As filed with the Securities and Exchange Commission on August
22, 1997
Registration No. _______________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- -----------------------------------------------------------------
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
- -----------------------------------------------------------------
PREMIER BANCORP, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 6021
------------- ----
(State or other jurisdiction of (Primary Standard Industrial
incorporation or organization) Classification Code Number)
Applied For
-------------
(I.R.S. Employer Identification
No.)
John C. Soffronoff, President
PREMIER BANCORP, INC. PREMIER BANCORP, INC.
379 North Main Street 379 North Main Street
Doylestown, Pennsylvania 18901 Doylestown, Pennsylvania 18901
(215) 345-5100 (215) 345-5100
- ------------------------------ -------------------------------
(Address, including ZIP Code, (Name, address, including ZIP
and telephone number, including Code, and telephone number,
area code, of registrant's including area code, of agent
principal executive offices) for service)
With A Copy To:
Nicholas Bybel, Jr., Esquire
Kimberly J. Kling, Esquire
Shumaker Williams, P.C.
Post Office Box 88
Harrisburg, Pennsylvania 17108
Telephone: (717) 763-1121
Approximate date of commencement of the proposed sale of the
securities to the public: As soon as practicable after the
effective date of the Registration Statement.
If the securities being registered on this Form are being
offered in connection with the formation of a holding company and
there is compliance with General Instruction G, check the
following box. x
---
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of Each Amount Proposed Maximum
Class of Securities to be Offering Price
Being Registered Registered Per Unit
<S> <C> <C>
Common Stock, par
value $1.00 per
share 868,128 $ 11.20<F1>
<CAPTION>
Title of Each Proposed Maximum Amount of
Class of Securities Aggregate Registration
Being Registered Offering Price Fee
<S> <C> <C>
Common Stock, par
value $1.00 per
share $ 9,723,033.60 $2,946.37
<CAPTION>
Title of Each Amount Proposed Maximum
Class of Securities to be Offering Price
Being Registered Registered Per Unit
<S> <C> <C>
Common Stock, par
value $1.00 per
share, underlying
options 254,448<F2> $11.09<F3>
<CAPTION>
Title of Each Proposed Maximum Amount of
Class of Securities Aggregate Registration
Being Registered Offering Price Fee
<S> <C> <C>
Common Stock, par
value $1.00 per
share, underlying
options $ 2,821,828.32 $ 855.10
<FN>
<F1> Estimated solely for the purpose of calculating the
registration fee and based, in accordance with Rule 457(f)(2),
upon the book value of the outstanding shares of Premier Bank, of
868,128 shares of common stock, par value $1.00 per share, as of
July 31, 1997, of $11.20 per share and a maximum of 868,128
shares of such stock to be converted in the reorganization into
common stock of the Registrant with a par value of $1.00 per
share.
<F2> Includes 100,000 shares reserved for issuance under the 1995
Premier Bank Incentive Stock Option Plan, of which, at the date
hereof, 74,955 options have been awarded.
<F3> Based upon the weighted average exercise price of all
outstanding options.
</FN>
</TABLE>
<PAGE>
PREMIER BANK
379 NORTH MAIN STREET
DOYLESTOWN, PA 18901
(215) 345-5100
- -----------------------------------------------------------------
September 9, 1997
TO OUR SHAREHOLDERS:
The Board of Directors of Premier Bank (the "Bank")
cordially invites you to attend the Special Meeting of
Shareholders which will commence at 9:00 a.m., prevailing time on
Thursday, October 9, 1997, at Barley Sheaf Farm Bed and Breakfast
Inn, Route 202, Holicong, Pennsylvania.
The Notice of Special Meeting and the Proxy Statement on the
following pages address the formal business of the meeting. The
formal business schedule for the Special Meeting includes a
proposal to approve and adopt a Plan of Reorganization and a Plan
of Merger to form a bank holding company for the Bank. The Board
of Directors recommends that you vote in favor of the proposal
and believes that the formation of a bank holding company at this
time is an important and necessary part of the Bank's plans for
the future. The Board of Directors believes that the formation
of a Holding Company at this time will provide the Bank with
flexibility to utilize alternative sources of capital that are
not available to the Bank to support its current growth. These
alternatives include, but are not limited to, the issuance of
Trust Preferred Stock.
Under the proposed Plan of Reorganization, each share of
Common Stock of the Bank presently held by you would be converted
into one (1) share of Common Stock of Premier Bancorp, Inc., a
bank holding company whose only substantial asset would be all of
the Common Stock of the Bank (the "Holding Company"). If the
Plan of Reorganization is approved and adopted, the Bank's
shareholders (other than dissenting shareholders) will
automatically become shareholders of the Holding Company. Since
the Holding Company will own all of the outstanding shares of the
Bank, your interest in the Bank at the time of the reorganization
will remain essentially the same, except that it will be indirect
rather than direct. The conversion of Common Stock of the Bank
into Common Stock of the Holding Company will be tax free for
federal income tax purposes, with the exception of money received
for fractional shares owned.
<PAGE>
THE BOARD OF DIRECTORS BELIEVES THAT THE PLAN OF
REORGANIZATION AND PLAN OF MERGER ARE IN THE BEST INTERESTS OF
THE BANK AND ITS SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF
THE PLAN OF REORGANIZATION AND PLAN OF MERGER. THE APPROVAL AND
ADOPTION OF THE PLAN OF REORGANIZATION AND PLAN OF MERGER
REQUIRES AN AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST SIXTY-SIX
AND TWO-THIRDS PERCENT (66-2/3%) OF THE OUTSTANDING SHARES OF THE
BANK'S COMMON STOCK. IT IS, THEREFORE, EXTREMELY IMPORTANT FOR
YOU TO SIGN, DATE AND RETURN YOUR ENCLOSED PROXY AS SOON AS
POSSIBLE IN THE PRE-ADDRESSED AND STAMPED ENVELOPE SUPPLIED FOR
YOUR CONVENIENCE, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL
MEETING.
We urge you to carefully review the enclosed Proxy
Statement/Prospectus that describes the Plan of Reorganization
and the Plan of Merger proposal in detail. Again, your Board of
Directors strongly recommends that you vote FOR the proposal.
On behalf of the Board of Directors, thank you for your
cooperation and continued support.
Very truly yours,
Clark S. Frame, Chairman of the Board
<PAGE>
_________________________________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 9, 1997
_________________________________________
TO THE SHAREHOLDERS OF PREMIER BANK:
Notice is hereby given that the Special Meeting of
Shareholders of Premier Bank (the "Bank") will be held at 9:00
a.m., prevailing time, on Thursday, October 9, 1997, at Barley
Sheaf Farm Bed and Breakfast Inn, Route 202, Holicong,
Pennsylvania, for the following purposes:
1. To consider and act upon a proposal to approve and adopt a
Plan of Reorganization and Plan of Merger, dated as of
, providing, among other things, for the merger of
the Bank and Premier Interim Bank (the "Interim Bank"), a
Pennsylvania state-chartered banking association and a subsidiary
of Premier Bancorp, Inc. (the "Holding Company"), and for the
automatic conversion of each share of the Common Stock of the
Bank into one (1) share of the Common Stock of the Holding
Company; and
2. To transact such other business as may properly come before
the Special Meeting and any adjournment or postponement thereof.
You are urged to mark, sign, date and promptly return your
Proxy in the enclosed envelope so that your shares may be voted
in accordance with your wishes and in order that the presence of
a quorum may be assured. The prompt return of your signed Proxy,
regardless of the number of shares you hold, will aid the Bank in
reducing the expense of additional proxy solicitation. The
giving of such Proxy does not affect your right to vote in person
if you attend the meeting and give notice to the Secretary of the
Bank.
Only those shareholders of record at the close of business
on September 1, 1997 , will be entitled to notice of and to vote
at the Special Meeting and any adjournment or postponement
thereof.
A copy of the Bank's Annual Report for the fiscal year ended
December 31, 1996, was mailed to Shareholders on or about April
1, 1997. Additional copies of the Bank's Annual Report for the
1995 fiscal year and 1994 fiscal year may be obtained at no cost
by contacting John C. Soffronoff, President, Premier Bank, 379
North Main Street, Doylestown, Pennsylvania 18901; telephone:
(215) 345-5100.
<PAGE>
AN AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST SIXTY-SIX AND
TWO-THIRDS PERCENT (66-2/3%) OF THE OUTSTANDING SHARES IS
REQUIRED FOR APPROVAL AND ADOPTION OF THE PLAN OF REORGANIZATION
AND PLAN OF MERGER. THEREFORE, WHETHER OR NOT YOU EXPECT TO
ATTEND THE SPECIAL MEETING IN PERSON, YOU ARE URGED TO SIGN, DATE
AND PROMPTLY RETURN THE ENCLOSED PROXY. A SELF-ADDRESSED STAMPED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
By Order of the Board of Directors,
Clark S. Frame, Chairman of the Board
September 9, 1997
<PAGE>
PROXY STATEMENT/PROSPECTUS
PREMIER BANCORP, INC.
1,122,576 Shares Common Stock
($1.00 par value)
PREMIER BANK
PROXY STATEMENT
Premier Bancorp, Inc., a newly formed Pennsylvania business
corporation (the "Holding Company"), proposes to issue 1,122,576
shares of its common stock to shareholders of Premier Bank (the
"Bank") in a reorganization whereby the Bank will become a
wholly-owned subsidiary of the Holding Company, and shareholders
of the Bank will become shareholders of the Holding Company.
This Proxy Statement/Prospectus includes this cover page and
a Proxy Statement of the Bank for use in connection with a
Special Meeting of Shareholders to be held on Thursday, October
9, 1997. The proposed reorganization and related matters to be
acted upon at the shareholders' meeting are described in this
Proxy Statement/Prospectus.
If the proposed reorganization is approved and adopted, and
certain other conditions are met, each shareholder of the Bank
will receive one (1) share of Holding Company common stock in
exchange for each whole share of common stock of the Bank held by
shareholders as of September 1, 1997 . Shareholders will receive
cash in lieu of any fractional shares of Bank common stock. See
section entitled "PROPOSED REORGANIZATION - Conversion of Stock."
The affirmative vote of the holders of at least sixty-six
and two-thirds percent (66-2/3%) of the outstanding shares of the
Bank is required, under the Pennsylvania Banking Code of 1965, as
amended, to approve and adopt the Plan of Reorganization and Plan
of Merger.
_________________________________
This Proxy Statement/Prospectus does not cover resales of
shares of Holding Company common stock upon consummation of the
proposed reorganization, and no person is authorized to make use
of the Proxy Statement/Prospectus in connection with any such
resale.
For a discussion of Risk Factors, see the following sections
of the Proxy Statement/ Prospectus: Outside Front Cover Page;
Summary; Introduction; Proposed Reorganization; Description of
the Holding Company; Description of the Bank; Description of the
Bank's Common Stock, Comparative Market Prices; Description of
the Holding Company's Stock; Comparison of Shareholder Rights;
Principal Beneficial Owners of the Bank's Common Stock
The Holding Company's principal executive office is located
at 379 North Main Street, Doylestown, Pennsylvania 18901. The
Holding Company's telephone number is (215) 345-5100.
_________________________________
i
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), THE
PENNSYLVANIA DEPARTMENT OF BANKING (THE "DEPARTMENT"), THE BOARD
OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (THE "FRB"), THE
PENNSYLVANIA SECURITIES COMMISSION OR ANY OTHER STATE SECURITIES
COMMISSION. NONE OF THE AFOREMENTIONED HAS PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/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 BANK OR HOLDING COMPANY. THERE
CAN BE NO ASSURANCE THAT THE TRADING PRICE OF THE COMMON STOCK
OFFERED HEREBY WILL NOT DECREASE AT ANY TIME.
_________________________________
AVAILABLE INFORMATION
The Holding Company has filed a Registration Statement under
the Securities Act of 1933, as amended, with the SEC in
Washington, D.C. for the registration of its common stock to be
issued and exchanged in the proposed reorganization.
The registration statement, of which this Proxy
Statement/Prospectus is a part, is on file with the SEC in
Washington, D.C. The registration statement, including the
exhibits thereto, contains information in addition to that
contained herein. The registration statement and exhibits may be
examined during normal business hours at the SEC public reference
room located at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, DC 20549 and also at the regional offices of the SEC
located at 75 Park Place, 14th Floor, New York, New York 10007;
Curtis Center, Independence Square West, 601 Walnut Street, Suite
1005E, Philadelphia, Pennsylvania 19106; and Northwestern Atrium
Center, 500 West Madison Street, Suite 400, Chicago, Illinois
60661. Copies of such material may be obtained from the public
reference section of the SEC at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, DC 20549, at prescribed rates. The SEC
maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the SEC. The address of the SEC site is
http://www.sec.gov.
The Bank is not subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"),
and, accordingly, does not file reports, proxy statements and
other information with its primary federal regulator, the FRB. A
copy of the Bank's Annual Report, including the financial
statements and the schedules thereto, for the year ended December
31, 1996, may be obtained at no cost by contacting John C.
Soffronoff, President, Premier Bank, 379 North Main Street,
Doylestown, Pennsylvania 18901.
__________________________________
ii
<PAGE>
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY
REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH.
THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM JOHN C.
SOFFRONOFF, PRESIDENT, PREMIER BANCORP, INC. AND PREMIER BANK,
379 NORTH MAIN STREET, DOYLESTOWN, PENNSYLVANIA 18901; TELEPHONE
(215) 345-5100. IN ORDER TO ENSURE TIMELY DELIVERY OF SUCH
DOCUMENTS, ANY REQUEST SHOULD BE MADE BY SEPTEMBER 25, 1997.
The date of this Proxy Statement/Prospectus is September 9, 1997.
iii
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY 1
SPECIAL MEETING OF PREMIER BANK 1
PROPOSED REORGANIZATION 2
INTRODUCTION 8
Date, Place and Time of Special Meeting 8
Purpose of the Special Meeting 8
Record Date; Quorum; Voting Rights 9
Solicitation of Proxies 9
Voting and Revocation of Proxies 10
PRINCIPAL BENEFICIAL OWNERS OF THE BANK'S COMMON STOCK 10
Principal Owners 10
Beneficial Ownership by Officers and Directors 11
PROPOSED REORGANIZATION 12
Plan of Reorganization and Plan of Merger 12
Reasons for the Proposed Reorganization 13
Shareholder Approval 15
Effective Date 15
Effect of Reorganization on Bank's Business
and Shareholders 15
Conversion of Stock 16
Exchange of Stock Certificates 16
Failure To Surrender Stock Certificates 16
Trading and Resale of Holding Company Common Stock 17
Tax Consequences 17
Rights of Dissenting Shareholders 18
Regulatory Approvals 21
DESCRIPTION OF THE HOLDING COMPANY 21
Organization 21
Management 22
Remuneration 22
Indemnification for Securities Act Liabilities 23
Supervision and Regulation of the Holding Company 23
Permitted Activities 24
Issuance of Additional Securities 26
DESCRIPTION OF THE BANK 26
History and Business 26
Competition 27
iv
<PAGE>
Supervision and Regulation of the Bank 28
The Federal Reserve System 29
Monetary Policy 29
Deposit Insurance 30
Legislation 30
Legal Proceedings 36
Directors 36
Principal Officers of the Bank 37
Remuneration of Officers and Directors 38
401(K) Plan 38
DESCRIPTION OF THE BANK'S COMMON STOCK 39
The Bank's Common Stock 39
Comparative Market Prices 40
Capitalization 40
DESCRIPTION OF THE HOLDING COMPANY'S STOCK 41
Common Stock 41
Legal Opinion 42
Anti-Takeover Provisions 42
DIVIDENDS 44
COMPARISON OF SHAREHOLDER RIGHTS 44
INDEPENDENT AUDITORS 44
FINANCIAL STATEMENTS 48
SHAREHOLDER PROPOSALS 48
OTHER MATTERS 49
EXHIBIT A PLAN OF REORGANIZATION AMONG PREMIER BANK, PREMIER
INTERIM BANK, AND PREMIER BANCORP, INC.
EXHIBIT B PLAN OF MERGER BETWEEN PREMIER BANK AND PREMIER
INTERIM BANK
EXHIBIT C ARTICLES OF INCORPORATION OF PREMIER BANCORP, INC.
EXHIBIT D BY-LAWS OF PREMIER BANCORP, INC.
EXHIBIT E EXCERPTS FROM SUBCHAPTER D OF CHAPTER 15 OF THE
PENNSYLVANIA BUSINESS CORPORATION LAW OF 1988, AS
AMENDED, SECTION 1571 ET SEQ.,CONCERNING DISSENTERS'
RIGHTS
EXHIBIT F PREMIER BANK 1995 STOCK INCENTIVE PLAN
v
<PAGE>
This Page Intentionally Left Blank
<PAGE>
SUMMARY
The following summary of this Proxy Statement/Prospectus is
provided for your convenience and is not intended to be complete.
This summary is qualified in its entirety by the detailed
information set forth elsewhere in this Proxy
Statement/Prospectus, including the exhibits hereto.
SPECIAL MEETING OF PREMIER BANK
Date October 9, 1997
Time and Place 9:00 a.m., prevailing time, at the
Barley Sheaf Farm Bed and Breakfast Inn,
Route 202, Holicong, Pennsylvania
Record Date September 1, 1997
Securities Entitled Each share of Premier Bank (the "Bank")
to vote common stock, par value One Dollar
($1.00) per share, issued and outstanding
on the record date entitles its holders
to one (1) vote with respect to all
matters presented at the meeting for
shareholder action. Any fractional
shares held are entitled to a
proportionate fractional vote.
Shares Outstanding 868,128
on the Record Date
Effects of Abstaining A Bank shareholder who abstains from
From Voting voting does not perfect his or her
dissenter's rights. See, "Rights of
Dissenting Shareholders." A shareholder
who abstains from voting is not included
in the affirmative vote necessary to
approve and adopt the Plan of
Reorganization and Plan of Merger. A
bank shareholder who abstains from
voting, automatically, without any
action on his or her part, will
receive one (1) share of Holding
Company common stock, par value One
Dollar ($1.00) per share, in exchange
for one (1) share of common stock of the
Bank, par value One Dollar ($1.00) per
share, held on the Effective Date if
at least sixty-six and two-thirds
percent (66-2/3%) of the outstanding
shares of Bank common stock vote in
favor of the Plan of Reorganization and
Plan of Merger. See section entitled
"PROPOSED REORGANIZATION - Conversion of
Stock."
1
<PAGE>
Matters to be Considered (1) A proposal to approve and adopt a
Plan of Reorganization among the Bank,
Premier Interim Bank (the "Interim
Bank") and Premier Bancorp, Inc., a
Pennsylvania business corporation (the
"Holding Company"), and to approve and
adopt a Plan of Merger between the Bank
and Interim Bank whereby the
shareholders of the Bank will become
shareholders of the Holding Company, and
the Bank will become a wholly-owned
subsidiary of the Holding Company; (2)
To act on such other matters as may
properly come before the Special Meeting
and any adjournment or postponement
thereof.
PROPOSED REORGANIZATION
Conditions to the The affirmative vote of the holders of
Consummation of the at least sixty-six and two-thirds
Plan of Reorganization percent (66-2/3%) of the outstanding
and Plan of Merger shares of the Bank's common stock is
required to approve and adopt the Plan
of Reorganization and Plan of Merger.
In addition, the Plan of
Reorganization and Plan of Merger
require the approval of the Board of
Governors of the Federal Reserve System
("FRB") and the Pennsylvania Department
of Banking (the "Department"). On August
1, 1997, the organizers of the Interim
Bank filed an application with the
Department for approval to charter the
Interim Bank. The Charter Application
of the Interim Bank was preliminarily
approved by the Department on
__________, 1997. An application was
made to the Department on ____________,
1997, and to the FRB on ________ ,1997,
for approval to merge the Interim Bank
with and into the Bank. The merger of
the Interim Bank with and into the Bank
was conditionally approved by the
Department on ____________ , 1997, and
by the FRB on __________, 1997. Any
approval granted by these agencies
reflects only these agencies' view that
the transaction does not contravene the
competitive standards of the law and is
consistent with regulatory concerns
relating to bank management and to the
safety of stockholders from a financial
point of view or that these agencies
have considered the adequacy of the
terms of the exchange.
2
<PAGE>
THESE AGENCIES' APPROVAL IS NOT AN
ENDORSEMENT OR RECOMMENDATION OF THE
REORGANIZATION AND MERGER. The
application of the Holding Company to
become a bank holding company requires
the approval of the FRB. An application
for such approval was filed by the
Holding Company with FRB on
_____________. See sections entitled
"PROPOSED REORGANIZATION - Shareholder
Approval" and "PROPOSED REORGANIZATION -
Regulatory Approvals."
Conversion of Stock Upon the consummation of the Plan of
Reorganization and Plan of Merger, all
shareholders of the Bank, except those
who exercise dissenting shareholders'
rights, will become shareholders of the
Holding Company. Each outstanding whole
share of the Bank's common stock, par
value One Dollar ($1.00) per share, will
be converted into and become one (1)
share of common stock, par value One
Dollar ($1.00) per share, of the
Holding Company. No fractional shares
of Holding Company common stock will be
issued in connection with the
reorganization and merger. In lieu of
the issuance of any fractional share to
which a shareholder would otherwise be
entitled, cash equal to the fair market
value of the fractional interest will be
received. See section entitled
"PROPOSED REORGANIZATION - Conversion
of Stock."
Exchange of Stock Shareholders will be required to
Certificates exchange their present stock
certificates (bearing the name "Premier
Bank") for new stock certificates
(bearing the name "Premier Bancorp,
Inc."). The Board of Directors has
reserved the right to withhold any
dividends from those shareholders who do
not exchange their certificates within a
reasonable period of time after
notification of the exchange. See
section entitled "PROPOSED
REORGANIZATION - Exchange of Stock
Certificates."
3
<PAGE>
Failure to Surrender Shareholders of the Bank must surrender
Stock Certificates their stock certificates within two(2)
years of the date of notification to do
so. In the event that any stock
certificates are not surrendered for
exchange within such two (2) year
period, shares represented by
appropriate certificates of the Holding
Company that would otherwise have been
delivered in such exchange may be sold,
at the option of the Holding Company.
If sold, the net proceeds of the sale
shall be held for those shareholders of
the unsurrendered certificates to be
paid to them upon surrender of their
outstanding certificates. FROM AND
AFTER SUCH SALE, THE SOLE RIGHT OF THE
HOLDERS OF THE UNSURRENDERED OUTSTANDING
CERTIFICATES SHALL BE THE RIGHT TO
COLLECT THE NET SALES PROCEEDS HELD FOR
THEIR ACCOUNT. See section entitled
"PROPOSED REORGANIZATION - Failure to
Surrender Stock Certificates."
Amendment The Board of Directors of the Bank, the
Holding Company and the Interim Bank may
amend the Plan of Reorganization and
Plan of Merger by mutual consent either
before or after approval by the Bank's
shareholders. However, no amendments
can be made to the provisions relating
to the conversion of shares of the Bank
into shares of the Holding Company
without proper shareholder approval.
See section entitled "PROPOSED
REORGANIZATION - Plan of Reorganization
and Plan of Merger."
Termination The Plan of Reorganization and Plan of
Merger may be terminated by the mutual
consent of the Boards of Directors of
the Bank, the Interim Bank and the
Holding Company, even after the approval
of such plans by the Bank's
shareholders. The Bank's Board of
Directors may terminate the Plan of
Reorganization at any time before it is
consummated if the Board of Directors
believes the reorganization would be
inadvisable for any other proper reason.
See section entitled "PROPOSED
REORGANIZATION - Plan of Reorganization
and Plan of Merger."
4
<PAGE>
"Anti-Takeover" The Articles of Incorporation and By-
Provisions laws of the Holding Company establish or
contain certain provisions that may be
deemed to be "anti-takeover" in nature.
The Articles of Incorporation and the
By-laws of the Holding Company were
effective as of the date the Articles of
Incorporation were filed with the
Pennsylvania Department of State,
Corporation Bureau, and the date that
the By-laws were approved by the Holding
Company's Board of Directors. These
provisions of the Articles of
Incorporation and By-laws will apply to
all shareholders of the Holding Company
on the Effective Date of the Holding
Company formation, the date on which the
Plan of Reorganization and Plan of
Merger are consummated. The anti-
takeover provisions are as follows: (1)
the authorization of ten million
(10,000,000) shares of common stock, all
of which may be issued without
shareholder approval; (2) three (3) year
staggered terms of office for directors;
(3) the requirement that holders of at
least sixty-six and two-thirds percent
(66-2/3%) of the outstanding shares of
the Holding Company's common stock
approve any merger, consolidation,
liquidation or dissolution of the
Holding Company or the sale of all or
substantially all of its assets. (4) the
requirement that holders of at least
sixty-six and two-thirds percent
(66-2/3%) of the outstanding shares of
the Holding Company's common stock
approve any change in the By-laws or
change any amendment to the By-laws, or
by a majority vote of the members of the
Board of Directors subject to the power
of the shareholders to change such
action of the Board of Directors by the
affirmative vote of the holders of
sixty-six and two-thirds percent
(66-2/3%) of the outstanding shares of
common stock; (5) the authorization for
the Board of Directors to oppose a
tender offer on the basis of factors
other than economic benefit to
shareholders; and (6) the requirement
that a special meeting of shareholders
may only be called by a majority of the
Board of Directors, the Chairman, the
President, or one or more shareholders
owning, in the aggregate, not less than
20% of the outstanding shares of the
Holding Company. THEREFORE, A VOTE IN
FAVOR OF THE PLANS OF REORGANIZATION AND
MERGER IS A
5
<PAGE>
VOTE IN FAVOR OF THESE ANTI-TAKEOVER
PROVISIONS. See section entitled
"DESCRIPTION OF THE HOLDING COMPANY'S
STOCK - Anti-takeover Provisions."
