the
opinion of counsel satisfactory to the Holding Company or as
described in a "no-action" or interpretive letter from the staff
of the Securities and Exchange Commission ("SEC"), is not
required to be registered under the Securities Act; and
acknowledges and agrees that the Holding Company is under no
obligation to register the sale, transfer or other disposition of
the Holding Company common stock by the undersigned or on behalf
of the undersigned, or to take any other action necessary to make
an exemption from registration available;
(c) Notwithstanding the foregoing, agrees not to sell,
or in any other way reduce the risk of the undersigned relative
to, any shares of common stock of Heritage or of common stock of
the Holding Company, during the period commencing thirty days
prior to the effective date of the Consolidation and ending on
the date on which financial results covering at least thirty days
of post-Consolidation combined operations of the Holding Company
have been published within the meaning of Section 201.01 of the
SEC's Codification of Financial Reporting Policies, provided,
however, that excluded from the foregoing undertaking shall be
such sales, pledges, transfers or other dispositions of shares of
Heritage common stock or shares of Holding Company common stock
which, in BCB's or the Holding Company's sole judgment, are
individually and in the aggregate de minimis within the meaning
of Topic 2-E of the Staff Accounting Bulletin Series of the SEC;
(d) Agrees that neither Heritage nor the Holding
Company shall be bound by any attempted sale of any shares of
Heritage common stock or Holding Company common stock,
respectively, in violation of this Agreement and Heritage's and
the Holding Company's transfer agents 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; and further
agrees that the certificate representing shares of Holding
Company common stock owned by the undersigned may be endorsed
with a restrictive legend consistent with the terms of this
Letter Agreement;
(e) Agrees to use reasonable efforts to cause the
provisions of subparagraphs (b) or (c) hereof to be observed with
respect to shares of Holding Company common stock and Heritage
common stock owned by (i) his or her spouse, (ii) any of his or
her relatives or relatives of his or her spouse occupying his or
her home, (iii) any trust or estate in which he or she, his or
her spouse, or any such relative owns at least a 10% beneficial
interest or of which any of them serves as trustee, executor or
in any similar capacity, and (iv) any corporation or other
organization in which the undersigned, any affiliate of the
undersigned, his or her spouse, or any such relative owns at
least 10% of any class of equity securities or of the equity
interest;
(f) Represents that the undersigned has the capacity
to enter into this Letter Agreement and that it is a valid and
binding obligation enforceable against the undersigned in
accordance with its terms, subject to bankruptcy, insolvency and
other laws affecting creditors' rights and general equitable
principles.
_________________________
It is understood and agreed that the provisions of
subparagraph (a) of this Letter Agreement relate solely to the
capacity of the undersigned as a shareholder or other beneficial
owner of shares of Heritage common stock and is not in any way
intended to affect the exercise by the undersigned of the
undersigned's responsibilities as a director or officer of
Heritage. It is further understood and agreed that such
subparagraphs of this Letter Agreement are not in any way
intended to affect the exercise by the undersigned of any
fiduciary responsibility which the undersigned may have in
respect of any shares of Heritage common stock held by the
undersigned as of the date hereof.
_________________________
This Letter Agreement may be executed in two or more
counterparts, each of which shall be deemed to constitute an
original, but all of which together shall constitute one and the
same Letter Agreement.
_________________________
This Letter Agreement shall terminate concurrently with any
termination of the Agreement in accordance with its terms.
_________________________
The undersigned intend to be legally bound hereby.
Sincerely,
Exhibit 1-B
November 18, 1997
Heritage Bancorp, Inc.
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Ladies and Gentlemen:
BCB Financial Services Corporation and Heritage Bancorp,
Inc. ("Heritage") desire to enter into an agreement dated
November 18, 1997 ("Agreement"), pursuant to which, subject to
the terms and conditions set forth therein (a) a new corporation
will be formed by BCB and Heritage (the "Holding Company"),
(b) shareholders of BCB will receive shares of Holding Company
common stock for shares of BCB common stock outstanding on the
closing date, and (c) shareholders of Heritage shall receive
shares of Holding Company common stock for shares of common stock
Heritage outstanding on the closing date (the foregoing,
collectively referred to herein as the "Consolidation").
Heritage has requested, as an inducement to its execution
and delivery to BCB of the Agreement, that the undersigned
execute and deliver to Heritage this Letter Agreement.
In consideration of the foregoing, each of the undersigned
hereby irrevocably:
(a) Agrees (i) to be present (in person or by proxy)
at all meetings of shareholders of BCB called to vote for
approval of the Agreement and the Consolidation so that all
shares of common stock of BCB then owned by the undersigned will
be counted for the purpose of determining the presence of a
quorum at such meetings, and (ii) subject to Section 4.06 of the
Agreement and unless the undersigned has voted against approval
and adoption of the Agreement in his capacity as a director of
BCB at a meeting of the Board of Directors of BCB or pursuant to
Section 4.06 of the agreement has voted to recommend or endorse
an Acquisition Transaction, to vote or cause to be voted all
shares owned by the undersigned on any record date for any
meeting of shareholders of BCB called to vote on the
Consolidation in favor of approval and adoption of the Agreement
and the transactions contemplated thereby (including any
amendments or modifications of the terms thereof approved by the
Board of Directors of BCB).
(b) Notwithstanding the foregoing, agrees not to sell,
or in any other way reduce the risk of the undersigned relative
to, any shares of common stock of Heritage or of common stock of
BCB, during the period commencing thirty days prior to the
effective date of the Consolidation and ending on the date on
which financial results covering at least thirty days of post-
Consolidation combined operations of BCB and Heritage have been
published within the meaning of Section 201.01 of the
Codification of Financial Reporting Policies of the Securities
and Exchange Commission ("SEC"), provided, however, that excluded
from the foregoing undertaking shall be such sales, pledges,
transfers or other dispositions of shares of BCB common stock or
shares of BCB common stock which, in Heritage's or the Holding
Company's sole judgment, are individually and in the aggregate
de minimis within the meaning of Topic 2-E of the Staff
Accounting Bulletin Series of the SEC;
(c) Agrees that neither the Holding Company nor BCB
shall be bound by any attempted sale of any shares of Holding
Company common stock or BCB common stock, respectively, in
violation of this Agreement and the Holding Company's and BCB's
transfer agents 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; and further agrees that the certificate
representing shares of the Holding Company common stock owned by
the undersigned may be endorsed with a restrictive legend
consistent with the terms of this Letter Agreement;
(d) Agrees to use reasonable efforts to cause the
provisions of subparagraphs (b) and (c) to be observed with
respect to shares of BCB common stock and Holding Company common
stock owned by (i) his or her spouse, (ii) any of his or her
relatives or relatives of his or her spouse occupying his or her
home, (iii) any trust or estate in which he or she, his or her
spouse, or any such relative owns at least a 10% beneficial
interest or of which any of them serves as trustee, executor or
in any similar capacity, and (iv) any corporation or other
organization in which the undersigned, any affiliate of the
undersigned, his or her spouse, or any such relative owns at
least 10% of any class of equity securities or of the equity
interest;
(e) Represents that the undersigned has the capacity
to enter into this Letter Agreement and that it is a valid and
binding obligation enforceable against the undersigned in
accordance with its terms, subject to bankruptcy, insolvency and
other laws affecting creditors' rights and general equitable
principles.
_________________________
It is understood and agreed that the provisions of
subparagraph (a) of this Letter Agreement relate solely to the
capacity of the undersigned as a shareholder or other beneficial
owner of shares of BCB common stock and is not in any way
intended to affect the exercise by the undersigned of the
undersigned's responsibilities as a director or officer of BCB.
It is further understood and agreed that such subparagraphs of
this Letter Agreement are not in any way intended to affect the
exercise by the undersigned of any fiduciary responsibility which
the undersigned may have in respect of any shares of BCB common
stock held by the undersigned as of the date hereof.
_________________________
This Letter Agreement may be executed in two or more
counterparts, each of which shall be deemed to constitute an
original, but all of which together shall constitute one and the
same Letter Agreement.
_________________________
This Letter Agreement shall terminate concurrently with any
termination of the Agreement in accordance with its terms.
_________________________
The undersigned intend to be legally bound hereby.
Sincerely,
Exhibit 2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Stock Option Agreement")
dated November 18, 1997, is by and between BCB FINANCIAL SERVICES
CORPORATION, a Pennsylvania corporation ("BCB") and HERITAGE
BANCORP, INC., a Pennsylvania corporation ("HERITAGE").
BACKGROUND
1. BCB and Heritage desire to enter into an Agreement
and Plan of Consolidation, dated November 18, 1997 (the
"Agreement"), providing, among other things, for the creation by
BCB and Heritage of a bank holding company which will issue
shares of its common stock to the shareholders of BCB and
Heritage (the "Consolidation").
2. As a condition to BCB to enter into the Agreement,
Heritage is granting to BCB an option to purchase up to that
number of shares of common stock, par value $5.00 per share (the
"Common Stock") of Heritage as shall equal 19.9% of shares of
Common Stock of Heritage issued and outstanding as of the date
hereof, on the terms and conditions hereinafter set forth.
AGREEMENT
In consideration of the foregoing and the mutual
covenants and agreements set forth herein, BCB and Heritage,
intending to be legally bound hereby, agree:
1. Grant of Option. Heritage hereby grants to BCB,
on the terms and conditions set forth herein, the option to
purchase (the "Option") up to 947,041 shares of Common Stock of
Heritage (as adjusted as set forth herein, the "Option Shares")
at a price per share (as adjusted as set forth herein, the
"Option Price") equal to $22.875, provided, however, that in no
event shall the number of Option Shares for which the Option is
exercisable exceed 19.9% of the issued and outstanding shares of
Heritage Common Stock without giving effect to any shares subject
to or issued pursuant to the Option.
2. Exercise of Option.
(a) Provided that (i) BCB shall not be, on the
date of exercise, in material breach of the agreements or
covenants contained in the Agreement, this Stock Option Agreement
or the reciprocal Stock Option Agreement by and between Heritage
and BCB, and (ii) no preliminary or permanent injunction or other
order against the delivery of shares covered by the Option issued
by any court of competent jurisdiction in the United States shall
be in effect on the date of exercise, upon or after the
occurrence of a Triggering Event (as such term is hereinafter
defined) BCB may exercise the Option, in whole or in part, at any
time or one or more times, from time to time; provided that the
Option shall terminate and be of no further force and effect upon
the earliest to occur of (A) the Effective Date of the
Consolidation, as provided in the Agreement, (B) termination of
the Agreement in accordance with the terms thereof prior to the
occurrence of a Triggering Event or a Preliminary Triggering
Event, other than a termination of the Agreement pursuant to
Section 6.01(d), unless in the case of termination by Heritage
pursuant to Section 6.01(d), such termination is as a result of a
willful breach of the Agreement by BCB (a termination pursuant to
Section 6.01(d), except a termination by Heritage as a result of
a willful breach by BCB, being referred to herein as a "Default
Termination"), (C) 18 months after the termination of the
Agreement by BCB or Heritage pursuant to a Default Termination,
and (D) 18 months after termination of the Agreement (other than
pursuant to a Default Termination) following the occurrence of a
Triggering Event or a Preliminary Triggering Event; and provided,
further, that any purchase of shares upon exercise of the Option
shall be subject to compliance with applicable securities and
banking laws. The rights set forth in Section 3 hereof shall
terminate when the right to exercise the Option terminates (other
than as a result of a complete exercise of the Option) as set
forth above.
(b) As used herein, the term "Triggering Event"
means the occurrence of any of the following events:
(i) a person or group (as such terms are
defined in the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations
thereunder), other than BCB or an affiliate of BCB, acquires
beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of 25% or more of the then outstanding
shares of Common Stock (excluding any shares eligible to be
reported on Schedule 13G of the Securities and Exchange
Commission); or
(ii) a person or group, other than BCB or an
affiliate of BCB, enters into an agreement or letter of
intent or memorandum of understanding with Heritage or
Heritage shall have authorized, recommended or publicly
proposed, or publicly announced an intention to authorize,
recommend or propose, such an agreement or letter of intent
or memorandum of understanding, pursuant to which such
person or group or any affiliate of such person or group
would (i) merge or consolidate, or enter into any similar
transaction, with Heritage, (ii) acquire all or
substantially all of the assets or liabilities of Heritage
or all or substantially all of the assets or liabilities of
Heritage National Bank (or any successor subsidiary), the
wholly-owned subsidiary of Heritage ("Heritage Bank"), or
(iii) acquire beneficial ownership of securities
representing, or the right to acquire beneficial ownership
or to vote securities representing, 25% or more of the then
outstanding shares of Common Stock (excluding any shares
eligible to be reported on Schedule 13G of the Securities
and Exchange Commission) or the then outstanding shares of
common stock of Heritage Bank.
(c) As used herein, the term "Preliminary
Triggering Event" means the occurrence of any of the following
events:
(i) a person or group (as such terms are
defined in the Exchange Act and the rules and regulations
thereunder), other than BCB or an affiliate of BCB, acquires
beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of 10% or more of the then outstanding
shares of Common Stock (excluding any shares eligible to be
reported on Schedule 13G of the Securities and Exchange
Commission);
(ii) a person or group, other than BCB or an
affiliate of BCB, publicly announces a bona fide proposal
(including a written communication that is or becomes the
subject of public disclosure) for (i) any merger,
consolidation or acquisition of all or substantially all the
assets or liabilities of Heritage or all or substantially
all the assets or liabilities of Heritage Bank, or any other
business combination involving Heritage or Heritage Bank, or
(ii) a transaction involving the transfer of beneficial
ownership of securities representing, or the right to
acquire beneficial ownership or to vote securities
representing, 10% or more of the then outstanding shares of
Common Stock or the then outstanding shares of Common Stock
of Heritage Bank (collectively, a "Proposal"), and
thereafter, if such Proposal has not been Publicly Withdrawn
(as such term is hereinafter defined) at least 30 days prior
to the meeting of shareholders of Heritage called to vote on
the Consolidation, Heritage's shareholders fail to approve
the Consolidation by the vote required by applicable law at
the meeting of shareholders called for such purpose or such
meeting has been cancelled; or
(iii) the Board of Directors of Heritage
shall (A) exercise the right granted to it in clause (i) of
the second sentence of Section 4.06 of the Agreement,
(B) fail to recommend the Consolidation, (C) recommend an
Acquisition Transaction or (D) have withdrawn or modified in
a manner adverse to BCB the recommendation of the Board of
Directors of Heritage with respect to the Agreement and
thereafter Heritage's shareholders fail to approve the
Consolidation by the vote required by law at the meeting of
shareholders called for such purpose or such meeting is not
scheduled or is cancelled without the written consent of
BCB; or
(iv) a person or group, other than BCB or an
affiliate of BCB, makes a bona fide Proposal and thereafter,
but before such Proposal has been Publicly Withdrawn,
Heritage shall have breached any representation, warranty,
covenant or obligation contained in the Agreement and such
breach would entitle BCB to terminate the Agreement under
Section 6.01(d) thereof (without regard to the cure period
provided for therein unless such cure is promptly effected
without jeopardizing consummation of the Consolidation
pursuant to the Agreement).
If more than one of the transactions giving rise to a Triggering
Event or a Preliminary Triggering Event under this Section 2 is
undertaken or effected, then all such transactions shall give
rise only to one Triggering Event or Preliminary Triggering
Event, as applicable, which Triggering Event or Preliminary
Triggering Event shall be deemed continuing for all purposes
hereunder until all such transactions are abandoned.
"Publicly Withdrawn" for purposes of this Section 2
shall mean an unconditional bona fide withdrawal of the Proposal
coupled with a public announcement of no further interest in
pursuing such Proposal or in acquiring any controlling influence
over Heritage or in soliciting or inducing any other person
(other than BCB or an affiliate of BCB) to do so.
Notwithstanding the foregoing, the obligation of
Heritage to issue Option Shares upon exercise of the Option shall
be deferred (but shall not terminate): (i) until the receipt of
all required governmental or regulatory approvals or consents
necessary for Heritage to issue the Option Shares or BCB to
exercise the Option, or until the expiration or termination of
any waiting period required by law, or (ii) so long as any
injunction or other order, decree or ruling issued by any federal
or state court of competent jurisdiction is in effect which
prohibits the sale or delivery of the Option Shares, and, in each
case, notwithstanding any provision to the contrary set forth
herein, the Option shall not expire or otherwise terminate with
respect to the Option Shares subject to any prior exercise.
Heritage shall notify BCB promptly in writing of the
occurrence of any Triggering Event known to it, it being
understood that the giving of such notice by Heritage shall not
be a condition to the right of BCB to exercise the Option.
Heritage will not take any action which would have the effect of
preventing or disabling Heritage from delivering the Option
Shares to BCB upon exercise of the Option or otherwise performing
its obligations under this Stock Option Agreement, except to the
extent required by applicable securities and banking laws and
regulations. In the event BCB wishes to exercise the Option, BCB
shall send a written notice to Heritage (the date of which is
hereinafter referred to as the "Notice Date") specifying the
total number of Option Shares it wishes to purchase and a place
and date between two and ten business days inclusive from the
Notice Date for the closing of such a purchase (a "Closing");
provided, however, that a Closing shall not occur prior to two
days after the later of receipt of any necessary regulatory
approvals or the expiration of any legally required notice or
waiting period, if any.
3. Repurchase of Option by Heritage.
(a) Subject to the last sentence of Section 2(a),
at the request of BCB at any time commencing upon the first
occurrence of a Repurchase Event (as defined in Section 3(d)) and
ending 18 months immediately thereafter, Heritage shall
repurchase from BCB (x) the Option and (y) all shares of Common
Stock purchased by BCB pursuant hereto with respect to which BCB
then has beneficial ownership. The date on which BCB exercises
its rights under this Section 3 is referred to as the "Request
Date." Such repurchase shall be at an aggregate price (the
"Section 3 Repurchase Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by BCB
for any shares of Common Stock acquired pursuant to the
Option with respect to which BCB then has beneficial
ownership;
(ii) the excess, if any, of (x) the
Applicable Price (as defined below) for each share of Common
Stock over (y) the Option Price (subject to adjustment
pursuant to Section 6), multiplied by the number of shares
of Common Stock with respect to which the Option has not
been exercised; and
(iii) the excess, if any, of the Applicable
Price over the Option Price (subject to adjustment pursuant
to Section 6) paid (or, in the case of Option Shares with
respect to which the Option has been exercised, but the
Closing has not occurred, payable) by BCB for each share of
Common Stock with respect to which the Option has been
exercised and with respect to which BCB then has beneficial
ownership, multiplied by the number of such shares.
