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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 15, 1998
REGISTRATION NO. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NORTHWEST BANCORP, INC.
-----------------------
(Exact name of registrant as
specified in its charter)
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PENNSYLVANIA 23-2900888
- ----------------------- ----------------------
(State of Incorporation (I.R.S. Employer
or Organization) Identification Number)
</TABLE>
LIBERTY AND SECOND STREETS
WARREN, PENNSYLVANIA 10365-2353
(814) 726-2140
---------------------------------------------------------
(Address, including ZIP Code, and telephone number
including area code, of registrants' principal
executive offices)
JOHN O. HANNA
PRESIDENT AND CHIEF EXECUTIVE OFFICER
NORTHWEST BANCORP, INC.
LIBERTY AND SECOND STREETS
WARREN, PENNSYLVANIA 10365-2353
---------------------------------------------------------
(Name, address, including ZIP Code, and telephone number,
including area code, of agent for service)
Copies to:
KENNETH R. LEHMAN, ESQ.
NED QUINT, ESQ.
LUSE LEHMAN GORMAN POMERENK & SCHICK, P.C.
5335 WISCONSIN AVENUE, N.W., SUITE 400
WASHINGTON, D.C. 20015
(202) 274-2000
____________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC. As soon
as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box [ ].
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box [X].
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering [ ].
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering [ ].
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box [ ].
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITY AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED(4) REGISTERED PER SHARE OFFERING PRICE FEE(5)
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Common Stock, par value $.10 per share 150,000 $16.00 $2,500,000 $708
- ------------------------------------------------------------------------------------------------------
</TABLE>
The amount of registration fee is calculated pursuant to Rule 457(o) under the
Securities Act of 1933.
<PAGE>
PROSPECTUS
NORTHWEST BANCORP, INC.
108,460 SHARES OF COMMON STOCK (ANTICIPATED MAXIMUM)
Northwest Bancorp, Inc. (the "Company") a Pennsylvania corporation, which
owns 100% of the common stock of Northwest Savings Bank ("Northwest" or the
"Bank"), a Pennsylvania-chartered savings bank headquartered in Warren,
Pennsylvania, is offering 108,460 shares of its common stock, par value $.10 per
share (the "Common Stock"), pursuant to an Agreement and Plan of Merger Between
Northwest Savings Bank and Corry Savings Bank, dated as of June 19, 1997 (the
"Agreement"), and the related Corry Savings Bank Plan of Merger and Stock
Issuance Plan (the "Plan"). Pursuant to the Agreement and the Plan, the Company
is offering such shares to certain depositors of Corry Savings Bank and others
in a subscription offering (the "Subscription Offering") and may offer shares to
certain other persons in a community offering (the "Community Offering" and
together with the Subscription Offering, the "Offering"). Approximately 69.5% of
the currently outstanding shares of Common Stock are owned by Northwest Bancorp,
MHC, a Pennsylvania chartered mutual holding company (the "Mutual Company"). At
the time of the completion of the Offering, Corry Savings Bank, a Pennsylvania-
chartered mutual savings bank headquartered in Corry, Pennsylvania ("Corry
Savings"), will merge with and into Northwest (the "Merger") with Northwest as
the surviving institution. In certain circumstances the total number of shares
of Common Stock to be offered in the Offering may be increased by up to 15%.
In accordance with the Plan and subject to certain maximum and minimum
purchase limitations, subscription rights to purchase Common Stock have been
granted to: (i) Corry Savings' account holders who had deposit accounts totaling
$50 or more as of the close of business on March 31, 1996 (the "Eligibility
Record Date," and such depositors "Eligible Account Holders"); (ii) Corry
Savings' account holders who had deposit accounts totaling $50 or more as of the
close of business on ________,1998 (the "Supplemental Eligibility Record Date,"
and such depositors "Supplemental Eligible Account Holders"); (iii) Corry
Savings' account holders as of the close of business on _____, 1998 (the
"Voting Record Date"), the voting record date for the Special Meeting of Corry
Savings' depositors being held to approve the Plan ("Other Depositors"); (iv)
employees, officers and trustees of Corry Savings ("Eligible Employees and
Trustees"); and (v) the Northwest Savings Bank Employee Stock Ownership Plan
(the "ESOP"). Any shares of Common Stock not purchased in the Subscription
Offering may be offered for sale in the Community Offering, with a preference
given to persons residing in Corry Savings' local community. The Community
Offering, if any, will be conducted by officers and directors of the Company
and/or the Bank.
------------------------------------
THESE SECURITIES ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF
THE PRINCIPAL INVESTED. FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE
CONSIDERED BY EACH PROSPECTIVE INVESTOR, SEE "SPECIAL CONSIDERATIONS."
------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE PENNSYLVANIA
DEPARTMENT OF BANKING, OR ANY OTHER FEDERAL OR STATE AGENCY OR ANY STATE
SECURITIES COMMISSION, NOR HAS SUCH COMMISSION, CORPORATION, DEPARTMENT OR OTHER
AGENCY OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------------------
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY. THE COMMON STOCK IS NOT GUARANTEED BY THE COMPANY, THE MUTUAL
COMPANY OR THE BANK. THERE CAN BE NO ASSURANCE THAT THE TRADING PRICE OF THE
COMMON STOCK WILL NOT DECREASE AT ANY TIME.
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ESTIMATED ESTIMATED FEES ESTIMATED NET
SUBSCRIPTION PRICE (1) AND EXPENSES (2) PROCEEDS
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Minimum Per Share (3) $ 15.86 $ 3.12 $ 12.74
- ---------------------------------------------------------------------------------
Midpoint Per Share (4) $ 15.86 $ 2.65 $ 13.21
- ---------------------------------------------------------------------------------
Maximum Per Share (5) $ 17.63 $ 2.31 $ 15.32
- ---------------------------------------------------------------------------------
Minimum Total (3) $1,271,621 $250,000 $1,021,621
- ---------------------------------------------------------------------------------
Midpoint Total (4) $1,496,025 $250,000 $1,246,025
- ---------------------------------------------------------------------------------
Maximum Total (5) $1,720,429 $250,000 $1,470,429
=================================================================================
</TABLE>
(1) The Estimated Subscription Price Per Share is based on the last sale price
of Common Stock on May 13, 1998, of $17 5/8 per share, as reported by the
Nasdaq National Market. The aggregate Estimated Subscription Price is based
on the Independent Valuation.
(2) Includes estimated legal, accounting, appraisal, printing, filing and
registration fees and other miscellaneous expenses incurred or expected to
be incurred by the Bank and Corry Savings in connection with the Offering
and the Merger. See "The Offering and Merger; The Offering."
(3) Assumes that all shares are purchased by Eligible Account Holders at the
"Adjusted Price Per Share" which, for purposes of this table is assumed to
be equal to 90% of the last reported sale price of Common Stock on May 13,
1998. Also assumes that the final appraisal is equal to the minimum of the
Valuation Range (as defined herein).
(4) Assumes that all shares are purchased by Eligible Account Holders at the
Adjusted Price Per Share and that the final appraisal is equal to the
midpoint of the Valuation Range (as defined herein).
(5) Assumes that all shares are purchased at the Unadjusted Price Per Share and
that the final appraisal is equal to the maximum of the Valuation Range (as
defined herein). Includes proceeds of the sale of 7% of the shares to the
Bank's ESOP.
THE DATE OF THIS PROSPECTUS IS JUNE ____, 1998
<PAGE>
In connection with the Merger and the Offering, Corry Savings has obtained
an updated independent valuation (the "Independent Valuation") of its pro forma
market value assuming a merger with Northwest. The number of shares of Common
Stock offered in the Offering will be equal to approximately 30.5% of the
quotient obtained by dividing the Independent Valuation as updated at the
conclusion of the Offering by the "Unadjusted Price Per Share" which shall be
equal to the lower of (i) the average of the highest closing bid price of the
Common Stock at the close of trading of each of the 20 trading days prior to the
date of the completion of the Merger and Offering (the "Effective Date"), and
(ii) the highest closing bid price of the Common Stock on the last trading day
prior to the completion of the Merger. The Company will offer shares of Common
Stock to Eligible Account Holders at a 10% discount to the Unadjusted Price Per
Share (the "Adjusted Price Per Share").
The Independent Valuation has been performed by Feldman Financial Advisors,
Inc. (the "Independent Appraiser"), a firm experienced in the valuation and
appraisal of savings institutions. The Independent Appraiser determined that as
of April 28, 1998, the appraised value of Corry Savings was within a range of
between $4,632,500 to $6,267,500 (the "Valuation Range") with a mid-point of
$5,450,000. The Independent Valuation will be updated and the aggregate
purchase price of the Common Stock to be sold in the Offering will be determined
after the completion of the Offering. If the updated appraised value of Corry
Savings is outside the Valuation Range, the Offering may be terminated, or a new
valuation range may be established, in which event subscribers will be
resolicited and given the opportunity to modify or rescind their order. See
"The Offering and Merger; The Offering -- The Independent Valuation."
In order to purchase Common Stock each purchaser must complete and submit
an Order Form indicating the total dollar amount of Common Stock for which he is
subscribing. The subscription price per share of Common Stock for all
subscribers other than Eligible Account Holders will be equal to the Unadjusted
Price Per Share. The subscription price per share for Eligible Account Holders
will be equal to the Adjusted Price Per Share. Subject to the applicable
purchase limitations, the total number of shares that will be issued to a
subscriber whose subscription has been accepted will be equal to the total
dollar amount of stock for which such subscription has been accepted divided by
the Unadjusted Price Per Share or the Adjusted Price Per Share, as applicable.
Payment for subscriptions must accompany an order form and may be made (i) in
cash if delivered in person at the office of Corry Savings, (ii) by check or
money order, or (iii) by authorization of withdrawal from deposit accounts
maintained with Corry Savings. The Company, Corry Savings and Northwest reserve
the right to refund subscription funds in lieu of issuing fractional shares, or
permit subscribers to elect to receive additional whole shares in this process.
The minimum amount of Common Stock for which any person may subscribe in
the Subscription Offering or in the Community Offering, respectively, is $500.
No person, directly or indirectly or with an associate or a group acting in
concert, may subscribe for or purchase in the aggregate more than 5% of the
total number of shares of Common Stock offered in the Offering, or $95,579 of
Common Stock based on the maximum of the Valuation Range. Such stock may be
purchased at a 10% discount (i.e., for $86,021) by Eligible Account Holders.
The maximum purchase limitation may be increased or decreased as described
herein. See "The Offering and Merger--Purchase Limitations."
All subscription rights will expire at _____ p.m., Pennsylvania time, on
__________, 1998 (the "Expiration Date") unless extended by the Company, with
the approval of the Pennsylvania Department of Banking (the "Department") if
necessary, for up to an additional 45 days. Any shares not sold in the
Subscription Offering may be sold in the Community Offering, which also is
expected to terminate on __________, 1998, but which may terminate as late as
______________, 1998. Subscriptions paid by cash, check, or money order will be
placed in a segregated account at Corry Savings and will earn interest at
Northwest's regular passbook rate of interest from the date of receipt until
completion or termination of the Offering. Payments authorized by withdrawal
from deposit accounts at Corry Savings will continue to earn interest at the
contractual rate until the Offering is completed or terminated, and such funds
will be otherwise unavailable to the depositor until such time. Orders
submitted are irrevocable until the completion of the Offering; provided that
all subscribers will have their funds returned promptly, with interest, and all
withdrawal authorizations will be canceled if the Offering is not completed by
___________,
2
<PAGE>
1998, unless such period has been extended with the approval of the Department,
if necessary. If an extension of time has been granted, all subscribers will be
notified of such extension, and of any rights to confirm, modify or rescind
their subscriptions and have their funds returned promptly with interest, and of
the time period within which each subscriber must notify Corry Savings or the
Company of his intention to confirm, modify or rescind his subscription. If an
affirmative response to any resolicitation is not received by Corry Savings or
the Company from a subscriber, the subscriber's order will be rescinded and all
funds will be returned promptly with interest.
Consummation of the Offering is subject to the approval of the Plan by
Corry Savings' depositors at a special meeting called for such purpose, the
satisfaction of conditions contained in certain regulatory approvals and letters
of nonobjection, and the satisfaction or waiver of certain conditions contained
in the Agreement.
The Common Stock is listed for quotation on the Nasdaq National Market
under the symbol "NWSB." On May 13, 1998, the last reported sale price of
Common Stock, as reported on the Nasdaq National Market, was $17 5/8 per share.
THE COMPANY IS SUBJECT TO THE INFORMATIONAL REQUIREMENTS OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, AND IN ACCORDANCE THEREWITH FILES REPORTS,
PROXY STATEMENTS AND OTHER INFORMATION WITH THE SECURITIES AND EXCHANGE
COMMISSION (THE "SEC").
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities of
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies of such materials can be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Commission maintains an Internet web sight that contains reports,
proxy and information statements and other information regarding issuers who
file electronically with the Commission. The address of that sight is
http://www.sec.gov.
- -------------------
Prior to the completion of the organization of the Company as the Bank's
holding company, the Bank was subject to the information, reporting and proxy
statement requirements of the Exchange Act and, in accordance therewith and with
the rules and regulations of the FDIC, filed reports, proxy statements and other
information with the FDIC. Copies of such materials may be obtained at
prescribed rates from the FDIC's Registration, Disclosure and Operations Unit,
550 17th Street, N.W., Washington, D.C. The statements contained herein as to
the contents of any contract or other document filed as an exhibit hereto are of
necessary brief descriptions thereof and are not necessarily complete. Each
such statement is qualified by reference to such contract or document.
The Company has filed with the SEC a registration statement (the
"Registration Statement"), of which this Prospectus is a part, under the
Securities Act. As permitted by the rules and regulations of the SEC, this
Prospectus does not contain all of the information set forth in the Registration
Statement. In addition, certain documents filed by the Company with the
Commission have been incorporated in this Prospectus by reference. See
"Incorporation of Certain Documents by Reference." The statements contained
herein as to the contents of any contract or other document filed as an exhibit
to the Registration Statement or incorporated by reference into the Prospectus
are of necessity brief descriptions thereof and are not necessarily complete.
Each such statement is qualified by reference to such contract or document. The
information filed with the Commission can be examined without charge as
described above.
The Company will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of the Agreement and the Plan, and the Company's Articles of Incorporation
and Bylaws. Such requests, in writing or by telephone, should be directed to:
Gregory C. LaRocca, Secretary, Northwest Bancorp, Inc., Liberty and Second
Streets, Warren, Pennsylvania, 16365-2353, (814) 726-2140. In addition, the
Agreement, the Plan and the Independent Appraisal may be inspected at the
offices of Corry Savings at 150 North Centre Street, Corry, Pennsylvania.
3
<PAGE>
Corry Savings will establish a stock sales center in connection with the
Offering, and the Common Stock will be marketed principally through the
distribution of this Prospectus and through the activities in the stock sales
center. Questions regarding the Offering should be addressed to the persons at
the stock center. The stock sales center will be located at Corry Savings Bank,
150 North Centre Street, Corry, Pennsylvania. The telephone number of the stock
sales center is (814) _________. The stock sales stock center is expected to
operate during normal business hours throughout the period of the Offering. See
"the Offering and Merger--Description of Sales Activities."
SUMMARY
The following summary does not purport to be complete, and is qualified in
its entirety by the more detailed information contained elsewhere in the
Prospectus or in the documents incorporated by reference.
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Northwest Bancorp, Inc. The Company is a Pennsylvania
corporation that was formed to become
the stock holding company of the Bank in
a transaction (the "Two-Tier
Reorganization") that was approved by
the Bank's stockholders on December 10,
1997, and completed on February 17,
1998. In the Two-Tier Reorganization,
each share of the Bank's common stock
was converted into and became a share of
Common Stock of the Company, and the
Bank became a wholly-owned subsidiary of
the Company. The Mutual Company, which
owned a majority of the Bank's
outstanding shares of common stock
immediately prior to completion of the
Two-Tier Reorganization, became the
owner of the same percentage of the
outstanding shares of Common Stock of
the Company immediately following the
completion of the Two-Tier
Reorganization. As of the date hereof,
the sole activity of the Company is the
ownership of all of the issued and
outstanding common stock of the Bank and
the ownership of approximately 65% of
the outstanding shares of common stock
of Jamestown Savings Bank. Jamestown
Savings Bank was formed in November of
1995 as a de novo New York-chartered
savings bank headquartered in Jamestown,
New York. As of March 31, 1998,
Jamestown Savings Bank had assets of
$55.7 million and deposits of $49.8
million.
Northwest Savings Bank The Bank is a Pennsylvania-chartered
stock savings bank headquartered in
Warren, which is located in
northwestern Pennsylvania. The Bank
is a community-oriented institution
offering traditional deposit and loan
products, and through its
subsidiaries, consumer finance
services. The Bank's mutual savings
bank predecessor was originally
founded in 1896. The Bank in its
current stock form was established on
November 2, 1994, as a result of the
reorganization (the "Reorganization")
of the Bank's mutual predecessor into
a mutual holding company structure.
At the time of the Reorganization,
the Bank issued a majority of its
to-be outstanding shares of common
stock to the Mutual Company (which
was formed in connection with the
Reorganization) and a minority of its
to-be outstanding shares to
stockholders other than the Mutual
Company. At March 31, 1998, the Bank
had total assets of $2.41 billion,
total deposits of $1.99 billion and
shareholders equity of $213.3 million.
Corry Savings Corry Savings Bank is a Pennsylvania
chartered mutual savings bank located
in Corry, Pennsylvania. The primary
business of Corry Savings consists of
attracting deposits from the general
public and originating residential
mortgage and consumer loans. Corry
Savings conducts its business from
one office located at 150 North
Centre Street, Corry, Pennsylvania.
Corry Savings' deposits are insured
by the FDIC through the SAIF, and
Corry Savings is a member of the
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Federal Home Loan Bank of Pittsburgh. As
of March 31, 1998, Corry Savings had
assets of $29.0 million, net loans
receivable of $21.2 million, deposits of
$25.2 million and retained earnings of
approximately $3.1 million.
Special Considerations Attention should be given to the matters
discussed under "Special
Considerations," which include a
discussion of certain federal income tax
consequences of the transaction to
Eligible Account Holders; the potential
adverse impact on the Bank of changes in
interest rates; extensive governmental
regulation of the financial institution
industry; the possible decline in the
market price for the Common Stock after
the Offering; the inability to sell
Common Stock until issuance and receipt
of the certificates; the highly
competitive environment in which the
Bank operates; and certain anti-takeover
provisions with respect to the Company.
Use of Proceeds Although the actual net proceeds from
the sale of the Common Stock cannot be
determined until the Offering is
completed, it is presently anticipated
that the net proceeds will be between
$890,000 and $1.3 million, assuming
that: (i) 93% of the shares of Common
Stock offered in the Offering is
purchased by Eligible Account Holders at
the Adjusted Price Per Share; (ii) 7% of
the shares of Common Stock offered in
the Offering are purchased by the ESOP;
and (iii) a number of shares of Common
Stock equal to 3% of the Common Stock
sold in the Offering is purchased by the
Bank's Recognition and Retention Plan
for awards to employees, such open
market purchases are funded with
proceeds from the Offering, and the
purchase price per share is equal to the
Unadjusted Price Per Share. The net
proceeds of the Offering will be
initially invested in federal funds and
investment grade, short-term marketable
securities, or used for general
corporate purposes.
Dividend Policy The Bank or the Company has paid
quarterly cash dividends every quarter
since the completion of the
Reorganization and minority stock
issuance in November 1994, and it is the
current policy of the Company to pay a
quarterly cash dividend of $.04 per
share of Common Stock. During the fiscal
years ended June 30, 1997 and 1996 the
Bank declared and paid cash dividends
totaling $.16 and $.152 (as adjusted for
the Bank's May 22, 1996 and November 20,
1997 two-for-one stock splits),
respectively, per share of Common Stock.
As of the date hereof the Company has
insignificant assets other than common
stock of the Bank, and its principal
source of income with which to pay
dividends consists of dividends from the
Bank. Accordingly, the Company's ability
to pay dividends will depend largely on
its receipt of sufficient cash dividends
from the Bank. Under Pennsylvania law,
the Bank is generally permitted to pay
dividends out of accumulated net
earnings if the Bank's surplus would not
be reduced by the payment of such
dividend. Pennsylvania law requires the
Bank to maintain surplus in an amount
that is at least equal to capital. See
"Dividend Policy."
Dividends paid by the Company will be
determined by the Company's Board of
Directors and will be based upon its
consolidated financial condition,
results of operations, tax
considerations, economic conditions,
regulatory restrictions which affect the
payment of dividends by the Bank to the
Company, and other factors. In addition,
the Company's ability to pay dividends
is subject to limitations under
Pennsylvania law, and regulations of the
FRB that require the Company to maintain
minimum levels of capital. There can be
no assurance that dividends
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will be paid on Company Common Stock or
that, if paid, such dividends will not
be reduced or eliminated in the future.
Market for Common Stock The Common Stock is listed on the
Nasdaq National Market under the
symbol "NWSB." As of March 31, 1998,
there were 10 registered market
makers in the Company's Common Stock,
4,402 stockholders of record
(excluding the number of persons or
entities holding stock in street name
through various brokerage firms), and
46,837,755 shares outstanding.
The Offering Pursuant to the Agreement and the
Plan, Corry Savings will merge with
and into the Bank with the Bank as
the surviving institution, and the
Company will sell shares of Common
Stock in the Offering to the
depositors of Corry Savings and issue
shares to the Mutual Company. The
Merger has been approved by the
Pennsylvania Department of Banking
(the "Department") subject to certain
conditions including, among other
things, approval of the Plan by Corry
Savings' depositors. A special
meeting of depositors for this
purpose is to be held on
__________________, 1998. The Merger
must also be approved by the FDIC and
the Board of Governors of the Federal
Reserve System (the "FRB"). See "The
Offering and Merger."
The Charitable Foundation In connection with the Merger and
Offering, Northwest and Corry shall
establish a charitable foundation
(the "Charitable Foundation") for the
purpose of providing charitable
contributions to the Corry,
Pennsylvania community, and other
market areas served by Northwest. The
initial contribution to the
Charitable Foundation shall be
$500,000. See "The Offering and
Merger--The Charitable Foundation."
Offering Priorities The Plan provides that, subject to
certain maximum and minimum purchase
limitations, subscription rights to
purchase shares of Common Stock in
the Subscription Offering have been
granted to (i) Eligible Account
Holders, (ii) Supplemental Eligible
Account Holders, (iii) Other
Depositors, (iv) Eligible Employees
and Trustees, and (v) the Bank's
ESOP. Any shares of Common Stock for
which subscriptions have not been
accepted in the Subscription Offering
may, at the sole discretion of the
Board of Directors of the Company, be
issued to the Mutual Company or
offered for sale in a Community
Offering. In the Community Offering,
should it be conducted, unsubscribed
shares would be offered directly to
the general public with a preference
to those natural persons residing in
the local community of Corry,
Pennsylvania (the boundaries of which
community would be determined by
Corry Savings' Board of Trustees in
its sole discretion). Additional
terms and conditions may be
established at any time prior to the
closing of any Community Offering by
the Board of Directors of the Bank
and the Board of Trustees of Corry
Savings.
Stock Pricing and Number The total number of shares of Common
of Shares to be Issued Stock to be offered in the Offering
will be determined jointly by the
Boards of Directors of the Company
and the Board of Trustees of Corry
Savings, based upon the Independent
Valuation. The number of shares of
Common Stock to be offered in the
Offering will be equal to 30.5% of
the quotient obtained by dividing the
Independent Valuation as updated at
the conclusion of the Offering by the
Unadjusted Price Per Share, except
that such number of shares may not be
more than 15% larger than the number
of shares indicated on the cover page
as being offered hereby.
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The Independent Valuation The Independent Valuation was
performed by the Independent
Appraiser, a firm experienced in the
valuation and appraisal of savings
institutions. The Independent
Appraiser determined that the
appraised value of Corry Savings as
of April 28, 1998 ranged from
$4,632,500 to $6,267,500. The
Independent Valuation will be updated
again after the completion of the
Offering. Such valuation, however,
is not intended, and must not be
construed, as a recommendation of any
kind as to the advisability of
purchasing Common Stock. THE
INDEPENDENT APPRAISER VALUED CORRY
SAVINGS, BUT DID NOT VALUE THE SHARES
OF COMMON STOCK OFFERED IN THE
OFFERING. The Independent Appraiser
did not independently verify the
financial statements and other
information provided by Corry
Savings, nor did the Independent
Appraiser value independently the
assets or liabilities of Corry
Savings, the Bank or the Company.
Moreover, because such valuation is
necessarily based upon estimates and
projections of a number of matters,
all of which are subject to change
from time to time, no assurance can
be given that persons purchasing
shares in the Offering will
thereafter be able to sell such
shares at prices at or above the
price at which they purchased such
shares.
Purchase Limitations The minimum amount of Common Stock
for which any person may subscribe in
the Subscription Offering or in the
Community Offering, respectively, is
$500. No person, directly or
indirectly or with an associate or a
group acting in concert, may
subscribe for or purchase in the
aggregate more than 5% of the total
number of shares of Common Stock
offered in the Offering, or $95,579
of Common Stock based on the maximum
of the Valuation Range. Such stock
may be purchased at a 10% discount
(i.e., for $86,021) by Eligible
Account Holders. The maximum purchase
limitation may be decreased below 5%
or increased to 9.9%; provided, that
orders for Common Stock exceeding 5%
of the shares being offered shall not
exceed in the aggregate 10% of the
total offering. Requests to purchase
additional shares of the Common Stock
in the event that the purchase
limitation is so increased will be
determined by the Company and Corry
Savings in their sole discretion.
See "The Offering and
Merger--Purchase Limitations."
Expiration Date for the Offering The Subscription Offering will expire
on _____________, 1998, unless
extended for up to 45 days or such
additional periods by the Company
with the approval of the Department
(as extended, the "Expiration Date").
Subscription rights which have not
been exercised prior to the
Expiration Date will become void.
Orders will not be executed until all
shares of Common Stock have been
subscribed for or otherwise sold. If
all shares have not been issued by
the Expiration Date unless such
period is extended with the consent
of the Department, all funds will be
returned promptly to the subscribers
with interest and all withdrawal
authorizations will be canceled. If
an extension is granted, subscribers
will be notified of the extension of
time and of any rights of subscribers
to modify or rescind their
subscriptions.
Community Offering Any shares of Common Stock for which
subscriptions have not been accepted
in the Subscription Offering may, at
the sole discretion of the Board of
Directors of the Company, be issued
to the Mutual Company or offered for
sale in a Community Offering. In the
Community Offering, should it be
conducted, unsubscribed shares would
be offered directly to the general
public with a preference to those
natural persons residing in the local
community of Corry, Pennsylvania (the
boundaries of which community would
be determined by Corry
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Savings' Board of Trustees in its sole
discretion). Additional terms and
conditions may be established at any
time prior to the closing of any
Community Offering by the Board of
Directors of the Bank and the Board of
Trustees of Corry Savings. The Community
Offering, if any, shall be for a period
of not more than 45 days unless extended
by the Company and Corry Savings, and
shall commence concurrently with, during
or promptly after the Subscription
Offering. The opportunity to subscribe
for shares of Common Stock in the
Community Offering category is subject
to the right of the Company and Corry
Savings, in their sole discretion, to
accept or reject any such orders in
whole or in part either at the time of
receipt of an order or as soon as
practicable following the Expiration
Date.
Procedure for Purchasing To purchase shares in the Subscription
Shares in Subscription and and Community Offering, an executed
Community Offering order form with the required payment for
the total dollar amount of Common Stock
subscribed for, or with appropriate
authorization for withdrawal from a
Corry Savings' deposit account (which
may be given by completing the
appropriate blanks in the order form),
must be received by Corry Savings at its
office by ____ p.m., local time on the
Expiration Date. Order forms which are
not received by such time or are
executed defectively or are received
without full payment (or appropriate
withdrawal instructions) are not
required to be accepted. In addition, an
order submitted on photocopied or
facsimile order forms will not be
accepted. The Company has the right to
waive or permit the correction of
incomplete or improperly executed forms,
but does not represent it will do so.
Once received, an executed order form
may not be modified, amended or
rescinded without the consent of the
Company unless the Offering has not been
completed by _____________________,
1998, unless such period has been
extended. IN ORDER TO ENSURE THAT
ELIGIBLE ACCOUNT HOLDERS, SUPPLEMENTAL
ELIGIBLE ACCOUNT HOLDERS AND OTHER
DEPOSITORS ARE PROPERLY IDENTIFIED AS TO
THEIR STOCK PURCHASE PRIORITIES,
DEPOSITORS AS OF THE ELIGIBILITY RECORD
DATE, SUPPLEMENTAL ELIGIBILITY RECORD
DATE AND/OR THE VOTING RECORD DATE MUST
LIST ALL ACCOUNTS ON THE STOCK ORDER
FORM GIVING ALL NAMES IN EACH ACCOUNT
AND THE ACCOUNT NUMBER.
The subscription price per share of
Common Stock for all subscribers other
than Eligible Account Holders will be
equal to the Unadjusted Price Per Share.
The subscription price per share for
Eligible Account Holders shall be equal
to the Adjusted Price Per Share (i.e.,
90% of the Unadjusted Price Per Share).
Subject to the applicable purchase
limitations, the total number of shares
that will be issued to a subscriber
whose subscription has been accepted
will be equal to the total dollar amount
of stock for which such subscription has
been accepted divided by the Unadjusted
Price Per Share or the Adjusted Price
Per Share, as applicable. Payment for
subscriptions must accompany an order
form and may be made (i) in cash if
delivered in person at the office of
Corry Savings, (ii) by check or money
order, or (iii) by authorization of
withdrawal from deposit accounts
maintained with Corry Savings. Interest
will be paid on payments made by cash,
check, or money order at the Bank's
passbook rate of interest from the date
payment is received until the completion
or termination of the Offering. If
payment is made by authorization of
withdrawal from deposit accounts (other
than checking accounts), the funds
authorized to be withdrawn from a
deposit account will continue to accrue
interest at the contractual rates until
completion or termination of the
Offering, but a hold will be placed on
such funds, thereby
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
making them unavailable to the depositor
until completion or termination of the
Offering.
Restrictions on Transfer of Prior to the completion of the
Subscription Rights and Offering, persons receiving
Shares subscription rights may not transfer
them or enter into any agreement or
understanding to transfer the legal
or beneficial ownership of the
subscription rights issued under the
Plan or the shares of Common Stock to
be issued upon their exercise. Such
rights may be exercised only by the
person to whom they are granted and
only for his account. Each person
exercising such subscription rights
will be required to certify that he
is purchasing shares solely for his
own account and that he has no
agreement or understanding regarding
the sale or transfer of such shares.
In addition, persons may not offer or
make an announcement of an offer or
intent to make an offer to purchase
such subscription rights or shares of
Common Stock prior to the completion
of the Offering. The Company and
Corry Savings will pursue any and
all legal and equitable remedies in
the event they become aware of the
transfer of subscription rights and
will not honor orders known by them
to involve the transfer of such
rights.
Certain Federal Income It is a condition to the completion
Tax Consequences of the of the Offering and Merger that Corry
Merger and Offering Savings and the Bank receive an
opinion of counsel or independent tax
advisor (the "Tax Opinion") to the
effect that the Merger will qualify
as a reorganization within the
meaning of Section 368(a) of the
Internal Revenue Code of 1986, as
amended (the "Code") and that,
accordingly, no gain or loss will be
recognized by: (a) Corry Savings or
the Bank as a result of the Offering
and Merger; (b) the Company as a
result of the issuance of
subscription rights to eligible
account holders and other depositors
("Subscription Rights"), the lapse of
any Subscription Rights or the
receipt of money in exchange for the
issuance of Common Stock pursuant to
the Offering.
The Tax Opinion will not express an
opinion as to the expected tax
effects to Eligible Account Holders
as a result of the Offering and their
ability to purchase Common Stock at
the Adjusted Price Per Share. These
tax effects may include, among other
things, the recognition of gain upon
receipt or exercise of the
Subscription Rights to the extent of
their fair market value, which value
may be substantial because the
Adjusted Purchase Price is likely to
be less than the fair market value of
the Common Stock purchased pursuant
to the exercise of the Subscription
Rights. Participants will probably
not, however, recognize gain or loss
as a result of obtaining savings
accounts in the Bank after the
Offering and their interests in a
liquidation account in exchange for
their savings accounts in Corry
Savings as a mutual savings bank.
See "Special Considerations--Certain
Federal Income Tax Consequences" and
"The Offering and Merger--Certain
Federal Income Tax Consequences" for
a more complete description of all
anticipated material federal income
tax consequences of the Offering and
Merger.
Required Regulatory The Merger and the Offering are
Approvals and subject to approval and/or
Considerations nonobjection of the Department, the
FDIC and the FRB. These approvals
and/or nonobjections do not
constitute recommendations or
endorsements by the Department, the
FDIC or the FRB of any of the
proposed transactions contemplated by
the Plan.
</TABLE>
9
<PAGE>
SPECIAL CONSIDERATIONS
The following special considerations, in addition to the information
presented in this Prospectus, should be considered by prospective investors in
deciding whether to purchase the Common Stock offered hereby.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Bank and Corry Savings will receive a Tax Opinion to the effect that:
(i) the Merger qualifies as a reorganization within the meaning of Section
368(a) of the Code, and that no gain or loss will be recognized by Corry Savings
or the Bank as a result of such Merger; and (ii) no gain or loss will be
recognized by the Company as a result of (a) the issuance of Subscription Rights
to Eligible Account Holders, Supplemental Eligible Account Holders, Other
Depositors, Eligible Employees and Trustees of Corry Savings and the ESOP
(collectively, the "Depositors"), (b) the lapse of such Subscription Rights, or
(c) the receipt of money or other property, if any, in exchange for the issuance
of Common Stock pursuant to the Offering. The foregoing is a summary of the Tax
Opinion.
Assuming that the Offering qualifies as one or more reorganizations, an
Eligible Account Holder or Supplemental Eligible Account Holder should be
treated for federal income tax purposes as having exchanged his or her deposit
account(s) and ownership interest in Corry Savings for (i) deposit account(s) in
the Bank, (ii) interest(s) in the liquidation account in the Bank, (iii)
liquidation rights in the Mutual Company, which will be subordinate to a such
person's interest in the liquidation account in the Bank, and (iv) to the extent
such person actually purchases any Common Stock in the Subscription Offering in
such person's capacity as an Eligible Account Holder or Supplemental Eligible
Account Holder, rights to purchase such shares of Common Stock ("Subscription
Rights"). In addition, an Other Depositor and Eligible Employee and Trustee
purchasing in his capacity as such should be treated as having exchanged his or
her deposit account(s), if any, and ownership interest in Corry Savings, if any,
for (i) deposit account(s) in the Bank and (ii) Subscription Rights.
For tax purposes, the liquidation rights in the Mutual Company and the
Subscription Rights will be considered "boot" under Code Section 356, taxable to
the Eligible Account Holder or Supplemental Eligible Account Holder to the
extent of the fair market value of such property. In the opinion of the
Independent Appraiser, which opinion is not binding on the IRS, the liquidation
rights, which are subordinate to the interest in the liquidation account, and
the Subscription Rights issued to Supplemental Eligible Account Holders (which
are issued at the Unadjusted Price Per Share of the Common Stock sold in the
Offering) do not have any value, and thus, Eligible Account Holders and
Supplemental Eligible Account Holders will not recognize gain or loss upon the
receipt of the liquidation rights in the Mutual Company and Supplemental
Eligible Account Holders will not recognize gain or loss upon receipt of
Subscription Rights.
The Subscription Rights issued to Eligible Account Holders will provide
such persons the opportunity to purchase Common Stock at a price per share equal
to the Adjusted Purchase Price Per Share, which is 90% of the price per share
paid by subscribers other than Eligible Account Holders based on the trading
price of Common Stock. The federal income tax consequences of the receipt,
exercise and lapse of Subscription Rights which are exercisable at a discount
are uncertain, but they may be significant and could include the recognition of
gain equal to the fair market value of such Subscription Rights. Those
consequences present novel issues of tax law which are not addressed by any
direct authorities and, to the extent related authorities do exist, they appear
to be conflicting and inconclusive. Accordingly, the Tax Opinion will not
express an opinion on those issues. Eligible Account Holders, however, should
be aware of the following:
(a) Eligible Account Holders who receive and exercise Subscription Rights
may be required to recognize gain in an amount equal to the sum of: (i) the
product of (a) the number of shares of Common Stock received by the Eligible
Account Holder pursuant to the exercise of Subscription Rights, multiplied by
(b) the excess of the fair market value of a share of Common Stock on the date
such stock is purchased pursuant to the exercise of Subscription Rights (the
"Purchase Date"), over the Adjusted Price Per Share.
10
<PAGE>
(b) Eligible Account Holders who do not exercise some or all of their
Subscription Rights may also be required to recognize gain as a result of the
receipt of such rights. The amount of such gain should be equal to the product
of (i) the number of Subscription Rights received and not exercised by the
Eligible Account Holders times (ii) the excess of the fair market value of a
share of Common Stock on the date the Merger and Offering is completed over the
purchase price. However, such Eligible Account Holders should also be entitled
to offset such gain with a corresponding loss upon the lapse of such
Subscription Rights.
(c) If Eligible Account Holders are required to recognize gain as the
result of the receipt of Subscription Rights, Eligible Account Holders will be
required to report such gain for federal income tax purposes, even though
Eligible Account Holders who do not exercise all or a portion of the
Subscription Rights allocated to them should be entitled to offset all or a
portion of such gain with a corresponding loss to the extent such Subscription
Rights are not exercised.
(d) It does not appear that either the Company or Corry Savings is required
under the Federal income tax laws as now in effect to determine or notify the
Eligible Account Holders (on Form 1099 or otherwise) of the amount or character
of the gain to be reported by each Eligible Account Holder or the year in which
such gain should be reported for Federal income tax purposes.
In the opinion of the Independent Appraiser, which opinion is not binding
on the IRS, the Subscription Rights issued to Supplemental Eligible Account
Holders and Other Depositors do not have any value, based on the fact that such
rights are acquired by the recipients without cost, are nontransferable and of
short duration, and afford the recipients the right only to purchase the Common
Stock at a price equal to the Actual Purchase Price. Assuming that, for the
reasons set forth above, the Subscription Rights issued to Supplemental Eligible
Account Holders and Depositors have no value at the time issued, the
Supplemental Eligible Account Holders and Depositors will not recognize gain or
loss upon the receipt of Subscription Rights or upon the exercise of
Subscription Rights. No gain or loss will be required to be recognized by
Subscribers who acquire shares in the Community Offering.
ELIGIBLE ACCOUNT HOLDERS, DIRECTORS, OFFICERS AND EMPLOYEES OF CORRY
SAVINGS, TAX-EXEMPT PERSONS AND OTHER PERSONS WHO ARE INTERESTED IN THE MERGER,
OR THE OFFERING, ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE SPECIFIC TAX
CONSEQUENCES TO THEM OF THE MERGER AND THE OFFERING, INCLUDING TAX REPORTING
REQUIREMENTS, THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS, AND THE IMPLICATIONS OF ANY PROPOSED CHANGES IN THE TAX LAWS.
The foregoing is a summary of all anticipated material federal income tax
consequences of the Offering. See "The Offering and Merger; The Offering--
Certain Federal Income Tax Consequences" for a more complete description of all
anticipated material federal income tax consequences of the Offering and the
Offering.
POTENTIAL ADVERSE IMPACT OF CHANGES IN INTEREST RATES
Because the Company's primary asset consists of 100% of the outstanding
shares of the Bank's common stock, the Company's profitability depends primarily
on the profitability of the Bank. The Bank's profitability, like that of most
financial institutions, depends to a large extent upon its net interest income,
which is the difference between interest income on interest-earning assets, such
as loans and investments, and interest expense on interest-bearing liabilities,
such as deposits and other borrowings. The Bank's net interest income, for
example, could be adversely affected if changes in market interest rates
resulted in the cost of interest-bearing liabilities increasing faster than any
increase in the yield on the Bank's interest-earning assets. The Bank, like
other financial institutions, uses a methodology that measures its exposure to
interest rate risk based on its interest rate sensitivity gap. A gap is
considered positive when the amount of interest sensitive assets exceeds the
amount of interest sensitive liabilities. A gap is considered negative when the
amount of interest sensitive liabilities exceeds the amount of interest
sensitive
11
<PAGE>
assets. At March 31, 1998, the Bank's cumulative one-year interest sensitivity
gap (the difference, based on certain assumptions, between the amount of
interest-earning assets anticipated by the Bank to mature or reprice within one
year and the amount of interest-bearing liabilities anticipated by the Bank,
based on certain assumptions, to mature or reprice within one year) as a
percentage of total assets was a negative 3.0%. As a result, based upon the
methodology used by the Bank, the yield on interest-earning assets of the Bank
may adjust to changes in interest rates at a slower rate than the cost of the
Bank's interest-bearing liabilities. Consequently, the Bank's net interest
income could be adversely affected during periods of rapidly rising interest
rates. There can be no assurance, however, that the changes in the Bank's actual
net interest income will be consistent with those projected in the methodology.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the accompanying 1997 Annual Report for further discussion of the
Bank's exposure to interest rate risk, as well as any shortcomings in the
methodology. Changes in interest rates also may impact the volume of mortgage
loan originations as well as the value of the Bank's investments in mortgage-
backed securities, investment securities and other interest-earning assets.
EXTENSIVE GOVERNMENTAL REGULATION OF THE FINANCIAL INSTITUTION INDUSTRY
The Bank is subject to extensive regulation by the FDIC and is periodically
examined by the FDIC to test compliance with various regulatory requirements.
Such supervision and regulation is intended primarily for the protection of
depositors and the deposit insurance fund, and not for the maximization of
shareholder value. The lending and savings activities of the Bank are also
subject to various "consumer protection" laws that impose significant liability
for noncompliance, whether intentional or not. Accordingly, the operations and
profitability of financial institutions and their holding companies are
significantly affected by legislation and the policies of the various federal
banking agencies. Since 1989, numerous legislation has been enacted that imposes
increased regulatory restrictions and obligations on the operations of financial
institutions and mandates the development of regulations designed to empower
regulators to take prompt corrective action with respect to institutions that
fall below certain capital standards.
THE POSSIBLE DECLINE IN THE MARKET FOR COMMON STOCK AFTER THE OFFERING
Because the Adjusted Price Per Share may be less than the market price of
Common Stock on the date the Offering is completed, some Eligible Account
Holders may be inclined to immediately sell shares of Common Stock, purchased at
the discounted price, in order to attempt to realize any such profit. In
addition, it is possible that the receipt, exercise, or lapse of subscription
rights may result in tax liability for certain Eligible Account Holders. In
such case, Eligible Account Holders may also be inclined to sell Common Stock to
realize sufficient cash to pay the tax liability resulting therefrom. Any such
sales, depending on the volume and timing, could cause the market price of
Common Stock to decline. Purchasers should consider these possibilities in
determining whether to purchase Common Stock and, the timing of any sale of
Common Stock. The Common Stock is quoted on the Nasdaq National Market. See
"Market Information" and "The Offering and Merger--Stock Pricing and Number of
Shares to be Issued," "--The Independent Valuation" and "--Certain Federal
Income Tax Consequences."
INABILITY TO RESELL THE COMMON STOCK UNTIL THE ISSUANCE AND RECEIPT OF
CERTIFICATES
Except for shares issued to a person who is deemed an affiliate of Corry
Savings or the Company for purposes of Rule 145 under the 1933 Act, the Common
Stock purchased in the Offering will be freely transferable under the 1933 Act.
However, until certificates for Common Stock are delivered to purchasers,
purchasers may not be able to sell the shares of Common Stock for which they
subscribe. Accordingly, during such period subscribers will bear the risk of
any decline in the market price in the Common Stock. The Company intends to
mail the certificates representing Common Stock issued in the Offering promptly
following completion of the Offering. See "The Offering and Merger--Procedure
for Purchasing Shares in Subscription and Community Offering."
12
<PAGE>
THE HIGHLY COMPETITIVE ENVIRONMENT IN WHICH THE COMPANY OPERATES
The Bank faces significant competition in its market area both in
attracting deposits and in originating loans. The Bank faces direct competition
from a significant number of financial institutions, as well as other providers
of financial services, operating in its market area, many with a state-wide or
regional presence, and, in some cases, a national presence. This competition
arises from commercial banks, savings institutions, mortgage banking companies,
credit unions, brokerage firms, mutual funds and other providers of financial
services, many of which are significantly larger than the Bank, and therefore
have greater financial and marketing resources than those of the Bank.
ANTITAKEOVER PROVISIONS AND THE MUTUAL HOLDING COMPANY STRUCTURE
Because the Mutual Company is required by Pennsylvania law to own a
majority of the outstanding shares of Common Stock for so long as the Mutual
Company remains in existence, an acquisition of the Company could generally not
be consummated without the approval of the Mutual Company, the Trustees of which
are also the Directors of the Company. In addition, regulatory authorities are
unlikely to approve an acquisition of the Company by another institution while
the Bank and the Company are in the mutual holding company structure. Moreover,
the Certificate of Incorporation and the Bylaws of the Bank and the Company
include certain provisions which may be considered to be antitakeover in nature
because they may have the effect of discouraging or making more difficult the
acquisition of control of the Bank by means of an unsolicited tender or exchange
offer, proxy contest or similar transaction. See "Certain Antitakeover
Provisions."
BEST EFFORTS OFFERING WITH NO REQUIRED MINIMUM AND WITHOUT THE ASSISTANCE OF A
MARKETING AGENT
The shares of Common Stock are being offered by the Company on a best
efforts basis without the assistance of a marketing agent or financial advisor.
Accordingly, the Company has not obtained a report or opinion constituting a
recommendation or advice to the Bank or the Company, nor has it obtained an
opinion as to the fairness of the price at which the shares will be sold in the
Offering or the terms of the Offering. Furthermore, no financial advisor or
underwriter has verified the accuracy or completeness of the information
contained in the Prospectus.
There is no minimum number of shares that must be sold in order to complete
the Offering. Any shares of Common Stock for which subscriptions have not been
accepted in the Subscription Offering may, at the sole discretion of the Company
and if approved by the Department, be issued to the Mutual Company (without the
payment by the Mutual Company of cash consideration therefore) or offered for
sale in a Community Offering. The Company does not intend to conduct a
syndicated offering if subscriptions are not accepted for the minimum number of
shares offered. The Community Offering, should it be conducted, will involve an
offering of unsubscribed shares directly to the general public with a preference
to those natural persons residing in the local community of Corry, Pennsylvania.
Although the Company may use an investment banking firm or marketing agent on a
best efforts basis to sell the shares in the Community Offering, it is not
obligated to do so. If shares for which subscriptions are not received or
accepted are issued to the Mutual Company, then the Company will not receive the
cash proceeds of the sale of such shares. See "The Offering and Merger--
Description of Sales Activity" and "--Community Offering."