Rights of Dissenting Shareholders of the Bank who: (1) vote
Shareholder against the Plan of Reorganization and
Plan of Merger at the Special Meeting or
give notice in writing to the Bank prior
to or at the Special Meeting that they
dissent from the Plan of Reorganization
and Plan of Merger; and (2) comply with
the procedures described in the section
entitled "PROPOSED REORGANIZATION -
Rights of Dissenting Shareholders" will
be entitled to receive cash for the fair
value of their shares. Merely voting
against the Plan of Reorganization and
Plan of Merger at the Special Meeting
will not perfect a shareholder's
dissenters' rights. Shareholders are
urged to review carefully the section of
this Proxy Statement/Prospectus entitled
"PROPOSED REORGANIZATION - Rights of
Dissenting Shareholders" and the
statutory excerpts concerning
dissenters' rights attached to this
Proxy Statement/Prospectus as Exhibit E.
FAILURE TO FOLLOW THE PROCEDURES SET
FORTH IN 15 Pa.C.S.A. SECTION 1571, et
seq, REGARDING DISSENTERS' RIGHTS WILL
CONSTITUTE A WAIVER OF APPRAISAL RIGHTS.
Tax Consequences Under the current provisions of the
Internal Revenue Code of 1986, as
amended (the "Code"), no gain or loss is
expected to be recognized for federal
income tax purposes by the shareholders
of the Bank by reason of the conversion
of their common stock of the Bank into
common stock of the Holding Company in
connection with the consummation of the
Plan of Reorganization and Plan of
Merger with the exception of any cash
issued for fractional shares owned. See
section entitled "PROPOSED
REORGANIZATION - Rights of Dissenting
Shareholders."
6
<PAGE>
This Page Intentionally Left Blank.
<PAGE>
PREMIER BANCORP, INC.
AND
PREMIER BANK
PROXY STATEMENT/PROSPECTUS
INTRODUCTION
This Proxy Statement, which also constitutes a Prospectus
(the "Proxy Statement/Prospectus"), is furnished for the
solicitation by the Board of Directors of Premier Bank (the
"Bank"), a state-chartered banking institution, of proxies to be
voted at the Special Meeting of Shareholders of the Bank, to be
held at Barley Sheaf Farm Bed and Breakfast Inn, Route 202,
Holicong, Pennsylvania, on Thursday, October 9, 1997, at 9:00
a.m., prevailing time, and at any adjournment or postponement of
the Special Meeting. This Proxy Statement/Prospectus also
constitutes a prospectus of Premier Bancorp, Inc. (the "Holding
Company") in offering its shares of common stock to the Bank's
shareholders in accordance with the Plan of Reorganization and
Plan of Merger. The principal executive offices of the Bank and
the Holding Company are located at 379 North Main Street,
Doylestown, Pennsylvania 18901. The telephone number for the
Bank and the Holding Company is (215) 345-5100. All inquiries
should be directed to John C. Soffronoff, President. This Proxy
Statement/Prospectus and the enclosed form of proxy (the "Proxy")
are first being sent to shareholders of the Bank on or about
September 9, 1997 .
Date, Place and Time of Special Meeting
- ---------------------------------------
The Special Meeting of Shareholders of Premier Bank will be
held on Thursday, October 9, 1997, at Barley Sheaf Farm Bed and
Breakfast Inn, Route 202, Holicong, Pennsylvania, at 9:00 a.m.
prevailing time.
Purpose of the Special Meeting
- ------------------------------
At the Special Meeting, shareholders of the Bank will be
requested: (1) to consider and act upon a proposal to approve and
adopt the Plan of Reorganization and Plan of Merger dated as of
___________, 1997, providing, among other things, for the merger
of the Bank and Premier Interim Bank (the "Interim Bank"), a
Pennsylvania state-chartered banking institution organized under
the laws of the Commonwealth of Pennsylvania and a subsidiary of
Premier Bancorp, Inc. (the "Holding Company"), and for the
automatic conversion of each whole share of common stock of the
Bank into one (1) share of common stock of the Holding Company
(no fractional shares of Holding Company common stock will be
issued. Shareholders will receive cash in lieu of any fractional
shares of Bank common stock); and (2) to transact such other
business as may properly come before the Special Meeting and any
adjournment or postponement thereof.
8
<PAGE>
Record Date; Quorum; Voting Rights
- ----------------------------------
The Board of Directors of the Bank has fixed the close of
business on September 1, 1997 , as the record date for the
determination of shareholders of the Bank entitled to notice of
and to vote at the Special Meeting (the "Record Date"). On the
Record Date, the Bank had outstanding 868,128 shares of common
stock, par value One Dollar ($1.00) per share, the only
authorized class of stock (the "Common Stock"), which was held by
approximately four-hundred ninety (490) shareholders.
Under Pennsylvania law and the By-laws of the Bank, the
presence of a quorum, in person or by proxy, is required for each
matter to be acted upon at the Special Meeting. The presence, in
person or by proxy, of shareholders entitled to cast at least a
majority of the votes which all shareholders are entitled to
cast, shall constitute a quorum for the transaction of business
at the Special Meeting. Votes withheld and abstentions will be
counted in determining the presence of a quorum for the
particular matter. Broker non-votes will not be counted in
determining the presence of a quorum for the particular matter as
to which the broker withheld authority.
Assuming the presence of a quorum, the affirmative vote of
at least sixty-six and two-thirds percent (66-2/3%) of the
outstanding shares of Common Stock is required to approve and
adopt the Plan of Reorganization and Plan of Merger. Abstentions
and broker non-votes are not votes cast and, therefore, do not
count either for or against such approval and adoption. However,
abstentions and broker non-votes have the practical effect of
reducing the number of affirmative votes received for each such
matter.
On all matters to come before the Special Meeting, including
the proposal to approve and adopt the Plan of Reorganization and
Plan of Merger, each share of Common Stock is entitled to one (1)
vote, and fractional shares are entitled to a proportionate,
fractional vote.
Solicitation of Proxies
- -----------------------
This Proxy Statement/Prospectus and the enclosed form of
Proxy are first being sent to shareholders of the Bank on or
about September 9, 1997 .
The cost of preparing, assembling, printing, mailing and
soliciting proxies, and any additional material that the Bank may
furnish shareholders in connection with the Special Meeting, will
be borne by the Bank. In addition to solicitation by mail,
directors, officers and employees of the Bank may solicit Proxies
from the shareholders of the Bank personally or by telephone,
telegram or telecopier. Arrangements will be made with brokerage
houses and other custodians, nominees and fiduciaries to forward
proxy solicitation materials to the beneficial owners of the
Common Stock held of record by these persons, and, upon request
therefor, the Bank will reimburse them for their reasonable
forwarding expenses.
9
<PAGE>
Voting and Revocation of Proxies
- --------------------------------
Shares represented by Proxies that are properly signed,
executed and returned, unless subsequently revoked, will be voted
at the Special Meeting in accordance with the instructions made
thereon by the shareholders. If a Proxy is signed, executed and
returned without indicating any voting instructions, the shares
represented by the Proxy will be voted FOR the approval and
adoption of the Plan of Reorganization and Plan of Merger.
Execution and return of the enclosed Proxy will not affect a
shareholder's right to attend the Special Meeting and vote in
person, after giving notice to John J. Ginley, Secretary of the
Bank.
A shareholder of the Bank who returns a Proxy may revoke the
Proxy prior to the time it is voted: (1) by giving written notice
of revocation to John J. Ginley, Secretary of Premier Bank, 379
North Main Street, Doylestown, Pennsylvania 18901; (2) by
executing a later-dated proxy and giving written notice thereof
to the Secretary of the Bank; or (3) by voting in person after
giving written notice to the Secretary of the Bank. Attendance
by a shareholder at the Special Meeting will not itself be deemed
or constitute a revocation of the Proxy.
PRINCIPAL BENEFICIAL OWNERS OF THE BANK'S COMMON STOCK
Principal Owners
- ----------------
The following table sets forth, as of September 1, 1997 ,
the name and address of each person who owns of record or who is
known by the Board of Directors to be the beneficial owner of
more than five percent (5%) of the Bank's outstanding Common
Stock, the number of shares beneficially owned by such person and
the percentage of the Bank's outstanding Common Stock so owned.
The footnote to the following table is set forth below under the
section entitled "Beneficial Ownership by Officers and
Directors."
<TABLE>
<CAPTION>
Percent of
Outstanding
Common Stock
Shares Beneficially Beneficially
Name and Address Owned <F1> Owned
- ---------------- ------------------- -------------
<S> <C> <C>
David C. Frame 57,697 <F2> 5.39%
95 Leonard Ave., Suite 201
Pittsburgh, PA
Clark S. Frame 55,158.3<F3> 5.15%
379 North Main Street
Doylestown, Pennsylvania
<FN>
<F1> For the definition of beneficial ownership, see footnote 1
to the table, following.
<F2> Includes an option to purchase 8,745 shares.
<F3> Includes an option to purchase 16,134 shares.
</FN>
</TABLE>
10
<PAGE>
Beneficial Ownership by Officers and Directors
- ----------------------------------------------
The following table sets forth as of September 1, 1997 , the
amount and percentage of the Common Stock of the Bank
beneficially owned by each director and all officers and
directors of the Bank as a group. This information has been
furnished by the reporting persons.
<TABLE>
<CAPTION>
Name of Individual Amount and Nature of Percent
or Identity Beneficial of Class
Of Group Ownership <F1> <F2> <F23>
- -------------------- ------------------------- --------
<S> <C> <C>
Daniel E. Cohen 34,344.0 <F3> 3.21%
Peter A. Cooper 37,316.0 <F4> 3.49%
Clark S. Frame 55,158.6 <F5> 5.15%
Thomas E. Mackell 26,136.0 <F6> 2.44%
Barry J. Miles, Sr. 20,201.5 <F7> 1.89%
Daniel A. Nesi 34,255.4 <F8> 3.20%
Neil Norton 28,931.0 <F9> 2.70%
Thomas M. O'Mara 17,783.0 <F10> 1.66%
Michael Perrucci 24,746.6 <F11> 2.31%
Brian R. Rich 27,413.0 <F12> 2.56%
Ezio U. Rossi 41,389.0 <F13> 3.87%
Richard F. Ryon 26,115.2 <F14> 2.44%
Gerald Schatz 38,456.4 <F15> 3.59%
Bruce E. Sickel 14,004.9 <F16> 1.31%
John C. Soffronoff 13,390.0 <F17> 1.25%
Irving N. Stein 22,922.0 <F18> 2.14%
Thomas P. Stitt 22,515.0 <F19> 2.10%
HelenBeth Garofalo-Vilcek 12,748.5 <F20> 1.19%
George H. Wetherill 25,287.4 <F21> 2.36%
John A. Zebrowski 31,266.1 <F22> 2.92%
All Officers and Directors
as a Group (21 persons) 568,673.6 53.12%
______________________
<FN>
<F1> The securities "beneficially owned" by an individual are
determined in accordance with the definitions of "beneficial
ownership" set forth in the regulations of the Federal Reserve
and the Securities and Exchange Commission and may include
securities owned by or for the individual's spouse and minor
children and any other relative who has the same home, as well as
securities as to which the individual has or shares voting or
investment power or has the right to acquire beneficial ownership
within sixty (60) days after September 1, 1997 . Beneficial
ownership may be disclaimed as to certain of the securities.
<F2> Unless otherwise indicated, all shares are legally owned by
the reporting person individually or jointly with a spouse.
<F3> Includes an option to purchase 14,280 shares.
<F4> Includes an option to purchase 16,955 shares.
<F5> Includes an option to purchase 16,134 shares.
<F6> Includes an option to purchase 9,350 shares.
<F7> Includes an option to purchase 5,841.5 shares.
<F8> Includes an option to purchase 12,845 shares.
<F9> Includes an option to purchase 13,465 shares.
<F10> Includes an option to purchase 6,541 shares.
<F11> Includes an option to purchase 10,550 shares.
<F12> Includes an option to purchase 6,613 shares.
<F13> Includes an option to purchase 7,014 shares.
<F14> Includes an option to purchase 4,995 shares.
<F15> Includes an option to purchase 8,466 shares.
<F16> Includes an option to purchase 7,395 shares.
11
<PAGE>
<F17> Includes an option to purchase 6,790 shares.
<F18> Includes an option to purchase 6,980 shares.
<F19> Includes an option to purchase 3,155 shares.
<F20> Includes an option to purchase 4,380 shares.
<F21> Includes an option to purchase 8,386 shares.
<F22> Includes an option to purchase 7,485.2 shares.
<F23> Upon consummation of the Plan of Reorganization and Plan of
Merger, the percentage of present ownership of the named
individuals and all officers and directors as a group shall
remain unchanged.
</FN>
</TABLE>
PROPOSED REORGANIZATION
Plan of Reorganization and Plan of Merger
- -----------------------------------------
Under the terms of the Plan of Reorganization and Plan of
Merger, the Interim Bank, a subsidiary of the Holding Company,
will merge with, into and under the Charter of the Bank, and each
whole outstanding share of the Bank's Common Stock (other than
shares as to which dissenters' rights have been perfected and
other than fractional shares in lieu of which cash will be
issued) will be converted into the right to receive one (1) share
of the Holding Company's Common Stock (the "Merger").
The Interim Bank is a Pennsylvania state-chartered banking
institution, organized under the Pennsylvania Banking Code of
1965, as amended (the "Banking Code"), for the sole purpose of
merging with the Bank to effect the reorganization. The
Interim Bank will conduct no banking business prior to the
Merger. After the Merger, the Bank will survive.
Upon consummation of the Plan of Reorganization, the Bank
will become a wholly-owned subsidiary of the Holding Company, and
the shareholders of the Bank will become shareholders of the
Holding Company. The Bank will continue its banking business
substantially unchanged and under the same management.
On ___________, 1997, the Boards of Directors of the Bank,
the Interim Bank and the Holding Company unanimously approved the
Plan of Reorganization and the Plan of Merger. The Plan of
Reorganization and the Plan of Merger may be amended by mutual
consent of the Parties before or after approval and adoption by
the Bank's shareholders except for provisions relating to the
conversion of shares of Common Stock of the Bank into shares of
common stock of the Holding Company.
THE PLAN OF REORGANIZATION AND THE PLAN OF MERGER MUST BE
APPROVED AND ADOPTED BY THE AFFIRMATIVE VOTE OF THE HOLDERS OF AT
LEAST SIXTY-SIX AND TWO-THIRDS PERCENT (66-2/3%) OF THE
OUTSTANDING SHARES OF THE BANK'S COMMON STOCK.
The Plan of Reorganization and the Plan of Merger are
subject to the consent and approval of certain governmental
authorities, including approval by the Board of Governors of the
Federal Reserve System ("FRB") and by the Pennsylvania Department
of Banking (the "Department"). The Holding Company is required
to register with the FRB as a bank holding company under the Bank
Holding Company Act of 1956, as amended. An application for
12
<PAGE>
such registration was filed with the FRB on ________, 1997.
Application for approval of the Merger was filed on __________,
1997, with the FRB, and on __________, 1997, with the Department.
Approval was conditionally granted on ________, 1997, by the
FRB, and on __________, 1997, by the Department.
The Plan of Reorganization and Plan of Merger may be
terminated by the mutual consent of the Boards of Directors of
the Bank, the Interim Bank and the Holding Company even after
they are approved by the Bank's shareholders. The Board of
Directors, however, may not amend any provisions relating to the
conversion of shares of the Bank into shares of the Holding
Company without shareholder approval. The Board of Directors of
the Bank may also terminate the Plan of Reorganization and the
Plan of Merger at any time before the consummation of the Merger, if
the Board of Directors believes that the reorganization would be
inadvisable, for any reason.
As required by generally accepted accounting principles, the
Merger may be accounted for as a pooling of interests.
For additional information, see the Plan of Reorganization
and the Plan of Merger, attached hereto as Exhibits A and B,
respectively, and incorporated by reference herein.
Reasons for the Proposed Reorganization
- ----------------------------------------
In the opinion of the Board of Directors of the Bank, the
formation of a bank holding company will provide greater
flexibility in financing, in engaging in non-banking activities,
in protecting against an unfriendly takeover, and in responding
to changes in law.
The Bank has experienced a period of sustained and
substantial growth. In order to continue the rate of this
growth, additional capital may be necessary. One of the
advantages of formation of a Holding Company is the greater
number of alternatives in connection with the raising capital.
When used, these alternatives may permit the Bank or Holding
Company, as the case may be, to support its growth. These additional
alternatives include, but are not limited to, the issuance of
Trust Preferred Stock. Although the manner in which Trust Preferred Stock is
issued is very complicated, the basic form of the transaction is as follows: a
holding company creates a special trust subsidiary, usually a Delaware business
trust. The subsidiary issues preferred stock ("Trust Preferred
Stock") to interested investors. The holding company then issues long
term debt to the subsidiary in return for which the subsidiary pays to
the holding company the proceeds of the sale of the Trust
Preferred Stock. The holding company must pay interest to the subsidiary which
interest the subsidiary passes through to the holders of the Trust Preferred
Stock.
Although the Holding Company has made no final decision to
issue Trust Preferred Stock at this time, it is likely that the
Holding Company will do so in the future. Management of the
Holding Company will consider all available options for obtaining
capital and market conditions. The advantages of Trust Preferred
Stock to the Holding Company are that: (1) it qualifies as Tier 1 capital,
a key factor examined by the Holding Company's regulators in
determining whether the Holding Company is adequately capitalized; (2) under
current tax law, the payment of interest by the Holding Company
to a subsidiary is tax deductible; and (3) the issuance of
Trust Preferred Stock will not dilute the Holding Company's
common equity ownership or earnings per share. In addition, a
Bank, without a
13
<PAGE>
holding company, may not issue Trust Preferred Stock. The
Holding Company structure is necessary to issue such securities.
Flexibility in Financing. The authorized capitalization of
the Holding Company, whose Articles of Incorporation authorize
ten million (10,000,000) shares of Common Stock, provide
flexibility in financing to the Holding Company. If the Plan of
Reorganization is approved, approximately 868,128 shares of
Common Stock will be issued in connection with the consummation of the Plan of
Reorganization, leaving approximately 9,131,872 authorized but unissued shares
of Common Stock. The authorized but unissued shares of Common Stock would
be available for issuance from time to time by action of the Board of
Directors to raise additional capital, for acquisitions, or for other
corporate purposes without further action by the shareholders of
the Holding Company unless otherwise required by law. Such
issuance could result in a dilution of voting rights and book
value per share as to the Common Stock of the Holding Company.
There are no present plans, arrangements or commitments for the
issuance of any such shares. The ability to incur indebtedness
at the Holding Company level and to contribute the proceeds of
such indebtedness to the Bank as equity capital provides further
flexibility.
Non-Banking Activities. Under the Bank Holding Company Act
of 1956, as amended, with the prior approval of the Federal
Reserve Board, the Holding Company may organize or acquire
certain other financially related businesses without shareholder
approval. The Holding Company has no present plans for such
acquisition. Subsidiaries of the Holding Company, not engaged in banking, but
in activities related to banking, are not subject to geographic
restrictions. See, "Description of the Holding Company -
Permitted Activities".
Protection Against an Unfriendly Takeover. See,
"Description of the Holding Company's Stock - Anti-Takeover
Provisions".
Interstate Banking and Branching. Under the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994 (the
"Interstate Banking and Branching Act"), bank holding companies,
pursuant to an amendment to the Bank Holding Company Act, can
acquire a bank located in any state, as long as the acquisition
does not result in the bank holding company controlling more than
ten percent (10%) of the deposits in the United States, or thirty
percent (30%) of deposits in the target bank's state. The
legislation permits states to waive the concentration limitations
and require that the target institution be in existence for up to
five (5) years before it can be acquired by an out-of-state bank
or bank holding company. Interstate branching and merging of
existing banks is permitted after three (3) years from the
enactment of the Interstate Banking and Branching Act, if the
bank is adequately capitalized and demonstrates good management.
Branch merging will be permitted earlier if a state undertakes to
enact a law which allows it and states may also enact a law to
permit banks to branch de novo. The Interstate Banking and
Branching Act also amends the International Banking Act to allow
a foreign bank to establish and operate a federal branch or
agency upon approval of the appropriate federal and state banking
regulator.
Section 1602 of the Pennsylvania Banking Code of 1965 has
been amended to allow interstate mergers upon compliance with
applicable requirements. Section 907 of the Pennsylvania Banking
Code has been amended to allow Pennsylvania state banks to
maintain branches in any other state, the District of Columbia,
or a territory or possession of the United States with prior
14
<PAGE>
regulatory approval. Section 30 of the National Bank Act allows
national banks to engage in interstate banking to the extent
permissible for state banks within the subject state.
Shareholder Approval
- --------------------
An affirmative vote of sixty-six and two-thirds percent
(66-2/3%) of the issued and outstanding shares of Common Stock of
the Bank is necessary to approve and adopt the Plan of
Reorganization and Plan of Merger.
Effective Date
- --------------
The reorganization and the Merger shall be effective at the
time and on the date specified on the certificate to be issued by
the Department and by the FRB. The Bank will request that the
Department and the FRB issue a certificate no later than October
30, 1997 (the "Effective Date"). Neither the Department nor the FRB will
issue a certificate before they approve the Merger. Final approval
will not be considered and given until the Holding Company and the
Bank give notice that holders of at least sixty-six and two-thirds percent
(66-2/3%) of the issued and outstanding shares of Common Stock of the Bank
have approved and adopted the Plan of Reorganization and the Plan of
Merger.
The approval of the Department and of the FRB reflects only
the regulator's view that the transaction does not contravene
the competitive standards of law and is consistent with
regulatory concerns relating to bank management and to the safety
and soundness of the subject banking organizations. Such approval is not to be
interpreted as an opinion by the regulators that the reorganization is favorable
to the shareholders from a financial point of view or that these
agencies have considered the adequacy of the terms of the
exchange. THE REGULATORS' APPROVAL IS NOT AN ENDORSEMENT OR
RECOMMENDATION OF THE REORGANIZATION OR OF THE MERGER.
Effect of Reorganization on Bank's Business and Shareholders
- -------------------------------------------------------------
The Interim Bank is a Pennsylvania state-chartered banking
institution, organized by the Holding Company, for the sole
purpose of effecting the reorganization and holding company
formation. The Interim Bank is a subsidiary of the Holding
Company. The Interim Bank will conduct no banking business prior
to the proposed merger. On the Effective Date, the Interim Bank
will merge with, into and under the Charter of the Bank. The
Bank will survive.
On the Effective Date, shareholders of the Bank will cease
to have any rights as shareholders of the Bank and their rights
will relate solely to the shares of the Holding Company Common
Stock, or, if demanded in accordance with Subchapter D of Chapter
15 of the Pennsylvania Business Corporation Law of 1988, as
amended (the "BCL")(15 Pa C.S.A. Section 1571, et seq.), they
will have the right to receive cash in the amount of the
appraised value of their shares of Bank Common Stock. See
"Rights of Dissenting Shareholders" and Exhibit E, Excerpts from
Subchapter D of Chapter 15 of the BCL, Relating to Dissenters'
Rights.
15
<PAGE>
Conversion of Stock
- --------------------
On the Effective Date, shareholders of the Bank who do not
perfect dissenters' rights will become shareholders of the
Holding Company by reason of the Merger. They will own the same
number of shares of the Holding Company's Common Stock as they
previously owned of the Bank's Common Stock with the exception of
fractional shares. Cash equal to the fair market value of the
fractional interest on the Effective Date will be paid in lieu of
fractional shares. Each outstanding whole share of the Bank's
Common Stock, par value One Dollar ($1.00) per share, will
automatically be converted into and become the right to receive
one (1) share of Common Stock, par value One Dollar ($1.00) per share, of the
Holding Company.
