AGREEMENT AND PLAN OF REORGANIZATION
by and between
BT Financial Corporation,
and
First ▇▇▇▇▇▇▇ Financial Corporation
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS................................................ 1
1.01. Definitions................................................ 1
1.02. Accounting Terms........................................... 5
ARTICLE II - THE MERGER................................................ 6
2.01. Merger..................................................... 6
2.02. Conversion of Shares of Common Stock....................... 6
2.03. Articles of Incorporation; By-Laws......................... 7
2.04. Directors and Officers..................................... 7
2.05. Closing.................................................... 8
2.06. Exchange of Certificates for Stock and Cash................ 8
2.07. Termination of this Reorganization Agreement............... 9
2.08. Consequences of Termination................................ 10
2.09. Confidentiality............................................ 11
2.10. Public Disclosure.......................................... 11
ARTICLE III - SHAREHOLDER APPROVAL..................................... 11
3.01. First ▇▇▇▇▇▇▇ Shareholders Meeting......................... 11
3.02. BT Financial Shareholders Meeting.......................... 12
ARTICLE IV - REPRESENTATIONS, WARRANTIES AND COVENANTS................. 12
4.01. Representations and Warranties of First ▇▇▇▇▇▇▇............ 12
4.02. Representations and Warranties of BT Financial............. 26
4.03. Covenants of All Parties................................... 30
4.04. Covenants of First ▇▇▇▇▇▇▇................................. 33
4.05. Covenants of BT Financial.................................. 38
ARTICLE V - CONDITIONS PRECEDENT....................................... 42
5.01. Conditions Precedent to the Obligations of BT Financial.... 42
5.02. Conditions Precedent to the Obligations of First ▇▇▇▇▇▇▇... 47
5.03. Waivers.................................................... 50
ARTICLE VI - BROKERS AND EXPENSES...................................... 51
6.01. Brokers.................................................... 51
6.02. Expenses................................................... 51
ARTICLE VII - MISCELLANEOUS............................................ 51
7.01. Further Assurances......................................... 51
7.02. Survival of Representations, Warranties and Covenants...... 51
7.03. Notices.................................................... 52
7.04. Binding Effect............................................. 52
7.05. Headings................................................... 53
7.06. Counterparts............................................... 53
7.07. Integration; No Third-Party Beneficiaries.................. 53
7.08. Severability............................................... 53
7.09. Amendments................................................. 53
7.10. Governing Law.............................................. 54
7.11. Incorporation by Reference................................. 54
Schedules and Exhibits
----------------------
Schedule 4.01(f) First ▇▇▇▇▇▇▇ - Financial Statements
Schedule 4.01(m) First ▇▇▇▇▇▇▇ - Loans
Schedule 4.01(p) First ▇▇▇▇▇▇▇ - Real Property
Schedule 4.01(q) First ▇▇▇▇▇▇▇ - Environmental Conditions
Schedule 4.01(q)(iii) First ▇▇▇▇▇▇▇ - Governmental Filings
Schedule 4.01(s) First ▇▇▇▇▇▇▇ - Leases
Schedule 4.01(t) First ▇▇▇▇▇▇▇ - Material Contracts
Schedule 4.01(v) First ▇▇▇▇▇▇▇ - Employee Benefits
Schedule 4.01(w) First ▇▇▇▇▇▇▇ - Employment Contract
Schedule 4.01(y) First ▇▇▇▇▇▇▇ - ▇▇▇▇ Claim
Schedule 4.01(cc) First ▇▇▇▇▇▇▇ - Investments
Exhibit A First ▇▇▇▇▇▇▇ Financial Corporation Affiliates Agreement
Exhibit B BT Financial Corporation Affiliates Agreement
----------------
*The Table of Contents is not part of this Agreement.
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, is made and entered into as
of this 23rd day of February, 1999 (the "Reorganization Agreement"), by and
among BT Financial Corporation, a business corporation organized and existing
under the laws of the Commonwealth of Pennsylvania with its principal office at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("BT Financial"),
AND
First ▇▇▇▇▇▇▇ Financial Corporation, a corporation organized and existing under
the laws of Delaware with its principal office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ("First ▇▇▇▇▇▇▇").
WITNESSETH:
WHEREAS, the respective Boards of Directors of BT Financial and First
▇▇▇▇▇▇▇ have determined that it would be in the best interests of their
respective organizations, shareholders and customers and the communities served
by them for First ▇▇▇▇▇▇▇ to be merged with and into BT Financial (the "Merger")
pursuant to this Reorganization Agreement, whereby the shareholders of First
▇▇▇▇▇▇▇ will receive shares of common stock of BT Financial in exchange for
their First ▇▇▇▇▇▇▇ Common Stock; and
WHEREAS, the respective Boards of Directors of BT Financial and First
▇▇▇▇▇▇▇ have approved the proposed merger of First ▇▇▇▇▇▇▇ with and into BT
Financial upon the terms and conditions set forth in this Reorganization
Agreement; and
WHEREAS, the parties intend that the Merger will (i) be accounted for
as a pooling of interests under generally accepted accounting principals and
(ii) qualify as a reorganization under Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants, conditions and actions hereinafter set
forth, the parties hereto, each intending to be legally bound hereby, agree as
follows:
ARTICLE I
DEFINITIONS
1.01. Definitions. The terms defined in this Section 1.01 shall have
the meanings herein specified, unless the context clearly requires otherwise.
Other terms used herein are defined elsewhere in this Reorganization Agreement.
"Affiliate" of a Party means a Person that, directly or
indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Party.
"AMEX" means the American Stock Exchange.
"Articles of Merger" means the Articles of Merger delivered to
the Department of State of the Commonwealth of Pennsylvania for filing
pursuant to Sections 1921 et seq. of the BCL.
"Bank" means First ▇▇▇▇▇▇▇ Bank, N.A.
"Banking Code" means the Pennsylvania Banking Code of 1965, as
amended.
"Bank Merger" means the merger of Bank with and into Laurel Bank,
with Laurel Bank as the Resulting Institution.
"BCL" means the Pennsylvania Business Corporation Law of 1988, as
amended.
"BT Financial Common Stock" means the common stock, par value
$5.00 per share, of BT Financial.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Certificate of Merger" means the Certificate of Merger delivered
to the Secretary of State of Delaware for filing pursuant to Section
252 of the GCL.
"Closing Date" shall have the meaning set forth in Section
2.05(a).
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act
of 1986.
"Comptroller" means the Office of the Comptroller of the
Currency.
"Computer Systems" means the hardware, software and embedded
microcontrollers in noncomputer equipment.
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"Department of Banking" means the Pennsylvania Department of
Banking.
"Effective Time" means the date and time specified in the
Articles of Merger and Certificate of Merger.
"Environmental Condition" shall have the meaning set forth in
Section 4.01(q).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"FDIA" means the Federal Deposit Insurance Act, as amended.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System.
"FHLMC" means the Federal Home Loan Mortgage Corporation.
"First ▇▇▇▇▇▇▇ Common Stock" means the common stock, $2.50 par
value per share, of First ▇▇▇▇▇▇▇.
"FNMA" means the Federal National Mortgage Association.
"GCL" means the Delaware General Corporation Law , as amended.
"GNMA" means the Government National Mortgage Association.
"NASD" means the National Association of Securities Dealers, Inc.
"NASDAQ" means the NASD Automated Quotations System.
"Option" means the Option granted to BT Financial by First
▇▇▇▇▇▇▇ under the Stock Option Agreement of even date herewith between
BT Financial and First ▇▇▇▇▇▇▇.
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"Owned Real Property" shall have the meaning set forth in Section
4.01(p).
"Parties" means BT Financial and First ▇▇▇▇▇▇▇.
"PBG" means the Pension Benefit Guaranty Corporation.
"Person" means a corporation, an association, a partnership, an
organization, a business, an individual, a government or a subdivision
thereof or a governmental agency.
"Permitted Dividend" means (a) a regular quarterly cash
dividend declared and paid in accordance with First ▇▇▇▇▇▇▇'▇ past
practices as to time of declaration, payment and amount, whose
aggregate amount shall not exceed the lower of (A) the higher of (i)
$.13 1/2 per share, and (ii) the subtrahend of $.13 1/2 per share
minus the amount of quarterly dividends paid since the date of this
Agreement multiplied by the number of calendar quarters ending after
the date of this Agreement, and (B) the higher of (i) the amount by
which net income per share for the quarter ending immediately before
the quarter in which such dividend is paid exceeded $.53 1/2 per share
and (ii) the amount by which cumulative net income for each quarter
ending after the date of this Agreement and before the quarter in
which such dividend is paid shall have exceeded $.53 1/2 per share
multiplied by the number of quarters ending after the date of this
Agreement. The quarterly dividend for December 31, 1999, may be
increased in accordance with First ▇▇▇▇▇▇▇'▇ past practices by an
aggregate amount not to exceed $.01 per share, provided that the net
income for the quarter ending September 30, 1999 shall have exceeded
$.40 per share.
"Joint Proxy Statement/Prospectus" means the Prospectus/Proxy
Statement, together with any supplements thereto, to be sent to the
shareholders of each of First ▇▇▇▇▇▇▇ and BT Financial to solicit
their votes in connection with the transactions contemplated by this
Reorganization Agreement.
"Registration Statement" means the registration statement on Form
S-4 (or other appropriate form) of BT Financial, including any
amendments or supplements thereto, as declared effective by the SEC
under the Securities Act with respect to the issuance of BT Financial
Common Stock in connection with the Merger and the approval by the
shareholders of the transactions contemplated by this Reorganization
Agreement, which Registration Statement shall include the Joint Proxy
Statement/Prospectus.
4
"Regulatory Approvals" means all necessary approvals of the
Merger by state and federal agencies, including the Department of
Banking, the Federal Reserve Board, the FDIC and the Comptroller.
"Schedules" means the disclosure schedules attached hereto and
made a part hereof.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Service" means the United States Internal Revenue Service.
"Subsidiary" means any corporation or other entity, the
securities or other ownership interests having ordinary voting power
to elect a majority of the board of directors or other persons
performing similar functions of such corporation or other entity are
at the time directly or indirectly owned or controlled by a Party.
"Surviving Corporation" means BT Financial after consummation of
the Merger.
"Taxes" means all federal, state and local taxes and similar
governmental charges.
"Transactions" means the negotiation and execution of this
Reorganization Agreement and the consummation of the transactions
contemplated hereby, and all related transactions.
"Year 2000 Compliant" means all of the Computer Systems will
correctly differentiate between years in different centuries that end
in the same two digits, and will accurately process date/time data
(including but not limited to calculating, comparing and sequencing)
from into and between the twentieth and twenty-first centuries,
including leap year calculations.
1.02. Accounting Terms. For all purposes of this Reorganization
Agreement, unless the context clearly requires otherwise, any accounting term
not specifically defined in this Reorganization Agreement shall have the meaning
given to it in accordance with generally accepted accounting principles and
practices within the banking industry as in effect as of the date of this
Reorganization Agreement.
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ARTICLE II
THE MERGER
2.01. Merger. Upon satisfaction of the conditions set forth herein, at
the Effective Time, First ▇▇▇▇▇▇▇ shall merge with and into BT Financial in
accordance with the provisions and procedures set forth herein, and BT Financial
shall be the Surviving Corporation (the "Merger"). At the Effective Time, the
separate corporate existence of First ▇▇▇▇▇▇▇ shall cease and BT Financial shall
succeed to all the rights, privileges, immunities and franchises, and all the
property and assets, real, personal and mixed, of First ▇▇▇▇▇▇▇ without the
necessity for any separate conveyance or other transfer. Except as set forth in
Section 4.05(g), the Surviving Corporation shall thereafter be responsible and
liable for all liabilities and obligations of every kind and description, and
neither the rights of creditors nor any liens on the property of First ▇▇▇▇▇▇▇
shall be impaired by the Merger.
2.02. Conversion of Shares of Common Stock.
(a) At the Effective Time, each share of First ▇▇▇▇▇▇▇ Common Stock then
outstanding, except treasury shares, shall be converted into the right to
receive 1.667 shares of BT Financial Common Stock (the "Exchange Ratio"),
unless the average closing price per share of BT Financial Common Stock on the
NASDAQ National Market as reported in the Wall Street Journal for the thirty
---- ------ -------
(30) consecutive trading days ending on the fifth trading day immediately
preceding the mutually agreed upon mailing date of the Joint Proxy/Prospectus
(the "Mailing Date")(the "Valuation Period") is less than $24 or more than $32.
(i) If the average per share price of BT Financial Common Stock is
less than $24 for the Valuation Period, BT Financial shall have the
option to adjust the Exchange Ratio by increasing the number of shares
of BT Financial Common Stock included in the Exchange Ratio, so as to
maintain a total consideration of $24 per share of Common Stock based
on the average price per share for BT Financial Common Stock for the
Valuation Period. If BT Financial does not elect to so adjust the
Exchange Ratio, First ▇▇▇▇▇▇▇ may elect to terminate this Agreement,
and neither party shall have any further liability hereunder; or
(ii) If the average price per share of BT Financial Common Stock for
the Valuation Period is more than $32, BT Financial shall have the
option to adjust the Exchange Ratio by reducing the number of shares
of BT Financial Common Stock included in the Exchange Ratio, so that
the total consideration does not exceed $32 per share of Common Stock
based on the average price per share of BT Financial Common Stock for
the Valuation Period.
6
(b) At the Effective Time, by virtue of the Merger, and without any
action on the part of the shareholders of First ▇▇▇▇▇▇▇, each of the then issued
and outstanding shares of First ▇▇▇▇▇▇▇ Common Stock shall cease to exist and
shall be deemed canceled, retired and eliminated, and all rights in respect
thereof shall cease except the right to receive BT Financial Common Stock,
regardless of whether the certificates representing such shares are surrendered
to BT Financial by the shareholders of First ▇▇▇▇▇▇▇.
(c) The Exchange Ratio shall be adjusted at the Effective Time to reflect
any consolidation, split-up, other subdivision or combination of BT Financial
Common Stock, any dividend payable in BT Financial Common Stock, or any capital
reorganization involving the reclassification of BT Financial Common Stock
subsequent to the date of this Reorganization Agreement and prior to such time.
BT Financial shall register under the Securities Act all shares of BT Financial
Common Stock to be issued in the Merger prior to the Effective Time.
2.03. Articles of Incorporation; By-Laws. At the Effective Time, the
articles of incorporation and bylaws of BT Financial as in effect immediately
prior to the Effective Time shall be the articles of incorporation and bylaws of
the Surviving Corporation.
2.04. Directors and Officers.
(a) The directors and principal officers of BT Financial immediately
prior to the Effective Time shall be the directors and principal officers of the
Surviving Corporation from and after the Effective Time. In addition, two
directors of First ▇▇▇▇▇▇▇ designated by First ▇▇▇▇▇▇▇, who shall be acceptable
to BT Financial, shall become directors of BT Financial at the Effective Time to
serve for such terms as may be determined by BT Financial consistent with its
director retirement policies.
(b) In addition, two directors of First ▇▇▇▇▇▇▇ designated by First
▇▇▇▇▇▇▇, (who may include those persons selected to be directors pursuant to
clauses (a) or (c) of this Section 2.04), shall be acceptable to BT Financial,
shall become directors of Laurel Trust Company at the Effective Time to serve
until the 2001 annual meeting of the shareholders of BT Financial.
(c) Immediately after the Bank Merger, two directors of First
▇▇▇▇▇▇▇, selected by First ▇▇▇▇▇▇▇ (who may include those persons selected to be
directors of BT Financial pursuant to clauses (a) or (b) of this Section 2.04)
and acceptable to BT Financial shall be appointed to the Board of Directors of
Laurel Bank, each to serve until the 2001 annual meeting of the shareholders of
BT Financial.
7
2.05. Closing.
(a) The closing hereunder ("Closing") shall take place at the offices of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or
such other place agreed upon by the Parties, on the Closing Date selected by the
Parties which shall be the latest of:
(i) Any business day within five business days after the receipt of
the approval of the Merger by the Department of Banking;
(ii) Any business day between the thirtieth and thirty-seventh day
following receipt of the last Regulatory Approval, if all other
conditions set forth in Article VI have been satisfied or waived;
(iii) The fifth business day after any stay of any Regulatory
Approval or any injunction against consummation of the Merger is
lifted, discharged or dismissed, if all other conditions set forth in
Article VI have been satisfied or waived;
(iv) Such other date as shall be mutually agreed to in writing by the
Parties on which all other conditions set forth in Article V shall
have been satisfied or waived.
(b) Any Party may postpone the Closing Date fixed under Section 2.05(a)
once for a reasonable period of time (which shall be no more than thirty (30)
days but in no event ending later than the day of automatic termination in
accordance with Section 2.07(h)) if (i) necessary to enable it to perform any
obligations hereunder, provided, that such Party provides prompt written notice
to the other Parties of such postponement, stating the reasons therefor, or (ii)
the other Party would have the right to terminate this Reorganization Agreement
on the basis of the average per share price of BT Financial Common Stock for the
Valuation Period under Section 2.02.
(c) If First ▇▇▇▇▇▇▇ or BT Financial shall fail to close because all the
conditions precedent to its obligation to close shall not have been met on the
Closing Date as postponed, such Party may immediately terminate this
Reorganization Agreement by giving written notice of such termination to the
other Party.