(b) If BCB exercises it rights under this
Section 3, Heritage shall, within ten (10) business days after
the Request Date, pay the Section 3 Repurchase Consideration to
BCB in immediately available funds, and contemporaneously with
such payment, BCB shall surrender to Heritage the Option and the
certificate evidencing the shares of Common Stock purchased
thereunder with respect to which BCB then has beneficial
ownership, and BCB shall warrant that it has sole record and
beneficial ownership of such shares, and that the same are then
free and clear of all liens, claims, charges and encumbrances of
any kind whatsoever. Notwithstanding the foregoing, to the
extent that prior notification to or approval of any banking
agency or department of any federal or state government,
including without limitation the FRB, the OCC, the FDIC, or the
respective staffs thereof (the "Regulatory Authority"), is
required in connection with the payment of all or any portion of
the Section 3 Repurchase Consideration, BCB shall have the
ongoing option to revoke its request for repurchase pursuant to
Section 3, in whole or in part, or to require that Heritage
deliver from time to time that portion of the Section 3
Repurchase Consideration that it is not then so prohibited from
paying and promptly file the required notice or application for
approval and expeditiously process the same (and each party shall
cooperate with the other in the filing of any such notice or
application and the obtaining of any such approval), in which
case the ten (10) business day period of time that would
otherwise run pursuant to the preceding sentence for the payment
of the portion of the Section 3 Repurchase Consideration shall
run instead from the date on which, as the case may be, any
required notification period has expired or been terminated or
such approval has been obtained and, in either event, any
requisite waiting period shall have passed. If any Regulatory
Authority disapproves of any part of Heritage's proposed
repurchase pursuant to this Section 3, Heritage shall promptly
give notice of such fact to BCB. If any Regulatory Authority
prohibits the repurchase pursuant to this Section 3, Heritage
shall promptly give notice of such fact to BCB. If any
Regulatory Authority prohibits the repurchase in part but not in
whole, then BCB shall have the right (i) to revoke the repurchase
request or (ii) to the extent permitted by such Regulatory
Authority, determine whether the repurchase should apply to the
Option and/or Option Shares and to what extent to each, and BCB
shall thereupon have the right to exercise the Option as to the
number of Option Shares for which the Option was exercisable at
the Request Date less the sum of the number of shares covered by
the Option in respect of which payment has been made pursuant to
Section 3(a)(ii) and the number of shares covered by the portion
of the Option (if any) that has been repurchased. BCB shall
notify Heritage of its determination under the preceding sentence
within five (5) business days of receipt of notice of disapproval
of the repurchase.
(c) For purposes of this Agreement, the
"Applicable Price" means the highest of (i) the highest price per
share of Common Stock paid for any such share by the person or
groups described in Section 3(d)(i), (ii) the price per share of
Common Stock received by a holder of Common Stock in connection
with any merger or other business combination transaction
described in Section 3(d)(ii), (iii) or (iv), or (iii) the
highest closing sales price per share of Common Stock quoted on
the Nasdaq Stock Market during the 40 business days preceding the
Request Date; provided, however, that in the event of a sale of
less than all of Heritage's assets, the Applicable Price shall be
the sum of the price paid in such sale for such assets and the
current market value of the remaining assets of Heritage as
determined by a nationally-recognized investment banking firm
selected by BCB, divided by the number of shares of Common Stock
outstanding at the time of such sale. If the consideration to be
offered, paid or received pursuant to either of the foregoing
clauses (i) or (ii) shall be other than in cash, the value of
such consideration shall be determined in good faith by an
independent nationally-recognized investment banking firm
selected by BCB and reasonably acceptable to Heritage, which
determination shall be conclusive for all purposes of this
Agreement.
(d) As used herein, a Repurchase Event shall
occur if (i) any person or group (as such terms are defined in
the Exchange Act and the rules and regulations thereunder), other
than BCB or an affiliate of BCB, acquires beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of, or
the right to acquire beneficial ownership of, 25% or more of the
then-outstanding shares of Common Stock, (ii) Heritage shall have
merged or consolidated with any person, other than BCB or an
affiliate of BCB, and shall not be the surviving or continuing
corporation of such merger or consolidation, (iii) any person,
other than BCB or an affiliate of BCB, shall have merged into
Heritage and Heritage shall be the surviving corporation, but, in
connection with such merger, the then-outstanding shares of
Common Stock have been changed into or exchanged for stock or
other securities of Heritage or any other person or cash or any
other property or the outstanding shares of Common Stock
immediately prior to such merger shall after such merger
represent less than 50% of the outstanding shares and share
equivalents of the surviving corporation or (iv) Heritage shall
have sold or otherwise transferred more than 25% of its
consolidated assets to any person, other than BCB or an affiliate
of BCB.
4. Payment and Delivery of Certificates. At any
Closing hereunder, (a) BCB will make payment to Heritage of the
aggregate price for the Option Shares so purchased by wire
transfer of immediately available funds to an account designated
by Heritage, (b) Heritage will deliver to BCB a stock certificate
or certificates representing the number of Option Shares so
purchased, registered in the name of BCB or its designee, in such
denominations as were specified by BCB in its notice of exercise,
and (c) BCB will pay any transfer or other taxes required by
reason of the issuance of the Option Shares so purchased.
A legend will be placed on each stock certificate
evidencing Option Shares issued pursuant to this Stock Option
Agreement, which legend will read substantially as follows:
"The shares of stock evidenced by this
certificate have not been the subject of a registration
statement filed under the Securities Act of 1933, as
amended (the "Act"), and declared effective by the
Securities and Exchange Commission. These shares may
not be sold, transferred or otherwise disposed of prior
to such time unless Heritage Bancorp, Inc. receives an
opinion of counsel acceptable to it stating that an
exemption from the registration provisions of the Act
is available for such transfer."
5. Registration Rights. Upon or after the occurrence
of a Triggering Event and upon receipt of a written request from
BCB, Heritage shall prepare and file as soon as practicable a
registration statement under the Securities Act of 1933 (the
"Securities Act") with the Securities and Exchange Commission
covering the Option and such number of Option Shares as BCB shall
specify in its request, and Heritage shall use its best efforts
to cause such registration statement to be declared effective in
order to permit the sale or other disposition of the Option and
the Option Shares, provided that BCB shall in no event have the
right to have more than one such registration statement become
effective, and provided further that Heritage shall not be
required to prepare and file any such registration statement in
connection with any proposed sale with respect to which counsel
to Heritage delivers to Heritage and to BCB its opinion to the
effect that no such filing is required under applicable laws and
regulations with respect to such sale or disposition; provided
further, however, that Heritage may delay any registration of
Option Shares above for a period not exceeding 90 days in the
event that Heritage shall in good faith determine that any such
registration would adversely affect an offering or contemplated
offering of securities by Heritage. BCB shall provide all
information reasonably requested by Heritage for inclusion in any
registration statement to be filed hereunder. In connection with
such filing, Heritage shall use its reasonable best efforts to
cause to be delivered to BCB such certificates, opinions,
accountant's letters and other documents as BCB shall reasonably
request and as are customarily provided in connection with
registration of securities under the Securities Act. Heritage
shall provide to BCB such number of copies of the preliminary
prospectus and final prospectus and any amendments and
supplements thereto as BCB may reasonably request.
All reasonable expenses incurred by Heritage in
complying with the provisions of this Section 5, including,
without limitation, all registration and filing fees, reasonable
printing expenses, reasonable fees and disbursements of counsel
for Heritage and blue sky fees and expenses, shall be paid by
Heritage. Underwriting discounts and commissions to brokers and
dealers relating to the Option Shares, fees and disbursements of
counsel to BCB and any other expenses incurred by BCB in
connection with such filing shall be borne by BCB. In connection
with such filing, Heritage shall indemnify and hold harmless BCB
against any losses, claims, damages or liabilities, joint or
several, to which BCB may become subject, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any
preliminary or final registration statement or any amendment or
supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and Heritage will reimburse BCB for any
legal or other expense reasonably incurred by BCB in connection
with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that Heritage will not be
liable in any case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission made in such preliminary or final registration statement
or such amendment or supplement thereto in reliance upon and in
conformity with written information furnished by or on behalf of
BCB specifically for use in the preparation thereof. BCB will
indemnify and hold harmless Heritage to the same extent as set
forth in the immediately preceding sentence but only with
reference to written information furnished by or on behalf of BCB
for use in the preparation of such preliminary or final
registration statement or such amendment or supplement thereto;
and BCB will reimburse Heritage for any legal or other expense
reasonably incurred by Heritage in connection with investigating
or defending any such loss, claim, damage, liability or action.
Notwithstanding anything to the contrary contained herein, no
indemnifying party shall be liable for any settlement effected
without its prior written consent.
6. Adjustment Upon Changes in Capitalization. In the
event of any change in the Common Stock by reason of stock
dividends, split-ups, recapitalizations, combinations,
conversions, divisions, exchanges of shares or the like, then the
number and kind of Option Shares and the Option Price shall be
appropriately adjusted.
7. Filings and Consents. Each of BCB and Heritage
will use its reasonable best efforts to make all filings with,
and to obtain consents of, all third parties and governmental
authorities necessary to the consummation of the transactions
contemplated by this Stock Option Agreement. Within 10 days from
the date hereof, BCB shall file a report of beneficial ownership
on Form 13D with the Securities and Exchange Commission under the
Exchange Act which discloses the rights of BCB hereunder.
8. Representations and Warranties of Heritage.
Heritage hereby represents and warrants to BCB as follows:
(a) Due Authorization. Heritage has full
corporate power and authority to execute, deliver and perform
this Stock Option Agreement and all corporate action necessary
for execution, delivery and performance of this Stock Option
Agreement has been duly taken by Heritage. This Stock Option
Agreement constitutes a legal, valid and binding obligation of
Heritage, enforceable against Heritage in accordance with its
terms (except as 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).
(b) Authorized Shares. Heritage has taken all
necessary corporate action to authorize and reserve for issuance
all shares of Common Stock that may be issued pursuant to any
exercise of the Option.
9. Representations and Warranties of BCB. BCB hereby
represents and warrants to Heritage that BCB has full corporate
power and authority to execute, deliver and perform this Stock
Option Agreement and all corporate action necessary for
execution, delivery and performance of this Stock Option
Agreement has been duly taken by BCB. This Stock Option
Agreement constitutes a legal, valid and binding obligation of
BCB, enforceable against BCB in accordance with its terms (except
as 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).
10. Specific Performance. The parties hereto
acknowledge that damages would be an inadequate remedy for a
breach of this Stock Option Agreement and that the obligations of
the parties hereto shall be specifically enforceable.
11. Entire Agreement. This Stock Option Agreement and
the Agreement constitute the entire agreement between the parties
with respect to the subject matter hereof and supersede all other
prior agreements and understandings, both written and oral, among
the parties or any of them with respect to the subject matter
hereof.
12. Assignment or Transfer. BCB may not sell, assign
or otherwise transfer its rights and obligations hereunder, in
whole or in part, to any person or group of persons other than to
a subsidiary of BCB. BCB represents that it is acquiring the
Option for BCB's own account and not with a view to, or for sale
in connection with, any distribution of the Option or the Option
Shares. BCB is aware that neither the Option nor the Option
Shares is the subject of a registration statement filed with, and
declared effective by, the Securities and Exchange Commission
pursuant to Section 5 of the Securities Act, but instead each is
being offered in reliance upon the exemption from the
registration requirement provided by Section 4(2) thereof and the
representations and warranties made by BCB in connection
therewith.
13. Amendment of Stock Option Agreement. By mutual
consent of the parties hereto, this Stock Option Agreement may be
amended in writing at any time, for the purpose of facilitating
performance hereunder or to comply with any applicable regulation
of any governmental authority or any applicable order of any
court or for any other purpose.
14. Validity. The invalidity or unenforceability of
any provision of this Stock Option Agreement shall not affect the
validity or enforceability of any other provisions of this Stock
Option Agreement, which shall remain in full force and effect.
15. Notices. All notices, requests, consents and
other communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when
delivered personally, by telegram or telecopy, or by registered
or certified mail (postage prepaid, return receipt requested) to
the respective parties as follows:
(i) If to BCB, to:
BCB Financial Services Corporation
The Madison Building
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
and Chief Executive Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇
One Glenhardie Corporate Center
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▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to Heritage, to:
Heritage Bancorp, Inc.
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
and Chief Executive Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is to be
given may have previously furnished to the others in writing in
the manner set forth above (provided that notice of any change of
address shall be effective only upon receipt thereof).
16. Governing Law. This Stock Option Agreement shall
be governed by and construed in accordance with the domestic
internal law (but not the law of conflicts of law) of the
Commonwealth of Pennsylvania.
17. Captions. The captions in this Stock Option
Agreement are inserted for convenience and reference purposes,
and shall not limit or otherwise affect any of the terms or
provisions hereof.
18. Waivers and Extensions. The parties hereto may,
by mutual written consent, extend the time for performance of any
of the obligations or acts of either party hereto. Each party
may waive in writing (i) compliance with any of the covenants of
the other party contained in this Stock Option Agreement and/or
(ii) the other party's performance of any of its obligations set
forth in this Stock Option Agreement.
19. Parties in Interest. This Stock Option Agreement
shall be binding upon and inure solely to the benefit of each
party hereto, and, nothing in this Stock Option Agreement,
express or implied, is intended to confer upon any other person
any rights or remedies of any nature whatsoever under or by
reason of this Stock Option Agreement.
20. Counterparts. This Stock Option Agreement may be
executed in two or more counterparts, each of which shall be
deemed to be an original, but all of which shall constitute one
and the same agreement.
21. Expenses. Except as otherwise provided herein,
all costs and expenses incurred by the parties hereto in
connection with the transactions contemplated by this Stock
Option Agreement or the Option shall be paid by the party
incurring such cost or expense.
22. Defined Terms. Capitalized terms which are used
but not defined herein shall have the meanings ascribed to such
terms in the Agreement.
IN WITNESS WHEREOF, each of the parties hereto,
pursuant to resolutions adopted by its Board of Directors, has
caused this Stock Option Agreement to be executed by its duly
authorized officer all as of the day and year first above
written.
BCB FINANCIAL SERVICES CORPORATION
By/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chairman, President and Chief
Executive Officer
HERITAGE BANCORP, INC.
By/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief Executive
Officer
Exhibit 3
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Stock Option Agreement")
dated November 18, 1997, is by and between HERITAGE BANCORP,
INC., a Pennsylvania corporation ("Heritage") and BCB FINANCIAL
SERVICES CORPORATION, a Pennsylvania corporation ("BCB").
BACKGROUND
1. Heritage and BCB desire to enter into an Agreement
and Plan of Consolidation, dated November 18, 1997 (the
"Agreement"), providing, among other things, for the creation by
Heritage and BCB of a bank holding company which will issue
shares of its common stock to the shareholders of Heritage and
BCB (the "Consolidation").
2. As a condition to Heritage to enter into the
Agreement, BCB is granting to Heritage an option to purchase up
to that number of shares of common stock, par value $2.50 per
share (the "Common Stock") of BCB as shall equal 19.9% of shares
of Common Stock of BCB issued and outstanding as of the date
hereof, on the terms and conditions hereinafter set forth.
AGREEMENT
In consideration of the foregoing and the mutual
covenants and agreements set forth herein, Heritage and BCB,
intending to be legally bound hereby, agree:
1. Grant of Option. BCB hereby grants to Heritage,
on the terms and conditions set forth herein, the option to
purchase (the "Option") up to 690,516 shares of Common Stock of
BCB (as adjusted as set forth herein, the "Option Shares") at a
price per share (as adjusted as set forth herein, the "Option
Price") equal to $22.375, provided, however, that in no event
shall the number of Option Shares for which the Option is
exercisable exceed 19.9% of the issued and outstanding shares of
BCB Common Stock without giving effect to any shares subject to
or issued pursuant to the Option.
2. Exercise of Option.
(a) Provided that (i) Heritage shall not be, on
the date of exercise, in material breach of the agreements or
covenants contained in the Agreement, this Stock Option Agreement
or the reciprocal Stock Option Agreement by and between BCB and
Heritage, and (ii) no preliminary or permanent injunction or
other order against the delivery of shares covered by the Option
issued by any court of competent jurisdiction in the United
States shall be in effect on the date of exercise, upon or after
the occurrence of a Triggering Event (as such term is hereinafter
defined) Heritage may exercise the Option, in whole or in part,
at any time or one or more times, from time to time; provided
that the Option shall terminate and be of no further force and
effect upon the earliest to occur of (A) the Effective Date of
the Consolidation, as provided in the Agreement, (B) termination
of the Agreement in accordance with the terms thereof prior to
the occurrence of a Triggering Event or a Preliminary Triggering
Event, other than a termination of the Agreement pursuant to
Section 6.01(d), unless in the case of termination by BCB
pursuant to Section 6.01(d), such termination is as a result of a
willful breach of the Agreement by Heritage (a termination
pursuant to Section 6.01(d), except a termination by BCB as a
result of a willful breach by Heritage, being referred to herein
as a "Default Termination"), (C) 18 months after the termination
of the Agreement by Heritage or BCB pursuant to a Default
Termination, and (D) 18 months after termination of the Agreement
(other than pursuant to a Default Termination) following the
occurrence of a Triggering Event or a Preliminary Triggering
Event; and provided, further, that any purchase of shares upon
exercise of the Option shall be subject to compliance with
applicable securities and banking laws. The rights set forth in
Section 3 hereof shall terminate when the right to exercise the
Option terminates (other than as a result of a complete exercise
of the Option) as set forth above.
(b) As used herein, the term "Triggering Event"
means the occurrence of any of the following events:
(i) a person or group (as such terms are
defined in the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations
thereunder), other than Heritage or an affiliate of
Heritage, acquires beneficial ownership (within the meaning
of Rule 13d-3 under the Exchange Act) of 25% or more of the
then outstanding shares of Common Stock (excluding any
shares eligible to be reported on Schedule 13G of the
Securities and Exchange Commission); or
(ii) a person or group, other than Heritage
or an affiliate of Heritage, enters into an agreement or
letter of intent or memorandum of understanding with BCB or
BCB shall have authorized, recommended or publicly proposed,
or publicly announced an intention to authorize, recommend
or propose, such an agreement or letter of intent or
memorandum of understanding, pursuant to which such person
or group or any affiliate of such person or group would
(i) merge or consolidate, or enter into any similar
transaction, with BCB, (ii) acquire all or substantially all
of the assets or liabilities of BCB or all or substantially
all of the assets or liabilities of Berks County Bank (or
any successor subsidiary), the wholly-owned subsidiary of
BCB ("BCB Bank"), or (iii) acquire beneficial ownership of
securities representing, or the right to acquire beneficial
ownership or to vote securities representing, 25% or more of
the then outstanding shares of Common Stock (excluding any
shares eligible to be reported on Schedule 13G of the
Securities and Exchange Commission) or the then outstanding
shares of common stock of BCB Bank.