The Bank has issued options representing the ability to
purchase 229,403 shares of Bank common stock at prices ranging
from $9.09 per share to $15.00 per share. The Holding Company will assume the
obligation of the Bank under any options outstanding and unexercised on the
Effective Date. Option holders will receive stock options to purchase the same
number of shares at the same exercise price had the option been exercised
prior to the Merger.
Exchange of Stock Certificates
- ------------------------------
The outstanding stock certificates that represent one (1)
share of the Bank's Common Stock will be deemed automatically to
represent one (1) share of the Holding Company's Common Stock.
Shareholders will be required to exchange their present stock
certificates (bearing the name "Premier Bank") for new stock
certificates (bearing the name "Premier Bancorp, Inc."). The
Board of Directors has reserved the right to withhold any
dividends from those shareholders who do not exchange their
present stock certificates for new stock certificates within a
reasonable period of time after being advised by the Board of
Directors of such exchange of share certificates.
Failure To Surrender Stock Certificates
- ----------------------------------------
In addition to the right of the Board of Directors of the
Holding Company to withhold dividends from those shareholders who
do not exchange their present stock certificates within a
reasonable period of time, shareholders will be required to
surrender their stock certificates within two (2) years of the
date of notification to do so. In the event that any stock
certificates are not surrendered for exchange within such two (2)
year period, the shares represented by appropriate certificates
of the Holding Company that would otherwise have been delivered
in exchange for the unsurrendered certificates, may be sold at
the option of the Holding Company. The net proceeds of the sale
shall be held for the shareholders of the unsurrendered
certificates and will be paid to them upon surrender of their
outstanding certificates. FROM AND AFTER SUCH SALE, THE SOLE
RIGHT OF THE HOLDERS OF THE UNSURRENDERED OUTSTANDING
CERTIFICATES SHALL BE THE RIGHT TO COLLECT THE NET SALES PROCEEDS
HELD FOR THEIR ACCOUNT.
Trading and Resale of Holding Company Common Stock
- --------------------------------------------------
There is no regular trading market for the Bank's Common
Stock, although shares are sold from time to time in private
transactions. Initially, it is not expected that Holding Company
Common Stock will be traded on a more established basis following
the Merger. The Holding Company is in the process of researching
the advantages of having its shares quoted in the NASDAQ SmallCap
Market. It is anticipated that the Holding Company will arrange
to have its shares quoted on NASDAQ SmallCap Market at or after
the Effective Date of the Holding Company formation.
16
<PAGE>
The shares of Holding Company Common Stock to be received in
connection with the Merger will not require registration under
the Securities Act of 1933, as amended (the "Securities Act"),
for their subsequent transfer, except that shares of the Holding
Company Common Stock to be received by persons who are deemed to
be "affiliates" of the Bank (directors, certain officers and
shareholders owning five percent (5%) or more of the outstanding
shares of Common Stock), within the meaning of Rule 145 under the
Securities Act, may be resold by affiliates without further
registration only in transactions permitted under certain
sections of Rule 144 under the Securities Act or pursuant to
other exemptions under the Securities Act. Rule 144, among other
things, will operate generally to limit the number of shares of
Holding Company Common Stock that may be sold in any three-month
period by any one affiliate not acting in concert with others to
one percent (1%) of the outstanding shares of the Holding Company
Common Stock. This limitation will cease at the end of one (1)
year following the Effective Date as to former affiliates of the
Bank who are not affiliates of the Holding Company. Most
affiliates of the Bank, however, will at least initially also be
affiliates of the Holding Company and thus may only sell shares
of Holding Company Common Stock in transactions permitted under
Rule 144 or otherwise in compliance with the Securities Act.
Tax Consequences
- ----------------
Under the current provisions of the Internal Revenue Code of
1986, as amended (the "Code") it is anticipated that: (1) no
gain or loss will be recognized by the Bank, the Holding Company
or the Interim Bank by reason of the reorganization; (2) no gain
or loss will be recognized by the Bank's shareholders upon the
exchange of the Bank's Common Stock solely for the Holding
Company's Common Stock pursuant to the reorganization, except for
any shareholder of the Bank who receives payment in cash as a
dissenting shareholder or for fractional shares; (3) the tax
basis of the Holding Company's Common Stock to be owned by each
of the Bank's shareholders will be the same as the tax basis of
the Bank's Common Stock theretofore owned by such shareholder;
(4) the holding period of the Holding Company's Common Stock into
which the Bank's Common Stock has been converted will include the
holding period of the Bank's Common Stock, provided that the
Common Stock of the Bank was held as a capital asset on the date
of the conversion; (5) the Interim Bank will carry-over and take
into account all accounting items of the Bank such as earnings
and profits, method of accounting, inventories, etc.; and (6) any
distribution by the Interim Bank to the Holding Company for the
repayment of the loan to charter the Interim Bank will be
disregarded as having any tax consequence.
In general, cash received by dissenting shareholders of the
Bank or for fractional shares will be treated as amounts
distributed in redemption of their Bank Common Stock and will be
taxable under Section 302(a) of the Code, that is as a capital
gain or loss, if the shares are held as a capital asset and as
ordinary income otherwise. It is possible, however, that the
provisions of Section 302(a) will not apply to a particular
dissenting shareholder due to Code rules that require that
certain shareholders be treated as owning shares actually owned
by other individuals and entities (i.e., certain individuals
related to the shareholder and certain partnerships, estates,
trusts and corporations in which the shareholder has an
interest); if so, the amounts paid to the dissenting shareholder
may be taxable as dividends because they would be treated as
distributions to which Code Section 301 applies and not as a
redemption under Code Section 302(a).
17
<PAGE>
Under the current Pennsylvania personal income tax law, no
gain or loss will be recognized by the shareholders on the
conversion of the Bank Common Stock into the Holding Company
Common Stock, except for shareholders exercising Dissenters'
Rights for Pennsylvania residents and except for fractional
shares. The Holding Company's Common Stock will be exempt from
the personal property tax, as presently in effect.
SHAREHOLDERS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS
IN ORDER TO MAKE AN INDIVIDUAL APPRAISAL OF THE FEDERAL, STATE
AND LOCAL INCOME TAX AND PERSONAL PROPERTY AND OTHER TAX
CONSEQUENCES OF THE CONSUMMATION OF THE REORGANIZATION AND MERGER
AND THE EXERCISE OF DISSENTERS' RIGHTS.
Rights of Dissenting Shareholders
- ---------------------------------
Any shareholder who objects to the Plan of Reorganization
and Plan of merger may seek the remedies provided by Subchapter D
of Chapter 15 of the BCL. The following summary of Dissenters'
Rights granted pursuant to the BCL does not purport to be
complete and is qualified in its entirety by reference to Exhibit
E hereto, which contains the complete test of Dissenters' Rights.
Exhibit E is incorporated herein by reference in its entirety.
In accordance with the provisions for Dissenters' Rights in
the BCL, any shareholder of the Bank who: (1) files with the
Bank, prior to commencement of the voting by the shareholders on
the Plan of Reorganization and Plan of Merger at the Special
Meeting, a written notice of intention to demand that he be paid
the fair value for his shares if the merger is approved; (2)
makes no change in beneficial ownership of his shares from the
date of filing the notice of intention to demand payment until
the effective date of the merger; (3) does not vote in favor of
the Plan of Reorganization and Plan of merger; (4) upon receiving
a further notice from the Bank of such right of dissent, timely
files a demand for the payment of the fair value of his shares
and deposits his stock certificates with the Bank; and (5)
complies with all further procedural requirements set forth in
Subchapter D of Chapter 15 of the BCL, will be entitled to
receive in cash, the fair value of the Bank's Common Stock held
by him or her, determined as of the point in time immediately
prior to the effectuation of the merger, without regard to any
depreciation or appreciation thereof in consequence of the Plan
of Reorganization and Plan of Merger. A VOTE AGAINST THE PLAN OF
REORGANIZATION AND PLAN OF MERGER, WHETHER CAST BY PROXY OR IN
PERSON AT THE SPECIAL MEETING, SHALL NOT, IN ITSELF, CONSTITUTE
THE REQUIRED WRITTEN NOTICE OF INTENTION TO DEMAND PAYMENT.
A shareholder may assert Dissenters' Rights as to fewer than
all of the shares of the Bank's Common Stock registered in his or
her name only if he or she dissents with respect to all the
shares beneficially owned by any one person and notifies the Bank
of the name and address of the beneficial owner or owners on
whose behalf he or she dissents. A shareholder may assert
Dissenters' Rights with respect to shares owned beneficially but
not registered in his or her name if he or she submits to the
Bank a written consent of the record shareholder prior to
commencement of the voting by the shareholders on the proposed
merger at the Special meeting. A shareholder may
18
<PAGE>
not dissent with respect to some but less than all shares owned
beneficially, whether or not the shares so owned are registered
in the shareholder's name.
If the proposed merger is approved and adopted by the
shareholders at the Special Meeting, the Bank will mail a further
notice to all shareholders who timely filed a written notice of
intention to demand payment and who refrained from voting in
favor of the proposed merger. The further notice will include
the following: (1) information concerning where and when a demand
for payment must be sent; (2) where and when a shareholder must
deposit the certificates representing his Common Stock in order
to obtain payment; (3) a form to be used by a shareholder for
demanding payment that includes a request for certification of
the date on which the shareholder, or the person on whose behalf
the shareholder dissents, acquired beneficial ownership of the
shares; and (4) a copy of Subchapter D of Chapter 15 of the BCL.
The time set by the Bank for receipt of the demand for payment
and deposit of the certificates by shareholders shall not be less
than 30 days from the mailing of the notice. A SHAREHOLDER WHO
FAILS TO TIMELY FILE THE FORM FOR DEMANDING PAYMENT OR FAILS TO
DEPOSIT HIS OR HER COMMON STOCK CERTIFICATES, AS REQUIRED BY THE
NOTICE, SHALL NOT HAVE ANY RIGHT TO RECEIVE PAYMENT OF THE FAIR
VALUE OF HIS OR HER SHARES. A dissenting shareholder shall
retain all other rights of a shareholder until those rights are
modified by effectuation of the proposed merger.
If the merger is not effectuated within 60 days after the
date set by the Bank for filing the demand for payment and
depositing Common Stock certificates, the Bank shall return to
shareholders any certificates that have been deposited.
Promptly after the Effective Date of the Merger, the Bank
may in its discretion, with respect to the dissenting
shareholders who have timely filed the demand for payment and
deposited their certificates, either remit to dissenting
shareholders the amount that the Bank estimates to be the fair
value of the shares, or send to dissenting shareholders a written
notice of its estimate of the fair value of the shares. The
payment or the notice shall be accompanied by: (1) the closing
balance sheet and statement of income of the Bank or the most
recent fiscal year, together with the latest available fair
value of the shares; (2) a statement of the Bank's estimate of
the fair value of the shares; and (3) a notice of the right of
the dissenting shareholder to demand supplemental payment
accompanied by a copy of Subchapter D of Chapter 15 of the BCL.
If the Bank remits payment, a dissenting shareholder who
believes that the amount remitted is less than the fair value of
his or her shares may, within 30 days after the mailing by the
Bank of the payment, send his or her own estimate of the fair
value of his shares to the Bank. The estimate by a dissenting
shareholder of the fair value of his or her shares shall be
deemed a demand for payment of the deficiency. If a dissenting
shareholders does not file his or her own estimate of the fair
value of the shares within 30 days after the Bank has mailed its
payment, the dissenting shareholder shall be entitled to no more
than the amount remitted to him or her by the Bank.
If, in lieu of remitting payment to dissenting shareholders,
the Bank sends a notice of its estimate of the fair value of the
shares, a dissenting shareholder who believes that the amount
stated in the notice is less than the fair value of the shares
may send his or her own estimate to the Bank
19
<PAGE>
of the fair value of the shares. The estimate by a dissenting
shareholder of the fair value of the shares shall be deemed a
demand for payment of that amount.
If any demands for payment remain unsettled within 60 days
after the last to occur of: (1) the effective date of the merger;
(2) timely receipt by the Bank of any demands for payment by
dissenting shareholders of the fair value of their shares, the
Bank may file in the Court of Common Pleas in and for the 7th
Judicial District of Bucks County of the Commonwealth of
Pennsylvania (the "Court") an application for relief requesting
that the fair value of the shares be determined by the Court.
All dissenting shareholders whose demands have not been settled
are required to be made parties to the proceeding. Also, a copy
of the application filed with the Court is required to be served
upon such dissenting shareholder. If the Bank fails to file an
application, any dissenting shareholder who has made a demand for
payment and has not settled his or her claim against the Bank may
file an application in the name of the Bank within 30 days after
the expiration of the 60-day period. If no dissenting
shareholder files an application within the 30-day period, each
dissenting shareholder who would have been entitled to file an
application will be paid the Bank's estimate of the fair value of
his or her shares and no more. The costs and expenses of any
such proceeding will be paid by the Bank, but the Court may
assess any part of such costs and expenses against any or all of
the dissenting shareholders who are parties to the proceeding if
the Court finds that the action of such shareholders in demanding
supplemental payment was dilatory, obdurate, arbitrary, vexatious
or in bad faith.
THE FOREGOING DISCUSSION IS ONLY A SUMMARY OF THE RIGHTS AND
OBLIGATIONS OF DISSENTING SHAREHOLDERS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE PROVISIONS OF SUBCHAPTER D OF
CHAPTER 15 OF THE PENNSYLVANIA BUSINESS CORPORATION LAW OF 1988,
AS AMENDED, WHICH PROVISIONS ARE REPRODUCED AND SET FORTH IN FULL
IN EXHIBIT E TO THIS PROXY STATEMENT/PROSPECTUS.
FAILURE TO FOLLOW THE PROCEDURES SET FORTH IN 15 PA C.S.A.
SECTION 1571, ET SEQ. REGARDING DISSENTERS' RIGHTS WILL
CONSTITUTE A WAIVER OF APPRAISAL RIGHTS. SHAREHOLDERS MAY WISH
TO CONSULT INDEPENDENT LEGAL COUNSEL BEFORE EXERCISING
DISSENTERS' RIGHTS.
Except as set forth herein, notification of the beginning or
end of any statutory period will not be given by the Bank to any
dissenting shareholders.
Regulatory Approvals
- --------------------
Consummation of the Plan of Reorganization and Plan of
Merger is subject to the approval of the FRB and the Department,
hereinafter collectively designated as the "Bank Regulatory
Authorities". An application to charter the Interim Bank was
filed with the Department on August 1, 1997. Applications for
approval of the Merger were filed on __________, 1997, with the
Department, and with the FRB on__________, 1997. The Holding
Company filed an application with the FRB for permission to
become a Bank Holding Company on ________, 1997. The
20
<PAGE>
Department preliminarily approved the Charter Application of the
Interim Bank on ___________, 1997. To date, the Federal Reserve
and the Department have conditionally approved the Merger.
In general, the Bank Regulatory Authorities may disapprove
this transaction if the Merger and the reorganization of the Bank
into a one-bank holding company would not be consistent with
adequate sound banking practices and would not be in the public
interest.
In addition, the Merger may not be consummated for fifteen
(15) days from the date of the later approval by the Department
or approval by the Federal Reserve Board, if there has been no
challenge issued by the United States Department of Justice on
anti-trust grounds in which case the period of time before which
consummation may occur may be extended. The Merger and the
reorganization of the Bank into a one-bank holding company cannot
proceed in the absence of requisite regulatory approvals. The
approval of the Bank Regulatory Authorities reflects only the
Bank Regulatory Authorities's view that the transaction does not
contravene the competitive standards of the law and is consistent
with regulatory concerns relating to bank management and to the
safety and soundness of the subject banking organizations. Such
approval is not to be interpreted as an opinion by the Bank
Regulatory Authorities that the reorganization is favorable to
the stockholders from a financial point of view or that the Bank
Regulatory Authorities have considered the adequacy of the terms
of the exchange. THE BANK REGULATORY AUTHORITIES' APPROVAL IS
NOT AN ENDORSEMENT OR RECOMMENDATION OF THE REORGANIZATION AND
MERGER.
There can be no assurance that the Bank Regulatory
Authorities will approve the reorganization and the Merger, and,
if approvals are granted, there can be no assurance as to the
grant date of such approvals.
DESCRIPTION OF THE HOLDING COMPANY
Organization
- ------------
The Holding Company was organized as a Pennsylvania business
corporation and incorporated under Pennsylvania law on July 15,
1997, at the direction of the Board of Directors of the Bank for
the purpose of becoming a bank holding company by acquiring all
of the Bank's outstanding Common Stock. The Holding Company has
authorized ten million (10,000,000) shares of Common Stock, par
value One Dollar ($1.00) per share. Currently, there are three
(3) shares of the Common Stock outstanding and held by the
incorporators.
The Holding Company expects to function primarily as the
holder of all of the Bank's Common Stock. It may, in the future,
acquire or form additional subsidiaries, including other banks,
to the extent permitted by law.
At present, the Holding Company does not own or lease any
property and has no paid employees. It will not actively engage
in business until after the consummation of the Plan of
Reorganization and Plan of Merger. Until then, the Holding
Company will use the Bank's space and
21
<PAGE>
employees without payment. Thereafter, it will reimburse the
Bank on a fair and reasonable basis for all services furnished to
it.
Copies of the Articles of Incorporation and By-laws of the
Holding Company are attached to this Proxy Statement/Prospectus
as Exhibits C and D, respectively.
Management
- ----------
On the Effective Date, the Board of Directors of the Holding
Company will consist of those persons who are members of the
Board of Directors of the Bank. The appropriate class of
directors of the Bank will be elected annually by the Holding
Company in accordance with the current Bank by-laws (Class 1 in
2000, Class 2 in 1998 and Class 3 in 1999). (For a list of
Directors of the Holding Company and Bank and the current Classes
in which they serve, see "Directors," infra.)
The officers of the Holding Company are as follows:
Name Age Position
----- ----- --------
Clark S. Frame 47 Chairman of the Board
Barry J. Miles, Sr. 47 Vice Chairman of the
Board
John C. Soffronoff 50 President and Chief
Executive Officer
John J. Ginley 52 Secretary
Bruce E. Sickel 37 Treasurer
Remuneration
- ------------
Because the Holding Company was not in existence in 1996, it
paid no remuneration to its directors and officers for that year.
Further, the Holding Company has paid no remuneration to its
officers to date during 1997. In the future, the Holding Company
may pay each of its directors for attendance at meetings of the
Board of Directors.
Indemnification for Securities Act Liabilities
- ----------------------------------------------
The Bank expects to extend its present directors' and
officers' liability insurance policy to cover the Holding
Company's directors and officers without significant additional
cost. This liability policy would cover the typical errors and
omissions liability associated with the activities of the Holding
Company. The provisions of the insurance policy would probably
not indemnify any of the Holding Company's officers and directors
against liability arising under the 1933 Act.
Pennsylvania Law and the By-laws of the Holding Company and
of the Interim Bank provide for broad indemnification of officers
and directors against liabilities and expenses incurred in legal
22
<PAGE>
proceedings. In addition, the By-laws of the Holding Company and
the Interim Bank limit the liability of directors for monetary
damages under certain conditions.
In the opinion of the SEC, indemnification of officers,
directors or persons controlling the Holding Company for
liabilities arising under the 1933 Act is against public policy
as expressed in the Act and is, therefore, unenforceable.
Supervision and Regulation of the Holding Company
- -------------------------------------------------
The Holding Company will be subject to the jurisdiction of
the SEC and of state securities commissions for matters relating
to the offering and sale of its securities. Presently, the Bank
is exempt from such registration requirements. Accordingly,
additional issuances of Holding Company stock to raise capital
and for dividend reinvestment, stock option and other plans will
be subject to such registration (absent any exemption from
registration). Registration will require the incursion of
additional costs by the Holding Company that the Bank does not
presently have to incur.
On the Effective Date, the Holding Company will become
subject to the provisions of the Bank Holding Company Act of
1956, as amended, and to supervision by the FRB. The Bank
Holding Company Act requires the Holding Company to secure prior
approval of the FRB before acquiring control, directly or
indirectly, of more than five percent (5%) of the voting shares
or substantially all of the assets of any institution, including
another bank.
A bank holding company is prohibited from engaging in or
acquiring direct or indirect control of more than five percent
(5%) of the voting shares of any company engaged in non-banking
activities unless the FRB, by order or regulation, has found such
activities to be so closely related to banking, managing, or
controlling banks as to be a proper incident thereto. In making
this determination, the FRB considers whether these activities
offer benefits to the public that outweigh any possible adverse
effects.
As a bank holding company, the Holding Company will be
required to file an annual report with the FRB as well as any
additional information that the FRB may require pursuant to the
Bank Holding Company Act. The FRB may also make examinations of
the Holding Company and any or all of its subsidiaries. Further,
under Section 106 of the 1970 amendments to the Bank Holding
Company Act and the FRB's regulations, a bank holding company and
its subsidiaries are prohibited from engaging in certain tie-in
arrangements in connection with any extension of credit or
provision of credit or provision of any property or services.
The so-called "anti-tie-in" provisions state generally that a
bank may not extend credit, lease, sell property or furnish any
service to a customer on the condition that the customer provide
additional credit or service to the bank, to its bank holding
company or to any other subsidiary of its bank holding company or
on the condition that the customer not obtain other credit or
service from a competitor of the bank, its bank holding company
or any subsidiary of its bank holding company.
Subsidiary banks of a bank holding company are subject to
certain restrictions imposed by the Federal Reserve Act on any
extensions of credit to the bank holding company or any of its
23
<PAGE>
subsidiaries, on investments in the stock or other securities of
the bank holding company and on taking of such stock or
securities as collateral for loans to any borrower.
Permitted Activities
- --------------------
The FRB permits bank holding companies to engage in
activities so closely related to banking or managing or
controlling banks as to be a proper incident thereto. While the
types of permissible activities are subject to change by the FRB,
the following list comprises the principal activities that
presently may be conducted by a bank holding company.
1. Making, acquiring or servicing loans and other extensions of
credit for its own account or for the account of others, such as
would be made by the following types of companies: consumer
finance, credit card, mortgage, commercial finance and factoring.
2. Operating as an industrial bank, Morris Plan or industrial
loan company in the manner authorized by state law so long as the
institution does not both accept demand deposits and make
commercial loans.
3. Operating as a trust company in the manner authorized by
federal or state law so long as the institution does not make
certain types of loans or investments or accept deposits, except
as may be permitted by the Federal Reserve Board.
4. Subject to certain limitations, acting as an investment or
financial advisor to investment companies and other persons.
5. Leasing personal and real property or acting as agent,
broker, or advisor in leasing property, provided that it is
reasonably anticipated that the transaction will compensate the
lessor for not less than the lessor's full investment in the
property.
6. Making equity and debt investments in corporations or
projects designed primarily to promote community welfare.
7. Providing to others financially oriented data processing or
bookkeeping services.
8. Subject to certain limitations, acting as an insurance agent
or broker in relation to insurance for itself and its
subsidiaries or for insurance directly related to extensions of
credit by the bank holding company system.
9. Subject to certain limitations, acting as underwriter for
credit life insurance and credit accident and health insurance
that is directly related to extensions of credit by the bank
holding company system.
10. Providing courier services of a limited character.
24
<PAGE>
11. Subject to certain limitations, providing management
consulting advice to nonaffiliated banks and nonbank depository
institutions.
12. Selling money orders having a face value of One Thousand
Dollars ($1,000) or less, travelers' checks and United States
savings bonds.
13. Performing appraisals of real estate.
14. Subject to certain conditions, acting as intermediary for
the financing of commercial or industrial income-producing real
estate by arranging for the transfer of the title, control and
risk of such a real estate project to one or more investors.
15. Providing securities brokerage services, related securities
credit activities pursuant to Federal Reserve Board Regulation T
and incidental activities such as offering custodial services,
individual retirement accounts and cash management services, if
the securities brokerage services are restricted to buying and
selling securities solely as agent for the account of customers
and do not include securities underwriting or dealing or
investment advice or research services.
16. Underwriting and dealing in obligations of the United
States, general obligations of states and their political
subdivisions and other obligations such as bankers' acceptances
and certificates of deposit.
17. Subject to certain limitations, providing by any means,
general information and statistical forecasting with respect to
foreign exchange markets; advisory services designed to assist
customers in monitoring, evaluating and managing their foreign
exchange exposures; and certain transactional services with
respect to foreign exchange.
18. Subject to certain limitations, acting as a futures
commission merchant in the execution and clearance on major
commodity exchanges of futures contracts and options on futures
contracts for bullion, foreign exchange, government securities,
certificates of deposit and other money market instruments.
19. Subject to certain limitations, providing commodity trading
and futures commission merchant advice.
20. Providing consumer financial counseling that involves
counseling, educational courses and distribution of instructional
materials to individuals on consumer-oriented financial
management matters, including debt consolidation, mortgage
applications, bankruptcy, budget management, real estate tax
shelters, tax planning, retirement and estate planning, insurance
and general investment management, so long as this activity does
not include the sale of specific products or investments.