2.06. Exchange of Certificates for Stock and Cash.
(a) Common Stock. After the Effective Time, each holder of a certificate
for theretofore outstanding shares of First ▇▇▇▇▇▇▇ Common Stock will be
entitled to receive in exchange therefor a certificate or certificates
representing the number of whole shares of BT Financial Common Stock to which
such shareholder is entitled as provided in Section 2.02 plus cash (payable by
check) in lieu of any fractional share of BT Financial Common Stock to which
such holder would otherwise be entitled. Such exchange will be effected upon
surrender of such
8
certificate to BT Financial or its exchange agent, together with a duly executed
and completed Letter of Transmittal, which will be mailed to each holder of a
certificate for theretofore outstanding shares of First ▇▇▇▇▇▇▇ Common Stock by
BT Financial or its exchange agent promptly following the Effective Time.
(b) Fractional Shares. Neither certificates nor scrip certificates for
fractions of shares of BT Financial Common Stock shall be issued. Holders of
First ▇▇▇▇▇▇▇ Common Stock who would but for Section 2.06(a) be entitled to
receive fractions of shares of BT Financial Common Stock shall have none of the
rights with respect to such fractions of shares (including, without limitation,
the right to receive dividends) which a holder shall possess in respect of a
full share of BT Financial Common Stock issuable as a result of the Merger, and
each such holder shall receive, in lieu of the applicable fraction of a share of
BT Financial Common Stock, a cash payment equal to such fraction of a share of
BT Financial Common Stock multiplied by the closing sales price on NASDAQ for a
share of BT Financial Common Stock on the Closing Date as reported in the Wall
----
Street Journal, or, if the BT Financial Common Stock is not traded on such date,
------ -------
the next succeeding day on which such stock is traded. No interest will be paid
or accrued on cash payable upon surrender of certificates previously
representing Common Stock.
(c) Failure to Surrender Certificates. Until surrendered in accordance
with the provisions of this Section 2.06, the certificates which immediately
prior to the Effective Time represented issued and outstanding shares of Common
Stock (except for certificates representing treasury shares) shall from and
after the Effective Time represent for all purposes only the right to receive BT
Financial Common Stock. Upon surrender of a certificate for theretofore
outstanding shares of First ▇▇▇▇▇▇▇ Common Stock, there shall be paid to the
record holder of the certificate for shares of BT Financial Common Stock issued
in exchange therefor (i) on the date of such exchange, the amount of dividends
theretofore accrued and payable with respect to such full shares of BT Financial
Common Stock as of any date subsequent to the Effective Time which have not yet
been paid to a public official pursuant to abandoned property laws and (ii) at
the appropriate payment date, the amount of dividends with a record date after
the Effective Time but prior to such surrender and a payment date subsequent to
such surrender. No interest shall be payable with respect to such dividends.
(d) Treasury Shares. At the Effective Time, each share of First ▇▇▇▇▇▇▇
Common Stock held in treasury shall be canceled, retired and cease to exist and
no consideration shall be paid therefor.
2.07. Termination of this Reorganization Agreement. This
Reorganization Agreement and the transactions contemplated hereby may be
terminated:
(a) At any time prior to the Effective Time by mutual consent of the
Boards of Directors of BT Financial and First ▇▇▇▇▇▇▇;
(b) As provided in Section 2.02(a);
9
(c) As provided in Section 2.05(c);
(d) At any time, by either Party hereto in writing, if the applications
for prior approval referred to in Section 4.03(e) hereof have been denied, and
the time period for appeals and requests for reconsideration has run;
(e) At any time, by either Party hereto in writing, if the stockholders of
either First ▇▇▇▇▇▇▇ or BT Financial do not approve the transactions
contemplated herein at the annual or special meetings duly called for that
purpose;
(f) At any time, by either Party in writing, if any of the conditions
precedent to such Party's obligations to consummate the Merger has not been
satisfied, fulfilled or waived by the Party entitled to so waive on or before
the Closing Date, as postponed under Section 2.05(b);
(g) Upon exercise of the Option in whole or in part; or
(h) In any event, automatically on December 31, 1999, if the Merger has
not been consummated on or before such date, unless extended by mutual consent
of the Parties.
2.08. Consequences of Termination. Upon any termination hereunder:
(a) Sections 2.08, 2.09 and 2.10 and Article VI hereof shall survive any
termination;
(b) If BT Financial terminates this Reorganization Agreement under Section
2.05(c) due to the failure of any of the conditions set forth in Section 5.01
(a), (b), (c), (m) or (n) and satisfaction of such condition was within the
control of First ▇▇▇▇▇▇▇, or if this Reorganization Agreement terminates under
Section 2.07(f), then First ▇▇▇▇▇▇▇ shall reimburse BT Financial for attorneys'
fees and other expenses reasonably incurred in connection with the Transactions
[to the extent not already paid by First ▇▇▇▇▇▇▇ to BT Financial]; any such
failure of condition shall constitute a breach of this Reorganization Agreement,
and BT Financial shall have all rights available in law and at equity for such
breach of contract;
(c) If First ▇▇▇▇▇▇▇ terminates this Reorganization Agreement under
Section 2.05(c) due to the failure of any of the conditions set forth in Section
5.02 (a), (b), (c), (l) or (m), and satisfaction of such condition was within
the control of BT Financial or any of its Subsidiaries, then BT Financial shall
reimburse First ▇▇▇▇▇▇▇ for attorneys' fees and other expenses reasonably
incurred in connection with the Transactions; such failure shall constitute a
breach of this Reorganization Agreement, and First ▇▇▇▇▇▇▇ shall have all rights
available in law and at equity for such breach of contract;
(d) If BT Financial terminates this Reorganization Agreement under Section
2.05(c) due to the failure of any of the conditions set forth in Section 5.01
(d), (g), (h), (j), (k), or (l), then First ▇▇▇▇▇▇▇ shall reimburse BT Financial
for attorneys' fees and other expenses reasonably
10
incurred in connection with the Transactions [to the extent not already paid by
First ▇▇▇▇▇▇▇ to BT Financial] and upon payment in full thereof, First ▇▇▇▇▇▇▇
shall have no further liability or obligation hereunder to BT Financial; and
(e) If First ▇▇▇▇▇▇▇ terminates this Reorganization Agreement under
Section 2.05(c) due to the failure of any of the conditions set forth in Section
5.02 (g), (h) or (i), then BT Financial shall reimburse First ▇▇▇▇▇▇▇ for
attorneys' fees and other expenses reasonably incurred in connection with the
Transactions and upon payment in full thereof, BT Financial shall have no
further liability or obligation hereunder to First ▇▇▇▇▇▇▇.
In no event shall the amount reimbursed for attorneys' fees and other
expenses reasonably incurred in connection with the Transactions under clause
(d) or (e) of this Section 2.08 exceed $250,000.
2.09. Confidentiality. In connection with the Merger, each Party has
furnished and will furnish to the other Party, pursuant to this Reorganization
Agreement or otherwise, confidential information concerning its business and
financial condition. Each Party shall, and shall cause its employees, agents,
accountants, attorneys and investment advisors to, maintain the confidentiality
of such information received from the other Parties and shall not use such
information for any purpose except in furtherance of the Merger and the other
transactions contemplated hereby. In the event of a termination of this
Reorganization Agreement, upon request by a Party, the other Party shall return
or destroy all copies of written confidential information received from such
Party, whether pursuant to this Reorganization Agreement or otherwise, and all
documents prepared by them which contain such information.
2.10. Public Disclosure. Each Party shall consult with the other
Parties before issuing any press release or making any other public disclosure
regarding the proposed Merger or the other transactions contemplated hereby and
shall not issue any press release or make any other public disclosure prior to
such consultations, except as may be required by law or by the rules of the AMEX
or the NASD in the opinion of counsel. A copy of such press release or public
disclosure (or, if not in written form, a written description thereof) shall be
provided to the other Parties prior to the dissemination thereof.
ARTICLE III
SHAREHOLDER APPROVAL
3.01. First ▇▇▇▇▇▇▇ Shareholders Meeting. First ▇▇▇▇▇▇▇ shall submit
this Reorganization Agreement to its shareholders for approval in accordance
with the GCL at a meeting duly convened and held on such date as shall be agreed
upon by the Parties. In connection with such meetings, First ▇▇▇▇▇▇▇ shall
furnish the Joint Proxy Statement/Prospectus to its shareholders. The Board of
Directors of First ▇▇▇▇▇▇▇ shall recommend the proposed Merger to its
shareholders and use their best efforts to obtain the affirmative vote of the
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shareholders required to approve the transactions contemplated by this
Reorganization Agreement.
3.02. BT Financial Shareholders Meeting. BT Financial shall submit
this Reorganization Agreement to its shareholders for approval in accordance
with the BCL at a meeting duly convened and held on such date as shall be
mutually agreed upon by BT Financial and First ▇▇▇▇▇▇▇. In connection with such
meeting, BT Financial shall furnish the Joint Proxy Statement/Prospectus to its
stockholders. The Board of Directors of BT Financial shall recommend the
proposed Merger to its shareholders and use its best efforts to obtain the
affirmative vote of the shareholders of BT Financial required to approve the
transactions contemplated by this Reorganization Agreement.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
4.01. Representations and Warranties of First ▇▇▇▇▇▇▇. First ▇▇▇▇▇▇▇
represents and warrants to BT Financial as follows:
(a) Organization and Capitalization. First ▇▇▇▇▇▇▇ is a corporation duly
organized and validly existing under Delaware law. First ▇▇▇▇▇▇▇ has the
corporate power and authority to carry on its business as it is now being
operated and to carry out the transactions contemplated by this Reorganization
Agreement. The authorized capital stock of First ▇▇▇▇▇▇▇ consists of 10,000,000
shares of common stock having a par value of $2.50 per share, of which 1,742,400
shares are issued and outstanding as of the date hereof and no shares are held
in the treasury of First ▇▇▇▇▇▇▇. To the knowledge of First ▇▇▇▇▇▇▇, all issued
and outstanding shares of First ▇▇▇▇▇▇▇ Common Stock are validly issued, fully
paid and nonassessable. There is no subscription, option, warrant, call, right,
stock appreciation right or commitment of any kind obligating First ▇▇▇▇▇▇▇ to
issue any of its stock or to acquire any of its stock under any circumstances or
to pay cash on account of stock appreciation.
(b) The Bank. The Bank is a national banking association duly organized
and validly existing under the National Bank Act. The Bank has the corporate
power and authority to carry on its business as it is now being operated and to
carry out the transactions contemplated by this Reorganization Agreement. The
Bank's deposits are insured by the Bank Insurance Fund of the FDIC. The
authorized capital stock of the Bank consists of 300,000 shares of common stock
having a par value of $10 per share, of which all shares are issued and
outstanding as of the date hereof and no shares are held in the treasury of the
Bank. All issued and outstanding shares of First ▇▇▇▇▇▇▇ Common Stock are
validly issued, fully paid and nonassessable. There is no subscription, option,
warrant, call, right, stock appreciation right or commitment of any kind
obligating the Bank to issue any of its stock or to acquire any of its stock
under any circumstances or to pay cash on account of stock appreciation. First
▇▇▇▇▇▇▇ owns all of the issued and outstanding common stock of the Bank.
12
(c) Flex Organization and Capitalization. Flex Financial Consumer
Discount Company ("Flex") is a finance company validly existing under the laws
of the Commonwealth of Pennsylvania. Flex has full power and authority to carry
on its business as it is now being operated and to carry out the transactions
contemplated by this Reorganization Agreement. The authorized, issued and
outstanding capital stock of Flex consists of 1,000 shares of common stock
having a par value of $1.00 per share. All issued and outstanding shares of
Flex common stock are validly issued, fully paid and nonassessable and are owned
of record and beneficially by First ▇▇▇▇▇▇▇.
(d) Authority for Transactions. This Reorganization Agreement has been,
and the Articles of Merger and Certificate of Merger, when executed and
delivered, will have been, duly and validly authorized, executed and delivered
by First ▇▇▇▇▇▇▇, subject only to Regulatory Approvals and approval by the
shareholders of First ▇▇▇▇▇▇▇, and each constitutes the valid and binding
obligations of First ▇▇▇▇▇▇▇ and are and will be enforceable in accordance with
their respective terms.
(e) No Conflicts. Neither the execution, delivery and performance of this
Reorganization Agreement nor the consummation of the transactions contemplated
hereby, nor compliance by First ▇▇▇▇▇▇▇ and any of its Subsidiaries with any of
the provisions hereof or thereof will (i) violate, or conflict with, or result
in a breach of any provisions of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties or assets of First ▇▇▇▇▇▇▇ or any of its Subsidiaries under any of
the terms, conditions or provisions of, (A) the articles of incorporation or
bylaws, as amended, of First ▇▇▇▇▇▇▇ or any of its Subsidiaries or (B) any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which First ▇▇▇▇▇▇▇ or any of its Subsidiaries is a
party or by First ▇▇▇▇▇▇▇ or any of its Subsidiaries which is bound or to which
any of First ▇▇▇▇▇▇▇'▇ properties or assets or any of its Subsidiaries'
properties or assets may be subject, except for such violations, conflicts,
breaches, defaults, terminations, accelerations, rights or creations which would
not, in the aggregate, have a material adverse effect on First ▇▇▇▇▇▇▇'▇ or any
of its Subsidiaries' business or financial condition, or (ii) violate any
judgment, ruling, order, writ, injunction, decree, statute, rule or regulation
applicable to First ▇▇▇▇▇▇▇ or any of its properties or assets or any of its
Subsidiaries' or their properties or assets.
(f) Financial Statements and SEC Documents. First ▇▇▇▇▇▇▇'▇ Annual
Reports on Form 10-K for the fiscal years ended December 31, 1996, 1997 and
1998, and all other reports, registration statements, definitive proxy
statements or information statements filed or to be filed by it or any of its
Subsidiaries subsequent to December 31, 1995 under the Securities Act of 1933,
as amended (together with the rules and regulations thereunder, the "Securities
Act") or under Sections 13(a), 13(c) 14(d) and 15(d) of the Securities Exchange
Act of 1934, as amended (together with the rules and regulations thereunder, the
"Exchange Act"), in the form filed, or to be filed, with the SEC (collectively,
the "SEC Documents") (i) complied or will comply in all
13
material respects as to form with the applicable requirements under the
Securities Act or the Exchange Act, as the case may be, and (ii) did not and
will not, at the time of such filing, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under which
they were made, not misleading; and each of the balance sheets in or
incorporated by reference into any such SEC Document (including the related
notes and schedules thereto) fairly presents and will fairly present the
financial position of the entity or entities to which it relates as of its date
and each of the statements of income and changes in stockholders' equity and
cash flows or equivalent statements in such report and documents (including any
related notes and schedules thereto) fairly presents and will fairly present the
results of operations, changes in stockholder's equity and changes in cash
flows, as the case may be, of the entity to entities to which it relates for the
periods set forth therein, in each case in accordance with generally accepted
accounting principles consistently applied during the periods involved, except
in each case as may be noted therein, subject to normal year-end audit
adjustments in the case of unaudited statements.
(g) Certain Changes. Since December 31, 1998, there has been (i) no
material adverse change in the financial condition, assets, liabilities, income
or operations of First ▇▇▇▇▇▇▇, or any of its Subsidiaries, (ii) no material
change in the organization or key personnel of First ▇▇▇▇▇▇▇ or any of its
Subsidiaries; (iii) no material damage, destruction or casualty loss with
respect to property owned or leased by First ▇▇▇▇▇▇▇ (whether or not covered by
insurance) which affected or could affect the business or financial condition or
results of First ▇▇▇▇▇▇▇; (iv) no changes in the authorized or issued shares of
First ▇▇▇▇▇▇▇ Common Stock and no declaration or payment of distributions with
respect to the First ▇▇▇▇▇▇▇ Common Stock or redemption or repurchase of any
such shares, except for Permitted Dividends; or (v) no acquisition by First
▇▇▇▇▇▇▇ or any of its Subsidiaries of the assets or more than 5% of the
outstanding voting capital stock of another bank or trust company.
(h) Taxes. First ▇▇▇▇▇▇▇ and its Subsidiaries have filed when due all
returns ("Returns") for and paid in full all state, federal and local Taxes to
the extent such filings and payments were required prior to the date of this
Reorganization Agreement. Such filings comply with all applicable laws and are
true, correct and complete in all material respects. Any amounts set up as
accruals or reserves in the audited financial statements of First ▇▇▇▇▇▇▇ are
sufficient for the payment of all Taxes, whether or not presently being asserted
or assessed, the liability for which has arisen from any action of First ▇▇▇▇▇▇▇
or any of its Subsidiaries prior to the dates of such financial statements. No
claims are currently being made by any taxing authority with respect to any
Return, and First ▇▇▇▇▇▇▇ has no knowledge of any basis for any such claims.
Proper and accurate amounts have been withheld and remitted by First ▇▇▇▇▇▇▇ and
its Subsidiaries from and for their employees for all prior periods in
compliance with the tax withholding provisions of applicable federal, state and
local law. First ▇▇▇▇▇▇▇ and its Subsidiaries have not had any Tax deficiencies
proposed or assessed against it and has not executed any waiver or extended the
statute of limitations on the audit of any Return or the assessment or
collection of any Tax. First ▇▇▇▇▇▇▇ and its Subsidiaries have not made any
payment, nor is either obligated to make any
14
payment, nor is it a party to any agreement that under certain circumstances
could obligate it to make any payment, that would not be deductible under Code
Sections 280G or 162(m).