13
<PAGE>
NORTHWEST BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL AND OTHER DATA
Set forth below are selected consolidated financial and other data of the
Company. For additional information about the Company, please refer to
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Consolidated Financial Statements of the Bank and related
notes included in the 1997 Annual Report that accompanies this Prospectus.
Because the Company had insignificant assets and operations until completion of
the Two-Tier Reorganization on February 17, 1998, information as of and for
periods ending prior to such time is presented for the Bank.
<TABLE>
<CAPTION>
At
March 31, At June 30,
-----------------------------------------------------------
1998 1997 1996 1995 1994 1993
---------- ---------- ---------- ----------- ---------- ----------
SELECTED CONSOLIDATED FINANCIAL CONDITION DATA: (In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Total assets............................................... $2,409,564 $2,091,363 $1,877,925 $1,591,894 $1,430,284 $1,292,488
Interest-bearing deposits at other financial institutions.. 17,926 57,765 30,498 59,930 85,705 38,699
Investment securities held-to-maturity..................... 77,070 43,419 54,086 65,470 33,180 2,699
Investment securities available for sale................... 128,948 78,684 51,961 1,414 -- --
Mortgage-backed securities held-to-maturity................ 105,392 110,561 101,932 204,841 199,165 166,631
Mortgage-backed securities available for sale.............. 203,477 181,036 189,514 38,343 200 31,436
Loans receivable net:
Real estate............................................... 1,319,975 1,156,160 1,066,887 906,276 864,448 819,098
Consumer.................................................. 346,982 306,228 249,051 202,630 179,765 163,036
Commercial................................................ 105,533 74,110 59,017 55,829 18,320 17,127
Total loans receivable, net............................. 1,772,490 1,536,498 1,374,955 1,164,735 1,062,533 999,261
Deposits................................................... 1,985,003 1,640,815 1,450,047 1,283,935 1,235,401 1,136,116
Advances from FHLB and other borrowed funds................ 182,424 223,458 211,761 103,439 71,203 53,637
Shareholders' equity and retained earnings (1)............. 213,259 198,494 190,651 178,690 102,319 84,251
<CAPTION>
Nine Months Ended
March 31, Years Ended June 30,
------------------- --------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
--------- -------- -------- --------- -------- -------- --------
SELECTED CONSOLIDATED OPERATING DATA: (In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Total interest income................................... 127,207 112,746 $153,518 $135,130 $118,158 $106,492 $106,204
Total interest expense.................................. 69,064 59,931 81,424 68,637 58,126 51,256 55,888
-------- -------- -------- -------- -------- -------- --------
Net interest income................................... 58,143 52,815 72,094 66,493 60,032 55,236 50,316
Provision for loan losses............................... 2,382 1,185 2,491 1,502 1,098 1,728 1,797
-------- -------- -------- -------- -------- -------- --------
Net interest income after provision for loan losses... 55,761 51,630 69,603 64,991 58,934 53,508 48,519
-------- -------- -------- -------- -------- -------- --------
Noninterest income...................................... 5,669 5,239 6,736 4,125 4,512 7,811 8,180
Noninterest expense..................................... 36,363 42,238 54,203 40,827 36,971 34,130 33,898
-------- -------- -------- -------- -------- -------- --------
Income before income tax expense and
cumulative effect of accounting change................. 25,067 14,631 22,136 28,289 26,475 27,189 22,801
Income tax expense...................................... 9,570 6,003 8,472 10,803 10,181 11,191 8,753
-------- -------- -------- -------- -------- -------- --------
Income before cumulative effect of accounting change.... 15,497 8,628 13,664 17,486 16,294 15,998 14,048
Cumulative effect of change in accounting for
income taxes........................................... -- -- -- -- -- 2,070 --
-------- -------- -------- -------- -------- -------- --------
Net income........................................... $ 15,497 $ 8,628 $ 13,664 $ 17,486 $ 16,294 $ 18,068 $ 14,048
======== ======== ======== ======== ======== ======== ========
Basic earnings per share................................ $0.33 $0.19 $0.30 $0.39 $0.24
======== ======== ======== ======== ========
Diluted earnings per share.............................. $0.33 $0.19 $0.30 $0.39 $0.24
======== ======== ======== ======== ========
<CAPTION>
At or for the
Nine Months
Ended
March 31, At or for the Year Ended June 30,
-----------------------------------------------------
1998 1997 1996 1995 1994 1993
-------------- ------- ----------- ----------- ---------- ------
<S> <C> <C> <C> <C> <C> <C>
KEY FINANCIAL RATIOS AND OTHER DATA:
Return on average assets(2)........................ .94% .70% 1.05% 1.09% 1.33% 1.12%
Return on average equity(2)........................ 10.09 7.12 9.48 11.00 19.25 18.29
Average capital to average assets.................. 9.36 9.84 11.03 9.87 6.93 6.11
Capital to total assets............................ 8.85 9.49 10.15 11.22 7.15 6.52
Net interest rate spread........................... 3.38 3.53 3.72 3.81 4.00 3.96
Net interest margin................................ 3.70 3.87 4.15 4.15 4.22 4.15
Noninterest expense to average assets.............. 2.22 2.78 2.44 2.46 2.52 2.70
Net interest income to noninterest expenses(2)..... 1.60x 1.33x 1.63x 1.62x 1.62x 1.48x
Nonperforming loans to net loans receivable........ .73 .68 .69 .89 1.33 1.72
Nonperforming assets to total assets............... .69 .72 .81 1.03 1.53 2.42
Allowance for loan losses to nonperforming loans... 115.86 130.50 138.49 113.52 79.40 64.18
Allowance for loan losses to net loans receivable.. .84 .89 .95 1.02 1.06 1.10
Average interest-bearing assets to average
interest-bearing liabilities..................... 1.07x 1.08x 1.10x 1.08x 1.06x 1.04x
Number of:
Full-service offices............................. 71 57 54 45 45 38
Consumer finance offices......................... 32 30 29 28 26 26
Mortgage loan production offices................. 5 7 8 8 6 5
- -------------------------
</TABLE>
Footnotes on following page
14
<PAGE>
Footnotes from preceding page
(1) Reflects net proceeds of $67 million from the Bank's public offering which
was completed on November 4, 1994.
(2) For the fiscal year ended June 30, 1997, basic and diluted earnings per
share, return on average assets, return on average equity, and net interest
income to noninterest expense would have been $.41, .96%, 9.80%, and 1.58x,
respectively, without the one-time charge of $8.6 million (or $5.1 million,
after adjustment for taxes) to recapitalize the Savings Association
Insurance Fund.
(3) Basic and diluted earnings per share for the fiscal year ended June 30, 1995
reflects only earnings for the period subsequent to the Bank's minority
stock offering on November 4, 1994.
NORTHWEST BANCORP, INC.
The Company is a Pennsylvania corporation that was formed to become the
stock holding company of the Bank in a transaction (the "Two-Tier
Reorganization") that was approved by the Bank's stockholders on December 10,
1997, and completed on February 17, 1998. In the Two-Tier Reorganization, each
share of the Bank's common stock was converted into and became a share of Common
Stock of the Company, and the Bank became a wholly-owned subsidiary of the
Company. The Mutual Company and stockholders other than the Mutual Company,
which owned approximately 70% and 30%, respectively, of the Bank's outstanding
shares of common stock immediately prior to completion of the Two-Tier
Reorganization, became the owners of the same percentage of the outstanding
shares of Common Stock of the Company immediately following the completion of
the Two-Tier Reorganization. As of the date hereof, the sole activity of the
Company is the ownership of all of the issued and outstanding common stock of
the Bank and the ownership of approximately 65% of the outstanding shares of
common stock of Jamestown Savings Bank.
At March 31, 1998, the Company had total assets of $2.41 billion, total
deposits of $1.99 billion and shareholders equity of $213.3 million. As of
March 31, 1998, the Company, through its Bank and Jamestown Savings Bank
subsidiaries, operated 68 community banking offices throughout its market area
in northwest, southwest and central Pennsylvania and three community banking
offices in Southern New York. The Company, through its Bank subsidiary, also
operated one mortgage lending office in Pennsylvania, two in New York and two in
South Carolina, and 31 consumer lending offices throughout Pennsylvania and one
consumer lending office in New York. The Company has focused its lending
activities primarily on the origination of loans secured by first mortgages on
owner-occupied, one- to four-family residences. At March 31, 1998, $1.185
billion, or 66.8%, of the Company's total loans receivable were collateralized
by one- to four-family residential real estate. The Company also emphasizes the
origination of consumer loans, including home equity, second mortgage, education
and other consumer loans. At March 31, 1998, such loans totaled $347.0 million,
or 19.6%, of the Company's total loans receivable. To a lesser extent the
Company also originates multifamily residential and commercial real estate
loans, which totaled $134.7 million, or 7.6%, of the Company's total loans
receivable at March 31, 1998, and commercial business loans, which totaled
$105.5 million, or 6.0%, of the Company's total loans receivable.
The Company also invests in mortgage-backed securities issued or guaranteed
by the United States Government or agencies thereof, which totaled $308.9
million, or 12.8%, of total assets at March 31, 1998. As part of the Company's
current strategy of maintaining high levels of liquidity, the Company invests a
portion of its assets in various types of investment securities, cash and cash
equivalents including deposits in other financial institutions. These
investments totaled $223.9 million, or 9.3% of total assets, at March 31, 1998.
The Company's principal sources of funds are deposits, borrowed funds and
the principal and interest payments on loans. The principal source of income is
interest received from loans, mortgage-backed securities and investment
securities. The Bank's principal expenses are the interest paid on deposits and
the cost of employee compensation and benefits.
The Company's principal executive office is located at Liberty and
Second Streets, Warren, Pennsylvania, and its telephone number at that
address is (814) 726-2140.
15
<PAGE>
USE OF PROCEEDS
Although the actual net proceeds from the sale of the Common Stock cannot
be determined until the Offering is completed, it is presently anticipated that
the net proceeds will be between $890,220 and $1.3 million, assuming that: (i)
93% of the Common Stock offered in the Offering is purchased by Eligible Account
Holders at the Adjusted Price Per Share; (ii) 7% of the Common Stock sold in the
Offering is purchased by the ESOP; and (iii) a number of shares of Common Stock
equal to 3% of the Common Stock sold in the Offering is purchased by the Bank's
Recognition and Retention Plan for awards to employees, that such open market
purchases are funded with gross proceeds from the Offering, and that the
purchase price is equal to the Unadjusted Purchase Price Per Share. The net
proceeds of the Offering will be initially invested in federal funds and
investment grade, short-term marketable securities, or used for general
corporate purposes.
The following table demonstrates the estimated net proceeds of the
Offering.
<TABLE>
<CAPTION>
Valuation Valuation Valuation
Minimum Midpoint Maximum
---------- ---------- ----------
<S> <C> <C> <C>
Appraised value of Corry Savings (1)......... $4,632,500 $5,450,000 $6,267,500
Value of Common Stock contributed
to the Mutual Company for benefit of
Corry Savings' depositors (2)............. 3,219,588 3,787,750 4,355,913
---------- ---------- ----------
Gross proceeds from sale of Common Stock..... 1,412,912 1,662,250 1,911,588
Merger fixed expenses........................ 250,000 250,000 250,000
Eligible Depositor discount (3).............. 131,401 154,589 177,778
ESOP contribution (3)........................ 98,904 116,358 133,811
Restricted Stock issued to Corry management
and trustees (4)......................... 42,387 49,868 57,348
---------- ---------- ----------
Estimated net proceeds............... $ 890,220 $1,091,435 $1,292,651
========== ========== ==========
- ---------------------------
</TABLE>
(1) The Appraisal was prepared based on the assumption that Corry Savings would
make a charitable contribute of $500,000 prior to the completion of the
Merger, and Offering proceeds have not been reduced by the amount of the
charitable contribution. See "The Offering and Merger-The Charitable
Foundation."
(2) Assumes that 69.5% of the Common Stock issued in the Merger is issued to the
Mutual Company.
(3) Assumes that Northwest's ESOP purchases 7% of the shares issued in the Stock
Offering and that all remaining shares issued in the Offering are purchased
by Eligible Account Holders at the Adjusted Price Pre Share.
(4) Assumes that a number of shares equal to 3% of the shares sold in the
Offering are purchased by Northwest's Recognition and Retention Plan for
awards to Corry employees, such open market purchases are funded with
Offering proceeds, and the price paid is equal to the Unadjusted Price Per
Share. Alternatively, such shares could be issued out of the Company's
authorized but unissued shares of Common Stock, which would result in an
increase in pro forma Offering proceeds as presented. See "The Offering and
Merger--Interests of Certain Persons in the Offering."
MARKET INFORMATION
The Common Stock is listed on the Nasdaq National Market under the symbol
"NWSB." As of March 31, 1998, the Company had 10 registered market makers,
4,402 stockholders of record (excluding the number of persons or entities
holding stock in street name through various brokerage firms), and 46,837,755
shares outstanding (as
16
<PAGE>
adjusted). The following table sets forth market price and dividend information
for the Common Stock or, prior to the completion of the Two-Tier Reorganization,
the Bank's common stock. Information is presented for each quarter of the
previous two calendar years. All information has been revised to reflect the
Bank's May 22, 1996 and November 20, 1997 two-for-one stock splits.
<TABLE>
<CAPTION>
QUARTER ENDED HIGH LOW DIVIDENDS
------------------- -------- --------- ---------
<S> <C> <C> <C>
1996
----
March 31 $ 6 3/8 $ 5 9/16 $.0375
June 30 $ 6 1/4 $ 5 9/16 $.04
September 30 $ 6 1/8 $ 5 3/8 $.04
December 31 $ 6 7/8 $ 5 15/16 $.04
1997
----
March 31 $ 7 7/8 $ 7 1/8 $.04
June 30 $ 7 7/8 $ 7 1/8 $.04
September 30 $ 13 5/8 $ 11 $.04
December 31 $ 16 3/8 $ 13 5/8 $.04
1998
----
March 31 $ 17 3/16 $ 13 $.04
</TABLE>
The last trade of the Common Stock on May 13, 1998 was at a price of
$17 5/8 per share.
DIVIDEND POLICY
GENERAL
The Bank, or, since the Two-Tier Reorganization, the Company, has paid
quarterly cash dividends every quarter since the completion of its mutual
holding company reorganization and minority stock issuance in November 1994, and
it is the current policy of the Company to pay a quarterly cash dividend of $.04
per share. As of the date hereof the Company has insignificant assets other
than common stock of the Bank, and its principal source of income with which to
pay dividends consists of dividends from the Bank. Accordingly, the Company's
ability to pay dividends will depend largely on its receipt of sufficient cash
dividends from the Bank. Under Pennsylvania law, the Bank is generally
permitted to pay dividends out of accumulated net earnings if the Bank's surplus
would not be reduced by the payment of such dividend. Pennsylvania law requires
the Bank to maintain surplus in an amount that is at least equal to capital.
Dividends paid by the Company will be determined by the Company's Board of
Directors and will be based upon its consolidated financial condition, results
of operations, tax considerations, economic conditions, regulatory restrictions
which affect the payment of dividends by the Bank to the Company, and other
factors. In addition, the Company's ability to pay dividends is subject to
limitations under Pennsylvania law, and regulations of the FRB that require the
Company to maintain minimum levels of capital. There can be no assurance that
dividends will be paid on Company Common Stock or that, if paid, such dividends
will not be reduced or eliminated in the future.
17
<PAGE>
DIVIDEND WAIVERS BY THE MUTUAL COMPANY
It is the current policy of many mutual holding companies to waive the
right to receive dividends paid by their subsidiary savings association or
savings association holding company, and in such cases dividends are paid only
to minority stockholders and not to the mutual holding company. In connection
with the FRB's approval of the Bank's formation of the Mutual Company, and the
FRB's approval of the Two-Tier Reorganization, the FRB imposed certain
conditions on the waiver by the Mutual Company of dividends paid on the Common
Stock. In particular, the Mutual Company must obtain prior FRB approval before
it may waive any dividends. The amount of any waived dividends will not be
available for payment to Minority Stockholders and will be excluded from capital
for purposes of calculating dividends payable to Minority Stockholders.
Moreover, the cumulative amount of waived dividends must be maintained in a
restricted capital account which would be added to any liquidation account of
the Bank, and would not be available for distribution to Minority Stockholders.
The restricted capital account and liquidation account amounts would not be
reflected in the Bank's or the Company's financial statements or the notes
thereto, but would be considered as a notational or memorandum account of the
Bank, and would be maintained in accordance with the rules, regulations and
policy of the Office of Thrift Supervision ("OTS") except that such rules would
be administered by the FRB, and any other rules and regulations adopted by the
FRB.
The Mutual Company's decision as to whether or not to apply to the FRB for
approval to waive a particular dividend will depend on a number of factors,
including the Mutual Company's capital needs, regulatory approvals and the
investment alternatives available to the Mutual Company as compared to those
available to the Bank and the Company. There can be no assurance (i) that the
Mutual Company will apply to the FRB for approval to waive dividends paid by the
Company, (ii) that the FRB will approve any dividend waivers by the Mutual
Company or (iii) of the terms that may be imposed by the FRB on any dividend
waiver. As of the date hereof, the FRB had not given its approval to any
waiver, and the Mutual Company had not waived any dividends.
18
<PAGE>
CAPITALIZATION
The following table presents the consolidated capitalization of the Company
at March 31, 1998 and the pro forma consolidated capitalization of the Company
at such date after giving effect to the Merger of Corry Savings into Northwest
Savings and the receipt of the estimated net proceeds from the sale of the
Common Stock offered hereby at the midpoint of the Offering Range, based on the
assumptions set forth above in "Use of Proceeds" and in the notes below.
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA PRO FORMA
CAPITALIZATION CAPITALIZATION CAPITALIZATION
HISTORICAL OF COMPANY AT OF COMPANY AT OF COMPANY AT
CAPITALIZATION MINIMUM OF MIDPOINT OF MAXIMUM OF
OF COMPANY VALUATION RANGE VALUATION RANGE VALUATION RANGE
--------------- ---------------- ---------------- ----------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Deposits and borrowed funds:
Deposits (1)....................................... $1,985,003 $2,010,232 $2,010,232 $2,010,232
Borrowed funds..................................... 182,424 182,424 182,424 182,424
Debt in connection with the acquisition of shares
in the Offering by the ESOP (2)................... -- 99 116 134
---------- ---------- ---------- ----------
Total deposits and borrowed funds.................. $2,167,427 $2,192,555 $2,192,572 $2,192,590
========== ========== ========== ==========
Capital Stock:
Common Stock, par value $.10 per share (3)......... $ 4,684 4,709 4,715 4,720
Paid in capital (4)................................ 66,780 67,787 68,006 68,228
Retained earnings.................................. 141,307 141,307 141,307 141,307
Net unrealized gain (loss) on securities
available for sale, net of income taxes........... 3,171 3,171 3,171 3,171
Unearned ESOP shares (2)........................... (1,412) (1,511) (1,528) (1,546)
Unearned Recognition and Retention
Plan Shares (5)................................... (1,271) (1,313) (1,321) (1,328)
---------- ---------- ---------- ----------
Total stockholders' equity......................... $ 213,259 $ 214,150 $ 214,350 $ 214,552
========== ========== ========== ==========
Stockholders' equity per share..................... $4.55 $4.55 $4.55 $4.55
========== ========== ========== ==========
</TABLE>
_______________
(1) Does not reflect withdrawals from deposit accounts for the purchase of
Common Stock. Such withdrawals would reduce pro forma deposits by the
amount of such withdrawals.
(2) Assumes that 7% of the Common Stock is purchased by the Bank's ESOP and that
such purchase is funded by a loan from a third party.
(3) The Company had 100,000,000 shares of common stock authorized for issuance
and 46,837,755 shares issued and outstanding as of March 31, 1998. Assumes
that the shares of Common Stock sold in the Offering and issued to the
Mutual Company are issued from authorized but unissued shares.
(4) Assumes that all of the Common Stock (other than shares purchased by the
ESOP) is purchased by Eligible Account Holders at the Adjusted Price Per
Share which is assumed to be $15.86 per share (i.e., 90% of $17.625, the
last sale price of Common Stock on May 13, 1998).
(5) Assumes that a number of shares equal to 3% of the shares sold in the
Offering are purchased by Northwest's Recognition and Retention Plan for
awards to Corry employees, that such open market purchases are funded with
Offering proceeds, and that the price paid is equal to the Unadjusted Price
Per Share. See "The Offering and Merger--Interests of Certain Persons in
the Offering."
PRO FORMA DATA
The following tables set forth selected unaudited pro forma financial data
for the Bank and/or the Company reflecting the Offering and Merger, assuming
that the Merger was accounted for using the purchase method of accounting. The
pro forma statement of income information has been prepared assuming as follows:
(i) the shares of Common Stock are issued from authorized but unissued shares at
the beginning of the period and shares sold in the Offering as well as shares
issued to the Mutual Company are included in per share amounts ; (ii) net
proceeds from the Offering are invested at 5.40% (the one year U.S. Treasury
Bill yield as of March 31, 1998; (iii) the effective tax rate of the Bank for
the year ended December 31, 1997, was 40%; (iv) the shares of Common Stock are
sold in the Offering at the mid-point of the Valuation Range; (v) total
expenses of the Offering are $250,000; (vi) 93% of the shares of Common Stock
sold in the Offering are purchased by Eligible Account Holders at the Adjusted
Price Per Share; (vi) the ESOP purchases 7% of the shares of Common Stock sold
in the Offering; and (vii)
19
<PAGE>
a number of shares of Common Stock equal to 3% of the Common Stock sold in the
Offering is purchased by the Bank's Recognition and Retention Plan for awards to
employees, such open market purchases are funded with gross proceeds from the
Offering, and the purchase price is equal to the Unadjusted Price Per Share. No
assurance can be given that the Offering and Merger will be completed on the
terms and conditions described herein. The information is presented for the Bank
rather than the Company because the Company has insignificant assets and
operations until completion of the Two-Tier Reorganization.
REGULATORY CAPITAL
Set forth below is a summary of the Bank's and the Company's historical
regulatory capital at March 31, 1998, and pro forma regulatory capital following
completion of the Merger and the Offering, based on the estimated net proceeds
from the sale of the Common Stock in the Offering at the midpoint of the
Valuation Range. The Bank and the Company exceed all regulatory capital
requirements on an historical and pro forma basis.
<TABLE>
<CAPTION>
BANK COMPANY BANK COMPANY
HISTORICAL HISTORICAL PRO FORMA PRO FORMA
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Total stockholders' equity or GAAP capital.............. $ 204,007 $ 213,258 $ 205,098 $ 214,349
Less: unrealized gain on securities available for sale.. (2,720) (3,171) (2,720) (3,171)
Less: intangible assets................................. (22,077) (22,707) (19,516) (20,146)
---------- ---------- ---------- ----------
FDIC leverage capital................................... 179,211 187,380 182,862 191,032
Plus: FDIC tier 2 capital (1)........................... 14,697 14,922 14,697 14,922
---------- ---------- ---------- ----------
Total FDIC risk-based capital........................... $ 193,908 $ 202,302 $ 197,559 $ 205,954
========== ========== ========== ==========
FDIC quarterly average total assets for leverage ratio.. $2,278,563 $2,303,416 $2,307,486 $2,332,339
========== ========== ========== ==========
FDIC net risk-weighted assets including off-balance
sheet items........................................ $1,224,575 $1,253,322 $1,238,189 $1,266,936
========== ========== ---------- ----------
FDIC leverage capital ratio............................. 7.86% 8.13% 7.92% 8.19%
Minimum requirement..................................... 3.00% to 5.00%(2) 3.00% to 5.00%(2) 3.00% to 5.00%(2) 3.00% to 5.00%(2)
FDIC risk-based capital ratio........................... 15.83% 16.14% 15.96% 16.26%
Minimum requirement..................................... 8.00% 8.00% 8.00% 8.00%
- ---------------------------
</TABLE>
(1) Tier 2 capital consists entirely of the allowance for loan losses, which is
limited to 1.25% of total risk-weighted assets as detailed under
regulations of the FDIC.
(2) The FDIC has indicated that the most highly rated institutions which meet
certain criteria will be required to maintain a ratio of 3.00%, and all
other institutions will be required to maintain an additional cushion of
100 to 200 basis points. As of March 31, 1998, the Bank had not been
advised of any additional requirements in this regard.
The Bank is also subject to Pennsylvania Department of Banking
("Department") capital guidelines. Although not adopted in regulation form, the
Department utilized capital standards requiring a minimum of 6% leverage capital
and 10% risk-based capital. The components of leverage and risk-based capital
are substantially the same as those defined by the FDIC.
20
<PAGE>
PRO FORMA COMBINED CONDENSED BALANCE SHEET AS OF MARCH 31, 1998
The following unaudited pro forma combined, condensed, consolidated balance
sheet information reflects (i) the historical consolidated balance sheet of the
Company as of March 31, 1998, and (ii) the pro forma combined condensed,
consolidated balance sheet of the Company as of such date, after giving effect
to the Offering, and Merger and the estimated net proceeds from the sale of the
Common Stock in the Offering at the midpoint of the Valuation Range. The
Offering and the Merger has been reflected on the purchase accounting basis.
Such pro forma financial information does not necessarily reflect what the
actual results of the Company would be following completion of the Offering and
Merger. The information should be read in conjunction with the historical
consolidated financial statements of the Bank, including the notes thereto,
which are included in the Bank's 1997 Annual Report to Shareholders, which is
incorporated by reference in, and accompanies, this Prospectus.
<TABLE>
<CAPTION>
At March 31, 1998
------------------------------------------------------
Offering and
Purchase
The Corry Accounting Pro-Forma
Company Savings Adjustments Combined
---------- -------- --------------- -----------
<S> <C> <C> <C> <C>
Assets (In thousands)
- ------
Cash and cash equivalents.................................. $ 20,155 $ 167 $ 1,091 (1)(8) $ 21,413
Interest bearing deposits in other financial institutions.. 17,926 2,107 (748)(9) 19,285
Marketable securities available-for-sale................... 332,425 1,278 -- 333,703
Marketable securities held-to-maturity..................... 182,462 3,196 -- 185,658
Loans receivable, net of allowance for estimated losses.... 1,772,490 21,199 -- 1,793,689
Accrued interest receivable................................ 13,167 187 -- 13,354
Real estate owned, net..................................... 3,779 -- -- 3,779
Federal Home Loan Bank stock, at cost...................... 13,444 202 -- 13,646
Premise and equipment, net................................. 25,332 86 (86) 25,332
Goodwill and other intangibles............................. 22,707 -- -- 22,707
Other assets............................................... 5,677 244 -- 5,921
---------- ------- ------- ----------
Total assets.............................................. $2,409,564 $28,666 $ 257 $2,438,487
========== ======= ======= ==========
Liabilities and Shareholders' Equity
- ------------------------------------
Liabilities:
Deposits.................................................. $1,985,003 $25,229 (748)(9) 2,009,484
Borrowed funds............................................ 182,424 -- -- 182,424
Advances by borrowers for taxes and insurance............. 11,815 490 -- 12,305
,305
Accrued interest payable.................................. 3,405 11 -- 3,416
Negative goodwill......................................... -- -- 2,561 (2) 2,561
Other liabilities......................................... 11,598 173 116 11,887
---------- ------- ------- ----------
Total liabilities........................................ 2,194,245 25,903 1,929 2,222,077
---------- ------- ------- ----------
Minority interest in subsidiary............................ 2,060 2,060
Shareholders' equity
- --------------------
Common stock, $.10 par value, authorized
100,000,000 shares; 46,837,755 issued
and outstanding at March 31, 1998(8)..................... 4,684 -- 31 (5) 4,715
Paid-in capital........................................... 66,780 -- 1,226 (5) 68,006
Retained earnings, substantially restricted............... 141,307 2,754(10) (2,754)(3) 141,307
Unrealized gain (loss) on securities
available-for-sale, net of income taxes.................. 3,171 9 (9)(4) 3,171
Unearned ESOP shares...................................... (1,412) -- (116)(6) (1,528)
Unearned recognition and retention plan shares............ (1,271) -- (50)(7) (1,321)
---------- ------- ------- ----------
Total shareholders' equity............................... 213,259 2,763 (1,672) 214,350
---------- ------- ------- ----------
Total liabilities and shareholders' equity............... $2,409,564 $28,666 $ 257 $2,438,487
========== ======= ======= ==========
- ---------------------------
</TABLE>
(1) Represents estimated net proceeds from sale of Common Stock at the midpoint
of the Valuation Range as set forth above in "Use of Proceeds."
(2) Represents $2,561,000 for the recording of negative goodwill.
(3) Elimination of Corry Savings' retained earnings.
(4) Elimination of Corry Savings' fair value adjustment of securities
available-for-sale, net of tax.
(5) Issuance of Common Stock in the Offering.
(6) Represents unearned shares of ESOP plan equal to 7% of the Offering.
(7) Represents unearned shares of Restricted Stock equal to 3% of the Offering.
See "The Offering and Merger--Interests of Certain Persons in the
Offering."
(8) Assumes as follows: the shares of Common Stock are issued from authorized
but unissued shares; the shares are sold at the mid-point of the Valuation
Range; all shares not purchased by the ESOP are purchased by Eligible
Account Holders at the Adjusted Price Per Share (which is assumed to be
$15.86); and a number of shares of Common Stock equal to 3% of the Common
Stock sold in the Offering is purchased by the Bank's Recognition and
Retention Plan for awards to employees, such open market purchases are
funded with gross proceeds from the Offering, and the purchase price is
equal to the Unadjusted Price Per Share (which is assumed to be $17.625).
(9) Assumes that 50% of the proceeds for the purchase of stock by Corry Savings
depositors will result from withdrawals from deposit accounts at Corry
Savings.
(10) Reflects an adjustment of $300,000 after tax, for the $500,000 contributed
by Corry Savings to the Charitable Foundation.
21
<PAGE>
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME FOR THE YEAR ENDED JUNE 30,
1997
The following unaudited pro forma combined condensed consolidated statement
of income reflects the historical consolidated statement of income of the Bank
for the year ended June 30, 1997, and the pro forma combined condensed statement
of income of the Bank, after giving effect to the Offering and Merger. Such pro
forma financial information does not necessarily reflect what the actual results
of the Bank would be following completion of the Offering and Merger. The
information should be read in conjunction with the historical consolidated
financial statements of the Bank, including the notes thereto, which are
included in the Bank's 1997 Annual Report to Shareholders, which is incorporated
by reference in, and accompanies, this Prospectus.
<TABLE>
<CAPTION>
For the Year Ended June 30, 1997
-----------------------------------------------
(Dollars in thousands, except per share data)
Offering and
Purchase
The Corry Accounting Pro-Forma
Bank Savings Adjustments Combined
---------- --------- ----------- ----------
<S> <C> <C> <C> <C>
Total interest income.......................... $153,518 $ 2,226 $ 59 (1) $155,803
Total interest expense......................... 81,424 1,166 -- 82,590
-------- ------- ---- --------
Net interest income........................... 72,094 1,060 59 73,213
Provision for loan losses...................... 2,491 -- -- 2,491
-------- ------- ---- --------
Net interest income after provision for loan
losses....................................... 69,603 1,060 59 70,722
-------- ------- ---- --------
Noninterest income............................. 6,736 47 -- 6,783
Noninterest expense (4)........................ 54,203 886 (223)(2) 54,866
-------- ------- ---- --------
Income before income tax expense............... 22,136 221 282 22,639
Income tax expense............................. 8,472 73 10 (3) 8,555
-------- ------- ---- --------
Net income..................................... $ 13,664 $ 148 $272 $ 14,084
======== ======= ==== ========
Basic earnings per share (5)................... $.30 N/A N/A $ .30
======== ========
- -------------------------
</TABLE>
(1) Reflects investment of net proceeds in one year U.S. Treasury Bills at a
rate of 5.40%.
(2) Reflects the accretion of negative goodwill over ten years and amortization
of the additional shares purchased by the Bank's ESOP and Recognition and
Retention Plan over five years.
(3) Income tax effect assuming an income tax rate of 40% on: earnings on
investment of the estimated net proceeds of the Offering less the
amortization of ESOP and Recognition and Retention Plan.
(4) Figures for the Bank and Corry include the one time assessment to
recapitalize the SAIF of $8.6 million and $173,431, respectively.
(5) Based on 47,146,975 pro forma shares outstanding (including shares sold in
the Offering and issued to the Mutual Company), as adjusted for the Bank's
November 20, 1997 two-for-one stock split.
22
<PAGE>
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED
MARCH 31, 1998
The following unaudited pro forma combined condensed consolidated statement
of income reflects the historical consolidated statement of income of the
Company for the nine months ended March 31, 1998, and the pro forma combined
condensed statement of income of the Company, after giving effect to the
Offering and Merger. Such pro forma financial information does not necessarily
reflect what the actual results of the Company would be following completion of
the Offering and Merger. The information should be read in conjunction with the
historical consolidated financial statements of the Bank, including the notes
thereto, which are included in the Bank's 1997 Annual Report to Shareholders,
which is incorporated by reference in, and accompanies, this Prospectus.
<TABLE>
<CAPTION>
For the Nine Months Ended March 31, 1998
---------------------------------------------
(Dollars in thousands, except per share data)
Offering and
Purchase
The Corry Accounting Pro-Forma
Company Savings Adjustments Combined
---------- --------- ------------ ---------
<S> <C> <C> <C> <C>
Total interest income.......................... $127,207 $ 1,692 $ 44 (1) $128,943
Total interest expense......................... 69,064 910 -- 69,974
-------- ------- ----- --------
Net interest income........................... 58,143 782 44 58,969
Provision for loan losses...................... 2,382 -- -- 2,382
-------- ------- ----- --------
Net interest income after provision for loan
losses....................................... 55,761 782 44 56,587
-------- ------- ----- --------
Noninterest income............................. 5,669 27 -- 5,696
Noninterest expense............................ 36,363 656 (167)(2) 36,852
-------- ------- ----- --------
Income before income tax expense............... 25,067 153 211 25,431
Income tax expense............................. 9,570 89 7 (3) 9,666
-------- ------- ----- --------
Net income..................................... $ 15,497 $ 64 $ 204 $ 15,765
======== ======= ===== ========
Basic earnings per share (4)................... $.33 $.33
======== ========
- -------------------------
</TABLE>
(1) Reflects investment of net proceeds in one year U.S. Treasury Bills at a
rate of 5.4%.
(2) Reflects the accretion of negative goodwill over ten years and amortization
of the additional shares purchased by the Bank's ESOP and Recognition and
Retention Plan over five years.
(3) Income tax effect assuming an income tax rate of 40% on: earnings on
investment of the estimated net proceeds of the Offering less the
amortization of ESOP and Recognition and Retention Plan.
(4) Based on 47,146,975 pro forma shares outstanding (including shares sold in
the Offering and issued to the Mutual Company) as adjusted for the Bank's
November 20, 1997 two-for-one stock split.
THE OFFERING AND MERGER
THE DEPARTMENT HAS APPROVED THE MERGER. SUCH APPROVAL DOES NOT CONSTITUTE A
RECOMMENDATION OR ENDORSEMENT OF THE MERGER OR THE OFFERING. THE FDIC AND THE
FRB HAVE NOT APPROVED THE MERGER AND THERE CAN BE NO ASSURANCES THAT SUCH
APPROVAL WILL BE OBTAINED.
GENERAL
The Offering and the Merger are being conducted pursuant to the Agreement
and the Plan. The Merger has been approved by Department subject to, among
other things, approval of the Agreement by Corry Savings' depositors. A special
meeting of depositors has been called for this purpose to be held on
___________, 1998 (the "Special Meeting"). Copies of the Agreement and the Plan
are available without charge from the Bank by a written request addressed to the
Corporate Secretary, Liberty and Second Streets, Warren, Pennsylvania 16365, or
by a
23
<PAGE>
telephone call to (814) 726-2140. The FDIC and the FRB have not approved the
Merger and there can be no assurances that such approval will be obtained.
In accordance with the Plan and subject to certain maximum and minimum
purchase limitations, subscription rights to purchase Common Stock have been
granted to (i) Corry Savings' Eligible Account Holders, (ii) Corry Savings'
Supplemental Eligible Account Holders, (iii) Corry Savings' Other Depositors,
(iv) Eligible Employees and Trustees, and (v) the Northwest Savings Bank ESOP.
Any shares of Common Stock for which subscriptions have not been accepted in the
Subscription Offering may, at the sole discretion of the Board of Directors of
the Bank, be issued to the Mutual Company or offered for sale in a Community
Offering. In the Community Offering, should it be conducted, unsubscribed
shares will be offered directly to the general public with a preference to those
natural persons residing in the local community of Corry, Pennsylvania (the
boundaries of which community would be determined by Corry Savings' Board of
Trustees in its sole discretion). Additional terms and conditions may be
established at any time prior to the closing of any Community Offering by the
Board of Directors of the Bank and the Board of Trustees of Corry Savings. The
Plan does not preclude the Company from conducting a future minority stock
offering, although the Company has no current intention of doing so.
THE CHARITABLE FOUNDATION
On or prior to the Effective Time, Northwest and Corry Savings shall
establish a charitable foundation (the "Charitable Foundation") for the purpose
of providing charitable contributions to the Corry, Pennsylvania community and
other market areas served by the Bank. The contribution by Corry Savings to the
Charitable Foundation shall be $500,000. The Bank, the Company or the Mutual
Company shall make additional contributions to the Charitable Foundation, and
the Charitable Foundation shall maintain a division using funds contributed or
earmarked by Corry Savings that is devoted substantially to Corry Savings'
community. In the event the Bank determines that it is not feasible or
practicable to establish the Charitable Foundation and that the alternative of
making charitable contributions directly or through the Mutual Company is
preferable, then the funds to be earmarked or contributed by Corry Savings shall
be contributed directly by Corry Savings to charities or other organizations of
its choice prior to or after the completion of the Merger. The Corry Advisory
Board, consisting of the members of the Corry Savings Board of Trustees on June
19, 1997, shall advise the foundation manager ("Foundation Manager") of the
Charitable Foundation on appropriate charities and appropriate distribution of
the annual income, and such principal as may be deemed appropriate, from the
Corry division of the Charitable Foundation.
STOCK PRICING AND NUMBER OF SHARES TO BE ISSUED
The total number of shares of Common Stock of Northwest Savings to be
issued and sold in the Offering will be determined jointly by the Boards of
Directors of the Bank and Corry Savings, based upon the Independent Valuation.
The number of shares of Common Stock to be offered in the Offering will be equal
to approximately 30.5% of the quotient obtained by dividing the Independent
Valuation as updated at the conclusion of the Offering by the Unadjusted Price
Per Share, except that such number of shares may not be more than 15% larger
than the number of shares indicated on the cover page as being offered hereby.
In addition, a number of authorized but unissued shares of common stock equal to
69.5% of such quotient will be issued to the Mutual Company.
In order to purchase Common Stock each purchaser must complete and submit
an Order Form indicating the total dollar amount of Common Stock for which he is
subscribing. The subscription price per share of Common Stock for all
subscribers other than Eligible Account Holders will be equal to the Unadjusted
Price Per Share. The subscription price per share for Eligible Account Holders
shall be equal to the Adjusted Price Per Share (i.e., 90% of the Unadjusted
Price Per Share). Subject to the applicable purchase limitations, the total
number of shares that will be issued to a subscriber whose subscription has been
accepted will be equal to the total dollar amount of stock for which such
subscription has been accepted divided by the Unadjusted Price Per Share or the
Adjusted Price Per Share, as applicable. Payment for subscriptions must
accompany an order form and may be made (i) in cash if delivered in person at
the office of Corry Savings, (ii) by check or money order, or (iii) by
authorization of withdrawal from deposit accounts maintained with Corry Savings.
Corry Savings and Northwest reserve the right to refund
24
<PAGE>
subscription funds in lieu of issuing fractional shares, or permit subscribers
to elect to receive additional whole shares in this process.
The minimum amount of Common Stock for which any person may subscribe in
the Subscription Offering or in the Community Offering, respectively, is $500.
No person, directly or indirectly or with an associate or a group acting in
concert, may subscribe for or purchase in the aggregate more than 5% of the
total number of shares of Common Stock offered in the Offering, or $95,579 of
Common Stock based on the maximum of the Valuation Range. Such stock may be
purchased at a 10% discount (i.e., for $86,021) by Eligible Account Holders.
The maximum purchase limitation may be increased or decreased as described
herein. See "The Offering and Merger--Purchase Limitations."
THE INDEPENDENT VALUATION
The Independent Valuation was performed by the Independent Appraiser, a
firm experienced in the valuation and appraisal of savings institutions. The
Independent Appraiser is not affiliated with the Bank or Corry Savings. For its
services in preparing the Independent Valuation, the Independent Appraiser will
receive a fee of $17,000. The Independent Appraiser was hired by Corry Savings
on the basis of its reputation and proposed fees. Corry Savings has agreed to
indemnify the Independent Appraiser and its employees and affiliates against
certain losses (including any losses in connection with claims under the federal
securities laws) arising out of its services as appraiser, except where the
Independent Appraiser's liability results from its negligence or bad faith. In
determining the Independent Valuation, the Appraiser reviewed, among other
factors, Corry Savings' audited financial statements as of and for the five
years ended June 30, 1997 and unaudited financial statements as of and for the
nine months ended March 31, 1998. The Appraiser also examined the economy in
Corry Savings' market area and the competitive environment in which it operates,
and compared its operating performance with that of selected segments of the
thrift industry and selected publicly traded thrift institutions. The
Independent Appraiser also reviewed conditions in the securities markets in
general and for thrift institution stocks in particular. Similarly, when the
Independent Appraiser updates the Independent Valuation prior to the completion
of the Offering, it intends to consider, among other things, any new
developments or changes in Corry Savings' performance, financial condition and
management policies, and conditions in the equity markets for thrift institution
stock.
On the basis of the foregoing, the Independent Appraiser determined the
Valuation Range as of April 28, 1998 to be between $4,632,500 and $6,267,500.
The Independent Valuation will be updated prior to the completion of the
Offering. Such valuation, however, is not intended, and must not be construed,
as a recommendation of any kind as to the advisability of purchasing Common
Stock. THE INDEPENDENT APPRAISER VALUED CORRY SAVINGS, BUT DID NOT VALUE THE
SHARES OF COMMON STOCK OFFERED IN THE OFFERING. The Independent Appraiser did
not independently verify the financial statements and other information provided
by Corry Savings, nor did the Independent Appraiser value independently the
assets or liabilities of Corry Savings or the Bank. Moreover, because such
valuation is necessarily based upon estimates and projections of a number of
matters, all of which are subject to change from time to time, no assurance can
be given that persons purchasing shares in the Offering will thereafter be able
to sell such shares at prices at or above the price at which they purchased such
shares.
If the updated Independent Valuation is either more than the maximum of the
Valuation Range or less than the minimum of the Valuation Range, the Bank and
Corry Savings, after consulting with the Department and the FDIC, may terminate
the Offering and return all funds promptly with interest at the Bank's passbook
rate of interest on payments made by cash, check or money order, extend or hold
a new Subscription and Community Offering, establish a new Valuation Range,
commence a resolicitation of subscribers or take such other actions as permitted
by the Department and FDIC in order to complete the Offering. In the event that
a resolicitation is commenced, unless an affirmative response is received within
a reasonable period of time, all funds will be promptly returned to investors as
described above. A resolicitation, if any, following the conclusion of the
Subscription and Community Offering would not exceed 45 days unless further
extended by the Department or FDIC for periods of up to 90 days not to extend
beyond _________, 1998.
25
<PAGE>
Notwithstanding the foregoing, no sale of Common Stock may be consummated
unless, prior to such consummation, the Independent Appraiser confirms to Corry
Savings, the Bank, and the Department that, to the best knowledge of the
Independent Appraiser, nothing of a material nature has occurred that, taking
into account all relevant factors, would cause the Independent Appraiser to
conclude that the actual aggregate market value of Corry Savings as an entity
merged with and into the Bank is incompatible with its estimate of the aggregate
pro forma market value of Corry Savings as an entity merged with and into the
Bank. If such confirmation is not received, Corry Savings and the Bank may
cancel, extend, reopen, or hold new Subscription and Community Offerings,
establish a new Valuation Range, or take such other action as the Department may
permit.
Copies of the appraisal report of the Independent Appraiser and the
detailed memorandum of the appraiser setting forth the method and assumptions
for such appraisal are available for inspection at the main office of Corry
Savings and the other locations specified under "Additional Information."
PURCHASE LIMITATIONS
The minimum amount of Common Stock for which any person may subscribe in
the Subscription Offering or in the Community Offering, respectively, is $500.
No person, directly or indirectly or with an associate or a group acting in
concert, may subscribe for or purchase in the aggregate more than 5% of the
total number of shares of Common Stock offered in the Offering, or $95,579 of
Common Stock based on the maximum of the Valuation Range. Such stock may be
purchased at a 10% discount (i.e., for $86,021) by Eligible Account Holders.
The maximum purchase limitation may be decreased below 5% or increased to 9.9%;
provided, that orders for Common Stock exceeding 5% of the shares being offered
shall not exceed in the aggregate 10% of the total offering. Requests to
purchase additional shares of the Common Stock in the event that the purchase
limitation is so increased will be determined by the Boards of Directors of the
Bank and Corry Savings in their sole discretion.
In the event of a decrease in the Independent Valuation, the orders of
persons who subscribed for the maximum number of shares will be reduced. In the
event of a resolicitation, subscribers will be afforded the opportunity to
increase, decrease or maintain their previously submitted order. In the event
no change from the previous order is desired, no action need be taken.
If purchasers from the general public cannot be found for an insignificant
residue of unsubscribed shares, other purchase arrangements will be made by the
Boards of Directors of the Bank and Corry Savings, if possible. Such other
purchase arrangements will be subject to the approval of the Department and may
provide for purchases by directors, officers, their associates and other persons
in excess of the limitations provided below. If such other purchase
arrangements cannot be made, the Offering will be terminated.