21. Providing tax planning and preparation advice such as
strategies designed to minimize tax liabilities and includes, for
individuals, analysis of the tax implications of retirement
plans,
25
<PAGE>
estate planning and family trusts. For corporations, tax planning
includes the analysis of the tax implications of mergers and
acquisitions, portfolio mix, specific investments, previous tax
payments and year-end tax planning. Tax preparation involves the
preparation of tax forms and advice concerning liability based on
records and receipts supplied by the client.
22. Providing check guaranty services to subscribing merchants.
23. Subject to certain limitations, operating a collection
agency and credit bureau.
24. Acquiring and operating thrift institutions, including
savings and loan associations, building and loan associations and
FDIC-insured savings banks.
25. Operating a credit bureau, subject to certain limitations.
Issuance of Additional Securities
- ---------------------------------
Because the Holding Company has authorized Common Stock
substantially in excess of the number of shares that will be
issued in connection with the Plan of Reorganization, the Board
of Directors of the Holding Company will have the flexibility to
raise additional capital and to make acquisitions through the
issuance of Holding Company Common Stock without further approval
by the Holding Company's shareholders. The Holding Company
shareholders will not have preemptive rights to subscribe for
additional shares. Therefore, such issuance could result in a
dilution of voting rights and book value per share as to the
Common Stock of the Holding Company. The Board of Directors of
the Holding Company has no present plans for issuing additional
shares of Holding Company Common Stock.
DESCRIPTION OF THE BANK
History and Business
- --------------------
The Bank was organized in 1990 as a Pennsylvania
state-chartered banking institution and is under the supervision
of the FRB. The Bank commenced operations on April 24, 1992. Its
principal office is located at 379 North Main Street, Doylestown,
Pennsylvania 18901. In addition, the Bank operates two branch
offices and is in the process of opening a third branch office in
Yardley, Pennsylvania. The Pennsylvania Department of Banking
approved the Bank's application for the Yardley branch on July
16, 1997.
As of June 30, 1997, the Bank had total assets of
approximately One Hundred Seventy-eight Million, Eighteen
Thousand Dollars ($178,018,000), total shareholders' equity of
approximately Nine Million Five Hundred One Thousand Dollars
($9,501,000), and total liabilities of approximately One Hundred
Sixty-eight Million, Five Hundred Seventeen Thousand Dollars
($168,517,000), of which total deposits amounted to approximately
One Hundred Thirty-six Million, Forty-two Thousand Dollars
($136,042,000).
26
<PAGE>
Major classifications of loans are summarized as follows:
<TABLE>
<CAPTION>
In Thousands of Dollars
--------------------------------------------
June 30, Dec. 31, Dec. 31, Dec. 31,
1997 1996 1995 1994
<S> <C> <C> <C> <C>
Loan
Classifications:
Commercial
and Industrial $ 5,539,828 $ 6,861,611 $ 3,572,489 $ 1,965,189
Secured by Real
Estate:
Construction,
one-to-four
family 1,469,593 1,952,730 3,055,611 4,071,290
Residential,
one-to-four
family 22,723,878 19,665,913 13,631,357 11,003,667
Multifamily 1,699,897 1,137,649 1,422,684 1,312,944
Commercial 65,198,106 52,731,559 37,414,560 26,139,992
Consumer
Installment
Loans 955,890 735,124 1,153,361 792,549
Less Allowance
for Loan Losses (1,135,672) (960,672) (738,313) (602,195)
Net deferred
Loan Fees (228,104) (174,750) (153,436) (117,019)
---------- --------- ---------- ----------
Net Loans $96,223,416 $81,949,164 $59,358,313 $44,566,417
=========== ============ =========== ===========
</TABLE>
_________________________
The Bank engages in a full-service commercial banking
business, including accepting time and demand deposits, and
making secured and unsecured commercial and consumer loans. The
Bank's business is not seasonal in nature. The Bank's deposits
are insured by the Federal Deposit Insurance Corporation (the
"FDIC") to the extent provided by law.
On June 30, 1997, the Bank had forty (40) full-time
equivalent employees. The Bank leases all facilities from which
it operates.
Competition
- -----------
The Bank competes actively with other area commercial banks
and savings and loan associations, many of which are larger than
the Bank, as well as with major regional banking and financial
institutions headquartered in other areas of Pennsylvania. The
Bank, however, is generally competitive with all financial
institutions in its service area with respect to interest rates
paid on time and savings deposits, service charges on deposit
accounts and interest rates charged on loans. Additional
competition is derived from credit unions, finance companies,
brokerage firms, insurance companies and retailers.
Supervision and Regulation of the Bank
- ---------------------------------------
(See also "Supervision and Regulation of the Holding Company,"
supra.)
The operations of the Bank are subject to federal and state
statutes applicable to banks chartered under the banking laws of
Pennsylvania, to members of the Federal Reserve System and to
banks whose deposits are insured by the FDIC. The proposed
reorganization will not affect the authority of these agencies
over the Bank.
27
<PAGE>
The FRB has primary supervisory authority over the Bank and
regularly examines the Bank. The FRB has the authority to
prevent a state member bank, such as the Bank, from engaging in
an unsafe or unsound practice in conducting its business.
Federal and state banking laws and regulations govern, among
other things, the scope of a bank's business, a bank's
investments, a bank's reserves against deposits, a bank's loans,
interest rates, the activities of a bank with respect to mergers
and consolidations and the establishment of branches. Under
Pennsylvania law, all banks in Pennsylvania are permitted to
establish or acquire branch offices in any county of the state.
The laws of Pennsylvania applicable to the Bank include,
among other things, provisions that: (1) require the maintenance
of certain reserves against deposits; (2) limit the type and
amount of loans that may be made and the interest that may be
charged thereon; (3) restrict investments and other activities;
and (4) limit the payment of dividends. The amount of funds that
the Bank may lend to a single borrower is limited generally under
Pennsylvania law to 15% of the aggregate of its capital, surplus,
undivided profits and loan loss reserves and capital securities
of the Bank (all as defined by statute and by regulation).
The Bank may establish or acquire branch offices, subject to
certain limitations, in any county of the state. Branches may be
established only after approval by the Department. The
Department is required to grant approval only if it finds that
there is a need for banking services or facilities such as are
contemplated by the proposed branch and may disapprove the
application if the Bank does not have the capital and surplus
deemed necessary by the Department or if the application relates
to the establishment of a branch in a county contiguous to the
county in which the applicant's principal place of Business is
located and another banking institution that has its principal
place of business in the county in which the proposed branch
would be located has in good faith notified the Department of
Banking of its intention to establish a branch in the same
municipal location in which the proposed branch would be located.
Applicable Pennsylvania law also requires that a bank obtain
the approval of the Department prior to effecting any merger
where the surviving bank would be a Pennsylvania chartered bank.
In reviewing the merger application, the Department considers,
among other things, whether the merger would be consistent with
adequate and sound banking practices and in the public interest
on the basis of several factors, including the potential effect
of the merger on competition and the convenience and needs of the
area primarily to be served by the Bank resulting from the
merger.
Multi-bank holding companies are permitted in Pennsylvania
within certain limitations. See section entitled "Reasons for
the Proposed Reorganization - Multi-Bank Holding Companies and
Statewide Branching".
The Federal Reserve System
- --------------------------
The Federal Reserve System is managed through a tripartite
hierarchy headed by the FRB, which oversees the entire system.
The second-level of the hierarchy is the twelve Federal Reserve
banks and their branches spread throughout the nation's twelve
Federal Reserve districts. The third
28
<PAGE>
level in the Federal Reserve System's structure is the member
banks of each district. These banks act in concert with the
Federal Reserve banks to perform the actual operations of the
Federal Reserve System, including such functions as furnishing an
elastic currency and affording means of rediscounting commercial
paper. The Federal Reserve System is at the center of the
nation's stable financial and economic system. The Federal
Reserve banks are the means through which the Federal Reserve
System effectuates its goals of maintaining financial and
economic stability.
A subsidiary bank of a bank holding company (which the Bank
would become on the Effective Date,) is subject to certain
restrictions imposed by the Federal Reserve Act on any extensions
of credit to the bank holding company or its subsidiaries, on
investments in the stock or other securities of the bank holding
company or its subsidiaries and on taking such stock or
securities as collateral for loans. The Federal Reserve Act and
FRB regulations also place certain limitations and reporting
requirements on extensions of credit by a bank to principal
shareholders of its parent holding company, among others, and to
related interests of such principal shareholders. In addition,
legislation and regulations may affect the terms upon which any
person becoming a principal shareholder of a holding company may
obtain credit from banks with which the subsidiary bank maintains
a correspondent relationship.
Monetary Policy
- ---------------
The earnings of the Bank are affected by the policies of
regulatory authorities, including the Department and the FRB. An
important function of the Federal Reserve System is to regulate
the money supply and interest rates. Among the instruments used
to implement these objectives are open market operations in
United States government securities, changes in reserve
requirements against member bank deposits and limitations on
interest rates that member banks may pay on time and savings
deposits. These instruments are used in varying combinations to
influence overall growth and distribution of bank loans,
investments and deposits, and their use may also affect rates
charged on loans or paid for deposits.
The Bank is a member of the Federal Reserve System and,
therefore, the policies and regulations of the FRB have had and
will continue to have a significant effect on deposits, loans and
investment growth, as well as the rate of interest earned and
paid, and are expected to affect the Bank's operations in the
future. Neither the Holding Company nor the Bank can predict the
effect of such policies and regulations upon the future business
and earnings of the Bank.
From time to time, various types of federal and state
legislation are proposed that could result in additional
regulation of, and restrictions on, the business of the Bank.
The Bank cannot predict whether any such legislation will be
adopted or how such legislation would affect the business of the
Bank. As a consequence of the extensive regulation of commercial
banking activities in the United States, the Bank's business is
particularly susceptible to being affected by federal legislation
and regulations that may increase the cost of doing business.
29
<PAGE>
Deposit Insurance
- -----------------
The Bank's deposits are insured by the FDIC pursuant to the
system of federal deposit insurance initially established by the
Banking Act of 1933. The Monetary Control Act of 1980 increased
the coverage of FDIC insurance from Forty Thousand Dollars
($40,000) to One Hundred Thousand Dollars ($100,000) per deposit
account. The Bank pays insurance premiums into the Bank
Insurance Fund ("BIF") according to rates established by the
FDIC. The FDIC Improvement Act of 1991 ("FDICIA"), enacted in
part to prevent the insolvency of the deposit insurance funds,
authorized the FDIC to raise insurance premium assessments in
order to achieve and maintain an adequate level of funds. The
depletion of the deposit insurance funds was due, in part, to the
failure of a large number of financial institutions in the
1980's, and the requisite increased deposit account coverage.
Due to the health of the banking industry, the FDIC
established a new rate schedule in 1996. The new rate schedule
substantially reduces the cost of deposit insurance for BIF
insured institutions.
Although the FDIC reduced the assessment rate, the FDIC has
discretion to increase the assessment in the future in response
to changes in the economic climate of the banking industry. As a
result, the future cost of deposit insurance for the Bank is, in
large part, dependent upon the extent of future bank failures and
the amount of insurance coverage provided by the FDIC for each
deposit account, neither of which are within the Bank's control.
Moreover, because the current insurance premium assessment system
differentiates between higher and lower risk institutions, with
lower premiums assessed against institutions in a lower risk
category, the Bank's future cost of deposit insurance will depend
upon its risk-rating. The Bank is currently in the FDIC's lowest
risk category.
Legislation
- ------------
Federal law, including the Change in Bank Control Act of
1978 ("CBCA"), prohibits acquisitions of control of a bank
without prior notice to certain federal bank regulators.
"Control" is defined for this purpose as the power, directly or
indirectly, to direct the management or policies of the bank or
to vote twenty-five percent (25%) or more of any class of voting
securities of a bank.
Under the Federal Deposit Insurance Act ("FDIA"), the FRB
possesses the power to prohibit institutions, such as the Bank,
from engaging in any activity that would be an unsafe and unsound
banking practice and in violation of the law. Moreover, the
Financial Institutions Regulatory and Interest Rate Control Act
of 1978 ("FIRA") generally expanded the circumstances under which
officers or directors of a bank may be removed by the bank's
federal supervisory agency, restricted lending by a bank to its
executive officers, directors, principal shareholders or related
interests thereof and restricts management personnel of a bank
from serving as directors or in other management positions with
certain depository institutions whose assets exceed a specified
amount or which have an office within a specified geographic
area, and restricts management personnel from borrowing from
another institution that has a correspondent relationship with
their bank. Additionally, FIRA requires that no person may
acquire control of a bank unless the appropriate federal
supervisory agency has been given sixty (60) days prior written
notice and within that time has not disapproved the acquisition
or extended the period for disapproval.
30
<PAGE>
Control for purposes of FIRA, means the power, directly or
indirectly, to direct the management or policies or to vote
twenty-five percent (25%) or more of any class of outstanding
stock of a financial institution or its respective holding
company. A person or group holding revocable proxies to vote
twenty-five percent (25%) or more of the outstanding stock of a
financial institution or bank holding company, such as the
Holding Company, would presumably be deemed to control the
institution for purposes of FIRA.
The Garn-St. Germain Depository Institutions Act of 1982
("Garn-St. Germain"), removed certain restrictions on a bank's
lending powers and liberalizes its depository capabilities.
Garn-St. Germain also strengthened FIRA (see above) by
eliminating the statutory limits on lending by a bank to its
executive officers, directors, principal shareholders or related
interests thereof and by relaxing certain reporting requirements.
Garn-St. Germain, however, also tightened FIRA provisions
respecting management interlocks and correspondent bank
relationships by management personnel.
Under the Community Reinvestment Act of 1977, as amended,
("CRA"), the FRB is required to assess the record of all
financial institutions regulated by it to determine if these
institutions are meeting the credit needs of the community
(including low and moderate-income neighborhoods) which they
serve and to take this record into account in its evaluation of
any application made by any such institutions for, among other
things, approval of a branch or other deposit facility, office
relocation, a merger or an acquisition of bank shares. The
Financial Institutions Reform, Recovery and Enforcement Act of
1989 ("FIRREA", see below) amended the CRA to require, among
other things, that the FRB make publicly available the evaluation
of a bank's record of meeting the credit needs of its entire
community, including low- and moderate-income neighborhoods.
This evaluation will include a descriptive rating ("outstanding,"
"satisfactory," "needs to improve," or "substantial
noncompliance") and a statement describing the basis for the
rating. These ratings are publicly disclosed.
In April, 1995, regulators revised CRA with an emphasis on
performance over process and documentation. Under the revised
rules, the five-point rating scale is still utilized; however,
the twelve (12) assessment factors have been replaced with a
three-prong test. A bank's compliance is determined by a
three-prong test whereby examiners assign a numerical score for a
bank's
performance in each of three areas: lending, service and
investment. The area of lending is weighted to increase its
importance in the
application of the test. The rule became effective July 1, 1995.
When rating a bank in the area of lending, regulators
examine the number and amount of loan originations, the location
of where the loans were made, and the income levels of the
borrowers. Although banks, under the revised rules, are not
required to make loans in every area, if there are apparent
tracts in which there is little lending, examiners will focus
their investigations in that area.
The service prong evaluates how a bank delivers its products
to the community through branching. As with lending, banks are
not required to branch in every area, although conspicuous gaps
will be investigated.
The third prong, investment in community, examines how the
bank meets the investment needs in the community within which it
operates. Assessment of investment is accomplished using
31
<PAGE>
a "performance context" pursuant to which regulators meet with
civic, community and bank officials in order to determine the
credit needs of the community.
Expanded Home Mortgage Disclosure Act reporting requirements
were also approved for large banks and thrifts which require
reporting of census tract data on mortgages made outside of the
delineated communities. In addition, effective March 1, 1997,
institutions with assets above Two Hundred Fifty Million Dollars
($250,000,000) will be required to report their aggregate small
business loans made by geographic region.
Independent banks with total assets of less than Two Hundred
Fifty Million Dollars ($250,000,000) and bank subsidiaries with
total assets of less than Two Hundred Fifty Million Dollars
($250,000,000) that have holding companies with total assets of
less than One Billion Dollars ($1,000,000,000) will be subjected
to less stringent CRA examinations.
Under the new regulation, banks will enjoy a reduction in
compliance burden. Specifically, banks are not required to keep
extensive documentation to prove that directors have participated
in drafting and review of CRA policies. A formal CRA statement
does not have to be prepared. The efforts banks make to market
in low- and moderate-income communities do not have to be
documented, nor will banks have to justify the basis for their
community delineation or the methods utilized to determine the
credit needs of the community.
Under the Bank Secrecy Act ("BSA"), banks and other
financial institutions are required to report to the Internal
Revenue Service currency transactions of more than Ten Thousand
Dollars ($10,000) or multiple transactions of which the Bank is
aware in any one day that aggregate in excess of Ten Thousand
Dollars ($10,000). Civil and criminal penalties are provided
under the BSA for failure to file a required report, for failure
to supply information required by the BSA or for filing a false
or fraudulent report.
An omnibus federal banking bill, known as the Competitive
Equality Banking Act ("CEBA"), was signed into law on August 10,
1987. Included in the legislation were measures: (1) imposing
certain restrictions on transactions between banks and their
affiliates; (2) expanding the powers available to federal bank
regulators in assisting failed and failing banks; (3) limiting
the amount of time banks may hold certain deposits prior to
making such funds available for withdrawal and any interest
thereon; and (4) requiring that any adjustable rate mortgage loan
and secured by a lien on a one- to four-family dwelling include a
limitation on the maximum rate at which interest may accrue on
the principal balance during the term of such loan. This
legislation has not had a material adverse effect on the Bank's
anticipated operations or its competitive position.
The Financial Institutions Reform, Recovery and Enforcement
Act of 1989 ("FIRREA") was primarily enacted to improve the
supervision of savings associations by strengthening capital,
accounting and other supervisory standards. In addition, FIRREA
reorganized the FDIC by creating two deposit insurance funds to
be administered by the FDIC: the Savings Association Insurance
Fund and the Bank Insurance Fund.
32
<PAGE>
FIRREA reformed real estate appraisal proceedings and the
existing supervisory/ enforcement powers and penalty provisions
in connection with the regulation of the Bank under FIRREA, civil
monetary penalties are classified into three levels, with amounts
increasing with the severity of the violation. The first tier
provides for civil penalties of up to Five Thousand Dollars
($5,000) per day for any violation of law or regulation. A civil
penalty of up to Twenty-five Thousand Dollars ($25,000) per day
may be assessed if more than a minimal loss or a pattern of
misconduct is involved. Finally, a civil penalty of up to One
Million Dollars ($1,000,000) per day may be assessed for
knowingly or recklessly causing a substantial loss to an
institution or taking action that results in a substantial
pecuniary gain or other benefit. Criminal penalties are
increased to One Million Dollars ($1,000,000) per violation, and
up to Five Million Dollars ($5,000,000) for continuing violations
or for the actual amount of gain or loss. These monetary
penalties may be combined with prison sentences for up to five
(5) years. Management is of the opinion that these additional
reforms have not materially impacted the results of operations of
the Bank.
Regulatory Capital. The FDIC and other federal bank regulatory
agencies have issued risk-based capital guidelines which
supplement leverage capital requirements. As of December 31,
1992, the guidelines require all state banks and bank holding
companies to maintain a minimum risk-based capital ratio of eight
percent (8%), of which at least four percent (4%) must be in the
form of common stockholders' equity. Assets are assigned to
categories with higher levels of capital required for the
categories perceived as representing greater risk. The required
capital ratios represent equity, and to the extent permitted,
non-equity capital as a percentage of total risk-weighted assets.
The risk-based capital rules are designed to make regulatory
capital requirements more sensitive to differences in risk
profiles among banks and bank holding companies and to minimize
disincentives for holding liquid assets. The risk-based capital
rules have not had a material effect on the Bank's business and
capital plans.
On December 19, 1991, the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA") became law. Under
FDICIA, institutions must be classified, based on their
risk-based capital ratios, into one of five defined categories,
as illustrated below (well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized).
<TABLE>
<CAPTION>
Total Tier 1 Under a
Risk- Risk- Tier 1 Capital
Based Based Leverage Order or
Ratio Ratio Ratio Directive
------- ----- -------- ---------
<S> <C> <C> <C> <C>
CAPITAL CATEGORY
Well capitalized >10.0 >6.0 >5.0 No
-- -- --
Adequately capitalized >8.0 >4.0 >4.0 *
-- -- --
Undercapitalized <8.0 <4.0 <4.0 *
Significantly
undercapitalized <6.0 <3.0 <3.0
Critically
undercapitalized <2.0
--
*3.0 for those banks having the highest available regulatory
rating.
</TABLE>
In the event an institution's capital deteriorates to the
undercapitalized category or below, FDICIA prescribes an
increasing amount of regulatory intervention, including: (1) the
institution of a capital restoration plan and a guarantee of the
plan by a parent institution; and (2) the placement
33
<PAGE>
of a hold on increases in assets, number of branches or lines of
business. If capital has reached the significantly or critically
undercapitalized levels, further material restrictions can be
imposed, including restrictions on interest payable on accounts,
dismissal of management and (in critically undercapitalized
situations) appointment of a receiver. For well capitalized
institutions, FDICIA provides authority for regulatory
intervention where the institution is deemed to be engaging in
unsafe or unsound practices or receives a less than satisfactory
examination report rating for asset quality, management, earnings
or liquidity. All but well capitalized institutions are
prohibited from accepting brokered deposits without prior
regulatory approval.
Under FDICIA, financial institutions are subject to
increased regulatory scrutiny and must comply with certain
operational, managerial and compensation standards to be
developed by Federal Reserve Board regulations. FDICIA also
requires the regulators to issue new rules establishing certain
minimum standards to which an institution must adhere including
standards requiring a minimum ratio of classified assets to
capital, minimum earnings necessary to absorb losses and minimum
ratio of market value to book value for publicly held
institutions. Additional regulations are required to be
developed relating to internal controls, loan documentation,
credit underwriting, interest rate exposure, asset growth and
excessive compensation, fees and benefits.
Examinations and Audits. Annual full-scope, on site
examinations are required for all FDIC-insured institutions
except institutions with assets under Two Hundred Fifty Million
Dollars ($250,000,000) which are well capitalized, well-managed
and not subject to a recent change in control, in which case, the
examination period is every eighteen (18) months. Banks with
total assets of Five Hundred Million Dollars ($500,000,000) or
more as of the beginning of a fiscal year, are required to submit
to their supervising federal and state banking agencies a
publicly available annual audit report. The independent
accountants of such bank shall attest to the accuracy of
management's report. The accountants shall also monitor
management's compliance with governing laws and regulations. In
addition, banks with assets of Five Hundred Million Dollars
($500,000,000) or more as of the beginning of a fiscal year are
also required to select an independent audit committee composed
of outside directors who are independent of management, to review
with management and the independent accountants the reports that
must be submitted to the bank regulatory agencies. If the
independent accountants resign or are dismissed, written
notification thereof must be given to the bank's supervising
government banking agencies.
Real Estate Loans. FDICIA also requires that banking
agencies reintroduce loan-to-value ("LTV") ratio regulations
which were previously repealed by the 1982 Act. LTV's will limit
the amount of money a financial institution may lend to a
borrower, when the loan is secured by real estate, to no more
than a percentage to be set by regulation of the value of the
real estate.
A separate subtitle within FDICIA, called the "Bank
Enterprise Act of 1991", requires "Truth-In-Savings" on consumer
deposit accounts so that consumers can make meaningful
comparisons between the competing claims of banks with regard to
deposit accounts and products. Under this provision, the Bank
will be required to provide information to depositors concerning
the terms of their deposit accounts, and in particular, to
disclose the annual percentage yield. There are operational
costs involved in complying with the Truth-In-Savings law.
34
<PAGE>
For a discussion of the Interstate Banking and Branching
Act, see section entitled "PROPOSED REORGANIZATION - Reasons for
the Proposed Organization - Interstate Banking and Branching."
Regulatory Activity. Recently, Pennsylvania enacted a law
to permit State chartered banking institutions to sell insurance.
This follows a U. S. Supreme Court decision in favor of
nationwide insurance sales by banks and which also bars states
from blocking insurance sales by national banks in towns with
populations of no more than 5,000. The Bank is currently
evaluating its options regarding the sale of insurance.
Congress is currently considering legislative reforms to
modernize the financial services industry, including repealing
the Glass Steagall Act which prohibits commercial banks from
engaging in the securities industry. Consequently, equity
underwriting activities of banks may increase in the near future.
However, the Corporation does not currently anticipate entering
into these activities.
Changes in the Bank's FDIC assessment rate, caused by the
enactment of the Deposit Insurance Funds Act of 1996, will
adversely impact results of operations, net of income taxes, in a
currently estimated amount of $_____ for the remaining months of
1997. The Act also provides regulatory relief to the financial
services industry relative to environmental risks, frequency of
examinations, and the simplification of forms and disclosures.