(i) Litigation. No action, suit, investigation, claim or proceeding of
any nature or kind whatsoever, whether civil, criminal or administrative, by or
before any governmental body or arbitrator ("Litigation") is pending or, to the
knowledge of First ▇▇▇▇▇▇▇, threatened against or affecting First ▇▇▇▇▇▇▇, or
any of its Subsidiaries, or their respective businesses, business assets, Common
Stock, or any of the transactions contemplated by this Reorganization Agreement,
and, to the knowledge of First ▇▇▇▇▇▇▇, there is no basis for any Litigation.
There is presently no outstanding judgment, decree or order of any governmental
body against or affecting First ▇▇▇▇▇▇▇ or any of its Subsidiaries, or their
respective businesses, business assets, Common Stock, or any of the transactions
contemplated by this Reorganization Agreement.
(j) Compliance with Laws. First ▇▇▇▇▇▇▇ and each of its Subsidiaries are
in compliance in all material respects with all laws and regulations applicable
to its operations or with respect to which compliance is a condition of engaging
in the business thereof. First ▇▇▇▇▇▇▇ and the Bank have paid all assessments
and filed all reports and statements required to be filed with respect thereto
under the rules and regulations of the Comptroller.
(k) Agreements with Banking Authorities. Neither First ▇▇▇▇▇▇▇ nor any of
its Subsidiaries is a party to any written agreement or memorandum of
understanding with, or a party to any commitment letter or similar undertaking
to, or is subject to any order or directive by, the Federal Reserve or the
Comptroller or any other regulatory agency which restricts its activities in any
manner, or in any manner relates to the capital adequacy, credit policies or
management of First ▇▇▇▇▇▇▇ or any of its Subsidiaries, nor has First ▇▇▇▇▇▇▇ or
any of its Subsidiaries been advised by any such regulatory agency that it is
contemplating, issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, directive, agreement, memorandum of
understanding, commitment letter or similar undertaking.
(l) Regulatory Reports. First ▇▇▇▇▇▇▇ and its Subsidiaries have made
available for inspection by BT Financial (i) copies of all reports, if any, by
First ▇▇▇▇▇▇▇ or its Subsidiaries to the Comptroller and (ii) all material
notices, reports and review letters received from the Federal Reserve or
Comptroller or any other governmental agency.
(m) Loans. Each loan outstanding on the books of the Bank is reflected
correctly in all material respects by the loan documentation relating thereto,
was made in the ordinary course of business, was not known to be uncollectible
at the time it was made, and was made in accordance with the Bank's standard
loan policies. The Bank has not received notice from any obligor on any such
loan of a dispute with respect to the loan or that the loan may be unenforceable
against the obligor. All loans sold by the Bank, including whole loans and
participations, were sold without recourse.
15
As of December 31, 1998, except as set forth in Schedule 4.01(m)
attached hereto, the Bank: (i) had no loans, of any type or character, in its
portfolio (A) exceeding its lending limits under applicable provisions of
Pennsylvania and federal law, or (B) in violation of Regulation 0 or 12 C.F.R.
Part 215, or similar provisions under Pennsylvania law; (ii) had no loans, of
any type or character, in its portfolio in excess of $100,000 which were or
should have been as of such date (A) considered non-performing or placed on a
non-accrual status or (B) classified by as other loans specially mentioned,
substandard, doubtful or loss loans, except in any case such loans as were
listed on the Bank's most recent internal classified asset report, a copy of
which has been made available to BT Financial. For purposes of this
Reorganization Agreement, "non-performing" and "non-accrual" shall mean any loan
delinquent for 90 days or more as to the payment of interest and/or principal.
(n) Loan Loss Reserve. The loan loss reserve maintained by the Bank for
all loans in its portfolio is in the best judgment of Bank management, adequate
in all material respects under the requirements of generally accepted accounting
principles and practices within the banking industry to cover all material known
and anticipated risks of nonpayment with regard to the Bank's loan portfolio.
(o) Core Deposits. The Bank has delivered to, or made available for
inspection by, BT Financial a summary of the total amounts held by depositors
that in the aggregate each have less than $100,000 on deposit with the Bank
("Core Deposits"). In addition, the Bank has delivered to, or made available
for inspection by, BT Financial a complete list of all depositors that have
monies on deposit at the Bank that are not Core Deposits.
(p) Real Property. First ▇▇▇▇▇▇▇ and its Subsidiaries have good and
marketable title to the real property (including real estate owned or acquired
through foreclosure) listed in Schedule 4.01(p) ("Owned Real Property"), free
and clear of all material liens, leases, security interests, title retention
agreements, encumbrances, restrictions, conditions, charges, equities and
claims, except those referred to in First ▇▇▇▇▇▇▇'▇ statement of financial
condition dated December 31, 1998 or the notes thereto, liens for current Taxes
not yet due and payable, any unfilled mechanics' liens and such encumbrances and
imperfections of title, if any, as are not substantial in character or amount or
do not otherwise materially impair First ▇▇▇▇▇▇▇ or any of its Subsidiaries, as
the case may be. The present uses of the Owned Real Property are in compliance
with the present zoning classifications assigned to such real property, and all
improvements constructed on the land included in the Owned Real Property have
been constructed in all material respects in accordance with the requirements of
all applicable building, health, safety, environmental, zoning and other
federal, state and local laws, ordinances, regulations, codes, licenses or
permits applicable at the time of such construction, do not contain any defect
in design or construction or otherwise, and have access to existing highways,
roads and utility services. Neither First ▇▇▇▇▇▇▇ nor any of its Subsidiaries
have received any notice or request from any governmental authority, utility,
insurer, board of fire authorities or similar organization for the performance
of any work or alteration with respect to the Owned Real Property or for the
termination or limitation of any access, services or insurance with respect
thereto. All such
16
Owned Real Property is adequately insured against loss, except with respect to
Environmental Conditions. Neither First ▇▇▇▇▇▇▇ nor any of its Subsidiaries own
any real property not listed in Schedule 4.01(p).
(q) Environmental. Except as disclosed in Schedule 4.01(q) attached
hereto:
(i) To the best knowledge of First ▇▇▇▇▇▇▇ and its Subsidiaries, there
are no Environmental Conditions. The term "Environmental Condition"
means (x) the presence in surface water, groundwater, drinking water
supply, land surface, subsurface strata, above-ground or underground
storage tanks or other containers, or ambient air of any pollutant,
contaminant, industrial waste, hazardous waste, polychlorinated
biphenyls, radioactive materials, toxic or hazardous substances
("Hazardous Substances") or (y) any violation of any statute,
ordinance, regulation, administrative order, judicial order or decree
or other governmental requirement relating to the emission, discharge,
deposit, disposal, leaching, migration or release of any Hazardous
Substance into the environment or the generation, treatment, storage,
transportation or disposal of any Hazardous Substance (i) arising out
of or otherwise related to the operations or other activities
(including the disposition of such materials or substances) of First
▇▇▇▇▇▇▇, or any of its Subsidiaries, or of any predecessor in title,
interest or line of business to First ▇▇▇▇▇▇▇, conducted or undertaken
prior to the Closing, or (ii) existing at or prior to the Closing at
any Owned Real Property, any real property leased by First ▇▇▇▇▇▇▇, or
any of its Subsidiaries, ("Leased Real Property"), any real property
securing outstanding loans ("Secured Real Property"), or any property
previously owned, leased, occupied, used or foreclosed upon ("Prior
Property");
(ii) No investigation, administrative order, consent order, agreement,
litigation or settlement with respect to any Environmental Condition
is proposed, threatened or in existence, and First ▇▇▇▇▇▇▇ and its
Subsidiaries have not received any communication from or on behalf of
any governmental authority that alleges that any such Environmental
Condition exists;
(iii) First ▇▇▇▇▇▇▇ and its Subsidiaries have obtained, hold, and will
maintain all permits, licenses, authorizations, consents, approvals,
waivers, variances or exemptions ("Governmental Approvals") issued by
any federal, state, local, foreign, regional or other judicial,
governmental, administrative or regulatory authority or
instrumentality ("Governmental Authority") required under any federal,
state, local or foreign statutory or common law, rule, regulation,
ordinance, code, policy, guidelines or Governmental Approvals,
relating to Environmental Law for the ownership, use, occupation,
operation and other activities of First ▇▇▇▇▇▇▇ and any of its
Subsidiaries, any Owned Real Property, Leased Real Property, Secured
Real Property and Prior Property. First ▇▇▇▇▇▇▇
17
and its Subsidiaries have made to any Governmental Authority all
filings, reports, registrations, notices or other submissions
("Governmental Filings") required under Environmental Laws with
respect to the ownership, use, occupation, operation and other
activities of First ▇▇▇▇▇▇▇ and any of its Subsidiaries and the Owned
Real Property, Leased Real Property, Secured Real Property and any
Prior Property. Such required Governmental Approvals and Governmental
Filings are listed on Schedule 4.01(q)(iii) attached hereto. The term
"Environmental Law" means all statutory and common law, rules,
regulations, ordinances, Governmental Approvals, guidelines, policies,
judicial or administrative orders or decrees of any federal, state or
local Governmental Authority relating to the protection of human
health and safety or the environment.
(iv) Neither First ▇▇▇▇▇▇▇ nor any of its Subsidiaries have
transported or disposed of any Hazardous Substances or arranged for
the transportation or disposal of such Hazardous Substances to any
location which is listed or to the knowledge of First ▇▇▇▇▇▇▇ or any
of its Subsidiaries proposed for listing under CERCLA, a comparable
state statute or other Environmental Law, or which is the subject of
federal, state or local enforcement actions or other investigations
which may lead to claims against First ▇▇▇▇▇▇▇ or any of its
Subsidiaries for clean-up costs, remedial work, damages to natural
resources or for personal injury claims, including, but not limited
to, claims under CERCLA. None of the Owned Real Property, Leased Real
Property, Secured Real Property or Prior Property is listed or, to the
knowledge of First ▇▇▇▇▇▇▇, or any of its Subsidiaries, proposed for
listing under CERCLA or a comparable state or other Environmental Law.
(v) Each of the Governmental Approvals set forth in Schedule
4.01(q)(iii) is in full force and effect and is final, any fixed
period for appeal or review having elapsed (other than as to ongoing
compliance or modification during the term of such Governmental
Approval as otherwise provided by law or as indicated in Schedule
4.01(q)(iii)). No such Governmental Approval is subject to any pending
suit, action, investigation of which First ▇▇▇▇▇▇▇ or its Subsidiaries
has notice, proceeding or appeal (whether judicial, administrative or
otherwise) and, to the best of First ▇▇▇▇▇▇▇'▇ knowledge, no such
matter is threatened.
(vi) To the knowledge of First ▇▇▇▇▇▇▇ or its Subsidiaries, with
respect to First ▇▇▇▇▇▇▇'▇ or its Subsidiaries' operations or other
activities, any Owned Real Property, Leased Real Property, Secured
Real Property or Prior Property, First ▇▇▇▇▇▇▇ and each of its
Subsidiaries have complied in all material respects with, and
currently are in compliance in all material respects with: (A) the
terms and conditions of all Governmental Approvals issued or required
pursuant to any Environmental Law, and (B) all other limitations,
restrictions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any
18
Environmental Law, or in any written notice, order, or demand letter
issued, entered, promulgated, or approved pursuant to any
Environmental Law;
(vii) Neither First ▇▇▇▇▇▇▇ nor any of its Subsidiaries have received
any notice of violation or other notification from any Governmental
Authority, or any written notice from any third party, alleging that
First ▇▇▇▇▇▇▇ or any of its Subsidiaries is now or has been in
violation of any Environmental Law;
(viii) To the knowledge of First ▇▇▇▇▇▇▇ and its Subsidiaries, no
ozone depleting substances ("ODS"), polychlorinated biphenyls
("PCBs"), asbestos containing material ("ACM"), or urea formaldehyde
insulation ("UFI") is present on or at any Owned Real Property, Leased
Real Property, Secured Real Property or any Prior Property and First
▇▇▇▇▇▇▇ and each of its Subsidiaries have complied with all regulatory
requirements relating to the storage, removal, disposal or release, if
any, of ODS, ACM, PCB, or UFIs which currently are or may in the past
have been located on or at any Owned Real Property, Leased Real
Property, Secured Real Property and any Prior Property.
(ix) To the knowledge of First ▇▇▇▇▇▇▇ and each of its Subsidiaries,
there are not now any underground or aboveground storage tanks and
associated piping ("Storage Tanks") on or at any Owned Real Property,
Leased Real Property, Secured Real Property or Prior Property, nor has
First ▇▇▇▇▇▇▇ nor any of its Subsidiaries owned or operated Storage
Tanks at any time.
(x) With respect to the ownership, use, occupation, operation and
other activities of First ▇▇▇▇▇▇▇, any Owned Real Property, Leased
Real Property, Secured Real Property and any Prior Property, neither
First ▇▇▇▇▇▇▇ nor any of its Subsidiaries have received any written
request for information from any Governmental Authority or other
Person related to any site which is, or may be, subject to actions for
removal, response, remediation or cleanup of Hazardous Substances,
including, but not limited to, any information request pursuant to
CERCLA, comparable state statutes, or other Environmental Law;
(xi) To the knowledge of First ▇▇▇▇▇▇▇, neither First ▇▇▇▇▇▇▇ nor any
of its Subsidiaries, nor any other Person ever caused or permitted any
Hazardous Substances to be placed, stored, treated, handled or located
on, under or at any Owned Real Property, Leased Real Property, Secured
Real Property or Prior Property or any part thereof other than in the
ordinary course of business and in compliance with all Environmental
Laws.
(xii) First ▇▇▇▇▇▇▇ and its Subsidiaries have complied in all material
respects with all applicable provisions of any Environmental Laws that
condition, restrict or prohibit the transfer, sale, lease or closure
of any property for environmental
reasons; no environmental lien has attached to any portion of First
▇▇▇▇▇▇▇ or any of its Subsidiaries or any Owned Real Property, Leased
Real Property, Secured Real Property or Prior Property, and no
governmental actions have been taken or are in progress that could
subject any or all of the foregoing to any such lien.
(xiii) There have been no past and there are no pending or
contemplated claims by First ▇▇▇▇▇▇▇ or any of its Subsidiaries, under
any Environmental Laws based on actions of others that may have
impacted any Owned Real Property, Leased Real Property, Secured Real
Property or Prior Property, and neither First ▇▇▇▇▇▇▇ nor any of its
Subsidiaries have entered into any agreement with any Person regarding
liabilities or responsibilities with respect to (i) any Environmental
Law, (ii) remedial action or (iii) other environmental expense
(including contingent liabilities).
(xiv) Neither First ▇▇▇▇▇▇▇ nor any of its Subsidiaries have
agreed to retain, assume or guarantee the costs of any investigation,
removal, response, remediation or cleanup of any property.
(xv) First ▇▇▇▇▇▇▇ and its Subsidiaries have provided copies of all
material reports, documents and other information pertaining to
compliance with Environmental Laws and environmental matters or
liabilities arising out of, resulting from or in connection with the
operations of First ▇▇▇▇▇▇▇ or any of its Subsidiaries, any Owned Real
Property, Leased Real Property, Secured Real Property or Prior
Property.
(r) Personal Property. All personal property used by First ▇▇▇▇▇▇▇ and
its Subsidiaries in its business is either owned or leased by First ▇▇▇▇▇▇▇ or
its Subsidiaries and is suitable for the operations and business as currently
conducted by First ▇▇▇▇▇▇▇ and its Subsidiaries.
(s) Leases. All leased real property and leased personal property of
First ▇▇▇▇▇▇▇ and its Subsidiaries is listed in Schedule 4.01(s) attached
hereto. Except as disclosed in Schedule 4.01(s), no consents or approvals are
required under the leases for such property in connection with the transactions
contemplated by this Reorganization Agreement.
(t) Material Contracts. True, correct and complete copies of all material
contracts, agreements, plans, loans, leases, indentures, mortgages, instruments,
or other commitments, arrangements, understandings, letters of credit or
undertakings, oral or written, formal or informal, to which First ▇▇▇▇▇▇▇ or any
of its Subsidiaries is a party or otherwise bound or to which its assets may be
affected have been submitted or made available to BT Financial or are included
as part of Schedule 4.01(t) (hereinafter referred to individually as a
"Contract" and collectively as the "Contracts"). There is no breach or default
(or an event which, with notice or lapse of time or both, would constitute a
default) by First ▇▇▇▇▇▇▇ or any of its Subsidiaries of or with respect to any
provision of any Contract to which First ▇▇▇▇▇▇▇ is a party that could have a
19
material adverse effect upon the financial condition, operations, results of
operations or business of First ▇▇▇▇▇▇▇. All such Contracts, including but not
limited to all contracts relating to the purchase and sale of loans, are or will
be assignable to BT Financial or BT Financial, as the case may be, without
further action thereby effective as of the Closing Date, except as listed in
Schedule 4.01(t). Neither First ▇▇▇▇▇▇▇ nor any of its Subsidiaries is
currently renegotiating any Contract.
(u) Insurance. Neither First ▇▇▇▇▇▇▇ nor any of its Subsidiaries is in
default with respect to any provisions of any liability or other forms of
insurance held by each or has failed to give any notice or present any claim
thereunder in a due and timely fashion. All polices of insurance are in full
force and effect and are carried in an amount and are otherwise adequate to
protect First ▇▇▇▇▇▇▇ from any material adverse loss on a consolidated basis.