SUBSCRIPTION OFFERING AND SUBSCRIPTION RIGHTS
In accordance with the Plan, rights to subscribe for the purchase of Common
Stock have been granted under the Plan to the following persons in the following
order of descending priority:
PRIORITY 1: ELIGIBLE ACCOUNT HOLDERS. Each Eligible Account Holder will
receive, without payment therefor, nontransferable subscription rights to
subscribe for in the Subscription Offering up to the greater of: 5% of the
shares of Common Stock issued in the Offering (or $95,579 of Common Stock
offered based on the maximum of the Valuation Range), which stock may be
purchased at a 10% discount (i.e., for $86,021) by Eligible Account Holders); or
one-tenth of one percent (.10%) of the total offering of shares of Common Stock;
or fifteen times the product (rounded down to the next whole number) obtained by
multiplying the total number of shares of Common Stock to be issued by a
fraction the numerator of which is the amount of the Eligible Account Holder's
qualifying deposit and the denominator of which is the total amount of
qualifying deposits of all Eligible Account Holders, in each case on the
Eligibility Record Date, subject to the overall purchase limitations; provided
that the Company may, in its sole discretion, and without further notice to or
solicitation of subscribers or other prospective purchasers, decrease such
maximum purchase limitation to 1% of the maximum number of shares offered in the
Offering. See "--Limitations on Common Stock Purchases." If there are
insufficient shares available to satisfy all subscriptions,
26
<PAGE>
shares first will be allocated so as to permit each subscribing Eligible Account
Holder to purchase a number of shares sufficient to make his total allocation
equal to the lesser of 100 shares or the number of shares for which he has
subscribed. Thereafter, unallocated shares will be allocated to subscribing
Eligible Account Holders whose subscriptions remain unfilled in the proportion
that the amounts of their respective eligible deposits bear to the total amount
of eligible deposits of all subscribing Eligible Account Holders whose
subscriptions remain unfilled. To ensure proper allocation of stock, each
Eligible Account Holder must list on his subscription order form all accounts in
which he has an ownership interest. Failure to list an account could result in
fewer shares being allocated than if all accounts had been disclosed. The
subscription rights of Eligible Account Holders who are also trustees or
officers of Corry Savings, or their associates, will be subordinated to the
subscription rights of other Eligible Account Holders to the extent attributable
to increased deposits in the twelve months preceding the Eligibility Record
Date.
PRIORITY 2: SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS. To the extent there
are sufficient shares remaining after satisfaction of subscriptions by Eligible
Account Holders, each Supplemental Eligible Account Holder shall have the
opportunity to purchase up to the greater of: 5% of the shares of Common Stock
issued in the Offering (or $95,579 of Common Stock offered based on the maximum
of the Valuation Range); or one-tenth of one percent (.10%) of the total
offering of shares of Common Stock; or fifteen times the product obtained by
multiplying the total number of shares to be issued in the Offering by a
fraction the numerator of which is the Supplemental Eligible Account Holder's
qualifying deposit and the denominator of which is the total amount of
qualifying deposits of all Supplemental Eligible Account Holders, in each case
on the Supplemental Eligibility Record Date subject to the overall purchase
limitations; provided that the Company may, in its sole discretion, and without
further notice to or solicitation of subscribers or other prospective
purchasers, decrease such maximum purchase limitation to 1% of the maximum
number of shares offered in the Offering. In the event Supplemental Eligible
Account Holders subscribe for a number of shares which, when added to the shares
subscribed for by Eligible Account Holders is in excess of the total number of
shares offered in the Offering, the subscriptions of Eligible Account Holders
will be satisfied first, and then the orders of Supplemental Eligible Account
Holders will be allocated among subscribing Supplemental Eligible Account
Holders so as to permit each subscribing Supplemental Eligible Account Holder to
purchase a number of shares sufficient to make his total allocation equal to the
lesser of 100 shares or the number of shares for which he has subscribed.
Thereafter, unallocated shares will be allocated to each subscribing
Supplemental Eligible Account Holder whose subscription remains unfilled in the
same proportion that such subscriber's qualifying deposits on the Supplemental
Eligibility Record Date bear to the total amount of qualifying deposits of all
subscribing Supplemental Eligible Account Holders whose subscriptions remain
unfilled.
PRIORITY 3: OTHER DEPOSITORS. To the extent that there are sufficient
shares remaining after satisfaction of subscriptions by Eligible Account Holders
and Supplemental Eligible Account Holders, each Other Depositor will receive,
without payment therefor, nontransferable subscription rights to subscribe for
Common Stock in the Subscription Offering up to the greater of: 5% of the
shares of Common Stock issued in the Offering (or $95,579 of Common Stock
offered based on the maximum of the Valuation Range); or one-tenth of one
percent (.10%) of the total offering of shares of Common Stock; provided that
the Company may, in its sole discretion, and without further notice to or
solicitation of subscribers or other prospective purchasers, decrease such
maximum purchase limitation to 1% of the maximum number of shares offered in the
Offering. See "--Limitations on Common Stock Purchases." In the event the Other
Depositors subscribe for a number of shares which, when added to the shares
subscribed for by Supplemental Eligible Account Holders, the ESOP and Eligible
Account Holders, is in excess of the total number of shares offered in the
Offering, the subscriptions of Other Depositors will be allocated among
subscribing Other Depositors based on the size of such Other Depositors orders.
PRIORITY 4: EMPLOYEES, OFFICERS AND TRUSTEES. To the extent that shares
remain available for purchase after satisfaction of all subscriptions of the
Eligible Account Holders, Supplemental Eligible Account Holders and Other
Depositors, each Eligible Employee and Trustee of Corry Savings shall have the
opportunity to purchase up to 5% of the shares of Common Stock offered in the
Offering; provided that the Company may, in its sole discretion, and without
further notice to or solicitation of subscribers or other prospective
purchasers, decrease such maximum purchase limitation to 1% of the maximum
number of shares offered in the Offering. In the event that Eligible Employees
and Trustees subscribe for a number of shares, which, when added to the shares
subscribed for by Eligible Account Holders, the ESOP, Supplemental Eligible
Account Holders, and Other Depositors is in excess of the total
27
<PAGE>
shares offered in the Offering, the subscriptions of such persons will be
allocated among Eligible Employees and Trustees on a pro rata basis based on the
size of such person's subscription orders.
PRIORITY 5: TAX-QUALIFIED EMPLOYEE PLANS. To the extent that shares
remain available for purchase after satisfaction of all subscriptions of the
Eligible Account Holders, Supplemental Eligible Account Holders, Other
Depositors, and Eligible Employees and Trustees, the Bank's ESOP shall be given
the opportunity to purchase in the aggregate up to 7% of the Common Stock issued
in the Offering. In the event of an oversubscription in the Offering,
subscriptions for shares by the ESOP may be satisfied, in whole or in part,
through open market purchases by the ESOP subsequent to the completion of the
Offering.
EXPIRATION DATE FOR THE SUBSCRIPTION OFFERING. All subscription rights
will expire on the Expiration Date unless extended by Northwest, with the
approval of the Department, if necessary, for up to an additional 45 days. Any
shares not sold in the Subscription Offering may be sold in the Community
Offering, which also is expected to terminate on __________, 1998, but which may
terminate as late as ______________, 1998. Subscriptions paid by cash, check,
or money order will be placed in a segregated account at Corry Savings and will
earn interest at Northwest's regular passbook rate of interest from the date of
receipt until completion or termination of the Offering. Payments authorized by
withdrawal from deposit accounts at Corry Savings will continue to earn interest
at the contractual rate until the Offering is completed or terminated, and such
funds will be otherwise unavailable to the depositor until such time. Orders
submitted are irrevocable until the completion of the Offering; provided that
all subscribers will have their funds returned promptly, with interest, and all
withdrawal authorizations will be canceled if the Offering is not completed by
___________, 1998, unless such period has been extended with the approval of the
Department, if necessary. If an extension of time has been granted, all
subscribers will be notified of such extension, and of any rights to confirm,
modify or rescind their subscriptions and have their funds returned promptly
with interest, and of the time period within which each subscriber must notify
Corry Savings or the Bank of his intention to confirm, modify or rescind his
subscription. If an affirmative response to any resolicitation is not received
by Corry Savings or Northwest from a subscriber, the subscriber's order will be
rescinded and all funds will be returned promptly with interest. Such
extensions may not go beyond _____________, 2000.
The Bank will not execute orders until all shares of Common Stock have been
subscribed for or otherwise issued. If all shares have not been subscribed for
or otherwise issued within 45 days after the Expiration Date, unless such period
is extended with the consent of the Department, all funds delivered to the Bank
pursuant to the Subscription Offering will be returned promptly to the
subscribers with interest and all withdrawal authorizations will be canceled.
If an extension beyond the 45 day period following the Expiration Date is
granted, the Bank will notify subscribers of the extension of time and of any
rights of subscribers to modify or rescind their subscriptions. Such extensions
may not go beyond ______________.
PERSONS IN NONQUALIFIED STATES OR FOREIGN COUNTRIES. The Bank will make
reasonable efforts to comply with the securities laws of all states in the
United States in which persons entitled to subscribe for stock reside. However,
the Bank is not required to offer stock in the Subscription Offering to any
person who resides in a foreign country or resides in a state of the United
States with respect to which (i) a small number of persons otherwise eligible to
subscribe for shares of Common Stock reside; or (ii) the Bank determines that
compliance with the securities laws of such state would be impracticable for
reasons of cost or otherwise, including but not limited to a requirement that
the Bank or its officers or directors, under the securities laws of such state,
register as a broker, dealer, salesman or selling agent or to register or
otherwise qualify the subscription rights or Common Stock for sale or subject
any filing with respect thereto in such state. Where the number of persons
eligible to subscribe for shares in one state is small, the Bank will base its
decision as to whether or not to offer the Common Stock in such state on a
number of factors, including the size of accounts being held by account holders
in the state, the cost of registering or qualifying the shares or the need to
register the Bank, its officers, directors or employees as brokers, dealers or
salesmen.
COMMUNITY OFFERING
Any shares of Common Stock for which subscriptions have not been accepted
in the Subscription Offering may, at the sole discretion of the Company and if
approved by the Department, be issued to the Mutual Company
28
<PAGE>
(without the payment by the Mutual Company of cash consideration therefor) or
offered for sale in a Community Offering. The Community Offering, should it be
conducted, will involve an offering of unsubscribed shares directly to the
general public with a preference to those natural persons residing in the local
community of Corry, Pennsylvania, the boundaries of which shall be determined by
Corry Savings' Board of Trustees in its sole discretion. The Community Offering,
if any, shall be for a period of not more than 45 days unless extended by the
Company and Corry Savings, and shall commence concurrently with, during or
promptly after the Subscription Offering. The Company may use an investment
banking firm or marketing agent on a best efforts basis to sell the shares in
the Community Offering. The Company and/or Corry Savings may pay a commission or
other fee to such investment banking firm or marketing agent as to the shares
sold by such firm or firms in the Community Offering and may also reimburse such
firm or firms for expenses incurred in connection with the sale. No person, by
himself or herself, or with an associate or group of persons acting in concert,
may subscribe for or purchase more than 5% of the shares of Common Stock offered
in the Community Offering. Further, the Company may limit total subscriptions in
the Community Offering so as to assure that the number of shares available for
the public offering may be up to a specified percentage of the number of shares
of Common Stock.
In the event of an oversubscription for shares that the Company determines
to sell in the Community Offering, shares may be allocated first to cover orders
of natural persons residing in the Community, then to cover the orders of any
other Person subscribing for shares in the Community Offering so that each such
person may receive 1,000 shares, and thereafter, on a pro rata basis to such
persons based on the amount of their respective subscriptions. THE OPPORTUNITY
TO SUBSCRIBE FOR SHARES OF COMMON STOCK IN THE COMMUNITY OFFERING CATEGORY IS
SUBJECT TO THE RIGHT OF THE COMPANY AND CORRY SAVINGS, IN THEIR SOLE DISCRETION,
TO ACCEPT OR REJECT ANY SUCH ORDERS IN WHOLE OR IN PART EITHER AT THE TIME OF
RECEIPT OF AN ORDER OR AS SOON AS PRACTICABLE FOLLOWING THE EXPIRATION DATE.
If for any reason a public offering of unsubscribed shares of Common Stock
cannot be effected and shares remain unsold after the Subscription Offering and
the Community Offering, if any, and the Board of Directors of the Company
determines not to issue such shares to the Mutual Company, the Boards of
Directors of the Bank and the Board of Trustees of Corry will seek to make other
arrangements for the sale of the remaining shares. Such other arrangements will
be subject to the approval of the FDIC and the Department and to compliance with
applicable securities laws.
DESCRIPTION OF SALES ACTIVITIES
The Common Stock will be sold in both the Subscription and Community
Offerings by employees of the Bank and by employees and directors of Corry
Savings. The Common Stock will be marketed principally through the distribution
of this Prospectus and through the activities in a stock sales center. The
stock sales center will be located at Corry Savings Bank, 150 North Centre
Street, Corry, Pennsylvania, in an area that is separate and apart from the
banking floor and other customer areas of that building.
The stock sales stock center is expected to operate during normal business
hours throughout the period of the Offering. An employee of a broker-dealer
registered with the SEC may, but is not required to, supervise the stock sales
center but will not render any advice or recommendation as to whether
prospective purchasers should subscribe for or purchase shares of the Common
Stock. It is not expected that any employees of the Bank or Corry Savings, other
than officers, will be working in the stock sales center, other than employees
providing clerical services relating to processing orders and other mailed
materials. The stock sales center may make telephone contact with potential
offerees, including depositors. Initial calls will be made to determine that
offering and proxy materials have been received, to relieve customer anxiety
about the transaction, and to answer questions. In addition, persons in the
stock sales center will respond to telephone inquiries regarding the Offering.
Only officers of the Bank or Corry Savings will be permitted to address
investment related questions.
In addition to the activities in the stock sales center, certain senior-
level management employees of both the bank and Corry Savings will participate
in the Offering. It is expected that members of Corry Savings' Board of
Trustees will contact certain Corry Savings depositors as well as other persons
in the community to discuss the
29
<PAGE>
Offering. Members of the Bank's senior management may assist in those efforts
and, in addition, may contact other potential offerees.
None of the Bank or Corry Savings employees or directors who participate in
the Offering, either in the stock sales center or otherwise, will receive any
special compensation or other remuneration for such activities. Management of
Corry Savings and the Bank will respond to any inquiries made to them, whether
by depositors or by members of the general public in the Community Offering.
The Offering is being conducted on a "best-efforts" basis.
None of the Bank or the Corry Savings personnel participating in the
Offering is registered or licensed as a broker-dealer or an agent of a broker-
dealer. Each such person will conduct the offering activities pursuant to an
exemption from such registration provided under Rule 3a4-1 under the Securities
Exchange Act of 1934. That Rule provides that certain persons who are
associated with an issuer of securities and who perform securities sales
activities as an incidental part of their normal job duties and without any
special compensation, are exempt from registration as a broker/dealer or agent
of a broker/dealer. The employees of the Bank are entitled to rely on such
exemption due to their present association with the Bank. The employees of
Corry Savings may be entitled to rely on such exemption because immediately upon
successful consummation of the Offering, those persons will become associated
with the Bank. Their current association with the Bank is in connection with
the contemplated Offering.
PROCEDURE FOR PURCHASING SHARES IN SUBSCRIPTION AND COMMUNITY OFFERING
To ensure that each purchaser receives a Prospectus at least 48 hours
before the Expiration Date in accordance with Rule 15c2-8 of the 1934 Act, no
Prospectus will be mailed any later than five days prior to such date or hand
delivered any later than two days prior to such date. Execution of an order
form will confirm receipt or delivery in accordance with Rule 15c2-8. Order
Forms will only be distributed with a Prospectus.
To purchase shares in the Subscription and Community Offering, an executed
order form with the required payment for the total amount of Common Stock
subscribed for, or with appropriate authorization for withdrawal from Corry
Savings' deposit account (which may be given by completing the appropriate
blanks in the order form), must be received by Corry Savings by ______ p.m.,
local time on the Expiration Date. Order forms which are not received by such
time or are executed defectively or are received without full payment (or
appropriate withdrawal instructions) are not required to be accepted. In
addition, Corry Savings and the Bank will not accept an order submitted on
photocopied or facsimile order forms. Corry Savings and the Bank have the right
to waive or permit the correction of incomplete or improperly executed forms,
but do not represent that they will do so. Once received, an executed order
form may not be modified, amended or rescinded without the consent of the Bank
and Corry Savings unless the Offering has not been completed within 45 days
after the end of the Subscription and Community Offering, unless such period has
been extended.
The subscription price per share of Common Stock for all subscribers other
than Eligible Account Holders will be equal to the Unadjusted Price Per Share.
The subscription price per share for Eligible Account Holders shall be equal to
the Adjusted Price Per Share (i.e., 90% of the Unadjusted Price Per Share).
Subject to the applicable purchase limitations, the total number of shares that
will be issued to a subscriber whose subscription has been accepted will be
equal to the total dollar amount of stock for which such subscription has been
accepted divided by the Unadjusted Price Per Share or the Adjusted Price Per
Share, as applicable. Payment for subscription must accompany the Order Form
and may be made (i) in cash if delivered in person at the office of Corry
Savings, (ii) by check or money order, or (iii) by authorization of withdrawal
from deposit accounts maintained with Corry Savings. Corry Savings and Northwest
reserve the right to refund subscription funds in lieu of issuing fractional
shares, or permit subscribers to elect to receive additional whole shares in
this process.
IN ORDER TO ENSURE THAT ELIGIBLE ACCOUNT HOLDERS, SUPPLEMENTAL ELIGIBLE
ACCOUNT HOLDERS AND OTHER DEPOSITORS ARE PROPERLY IDENTIFIED AS TO THEIR STOCK
PURCHASE PRIORITIES, DEPOSITORS AS OF THE ELIGIBILITY RECORD DATE, SUPPLEMENTAL
ELIGIBILITY RECORD DATE AND/OR THE VOTING RECORD DATE MUST LIST ALL ACCOUNTS ON
THE STOCK ORDER FORM GIVING ALL NAMES IN EACH ACCOUNT AND THE ACCOUNT NUMBER.
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Interest will be paid on payments made by cash, check, or money order at
the Bank's passbook rate of interest from the date payment is received until the
completion or termination of the Offering. If payment is made by authorization
of withdrawal from deposit accounts (other than checking accounts), the funds
authorized to be withdrawn from a deposit account will continue to accrue
interest at the contractual rates until completion or termination of the
Offering, but a hold will be placed on such funds, thereby making them
unavailable to the depositor until completion or termination of the Offering.
If a subscriber authorizes Corry Savings to withdraw the amount of the
purchase price from his deposit account (other than checking accounts), Corry
Savings will do so as of the effective date of Offering. Corry Savings will
waive any applicable penalties for early withdrawal from certificate accounts.
If the remaining balance in a certificate account is reduced below the
applicable minimum balance requirement at the time that the funds actually are
transferred under the authorization, the certificate will be canceled at the
time of the withdrawal, without penalty, and the remaining balance will earn
interest at Corry Savings' passbook rate of interest.
Certificates representing shares of Common Stock purchased will be mailed
to purchasers at the last address of such persons appearing on the records of
Corry Savings, or to such other address as may be specified in properly
completed order forms, as soon as practicable following consummation of the
Offering. Any certificates returned as undeliverable will be disposed of in
accordance with applicable law.
RESTRICTIONS ON TRANSFER OF SUBSCRIPTION RIGHTS AND SHARES
PRIOR TO THE COMPLETION OF THE OFFERING, THE PLAN PROHIBITS ANY PERSON WITH
SUBSCRIPTION RIGHTS FROM TRANSFERRING OR ENTERING INTO ANY AGREEMENT OR
UNDERSTANDING TO TRANSFER THE LEGAL OR BENEFICIAL OWNERSHIP OF THE SUBSCRIPTION
RIGHTS ISSUED UNDER THE PLAN OR THE SHARES OF COMMON STOCK TO BE ISSUED UPON
THEIR EXERCISE. SUCH RIGHTS MAY BE EXERCISED ONLY BY THE PERSON TO WHOM THEY ARE
GRANTED AND ONLY FOR HIS ACCOUNT. EACH PERSON EXERCISING SUCH SUBSCRIPTION
RIGHTS WILL BE REQUIRED TO CERTIFY THAT HE IS PURCHASING SHARES SOLELY FOR HIS
OWN ACCOUNT AND THAT HE HAS NO AGREEMENT OR UNDERSTANDING REGARDING THE SALE OR
TRANSFER OF SUCH SHARES. THE PLAN ALSO PROHIBITS ANY PERSON FROM OFFERING OR
MAKING AN ANNOUNCEMENT OF AN OFFER OR INTENT TO MAKE AN OFFER TO PURCHASE SUCH
SUBSCRIPTION RIGHTS OR SHARES OF COMMON STOCK PRIOR TO THE COMPLETION OF THE
OFFERING.
CORRY SAVINGS AND THE BANK WILL PURSUE ANY AND ALL LEGAL AND EQUITABLE
REMEDIES IN THE EVENT THEY BECOME AWARE OF THE TRANSFER OF SUBSCRIPTION RIGHTS
AND WILL NOT HONOR ORDERS KNOWN BY THEM TO INVOLVE THE TRANSFER OF SUCH RIGHTS.
LIMITATIONS ON COMMON STOCK PURCHASES
The Plan includes the following limitations on the number of shares of
Common Stock which may be purchased during the Offering:
1. No person may purchase fewer than the number of shares of Common Stock
having an aggregate purchase price of $500;
2. The aggregate amount of outstanding common stock of the Bank owned or
controlled by persons other than Mutual Company at the close of the
Offering shall be less than 50% of the Bank's total outstanding common
stock.
3. No person, associate thereof, or group of persons acting in concert,
may purchase more than 5% of the shares of Common Stock, except that: (i)
the ESOP may purchase in the aggregate up to 7% of the shares of Common
Stock; and (ii) for purposes of this limitation shares to be held by any
tax-qualified employee plan and attributable to a person shall not be
aggregated with other shares purchased directly by or otherwise
attributable to such person.
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4. The aggregate amount of Common Stock that may be acquired in the
Offering by officers and directors of Corry Savings and any person acting
in concert with such persons, exclusive of any stock acquired by such
persons in the open market, shall not exceed 35% of the shares of Common
Stock, provided that in calculating the number of shares held by officers
and directors of Corry Savings and any person acting in concert with such
persons under this paragraph shares held by any tax-qualified employee plan
of the Bank that are attributable to such persons shall not be counted.
5. Subject to any required regulatory approval and the requirements of
applicable laws and regulations, the Board of Directors of the Bank after
consulting with the Board of Trustees of Corry may, in its sole discretion,
increase the maximum purchase limitation to up to 9.9%, provided that
orders for Common Stock in excess of 5% of the number of shares of Common
Stock shall not in the aggregate exceed 10% of the total shares of Common
Stock (except that this limitation shall not apply to purchases by tax-
qualified employee Plans). If such 5% limitation is increased, subscribers
for the maximum amount will be, and certain other large subscribers in the
sole discretion of the Bank and Corry Savings may be, given the opportunity
to increase their subscriptions up to the then applicable limit. Requests
to purchase additional shares of Common Stock under this provision will be
determined by the Board of Directors of the Bank, in its sole discretion.
6. No person shall be entitled to purchase any Common Stock to the extent
such purchase would be illegal under any federal law or state law or
regulation or would violate regulations or policies of the National
Association of Securities Dealers, Inc. The Bank and/or its agents, in the
Bank's sole discretion, may require that a prospective subscriber provide a
legal opinion as to the legality of his proposed purchase and may refuse to
honor any purchase order if such opinion is not timely furnished or is
otherwise unacceptable to the Bank, in its sole discretion.
7. The Board of Directors of the Bank has the right in its sole discretion
to reject any order submitted by a person whose representations the Board
of Directors believes to be false or who it otherwise believes, either
alone or acting in concert with others, is violating, circumventing, or
intends to violate, evade or circumvent the terms and conditions of the
Plan.
The Board of Directors of the Bank shall have the authority to interpret
terms used in the above limitations and terms used in the Plan in their sole
discretion.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of all anticipated material federal income tax
consequences of the Offering and the possible purchase of Common Stock in the
Subscription Offering or the Community Offering. The summary is based on the
federal income tax laws as now in effect and as currently interpreted; it does
not take into account possible changes in such laws or interpretations,
including amendments to applicable statutes or regulations or changes in
judicial or administrative rulings, some of which may have retroactive effect.
In addition, to the extent the discussion is premised upon the receipt of an
opinion of legal counsel, purchasers should be aware that any such opinion will
not be binding on the IRS or the courts. The summary does not purport to
address all aspects of the possible federal income tax consequences of the
Offering. In particular, and without limiting the foregoing, this summary does
not address the federal income tax consequences of the Offering to Eligible
Account Holders in light of their particular circumstances or status (e.g.,
foreign persons tax-exempt entities, etc.), nor does this summary address any
consequences of the Offering under any state, local, or foreign tax laws.
SUBSCRIBERS ARE THEREFORE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE
SPECIFIC TAX CONSEQUENCES TO THEM OF THE PROPOSED TRANSACTIONS AND ANY PURCHASE
OF COMMON STOCK PURSUANT TO THE SUBSCRIPTION OFFERING OR THE COMMUNITY OFFERING,
INCLUDING TAX RETURN REPORTING REQUIREMENTS, THE APPLICATION AND EFFECT OF
FEDERAL, FOREIGN, STATE, LOCAL AND OTHER TAX LAWS, AND THE IMPLICATIONS OF ANY
PROPOSED CHANGES IN THE TAX LAWS.
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The tax consequences of the purchase of Common Stock may vary depending on
whether the purchase is by an Eligible Account Holder in his capacity as such.
All Eligible Account Holders should read carefully the entire discussion under
"Special Considerations--Certain Federal Income Tax Consequences" before
deciding whether to purchase Common Stock in such person's capacity as an
Eligible Account Holder.
Reorganization Status. The consummation of the Offering is conditioned
upon the receipt by the Bank of an opinion of counsel or independent tax advisor
to the effect that, based on facts and representations made by the Bank, the
Offering will constitute one or more reorganizations within the meaning of
Section 368(a) of the Code.
Certain Tax Consequences of the Proposed Transactions to Subscribers.
Assuming that the Offering qualifies as one or more reorganizations, an Eligible
Account Holder or Supplemental Eligible Account Holder should be treated for
federal income tax purposes as having exchanged his or her deposit account(s)
and depositorship interest in Corry Savings for (i) deposit account(s) in
Northwest Savings, (ii) interest(s) in the liquidation account in Northwest
Savings, (iii) liquidation rights in the Mutual Company, which will be
subordinate to a depositor's interest in the liquidation account in the Bank,
and (iv) to the extent such person actually purchases any Common Stock in the
Subscription Offering in such person's capacity as an Eligible Account Holder or
Supplemental Eligible Account Holder, rights to purchase such shares of Common
Stock ("Subscription Rights"). In addition, an Other Depositor and Eligible
Employee and Trustee purchasing in his capacity as such should be treated as
having exchanged his or her deposit account(s), if any, and depositorship
interest in Corry Savings, if any, for (i) deposit account(s) in the Bank and
(ii) Subscription Rights.
The federal income tax consequences of the receipt, exercise and lapse of
Subscription Rights which are exercisable at a discount are uncertain, but they
may be significant and could include the recognition of gain equal to the fair
market value of such Subscription Rights. Those consequences present novel
issues of tax law which are not addressed by any direct authorities and, to the
extent related authorities do exist, they appear to be conflicting and
inconclusive. Set forth below are two possible tax consequences of the receipt
and/or exercise of Subscription Rights.
Under one scenario, only those Eligible Account Holders who actually
exercise Subscription Rights should recognize gain as a result of the exchanges
described in the preceding paragraph and the amount of such gain should be equal
to the fair market value of the Subscription Rights exercised. As a result,
Eligible Account Holders who do not exercise Subscription Rights should not
recognize gain for federal income tax purposes as a result of the Offering. The
determination of the fair market value of the Subscription Rights will depend on
a number of factors, including the excess, if any, of the market price of the
Common Stock over the Adjusted Purchase Price, the period of time during which
the Subscription Rights will be outstanding and exercisable, the
nontransferability of the Subscription Rights, and perhaps other factors. For
purposes of the information returns to be filed with the IRS relating to the
gain recognized by Eligible Account Holders who exercise Subscription Rights,
the Bank and Corry Savings intend to value the Subscription Rights exercised
based solely on the difference between the Adjusted Price Per Share and the
Unadjusted Price Per Share.
It is possible that, consistent with earlier private letter rulings, all
Eligible Account Holders (including those who do not exercise Subscription
Rights) will be treated as having received taxable Subscription Rights pursuant
to the Offering. Should this be the case, each Eligible Account Holder will
recognize taxable gain in an amount equal to the fair market value of the
Subscription Rights received. In addition, the IRS may take the position that
those Eligible Account Holders who actually exercise Subscription Rights have
additional income that, when added to the income recognized on the receipt of
the Subscription Rights, generally would increase their total amount of income
to approximately the amount such Eligible Account Holders would recognize as
described above. An Eligible Account Holder who does not exercise some or all
of his or her Subscription Rights should be entitled to claim, at the time the
unexercised Subscription Rights expire, a capital loss equal to the amount of
gain attributable to the Subscription Rights not exercised, provided that the
Common Stock that would have been acquired upon exercise of the expired
Subscription Rights would have constituted a capital asset in the hands of the
Eligible Account Holder. Thus, in general, an Eligible Account Holder who does
not exercise any Subscription Rights would have gain and an equal offsetting
loss as a result of the Offering. Although the capital loss should be equal in
amount to the related gain recognized, the character of the loss as a capital
loss may not be the same as the character of the gain required to be
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recognized upon receipt of the unexercised Subscription Rights, certain
additional tax forms may have to be filed, and, under certain circumstances, an
Eligible Account Holder may have to use the loss in a later tax year than the
year in which the gain from receipt of the unexercised Subscription Rights is
recognized. For most Eligible Account Holders, any gain recognized on the
distribution of the Subscription Rights will be treated as a capital gain.
Based on the foregoing, if all Eligible Account Holders are treated as
having received Subscription Rights, then all Eligible Account Holders, not just
those who exercise Subscription Rights, will have to be concerned about the
value assigned to the Subscription Rights, and other questions, such as when and
how many Subscription Rights should be deemed to be received by each Eligible
Account Holder. There is no authority that clearly resolves these questions
and, in the absence of such authority, there may be several possible approaches
for determining the time at which Subscription Rights would, under these
circumstances, be deemed to be received by Eligible Account Holders.
In the opinion of the Independent Appraiser, which opinion is not binding
on the IRS, the Subscription Rights issued to Supplemental Eligible Account
Holders, Other Depositors and Corry Officers do not have any value, based on the
fact that such rights are acquired by the recipients without cost, are
nontransferable and of short duration, and afford the recipients the right only
to purchase the Common Stock at a price equal to the Unadjusted Price Per Share.
Assuming that, for the reasons set forth above, the Subscription Rights issued
to Supplemental Eligible Account Holders, Other Depositors and Corry Officers
have no value at the time issued, the Supplemental Eligible Account Holders,
Other Depositors and Corry Officers will not recognize gain or loss upon the
receipt of Subscription Rights or upon the exercise of Subscription Rights.
Exercise of Subscription Rights. An Eligible Account Holder (i) should not
recognize any taxable income as a result of the purchase of Common Stock
pursuant to the exercise of Subscription Rights (although as noted above such an
Eligible Account Holder will be required to recognize taxable gain as a result
of the receipt of exercised Subscription Rights at the Adjusted Price Per
Share), (ii) should have a basis in such Common Stock equal to the purchase
price paid therefor increased by the basis, if any, of the Subscription Rights
exercised (such an Eligible Account Holder's basis in the Subscription Rights
should be equal to the amount of gain (and any additional income) recognized on
the receipt (and exercise) of Subscription Rights), and (iii) should have a
holding period in the Common Stock purchased pursuant to the exercise of
Subscription Rights commencing on the date the Subscription Rights are
exercised, which should be the Closing Date.
Purchase of Common Stock by a Purchaser in His or Her Capacity as Other
than an Eligible Account Holder. No income, gain or loss should be recognized by
Supplemental Eligible Account Holders, Other Depositors, Eligible Employees and
Trusts, or purchasers in the Community Offering, either as a result of having
the opportunity to purchase shares of Common Stock in the Offering or as a
result of the purchase of Common Stock in the Offering. Supplemental Eligible
Account Holders, Other Depositors, Eligible Employees and Trusts, or purchasers
in the Community Offering who purchase Common Stock in the Offering should have
a basis in such stock equal to the purchase price thereof, and should have a
holding period for such stock commencing on the day following the day on which
the stock is purchased, which should be the day after the closing date. A
purchaser of shares of Common Stock in the Offering may have a tax basis in such
shares that is less than the tax basis that an Eligible Account Holder purchaser
in the Subscription Offering might have.
Individual Retirement Accounts. Those persons who are beneficial owners of
IRA, Keogh or similar retirement accounts are not themselves Eligible Account
Holders by virtue of having such accounts, but the account itself may be an
Eligible Account Holder. Thus, the tax consequences of the receipt and exercise
of Subscription Rights should be applicable to the IRAs and Keogh accounts
themselves, and not the beneficial owners thereof. So long as such accounts are
tax-exempt, under Section 408 of the Code (in the case of IRAs) or Section
501(a) of the Code (in the case of Keogh accounts), there should be no federal
income tax consequences to the accounts resulting from receipt of Subscription
Rights. In the case of an IRA, Keogh or similar retirement account established
at Corry Savings, or the Bank, however, in order to subscribe for shares in the
Offering, the beneficial owner first must authorize and direct such institution
to transfer the account to a self-directed account at an independent trustee
that permits the account to hold stock. Payment for the Common Stock under
these circumstances should have no federal
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income tax consequences to the IRA or Keogh account or to the beneficial owner
of such account. To the extent that the balance in an IRA or Keogh account is
increased as a result of the exercise of Subscription Rights, additional income
generally would be recognized upon the future withdrawal of such account
balance.
CERTAIN PENNSYLVANIA INCOME TAX CONSEQUENCES OF THE OFFERING
For Pennsylvania income tax purposes, the tax consequences of the Offering
and the possible purchase by Eligible Account Holders of Common Stock pursuant
to the Subscription Offering or the Community Offering are expected to be
substantially similar to the federal income tax consequences.
REQUIRED REGULATORY APPROVALS AND CONSIDERATIONS AS TO THE MERGER AND OFFERING
The Offering is subject to the receipt of a notice of non-objection from
the FDIC pursuant to 12 C.F.R. (S) 303.15. The merger of Corry Savings into the
Bank is also subject to approval of the Department under Pennsylvania law and
regulations, and the FDIC pursuant to the Bank Merger Act. The Bank Merger Act
requires that the FDIC take into consideration the financial and managerial
resources and future prospects of the existing and proposed institutions and the
convenience and needs of the communities to be served. Further, the FDIC may
not approve the merger if it would result in a monopoly or if it would be in
furtherance of any combination or conspiracy to monopolize or to attempt to
monopolize the business of banking in any part of the United States, or if its
effect in any section of the country may be substantially to lessen competition
or to tend to create a monopoly, or if it would be in any other manner in
restraint of trade, unless the FDIC finds that the anticompetitive effects of
the merger are clearly outweighed in the public interest by the probable effect
of the transaction in meeting the convenience and needs of the communities to be
served. In addition, the FDIC must take into account the record of performance
of the existing and proposed institutions under the Community Reinvestment Act
in meeting the credit needs of the entire community, including low- and
moderate-income neighborhoods, served by such institutions. Applicable
regulations also require publication of notice of the application for approval
of the merger and provide an opportunity for the public to comment on the
application in writing and to request a hearing. The Bank Merger Act requires
that any bank merger, including the merger of Corry Savings into the Bank, may
not be consummated until the 15th day after approval under the Bank Merger Act,
during which time the United States Department of Justice may challenge the
merger on antitrust grounds.
In addition, as a condition to their approvals of the applications relating
to the Two-Tier Reorganization filed by the Bank, the Mutual Company and the
Company, the FDIC, the FRB and the Department required that any future stock
issuances by the Company be approved by such agencies. Accordingly, the
issuance of Common Stock in connection with the Merger requires the approval of
such agencies.
The approvals described above do not constitute a recommendation or
endorsement by the FDIC, the FRB or the Department of any of the proposed
transactions contemplated by the Plan.
ACCOUNTING TREATMENT
The Offering and Merger will be accounted for on a purchase accounting
basis in accordance with generally accepted accounting principles. Under
purchase accounting, the assets and liabilities of Corry Savings as of the
Closing Date will be recorded at their respective fair values, and added to
those of the Bank. Any excess of the fair market value of the assets of Corry
Savings over the "purchase price" (i.e., the value of the stock issued to the
Mutual Company) will be recorded as negative goodwill. The consolidated
financial statements of the Company issued after consummation of the Merger and
Offering will reflect these items.
TIME LIMITS ON COMPLETION OF THE OFFERING
Applicable regulations governing mutual to stock conversion offerings
require that the sale of the Common Stock offered in connection with the
Offering be completed within 45 calendar days after the expiration of the
Subscription Offering. In the event the sale of the Common Stock cannot be
completed within the required 45-day
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period, one or more extensions of time to complete the sale of the Common Stock
may be granted by the Department prior to the end of such 45-day period, but no
single extension of time may exceed 90 days. No assurance can be given that an
extension will be granted if requested. The Subscription Offering is scheduled
to expire at _____ p.m., local time, on __________, 1998. Thus, unless extended
by Corry Savings and the Bank with the approval of the Department, such sale
must be completed by _______________, 1998.
The Company will not issue the shares of Common Stock until all such shares
(other than an insignificant residue) have been subscribed for or arrangements
made to issue such shares to the Mutual Company. If this has not occurred
within 45 days after the expiration of the Subscription Offering, unless such
period is extended with the consent of the Department, all funds delivered to
Corry Savings in the Subscription Offering and the Community Offering will be
returned promptly to those who subscribed in the Subscription Offering and the
Community Offering with interest, and all withdrawal authorizations will be
canceled. If an extension beyond the 45-day period following the expiration of
the Subscription Offering is granted, Corry Savings will notify those who
subscribed in the Subscription Offering and the Community Offering of the
extension of time and of their rights, if any, to modify or rescind their
subscriptions. No sales of shares may be completed, either in the Subscription
Offering or the Community Offering, or otherwise, unless the Plan is approved by
the depositors of Corry Savings.
EFFECT OF THE PROPOSED TRANSACTIONS ON ACCOUNT HOLDERS AND BORROWERS
The Merger and the Offering will not change the amount or withdrawal rights
of savings deposits. Thus, depositors will continue to hold their existing
certificates, passbooks and other evidences of their accounts. In addition,
such accounts will continue to be insured by the FDIC up to the maximum amount
authorized by federal law; however, persons who have deposit accounts at both
the Bank and Corry Savings prior to the Offering will retain separate insurance
coverage in those accounts only for a period of six months from the date of the
closing of the Merger as if the institutions remained as separate entities,
except in the case of certificate of deposit accounts that will mature more than
six months thereafter--in which event separate insurance coverage will continue
until the earliest maturity date. Thereafter, such separate insurance coverage
will cease and those depositors' accounts will be insured up to the maximum
amount permitted under federal law. Depositors whose insurance coverage is
affected by the Merger will be notified in advance of any reduction in deposit
insurance taking effect. The principal amount, interest rate, maturity date and
other terms of Corry Savings' loans will continue under the same contractual
terms as those prior to completion of the Merger.
VOTING RIGHTS
At present, neither holders of withdrawable accounts nor borrowers at Corry
Savings have voting rights in Corry Savings, except that the Plan requires the
affirmative vote of a majority of depositors in connection with the Offering and
Merger. Subsequent to the Merger, each person who has purchased Common Stock in
the Offering or otherwise, as a holder of shares of Common Stock, will have
exclusive rights to vote on any matters to be considered by the holders of
Common Stock. A shareholder is entitled to one vote for each share of Common
Stock owned (however, the Certificate of Incorporation of the Company provides
that in no event shall any record owner of any outstanding Common Stock which is
beneficially owned, directly or indirectly, by a person who beneficially owns in
excess of 10% of the then outstanding shares of Common Stock (the "Limit") be
entitled or permitted to any vote in respect of the shares held in excess of the
Limit).
LIQUIDATION RIGHTS
Currently, in the unlikely event of liquidation of Corry Savings, any
assets remaining after satisfaction of all creditors' claims in full (including
the claims of all depositors to the withdrawal value of their accounts) would be
distributed pro rata among the depositors of Corry Savings, with the pro rata
share of each being the same proportion of all such remaining assets as the
withdrawal value of each depositor's account is to the total withdrawal value of
all accounts in Corry Savings at the time of the liquidation.
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Upon consummation of the Merger, the Bank intends to increase the
liquidation account that it currently maintains or establish a new liquidation
account (in either case, the "Liquidation Account"), for the benefit of Eligible
Account Holders and Supplemental Eligible Account Holders. The Liquidation
Account will initially be established on the Bank's books in an amount equal to
Corry Savings' net worth as of March 31, 1998. Each Eligible Account Holder and
Supplemental Eligible Account Holder will receive an initial interest in the
Liquidation Account (subaccount balance) which will be in the same proportion to
the total Liquidation Account as the balance of the deposit at Corry Savings of
each Eligible Account Holder and Supplemental Eligible Account Holder on the
Eligibility Record Date and Supplemental Eligibility Record Date, respectively,
was to the total of the deposits of all Eligible Account Holders and
Supplemental Eligibility Record Date, respectively. Neither the total amount of
the Liquidation Account nor an Eligible Account Holder's or Supplemental
Eligible Account Holder's subaccount balance in the Liquidation Account will
ever increase. The Liquidation Account will be maintained as an off-balance
sheet "memorandum" account. The Bank may not pay any dividend that would reduce
its equity to an amount that is less than the amount of the Liquidation Account.
In addition, to the extent that Eligible Account Holders and Supplemental
Eligible Account Holders are depositors of the Bank they will obtain liquidation
rights in the Mutual Company on the same terms as other depositors of the Bank.
However, any liquidation rights of Eligible Account Holders and Supplemental
Eligible Account Holders in the Mutual Company may only be realized if, and to
the extent that, such person's interest in the Liquidation Account of the Bank
cannot be fully realized.
If the amount on deposit at the Bank by any Eligible Account Holder or
Supplemental Eligible Account Holder on any annual audit year closing date after
the consummation of the Merger is less than the amount on deposit on the
Eligibility Record Date or Supplemental Eligibility Record Date, respectively,
or any subsequent annual audit year closing date, his subaccount balance in the
Liquidation Account will be reduced by an amount proportionate to the reduction
in the related deposit at the Bank and will not thereafter be increased despite
any subsequent increase in the related deposit. In the unlikely event of
liquidation of the Bank, the Bank's assets would first be applied against the
claims of all creditors (including the claims of all depositors to the
withdrawal value of their accounts). Any remaining assets would then be
distributed pro rata to the persons who maintain an interest in the Bank's
liquidation account in an amount equal to their subaccount balance before any
distribution may be made to any holder of the Common Stock.
CERTAIN RESTRICTIONS ON PURCHASE OR TRANSFER OF SHARES AFTER OFFERING
All shares of Common Stock purchased in connection with the Offering by a
director or an executive officer of Corry Savings will be subject to a
restriction that the shares not be sold for a period of one year following the
Offering, except in the event of the death of such director or executive
officer. Each certificate for restricted shares will bear a legend giving
notice of this restriction on transfer, and instructions will be issued to the
effect that any transfer within such time period of any certificate or record
ownership of such shares other than as provided above is a violation of the
restriction. Any shares of Common Stock issued at a later date as a stock
dividend, stock split, or otherwise, with respect to such restricted stock will
be subject to the same restrictions.
INTERESTS OF CERTAIN PERSONS IN THE OFFERING
The Bank intends to offer continued employment to all employees of Corry
Savings as of the Effective Time at the salary levels in effect at the Effective
Time. Employees of Corry Savings who continue employment with the Bank
("Continuing Employees") shall be eligible to participate in such employee
benefit plans as may be in effect generally for employees of the Bank (the "the
Bank Plans"). Continuing Employees shall generally be entitled to participate
on the same basis as similarly situated employees of the Bank, except that
Continuing Employees shall generally be entitled to full credit for each full
year of service with Corry Savings for purposes of determining eligibility for
participation and vesting, but not for benefit accruals
The officers and trustees of Corry Savings will be permitted to participate
in the Northwest Savings Bank and Northwest Bancorp, MHC Recognition and
Retention Plan (the "Restricted Stock Plan"), and the Northwest
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<PAGE>
Savings Bank and the Northwest Bancorp, MHC Stock Option Plan (the "Option
Plan"). The Board of Trustees of Corry Savings shall designate officers and
trustees who shall receive in the aggregate (i) a number of shares of Common
Stock, restricted by the terms of the Restricted Stock Plan, equal to 3% of the
number of shares of Common Stock sold in the Offering, and (ii) pursuant to the
Option Plan options to purchase a number of shares of the Common Stock equal to
10% of the number of shares of Common Stock sold in the Offering, at an exercise
price equal to the fair market value of the Common Stock at the time the options
are awarded. If sufficient shares or options to satisfy the awards set forth
above under (i) and (ii) are not then available under such plans, the Bank
intends to amend such plans, or to adopt an additional restricted stock plan and
stock option plan, to permit such awards to be made. Any additional restricted
stock or stock option plans shall be established in accordance with rules and
policy of the Department and the FDIC. In addition, the Bank's ESOP or other tax
qualified employee plans intend to subscribe for 7% of the shares of Common
Stock sold in the Offering and Continuing Employees shall not be entitled to
credit for prior service with Corry Savings for any purpose but shall be
eligible for participation in the tax-qualified employee plans on the same basis
as new employees of the Bank. Participation by Continuing Employees in employee
benefit plans of the Bank with respect to which eligibility and participation is
at the discretion of the employer shall be discretionary with such employer.
The Bank will honor the written employment agreement of Vicki L. Stec. Any
other full-time employee of Corry Savings as of the Effective Time who is
terminated by the Bank within one year following the completion of the Merger
without cause (as defined in the Agreement), except in the case of voluntary
resignation, disability or death, shall be entitled to severance benefits equal
to one week's salary for each year of service to Corry Savings as of the date of
termination, up to a maximum of 18 weeks.
Each member of the Board of Trustees of Corry as of the date of the
Agreement is entitled to serve on an Advisory Board to the Board of Directors of
the Bank. The non-employee Advisory Directors shall receive an annual fee no
less than the annual fee paid to such persons as trustees of Corry as of the
date of the Agreement. The Advisory Board will meet monthly.
THE AGREEMENT
General. The Bank and Corry Savings are parties to the Agreement, dated as
of June 19, 1997, pursuant to which Corry Savings will merge with and into the
Bank with the Bank as the surviving institution. The Agreement contains certain
agreements between the Bank and Corry Savings relating to the Merger and
Offering, and certain related provisions.
Indemnification. The Agreement provides that all rights to indemnification
existing at the time of the Agreement in favor of the trustees, officers,
employees and agents of Corry Savings as provided under applicable law or in its
charter, bylaws, indemnification agreements or otherwise with respect to matters
occurring prior to the Effective Time shall survive the Merger and continue in
full force and effect until the applicable statute of limitations has expired.
Thereafter, such persons shall be indemnified to the extent permitted by the
Bank's charter and bylaws. In the event of any claim or litigation giving rise
to such indemnification, the Agreement provides that the Bank will provide the
indemnified party with reasonable access to all documents and other information
relating to the subject matter of the litigation and will reasonably cooperate
in the defense of such litigation. An employee, agent, trustee or officer of
Corry Savings seeking indemnification pursuant to the provisions of Corry
Savings' articles of incorporation or bylaws shall be entitled to have the
resolution of any dispute regarding the right to and the extent of the
indemnification, including the right to the advancement of or the reimbursement
of legal fees and expenses related to such claim or litigation, resolved by an
arbitrator selected by the Bank and the indemnified party.