From time to time, various types of federal and state
legislation have been proposed that could result in additional
regulation of, and restrictions on, the business of the
Corporation and the Bank. It cannot be predicted whether such
legislation will be adopted or, if adopted, how such legislation
would affect the business of the Corporation and the Bank. As a
consequence of the extensive regulation of commercial banking
activities in the United States, the Corporation's and the Bank's
business is particularly susceptible to being affected by federal
legislation and regulations that may increase the costs of doing
business. Except as specifically described above, Management
believes that the affect of the provisions of the aforementioned
legislation on the liquidity, capital resources, and results of
operations of the Corporation will be immaterial. Management is
not aware of any other current specific recommendations by
regulatory authorities or proposed legislation, which if they
were implemented, would have a material adverse effect upon the
liquidity, capital resources, or results of operations, although
the general cost of compliance with numerous and multiple federal
and state laws and regulations does have, and in the future may
have, a negative impact on the Corporation's results of
operations.
Further, the business of the Corporation is also affected by
the state of the financial services industry in general. As a
result of legal and industry changes, Management predicts that
the industry will continue to experience an increase in
consolidations and mergers as the financial services industry
strives for greater cost efficiencies and market share.
Management also expects increased diversification of financial
products and services offered by the Bank and its competitors.
35
<PAGE>
Management believes that such consolidations and mergers, and
diversification of products and services may enhance its
competitive position as a community bank.
Legal Proceedings
- -----------------
The nature of the Bank's business generates a certain amount
of litigation involving matters arising in the ordinary course of
business. In the opinion of management of the Bank, however,
there are no proceedings pending to which the Bank is a party or
to which its property is subject, which, if determined adversely
to the Bank, would be material in relation to the Bank's
undivided profits or financial condition, nor are there any
proceedings pending other than ordinary routine litigation
incident to the business of the Bank. In addition, no material
proceedings are pending or are known to be threatened or
contemplated against the Bank by government authorities or
others.
36
<PAGE>
Directors
- ----------
The following table sets forth selected information about
the directors of the Bank.
<TABLE>
<CAPTION>
Class Principal Occupation
Of For the Past
Name Director Five Years
- ---- --------- --------------------
<S> <C> <C>
Daniel E. Cohen 1 Partner - Laub,
Seidel, Cohen & Hof
(Law Firm)
Peter A. Cooper 3 President - Lexus of
the Lehigh Valley
Clark S. Frame 3 Chairman of Board
Thomas E. Mackell 2 Surgeon
Barry J. Miles, Sr. 3 Vice Chairman of the
Board
Daniel A. Nesi 3 Surgeon
Neil Norton 2 President - Norton
Oil Company
Thomas M. O'Mara 3 Owner - Master
Gardener
Michael Perrucci 1 Partner - Florio &
Perrucci
Brian R. Rich 1 President - Jack
Rich, Inc.
Ezio U. Rossi 1 Retired, Former Owner
- Arctic Foods, Inc.
Richard F. Ryon 3 Partner - Richard B.
Ryon Insurance
Gerald Schatz 1 Chairman - Wordsworth
Academy, Play and
Learn Centers, and
Wyncote Academy
Bruce E. Sickel 1 SVP/Chief Financial
Officer
John C. Soffronoff 3 President/Chief
Executive Officer
Irving N. Stein 2 Vice President -
Keystone Motors, Inc.
Thomas P. Stitt 1 Attorney At Law
HelenBeth Garofalo-Vilcek 2 Real Estate Broker
George H. Wetherill 2 Owner - G.H.
Wetherill Opticians &
G.H. Wetherill
Hearing Aid
Associates
John A. Zebrowski 1 President - J.A.Z.
Associates (Plastic
Resins Sales)
<CAPTION>
Age As of
Director September 1,
Name Since 1997
- ---- --------- -------------------
<S> <C> <C>
Daniel E. Cohen 1992 53
Peter A. Cooper 1992 38
Clark S. Frame 1992 47
Thomas E. Mackell 1992 51
Barry J. Miles, Sr. 1992 47
Daniel A. Nesi 59
Neil Norton 1992 51
Thomas M. O'Mara 1992 44
Michael Perrucci 1992 43
Brian R. Rich 1993 37
Ezio U. Rossi 1994 66
Richard F. Ryon 1993 46
Gerald Schatz 1992 62
Bruce E. Sickel 1992 37
John C. Soffronoff 1992 50
Irving N. Stein 1992 47
Thomas P. Stitt 1993 54
HelenBeth Garofalo-Vilcek 1992 39
George H. Wetherill 1992 60
John A. Zebrowski 1992 55
</TABLE>
37
<PAGE>
Principal Officers of the Bank
- ------------------------------
The following table sets forth selected information about
the principal officers of the Bank, each of whom is elected by
the Board of Directors and each of whom holds office at the
discretion of the Board of Directors.
<TABLE>
<CAPTION>
Bank
Office and Position Held Employee
Name with the Bank Since Since
---- ------------------- ----- --------
<S> <C> <C> <C>
John C. Soffronoff President & CEO 1992 1992
John J. Ginley Senior Vice President
& CLO 1992 1992
Bruce E. Sickel Senior Vice President
& CFO 1992 1992
<CAPTION>
Number of Age as
Shares Of
Beneficially Owned September 1,
Name <F1><F2><F3> 1997
---- ------------------- ------------
<S> <C> <C>
John C. Soffronoff 13,390.0 50
John J. Ginley 14,294.0 52
Bruce E. Sickel 14,004.9 37
<FN>
<F1> For the definition of Beneficial Ownership, see footnote 1
to "Beneficial Ownership by Officers and Directors" table, supra,
at page 10.
<F2> All shares are owned individually or jointly with a spouse,
unless otherwise indicated.
<F3> For breakdown of beneficially owned shares, see footnotes to
"Beneficial Ownership by Officers and Directors" table, supra, at
page 12.
</FN>
</TABLE>
Remuneration of Officers and Directors
- ---------------------------------------
Directors received stock options under the Bank Incentive
Stock Option Plan for attendance at Board and Committee Meetings
in accordance with the following formula and provided individual
attendance at Board Meetings was at least seventy-five percent:
Options for 10 shares per Board Meeting and 10 shares per
Committee Meeting. There was no cash compensation paid to
Directors in 1996 for attendance at meetings.
The following table sets forth all cash compensation for
services in all capacities paid by the Bank during 1996 (1) to
the Chief Executive Officer and (2) to the three most highly
compensated executive officers.
38
<PAGE>
<TABLE>
CASH COMPENSATION TABLE
<CAPTION>
(A) (B) (C)
Name of Individual or Capacities in Cash Compensation
Number in Group which Served <F2><F3>
- -----------------------------------------------------------------
<S> <C> <C>
John C. Soffronoff President & Chief 116,383
Executive Officer
Executive Officers Executive Officers <F1> 345,026
(3 Persons)
<FN>
<F1> These three officers are John C. Soffronoff, President and
CEO, Bruce E. Sickel, SVP & CFO, and John J. Ginley, SVP & CLO.
<F2> No officer received, in the aggregate, more than $10,000 in
personal benefits.
<F3> Effective January 1, 1996, the Bank adopted a 401(K) plan
that allows employees meeting certain minimum qualification to
contribute tot he 401(K) plan. The aggregate compensation
figures include salary deferred pursuant to the 401(K) plan and
the matching contribution authorized by the Board of Directors.
</FN>
</TABLE>
401(K) Plan
- -----------
The Bank maintains a 401(K) deferred income retirement plan
(the "401(K) Plan") for employees. The 401(K) Plan has two
features: an elective deferral feature and a savings plus
feature. To be eligible to become a member of the 401(K) Plan, an
employee must have completed at least 6 months service and
attained the age of 21. All employee contributions vest
immediately. Employer contributions vest over a 3 year period.
The 401(K) Plan is subject to certain terms and restrictions
imposed by the Internal Revenue Code of 1986 and the Employee
Retirement Income Security Act.
An eligible employee may choose the elective deferral
feature of the 401(K) Plan by entering into an agreement with the
Bank to defer current total compensation by up to 15 percent
(unless otherwise limited by the 401(K) administrators). In
1996, the Bank matched this deferred compensation with a
discretionary match which is currently set at 50 percent, up to 6
percent of the employee's salary. The amount of the match if any
determined by the Bank each year.
During 1996 the Bank made a contribution of $26,818 to the
401(K) Plan. The amounts allocated to the three most highly
compensation officers pursuant to the 401(K) Plan in 1996 are as
follows (These amounts do not include the additional
contribution): Mr. Soffronoff, President and Chief Executive
Officer of the Bank, $3,390; Mr. Sickel, Senior Vice President
and Chief Financial Officer of the Bank, $1,671; and Mr. Ginley,
Senior Vice President and Chief Loan Officer of the Bank, $3,752.
39
<PAGE>
DESCRIPTION OF THE BANK'S COMMON STOCK
The Bank's Common Stock
- -----------------------
As of September 1, 1997 , the Bank's authorized Common Stock
consisted of ten million (10,000,000) shares, par value One
Dollar ($1.00) per share, of which 868,128 shares were issued and
outstanding. Each share of Common Stock is entitled to one (1)
vote on all matters that may be brought before shareholders'
meetings, except that the holders of Common Stock have cumulative
voting rights in the election of directors. Cumulative voting
for the election of directors entitles each shareholder to
multiply the number of votes to which the shareholder is entitled
by the total number of directors to be elected, and the
shareholder may cast the whole number of these votes for one
candidate or may distribute them among two or more candidates.
As of September 1, 1997 , the Bank had approximately four hundred
ninety (490) shareholders. The Bank's Common Stock has no
preemptive subscription rights. The Bank's shares are
non-assessable (except as provided under the Pennsylvania Banking
Code of 1965, as amended, relating to assessments upon
shareholders for a deficiency in paid-up capital stock; this
provision has not been used for many years) and requires no
sinking fund. Each shareholder is entitled to receive dividends
that may be declared by the Board of Directors, and, in the event
of liquidation, dissolution or merger, the holders will be
entitled to share pro rata according to their interests. See
section entitled "Comparison of Shareholder Rights" for a summary
of the differences between the rights of holders of the Bank's
Common Stock and the rights of holders of the Holding Company's
Common Stock.
Payment of dividends is subject to the restrictions set
forth in the Pennsylvania Banking Code of 1965, as amended, and
the Federal Deposit Insurance Act. The Pennsylvania Banking Code
provides that dividends may be declared and paid only out of
accumulated net earnings, while the Federal Deposit Insurance Act
generally prohibits payment of dividends that would be an "unsafe
or unsound banking practice" under then existing circumstances.
In addition, under the FDIA (12 U.S.C. Section 1818),
dividends cannot be declared and paid if the FRB obtains a cease
and desist order because such payment would constitute an unsafe
and unsound banking practice.
The Bank maintains a philosophy of retaining earnings to
fund the Bank's growth. Therefore, the Bank has never paid a
cash dividend.
Holders of Common Stock who are Pennsylvania residents are
not subject to the Pennsylvania county personal property tax on
their share holdings.
Comparative Market Prices
- -------------------------
There has never been an organized public trading market for
the Bank's outstanding Common Stock. The Bank's Common Stock is
traded over-the-counter from time to time; as of September 1,
1997, the highest bid price known to management for transactions
of the Bank's Common Stock was $_____ which such price may
include retail markups, markdowns or commissions. As of July 10,
1997, the date on which the Board of Directors made the decision
to form a bank holding
40
<PAGE>
company and to submit the Plan of Reorganization and Plan of
Merger to the shareholders of the Bank, the last known trade was
$16.50 on May 21, 1997, which such price may include retail
markups, markdowns or commissions. Due to the infrequency of
such trading and the fact that such trades are generally private
transactions, the Board of Directors of the Bank is unable to
determine actual trading prices on any given date.
Capitalization
- --------------
Set forth below is the capitalization of the Bank at June
30, 1997, and of the Interim Bank and the Holding Company at
initial formation, and as adjusted to reflect the consummation of
the Merger.
<TABLE>
<CAPTION>
Premier Premier Interim Premier
Bank Bank Bancorp, Inc.
------- ------------- -------------
<S> <C> <C> <C>
Prior to Merger
- ---------------
Number of Shares
Authorized
or to be Authorized,
Common Stock, par value
$1.00 for Bank, Interim
Bank and for Holding
Company 10,000,000 10,000,000 10,000,000
Number of Shares
outstanding:
Common Stock 868,128 200,000<F1> 3<F2>
Capital Accounts:
Common Stock $ 868,128 $ 200,000<F1> $3.00<F2>
Capital Surplus 7,024,000 100,000<F1> -0-
Undivided Profits 1,631,000 -0- -0-
Net Unrealized Holding
Gains (Losses) on
Available-for-Sale
Securities (22) -0- -0-
Expense Fund -0- 10,000 -0-
--------- ------------- ---------
Total Equity Common $ 9,501,128 $ 310,000 $ 3.00
After Merger
- ------------
Number of Shares
Outstanding:
Common Stock par value
$1.00 for Bank, Interim
Bank and for Holding
Company 868,128 -0-<F3>
868,128<F4>
Capital Accounts:
Common Stock $ 868,128 $ -0- $ 868,128
Capital Surplus 7,024,000 -0- 7,024,000
Undivided Profits 1,631,000 -0- 1,631,000
Net Unrealized Holding
Gains(Losses) on
Available-for-Sale
Securities (22) -0- (22)
Expense Fund -0- -0- -0-
Total Equity Common $ 9,501,128<F5> -0-<F5>$9,501,128<F6>
=== ============ =============
41
<PAGE>
- ------------------
<FN>
<F1> Represents shares issued upon the initial capitalization of
the Interim Bank for One Dollar and Fifty-five Cents ($1.55) per
share. Twenty thousand (20,000) shares were subscribed by the
organizers of the Interim Bank and One Hundred Eighty Thousand
(180,000) shares were subscribed by Premier Bancorp, Inc. At the
Effective Date of the Merger, the Twenty thousand (20,000) shares
of the organizers will be assigned to Premier Bancorp, Inc. at
the same purchase price, One Dollar and Fifty-five Cents ($1.55)
per share.
<F2> Represents three (3) shares issued to the incorporators of
the Holding Company for One Dollar ($1.00) per share. At the
Effective Date of the Merger, these shares will be repurchased
and retired by Premier Bancorp, Inc. at the same purchase price,
One Dollar ($1.00) per share.
<F3> Represents the merger of the Interim Bank into Premier Bank
on the Effective Date of the Merger.
<F4> Represents the maximum number of shares to be issued to the
holders of Common Stock of the Bank as the result of the Merger.
<F5> Total equity capital reflects the capital accounts after
payment of the Three Hundred Ten Thousand Dollar ($310,000)
dividend to the Holding Company to repay a loan and purchase the
shares that provided the funds for the initial capitalization of
the Interim Bank. This borrowing will be through ________,
__________, Pennsylvania at approximately __%.
<F6> Amounts after the Merger are on a consolidated basis.
</FN>
</TABLE>
DESCRIPTION OF THE HOLDING COMPANY'S STOCK
Common Stock
- ------------
The Holding Company is authorized to issue ten million
(10,000,000) shares of Common Stock, par value One Dollar ($1.00)
per share, of which approximately 868,128 shares would be
outstanding if the reorganization had been consummated as of June
30, 1997. The remaining authorized but unissued shares of Common
Stock may be issued by the Board of Directors without further
shareholder approval. Issuance of these shares could cause a
dilution of the book value of the stock and the voting power of
present shareholders. The holders are entitled to one (1) vote
per share on all matters presented to them, but have cumulative
voting rights in the election of directors.
The Common Stock has no preemptive, subscription, or
conversion rights, redemption or repurchase provisions. These
shares are non-assessable and require no sinking fund. Each
shareholder is entitled to receive dividends that may be declared
by the Board of Directors and to share pro rata in the event of
dissolution or liquidation. For information concerning dividend
restrictions, see sections entitled "Description of the Bank's
Stock - The Bank's Common Stock" and "Comparison of Shareholder
Rights".
In some jurisdictions, shares of common stock of a general
business corporation, such as the Holding Company, may be treated
differently from shares of stock of a bank, and therefore, may be
the subject of personal property taxation.
42
<PAGE>
Legal Opinion
- -------------
Shumaker Williams, P.C., 3425 Simpson Ferry Road, Camp Hill,
Pennsylvania, Special Counsel to the Bank and the Holding
Company, has delivered an opinion to the effect that the shares
of Common Stock of the Holding Company to be issued in connection
with the reorganization will be, when issued and delivered
pursuant to the Plan of Reorganization and Plan of Merger, fully
paid and non-assessable by the Holding Company.
Anti-Takeover Provisions
- ------------------------
Under the Pennsylvania Business Corporation Law of 1988, as
amended ("BCL"), the Articles of Incorporation and By-laws of the
Holding Company, there are seven (7) provisions that may be
deemed to be "anti-takeover" in nature that will be immediately
applicable. Two of these provisions are: the authorization of
ten million (10,000,000) shares of Common Stock and the lack of
preemptive rights for shareholders to subscribe to purchase
additional shares of stock on a pro rata basis. The additional
shares of Common Stock and the elimination of preemptive rights
to such stock were authorized for the purpose of providing the
Board of Directors of the Holding Company with as much
flexibility as possible to issue additional shares, without
further shareholder approval for proper corporate purposes,
including financing, acquisitions, stock dividends, stock splits,
employee incentive plans and other similar purposes. However,
these additional shares may also be used by the Board of
Directors (if consistent with its fiduciary responsibilities) to
deter future attempts to gain control over the Holding Company.
The Bank is permitted under the Banking Code to elect
directors for staggered terms (a "Classified Board"). Provisions
for a Classified Board are also included in the By-Laws of the
Holding Company. The Board of Directors believes that a
Classified Board will help to assure continuity and stability of
corporate leadership and policy. In addition, a Classified Board
will help to moderate the pace of any change in control of the
Board of Directors by extending the time required to elect a
majority of the directors to at least two successive Annual
Meetings. However, since this extension of time also tends to
discourage a tender offer or takeover bid, this provision may
also be deemed to be "anti-takeover" in nature. In addition, a
Classified Board makes it more difficult for a majority of the
shareholders to change the composition of the Board of Directors
even though this may be considered desirable for them. Section
9.3 of the By-laws of the Holding Company provides that at the
1998 Annual Meeting of Shareholders of the Holding Company, the
shareholders shall elect twenty (20) directors as follows: Eight
(8) Class A directors to serve until the 2000 Annual Meeting of
Shareholders, five (5) Class B directors to serve until the 2001
Annual Meeting of Shareholders, and seven (7) Class C directors
to serve until the 1999 Annual Meeting of Shareholders. Each
class shall be elected in a separate election. At each Annual
Meeting of Shareholders thereafter, successors to the class of
directors whose term shall then expire shall be elected to hold
office for a term of three (3) years, so that the term of office
of one class of directors shall expire in each year.
Provisions in the Holding Company's Articles of
Incorporation and By-laws require action by a majority of the
Board of Directors, the Chairman, the President or one or more
shareholders owning, in the aggregate, not less than 20% of the
Outstanding shares of the Holding Company to
43
<PAGE>
call a Special Meeting of Shareholders. The Holding Company's
By-laws may be amended by a majority vote of the members of the
Board of Directors, subject to the affirmative vote of at least
sixty-six and two-thirds percent (66-2/3%) of the issued and
outstanding shares to change any amendment to the By-laws
previously approved by the Board of Directors. These provisions
were included in the By-laws of the Holding Company in order to
ensure that any extraordinary corporate transaction could be
effected only if it received a clear mandate from the
shareholders and/or the directors.
Other provisions that could be considered "anti-takeover"
are the requirements in the Holding Company's Articles of
Incorporation that the affirmative vote of the holders of at
least sixty-six and two-thirds percent (66-2/3%) of the
outstanding shares of Common Stock of the Holding Company is
required to approve any merger, consolidation, dissolution or
liquidation of the Holding Company or the sale of all or
substantially all of its assets. This provision was included in
the Articles of Incorporation of the Holding Company in order to
ensure that any extraordinary corporate transaction could be
effected only if it receives a clear mandate from the
shareholders. Also, these provisions could give the holders of a
minority of the Holding Company's outstanding shares a veto power
over any merger, consolidation, dissolution or liquidation of the
Holding Company, the sale of all or substantially all of its
assets even if a majority of the shareholders believes such
transaction to be desirable and beneficial. Absent such
provisions in the Holding Company's Articles of Incorporation,
the affirmative vote of at least a majority of the Holding
Company's shares outstanding and entitled to vote thereon would
be required to approve any merger, consolidation, dissolution,
liquidation, and the sale of all of its assets. Upon the
consummation of the reorganization, it is expected that the
executive officers and directors of the Holding Company will own,
approximately, an aggregate of 567,674 shares, or 53.12% of the
Holding Company's outstanding stock.
Another anti-takeover provision in the Articles of
Incorporation enables the Board of Directors to oppose a tender
offer on the basis of factors other than economic benefit to
shareholders, such as the impact the acquisition of the Holding
Company would have on the community; the effect of the
acquisition upon shareholders, employees, depositors, suppliers
and customers; and the reputation and business practices of the
tender offeror. This provision was included in the Articles of
Incorporation of the Holding Company to permit the Board of
Directors to recognize the responsibilities to these constituent
groups and to the Holding Company and its subsidiaries and the
communities that they serve.
THE OVERALL EFFECT OF THESE PROVISIONS MAY BE TO DETER A
FUTURE OFFER OR OTHER MERGER OR ACQUISITION PROPOSAL THAT A
MAJORITY OF THE SHAREHOLDERS MIGHT VIEW TO BE IN THEIR BEST
INTERESTS AS THE OFFER MIGHT INCLUDE A SUBSTANTIAL PREMIUM OVER
THE MARKET PRICE OF THE HOLDING COMPANY'S COMMON STOCK AT THAT
TIME. IN ADDITION, THESE PROVISIONS MAY HAVE THE EFFECT OF
ASSISTING THE HOLDING COMPANY'S CURRENT MANAGEMENT IN RETAINING
ITS POSITION AND PLACING IT IN A BETTER POSITION TO RESIST
CHANGES THAT THE SHAREHOLDERS MAY WANT TO MAKE IF DISSATISFIED
WITH THE CONDUCT OF THE HOLDING COMPANY'S BUSINESS.
44
<PAGE>
A vote in favor of the Plan of Reorganization and Plan of
Merger is a vote in favor of the anti-takeover provisions
contained in the Holding Company's Articles and By-laws and under
the BCL.
DIVIDENDS
The Bank has never paid a cash dividend and has no plans to
do so for the foreseeable future. Any decision to pay a cash
dividend in the future must necessarily depend upon earnings,
financial condition, appropriate legal restrictions and other
factors relevant at the time the Board of Directors of the
Holding Company considers dividend policy. Cash available for
dividend distribution to shareholders of the Holding Company must
initially come from dividends paid by the Bank to the Holding
Company. Therefore, the restrictions on the Bank's dividend
payments are directly applicable to the Holding Company. See
sections entitled "Description of the Bank's Stock - The Bank's
Common Stock" and "Comparison of Shareholder Rights".
Under the BCL, the Holding Company may not pay a dividend
if, after giving effect thereto: (1) the Holding Company would
be unable to pay its debts as they become due or (2) the Holding
Company's total assets would be less than its total liabilities
plus an amount needed to satisfy any preferential rights of
shareholders. Total assets and liabilities shall be determined
by the Board of Directors, which may base its determination on
such factors as it considers relevant, including without
limitation: (i) the book value of the assets and liabilities of
the Holding Company, as reflected on its books and records; and
(ii) unrealized appreciation and depreciation of the assets of
the Holding Company.
COMPARISON OF SHAREHOLDER RIGHTS
One result of the consummation of the proposed
reorganization is that shareholders of the Bank, whose rights are
presently governed by the Banking Code, will become shareholders
of the Holding Company, and their rights in the future will be
governed by the BCL. Another result is that the Articles of
Incorporation and By-laws of the Holding Company differ in
several aspects from those of the Bank.
45
<PAGE>
The following table compares the rights of shareholders of
the Bank with the rights of shareholders of the Holding Company.
This table is qualified by the more detailed information
appearing elsewhere in this Proxy Statement/Prospectus and in the
exhibits hereto and is not intended to be an exhaustive
comparison.
<TABLE>
<CAPTION>
The Bank's Common Stock
-----------------------
<S> <C>
Authorized and
Outstanding Ten million (10,000,000) shares, par value
One Dollar($1.00) per share, authorized;
of which 868,128 were outstanding on
September 1,
1997
Voting One (1) vote per share with cumulative
voting for directors
Preemptive Rights No preemptive rights to subscribe for
additional shares on a pro rata basis
Dividends As declared by the Board of Directors; may
be paid only from accumulated net earnings
and only if the Bank is not in arrears in
payments due the FDIC and only if not an
"unsafe or unsound" banking practice
Amendment of By-laws Approval by a majority vote of the Board
of Directors, subject to the power of
shareholders to change such action by the
affirmative vote of the holders of at
least sixty six and two-thirds percent
(66-2/3%) of the outstanding shares
Shareholder Action
(a) Mergers, Approval by a vote of at least sixty-six
Consolidations and two-thirds (66-2/3%) of outstanding
shares
(b) Liquidation, Approval by a vote of at least sixty-six
Sales of and two-thirds (66-2/3%) of outstanding
Substantially shares.