(c) As used herein, the term "Preliminary
Triggering Event" means the occurrence of any of the following
events:
(i) a person or group (as such terms are
defined in the Exchange Act and the rules and regulations
thereunder), other than Heritage or an affiliate of
Heritage, acquires beneficial ownership (within the meaning
of Rule 13d-3 under the Exchange Act) of 10% or more of the
then outstanding shares of Common Stock (excluding any
shares eligible to be reported on Schedule 13G of the
Securities and Exchange Commission);
(ii) a person or group, other than Heritage
or an affiliate of Heritage, publicly announces a bona fide
proposal (including a written communication that is or
becomes the subject of public disclosure) for (i) any
merger, consolidation or acquisition of all or substantially
all the assets or liabilities of BCB or all or substantially
all the assets or liabilities of BCB Bank, or any other
business combination involving BCB or BCB Bank, or (ii) a
transaction involving the transfer of beneficial ownership
of securities representing, or the right to acquire
beneficial ownership or to vote securities representing, 10%
or more of the then outstanding shares of Common Stock or
the then outstanding shares of Common Stock of BCB Bank
(collectively, a "Proposal"), and thereafter, if such
Proposal has not been Publicly Withdrawn (as such term is
hereinafter defined) at least 30 days prior to the meeting
of shareholders of BCB called to vote on the Consolidation,
BCB's shareholders fail to approve the Consolidation by the
vote required by applicable law at the meeting of
shareholders called for such purpose or such meeting has
been cancelled; or
(iii) the Board of Directors of BCB shall
(A) exercise the right granted to it in clause (i) of the
second sentence of Section 4.06 of the Agreement, (B) fail
to recommend the Consolidation, (C) recommend an Acquisition
Transaction or (D) have withdrawn or modified in a manner
adverse to Heritage the recommendation of the Board of
Directors of BCB with respect to the Agreement and
thereafter BCB's shareholders fail to approve the
Consolidation by the vote required by law at the meeting of
shareholders called for such purpose or such meeting is not
scheduled or is cancelled without the written consent of
Heritage; or
(iv) a person or group, other than Heritage
or an affiliate of Heritage, makes a bona fide Proposal and
thereafter, but before such Proposal has been Publicly
Withdrawn, BCB shall have breached any representation,
warranty, covenant or obligation contained in the Agreement
and such breach would entitle Heritage to terminate the
Agreement under Section 6.01(d) thereof (without regard to
the cure period provided for therein unless such cure is
promptly effected without jeopardizing consummation of the
Consolidation pursuant to the Agreement).
If more than one of the transactions giving rise to a Triggering
Event or a Preliminary Triggering Event under this Section 2 is
undertaken or effected, then all such transactions shall give
rise only to one Triggering Event or Preliminary Triggering
Event, as applicable, which Triggering Event or Preliminary
Triggering Event shall be deemed continuing for all purposes
hereunder until all such transactions are abandoned.
"Publicly Withdrawn" for purposes of this Section 2
shall mean an unconditional bona fide withdrawal of the Proposal
coupled with a public announcement of no further interest in
pursuing such Proposal or in acquiring any controlling influence
over BCB or in soliciting or inducing any other person (other
than Heritage or an affiliate of Heritage) to do so.
Notwithstanding the foregoing, the obligation of BCB to
issue Option Shares upon exercise of the Option shall be deferred
(but shall not terminate): (i) until the receipt of all required
governmental or regulatory approvals or consents necessary for
BCB to issue the Option Shares or Heritage to exercise the
Option, or until the expiration or termination of any waiting
period required by law, or (ii) so long as any injunction or
other order, decree or ruling issued by any federal or state
court of competent jurisdiction is in effect which prohibits the
sale or delivery of the Option Shares, and, in each case,
notwithstanding any provision to the contrary set forth herein,
the Option shall not expire or otherwise terminate with respect
to the Option Shares subject to any prior exercise.
BCB shall notify Heritage promptly in writing of the
occurrence of any Triggering Event known to it, it being
understood that the giving of such notice by BCB shall not be a
condition to the right of Heritage to exercise the Option. BCB
will not take any action which would have the effect of
preventing or disabling BCB from delivering the Option Shares to
Heritage upon exercise of the Option or otherwise performing its
obligations under this Stock Option Agreement, except to the
extent required by applicable securities and banking laws and
regulations. In the event Heritage wishes to exercise the
Option, Heritage shall send a written notice to BCB (the date of
which is hereinafter referred to as the "Notice Date") specifying
the total number of Option Shares it wishes to purchase and a
place and date between two and ten business days inclusive from
the Notice Date for the closing of such a purchase (a "Closing");
provided, however, that a Closing shall not occur prior to two
days after the later of receipt of any necessary regulatory
approvals or the expiration of any legally required notice or
waiting period, if any.
3. Repurchase of Option by BCB.
(a) Subject to the last sentence of Section 2(a),
at the request of Heritage at any time commencing upon the first
occurrence of a Repurchase Event (as defined in Section 3(d)) and
ending 18 months immediately thereafter, BCB shall repurchase
from Heritage (x) the Option and (y) all shares of Common Stock
purchased by Heritage pursuant hereto with respect to which
Heritage then has beneficial ownership. The date on which
Heritage exercises its rights under this Section 3 is referred to
as the "Request Date." Such repurchase shall be at an aggregate
price (the "Section 3 Repurchase Consideration") equal to the sum
of:
(i) the aggregate Purchase Price paid by
Heritage for any shares of Common Stock acquired pursuant to
the Option with respect to which Heritage then has
beneficial ownership;
(ii) the excess, if any, of (x) the
Applicable Price (as defined below) for each share of Common
Stock over (y) the Option Price (subject to adjustment
pursuant to Section 6), multiplied by the number of shares
of Common Stock with respect to which the Option has not
been exercised; and
(iii) the excess, if any, of the Applicable
Price over the Option Price (subject to adjustment pursuant
to Section 6) paid (or, in the case of Option Shares with
respect to which the Option has been exercised, but the
Closing has not occurred, payable) by Heritage for each
share of Common Stock with respect to which the Option has
been exercised and with respect to which Heritage then has
beneficial ownership, multiplied by the number of such
shares.
(b) If Heritage exercises it rights under this
Section 3, BCB shall, within ten (10) business days after the
Request Date, pay the Section 3 Repurchase Consideration to
Heritage in immediately available funds, and contemporaneously
with such payment, Heritage shall surrender to BCB the Option and
the certificate evidencing the shares of Common Stock purchased
thereunder with respect to which Heritage then has beneficial
ownership, and Heritage shall warrant that it has sole record and
beneficial ownership of such shares, and that the same are then
free and clear of all liens, claims, charges and encumbrances of
any kind whatsoever. Notwithstanding the foregoing, to the
extent that prior notification to or approval of any banking
agency or department of any federal or state government,
including without limitation the FRB, the OCC, the FDIC, or the
respective staffs thereof (the "Regulatory Authority"), is
required in connection with the payment of all or any portion of
the Section 3 Repurchase Consideration, Heritage shall have the
ongoing option to revoke its request for repurchase pursuant to
Section 3, in whole or in part, or to require that BCB deliver
from time to time that portion of the Section 3 Repurchase
Consideration that it is not then so prohibited from paying and
promptly file the required notice or application for approval and
expeditiously process the same (and each party shall cooperate
with the other in the filing of any such notice or application
and the obtaining of any such approval), in which case the ten
(10) business day period of time that would otherwise run
pursuant to the preceding sentence for the payment of the portion
of the Section 3 Repurchase Consideration shall run instead from
the date on which, as the case may be, any required notification
period has expired or been terminated or such approval has been
obtained and, in either event, any requisite waiting period shall
have passed. If any Regulatory Authority disapproves of any part
of BCB's proposed repurchase pursuant to this Section 3, BCB
shall promptly give notice of such fact to Heritage. If any
Regulatory Authority prohibits the repurchase pursuant to this
Section 3, BCB shall promptly give notice of such fact to
Heritage. If any Regulatory Authority prohibits the repurchase
in part but not in whole, then Heritage shall have the right
(i) to revoke the repurchase request or (ii) to the extent
permitted by such Regulatory Authority, determine whether the
repurchase should apply to the Option and/or Option Shares and to
what extent to each, and Heritage shall thereupon have the right
to exercise the Option as to the number of Option Shares for
which the Option was exercisable at the Request Date less the sum
of the number of shares covered by the Option in respect of which
payment has been made pursuant to Section 3(a)(ii) and the number
of shares covered by the portion of the Option (if any) that has
been repurchased. Heritage shall notify BCB of its determination
under the preceding sentence within five (5) business days of
receipt of notice of disapproval of the repurchase.
(c) For purposes of this Agreement, the
"Applicable Price" means the highest of (i) the highest price per
share of Common Stock paid for any such share by the person or
groups described in Section 3(d)(i), (ii) the price per share of
Common Stock received by a holder of Common Stock in connection
with any merger or other business combination transaction
described in Section 3(d)(ii), (iii) or (iv), or (iii) the
highest closing sales price per share of Common Stock quoted on
the Nasdaq Stock Market during the 40 business days preceding the
Request Date; provided, however, that in the event of a sale of
less than all of BCB's assets, the Applicable Price shall be the
sum of the price paid in such sale for such assets and the
current market value of the remaining assets of BCB as determined
by a nationally-recognized investment banking firm selected by
Heritage, divided by the number of shares of Common Stock
outstanding at the time of such sale. If the consideration to be
offered, paid or received pursuant to either of the foregoing
clauses (i) or (ii) shall be other than in cash, the value of
such consideration shall be determined in good faith by an
independent nationally-recognized investment banking firm
selected by Heritage and reasonably acceptable to BCB, which
determination shall be conclusive for all purposes of this
Agreement.
(d) As used herein, a Repurchase Event shall
occur if (i) any person or group (as such terms are defined in
the Exchange Act and the rules and regulations thereunder), other
than Heritage or an affiliate of Heritage, acquires beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange
Act) of, or the right to acquire beneficial ownership of, 25% or
more of the then-outstanding shares of Common Stock, (ii) BCB
shall have merged or consolidated with any person, other than
Heritage or an affiliate of Heritage, and shall not be the
surviving or continuing corporation of such merger or
consolidation, (iii) any person, other than Heritage or an
affiliate of Heritage, shall have merged into BCB and BCB shall
be the surviving corporation, but, in connection with such
merger, the then-outstanding shares of Common Stock have been
changed into or exchanged for stock or other securities of BCB or
any other person or cash or any other property or the outstanding
shares of Common Stock immediately prior to such merger shall
after such merger represent less than 50% of the outstanding
shares and share equivalents of the surviving corporation or
(iv) BCB shall have sold or otherwise transferred more than 25%
of its consolidated assets to any person, other than Heritage or
an affiliate of Heritage.
4. Payment and Delivery of Certificates. At any
Closing hereunder, (a) Heritage will make payment to BCB of the
aggregate price for the Option Shares so purchased by wire
transfer of immediately available funds to an account designated
by BCB, (b) BCB will deliver to Heritage a stock certificate or
certificates representing the number of Option Shares so
purchased, registered in the name of Heritage or its designee, in
such denominations as were specified by Heritage in its notice of
exercise, and (c) Heritage will pay any transfer or other taxes
required by reason of the issuance of the Option Shares so
purchased.
A legend will be placed on each stock certificate
evidencing Option Shares issued pursuant to this Stock Option
Agreement, which legend will read substantially as follows:
"The shares of stock evidenced by this
certificate have not been the subject of a registration
statement filed under the Securities Act of 1933, as
amended (the "Act"), and declared effective by the
Securities and Exchange Commission. These shares may
not be sold, transferred or otherwise disposed of prior
to such time unless BCB Financial Services Corporation
receives an opinion of counsel acceptable to it stating
that an exemption from the registration provisions of
the Act is available for such transfer."
5. Registration Rights. Upon or after the occurrence
of a Triggering Event and upon receipt of a written request from
Heritage, BCB shall prepare and file as soon as practicable a
registration statement under the Securities Act of 1933 (the
"Securities Act") with the Securities and Exchange Commission
covering the Option and such number of Option Shares as Heritage
shall specify in its request, and BCB shall use its best efforts
to cause such registration statement to be declared effective in
order to permit the sale or other disposition of the Option and
the Option Shares, provided that Heritage shall in no event have
the right to have more than one such registration statement
become effective, and provided further that BCB shall not be
required to prepare and file any such registration statement in
connection with any proposed sale with respect to which counsel
to BCB delivers to BCB and to Heritage its opinion to the effect
that no such filing is required under applicable laws and
regulations with respect to such sale or disposition; provided
further, however, that BCB may delay any registration of Option
Shares above for a period not exceeding 90 days in the event that
BCB shall in good faith determine that any such registration
would adversely affect an offering or contemplated offering of
securities by BCB. Heritage shall provide all information
reasonably requested by BCB for inclusion in any registration
statement to be filed hereunder. In connection with such filing,
BCB shall use its reasonable best efforts to cause to be
delivered to Heritage such certificates, opinions, accountant's
letters and other documents as Heritage shall reasonably request
and as are customarily provided in connection with registration
of securities under the Securities Act. BCB shall provide to
Heritage such number of copies of the preliminary prospectus and
final prospectus and any amendments and supplements thereto as
Heritage may reasonably request.
All reasonable expenses incurred by BCB in complying
with the provisions of this Section 5, including, without
limitation, all registration and filing fees, reasonable printing
expenses, reasonable fees and disbursements of counsel for BCB
and blue sky fees and expenses, shall be paid by BCB.
Underwriting discounts and commissions to brokers and dealers
relating to the Option Shares, fees and disbursements of counsel
to Heritage and any other expenses incurred by Heritage in
connection with such filing shall be borne by Heritage. In
connection with such filing, BCB shall indemnify and hold
harmless Heritage against any losses, claims, damages or
liabilities, joint or several, to which Heritage may become
subject, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material
fact contained in any preliminary or final registration statement
or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading; and BCB will reimburse
Heritage for any legal or other expense reasonably incurred by
Heritage in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that
BCB will not be liable in any case to the extent that any such
loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or
alleged omission made in such preliminary or final registration
statement or such amendment or supplement thereto in reliance
upon and in conformity with written information furnished by or
on behalf of Heritage specifically for use in the preparation
thereof. Heritage will indemnify and hold harmless BCB to the
same extent as set forth in the immediately preceding sentence
but only with reference to written information furnished by or on
behalf of Heritage for use in the preparation of such preliminary
or final registration statement or such amendment or supplement
thereto; and Heritage will reimburse BCB for any legal or other
expense reasonably incurred by BCB in connection with
investigating or defending any such loss, claim, damage,
liability or action. Notwithstanding anything to the contrary
contained herein, no indemnifying party shall be liable for any
settlement effected without its prior written consent.
6. Adjustment Upon Changes in Capitalization. In the
event of any change in the Common Stock by reason of stock
dividends, split-ups, recapitalizations, combinations,
conversions, divisions, exchanges of shares or the like, then the
number and kind of Option Shares and the Option Price shall be
appropriately adjusted.
7. Filings and Consents. Each of Heritage and BCB
will use its reasonable best efforts to make all filings with,
and to obtain consents of, all third parties and governmental
authorities necessary to the consummation of the transactions
contemplated by this Stock Option Agreement. Within 10 days from
the date hereof, Heritage shall file a report of beneficial
ownership on Form 13D with the Securities and Exchange Commission
under the Exchange Act which discloses the rights of Heritage
hereunder.
8. Representations and Warranties of BCB. BCB hereby
represents and warrants to Heritage as follows:
(a) Due Authorization. BCB has full corporate
power and authority to execute, deliver and perform this Stock
Option Agreement and all corporate action necessary for
execution, delivery and performance of this Stock Option
Agreement has been duly taken by BCB. This Stock Option
Agreement constitutes a legal, valid and binding obligation of
BCB, enforceable against BCB in accordance with its terms (except
as 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).
(b) Authorized Shares. BCB has taken all
necessary corporate action to authorize and reserve for issuance
all shares of Common Stock that may be issued pursuant to any
exercise of the Option.
9. Representations and Warranties of Heritage.
Heritage hereby represents and warrants to BCB that Heritage has
full corporate power and authority to execute, deliver and
perform this Stock Option Agreement and all corporate action
necessary for execution, delivery and performance of this Stock
Option Agreement has been duly taken by Heritage. This Stock
Option Agreement constitutes a legal, valid and binding
obligation of Heritage, enforceable against Heritage in
accordance with its terms (except as 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).
10. Specific Performance. The parties hereto
acknowledge that damages would be an inadequate remedy for a
breach of this Stock Option Agreement and that the obligations of
the parties hereto shall be specifically enforceable.
11. Entire Agreement. This Stock Option Agreement and
the Agreement constitute the entire agreement between the parties
with respect to the subject matter hereof and supersede all other
prior agreements and understandings, both written and oral, among
the parties or any of them with respect to the subject matter
hereof.
12. Assignment or Transfer. Heritage may not sell,
assign or otherwise transfer its rights and obligations
hereunder, in whole or in part, to any person or group of persons
other than to a subsidiary of Heritage. Heritage represents that
it is acquiring the Option for Heritage's own account and not
with a view to, or for sale in connection with, any distribution
of the Option or the Option Shares. Heritage is aware that
neither the Option nor the Option Shares is the subject of a
registration statement filed with, and declared effective by, the
Securities and Exchange Commission pursuant to Section 5 of the
Securities Act, but instead each is being offered in reliance
upon the exemption from the registration requirement provided by
Section 4(2) thereof and the representations and warranties made
by Heritage in connection therewith.
13. Amendment of Stock Option Agreement. By mutual
consent of the parties hereto, this Stock Option Agreement may be
amended in writing at any time, for the purpose of facilitating
performance hereunder or to comply with any applicable regulation
of any governmental authority or any applicable order of any
court or for any other purpose.