Termination. The Agreement may be terminated and the Merger abandoned at
any time before the Closing Date, whether before or after the approval or
adoption of the Agreement by the depositors of Corry:
(a) By mutual written consent of the Board of Directors of the Bank and
Board of Trustees of Corry;
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(b) By the written notice from the Bank to Corry if: (i) any condition to
the Bank's obligations becomes impossible to substantially satisfy at any time
or has not been substantially satisfied or waived in writing; or (ii) any
condition to the obligations of the Bank and Corry Savings becomes impossible to
substantially satisfy at any time or has not been substantially satisfied or
waived in writing, provided, however, the Bank shall not have the right to
terminate the Agreement pursuant to this clause if any required governmental
approval was not received due to the failure of the Bank to perform or observe
the covenants and agreements set forth in the Agreement; or (iii) any Corry
Savings' warranty or representation shall be untrue or incorrect in any material
respect and such breach has not been cured within 30 days following receipt by
Corry Savings of written notice of such discovery; (iv) Corry Savings shall
have breached one or more provisions of the Agreement in any material respect
and such breach has not been cured within 30 days following receipt by Corry
Savings of written notice of such breach; or
(c) By written notice from Corry Savings to the Bank, which has been
approved by the Board of Trustees of Corry, if: (i) any condition to Corry
Savings obligations becomes impossible to substantially satisfy and has not been
substantially satisfied or waived in writing; or (ii) any condition to the
obligations of the Bank or Corry becomes impossible to substantially satisfy at
any time or has not been substantially satisfied or waived in writing, provided,
however, Corry shall not have the right to terminate this Agreement pursuant to
this clause if any required governmental approval was not received due to the
failure of Corry Savings to perform or observe the covenants and agreements set
forth in the Agreement; or (iii) any of the Bank's warranties or
representations shall be untrue or incorrect in any material respect and such
breach has not been cured within 30 days following receipt by Northwest of
written notice of such discovery; or (iv) the Bank shall have breached one or
more provisions of the Agreement in any material respect and such breach has not
been cured within 30 days following receipt by the Bank of written notice of
such breach.
(d) By the Board of Directors of the Bank if the Board of Trustees of Corry
shall not recommend, or shall withdraw or modify in a manner adverse to the
Bank, its recommendation to Corry Savings' depositors to approve the Agreement.
(e) By the Board of Directors of the Bank or Board of Trustees of Corry at
any time if the depositors of Corry Savings have not approved the Agreement by
the requisite affirmative vote.
(f) By the Board of Directors of the Bank or Board of Trustees of Corry if
the Merger has not been consummated on or before March 31, 1998.
In the event of termination of the Agreement by either Corry Savings or the
Bank, the Agreement shall become void, and there shall be no liability or
obligation on the part of the Bank or Corry or their respective officers,
trustees or directors except with respect, generally, to provisions relating to
confidentiality and expenses.
Expenses. The Agreement provides that all expenses incurred by the Bank
and Corry in connection with or related to the authorization, preparation and
execution of the Agreement, the solicitation of any required depositor approvals
and all other matters related to the closing of the transactions contemplated
thereby, including all fees and expenses of agents, representatives, counsel and
accountants employed by either such party or its affiliates, shall be borne
solely and entirely by the party that has incurred the same. If the Offering is
completed all expenses will be netted against the proceeds of the Offering.
INDEMNIFICATION OF THE COMPANY'S OFFICERS AND DIRECTORS
AND LIMITATION OF LIABILITY
General. Certain provisions of the Company's Articles of Incorporation
seek to ensure that directors are able to exercise their best business judgment
in managing corporate affairs, subject to their continuing fiduciary duties, and
are not unreasonably impeded by exposure to the potentially high personal costs
or other uncertainties of litigation. The nature of the responsibilities of
directors and officers often requires them to make difficult decisions which can
expose such persons to personal liability, but from which they will acquire no
personal benefit (other than as stockholders). In recent years, litigation
against corporations and their directors and officers, often amounting to mere
39
<PAGE>
"second guessing" of good-faith judgments and involving no allegations of
personal wrongdoing, has become common. Such litigation often claims damages in
large amounts which bear no relationship to the amount of compensation received
by the directors or officers, particularly in the case of directors who are not
officers of the corporation, and the expense of defending such litigation,
regardless of whether it is well founded, can be enormous. Individual directors
and officers can seldom bear either the legal defense costs involved or the risk
of a large judgment.
In order to attract and retain competent and conscientious directors and
officers in the face of these potentially serious risks, corporations have
historically provided for corporate indemnification and limitation of liability
in their articles of incorporation or bylaws, and have obtained liability
insurance protecting the company and its directors and officers against the cost
of litigation and related expenses. Such indemnification and limitation of
liability provisions may also benefit stockholders who indirectly assume the
expense of litigation and directors and officers liability insurance. The
Company currently has insurance coverage for its directors and officers.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the following provisions, the Company has been informed that in the
opinion of the SEC such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable. In addition, Federal banking
regulations restrict the Bank or the Company from indemnifying officers and
directors for civil monetary penalties or judgments resulting from
administrative or civil actions instituted by any Federal banking agency, or any
other liability or legal expense with regard to any administrative proceeding or
civil action instituted by any Federal banking agency, which results in a final
order or settlement pursuant to which such person is assessed a civil monetary
penalty, removed from office or prohibited from participating in the conduct of
the affairs of an insured depository institution, or required to cease and
desist from or take certain actions.
Limitation of Liability under the Company's Articles of Incorporation. The
Company's Articles of Incorporation provide that the personal liability of a
director or officer of the Company for monetary damages shall be eliminated to
the fullest extent permitted by the Business Corporation Law of 1988, as
amended, of the Commonwealth of Pennsylvania (the "BCL") as it exists on the
effective date of the Articles of Incorporation or as such law may be thereafter
in effect. The Articles of Incorporation also state that in no event shall a
director be personally liable for monetary damages for any action taken unless
the director has breached or failed to perform the duties of his office under
the BCL and the breach or failure to perform constitutes self-dealing, willful
misconduct or recklessness. This latter provision regarding limitation of a
director's personal liability is specifically permitted by Pennsylvania law.
These provisions may reduce the likelihood of derivative litigation against
directors and discourage or deter stockholders or management from bringing a
lawsuit against directors for breach of their duty of care, even though such an
action, if successful, might otherwise have been beneficial to the Company and
its stockholders. The provisions will not, however, affect the right to pursue
equitable remedies for breach of the duty of care, although such remedies might
not be available as a practical matter. Federal banking and securities laws may
limit the effect of such limitation of liability provisions.
Indemnification Provisions of the Company's Bylaws. The Company's Bylaws
provide that the Company shall indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Company), by reason of the fact that he is
or was a director or officer of the Company, or is or was serving at the request
of the Company as a representative of another entity, against expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
incurred by him in connection with the action or proceeding if he acted in good
faith and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the Company and, with respect to any criminal proceeding, had
no reasonable cause to believe his conduct was unlawful. The Bylaws further
provide that the Company shall not be liable for any amounts which may be due to
any such person in connection with a settlement of any action or proceeding
initiated by any such person (other than an action or proceeding to enforce
rights to indemnification hereunder).
As regards derivative and corporate actions, the Company's Bylaws provide
that the Company shall indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending or completed action by
or in the right of the Company to procure a judgment in its favor by reason of
the fact that he is or was a director or officer of the Company or is or was
serving at the request of the Company as a representative of another entity,
against expenses (including attorney's fees) actually and reasonably incurred by
him in connection with the defense or settlement of the action if he acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the Company. The Bylaws further provide that no
indemnification shall be made under such provisions of the Bylaws in respect of
any claim, issue or matter as to which the person has been adjudged to be liable
to the Company unless and only to the extent that the court of common pleas of
the judicial district embracing the county in which the registered office of the
Company is located or the court in which the action was brought determines upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for the expenses that the court of common pleas or other court deems
proper.
Unless ordered by a court, any indemnification described above shall be
made by the Company only as authorized in the specific case upon a determination
that indemnification of the representative is proper in the circumstances
because he has met the applicable standard of conduct set forth above. The
determination shall be made: (1) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to the action or
proceeding; (2) if such a quorum is not obtainable, or if obtainable and a
majority vote of a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion; or (3) by the stockholders.
The Bylaws provide that expenses (including attorneys' fees) incurred in
defending any action or proceeding referred to above shall be paid by the
Company in advance of the final disposition of the action or proceeding upon
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receipt of an undertaking by or on behalf of the director or officer to repay
the amount if it is ultimately determined that he is not entitled to be
indemnified by the Company.
The duties of the Company to indemnify and to advance expenses to a
director or officer are in the nature of a contract between the Company and each
such person, and no amendment or repeal of any provision of the Bylaws may
alter, to the detriment of such person, the right of such person to the advance
of expenses or indemnification related to a claim based on an act or failure to
act which took place prior to such amendment or repeal.
CERTAIN ANTITAKEOVER PROVISIONS
Introduction. A number of provisions of the Articles of Incorporation and
Bylaws of the Company deal with matters of corporate governance and certain
rights of stockholders. The following discussion is a general summary of
certain of these provisions and certain other statutory and regulatory
provisions relating to stock ownership and transfers, and business combinations.
Some of these provisions may be deemed to have potential anti-takeover effects
in that they may have the effect of discouraging a future takeover attempt or
change of control which is not approved by the Board of Directors but which a
majority of individual stockholders may deem to be in their best interests or in
which stockholders may receive a substantial premium for their shares over then
current market prices. As a result, stockholders who desire to participate in
such a transaction may not have an opportunity to do so. Such provisions will
also render the removal of the current Board of Directors or management more
difficult.
Issuance of Capital Stock. The Articles of Incorporation of the Company
authorizes the issuance of 100,000,000 shares of Common Stock, par value $.10
per share, and 10,000,000 shares of serial preferred stock. The Company has
adopted no plan or agreement to issue additional shares of stock at this time,
other than in the Offering and upon the exercise of stock options. If
additional authorized but unissued shares of Common Stock are issued in the
future, the percentage ownership interests of existing stockholders would be
reduced and, depending on the terms pursuant to which new shares are issued, the
book value and earnings per share of outstanding Common Stock might be diluted.
Moreover, such additional share issuances could be construed as having an anti-
takeover effect. The ability to issue additional shares gives management
greater flexibility in financing corporate operations. Under Pennsylvania law,
as long as the Mutual Company is in existence it must own at least a majority of
the outstanding voting stock of the Company. Accordingly, Pennsylvania law
would not permit the Company to issue shares of voting stock if after such
issuance stockholders other than the Mutual Company would own more than a
majority of the Company's outstanding voting stock.
Special Meetings of Stockholders. The Articles of Incorporation of the
Company provide that special meetings of the stockholders of the Company may be
called only by the Board of Directors pursuant to a resolution approved by the
affirmative vote of a majority of directors then in office.
Cumulative Voting. The Company's Articles of Incorporation do not provide
for cumulative voting. The absence of cumulative voting rights means that the
holders of a majority of the shares voted at a meeting of stockholders may elect
all directors of the Company thereby precluding minority stockholder
representation on the Board of Directors.
Number and Term of Directors; Classified Board of Directors. The Company's
Bylaws provide that the Board of Directors shall consist of between 5 and 15
members, the exact number to be determined by the Board of Directors. The Board
of Directors of the Company has set the number of directors at 10 persons.
Although the Company has no present intention of reducing its number of
directors below its present number of members, the Board of Directors believes
that the ability to reduce the number of directors will result in greater
flexibility in the event of vacancies on the current Board.
The Company's Articles of Incorporation provides for a classified board of
directors, consisting of three classes of directors, each serving for a three
year term, with the term of each class of directors ending in successive years.
Directors may be removed only for cause.
Presentation of New Business at Meetings of Stockholders. The Company's
Bylaws provide that any stockholder entitled to vote generally in an election of
directors may nominate one or more persons for election as
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directors at a meeting, and, if properly brought, may bring other business
before an annual meeting of the Company. For nominations or other business to be
properly brought before an annual meeting, written notice of such stockholder's
intent must be given not later than (i) 90 days prior to the anniversary date of
the mailing of proxy materials by the Company in connection with the immediately
preceding annual meeting of stockholders of the Company or, in the case of the
first annual meeting of stockholders of the Company following the Two-Tier
Reorganization, ninety days prior to the anniversary date of the mailing of
proxy materials by the Bank in connection with the immediately preceding annual
meeting of the Bank prior to such acquisition, and (ii) with respect to a
nomination relating to an election of directors at a special meeting of
stockholders, the close of business on the tenth day following the date on which
notice of such meeting is first given to stockholders. The Company's Bylaws
specify further procedural requirements that must be satisfied for notice to be
properly given.
Mutual Company Ownership. So long as the Mutual Company is in existence,
the Mutual Company must own at least a majority of the outstanding voting stock
of the Company. The Mutual Company currently is able to elect directors and
direct the affairs and business operations of the Company.
Limitation on Voting Rights. The Articles of incorporation of the Company
provide that no person other than the Mutual Company shall directly or
indirectly offer to acquire or acquire the beneficial ownership of more than 10%
of any class of any equity security of the Company. In the event shares are
acquired in violation of this provision, all shares beneficially owned by any
person in excess of 10% shall be considered "excess shares" and shall not be
counted as shares entitled to vote and shall not be voted by any person or
counted as voting shares in connection with any matters submitted to the
stockholders for a vote.
SUBSCRIPTIONS BY MANAGEMENT AND TRUSTEES OF CORRY SAVINGS
The following table sets forth the number of shares of Common Stock for
which Corry Savings' executive officers and trustees, individually and as a
group, are expected to subscribe. The table assumes that sufficient shares will
be available to satisfy their subscriptions.
<TABLE>
<CAPTION>
Total Subscriptions
Total as a Percentage of
Amount of the Maximum of
Name Total Shares* Subscriptions the Valuation Range
- ------------------------------------ ------------------ ------------- --------------------
<S> <C> <C> <C>
Vicki L. Stec, President
and Chief Executive Officer 1,961 $30,000 *
Frederick D. Davids, Trustee 327 5,000 *
Olin C. Capwell, Trustee 654 10,000 *
William A. Nichols, Trustee 327 5,000 *
David A. Johnson, Trustee 327 5,000 *
Executive Officers and Trustees as
a group (5 persons) 3,596 55,000 1.0%
- ------------------
</TABLE>
*Total shares assumes that all shares are purchased at the Adjusted Price Per
Share, which is assumed to be $15.30 (i.e., 90% of the Northwest Savings Bank
last sale price on April 2, 1998).
DESCRIPTION OF CAPITAL STOCK OF THE COMPANY
GENERAL
The Company is authorized to issue capital stock consisting of 100,000,000
shares of common stock, par value $.10 per share ("Common Stock"), and
10,000,000 shares of preferred stock, which may be issued in series and classes
having such rights, preferences, privileges and restrictions as the Company's
Board of Directors may determine. Each share of Common Stock will have the same
relative rights as, and will be identical in all respects with, each other share
of Common Stock. The Board of Directors of the Company is authorized to approve
the issuance of Common Stock up to the amount authorized by the Articles of
Incorporation without the approval of the
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Company's stockholders. A majority of the issued and outstanding voting stock of
the Company must be held at all time by the Mutual Company. THE COMMON STOCK
REPRESENTS NONWITHDRAWABLE CAPITAL, IS NOT AN ACCOUNT OF AN INSURABLE TYPE, AND
IS NOT INSURED BY THE FDIC, THE SAIF OR ANY OTHER GOVERNMENT AGENCY. THE COMMON
STOCK IS NOT GUARANTEED BY THE COMPANY OR THE BANK. Upon payment of the purchase
price for the shares of Common Stock issued in the Offering, all such shares
will be fully-paid, duly issued and nonassessable.
COMMON STOCK
Voting Rights. The holders of the Common Stock possess exclusive voting
rights in the Company, except to the extent that shares of serial preferred
stock issued in the future may have voting rights. Each holder of the Common
Stock is entitled to one vote for each share held, except that the Articles of
Incorporation eliminates voting rights with respect to those shares that are
beneficially owned by any person in excess of 10% of the Common Stock then
outstanding excluding the Mutual Company and tax-qualified employee benefit
plans. Stockholders will not be permitted to cumulate their votes in the
election of directors.
Dividends. The holders of the Common Stock will be entitled to receive and
to share equally in such dividends as may be declared by the Board of Directors
out of funds legally available therefor.
Liquidation. In the unlikely event of any liquidation, dissolution, or
winding up of the Company, the holders of Common Stock (and the holders of any
class or series of stock entitled to participate with the Common Stock in the
distribution of assets) will be entitled to receive all assets of the Company
available for distribution in cash or in kind after the payment of all debts and
liabilities, the satisfaction of obligations to depositors having an interest in
any liquidation account maintained by the Bank, and the payment of any accrued
dividend claims. If the Company issues preferred stock, the holders thereof may
also have priority over the holders of the Common Stock in the event of
liquidation or dissolution.
Preemptive Rights; Redemption. Holders of the Common Stock will not be
entitled to preemptive rights with respect to any additional shares which may be
issued except that under current Pennsylvania law and policy, persons who are
depositors of the Bank at the time of any subsequent stock offering may be
entitled to receive preemptive rights to purchase stock in such offering. The
Common Stock is not subject to call for redemption. If the Company determined
to issue authorized but unissued shares in the future to persons other than, or
in addition to the existing stockholders, the interests of existing stockholders
would be diluted to the extent of the additional issuance.
SERIAL PREFERRED STOCK
None of the 10,000,000 authorized shares of serial preferred stock of the
Company will be issued in the Offering. The Board of directors is authorized,
without stockholder approval, to issue serial preferred stock and to fix and
state voting powers, designations, preferences or other special rights of such
shares. If and when issued, the serial preferred stock may rank senior to the
Common Stock as to dividend rights, liquidation preferences, or both, and may
have full, limited or no voting rights. Accordingly, the issuance of preferred
stock could adversely affect the voting and other rights of holders of Common
Stock.
EXPERTS
The consolidated financial statements of the Bank and subsidiaries as of
June 30, 1997 and 1996 and for each of the years in the three year period ended
June 30, 1997, incorporated by reference herein, have been incorporated by
reference herein in reliance upon the report of KPMG Peat Marwick LLP,
Independent Certified Public Accountants, which report is incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
The Independent Appraiser has consented to the publication herein of the
summary of its report to Corry Savings setting forth its opinion as to the
estimated pro forma market value of Corry Savings as an entity merged with and
into the Bank and its opinion with respect to subscription rights.
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<PAGE>
LEGAL OPINIONS
The legality of the Common Stock will be passed upon for Corry Savings and
the Bank by Luse Lehman Gorman Pomerenk & Schick, P.C., Washington, D.C.,
special counsel to the Bank. KPMG Peat Marwick LLP, Independent Certified
Public Accountants will pass upon the federal income tax consequences of the
Offering.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the SEC are incorporated in this
Prospectus by reference:
1. The Bank's Annual Report on Form 10-K for the year ended June 30, 1997
(filed on November 4, 1997 as an exhibit to the Company's Registration
Statement on Form S-4).
2. The Bank's Annual Report to Shareholders for the fiscal year ended
June 30, 1997 (the "1997 Annual Report") (filed on November 4, 1997 as
an exhibit to the Company's Registration Statement on Form S-4).
3. The Bank's Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1997 (filed on February 20, 1998 as an exhibit to the
Company's Registration Statement on Form S-8).
4. The Bank's Quarterly Report on Form 10-Q for the fiscal quarter ended
December 31, 1997 (filed on February 20, 1998 as an exhibit to the
Company's Registration Statement on Form S-8).
5. The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1997.
6. The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended December 31, 1997.
7. The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1998.
8. All documents filed by the Company subsequent to the date hereof
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all documents incorporated herein by reference (except exhibits
thereto). Such requests, in writing or by telephone, should be directed to:
Gregory C. LaRocca, Secretary, Northwest Bancorp, Inc., Liberty and Second
Streets, Warren, Pennsylvania, 16365-2353, (814) 726-2140.
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No dealer, salesman or any other person has been authorized to give any
information or to make any representation other than as contained in this
Prospectus in connection with the offering made hereby, and, if given or made,
such other information or representation must not be relied upon as having been
authorized by Northwest Bancorp, Inc., Northwest Savings Bank, or Corry Savings
Bank. This Prospectus does not constitute an offer to sell or a solicitation of
an offer to buy any of the securities offered hereby to any person in any
jurisdiction in which such offer or solicitation is not authorized or in which
the person making such offer or solicitation is not qualified to do so, or to
any person whom it is unlawful to make such offer or solicitation in such
jurisdiction. Neither the delivery of this Prospectus nor any sale hereunder
shall under any circumstances create any implication that there has been no
change in the affairs of Northwest Bancorp, Inc. or Northwest Savings Bank since
any of the dates as of which information is furnished herein or since the date
hereof.
-------------------------
TABLE OF CONTENTS
Page
----
Available Information.......................................................
Incorporation of Certain Information by Reference...........................
Summary.....................................................................
Special Considerations......................................................
Northwest Bancorp, Inc. and Subsidiaries Selected Financial
and Other Data............................................................
Northwest Savings Bank......................................................
Use of Proceeds.............................................................
Market Information..........................................................
Dividend Policy.............................................................
Capitalization..............................................................
Pro Forma Data..............................................................
The Offering and Merger.....................................................
Subscriptions by Management and Trustees....................................
of Corry Savings Bank.....................................................
Description of Capital Stock of the Company.................................
Experts.....................................................................
Legal Opinions..............................................................
-----------------------
108,460 SHARES
(ANTICIPATED MAXIMUM)
NORTHWEST BANCORP, INC.
COMMON STOCK
PAR VALUE $.10 PER SHARE
------------------------------
PROSPECTUS
------------------------------
____________, 1998
<PAGE>
PART II: INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<CAPTION>
Amount
------
<S> <C> <C>
* Legal Fees and Expenses................................. $110,000
* Printing and Mailing.................................... 50,000
* Accounting Fees and Expenses............................ 35,000
* Appraisal Fees and Expenses............................. 17,000
* EDGARization Fees....................................... 10,000
* Data Processing Fees.................................... 10,000
* Filing Fees............................................. 2,000
Nasdaq Listing Fee...................................... 2,500
* Other Expenses.......................................... 15,000
--------
* Total................................................... $250,000
========
</TABLE>
- ----------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
ARTICLE VI of the Bylaws of Northwest Bancorp, Inc. (the "Corporation")
provides for indemnification of directors and officers of the Company as
follows:
6.1 THIRD PARTY ACTIONS. The Corporation shall indemnify any person
-------------------
who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed action or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in
the right of the Corporation), by reason of the fact that he is or was a
director or officer of the Corporation, or is or was serving at the request
of the Corporation as a representative of another domestic or foreign
corporation for profit or not-for-profit, partnership, joint venture, trust
or other enterprise, against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with the action or proceeding if he acted in
good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the Corporation and, with respect to any criminal
proceeding, had no reasonable cause to believe his conduct was unlawful,
provided that the Corporation shall not be liable for any amounts which may
be due to any such person in connection with a settlement of any action or
proceeding effected without its prior written consent or any action or
proceeding initiated by any such person (other than an action or proceeding
to enforce rights to indemnification hereunder).
6.2 DERIVATIVE AND CORPORATE ACTIONS. The Corporation shall indemnify
--------------------------------
any person who was or is a party, or is threatened to be made a party, to
any threatened, pending or completed action by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact that
he is or was a director or officer of the Corporation or is or was serving
at the request of the Corporation as a representative of another domestic
or foreign corporation for profit or not-for-profit, partnership, joint
venture, trust or other enterprise, against expenses (including attorney's
fees) actually and reasonably incurred by him in connection with the
defense or settlement of the action if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best
interests of the Corporation, provided that the Corporation shall not be
liable for any amounts which may be due to any such person in connection
with a settlement of any action or proceeding affected without its prior
written consent. Indemnification shall not be made under this Section 6.2
in respect of any claim, issue or matter as to which the person has been
adjudged to be liable to the Corporation unless and only to the extent that
the court of common pleas of the judicial district embracing the county in
which the registered office of the Corporation is located or the court in
which the action was brought determines upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
the person is fairly and reasonably entitled to indemnity for the expenses
that the court of common pleas or other court deems proper.
<PAGE>
6.3 MANDATORY INDEMNIFICATION. To the extent that a representative of
-------------------------
the Corporation has been successful on the merits or otherwise in defense
of any action or proceeding referred to in Section 6.1 or Section 6.2 or in
defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
6.4 PROCEDURE FOR EFFECTING INDEMNIFICATION. Unless ordered by a
---------------------------------------
court, any indemnification under Section 6.1 or Section 6.2 shall be made
by the Corporation only as authorized in the specific case upon a
determination that indemnification of the representative is proper in the
circumstances because he has met the applicable standard of conduct set
forth in those sections. The determination shall be made:
(1) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the action or proceeding;
(2) if such a quorum is not obtainable, or if obtainable and a
majority vote of a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion; or
(3) by the stockholders.
6.5 ADVANCING EXPENSES. Expenses (including attorneys' fees)
------------------
incurred in defending any action or proceeding referred to in this Article
VI shall be paid by the Corporation in advance of the final disposition of
the action or proceeding upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined
that he is not entitled to be indemnified by the Corporation as authorized
in this Article VI or otherwise.
6.6 INSURANCE. The Corporation shall have the power to purchase and
---------
maintain insurance on behalf of any person who is or was a representative
of the Corporation or is or was serving at the request of the Corporation
as a representative of another domestic or foreign corporation for profit
or not-for-profit, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against that liability
under the provisions of this Article VI.
6.7 MODIFICATION. The duties of the Corporation to indemnify and to
------------
advance expenses to a director or officer provided in this Article VI shall
be in the nature of a contract between the Corporation and each such
person, and no amendment or repeal of any provision of this Article VI
shall alter, to the detriment of such person, the right of such person to
the advance of expenses or indemnification related to a claim based on an
act or failure to act which took place prior to such amendment or repeal.
ARTICLE VIII of the Corporation's Articles of Incorporation provides for
the limitation of liability of directors and officers of the Company as follows:
A. PERSONAL LIABILITY FOR MONETARY DAMAGES. The personal
liabilities of the directors and officers of the Corporation for monetary
damages for conduct in their capacities as such shall be eliminated to the
fullest extent permitted by the BCL as it exists on the effective date of
these Articles of Incorporation or as such law may be thereafter in effect,
and in no event shall a director be personally liable, as such, for
monetary damages for any action taken unless the director has breached or
failed to perform the duties of his office under the BCL and the breach or
failure to perform constitutes self-dealing, willful misconduct or
recklessness. This section A of Article VIII shall not apply to the
responsibility or liability of a director pursuant to any criminal statute,
or the liability of a director for the payment of taxes pursuant to
Federal, State, or local law.
B. AMENDMENTS. No amendment, modification or repeal of this Article
VIII, nor the adoption of a provision of these Articles of Incorporation
inconsistent with this Article VIII, shall adversely affect the rights
provided hereby with respect to any claim, issue or matter in any
proceeding that is based in any respect on any alleged action or failure to
act prior to such amendment, modification, repeal or adoption.
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES:
The exhibits and financial statement schedules filed as part of this
registration statement are as follows:
(a) LIST OF EXHIBITS
The list of exhibits immediately preceeds the exhibits filed as part of
this registration statement.
(b) FINANCIAL STATEMENT SCHEDULES
No financial statement schedules are filed because the required information
is not applicable or is included in the consolidated financial statements or
related notes.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells securities,
a post-effective amendment to this registration statement to
include any additional or changed material information on the plan
of distribution;
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time
to be the initial bona fide offering;
(3) To file a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering;
(4) That, for the purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
(5) To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual
report. to security holders that is incorporated by reference in
the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X is not set
forth in the prospectus, to deliver, or cause to be delivered to
each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information;
(6) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrants pursuant to the foregoing
provisions, or otherwise, the Registrants have been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act,
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrants of expenses incurred or paid by a director, officer
or controlling person of the Registrants in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the Registrants will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the questions whether
such indemnification by
<PAGE>
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue;
(7)(a) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrants pursuant
to Rule 424 (b)(1) or (4) or 497(h) under the Securities Act shall
be deemed to be part of this Registration Statement as of the time
it was declared effective;
(7)(b) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona
fide offering thereof;
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, Northwest
Bancorp, Inc. certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Warren, Pennsylvania, on the 10th day of June, 1998.
NORTHWEST BANCORP, INC.
By: /s/ John O. Hanna
----------------------------------
John O. Hanna, President and
Chief Executive Officer
We, the undersigned Directors of Northwest Bancorp, Inc. (the "Company")
hereby severally constitute and appoint John O. Hanna as our true and lawful
attorney and agent, to do any and all things in our names in the capacities
indicated below which said John O. Hanna may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, and any rules,
regulations and requirements of the Securities and Exchange Commission, in
connection with the registration statement on Form S-3 relating to the offering
of the Company's Common Securities, including specifically, but not limited to,
power and authority to sign for us in our names in the capacities indicated
below the registration statement and any and all amendments (including post-
effective amendments) thereto; and we hereby approve, ratify and confirm all
that said John O. Hanna shall do or cause to be done by virtue thereof.
NORTHWEST BANCORP, INC.
<TABLE>
<S> <C> <C> <C>
By: /s/ John O. Hanna By: /s/ William J. Wagner
------------------------------------------ -----------------------------------------
John O. Hanna, President, Chief William J. Wagner, Executive Vice
Executive Officer and Director President, Chief Financial Officer, Chief
(Principal Executive Officer) Operating Officer and Director
(Principal Financial and Accounting Officer)
Date: June 10, 1998 Date: June 10, 1998
By: /s/ Richard L. Carr By: /s/ Thomas K. Creal, III
------------------------------------------ -----------------------------------------
Richard L. Carr, Director Thomas K. Creal, III, Director
Date: June 10, 1998 Date: June 10, 1998
By: /s/ John J. Doyle By: /s/ Robert G. Ferrier
------------------------------------------ -----------------------------------------
John J. Doyle, Director Robert G. Ferrier, Director
Date: June 10, 1998 Date: June 10, 1998
By: /s/ Richard E. McDowell By: /s/ Joseph T. Stadler
------------------------------------------ -----------------------------------------
Richard E. McDowell, Director Joseph T. Stadler, Director
Date: June 10, 1998 Date: June 10, 1998
By: /s/ Walter J. Yahn By: /s/ John S. Young
------------------------------------------ -----------------------------------------
Walter J. Yahn, Director John S. Young, Director
Date: June 10, 1998 Date: June 10, 1998
</TABLE>
<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 15, 1998
REGISTRATION NO. 333-_____
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
EXHIBITS
TO
REGISTRATION STATEMENT
ON
FORM S-3
--------------------
NORTHWEST BANCORP, INC.
================================================================================
<PAGE>
EXHIBIT INDEX
2.1 Agreement and Plan of Merger Between Northwest Savings Bank and Corry
Savings Bank
2.2 Corry Savings Bank Plan of Merger and Stock Issuance Plan
4 Form of Common Stock of Northwest Bancorp, Inc.*
5.1 Opinion of Luse Lehman Gorman Pomerenk & Schick, P.C. as to the legality
of the securities being issued.
8.1 Tax Opinion of KPMG Peat Marwick LLP***
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Luse Lehman Gorman Pomerenk & Schick, P.C. (set forth in
Exhibit 5.1)
24 Power of attorney (set forth on the signature pages to this Registration
Statement)
27 Financial Data Schedules**
99.1 Proxy Statement for depositors of Corry Savings Bank
99.2 Stock Order Form
- ----------
* Filed as an exhibit to the Registrant's Registration Statement on Form S-4
(Registration No. 333-31687) previously filed with the Securities and
Exchange Commission on July 21, 1997, as amended October 9, 1997 and
November 4, 1997.
** Previously filed with the Securities and Exchange Commission on July 21,
1997, November 13, 1997, February 13, 1998 and May 15, 1998. Such
documents are incorporated herein by reference pursuant to Rule 601 of
Regulation S-K.
*** To be filed supplementally or by amendment.
<PAGE>
EXHIBIT 2.1
<PAGE>
CONFIDENTIAL
AGREEMENT AND PLAN OF MERGER
BETWEEN
NORTHWEST SAVINGS BANK
AND
CORRY SAVINGS BANK
Dated: June 19, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE I.
THE MERGER.................................................... 1
1.1. The Merger............................................. 1
----------
1.2. Effective Time of the Merger........................... 2
----------------------------
1.3 Closing................................................ 2
-------
1.4. Modification of Structure.............................. 2
-------------------------
1.5. Stock Offering......................................... 2
--------------
1.6. Formation of a "Mid-Tier" Stock Holding Company........ 3
-----------------------------------------------
ARTICLE II.
EFFECT OF THE MERGER; CERTAIN ACTIONS IN CONNECTION THEREWITH. 3
2.1. Effect of the Merger................................... 3
--------------------
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF NORTHWEST................... 4
3.1. Corporate Organization................................. 4
----------------------
3.2. Authorization.......................................... 4
-------------
3.3. No Violation........................................... 4
------------
3.4. Consents and Approvals................................. 5
----------------------
3.5. Information Supplied for Inclusion in the Corry Proxy.. 5
-----------------------------------------------------
Statement
---------
3.6. Northwest Information.................................. 5
---------------------
3.7. Accuracy of Information................................ 6
-----------------------
3.8. Supplement to Northwest Disclosure Schedule............ 6
-------------------------------------------
3.9. Litigation............................................. 6
----------
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF CORRY....................... 7
4.1. Corporate Organization................................. 7
----------------------
4.2. Capitalization......................................... 7
--------------
4.3. Authorization.......................................... 7
-------------
4.4. No Violation........................................... 8
------------
4.5. Reports and Financial Statements....................... 8
--------------------------------
4.6. Consents and Approvals................................. 9
----------------------
4.7. Absence of Certain Changes............................. 9
--------------------------
4.8. Employee and Employee Benefits Matters................. 10
--------------------------------------
4.9. Litigation............................................. 11
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
4.10. Tax Matters............................................ 12
-----------
4.11. Environmental Matters.................................. 12
---------------------
4.12. Compliance with Laws and Orders........................ 14
-------------------------------
4.13. Governmental Regulation................................ 14
-----------------------
4.14. Contracts and Commitments.............................. 15
-------------------------
4.15. Accuracy of Information................................ 15
-----------------------
4.16. Supplement to Corry Disclosure Schedule................ 15
---------------------------------------
4.17. Title to Assets; Leases................................ 15
-----------------------
ARTICLE V.
COVENANTS OF NORTHWEST........................................ 16
5.1. Affirmative Covenants.................................. 16
---------------------
5.2. Negative Covenants..................................... 16
------------------
5.3. Breaches............................................... 17
--------
5.4. Employee Benefit Plans; Employment Arrangements........ 17
-----------------------------------------------
5.5. Filing of Applications................................. 19
----------------------
5.6. Supplement to Northwest Disclosure Schedule............ 19
-------------------------------------------
5.7. Confidentiality........................................ 19
---------------
ARTICLE VI.
COVENANTS OF CORRY............................................ 19
6.1. Affirmative Covenants.................................. 19
---------------------
6.2. Negative Covenants..................................... 20
------------------
6.3. Report to Northwest.................................... 22
-------------------
6.4. Breaches............................................... 22
--------
6.5. Supplement to Disclosure Schedule...................... 22
---------------------------------
6.6. Consents and Approvals................................. 22
----------------------
ARTICLE VII.
ADDITIONAL AGREEMENTS......................................... 23
7.1. Corry Depositors' Meeting.............................. 23
-------------------------
7.2. Proxy Statement for Corry Depositors' Meeting.......... 23
---------------------------------------------
7.3. Cooperation: Regulatory Approvals...................... 23
---------------------------------
7.4. Brokers or Finders..................................... 23
------------------
7.5. Additional Agreements: Reasonable Efforts.............. 23
-----------------------------------------
7.6. Release of Information................................. 24
----------------------
7.7. Advisory Directors..................................... 24
------------------
7.8. Indemnification and Insurance Coverage................. 24
--------------------------------------
7.9. Directors' Life Insurance.............................. 25
-------------------------
7.10. Retention of Senior Officers........................... 25
----------------------------
7.11. Access to Properties and Records: Confidentiality...... 25
-------------------------------------------------
7.12 Charitable Foundation.................................. 26
---------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
7.13. Certain Policies....................................... 26
----------------
ARTICLE VIII.
CONDITIONS TO THE OBLIGATIONS OF NORTHWEST.................... 27
8.1. No Material Adverse Effect............................. 27
--------------------------
8.2. Representations and Warranties......................... 27
------------------------------
8.3. Performance and Compliance............................. 27
--------------------------
8.4. No Proceeding or Litigation............................ 27
---------------------------
8.5. Consents Under Agreements.............................. 27
-------------------------
8.6. No Amendments to Resolutions........................... 28
----------------------------
8.7. Certificate of Corry Officers.......................... 28
-----------------------------
8.8. Corporate Proceedings.................................. 28
---------------------
ARTICLE IX.
CONDITIONS TO THE OBLIGATIONS OF CORRY........................ 28
9.1. Representations and Warranties......................... 28
------------------------------
9.2. Performance and Compliance............................. 29
--------------------------
9.3. Corporate Proceedings.................................. 29
---------------------
9.4. Certificate of Northwest Officers...................... 29
---------------------------------
ARTICLE X.
CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES.................. 29
10.1. Governmental Approvals................................. 29
----------------------
10.2. No Injunctions or Restraints........................... 30
----------------------------
10.3. Corry Depositor Approval............................... 30
------------------------
10.4 Corporate Proceedings.................................. 30
---------------------
ARTICLE XI.
TERMINATION................................................... 30
11.1. Reasons for Termination................................ 30
-----------------------
11.2. Effect of Termination.................................. 32
---------------------
ARTICLE XII.
MISCELLANEOUS................................................. 32
12.1. Nonsurvival of Representations, Warranties and
----------------------------------------------
Agreements............................................. 32
----------
12.2. Expenses............................................... 32
--------
12.3. Waivers: Amendments.................................... 32
-------------------
12.4. Assignment: Parties in Interest........................ 32
-------------------------------
12.5. Entire Agreement....................................... 33
----------------
12.6. Captions and Counterparts.............................. 33
-------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
12.7. Certain Definitions.................................... 33
-------------------
12.8. Governing Law.......................................... 33
-------------
12.9. Notices................................................ 33
-------
</TABLE>
<PAGE>
SCHEDULES
Schedule 3.1
Schedule 4.4
Schedule 4.5
Schedule 4.6
Schedule 4.7
Schedule 4.8(a)
Schedule 4.8(b)
Schedule 4.9
Schedule 4.1 0
Schedule 4.11(a)
Schedule 4.11(b)
Schedule 4.11(c)
Schedule 4.11(d)
Schedule 4.11(e)
Schedule 4.11(f)
Schedule 4.12
Schedule 4.13
Schedule 4.14
Schedule 4.15
Schedule 4.16
Schedule 4.17
<PAGE>
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of June 19, 1997 (the
"Agreement"), is entered into between Northwest Savings Bank ("Northwest"),
Northwest Bancorp, M.H.C. ("Bancorp MHC"), Northwest Bancorp, Inc. (the "Stock
Holding Company") and Corry Savings Bank ("Corry").
R E C I T A L S:
- - - - - - - -
1. Northwest is a Pennsylvania-chartered stock savings bank
headquartered in Warren, Pennsylvania, approximately 69.3% of the issued and
outstanding capital stock of which is owned on the date hereof by Bancorp MHC, a
Pennsylvania-chartered mutual savings bank holding company; and
2. The Stock Holding Company is a Pennsylvania corporation that will
own 100% of the outstanding common stock of Northwest upon the completion of the
reorganization of Northwest and Bancorp MHC into a two-tier mutual holding
company.
3. Corry is a Pennsylvania-chartered mutual savings bank
headquartered in Corry, Pennsylvania; and
4. The parties desire to provide for Northwest's acquisition of
Corry pursuant to a merger (the "Merger") of Northwest and Corry on or after the
Effective Time (as defined in Section 1.2 hereof): and
5. It is intended that Corry will be merged into an interim
subsidiary of Northwest with Corry as the resulting institution, followed
immediately by a merger of Corry into Northwest, such that Northwest will be the
surviving institution as a result of the Merger.
In consideration of the premises and the mutual covenants,
representations, warranties, and agreements herein contained, and in order to
set forth the conditions upon which the Merger will be carried out, the parties,
intending to be legally bound, hereby agree as follows:
ARTICLE I.
THE MERGER
1.1. The Merger. Subject to the terms and conditions of this
----------
Agreement, and in accordance with the provisions of Section 18(c) of the Federal
Deposit Insurance Act (12 U.S.C. 1828(c)), as amended (the "Bank Merger Act"),
and the Chapter 16 of the Pennsylvania Banking Code of 1965 ("Banking Code"),
and the rules, regulations and policies promulgated under each of the Bank
Merger Act, the Federal Deposit Insurance Act, and the Banking Code (the
"Regulations"), at the Effective Time, Corry shall be merged with and into an
interim savings institution subsidiary of Northwest (the "Interim"), with Corry
as the surviving institution, followed immediately by the merger of Corry with
and into Northwest, with Northwest as the
<PAGE>
surviving institution (the merger of Corry into Interim, and the subsequent
merger of Corry into Northwest, are collectively referred to as the "Merger"),
all pursuant to the terms and conditions set forth herein. Upon the consummation
of the Merger, the separate existence of Corry shall cease, and Northwest shall
continue as the surviving institution in the Merger.
1.2. Effective Time of the Merger. As soon as practicable after
----------------------------
each of the conditions set forth in Articles VIII IX and X hereof have been
----------------------
satisfied or waived, Northwest and Corry will file, or cause to be filed,
articles of merger with the Pennsylvania Department of Banking ("Department")
for the Merger. The foregoing articles of merger shall in each case be in the
form required by and executed in accordance with the applicable provisions of
the Banking Code and the Regulations. The Merger shall become effective at the
time specified by the Pennsylvania Secretary of State in its endorsement of the
articles of merger (the "Effective Time").
1.3 Closing. If (a) the Agreement and the transactions
-------
contemplated hereby have been duly approved by the depositors of Corry and the
stockholders of Northwest, and (b) all relevant conditions of the Agreement have
been satisfied or waived, the closing (the "Closing") shall take place as
promptly as practicable thereafter at the executive offices of Northwest. At the
Closing, the parties hereto will exchange certificates, letters and other
documents as required hereby and will cause the filing described in Section 1.2
hereof with respect to the Merger to be made. Such Closing will take place
within five (5) business days of the satisfaction or waiver of all conditions
and/or obligations contained in Articles VIII, IX and X of this Agreement. The
date on which the Closing occurs is hereinafter referred to as the "Closing
Date."
1.4. Modification of Structure. Notwithstanding any provision of
-------------------------
this Agreement to the contrary, Northwest may elect, subject to the filing of
all necessary applications and the receipt of all required regulatory approvals,
to modify the structure of the transactions contemplated hereby so long as (i)
there are no material adverse federal income tax consequences to Corry or the
depositors of Corry as a result of such modification, and (ii) such modification
will not be likely to materially delay or jeopardize receipt of any required
regulatory approvals or of the tax ruling or opinion required hereunder.
1.5. Stock Offering. In connection with the Merger, Corry and
--------------
Northwest have adopted a Plan of Merger and Stock Issuance (the "Plan") setting
forth the terms and conditions pursuant to which Northwest, or the Stock Holding
Company which will own 100% of the common stock of Northwest upon completion of
the reorganization of Northwest into a two-tier mutual holding company
structure, shall offer for sale shares of Northwest or Stock Holding Company
common stock (the "Common Stock") to certain Corry depositors and tax-qualified
employee plans pursuant to rules of the FDIC and the Department (the "Stock
Offering"). As part of the Stock Offering, Corry shall obtain an independent
valuation (the "Valuation") of its pro forma market value assuming a merger with
Northwest. The number of shares of Common Stock sold shall be determined by
multiplying the Valuation by 30% (which percent may be increased by Northwest in
its sole discretion) and dividing the result by the lower of (i) the average of
the highest closing bid price of the Stock Holding Company Common Stock at the
close of trading of
2
<PAGE>
each of the twenty (20) trading days prior to the Effective Date and (ii) the
highest closing bid price of the Stock Holding Company Common Stock on the last
trading day prior to the completion of the Merger (the "Unadjusted Price Per
Share"). Northwest shall use its best efforts to obtain regulatory approval to
sell shares of Common Stock to Eligible Account Holders of Corry, as defined in
the Plan, at 90% of the Unadjusted Price Per Share (the "Adjusted Price Per
Share"). Corry depositors are not intended to be the beneficiary of any of the
provisions of this Agreement or this section 1.5, and nothing in this Agreement
shall be construed to give any rights whatsoever to depositors, which rights, if
any, shall only be granted pursuant to the Plan.
1.6. Formation of a "Mid-Tier" Stock Holding Company. Nothing in
-----------------------------------------------
this Agreement shall prohibit Northwest and Bancorp MHC from reorganizing into a
mid-tier stock holding company structure (the "Mid-Tier Reorganization") by
establishing the Stock Holding Company that will become the owner of 100% of the
outstanding shares of common stock of Northwest by exchanging one share of its
common stock for each outstanding share of common stock.
ARTICLE II.
EFFECT OF THE MERGER; CERTAIN ACTIONS IN CONNECTION THEREWITH
2.1. Effect of the Merger.
--------------------
(a) Northwest, as the surviving institution in the Merger, shall
possess all of the properties and rights and shall be subject to all of the
liabilities and obligations of Corry, all as more fully described in the
Regulations. The name of Northwest, as the surviving institution in the Merger,
shall remain "Northwest Savings Bank."
(b) The Articles of Incorporation and Bylaws of Northwest, as in
effect immediately prior to the Effective Time, shall be the Articles of
Incorporation and Bylaws of Northwest, as the surviving institution of the
Merger.
(c) The directors and officers of Northwest immediately prior to the
Effective Time and the officers of Corry designated by Northwest shall be the
directors and officers of Northwest, as the surviving institution of the Merger,
and shall continue in office until their successors are duly elected or
otherwise duly selected.
(d) All deposit accounts of Corry existing immediately prior to the
Merger shall, upon consummation of the Merger, remain insured by the Federal
Deposit Insurance Corporation ("FDIC") to the fullest extent permitted by law
and regulation, and shall become deposit accounts in Northwest without change in
their respective terms, maturity, minimum required balances or withdrawal value
and with the same rights as other deposit accounts in Northwest.