All Assets
(c) Special Upon request by a majority of the Board of
Shareholder Directors, the Chairman, the President or
Meetings one or more shareholders owning, in the
aggregate, not less than twenty percent
(20%) of the outstanding shares
Authorization of Approval by vote of at least
Additional sixty-six and two-thirds (66-2/3%) of
Shares outstanding shares
Amendment of Articles Approval by vote of at least sixty-six
of Incorporation and two-thirds (66-2/3%) of outstanding
(other than for the shares
purposes named
above)
Repurchase Cannot reduce or retire any part of its
stock without prior regulatory approvals
and shareholder approval.
<CAPTION>
The Holding Company's
Common Stock
---------------------
<S> <C>
Authorized and Ten million (10,000,000) shares, par value
Outstanding One Dollar ($1.00) per share, authorized;
of which 868,128 shares would be
outstanding if the reorganization were
effected on September 1, 1997
Voting One (1) vote per share with cumulative
voting for directors
Preemptive Rights No preemptive rights to subscribe for
additional shares on a pro rata basis
Dividends As declared by the Board of Directors; the
Bank's dividend restrictions apply
indirectly to the Holding Company as cash
available for dividend distributions will
initially come from dividends paid to the
Holding Company by the Bank. In addition,
the Holding Company may not pay a dividend
if, after giving effect thereto: (1) the
Holding Company would be unable to pay its
debts as they become due or (2) the
Holding Company's total assets would be
less than the amount needed to satisfy any
preferential rights of shareholders
46
<PAGE>
Amendment of By-laws Approval by the affirmative vote of the
holders of at least sixty-six and two-
thirds percent (66-2/3%) of the
outstanding shares, or by a majority vote
of the Board of Directors subject to the
power of shareholders to change such
action of the Board of Directors by the
affirmative vote of the holders of sixty-
six and two-thirds percent (66-2/3%) of
the outstanding shares
Shareholder Action
(a) Mergers, Approval by vote of at least sixty six and
consolidations two-thirds percent (66-2/3%) of
outstanding shares.
(b) Liquidation, Approval by vote of at least sixty six and
Sales of two-thirds percent (66-2/3%) of
Substantially outstanding shares.
All Assets
(c) Special Upon request by a majority of the Board of
Shareholder Directors, the Chairman, the President or
Meetings one or more shareholders owning, in the
aggregate, not less than twenty percent
(20%) of the outstanding shares
Authorization of Approval by vote of a majority of
Additional Shares the shareholders
Amendment of Articles Approval by vote of majority of the
of Incorporation votes cast except for the Anti-
(other than for takeover provisions, then sixty-six
the purposes named and two-thirds percent (66-2/3%).
above)
47
<PAGE>
Repurchase Stock can be repurchased if, after giving
effect thereto: (1) the Holding Company
would still be able to pay its debts as
they become due or (2) the Holding
Company's total assets would still be more
than its total liabilities plus an amount
needed to satisfy any preferential rights
of shareholders and that no more than ten
percent (10%) of the outstanding shares
can be repurchased in any twelve (12)
month period without prior regulatory
approval
</TABLE>
The Articles of Incorporation of the Holding Company and the
Bank authorize the Board of Directors to oppose a tender offer
for shares of the Holding Company on the basis of factors other
than economic benefit to shareholders such as: the impact of the
acquisition upon the community; the effect of the acquisition
upon employees, depositors, shareholders and customers; and the
reputation and business practices of the tender offeror. See
section entitled "Description of the Holding Company's Stock -
Anti-Takeover Provisions". Also, the By-laws of the Holding
Company provide for three (3) year staggered terms of office for
directors (a "Classified Board"). See, section entitled
"Description of the Holding Company's Stock - Anti-Takeover
Provisions".
In some jurisdictions, shares of common stock of a business
corporation such as the Holding Company may be treated
differently from shares of stock of a state banking institution
for legal investments for institutions and fiduciaries, and as
the subject of personal property taxation. Thus, shareholders of
the Bank may desire to determine whether the status of their
shares under local or state laws applicable to them would be
changed upon the effective date of the Merger. Under
Pennsylvania law, a fiduciary will be subject to the same
standards for investments in stock of the Holding Company as for
investments in the stock of the Bank. Under Pennsylvania law,
the holders of the Common Stock of the Holding Company who are
Pennsylvania residents will not be subject to the Pennsylvania
county personal property tax on their share holdings.
48
<PAGE>
INDEPENDENT AUDITORS
KPMG Peat Marwick, Certified Public Accountants, of
Philadelphia, Pennsylvania, served as the Bank's independent
auditors for the 1996 fiscal year. In addition to performing
customary audit services, KPMG Peat Marwick assisted the Bank
with the preparation of its federal and state tax returns and
provided assistance in connection with regulatory matters,
charging the Bank for such services at its customary hourly
billing rates. These non-audit services were approved by the
Bank's Board of Directors after the Board of Directors reviewed
the nature and expense associated with such services and
concluded that there was no effect on the independence of the
accountants. The Bank has been advised by KPMG Peat Marwick that
none of its members has any financial interest in the Bank. KPMG
Peat Marwick has been engaged as the independent auditor for the
fiscal year ending December 31, 1997.
FINANCIAL STATEMENTS
The Bank is not subject to the reporting requirements of the
1934 Act, and accordingly, does not have to file reports, proxy
statements and other information with the FRB.
The Board of Directors has not included any financial
statements of the Bank in this Proxy Statement/Prospectus. It is
the Board's position that financial statements would not be
material or relevant, in order for the shareholders to make an
informed prudent judgment to approve the Plan of Reorganization
and Plan of Merger. For example, if the reorganization into the
Holding Company would have occurred on January 1, 1996, the
financial statements contained in the 1996 Annual Report would
not be different in any material respect.
A copy of the Bank's Annual Report for the fiscal year ended
December 31, 1996, was mailed to Shareholders on or about April
1, 1997. A copy of the Bank's 1995 and 1994 Annual Reports,
prepared in conformity with generally accepted accounting
principles, may be obtained at no cost by contacting John C.
Soffronoff, President, Premier Bank, 379 North Main Street,
Doylestown, Pennsylvania 18901. A representative of KPMG Peat
Marwick, the Bank's independent auditor, will not attend the
Special Meeting and be available to respond to any appropriate
questions concerning the Annual Report presented by the
shareholders at the Special Meeting.
SHAREHOLDER PROPOSALS
In the event of consummation of the Plan of Reorganization,
any shareholder who, in accordance with and subject to the
provisions of the proxy rules of the Securities and Exchange
Commission, wishes to submit a proposal for inclusion in the
Holding Company's proxy statement for its 1998 Annual Meeting of
Shareholders must deliver such proposal in writing to John C.
Soffronoff, President, at the Holding Company's principal
executive offices, 379 North Main Street, Doylestown,
Pennsylvania 18901, no later than December 9, 1997.
49
<PAGE>
If the Plan of Reorganization is not consummated, then any
shareholder of the Bank who wishes to submit a proposal for
inclusion in the Bank's proxy statement for its 1998 Annual
Meeting of Shareholders, must submit the proposal in writing to
John C. Soffronoff, President of the Bank, at the Bank's
principal office at 379 North Main Street, Doylestown,
Pennsylvania 18901, no later than December 8, 1997.
OTHER MATTERS
The Board of Directors does not know of any matters to be
presented for consideration other than the matters described in
the Proxy Statement/Prospectus, but if any matters are properly
presented, it is the intention of the persons named in the
accompanying Proxy to vote on such matters in accordance with
their best judgment.
50
<PAGE>
EXHIBIT A
PLAN OF REORGANIZATION
<PAGE>
PLAN OF REORGANIZATION EXHIBIT A
THIS AGREEMENT made as of this ____ day of _______________,
1997, among PREMIER BANCORP, INC., a Pennsylvania business
corporation (the "Holding Company"), PREMIER BANK, Doylestown,
Pennsylvania, a state banking institution (the "Bank"), and
PREMIER INTERIM BANK (In Organization), a state banking
institution and a subsidiary of the Holding Company (the "Interim
Bank").
WHEREAS, the Holding Company, the Bank and the Interim Bank
desire to effect the formation of a bank holding company whereby
Bank and the Interim Bank will be merged, the surviving bank will
become a wholly-owned subsidiary of the Holding Company, and the
present shareholders of the Bank (except for those who perfect
dissenters' rights) will become shareholders of the Holding
Company, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants
and agreements contained herein, and intending to be legally
bound hereby, the parties agree as follows:
SECTION 1. MERGER.
1.1. Agreement to Merge. Subject to the terms and
conditions hereinafter set forth, the parties hereto agree to
effect a merger of the Bank and the Interim Bank (the "Merger")
pursuant to the provisions of the Pennsylvania Banking Code of
1965, as amended (the "Banking Code") in accordance with the Plan
of Merger, attached hereto as Exhibit A and made a part hereof
(the "Plan of Merger").
1.2. Holding Company Common Stock. The Holding
Company shall make available to the Bank and the Interim Bank a
sufficient number of shares of the Holding Company's Common Stock
to effect the Merger pursuant to the Plan of Merger.
SECTION 2. SHARES OF THE HOLDING COMPANY AND OF THE
SURVIVING BANK.
2.1. Conversion of Shares. The manner of converting
the shares of Common Stock of the Bank into shares of Common
Stock of the Holding Company and the shares of Common Stock of
the Interim Bank into shares of Common Stock of the surviving
bank in the Merger and the assumption of the outstanding options
of the Bank by the Holding Company, shall be as set forth in
Section 2 of the Plan of Merger.
A-1
<PAGE>
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE HOLDING
COMPANY.
The Holding Company represents, warrants and agrees as
follows:
3.1. Organization and Standing. The Holding Company
is a corporation duly organized and validly existing under the
Pennsylvania Business Corporation Law of 1988, as amended.
3.2. Capitalization. The Holding Company is
authorized to issue Ten Million (10,000,000) shares of Common
Stock, par value One Dollar ($1.00) per share, of which three (3)
shares are issued and outstanding. There are no outstanding
options, warrants, calls, convertible securities, subscriptions
or other commitments or rights of any nature with respect to the
Common Stock of the Holding Company.
3.3. Authority Relative to this Agreement. The
execution, delivery and performance of this Agreement have been
duly authorized by the Board of Directors of the Holding Company.
Subject to appropriate shareholder and regulatory approvals,
neither the execution and delivery of this Agreement nor the
consummation of the transactions provided for herein will violate
any agreement to which the Holding Company is a party or by which
it is bound or any law, order or decree or any provision of its
Articles of Incorporation or By-laws.
3.4. Absence of Liabilities. Prior to the effective
time of the Merger, the Holding Company will have engaged only in
the transactions contemplated by this Agreement and the Plan of
Merger, will have no material liabilities and will have incurred
no material obligations except in connection with its performance
of the transactions provided for in this Agreement and in the
Plan of Merger.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE BANK.
The Bank represents, warrants and agrees as follows:
4.1. Organization and Standing. The Bank is a
state-chartered banking institution duly organized and validly
existing under the Pennsylvania Banking Code of 1965, as amended
(the "Banking Code").
4.2. Capitalization. The Bank is authorized to issue
Ten Million (10,000,000) shares of Common Stock, par value One
Dollar ($1.00) per share, of which 868,128 shares are issued and
outstanding. As of the date of the Agreement, the Bank has
issued 229,403 options at exercise prices ranging from $9.09 to
$15.00 per share. Each such option is exercisable for
one share of common stock of the Bank. There are no other
outstanding options, warrants, calls, convertible securities,
subscriptions or other commitments or rights of any nature with
respect to the Common Stock of Bank.
A-2
<PAGE>
4.3. Authority Relative to this Agreement. The
execution, delivery and performance of this Agreement and of the
Plan of Merger have been duly authorized by the Board of
Directors of the Bank. Subject to appropriate shareholder and
regulatory approvals, neither the execution and delivery of this
Agreement or the Plan of Merger nor the consummation of the
transactions provided for herein or therein will violate any
agreement to which the Bank is a party or by which it is bound,
or any law, order, or decree or any provision of its Articles of
Incorporation or By-laws.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE INTERIM
BANK.
The Interim Bank represents, warrants and agrees as
follows:
5.1. Organization and Standing. The Interim Bank is a
state-chartered banking institution in the process of formation
under the Banking Code.
5.2. Capitalization. Upon formation, the Interim Bank
will be authorized to issue 10,000,000 shares of Common Stock,
par value One Dollar ($1.00) per share, of which 200,000 shares
will be issued and outstanding and owned by the Holding Company
and twenty organizers immediately prior to the Merger.
5.3. Authority Relative to this Agreement. The
execution, delivery and performance of this Agreement and the
Plan of Merger have been duly authorized by the Board of
Directors of the Interim Bank. Subject to appropriate
shareholder and regulatory approvals, neither the execution and
delivery of this Agreement or the Plan of Merger nor the
consummation of the transactions provided for herein or therein
will violate any agreement to which the Interim Bank is a party
or by which it is bound or any law, order, decree or any
provision of its Articles of Incorporation or By-laws.
5.4. Absence of Liabilities. Prior to the effective
time of the Merger, the Interim Bank will have engaged only in
the transactions contemplated by this Agreement and the Plan of
Merger, will have no material liabilities and will have incurred
no material obligations except in connection with its performance
of the transactions provided for in this Agreement and in the
Plan of Merger.
SECTION 6. COVENANTS OF THE HOLDING COMPANY.
The Holding Company agrees that between the date hereof and
the effective time of the Merger:
6.1. Capitalization of the Interim Bank. The Holding
Company shall purchase a total of 200,000 shares of Common Stock,
par value One Dollar ($1.00) per share, of Interim Bank for One
Dollar and Fifty-five Cents ($1.55) per share, and shall cause
the Interim Bank to do all things necessary to obtain a charter
as a state banking institution, pursuant to the Banking Code, so
as to permit the consummation of the Merger provided for in the
Plan of Merger. The Holding Company
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<PAGE>
may also purchase the subscription rights of the organizers of
the Interim Bank for the 20,000 shares of Common Stock issued to
them in the aggregate. Such shares of the organizers shall be
purchased at One Dollar and Fifty-five Cents ($1.55) per share.
6.2. Approval of Merger. The Holding Company, as a
shareholder of the Interim Bank, shall approve this Agreement and
the Plan of Merger in accordance with applicable law.
6.3. Best Efforts. The Holding Company will use its
best efforts to take, or cause to be taken, all actions or do, or
cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement and the Plan of
Merger, subject, however, to the requisite vote of the
shareholders of the Bank in accordance with the requirements of
the Banking Code and applicable law.
SECTION 7. COVENANTS OF THE BANK.
The Bank agrees that between the date hereof and the
effective time of the Merger:
7.1. Shareholders Meeting. The Bank shall submit this
Agreement and the Plan of Merger to the vote of its shareholders,
as provided by the Banking Code and other applicable laws, at a
Special Meeting of Shareholders to be held on or about October 9,
1997, and any adjournment or postponement thereof.
7.2. Best Efforts. The Bank will use its best efforts
to take, or cause to be taken, all actions or do, or cause to be
done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the
transactions contemplated by this Agreement and the Plan of
Merger, subject, however, to the requisite vote of the
shareholders of the Bank in accordance with the requirements of
the Banking Code and applicable law.
SECTION 8. CONDITIONS TO OBLIGATIONS OF THE PARTIES.
The obligations of the parties to consummate this Agreement
and the Plan of Merger shall be subject to the following
conditions:
8.1. Representations and Warranties: Performance of
Covenants. The representations and warranties and covenants
contained in Sections 3, 4, 5, 6 and 7 hereof shall be true as of
and at the effective time of the Merger, and each party shall
have performed all obligations required hereby to be performed by
it prior to the effective time of the Merger.
8.2. Bank Shareholder Approval. The shareholders of
Bank shall have duly approved this Agreement and the Plan of
Merger in accordance with applicable laws.
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<PAGE>
8.3. Regulatory Approvals. Any federal or state
regulatory agency having jurisdiction (banking or otherwise), to
the extent that any consent or approval is required by applicable
laws or regulations for the consummation of this Agreement and
the Plan of Merger, shall have granted any necessary consent or
approval.
8.4. Registration Statement. The registration
statement (the "Registration Statement") filed by the Holding
Company, if required pursuant to the Securities Act of 1933, as
amended, covering the shares of the Holding Company's Common
Stock to be issued pursuant to the Plan of Merger shall have been
declared effective by the Securities and Exchange Commission; and
no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that
purpose shall have been initiated or, to the knowledge of the
Holding Company, shall be contemplated or threatened by the
Securities and Exchange Commission.
8.5. Litigation. There shall be no litigation or
proceeding pending or threatened for the purpose of enjoining,
restraining or preventing the consummation of the Merger, this
Agreement or the Plan of Merger or otherwise claiming that such
consummation is improper.
8.6. Tax Opinion. A tax opinion shall have been
obtained from Shumaker Williams, P.C. of Camp Hill, Pennsylvania,
Special Counsel to the Bank that the conversion of Bank's Common
Stock into the Holding Company's Common Stock will be tax free
for federal income tax purposes; provided, however, that the
requirements of this Section 8.6 may be waived by the affirmative
vote of a majority of the Board of Directors of each of the
parties hereto.
SECTION 9. TERMINATION, WAIVER AND AMENDMENT.
9.1. Circumstances of Termination. Anything herein or
elsewhere to the contrary notwithstanding, this Agreement and the
Plan of Merger may be terminated at any time before the effective
time of the Merger (whether before or after action with respect
thereto by the Bank's shareholders) only:
(a) by the mutual consent of the Board of Directors of
the Bank, the Interim Bank and the Holding Company evidenced by
an instrument in writing signed on behalf of each by any two of
their respective officers; or
(b) by the Board of Directors of the Bank if, in its
sole judgment, the Merger would be inadvisable because of the
number of shareholders of the Bank who perfect their dissenter's
rights in accordance with applicable law and the Plan of Merger,
or if, in the sole judgment of such Board, the Merger would not
be in the best interests of the Bank or its employees, depositors
or shareholders for any reason whatsoever.
9.2. Effect of Termination. In the event of the
termination and abandonment hereof, this Agreement and the Plan
of Merger shall become void and have no effect, without any
liability on the part of any of the parties, their directors,
officers or shareholders, except as set forth in Section 10
hereof.
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<PAGE>
9.3. Waiver. Any of the terms or conditions of this
Agreement and the Plan of Merger may be waived in writing at any
time by the Bank by action taken by its Board of Directors,
whether before or after action by the Bank's shareholders;
provided, however, that such action shall be taken only if, in
the judgment of the Board of Directors, such waiver will not have
a materially adverse effect on the benefits intended to be
granted hereunder to the shareholders of the Bank.
9.4. Amendment. Anything herein or elsewhere to the
contrary notwithstanding, to the extent permitted by law, this
Agreement and the Plan of Merger may be amended at any time by
the affirmative vote of a majority of the Board of Directors of
each of the Bank, the Holding Company and the Interim Bank,
whether before or after action with respect thereto by the Bank's
shareholders and without further approval of such amendment by
the shareholders of the parties hereto; provided, however, that
Section 2.1 of this Agreement and Section 2 of the Plan of Merger
may not be amended after the meeting of the Bank's shareholders
referred to in Section 7.1 hereof except by the vote of Bank
shareholders required for the approval of the Merger by such
shareholders.
SECTION 10. EXPENSES.
10.1. General. Each party hereto will pay its own
expenses incurred in connection with this Agreement and the Plan
of Merger, whether or not the transactions contemplated herein
are effected.
10.2. Special Dividend. Upon the effective time of
the Merger, the surviving bank shall pay a special dividend to
the Holding Company in an amount equal to the sum of:
(a) the expenses of the Holding Company in connection
with the transactions contemplated herein, if any;
(b) the principal amount of any loan that the Holding
Company shall have obtained to purchase shares of Common Stock of
the Interim Bank as provided in 6.1 hereof; and
(c) the amount of any interest incurred by the Holding
Company on account of any loans obtained by it in order to
purchase shares of Common Stock of the Interim Bank as provided
in Section 6.1 hereof.
SECTION 11. MISCELLANEOUS.
11.1. Restrictions on Affiliates. The Holding Company
may cause stock certificates representing any shares issued to
any shareholder who may be deemed to be an affiliate of the Bank,
within the meaning of Rule 145 under the Securities Act of 1933,
as amended, to bear a legend setting forth any applicable
restrictions on transfer thereof under Rule 145 and may cause
stop-transfer orders to be entered with its transfer agent with
respect to any such certificates.
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11.2. No Brokers. Each of the parties represents to
the other that it has not incurred and will not incur any
liability for brokerage fees or agents' commissions in connection
with this Agreement, the Plan of Merger and the transactions
contemplated hereby.
11.3. Right to Withhold Dividends. The Board of
Directors of the Holding Company reserves the right to withhold
dividends from any former shareholder of the Bank who fails to
exchange certificates representing the shares of the Bank for
certificates representing the shares of the Holding Company in
accordance with Section 2 of the Plan of Merger.
11.4. Failure to Surrender of Certificates.
Shareholders of the Holding Company may be required, at the
option of the Holding Company, to surrender certificates
representing the shares of the Bank for certificates representing
the shares of the Holding Company as provided in Section 2 of the
Plan of Merger.
11.5. Entire Agreement. This Agreement (including the
Plan of Merger attached as an exhibit hereto) contains the entire
agreement among the parties with respect to the subject matter
hereof and supersedes all prior agreements, written or oral, with
respect thereto.
11.6. Captions. Descriptive headings are for
convenience only and shall not control or affect the meaning or
construction of any provisions of this Agreement or the Plan of
Merger.
11.7. Applicable Law. This Agreement and the Plan of
Merger shall be governed by the laws of the Commonwealth of
Pennsylvania applicable to contracts executed in and to be
performed exclusively within the Commonwealth of Pennsylvania,
regardless of where they are executed.
11.8. Counterparts. This Agreement may be executed in
any number of counterparts, and each such counterpart shall be
deemed to be an original instrument, but all such counterparts
together shall constitute but one agreement.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed as of
the day, month and year first above mentioned.
(SEAL)
ATTEST: PREMIER BANCORP, INC.
___________________________ By:______________________________
John J. Ginley, Secretary John C. Soffronoff, President
(SEAL)
ATTEST: PREMIER BANK
___________________________ By:______________________________
John J. Ginley, Secretary John C. Soffrononff, President
(SEAL)
ATTEST: PREMIER INTERIM BANK
(In Organization)
___________________________ By:_____________________________
John J. Ginley, Secretary John C. Soffronoff, President
<PAGE>
EXHIBIT B
PLAN OF MERGER
<PAGE>
PLAN OF MERGER
PREMIER INTERIM BANK
with, into and under the charter of
PREMIER BANK
EXHIBIT B
THIS PLAN OF MERGER made between Premier Bank (the "Bank"),
a Pennsylvania-chartered bank, being located at 379 North Main
Street, Doylestown, Pennsylvania 18901-0818, County of Bucks, in
the Commonwealth of Pennsylvania, and Premier Interim Bank (in
organization) (the "Interim Bank"), a Pennsylvania-chartered
bank, being located at 379 North Main Street, Doylestown, County
of Bucks, in the Commonwealth of Pennsylvania (the two parties
are sometimes collectively referred to as the "Constituent
Banks").
WHEREAS, Bank, Interim Bank and Premier Bancorp, Inc. (the
"Holding Company"), a Pennsylvania business corporation of which
Interim Bank is a wholly owned subsidiary, have entered into a
Plan of Reorganization dated the day hereof (the "Plan of
Reorganization"), providing for, among other things, the
execution of the Plan of Merger and the merger (the "Merger") of
the Bank and the Interim Bank all in accordance with the terms
and conditions hereinafter set forth;
NOW, THEREFORE, the Constituent Banks, intending to be
legally bound hereby, agree to effect the Merger in accordance
with the terms and conditions hereinafter set forth.
Section 1. General.
1.1 The Merger. On the Effective Date, as hereinafter
defined, Interim Bank will merge with, into and under the
Charter of the Bank pursuant to the Pennsylvania Banking Code of
1965, as amended (the "Banking Code"), the separate existence of
Interim Bank shall cease, and Bank shall be the surviving bank
(the "Surviving Bank"), in accordance with this Plan of Merger
and applicable law.
1.2 Name. The name of the surviving bank shall be Premier
Bank, and the location of its principal office shall be 379 North
Main Street, Doylestown, Pennsylvania 18901.