14. Validity. The invalidity or unenforceability of
any provision of this Stock Option Agreement shall not affect the
validity or enforceability of any other provisions of this Stock
Option Agreement, which shall remain in full force and effect.
15. Notices. All notices, requests, consents and
other communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when
delivered personally, by telegram or telecopy, or by registered
or certified mail (postage prepaid, return receipt requested) to
the respective parties as follows:
(i) If to Heritage, to:
Heritage Bancorp, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
and Chief Executive Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & Sinon LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to BCB, to:
BCB Financial Services Corporation
The Madison Building
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
and Chief Executive Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇▇ & ▇▇▇
One Glenhardie Corporate Center
Suite 202
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▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is to be
given may have previously furnished to the others in writing in
the manner set forth above (provided that notice of any change of
address shall be effective only upon receipt thereof).
16. Governing Law. This Stock Option Agreement shall
be governed by and construed in accordance with the domestic
internal law (but not the law of conflicts of law) of the
Commonwealth of Pennsylvania.
17. Captions. The captions in this Stock Option
Agreement are inserted for convenience and reference purposes,
and shall not limit or otherwise affect any of the terms or
provisions hereof.
18. Waivers and Extensions. The parties hereto may,
by mutual written consent, extend the time for performance of any
of the obligations or acts of either party hereto. Each party
may waive in writing (i) compliance with any of the covenants of
the other party contained in this Stock Option Agreement and/or
(ii) the other party's performance of any of its obligations set
forth in this Stock Option Agreement.
19. Parties in Interest. This Stock Option Agreement
shall be binding upon and inure solely to the benefit of each
party hereto, and, nothing in this Stock Option Agreement,
express or implied, is intended to confer upon any other person
any rights or remedies of any nature whatsoever under or by
reason of this Stock Option Agreement.
20. Counterparts. This Stock Option Agreement may be
executed in two or more counterparts, each of which shall be
deemed to be an original, but all of which shall constitute one
and the same agreement.
21. Expenses. Except as otherwise provided herein,
all costs and expenses incurred by the parties hereto in
connection with the transactions contemplated by this Stock
Option Agreement or the Option shall be paid by the party
incurring such cost or expense.
22. Defined Terms. Capitalized terms which are used
but not defined herein shall have the meanings ascribed to such
terms in the Agreement.
IN WITNESS WHEREOF, each of the parties hereto,
pursuant to resolutions adopted by its Board of Directors, has
caused this Stock Option Agreement to be executed by its duly
authorized officer as of the day and year first above written.
HERITAGE BANCORP, INC.
By/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
President and Chief Executive
Officer
BCB FINANCIAL SERVICES CORPORATION
By/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chairman, President and Chief
Executive Officer
EXHIBIT 4
FORM OF
ARTICLES OF CONSOLIDATION OF
BCB FINANCIAL SERVICES CORPORATION
AND
HERITAGE BANCORP, INC.
ARTICLES OF CONSOLIDATION (the "Articles of
Consolidation") dated __________, 1997 between BCB FINANCIAL
SERVICES CORPORATION, a Pennsylvania corporation ("BCB") with a
principal place of business in Reading, Pennsylvania, and
HERITAGE BANCORP, INC., a Pennsylvania corporation ("Heritage")
with a principal place of business in Pottsville, Pennsylvania.
WHEREAS, BCB is a corporation organized and existing
under the laws of the Commonwealth of Pennsylvania that is
registered as a bank holding company pursuant to the Bank Holding
Company Act of 1956, as amended (the "Act"), the authorized
capital stock of which consists of 20,000,000 shares of common
stock, par value $2.50 per share (the "BCB Common Stock"), of
which at November 18, 1997, 3,469,930 shares were issued and
outstanding; and
WHEREAS, Heritage is a corporation organized and
existing under the laws of the Commonwealth of Pennsylvania that
is registered as a bank holding company pursuant to the Act, the
authorized capital stock of which consists of 10,000,000 shares
of common stock, par value $5.00 per share (the "Heritage Common
Stock"), of which at November 18, 1997, 4,758,999 shares were
issued and outstanding, and 10,000,000 shares of preferred stock,
par value $25.00 per share, none of which are issued and
outstanding; and
WHEREAS, the respective Boards of Directors of BCB and
Heritage deem the formation of a new Pennsylvania corporation by
BCB and Heritage (the "Holding Company") which will then issue
1.05 share and 1.3335 shares of common stock of the Holding
Company to Heritage and BCB shareholders, respectively, for each
share of each of Heritage and BCB common stock outstanding as of
the closing date, pursuant to the terms and conditions herein set
forth or referred to, is desirable and in the best interests of
the respective corporations and their respective shareholders,
and the respective Boards of Directors and shareholders of BCB
and Heritage have adopted resolutions approving the Plan of
Consolidation and an Agreement and Plan of Consolidation of even
date herewith (the "Agreement and Plan") pursuant to the
following vote results:
(i) the BCB Board of Directors approved the Agreement
and the Plan by a vote of ______ votes for the
Agreement and the Plan and ______ votes against
the Agreement and the Plan;
(ii) the BCB shareholders approved the Agreement and
the Plan by a vote of ______ votes for the
Agreement and the Plan and ______ votes against
the Agreement and the Plan;
(iii) the Heritage Board of Directors approved the
Agreement and the Plan by a vote of _____ votes
for the Agreement and the Plan and ______ votes
against the Agreement and the Plan; and
(iv) the Heritage shareholders approved the Agreement
and the Plan by a vote of ______ votes for the
Agreement and the Plan and ______ votes against
the Agreement and the Plan.
NOW, THEREFORE, in consideration of the premises and of
the mutual agreements herein contained, and in accordance with
applicable provisions of the Pennsylvania Business Corporation
Law of 1988, as amended, of the Commonwealth of Pennsylvania (the
"BCL"), the parties hereto do hereby agree as follows:
ARTICLE I
CONSOLIDATION
Subject to the terms and conditions of the Agreement
and Plan on the Effective Date, the shareholders of BCB and
Heritage shall consolidate into the Holding Company in accordance
with the BCL. As a result of the foregoing, the separate
corporate existence of BCB and Heritage shall cease and such
transaction shall hereinafter be referred to as the
"Consolidation." The capital stock of the Holding Company shall
consist of 50,000,000 shares of common stock, par value $1.00 per
share (the "Holding Company Common Stock") and 5,000,000 shares
of preferred stock, having such par value as the board of
directors of the Holding Company shall fix from time to time,
issuable in series.
ARTICLE II
ARTICLE OF INCORPORATION AND BY-LAWS
The Articles of Incorporation of the Holding Company
shall be as set forth in Exhibit A hereto and the By-Laws of the
Holding Company shall be as set forth in Exhibit B hereto, in
each case until altered, amended or repealed.
ARTICLE III
BOARD OF DIRECTORS AND OFFICERS
From and after the Effective Date, the directors and
officers of the Holding Company, who shall hold office until
their successors are elected and qualified according to the By-
Laws of the Holding Company, shall be those persons listed on
Exhibit C hereto.
ARTICLE IV
CONVERSION AND EXCHANGE OF SHARES
1. The shares of the parties hereto outstanding
immediately prior to the Effective Date, shall, by virtue of the
Consolidation and without any action by the holders thereof, be
converted as follows:
(a) Each share of BCB Common Stock shall be
converted into 1.3335 shares of Holding Company Common Stock.
(b) Each share of Heritage Common Stock shall be
converted into 1.05 share of Holding Company Common Stock.
(c) No fractional shares of Holding Company
Common Stock and no scrip or certificates therefor will be issued
in connection with the Consolidation. Any former holder of BCB
or Heritage Common Stock who would otherwise be entitled to
receive a fraction of a share of Holding Company Common Stock
shall receive, in lieu thereof, a check for cash in an amount
equal to such fraction of a share multiplied by the closing price
of the Holding Company Common Stock on the Nasdaq National Market
System on the first day Holding Company Common Stock is traded
after the Effective Date.
2. All shares of BCB Common Stock held in the
treasury of BCB or any BCB Subsidiary or owned by Heritage or any
Heritage Subsidiary and all shares of Heritage Common Stock held
in the treasury of Heritage or any Heritage Subsidiary or owned
by BCB or any BCB Subsidiary shall be cancelled, and no cash,
stock or other property shall be delivered in exchange therefor.
3. On and after the Effective Date, each holder of a
certificate or certificates theretofore representing outstanding
shares of BCB Common Stock or outstanding shares of Heritage
Common Stock may surrender same to the Holding Company or the
Exchange Agent for cancellation and each such holder shall be
entitled upon such surrender to receive in exchange therefor
certificate(s) representing the number of shares of Holding
Company Common Stock and a check for cash representing the value
of fractional shares to which the holder is entitled as provided
above. Until surrendered, each certificate theretofore
representing outstanding shares of BCB Common Stock or
outstanding shares of Heritage Common Stock, from and after the
Effective Date, will evidence solely the right to receive
certificates for shares of Holding Company Common stock and a
check for cash in lieu of any fractional shares as described
above.
ARTICLE V
EFFECTIVE DATE OF THE CONSOLIDATION
The Consolidation shall be effective at the close of
business on the date these Articles of Consolidation are filed in
accordance with the BCL (the date of such filing being herein
referred to as the "Effective Date").
ARTICLE VI
EFFECT OF THE CONSOLIDATION
On the Effective Date, the separate existence of BCB
and Heritage shall cease and all of the property, real, personal,
and mixed, and franchises of each of BCB and Heritage, and all
debts due on whatever account to each of them, including
subscriptions to shares and other choses in action, shall be
taken and deemed to be transferred to and vested in the Holding
Company, without further act or deed. The Holding Company shall
thenceforth be responsible for all the liabilities and
obligations of each of BCB and Heritage provided in the BCL.
ARTICLE VII
CONDITIONS PRECEDENT
The obligations of BCB and Heritage to effect the
Consolidation shall be subject to satisfaction, unless duly
waived, of the conditions set forth in the Agreement and Plan.
ARTICLE VIII
TERMINATION
Anything contained in these Articles of Consolidation
to the contrary notwithstanding, and notwithstanding adoption
hereof by the shareholders of BCB or Heritage, the Agreement and
Plan may be terminated and the Consolidation abandoned as
provided in Section 6 of the Agreement and Plan.
ARTICLE IX
MISCELLANEOUS
1. Each party, by written instrument signed by a duly
authorized officer, may extend the time for the performance of
any of the obligations or other acts of the other party hereto
and may waive compliance with any of the covenants or performance
of any of the obligations of the other party contained in this
Plan of Consolidation.
2. Any notice or other communication required or
permitted under this Plan of Consolidation shall be given, and
shall be effective, in accordance with the provisions of
Section 7 of the Agreement.
3. The headings of the several Articles herein are
inserted for convenience of reference only and are not intended
to be part of or to affect the meaning or interpretation of this
Plan of Consolidation.
4. For the convenience of the parties hereto and to
facilitate the filing and recording of this Plan of
Consolidation, it may be executed in several counterparts, each
of which shall be deemed the original, but all of which together
shall constitute one and the same instrument.
5. This Plan of Consolidation shall be governed by
and construed in accordance with the laws of the Commonwealth of
Pennsylvania.
6. The full text of the Agreement and Plan is on file
at the offices of the Holding Company located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and is available for review
by BCB shareholders or Heritage shareholders during reasonable
business hours.
IN WITNESS WHEREOF, BCB and Heritage have caused this
Plan of Consolidation to be executed in counterparts by their
duly authorized officers and their corporate seals to be hereunto
affixed on the date first written above.
ATTEST BCB FINANCIAL SERVICES CORPORATION
_________________________ ___________________________________
Secretary ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chairman, President and Chief
Executive Officer
(SEAL)
ATTEST HERITAGE BANCORP, INC.
_________________________ ___________________________________
Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
President and Chief Executive
Officer
(SEAL)
EXHIBIT A
ARTICLES OF INCORPORATION
OF
______________________
FIRST. The name of the Corporation is ____________________.
SECOND. The location and post office address of the
Corporation's registered office in this Commonwealth is ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
THIRD. The purpose of the Corporation is and it shall have
unlimited power to engage in and to do any lawful act concerning
any or all lawful business for which corporations may be
incorporated under provisions of the Business Corporation Law of
1988, the Act approved December, 1988, P.L. 1444, as amended (the
"Pennsylvania Business Corporation Law").
FOURTH. The term of the Corporation's existence is
perpetual.
FIFTH. The aggregate number of shares of capital stock
which the Corporation shall have authority to issue is 55,000,000
shares, divided into two classes consisting of 50,000,000 shares
of common stock, par value $1.00 per share (the "Common Stock")
and 5,000,000 shares of preferred stock, having such par value as
the board of directors shall fix and determine, as provided in
Article SIXTH below (the "Preferred Stock").
SIXTH. The Preferred Stock may be issued from time to time
as a class without series or, if so determined by the board of
directors of the Corporation, either in whole or in part, in one
or more series. There is hereby expressly granted to and vested
in the board of directors of the Corporation authority to fix and
determine (except as fixed and determined herein), by resolution,
the par value, voting powers, full or limited, or no voting
powers, and such designations, preferences and relative,
participating, optional or other special rights, if any, and the
qualifications, limitations or restrictions thereof, if any,
including specifically, but not limited to, the dividend rights,
conversion rights, redemption rights and liquidation preferences,
if any, of any wholly unissued series of Preferred Stock (or the
entire class of Preferred Stock if none of such shares have been
issued), the number of shares constituting any such series and
the terms and conditions of the issue thereof. Prior to the
issuance of any shares of Preferred Stock, a statement setting
forth a copy of each such resolution or resolutions and the
number of shares of Preferred Stock of each such class or series
shall be executed and filed in accordance with the Pennsylvania
Business Corporation Law. Unless otherwise provided in any such
resolution or resolutions, the number of shares of capital stock
of any such class or series so set forth in such resolution or
resolutions may thereafter be increased or decreased (but not
below the number of shares then outstanding), by a statement
likewise executed and filed setting forth a statement that a
specified increase or decrease therein had been authorized and
directed by a resolution or resolutions likewise adopted by the
board of directors of the Corporation. In case the number of
such shares shall be decreased, the number of shares so specified
in the statement shall resume the status they had prior to the
adoption of the first resolution or resolutions.
SEVENTH. Each holder of record of Common Stock shall have
the right to one vote for each share of Common Stock standing in
such holder's name on the books of the Corporation. No
shareholder shall be entitled to cumulate any votes for the
election of directors.
EIGHTH. For a period of three (3) years after the formation
of the Corporation, the Board of Directors shall consist of at
least thirteen (13) directors, (i) seven (7) of whom shall have
been directors of BCB Financial Services Corporation or chosen by
directors of the Holding Company who were directors of BCB
Financial Services Corporation, and (ii) six (6) of whom shall
have been directors of Heritage Bancorp, Inc. or chosen by
directors of the Holding Company who were directors of Heritage
Bancorp, Inc. Thereafter, the management, control and government
of the Corporation shall be vested in a board of directors
consisting of not less than five (5) nor more than twenty-five
(25) members in number, as fixed by the board of directors of the
Corporation from time to time. The directors of the Corporation
shall be divided into three classes: Class I, Class II and
Class III. Each Class shall be as nearly equal in number as
possible. If the number of Class I, Class II or Class III
directors is fixed for any term of office, it shall not be
increased during that term, except by a majority vote of the
board of directors. The term of office of the initial Class I
directors shall expire at the annual election of directors by the
shareholders of the Corporation in 1998; the term of office of
the initial Class II directors shall expire at the annual
election of directors by the shareholders of the Corporation in
1999; and the term of office of the initial Class III directors
shall expire at the annual election of directors by the
shareholders of the Corporation in 2000. After the initial term
of each Class, the term of office of each Class shall be three
(3) years, so that the term of office of one class of directors
shall expire each year when their respective successors have been
duly elected by the shareholders and qualified. At each annual
election by the shareholders of the Corporation, the directors
chosen to succeed those whose terms then expire shall be
identified as being of the same class as the directors they
succeed. Unless waived by the board of directors of the
Corporation, in order to qualify for election as a director of
the Corporation, a person must have been a shareholder of record
of the Corporation for a period of time equal to the lesser of
(i) three (3) years, or (ii) the time elapsed since the
consolidation of BCB Financial Services Corporation and Heritage
Bancorp, Inc. into the Corporation (the "Consolidation").
Shareholders of another corporation that merges with the
Corporation, is acquired by, or acquires the Corporation, or
enters into any similar transaction with the Corporation shall
qualify for election as a director of the Corporation if such
shareholder was a shareholder of record of the other corporation
for a period of time equal to the lesser of (i) three (3) years,
or (ii) the time elapsed since the Consolidation. If, for any
reason, a vacancy occurs on the board of directors of the
Corporation, a majority of the remaining directors shall have the
exclusive power to fill the vacancy by electing a director to
hold office for the unexpired term in respect of which the
vacancy occurred. No director of the Corporation shall be
removed from office, as a director, by the vote of shareholders,
unless the votes of shareholders cast in favor of the resolution
for the removal of such director constitute at least a majority
of the votes which all shareholders would be entitled to cast at
an annual election of directors.
NINTH. No holder of any class of capital stock of the
Corporation shall have preemptive rights, and the Corporation
shall have the right to issue and to sell to any person or
persons any shares of its capital stock or any option, warrant or
right to acquire capital stock, or any securities having
conversion or option rights without first offering such shares,
rights or securities to any holder of any class of capital stock
of the Corporation.
TENTH. Except as set forth below, the affirmative vote of
at least 80 percent (80%) of votes cast by shareholders entitled
to vote, and if any class of shares is entitled to vote as a
separate class, the affirmative vote of shareholders entitled to
cast at least a majority of the votes cast by the outstanding
shares of such class (or such greater amount as required by the
provisions of these Articles of Incorporation establishing such
class) shall be required to approve any of the following:
(a) any merger or consolidation of the Corporation
with or into any other corporation;
(b) any share exchange in which a corporation, person
or entity acquires the issued or outstanding shares of
capital stock of the Corporation pursuant to a vote of
shareholders;
(c) any sale, lease, exchange or other transfer of
all, or substantially all, of the assets of the Corporation
to any other corporation, person or entity; or
(d) any transaction similar to, or having similar
effect as, any of the foregoing transactions.