Neither First ▇▇▇▇▇▇▇ nor any of its Subsidiaries have been denied any
application for insurance or had any policy of insurance terminated during the
past three years, nor has First ▇▇▇▇▇▇▇ or any of its Subsidiaries been notified
of any pending termination.
(v) Employee Benefits.
(i) Benefit Plans; Company Plans. Schedule 4.01(v) discloses all
written and unwritten "employee benefit plans" within the meaning of
Section 3(3) of ERISA, and any other written and unwritten profit
sharing, pension, savings, deferred compensation, consultant, bonus,
fringe benefit, insurance, medical, medical reimbursement, life,
disability, accident, post-retirement health or welfare benefit, stock
option, stock purchase, sick pay, vacation, employment, severance,
termination or other incentive, welfare or employee benefit plan,
agreement, contract, policy, trust fund or arrangement (each a
"Benefit Plan"), whether or not funded and whether or not terminated,
(i) maintained or sponsored by First ▇▇▇▇▇▇▇ or any of its
Subsidiaries, or (ii) with respect to which First ▇▇▇▇▇▇▇ or any of
its Subsidiaries has or may have liability or is obligated to
contribute, or (iii) that otherwise covers any of the current or
former employees of First ▇▇▇▇▇▇▇ or any of its Subsidiaries or their
beneficiaries, or (iv) as to which any such current or former
employees or their beneficiaries participated or were entitled to
participate or accrue or have accrued any rights thereunder (each, a
"Company Plan"). For each Company Plan, to the extent applicable to
each such Company Plan, complete copies of the following have been
delivered to BT Financial (but in any event, no later than seven (7)
days prior to the Closing Date): (i) the documents embodying the
Company Plans, including the plan documents, all amendments thereto,
the related trust or funding agreements, investment management
agreements, administrative service contracts, insurance contracts,
union or trade agreements and, in the case of any unwritten Company
Plans, written descriptions thereof; (ii) annual reports including
Forms 5500 and all schedules thereto for the last three years; (iii)
financial statements for the last three years; (iv) actuarial reports,
if applicable, for the last three years; and (v) each
20
communication (other than routine communications) received by First
▇▇▇▇▇▇▇ or any of its Subsidiaries from or furnished by First ▇▇▇▇▇▇▇
or any of its Subsidiaries to the Service, DOL, PBGC or other
governmental authorities. First ▇▇▇▇▇▇▇ and its Subsidiaries have also
furnished to BT Financial a copy of the current summary plan
description and each summary of material modification prepared in the
last three years for each Company Plan, and all employee manuals,
handbooks, policy statements and other written materials given to
employees relating to any Company Plans. No oral or written
representations or commitments inconsistent with such written
materials have been made to any employee of by any member of the
Company Group or any employee or agent thereof.
(ii) Company Group Matters. First ▇▇▇▇▇▇▇ has never been a member of a
controlled group of corporations within the meaning of Sections
414(b), (c), (m) or (o) of the Code.
(iii) Compliance. Each of the Company Plans and all related trusts,
insurance contracts and funds have been created, maintained, funded
and administered in all material respects in compliance with all
applicable Laws including, without limitation, all applicable
requirements of the Code and any predecessor federal income tax laws,
ERISA, the health care continuation requirements of COBRA, and any
applicable collective bargaining agreements. Without limiting the
generality of the foregoing, First ▇▇▇▇▇▇▇ and its Subsidiaries have
provided all notices and other correspondence to employees and former
employees required by the health care continuation provisions of
COBRA. Each of the Company Plans and all related trusts, insurance
contracts and funds have also been created, maintained, funded and
administered in all material respects in compliance with applicable
law, the plan document, trust agreement, insurance policy or other
writing creating the same or applicable thereto. To the knowledge of
First ▇▇▇▇▇▇▇ and its Subsidiaries, no Company Plan is or is proposed
to be under audit or investigation, and no completed audit of any
Company Plan has resulted in the imposition of any Tax, fine or
penalty.
(iv) Qualified Plans. Schedule 4.01(v) discloses each Company Plan
that purports to be a qualified plan under Section 401(a) of the Code
and exempt from United States federal income tax under Section 501(a)
of the Code (a "Qualified Plan"). Each Qualified Plan has received a
determination letter (or opinion or notification letter, if
applicable) from the Service that such plan is qualified under Section
401(a) of the Code and exempt from federal income tax under Section
501(a) of the Code. No Qualified Plan has been amended since the date
of the most recent such letter in a manner that might adversely affect
the qualification of such plan under Sections 401(c) and 501(a) of the
Code. No member of the Company Group, nor any fiduciary of any
Qualified Plan, nor any agent of any of
21
the foregoing, has done anything that would adversely affect the
qualified status of a Qualified Plan or the qualified status of any
related trust.
(v) Defined Benefit Plans; Multi-employer Plans. Schedule 4.01(v)
discloses each Company Plan that is a defined benefit plan as defined
in Section 3(35) of ERISA (a "Defined Benefit Plan"). No Company Plan
is a multi employer plan as defined in Section 3(37) or 4001(a)(3) of
ERISA. Neither First ▇▇▇▇▇▇▇ nor any of its Subsidiaries have a
material liability for any Company Plan that is not accrued on the
December 31, 1998 Balance Sheet or, that has arisen after December 31,
1998 and on and before the Closing.
(vi) Prohibited Transactions; Fiduciary Duties; Post-Retirement
Benefits. No prohibited transaction (within the meaning of Section 406
of ERISA and Section 4975 of the Code) with respect to any Company
Plan exists or has occurred that could subject First ▇▇▇▇▇▇▇ or any of
its Subsidiaries, directly or indirectly, to any material liability or
Tax under Part 5 of Title I of ERISA or Section 4975 of the Code. No
reportable event (within the meaning of Section 4043(b) of ERISA) with
respect to any Company Plan exists or has occurred that could result
in any tax or liability material to First ▇▇▇▇▇▇▇ or any of its
Subsidiaries. No member of the Company Group, nor any administrator or
fiduciary of any Company Plan, nor any agent of any of the foregoing,
has engaged in any transaction or acted or failed to act in a manner
that could subject First ▇▇▇▇▇▇▇ or any of its Subsidiaries, directly
or indirectly, to any material liability for a breach of fiduciary or
other duty under ERISA or any other applicable law. With the exception
of the requirements of Section 4980B of the Code, no post-retirement
benefits are provided under any Company Plan that is a welfare benefit
plan as described in ERISA Section 3(1).
(vii) Except as set forth on Schedule 4.01(v), the consummation of the
transactions contemplated hereby will not create, accelerate or
increase any liability under any Company Plan because of the creation,
acceleration or increase of any rights or benefits to which employees
are entitled hereunder, and no payment required under any Company Plan
in connection with the transactions contemplated hereby shall be non-
deductible for federal income tax purposes by reason of Section 280G
of the Code.
(w) Labor Relations. There are no pending or threatened labor disputes
with any employees of First ▇▇▇▇▇▇▇ or employees of any of its Subsidiaries.
Neither First ▇▇▇▇▇▇▇ nor any of its Subsidiaries are a party to a collective
bargaining agreement with any of its employees. Neither First ▇▇▇▇▇▇▇ nor any of
its Subsidiaries has existing employment contracts with any of its current or
former employees, directors or officers, with the exception of those agreements
listed in Schedule 4.01(w).
22
(x) Related Party Transactions. Neither First ▇▇▇▇▇▇▇ nor any of its
Subsidiaries have current contractual arrangements with or commitments to or
from any officers, directors or employees of each other than such as are
terminable at will. All current extensions of credit to the shareholders,
officers, directors and employees of First ▇▇▇▇▇▇▇ or any of its Subsidiaries as
well as business organizations and individuals associated either have been made
in the ordinary course of First ▇▇▇▇▇▇▇'▇ or any of its Subsidiaries' business
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other banking
customers, and did not, at the time they were entered into, involve more than
the normal risk of collectibility or present other unfavorable features and are
in compliance with all applicable regulations of the FDIC. Since December 31,
1992, all transactions with the shareholders, officers, directors and employees
of have complied in all material respects with the rules of the FDIC regarding
such transactions, including delivery of all reports required thereunder. The
transactions contemplated by this Reorganization Agreement will not (either
alone, or upon the occurrence of any act or event, lapse of time or the giving
of notice or failure to cure) result in any payment (severance or otherwise)
becoming due from any of the Parties to any director, officer or employee of
First ▇▇▇▇▇▇▇ or any of its Subsidiaries, except as contemplated herein.
(y) Fidelity Bonds. First ▇▇▇▇▇▇▇ and each of its Subsidiaries maintained
continuously fidelity bonds insuring it against acts of dishonesty by each of
its employees in aggregate amounts as are customary, usual and prudent for
banking institutions of its size, which coverage currently is $1,000,000.00.
Since December 31, 1992, there have been no claims under such bonds with the
exception of the claim disclosed in Schedule 4.01(y), and neither First ▇▇▇▇▇▇▇
nor any of its Subsidiaries is aware of any facts which would form the basis of
a claim under such bonds. Neither First ▇▇▇▇▇▇▇ nor any of its Subsidiaries has
reason to believe that its fidelity coverage will not continue to be available
on substantially the same terms as its existing coverage.
(z) Representations Not Misleading. No representation or warranty by
First ▇▇▇▇▇▇▇ or any of its Subsidiaries in this Reorganization Agreement
contains, and no written statement, exhibit or schedule furnished to BT
Financial by or on behalf of First ▇▇▇▇▇▇▇ or any of its Subsidiaries under this
Reorganization Agreement will contain as of the date thereof, any untrue
statement of a material fact or omits, or will omit, to state a material fact
necessary to make the statements contained herein or therein not misleading in
any material respect, when taken as a whole.
(aa) Information Provided by First ▇▇▇▇▇▇▇. All information to be
provided in writing by First ▇▇▇▇▇▇▇ or any of its Subsidiaries for use in the
Joint Proxy Statement/Prospectus in connection with each of the meetings of
shareholders of First ▇▇▇▇▇▇▇ and BT Financial contemplated hereby or in any
application made by BT Financial to the Service or to any other governmental or
regulatory body in connection with the Merger, and the information to be
provided in writing by First ▇▇▇▇▇▇▇ or any of its Subsidiaries for use in the
Registration Statement, including any prospectus contained therein, will comply
in all material respects with
23
applicable laws and will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made
therein, in light of the circumstances under which they are made, not
misleading.
(bb) Consents and Approvals. Except for: (i) the filing with any federal
or state governmental authority of a Joint Proxy Statement/Prospectus, a
Registration Statement and any other applicable securities filings relating to
the issuance of BT Financial Common Stock and each of the meetings of the
shareholders of First ▇▇▇▇▇▇▇ and BT Financial; (ii) Regulatory Approvals; (iii)
the approval of the shareholders of First ▇▇▇▇▇▇▇; (iv) the approval of the
shareholders of BT Financial; (v) the obtaining of third party consents as set
forth in the Schedules attached hereto; (vi) the expiration of any regulatory
waiting period and (vii) the notification of AMEX and NASDAQ, no consents or
approvals of or filings or registrations with any third party or any public
body, agency or authority are necessary in connection with the execution and
delivery by First ▇▇▇▇▇▇▇ of this Reorganization Agreement and its performance
of the transactions contemplated hereby.
(cc) Investments. Except as set forth in Schedule 4.01(cc) attached
hereto, the investments reflected in First ▇▇▇▇▇▇▇'▇ statement of financial
condition as of December 31, 1998 are a true, correct and complete list of the
investments of First ▇▇▇▇▇▇▇.
(dd) Intellectual Property. First ▇▇▇▇▇▇▇ and its Subsidiaries have no
(i) patents, trademarks, tradenames, and copyrights and applications therefor or
(ii) trade secrets (collectively referred to as the "Intellectual Property").
No claim, suit or action is pending or, to the knowledge of First ▇▇▇▇▇▇▇ or any
of its Subsidiaries, threatened alleging that First ▇▇▇▇▇▇▇ or any of its
Subsidiaries is infringing upon the intangible property rights of others, or
that their use of the Intellectual Property infringes or conflicts with the
rights of others.
(ee) Minute Books. The minute books of First ▇▇▇▇▇▇▇ and each of its
Subsidiaries, which have been and will continue to be made available through the
Closing Date to BT Financial, contain true, correct and complete records of all
meetings of the shareholders, the Board of Directors and all committees thereof
and accurately reflect all of the corporate action of the shareholders, the
Board of Directors and all committees thereof.
(ff) Reverse Repurchase Agreements. Neither First ▇▇▇▇▇▇▇ nor any of its
Subsidiaries have any agreements pursuant to which purchased securities are
subject to an agreement to resell.
(gg) Shareholder and FDIC Reports. First ▇▇▇▇▇▇▇ and its Subsidiaries
have delivered to, or made available for inspection by, BT Financial copies of
all reports to its shareholders and the FDIC made by it with respect to the
three (3) years ended December 31, 1998 and for all calendar quarters subsequent
thereto. All such reports do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under which
they were made, not misleading.
24
(hh) Deposit Insurance. The deposits of the Bank are insured by the Bank
Insurance Fund of the FDIC in accordance with the provisions of the FDIA, and
has paid all assessments and filed all reports required by the FDIA.
(ii) Pooling; Reorganization. First ▇▇▇▇▇▇▇ is not aware of any reason
why the Merger may not qualify for pooling-of-interests accounting treatment or
as a reorganization under Section 368(A) of the Code.
(jj) Year 2000 Status. First ▇▇▇▇▇▇▇ and each of its Subsidiaries have
conducted a thorough inventory and assessment of the hardware, software and
embedded microcontrollers in noncomputer equipment (collectively, the "Computer
Systems") used by First ▇▇▇▇▇▇▇ and its Subsidiaries in its business, in order
to determine which parts of the Computer Systems are not Year 2000 Compliant (as
defined below) and to estimate the cost of rendering such Computer Systems Year
2000 Compliant prior to January 1, 2000 or such earlier date on which the
Computer Systems may shut down or may produce incorrect calculations or
otherwise malfunction without becoming totally inoperable. Based on the above
inventory and assessment, the estimated total cost of rendering the Computer
Systems Year 2000 Compliant is $100,000, which expenditure has been included in
the budget adopted by First ▇▇▇▇▇▇▇ for 1999.
4.02. Representations and Warranties of BT Financial.
BT Financial represents and warrants to First ▇▇▇▇▇▇▇ as follows:
(a) Organization and Capitalization. BT Financial is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania and has full power and authority to carry on its
business as it is now being operated and to carry out the transactions
contemplated by this Reorganization Agreement. The authorized capital stock of
BT Financial consists of 20,000,000 shares of common stock having a par value of
$5.00 per share, of which 12,985,292 shares are issued and outstanding as of the
date hereof and 2,000,000 shares of preferred stock, none of which are issued
and outstanding. All issued and outstanding shares of BT Financial Common Stock
are validly issued, fully paid and nonassessable and all shares of BT Financial
Common Stock to be issued in the Merger shall be validly issued, fully paid and
nonassessable.
(b) Laurel Bank Organization and Capitalization. Laurel Bank is a bank
and trust company duly organized, validly existing and in good standing under
the laws of the Commonwealth of Pennsylvania and is a member of the Federal
Reserve System. Laurel Bank has full power and authority to carry on its
business as it is now being operated and to carry out the transactions
contemplated by this Reorganization Agreement. The authorized, issued and
outstanding capital stock of Laurel Bank consists of 981,864 shares of common
stock having a par value of $5.00 per share. All issued and outstanding shares
of Laurel Bank common stock are validly issued, fully paid and nonassessable and
are owned of record and beneficially by BT Financial.
25
(c) Authority for Transactions. This Reorganization Agreement has been,
and the Articles of Merger and Certificate of Merger, when executed and
delivered, will have been, duly and validly authorized, executed and delivered
by BT Financial, subject only to receipt of Regulatory Approvals, and each
constitute and will constitute the valid and binding obligations of BT Financial
and are and will be enforceable in accordance with their respective terms.
(d) No Conflicts. Neither the execution, delivery and performance of this
Reorganization Agreement by BT Financial, nor the consummation of the
transactions contemplated hereby, nor compliance by BT Financial with any of the
provisions hereof will (i) violate, or conflict with, or result in a breach of
any provisions of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result in a right
of termination or acceleration under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
BT Financial or any of its Subsidiaries under any of the terms, conditions or
provisions of, (A) the articles of incorporation or bylaws, as amended, of BT
Financial, or (B) any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which BT Financial or any
of its Subsidiaries is a party or by which any of them is bound or to which any
of their respective properties or assets may be subject, except for such
violations, conflicts, breaches, defaults, terminations, accelerations, rights
or creations which would not, in the aggregate, have a material adverse effect
on BT Financial's business or financial condition on a consolidated basis, or
(ii) subject to compliance with all applicable statutes and regulations, violate
any judgment, ruling, order, writ, injunction, decree, statute, rule or
regulation applicable to them or any of their respective properties or assets.