1.3 Articles of Incorporation. At the Effective Date, the
Articles of Incorporation of the Bank, as in effect immediately
prior to the Effective Date, shall be the Articles of
Incorporation of the Surviving Bank.
1.4 By-laws. At the Effective Date, the By-laws of the
Bank, as in effect immediately prior to the Effective Date, shall
be the By-laws of the Surviving Bank.
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<PAGE>
1.5 Effect of Merger. On the Effective Date, the Surviving
Bank shall succeed, without further act or deed, to all of the
property, rights, powers, duties and obligations of the
Constituent Banks in accordance with the Banking Code. Any claim
existing or action pending by or against either of the
Constituent Banks may be prosecuted to judgment as if the Merger
had not taken place, and the Surviving Bank may be substituted in
its place.
1.6 Continuation in Business. The Surviving Bank shall
continue in business with the assets and liabilities of each of
the Constituent Banks. The Surviving Bank shall be a commercial
bank organized and having perpetual existence under the laws of
the Commonwealth of Pennsylvania. Any branch offices of the
Surviving Bank shall consist of the Bank's present branch offices
and any other branch office or offices that Bank may be
authorized to have as of the Effective Date.
1.7 Board of Directors. The Board of Directors of Bank
immediately prior to the consummation of the Merger shall serve
as the Board of Directors of the Surviving Bank from and after
the Effective Date and until such time as their successors have
been duly elected and qualified.
1.8 Officers. The persons who are executive or other
officers of Bank immediately prior to the consummation of the
Merger shall serve as the officers of the Surviving Bank from and
after the Effective Date and until such time as the Board of
Directors of the Surviving Bank shall otherwise determine.
1.9 Employees. On the Effective Date, all persons who are
employees of Bank and of Interim Bank shall become employees of
the Surviving Bank.
Section 2. Conversion of Shares. The manner and basis of
converting shares of Common Stock of the Constituent Banks shall
be as follows:
2.1 Stock of Interim Bank. The shares of Common Stock, par
value $1.00 per share, of Interim Bank issued and outstanding
immediately prior to the Effective Date shall be converted into
the right to receive fully paid and non-assessable shares of the
Surviving Bank so that the number of outstanding shares of the
Surviving Bank at and after the Effective Date shall equal the
number of outstanding shares of the Bank prior to the Effective
Date and resulting in all outstanding shares of the Bank being held by the
Holding Company at and after the Effective Date.
2.2 Stock of the Bank. Each share of Common Stock, par
value $1.00 per share, of Bank issued and outstanding immediately
prior to the Effective Date (except for shares owned by
shareholders who shall have duly perfected dissenters' rights in
accordance with this Plan of Merger and applicable law and except
for fractional shares) shall, on the Effective Date, by virtue of
the Merger and without any action on the part of the holder
thereof, be converted into and become one (1) share of fully paid
and nonassessable Common Stock, par value $1.00 per share, of the
Holding Company. No fractional shares of Common Stock and no
scrip or certificates therefor, shall be issued in connection
with the Merger. In lieu of the insurance of any fractional
share to which a shareholder would otherwise be entitled, each
former shareholder of Bank shall receive, in cash, an amount
equal to the fair market value
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<PAGE>
of his or her fractional interest.
2.3 Treasury Stock. Each share of Common Stock, par value
$1.00 per share, of Bank held as a treasury share immediately
prior to the Effective Date, if any, shall thereupon and without
notice be canceled.
2.4 Assumption of Stock Options. Holding Company shall
assume all of the obligations of Bank under the stock options
outstanding to the extent that such options remain
unexercised on the Effective Date. Option holders shall
receive stock options to purchase the same number of shares at
the same option exercise price that the option held had such
option been exercised prior to the Merger. No fractional shares
of Holding Company Common Stock, and no scrip or certificates
therefor, shall be issued in connection with the assumption or
exercise of such stock options.
2.5 Exchange Agent. Bank shall designate the Secretary or
another officer of the Holding Company or Bank to act as exchange
agent to receive from the holders thereof, certificates that,
immediately prior to the Effective Date, represented Bank's
Common Stock and to exchange such certificates for Common Stock
of the Holding Company, as provided herein and if applicable, to
pay cash for fractional shares of Bank Common Stock pursuant to
Section 2.2, above.
2.6 Exchange Procedure. If appointed pursuant to Section
2.5 hereof, the exchange agent shall promptly mail to each record
holder as of the date of exchange of an outstanding certificate
or certificates that, prior to the Effective Date, represented
shares of Bank's Common Stock, a letter of transmittal (which
shall specify how delivery shall be effected, and that risk of
loss and title to such certificate or certificates shall pass
only upon proper delivery of such certificate or certificates,
together with a properly executed letter of transmittal to the
exchange agent at is address stated therein) and instructions for
use in effecting the surrender of such certificate or
certificates for exchange therefor. Upon surrender to the
exchange agent of such certificate or certificates, together with
such letter of transmittal, properly executed, the exchange agent
shall exchange such certificate or certificates for shares of
common stock of the holding company, as provided herein.
2.7 Failure to Surrender Certificates. Shareholders will be
required to surrender certificates representing shares of the
Bank for certificates representing shares of the Holding Company.
All Bank Common Stock certificates must be surrendered within two
(2) years after notice that surrender will be required. In the
event that any former shareholder of Bank shall not have properly
surrendered his Common Stock certificates within two (2) years
after such
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<PAGE>
notice, the shares of Holding Company Common Stock that would
otherwise have been issued to him may, at the option of the
Holding Company, be sold, and the net proceeds of such sale,
together with the cash (if any) to which he is entitled in lieu
of the issuance of a fractional share and any previously accrued
dividends, shall be held in a noninterest bearing account for his
benefit. From and after any such sale, the sole right of such
former shareholder of Bank shall be right to collect such net
proceeds, cash and accumulated dividends. Subject to all
applicable laws of escheat, such net proceeds, cash and
accumulated dividends shall be paid to such former shareholder of
Bank, without interest, upon proper surrender of his Common Stock
certificates.
2.8 Dissenters' Rights. Shareholder of Bank shall be
entitled to exercise the rights provided in Subchapter D of
Chapter 15 of the Pennsylvania Business Corporation Law of 1988,
as amended, (15 Pa.C.S.A. Section 1571 et. seq.) ("Dissenters'
Rights") with respect to the Plan of Merger.
Section 3. Miscellaneous.
3.1 Conditions. The obligations of Bank and Interim Bank to
effect the Merger shall be subject to all of the terms and
conditions contained in the Plan of Reorganization.
3.2 Termination and Agreement. This Plan of Merger may be
terminated or amended prior to the Effective Date in the manner
and upon the conditions set forth in the Plan of Reorganization.
If the Plan of Reorganization is terminated pursuant to the terms
thereof, this Plan of Merger shall terminate simultaneously, and
the Merger shall be abandoned without further action of the
parties hereto.
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<PAGE>
IN WITNESS WHEREOF, this Plan of Merger has been executed on
the day and year first mentioned above.
ATTEST: PREMIER BANK
___________________________ By:_____________________________
John J. Ginley, Secretary John C. Soffronoff, President
ATTEST: PREMIER INTERIM BANK
(In Organization)
___________________________ By:_____________________________
John J. Ginley, Secretary John C. Soffronoff, President
<PAGE>
EXHIBIT C
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
PREMIER BANCORP, INC.
<PAGE>
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
PREMIER BANCORP, INC.
<PAGE>
EXHIBIT C
In compliance with the requirements of 15 Pa.C.S. Section
1306 (relating to Articles of Incorporation), the undersigned,
desiring to be incorporated as a business corporation, hereby
state that:
1. The name of the Corporation is PREMIER BANCORP, INC.
2. The address, including street and number, if any, of this
Corporation's initial registered office in this Commonwealth is
379 North Main Street, Doylestown, Pennsylvania 18901, and the
county of venue is Bucks.
3. The Corporation is incorporated under the provisions of the
Pennsylvania Business Corporation Law of 1988 (15 Pa.C.S. Section
1101 et seq.), as the same may be amended.
4. The purpose or purposes of the Corporation are to have
unlimited power to engage in and to do any lawful act concerning
any or all business for which corporations may be incorporated
under the provisions of the Pennsylvania Business Corporation Law
of 1988, as the same may be amended.
5. The aggregate number of shares that the Corporation shall
have authority to issue is Ten Million (10,000,000) shares of
Common Stock having a par value of One Dollar ($1.00) per share.
6. The name and address, including street and number, if any, of
each of the Incorporators, and the number and class of shares
subscribed to by each Incorporator is:
Number and Class
Name Address of Shares
- ---- ------- ------------------
John C. Soffronoff 379 North Main Street, 1 Share of Common
Doylestown, PA 18901 Stock
Clark S. Frame 379 North Main Street, 1 Share of Common
Doylestown, PA 18901 Stock
Bruce E. Sickel 379 North Main Street, 1 Share of Common
Doylestown, PA 18901 Stock
7. No merger, consolidation, liquidation or dissolution of the
Corporation nor any action that would result in the sale or other
disposition of all or substantially all of the assets of the
Corporation shall be valid unless first approved by the
affirmative vote of at least sixty-six and two-thirds percent
(66-2/3%) of the outstanding shares of Common Stock of the
Corporation.
8. Cumulative voting rights shall exist with respect to the
election of directors.
9(a) The Board of Directors may, if it deems advisable, oppose a
tender or other offer for the Corporation's securities, whether
the offer is in cash or in the securities of a corporation or
otherwise. When considering whether to oppose an offer, the
Board of Directors may, but is not legally obligated to, consider
any relevant, germane or pertinent issue; by way of illustration,
but not to be considered any limitation on the power of
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<PAGE>
the Board of Directors to oppose a tender or other offer for this
Corporation's securities, the Board of Directors may, but shall
not be legally obligated to, consider any or all of the
following:
(i) Whether the offer price is acceptable based on the
historical and present operating results or financial condition
of the Corporation;
(ii) Whether a more favorable price could be obtained for
this Corporation's securities in the future;
(iii) The social and economic effects of the offer or
transaction on this Corporation and any of its subsidiaries,
employees, depositors, loan and other customers, creditors,
shareholders and other elements of the communities in which this
Corporation and any of its subsidiaries operate or are located;
(iv) The reputation and business practice of the offeror
and its management and affiliates as they would affect the
shareholders, employees, depositors and customers of the
Corporation and its subsidiaries and the future value of the
Corporation's stock;
(v) The value of the securities (if any) which the offeror
is offering in exchange for the Corporation's securities, based
on an analysis of the worth of the Corporation or other entity
whose securities are being offered;
(vi) The business and financial conditions and earnings
prospects of the offeror, including, but not limited to, debt
service and other existing or likely financial obligations of the
offeror, and the possible affect of such conditions upon this
Corporation and any of its subsidiaries and the other elements of
the communities in which this Corporation and any of its
subsidiaries operate or are located;
(vii) Any antitrust or other legal and regulatory issues
that are raised by the offer.
(b) If the Board of Directors determines that an offer should be
rejected, it make take any lawful action to accomplish its
purpose including, but not limited to, any or all of the
following: advising shareholders not to accept the offer;
litigation against the offeror; filing complaints with all
governmental and regulatory authorities; acquiring the offeror
corporation's securities; selling or otherwise issuing authorized
but unissued securities or treasury stock or granting options
with respect thereto; acquiring a company to create an antitrust
or other regulatory problem for the offeror; and obtaining a more
favorable offer from another individual or entity.
10. Articles 7, 8, 9 and 10 shall not be amended unless first
approved by the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66 2/3%) of the outstanding
shares of Common Stock of the Corporation.
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<PAGE>
IN TESTIMONY WHEREOF, the incorporators have signed these
Articles of Incorporation this ______ day of
_____________________, 1997.
/s/ John C. Soffronoff /s/ Clark S. Frame
- ---------------------- ---------------------
John C. Soffronoff Clark S. Frame
/s/ Bruce E. Sickel
- ---------------------
Bruce E. Sickel
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<PAGE>
EXHIBIT D
BY-LAWS OF
PREMIER BANCORP, INC.
<PAGE>
BY-LAWS OF
PREMIER BANCORP, INC. EXHIBIT D
ARTICLE I. OFFICES
1. Principal Office. The principal place of business of the
Corporation shall be located at 42 Shewell Avenue, Doylestown,
Pennsylvania 19801.
Additional places of business may be established from time
to time and thereafter changed or discontinued in a manner
prescribed by law.
ARTICLE II. SEAL
1. Corporate Seal. Corporate seal of the Corporation shall have
inscribed thereon the name of the Corporation, the year of its
organization and the words "Corporate Seal Pennsylvania". The
following is an impression of the Seal adopted by the Board of
Directors of this Corporation.
2. Authority to Affix Corporate Seal. The Chairman of the Board
of Directors, the President, the Executive Vice President and the
Secretary and each Assistant Secretary shall have authority to
affix the Corporate Seal of this Corporation to any documents
requiring such Seal and to attest the same.
ARTICLES III. SHAREHOLDERS MEETINGS
1. Meetings of Shareholders. Meetings of the shareholders shall
be held at the principal place of business of the Corporation or
at such other place or places within the Commonwealth of
Pennsylvania as may from time to time be selected by the Board of
Directors.
2. Annual Meeting of Shareholders. The annual meeting of the
shareholders shall be held on the second Thursday in the month of
May of each year if not a legal holiday, Saturday or Sunday, and
if a legal holiday, Saturday or Sunday then on the next secular
day following, at 2:00 o'clock p.m., when the shareholders shall
elect a Board of Directors, and transact such other business as
may properly be brought before the meeting. If the annual
meeting shall not be called and held during any calendar year,
any shareholder may callsuch meeting at any time after the end of
the calendar year in which the meeting was not held.
D-1
<PAGE>
3. Notice of Annual Meeting of Shareholders. Written notice of
the annual meeting of shareholders shall be mailed, postage
prepaid, to each shareholder entitled to vote thereat, at such
address as appears on the books of the Corporation, at least
fifteen (15) days prior to the meeting, unless a greater period
of notice is required by statute in a particular case.
4. Special Meeting of Shareholders. Special meetings of the
shareholders may be called at any time by the Chairman of the
Board of Directors, the President, a majority of the Board of
Directors, or by the holders of not less than one-fifth (1/5) of
all the shares entitled to vote at the particular meeting. At
any time, upon written request of any person entitled to call a
special meeting, it shall be the duty of the Secretary to call a
special meeting of the shareholders, to be held at such time as
the Secretary may fix, not less than fifteen (15) or more than
sixty (60) days after receipt of the request. The business
transacted at all special meetings shall be confined to the
objects stated in the call and notice and matters germane
thereto.
5. Notice of Special Meeting of Shareholders. Written notice of
a special meeting of shareholders stating the time and place and
object thereof, shall be mailed, postage prepaid, to each
shareholder entitled to vote thereat at such address as appears
on the books of the Corporation, at least fifteen (15) days
before such meeting, unless a greater period of notice is
required by statute in a particular case.
6. Voting Rights. The officer or agent having charge of the
transfer books of the Corporation shall make at least five (5)
days before each meeting of shareholders, a complete list of the
shareholders entitled to vote at the meeting, arranged in
alphabetical order, with the address of and the number of shares
held by each, which list shall be subject to inspection by any
shareholder at any time during normal business hours at the
principal place of business of the Corporation or such other
place designated by the Board of Directors for that purpose.
Such list shall also be produced and kept open at the time and
place of the meeting, and shall be subject to the inspection of
any shareholder during the whole time of the meeting. The
original share ledger or transfer book, or a duplicate thereof
kept in this Commonwealth, shall be prima facie evidence as to
who are the shareholders entitled to examine such list or share
ledger or transfer book, or to vote in person or by proxy, at any
meeting of shareholders.
7. Quorum of and Action by Shareholders. A shareholders'
meeting duly called shall not be organized for the transaction of
business unless a quorum is present. Unless otherwise provided
by the Articles of Incorporation of the Corporation, the
presence, in person
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<PAGE>
or by proxy, of shareholders entitled to cast at least a majority
of the votes which all shareholders are entitled to cast on a
particular matter shall constitute a quorum for the purpose of
considering such matter, and unless otherwise provided by statute
or by the Articles of Incorporation, the acts at a duly organized
meeting, of the shareholders present, in person or by proxy,
entitled to cast at least a majority of the votes which all
shareholders present are entitled to cast, shall be the acts of
the shareholders. The shareholders present at a duly organized
meeting may continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave
less than a quorum. If, however, such quorum shall not be
present or represented at any meeting of the shareholders, those
present in person or represented by proxy shall, except as
otherwise provided by statute, have power to adjourn the meeting,
from time to time, to such time and place as they may determine
without notice other than announcement at the meeting, until he
requisite number of shares shall be present. In the case of the
second adjournment of any meeting called for the election of
directors, as provided by statute, those who attend the second of
such adjourned meetings, although less than a quorum, shall
nevertheless constitute a quorum for the purpose of electing
directors.
8. Voting Rights of Shareholders. Every shareholder of record
entitled to vote shall have the right at every shareholders'
meeting to one (1) vote for each standing in his name on the
books of the Corporation. Except as otherwise provided in the
Articles of Incorporation, a shareholder may vote in person or
may authorize another person or persons to act for him by proxy.
Every proxy shall be executed in writing by the shareholder, or
by his duly authorized attorney-in-fact, and filed with the
Secretary of the Corporation. A proxy, unless coupled with an
interest, shall be revocable at will, notwithstanding any other
agreement or any provision in the proxy to the contrary, but the
revocation of a proxy shall not be effective until notice thereof
has been given to the Secretary of the Corporation. No unrevoked
proxy shall be valid after eleven (11) months from the date of
its execution, unless a longer time is expressly provided
therein, but in no event shall a proxy, unless coupled with an
interest, be voted on after three (3) years from the date of its
execution. A proxy shall not be revoked by the date or
incompetence of the maker unless, before the vote is counted or
the authority is exercised, written notice of such death or an
adjudication of such incompetence is received by the Secretary of
the Corporation. A shareholder shall not sell his vote or
execute a proxy to any person for any sum of money or anything of
value. A proxy coupled with an interest shall include an
unrevoked proxy in favor of a creditor of a shareholder and such
a proxy shall be valid so long as the debt owed by him to the
creditor remains unpaid.
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9. Election of Directors; Cumulative Voting. Elections for
directors need not be by ballot, except upon demand made by a
shareholder at the election and before the voting begins. Except
as otherwise provided in the Article of Incorporation of the
Corporation, in each election of directors cumulative voting
shall be allowed. No share shall be voted at any meeting upon
which any installment is due and unpaid.
10. Judges of Election. In advance of any meeting of
shareholders, the Board of Directors may appoint judges of
election, who need not be shareholder, to act at such meeting or
any adjournment thereof. If judges of election be not so
appointed, the Chairman of any such meeting may, and on the
request of any shareholder or his proxy shall, make such
appointment at the meeting; in which event the number of judges
shall be one (1) or three (3) and the holders of a majority of
shares present and entitled to vote shall determine whether one
(1) or there (3) judges are to be appointed. On request of the
Chairman of the meeting, or of any shareholder or his proxy, the
judges of election shall make a report in writing of any
challenge or question or matter determined by them, and execute a
certificate of any fact found by them. No person who is a
candidate for office shall act as a judge. If any judge of
election shall not be present at a meeting, the vacancy shall be
filled by another person appointed by the Chairman of the
meeting.
11. Informal Action by Shareholders. Any action which may be
taken at a meeting of the shareholders may be taken without a
meeting if a consent or consents in writing, setting forth the
action so taken, shall be signed by all of the shareholders who
would be entitled to vote on such action at a meeting and shall
be filed with the Secretary of the Corporation.
ARTICLE IV. DIRECTORS.
1. Number and Qualification. The business of this Corporation
shall be managed by its Board of Directors, who shall be citizens
of the United States and at least two thirds (2/3) of whom shall
be residents of this Commonwealth. Every director shall be a
shareholder of the Corporation. The number of the Directors
shall be not less than five (5) nor more than twenty-five (25).
2. Nomination. Nomination for election to the Board of
Directors may be made by the Board of Directors or by any
shareholder of any outstanding class of stock of the Corporation
entitled to vote for election of directors. Nominations, other
than those made by or on behalf of the existing management of the
Corporation, shall be made in writing and shall be delivered or
mailed to the President of the Corporation not less than 14 days
nor more than 50 days prior to any meeting of shareholders called
for the election of directors, provided, however, that if less
than 21 days' notice
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of the meeting is given to shareholders, such nomination shall be
mailed or delivered to the President of the Corporation not later
than the close of business on the seventh day following the day
on which the notice of meeting was mailed. Such notification
shall contain the following information to the extent known to
the notifying shareholder: (a) the name and address of each
proposed nominee; (b) the principal occupation of each proposed
nominee; (c) the total number of shares of stock of the
Corporation that will be voted for each proposed nominee; (d) the
name and residence address of the notifying shareholder; and (e)
the number of shares of stock of the Corporation owned by the
notifying shareholder. Nominations not made in accordance
herewith may, in, the discretion of the chairperson of the
meeting, be disregarded, and upon the chairperson's instructions,
the inspectors of election may disregard all votes cast for each
such nominee. In the event the same person is nominated by more
than one shareholder, the nomination shall be honored, and all
shares of stock of the Corporation casting votes for that person
shall be counted if at least one nomination for that person
complies herewith.
3. Election. The Board of Directors shall be determined as
follows:
(a) At the annual meeting of shareholders by a majority of
the votes cast by the shareholders entitled to vote in person or
by proxy, or by a similar vote at any special meeting called for
that purpose, upon due notice having been given according to law;
(b) The Board of Directors may, by the vote of a majority of
the full Board of Directors, between annual meetings of the
shareholders, increase the membership of the Board of Directors
by no more than two (2) members in any one year, provided, that
such increase will not result in more than twenty-five (25)
members; and by like vote appoint qualified persons to fill the
vacancies created thereby.
4. Term of Office. The Directors shall be divided into three
classes to be known as Class 1, Class 2, and Class 3. Each of
the Classes shall consist of one third of the Directors as nearly
as possible. At the first annual meeting of shareholders of the
Corporation, Directors in Class 1 shall be elected to hold office
for a one year term; Directors in Class 2 shall be elected to
hold office for a two year term; and Directors in Class 3 shall
be elected to hold office for a three year term. After the
expiration of the terms to which the Directors are elected at the
first annual meeting of shareholders, Directors in each Class
shall thereafter by elected every three (3) years for a three (3)
year terms. Each Director shall serve until his or her successor
shall have been elected and shall qualify, even though his or her
term of office as herein provided has otherwise expired, except
in
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the event of his or her earlier resignation, removal or
disqualification.
5. Powers of the Board of Directors. In addition to the powers
and authorities by these By-Laws expressly conferred upon them,
the Board of Directors may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by
statute or by the Articles of Incorporation of the Corporation or
by these By-Laws directed or required to be exercise or done by
the shareholders.
6. Organization Meeting. A meeting for the purpose of
organizing the new Board of Directors and electing and appointing
officers of the Corporation for the succeeding year shall be held
on the first regularly schedule meeting date of the Board of
Directors following the annual meeting of shareholders. Each
newly elected Chairman or Secretary of the meeting at which such
directors are elected, and notice shall not be necessary to the
newly elected directors in order to legally constitute the
meeting, or they may meet at such place and time as may be fixed
by the consent in writing of all the directors.
7. Place of Meetings. The meetings of the Board of Directors
may be held at such place within this Commonwealth as a majority
of the directors may from time to time appoint, or as may be
designated in the notice calling the meeting.
8. Regular Meeting. Regular meetings of the Board of Directors
shall be held quarterly on ten (10) days notice, at the principal
place of business of the Corporation, or at such other time and
place as shall be determined by the Board of Directors.
9. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board of Directors or by the
President upon one (1) day's notice to each director, either
personally or by mail or telegram; special meetings shall be
called by the Chairman of the Board of Directors, President or
Secretary in like manner and on like notice upon the written
request in writing of a majority of the directors then in office.
10. Quorum. A majority of the directors then in office shall be
necessary to constitute a quorum for the transaction of business,
and the acts of majority of the directors present at a meeting at
which a quorum is present shall be the acts of the Board of
Directors, except as a greater number is required by statute or
by the Articles of Incorporation of the Corporation or these
By-Laws.
11. Consent in Lieu of Meeting. Any action may be taken at a
meeting of the directors or of the members of a committee may be
taken without a meeting if a consent or consents in writing,
setting forth the action so taken, shall be signed by all of the
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directors or all of the members of the committee and shall be
filed with the Secretary of the Corporation. In addition,
directors and committee members may participate in meetings by
means of conference telephone or similar communications
equipment, as provided in Article XI, Section 4 hereof.