The board of directors of the Corporation shall have the
power and duty to determine, for purposes of this Article TENTH,
on the basis of information known to the board, if any
transaction is similar to, or has an effect similar to, any of
the transactions identified above in this Article TENTH. Any
such determination shall be conclusive and binding for all
purposes of this Article TENTH. The Corporation may voluntarily
completely liquidate and/or dissolve only in accordance with all
applicable laws and only if the proposed liquidation and/or
dissolution is approved by the affirmative vote of shareholders
entitled to cast at least 80 percent (80%) of the votes which all
shareholders are entitled to cast. The provisions of this
Article TENTH shall not apply to any transaction which is
approved in advance by 75 percent (75%) of the members of the
board of directors of the Corporation, at a meeting duly called
and held.
ELEVENTH. Subsection 1. No Person or Group Acting in
Concert shall Acquire Voting Control of the Corporation, at any
time, except in accordance with the provisions of Article TENTH.
The terms "Acquire," "Voting Control," "Group Acting in Concert,"
and "Person" as used in this Article ELEVENTH are defined in
subsection 4 hereof.
Subsection 2. If Voting Control of the Corporation is
acquired, in violation of this Article ELEVENTH, all shares with
respect to which any Person or Group Acting in Concert has
acquired Voting Control in excess of the number of shares the
beneficial ownership of which is deemed under subsection 4 hereof
to confer Voting Control of the Corporation (as determined
without regard to this Subsection 2) shall be considered from and
after the date of acquisition by such Person or Group Acting in
Concert to be "excess shares" for purposes of this Article
ELEVENTH. All shares deemed to be excess shares shall thereafter
no longer be entitled to vote on any matter or to take other
shareholder action. If, after giving effect to the first two
sentences of this Subsection 2, any Person or Group Acting in
Concert still shall be deemed to be in Voting Control of the
Corporation based on the number of votes then entitled to be cast
(rather than the number of issued and outstanding shares of
common stock of the Corporation), then shares held in excess of
the number of shares deemed to confer Voting Control upon such
Person or Group Acting in Concert also shall not be entitled to
vote on any matter or take any other shareholder action, but this
subsequent reduction in voting rights shall be effected only
once. The provisions of this Subsection 2 deeming shares to be
excess shares shall only apply for so long as such shares shall
be beneficially owned by such Person or Group Acting in Concert
who has acquired Voting Control. Notwithstanding the foregoing,
shares held in excess of the number of shares the beneficial
ownership of which would otherwise be deemed under Subsection 4
to confer Voting Control of the Corporation shall not be deemed
to be excess shares if such shares are held by a Tax-Qualified
Employee Stock Benefit Plan.
Subsection 3. The provisions of this Article ELEVENTH
shall be of no further force and effect after the consummation of
a transaction in which another Person Acquires shares of capital
stock of the Corporation entitled to cast 80% or more of the
votes which all shareholders are entitled to cast (as determined
without regard to the application of this Article ELEVENTH) and
such transaction was approved in advance by the board of
directors of the Corporation.
Subsection 4. For purposes of this Article ELEVENTH:
A. The term "Acquire" includes every type of
acquisition, whether effected by purchase, exchange,
operation of law or otherwise.
B. "Voting Control" means the sole or shared
power to vote or to direct the voting of, or to dispose or
to direct the disposition of, more than ten percent (10%) of
the issued and outstanding common stock of the Corporation;
provided that (i) the solicitation, holding and voting of
proxies obtained by the board of directors of the
Corporation pursuant to a solicitation under Regulation 14A
of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") shall
not constitute Voting Control, (ii) a Tax-Qualified Employee
Stock Benefit Plan which holds more than 10 percent of the
voting shares of the Corporation shall not be deemed to have
Voting Control of the Corporation, (iii) any trustee, member
of any administrative committee or employee beneficiary of a
Tax-Qualified Employee Stock Benefit Plan shall not be
deemed to have Voting Control of the Corporation either
(A) as a result of their control of a Tax-Qualified Employee
Stock Benefit Plan, and/or their beneficial interest in
voting shares held by a Tax-Qualified Employee Stock Benefit
Plan, or (B) as a result of the aggregation of both their
beneficial interest in voting shares held by a Tax-Qualified
Employee Stock Benefit Plan and voting shares held by such
trustee, administrative committee member or employee
beneficiary independent of a Tax-Qualified Employee Stock
Benefit Plan, and (iv) any trustee which is a direct or
indirect subsidiary of the Corporation shall not be deemed
to have Voting Control of the Corporation as a result of
having the right to vote more than ten percent (10%) of the
issued and outstanding common stock of the Corporation.
C. "Group Acting in Concert" includes Persons
seeking to combine or pool their voting or other interests
in the voting shares for a common purpose, pursuant to any
contract, understanding, relationship, agreement or other
arrangement, whether written or otherwise, provided, that a
"Group Acting in Concert" shall not include (i) the members
of the board of directors of the Corporation solely as a
result of their board membership, (ii) the members of the
board of directors of the Corporation as a result of their
solicitation, holding and voting of proxies obtained by them
pursuant to a solicitation subject to rules and regulations
promulgated under the Exchange Act or any successor statute
or (iii) any member or all the members of the board of
directors of the Corporation, and any Tax-Qualified Employee
Stock Benefit Plan and the trustees, administrative
committee members and employee beneficiaries thereof.
D. The term "Person" includes an individual, a
Group Acting in Concert, a corporation, a partnership, an
association, a joint stock company, a trust, an
unincorporated organization or similar company, a syndicate
or any other group formed for the purpose of acquiring,
holding or disposing of the equity securities of the
Corporation.
E. The term "Tax-Qualified Employee Stock
Benefit Plan" means any defined benefit plan or defined
contribution plan of the Corporation or any subsidiary, such
as an employee stock ownership plan, stock bonus plan,
profit sharing plan or other plan, that, with its related
trust, meets the requirements to be "qualified" under
Section 401 of the Internal Revenue Code of 1986, as
amended.
Subsection 5. This Article ELEVENTH shall not apply to
the purchase of securities of the Corporation by underwriters in
connection with a public offering of such securities by the
Corporation or by a holder of shares of capital stock of the
Corporation with written consent of the board of directors of the
Corporation; provided, however, that purchasers of securities of
the Corporation from any underwriter shall be subject to the
provisions of this Article ELEVENTH.
The board of directors of the Corporation shall have the
power and duty to determine, for purposes of this Article
ELEVENTH, on the basis of information known to the Board, if and
when such other Person has acquired Voting Control of the
Corporation, and/or if any transaction is similar to, or has a
similar effect as, any of the transactions identified in this
Article ELEVENTH. Any such determination shall be conclusive and
binding for all purposes of this Article ELEVENTH.
TWELFTH. No action required to be taken or which may be
taken at any annual or special meeting of shareholders of the
Corporation may be taken without a meeting, and the power of the
shareholders of the Corporation to consent in writing to action
without a meeting is specifically denied. The presence, in
person or by proxy, of shareholders entitled to cast at least a
majority of the votes which all shareholders are entitled to cast
shall constitute a quorum of shareholders at any annual or
special meeting of shareholders of the Corporation.
THIRTEENTH. The authority to make, amend, alter, change or
repeal the By-Laws of the Corporation is hereby expressly and
solely granted to and vested in the board of directors of the
Corporation, subject always to the power of the shareholders to
change such action by the affirmative vote of shareholders of the
Corporation entitled to cast at least 66-2/3 percent (66-2/3%) of
the votes which all shareholders are entitled to cast, except
that provisions of the By-Laws of the Corporation relating to
limitations on directors' liabilities and indemnification of
directors, officers and others may not be amended to increase the
exposure to liability for directors or to decrease the
indemnification of directors, officers and others except by the
affirmative vote of 66-2/3 percent (66-2/3%) of the entire board
of directors or by the affirmative vote of shareholders of the
Corporation entitled to cast at least 75 percent (75%) of the
votes which all shareholders are entitled to cast.
FOURTEENTH. The board of directors of the Corporation, when
evaluating any offer of another party to (a) make a tender or
exchange offer for any equity security of the Corporation,
(b) merge or consolidate the Corporation with another
corporation, (c) purchase or otherwise acquire all or
substantially all of the properties and assets of the
Corporation, or (d) engage in any transaction similar to, or
having similar effects as, any of the foregoing transactions,
shall, in connection with the exercise of its judgment in
determining what is in the best interests of the Corporation and
its shareholders, give due consideration to all relevant factors,
including without limitation the social and economic effects of
the proposed transaction on the employees, suppliers, customers
and other constituents of the Corporation and its subsidiaries
and on the communities in which the Corporation and its
subsidiaries operate or are located, the business reputation of
the other party, and the board of directors' evaluation of the
then value of the Corporation in a freely negotiated sale and of
the future prospects of the Corporation as an independent entity.
FIFTEENTH. If any corporation, person, entity, or group
becomes the beneficial owner, directly or indirectly, of shares
of capital stock of the Corporation having the right to cast in
the aggregate 25 percent (25%) or more of all votes entitled to
be cast by all issued and outstanding shares of capital stock of
the Corporation entitled to vote, such corporation, person,
entity or group shall within thirty (30) days thereafter offer to
purchase all shares of capital stock of the Corporation issued,
outstanding and entitled to vote. Such offer to purchase shall
be at a price per share equal to the highest price paid for
shares of the respective class or series of capital stock of the
Corporation purchased by such corporation, person, entity or
group within the preceding twelve months. If such corporation,
person, entity or group did not purchase any shares of a
particular class or series of capital stock of the Corporation
within the preceding twelve months, such offer to purchase shall
be at a price per share equal to the fair market value of such
class or series of capital stock on the date on which such
corporation, person, entity or group becomes the beneficial
owner, directly or indirectly, of shares of capital stock of the
Corporation having the right to cast in the aggregate 25 percent
(25%) or more of all votes entitled to be cast by all issued and
outstanding capital stock of the Corporation. Such offer shall
provide that the purchase price for such shares shall be payable
in cash. The provisions of this Article FIFTEENTH shall not
apply if 80 percent (80%) or more of the members of the board of
directors of the Corporation approve in advance the acquisition
of beneficial ownership by such corporation, person, entity or
group, of shares of capital stock of the Corporation having the
right to cast in the aggregate 25 percent (25%) or more of all
votes entitled to be cast by all issued and outstanding shares of
capital stock of the Corporation. The provisions of this Article
FIFTEENTH shall be in addition to and not in lieu of any rights
granted under Subchapter E of Chapter 25 of the Pennsylvania
Business Corporation Law and any amendment or restatement of such
section ("Subchapter E"); provided, however, that if the
provisions of this Article FIFTEENTH and Subchapter E are both
applicable in any given instance, the price per share to be paid
for shares of capital stock of the Corporation issued,
outstanding and entitled to vote shall be the higher of the price
per share determined in accordance with this Article FIFTEENTH or
the price per share determined in accordance with the provisions
of Subchapter E.
SIXTEENTH. The Corporation reserves the right to amend,
alter, change or repeal any provision contained in its Articles
of Incorporation in the manner now or hereafter prescribed by
statute and all rights conferred upon shareholders and directors
herein are hereby granted subject to this reservation; provided,
however, that the provisions set forth in Articles SEVENTH,
EIGHTH and TENTH through FOURTEENTH, inclusive, of these Articles
of Incorporation may not be repealed, altered or amended, in any
respect whatsoever, unless such repeal, alteration or amendment
is approved by either (a) the affirmative vote of at least 80
percent (80%) of votes cast by shareholders entitled to vote or
(b) the affirmative vote of 75 percent (75%) of the members of
the board of directors of the Corporation and the affirmative
vote of a majority of the votes cast by all shareholders of the
Corporation then entitled to vote.
EXHIBIT B
BYLAWS
OF
ARTICLE I. MEETINGS OF SHAREHOLDERS.
Section 101. Place of Meetings. All meetings of the
shareholders shall be held at such place or places, within or
without the Commonwealth of Pennsylvania, as shall be determined
by the Board of Directors from time to time.
Section 102. Annual Meetings.
(a) Time and Date. The annual meeting of the
shareholders for the election of Directors and the transaction of
such other business as may properly come before the meeting shall
be held at such date or hour as may be fixed by the Board of
Directors. At each annual meeting of shareholders, directors
shall be elected, reports of the affairs of the Corporation shall
be considered, and any other business may be transacted which is
within the power of the shareholders.
(b) Agenda for Annual Meeting. Matters to be placed
on the agenda for consideration at annual meetings of
shareholders may be determined by the Board of Directors or by
any shareholder entitled to vote for the election of directors.
Matters proposed for the agenda by shareholders entitled to vote
for the election of directors shall be made by notice in writing,
delivered or mailed by first-class United States mail, postage
prepaid, to the Secretary of the Corporation not less than sixty
(60) days prior to any annual meeting of shareholders; provided,
however, that if less than twenty-one (21) days' notice of the
meeting is given to shareholders, such written notice shall be
delivered or mailed, as prescribed, to the Secretary of the
Corporation not later than the close of the seventh day following
the day on which notice of the meeting was mailed to
shareholders. Notice of matters which are proposed by the Board
of Directors shall be given at any time by the Chairman of the
Board or any other appropriate officer. Each notice made by
shareholders shall set forth a brief description of the business
desired to be brought before the annual meeting. The chairman of
the meeting may determine and declare to the meeting that a
matter proposed for the agenda was not made in accordance with
the foregoing procedure, and if the chairman should so determine,
the chairman shall so declare to the meeting and the matter shall
be disregarded.
Section 103. Special Meetings. Special meetings of the
shareholders may be called at any time by the Board of Directors
in the manner provided herein. Shareholders shall not have the
right to call special meetings of shareholders, except as
specifically provided by law.
Section 104. Conduct of Shareholders' Meetings. At every
meeting of the shareholders, the Chairman of the Board or, in the
Chairman's absence, the President or, in the President's absence,
a chairman (who shall be one of the officers, if any is present)
chosen by a majority of the members of the Board of Directors
shall act as chairman of the meeting. The chairman of the
meeting shall have any and all powers and authority necessary in
the chairman's sole discretion to conduct an orderly meeting and
preserve order and to determine any and all procedural matters,
including imposing reasonable limits on the amount of time at the
meeting taken up in remarks by any one shareholder or group of
shareholders. In addition, until the business to be completed at
a meeting of the shareholders is completed, the chairman of a
meeting of the shareholders is expressly authorized to
temporarily adjourn and postpone the meeting from time to time.
The Secretary of the Corporation or in the Secretary's absence,
an assistant secretary, shall act as secretary of all meetings of
the shareholders. In the absence at such meeting of the
Secretary or assistant secretary, the chairman of the meeting may
appoint another person to act as secretary of the meeting.
Section 105. Determination of Record Date. The Board of
Directors may fix a time prior to the date of any meeting of
shareholders as a record date for the determination of the
shareholders entitled to notice of, or to vote at, the meeting,
which time, except in the case of an adjourned meeting, shall be
not more than 90 days prior to the date of the meeting of
shareholders. Only shareholders of record on the date fixed
shall be so entitled notwithstanding any transfer of shares on
the books of the Corporation after any record date fixed as
provided in this section. The Board of Directors may similarly
fix a record date for the determination of shareholders of record
for any other purpose. When a determination of shareholders of
record has been made as provided in this section for purposes of
a meeting, the determination shall apply to any adjournment
thereof unless the Board of Directors fixes a new record date for
the adjourned meeting.
Section 106. Voting List. The officer or agent having
charge of the transfer books for shares of the Corporation shall
make a complete list of the shareholders entitled to vote at any
meeting of shareholders, arranged in alphabetical order, with the
address of and the number of shares held by each. The list shall
be produced and kept open at the time and place of the meeting
and shall be subject to the inspection of any shareholder during
the whole time of the meeting for the purposes thereof.
Failure to comply with the requirements of this section
shall not affect the validity of any action taken at a meeting
prior to a demand at the meeting by any shareholder entitled to
vote thereat to examine the list. The original share register or
transfer book, or a duplicate thereof kept in Pennsylvania, shall
be prima facie evidence as to who are the shareholders entitled
to examine the list or share register or transfer book or to vote
at any meeting of shareholders.
Section 107. Judges of Election. In advance of any meeting
of shareholders of the Corporation, the Board of Directors may
appoint judges of election, who need not be shareholders, to act
at the meeting or any adjournment thereof. If judges of election
are not so appointed, the presiding officer of the meeting may,
and on the request of any shareholder shall, appoint judges of
election at the meeting. The number of judges shall be one (1)
or three (3). No person who is a candidate for office to be
filled at the meeting shall act as a judge of election.
In the event any person appointed as a judge fails to appear
or fails or refuses to act, the vacancy may be filled by
appointment made by the Board of Directors in advance of
convening the meeting or at the meeting by the presiding officer
thereof.
The judges of election shall determine the number of shares
outstanding and the voting power of each, the shares represented
at the meeting, the existence of a quorum, the authenticity,
validity and effect of proxies, receive votes or ballots, hear
and determine all challenges and questions in any way arising in
connection with the right to vote, count and tabulate all votes,
determine the result and do such acts as may be proper to conduct
the election or vote with fairness to all shareholders. The
judge or judges of election shall perform their duties
impartially, in good faith, to the best of their ability and as
expeditiously as is practical. If there are three judges of
election, the decision, act or certificate of a majority shall be
effective in all respects as the decision, act or certificate of
all.
On request of the presiding officer of the meeting, or of
any shareholder, the judge or judges shall make a report in
writing of any challenge or question or matter determined by
them, and execute a certificate of any fact found by them. Any
report or certificate made by them shall be prima facie evidence
of the facts stated therein.
Section 108. No Consent of Shareholders in Lieu of Meeting.
No action required to be taken or which may be taken at any
annual or special meeting of shareholders of the Corporation may
be taken without a meeting, and the power of the shareholders to
consent in writing to action without a meeting is specifically
denied.
ARTICLE II. DIRECTORS AND BOARD MEETINGS.
Section 201. Management by Board of Directors. The
business and affairs of the Corporation shall be managed by a
Board of Directors consisting of not less than five (5) nor more
than twenty-five (25) members, as fixed by the Board of Directors
from time to time. The Board of Directors may exercise all such
powers of the Corporation and do all such lawful acts and things
as are not by statute, regulation, the Articles of Incorporation
or these Bylaws directed or required to be exercised or done by
the shareholders. The Board of Directors shall appoint one of
its members to be the Chairman and Chief Executive Officer
("Chairman and CEO") to serve at the pleasure of the Board. He
shall be a voting member of the Board of Directors, the Executive
Committee and shall preside at all meetings of the Board of
Directors and Shareholders. The Board of Directors shall also
appoint a Vice Chairman and/or President of the Corporation. The
Vice Chairman or President shall preside at any meeting of the
Board in the absence of the Chairman and CEO.