3
<PAGE>
(e) As depositors of Northwest, all depositors of Corry as of the
Effective Time shall have the same rights in Bancorp MHC as other depositors of
Northwest, including any right to have priority subscription rights to purchase
additional shares of common stock that may be issued in connection with a
mutual-to-stock conversion of Bancorp MHC, or in any stock offering where
subscription rights are granted to depositors of Northwest.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF NORTHWEST
Northwest hereby represents and warrants to Corry as follows:
3.1. Corporate Organization. Northwest is a stock savings bank
----------------------
duly organized and validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. Bancorp MHC is a mutual savings bank holding
company duly organized and validly existing and in good standing under the laws
of the Commonwealth of Pennsylvania. All eligible accounts issued by Northwest
are insured by the FDIC to the maximum extent permitted under applicable law.
Each of Northwest and Bancorp MHC has all requisite corporate power and
authority to own, operate and lease its properties as presently owned, operated
and leased and to engage in the activities and business now being conducted by
it. Schedule 3.1 to the Northwest disclosure schedule attached hereto as Annex I
------------
(the "Northwest Disclosure Schedule") lists each subsidiary of Bancorp MHC and
Northwest as of the date hereof (each "a Northwest Subsidiary," together, the
"Northwest Subsidiaries")
3.2. Authorization. The Board of Directors of Northwest and the
-------------
Board of Trustees of Bancorp MHC (as majority stockholder of Northwest) have
approved the Agreement and the transactions contemplated hereby and have
authorized the execution, delivery and performance by Northwest of the
Agreement. Other than the approval by stockholders of Northwest, no other
corporate proceeding on the part of Northwest is necessary to authorize the
Agreement or to consummate the transactions contemplated thereby, and Northwest
has full corporate power and authority to enter into the Agreement and to
consummate the transactions contemplated hereby subject to the conditions set
forth in Articles VIII and X of this Agreement. This Agreement has been duly and
-------------------
validly executed and delivered by Northwest and Bancorp MHC and constitutes the
valid and binding obligation of Northwest and Bancorp MHC, enforceable against
them in accordance with its terms, subject to (a) all applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors' rights generally, and (b) the application of equitable principles if
equitable remedies are sought.
3.3. No Violation. Neither the execution and delivery of the
------------
Agreement nor, subject to the receipt of the consents and approvals contemplated
by Section 3.4, the consummation of the transactions contemplated herein will,
-----------
(a) conflict with, result in the breach of, constitute a violation of,
constitute a default under or accelerate the performance of the terms of any
government regulation, judgment, order or decree of any court or other
governmental
4
<PAGE>
agency to which Northwest, Bancorp MHC or any of the Northwest Subsidiaries may
be subject, or any contract, agreement or instrument to which Northwest, Bancorp
MHC or any of the Northwest Subsidiaries is a party or by which Northwest,
Bancorp MHC or any of the Northwest Subsidiaries are bound or committed, or the
articles of incorporation of Northwest, Bancorp MHC, the charter of any
Northwest Subsidiary, or the bylaws of Northwest, Bancorp MHC or the Northwest
Subsidiaries, or, any law, or any rule or regulation of any governmental agency
or authority, or (b) constitute an event that with the lapse of time or action
by a third party could result in a default under any of the foregoing, or (c)
result in the creation of any lien, charge or encumbrance upon any of the assets
or properties of Northwest, Bancorp MHC or any Northwest Subsidiary.
3.4. Consents and Approvals. Other than the receipt of approvals
----------------------
required by the Banking Code, the Bank Merger Act, the Bank Holding Company Act
of 1956, as amended (the "BHCA") and the Regulations, no filing or registration
with, no notice to and no permit, authorization, consent or approval of the
depositors of Northwest or any public or governmental body or authority is
necessary for the consummation by Northwest of the transactions contemplated by
the Agreement. Northwest knows of no reason (including those relating to fair
lending laws or other laws relating to discrimination, including, without
limitation, the Equal Credit Opportunity Act, the Fair Housing Act, the
Community Reinvestment Act and the Home Mortgage Disclosure Act, and anti-trust
or consumer disclosure laws and regulations) why the regulatory approvals should
not be obtained.
3.5. Information Supplied for Inclusion in the Corry Proxy
-----------------------------------------------------
Statement. Any information regarding Northwest, Bancorp MHC or the Northwest
- ---------
Subsidiaries supplied by Northwest to Corry specifically for inclusion in the
Corry Proxy Statement (as defined in Section 7.2 hereof) will not contain any
-----------
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances in which they were
made, not misleading.
3.6. Northwest Information.
---------------------
(a) Northwest has previously delivered or made available to Corry
accurate and complete copies of the consolidated statements of financial
condition of Northwest as of June 30, 1996 and 1995, and the related
consolidated statements of income, stockholders' equity and cash flows for the
years ended June 30, 1996, 1995 and 1994, in each case accompanied by the audit
report of KPMG Peat Marwick LLP, independent public accountants with respect to
Northwest, and the unaudited consolidated statement of financial condition of
Northwest as of December 31, 1996 and the related unaudited consolidated
statements of income and cash flows for the six months ended December 31, 1996
and the unaudited consolidated statement of changes in stockholders' equity for
the six months ended December 31, 1996. The consolidated statements of financial
condition of Northwest referred to herein (including the related notes, where
applicable), as well as the consolidated statements of financial condition of
Northwest to be delivered pursuant to Section 4.04 hereof, fairly present or
------------
will fairly present, as the case may be,
5
<PAGE>
the consolidated financial condition of Northwest as of the respective dates set
forth therein, and the related consolidated statements of income, stockholders'
equity and cash flows (including the related notes, where applicable) fairly
present or will fairly present, as the case may be, the consolidated results of
operations, stockholders' equity and cash flows of Northwest for the respective
periods or as of the respective dates set forth therein.
(b) Each of the financial statements referred to in Section 3.6(a) has
--------------
been or will be, as the case may be, prepared in accordance with generally
accepted accounting principles consistently applied during the periods involved.
The audits of Northwest and the Northwest Subsidiaries have been conducted in
accordance with generally accepted auditing standards. The books and records of
Northwest and the Subsidiaries are being maintained in material compliance with
applicable legal and accounting requirements, and such books and records
accurately reflect in all material respects all dealings and transactions
regarding the business, assets, liabilities and affairs of Northwest and the
Northwest Subsidiaries.
(c) As of December 31, 1996, except and to the extent (i) reflected,
disclosed or provided for in the financial statements referred to above and (ii)
of liabilities incurred since December 31, 1996 in the ordinary course of
business and consistent with prudent banking practice, neither Northwest nor any
Northwest Subsidiary has any liabilities, whether absolute, accrued, contingent
or otherwise, material to the business, operations, assets or financial
condition of Northwest and its subsidiaries taken as a whole.
3.7. Accuracy of Information. The statements made by Northwest in
-----------------------
the Agreement and in any other written documents executed and/or delivered by or
on behalf of Northwest pursuant to the terms of the Agreement are true and
correct in all material respects.
3.8. Supplement to Northwest Disclosure Schedule. Northwest will
-------------------------------------------
promptly supplement or amend the Northwest Disclosure Schedule with respect to
any matter hereafter arising that, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in the
Northwest Disclosure Schedule. No supplement or amendment to the Northwest
Disclosure Schedule will have any effect for the purpose of determining
satisfaction of the condition set forth in Section 9.1 hereof.
3.9. Litigation. No claims have been asserted and no relief has
----------
been sought against Bancorp MHC, Northwest or any Northwest Subsidiary in any
pending litigation or governmental proceedings or otherwise which would be
reasonably likely to result in Northwest becoming unable to perform its
obligations under, and consummate the transactions contemplated by, this
Agreement.
6
<PAGE>
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF CORRY
Corry hereby represents and warrants to Northwest as follows:
4.1. Corporate Organization.
----------------------
(a) Corry has all requisite corporate power and authority to own,
operate and lease its properties as presently owned, operated or leased and to
engage in the activities and business now conducted by it. Corry is qualified to
do business in each jurisdiction in which the nature of business conducted or
assets owned or leased by it makes such qualification necessary and where a
failure to do so would have a Material Adverse Effect. All eligible accounts
issued by Corry are insured by the FDIC to the maximum extent permitted under
applicable law. Corry is a "domestic building and loan association" as defined
in the Internal Revenue Code of 1986, as amended (the "Code"). Corry is a
savings bank duly organized, validly existing and in good standing under the
laws of the Commonwealth of Pennsylvania. Corry does not own, control or have an
ownership interest in any other corporation or business.
(b) Corry has heretofore delivered to Northwest true and complete
copies of the articles of incorporation, organization certificate or other
chartering instrument and bylaws of Corry in effect on the date hereof. The
minute books of Corry contain accurate minutes of all meetings and accurate
consents in lieu of meetings of the Board of Trustees (and any committee
thereof) of Corry recorded therein, and as of the Effective Time such minute
books will contain accurate minutes of all such meetings and such consents in
lieu of meetings respectively held or executed prior thereto. The minute books
accurately reflect all transactions referred to in such minutes and consents in
lieu of meetings and disclose all material corporate actions of the Board of
Trustees of Corry and all committees thereof. Except as reflected in such minute
books, there are no minutes of meetings or consents in lieu of meetings of the
Board of Trustees (or any committee thereof) of Corry.
4.2. Capitalization. As of the date hereof, Corry is a mutual
--------------
savings bank and has no authorized shares of capital stock whatsoever.
4.3. Authorization. The Board of Trustees of Corry has approved
-------------
the Agreement and the transactions contemplated thereby and authorized the
execution, delivery and performance by Corry of the Agreement. No other
corporate proceeding on the part of Corry is necessary to authorize the
Agreement or to consummate the transactions contemplated thereby other than the
approval of the depositors of Corry as provided in Section 7.1 hereof. Corry has
-----------
full corporate power and authority to enter into the Agreement and, upon
approval of the depositors of Corry in accordance with law and subject to the
additional conditions set forth in Articles IX and X of this Agreement, to
-----------------
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Corry and constitutes the valid and
binding obligations
7
<PAGE>
of Corry, enforceable against it in accordance with its terms, subject to (a)
all applicable bankruptcy, insolvency, moratorium, or other similar laws
affecting the enforcement of creditors' rights generally or the rights of
creditors of savings associations the accounts of which are insured by the FDIC,
(b) the application of equitable principles if equitable remedies are sought,
and (c) the provisions of this Agreement providing that the Merger will be
enforceable only upon approval by the depositors of Corry as described in
Section 7.1 hereof.
4.4. No Violation. Other than as set forth in Schedule 4.4 of the
------------ ------------
Corry Disclosure Schedule attached hereto as Annex II (the "Corry Disclosure
Schedule"), neither the execution and delivery of this Agreement nor, subject to
the receipt of the consents and approvals contemplated by Section 4.6, the
consummation of the transactions contemplated herein will (a) conflict with,
result in the breach of, constitute a default under or accelerate the
performance provided by the terms of any judgment, order or decree of any court
or other governmental agency to which Corry may be subject, or any contract,
agreement or instrument to which Corry is a party or by which Corry is bound or
committed, or the charter or the bylaws of Corry, or, to the knowledge of Corry
(as defined in Section 12.7(e) hereof), any law, or any rule or regulation of
---------------
any governmental agency or authority, or (b) constitute an event that with the
lapse of time or action by a third party, or both, could result in a default
under any of the foregoing or (c) result in the creation of any material lien,
charge or encumbrance upon any of the assets or properties of Corry.
4.5. Reports and Financial Statements. Corry has previously
--------------------------------
furnished Northwest with true and complete copies of its (a) Audited Balance
Sheet as the years ended December 31, 1996 and 1995, and the related Statements
of Income, Retained Earnings and Cash Flows for the years ended December 31,
1996, 1995, and 1994, and (b) all other reports or registration statements filed
by Corry with the FDIC or the Department since December 31, 1996 (including call
reports). The audited consolidated financial statements and unaudited interim
financial statements of Corry included in such reports or otherwise delivered to
Northwest (collectively referred to herein as the "Corry Financial Statements")
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis (except as may be indicated therein or in the
notes thereto) and fairly present the financial position of Corry as of the
dates thereof and the results of its operations and changes in financial
position for the periods then ended, subject, in the case of the unaudited
interim financial statements, to normal year-end audit adjustments, any other
adjustments described therein, and the absence of certain footnotes. Except as
set forth in Schedule 4.5 to the Corry Disclosure Schedule, since December 31,
------------
1996 Corry has not suffered a Material Adverse Effect and Corry is not aware of
any event or circumstance, or series of events and circumstances, which is
reasonably likely to result in a Material Adverse Effect to Corry. The books and
records of Corry have been, and are being, maintained in accordance with
applicable legal and accounting requirements and reflect only actual
transactions. As of December 31, 1996, except and to the extent (i) reflected,
disclosed or provided for in the financial statements referred to above and (ii)
of liabilities incurred since December 31, 1996 in the ordinary course of
business and consistent with prudent banking practice, Corry does not have
8
<PAGE>
any liabilities, whether absolute, accrued, contingent or otherwise, material to
the business, operations, assets or financial condition of Corry
4.6. Consents and Approvals. Other than as set forth in Schedule
---------------------- --------
4.6 to the Corry Disclosure Schedule and other than the receipt of approvals
- ---
required by the Banking Code, the Bank Merger Act, the Regulations, and any
required approval of the Corry depositors as described in Section 7.1 hereof, no
-----------
filing or registration with, no notice to and no permit, authorization, consent
or approval of any third party or any public or governmental body or authority
is necessary for the consummation by Corry of the transactions contemplated by
this Agreement or to enable Northwest to continue to conduct the business of
Corry after the Effective Time in a manner which is consistent with that in
which it is presently conducted, except where the failure to make such filing or
obtain such permit, authorization, consent or approval will not in the aggregate
have a Material Adverse Effect.
4.7. Absence of Certain Changes. Since December 31, 1996, and
--------------------------
except as otherwise permitted by this Agreement, Corry has not, except as set
forth in Schedule 4.7 to the Corry Disclosure Schedule, (a) incurred any
------------
material obligation or liability (absolute or contingent), except obligations or
liabilities incurred in the ordinary course of business in accordance with past
practices; (b) mortgaged, pledged or subjected to lien or encumbrance (other
than statutory liens for taxes not yet delinquent and landlord liens) any of its
material assets or properties except pledges to secure government deposits and
in connection with repurchase or reverse repurchase agreements; (c) discharged
or satisfied any material lien or encumbrance or paid any obligation or
liability (absolute or contingent), other than current liabilities included in
Corry's balance sheet as of December 31, 1996, and current liabilities incurred
since the date thereof in the ordinary course of business in accordance with
past practices; (d) sold, exchanged or otherwise disposed of any of its material
capital assets other than in the ordinary course of business in accordance with
past practices; (e) materially made or modified any wage or salary increase
other than routine periodic increases in salary for employees in the ordinary
course of business and in accordance with past practices or as required by law,
entered into or modified any employment contract with any officer or salaried
employee or instituted any employee welfare, bonus, stock option, profit
sharing, retirement or similar plan or arrangement; (f) suffered any damage,
destruction or loss, whether or not covered by insurance, materially and
adversely affecting its business, property or assets or waived any rights of
value that are material in the aggregate, considering its business taken as a
whole; (g) except in the ordinary course of business in accordance with past
practices, entered, or agreed to enter, into any agreement or arrangement
granting any preferential right to purchase any of its assets, properties or
rights or requiring the consent of any party to the transfer and assignment of
any such assets, properties or rights; (h) entered into any material transaction
outside the ordinary course of its business in accordance with past practices,
except as expressly contemplated by the Agreement or (i) except in the ordinary
course of business in accordance with past practices or as reflected in the
Corry Financial Statements, sold or otherwise disposed of any of its material
investment securities.
9
<PAGE>
4.8. Employee and Employee Benefits Matters. (a) Schedule 4.8(a)
-------------------------------------- ---------------
to the Corry Disclosure Schedule lists (i) each pension, profit sharing, bonus,
thrift, savings program or arrangement, which constitutes an "employee pension
plan" within the meaning of Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), which is maintained by Corry or to
which Corry contributes for the benefit of any current or former employee,
officer, trustee, consultant or agent; (ii) each plan, program or arrangement
for the provision of medical, surgical, or hospital care or benefits, benefits
in the event of sickness, accident, disability, death, unemployment, severance,
vacation, apprenticeship, day care, scholarship, prepaid legal services or other
benefits which constitute an "employee welfare benefit plan" within the meaning
of Section 3(1) of ERISA, which is maintained by Corry to which Corry
contributes for the benefit of any current or former employee, officer, trustee,
consultant or agent; and (iii) every other retirement or deferred compensation
plan, bonus or incentive compensation plan or arrangement, severance or vacation
pay arrangement, or other fringe benefit plan, program or arrangement through
which Corry provides benefits for or on behalf of any current or former
employee, officer, trustee, consultant or agent. Corry has delivered or made
available to Northwest a true and correct copy of (a) each Corry Benefit Plan,
(b) the most recent annual report (Form 5500) filed with the Internal Revenue
Service ("IRS") with respect to each Corry Benefit Plan, if applicable, (c) each
trust agreement and group annuity contract, if any, relating to such Corry
Benefit Plan, (d) the most recent actuarial report or valuation relating to a
Corry Benefit Plan subject to Title IV of ERISA and (e) all rulings and
determination letters and any open requests for rulings or letters that pertain
to any Corry Benefit Plan.
(b) All of the plans, programs and arrangements described in this
Section 4.8 or listed in Schedule 4.8(a) to the Corry Disclosure Schedule
- ----------- ---------------
(hereinafter referred to as the "Corry Benefit Plans") that are subject to ERISA
and the Internal Revenue Code ("Code") are in material compliance with all
applicable requirements of ERISA and the Code and all other applicable federal
and state laws, including, without limitation, the reporting and disclosure
requirements of Part I of Title I of ERISA. Each of the Corry Benefit Plans that
is intended to be a pension, profit sharing, thrift, or savings plan that is
qualified under Section 401(a) of the Code satisfies the applicable requirements
of such provision and there exist no circumstances that would adversely affect
the qualified status of any such Plan under that section, except with respect to
any required retroactive amendment for which the remedial amendment period has
not yet expired. Except as set forth in Schedule 4.8(b) to the Corry Disclosure
---------------
Schedule, there is no pending or, to the knowledge of Corry, threatened
litigation, claim, action, governmental proceeding or investigation against or
relating to any Corry Benefit Plan which could give rise to any material
liability, and there is no reasonable basis for any material litigation, claims,
actions or proceedings against any such Corry Benefit Plan. No Corry Benefit
Plan (or Corry Benefit Plan fiduciary) has engaged in a non-exempt "Prohibited
Transaction" (as defined in Section 406 of ERISA and Section 4975(c) of the
Code) since the date on which said sections became applicable to such Plan.
There have been no acts or omissions by Corry that have given rise to any fines,
penalties, taxes or related charges under Sections 502(c), 502(i) or 4071 of
ERISA or Chapter 43 of the Code, or that may give rise to any material fines,
penalties, taxes or related damages under such laws for which Corry may be
liable. Corry has no knowledge of, or any reasonable basis to believe, that any
10
<PAGE>
material liability under Title IV of ERISA has been incurred by Corry, any
former Affiliates of Corry or the Corry Benefit Plans since the effective date
of ERISA that has not been satisfied in full, and that any condition exists that
presents a material risk of incurring a liability under such Title, other than
liability for premiums due the Pension Benefit Guaranty Corporation ("PBGC"),
which payments have been made or will be made when due. With respect to each of
the Corry Benefit Plans which is subject to Title IV of ERISA, the present value
of accrued benefits under such Plan or Plans, based upon the actuarial
assumptions used for funding purposes in the most recent actuarial report
prepared by such Plan's actuary with respect to such Plan, did not, as of its
latest valuation date, exceed the then current value of the assets of such Plan
allocable to such accrued benefits and Corry is not aware of any facts or
circumstances that would materially change the funded status of any such ERISA
Plan. Other than as set forth in Schedule 4.8(a), none of the Corry Benefit
Plans is a "multiemployer pension plan" as such term is defined in section 3(37)
of ERISA. Except as listed on Schedule 4.8(b) of the Corry Disclosure Schedule,
no employee of Corry will be entitled to any additional benefits or any
acceleration of the time of payment or vesting of any benefits under any Corry
Benefit Plan as a result of the transactions contemplated by this Agreement.
Other than current or contingent liabilities previously disclosed on Schedule
4.8(b) of the Corry Disclosure Schedule, neither Corry nor any Corry Benefit
Plan will have any material current or contingent liability with respect to any
Plan. All group health plans of Corry, including any plans of current and former
Affiliates of Corry that must be taken into account under Section 4980B of the
Code or Section 601 of ERISA or the requirements of any similar state law
regarding insurance continuation, have been operated in material compliance with
the group health plan continuation coverage requirements of Section 4980B of the
Code and Section 601 of ERISA to the extent such requirements are applicable.
All payments due from any Corry Benefit Plan (or from Corry with respect to any
Corry Benefit Plan) have been made, and all amounts properly accrued to date as
liabilities of Corry that have not yet been paid have been properly recorded on
the books of Corry.
(c) No amounts payable under the Corry Benefit Plans, or any
employment, severance or termination agreement between Corry and any employee or
officer will fail to be deductible for federal income tax purposes by virtue of
section 280G of the Code.
4.9. Litigation. Except as set forth in Schedule 4.9 to the Corry
---------- ------------
Disclosure Schedule, no claims have been asserted and no relief has been sought
against Corry in any pending litigation or governmental proceedings or otherwise
which would be reasonably expected to result in damages or other relief which
would be reasonably likely to have a Material Adverse Effect. To the knowledge
of Corry, there are no circumstances, conditions, events or arrangements,
contractual or otherwise, which may hereafter give rise to any proceedings,
claims, actions or government investigations involving Corry which would
reasonably be expected to result in damages or other relief which would be
reasonably likely to have a Material Adverse Effect, nor are any such
proceedings, claims, actions or government investigations threatened. Except as
set forth in Schedule 4.9 to the Corry Disclosure Schedule, Corry is not a party
------------
to any order, judgment or decree which would reasonably be expected to have a
Material Adverse Effect, and Corry (a) is not the subject of any cease and
desist order, or other formal or informal enforcement
11
<PAGE>
action by any regulatory authority and (b) has not made any commitment to or
entered into any agreement with any regulatory authority that restricts or
adversely affects its operations or financial condition.
4.10. Tax Matters. Corry has timely filed (inclusive of applicable
-----------
extension periods) with the appropriate governmental agencies all material
federal, state and local income, franchise, excise, sales, use, real and
personal property and other tax returns and reports (including information
returns and reports) that are required to be filed, and Corry is not materially
delinquent in the payment of any taxes shown on such returns or reports or on
any assessments for any such taxes received by Corry. There are included in the
Corry Financial Statements adequate reserves for the payment of all accrued but
unpaid material federal, state and local taxes of Corry, including interest and
penalties, whether or not disputed for such fiscal years as reflected therein
and all fiscal years prior thereto. Corry has not executed or filed with the
Internal Revenue Service ("IRS") or any state tax authority any agreement
extending the period for assessment and collection of any federal or state tax,
nor is Corry a party to any action or proceeding by any governmental authority
for assessment or collection of taxes. There is no outstanding material
assessment or claim for collection of taxes against Corry. Except as set forth
in Schedule 4.10 to the Corry Disclosure Schedule, the federal income tax
-------------
returns of Corry have been audited by the IRS (or are closed to examination due
to the expiration of the applicable statute of limitations) and no deficiencies
were asserted as a result of such audit which have not been resolved and paid in
full or adequate reserves or accruals established in accordance with generally
accepted accounting principles with respect thereto.
Corry has not, during the past five (5) years, except as disclosed in
Schedule 4.10 to the Corry Disclosure Schedule, received any notice of
- -------------
deficiency, proposed deficiency or assessment from the IRS or any other
governmental agency, with respect to any federal, state, county or local taxes.
No federal or state tax return of Corry is currently the subject of any audit by
the IRS or any other governmental agency. During the past five (5) years, no
material deficiencies have been asserted in connection with the federal and
state income tax returns of Corry and Corry has no reason to believe that any
material deficiency would be asserted relating thereto. Except as disclosed in
Schedule 4.10 to the Corry Disclosure Schedule, Corry is not a party to any
- -------------
agreement providing for allocation or sharing of taxes. Corry has never been a
member of an "affiliated group of corporations" (within the meaning of Section
1504(a) of the Code) filing consolidated returns, other than the affiliated
group of which Corry is or Corry was the common parent.
4.11. Environmental Matters. For purposes of this Section 4.11,
--------------------- ------------
the following terms shall have the indicated meaning:
"Environmental Law" means any federal, state or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization, approval,
consent, order, judgment, decree, injunction or agreement with any governmental
entity relating to (1) the protection, preservation or restoration of the
environment (including, without limitation, air, water vapor, surface water,
12
<PAGE>
groundwater, drinking water supply, surface soil, subsurface soil, plant and
animal life or any other natural resource), and/or (2) the use, storage,
recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Materials of Environmental Concern.
The term Environmental Law includes without limitation (1) the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
(S)9601, et seq; the Resource Conservation and Recovery Act, as amended, 42
-- ---
U.S.C. (S)6901, et seq; the Clean Air Act, as amended, 42 U.S.C. (S)7401, et
-- --- --
seq; the Federal Water Pollution Control Act, as amended, 33 U.S.C. (S)1251, et
- --- --
seq; the Toxic Substances Control Act, as amended, 15 U.S.C. (S)9601, et seq;
- --- -- ---
the Emergency Planning and Community Right to Know Act, 42 U.S.C. (S)11001, et
--
seq; the Safe Drinking Water Act, 42 U.S.C. (S)300f, et seq; and all comparable
- --- -- ---
state and local laws, and (2) any common law (including without limitation
common law that may impose strict liability) that may impose liability or
obligations for injuries or damages due to, or threatened as a result of, the
presence of or exposure to any Materials of Environmental Concern.
"Environmental Claim" means any written notice from any governmental
authority or third party alleging potential liability (including, without
limitation, potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries or penalties) arising out of, based on, or resulting from the
presence, or release into the environment, of any Materials of Environmental
Concern.
"Materials of Environmental Concern" means pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products and any other
materials regulated under Environmental Laws.
"Loan Portfolio Properties and Other Properties Owned" means those
properties owned, leased or operated by Corry, including those properties
serving as collateral for any loans made and retained by Corry or for which
Corry serves in a trust relationship for the loans retained in portfolio.
(a) Other than as set forth on Schedule 4.11(a) to the Corry
----------------
Disclosure Schedule, to the knowledge of Corry it is in compliance with all
Environmental Laws, except for any violations of any Environmental Law which
would not, singly or in the aggregate, have a material adverse effect on the
business, operations, assets, financial condition or prospects of Corry. Other
than as set forth on Schedule 4.12 to the Corry Disclosure Schedule, since June
-------------
30, 1990, Corry has not received any communication alleging that Corry is not in
such compliance and, to the knowledge of Corry, there are no present
circumstances that would prevent or interfere with the continuation of such
compliance.
(b) Other than as set forth on Schedule 4.11(b) to the Corry
----------------
Disclosure Schedule, to the knowledge of Corry, it has not been or is in
violation of or liable under any Environmental Law, except any such violations
or liabilities which would not singly or in the aggregate have a material
adverse effect on the business, operations, assets or financial condition of
Corry.
13
<PAGE>
(c) Other than as set forth on Schedule 4.11(c) to the Corry
Disclosure Schedule, to the knowledge of Corry, none of the Loan Portfolio
Properties and Other Properties Owned by it has been or is in violation of or
liable under any Environmental Law, except any such violations or liabilities
which singly or in the aggregate would not have a material adverse effect on the
business, operations, assets or financial condition of Corry.
(d) Other than as set forth on Schedule 4.11(d) to the Corry
----------------
Disclosure Schedule, to the knowledge of Corry, there are no actions, suits,
demands, notices, claims, investigations or proceedings pending or threatened
relating to the liability of the Loan Portfolio Properties and Other Properties
Owned by Corry under any Environmental Law, including without limitation any
notices, demand letters or requests for information from any federal or state
environmental agency relating to any such liabilities under or violations of
Environmental Law, except such which would not have or result in a material
adverse effect on the business, operations, assets or financial condition of
Corry.
(e) Other than as set forth on Schedule 4.11(e) to the Corry
----------------
Disclosure Schedule, to the knowledge of Corry, there are no past or present
actions, activities, circumstances, conditions, events or incidents that could
reasonably form the basis of any Environmental Claim or other claim or action or
governmental investigation that could result in the imposition of any liability
arising under any Environmental Law against Corry or against any person or
entity whose liability for any Environmental Claim Corry has or may have
retained or assumed either contractually or by operation of law, except such
which would not have a material adverse effect on the business, operations,
assets, financial condition or prospects of Corry.
(f) Corry has set forth on Schedule 4.11(f) to the Corry Disclosure
----------------
Schedule, any environmental studies conducted by it during the past five years
with respect to any properties owned by it as of the date hereof.
4.12. Compliance with Laws and Orders. Except as set forth in
-------------------------------
Schedule 4.12 to the Corry Disclosure Schedule, Corry has not received notice of
- -------------
any violation or alleged material violation of, or, to the knowledge of Corry,
is subject to any liability (whether accrued, absolute, contingent, direct or
indirect) for past or continuing material violations of, any law, statute or
regulation. Corry is not in default under, and no event has occurred that, with
the lapse of time or action by a third party or both, could result in a default
under the terms of any judgment, decree, order, writ, rule or regulation of any
governmental authority or court, whether federal, state or local and whether at
law or in equity, where the failure to be in full compliance would reasonably be
expected to result alone or in the aggregate in damages, which would be
reasonably likely to have a Material Adverse Effect.
4.13. Governmental Regulation. Corry holds all material licenses,
-----------------------
certificates, permits, franchises and rights from all appropriate federal, state
and other public authorities necessary for the conduct of its business; and,
between the date hereof and the Closing Date, Corry will use its best efforts to
maintain all such licenses, certificates, permits, franchises and
14
<PAGE>
rights in effect. Except as set forth in Schedule 4.13 to the Corry Disclosure
-------------
Schedule, Corry is not a party or subject to any agreements, directives, orders
or similar arrangements between or involving Corry and any federal savings
institution regulatory authority.
4.14. Contracts and Commitments. Except as set forth in Schedule
------------------------- --------
4.14 to the Corry Disclosure Schedule, Corry is not a party to or bound by any
- ----
(a) material lease or license with respect to any property, real or personal;
(b) material contract or commitment for capital expenditures; (c) material
contract or commitment for total expenses for the purchase of materials,
supplies or for the performance of services by third parties for a period of
more than 60 days from the date of this Agreement; (d) material contract or
option for the purchase or sale of any real or personal property other than in
the ordinary course of business; or (e) agreement, arrangement or understanding
relating to the employment, election, retention in office or severance of any
present or former trustee, officer or employee of Corry. To its knowledge, Corry
has performed in all material respects all obligations required to be performed
by them to date and are not in default under, and no event has occurred which,
with the lapse of time or action by a third party or both, could result in a
default resulting in material damages or other material default under any
outstanding mortgage, lease, contract, commitment or agreement to which Corry is
a party or by which Corry is bound or under any provision of its charters or
bylaws. Each such outstanding material mortgage, lease, contract, commitment or
agreement is a valid and legally binding obligation of Corry subject to (x) all
applicable bankruptcy, insolvency, moratorium or other similar laws affecting
the enforcement of creditors rights generally or the rights of creditors of
savings associations the accounts of which are insured by the FDIC, and (y) the
application of equitable principles if equitable remedies are sought.
4.15. Accuracy of Information. The statements made by Corry in the
-----------------------
Agreement and in any other written documents executed and/or delivered by or on
behalf of Corry pursuant to the terms of the Agreement are true and correct in
all material respects. The statements contained in such other documents or
specifically referred to in the Agreement will be deemed to constitute
representations and warranties of Corry under this Agreement to the same extent
as if set forth herein in full.
4.16. Supplement to Corry Disclosure Schedule. Corry will promptly
---------------------------------------
supplement or amend the Corry Disclosure Schedule with respect to any matter
hereafter arising that, if existing or occurring at the date of this Agreement,
would have been required to be set forth or described in the Corry Disclosure
Schedule. No supplement or amendment to the Corry Disclosure Schedule will have
any effect for the purpose of determining satisfaction of the condition set
forth in Section 8.2 hereof.
-----------
4.17. Title to Assets; Leases
-----------------------
(a) Except for (i) liens and encumbrances specifically disclosed in
any of the consolidated financial statements of Corry referred to in Section 4.5
-----------
hereof, (ii) landlords' or statutory liens or other liens incurred in the
ordinary course of business and not securing
15
<PAGE>
indebtedness for borrowed money and not yet delinquent, and (iii) liens and
encumbrances which are not material in amount and do not materially impair the
value of any property subject thereto or the use of such property for the
purposes for which it is presently used or intended to be used, Corry has good
and marketable title, free and clear of all security interests, encumbrances,
trust agreements, liens or other adverse claims, to all its assets and property,
real and personal, reflected in the financial statements referred to in Section
4.5 hereof or acquired thereafter, which includes all property and assets used
by Corry that are material to the conduct of its businesses, except for assets
and property disposed of in the ordinary course of business after December 31,
1996.
(b) Corry, as lessee, has the right under valid and subsisting leases
to occupy, use, possess and control all property leased by it in all material
respects as presently occupied, used, possessed and controlled by Corry and such
leases will not terminate or lapse prior to the Effective Time or be affected in
any material respect by consummation of the transactions contemplated hereby.
Schedule 4.17 contains an accurate listing of each lease pursuant to which Corry
- -------------
acts as lessor or lessee, including the expiration date and the terms of any
renewal options which relate to the same, as well as a listing of each material
real property owned by Corry and used in the conduct of its business.
(c) All material real and personal property owned by Corry or
presently used by it are in an adequate condition (ordinary wear and tear
excepted) and are sufficient to carry on the business of Corry.
ARTICLE V.
COVENANTS OF NORTHWEST
Northwest hereby agrees that from the date of this Agreement until the
Effective Time:
5.1. Affirmative Covenants.
---------------------
(a) Unless the prior written consent of Corry shall have been obtained
(which shall not be unreasonably withheld), Northwest will maintain and will
cause each of its Subsidiaries to maintain their corporate existence in good
standing so as to be able to consummate the transactions contemplated by the
Agreement.
(b) As soon as reasonably practicable, furnish Corry with copies of
all of Northwest's periodic reports filed with the Department or FDIC subsequent
to the date hereof.
5.2. Negative Covenants. Except as specifically contemplated by
------------------
this Agreement, Northwest shall not do, or agree or commit to do, or permit any
of the Northwest Subsidiaries to
16
<PAGE>
do, without the prior written consent of Corry (which shall not be unreasonably
withheld), any of the following:
(a) willfully take action which would or is reasonably likely to (i)
adversely affect the ability of either Northwest or Corry to obtain any
necessary approvals of governmental authorities required for the transactions
contemplated hereby; (ii) adversely affect Northwest's ability to perform its
covenants and agreements under this Agreement; or (iii) result in any of the
conditions to the Merger set forth in Articles IX and X not being satisfied; or
----------- -
(b) agree in writing or otherwise to do any of the foregoing.
5.3. Breaches. Northwest shall, in the event it becomes aware of
--------
the impending or threatened occurrence of any event or condition which would
cause or constitute a material breach (or would have caused or constituted a
breach had such event occurred or been known prior to the date hereof) of any of
its representations or agreements contained or referred to herein, give prompt
written notice thereof to Corry and use its best efforts to prevent or promptly
remedy the same.
5.4. Employee Benefit Plans; Employment Arrangements
-----------------------------------------------
(a) Northwest shall offer continued employment to all employees of
Corry as of the Effective Time at the salary levels in effect at the Effective
Time, subject to the provisions in this Section 5.4. Employees of Corry who
-----------
continue employment with Northwest on or after the Effective Time (all such
persons referred to herein as "Continuing Employees") shall be eligible to
participate in such employee benefit plans as may be in effect generally for
employees of Northwest from time to time (the "Northwest Plans"), if such
Continuing Employee shall be eligible for participation therein. Except as
specifically set forth in this Section 5.4, Continuing Employees shall be
-----------
entitled to participate on the same basis as similarly situated employees of
Northwest, except that Continuing Employees shall be entitled to full credit for
each year of service (in which 1,000 hours of service are performed) with Corry
for purposes of determining eligibility for participation and vesting, but not
for benefit accruals, in the Northwest Plans, subject to applicable break in
service rules. The officers and trustees of Corry shall be permitted to
participate in the Northwest Savings Bank and Northwest Bancorp, MHC Recognition
and Retention Plan (the "Restricted Stock Plan"), and the Northwest Savings Bank
and Northwest Bancorp, MHC Stock Option Plan (the "Option Plan"). The Board of
Trustees of Corry shall designate officers and trustees who shall receive in the
aggregate (i) a number of shares of Northwest common stock, restricted by the
terms of the Restricted Stock Plan, equal to 4% of the number of shares of
common stock sold in the Stock Offering, and (ii) pursuant to the Option Plan
options to purchase a number of shares of Northwest common stock equal to 10% of
the number of shares of Common Stock sold in the Stock Offering, at an exercise
price equal to the fair market value of the Northwest common stock at the time
the options are awarded. If sufficient shares or options to satisfy the awards
set forth above under (i) and (ii) are not then available under such plans, Bank
and Bancorp MHC shall use their best efforts to amend such plans, or to adopt an
17
<PAGE>
additional restricted stock plan and stock option plan, to permit such awards to
be made. Any additional restricted stock or stock option plans shall be
established in accordance with rules and policy of the Department and the FDIC.
In addition, Northwest's ESOP or other tax qualified employee plans shall
purchase up to 10% of the shares of Common Stock sold in the Stock Offering and
Continuing Employees shall not be entitled to credit for prior service with
Corry for any purpose but shall be eligible for participation in the tax-
qualified employee plans on the same basis as new employees of Northwest.
Notwithstanding anything in this Section 5.4(a) to the contrary, participation
--------------
by Continuing Employees in employee benefit plans of Northwest with respect to
which eligibility and participation is at the discretion of the employer, such
as non-qualified deferred compensation plans, and other such similar plans (but
not including employee benefit plans generally available to all full-time
employees of Northwest) shall be discretionary with such employer. Furthermore,
notwithstanding anything in this Agreement to the contrary, Northwest reserves
the right following the Effective Time to terminate any benefit plan maintained
by Corry as of the Effective Time or to merge any such benefit plans with the
Northwest plans. Nothing in this Section 5.4 shall be construed to establish an
employment contract relationship between Northwest and any Corry employee except
with respect to any agreement listed in Schedule 4.14 of the Corry Disclosure
-------------
Schedule.
(b) With respect to Continuing Employees, there shall be no waiting
period or preexisting condition exclusions applicable under the health benefits
coverage to be provided following the Effective Time to such persons, but the
benefits previously received by such persons will not count toward the maximum
benefit coverages provided by Northwest.
(c) Any full-time employee of Corry as of the Effective Time (other
than any such employee whose written employment agreement is assumed as provided
for herein) who is terminated by Northwest within one (1) year following the
Effective Time without "cause" (as defined herein), except in the case of
voluntary resignation, disability or death, shall be entitled to severance
benefits equal to one week's salary for each year of service to Corry as of the
date of termination, up to a maximum of 18 weeks, calculated on a pre-tax basis.
For purposes of the preceding sentence, "cause" shall mean either (a) a
continued failure by the employee to substantially perform his or her assigned
duties, which duties shall be substantially similar to the duties which have
been performed by such employees for Corry, or (b) the engaging by the employee
in willful misconduct which is injurious to Bancorp MHC or Northwest. A refusal
by an employee to relocate shall not constitute "cause" and any termination
resulting therefrom, whether voluntary or involuntary, shall be deemed an
involuntary termination without cause, unless such relocation is not more than
fifteen miles in distance from such employee's place of employment prior to
relocation, or not more than fifteen miles in distance greater from such
person's residence at the time of the relocation. It is the intention of
Northwest that various employee benefit plans or other arrangements of Corry
will be terminated and others merged into the corresponding plans or
arrangements of Northwest. Following the Effective Time, Northwest shall honor,
in accordance with their terms, all of the employment or other compensation
agreements or arrangements set forth in Schedule 4.14 of the Corry Disclosure
Schedule and
18
<PAGE>
assume all duties, liabilities and obligations under such agreements and
arrangements; provided, however, that such obligations shall be subject to the
provisions of Section 7.10 hereof.
5.5. Filing of Applications. Northwest shall use its best efforts
----------------------
promptly to prepare, submit, publish and file: (a) an application to the
Department pursuant to Section 1604 of the Banking Code; (b) an application to
the FDIC under the Bank Merger Act; and (c) any other applications, notices or
statements required to be filed in connection with the transactions contemplated
hereby.
5.6. Supplement to Northwest Disclosure Schedule. Northwest will
-------------------------------------------
promptly supplement or amend the Northwest Disclosure Schedule with respect to
any matter hereafter arising that, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in the
Northwest Disclosure Schedule. No supplement or amendment to the Northwest
Disclosure Schedule will have any effect for the purpose of determining
satisfaction of the condition set forth in Section 9.1 hereof.
-----------
5.7. Confidentiality. Northwest agrees to treat as strictly
---------------
confidential and agrees not to divulge to any other person, natural or corporate
(other than employees of, and attorneys and accountants for, such party) any
proprietary financial statements, schedules, contracts, agreements, instruments,
papers, documents and other information relating to Corry by which it may come
to know or which may come into its possession during the course of its due
diligence investigation of Corry and, if the transactions contemplated hereby
are not consummated for any reason, Northwest agrees promptly to return to Corry
all written proprietary material furnished in connection with such
investigation.
ARTICLE VI.
COVENANTS OF CORRY
Corry hereby agrees that from the date of this Agreement until the
Effective Time:
6.1. Affirmative Covenants. Unless the prior written consent of
---------------------
Northwest shall have been obtained (which shall not be unreasonably withheld)
and except as otherwise contemplated herein, Corry will:
(a) operate its business in the ordinary course in accordance with
past business practices;
(b) use its best efforts to preserve intact its business organization
and assets, maintain its rights and franchises, retain the services of its
officers and key employees (except that it shall have the right to terminate the
employment of any officer or key employee in accordance with established
employment procedures) and maintain its relationships with customers:
19
<PAGE>
(c) maintain its corporate existence in good standing and file all
required Corry Reports (as defined in such Section 12.7(c) hereof);
---------------
(d) use its best efforts to maintain and keep its properties in as
good repair and condition as at present, except for ordinary wear and tear;
(e) use its best efforts to keep in full force and effect insurance
and bonds comparable in amount and scope of coverage to that now maintained by
it and, in the event that Corry is unable to keep such insurance and bonds in
full force and effect, to provide prompt notice of such failure to Northwest;
(f) perform all obligations required to be performed by it under all
material contracts, leases, and documents relating to or affecting its assets,
properties, and business;
(g) use its best efforts to comply with and perform in all material
respects all obligations and duties imposed upon it by all applicable laws and
regulations; and
(h) as soon as reasonably practicable, furnish Northwest copies of all
of Corry's reports filed with the FDIC and the Department subsequent to the date
hereof.
6.2. Negative Covenants. Except as specifically contemplated by
------------------
this Agreement, from the date hereof until the Effective Time, Corry shall not,
without the prior written consent of Northwest (which shall not be unreasonably
withheld), do any of the following:
(a) incur any material liabilities or material obligations, whether
directly or by way of guaranty, including any obligation for borrowed money
whether or not evidenced by a note, bond, debenture or similar instrument or
enter into or extend any material agreement or lease, except in the ordinary
course of business consistent with prudent business practices or in connection
with the transactions contemplated and permitted by the Agreement;
(b) (i) grant any bonus or material increase in compensation to its
trustees or grant any bonus or any increase in compensation to its officers and
employees either individually or as a class, except routine periodic increases
in salary for employees in the ordinary course of business and in accordance
with past practices or as required by law; (ii) effect any change in retirement
benefits to any class of employees or officers (unless any such change shall be
required by applicable law) that would increase its retirement benefit
liabilities; (iii) adopt, enter into, amend or modify any Corry Benefit Plan; or
(iv) enter into or amend any employment, severance or similar agreements or
arrangements with any trustees or officers, except as contemplated by this
Agreement;
(c) declare or pay any special dividend on, or make any other
distribution in respect of, its deposit accounts;
20
<PAGE>
(d) (i) merge with or into any other corporation, savings institution
or bank, permit any other corporation, savings institution or bank to merge into
it or consolidate with any other corporation or bank, in either case, unless the
fiduciary duties of Corry's Board of Trustees require it to do so, or effect any
reorganization or recapitalization; (ii) purchase or otherwise acquire any
assets, or shares of any class of stock, of any corporation, savings
institution, bank or other business; or (iii) liquidate, sell, dispose of, or
encumber any assets or acquire any assets, other than in the ordinary course of
its business consistent with past practices;
(e) initiate, solicit or encourage, or take any other action to
facilitate, any inquiries or the making of any proposal for a merger or sale of
assets of Corry (a "Proposal"), or negotiate with any person in, or agree to or
endorse any, or authorize or permit any of its officers, trustees or employees
or any investment banker, financial advisor, accountant or other representative
retained by it to take any such action, except as required by the fiduciary
duties of the Corry's Board of Trustees under applicable law, and Corry shall
promptly notify Northwest orally and in writing of all of the relevant details
relating to all inquiries and proposals which it may receive relating to any of
such matters;
(f) propose or adopt any amendments to its charter or by-laws, except
such amendments as may be required to consummate the transactions contemplated
by this Agreement;
(g) enter into an agreement in principle with respect to any
acquisition of a material amount of assets or securities or any release or
relinquishment of any material contract rights not in the ordinary course of
business;
(h) change any of its methods of accounting in effect at December 31,
1996, except as required by changes in laws or regulations or generally accepted
accounting principles concurred in by Corry's independent certified public
accountants, or change any of its methods of reporting income or deductions for
federal income tax purposes from those employed in the preparation of the
federal income tax returns for the taxable year ending December 31, 1996, except
as may be required by law, regulations, or generally accepted accounting
principles;
(i) willfully take action which would or is reasonably likely to (i)
adversely affect the ability of either of Northwest or Corry to obtain any
necessary approvals of governmental authorities required for the transactions
contemplated hereby; (ii) adversely affect Corry's ability to perform its
covenants and agreements under this Agreement; or (iii) result in any of the
conditions to the Merger set forth in Articles VIII and X not being satisfied;
------------- -
(j) change in any material respect the lending, investment, deposit,
asset and liability management and other material policies concerning the
business of Corry, unless required by law or regulation or, with respect to
lending or depository activities, unless such change is made in response to
market conditions;
21
<PAGE>
(k) make any investment which causes Corry to not be a "domestic
building and loan association" as defined in Section 7701 (a)(19) of the Code;
(l) sell or otherwise dispose of any loan, mortgage-backed security or
investment security except in the ordinary course of business consistent with
prudent banking practices and policies;
(m) modify or restructure the terms of any loans except in the
ordinary course of business consistent with prudent banking practices;
(n) acquire in any manner whatsoever (other than to realize upon
collateral for a defaulted loan) any business or entity; or
(o) agree in writing or otherwise to do any of the foregoing.