(e) Financial Statements and SEC Documents. BT Financial's Annual Reports
on Form 10-K for the fiscal years ended December 31, 1996, 1997 and 1998, and
all other reports, registration statements, definitive proxy statements or
information statements filed or to be filed by it or any of its Subsidiaries
subsequent to December 31, 1995 under the Securities Act of 1933, as amended
(together with the rules and regulations thereunder, the "Securities Act") or
under Sections 13(a), 13(c) 14(d) and 15(d) of the Securities Exchange Act of
1934, as amended (together with the rules and regulations thereunder, the
"Exchange Act"), in the form filed, or to be filed, with the SEC (collectively,
the "SEC Documents") (i) complied or will comply in all material respects as to
form with the applicable requirements under the Securities Act or the Exchange
Act, as the case may be, and (ii) did not and will not, at the time of such
filing, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading; and each of the balance sheets in or incorporated by reference into
any such SEC Document (including the related notes and schedules thereto) fairly
presents and will fairly present the financial position of the entity or
entities to which it relates as of its date and each of the statements of income
and changes in stockholders' equity and cash flows or equivalent statements in
such report and documents (including any related notes and schedules thereto)
fairly presents and will fairly present the results of operations, changes in
stockholder's equity and changes in cash flows, as the case may be, of the
entity or entities to which it relates
26
for the periods set forth therein, in each case in accordance with generally
accepted accounting principles consistently applied during the periods involved,
except in each case as may be noted therein, subject to normal year-end audit
adjustments in the case of unaudited statements.
(f) Certain Changes. Since December 31, 1998, there has been: (i) no
material adverse change in the consolidated financial condition, assets,
liabilities, income or operations of BT Financial taken as a whole; (ii) no
material adverse change in the organization or key personnel of BT Financial or
any of its Subsidiaries, except for changes in the ordinary course of business,
none of which, individually or in the aggregate, has been material to the
business or financial condition of BT Financial on a consolidated basis; (iii)
no material damage, destruction or casualty loss with respect to property owned
or leased by BT Financial or any of its Subsidiaries (whether or not covered by
insurance) which affected or could affect the business or financial condition or
results of BT Financial on a consolidated basis; or (iv) no acquisition by BT
Financial of the assets or more than 5% of the outstanding voting capital stock
of another savings association, bank or company.
(g) Litigation. Except for any matters referred to in its financial
statements referred to in Section 4.02(e), (i) there are no suits, actions,
investigations (formal or informal), proceedings or claims pending or, to the
knowledge of BT Financial, threatened against BT Financial or any of its
Subsidiaries or their respective assets or business or against their respective
officers or directors (in their capacity as such) in law or at equity or before
any governmental agency which are reasonably expected by BT Financial to have a
material adverse effect on the business, properties, assets, operations or
liabilities of BT Financial on a consolidated basis, or its right to conduct its
business as presently conducted, and (ii) neither BT Financial nor any of its
Subsidiaries is presently subject to any injunction, order or other decree of
any court or other governmental agency of competent jurisdiction.
(h) Compliance with Laws. To the knowledge of BT Financial, BT Financial
and each of its Subsidiaries are in compliance in all material respects with all
laws and regulations applicable to their respective operations or with respect
to which compliance is a condition of engaging in the business thereof, except
for failures to comply which, in the aggregate, would not have a material
adverse effect on the conduct of, or the financial or other condition of, BT
Financial's business on a consolidated basis. BT Financial and its Subsidiaries
have paid all assessments and filed all reports and statements required to be
filed with respect thereto under the rules and regulations of the Department of
Banking, the Federal Reserve and the FDIC.
(i) SEC and Shareholder Reports. BT Financial has delivered to First
▇▇▇▇▇▇▇, or made available for inspection by First ▇▇▇▇▇▇▇, all reports to its
shareholders and the SEC made by it with respect to the four (4) years ended
December 31, 1998. All such reports do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
27
(j) Registration Statement. All information relating to BT Financial and
its Subsidiaries which is included in the Registration Statement at the time it
becomes effective and each amendment or supplement thereto will be accurate and
complete, and will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
(k) Representations Not Misleading. No representation or warranty by BT
Financial in this Reorganization Agreement contains, and no written statement,
exhibit or schedule furnished to, by or on behalf of BT Financial under this
Reorganization Agreement will contain as of the date thereof, any untrue
statement of a material fact or omits, or will omit, to state a material fact
necessary to make the statements contained herein or therein not misleading in
any material respect, when taken as a whole.
(l) Information Provided by BT Financial. All information to be provided
in writing by BT Financial for use in the Joint Proxy Statement/Prospectus in
connection with each of the meetings of shareholders of First ▇▇▇▇▇▇▇ and BT
Financial contemplated hereby or in any application made by BT Financial to the
Service or to any other governmental or regulatory body in connection with the
Merger, and the information to be provided in writing by BT Financial for use in
the Registration Statement, including any prospectus contained therein, will
comply in all material respects with applicable laws and will not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they are made, not misleading.
(m) Consents and Approvals. Except for: (i) the filing with any federal
or state governmental authority of a Joint Proxy Statement/Prospectus, a
Registration Statement and any other applicable securities filings relating to
the issuance of BT Financial Common Stock and each of the meetings of First
▇▇▇▇▇▇▇ and BT Financial shareholders at which the Merger is to be considered
and the review and clearance thereof by such governmental authorities, (ii)
receipt of Regulatory Approvals, and (iii) the expiration of any regulatory
waiting period, and (iv) the notification of AMEX and NASDAQ, no consents or
approvals of or filings or registrations with any third party or any public
body, agency, or authority are necessary in connection with the execution and
delivery by BT Financial of this Reorganization Agreement and its performance of
the transactions contemplated hereby.
(n) Taxes. BT Financial and its Subsidiaries have filed when due all
returns ("Returns") for and paid in full all Taxes to the extent such filings
and payments were required prior to the date of this Reorganization Agreement.
Such filings comply with all applicable laws and are true and correct. Any
amounts set up as accruals or reserves in the audited consolidated financial
statements of BT Financial are sufficient for the payment of all Taxes, whether
or not presently being asserted or assessed, the liability for which has arisen
from any action of BT Financial or any of its Subsidiaries prior to the dates of
such financial statements. No claims are currently being made by any taxing
authority with respect to any Return, and BT Financial has no
28
knowledge of any basis for any such claims. Proper and accurate amounts have
been withheld and remitted by BT Financial and its Subsidiaries from and for
their employees for all prior periods in compliance with the tax withholding
provisions of applicable federal, state and local law. BT Financial has not had
any Tax deficiencies proposed or assessed against it and has not executed any
waiver or extended the statute of limitations on the audit for any Return or the
assessment or collection of any Tax.
(o) Agreements with Banking Authorities. Neither BT Financial nor any of
its Subsidiaries is a party to any written agreement or memorandum of
understanding with, or a party to any commitment letter or similar undertaking
to, or is subject to any order or directive by, the Department of Banking, the
Federal Reserve or the FDIC, which restricts its activities in any manner, or in
any manner relates to the capital adequacy, credit policies or management of BT
Financial and its Subsidiaries, nor has BT Financial or any of its Subsidiaries
been advised by any such regulatory agency that it is contemplating, issuing or
requesting (or is considering the appropriateness of issuing or requesting) any
such order, directive, agreement, memorandum of understanding, commitment letter
or similar undertaking.
(p) Pooling; Reorganization. BT Financial is not aware of any reason why
the Merger may not qualify for pooling-of-interests accounting treatment or as a
reorganization under Section 368(A) of the Code.
(q) Employment Matters. BT Financial intends to offer all employees of
First ▇▇▇▇▇▇▇ and its Subsidiaries with 15 or more years of employment with
First ▇▇▇▇▇▇▇ or its Subsidiaries, employment for one year with BT Financial or
its Subsidiaries, and thereafter employment-at-will. Such employment will
include such salaries and benefits commensurate with the salaries in comparable
positions at BT Financial or its Subsidiaries as the case may be.
(r) Year 2000 Status. BT Financial and each of its subsidiaries have
conducted a thorough inventory and assessment of the hardware, software and
embedded microcontrollers in noncomputer equipment (collectively, the "Computer
Systems") used by BT Financial and its Subsidiaries in its business, in order to
determine which parts of the Computer Systems are not Year 2000 Compliant and to
estimate the cost of rendering such Computer Systems Year 2000 Compliant prior
to January 1, 2000 or such earlier date on which the Computer Systems may shut
down or may produce incorrect calculations or otherwise malfunction without
becoming totally inoperable. Based on the above inventory and assessment, the
estimated total cost of rendering the Computer Systems Year 2000 Compliant is
$756,000, of which $500,000 has already been spent and the remaining amount
expected for completion, $256,000 has been included in the budget adopted by BT
Financial for 1999.
4.03. Covenants of All Parties. Each of the Parties covenants and
agrees that:
(a) Conduct of Business. From and after the date hereof and until the
Closing Date, each Party shall, and shall cause each of its Subsidiaries to:
29
(i) carry on its business diligently and substantially in the same
manner as heretofore and, except as otherwise provided in this
Reorganization Agreement, will not institute any unusual or novel
methods of management or operation of its properties or business;
(ii) maintain its books and records in the usual, ordinary and normal
course;
(iii) promptly advise the other Parties in writing of (A) the
initiation of any litigation of any kind against it or any litigation
by it and (B) the happening of any event which in the reasonable
belief of its management may have an adverse effect on either First
▇▇▇▇▇▇▇, or BT Financial on a consolidated basis, as the case may be;
(iv) continue in effect its present insurance coverage at the present
levels on all properties, assets, business and personnel;
(v) use its best efforts to preserve its business organization intact,
to keep available its present employees, to preserve its relationships
with customers and others having business dealings with it and to
maintain all of its tangible property in customary repair, order and
condition (reasonable wear and tear excepted); and
(vi) ensure that its executive officers shall meet periodically with
the executive officers of the other Parties to exchange information on
their respective institutions, and to facilitate an orderly transition
following the Closing Date.
(b) Environmental Studies. Within sixty days following the date of this
Reorganization Agreement, BT Financial shall cause to be completed, at its sole
cost and expense, a Phase I environmental assessment ("Phase I assessment") of
all real estate owned by First ▇▇▇▇▇▇▇ (the "Premises") and shall deliver a copy
of each such Phase I assessment to First ▇▇▇▇▇▇▇. If BT Financial should
determine pursuant to the results of any such Phase I assessment that (A) there
has been an Environmental Condition affecting the Premises or any storage,
discharge, disposal, release or emission of any Hazardous Substance in, on or
from the Premises and (B) BT Financial reasonably believes that it could become
responsible for the remediation of such storage, discharge, disposal, release or
emission or become liable for monetary damages resulting therefrom, and (C) the
remediation costs or potential liability is greater than $100,000, then BT
Financial shall inform First ▇▇▇▇▇▇▇ in writing with specificity, including a
good faith estimate of the cost of remediation, within thirty (30) days of BT
Financial's receipt of the Phase I assessment, and BT Financial may, in its sole
discretion, terminate this Reorganization Agreement.
(c) Mutual Cooperation on Tax Matters. First ▇▇▇▇▇▇▇ and BT Financial
shall each provide the other with such assistance as may reasonably be requested
by any of them in connection with the preparation of any Tax return, any Tax
audit, or any judicial or
30
administrative proceedings relating to any Tax, and each will retain and provide
the other with any records or information that may be relevant to such Tax
return, Tax audit, proceeding or determination. The party requesting assistance
hereunder shall reimburse the other for direct expenses incurred in providing
such assistance.
(d) Fulfillment of Agreements. Each party hereto shall use its best
efforts to cause all of those conditions to the obligations of the other under
Article VI that are not beyond its reasonable control to be satisfied on or
prior to the Closing and shall use its best efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Reorganization Agreement.
(e) Bank Regulatory Applications. As promptly as practicable after
the date hereof, BT Financial, (i) shall submit any requisite applications for
prior approval of the transactions contemplated herein and in the Certificate of
Merger between First ▇▇▇▇▇▇▇ and BT Financial and the Articles of Merger between
Laurel Bank and the Bank to the appropriate federal and state (if applicable)
financial institution regulatory authorities depending upon the structure of the
Merger, (ii) BT Financial shall submit applications for prior approval of the
Merger to the Federal Reserve Board, and (iii) each of the parties hereto shall,
and they shall cause their respective Subsidiaries to, submit any applications,
notices or other filings to any other state or federal government agency,
department or body the approval of which is required for consummation of the
Merger. BT Financial and First ▇▇▇▇▇▇▇ represent and warrant to the other that
all information concerning it, its Affiliates and their respective directors,
officers, shareholders and Subsidiaries included (or submitted for inclusion) in
any such application shall be true, correct and complete in all material
respects.
(f) Adverse Actions. No party will:
(i) take any action that would, or is reasonably likely to, prevent or
impede the Merger from qualifying (1) for pooling-of-interests
accounting treatment or (2) as a reorganization within the meaning of
Section 368(A) of the Code; or
(ii) knowingly take any action that is intended or is reasonably
likely to result in
(A) any of its representations or warranties set forth in the
Plan being or becoming untrue in any material respect at any time
prior to the Effective Time,
(B) any of the conditions to the Merger set forth in Article IV
not being satisfied, or
(C) a material violation of any provision of this Plan.
31
4.04. Covenants of First ▇▇▇▇▇▇▇.
First ▇▇▇▇▇▇▇ hereby covenants and agrees that:
(a) Access to Corporate Records. Until the Closing Date, First ▇▇▇▇▇▇▇
and each of its Subsidiaries shall give BT Financial and its representatives
full access during normal business hours to all their respective property,
documents, contracts and records and such information with respect to their
business affairs and properties as BT Financial from time to time may reasonably
request; provided, however, that First ▇▇▇▇▇▇▇ and each of its Subsidiaries
shall not be required to give such access or information to the extent that it
is prohibited therefrom by a rule, regulation or order of any regulatory body.
All documents, contracts, records or information obtained pursuant to this
Section 4.04(a) shall be and remain subject to the confidentiality provisions of
Section 2.09 of this Reorganization Agreement.
(b) Financial Statements and Internal Audit Reports. First ▇▇▇▇▇▇▇ shall
promptly provide BT Financial with copies of its annual, quarterly and monthly
financial statements for the periods ending between the date of this
Reorganization Agreement and the Effective Time. First ▇▇▇▇▇▇▇ shall promptly
forward to BT Financial copies of its periodic internal audit reports. First
▇▇▇▇▇▇▇ shall also promptly provide or permit inspection of all reports filed by
it and the Bank during such period with the Federal Reserve Board and the
Comptroller, and copies of all notices or reports sent to its shareholders to
the extent permitted by law and all material notices, reports, and review
letters received from the Federal Reserve Board and the Comptroller. Until the
Closing Date, First ▇▇▇▇▇▇▇ will provide copies of all such financial statements
and notices, reports and review letters to BT Financial on a prompt and timely
basis.
(c) Negative Covenants - Conduct of Business. Except with the prior
written consent of BT Financial, neither First ▇▇▇▇▇▇▇ nor any of its
Subsidiaries, shall on or after the date hereof:
(i) issue any capital notes or shares of its capital stock, declare or
distribute any dividend, including any stock dividends, authorize a
stock split, or authorize, issue or make any other distribution of,
on, or with respect to, its capital stock except for (a) Permitted
Dividends whose record dates and payable dates for such quarterly
Permitted Dividends shall be synchronized with BT Financial's record
dates and payable dates for dividends and First ▇▇▇▇▇▇▇ shall ▇▇▇▇▇▇
with BT Financial prior to fixing any such record dates or payable
dates, prior to any quarterly Permitted Divided distributions, and (b)
the Option granted pursuant to the Stock Option Agreement between
First ▇▇▇▇▇▇▇ and BT Financial of even date herewith;
(ii) merge with, consolidate with, sell its assets to, or acquire
substantially all the assets of, any other corporation, bank or
Person, or enter into any other transaction not in the ordinary course
of business;
32
(iii) make any direct or indirect redemption, purchase or other
acquisition of any of its capital stock;
(iv) create or award any pension or profit sharing plan, bonus,
deferred compensation, death benefit or retirement plan, or any other
employee benefit, enter into any employment or consulting contract
(written or otherwise), or grant any bonuses to any officer, director
or employee;
(v) amend its articles of incorporation or bylaws except as may be
necessary to consummate the transactions contemplated by this
Reorganization Agreement or as required by law;
(vi) incur any liability or obligation or make any commitment or
disbursement, acquire or dispose of any property or asset, make any
contract or agreement, or engage in any transaction, except in the
ordinary course of business;
(vii) increase the rate of compensation of any director, officer,
employee or agent or enter into any agreement to increase the rate of
compensation of any director, officer or employee, other than normal
increases in the ordinary course of business and consistent with past
practice;
(viii) unless permitted by BT Financial, take any action that would
entitle any employee to receive severance pay prior to the Closing
Date;
(ix) intentionally do anything or intentionally fail to do anything
which will cause a breach or a default under any contract, agreement,
commitment or obligation to which it is a party or by which it may be
bound;
(x) except for securities transactions effected in the ordinary course
of business with the prior consent of BT Financial (which consent
shall not be unreasonably withheld), make any capital expenditures in
excess of $150,000 in the aggregate;
(xi) modify or extend any service bureau contracts, hardware/software
maintenance agreements, lease agreements or other contracts that
involve annual payments that exceed $25,000 per contract or $100,000
in the aggregate;
(xii) change its lending, borrowing, investment, asset/liability
management or other material banking policies in any material respect
except as may be required by changes in applicable law, regulation or
regulatory directives, except that, in connection with the closing of
the transactions contemplated hereby, shall cooperate in good faith
with BT Financial to adopt policies, practices and procedures
consistent with those utilized by BT Financial and its Affiliates;
(xiii) open or close any branch offices except for the proposed new
office for Flex;
(xiv) fail to pay any tax or any other liability or charge when due,
other than charges contested in good faith by appropriate proceedings;
or
(xv) make, change or revoke any tax election or make any agreement or
settlement with any taxing authority.