Section 202. Nominations for Directors. Nominations by
shareholders for directors to be elected at an annual meeting of
shareholders must be submitted to the Secretary of the
Corporation in writing not later than the close of business on
the ninetieth (90th) day immediately preceding the date of the
meeting. Such notification shall contain the following
information: (a) name and address of each proposed nominee;
(b) the principal occupation of each proposed nominee; (c) the
total number of shares of capital stock of the Corporation that
will be voted for each proposed nominee; (d) the name and
residence address of the notifying shareholder; and (e) the
number of shares of capital stock of the Corporation owned by the
notifying shareholder. Nominations not made in accordance
herewith may, in the discretion of the chairman of the meeting,
be disregarded and, upon instruction, the judges of election may
disregard all votes cast for any such proposed nominee.
Section 203. Qualifications of Directors.
(a) Share Ownership. Every Director must be a
shareholder of the Corporation and shall own in his/her own right
the number of shares (if any) required by law in order to qualify
as such Director. Any Director shall forthwith cease to be a
Director when he/she no longer holds such shares, which fact
shall be reported to the Board of Directors by the Secretary,
whereupon the Board of Directors shall declare the seat of such
Director vacated.
(b) Other Qualifications. Until January 1, 2003, it
shall be a qualification for election and continued service as a
Director of the Corporation for each Director of the Corporation
to observe the following agreements and covenants:
(i) Except for the Chairman and Chief Executive
Officer, Directors of the Corporation shall not, either in
their capacities as Directors, shareholders, or otherwise,
directly or indirectly, encourage, solicit, initiate, or
respond to any indications of interest, proposals or offers
for any acquisition of, or change of control involving, the
Corporation, whether by merger, sale of assets, or
otherwise, or assist, aid or abet any person or persons with
respect to such conduct. In the event that any director is
approached as described herein, any such contact shall be
immediately referred in writing to the Chairman of the Board
of Directors.
(ii) Directors of the Corporation shall not,
either in their capacities as Directors, shareholders or
otherwise, provide any third person with non-public
information concerning the Corporation; and
(iii) Directors of the Corporation shall not (in
any capacity) publicly comment on the Corporation's
strategic alternatives (including sale or possible sale of
the Corporation) or on differences of view among members of
the Board relating to the Corporation's strategic
alternatives or on specific merger proposals or
opportunities;
absent in any case either a direction from the entire Board of
Directors by the affirmative vote of 75% of the total number of
directors then in office (rounding up to the nearest whole
number) or a written opinion of counsel to the Corporation that
such Director's fiduciary duty requires any such conduct.
It is adopted as the corporate policy of this Corporation
that the failure by a Director to observe and comply with the
foregoing covenants and agreements shall subject the Director to
removal by a vote of a majority of the Board of Directors then in
office or otherwise in accordance with law, unless such Director
has received a written opinion of the Corporation's counsel that
such Director's fiduciary duty requires such conduct.
Section 204. Classification of Directors. The Board of
Directors of the Corporation shall be divided into three (3)
classes, as nearly equal in number as possible, as provided in
the Corporation's Articles of Incorporation.
Section 205. Compensation of Directors. No Director shall
be entitled to any salary as such; but the Board of Directors may
fix, from time to time, reasonable fees or other compensation,
payable in cash, stock or other property, for acting as a
Director and reasonable fees to be paid each Director for his/her
services in attending meetings of the Board and meetings of
committees appointed by the Board. The Corporation may reimburse
Directors for expenses related to their duties as members of the
Board of Directors.
Section 206. Regular Meetings. Regular meetings of the
Board of Directors shall be held on such day, at such hour, and
at such place, consistent with applicable law, as the Board of
Directors shall from time to time designate or as may be
designated in any notice from the Secretary calling the meeting.
The Board of Directors shall meet for reorganizational purposes
at the first regular meeting following the annual meeting of
shareholders at which the Directors are elected. Notice need not
be given of regular meetings of the Board of Directors which are
held at the time and place designated by the Board of Directors.
If a regular meeting is not to be held at the time and place
designated by the Board of Directors, notice of such meeting,
which need not specify the business to be transacted thereat and
which may be either verbal or in writing, shall be given by the
President to each member of the Board of Directors at least
twenty-four (24) hours before the time of the meeting.
A majority of the members of the Board of Directors shall
constitute a quorum for the transaction of business. If at the
time fixed for the meeting, including the meeting to organize the
new Board following the annual meeting of shareholders, a quorum
is not present, the directors in attendance may adjourn the
meeting from time to time until a quorum is present.
Except as otherwise provided in Section 209 or as otherwise
provided herein, a majority of Directors present and voting at
any meeting of the Board of Directors at which a quorum is
present, shall decide each matter considered. A Director cannot
vote by proxy, or otherwise act by proxy at a meeting of the
Board of Directors.
Section 207. Special Meetings. Special meetings of the
Board of Directors may be called by the Chairman of the Board, or
at the request of a majority of Directors then in office. A
special meeting of the Board of Directors shall be deemed to be
any meeting other than a regular meeting of the Board of
Directors. Notice of the time and place of every special
meeting, which need not specify the business to be transacted
thereat, shall be given by the Chairman to each member of the
Board at least twenty-four (24) hours before the time of such
meeting.
Section 208. Reports and Records. The reports of officers
and Committees and the records of the proceedings of all
Committees shall be filed with the Secretary of the Corporation
and presented to the Board of Directors, if practicable, at its
next regular meeting. The Board of Directors shall keep complete
records of its proceedings in a minute book kept for that
purpose. When a Director shall request it, the vote of each
Director upon a particular question shall be recorded in the
minutes.
Section 209. Special Director Voting Requirements.
Notwithstanding anything contained herein to the contrary, until
January 1, 2003, approval of any of the following actions shall
require a vote of 75% of the total number of directors of the
Corporation then in office (rounding up to the nearest whole
number):
(i) adopting a motion or resolution to study sale
of the Corporation as a strategic alternative, or engaging a
financial advisor with respect thereto;
(ii) adopting a motion or resolution approving a
fundamental transaction (a "Fundamental Transaction")
involving the Corporation within the meaning of Chapter 19
of Title 15 of the Pennsylvania Business Corporation Law of
1988, as amended, if upon completion of the Fundamental
Transaction the Corporation would not be the surviving or
controlling entity, or any successor provisions (whether by
merger, consolidation, share exchange or otherwise), or
calling a special meeting of shareholders of the Corporation
to consider any such proposal or placing any such proposal
on the agenda for an annual meeting of shareholders of the
Corporation;
(iii) recommending that shareholders of the
Corporation (A) accept a transaction or tender their shares
of the Corporation's voting securities in connection with a
tender or exchange offer for the Corporation's voting
securities or (B) cast votes with respect to their voting
securities in a proxy solicitation conducted by a party
other than the Corporation's Board of Directors contrary to
the recommendation of the Board of Directors;
(iv) soliciting indications of interest or
responding to proposals relating to a Fundamental
Transaction in which the Corporation, upon completion of
such Fundamental Transaction, would not be the surviving or
controlling entity; or
(v) amending or repealing Sections 203 or 209 of
these Bylaws.
ARTICLE III. COMMITTEES.
Section 301. Committees. The following two (2) Committees
of the Board of Directors shall be established by the Board of
Directors in addition to any other Committee the Board of
Directors may in its discretion establish: Executive and Audit
Committees.
Section 302. Executive Committee. The Executive Committee
shall consist of five (5) Directors, including the Chairman and
CEO who shall serve as Chairman of the Committee and who shall
designate the remaining four members. For a period of three
years after the formation of the Corporation, the designees of
the Chairman shall consist of two former directors of BCB
Financial Services Corporation and two former directors of
Heritage Bancorp,Inc. A majority of the members of the Executive
Committee shall constitute a quorum, and actions of a majority of
those present at a meeting at which a quorum is present shall be
the actions of the Committee. Meetings of the Committee may be
called at any time by the Chairman of the Committee or his
designee. The Executive Committee shall have and exercise the
authority of the Board of Directors in the management of the
business of the Corporation between the dates of regular meetings
of the Board of Directors.
Section 303. Audit Committee. The Audit Committee shall
consist of at least five (5) Directors, none of whom shall be
officers of the Corporation. Meetings of the Committee may be
called at any time by the Chairman of the Board or the Chairman
of the Committee or his designee. A majority of the members of
the Committee shall constitute a quorum for the transaction of
business, and the actions of a majority of those present at a
meeting at which a quorum is present shall be the actions of the
Committee. The Committee shall, among other things, supervise
the audit of the books of the Corporation and recommend for
approval by the Board the services of a reputable Certified
Public Accounting firm to perform such audit.
Section 304. Appointment of Committee Members. The
Chairman of the Board of Directors shall appoint the members of
the Committees and the Chairman of each such Committee to serve
until the next annual meeting of shareholders. The Chairman of
the Board shall appoint the members of any other Committees
established by the Board of Directors, and the Chairman of such
Committee, to serve until the next annual meeting of
shareholders. The Board of Directors may appoint, from time to
time, other committees, for such purposes and with such powers as
the Board may determine.
Section 305. Organization and Proceedings. Each Committee
of the Board of Directors shall effect its own organization by
the appointment of a Secretary and such other officers, except
the Chairman, as it may deem necessary. A record of proceedings
of all Committees shall be kept by the Secretary of such
Committee and filed and presented as provided in Section 208 of
these Bylaws.
ARTICLE IV. OFFICERS.
Section 401. Chairman and CEO. The Board of Directors
shall appoint one of its members to be the Chairman and CEO to
serve at the pleasure of the Board. He shall be a voting member
of the Board of Directors and shall preside at all meetings of
the Board of Directors, the Executive Committee and shareholders.
The Chairman and CEO shall supervise the carrying out of the
policies adopted or approved by the Board. He shall have general
executive powers, as well as the specific powers conferred by
these Bylaws. He shall also have and may exercise such further
powers and duties as from time to time may be conferred upon,or
assigned to him by the Board of Directors.
Section 402. President. The Board of Directors shall
appoint a President of the Corporation. In the absence of the
Chairman of the Board and the Vice Chairman, the President shall
preside at any meeting of the Board. In the absence of the
Chairman and CEO, the President shall have general executive
powers, and shall have and may exercise any and all other powers
and duties pertaining by law, regulation, or practice, to the
office of President, or imposed by these Bylaws. He shall also
have and may exercise such further powers and duties as from time
to time may be conferred upon or assigned to him by the Board of
Directors.
Section 403. Vice Presidents. The Board of Directors may
appoint one or more Executive Vice Presidents, Senior Vice
Presidents, Vice Presidents and Assistant Vice Presidents
(collectively referred to herein as the "Vice Presidents"). The
Vice Presidents shall have such powers and duties as may be
assigned to them by the Board of Directors. The Executive Vice
Presidents shall, in the absence of the Vice Chairman and
President, perform all the duties of the Vice Chairman and
President.
Section 404. Secretary. The Board of Directors shall
appoint a Secretary, who shall be Secretary of the Board and of
the Corporation, and shall keep accurate minutes of all meetings.
He shall attend to the giving of all notices required by these
Bylaws to be given. He shall be custodian of the corporate seal,
records, documents and papers of the Corporation. He shall
provide for the keeping of proper records of all transactions of
the Corporation. He shall have and may exercise any and all
other powers and duties pertaining by law, regulation or
practice, to the office of Secretary, or imposed by these Bylaws.
He shall also perform such other duties as may be assigned to
him, from time to time, by the Board of Directors.
Section 405. Chief Financial Officer ("CFO"). The CFO
shall act under the supervision of the Chairman and CEO or such
other officer as the Chairman and CEO may designate. The CFO
shall have custody of the Corporation's funds and such other
duties as may be prescribed by the Board of Directors, Chairman
and CEO or such other Supervising Officer as the Chairman and CEO
may designate.
Section 406. Assistant Officers. Unless otherwise provided
by the Board of Directors, each Assistant Officer shall perform
such duties as shall be prescribed by the Board of Directors, the
Chairman of the Board, the President or the Officer to whom
he/she is an Assistant. In the event of the absence or
disability of an Officer or his/her refusal to act, his/her
Assistant Officer shall, in the order of their rank, and within
the same rank in the order of their seniority, have the powers
and authorities of such Officer.
Section 407. Compensation. Unless otherwise provided by
the Board of Directors, the salaries and compensation of all
Officers and Assistant Officers, except the Chairman of the
Board, the President and the Executive Vice Presidents, shall be
fixed by the Chairman of the Board in accordance with the general
salary administration programs and guidelines established by the
Board.
Section 408. General Powers. The Officers are authorized
to do and perform such corporate acts as are necessary in the
carrying on of the business of the Corporation, subject always to
the direction of the Board of Directors.
ARTICLE V. SHARES OF CAPITAL STOCK.
Section 501. Authority to Sign Share Certificates. Every
share certificate of the Corporation shall be signed by the
Chairman of the Board, the President or by an Executive Vice
President or one of the Vice Presidents. Certificates may be
signed by facsimile signature.
Section 502. Lost or Destroyed Certificates. Any person
claiming a share certificate to be lost, destroyed or wrongfully
taken shall receive a replacement certificate if such person
shall have: (a) requested such replacement certificate before the
Corporation has notice that the shares have been acquired by a
bona fide purchaser; (b) provided the Corporation with an
indemnity agreement satisfactory in form and substance to the
Chairman of the Board, the President or the Executive Vice
President; and (c) satisfied any other reasonable requirements
(including providing an affidavit and a surety bond) fixed by the
Vice Chairman and President or the Executive Vice President.
ARTICLE VI. GENERAL.
Section 601. Fiscal Year. The fiscal year of the
Corporation shall begin on the first (1st) day of January in each
year and end on the thirty-first (31st) day of December in each
year.
Section 602. Absentee Participation in Meetings.
Participation in meetings of the Board of Directors, or of
Committees of the Board, by means of a conference telephone or
similar communications equipment, by means of which all persons
participating in the meeting can hear each other shall be
permitted.
Section 603. Emergency Bylaws. In the event of any
emergency resulting from a nuclear attack or similar disaster,
and during the continuance of such emergency, the following Bylaw
provisions shall be in effect, notwithstanding any other
provisions of the Bylaws:
(a) A meeting of the Board of Directors or of any
Committee thereof may be called by any Officer or Director upon
one (1) hour's notice to all persons entitled to notice whom, in
the sole judgment of the notifier, it is feasible to notify;
(b) The Director or Directors in attendance at the
meeting of the Board of Directors or of any Committee thereof
shall constitute a quorum; and
(c) These Bylaws may be amended or repealed, in whole
or in part, by a majority vote of the Directors attending any
meeting of the board of Directors, provided such amendment or
repeal shall only be effective for the duration of such
emergency.
Section 604. Severability. If any provision of these
Bylaws is illegal or unenforceable as such, such illegality or
unenforceability shall not affect any other provision of these
Bylaws and such other provisions shall continue in full force and
effect.
ARTICLE VII. LIABILITY OF DIRECTORS: INDEMNIFICATION.
Section 701. Elimination of Liability. To the fullest
extent permitted by the laws of the Commonwealth of Pennsylvania,
a Director of the Corporation shall not be personally liable for
monetary damages for any action taken or any failure to take any
action unless the Director has breached or failed to perform the
duties of his or her office under the Pennsylvania Business
Corporation Law of 1988, as amended, or any successor statute,
and such breach or failure constitutes self-dealing, willful
misconduct or recklessness. The provisions of this Section 701
shall not apply with respect to the responsibility or liability
of a Director under any criminal statute or the liability of a
director for the payment of taxes pursuant to local, state or
federal law.
Section 702. Indemnification. The Corporation shall
indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or
investigative by reason of the fact that such person is or was a
Director, officer, employee, or agent of the Corporation, or is
or was serving at the request of the corporation as a director,
officer, employee, or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses
(including attorneys' fees), amounts paid in settlement,
judgments, and fines actually and reasonably incurred by such
person in connection with such action, suit, or proceeding;
provided, however, that no indemnification shall be made in any
case where the act or failure to act giving rise to the claim for
indemnification is determined by a court to have constituted
willful misconduct or recklessness.
Section 703. Expenses. Expenses (including attorneys'
fees) incurred in defending a civil or criminal action, suit, or
proceeding shall be paid by the Corporation in advance of the
final disposition of such action, suit, or proceeding upon
receipt of an undertaking by or on behalf of the Director,
officer, employee, or agent to repay such amount if it shall be
ultimately determined that he/she is not entitled to be
indemnified by the Corporation as authorized in this Article VII.
Section 704. Non-Exclusive. The indemnification and
advancement of expenses provided by this Article VII shall not be
deemed exclusive of any other right to which persons seeking
indemnification and advancement of expenses may be entitled under
any agreement, vote of shareholders or disinterested directors,
or otherwise, both as to actions in such persons' official
capacity and as to their actions in another capacity while
holding office, and shall continue as to a person who has ceased
to be a director, officer, employee, or agent and shall inure to
the benefit of the heirs, executors, and administrator of such
person.
Section 705. Insurance, Etc. The Corporation may purchase
and maintain insurance on behalf of any person, may enter into
contracts of indemnification with any person, may create a fund
of any nature (which may, but need not be, under the control of a
trustee) for the benefit of any person, and may otherwise secure
in any manner its obligations with respect to indemnification and
advancement of expenses, whether arising under this Article IX or
otherwise, to or for the benefit of any person, whether or not
the Corporation would have the power to indemnify such person
against such liability under the provisions of this Article VII.
Section 706. Amendment. Notwithstanding anything herein
contained or contained in the Articles of Incorporation to the
contrary, this Article VII may not be amended or repealed, and a
provision inconsistent herewith may not be adopted, except by the
affirmative vote of 66-2/3% of the members of the entire Board of
Directors or by the affirmative vote of shareholders of the
corporation entitled to cast at least 75% of all votes which
shareholders of the corporation are then entitled to cast, except
that, if the laws of the Commonwealth of Pennsylvania are amended
or any other statute is enacted so as to decrease the exposure of
directors to liability or to increase the indemnification rights
available, this Article VII and any other provision of these
Bylaws inconsistent with such decreased exposure or increased
indemnification rights shall be amended, automatically and
without any further action on the part of shareholders or
directors, to reflect such decreased exposure or to include such
increased indemnification rights, unless such legislation
expressly otherwise requires. Any repeal or modification of this
Article VII by the directors or shareholders of the Corporation
shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the
Corporation or any right to indemnification for any action taken
or any failure to take any action occurring prior to the time of
such repeal or modification.