6.3. Report to Northwest. Corry will use its best efforts to keep
-------------------
Northwest fully informed concerning all trends and developments of which it
becomes aware that may have a material effect upon the business, any properties
or condition (either financial or otherwise) of Corry.
6.4. Breaches. Corry shall, in the event it becomes aware of the
--------
impending or threatened occurrence of any event or condition which would cause
or constitute a material breach (or would have caused or constituted a breach
had such event occurred or been known prior to the date hereof) of any of its
representations or agreements contained or referred to herein, give prompt
written notice thereof to Northwest and use its best efforts to prevent or
promptly remedy the same.
6.5. Supplement to Disclosure Schedule. Corry will promptly
---------------------------------
supplement or amend the Corry Disclosure Schedule with respect to any matter
hereafter arising that, if existing or occurring at the date of this Agreement,
would have been required to be set forth or described in the Corry Disclosure
Schedule. No supplement or amendment to the Corry Disclosure Schedule will have
any effect for the purpose of determining satisfaction of the condition set
forth in Section 8.2 hereof.
6.6. Consents and Approvals. Corry shall use its best efforts to
----------------------
assist Northwest in obtaining the consents and approvals referenced in Section
8.5 hereof.
22
<PAGE>
ARTICLE VII.
ADDITIONAL AGREEMENTS
7.1. Corry Depositors' Meeting. If required by the Regulations,
-------------------------
Corry shall, as soon as is reasonably practicable, call and hold a meeting of
its depositors (the "Corry Depositors' Meeting") to submit for depositor
approval this Agreement. The Board of Trustees of Corry will recommend that
Corry depositors vote in favor of and approve this Agreement at the Corry
Depositors' Meeting.
7.2. Proxy Statement for Corry Depositors' Meeting. For the
---------------------------------------------
purposes of holding the Corry Depositors' Meeting, and if required by the
Department or the FDIC, Corry shall prepare an appropriate proxy statement,
being herein referred to as the "Corry Proxy Statement".
7.3. Cooperation: Regulatory Approvals. The parties shall
---------------------------------
cooperate in the preparation and submission by them, as promptly as reasonably
practicable, of such applications, petitions, and other documents and materials
as any of them may reasonably deem necessary or desirable to the Department, the
FDIC, the Federal Reserve Board, the Securities and Exchange Commission, other
regulatory authorities, and any other persons for the purpose of obtaining any
approvals or consents necessary to consummate the transactions contemplated by
the Agreement. Corry shall also provide to Northwest any information relating to
Corry that shall be reasonably necessary or required to be included in any
prospectus or registration statement used to sell common stock in connection
with the Stock Offering. Each party will have the right to review and comment on
such applications, petitions and other documents and materials and shall furnish
to the other copies thereof promptly after filing or submission thereof. At the
date hereof, none of the parties is aware of any reason that the regulatory
approvals required to be obtained by it would not be obtained. The obligation to
take action as provided in this Section 7.3 shall not be construed as including
-----------
an obligation to accept any terms of or conditions to a consent, authorization,
order or approval of, or any exemption by, any party that are unduly burdensome
as reasonably determined by the Board of Directors of Northwest or Board of
Trustees of Corry. In the event of a restraining order or injunction which
prevents the Closing by reason of the operation of Section 10.2, each of the
parties hereto shall use its respective best efforts to cause such order or
injunction to be lifted and the Closing to be consummated as soon as reasonably
practicable.
7.4. Brokers or Finders. Each of Northwest and Corry represents
------------------
that no agent, broker, investment banker, financial advisor or other firm or
person is or will be entitled to any broker's or finder's fee or any other
commission or similar fee in connection with any of the transactions
contemplated by this Agreement.
7.5. Additional Agreements: Reasonable Efforts. Subject to the
-----------------------------------------
terms and conditions of this Agreement, each of the parties hereto agrees to use
all reasonable efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
23
<PAGE>
contemplated by this Agreement, subject to the appropriate vote of the
depositors of Corry described in Section 7.1, including cooperating fully with
-----------
the other party. In case at any time after the Effective Time any further action
is necessary or desirable to carry out the purposes of this Agreement or to vest
Northwest with full title to all properties, assets, rights, approvals,
immunities and franchises of Corry, the proper officers and directors/trustees
of each party to this Agreement shall take all such necessary action.
7.6. Release of Information. Corry and Northwest agree that prior
----------------------
to making any public announcement with respect to the transactions contemplated
by this Agreement, each party will consult with the other and will use its best
efforts either to agree upon the text of the proposed joint announcement to be
made by both parties or to obtain the other's approval (which approval shall not
be unreasonably withheld) of the text of an announcement to be made solely on
behalf of such party. In the event that the parties do not ultimately agree on
the text of any proposed public announcement, no such disclosure shall be made
unless the party seeking to make an announcement is advised by counsel that its
failure to do so would be reasonably likely to constitute a violation of law.
7.7. Advisory Directors. Each member of the Board of Trustees of
------------------
Corry as of the date of this Agreement shall be entitled to serve on an Advisory
Board to the Board of Directors of Northwest. The non-employee Advisory
Directors shall receive an annual fee no less than the annual fee currently paid
to such persons as trustees of Corry as of the date of this Agreement. The
Advisory Board will meet monthly. Meetings of the Advisory Board of Directors
shall be held in either Warren or Corry, Pennsylvania, or such other location as
a majority of the Advisory Directors shall agree.
7.8. Indemnification and Insurance Coverage. Northwest agrees
--------------------------------------
that all rights to indemnification or exculpation now existing in favor of the
trustees, officers, employees and agents of Corry as provided under applicable
law or in its charter, bylaws, indemnification agreements or otherwise in effect
as of the date hereof with respect to matters occurring prior to the Effective
Time shall survive the Merger and shall continue in full force and effect
thereafter until such time as the applicable statute of limitations has expired.
Thereafter, such persons shall be indemnified to the extent permitted by
Northwest's charter and bylaws. In the event of any claim or litigation giving
rise to such indemnification, Northwest will provide the indemnified party with
reasonable access to and the right to copy all documents and other information
relating to the subject matter of the litigation and will reasonably cooperate
in the defense of such litigation. An employee, agent, trustee or officer of
Corry seeking indemnification pursuant to the provisions of Corry's articles of
incorporation or bylaws shall be entitled to have the resolution of any dispute
regarding the right to and the extent of the indemnification, including without
limitation the right to the advancement of or the reimbursement of legal fees
and expenses related to such claim or litigation, resolved by an arbitrator
selected by Northwest and the indemnified party in accordance with the rules of
the American Arbitration Association.
24
<PAGE>
7.9. Directors' Life Insurance. Northwest will continue to
-------------------------
provide those members of the Advisory Board with life insurance coverage
substantially equivalent to the life insurance coverage currently in effect for
trustees of Corry as of the Effective Time, and Northwest shall continue to
maintain such insurance coverage for as long as such persons serve on the
Advisory Board.
7.10. Retention of Senior Officers. Northwest agrees to honor all
----------------------------
terms and conditions of each employment agreement of Corry listed in Schedule
--------
4.14 of the Corry Disclosure Schedule, which is in effect on the date of this
- ----
Agreement.
7.11. Access to Properties and Records: Confidentiality.
-------------------------------------------------
(a) Corry shall permit Northwest and its representatives reasonable
access to its properties, and shall disclose and make available to them all
books, papers and records relating to the assets, stock ownership, properties,
operations, obligations and liabilities of Corry, including, but not limited to,
all books of account (including the general ledger), tax records, minute books
of meetings of the board of trustees (and any committees thereof),
organizational documents, bylaws, material contracts and agreements, filings
with any regulatory authority, accountants' work papers, litigation files, plans
affecting employees, and any other business activities or prospects in which
Corry may have a reasonable interest. Corry shall make its officers, employees
and agents and authorized representatives (including counsel and independent
public accountants) available to confer with Northwest and its representatives.
Corry shall permit the President of Northwest to attend regular meetings of
Corry's Board of Trustees', including, without limitation, the loan committee or
asset/liability committee meetings.
(b) All information furnished previously in connection with the
transactions contemplated by this Agreement or pursuant hereto shall be treated
as the sole property of the party furnishing the information until consummation
of the transactions contemplated hereby and, if such transactions shall not
occur, the party receiving the information shall, upon request, return to the
party which furnished such information all documents or other materials
containing, reflecting or referring to such information, shall use its best
efforts to keep confidential all such information, and shall not directly or
indirectly use such information for any competitive or other commercial
purposes. The obligation to keep such information confidential shall continue
for three years from the date the proposed transactions are abandoned but shall
not apply to (i) any information which (x) the party receiving the information
can establish by convincing evidence was already in its possession prior to the
disclosure thereof by the party furnishing the information; (y) was then
generally known to the public; or (z) became known to the public through no
fault of the party receiving the information; or (ii) disclosures pursuant to a
legal requirement or in accordance with an order of a court of competent
jurisdiction, provided that the party which is the subject of any such legal
requirement or order shall use its best efforts to give the other party at least
ten business days prior notice thereof.
25
<PAGE>
7.12 Charitable Foundation. On or prior to the Effective Time,
---------------------
Northwest and Corry shall use their best efforts to establish a charitable
foundation (the "Charitable Foundation") for the purpose of providing charitable
contributions to Corry, Pennsylvania and in other market areas served by
Northwest. The contribution by Corry to the Charitable Foundation shall be
$500,000 which contribution shall be made either prior to the Effective Time or
promptly thereafter, at the discretion of Northwest. Northwest or Bancorp MHC
shall make additional contributions to the Charitable Foundation, and the
Charitable Foundation shall maintain a division using funds contributed or
earmarked by Corry that is devoted substantially to the Corry community. In the
event Northwest determines that it is not feasible or practicable to establish
the Charitable Foundation and that the alternative of making charitable
contributions directly or through Bancorp MHC is preferable, then the funds
(described above) to be earmarked or contributed by Corry shall be contributed
directly by Corry to charities or other organizations of its choice prior to or
after the Effective Time. The Corry Advisory Board, as described in paragraph
7.7 of this Agreement, shall advise the foundation manager ("Foundation
Manager") of the Charitable Foundation on appropriate charities and appropriate
distribution of the annual income, and such principal as may be deemed
appropriate, from the Corry division of the Charitable Foundation.
7.13. Certain Policies. At the request of Northwest, Corry shall,
----------------
no earlier than five business days prior to the Effective Time, (i) establish
such reserves and accruals as Northwest shall reasonably request to conform, on
a mutually satisfactory basis, Corry's loan, real estate, accrual and reserve
policies to Northwest's policies and (ii) establish and take such accruals,
reserves and charges in order to implement such policies in respect of severance
costs, write-off or write-down of various assets and other appropriate
accounting adjustments, and to recognize for financial accounting purposes such
expenses incurred in connection with the Merger, provided, however, that Corry
shall not be obligated to take any such action pursuant to this Section 7.12
unless and until (x) Northwest specifies its request in a writing delivered to
Corry, and acknowledges that all conditions to the obligations of Northwest to
consummate the Merger set forth in Articles VIII and X have been waived (if
available) or satisfied and (y) Corry acknowledges that the conditions to its
obligation to consummate the Merger set forth in Articles IX and X have been
waived (if available) or satisfied. Corry shall not be required to take any such
action that is not consistent with generally accepted accounting principles, as
determined by Corry's independent auditors, or any requirement applicable to
Corry by any bank regulatory agency. The representations, warranties and
covenants of Corry contained in this Agreement shall not be deemed to be untrue
or breached in any respect for any purpose as a consequence of any action
undertaken on account of Sections 7.13 and shall not constitute grounds for
termination of the Agreement by Northwest.
26
<PAGE>
ARTICLE VIII.
CONDITIONS TO THE OBLIGATIONS OF NORTHWEST
The obligations of Northwest under this Agreement to cause the
transactions contemplated herein to be consummated shall be subject to the
satisfaction or written waiver by Northwest of the following conditions:
8.1. No Material Adverse Effect. Except as disclosed in Schedule
-------------------------- --------
4.5 to the Corry Disclosure Schedule and except for general changes in market
- ---
interest rates, payments due under any employment agreements or benefit plans
and the transactions contemplated hereby, costs and expenses relating to this
Agreement and the transactions contemplated hereby, there shall not have been
any Material Adverse Effect, or discovery of a condition or the occurrence of
any event that has or is likely to result in such a Effect, in the financial
condition, results of operations or business of Corry from December 31, 1996 to
the Closing Date; provided, however, that there shall not have occurred a
Material Adverse Effect for purposes of this Section 8.1 if such action that
-----------
would have given rise to a Material Adverse Effect was taken by Corry at the
request of Northwest pursuant to Section 7.13 of this Agreement.
------------
8.2. Representations and Warranties. Each of the representations
------------------------------
and warranties by Corry contained in this Agreement shall be true and correct in
all material respects (or where any statement in a representation or warranty
expressly contains a standard of materiality, such statement shall be true and
correct in all respects taking into consideration the standard of materiality
contained therein) at, or as of, the date of this Agreement and (except to the
extent such representation speaks as of an earlier date) and as of any date
subsequent, until and including the Closing Date (except as otherwise
contemplated or permitted by this Agreement) as though such representations and
warranties were made on and as of said date. Any information provided by Corry
pursuant to Section 6.5 hereof as a supplement to the Corry Schedule shall be
true and correct in all material respects as of the date such information is
supplied to Northwest.
8.3. Performance and Compliance. Corry shall have performed or
--------------------------
complied in all material respects with all covenants and agreements required by
the Agreements to be performed and satisfied by it on or prior to the Closing
Date.
8.4. No Proceeding or Litigation. On the Closing Date, no suit,
---------------------------
action or proceeding shall be pending or overtly threatened, and no liability or
claim shall have been asserted against Corry involving any of the assets,
properties, business or operations of Corry that would reasonably be expected to
have a Material Adverse Effect.
8.5. Consents Under Agreements. Northwest shall have received the
-------------------------
consent or approval of each person whose consent or approval shall be required
in order to permit consummation of the Merger under any loan or credit
agreement, note, mortgage, indenture, lease or other agreement or instrument to
which Corry is a party or to which its respective property is
27
<PAGE>
subject, except those for which failure to obtain such consents and approvals
would not, individually or in the aggregate, have a Material Adverse Effect on
Bancorp MHC or Northwest, whether prior to (if applicable) or following the
consummation of the transactions contemplated hereby.
8.6. No Amendments to Resolutions. Neither the Board of Trustees
----------------------------
of Corry nor any committee thereof shall have amended, modified, rescinded or
repealed the resolutions adopted by such Board of Trustees with respect to the
Agreement or shall have adopted any other resolutions in connection with the
Agreement and the transactions contemplated hereby which are inconsistent with
such resolutions, except resolutions adopted consistent with the express rights
of Corry under this Agreement.
8.7. Certificate of Corry Officers. Corry shall have furnished
-----------------------------
Northwest a certificate, signed by its Chief Executive Officer, dated the
Closing Date, to the effect, based on his knowledge, that the conditions
described in Sections 8.1, 8.2, 8.3, 8.4, 8.5, and 8.6 of this Agreement have
been fully satisfied.
8.8. Corporate Proceedings. All action required to be taken by,
---------------------
or on the part of Corry to authorize the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated by this
Agreement shall have been duly and validly taken by Corry.
ARTICLE IX.
CONDITIONS TO THE OBLIGATIONS OF CORRY
The obligations of Corry under this Agreement to cause the
transactions contemplated herein to be consummated shall be subject to the
satisfaction or written waiver by Corry of the following conditions:
9.1. Representations and Warranties. Each of the representations
------------------------------
and warranties of Northwest contained in this Agreement shall be true and
correct in all material respects (or where any statement in a representation or
warranty expressly contains a standard of materiality, such statement shall be
true and correct in all respects taking into consideration the standard of
materiality contained therein) at, or as of, the date of this Agreement and
(except to the extent such representation speaks as of an earlier date) and as
of any date subsequent, until and including the Closing Date (except as
otherwise contemplated or permitted by this Agreement) as though such
representations were made on and as of said date. Any information provided by
Northwest pursuant to Section 5.7 hereof as a supplement to the Northwest
-----------
Disclosure Schedule shall be true and correct in all material respects as of the
date such information is supplied to Corry.
28
<PAGE>
9.2. Performance and Compliance. Northwest shall have performed
--------------------------
or complied in all material respects with all covenants and agreements required
by this Agreement to be performed and satisfied by it on or prior to the Closing
Date.
9.3. Corporate Proceedings. All action required to be taken by,
---------------------
or on the part of Bancorp MHC and Northwest to authorize the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated by this Agreement shall have been duly and validly taken by Bancorp
MHC and Northwest.
9.4. Certificate of Northwest Officers. Northwest shall have
---------------------------------
furnished to Corry a certificate, signed by its Chief Executive Officer and its
Chief Financial Officer and dated the Closing Date, to the effect, based on
their best knowledge, that the conditions described in Sections 9.1, 9.2 and 9.3
-------------------------
of this Agreement have been satisfied.
ARTICLE X.
CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES
In addition to the provisions of Articles VIII and IX hereof, the
obligations of Northwest and Corry to cause the transactions contemplated herein
to be consummated, shall be subject to the satisfaction or written waiver by
both Northwest and Corry of the following conditions:
10.1. Governmental Approvals. The parties hereto shall have
----------------------
received all necessary approvals of the transactions contemplated by the
Agreements from governmental agencies and authorities, including, without
limitation, those of the Department, the FDIC, the DOJ, the Federal Reserve
Board and each of such approvals shall remain in full force and effect and all
statutory waiting periods in connection therewith shall have expired at the
Closing Date and such approvals and the transactions contemplated thereby shall
not have been contested by any federal or state governmental authority nor by
any other third party by formal proceeding. Provided, however, that no approval
or consent referred to in this Section 10.1 shall be deemed to have been
received by Northwest if it shall include any term, condition or requirement
that, individually or in the aggregate, (i) would result in a material adverse
effect on the results, business, operations, assets, or financial condition of
Northwest on a consolidated basis, or (ii) would reduce the economic or business
benefits of the transactions contemplated by this Agreement to Northwest in so
material a manner that Northwest, in its reasonable judgment, would not have
entered into this Agreement; provided further, that no condition or requirement
which does no more than subject Corry, Northwest or Bancorp MHC to legal
requirements generally applicable to entities and transactions of the same type
as a matter of law shall be deemed to affect materially the economic benefits of
the transactions contemplated by this Agreement. Northwest shall notify Corry in
writing of its intention to terminate this Agreement pursuant to Section 11.1(b)
---------------
hereof as a result of the receipt by Northwest of any such term, condition
29
<PAGE>
or requirement within five business days of the written receipt of such term,
condition or requirement, or the condition set forth in the second sentence of
this Section 10.1 shall be deemed waived by Northwest.
------------
10.2. No Injunctions or Restraints. No suit, action or proceeding
----------------------------
shall be pending or overtly threatened before any court or other governmental
agency by the federal or any state government in which it is sought to restrain
or prohibit the consummation of the Merger and no temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect.
10.3. Corry Depositor Approval. To the extent required by the FDIC
------------------------
or the Department, this Agreement shall have been duly approved by the requisite
affirmative vote of the depositors of Corry as contemplated by Section 7.1
hereof.
10.4 Corporate Proceedings. The obligations of the parties to
---------------------
this Agreement required to be performed at or prior to the Closing Date shall
have been duly performed and complied with in all material respects. All action
required to be taken by, or on the part of, the parties to this Agreement to
authorize the execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, shall have been duly and
validly taken by the parties hereto.
ARTICLE XI.
TERMINATION
11.1. Reasons for Termination. This Agreement may be terminated
-----------------------
and the Merger abandoned at any time before the Closing Date, whether before or
after the approval or adoption of the Agreements by the depositors of Corry:
(a) By mutual written consent of the Board of Directors of Northwest
and the Board of Trustees of Corry;
(b) By written notice from Northwest to Corry if:
(i) any condition set forth in Article VIII of this Agreement
------------
shall have become impossible to substantially satisfy at any time or has not
been substantially satisfied or waived in writing; or
(ii) any condition set forth in Article X of this Agreement
---------
shall have become impossible to substantially satisfy at any time or has not
been substantially satisfied or waived in writing, provided, however, Northwest
shall not have the right to terminate this Agreement pursuant to this Section
-------
11.1(b)(ii) if any condition imposed by Section 10.1 hereof
- ----------- ------------
30
<PAGE>
was not met due to the failure of Northwest to perform or observe the covenants
and agreements set forth in this Agreement; or
(iii) any warranty or representation as set forth in Article
-------
IV hereof made by Corry shall be discovered to be or to have become untrue or
- --
incorrect in any material respect, or where any statement in a representation or
warranty expressly includes a standard of materiality, such statement shall be
discovered to be or to have become untrue or incorrect in any respect taking
into consideration the standard of materiality contained therein, in either case
where any such breach has not been cured within thirty (30) days following
receipt by Corry of written notice of such discovery;
(iv) Corry shall have breached one or more provisions of this
Agreement in any material respect considering all such breaches in the
aggregate, where such breach has not been cured within thirty (30) days
following receipt by Corry of written notice of such breach; or
(c) By written notice from Corry to Northwest, which has been approved
by the Board of Trustees of Corry, if
(i) any condition set forth in Article IX of this Agreement has
----------
not been substantially satisfied or waived in writing; or
(ii) any condition set forth in Article X of this Agreement has
---------
not been substantially satisfied or waived in writing; provided, however, Corry
shall not have the right to terminate this Agreement pursuant to this Section
-------
11.1(c)(ii) if any condition imposed by Section 10.1 hereof was not met due to
- ----------- ------------
the failure of Corry to perform or observe the covenants and agreements set
forth in this Agreement; or
(iii) any warranty or representation as set forth in Article
-------
III hereof made by Northwest shall be discovered to be or to have become untrue
- ---
or incorrect in any material respect, or where any statement in a representation
or warranty expressly includes a standard of materiality, such statement shall
be discovered to be or to have become untrue or incorrect in any respect taking
into consideration the standard of materiality contained therein, in either case
where any such breach has not been cured within thirty (30) days following
receipt by Northwest of written notice of such discovery; or
(iv) Northwest shall have breached one or more provisions of this
Agreement in any material respect considering all such breaches in the
aggregate, where such breach has not been cured within thirty (30) days
following receipt by Northwest of written notice of such breach.
(d) By the Board of Directors of Northwest if the Board of Trustees of
Corry shall not recommend, or shall withdraw or modify in a manner adverse to
Northwest, its recommendation to the Corry depositors to approve this Agreement.
31
<PAGE>
(e) By the Board of Directors of Northwest or Board of Trustees of
Corry at any time if the depositors of Corry have not approved this Agreement by
the requisite affirmative vote (if such depositors approval is required by the
FDIC or the Department).
(f) By the Board of Directors of Northwest or Board of Trustees of
Corry if the Merger has not been consummated on or before March 31, 1998.
11.2. Effect of Termination. In the event of termination of this
---------------------
Agreement by either Corry or Northwest as provided in Section 11.1, this
------------
Agreement shall forthwith become void, and there shall be no liability or
obligation on the part of Northwest or Corry or their respective officers,
trustees or directors except with respect to Sections 5.7, 7.5 and 12.2 hereof.
--------------------------
ARTICLE XII.
MISCELLANEOUS
12.1. Nonsurvival of Representations, Warranties and Agreements.
---------------------------------------------------------
None of the representations, warranties, covenants and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time, except for the covenants and agreements which by
their terms are contemplated to be performed after the Effective Time.
12.2. Expenses. Except as otherwise provided herein, all expenses
--------
incurred by Northwest and Corry in connection with or related to the
authorization, preparation and execution of the Agreement, the solicitation of
any required depositor approvals and all other matters related to the closing of
the transactions contemplated thereby, including, without limitation of the
generality of the foregoing, all fees and expenses of agents, representatives,
counsel and accountants employed by either such party or its Affiliates, shall
be borne solely and entirely by the party that has incurred the same.
12.3. Waivers: Amendments. At any time prior to the Closing Date,
-------------------
either Northwest, by action taken by its Board of Directors, or any committee or
officers thereunto authorized, or Corry, by action taken by its Board of
Trustees, or any committee or officers thereunto authorized, may waive the
performance of any of the obligations of the other or waive compliance by the
other with any of the covenants or conditions contained in the Agreement or
agree to the amendment or modification of the Agreement by an agreement in
writing executed in the same manner as the Agreement.
12.4. Assignment: Parties in Interest. The Agreement shall be
-------------------------------
binding upon and inure solely to the benefit of the parties hereto and their
respective successors and assigns, but shall not be assigned by the parties
hereto, by operation of law or otherwise, without the prior written consent of
the other parties. Nothing in the Agreement, express or implied, is intended to
confer upon any third party any rights or remedies of any nature whatsoever
under or by reason of the Agreement.
32
<PAGE>
12.5. Entire Agreement. This Agreement supersedes any other
----------------
agreement, whether written or oral, that may have been made or entered into by
Corry or Northwest or by any officer or officers of such parties relating to the
acquisition of the business or assets of Corry by Northwest. The aforementioned
agreements constitute the entire agreement by the respective parties, and there
are no agreements or commitments except as set forth herein and therein.
12.6. Captions and Counterparts. The captions in this Agreement
-------------------------
are for convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Agreement. This
Agreement may be executed in several counterparts, each of which shall
constitute one and the same instrument.
12.7. Certain Definitions. For purposes of this Agreement, the
-------------------
term:
(a) "Affiliate" means a person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, another person;
(b) "Material Adverse Effect" shall mean any material adverse change
in or material adverse effect on the business, operations, assets, or financial
condition of the parties to this Agreement.
(c) "Corry Reports" shall mean all reports, registrations, and
statements, together with any amendments required to be made with respect
thereto that were and are required to be filed with the Department or the FDIC,
or any other applicable savings institution regulatory authority.
(d) "to the knowledge of Northwest" or "to the best knowledge of
Northwest" shall mean the actual knowledge of any member of the Board of
Directors or of any senior officer of Northwest.
(e) "to the knowledge of Corry" or "to the best knowledge of Corry"
shall mean the actual knowledge of any member of the Board of Trustees or of any
senior officer of Corry.
12.8. Governing Law. The Agreement shall be construed and
-------------
interpreted in accordance with the laws of the Commonwealth of Pennsylvania,
without regard to the conflicts of laws rules.
12.9. Notices. All notices given hereunder shall be in writing and
-------
shall be mailed by first class mail, postage prepaid, or sent by facsimile
transmission or by nationally recognized overnight delivery service, addressed
as follows:
33
<PAGE>
(a) If to Northwest to:
Northwest Savings Bank
Liberty Street at Second Avenue
Warren, Pennsylvania 16365
Attention: Mr. John O. Hanna, President
Facsimile No. (814) 726-1980
With A Copy To:
Luse Lehman Gorman Pomerenk & Schick
5335 Wisconsin Avenue, N.W.
Suite 400
Washington, D.C. 20015
Attention: Eric Luse, Esq.
Kenneth R. Lehman, Esq.
Facsimile No. (202) 362-2902
(b) If to Corry to:
Corry Savings Bank
150 North Centre
Corry, Pennsylvania 16407
Attention: Mr. David L. Nichols, President
Facsimile No. (814) 664-2159
with a copy to:
David S. Posner, Esq.
Goldfarb, Posner, Beck, DeHaven & Drewitz
26 South Main Street, Suite 200
Washington, PA 15301
Facsimile No. (412) 225-9123
34
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ATTEST: NORTHWEST SAVINGS BANK
By: /s/ Gregory C. LaRocca By: /s/ John O. Hanna
---------------------------- ---------------------------
Gregory C. LaRocca, Senior John O. Hanna, President
Vice President and Secretary
ATTEST: NORTHWEST BANCORP, M.H.C.
By: /s/ Gregory C. LaRocca By: /s/ John O. Hanna
---------------------------- ---------------------------
Gregory C. LaRocca, Senior John O. Hanna, President
Vice President and Secretary
ATTEST: CORRY SAVINGS BANK
By: /s/ David A. Johnson By: /s/ David L. Nichols
---------------------------- ---------------------------
David A. Johnson, Director David L. Nichols, President
and Secretary
35
<PAGE>
EXHIBIT 2.2
<PAGE>
CORRY SAVINGS BANK
PLAN OF MERGER
AND STOCK ISSUANCE PLAN
<PAGE>
TABLE OF CONTENTS
1. Introduction
2. Definitions
3. The Merger
4. Conditions to Implementation of the Merger and Stock Offering
5. Special Meeting of Depositors
6. Rights of Corry Depositors in the Event of a Conversion Transaction
7. Timing of the Merger and Stock Offering
8. Procedure
9. The Stock Offering
10. Resales of Stock by Management Persons
11. Stock Certificates
12. Restriction on Financing Stock Purchases
13. Stock Benefit Plans
14. Post-Merger Filing and Market Making
15. Employment and Other Severance Agreements
16. Payment of Dividends and Repurchase of Stock
17. Interpretation
18. Merger and Stock Offering Expenses
19. Amendment or Termination of the Plan
<PAGE>
1. INTRODUCTION
The Board of Trustees of Corry Savings Bank, a Pennsylvania-chartered
mutual savings bank headquartered in Corry, Pennsylvania ("Corry"), has adopted
this Plan of Merger and Stock Issuance Plan (the "Plan") pursuant to which Corry
proposes to merge (the "Merger") into Northwest Savings Bank, a Pennsylvania
chartered stock savings bank headquartered in Warren, Pennsylvania
("Northwest"), that operates in the mutual holding company structure. Northwest
Bancorp, MHC, a Pennsylvania-chartered mutual holding company (the "Mutual
Holding Company") owns approximately 69% of the common stock of Northwest, and
the remainder is owned by its employees, officers and directors, and by the
public. Northwest is currently forming Northwest Bancorp, Inc., a Pennsylvania
stock holding company (the "Stock Holding Company"), approximately 69% of the
common stock of which will be owned by the Mutual Holding Company upon the
exchange of each share of Northwest common stock for a share of Stock Holding
Company common stock (the "Northwest Reorganization"). Upon completion of the
Northwest Reorganization, Northwest will be a wholly-owned subsidiary of the
Stock Holding Company. In the event the Northwest Reorganization is not
completed prior to the Effective Date of the Merger, any reference to (i) the
Common Stock of the Stock Holding Company, (ii) the Stock Offering by the Stock
Holding Company, or (iii) action to be taken by the Stock Holding Company or its
management, shall, if applicable, be deemed to refer to Northwest rather than
the Stock Holding Company.
The Merger will offer customers of Corry the broader range of resources,
products and services that are offered by Northwest. As part of the Merger,
deposits of Corry will become deposits of Northwest equivalent in amount,
interest rate and terms to the deposits in Corry immediately prior to the
Effective Date. All deposits of Northwest following the Merger will continue to
be insured up to the legal maximum by the FDIC. The terms and conditions of the
Merger are set forth in the Agreement and Plan of Merger between Northwest and
Corry, dated as of the date of this Plan (the "Agreement of Merger").
Concurrently with the Merger, the Stock Holding Company intends to offer for
sale in the Stock Offering shares of Stock Holding Company common stock (the
"Common Stock") in an amount equal to up to 49% of the market value of Corry, as
determined by the Independent Valuation. The Common Stock will be offered on a
priority basis in a Subscription Offering. Any shares of Common Stock for which
subscriptions have not been accepted in the Subscription Offering may be issued
to the Mutual Holding Company and/or offered for sale in the Community Offering
under the terms set forth herein. The Plan Merger and the Stock Offering are
subject to the approval of the Pennsylvania Department of Banking and to a
receipt of a notice of non-objection from the FDIC. The Plan must be approved
by the affirmative vote of a majority of the total votes eligible to be cast by
depositors of Corry as of the Voting Record Date. Approval of this Plan by the
Voting Depositors shall also constitute approval of the Agreement of Merger by
such depositors.
2. DEFINITIONS
As used in this Plan, the terms set forth below have the following
meanings:
ACTING IN CONCERT: (i) Knowing participation in a joint activity or
interdependent conscious parallel action towards a common goal whether or not
pursuant to an express agreement, or (ii) a combination or pooling of voting or
other interests in the securities of an issuer for a common purpose pursuant to
any contract, understanding, relationship, agreement or other arrangement,
whether written or otherwise. A person or company which acts in concert with
another person or company ("other party") shall also be deemed to be acting in
concert with any person or company who is also acting in concert with that other
party, except that any Tax-Qualified Employee Plan will not be deemed to be
acting in concert with its trustee or a person who serves in a similar capacity
solely for the purpose of determining whether stock held by the trustee and
stock held by the Tax-Qualified Employee Plan will be aggregated. Persons or
<PAGE>
companies mutually engaged in such activities are referred to herein as a "Group
Acting in Concert." The determination of whether a group is acting in concert
shall be made solely by the Board of Directors of Northwest or officers
delegated by such Board and may be based on any evidence upon which the Board or
such delegatee chooses to rely.
ADJUSTED PRICE PER SHARE: The actual purchase price per share of Common
Stock purchased by Eligible Account Holders in the Subscription Offering, which
shall equal 90% of the Unadjusted Price Per Share.
AFFILIATE: The term "Affiliate" of, or a person "affiliated with" a
specified person, means any person that directly or indirectly through one or
more intermediaries controls, is controlled by, or is under common control with,
the person specified.
AGREEMENT OF MERGER: The Agreement and Plan of Merger between Northwest and
Corry, and any amendments thereto, which sets forth the terms and conditions of
the Merger.
ASSOCIATE: The term "Associate," when used to indicate a relationship with
any Person, means: (i) any corporation or organization (other than Corry,
Northwest, the Mutual Holding Company, the Stock Holding Company, or a majority-
owned subsidiary of any thereof) of which such Person is a director, officer or
partner or is, directly or indirectly, the beneficial owner of 10% or more of
any class of equity securities; (ii) any trust or other estate in which such
Person has a substantial beneficial interest or as to which such Person serves
as trustee or in a similar fiduciary capacity; (iii) any relative or spouse of
such Person or any relative of such spouse, who has the same home as such Person
or who is a director or officer of Corry, the Mutual Holding Company or the
Stock Holding Company or any subsidiary or any affiliate thereof; and (iv) any
person acting in concert with any of the persons or entities specified in
clauses (i) through (iii) above; provided, however, that any Tax-Qualified or
Non-Tax-Qualified Employee Plan shall not be deemed to be an Associate of any
director/trustee or officer of Corry, the Mutual Holding Company, the Stock
Holding Company or Northwest, to the extent provided in Sections 9-10 hereof.
When used to refer to a Person other than an officer or director of Corry, Corry
in its sole discretion may determine the Persons that are Associates of other
persons.
BHCA: The Bank Holding Company Act of 1956, as amended.
COMMON STOCK: Common stock, par value $.10 per share, issued by the Stock
Holding Company pursuant to, and in consideration of, the Merger or, in the
event the Northwest Reorganization has not been consummated prior to the
Effective Date, common stock issuable by Northwest in connection with the
Merger.
COMMUNITY: The local community of Corry, Pennsylvania, the boundaries of
which shall be determined by the Corry Board of Trustees in its sole discretion.
In such determination, the Board may use zip codes, township or county
boundaries, or any other delineation the Board deems appropriate.
COMMUNITY OFFERING: The offering to certain members of the general public
of any shares of Common Stock for which subscriptions have not been accepted in
the Subscription Offering, which Community Offering shall be at the sole
discretion of the Board of Directors of the Stock Holding Company and which may
be effected pursuant to Section 9 of this Plan. The Community Offering may
include a syndicated community offering or a public offering.
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CORRY: Corry Savings Bank in its pre-Merger mutual form.
DEPARTMENT: The Pennsylvania Department of Banking, and any successor
thereto.
ELIGIBLE DEPOSITOR: Any person with a Qualifying Deposit on the Eligibility
Record Date, the Supplemental Eligibility Record Date or the Voting Record Date.
EFFECTIVE DATE: The date upon which all necessary approvals have been
obtained to consummate the Merger, and the closing of the Merger occurs.
ELIGIBLE ACCOUNT HOLDER: Any person holding a Qualifying Deposit on the
Eligibility Record Date.
ELIGIBILITY RECORD DATE: March 31, 1996, the date for determining who
qualifies as an Eligible Account Holder.
EMPLOYEE: A person who is an employee of Corry at the Effective Date of
the Merger.
ESOP: Northwest's tax-qualified employee stock ownership plan.
ESTIMATED SUBSCRIPTION PRICE: The price per share submitted with orders
for shares of Common Stock in the Subscription Offering and the Community
Offering, if any, which is to be established by the Stock Holding Company at an
amount that the Stock Holding Company estimates will equal or exceed the
Unadjusted Price Per Share. In making this determination, the Stock Holding
Company shall consider the price of the Stock Holding Company common stock as
reported on the Nasdaq National Market System and, after consultation with its
financial advisors, such market and financial conditions that the Stock Holding
Company deems relevant.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
FDIC: The Federal Deposit Insurance Corporation.
FEDERAL RESERVE BOARD: The Board of Governors of the Federal Reserve
System.
INDEPENDENT APPRAISER: An investment banking or financial consulting firm
experienced and expert in the area of savings institution appraisals selected by
Northwest , subject to the approval of Corry.
INDEPENDENT VALUATION: The estimated pro forma market value of Corry, as
determined by the Independent Appraiser.
MANAGEMENT PERSON: Any Officer or Trustee of Corry or any Affiliate of
Corry, and any person acting in concert with any such Officer or Trustee.
MARKET MAKER: A dealer (i.e., any person who engages directly or
indirectly as agent, broker, or principal in the business of offering, buying,
selling or otherwise dealing or trading in securities issued by another person)
who, with respect to a particular security, (1) regularly publishes bona fide
competitive
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bid and offer quotations on request, and (2) is ready, willing and able to
effect transactions in reasonable quantities at the dealer's quoted prices with
other brokers or dealers.
MERGER: The merger of Corry into Northwest with Northwest as the resulting
savings bank, pursuant to the Agreement of Merger and this Plan.
MINORITY STOCKHOLDER: Any owner of the Stock Holding Company's common
stock, other than the Mutual Holding Company.
MINORITY STOCK OFFERING: One or more offerings of less than 50% in the
aggregate of the outstanding common stock of the Stock Holding Company to
persons other than the Mutual Holding Company.
MUTUAL HOLDING COMPANY: Northwest Bancorp, Inc., the mutual holding company
that owns the majority of the common stock of Northwest, and, which will own the
majority of the common stock of the Stock Holding Company upon completion of the
Northwest Reorganization.
OFFICER: An executive officer of Corry, including the Chief Executive
Officer, President, Senior Vice Presidents in charge of principal business
functions, Secretary, Treasurer and any other person performing similar
functions.
OFFERING RANGE: The aggregate Estimated Subscription Price of the Common
Stock to be sold in the Stock Offering based on the Independent Valuation,
expressed as a range which may vary within 15% above or 15% below the midpoint
of such range. The Offering Range will be based on the Valuation Range, and
will represent up to 49% of the Common Stock issued in the Stock Offering.
ORDER FORM: Any form together with attached cover letter sent to any
Eligible Depositors or to any other Person, containing among other things a
description of the alternatives available to such Person under the Plan and by
which any such Person may make elections regarding subscriptions for Common
Stock in the Subscription Offering or Community Offering.
OTHER DEPOSITORS: Any person holding a Qualifying Deposit at the close of
business on the Voting Record Date who is not an Eligible Account Holder or
Supplemental Eligible Account Holder, or Tax-Qualified Employee Plan.
PERSON: An individual, corporation, partnership, association, joint-stock
company, trust (including Individual Retirement Accounts and KEOGH Accounts),
unincorporated organization, government entity or political subdivision thereof
or any other entity.
PLAN: This Plan of Merger and Stock Issuance Plan.
PROSPECTUS: The document included in the Registration Statement setting
forth a description of Corry, Northwest, the Stock Holding Company, this Plan
and the process of issuing Common Stock.
PROXY STATEMENT: The document used by Corry to solicit proxies from Voting
Depositors.
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QUALIFYING DEPOSIT: The balance of each deposit account of $50 or more in
Corry as of the close of business on the Eligibility Record Date or as of the
close of business on the Supplemental Eligibility Record Date, as applicable.
Deposit accounts with total deposit balances of less than $50.00 shall not
constitute a Qualifying Deposit.
REGISTRATION STATEMENT: The statement pursuant to which the securities
issued in the Merger are registered with the Securities and Exchange Commission
under the Securities Act of 1933.
RESIDENT: Any Person who occupies a dwelling in the Community, has a
present intention to remain in the Community for a period of time, and manifests
the genuineness of that intent by establishing an ongoing physical presence
within the Community together with an indication that such presence within the
Community is something other than merely transitory in nature. The Stock
Holding Company may use deposit or loan records or such other evidence provided
to it to make a determination whether a person is a resident. In all cases,
however, such a determination shall be at the sole discretion of the Stock
Holding Company.
SAIF: The Savings Association Insurance Fund, which is a division of the
FDIC.
SEC: The Securities and Exchange Commission.
SPECIAL MEETING: The Special Meeting of depositors of Corry called for the
purpose of voting on the Plan.
STOCK HOLDING COMPANY: Northwest Bancorp, Inc., the Pennsylvania
corporation that will own 100% of the common stock of Northwest, and which will
issue Common Stock in the Stock Offering.
STOCK OFFERING: The offering of Common Stock of the Stock Holding Company
pursuant to this Plan to persons other than the Mutual Holding Company in a
Subscription Offering and a Community Offering, if any, in an aggregate amount
equal to up to 49% of the Independent Valuation.
SUBSCRIPTION OFFERING: The offering of Common Stock of the Stock Holding
Company for subscription and purchase by Eligible Depositors pursuant to Section
9 of this Plan.
SUBSIDIARY: A company that is controlled by another company, either
directly or indirectly through one or more subsidiaries.
SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDER: Any Person holding a Qualifying
Deposit on the Supplemental Eligibility Record Date, who is not an Eligible
Account Holder, a Tax-Qualified Employee Plan or an Officer or Trustee of Corry.
SUPPLEMENTAL ELIGIBILITY RECORD DATE: The date for determining who
qualifies as a Supplemental Eligible Account Holder, which shall be the last day
of the calendar quarter preceding Department approval of the Plan.
TAX-QUALIFIED EMPLOYEE PLAN: Any defined benefit plan or defined
contribution plan (including any employee stock ownership plan, stock bonus
plan, profit-sharing plan, or other plan) of Northwest, the Stock Holding
Company, or the Mutual Holding Company, or any of their affiliates, which, with
its
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related trusts, meets the requirements to be qualified under Section 401 of the
Internal Revenue Code. The term Non-Tax-Qualified Employee Stock Benefit Plan
means any defined benefit plan or defined contribution plan which is not so
qualified.
TRUSTEE(S): Any member of the Board of Trustees of Corry.
UNADJUSTED PRICE PER SHARE: The actual purchase price per share of Common
Stock to be paid by all subscribers or other purchasers in the Stock Offering,
other than Eligible Account Holders, which shall be the lesser of (i) the
average of the highest closing bid price per share of Stock Holding Company
common stock as reported on the Nasdaq National Market System at the close of
trading on each of the twenty trading days ending on the day prior to the
Effective Date, and (ii) the highest closing bid price per share of Stock
Holding Company common stock as reported on the Nasdaq National Market System on
the last trading day prior to the Effective Date.
VALUATION RANGE: The range of value for the Common Stock established
pursuant to Section 9 hereof.
VOTING DEPOSITOR: Those depositors of Corry as of the Voting Record Date.
Voting Depositors shall have one vote for every $100 of deposit accounts or
fraction thereof as of the Voting Record Date, up to a maximum of 1,000 votes.
VOTING RECORD DATE: The date established by Corry for determining which
depositors of Corry are entitled to vote on the Plan.
VOTING STOCK:
(1) Voting Stock means common stock or preferred stock, or similar
interests if the shares by statute, charter or in any manner, entitle the
holder:
(i) To vote for or to select directors of the Stock Holding Company;
and
(ii) To vote on or to direct the conduct of the operations or other
significant policies of the Stock Holding Company.
(2) Notwithstanding anything in paragraph (1) above, preferred stock is not
"Voting Stock" if:
(i) Voting rights associated with the preferred stock are limited
solely to the type customarily provided by statute with regard to
matters that would significantly and adversely affect the rights or
preferences of the preferred stock, such as the issuance of
additional amounts or classes of senior securities, the
modification of the terms of the preferred stock, the dissolution
of the Stock Holding Company, or the payment of dividends by the
Stock Holding Company when preferred dividends are in arrears;
(ii) The preferred stock represents an essentially passive investment or
financing device and does not otherwise provide the holder with
control over the issuer; and
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(iii) The preferred stock does not at the time entitle the holder, by
statute, charter, or otherwise, to select or to vote for the
selection of directors of the Stock Holding Company.
(3) Notwithstanding anything in paragraphs (1) and (2) above, "Voting
Stock" shall be deemed to include preferred stock and other securities that,
upon transfer or otherwise, are convertible into Voting Stock or exercisable to
acquire Voting Stock where the holder of the stock, convertible security or
right to acquire Voting Stock has the preponderant economic risk in the
underlying Voting Stock. Securities immediately convertible into Voting Stock
at the option of the holder without payment of additional consideration shall be
deemed to constitute the Voting Stock into which they are convertible; other
convertible securities and rights to acquire Voting Stock shall not be deemed to
vest the holder with the preponderant economic risk in the underlying Voting
Stock if the holder has paid less than 50% of the consideration required to
directly acquire the Voting Stock and has no other economic interest in the
underlying Voting Stock.
3. THE MERGER
A. GENERAL
Pursuant to the Agreement of Merger, the Bank will merge into Northwest
with Northwest as the surviving or resulting institution. The stock Charter and
Bylaws of Northwest, which are available upon request at Corry's main office,
will be the Charter and Bylaws of the resulting institution. Northwest will
continue to have, succeed to, and be responsible for all the rights, liabilities
and obligations of Corry. The terms and conditions of the Merger are set forth
in the Agreement of Merger. Northwest is currently a subsidiary of Northwest
Bancorp, MHC, a Pennsylvania-chartered mutual holding company, which owns
approximately 69% of the outstanding stock of Northwest. Upon completion of the
Northwest Reorganization, the Mutual Holding Company will own approximately 69%
of the outstanding common stock of the Stock Holding Company, which will own
100% of the outstanding common stock of Northwest. In the event the Northwest
Reorganization is not completed prior to the Effective Date of the Merger, any
reference to Common Stock of, or the Stock Offering by, the Stock Holding
Company shall mean common stock of Northwest and a Stock Offering by Northwest.
Any Person who purchases common stock of Northwest in the Stock Offering shall
have the right to exchange such Person's Northwest shares for shares of Common
Stock of the Stock Holding Company upon completion of the Northwest
Reorganization on the same terms and conditions as all Stockholders of
Northwest.