(d) Consents and Approvals. First ▇▇▇▇▇▇▇ and each of its Subsidiaries
shall cooperate with BT Financial in furnishing such information concerning
First ▇▇▇▇▇▇▇'▇ business and affairs and its directors and officers as is
reasonably necessary or requested in order to enable BT Financial to prepare and
file the Registration Statement and all applications for Regulatory Approvals,
and in obtaining such other consents required under any agreements which BT
Financial shall request to be obtained to the extent required to consummate the
Merger. First ▇▇▇▇▇▇▇ and each of its Subsidiaries shall use its best efforts
to obtain the approval or consent of any federal, state or other regulatory
agency having jurisdiction to the extent that such approvals or consents are
required to effect the Merger and the other transactions contemplated hereby.
(e) Notice of Changes. Until the Effective Time, First ▇▇▇▇▇▇▇ and each
of its Subsidiaries shall give BT Financial prompt written notice of any
material change or inaccuracies in any data previously given or made available
to BT Financial pursuant to this Reorganization Agreement. Notice of changes to
Schedule 4.01(m) of this Reorganization Agreement shall be effected by promptly
furnishing to BT Financial current monthly lists of doubtful, nonperforming or
problem loans.
(f) Acquisition Proposals. Neither First ▇▇▇▇▇▇▇ nor any of its
Subsidiaries, nor any of its officers or directors or the officers and
directors of its Subsidiaries, nor any of its other affiliates (as defined in
Rule 12b-2 under the Exchange Act) (each, an "Affiliate") shall, and First
▇▇▇▇▇▇▇ shall cause it and its Subsidiaries' its employees, agents and
representatives (including, without limitation, any investment banking, legal or
accounting firm retained by and any individual member or employee of the
foregoing) (each, an "Agent") not to,
(i) initiate, solicit or encourage, directly or indirectly, any
inquiries or the making or implementation of any proposal or offer
(including, without limitation, any proposal or offer to any of them
or their respective shareholders) with respect to a merger,
acquisition, consolidation, recapitalization, liquidation, dissolution
or similar transaction involving, or any purchase of all or a
substantial portion of the assets or equity securities of, (any such
proposal or offer being hereinafter referred to as an "Acquisition
Proposal") or
33
(ii) engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any
Person relating to an Acquisition Proposal, or
(iii) otherwise cooperate in any effort or attempt to make,
implement or accept an Acquisition Proposal.
Notwithstanding the foregoing, nothing herein shall prohibit First ▇▇▇▇▇▇▇
or its board of directors and officers from fulfilling their fiduciary duties
under Delaware or federal law to the shareholders of First ▇▇▇▇▇▇▇. First
▇▇▇▇▇▇▇ shall notify BT Financial immediately if any inquiries, proposals or
offers related to an Acquisition Proposal are received by, any confidential
information or data is requested from, or any negotiations or discussions
related to an Acquisition Proposal are sought to be initiated or continued with,
them or any individual or entity referred to in the first sentence of this
Section 4.04(f).
(g) Indemnification.
(i) First ▇▇▇▇▇▇▇ will indemnify and hold harmless BT Financial and
each Person, if any, who controls BT Financial within the meaning of
the Securities Act against any losses, claims, damages or liabilities,
joint or several, to which BT Financial or such controlling Persons
may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) (A) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, the Joint Proxy Statement/Prospectus or any
amendment or supplement thereto, or any related preliminary
prospectus, 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 to
the extent that any such statement or omission was provided in writing
by First ▇▇▇▇▇▇▇ or any of its Subsidiaries to BT Financial or (B)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact or any omission or alleged omission to
state a material fact required to be stated or necessary to make the
statements not misleading in any document distributed to any First
▇▇▇▇▇▇▇ shareholder to the extent that any such statement or omission
was provided in writing by First ▇▇▇▇▇▇▇ or any of its Subsidiaries to
BT Financial, and First ▇▇▇▇▇▇▇ will reimburse BT Financial and each
such controlling Person for any legal or other expenses reasonably
incurred by BT Financial or such controlling Person in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that First ▇▇▇▇▇▇▇ will not be liable in
any such 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 any
of the Registration Statement, the Joint Proxy Statement/Prospectus or
any amendment or supplement
34
thereto, or any related preliminary prospectus that was made or
omitted in reliance upon and in conformity with written information
furnished by the other Parties specifically for use therein. This
indemnity agreement will be in addition to any liability which First
▇▇▇▇▇▇▇ may otherwise have.
(ii) Promptly after receipt by an indemnified party under this Section
4.04(g) of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 4.04(g), notify the indemnifying
party of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party otherwise than under this Section
4.04(g). In case any such action is brought against any indemnified
party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified
party under this Section 4.04(g) for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
(iii) If recovery is not available under the foregoing indemnification
provisions of this Section 4.04(g) for any reason other than as
specified therein, the parties entitled to indemnification by the
terms thereof shall be entitled to contribution for liabilities and
expenses, except to the extent that contribution is not permitted
under Section 11(f) of the Securities Act. In determining the amount
of contribution to which the respective parties are entitled, there
shall be considered the relative benefits received by each party from
the transactions contemplated hereby, the parties' relative knowledge
and access to information concerning the matter with respect to which
the claim was asserted, the opportunity to correct and prevent any
statement or omission, and any other equitable considerations
appropriate under the circumstances. First ▇▇▇▇▇▇▇ and BT Financial
agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capital allocations.
(h) Deposits. First ▇▇▇▇▇▇▇ shall offer rates on all deposits which are
in accordance with present institutional guidelines and which are priced within
local competitor offerings. Further, First ▇▇▇▇▇▇▇ shall not accept any broker
or out of area deposits and shall price all "jumbo deposits" in accordance with
existing practice. Such jumbo deposits shall be offered only to local retail,
public or corporate accounts.
35
(i) Furnishing Information. First ▇▇▇▇▇▇▇ and each of its Subsidiaries
shall cooperate with BT Financial in furnishing such information concerning the
business of First ▇▇▇▇▇▇▇ and each of its Subsidiaries as is reasonably
necessary or requested in order to prepare and file the Registration Statement
and Joint Proxy Statement/Prospectus to be used in connection with the meeting
of the stockholders of as provided in Section 3.01 hereof, or to prepare and
file any applications for regulatory or governmental approvals.
(j) Certain Tax Matters.
(i) Tax Returns and Payment of Taxes for Periods Through the Closing
Date. First ▇▇▇▇▇▇▇ shall include its income on its federal income tax
return for all periods up to and including the Closing Date and will
pay any tax due thereon. First ▇▇▇▇▇▇▇ also shall pay its state or
local income tax for all taxable periods up to and including the
Closing Date. The income of First ▇▇▇▇▇▇▇ shall be apportioned for the
period up to and including the Closing Date and the period after the
Closing Date by closing the books of First ▇▇▇▇▇▇▇ as of the close of
business on the Closing Date.
(ii) Carrybacks. If is required to carry back any item of loss,
deduction or credit that arises in any taxable period ending after the
Closing Date to a tax return of First ▇▇▇▇▇▇▇ for any taxable period
ending on or before the Closing Date, BT Financial will be entitled to
an amount equal to the refund or credit of taxes realized as a result
thereof.
4.05. Covenants of BT Financial. BT Financial hereby covenants and
agrees that:
(a) Access to Corporate Records. Until the Closing Date, BT Financial
shall give First ▇▇▇▇▇▇▇ and its representatives full access during normal
business hours to all its property, documents, contracts and records and such
information with respect to its business affairs and properties (in each case
including those of its Subsidiaries) as First ▇▇▇▇▇▇▇ from time to time may
reasonably request; provided, however, that BT Financial shall not be required
to give such access or information to the extent that it is prohibited therefrom
by a rule, regulation or order of any regulatory body. All documents,
contracts, records or information obtained pursuant to this Section 4.05(a)
shall be and remain subject to the confidentiality provisions of Section 2.09 of
this Reorganization Agreement.
(b) Financial Statements. BT Financial shall promptly provide First
▇▇▇▇▇▇▇ with copies of its annual and quarterly financial statements, as
included in its reports on Form 10-K or 10-Q, respectively, as filed with the
SEC pursuant to the requirements of the Exchange Act, for the periods ending
between the date of this Reorganization Agreement and the Effective Time. Until
the Closing Date, BT Financial will provide copies of any reports it files with
the SEC under the Exchange Act to First ▇▇▇▇▇▇▇ on a prompt and timely basis.
36
(c) Consents and Approvals. BT Financial shall use its best efforts to
obtain the approval or consent of any federal, state or other regulatory agency
having jurisdiction to the extent that such approvals or consents are required
to effect the Merger and the other transactions contemplated hereby.
(d) Notice of Changes. Until the Effective Time, BT Financial shall give
First ▇▇▇▇▇▇▇ prompt written notice of any material change or inaccuracies in
any data previously given or made available to First ▇▇▇▇▇▇▇ pursuant to this
Reorganization Agreement.
(e) Furnishing Information. BT Financial shall cooperate with First
▇▇▇▇▇▇▇ in furnishing such information concerning the business of BT Financial
as is reasonably necessary or requested in order to prepare and file the
Registration Statement and Joint Proxy Statement/Prospectus to be used in
connection with the meetings of the shareholders of First ▇▇▇▇▇▇▇ as provided in
Section 3.01 hereof, or to prepare and file any applications for regulatory or
governmental approvals. BT Financial shall provide to First ▇▇▇▇▇▇▇ and their
respective counsel a copy of the Registration Statement and each application for
regulatory or governmental approval, including all amendments to such documents,
in draft form prior to filing and, as soon as practicable after the date of
filing, a copy of the filing. BT Financial shall provide to First ▇▇▇▇▇▇▇ and
their respective counsel a copy of all correspondence to and from the various
regulatory agencies with respect to the Registration Statement and the
regulatory applications.
(f) Indemnification of and Liability Insurance for Officers and Directors.
(i) After the Effective Time, BT Financial, as successor to First
▇▇▇▇▇▇▇, shall indemnify and hold harmless any former directors,
officers, employees or agents of First ▇▇▇▇▇▇▇ or any of its
Subsidiaries who have rights to indemnification under the articles of
incorporation and bylaws of First ▇▇▇▇▇▇▇ from and against any and all
claims, losses, liabilities or damages arising out of or in connection
with any of their activities in such capacities or on behalf of, or at
the request of First ▇▇▇▇▇▇▇, prior to the Effective Time ("Claims")
in accordance with and to the extent required under the articles of
incorporation and bylaws of First ▇▇▇▇▇▇▇. This section shall not be
construed to increase, in any manner, any liabilities or obligations
BT Financial would otherwise have as the successor by merger to First
▇▇▇▇▇▇▇.
(ii) BT Financial will indemnify and hold harmless First ▇▇▇▇▇▇▇ and
each Person, if any, who controls First ▇▇▇▇▇▇▇ within the meaning of
the Securities Act against any losses, claims, damages or liabilities,
joint or several, to which BT Financial or such controlling Persons
may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) (A) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Joint
Proxy Statement/Prospectus or any amendment or supplement thereto, or
any related
37
preliminary prospectus, 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 to the extent that any such statement or omission relates
to BT Financial or (B) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact or any
omission or alleged omission to state a material fact required to be
stated or necessary to make the statements not misleading in any
document distributed to any shareholder to the extent that any such
statement or omission relates to BT Financial, and will reimburse and
each such controlling Person for any legal or other expenses
reasonably incurred by or such controlling Person in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that BT Financial will not be liable in any
such 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 any of the Joint
Proxy Statement/Prospectus or any amendment or supplement thereto, or
any related preliminary prospectus that was made or omitted in
reliance upon and in conformity with written information furnished by
First ▇▇▇▇▇▇▇ specifically for use therein. This indemnity agreement
will be in addition to any liability which BT Financial may otherwise
have.
(iii) Promptly after receipt by an indemnified party under this
Section 4.05(f) of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 4.05(f), notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under this
Section 4.05(f). In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable
to such indemnified party under this Section 4.05(f) for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
(iv) If recovery is not available under the foregoing indemnification
provisions of this Section 4.05(f) for any reason other than as
specified therein, the parties entitled to indemnification by the
terms thereof shall be entitled to contribution for liabilities and
expenses, except to the extent that contribution is not permitted
38
under Section 11(f) of the Securities Act. In determining the amount
of contribution to which the respective parties are entitled, there
shall be considered the relative benefits received by each party from
the transactions contemplated hereby, the parties' relative knowledge
and access to information concerning the matter with respect to which
the claim was asserted, the opportunity to correct and prevent any
statement or omission, and any other equitable considerations
appropriate under the circumstances. First ▇▇▇▇▇▇▇ and BT Financial
agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocations.
(g) Employee Matters.
(i) Any full-time employee of First ▇▇▇▇▇▇▇, subject to Section
4.02(q), whose employment with First ▇▇▇▇▇▇▇ or any of its
Subsidiaries is terminated, other than for cause, by BT Financial
within six months after the Effective Time, and not offered a
comparable job with BT Financial or an affiliate of BT Financial, will
be paid severance pay equal to one week's W-2 compensation multiplied
by each year of service with First ▇▇▇▇▇▇▇ or any of its Subsidiaries
not exceeding three months salary. For purposes of this section, a job
shall not be considered comparable if it requires the employee to work
less than 30 hours per week or is at a location more than 30 miles
from First ▇▇▇▇▇▇▇'▇ main office.
(ii) All employees of First ▇▇▇▇▇▇▇ or any of its Subsidiaries
immediately prior to the Effective Time who are employed by BT
Financial following the Effective Time ("Transferred Employees") will
be entitled to participate in BT Financial's employee benefit plans as
to which they are eligible without fulfilling any vesting requirement
and shall be entitled to credit for their length of service,
compensation, job classification or position with First ▇▇▇▇▇▇▇ or any
of its Subsidiaries, to the extent permissible under all applicable
laws and regulations and the terms and benefits of BT Financial's
current benefit plans or those of its Affiliates. BT Financial agrees
that any pre-existing condition, limitation or exclusion in its health
plans shall not apply to Transferred Employees or their covered
dependents who are covered under a medical or hospitalization
indemnity plan maintained by First ▇▇▇▇▇▇▇ on the date of the Merger
and then change coverage to BT Financial's medical or hospitalization
indemnity health plan at the time such Transferred Employees are first
given the option to enroll in BT Financial's health plans. Except with
respect to any defined benefit pension plan sponsored by BT Financial
or an Affiliate of BT Financial, a Transferred Employee's service with
First ▇▇▇▇▇▇▇ or any of its Subsidiaries shall be recognized as
service with BT Financial for purposes of eligibility, participation,
vesting, and benefit accruals, subject to applicable break-in-service
rules and to the extent permissible under all applicable laws and
regulations and the terms and benefits of BT Financial's current
benefit plans or those of its Affiliates. With
39
respect to any defined benefit pension plans sponsored by BT Financial
or an Affiliate of BT Financial, a Transferred Employee's service with
First ▇▇▇▇▇▇▇ or any of its Subsidiaries shall be recognized as
service with BT Financial for purposes of eligibility, participation,
vesting, benefit accruals, subject to the extent permissible under all
applicable laws and regulations and the terms and benefits of BT
Financial's current benefit plans or those of its Affiliates.
Nothing contained in this Section shall be deemed to be a contract for
employment nor a guaranty or right to employment with BT Financial or its
Affiliates for any Person, nor shall anything contained in this Section
constitute an agreement by BT Financial or its Affiliates not to revise, amend,
revoke, or terminate any employee benefit plan or arrangement that it may in the
future make available to its employees, including Transferred Employees.
Notwithstanding anything contained herein to the contrary, the obligations of BT
Financial contained in this Section shall survive the Closing.
(h) Registration Statement and Joint Proxy Statement. BT Financial shall
prepare, and shall file with the SEC, and shall use its best efforts to cause to
become effective, the Registration Statement covering the shares of BT Financial
Common Stock to be delivered pursuant to this Reorganization Agreement and shall
use its best efforts to register or qualify such securities, if required, under
applicable state securities laws. If any material change occurs in the facts
set forth in the Registration Statement, BT Financial shall promptly notify
First ▇▇▇▇▇▇▇ in writing of such change (other than with respect to information
supplied by First ▇▇▇▇▇▇▇ for inclusion therein) and shall prepare, in
accordance with the requirements of the Securities Act of 1933, as amended, and
file amendments to the Registration Statement that may be appropriate or
required.
ARTICLE V
CONDITIONS PRECEDENT
5.01. Conditions Precedent to the Obligations of BT Financial. The
obligations of BT Financial to consummate the transactions contemplated by this
Reorganization Agreement shall be subject to the satisfaction, on or before the
Closing Date, of each and every one of the following conditions, all or any of
which may be waived, in whole or in part, by BT Financial to the extent
permitted by law:
(a) Performance of Covenants. Each of the covenants to be performed by
First ▇▇▇▇▇▇▇ hereunder on or before the Closing Date shall have been duly
performed in all material respects; and the President and Secretary of First
▇▇▇▇▇▇▇ shall each have executed and delivered to BT Financial a certificate,
dated as of the Closing Date, to the effect that such officers have no knowledge
of the nonfulfillment of the foregoing condition.