Section 707. Severability. If, for any reason, any
provision of this Article VII shall be held invalid, such
invalidity shall not affect any other provision not held so
invalid, and each such other provision shall, to the full extent
consistent with law, continue in full force and effect. If any
provision of this Article VII shall be held invalid in part, such
invalidity shall in no way affect the remainder of such
provision, and the remainder of such provision, together with all
other provisions of this Article VII shall, to the full extent
consistent with law, continue in full force and effect.
ARTICLE VIII. AMENDMENT OR REPEAL.
Section 801. Amendment or Repeal by the Board of Directors.
These Bylaws may be amended or repealed, in whole or in part, in
the manner set forth in the Articles of Incorporation.
EXHIBIT C
DIRECTORS
[TO BE SUPPLIED] BCB Heritage
CLASS I 2 2
CLASS II 3 2
CLASS III 2(1) 2(2)
OFFICERS
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ - Chairman and Chief Executive
Officer
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ - President and Chief Operating
Officer
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. - Executive Vice President and
Chief Financial Officer
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ - Executive Vice President and
Chief Administrative Officer
_________________
(1) Includes Holding Company Chairman
(2) Includes Holding Company Vice Chairman and President
Exhibit 5
BYLAWS
OF
ARTICLE I. MEETINGS OF SHAREHOLDERS.
Section 101. Place of Meetings. All meetings of the
shareholders shall be held at such place or places, within or
without the Commonwealth of Pennsylvania, as shall be determined
by the Board of Directors from time to time.
Section 102. Annual Meetings.
(a) Time and Date. The annual meeting of the
shareholders for the election of Directors and the transaction of
such other business as may properly come before the meeting shall
be held at such date or hour as may be fixed by the Board of
Directors. At each annual meeting of shareholders, directors
shall be elected, reports of the affairs of the Corporation shall
be considered, and any other business may be transacted which is
within the power of the shareholders.
(b) Agenda for Annual Meeting. Matters to be placed
on the agenda for consideration at annual meetings of
shareholders may be determined by the Board of Directors or by
any shareholder entitled to vote for the election of directors.
Matters proposed for the agenda by shareholders entitled to vote
for the election of directors shall be made by notice in writing,
delivered or mailed by first-class United States mail, postage
prepaid, to the Secretary of the Corporation not less than sixty
(60) days prior to any annual meeting of shareholders; provided,
however, that if less than twenty-one (21) days' notice of the
meeting is given to shareholders, such written notice shall be
delivered or mailed, as prescribed, to the Secretary of the
Corporation not later than the close of the seventh day following
the day on which notice of the meeting was mailed to
shareholders. Notice of matters which are proposed by the Board
of Directors shall be given at any time by the Chairman of the
Board or any other appropriate officer. Each notice made by
shareholders shall set forth a brief description of the business
desired to be brought before the annual meeting. The chairman of
the meeting may determine and declare to the meeting that a
matter proposed for the agenda was not made in accordance with
the foregoing procedure, and if the chairman should so determine,
the chairman shall so declare to the meeting and the matter shall
be disregarded.
Section 103. Special Meetings. Special meetings of the
shareholders may be called at any time by the Board of Directors
in the manner provided herein. Shareholders shall not have the
right to call special meetings of shareholders, except as
specifically provided by law.
Section 104. Conduct of Shareholders' Meetings. At every
meeting of the shareholders, the Chairman of the Board or, in the
Chairman's absence, the President or, in the President's absence,
a chairman (who shall be one of the officers, if any is present)
chosen by a majority of the members of the Board of Directors
shall act as chairman of the meeting. The chairman of the
meeting shall have any and all powers and authority necessary in
the chairman's sole discretion to conduct an orderly meeting and
preserve order and to determine any and all procedural matters,
including imposing reasonable limits on the amount of time at the
meeting taken up in remarks by any one shareholder or group of
shareholders. In addition, until the business to be completed at
a meeting of the shareholders is completed, the chairman of a
meeting of the shareholders is expressly authorized to
temporarily adjourn and postpone the meeting from time to time.
The Secretary of the Corporation or in the Secretary's absence,
an assistant secretary, shall act as secretary of all meetings of
the shareholders. In the absence at such meeting of the
Secretary or assistant secretary, the chairman of the meeting may
appoint another person to act as secretary of the meeting.
Section 105. Determination of Record Date. The Board of
Directors may fix a time prior to the date of any meeting of
shareholders as a record date for the determination of the
shareholders entitled to notice of, or to vote at, the meeting,
which time, except in the case of an adjourned meeting, shall be
not more than 90 days prior to the date of the meeting of
shareholders. Only shareholders of record on the date fixed
shall be so entitled notwithstanding any transfer of shares on
the books of the Corporation after any record date fixed as
provided in this section. The Board of Directors may similarly
fix a record date for the determination of shareholders of record
for any other purpose. When a determination of shareholders of
record has been made as provided in this section for purposes of
a meeting, the determination shall apply to any adjournment
thereof unless the Board of Directors fixes a new record date for
the adjourned meeting.
Section 106. Voting List. The officer or agent having
charge of the transfer books for shares of the Corporation shall
make a complete list of the shareholders entitled to vote at any
meeting of shareholders, arranged in alphabetical order, with the
address of and the number of shares held by each. The list shall
be produced and kept open at the time and place of the meeting
and shall be subject to the inspection of any shareholder during
the whole time of the meeting for the purposes thereof.
Failure to comply with the requirements of this section
shall not affect the validity of any action taken at a meeting
prior to a demand at the meeting by any shareholder entitled to
vote thereat to examine the list. The original share register or
transfer book, or a duplicate thereof kept in Pennsylvania, shall
be prima facie evidence as to who are the shareholders entitled
to examine the list or share register or transfer book or to vote
at any meeting of shareholders.
Section 107. Judges of Election. In advance of any meeting
of shareholders of the Corporation, the Board of Directors may
appoint judges of election, who need not be shareholders, to act
at the meeting or any adjournment thereof. If judges of election
are not so appointed, the presiding officer of the meeting may,
and on the request of any shareholder shall, appoint judges of
election at the meeting. The number of judges shall be one (1)
or three (3). No person who is a candidate for office to be
filled at the meeting shall act as a judge of election.
In the event any person appointed as a judge fails to appear
or fails or refuses to act, the vacancy may be filled by
appointment made by the Board of Directors in advance of
convening the meeting or at the meeting by the presiding officer
thereof.
The judges of election shall determine the number of shares
outstanding and the voting power of each, the shares represented
at the meeting, the existence of a quorum, the authenticity,
validity and effect of proxies, receive votes or ballots, hear
and determine all challenges and questions in any way arising in
connection with the right to vote, count and tabulate all votes,
determine the result and do such acts as may be proper to conduct
the election or vote with fairness to all shareholders. The
judge or judges of election shall perform their duties
impartially, in good faith, to the best of their ability and as
expeditiously as is practical. If there are three judges of
election, the decision, act or certificate of a majority shall be
effective in all respects as the decision, act or certificate of
all.
On request of the presiding officer of the meeting, or of
any shareholder, the judge or judges shall make a report in
writing of any challenge or question or matter determined by
them, and execute a certificate of any fact found by them. Any
report or certificate made by them shall be prima facie evidence
of the facts stated therein.
Section 108. No Consent of Shareholders in Lieu of Meeting.
No action required to be taken or which may be taken at any
annual or special meeting of shareholders of the Corporation may
be taken without a meeting, and the power of the shareholders to
consent in writing to action without a meeting is specifically
denied.
ARTICLE II. DIRECTORS AND BOARD MEETINGS.
Section 201. Management by Board of Directors. The
business and affairs of the Corporation shall be managed by a
Board of Directors consisting of not less than five (5) nor more
than twenty-five (25) members, as fixed by the Board of Directors
from time to time. The Board of Directors may exercise all such
powers of the Corporation and do all such lawful acts and things
as are not by statute, regulation, the Articles of Incorporation
or these Bylaws directed or required to be exercised or done by
the shareholders. The Board of Directors shall appoint one of
its members to be the Chairman and Chief Executive Officer
("Chairman and CEO") to serve at the pleasure of the Board. He
shall be a voting member of the Board of Directors, the Executive
Committee and shall preside at all meetings of the Board of
Directors and Shareholders. The Board of Directors shall also
appoint a Vice Chairman and/or President of the Corporation. The
Vice Chairman or President shall preside at any meeting of the
Board in the absence of the Chairman and CEO.
Section 202. Nominations for Directors. Nominations by
shareholders for directors to be elected at an annual meeting of
shareholders must be submitted to the Secretary of the
Corporation in writing not later than the close of business on
the ninetieth (90th) day immediately preceding the date of the
meeting. Such notification shall contain the following
information: (a) name and address of each proposed nominee;
(b) the principal occupation of each proposed nominee; (c) the
total number of shares of capital stock of the Corporation that
will be voted for each proposed nominee; (d) the name and
residence address of the notifying shareholder; and (e) the
number of shares of capital stock of the Corporation owned by the
notifying shareholder. Nominations not made in accordance
herewith may, in the discretion of the chairman of the meeting,
be disregarded and, upon instruction, the judges of election may
disregard all votes cast for any such proposed nominee.
Section 203. Qualifications of Directors.
(a) Share Ownership. Every Director must be a
shareholder of the Corporation and shall own in his/her own right
the number of shares (if any) required by law in order to qualify
as such Director. Any Director shall forthwith cease to be a
Director when he/she no longer holds such shares, which fact
shall be reported to the Board of Directors by the Secretary,
whereupon the Board of Directors shall declare the seat of such
Director vacated.
(b) Other Qualifications. Until January 1, 2003, it
shall be a qualification for election and continued service as a
Director of the Corporation for each Director of the Corporation
to observe the following agreements and covenants:
(i) Except for the Chairman and Chief Executive
Officer, Directors of the Corporation shall not, either in
their capacities as Directors, shareholders, or otherwise,
directly or indirectly, encourage, solicit, initiate, or
respond to any indications of interest, proposals or offers
for any acquisition of, or change of control involving, the
Corporation, whether by merger, sale of assets, or
otherwise, or assist, aid or abet any person or persons with
respect to such conduct. In the event that any director is
approached as described herein, any such contact shall be
immediately referred in writing to the Chairman of the Board
of Directors.
(ii) Directors of the Corporation shall not,
either in their capacities as Directors, shareholders or
otherwise, provide any third person with non-public
information concerning the Corporation; and
(iii) Directors of the Corporation shall not (in
any capacity) publicly comment on the Corporation's
strategic alternatives (including sale or possible sale of
the Corporation) or on differences of view among members of
the Board relating to the Corporation's strategic
alternatives or on specific merger proposals or
opportunities;
absent in any case either a direction from the entire Board of
Directors by the affirmative vote of 75% of the total number of
directors then in office (rounding up to the nearest whole
number) or a written opinion of counsel to the Corporation that
such Director's fiduciary duty requires any such conduct.
It is adopted as the corporate policy of this Corporation
that the failure by a Director to observe and comply with the
foregoing covenants and agreements shall subject the Director to
removal by a vote of a majority of the Board of Directors then in
office or otherwise in accordance with law, unless such Director
has received a written opinion of the Corporation's counsel that
such Director's fiduciary duty requires such conduct.
Section 204. Classification of Directors. The Board of
Directors of the Corporation shall be divided into three (3)
classes, as nearly equal in number as possible, as provided in
the Corporation's Articles of Incorporation.
Section 205. Compensation of Directors. No Director shall
be entitled to any salary as such; but the Board of Directors may
fix, from time to time, reasonable fees or other compensation,
payable in cash, stock or other property, for acting as a
Director and reasonable fees to be paid each Director for his/her
services in attending meetings of the Board and meetings of
committees appointed by the Board. The Corporation may reimburse
Directors for expenses related to their duties as members of the
Board of Directors.
Section 206. Regular Meetings. Regular meetings of the
Board of Directors shall be held on such day, at such hour, and
at such place, consistent with applicable law, as the Board of
Directors shall from time to time designate or as may be
designated in any notice from the Secretary calling the meeting.
The Board of Directors shall meet for reorganizational purposes
at the first regular meeting following the annual meeting of
shareholders at which the Directors are elected. Notice need not
be given of regular meetings of the Board of Directors which are
held at the time and place designated by the Board of Directors.
If a regular meeting is not to be held at the time and place
designated by the Board of Directors, notice of such meeting,
which need not specify the business to be transacted thereat and
which may be either verbal or in writing, shall be given by the
President to each member of the Board of Directors at least
twenty-four (24) hours before the time of the meeting.
A majority of the members of the Board of Directors shall
constitute a quorum for the transaction of business. If at the
time fixed for the meeting, including the meeting to organize the
new Board following the annual meeting of shareholders, a quorum
is not present, the directors in attendance may adjourn the
meeting from time to time until a quorum is present.
Except as otherwise provided in Section 209 or as otherwise
provided herein, a majority of Directors present and voting at
any meeting of the Board of Directors at which a quorum is
present, shall decide each matter considered. A Director cannot
vote by proxy, or otherwise act by proxy at a meeting of the
Board of Directors.
Section 207. Special Meetings. Special meetings of the
Board of Directors may be called by the Chairman of the Board, or
at the request of a majority of Directors then in office. A
special meeting of the Board of Directors shall be deemed to be
any meeting other than a regular meeting of the Board of
Directors. Notice of the time and place of every special
meeting, which need not specify the business to be transacted
thereat, shall be given by the Chairman to each member of the
Board at least twenty-four (24) hours before the time of such
meeting.
Section 208. Reports and Records. The reports of officers
and Committees and the records of the proceedings of all
Committees shall be filed with the Secretary of the Corporation
and presented to the Board of Directors, if practicable, at its
next regular meeting. The Board of Directors shall keep complete
records of its proceedings in a minute book kept for that
purpose. When a Director shall request it, the vote of each
Director upon a particular question shall be recorded in the
minutes.
Section 209. Special Director Voting Requirements.
Notwithstanding anything contained herein to the contrary, until
January 1, 2003, approval of any of the following actions shall
require a vote of 75% of the total number of directors of the
Corporation then in office (rounding up to the nearest whole
number):
(i) adopting a motion or resolution to study sale
of the Corporation as a strategic alternative, or engaging a
financial advisor with respect thereto;
(ii) adopting a motion or resolution approving a
fundamental transaction (a "Fundamental Transaction")
involving the Corporation within the meaning of Chapter 19
of Title 15 of the Pennsylvania Business Corporation Law of
1988, as amended, if upon completion of the Fundamental
Transaction the Corporation would not be the surviving or
controlling entity, or any successor provisions (whether by
merger, consolidation, share exchange or otherwise), or
calling a special meeting of shareholders of the Corporation
to consider any such proposal or placing any such proposal
on the agenda for an annual meeting of shareholders of the
Corporation;
(iii) recommending that shareholders of the
Corporation (A) accept a transaction or tender their shares
of the Corporation's voting securities in connection with a
tender or exchange offer for the Corporation's voting
securities or (B) cast votes with respect to their voting
securities in a proxy solicitation conducted by a party
other than the Corporation's Board of Directors contrary to
the recommendation of the Board of Directors;
(iv) soliciting indications of interest or
responding to proposals relating to a Fundamental
Transaction in which the Corporation, upon completion of
such Fundamental Transaction, would not be the surviving or
controlling entity; or
(v) amending or repealing Sections 203 or 209 of
these Bylaws.
ARTICLE III. COMMITTEES.
Section 301. Committees. The following two (2) Committees
of the Board of Directors shall be established by the Board of
Directors in addition to any other Committee the Board of
Directors may in its discretion establish: Executive and Audit
Committees.
Section 302. Executive Committee. The Executive Committee
shall consist of five (5) Directors, including the Chairman and
CEO who shall serve as Chairman of the Committee and who shall
designate the remaining four members. For a period of three
years after the formation of the Corporation, the designees of
the Chairman shall consist of two former directors of BCB
Financial Services Corporation and two former directors of
Heritage Bancorp,Inc. A majority of the members of the Executive
Committee shall constitute a quorum, and actions of a majority of
those present at a meeting at which a quorum is present shall be
the actions of the Committee. Meetings of the Committee may be
called at any time by the Chairman of the Committee or his
designee. The Executive Committee shall have and exercise the
authority of the Board of Directors in the management of the
business of the Corporation between the dates of regular meetings
of the Board of Directors.
Section 303. Audit Committee. The Audit Committee shall
consist of at least five (5) Directors, none of whom shall be
officers of the Corporation. Meetings of the Committee may be
called at any time by the Chairman of the Board or the Chairman
of the Committee or his designee. A majority of the members of
the Committee shall constitute a quorum for the transaction of
business, and the actions of a majority of those present at a
meeting at which a quorum is present shall be the actions of the
Committee. The Committee shall, among other things, supervise
the audit of the books of the Corporation and recommend for
approval by the Board the services of a reputable Certified
Public Accounting firm to perform such audit.
Section 304. Appointment of Committee Members. The
Chairman of the Board of Directors shall appoint the members of
the Committees and the Chairman of each such Committee to serve
until the next annual meeting of shareholders. The Chairman of
the Board shall appoint the members of any other Committees
established by the Board of Directors, and the Chairman of such
Committee, to serve until the next annual meeting of
shareholders. The Board of Directors may appoint, from time to
time, other committees, for such purposes and with such powers as
the Board may determine.
Section 305. Organization and Proceedings. Each Committee
of the Board of Directors shall effect its own organization by
the appointment of a Secretary and such other officers, except
the Chairman, as it may deem necessary. A record of proceedings
of all Committees shall be kept by the Secretary of such
Committee and filed and presented as provided in Section 208 of
these Bylaws.
ARTICLE IV. OFFICERS.
Section 401. Chairman and CEO. The Board of Directors
shall appoint one of its members to be the Chairman and CEO to
serve at the pleasure of the Board. He shall be a voting member
of the Board of Directors and shall preside at all meetings of
the Board of Directors, the Executive Committee and shareholders.
The Chairman and CEO shall supervise the carrying out of the
policies adopted or approved by the Board. He shall have general
executive powers, as well as the specific powers conferred by
these Bylaws. He shall also have and may exercise such further
powers and duties as from time to time may be conferred upon,or
assigned to him by the Board of Directors.