Each holder of a deposit account in Corry currently has liquidation rights
with respect to Corry and the right to subscribe for common stock in the event
Corry issues common stock or converts to stock form. Each holder of a deposit
account in Northwest has liquidation rights in the Mutual Holding Company and
Northwest, including the right to subscribe for additional shares of common
stock of the Stock Holding Company in the event of a future Minority Stock
Offering or the conversion of the Mutual Holding Company from mutual-to-stock
form, for so long as such person maintains a deposit account in Northwest. These
liquidation and subscription rights will be granted to the depositors of Corry
who continue to maintain one or more deposit accounts in Northwest after the
Merger. Accordingly, the Merger will not extinguish the liquidation and
subscription rights of the depositors of Corry.
Pursuant to the Plan, the Stock Holding Company will issue additional
shares of Common Stock equal in aggregate value to up to 49% of the Independent
Valuation of Corry as of the Effective Date. The
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remaining mutual interest in Corry which is not being offered for sale or sold
in the Stock Offering will be transferred to the Mutual Holding Company as set
forth in Section 9B of this Plan.
B. EFFECT ON DEPOSIT ACCOUNTS AND BORROWINGS
Each deposit account in Corry on the Effective Date of the Merger will
become a deposit account in the same amount and upon equivalent terms and
conditions as such deposit account in Corry prior to the Effective Date, and
will continue to be federally insured up to the legal maximum by the FDIC in the
same manner as the deposit account existed in Corry immediately prior to the
Merger, except that the holder of each such deposit account will have
liquidation rights with respect to the Mutual Holding Company and Northwest
rather than with Corry for so long as such holder maintains a deposit account
with Northwest. Any new deposit accounts established with Northwest after the
Merger will create liquidation rights in the Mutual Holding Company and
Northwest and will be federally insured up to the legal maximum by the FDIC.
Each depositor of Corry will have the right to subscribe for shares of common
stock of the Stock Holding Company in any future Minority Stock Offering, and
will have the right to subscribe for common stock of the Stock Holding Company
in any future mutual-to-stock conversion of the Mutual Holding Company. Upon
consummation of the Merger, all loans and other borrowings from Corry shall
retain the same status with Northwest after the Merger as they had with Corry
immediately prior to the Merger.
4. CONDITIONS TO IMPLEMENTATION OF THE MERGER AND STOCK OFFERING
Consummation of the Merger is expressly conditioned upon the following:
A. The execution and approval of the Agreement of Merger by Northwest and
Corry.
B. Submission of the Plan to the Voting Depositors for approval pursuant
to a Proxy Statement and form of proxy cleared in advance by the FDIC
and the Department, and such Plan is approved by a majority of the
total votes of the Voting Depositors eligible to be cast at a meeting
held at the call of the Trustees.
C. The filing of a conversion notice and merger application with the FDIC
and the Department, and the approval of the Merger by the FDIC and the
Department, the issuance of a notice of non-objection to the conversion
notice by the FDIC, and the approval of the Plan by the Department.
D. The filing of a Registration Statement with the SEC with respect to the
Common Stock to be offered pursuant to the Plan.
E. The approval of the Stock Offering by the Federal Reserve Board, to the
extent such approval is necessary.
F. The receipt by Corry of a legal opinion or an opinion from an
independent accounting firm, or a ruling from the Internal Revenue
Service, substantially to the effect that the Merger will not result in
certain adverse federal or state income tax consequences to Eligible
Depositors, or to Northwest or Corry, as contemplated by the Agreement
of Merger, including, but not limited to, an opinion that the Merger
will not result in a taxable reorganization of Corry under the Internal
Revenue Code of 1986, as amended.
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5. SPECIAL MEETING OF DEPOSITORS
At least 20 days but not more than 45 days prior to the Special Meeting,
Corry shall distribute proxy solicitation materials to all Voting Depositors as
of the Voting Record Date. The proxy solicitation materials shall include the
Proxy Statement, and other documents authorized for use by the regulatory
authorities. A copy of the Plan will be made available upon request. Pursuant
to the Regulations, an affirmative vote of not less than a majority of the total
outstanding votes of the Voting Depositors is required for approval of the Plan.
Voting may be in person or by proxy. Each Voting Depositor shall have one vote
for every $100 of deposit accounts or fraction thereof on the Voting Record
Date, up to a maximum of 1,000 votes.
6. RIGHTS OF CORRY DEPOSITORS IN THE EVENT OF A CONVERSION TRANSACTION
The Mutual Holding Company is authorized by Pennsylvania and federal law
and regulations to convert to stock form (a "Conversion Transaction"). There
can be no assurance when, if ever, a Conversion Transaction would occur. If the
Conversion Transaction does not occur, the Mutual Holding Company will always
own a majority of the Voting Stock of the Stock Holding Company.
In a Conversion Transaction, the Mutual Holding Company would merge with
and into Northwest or the Stock Holding Company, with Northwest or the Stock
Holding Company (as the case may be) as the resulting entity, and the depositors
of Northwest (including depositors who were depositors of Corry prior to the
Merger) would receive the right to subscribe for all of the shares of common
stock of the Stock Holding Company sold for cash in the Conversion Transaction,
according to terms established by the Board of Directors of the Stock Holding
Company and the Board of Trustees of the Mutual Holding Company. Depositors of
Corry who remain as depositors of Northwest shall have the right to subscribe
for shares in the Conversion Transaction on the same terms as other depositors
of Northwest. If the right to subscribe for shares sold in the Conversion
Transaction shall be determined, in part, based on deposit balances at a
particular date that precedes the date of the completion of the Merger, then
deposits held at Corry shall be considered as though such deposits were held at
Northwest.
At the sole discretion of the Board of Trustees of the Mutual Holding
Company and the Board of Directors of the Stock Holding Company, a Conversion
Transaction may be effected in any other manner necessary to qualify the
Conversion Transaction as a tax-free merger under applicable federal and state
tax laws. A Conversion Transaction would require the approval of applicable
federal regulators, and would be presented to a vote of the depositors of
Northwest. Northwest has no current intention to conduct a Conversion
Transaction.
7. TIMING OF THE MERGER AND STOCK OFFERING
Corry intends to consummate the Merger and Stock Offering as soon as
feasible following the receipt of all approvals referred to in Section 4 of the
Plan. Subject to any required approvals of the FDIC, the Department and the
Federal Reserve Board, the Stock Holding Company intends to commence the Stock
Offering concurrently with the proxy solicitation of Voting Depositors. The
Stock Holding Company may close the Stock Offering before the Special Meeting,
provided that the offer and sale of the Common Stock shall be conditioned upon
approval of the Plan by the Voting Depositors at the Special Meeting. Corry's
proxy solicitation materials may permit Voting Depositors to return to Corry by
a reasonable date certain a postage paid card or other written communication
requesting receipt of the Prospectus if the
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Prospectus is not mailed concurrently with the proxy solicitation materials. The
Stock Offering shall be conducted in compliance with any securities offering
regulations of the FDIC and the Department. Neither Corry nor Northwest will
finance or loan funds to any person to purchase Common Stock in the Stock
Offering.
8. PROCEDURE
The Common Stock shall be offered for sale in the Subscription Offering to
Eligible Account Holders, Supplemental Eligible Account Holders, Other
Depositors and Trustees, Officers and Employees of Corry. Any shares of Common
Stock for which subscriptions have not been accepted in the Subscription
Offering may be issued to the Mutual Holding Company and/or offered for sale in
the Community Offering as provided in Section 9 hereof. The Subscription
Offering must be commenced in time to complete the Stock Offering within the
time period specified in this Section 8. The period for the Subscription and
Community Offering shall not be less than 20 days nor more than 45 days,
determined in accordance with Section 9 hereof, unless extended by Corry and the
Stock Holding Company.
Completion of the sale of all shares of Common Stock not sold in the
Subscription and Community Offerings is required within 45 days after
termination of the Subscription Offering, subject to extension of such 45-day
period by Corry and the Stock Holding Company with the approval of the FDIC and
the Department. The Boards of Directors of Corry and the Stock Holding Company
may seek one or more extensions of such 45-day period if necessary to complete
the sale of all shares of Common Stock. In connection with any such extension,
subscribers shall be permitted to increase, decrease or rescind their
subscriptions to the extent required by the regulations in approving the
extensions.
Concurrently with completion of the sale of the Common Stock, Corry will be
merged with and into Northwest pursuant to the Agreement of Merger which is
available upon request to Voting Depositors at the main office of Corry.
9. THE STOCK OFFERING
A. PURCHASE PRICE OF SHARES SOLD
As part of the Stock Offering, Corry shall obtain an independent valuation
of its pro forma market value assuming its merger with and into Northwest (the
"Independent Valuation"), which shall also be expressed as a range (the
"Valuation Range"). The minimum of the Valuation Range shall be 15% less than
the midpoint of the Valuation Range, and the maximum of the Valuation Range
shall be 15% greater than the midpoint of the Valuation Range. The aggregate
Estimated Subscription Purchase price of the Common Stock to be sold in the
Stock Offering will be equal to a percentage of the Independent Valuation, and
will range within 15% above or 15% below the midpoint of such range (the
"Offering Range"). The Independent Valuation will be updated immediately prior
to the consummation of the Stock Offering without a resolicitation of
subscribers, unless the change in the Independent Valuation is greater than 15%
above or below the midpoint of the Valuation Range. An increase in the
Valuation Range will result in a corresponding increase in the Offering Range.
The Independent Valuation shall be made by an investment banking or financial
consulting firm experienced and expert in the area of savings institution
appraisals (the "Independent Appraiser") selected for such purpose by Northwest,
subject to the approval of Corry. The number of shares of Common Stock issued
by Northwest in connection with the Merger shall be equal to the Independent
Valuation (as updated) divided by the lower of (i) the average of the
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highest closing bid price per share of the Stock Holding Company common stock as
reported on the Nasdaq National Market System at the close of trading of each of
the twenty trading days prior to the Effective Date and (ii) the highest closing
bid price per share of Stock Holding Company common stock as reported on the
Nasdaq National Market System on the last trading day prior to the Effective
Date (the "Unadjusted Price Per Share").
Individual subscriptions will be accepted at the Estimated Subscription
Price. The actual purchase price to be paid for the Common Stock by subscribers
will be determined at the time of final pricing, which will be promptly after
completion of the Subscription Offering and Community Offering, if any. The
actual purchase price to be paid for the Common Stock by the subscribers other
than Eligible Account Holders in the Subscription and Community Offerings will
be the Unadjusted Price Per Share. The actual purchase price to be paid by
Eligible Account Holders in the Subscription Offering will be equal to 90% of
the Unadjusted Price Per Share (the "Adjusted Price Per Share").
The number of shares to be sold to each subscriber will be determined
promptly after the final pricing. The Stock Holding Company, in consultation
with Corry, will divide the total dollar amount of each Person's order by the
Unadjusted Price Per Share or the Adjusted Price Per Share, as applicable, to
determine the total number of shares to be issued to each subscriber, with a
cash refund for any difference in lieu of the issuance of fractional or
additional shares. Corry and the Stock Holding Company reserve the right to
permit subscribers to elect to receive additional whole shares in such process.
Notwithstanding the foregoing, no sale of Common Stock may be consummated
unless, prior to such consummation, the Independent Appraiser confirms to Corry,
the Stock Holding Company and the Department that, to the best knowledge of the
Independent Appraiser, nothing of a material nature has occurred which, taking
into account all relevant factors, would cause the Independent Appraiser to
conclude that the aggregate value of the Common Stock sold in the Stock Offering
and the Common Stock issued to the Mutual Holding Company is incompatible with
its estimate of the aggregate consolidated pro forma market value of Corry as an
entity merged with and into Northwest. If such confirmation is not received,
Corry and the Stock Holding Company may cancel the Subscription and Community
Offerings, extend the Stock Offering, establish a new Valuation Range, extend,
reopen or hold new Subscription and Community Offerings or take such other
action as the Commissioner may permit.
B. NUMBER OF SHARES ISSUED AND SOLD
The number of shares of Common Stock of the Stock Holding Company that
shall be issued in connection with the Merger shall be equal to the Independent
Valuation (as updated at the consummation of the Merger and Stock Offering)
divided by the Unadjusted Price Per Share. The number of shares of Stock
Holding Company Common Stock that shall be offered for sale in the Stock
Offering shall be determined at the time of the commencement of the Stock
Offering, and shall be equal to a fixed percentage which shall be no less than
30% and no more than 49% of the shares of Common Stock issued in connection with
the Merger. Any shares of Common Stock for which subscriptions have not been
accepted in the Subscription Offering may be issued to the Mutual Holding
Company and/or offered for sale in the Community Offering. The aggregate amount
of outstanding common stock of the Stock Holding Company that may be owned or
controlled by persons other than the Mutual Holding Company parent at the close
of the Stock Offering shall be less than 50% of the Stock Holding Company's
total outstanding Common Stock.
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This Plan shall not preclude Northwest or the Stock Holding Company from
adopting any stock issuance plan for a future Minority Stock Offering by
Northwest or the Stock Holding Company.
C. METHOD OF OFFERING SHARES AND RIGHTS TO PURCHASE STOCK
In descending order of priority, the opportunity to purchase Common Stock
shall be given in the Subscription Offering to: (1) Eligible Account Holders;
(2) Tax-Qualified Employee Plans; (3) Supplemental Eligible Account Holders; (4)
Other Depositors; and (5) Trustees, Officers and Employees pursuant to
priorities established by the Board of Trustees. Any shares of Common Stock for
which subscriptions have not been accepted in the Subscription Offering may, at
the discretion of the Stock Holding Company, be issued to the Mutual Holding
Company and/or offered for sale in the Community Offering.
The minimum purchase by any Person shall be 25 shares. The Stock Holding
Company may use its discretion in determining whether prospective purchasers are
"residents," "associates," or "acting in concert" as defined in the Plan, and in
interpreting any and all other provisions of the Plan. All such determinations
are in the sole discretion of the Stock Holding Company, and may be based on
whatever evidence the Stock Holding Company chooses to use in making any such
determination. In addition to the priorities set forth below, the Board of
Directors may establish other priorities for the purchase of Common Stock,
subject to the approval of the FDIC and the Department.
D. SUBSCRIPTION OFFERING
The priorities for the purchase of shares in the Stock Offering are as
follows:
PRIORITY 1: ELIGIBLE ACCOUNT HOLDERS. Each Eligible Account Holder shall
be given the opportunity to purchase up to 5% of the shares of Common Stock
offered in the Stock Offering; provided that the Stock Holding Company may, in
its sole discretion and without further notice to or solicitation of subscribers
or other prospective purchasers, decrease such maximum purchase limitation to 1%
of the maximum number of shares offered in the Stock Offering, subject to the
overall purchase limitations set forth in Section 9(F). If there are
insufficient shares available to satisfy all subscriptions of Eligible Account
Holders, shares will be allocated to Eligible Account Holders so as to permit
each such subscribing Eligible Account Holder to purchase a number of shares
sufficient to make his total allocation equal to the lesser of 100 shares or the
number of shares subscribed for. Thereafter, unallocated shares will be
allocated pro rata to remaining subscribing Eligible Account Holders whose
subscriptions remain unfilled in the same proportion that each such subscriber's
Qualifying Deposit bears to the total amount of Qualifying Deposits of all
subscribing Eligible Account Holders whose subscriptions remain unfilled. To
ensure proper allocation of stock, each Eligible Account Holder must list on his
subscription order form all accounts in which he had an ownership interest as of
the Eligibility Record Date.
PRIORITY 2: TAX-QUALIFIED EMPLOYEE PLANS. The Tax-Qualified Employee
Plans shall be given the opportunity to purchase in the aggregate up to 10% of
the Common Stock issued in the Stock Offering. In the event of an
oversubscription in the Stock Offering, subscriptions for shares by the Tax-
Qualified Employee Plans may be satisfied, in whole or in part, out of
authorized but unissued shares of the Stock Holding Company subject to the
maximum purchase limitations applicable to such plans set forth in Section 9(F),
or may be satisfied, in whole or in part, through open market purchases by the
Tax-Qualified Employee Plans subsequent to the closing of the Stock Offering.
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<PAGE>
PRIORITY 3: SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS. To the extent there
are sufficient shares remaining after satisfaction of subscriptions by Eligible
Account Holders and the Tax-Qualified Employee Plans, each Supplemental Eligible
Account Holder shall have the opportunity to purchase up to 5% of the shares of
Common Stock offered in the Stock Offering, provided that the Stock Holding
Company may, in its sole discretion and without further notice to or
solicitation of subscribers or other prospective purchasers, decrease such
maximum purchase limitation to 1% of the maximum number of shares offered in the
Stock Offering subject to the overall purchase limitations set forth in Section
9(F). In the event Supplemental Eligible Account Holders subscribe for a number
of shares which, when added to the shares subscribed for by Eligible Account
Holders and the Tax-Qualified Employee Plans is in excess of the total number of
shares offered in the Stock Offering, the shares of Common Stock will be
allocated among subscribing Supplemental Eligible Account Holders so as to
permit each subscribing Supplemental Eligible Account Holder to purchase a
number of shares sufficient to make his total allocation equal to the lesser of
100 shares or the number of shares subscribed for. Thereafter, unallocated
shares will be allocated to each subscribing Supplemental Eligible Account
Holder whose subscription remains unfilled in the same proportion that such
subscriber's Qualifying Deposits on the Supplemental Eligibility Record Date
bear to the total amount of Qualifying Deposits of all subscribing Supplemental
Eligible Account Holders whose subscriptions remain unfilled.
PRIORITY 4: OTHER DEPOSITORS. To the extent that there are sufficient
shares remaining after satisfaction of subscriptions by Eligible Account
Holders, the Tax-Qualified Employee Plans and Supplemental Eligible Account
Holders, each Other Depositor shall have the opportunity to purchase up to 5% of
the shares of Common Stock offered in the Stock Offering, provided that the
Stock Holding Company may, in its sole discretion and without further notice to
or solicitation of subscribers or other prospective purchasers, decrease such
maximum purchase limitation to 1% of the maximum number of shares offered in the
Stock Offering, subject to the overall purchase limitations set forth in Section
9(F). In the event Other Depositors subscribe for a number of shares which, when
added to the shares subscribed for by the Eligible Account Holders, Tax-
Qualified Employee Plans and Supplemental Eligible Account Holders is in excess
of the total number of shares offered in the Stock Offering, the subscriptions
of such Other Depositors will be allocated among subscribing Other Depositors on
a pro rata basis based on the size of such Other Depositors' subscription
orders.
PRIORITY 5: EMPLOYEES, OFFICERS AND TRUSTEES. To the extent that shares
remain available for purchase after satisfaction of all subscriptions of the
Eligible Account Holders, Tax-Qualified Employee Plans, Supplemental Eligible
Account Holders and Other Depositors, each Employee, Officer and Trustee of
Corry shall have the opportunity to purchase up to 5% of the shares of Common
Stock offered in the Stock Offering; provided that the Stock Holding Company
may, in its sole discretion, and without further notice to or solicitation of
subscribers or other prospective purchasers, decrease such maximum purchase
limitation to 1% of the maximum number of shares offered in the Stock Offering,
subject to the overall purchase limitations set forth in Section 9(F). In the
event that Employees, Officers and Trustees, subscribe for a number of shares,
which, when added to the shares subscribed for by Eligible Account Holders, Tax-
Qualified Employee Plans, Supplemental Eligible Account Holders, and Other
Depositors is in excess of the total shares offered in the Stock Offering, the
subscriptions of such persons will be allocated among Employees, Officers and
Trustees on a pro rata basis based on the size of such person's subscription
orders.
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<PAGE>
E. COMMUNITY OFFERING/PUBLIC OFFERING
Any shares of Common Stock for which subscriptions have not been accepted
in the Subscription Offering may, at the sole discretion of the Board of
Directors of the Stock Holding Company, be issued to the Mutual Holding Company
or offered for sale in a Community Offering. The Community Offering, should it
be conducted, will involve an offering of all unsubscribed shares directly to
the general public with a preference to those natural persons residing in the
Community. The Community Offering, if any, shall be for a period of not more
than 45 days unless extended by the Stock Holding Company and Corry, and shall
commence concurrently with, during or promptly after the Subscription Offering.
The Stock Holding Company may use an investment banking firm or marketing agent
on a best efforts basis to sell the shares in the Community Offering. The Stock
Holding Company and/or Corry may pay a commission or other fee to such
investment banking firm or marketing agent as to the shares sold by such firm or
firms in the Community Offering and may also reimburse such firm or firms for
expenses incurred in connection with the sale. The Community Offering may
include a syndicated community offering managed by such investment banking firm
or firms. The Common Stock will be offered and sold in the Community Offering,
in accordance with the FDIC and Department regulations, so as to achieve the
widest distribution of the Common Stock. No person, by himself or herself, or
with an Associate or group of Persons acting in concert, may subscribe for or
purchase more than 5% of the shares of Common Stock offered in the Community
Offering. Further, the Bank may limit total subscriptions under this Section
9(E) so as to assure that the number of shares available for the public offering
may be up to a specified percentage of the number of shares of Common Stock.
In the event of an oversubscription for shares that the Stock Holding
Company determines to sell in the Community Offering, shares may be allocated
first to cover orders of natural persons residing in the Community, then to
cover the orders of any other Person subscribing for shares in the Community
Offering so that each such person may receive 1,000 shares, and thereafter, on a
pro rata basis to such persons based on the amount of their respective
subscriptions.
Corry and the Stock Holding Company, in their sole discretion, may reject
subscriptions, in whole or in part, received from any Person under this Section
9(E).
If for any reason a public offering of unsubscribed shares of Common Stock
cannot be effected and shares remain unsold after the Subscription Offering and
the Community Offering, if any, and the Board of Directors of the Stock Holding
Company determines not to issue such shares to the Mutual Holding Company, the
Boards of Directors of the Stock Holding Company and the Board of Trustees of
Corry will seek to make other arrangements for the sale of the remaining shares.
Such other arrangements will be subject to the approval of the FDIC and the
Department and to compliance with applicable securities laws.
F. ADDITIONAL LIMITATIONS ON PURCHASES OF COMMON STOCK
The following additional limitations shall be imposed on all purchases of
Common Stock in the Stock Offering:
1. The aggregate amount of outstanding common stock of the Stock Holding
Company owned or controlled by persons other than Mutual Holding Company
at the close of the Stock Offering shall be less than 50% of the Stock
Holding Company's total outstanding common stock.
14
<PAGE>
2. No Person, Associate thereof, or group of persons acting in concert, may
purchase more than 5% of the shares of Common Stock offered in the Stock
Offering, except that: (i) Tax-Qualified Employee Plans may purchase in
the aggregate up to 10% of the shares offered in the Stock Offering; and
(ii) for purposes of this Section 9(F) shares to be held by any Tax-
Qualified Employee Plan and attributable to a person shall not be
aggregated with other shares purchased directly by or otherwise
attributable to such person.
3. The aggregate amount of Common Stock acquired in the Stock Offering by
all Management Persons and their Associates, exclusive of any stock
acquired by such persons in the secondary market, shall not exceed 35%
of the shares of Common Stock offered for sale in the Stock Offering. In
calculating the number of shares held by Management Persons and their
Associates under this paragraph or under the provisions of paragraph D
of this section, shares held by any Tax-Qualified Employee Plan of the
Bank that are attributable to such persons shall not be counted.
4. The Board of Directors of the Stock Holding Company after consulting
with the Board of Trustees of Corry may, in its sole discretion,
increase the maximum purchase limitation set forth in Section 9(F)
hereof to up to 9.9%, provided that orders for Common Stock in excess of
5% of the number of shares of Common Stock offered in the Stock Offering
shall not in the aggregate exceed 10% of the total shares of Common
Stock offered in the Stock Offering (except that this limitation shall
not apply to purchases by Tax-Qualified Employee Plans). If such 5%
limitation is increased, subscribers for the maximum amount will be, and
certain other large subscribers in the sole discretion of the Stock
Holding Company and Corry may be, given the opportunity to increase
their subscriptions up to the then applicable limit. Requests to
purchase additional shares of Common Stock under this provision will be
determined by the Board of Directors of the Stock Holding Company, in
its sole discretion.
5. Notwithstanding any other provision of this Plan, no person shall be
entitled to purchase any Common Stock to the extent such purchase would
be illegal under any federal law or state law or regulation or would
violate regulations or policies of the National Association of
Securities Dealers, Inc., particularly those regarding free riding and
withholding. The Stock Holding Company and/or its agents may ask for an
acceptable legal opinion from any purchaser as to the legality of such
purchase and may refuse to honor any purchase order if such opinion is
not timely furnished.
6. The Board of Directors of the Stock Holding Company has the right in its
sole discretion to reject any order submitted by a person whose
representations the Board of Directors believes to be false or who it
otherwise believes, either alone or acting in concert with others, is
violating, circumventing, or intends to violate, evade or circumvent the
terms and conditions of this Plan.
G. MAILING OF OFFERING MATERIALS AND COLLATION OF SUBSCRIPTIONS
After approval of the Plan by the Department and the Registration Statement
is declared effective by the SEC (of which the Prospectus is a part), the Stock
Holding Company may distribute the Prospectus and Order Forms for the purchase
of shares in accordance with the terms of the Plan.
15
<PAGE>
The recipient of an Order Form will be permitted not less than 20 days nor
more than 45 days from the date of mailing, unless extended, to properly
complete, execute and return the Order Form to the Stock Holding Company. Self-
addressed, postage-paid return envelopes will accompany these forms when mailed.
The Stock Holding Company will collate the returned executed Order Forms upon
completion of the subscription period. Failure of any eligible subscriber to
return a properly completed and executed Order Form within the prescribed time
limits shall be deemed a waiver and a release by such person of any rights to
purchase shares hereunder.
H. METHOD OF PAYMENT
Payment for all shares of Common Stock may be made in cash, if delivered in
person, by check or money order, or if the subscriber has a deposit account at
Corry, by withdrawal authorization from said deposit account for the purchase
amount on or prior to the expiration date specified on the Order Form, unless
such date is extended by Corry and the Stock Holding Company. Unless payment is
to be made by withdrawal from a deposit account at Corry, it shall accompany a
properly completed and executed Order Form. Corry shall pay interest at not
less than its then current passbook rate on all amounts paid in cash or by check
or money order to purchase shares of Common Stock in the Subscription and
Community Offerings from the date payment is received until the Stock Offering
is completed or terminated.
If a subscriber has authorized payment by a withdrawal from his or her
deposit account, the funds will remain in the Subscriber's deposit account and
will continue to earn interest at the applicable rate for such deposit account,
but may not be withdrawn by the subscriber until the Stock Offering is completed
or terminated, whichever is earlier. The withdrawal will be given effect only
concurrently with the sale of all shares of the Common Stock to be sold in the
Stock Offering and only to the extent necessary to satisfy the subscription at a
price equal to the Actual Purchase Price of the stock sold in the Stock
Offering. Corry will allow withdrawal of funds from certificate accounts without
the assessment of early withdrawal penalties. In the case of early withdrawal
of only a portion of such account, the certificate evidencing such account shall
be canceled if the remaining balance of the account is less than the applicable
minimum balance requirement. In that event, the remaining balance will earn
interest at the applicable passbook rate. This waiver of the early withdrawal
penalty is applicable only to withdrawals made in connection with the purchase
of Common Stock under the Plan.
I. MANNER OF EXERCISING SUBSCRIPTION RIGHTS THROUGH ORDER FORMS
As soon as practicable after the Prospectus has been declared effective by
the SEC, Order Forms will be distributed to all Depositors at their last known
addresses appearing on the records of Corry for the purpose of subscribing to
shares of Common Stock in the Stock Offering and will be made available for use
by those Persons entitled to purchase in the Community Offering. Notwithstanding
the foregoing, the Stock Holding Company may elect to send Order Forms only to
those Persons who request them after such notice as is approved by the
Department and is adequate to apprise such persons of the pendency of the
Subscription Offering has been given to Eligible Depositors.
Each Order Form will be preceded or accompanied by the Prospectus
describing Corry, Northwest, the Stock Holding Company, the Mutual Holding
Company, the Merger, the Common Stock and the Subscription and Community
Offerings. Each Order Form will contain, among other things, the following:
16
<PAGE>
1. A specified date by which all Order Forms must be received, which date
shall be not less than 20, nor more than 45 days, following the date on
which the Order Forms are mailed, and which date will constitute the
termination of the Subscription Offering;
2. The Estimated Subscription Price for shares of Common Stock to be sold
in the Subscription and Community Offerings;
3. A description of the minimum and maximum number of shares of Common
Stock which may be subscribed for pursuant to the exercise of
subscription rights or otherwise purchased in the Community Offering;
4. Instructions as to how the recipient of the Order Form is to indicate
thereon the number of shares of Common Stock for which such person
elects to subscribe and the available alternative methods of payment
therefor;
5. An acknowledgment that the recipient of the Order Form has received a
final copy of the Prospectus prior to execution of the Order Form;
6. A statement to the effect that all subscription rights are
nontransferable, will be void at the end of the Subscription Offering,
and can only be exercised by delivering to the Stock Holding Company
within the subscription period such properly completed and executed
Order Form, together with cash (if delivered in person), check or money
order in the full amount of the purchase price as specified in the Order
Form for the shares of Common Stock for which the recipient elects to
subscribe in the Subscription Offering (or by authorizing on the Order
Form that Corry withdraw said amount from the subscriber's deposit
account at Corry, as applicable); and
7. A statement to the effect that the executed Order Form, once received,
may not be modified or amended by the subscriber without the consent of
Corry and the Stock Holding Company.
Notwithstanding the above, Corry and the Stock Holding Company, after
consultation with Corry, reserves the right in its sole discretion to accept or
reject orders received on photocopied or facsimiled order forms.
J. UNDELIVERED, DEFECTIVE OR LATE ORDER FORMS; INSUFFICIENT PAYMENT
If an Order Form (a) is not delivered and is returned by the United States
Postal Service (or Corry or the Stock Holding Company is unable to locate the
addressee); (b) is not received by Corry or the Stock Holding Company, or is
received by Corry or the Stock Holding Company after termination of the date
specified thereon; (c) is defectively completed or executed; (d) is not
accompanied by the total required payment for the shares of Common Stock
subscribed for (including cases in which the subscriber's savings account is
insufficient to cover the amount of such required payment); or (e) is not mailed
pursuant to a "no mail" order placed in effect, the Subscription Rights of the
person to whom such rights have been granted will not be honored and will be
treated as though such person failed to return the completed Order Form within
the time period specified therein. The Stock Holding Company may, but will not
be required to, waive any irregularity relating to any Order Form or require the
submission of a corrected Order Form
17
<PAGE>
or the remittance of full payment for subscribed shares by such date as the
Stock Holding Company may specify. Subscription orders, once tendered, cannot be
revoked. The Stock Holding Company's interpretation of the terms and conditions
of this Plan and acceptability of the Order Forms will be final, subject to the
authority of the Department.
10. RESALES OF STOCK BY MANAGEMENT PERSONS
Common Stock purchased by Management Persons and their Associates in the
Stock Offering may not be resold for a period of at least one year following the
date of purchase, except in the case of death of the Management Person or
Associate.
11. STOCK CERTIFICATES
Each stock certificate shall bear a legend giving appropriate notice of the
restrictions set forth in Section 10 above. Appropriate instructions shall be
issued to the Stock Holding Company's transfer agent with respect to applicable
restrictions on transfers of such stock. Any shares of stock issued as a stock
dividend, stock split or otherwise with respect to such restricted stock, shall
be subject to the same restrictions as apply to the restricted stock.
12. RESTRICTION ON FINANCING STOCK PURCHASES
The Stock Holding Company will not offer or sell any of the Common Stock
proposed to be issued to any person whose purchase would be financed by funds
loaned to the person by the Stock Holding Company, Corry or any of their
Affiliates.
13. STOCK BENEFIT PLANS
The Board of Directors of the Stock Holding Company and/or Northwest
intends to adopt one or more stock benefit plans for the benefit of Employees,
Officers and Trustees of Corry, and have such persons participate in existing
stock benefit plans of Northwest or Corry, including an ESOP, stock award plans
and stock option plans, which will be authorized to purchase Common Stock and
grant options for Common Stock. However, only the Tax-Qualified Employee Plans
will be permitted to purchase Common Stock in the Stock Offering subject to the
purchase priorities set forth in this Plan. Subject to the approval of the FDIC
and the Department, the Board of Directors of Northwest (or the Stock Holding
Company) intends to authorize the ESOP and any other Tax-Qualified Employee
Plans to purchase in the aggregate up to 10% of the Common Stock issued in the
Stock Offering. Northwest or the Stock Holding Company may make scheduled
discretionary contributions to one or more Tax-Qualified Employee Plans to
purchase Common Stock issued in the Stock Offering or to purchase issued and
outstanding shares of Common Stock or authorized but unissued shares of Common
Stock subsequent to the completion of the Stock Offering, provided such
contributions do not cause the Northwest to fail to meet any of its regulatory
capital requirements. Any awards of Common Stock or stock options will be
subject to prior stockholder approval.
18
<PAGE>
14. POST-MERGER FILING AND MARKET MAKING
The Stock Holding Company shall register the Common Stock with the SEC
pursuant to the Exchange Act, and shall undertake not to deregister such Common
Stock for a period of three years thereafter.
15. EMPLOYMENT AND OTHER SEVERANCE AGREEMENTS
Following or contemporaneously with the Merger, Northwest and/or the Stock
Holding Company may enter into or assume any existing employment and/or
severance arrangements with one or more existing officers of Corry. It is
anticipated that any such agreements entered into or assumed by Northwest and
the Stock Holding Company will be for terms not exceeding three years and that
such contracts may provide for annual renewals of the term of the contracts,
subject to approval by the Board of Directors or Northwest.
16. PAYMENT OF DIVIDENDS AND REPURCHASE OF STOCK
The Stock Holding Company may not declare or pay a cash dividend on, or
repurchase any of, its Common Stock if the effect thereof would cause the
regulatory capital of Northwest to be reduced below the amount required FDIC
and/or Department rules and regulations. Otherwise, the Stock Holding Company
may declare dividends or make other capital distributions in accordance with
applicable laws and regulations. Subject to any required approvals of the
Federal Reserve Board and the Department, the Mutual Holding Company may waive
its right to receive dividends declared by the Stock Holding Company.
17. INTERPRETATION
All interpretations of this Plan and application of its provisions to
particular circumstances by a majority of the Board of Trustees of Corry and the
Board of Directors of the Stock Holding Company shall be final, subject to the
authority of the FDIC and the Department.
18. MERGER AND STOCK OFFERING EXPENSES
Corry will use its best efforts to assure that the expenses incurred by
Corry and the Stock Holding Company in effecting the Merger and the Stock
Offering will be reasonable.
19. AMENDMENT OR TERMINATION OF THE PLAN
If necessary or desirable, the terms of the Plan may be substantially
amended by a majority vote of Corry's Board of Trustees and by a majority vote
of the Stock Holding Company's Board of Directors as a result of comments from
regulatory authorities or otherwise, at any time prior to submission of the Plan
and proxy materials to the Voting Depositors. At any time after submission of
the Plan and proxy materials to the Voting Depositors, the terms of the Plan
that relate to the Merger may be amended by a majority vote of the Board of
Trustees and by a majority vote of the Stock Holding Company's Board of
Directors only with the concurrence of the FDIC and the Department. Terms of
the Plan relating to the Stock Offering including, without limitation, Sections
8 through 17, may be amended by a majority vote of Corry's Board of Trustees and
by a majority vote of the Stock Holding Company's Board of Directors
19
<PAGE>
as a result of comments from regulatory authorities or otherwise at any time
prior to the approval of the Plan by the FDIC and the Department and at any time
thereafter with the concurrence of the FDIC and the Department. The Plan may be
terminated by a majority vote of the Board of Trustees of Corry and a majority
vote of the Board of Directors of the Stock Holding Company at any time prior to
the earlier of approval of the Plan by the FDIC and the Department and the date
of the Special Meeting, and may be terminated by a majority vote of the Board of
Trustees of Corry and a majority vote of the Board of Directors of the Stock
Holding Company at any time thereafter with the concurrence of the FDIC and the
Department. In its discretion, the Board of Trustees of Corry and the Board of
Directors of the Stock Holding Company may modify or terminate the Plan upon the
order of the regulatory authorities without a resolicitation of proxies or
another meeting of the Voting Depositors; however, any material amendment of the
terms of the Plan that relate to the Merger which occur after the Special
Meeting shall require a resolicitation of Voting Depositors.
The Plan shall be terminated if the Effective Date does not occur within 24
months from the date upon which the Voting Depositors of Corry approve the Plan,
and may not be extended by Corry, the Stock Holding Company, Northwest, the FDIC
or the Department.
Dated: June 19, 1997.
20
<PAGE>
EXHIBIT 5.1
<PAGE>
[LETTERHEAD OF LUSE LEHMAN GORMAN POMERENK & SCHICK, P.C.]
(202) 274-2009
June 10, 1998
Board of Directors
Northwest Bancorp, Inc.
Liberty and Second Streets
Warren, Pennsylvania 16365
RE: NORTHWEST BANCORP, INC.
COMMON STOCK PAR VALUE $.10 PER SHARE
-------------------------------------
Ladies and Gentlemen:
You have requested the opinion of this firm as to certain matters in
connection with the offer and sale (the "Offering") of Northwest Bancorp, Inc.
(the "Company") Common Stock, par value $.10 per share (the "Common Stock"). We
have reviewed the Company's Articles of Incorporation, Registration Statement on
Form S-3 (the "Form S-3"), as well as applicable statutes and regulations
governing the Company and the offer and sale of the Common Stock.
We are of the opinion that upon the declaration of effectiveness of the
Form S-3, the Common Stock, when sold, will be legally issued, fully paid and
non-assessable.
This Opinion has been prepared for the use of the Company in connection
with the Form S-3. We hereby consent to our firm being referenced under the
caption "Legal and Tax Matters."
Very truly yours,
/s/ Luse Lehman Gorman Pomerenk & Schick
-----------------------------------------------------------
Luse Lehman Gorman Pomerenk & Schick
A Professional Corporation
<PAGE>
EXHIBIT 23.1
<PAGE>
[KPMG PEAT MARWICK LLP LETTERHEAD APPEARS HERE]
Independent Auditors' Consent
The Board of Directors
Northwest Bancorp, Inc.
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of Northwest Bancorp, Inc., of our report dated August 15, 1997,
with respect to the consolidated financial statements of Northwest Savings Bank
and subsidiaries as of June 30, 1997 and 1996, and for each of the years in the
three-year period ended June 30, 1997, and to the reference to our firm under
the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
- -------------------------
Pittsburgh, Pennsylvania
June 12, 1998
<PAGE>
EXHIBIT 99.1
<PAGE>
CORRY SAVINGS BANK
150 NORTH CENTRE STREET
CORRY, PENNSYLVANIA 16407
(814) 664-4681
---------------
NOTICE OF SPECIAL MEETING OF DEPOSITORS
----------------
Notice is hereby given that a Special Meeting of the Depositors of Corry
Savings Bank ("Corry Savings") will be held at Corry Savings' office, 150 North
Centre Street, Corry, Pennsylvania, on _______, 1998 at 4:00 p.m., local time,
to consider and vote upon:
1. The Plan of Merger and Stock Issuance Plan (the "Plan") pursuant
to which Corry Savings will merge with and into Northwest Savings Bank, a
Pennsylvania-chartered stock savings bank headquartered in Warren,
Pennsylvania ("Northwest") and Northwest Bancorp, Inc., a Pennsylvania
stock holding company of Northwest (the "Company") will offer for sale in a
stock offering shares of its common stock ("Common Stock") in an amount
equal to approximately 30.5% of the market value of Corry Savings (as
determined by an independent valuation) on a priority basis to certain of
the Corry Savings' depositors and certain others; and
Such other business as may properly come before the meeting and any
adjournment(s) thereof. Management is not aware of any other matters that may
come before the Special Meeting.
The record date for determining Corry Savings' depositors entitled to
notice of, and to vote at, the Special Meeting, and at any adjournment(s)
thereof, is ________, 1998 (the "Voting Record Date"). Only holders of Corry
Savings withdrawable accounts as of the Voting Record Date ("Voting Depositors")
will be entitled to vote at the Special Meeting or at any adjournment(s)
thereof. A deposit account creates a single depositor relationship for voting
purposes, even though more than one person has an interest in such deposit
account. Each Voting Depositor who is a holder of any Corry Savings
withdrawable account has one vote for each $100, or fraction thereof, on deposit
in such account. No Voting Depositor will be entitled to cast more than 1,000
votes. Approval of the Plan requires the affirmative vote, cast in person or by
proxy, of a majority of the total votes entitled to be cast by Voting Depositors
at the Special Meeting.
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ACCOMPANYING PROXY CARD(S) IN
THE ENCLOSED POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE, WHETHER OR NOT YOU PLAN
TO ATTEND THE SPECIAL MEETING. THIS WILL ASSURE YOUR REPRESENTATION AT THE
SPECIAL MEETING AND MAY AVOID THE COST OF ADDITIONAL COMMUNICATIONS. THIS WILL
NOT PREVENT YOU FROM VOTING IN PERSON IF YOU ATTEND THE SPECIAL MEETING. YOU
MAY REVOKE YOUR WRITTEN PROXY BY A WRITTEN INSTRUMENT DELIVERED TO THE SECRETARY
OF CORRY SAVINGS AT ANY TIME PRIOR TO OR AT THE SPECIAL MEETING. PROPERLY
COMPLETED PROXIES WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS INDICATED
THEREON, OR IF NO INSTRUCTIONS ARE INDICATED, FOR APPROVAL OF THE PLAN.
<PAGE>
YOUR PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF CORRY SAVINGS. THE BOARD OF
TRUSTEES UNANIMOUSLY RECOMMENDS THAT VOTING DEPOSITORS VOTE "FOR" APPROVAL OF
THE PLAN. FAILURE TO RETURN A PROXY OR TO VOTE IN PERSON WILL HAVE THE SAME
EFFECT AS A VOTE AGAINST THE PLAN. VOTING IN FAVOR OF THE PLAN WILL NOT
OBLIGATE ANY PERSON TO PURCHASE COMMON STOCK, AND VOTING AGAINST THE PLAN OR A
FAILURE TO VOTE WILL NOT PRECLUDE ANY SUCH PURCHASE.
YOUR PROXY IS SOLICITED FOR THE SPECIAL MEETING ONLY, AND ANY ADJOURNMENT(S)
THEREOF, AND WILL NOT BE USED FOR ANY OTHER MEETING. THIS PROXY STATEMENT DOES
NOT CONSTITUTE AN OFFER TO SELL, OR SOLICITATION OF AN OFFER TO BUY, COMMON
STOCK. SUCH COMMON STOCK TO BE OFFERED TO VOTING DEPOSITORS AND CERTAIN OTHERS
IS BEING OFFERED ONLY BY MEANS OF THE ACCOMPANYING PROSPECTUS.
BY THE BOARD OF TRUSTEES
____________________, 1998
2
<PAGE>
CORRY SAVINGS BANK
150 NORTH CENTRE STREET
CORRY, PENNSYLVANIA 16407
PROXY STATEMENT
SPECIAL MEETING OF DEPOSITORS
TO BE HELD ON _______, 1998
INTRODUCTION
PURPOSE OF THE SPECIAL MEETING
This Proxy Statement is being furnished to holders of withdrawable accounts
as of ________, 1998 (the "Voting Record Date," and such depositors "Voting
Depositors") of Corry Savings Bank ("Corry Savings") in connection with the
solicitation by the Board of Trustees of Corry Savings of proxies to be voted at
a special meeting of depositors (the "Special Meeting") to be held on _______,
1998 at 4:00 p.m. local time, at Corry Savings' office, 150 North Centre Street,
Corry, Pennsylvania. The purpose of the Special Meeting is to consider and vote
upon the Plan of Merger and Stock Issuance Plan (the "Plan"), which Plan is
available at Corry Savings' office, and which may be obtained upon written or
telephonic request to the Secretary of Corry Savings at the address given above.
If the Plan is approved, Corry Savings will merge (the "Merger") with and into
Northwest Savings Bank, a Pennsylvania-chartered stock savings bank
headquartered in Warren, Pennsylvania ("Northwest"). In connection with the
Merger, Northwest Bancorp, Inc. (the "Company"), a Pennsylvania corporation that
owns 100% of the common stock of Northwest, will offer for sale shares of its
common stock ("Common Stock") in an amount equal to approximately 30.5% of the
market value of Corry Savings, as determined by an independent valuation, on a
priority basis in a subscription offering (the "Subscription Offering") to
Eligible Account Holders, Supplemental Eligible Account Holders, Other
Depositors, Employees, Officers and Trustees (as such terms are defined in the
accompanying Prospectus), and Northwest's ESOP. If shares of Common Stock
remain available after the Subscription Offering, such shares may be offered to
certain members of the general public in a community offering (the "Community
Offering" and together with the Subscription Offering, the "Offering") and/or
may be issued to Northwest Bancorp, MHC, a Pennsylvania-chartered mutual holding
company (the "Mutual Company") which currently owns approximately 69.5% of the
Common Stock of the Company. No person is obligated to purchase shares of
Common Stock in the Offering.
Only Voting Depositors will be entitled to vote at the Special Meeting and
any adjournment(s) thereof. The Plan must be approved by the affirmative vote,
cast in person or by proxy, of a majority of the total votes entitled to be cast
by Voting Depositors at the Special Meeting. The Voting Depositors also may be
asked to consider such other business as may properly come before the Special
Meeting (although management knows of no other business to be presented).
THE BOARD OF TRUSTEES OF CORRY SAVINGS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"FOR" APPROVAL OF THE PLAN.
YOUR PROXY, IN THE FORM ENCLOSED, IS SOLICITED BY THE BOARD OF TRUSTEES OF
CORRY SAVINGS FOR USE AT THE SPECIAL MEETING OF DEPOSITORS, AND ANY
ADJOURNMENT(S) OF THAT MEETING, FOR THE PURPOSES SET FORTH IN THE FOREGOING
NOTICE OF SPECIAL MEETING; THIS PROXY WILL NOT BE USED AT ANY OTHER MEETING.
THE CORRY SAVINGS BOARD OF TRUSTEES URGES YOU TO VOTE "FOR" THE PLAN.
FAILURE TO RETURN YOUR PROXY OR TO VOTE AT THE MEETING IN PERSON WILL HAVE THE
EFFECT OF A NEGATIVE VOTE.
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<PAGE>
VOTING IN FAVOR OF THE PLAN WILL NOT OBLIGATE ANY PERSON TO PURCHASE COMMON
STOCK, AND VOTING AGAINST OR FAILING TO VOTE ON THE PLAN WILL NOT PRECLUDE ANY
SUCH PURCHASE.
VOTING RIGHTS, VOTING OF PROXIES AND VOTE REQUIRED FOR APPROVAL
Corry Savings' Board of Trustees has fixed the close of business on
________, 1998 as the Voting Record Date for the purpose of determining the
Voting Depositors entitled to notice of, and to vote at, the Special Meeting.