40
(b) Representations True at Closing. The representations and warranties
made by First ▇▇▇▇▇▇▇ herein and in any certificate provided to BT Financial
hereunder shall be true and correct in all material respects on the Closing Date
with the same force and effect as though such representations and warranties had
been made on and as of such time (or as of the date when made in the case of any
representation and warranty which specifically relates to an earlier date),
except that the representations made in Section 4.01(q) shall be modified by the
results of the Phase I assessment referred to in Section 4.03(b), and the
President and Secretary of First ▇▇▇▇▇▇▇ shall each have executed and delivered
to BT Financial a certificate, dated as of the Closing Date, to the effect that
such officers have no knowledge of the nonfulfillment of the foregoing
condition.
(c) Certified Resolutions. First ▇▇▇▇▇▇▇ and the Bank shall each have
furnished BT Financial with a certified copy of resolutions duly adopted by each
of its Board of Directors authorizing and approving this Reorganization
Agreement and the transactions contemplated hereby and by the shareholders of
the Bank approving this Reorganization Agreement and the transactions
contemplated thereby.
(d) Shareholder Approval. This Reorganization Agreement shall have been
approved by the affirmative vote of a majority of the votes cast by all holders
of BT Financial Common Stock entitled to vote thereon. This Reorganization
Agreement shall have been approved by the affirmative vote of the holders of a
majority of the outstanding shares of First ▇▇▇▇▇▇▇ Common Stock, and First
▇▇▇▇▇▇▇ shall have furnished BT Financial with a certified copy of resolutions
duly adopted by its shareholders authorizing and approving this Reorganization
Agreement and the transactions contemplated hereby.
(e) Government Approvals and Other Consents. BT Financial and First
▇▇▇▇▇▇▇ and their Subsidiaries shall have received in form and substance
satisfactory to BT Financial all necessary federal and state Regulatory
Approvals, shareholder or other consents necessary to permit consummation of the
Merger and the Bank Merger transactions contemplated hereby and all applicable
waiting periods required by law shall have expired or elapsed. No such
approvals and consents shall require BT Financial or such Subsidiary to enter
into any agreement or stipulation that is inconsistent with prior Federal
Reserve, Comptroller, FDIC or Department of Banking practice or procedure,
Delaware and Pennsylvania law and all applicable waiting periods required by law
shall have expired or elapsed.
(f) No Injunction. No action, proceeding, regulation or legislation shall
have been instituted or threatened before any court, governmental agency or
legislative body to enjoin, restrain or prohibit, or to obtain substantial
damages in respect of, or which is related to or arises out of, this
Reorganization Agreement, the consummation of the transactions contemplated
hereby or the Merger, which, in the good faith judgment of BT Financial, would
make it inadvisable to consummate such transactions.
41
(g) No Material Misstatements or Omissions. Subject to the cure
provisions of Section 2.07(f), BT Financial shall not have discovered any
material error, misstatement or omission in any information furnished in writing
or to be furnished in writing to BT Financial hereunder, or in the information
to be furnished by First ▇▇▇▇▇▇▇ or any of its Subsidiaries and contained in the
Registration Statement.
(h) Changes in Financial Condition. Since the date of this Reorganization
Agreement, there shall not have occurred any material adverse change in the
business, financial condition, or results of operation of First ▇▇▇▇▇▇▇ on a
consolidated basis, other than changes resulting from or attributable to changes
in laws or regulations, generally accepted accounting principles, or
interpretations thereof, that affect the banking industry generally.
(i) Registration Statement. The Registration Statement covering the
shares of BT Financial Common Stock to be issued to the shareholders of First
▇▇▇▇▇▇▇ under this Reorganization Agreement shall have been declared effective
by the SEC, shall be exempt or declared effective in each state having
jurisdiction thereon, and no stop order proceeding shall be pending or
threatened with respect thereto.
(j) Opinion of Counsel. An opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.
counsel for First ▇▇▇▇▇▇▇ shall have been delivered to BT Financial, dated the
Closing Date, and in form and substance satisfactory to BT Financial and its
counsel, substantially to the effect that:
(i) First ▇▇▇▇▇▇▇ is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has
full power and authority to carry on its business as described in the
Joint Proxy Statement/Prospectus and to carry out the transactions
contemplated by this Reorganization Agreement. The authorized capital
stock of First ▇▇▇▇▇▇▇ consists of 10,000,000 shares of common stock
having a par value of $2.50 per share, of which 1,742,400 shares are
issued and outstanding as of the date hereof. All issued and
outstanding shares of First ▇▇▇▇▇▇▇ Common Stock are validly issued,
fully paid and nonassessable.
(ii) The Bank is a national banking association duly organized and
validly existing under the National Bank Act. The Bank has the
corporate power and authority to carry on its business as it is now
being operated and to carry out the transactions contemplated by this
Reorganization Agreement. The Bank's deposits are insured by the Bank
Insurance Fund of the FDIC. The authorized capital stock of the Bank
consists of 300,000 shares of common stock having a par value of $10
per share, of which all shares are issued and outstanding as of the
date hereof and no shares are held in the treasury of the Bank. All
issued and outstanding shares of the Bank Common Stock are validly
issued, fully paid and nonassessable. There is no subscription,
option, warrant, call, right, stock appreciation right or commitment
of any kind obligating the Bank to issue any of its stock or to
acquire any of its stock under any circumstances or to pay cash on
42
account of stock appreciation. First ▇▇▇▇▇▇▇ owns all of the issued
and outstanding common stock of the Bank.
(iii) Flex Organization and Capitalization. Flex Financial Consumer
Discount Company ("Flex") is a finance company validly existing under
the laws of the Commonwealth of Pennsylvania. Flex has full power and
authority to carry on its business as it is now being operated and to
carry out the transactions contemplated by this Reorganization
Agreement. The authorized, issued and outstanding capital stock of
Flex consists of 1,000 shares of common stock having a par value of
$1.00 per share. All issued and outstanding shares of Flex common
stock are validly issued, fully paid and nonassessable and are owned
of record and beneficially by First ▇▇▇▇▇▇▇.
(iv) This Reorganization Agreement has been, and the Articles and
Certificate of Merger, when executed and delivered, will have been,
duly and validly authorized, executed and delivered by First ▇▇▇▇▇▇▇,
and constitute and will constitute the valid and binding obligations
of First ▇▇▇▇▇▇▇ and are and will be enforceable in accordance with
their respective terms, except as limited by (a) bankruptcy,
insolvency, fraudulent conveyance, moratorium, reorganization,
conservatorship, receivership or other similar laws from time to time
in effect affecting the enforcement of creditors' rights generally or
the rights of creditors of insured depository institutions, (b)
general equitable principles, (c) laws relating to the safety and
soundness of insured depository institutions, (d) the possible
unavailability of certain remedies in the event of non-material
breaches of such agreements, and (e) 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).
(v) Neither the execution, delivery and performance of this
Reorganization Agreement by First ▇▇▇▇▇▇▇, nor the consummation of the
transactions contemplated hereby, nor compliance by First ▇▇▇▇▇▇▇ with
any of the provisions hereof will (i) violate, or conflict with, or
result in a breach of any provisions of, or constitute a default (or
an event which, with notice or lapse of time or both, would constitute
a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or
acceleration under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets
of First ▇▇▇▇▇▇▇ or any of its Subsidiaries under any of the terms,
conditions or provisions of, (A) the articles of incorporation or
bylaws, as amended, of First ▇▇▇▇▇▇▇ or the Bank, or (B) any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which First ▇▇▇▇▇▇▇ or any of its
Subsidiaries is a party or by which any of them is bound or to which
any of their respective properties or assets may
43
be subject, except for such violations, conflicts, breaches, defaults,
etc. which would not, in the aggregate, have a material adverse effect
on First ▇▇▇▇▇▇▇'▇ business or financial condition on a consolidated
basis, or (ii) to its knowledge, violate any judgement, ruling, order,
writ, injunction, decree, statute, rule or regulation applicable to
them or any of their respective properties or assets.
(vi) First ▇▇▇▇▇▇▇ has obtained all necessary federal and state
governmental and Regulatory Approvals in order to consummate the
Merger.
(vi) The Registration Statement has become effective under the
Securities Act, and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or threatened under the Securities Act.
In expressing such opinion, counsel may rely on certificates of officers
and other representatives of First ▇▇▇▇▇▇▇ as to matters of fact and
certificates of public officials as to matters within their jurisdiction. Such
opinion shall be governed by the Legal Opinion Accord of the ABA Section of
Business Law (1991).
(k) Expenses. First ▇▇▇▇▇▇▇ shall have paid all out-of-pocket expenses
and disbursements, including legal, accounting and investment banking fees
incurred by First ▇▇▇▇▇▇▇ in connection with the Transactions, except for
reasonable out-of-pocket expenses actually incurred that the parties acknowledge
have not been billed on or before the Closing Date; and the President and
Secretary of First ▇▇▇▇▇▇▇ shall each have executed and delivered to BT
Financial a certificate, dated as of the Closing Date, to the effect that such
officers have no knowledge of the nonfulfillment of the foregoing condition.
(l) Tax Opinion. BT Financial shall have received an opinion of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, in form and substance reasonably satisfactory to BT Financial,
dated as of the Closing Date, substantially to the effect that, on the basis of
facts, representations and assumptions set forth in such opinion, (i) the Merger
will be treated for Federal income tax purposes as a reorganization within the
meaning of Section 368 of the Code and that accordingly no gain or loss will be
recognized by BT Financial or First ▇▇▇▇▇▇▇ as a result of the Merger; and (ii)
no gain or loss will be recognized by First ▇▇▇▇▇▇▇'▇ shareholders as a result
of the receipt of BT Financial Common Stock in the Merger. In rendering such
opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ may require and rely upon representations contained in
certificates of officers of BT Financial, First ▇▇▇▇▇▇▇, and others.
(m) Pooling Letter. BT Financial shall have received from
PricewaterhouseCoopers LLP, independent accountants for BT Financial, a letter
dated the date of or shortly prior to the mailing date of the Joint Proxy
Statement/Prospectus and the Effective Time, to the effect that such accountants
are not aware of any facts or circumstances which might cause the Merger not to
qualify for pooling of interests accounting treatment.
44
(n) Affiliates Agreements. BT Financial shall have received duly executed
Affiliates' Agreements from each director and officer of BT Financial and First
▇▇▇▇▇▇▇ in the forms of Exhibits A and B respectively.
5.02. Conditions Precedent to the Obligations of First ▇▇▇▇▇▇▇. The
obligations of First ▇▇▇▇▇▇▇ to consummate the transactions contemplated by this
Reorganization Agreement shall be subject to the satisfaction, on or before the
Closing Date, of each and every one of the following conditions, all or any of
which may be waived, in whole or in part, by First ▇▇▇▇▇▇▇ to the extent
permitted by law:
(a) Performance of Covenants. Each of the covenants to be performed by BT
Financial hereunder on or before the Closing Date shall have been duly performed
in all material respects; and the President and Secretary of BT Financial shall
each have executed and delivered to First ▇▇▇▇▇▇▇ a certificate, dated as of the
Closing Date, to the effect that such officers have no knowledge of the
nonfulfillment of the foregoing condition.
(b) Representations True at Closing. The representations and warranties
made by BT Financial herein and in any certificate provided by BT Financial
hereunder shall be true and correct in all material respects on the Closing Date
with the same force and effect as though such representations and warranties
had been made on and as of such time (or as of the date when made in the case of
any representation and warranty which specifically relates to an earlier date),
and the President and Secretary of BT Financial shall each have executed and
delivered to First ▇▇▇▇▇▇▇ a certificate, dated as of the Closing Date, to the
effect that such officers have no knowledge of the nonfulfillment of the
foregoing condition.
(c) Certified Resolutions. BT Financial and Laurel Bank shall each have
furnished First ▇▇▇▇▇▇▇ with a certified copy of resolutions duly adopted by the
Board of Directors of BT Financial and Laurel Bank authorizing this
Reorganization Agreement and the transactions contemplated hereby and by the
shareholder of Laurel Bank approving this Reorganization Agreement and the
transactions contemplated hereby.
(d) Shareholder Approval. This Reorganization Agreement shall have been
approved by the affirmative vote of a majority of the votes cast by all holders
of First ▇▇▇▇▇▇▇ Common Stock entitled to vote thereon. This Reorganization
Agreement shall have been approved by the affirmative vote of the holders of a
majority of the outstanding shares of BT Financial Common Stock, and BT
Financial shall have furnished First ▇▇▇▇▇▇▇ with a certified copy of
resolutions duly adopted by its shareholders authorizing and approving this
Reorganization Agreement and the transactions contemplated hereby.
(e) Government Approvals and Other Consents. BT Financial and First
▇▇▇▇▇▇▇ and their Subsidiaries shall have received in form and substance
satisfactory to BT Financial all necessary federal and state governmental and
Regulatory Approvals, shareholder approvals and other consents necessary to
permit consummation of the Merger and the Bank Merger transactions
45
contemplated hereby, and all applicable waiting periods required by law shall
have expired or elapsed. No such approvals and consents shall require First
▇▇▇▇▇▇▇ or its Subsidiaries to enter into any agreement or stipulation that is
inconsistent with prior Federal Reserve, Comptroller, FDIC, Department of
Banking practice or procedure, or Delaware or Pennsylvania law.
(f) No Injunction. No action, proceeding, regulation or legislation shall
have been instituted or threatened before any court, governmental agency or
legislative body to enjoin, restrain or prohibit, or to obtain substantial
damages in respect of, or which is related to or arises out of, this
Reorganization Agreement, the consummation of the transactions contemplated
hereby or the Merger, which, in the good faith judgment of First ▇▇▇▇▇▇▇, would
make it inadvisable to consummate such transactions.
(g) No Material Misstatements or Omissions. Subject to the cure
provisions of Section 2.07(f), First ▇▇▇▇▇▇▇ shall not have discovered any
material error, misstatement or omission in any information furnished in writing
or to be furnished in writing to hereunder, or in the information to be
furnished by BT Financial or its Subsidiaries and contained in the Registration
Statement.
(h) Changes in Financial Condition. Since the date of this Reorganization
Agreement, there shall not have occurred any material adverse change in the
business financial condition, or results of operation of BT Financial on a
consolidated basis, other than changes resulting from or attributable to changes
in laws or regulations, generally accepted accounting principles, or
interpretations thereof, that affect the banking industry generally.
(i) Registration Statement. The Registration Statement covering the
shares of BT Financial Common Stock to be issued to the shareholders of First
▇▇▇▇▇▇▇ under this Reorganization Agreement shall have been declared effective
by the SEC, shall be exempt or declared effective in each state having
jurisdiction thereon, and no stop order proceeding shall be pending or
threatened with respect thereto.
(j) Opinion of BT Financial and Counsel. An opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, counsel for BT Financial, shall have been delivered to First ▇▇▇▇▇▇▇, dated
the Closing Date, and in form and substance satisfactory to and its counsel,
substantially to the effect that:
(i) BT Financial is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Pennsylvania
and has full power and authority to carry on its business as described
in the Joint Proxy Statement/Prospectus and to carry out the
transactions contemplated by this Reorganization Agreement. The
authorized capital stock of BT Financial consists of 20,000,000 shares
of common stock having a par value of $5.00 per share, of which
12,985,292 shares are issued and outstanding as of the date hereof and
2,000,000 shares of preferred stock, no par value, none of which are
issued and
46
outstanding as of the date hereof. All issued and outstanding shares
of BT Financial Common Stock are validly issued, fully paid and
nonassessable.
(ii) Laurel Bank is a bank and trust company duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania and a member of the Federal Reserve System. Laurel Bank
has full power and authority to carry on its business as described in
the Joint Proxy Statement/Prospectus and to carry out the transactions
contemplated by this Reorganization Agreement. The authorized, issued
and outstanding capital stock of Laurel Bank consists of 981,864
shares of common stock having a par value of $5.00 per share. All
issued and outstanding shares of Laurel Bank Common Stock are validly
issued, fully paid and nonassessable.
(iii) This Reorganization Agreement has been, and the Articles and
Certificate of Merger, when executed and delivered, will have been,
duly and validly authorized, executed and delivered by BT Financial,
and constitute and will constitute the valid and binding obligations
of BT Financial and are and will be enforceable in accordance with
their respective terms, except as limited by (a) bankruptcy,
insolvency, fraudulent conveyance, moratorium, reorganization,
conservatorship, receivership or other similar laws from time to time
in effect affecting the enforcement of creditors' rights generally or
the rights of creditors of insured depository institutions, (b)
general equitable principles, (c) laws relating to the safety and
soundness of insured depository institutions, (d) the possible
unavailability of certain remedies in the event of non-material
breaches of such agreements, and (e) 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).
(iv) Neither the execution, delivery and performance of this
Reorganization Agreement by BT Financial, nor the consummation of the
transactions contemplated hereby, nor compliance by BT Financial with
any of the provisions hereof will (i) violate, or conflict with, or
result in a breach of any provisions of, or constitute a default (or
an event which, with notice or lapse of time or both, would constitute
a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or
acceleration under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets
of BT Financial or any of its Subsidiaries under any of the terms,
conditions or provisions of, (A) the articles of incorporation or
bylaws, as amended, of BT Financial or Laurel Bank, or (B) any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which BT Financial or any of its
Subsidiaries is a party or by which any of them is bound or to which
any of their respective properties or assets may be subject, except
for such violations, conflicts, breaches, defaults, etc. which
47
would not, in the aggregate, have a material adverse effect on BT
Financial's business or financial condition on a consolidated basis,
or (ii) to its knowledge, violate any judgement, ruling, order, writ,
injunction, decree, statute, rule or regulation applicable to them or
any of their respective properties or assets.