Section 402. President. The Board of Directors shall
appoint a President of the Corporation. In the absence of the
Chairman of the Board and the Vice Chairman, the President shall
preside at any meeting of the Board. In the absence of the
Chairman and CEO, the President shall have general executive
powers, and shall have and may exercise any and all other powers
and duties pertaining by law, regulation, or practice, to the
office of President, or imposed by these Bylaws. He shall also
have and may exercise such further powers and duties as from time
to time may be conferred upon or assigned to him by the Board of
Directors.
Section 403. Vice Presidents. The Board of Directors may
appoint one or more Executive Vice Presidents, Senior Vice
Presidents, Vice Presidents and Assistant Vice Presidents
(collectively referred to herein as the "Vice Presidents"). The
Vice Presidents shall have such powers and duties as may be
assigned to them by the Board of Directors. The Executive Vice
Presidents shall, in the absence of the Vice Chairman and
President, perform all the duties of the Vice Chairman and
President.
Section 404. Secretary. The Board of Directors shall
appoint a Secretary, who shall be Secretary of the Board and of
the Corporation, and shall keep accurate minutes of all meetings.
He shall attend to the giving of all notices required by these
Bylaws to be given. He shall be custodian of the corporate seal,
records, documents and papers of the Corporation. He shall
provide for the keeping of proper records of all transactions of
the Corporation. He shall have and may exercise any and all
other powers and duties pertaining by law, regulation or
practice, to the office of Secretary, or imposed by these Bylaws.
He shall also perform such other duties as may be assigned to
him, from time to time, by the Board of Directors.
Section 405. Chief Financial Officer ("CFO"). The CFO
shall act under the supervision of the Chairman and CEO or such
other officer as the Chairman and CEO may designate. The CFO
shall have custody of the Corporation's funds and such other
duties as may be prescribed by the Board of Directors, Chairman
and CEO or such other Supervising Officer as the Chairman and CEO
may designate.
Section 406. Assistant Officers. Unless otherwise provided
by the Board of Directors, each Assistant Officer shall perform
such duties as shall be prescribed by the Board of Directors, the
Chairman of the Board, the President or the Officer to whom
he/she is an Assistant. In the event of the absence or
disability of an Officer or his/her refusal to act, his/her
Assistant Officer shall, in the order of their rank, and within
the same rank in the order of their seniority, have the powers
and authorities of such Officer.
Section 407. Compensation. Unless otherwise provided by
the Board of Directors, the salaries and compensation of all
Officers and Assistant Officers, except the Chairman of the
Board, the President and the Executive Vice Presidents, shall be
fixed by the Chairman of the Board in accordance with the general
salary administration programs and guidelines established by the
Board.
Section 408. General Powers. The Officers are authorized
to do and perform such corporate acts as are necessary in the
carrying on of the business of the Corporation, subject always to
the direction of the Board of Directors.
ARTICLE V. SHARES OF CAPITAL STOCK.
Section 501. Authority to Sign Share Certificates. Every
share certificate of the Corporation shall be signed by the
Chairman of the Board, the President or by an Executive Vice
President or one of the Vice Presidents. Certificates may be
signed by facsimile signature.
Section 502. Lost or Destroyed Certificates. Any person
claiming a share certificate to be lost, destroyed or wrongfully
taken shall receive a replacement certificate if such person
shall have: (a) requested such replacement certificate before the
Corporation has notice that the shares have been acquired by a
bona fide purchaser; (b) provided the Corporation with an
indemnity agreement satisfactory in form and substance to the
Chairman of the Board, the President or the Executive Vice
President; and (c) satisfied any other reasonable requirements
(including providing an affidavit and a surety bond) fixed by the
Vice Chairman and President or the Executive Vice President.
ARTICLE 6. GENERAL.
Section 601. Fiscal Year. The fiscal year of the
Corporation shall begin on the first (1st) day of January in each
year and end on the thirty-first (31st) day of December in each
year.
Section 602. Absentee Participation in Meetings.
Participation in meetings of the Board of Directors, or of
Committees of the Board, by means of a conference telephone or
similar communications equipment, by means of which all persons
participating in the meeting can hear each other shall be
permitted.
Section 603. Emergency Bylaws. In the event of any
emergency resulting from a nuclear attack or similar disaster,
and during the continuance of such emergency, the following Bylaw
provisions shall be in effect, notwithstanding any other
provisions of the Bylaws:
(a) A meeting of the Board of Directors or of any
Committee thereof may be called by any Officer or Director upon
one (1) hour's notice to all persons entitled to notice whom, in
the sole judgment of the notifier, it is feasible to notify;
(b) The Director or Directors in attendance at the
meeting of the Board of Directors or of any Committee thereof
shall constitute a quorum; and
(c) These Bylaws may be amended or repealed, in whole
or in part, by a majority vote of the Directors attending any
meeting of the board of Directors, provided such amendment or
repeal shall only be effective for the duration of such
emergency.
Section 604. Severability. If any provision of these
Bylaws is illegal or unenforceable as such, such illegality or
unenforceability shall not affect any other provision of these
Bylaws and such other provisions shall continue in full force and
effect.
ARTICLE VII. LIABILITY OF DIRECTORS: INDEMNIFICATION.
Section 701. Elimination of Liability. To the fullest
extent permitted by the laws of the Commonwealth of Pennsylvania,
a Director of the Corporation shall not be personally liable for
monetary damages for any action taken or any failure to take any
action unless the Director has breached or failed to perform the
duties of his or her office under the Pennsylvania Business
Corporation Law of 1988, as amended, or any successor statute,
and such breach or failure constitutes self-dealing, willful
misconduct or recklessness. The provisions of this Section 701
shall not apply with respect to the responsibility or liability
of a Director under any criminal statute or the liability of a
director for the payment of taxes pursuant to local, state or
federal law.
Section 702. Indemnification. The Corporation shall
indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or
investigative by reason of the fact that such person is or was a
Director, officer, employee, or agent of the Corporation, or is
or was serving at the request of the corporation as a director,
officer, employee, or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses
(including attorneys' fees), amounts paid in settlement,
judgments, and fines actually and reasonably incurred by such
person in connection with such action, suit, or proceeding;
provided, however, that no indemnification shall be made in any
case where the act or failure to act giving rise to the claim for
indemnification is determined by a court to have constituted
willful misconduct or recklessness.
Section 703. Expenses. Expenses (including attorneys'
fees) incurred in defending a civil or criminal action, suit, or
proceeding shall be paid by the Corporation in advance of the
final disposition of such action, suit, or proceeding upon
receipt of an undertaking by or on behalf of the Director,
officer, employee, or agent to repay such amount if it shall be
ultimately determined that he/she is not entitled to be
indemnified by the Corporation as authorized in this Article VII.
Section 704. Non-Exclusive. The indemnification and
advancement of expenses provided by this Article VII shall not be
deemed exclusive of any other right to which persons seeking
indemnification and advancement of expenses may be entitled under
any agreement, vote of shareholders or disinterested directors,
or otherwise, both as to actions in such persons' official
capacity and as to their actions in another capacity while
holding office, and shall continue as to a person who has ceased
to be a director, officer, employee, or agent and shall inure to
the benefit of the heirs, executors, and administrator of such
person.
Section 705. Insurance, Etc. The Corporation may purchase
and maintain insurance on behalf of any person, may enter into
contracts of indemnification with any person, may create a fund
of any nature (which may, but need not be, under the control of a
trustee) for the benefit of any person, and may otherwise secure
in any manner its obligations with respect to indemnification and
advancement of expenses, whether arising under this Article IX or
otherwise, to or for the benefit of any person, whether or not
the Corporation would have the power to indemnify such person
against such liability under the provisions of this Article VII.
Section 706. Amendment. Notwithstanding anything herein
contained or contained in the Articles of Incorporation to the
contrary, this Article VII may not be amended or repealed, and a
provision inconsistent herewith may not be adopted, except by the
affirmative vote of 66-2/3% of the members of the entire Board of
Directors or by the affirmative vote of shareholders of the
corporation entitled to cast at least 75% of all votes which
shareholders of the corporation are then entitled to cast, except
that, if the laws of the Commonwealth of Pennsylvania are amended
or any other statute is enacted so as to decrease the exposure of
directors to liability or to increase the indemnification rights
available, this Article VII and any other provision of these
Bylaws inconsistent with such decreased exposure or increased
indemnification rights shall be amended, automatically and
without any further action on the part of shareholders or
directors, to reflect such decreased exposure or to include such
increased indemnification rights, unless such legislation
expressly otherwise requires. Any repeal or modification of this
Article VII by the directors or shareholders of the Corporation
shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the
Corporation or any right to indemnification for any action taken
or any failure to take any action occurring prior to the time of
such repeal or modification.
Section 707. Severability. If, for any reason, any
provision of this Article VII shall be held invalid, such
invalidity shall not affect any other provision not held so
invalid, and each such other provision shall, to the full extent
consistent with law, continue in full force and effect. If any
provision of this Article VII shall be held invalid in part, such
invalidity shall in no way affect the remainder of such
provision, and the remainder of such provision, together with all
other provisions of this Article VII shall, to the full extent
consistent with law, continue in full force and effect.
ARTICLE VIII. AMENDMENT OR REPEAL.
Section 801. Amendment or Repeal by the Board of Directors.
These Bylaws may be amended or repealed, in whole or in part, in
the manner set forth in the Articles of Incorporation.
EXHIBIT 6
FORM OF OPINION OF COUNSEL TO BCB
Heritage shall have received from counsel to BCB, an
opinion, dated as of the Closing Date, substantially to the
effect that, subject to normal exceptions and qualifications:
(a) BCB has full corporate power to carry out the
transactions contemplated in the Agreement. The execution and
delivery of the Agreement and the consummation of the
transactions contemplated thereunder have been duly and validly
authorized by all necessary corporate action on the part of BCB,
and the Agreement constitutes a valid and legally binding
obligation of BCB, except as may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, receivership,
conservatorship, and other laws now or hereafter in effect
relating to or affecting the enforcement of creditors' rights
generally or the rights of creditors of federal savings
institutions or their holding companies, and (ii) general
equitable principles, except that no opinion need be rendered as
to the effect or availability of equitable remedies or injunctive
relief (regardless of whether such enforceability is considered
in a proceeding in equity or at law). Subject to satisfaction of
the conditions set forth in the Agreement, neither the
transactions contemplated in the Agreement, nor compliance by BCB
with any of the provisions thereof, will (i) conflict with or
result in a breach or default under (A) the articles of
incorporation or bylaws of BCB or the charter or bylaws of Berks
County Bank, or, (B) to the knowledge of such counsel, any note,
bond, mortgage, indenture, license, agreement or other material
instrument or obligation to which BCB or Berks County Bank is a
party; or (ii) based on certificates of officers and without
independent verification, to the knowledge of such counsel,
result in the creation or imposition of any material lien or
encumbrance upon the property of BCB or Berks County Bank, except
such material lien, instrument or obligation that has been
disclosed pursuant to the Agreement or the Plan; or (iii) violate
in any material respect any order, writ, injunction or decree
known to such counsel, or any federal or Pennsylvania statute,
rule or regulation applicable to BCB or Berks County Bank.
(b) Berks County Bank is a validly existing
Pennsylvania-chartered commercial bank organized under the laws
of the Commonwealth of Pennsylvania and the United States of
America. The deposits of Berks County Bank are insured to the
maximum extent provided by law by the Federal Deposit Insurance
Corporation.
(c) There is, to the knowledge of such counsel, no
legal, administrative, arbitration or governmental proceeding or
investigation pending or threatened to which BCB or Berks County
Bank is a party which would, if determined adversely to BCB or
Berks County Bank, have a material adverse effect on the
financial condition or results of operation of BCB and Berks
County Bank taken as a whole, or which presents a claim to
restrain or prohibit the transactions contemplated by the
Agreement and the Plan, respectively.
(d) No consent, approval, authorization or order of
any federal or state court or federal or state governmental
agency or body, or to such counsel's knowledge, of any third
party, is required for the consummation by BCB of the
transactions contemplated by the Agreement, except for such
consents, approvals, authorizations or orders as have been
obtained or which would not have a Material Adverse Effect upon
BCB or the Holding Company upon consummation of the
Consolidation.
(e) Upon the filing and effectiveness of the Articles
of Consolidation with the PDS, the Consolidation will have been
effected in compliance with all applicable Pennsylvania laws and
regulations in all material respects.
(f) The shares of Holding Company Common Stock to be
issued in connection with the Consolidation have been duly
authorized and will, when issued in accordance with the terms of
the Agreement, be validly issued, fully paid and nonassessable,
free and clear of any mortgage, pledge, lien, encumbrance or
claim (legal or equitable).
Such counsel's opinion shall be limited to matters
governed by federal banking and securities laws and by the BCL.
EXHIBIT 7
FORM OF OPINION OF COUNSEL TO HERITAGE
BCB shall have received from counsel to Heritage, an
opinion, dated as of the Closing Date, substantially to the
effect that, subject to normal exceptions and qualifications:
(a) Heritage has full corporate power to carry out the
transactions contemplated in the Agreement. The execution and
delivery of the Agreement and the consummation of the
transactions contemplated thereunder have been duly and validly
authorized by all necessary corporate action on the part of
Heritage and the Agreement constitutes a valid and legally
binding obligation of Heritage except as may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium,
receivership, conservatorship, and other laws now or hereafter in
effect relating to or affecting the enforcement of creditors'
rights generally or the rights of creditors of federal savings
institutions or their holding companies, and (ii) general
equitable principles, except that no opinion need be rendered as
to the effect or availability of equitable remedies or injunctive
relief (regardless of whether such enforceability is considered
in a proceeding in equity or at law). Subject to satisfaction of
the conditions set forth in the Agreement, neither the
transactions contemplated in the Agreement nor compliance by
Heritage with any of the provisions thereof, will (i) conflict
with or result in a breach or default under (A) the certificate
of incorporation or bylaws of Heritage or the charter or bylaws
of Heritage National Bank, or (B) based 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 Heritage or
Heritage National Bank is a party; or (ii) to the knowledge of
such counsel, result in the creation or imposition of any
material lien, instrument or encumbrance upon the property of
Heritage or Heritage National Bank, except such material lien,
instrument or obligation that has been disclosed to BCB pursuant
to the Agreement and the Plan, or (iii) violate in any material
respect any order, writ, injunction, or decree known to such
counsel, or any statute, rule or regulation applicable to
Heritage or Heritage National Bank.
(b) Heritage National Bank is a validly existing
national bank organized under the laws of the United States of
America. The deposits of Heritage National Bank are insured to
the maximum extent provided by law by the Federal Deposit
Insurance Corporation.
(c) There is, to the knowledge of such counsel, no
legal, administrative, arbitration or governmental proceeding or
investigation pending or threatened to which Heritage or Heritage
National Bank is a party which would, if determined adversely to
Heritage or Heritage National Bank, have a material adverse
effect on the business, properties, results of operations, or
condition, financial or otherwise, of Heritage or Heritage
National Bank taken as a whole or which presents a claim to
restrain or prohibit the transactions contemplated by the
Agreement and the Plan, respectively.
(d) No consent, approval, authorization, or order of
any federal or state court or federal or state governmental
agency or body, or to such counsel's knowledge, of any third
party of any third party, is required for the consummation by
Heritage of the transactions contemplated by the Agreement,
except for such consents, approvals, authorizations or orders as
have been obtained or which would not have a Material Adverse
Effect upon Heritage or the Holding Company upon consummation of
the Consolidation.
Such counsel's opinion shall be limited to matters
governed by federal banking and securities laws and by the BCL.
EXHIBIT 8
FORM OF TAX OPINION OF ▇▇▇▇▇▇▇ & ▇▇▇
BCB and Heritage shall have received an opinion of ▇▇▇▇▇▇▇ &
▇▇▇ substantially to the effect that, under the provisions of the
IRC:
1. The Consolidation will constitute a reorganization
within the meaning of IRC Section 368(a)(1)(A).
2. BCB, Heritage and Holding Company will each be "a
party to a reorganization" within the meaning of IRC Section
368(b).
3. Neither BCB, nor Heritage, nor Holding Company
will recognize any gain or loss upon the respective transfers of
BCB's and Heritage's assets to Holding Company in exchange solely
for Holding Company Common Stock (including any fractional share
interests) and the assumption by Holding Company of the
respective liabilities of BCB and Heritage.
4. The basis of the respective BCB and Heritage
assets in the hands of Holding Company will be the same as the
basis of such assets in the hands of BCB and Heritage immediately
prior to the Consolidation.
5. The holding period of the respective assets of BCB
and Heritage to be received by Holding Company will include the
period during which the assets were held by BCB and Heritage.
6. No gain or loss will be recognized by the
shareholders of BCB or Heritage on the receipt of Holding Company
Common Stock (including any fractional share interests) solely in
exchange for their shares of BCB or Heritage Common Stock, as the
case may be.
7. The basis of the Holding Company Common Stock
(including any fractional share interests) to be received by the
BCB and Heritage shareholders in the Consolidation will be the
same as the basis of the BCB or Heritage Common Stock, as the
case may be, surrendered in exchange therefor.
8. The holding period of the Holding Company Common
Stock (including any fractional share interests) to be received
by the BCB and Heritage shareholders in the Consolidation will
include the period during which the BCB and Heritage shareholders
held their respective BCB and Heritage Common Stock, provided the
shares of such stock are held as a capital asset on the Effective
Date of the Consolidation.
9. The payment of cash in lieu of fractional share
interests of Holding Company Common Stock will be treated as if
the fractional share interests were distributed as part of the
Consolidation and then redeemed by Holding Company. Such cash
payments will be treated as having been received as distributions
in full payment in exchange for the fractional share interests
redeemed, as provided in IRC Section 302(a). Any gain or loss
recognized by a BCB or Heritage shareholder will be a capital
gain or loss, provided the shares of BCB or Heritage Common
Stock, as the case may be, are held as a capital asset on the
Effective Date of the Consolidation.
10. As provided in IRC Section 381(c)(2) and related
Treasury regulations, Holding Company will succeed to and take
into account the respective earnings and profits, or deficit in
earnings and profits, of BCB and Heritage as of the Effective
Date of the Consolidation. Any deficit in the earnings and
profits of the parties will be used only to offset the earnings
and profits accumulated after the Consolidation.
11. Pursuant to IRC Section 381(a) and related
Treasury regulations, Holding Company will succeed to and take
into account the respective items of BCB and Heritage described
in IRC Section 381(c). Such items will be taken into account by
Holding Company subject to the conditions and limitations of IRC
Sections 381, 382, 383, and 384 and the Treasury regulations
thereunder.