All holders of withdrawable accounts at Corry Savings as of the Voting Record
Date are considered Voting Depositors and are entitled to notice of, and to vote
at, the Special Meeting. Each such Voting Depositor will be entitled to one
vote for each $100 or fraction thereof, on deposit in the Voting Depositor's
account on the Voting Record Date. However, no Voting Depositor may cast more
than 1,000 votes. An account will create a single depositor relationship for
voting purposes. Only one proxy may be cast for any such account, even though
more than one person has an interest in such an account.
Any questions as to the eligibility of a Voting Depositor to vote or the
number of votes allocated to each Voting Depositor, or on any other matters
relating to the voting, will be finally resolved by the Secretary of Corry
Savings at or prior to the Special Meeting, and the records of Corry Savings
will control.
Voting Depositors of Corry Savings who are eligible to vote may vote at the
Special Meeting or any adjournments thereof in person or by proxy. A Voting
Depositor granting a proxy has the power to revoke it at any time prior to the
vote at the Special Meeting by submitting another duly executed proxy prior to
the Special Meeting or by filing written instructions revoking the earlier proxy
with the Secretary of Corry Savings. A proxy also may be revoked by appearing
at the Special Meeting and voting in person.
All properly completed proxies will be voted in accordance with the
instructions indicated thereon. If no instructions are indicated as to the
Plan, proxies will be voted FOR approval of the Plan. If any other matters are
properly presented at the Special Meeting and may properly be voted on, the
proxies solicited hereby will be voted on such matters in accordance with the
best judgment of the proxy holders named therein. Management is not aware of
any other business to be presented at the Special Meeting. This proxy is being
solicited for the Special Meeting called to consider the Plan and any
adjournment(s) of the Special Meeting, and will not be used for any other
meeting.
The Plan must be approved by a majority of the total votes entitled to be
cast by Voting Depositors at the Special Meeting. As of ________, 1998, Corry
Savings' records disclosed that there were _______ votes entitled to be cast, of
which ______ constituted a majority of the total votes entitled to be cast.
PERSONS MAKING THE SOLICITATIONS
Management expects to use the services of Corry Savings' trustees,
officers, and other employees to solicit proxies personally or by telephone,
telegraph or mail. The directors, officers and employees will not be
additionally compensated for such solicitation, but may be reimbursed for out-
of-pocket expenses incurred in connection therewith. Corry Savings also has
retained ________________________________ to act as proxy solicitation agent to,
among other things, assist in the solicitation of proxies, for a total fee of
$______, plus expenses (up to a maximum of $______). The costs of solicitation
will be borne by Corry Savings.
REGULATORY APPROVALS
Information with respect to the regulatory approvals that are required in
connection with the Merger is incorporated by reference from the section of the
accompanying Prospectus entitled "Summary--Required Regulatory Approval" and
"The Offering and Merger--Regulatory Approval."
4
<PAGE>
THE PARTIES TO THE MERGER
Corry Savings. Corry Savings Bank is a Pennsylvania chartered mutual
savings bank located in Corry, Pennsylvania. The primary business of Corry
Savings consists of attracting deposits from the general public and originating
residential mortgage and consumer loans. Corry Savings conducts its business
from one office located at 150 North Centre Street, Corry, Pennsylvania. Corry
Savings' deposits are insured by the FDIC through the SAIF, and Corry Savings is
a member of the Federal Home Loan Bank of Pittsburgh. As of March 31, 1998,
Corry Savings had assets of $29.0 million, net loans receivable of $21.2
million, deposits of $25.2 million and retained earnings of approximately $3.1
million.
Northwest Bancorp, Inc. The Company is a Pennsylvania corporation that was
formed to become the stock holding company of Northwest in a transaction (the
"Two-Tier Reorganization") that was approved by Northwest's stockholders on
December 10, 1997, and completed on February 17, 1998. In the Two-Tier
Reorganization, each share of Northwest's common stock was converted into and
became a share of Common Stock of the Company, and Northwest became a wholly-
owned subsidiary of the Company. The Mutual Company, which owned a majority of
Northwest's outstanding shares of common stock immediately prior to completion
of the Two-Tier Reorganization, became the owner of the same percentage of the
outstanding shares of Common Stock of the Company immediately following the
completion of the Two-Tier Reorganization. As of the date hereof, the sole
activity of the Company is the ownership of all of the issued and outstanding
common stock of Northwest and the ownership of approximately 65% of the
outstanding shares of common stock of Jamestown Savings Bank. Jamestown Savings
Bank was formed in November of 1995 as a de novo New York-chartered savings bank
headquartered in Jamestown, New York. As of March 31, 1998, Jamestown Savings
Bank had assets of $55.7 million and deposits of $49.8 million.
Northwest Savings Bank. Northwest is a Pennsylvania-chartered stock
savings bank headquartered in Warren, which is located in northwestern
Pennsylvania. Northwest is a community-oriented institution offering
traditional deposit and loan products, and through its subsidiaries, consumer
finance services. Northwest's mutual savings bank predecessor was originally
founded in 1896. Northwest in its current stock form was established on
November 2, 1994, as a result of the reorganization (the "Reorganization") of
Northwest's mutual predecessor into a mutual holding company structure. At the
time of the Reorganization, Northwest issued a majority of its to-be outstanding
shares of common stock to the Mutual Company (which was formed in connection
with the Reorganization) and a minority of its to-be outstanding shares to
stockholders other than the Mutual Company. At March 31, 1998, Northwest had
total assets of $2.41 billion, total deposits of $1.99 billion and shareholders
equity of $213.3 million.
Additional information regarding Corry Savings, Northwest, the Mutual
Company and the Company is incorporated by reference from the section of the
accompanying Prospectus entitled "Summary--The Bank," "--Northwest Bancorp,
Inc.," "--Corry Savings," and "Northwest Bancorp, Inc."
THE OFFERING AND MERGER
General. Pursuant to the Agreement and the Plan, Corry Savings will merge
with and into Northwest with Northwest as the surviving institution, and the
Company will issue shares of Common Stock in the Offering to the depositors of
Corry Savings. The Merger has been approved by the Pennsylvania Department of
Banking (the "Department") subject to certain conditions including, among other
things, approval of the Plan by Corry Savings' depositors. A special meeting of
depositors for this purpose is to be held on __________________, 1998. The
Merger must also be approved by the FDIC and the Board of Governors of the
Federal Reserve System (the "FRB").
In connection with the Merger and Offering, Northwest and Corry shall
establish a charitable foundation (the "Charitable Foundation") for the purpose
of providing charitable contributions to the Corry, Pennsylvania community, and
other market areas served by Northwest. The initial contribution to the
Charitable Foundation shall be $500,000. See the section of the Prospectus
titled "The Offering and Merger--The Charitable Foundation."
Offering Priorities. The Plan provides that, subject to certain maximum
and minimum purchase limitations, subscription rights to purchase shares of
Common Stock in the Subscription Offering have been granted to (i) Eligible
Account Holders, (ii) Supplemental Eligible Account Holders, (iii) Other
Depositors, (iv) Eligible Employees and
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<PAGE>
Trustees, and (v) Northwest's ESOP. Any shares of Common Stock for which
subscriptions have not been accepted in the Subscription Offering may, at the
sole discretion of the Board of Directors of the Company, be issued to the
Mutual Company or offered for sale in a Community Offering. In the Community
Offering, should it be conducted, unsubscribed shares would be offered directly
to the general public with a preference to those natural persons residing in the
local community of Corry, Pennsylvania (the boundaries of which community would
be determined by Corry Savings' Board of Trustees in its sole discretion).
Additional terms and conditions may be established at any time prior to the
closing of any Community Offering by the Board of Directors of Northwest and the
Board of Trustees of Corry Savings.
Stock Pricing and Number of Shares to be Issued. The total number of
shares of Common Stock to be offered in the Offering will be of Shares
determined jointly by the Boards of Directors of the Company and the Board of
Trustees of Corry Savings, based upon the Independent Valuation. The number of
shares of Common Stock to be offered in the Offering will be equal to 30.5% of
the quotient obtained by dividing the Independent Valuation as updated at the
conclusion of the Offering by the Unadjusted Price Per Share, except that such
number of shares may not be more than 15% larger than the number of shares
indicated on the cover page accompanying Prospectus.
The Independent Valuation. The Independent Valuation was performed by the
Independent Appraiser, a firm experienced in the valuation and appraisal of
savings institutions. The Independent Appraiser determined that the appraised
value of Corry Savings as of April 28, 1998 ranged from $4,632,500 to
$6,267,500. The Independent Valuation will be updated again after the completion
of the Offering. Such valuation, however, is not intended, and must not be
construed, as a recommendation of any kind as to the advisability of purchasing
Common Stock. THE INDEPENDENT APPRAISER VALUED CORRY SAVINGS, BUT DID NOT VALUE
THE SHARES OF COMMON STOCK OFFERED IN THE OFFERING. The Independent Appraiser
did not independently verify the financial statements and other information
provided by Corry Savings, nor did the Independent Appraiser value independently
the assets or liabilities of Corry Savings, Northwest or the Company. Moreover,
because such valuation is necessarily based upon estimates and projections of a
number of matters, all of which are subject to change from time to time, no
assurance can be given that persons purchasing shares in the Offering will
thereafter be able to sell such shares at prices at or above the price at which
they purchased such shares.
Purchase Limitations. The minimum amount of Common Stock for which any
person may subscribe in the Subscription Offering or in the Community Offering,
respectively, is $500. No person, directly or indirectly or with an associate
or a group acting in concert, may subscribe for or purchase in the aggregate
more than 5% of the total number of shares of Common Stock offered in the
Offering, or $95,579 of Common Stock based on the maximum of the Valuation
Range. Such stock may be purchased at a 10% discount (i.e., for $86,021) by
Eligible Account Holders. The maximum purchase limitation may be decreased
below 5% or increased to 9.9%; provided, that orders for Common Stock exceeding
5% of the shares being offered shall not exceed in the aggregate 10% of the
total offering. Requests to purchase additional shares of the Common Stock in
the event that the purchase limitation is so increased will be determined by the
Company and Corry Savings in their sole discretion. See the section of the
Prospectus titled "The Offering and Merger--Purchase Limitations."
Expiration Date for the Subscription Offering. The Subscription Offering
will expire on _____________, 1998, unless extended for up to 45 days or such
additional periods by the Company with the approval of the Department (as
extended, the "Expiration Date"). Subscription rights which have not been
exercised prior to the Expiration Date will become void. Orders will not be
executed until all shares of Common Stock have been subscribed for or otherwise
sold. If all shares have not been issued by the Expiration Date unless such
period is extended with the consent of the Department, all funds will be
returned promptly to the subscribers with interest and all withdrawal
authorizations will be canceled. If an extension is granted, subscribers will
be notified of the extension of time and of any rights of subscribers to modify
or rescind their subscriptions.
Community Offering. Any shares of Common Stock for which subscriptions
have not been accepted in the Subscription Offering may, at the sole discretion
of the Board of Directors of the Company, be issued to the Mutual Company or
offered for sale in a Community Offering. In the Community Offering, should it
be conducted,
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<PAGE>
unsubscribed shares would be offered directly to the general public with a
preference to those natural persons residing in the local community of Corry,
Pennsylvania (the boundaries of which community would be determined by Corry
Savings' Board of Trustees in its sole discretion). Additional terms and
conditions may be established at any time prior to the closing of any Community
Offering by the Board of Directors of Northwest and the Board of Trustees of
Corry Savings. The Community Offering, if any, shall be for a period of not more
than 45 days unless extended by the Company and Corry Savings, and shall
commence concurrently with, during or promptly after the Subscription Offering.
The opportunity to subscribe for shares of Common Stock in the Community
Offering category is subject to the right of the Company and Corry Savings, in
their sole discretion, to accept or reject any such orders in whole or in part
either at the time of receipt of an order or as soon as practicable following
the Expiration Date.
Procedure for Purchasing Shares in Subscription and Community Offering. To
purchase shares in the Subscription and Community Offering, an executed order
form with the required payment for the total dollar amount of Common Stock
subscribed for, or with appropriate authorization for withdrawal from a Corry
Savings' deposit account (which may be given by completing the appropriate
blanks in the order form), must be received by Corry Savings at its office by
____ p.m., local time on the Expiration Date. Order forms which are not
received by such time or are executed defectively or are received without full
payment (or appropriate withdrawal instructions) are not required to be
accepted. In addition, an order submitted on photocopied or facsimile order
forms will not be accepted. The Company has the right to waive or permit the
correction of incomplete or improperly executed forms, but does not represent it
will do so. Once received, an executed order form may not be modified, amended
or rescinded without the consent of the Company unless the Offering has not been
completed by _____________________, 1998, unless such period has been extended.
IN ORDER TO ENSURE THAT ELIGIBLE ACCOUNT HOLDERS, SUPPLEMENTAL ELIGIBLE ACCOUNT
HOLDERS AND OTHER DEPOSITORS ARE PROPERLY IDENTIFIED AS TO THEIR STOCK PURCHASE
PRIORITIES, DEPOSITORS AS OF THE ELIGIBILITY RECORD DATE, SUPPLEMENTAL
ELIGIBILITY RECORD DATE AND/OR THE VOTING RECORD DATE MUST LIST ALL ACCOUNTS ON
THE STOCK ORDER FORM GIVING ALL NAMES IN EACH ACCOUNT AND THE ACCOUNT NUMBER.
The subscription price per share of Common Stock for all subscribers other
than Eligible Account Holders will be equal to the Unadjusted Price Per Share.
The subscription price per share for Eligible Account Holders shall be equal to
the Adjusted Price Per Share (i.e., 90% of the Unadjusted Price Per Share).
Subject to the applicable purchase limitations, the total number of shares that
will be issued to a subscriber whose subscription has been accepted will be
equal to the total dollar amount of stock for which such subscription has been
accepted divided by the Unadjusted Price Per Share or the Adjusted Price Per
Share, as applicable. Payment for subscriptions must accompany an order form
and may be made (i) in cash if delivered in person at the office of Corry
Savings, (ii) by check or money order, or (iii) by authorization of withdrawal
from deposit accounts maintained with Corry Savings. Interest will be paid on
payments made by cash, check, or money order at Northwest's passbook rate of
interest from the date payment is received until the completion or termination
of the Offering. If payment is made by authorization of withdrawal from deposit
accounts (other than checking accounts), the funds authorized to be withdrawn
from a deposit account will continue to accrue interest at the contractual rates
until completion or termination of the Offering, but a hold will be placed on
such funds, thereby making them unavailable to the depositor until completion or
termination of the Offering.
Restrictions on Transfer of Subscription Rights and Shares. Prior to the
completion of the Offering, persons receiving subscription rights may not
transfer them or enter into any agreement or understanding to transfer the legal
or beneficial ownership of the subscription rights issued under the Plan or the
shares of Common Stock to be issued upon their exercise. Such rights may be
exercised only by the person to whom they are granted and only for his account.
Each person exercising such subscription rights will be required to certify that
he is purchasing shares solely for his own account and that he has no agreement
or understanding regarding the sale or transfer of such shares. In addition,
persons may not offer or make an announcement of an offer or intent to make an
offer to purchase such subscription rights or shares of Common Stock prior to
the completion of the Offering. The Company and Corry Savings will pursue any
and all legal and equitable remedies in the event they become aware of the
transfer of subscription rights and will not honor orders known by them to
involve the transfer of such rights.
Certain Federal Income Tax Consequences of the Merger and Offering. It is
a condition to the completion
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of the Offering and Merger that Corry Savings and Northwest receive an opinion
of counsel or independent tax advisor (the "Tax Opinion") to the effect that the
Merger will qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code") and that,
accordingly, no gain or loss will be recognized by: (a) Corry Savings or
Northwest as a result of the Offering and Merger; (b) the Company as a result of
the issuance of subscription rights to eligible account holders and other
depositors ("Subscription Rights"), the lapse of any Subscription Rights or the
receipt of money in exchange for the issuance of Common Stock pursuant to the
Offering.
The Tax Opinion will not express an opinion as to the expected tax effects
to Eligible Account Holders as a result of the Offering and their ability to
purchase Common Stock at the Adjusted Price Per Share. These tax effects may
include, among other things, the recognition of gain upon receipt or exercise of
the Subscription Rights to the extent of their fair market value, which value
may be substantial because the Adjusted Purchase Price is likely to be less than
the fair market value of the Common Stock purchased pursuant to the exercise of
the Subscription Rights. Participants will probably not, however, recognize gain
or loss as a result of obtaining savings accounts in Northwest after the
Offering and their interests in a liquidation account in exchange for their
savings accounts in Corry Savings as a mutual savings bank. See "Special
Considerations--Certain Federal Income Tax Consequences" and "The Offering and
Merger; The Offering--Certain Federal Income Tax Consequences" for a more
complete description of all anticipated material federal income tax consequences
of the Offering.
Required Regulatory Approvals and Considerations. The Merger and the
Offering are subject to approval and/or nonobjection of the Department, the FDIC
and the FRB. These approvals and/or nonobjections do not constitute
recommendations or endorsements by the Department, the FDIC or the FRB of any of
the proposed transactions contemplated by the Plan.
Information regarding the Plan and the terms of the Merger and the Offering
is incorporated by reference from the section of the accompanying Prospectus
entitled "The Offering and Merger."
8
<PAGE>
BACKGROUND AND REASONS FOR THE MERGER
Since the enactment of the Financial Institutions Reform Recovery and
Enforcement Act of 1989, the Board of Trustees of Corry Savings has observed the
increasing costs and burdens associated with ongoing compliance with federal and
state regulations governing financial institutions. The Board has also observed
the increasingly competitive market for deposit and lending products, with
substantial competition coming from both larger financial institutions, as well
as from larger non-financial institution providers of financial services. In
Pennsylvania and elsewhere, the Board has witnessed increased consolidation
within the financial services industry, which trend toward consolidation the
Board believes will continue, especially in light of recent federal legislation
authorizing interstate banking on a national basis. These trends have resulted
in more competitors, most of which are substantially larger than Corry Savings
and which are able to offer a wider range of financial services. The more
numerous and larger competitors are also better positioned to keep abreast of
technological developments in the delivery, and types, of products offered to
and demanded by consumers.
For these and other reasons, over the past several years the Board of
Trustees of Corry Savings has been assessing the future of the institution, and
has questioned whether the continued operation of Corry Savings as an
independent institution is the best means of assuring that the financial needs
of its community will continue to be served. In this regard, the Board
considered the fact that Corry Savings is one of the smallest banking
institutions in the state of Pennsylvania and conducts its business from only
one office operated by a small number of employees. The Board believes, however,
that the institution nevertheless has provided an important service to the Corry
community. In order to continue, and strengthen its ability to provide
competitive products and services to the Corry community, the Board believes
that an affiliation with a larger, but community oriented, financial institution
would be in the best interests of the Corry community and Corry Savings'
customers. The Merger is one of several alternatives that were considered by
the Board and that could have been presented to depositors for their approval.
Alternative transactions that Corry could have conducted include, among others,
a standard conversion to stock form in which 100% of the common stock of Corry
Savings would have been sold, and a mutual holding company transaction in which
a minority portion of Corry Savings' common stock would have been sold.
Among the factors that influenced the Board's decision to merge with
Northwest are the Board's favorable conclusions regarding: the prospects of
Corry Savings as part of a larger, more diverse financial institution such as
Northwest, that is able to compete more effectively, to participate in a program
of sound growth that increases funds and capital available for lending, and to
provide additional resources for expansion of products and services; Northwest's
past performance, sound financial condition, strong market position, reputation
as a well-managed organization and strong ties to the market area where Corry
Savings is located; the benefits to depositors of Corry Savings who elect to
subscribe for Common Stock because such stock is publicly traded will be offered
at a discount to Eligible Account Holders and has, in the Board's view, the
potential for future appreciation; the benefits that will inure to Corry
Savings' employees by allowing them to participate in Northwest's more extensive
training and compensation programs; and Northwest's agreement to continue to
employ the current personnel employed by Corry Savings and to honor all Corry
Savings' employment agreements. In addition, the Board of Trustees considered
the agreement of Northwest that, in connection with the Merger, a charitable
foundation would be established that would be funded with $500,000 in cash. The
charitable foundation is intended to complement Corry Savings' existing
community reinvestment activities in a manner that will allow the Corry local
community to share in the growth and profitability of Northwest and the Company
after the Merger.
INTERESTS OF CERTAIN PERSONS IN THE OFFERING
Northwest intends to offer continued employment to all employees of Corry
Savings as of the Effective Time at the salary levels in effect at the Effective
Time. Employees of Corry Savings who continue employment with Northwest
("Continuing Employees") shall be eligible to participate in such employee
benefit plans as may be in effect generally for employees of Northwest (the
"Northwest Plans"). Continuing Employees shall generally be entitled to
participate on the same basis as similarly situated employees of Northwest,
except that Continuing Employees shall generally be entitled to full credit for
each full year of service with Corry Savings for purposes of determining
eligibility for participation and vesting, but not for benefit accruals.
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The officers and trustees of Corry Savings will be permitted to participate
in the Northwest Savings Bank and Northwest Bancorp, MHC Recognition and
Retention Plan (the "Restricted Stock Plan"), and the Northwest Savings Bank and
the Northwest Bancorp, MHC Stock Option Plan (the "Option Plan"). The Board of
Trustees of Corry Savings shall designate officers and trustees who shall
receive in the aggregate (i) a number of shares of Common Stock, restricted by
the terms of the Restricted Stock Plan, equal to 3% of the number of shares of
Common Stock sold in the Offering, and (ii) pursuant to the Option Plan options
to purchase a number of shares of the Common Stock equal to 10% of the number of
shares of Common Stock sold in the Offering, at an exercise price equal to the
fair market value of the Common Stock at the time the options are awarded. If
sufficient shares or options to satisfy the awards set forth above under (i) and
(ii) are not then available under such plans, Northwest intends to amend such
plans, or to adopt an additional restricted stock plan and stock option plan, to
permit such awards to be made. Any additional restricted stock or stock option
plans shall be established in accordance with rules and policy of the Department
and the FDIC. In addition, Northwest's ESOP or other tax qualified employee
plans intend to subscribe for 7% of the shares of Common Stock sold in the
Offering and Continuing Employees shall not be entitled to credit for prior
service with Corry Savings for any purpose but shall be eligible for
participation in the tax-qualified employee plans on the same basis as new
employees of Northwest. Participation by Continuing Employees in employee
benefit plans of Northwest with respect to which eligibility and participation
is at the discretion of the employer shall be discretionary with such employer.
Northwest will honor the written employment agreement of Vicki L. Stec.
Any other full-time employee of Corry Savings as of the Effective Time who is
terminated by Northwest within one year following the completion of the Merger
without cause (as defined in the Agreement), except in the case of voluntary
resignation, disability or death, shall be entitled to severance benefits equal
to one week's salary for each year of service to Corry Savings as of the date of
termination, up to a maximum of 18 weeks.
Each member of the Board of Trustees of Corry as of the date of the
Agreement is entitled to serve on an Advisory Board to the Board of Directors of
Northwest. The non-employee Advisory Directors shall receive an annual fee no
less than the annual fee paid to such persons as trustees of Corry as of the
date of the Agreement. The Advisory Board will meet monthly.
INTENDED SUBSCRIPTIONS BY MANAGEMENT AND TRUSTEES OF CORRY SAVINGS
The following table sets forth the number of shares of Common Stock for
which Corry Savings' executive officers and trustees, individually and as a
group, are expected to subscribe. The table assumes that sufficient shares will
be available to satisfy their subscriptions.
<TABLE>
<CAPTION>
Total Subscriptions
Total as a Percentage of
Amount of the Maximum of
Name Total Shares* Subscriptions the Valuation Range
- ------------------------------------ ------------------ ------------- --------------------
<S> <C> <C> <C>
Vicki L. Stec, President
and Chief Executive Officer 1,961 $30,000 *
Frederick D. Davids, Trustee 327 5,000 *
Olin C. Capwell, Trustee 654 10,000 *
William A. Nichols, Trustee 327 5,000 *
David A. Johnson, Trustee 327 5,000 *
Executive Officers and Trustees as
a group (5 persons) 3,596 55,000 1.0%
</TABLE>
- ------------------
*Total shares assumes that all shares are purchased at the Adjusted Price Per
Share, which is assumed to be $15.30 (i.e., 90% of the Northwest Savings Bank
last sale price on April 2, 1998).
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RECOMMENDATION OF THE BOARD OF TRUSTEES
THE BOARD OF TRUSTEES OF CORRY SAVINGS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"FOR" APPROVAL OF THE PLAN. VOTING IN FAVOR OF THE PLAN WILL NOT OBLIGATE ANY
PERSON TO PURCHASE COMMON STOCK AND VOTING AGAINST THE PLAN OR FAILING TO VOTE
ON THE PLAN WILL NOT PRECLUDE ANY SUCH PURCHASE. Because a majority of the
votes eligible to be cast is required for approval, the failure by any Voting
Depositor to return a proxy card or to attend the Special Meeting and vote in
person will have the same effect as a vote against the Plan. In adopting the
Plan and approving the Merger Agreement, the Board of Trustees of Corry Savings
determined that the proposed transactions are in the best interests of Corry
Savings, its depositors and other customers and the community served by Corry
Savings.
THE BOARD OF DIRECTORS MAKES NO RECOMMENDATION REGARDING THE PURCHASE OF
COMMON STOCK.
THIS PROXY STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, SHARES OF COMMON STOCK. THE COMMON STOCK BEING
OFFERED IN THE OFFERING IS BEING OFFERED ONLY BY MEANS OF THE ACCOMPANYING
PROSPECTUS.
THE SHARES OF COMMON STOCK BEING OFFERED IN CONNECTION WITH THE PROPOSED
TRANSACTIONS ARE NOT SAVINGS ACCOUNTS OR DEPOSITS AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. THE COMMON
STOCK IS NOT GUARANTEED BY THE COMPANY, THE MUTUAL COMPANY OR NORTHWEST. THERE
CAN BE NO ASSURANCE THAT THE TRADING PRICE OF THE COMMON STOCK WILL NOT DECREASE
AT ANY TIME.
ADDITIONAL INFORMATION
Certain depositors of Corry Savings have subscription rights for the shares
of Common Stock. Such shares are offered only by means of the accompanying
Prospectus. Additional copies of the Prospectus may be obtained by returning
the enclosed postage paid card or by otherwise requesting such Prospectus in
writing at the office of Corry Savings. The Prospectus contains additional
information concerning the Merger and Northwest. The Plan is available to
members at the office of Corry Savings, and will be mailed to any depositor upon
written or telephonic request. Such requests should be directed to Vicki L.
Stec, President and Chief Executive Officer, Corry Savings Bank, 150 North
Centre Street, Corry, Pennsylvania 16407, (814) 664-4681. The Appraisal may be
inspected at Corry Savings' office.
This Proxy Statement is also accompanied by Corry Savings' Financial
Statements as of and for the nine months ended March 30, 1998, and as of and for
the years ended June 30, 1997 and 1996, which financial information is
incorporated into this Proxy Statement by reference.
OTHER MATTERS
The Board of Trustees is not aware of any business to come before the
Special Meeting other than those matters described above in this Proxy
Statement. However, if any other matters should properly come before the
Special Meeting, it is intended that proxies in the accompanying form will be
voted in respect thereof in accordance with the judgment of the person or
persons voting the proxies.
11
<PAGE>
BY ORDER OF THE BOARD OF TRUSTEES
------------------------------
Secretary
Corry, Pennsylvania
_____________, 1998
12
<PAGE>
PROXY CARD
13
<PAGE>
REVOCABLE PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
CORRY SAVINGS BANK
FOR A SPECIAL MEETING OF DEPOSITORS
TO BE HELD ON _____________, 1998
The undersigned depositors of Corry Savings Bank ("Corry Savings"), hereby
appoints the full Board of Directors, with full powers of substitution, as
attorneys-in-fact and agents for and in the name of the undersigned, to vote
such votes as the undersigned may be entitled to vote at the Special Meeting of
Depositors of Corry Savings, to be held at the main office of Corry Savings,
located at 150 North Centre Street, Corry, Pennsylvania on _________, 1998, at
______ p.m., local time, and at any and all adjournments thereof. They are
authorized to cast all votes to which the undersigned is entitled as follows:
FOR AGAINST
--- -------
[_] [_]
1. Approval of the Plan of Merger and Stock Issuance Plan (the "Plan") pursuant
to which Corry Savings will merge with and into Northwest Savings Bank, a
Pennsylvania-chartered stock savings bank headquartered in Warren,
Pennsylvania ("Northwest") and Northwest Bancorp, Inc., a Pennsylvania stock
holding company of Northwest (the "Company") will offer for sale in a stock
offering shares of its common stock ("Common Stock") in an amount equal to
approximately 30.5% of the market value of Corry Savings (as determined by
an independent valuation) on a priority basis to certain of the Corry
Savings' depositors and certain others.
NOTE: The Board of Directors is not aware of any other matter that may come
before the Special Meeting of Depositors.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS IS
---
PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THE BOARD OF DIRECTORS IN
THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO
OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
14
<PAGE>
Votes will be cast in accordance with the Proxy. Should the undersigned
be present and elect to vote at the Special Meeting or at any adjournment
thereof and after notification to the Secretary of Corry Savings at said Meeting
of the depositor's decision to terminate this Proxy, then the power of said
attorney-in-fact or agents shall be deemed terminated and of no further force
and effect.
The undersigned acknowledges receipt of a Notice of Special Meeting of
Depositors and a Proxy Statement dated ______________, 1998, prior to the
execution of this Proxy.
------------------------------------
Date
------------------------------------
Signature
NOTE: Only one signature is required
in the case of a joint account.
- --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN
THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
15
<PAGE>
EXHIBIT 99.2
<PAGE>
NORTHWEST BANCORP, INC.
STOCK ORDER FORM
PLEASE READ AND COMPLETE THIS STOCK ORDER FORM.
INSTRUCTIONS ARE INCLUDED ON THE REVERSE SIDE OF THIS FORM.
DEADLINE FOR DELIVERY
- --------------------------------------------------------------------------------
10:00 A.M., PENNSYLVANIA TIME, ON ______, 1998
Mail this Stock Order Form in the enclosed reply envelope or hand-deliver to
Corry Savings Bank's office. COPIES AND FACSIMILES OF STOCK ORDER FORMS WILL NOT
BE ACCEPTED.
- --------------------------------------------------------------------------------
FOR OFFICE USE ONLY
- --------------------------------------------------------------------------------
__________ _______ _______ _______
Date Rec'd Batch # Order # Deposit
- --------------------------------------------------------------------------------
(1) AMOUNT OF STOCK
- --------------------------------------------------------------------------------
COMMON STOCK SUBSCRIPTION
ENTER THE DOLLAR AMOUNT OF COMMON STOCK FOR WHICH YOU WOULD LIKE TO SUBSCRIBE:
$________.
THE MINIMUM PURCHASE IS $500.00. THE MAXIMUM PURCHASE IN THE OFFERING IS
$________ FOR ANY PERSON, TOGETHER WITH ASSOCIATES, OR A GROUP ACTING IN
CONCERT; HOWEVER, THIS LIMIT MAY BE INCREASED OR DECREASED, AS DESCRIBED IN THE
PROSPECTUS. PLEASE REFER TO THE PROSPECTUS SECTION ENTITLED "THE STOCK OFFERING"
FOR A DESCRIPTION OF PURCHASE LIMITATIONS AND PROCEDURES FOR ALLOCATION OF
SHARES IN THE EVENT OF OVERSUBSCRIPTION.
NUMBER OF SHARES
EACH SUBSCRIBER WILL RECEIVE AS MANY WHOLE SHARES OF COMMON STOCK AS ARE
PERMITTED TO BE PURCHASED WITH THE AMOUNT OF FUNDS SUBMITTED. AT THE CONCLUSION
OF THE OFFERING, ANY APPLICABLE REFUND (OR RELEASE OF FUNDS DESIGNATED FOR
WITHDRAWAL FROM DEPOSIT ACCOUNTS) WILL BE MADE. AFTER THE CONCLUSION OF THE
OFFERING, PURCHASERS OF COMMON STOCK IN THE OFFERING WILL BE NOTIFIED OF THE
NUMBER OF SHARES RECEIVED AND THE APPLICABLE PURCHASE PRICE PER SHARE, WHICH
WILL BE DETERMINED BASED ON MARKET AND FINANCIAL CONDITIONS AT THE CONCLUSION OF
THE OFFERING. THE PURCHASE PRICE IS EXPECTED TO BE WITHIN A RANGE OF $_____ TO
$_____ PER SHARE OR $_____ TO $_____ PER SHARE FOR ELIGIBLE ACCOUNT HOLDERS. IF
THE PRICE IS OUTSIDE THE RANGE, SUBSCRIBERS WILL BE RESOLICITED AND GIVEN THE
OPPORTUNITY TO INCREASE, DECREASE OR RESCIND THEIR ORDER(S) OF COMMON STOCK.
PLEASE REFER TO THE PROSPECTUS SECTION ENTITLED "THE STOCK OFFERING" FOR A
DETAILED DISCUSSION OF THE DETERMINATION OF THE PURCHASE PRICE PER SHARE.
- --------------------------------------------------------------------------------
(2) METHOD OF PAYMENT (WIRES WILL NOT BE ACCEPTED.)
- --------------------------------------------------------------------------------
[ ] Enclosed is a check or money order payable to CORRY SAVINGS BANK for
$______________.
[ ] I authorize withdrawal(s) from the Corry Savings Bank savings or
certificate account(s)* listed below, and I understand that the amounts
will not otherwise be available to me during the Offering period. (THERE IS
NO EARLY WITHDRAWAL PENALTY FOR THE PURCHASE OF STOCK.)
Account Number(s) Amount(s)
----------------- ---------
___________________________________ $_____________
___________________________________ $_____________
___________________________________ $_____________
___________________________________ $_____________
___________________________________ $_____________
TOTAL WITHDRAWAL: $_____________
* You may NOT indicate withdrawal from checking or money market accounts.
- --------------------------------------------------------------------------------
(3) PURCHASER INFORMATION
- --------------------------------------------------------------------------------
[ ] Check here if you are a Corry Savings Bank or Northwest Bancorp, Inc.
Corporation director, officer, trustee or employee, or a member of their
immediate household.
Check the box which applies:
(a) [ ] Eligible Account Holder - Check here if you were a depositor with at
least $50 at Corry Savings Bank on 3/31/96. List below all account(s) you had at
that date.
(b) [ ] Supplemental Eligible Account Holder - Check here if you were NOT a
depositor on 3/31/96, but you were a depositor with at least $50 at Corry
Savings Bank on 6/30/98. List below all account(s) you had at that date.
(c) [ ] Check here if you were not a Corry Savings Bank depositor with at least
$50 on deposit on either 3/31/96 or 6/30/98.
ACCOUNT TITLE ACCOUNT NUMBER(S)
------------- -----------------
(NAME(S) ON THE ELIGIBILITY DATE
_________________________________ _________________________________
_________________________________ _________________________________
_________________________________ _________________________________
IF ADDITIONAL SPACE IS NEEDED, ATTACH A SEPARATE PAGE.
- --------------------------------------------------------------------------------
(4) STOCK REGISTRATION (PLEASE PRINT CLEARLY - THIS INFORMATION WILL BE USED
--------------------
FOR SUBSEQUENT MAILINGS AND REGISTRATION OF STOCK CERTIFICATES. MAKE SURE THE
INFORMATION IS COMPLETE AND LEGIBLE. IF REGISTERING SHARES IN MORE THAN ONE
NAME, LIST ADDRESS AND PHONE NUMBER OF THE FIRST PERSON NAMED).
------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
- ----------------------------------------- ---------------------------------------------------------------------
(First Name, Middle Initial, Last Name) Social Security No./Tax ID# (certificate will show only this number)
- ----------------------------------------- ---------------------------------------------------------------------
(First Name, Middle Initial, Last Name) Social Security No./Tax ID#
- ----------------------------------------- ---------------------------------------------------------------------
(Street Address) (Daytime Phone Number)
- ----------------------------------------- ---------------------------------------------------------------------
(City, State, Zip Code) (Evening Phone Number)
- ----------------------------------------- ---------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(5) FORM OF STOCK OWNERSHIP (CHECK ONE - SEE REVERSE SIDE OF THIS STOCK ORDER FORM FOR OWNERSHIP
DEFINITIONS)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] Individual [ ] Joint Tenants [ ] Tenants in Common [ ] Uniform Transfer to Minors
[ ] IRA (for broker use only) [ ] Corporation [ ] Fiduciary (Under Agreement Dated___, 199__) [ ] Other ______________
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(6) NASD AFFILIATION (CHECK AND INITIAL ONLY IF APPLICABLE.)
----
- --------------------------------------------------------------------------------
[ ] Check here and initial below if you are a member of the NASD ("National
Association of Securities Dealers") or a person associated with an NASD member
or a member of the immediate family of any such person to whose support such
person contributes, directly or indirectly, or if you have an account in which
an NASD member, or person associated with an NASD member, has a beneficial
interest. I agree (i) not to sell, transfer or hypothecate the stock for a
period of three months following issuance; and (ii) to report this subscription
in writing to the applicable NASD member I am associated with within one day of
payment for the stock.
________ (Please initial)
- --------------------------------------------------------------------------------
(7) ACKNOWLEDGMENT, CONSENT TO MERGER AND SIGNATURE (VERY IMPORTANT)
- --------------------------------------------------------------------------------
I(we) acknowledge receipt of the Prospectus dated _________, 1998, and I(we)
have read the terms and conditions described therein (including the section
entitled "Risk Factors"). I(we) understand that this order may not be modified
-------
or withdrawn without the consent of Northwest Bancorp, Inc.. I(we) hereby
certify that the common stock shares subscribed for are for my(our) account
only, and that I(we) have no present agreement or understanding regarding
subsequent sale or transfer of such shares, and I(we) confirm that my(our) order
does not conflict with the purchase limitations in the Plan of Merger and Stock
Issuance Plan. I(we) acknowledge that the common stock is not a deposit
account, is not insured by the FDIC and is not guaranteed by Corry Savings Bank,
Northwest Bancorp, Inc. or any government agency. Under penalties of perjury,
I(we) certify that (1) the Social Security #(s) or Tax ID#(s) given above
is(are) correct; and (2) I(we) am(are) not subject to backup withholding. (Cross
out #2 above if you have been notified by the Internal Revenue Service that you
are subject to backup withholding because of underreporting interest or
dividends on your tax return).
Please sign and date this form. ONLY ONE SIGNATURE IS REQUIRED, UNLESS
--------------------------------------
AUTHORIZING A WITHDRAWAL FROM A CORRY SAVINGS BANK DEPOSIT ACCOUNT REQUIRING
- ----------------------------------------------------------------------------
MORE THAN ONE SIGNATURE TO WITHDRAW FUNDS. If signing as a custodian,
- ------------------------------------------
corporate officer, etc., please include your full title.
____________________________________________________ _____________________
Signature Title (if applicable) Date
____________________________________________________ _____________________
Signature Title (if applicable) Date
THIS ORDER NOT VALID UNLESS SIGNED - RETAIN A COPY OF THIS FORM FOR YOUR
- -------------------------------------------------------------------------
RECORDS
- -------
QUESTIONS? Please call (814) ___-____ or (800) ___-____ from 9:00 a.m. to
4:00 p.m., Monday-Friday Stock Information Center: At Corry Savings Bank's
headquarters - 150 North Centre Street, Corry, Pennsylvania.
- --------------------------------------------------------------------------------
(OVER)
<PAGE>
STOCK ORDER FORM INSTRUCTIONS (PLEASE READ CAREFULLY)
------------------------------------------------------
(1) NUMBER OF SHARES -- Indicate the number of shares of Northwest Bancorp, Inc.
----------------
common stock that you wish to purchase and indicate the amount due. The minimum
purchase is $500. No individual person may purchase more than $__________ in
the Offering (which consists of the Subscription, Community and Syndicated
Community Offerings). There is also a group purchase limitation whereby no
person, together with his/her associates or group of persons acting in concert,
may purchase more than $_____ million in the Offering. The categories of the
Offering are described in the Prospectus section entitled "The Offering".
Northwest Bancorp, Inc. reserves the right to accept or reject orders placed in
the Community and Syndicated Community Offerings.
(2) METHOD OF PAYMENT -- Payment for shares may be made by check or money order
-----------------
payable to Corry Savings Bank. Funds received will be cashed immediately. You
will earn interest at Corry Savings Bank's passbook rate (currently ___%) from
the time funds are received until the Offering is consummated. You may pay for
your shares by withdrawal from your Corry Savings Bank savings or certificate
account(s). Designate the account number(s) and the amount(s) to be withdrawn.
You may not designate withdrawals from checking or money market accounts. Funds
designated will be unavailable to you from the time this Stock Order Form is
received until the Offering is consummated, however the funds will continue to
earn interest at the contractual rate. CONTACT THE STOCK INFORMATION CENTER BY
___________ IF YOU INTEND TO USE YOUR CORRY SAVINGS BANK IRA OR KEOGH FUNDS (OR
ANY OTHER SUCH FUNDS) TO MAKE YOUR STOCK PURCHASE.
(3) PURCHASER INFORMATION -- Check the applicable box. This information is
---------------------
important because eligibility dates are utilized to prioritize orders in the
event that we receive orders for more than the available amount of stock. List
the name(s) on the deposit account(s) and account number(s) that you held at the
applicable date. See the section of the Prospectus entitled "The Offerings" for
an explanation of how shares will be allocated in the event the Offering is
oversubscribed. FAILURE TO CORRECTLY AND FULLY COMPLETE THIS SECTION COULD
----------------------------------------------------------
RESULT IN A LOSS OF ALL OR PART OF YOUR STOCK ALLOCATION.
- --------------------------------------------------------
(4) STOCK REGISTRATION -- Please CLEARLY PRINT the name(s) and address in which
------------------
you want the stock certificate registered and mailed. Isubscription rights are
nontransferable and are void at the end of the Subscription Offering. If you
are exercising subscription rights by purchasing in the Subscription Offering as
a Corry Savings Bank (i) eligible depositor as of 3/31/96 or (ii) eligible
depositor as of 6/30/98, you must register the stock in the name of at least one
of the account holders listed on your account as of the applicable date.
However, adding the name(s) of other persons who are not account holders, or
- -------
were account holders at a later eligibility date than yourself, may result in a
loss of your purchase priority. NOTE: ONE STOCK CERTIFICATE WILL BE GENERATED
PER STOCK ORDER FORM. IF VARIOUS REGISTRATIONS AND SHARE AMOUNTS ARE DESIRED ON
VARIOUS CERTIFICATES, A SEPARATE STOCK ORDER FORM MUST BE COMPLETED FOR EACH
CERTIFICATE DESIRED.
Enter the Social Security Number or Tax ID Number of the registered owner(s).
The first number listed will be identified with the stock certificate for tax
-----
purposes. Be sure to include at least one phone number, in the event you must be
contacted regarding this Stock Order Form.
(5) FORM OF STOCK OWNERSHIP -- Please check the one type of ownership
-----------------------
applicable to your registration. An explanation of each follows:
GUIDELINES FOR REGISTERING STOCK
--------------------------------
For reasons of clarity and standardization, the stock transfer industry has
developed uniform stockholder registrations which we will utilize in the
issuance of Seacoast Financial Services Corporation stock certificate(s). If you
have any questions, please consult your legal advisor.
Stock ownership must be registered in one of the following manners:
INDIVIDUAL: Avoid the use of two initials. Include the first given name,
middle initial and last name of the stockholder. Omit words of
limitation that do not affect ownership rights such as "special
account," "single man," "personal property," etc. If the stock is
held individually upon the individual's death, the stock will be
owned by the individual's estate and distributed as indicated by
the individual's will or otherwise in accordance with law.
JOINT: Joint ownership of stock by two or more persons shall be
inscribed on the certificate with one of the following types of
joint ownership. Names should be joined by "and"; do not connect
with "or." Omit titles such as "Mrs.," "Dr.," etc.
JOINT TENANTS--Joint Tenancy with Right of Survivorship and not
as Tenants in Common may be specified to identify two or more
owners where ownership is intended to pass automatically to the
surviving tenant(s).
TENANTS IN COMMON--Tenants in Common may be specified to identify
two or more owners. When stock is held as tenancy in common, upon
the death of one co-tenant, ownership of the stock will be held
by the surviving co-tenant(s) and by the heirs of the deceased
co-tenant. All parties must agree to the transfer or sale of
shares held in this form of ownership.
UNIFORM Stock may be held in the name of a custodian for a minor under
TRANSFER the Uniform Transfers to Minors laws of the individual states.
TO MINORS: There may be only one custodian and one minor designated on a
stock certificate. The standard abbreviation of custodian is
"CUST,", while the description "Uniform Transfers to Minors Act"
is abbreviated "UNIF TRAN MIN ACT." Standard U.S. Postal Service
state abbreviations should be used to describe the appropriate
state. For example, stock held by John P. Jones under the Uniform
Transfers to Minors Act will be abbreviated:
JOHN P. JONES CUST SUSAN A. JONES
UNIF TRAN MIN ACT MA
<PAGE>
FIDUCIARIES: Stock held in a fiduciary capacity must contain the following:
1. The name(s) of the fiduciary(ies):
If an individual, list the first given name, middle initial and
last name.
If a corporation, list the corporate title
If an individual and a corporation, list the corporation's title
before the individual.
2. The fiduciary capacity: Administrator, Conservator, Committee,
Executor, Trustee, Personal Representative, Custodian
3. The type of document governing the fiduciary relationship.
Generally, such relationships are either under a form of living
trust agreement or pursuant to a court order. Without a document
establishing a fiduciary relationship, your stock may not be
registered in a fiduciary capacity.
4. The date of the document governing the relationship. The date
of the document need not be used in the description of a trust
created by a will.
5. One of the following:
The name of the maker, donor or testator or
The name of the beneficiary
Example of Fiduciary Ownership:
JOHN D. SMITH, TRUSTEE FOR TOM A. SMITH
UNDER AGREEMENT DATED 6/9/74
(6) NASD AFFILIATION -- Check the box and initial, if applicable.
----------------
(7) ACKNOWLEDGMENT-- Stock Order Forms submitted without a signature will not
--------------
be accepted. Only one signature is required, unless the method of payment
section of this form includes authorization to withdraw from a Compass Bank
account requiring more than one signature for withdrawal. If signing as a
custodian, trustee, corporate officer, etc., please include your title. NOTE: If
exercising a Power of Attorney, you must submit a copy of the POA agreement with
this form.
THE SHARES OF COMMON STOCK ARE NOT DEPOSIT ACCOUNTS AND ARE NOT INSURED OR
GUARANTEED. THE COMMON STOCK IS SUBJECT TO INVESTMENT RISK, INCLUDING POSSIBLE
LOSS OF PRINCIPAL INVESTED.
QUESTIONS? Please call (814) ___-____ or (800) ___-____ from 9:00 a.m. to
4:00 p.m., Monday-Friday Stock Information Center: At Corry Savings Bank's
headquarters - 150 North Centre Street, Corry, Pennsylvania.