(v) BT Financial has obtained all necessary federal and state
governmental and Regulatory Approvals in order to consummate the
Merger.
(vi) The Registration Statement has become effective under the
Securities Act, and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or threatened under the Securities Act.
In expressing such opinion, counsel may rely on certificates of officers and
other representatives of BT Financial as to matters of fact and certificates of
public officials as to matters within their jurisdiction. Such opinion shall be
governed by the Legal Opinion Accord of the ABA Section of Business Law (1991).
(k) Fairness Opinion. First ▇▇▇▇▇▇▇ shall have received an opinion from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. dated prior to the date of the Joint Proxy
Statement/Prospectus that the consideration to be paid to shareholders of First
▇▇▇▇▇▇▇ pursuant to this Reorganization Agreement is fair from a financial point
of view to the shareholders of First ▇▇▇▇▇▇▇.
(l) Tax Opinion. First ▇▇▇▇▇▇▇ shall have received an opinion of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, in form and substance reasonably satisfactory to First ▇▇▇▇▇▇▇,
dated as of the Closing Date, substantially to the effect that, on the basis of
facts, representations and assumptions set forth in such opinion, (i) the Merger
will be treated for Federal income tax purposes as a reorganization within the
meaning of Section 368 of the Code and that accordingly no gain or loss will be
recognized by BT Financial, Laurel Bank or First ▇▇▇▇▇▇▇ as a result of the
Merger; and (ii) no gain or loss will be recognized by First ▇▇▇▇▇▇▇'▇
shareholders as a result of the receipt of BT Financial Common Stock in the
Merger. In rendering such opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ may require and rely upon
representations contained in certificates of officers of BT Financial, First
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Bank and others.
(m) Pooling Letter. First ▇▇▇▇▇▇▇ shall have received from
PricewaterhouseCoopers LLP, independent accountants for BT Financial, a letter
dated the date of or shortly prior to the mailing date of the Joint Proxy
Statement/Prospectus and the Effective Time, to the effect that such accountants
are not aware of any facts or circumstances which might cause the Merger not to
qualify for pooling of interests accounting treatment.
5.03. Waivers. A condition precedent as set forth in this Article V
shall be deemed to be satisfied if it has been materially and reasonably
satisfied, and no Party shall fail to consummate the transactions described
herein by reason of a breach of any covenant or the
48
failure to satisfy a condition precedent unless such breach or failure is
material to such transactions as a whole. Any condition waived in writing by the
Party entitled to the benefit thereof shall thereafter cease to be a condition
precedent for purposes of this Article V.
ARTICLE VI
BROKERS AND EXPENSES
6.01. Brokers. BT Financial represents and warrants to First ▇▇▇▇▇▇▇
that no broker or finder has acted for it in connection with the execution and
delivery of this Reorganization Agreement or the transactions contemplated
hereby. First ▇▇▇▇▇▇▇ represents and warrants to BT Financial that no broker or
finder has acted for it in connection with the execution and delivery of this
Reorganization Agreement or the transactions contemplated hereby. Each Party
shall be indemnified and held harmless by the other from any claim, suit, loss
or expense resulting from a breach of the other party's foregoing representation
and warranty.
6.02. Expenses. Except as otherwise provided in this Reorganization
Agreement, all expenses incurred by each Party in connection with or related to
the authorization, preparation and execution of this Reorganization Agreement,
the solicitation of shareholder approval and all other matters related to the
closing of the transactions contemplated hereby, including without limiting the
generality of the foregoing, all fees and expenses of agents, representatives,
counsel and accountants employed by any such Party, shall be borne solely and
entirely by the Party which has incurred the same.
ARTICLE VII
MISCELLANEOUS
7.01. Further Assurances. (a) From time to time as and when requested
by BT Financial or Laurel Bank, or their respective successors or assigns, First
▇▇▇▇▇▇▇, or the officers and directors of First ▇▇▇▇▇▇▇ last in office prior to
consummation of the Merger, shall execute and deliver such agreements, documents
and other instruments necessary to permit the Bank Merger to take place, subject
to the completion of the Merger; (b) such further agreements, documents, deeds
and other instruments and shall take or cause to be taken such other actions,
including those as shall be necessary to vest or perfect in or to confirm of
record or otherwise in the Surviving Corporation title to and possession of all
the property, interests, assets, rights, privileges, immunities, powers,
franchises and authority of First ▇▇▇▇▇▇▇, as shall be necessary or advisable to
carry out the purposes of and effect the transactions contemplated by this
Reorganization Agreement.
7.02. Survival of Representations, Warranties and Covenants. All
representations, warranties and covenants in this Reorganization Agreement or in
any instrument delivered
49
pursuant hereto shall expire on, and be terminated and extinguished on, the
Closing Date, other than covenants that by their terms are to survive or be
performed after the Closing Date.
7.03 Notices. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered or sent by first-class registered or certified mail, postage prepaid,
with return receipt requested, as follows:
(a) If to First ▇▇▇▇▇▇▇, to:
▇▇▇▇▇▇ ▇. ▇▇▇
President
First ▇▇▇▇▇▇▇ Financial Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Esquire
▇▇▇▇▇▇▇, Spiegel & ▇▇▇▇▇, P.C.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) If to BT Financial:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman and Chief Executive Officer
BT Financial Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or to such other address as any such Person may designate in writing to the
other Parties at the addresses listed above, in accordance with this Section.
7.04. Binding Effect. This Reorganization Agreement shall be binding
upon and inure to the benefit of the Parties hereto and their respective
successors and assigns. This
50
Reorganization Agreement may not be assigned by any Party without the express
written consent of the other Parties.
7.05. Headings. The Article, Section, paragraph and other headings in
this Reorganization Agreement are inserted solely as a matter of convenience and
for reference and are not a part of this Reorganization Agreement.
7.06. Counterparts. This Reorganization Agreement may be executed in
one or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
7.07. Integration; No Third-Party Beneficiaries. This Reorganization
Agreement constitutes the entire understanding of the Parties with respect to
the subject matter hereof and supersedes all prior agreements, arrangements or
communications, oral or written, between the Parties hereto with respect to the
subject matter hereunder. This Reorganization Agreement is not intended to
confer upon any Person other than the Parties hereto any rights or remedies
hereunder, except for the provisions of Sections 4.04(g) and 4.05(f).
7.08. Severability. If any term or other provision of this
Reorganization Agreement is held by a court of competent jurisdiction to be
invalid, illegal or incapable of being enforced under any rule of law in any
particular respect or under any particular circumstances, such term or provision
shall nevertheless remain in full force and effect in all other respects and
under all other circumstances, and all other terms, conditions and provisions of
this Reorganization Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any Party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Reorganization Agreement so as to effect the original intent of the parties
as closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the fullest extent possible.
7.09. Amendments. This Reorganization Agreement may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
Party against which the enforcement of such change, waiver, discharge or
termination is sought. This Agreement is not intended to confer upon any Person
other than the Parties hereto any rights or remedies hereunder, except for the
provisions of Sections 4.04(g) and 4.05(f). Any of the terms or conditions of
this Reorganization Agreement may be waived at any time by the Party which is
entitled to the benefit thereof, or any of such terms or conditions may be
amended or modified in whole or in part at any time before or after the vote of
the shareholders of First ▇▇▇▇▇▇▇ and BT Financial on this Reorganization
Agreement to the extent permitted by law by agreement in writing, executed in
the same manner as this Reorganization Agreement after authorization to do so by
the Board of Directors of each Party; provided, however, that such action shall
be taken only if, in the judgment of the Boards of Directors of each Party
taking the action, such waiver or
51
such amendment or modification will not have a material adverse effect on the
benefits intended under this Reorganization Agreement to such Party and its
shareholders following approval of this Reorganization Agreement by the
shareholders of First ▇▇▇▇▇▇▇, unless this Reorganization Agreement, as
modified, is resubmitted to the shareholders of First ▇▇▇▇▇▇▇ and BT Financial
for their approval.
7.10. Governing Law. This Reorganization Agreement shall be governed
by and construed and enforced in accordance with the laws of the Commonwealth of
Pennsylvania and, where the context so requires, under applicable federal law.
7.11. Incorporation by Reference. Any and all schedules, exhibits,
annexes, statements, reports, certificates or other documents or instruments
referred to herein or attached hereto are incorporated herein by reference
thereto as though fully set forth at the point referred to in this
Reorganization Agreement.
IN WITNESS HEREOF, each Party hereto has caused this Reorganization
Agreement to be executed on its behalf and its corporate seal to be affixed
hereto by its duly authorized officers, all as of the day and year first above
set forth.
ATTEST: First ▇▇▇▇▇▇▇ Financial Corporation
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
------------------------- ------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇
Secretary President and Chief Executive Officer
(Corporate Seal)
ATTEST: BT Financial Corporation
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------- ------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Secretary Chairman and Chief Executive Officer
(Corporate Seal)
52
Schedule 4.01(f) First ▇▇▇▇▇▇▇ Financial Statements
There are no exceptions to the criteria set forth in Section 4.01(f) with
respect to financial statements and other SEC documents.
53
Schedule 4.01(m) First ▇▇▇▇▇▇▇ Loans
None.
54
Schedule 4.01(p) First ▇▇▇▇▇▇▇ Real Property
1. Headquarter ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. Berlin ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
3. Somerset ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇)
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
4. Vacant Lot
East side of ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇)
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
5. New Centerville ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ (▇▇▇▇▇ ▇▇▇)
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
6. Confluence ▇▇▇▇▇▇
▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
7. Old Trails ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ (▇▇▇▇▇ ▇▇)
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
8. Indian Head ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
9. Shanksville ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
10. Stoystown ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
All documents, including deeds, relating to real estate owned by First ▇▇▇▇▇▇▇
have been provided or made available to BT Financial.
55
Schedule 4.01(q) First ▇▇▇▇▇▇▇ Environmental Conditions
None.
56
Schedule 4.01(q)(iii) First ▇▇▇▇▇▇▇ Governmental Filings
None.
57
Schedule 4.01(s) First ▇▇▇▇▇▇▇ Leases
REAL PROPERTY LEASED:
1. Meyersdale ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇)
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. Flex Financial Consumer Discount Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇)
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PERSONAL PROPERTY LEASED:
1. Paragon II Postage Equipment
Model SP6K
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. Time and Temperature Sign
(8 Locations)
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
508-510 Hugart Street, Confluence
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
2066 Indian Head Road, Indian Head
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
3. Credit Report Machine (2)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
All leases of real and personal property of First ▇▇▇▇▇▇▇ have been provided or
made available to BT Financial.
58
Schedule 4.01(t) First ▇▇▇▇▇▇▇ Material Contracts
All material contracts have been submitted or made available to BT Financial as
provided in Section 4.01(t).
59
Schedule 4.01(v) First ▇▇▇▇▇▇▇ Employee Benefits
1. Medical Insurance
Blue Cross/Blue Shield
2. Section 125 (flexible medical and child care expense)
Benefit Coordinators Corporation
3. Dental Insurance
Delta Dental
4. Life Insurance
UNUM Insurance Company
5. Long Term Disability
CNA Insurance
6. Short Term Disability
Self-Insured through the Bank
7. 401k Plan (Cash Op)
First ▇▇▇▇▇▇▇ Bank, N.A. Cash Op Plan
Self-Directed Investments in Mutual Funds through ▇▇▇▇▇▇ Investments
8. Defined Benefit Plan
First ▇▇▇▇▇▇▇ Bank, N.A. Pension Plan
9. Employee Stock Ownership Plan
First ▇▇▇▇▇▇▇ Bank, N.A. Employee Stock Ownership Plan*
10. Executive Supplement Income Plan
Massachusetts Mutual Insurance Company (▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ -
annual premium being paid)
Reliance Standard Insurance Company (10 current employees and 6 former
employees)
Metropolitan Life (2 former employees)
First Colony Life (3 former employees)
*The plan has been terminated subject to final approval of the Internal Revenue
Service.
All "employee benefit plans" of First ▇▇▇▇▇▇▇ have been provided or made
available to BT Financial.
60
Schedule 4.01(w) First ▇▇▇▇▇▇▇ Employment Contracts
First ▇▇▇▇▇▇▇ and/or the Bank have entered into employment contracts
with ▇▇▇▇▇▇ ▇. ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
copies of which contracts have been submitted to BT Financial.
61
Schedule 4.01(y) First ▇▇▇▇▇▇▇ ▇▇▇▇ Claim
There is one existing claim against the Bank's fidelity bond carrier with
respect to a defalcating employee. The details of the matter have been
submitted to BT Financial.
62
Schedule 4.01(cc) First ▇▇▇▇▇▇▇ Investments
None.
63
Exhibit A
First ▇▇▇▇▇▇▇ Financial Corporation
Affiliate's Agreement
The undersigned, in connection with the Agreement and Plan of
Reorganization dated as of the "Agreement"), by and between
-----------------
First ▇▇▇▇▇▇▇ Financial Corporation ("First ▇▇▇▇▇▇▇") and BT Financial
Corporation ("BT Financial") does hereby represent, warrant, undertake and agree
as follows:
1. The undersigned has been advised that as of the date hereof the
undersigned may be deemed to be an "affiliate" of First ▇▇▇▇▇▇▇ as the term
"affiliate" is used in and for purposes of Section 201.01 of the SEC's
Codification of Financial Reporting Policies (formerly SEC Accounting Series
Releases 130 and 135) and Rule 145 of the Securities Act of 1933, as amended
(the "Act"), although nothing contained herein should be construed as an
admission thereof;
2. The shares of BT Financial Common Stock to be issued to the
undersigned upon conversion of shares of First ▇▇▇▇▇▇▇ Common Stock (such shares
of BT Financial Common Stock to be issued to the undersigned being referred to
herein as the "BT Financial Shares") are not being acquired with a view toward
their distribution except to the extent and in the manner permitted by paragraph
(d) of Rule 145 of the Act; and
3. Within the 30 days prior to the Effective Time, the undersigned has
not sold, exchanged, transferred, pledged, disposed of or in any other way
reduced his risk relative to, and will not sell, exchange, transfer, pledge,
dispose of or in any other way reduce his risk relative to, any shares of First
▇▇▇▇▇▇▇ Common Stock or BT Financial Common Stock owned of record or
beneficially by the undersigned.
The undersigned does hereby further undertake and agree as follows:
1. The undersigned will not sell, exchange, transfer, pledge, dispose of
or in any other way reduce his risk relative to his BT Financial Common Stock
until BT Financial, pursuant to Section 201.01 of the SEC's Codification of
Financial Reporting Policies shall have published combined financial results
covering a period of at least 30 days of post-Merger combined operations
subsequent to the Effective Time; and
2. The undersigned will not sell or otherwise dispose of his BT Financial
Shares except in accordance with applicable provisions of the Act and the rules
and regulations thereunder; and
3. The certificates representing his BT Financial Shares will bear the
following legend:
64
"The shares represented by this certificate have been issued to
the registered holder in a transaction to which Rule 145 under the
Securities Act of 1933, as amended (the "Act") applies. The shares
represented by this certificate may not be sold, transferred or
assigned, and the issuer shall not be required to give effect to any
attempted sale, transfer or assignment except pursuant to (a) a
current registration statement under the Act, or (b) a transaction
which, in the opinion of counsel reasonably satisfactory to the
issuer, is not required to be registered under the Act."
Such legend shall be subject to prompt removal upon receipt of an opinion
of counsel satisfactory to BT Financial to the effect that such removal conforms
to then existing law.
All capitalized terms which are not defined herein are used as they are
defined in the Agreement.
WITNESS the due execution hereof this day of , 1999.
---- ----------
-----------------------------------
Accepted and Agreed:
BT Financial Corporation
By:
---------------------------
65
Exhibit B
BT Financial Corporation
Affiliate's Agreement
The undersigned, in connection with the Agreement and Plan of
Reorganization dated as of 1999 (the "Agreement"), by and between
---------
First ▇▇▇▇▇▇▇ Financial Corporation ("First ▇▇▇▇▇▇▇") and BT Financial
Corporation ("BT Financial") does hereby represent, warrant, undertake and agree
as follows:
1. The undersigned has been advised that as of the date hereof the
undersigned may be deemed to be an "affiliate" of BT Financial as the term
"affiliate" is used in and for purposes of Section 201.01 of the SEC's
Codification of Financial Reporting Policies (formerly SEC Accounting Series
Releases 130 and 135) and Rule 145 of the Securities Act of 1933, as amended
(the "Act"), although nothing contained herein should be construed as an
admission thereof;
2. Within the 30 days prior to the Effective Time, the undersigned has
not sold, exchanged, transferred, pledged, disposed of or in any other way
reduced his risk relative to, and will not sell, exchange, transfer, pledge,
dispose of or in any other way reduce his risk relative to, any shares of First
▇▇▇▇▇▇▇ Common Stock or BT Financial Common Stock owned of record or
beneficially by the undersigned; and
3. The undersigned will not sell, exchange, transfer, pledge, dispose of
or in any other way reduce his risk relative to his BT Financial Common Stock
until BT Financial, pursuant to Section 201.01 of the SEC's Codification of
Financial Reporting Policies shall have published combined financial results
covering a period of at least 30 days of post-Merger combined operations
subsequent to the Effective Time.
All capitalized terms which are not defined herein are used as they are
defined in the Agreement.
WITNESS the due execution hereof this day of , 1999.
---- ----------
------------------------------------
Accepted and Agreed:
BT Financial Corporation
By:
----------------------------
66