12. Compensation. Directors shall not receive any stated salary
for their services as such, but by resolution of the Board of
Directors, a fixed sum and expenses of attendance, if any, may be
allowed for attendance at each regular or special meeting of the
Board of Directors, by any director who is not an employee of the
Corporation, provided that nothing herein contained shall be
construed to preclude any director from serving the Corporation
in any other capacity and receiving compensation therefor.
13. Minutes. The Board of Directors and each committee
hereinafter provided for shall keep minutes of its meetings.
Minutes of the committee shall be submitted at the next regular
meeting of the Board of Directors, and any action taken by the
Board of Directors with respect thereto shall be entered in the
minutes of the Board of Directors.
14. Limitation of Liability. A director of the institution
shall not be personally liable for monetary damages as such for
any action taken, or any failure to take any action, unless:
(1) the director has breached or failed to perform the duties
of his or her office under Section 8363 of the Directors'
Liability Act ( relating to standard of care and justifiable
reliance); and
(2) the breach or failure to perform constitutes selfdealing,
willful misconduct or recklessness; provided however that the
provisions of this Section shall not apply to : (1) the
responsibility or liability of a director pursuant to any
criminal statute; or (2) the liability of a director for the
payment of taxes pursuant to local, State or Federal law.
15. Fiduciary Responsibility A director shall stand in a
fiduciary relation to the Corporation and shall perform his
duties as a director, including his duties as a member of any
committee of the Board of Directors upon which he may serve, in
good faith, in a manner he reasonably believes to be in the best
interests of the Corporation and with such care, including
reasonable inquiry, skill and diligence, as a person of ordinary
prudence would use under similar circumstances. In performing
his duties, a director shall be entitled to rely in good faith on
information, opinions, reports or statements, including financial
statements and other financial data, in each case prepared or
presented by any of the following:
(a) One or more officers or employees of the Corporation
whom the director reasonably believes to be reliable and
competent in the matters presented.
(b) Counsel, public accountants or other persons as to
matters which the director reasonably believes to be within the
professional or expert competence of such persons.
(c) A committee of the Board of Directors upon which he does
not serve, duly designated in accordance with law, as to matters
within its designated authority, which committee the director
reasonably believes to merit confidence.
A director shall not be considered to be acting in good
faith if he has knowledge concerning the matter in question that
would cause his reliance to be unwarranted.
16. Interests of the Corporation In discharging the duties of
their respective positions, the Board of Directors, committees of
the Board of Directors and individual directors may, in
considering the best interests of the Corporation, consider the
effects of any action upon employees, upon suppliers and
customers of the Corporation and upon communities in which
offices or other establishments of the Corporation are located,
and all other pertinent factors. The consideration of those
factors shall not constitute a violation of Section 14.
Absent breach of fiduciary duty, lack of good faith or
self-dealing, actions taken as a director or any failure to take
any action shall be presumed to be in the best interests of the
Corporation.
A director shall not be personally liable, as such, for
monetary damages for any action taken, or any failure to take any
action, unless:
(a) the director has breached or failed to perform the
duties of his office under this Article IV; and
(b) the breach or failure to perform constitutes
self-dealing, willful misconduct or recklessness.
The provisions of this paragraph shall not apply to:
(a) the responsibility or liability of a director pursuant
to any criminal statute; or
(b) the liability of a director for the payment of taxes
pursuant to local, State or Federal law.
17. Dissent of Director A director of the Corporation who is
present at a meeting of the Board of Directors, or of a committee
of the Board of Directors, at which action on any corporate
matter is taken shall be presumed to have assented to the action
taken unless his dissent is entered in the minutes of the meeting
or unless he files his written dissent to the action with the
Secretary of the Corporation before the adjournment thereof or
transmits the dissent in writing to the Secretary of the
Corporation immediately after the adjournment of the meeting.
The right to dissent shall not apply to a director who voted in
favor of the action. Nothing in this Section 17 shall bar a
director from asserting that minutes of any meeting incorrectly
omitted his dissent if, promptly upon receipt of a copy of such
minutes, he notifies the Secretary of the Corporation, in
writing, of the asserted omission or inaccuracy.
ARTICLE V. COMMITTEES
1. Executive Committee. There shall be a standing committee of
this Corporation appointed by the Board of Directors to be known
as the Executive Committee, consisting of the Chairman of the
Board of Directors, and three (3) or more directors, each to
serve a term of one (1) year and until his successor is chosen
and qualified. A majority of the members of the Committee shall
constitute a quorum for the transaction of business. The
Committee shall have power to discount and purchase bills, notes
and other evidences of indebtedness, to buy and sell bills of
exchange, to examine and approve loans and discounts, to exercise
authority regarding loans and discounts held by the Corporation,
and when the Board of Directors is not in
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session, to direct and transact all other business of the
Corporation which properly might come before the Board of
Directors, except such as the Board of Directors only, by
statute, is authorized to perform. The Executive Committee shall
report its actions in writing at each regular meeting of the
Board of Directors, which shall approve or disapprove the report
and record such action in the minutes of the meeting.
2. Audit Committee. There shall be a standing committee of this
Corporation appointed annually by the Board of Directors, to be
known as the Audit Committee. The Audit Committee shall consist
of three (3) members of the Board of Directors, none of whom
shall be active officers of the Corporation, and each member of
this Committee shall serve for a term of one (1) year and until
his successor is chosen and qualified. A majority of the members
of this Committee shall constitute a quorum for the transaction
of business. The duties of this Committee shall be to cause to
be made by CPA's selected for such purpose, at least once in each
year, a complete audit of the books and affairs of the
Corporation. The result of such audit shall be reported, in
writing, to the Board of Directors at its regular meetings. The
Audit Committee, upon its own recommendation and with the
approval of the Board of Directors will employ a qualified firm
of certified public accountants to make the annual audit of the
Corporation.
3. Special Committees and Alternates. The Chairman of the Board
of Directors or President shall have the authority to appoint all
special committees and designate alternate members of all
committees to serve temporarily for members unable to attend any
meetings of a standing committee.
ARTICLE VI. OFFICERS AND EMPLOYEES
1. Election of Officers. The executive officers of the
Corporation shall be elected by the directors and shall consist
of a Chairman of the Board of Directors, Vice Chairman of the
Board of Directors, President, Senior Vice President, Vice
President, Secretary and Treasurer. The Board of Directors may
also choose such other officers and agents as it shall deem
necessary, including a Corporation officer and Auditor, who shall
have such authority and shall perform such duties as from time to
time shall be prescribed by the Board of Directors. Any number
of offices may be held by the same person, except that the
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Chairman of the Board of Directors and the President may not also
serve as Secretary or Treasurer. It shall not be necessary for
the officers to be directors except that the Chairman and the
President shall be members of the Board of Directors.
2. Salaries of Officers and Employees. The salaries of all
officers and employees of the Corporation shall be fixed by the
Board of Directors.
3. Term of Office. The officers of the Corporation shall hold
office for one year and until their successors are elected and
have qualified. Any officer elected or appointed by the Board of
Directors may be removed by the Board of Directors whenever in
its judgment the best interests of the Corporation will be served
thereby.
4. Chairman of the Board of Directors. The Chairman of the
Board of Directors shall preside at all meetings of the Board of
Directors and of the shareholders and shall be an ex-officio
member of all committees of the Board of Directors. He also
shall perform such other duties as may be assigned to him, from
time to time, by the Board of Directors.
5. Vice Chairman of the Board of Directors. At the discretion
of the Chairman certain of his duties may be assigned to the Vice
Chairman.
6. President.
A. The President shall be the chief executive and the chief
operating officer of the Corporation and shall have supervision
of the operations of the Corporation. In the absence of the
Chairman of the Board of Directors, the President shall reside at
all meetings of the Board of Directors and of the shareholders.
He shall have general and active management of the business of
the Corporation, and shall have the special responsibility to
carry into effect all orders and resolutions of the Board;
subject, however, to the right of the Board to delegate any
specific powers, except such as may be by statute exclusively
conferred on the President, to any other
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officer or officers of the Corporation. He shall execute bonds,
mortgages, and other contracts requiring a seal, under the Seal
of the Corporation. He shall be ex-officio a member of all
committees, except the Audit Committee, and shall have the
general powers and duties of supervision and management usually
vested in the office of the chief executive officer and the chief
operating officer of a corporation.
B. The President acting individually or in concert with
the Executive Committee shall have the authority within the
Corporation's stated loan policy, to approve loans and advances
to borrowers equal to an amount to be established by the Board of
Directors.
7. Senior Vice President. The Senior Vice President shall, in
the absence or upon the incapacity of the President and the Vice
Chairman of the Board of Directors, perform the duties and
exercise the powers of the President, and shall have such other
responsibilities, powers and duties as are delegated to him by
the Chairman of the Board of Directors.
8. Vice President. The Vice President shall, in the absence or
upon the incapacity of the President and the Senior Vice
President, perform the duties and exercise the powers of the
President, and shall have such other powers and duties as are
delegated to him by the Chairman of the Board of Directors.
9. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of the shareholders and act
as clear thereto, and record all the votes of the Corporation and
the minutes of all its transactions in a book to be kept for that
purpose, and shall perform like duties for all committees of the
Board of Directors when required. He shall give, or cause to be
given, notice of all meetings of the shareholders and of the
Board of Directors, and shall perform such other duties as may be
prescribed by the Board of Directors, Chairman of the Board of
Directors, or President, under whose supervision he shall be. He
shall keep in safe custody the corporate records, papers, and the
Corporate Seal of the Corporation, and when authorized by the
Board of Directors, affix the same to any instrument requiring
it.
10. Treasurer. The Treasurer shall have custody of the
corporate assets, including all money, funds, securities,
fidelity and indemnity bonds and other valuables belonging to the
Corporation. He shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation
and shall keep moneys of the Corporation in separate accounts to
the credit of the Corporation. He shall disburse the funds of
the Corporation as may be ordered by the Board of Directors,
taking proper vouchers for such disbursements, and shall render
to the Chairman of the Board of Directors, President and
Directors, at the regular meetings of the Board of Directors, or
whenever they may require it, an account of all his transactions
as Treasurer and of the financial condition of the Corporation.
He shall
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also perform such other duties as may be assigned to him from
time to time by the Board of Directors, the Chairman of the Board
of Directors, or the President.
11. Auditor. The Auditor shall have charge of auditing the
books, records and accounts of the Corporation and shall make
recommendations and advice as to the internal audit control of
the Corporation. He shall report directly to the Board of
Directors and to the Audit Committee.
12. Assistant Officers. Each Assistant Officer shall assist in
the performance of the duties of the officer to whom he is
assistant and shall perform such duties in the absence of one (1)
officer. He shall perform such additional duties as the Board of
Directors, the Chairman of the Board of Directors, the President,
or the officer to whom he is assistant, may from time to time
assign to him.
13. Powers. The officers are fully empowered (subject to the
direction of the Board of Directors):
(a) To sell, assign and transfer any and all shares of
stock, bonds or other personal property standing in the name of
the Corporation or held by the Corporation either in its own name
or as agent;
(b) To assign and transfer any and all registered bonds and
to execute requests for payment or reissue of any such bonds that
may be issued or hereafter and held by the Corporation in its own
right or as agent;
(c) To sell at public or private sale, lease, mortgage or
otherwise dispose of any real estate or interest therein held or
acquired by the Corporation in its own right or as agent, except
the real estate and buildings occupied by the Corporation in the
transaction of its business, and to execute and deliver any
instrument necessary to completion of the transaction;
(d) To receive and receipt for any sums of money or property
due or owing to this Corporation in its own right or as agent and
to execute any instrument of satisfaction therefor any lien or
record; and
(e) To execute and deliver any deeds, contracts, agreements,
leases, conveyances, bills of sale, petitions, writings,
instruments, releases, acquittances and obligations necessary in
the exercise of the corporate powers of the Corporation.
The President (or any Vice President), acting in
conjunction with the Secretary or Treasurer or Assistant
Secretary or Assistant Treasurer, is (are) authorized to perform
such corporate and official acts as are necessary to carry on the
business of the Corporation, subject to the direction of the
Board of Directors and the Executive Committee.
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ARTICLE VII. VACANCIES
1. Officer or Employee. If the office of any officer or
employee, one (1) or more, becomes vacant for any reason, the
Board of Directors may elect a successor or successors, who shall
hold office for the unexpired term in respect of which such
vacancy occurred.
2. Board of Directors. Vacancies in the Board of Directors,
including vacancies resulting from an increase in the number of
directors, shall be filled by a majority of the remaining members
of the Board of Directors through less than a quorum, and each
person so elected shall be a director until his successor is
elected by the shareholders, who shall make such election at the
next annual meeting of the shareholders or at any special meeting
duly called for that purpose and held prior thereto.
ARTICLE VIII. CORPORATE MINUTES AND SHAREHOLDERS' RECORDS
1. Records. There shall be kept at the principal place of
business of the Corporation or at such other office as shall be
convenient for the Corporation, an original or duplicate record
of the proceedings of the shareholders and of the directors, and
the original or a copy of its By-Laws, including all amendments
or modifications thereto to date, certified by the Secretary of
the Corporation. An original or duplicate share register shall
also be kept at the principal place of business or at such other
office as shall be convenient for the Corporation, or at the
offices of the transfer agents or registrars of the Corporation,
giving the names of the shareholders in alphabetical order, and
showing their respective addresses, the number and class of
shares held by each, the number and date of certificates issued
for the shares, and the number and date of cancellation of every
certificate surrendered for cancellation.
2. Shareholder Right to Examine. Every shareholder shall have a
right to examine, in person or by agent or attorney, at a
reasonable time or times, for any reasonable purpose, the share
register, books or records of account, and records of the
proceedings of the shareholders and directors, and make extracts
therefrom.
3. Fiscal Year. The fiscal year of the Corporation shall begin
on the 1st day of January in each year and end on the 31st day of
December of each year.
ARTICLE IX. STOCK
1. Issuance of Certificates. The certificates of shares of the
Corporation shall be numbered and registered in the share
register as they are issued. They shall contain a statement that
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the Corporation is incorporated under the laws of the
Commonwealth of Pennsylvania, the registered holder's name, the
certificate number and the number and class of shares represented
thereby and the par value of each share. Every share certificate
shall be signed by the Chairman of the Board of Directors,
President or Vice President and the Secretary or Treasurer, and
shall be sealed with the Corporate Seal which may be a facsimile,
engraved or printed; but where such certificate is signed by an
independent transfer agent or by an independent registrar, the
signature of any corporate officer upon such certificate may be a
facsimile, engraved or printed. In case any officer who has
signed or whose facsimile signature has been placed upon any
share certificate shall have ceased to be such officer because of
death, resignation or otherwise, before the certificate is
issued, it may be issued by the Corporation with the same effect
as if the officer has not ceased to be such at the date of its
issue.
2. Transfer of Certificates. Except as otherwise provided in
the Articles of Incorporation, upon surrender to the Corporation
or its transfer agents of a share certificate duly endorsed or
accompanied by proper evidence of succession, assignment or
authority to transfer, a new certificate shall be issued to the
person entitled thereto and the old certificate canceled and the
transaction recorded upon the books of the Corporation. No
transfer shall be made inconsistent with the Articles of
Incorporation or the provisions of the Banking Code of 1965,
approved November 30, 1965 (Act No. 356), and its amendments and
supplements, or the Uniform Commercial Code, approved April 6,
1953 (Act No. 1), and its amendments and supplements.
3. Right to Certificate. Subject to the Articles of
Incorporation, every shareholder of record shall be entitled to a
share certificate representing the shares owned by him, but a
certificate shall not be issued by the Corporation to a
shareholder until the shares represented thereby have been fully
paid for.
4. Establishment of Record Dates. The Board of Directors may
fix a time, not more than forty (40) days, prior to the date of
any meeting of shareholders, or the date fixed for the payment of
any dividend or distribution, or the date for the allotment of
rights, or the date when any change or conversion or exchange of
shares will be made or go into effect, as a record date for the
determination of the shareholders entitled to notice of, and to
vote at, any such meeting, or entitled to receive payment of any
such dividend or distribution, or receive any such allotment of
rights, or to exercise the rights in respect to any such change,
conversion, or exchange of shares. In such case, only such
shareholders as shall be shareholders of record on the date so
fixed shall be entitled to notice of, and to vote at, such
meeting, or to be paid such dividend or distribution, or to
receive allotment of rights, or to exercise such rights as the
case may be, notwithstanding any transfer of any shares on the
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books of the Corporation after any record date fixed, as
aforesaid. The Board of Directors may close the books of the
Corporation against transfers of shares during the whole or any
part of such period, and in such case, written or printed notice
thereof shall be mailed at least ten (10) days before the closing
thereof to each shareholder of record at the address appearing on
the records of the Corporation or supplied by him to the
Corporation for the purpose of notice. While the stock transfer
books of the Corporation are closed, no transfer of shares shall
be made thereon. If no record date is fixed for the
determination of shareholders entitled to receive notice of, or
vote at, a shareholders meeting, transferees of shares which are
transferred on the books of the Corporation within ten (10) days
next preceding the date of such meeting shall not be entitled to
notice of or to vote at such meeting.
5. Lost Certificate. Any person claiming a share certificate to
be lost or destroyed shall make an affidavit of affirmation of
that fact, shall give the Corporation a bond of indemnity with
sufficient surety to protect the Corporation or any person
injured by the issue of a new certificate for any liability or
expense which it or they may incur by reason of the original
certificate remaining outstanding, and shall satisfy all other
requirements of the Board of Directors, whereupon a new
certificate may be issued of the same tenor and for the same
number of shares as the one alleged to be lost or destroyed, but
always subject to the approval of the Board of Directors.
6. Declaration of Dividend. Except as otherwise provided in the
articles of Incorporation, the Board of Directors may from time
to time declare, and the Corporation may pay, dividends upon the
outstanding shares of the Corporation, subject to the
restrictions of the Banking Code of 1965, as amended, and of the
Articles of Incorporation. Dividends may be declared and paid
only out of accumulated net earnings any may be paid in cash or
property, including its own shares.
ARTICLE X.INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
1. Third Party Actions. The Corporation shall have power to
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
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
expenses (including attorneys' 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. The termination of any action
or proceeding by judgment, order, settlement or conviction or
upon a plea of nolo contendere or its equivalent shall not of
itself create a presumption that the person did not act in good
faith and in a manner that he reasonably believed to be in, or
not opposed to, the best interests of the Corporation and, with
respect to any criminal proceeding, had reasonable cause to
believe that his conduct was unlawful.
2. Derivative Actions. The Corporation shall have power to
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
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
expenses (including attorneys' 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. Indemnification shall not be made
under this Section 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.
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 1 of this Article X (relating to third
party actions) or Section 2 of this Article X (relating to
derivative actions) 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.
4. Procedure for Effecting Indemnification. Unless ordered by a
court, any indemnification under Section 1 of this Article X
(relating to third party actions) or Section 2 of this Article X
(relating to derivative actions) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the person is proper in the circumstances
because he has met the applicable standard of conduct set forth
in those sections. The determination shall be made:
(a) by the Board of Directors by a majority vote of a
quorum consisting of directors who were not parties to the action
or proceeding;
(b) 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
(c) by the shareholders.
5. Advancing Expenses. Expenses (including attorneys' fees)
incurred in defending any action or proceeding referred to in
this Article X may 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 person 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 X or
otherwise.
6. Supplementary Coverage. (a) The indemnification and
advancement of expenses provided by, or granted pursuant to, the
other Sections of this Article X shall not be deemed exclusive of
any other rights to which a person seeking indemnification or
advancement of expenses may be entitled under any By-law,
agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in his official capacity and as to
action in another capacity while holding that office. The
Corporation may create a fund of any nature, which may, but need
not be, under the control of a trustee, or otherwise secure or
insure in any manner its indemnification obligations, whether
arising under or pursuant to this Section 6 or otherwise.
(b) Indemnification pursuant to subsection (a) of this
Section 6 shall not be made in any case where the act or failure
to act giving rise to the claim for indemnification is determined
by a court to have constituted willful misconduct or
recklessness.
(c) Indemnification pursuant to subsection (a) of this
Section 6 under any By-law, agreement, vote of shareholders or
directors or otherwise, may be granted for any action taken or
any failure to take any action and may be made whether or not the
Corporation would have the power to indemnify the person under
any other provision of law except as provided in this Section 6
and whether or not the indemnified liability arises or arose from
any threatened, pending or completed action by or in the right of
the Corporation.
7. Power to Purchase Insurance. The Corporation shall have
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 X.
8. Application to Surviving or New Corporations. For the
purpose of this Article X, references to "the Corporation"
include all constituent corporations absorbed in a consolidation,
merger or division, as well as the surviving or new corporations
surviving or resulting therefrom, so that any person who is or
was a representative of the constituent, surviving or new
corporation, or is or was serving at the request of the
constituent, surviving or new corporation as a representative of
another domestic or foreign corporation for profit or
not-for-profit, partnership, joint venture, trust or other
enterprise, shall stand in the same position under the provisions
of this Article X with respect to the surviving or new
corporation as he would if he had served the surviving or new
corporation in the same capacity.
9. Application to Employee Benefit Plans For purposes of this
Article X:
(a) References to "other enterprises" shall include
employee benefit plans and references to "serving at the request
of the Corporation" shall include any service as a representative
of the Corporation that imposes duties on, or involves services
by, the representative with respect to an employee benefit plan,
its participants or beneficiaries.
(b) Excise taxes assessed on a person with respect to an
employee benefit plan pursuant to applicable law shall be deemed
"fines."
(c) Action with respect to an employee benefit plan taken or
omitted in good faith by a representative of the Corporation in a
manner he reasonably believed to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be
action in a manner that is not opposed to the best interests of
the Corporation.
10. Duration and Extent of Coverage. The indemnification and
advancement of expenses provided by, or granted pursuant to, this
Article X shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a
representative of the Corporation and shall inure to the benefit
of the heirs and personal representative of that person.
ARTICLE XI. MISCELLANEOUS PROVISIONS
1. Enabling Resolutions. The Board of Directors shall at the
first regular meeting of the Board of Directors after the annual
meeting of shareholders, or from time to time thereafter as
deemed appropriate by the Board of Directors, promulgate and
establish by resolution
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the general enabling resolutions of the Corporation. These
enabling resolution shall define and determine the general
operating authorities for the daily operation of each department
of the Corporation.
2. Notices. Whenever written notice is required to be given to
any person, it may be given to such person, either personally or
by sending a copy thereof through the mail, or by telegram,
charges prepaid, to his address appearing on the books of the
Corporation, or supplied by him to the Corporation for the
purpose of notice. If the notice is sent by mail or by
telegraph, it shall be deemed to have been given to the person
entitled thereto when deposited in the United States Mail or with
a telegraph officer for transmission to such person. Such notice
shall specify the place, day and hour of the meeting.
3. Waivers of Notice. Whenever any written notice is required
by statute, or by the Articles of the Corporation, or by the
By-Laws of this Corporation, a waiver thereof in writing, signed
by
the person or persons entitled to such notice, whether before or
after the time stated therein, shall be deemed equivalent to the
giving of such notice. Neither the business to be transacted at
nor the purpose of the meeting need by specified in the waiver of
notice of such meeting, except where a person attends a meeting
for the express purpose of objecting to the transaction of any
business because the meeting was not lawfully called or convened.
4. Meeting by Telecommunications. One or more directors or
shareholders may participate in a meeting of the Board of
Directors, of a committee of the Board of Directors or of the
shareholders, by means of conference telephone or similar
communications equipment.
5. Conveyances of Real Estate. All transfers and conveyances of
real estate, title to which is vested in this Corporation, shall
be by written instrument under the Seal of this Corporation, made
pursuant to eh order of the Board of Directors (which may be by
way of a general enabling resolution) and signed by the Chairman
of the Board of Directors, President, Senior Vice President,
Executive Vice President, Vice President and Secretary or
Treasurer or such other officer as shall be designated by the
Board of Directors.
6. Surety Bonds. All officers and employees of the Corporation
and, in addition, any director who is authorized to receive
payments of moneys or to handle negotiable securities on behalf
of the Corporation, shall, before entering upon the performance
of their duties, be converted under the bond of the Corporation,
or if such coverage is unavailable to any such officer, employee
or director, such person shall furnish bond in such amounts and
such surety as is approved by the Board of Directors.
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7. Hours. The Corporation shall be open for business daily
during such hours as fixed by the Board of Directors except
Sundays and days or parts of days designated by the laws of the
federal or state government as holidays. the Board of Directors
may for any period adopt the so-called "daylight saving time."
8. Annual Statement. The Chairman of the Board of Directors or
President and Board of Directors shall present at each annual
meeting of shareholders, a full and complete statement of the
business and affairs of the Corporation for the preceding year.
Such statement shall be prepared and presented in whatever manner
the Board of Directors shall deem advisable and need not be
verified by a certified public accountant.
ARTICLE XII. EMERGENCIES
In the event of any emergency declared by governmental
authorities, the result of a regional or national disaster and of
such severity as to prevent the normal conduct and management of
the affairs of this Corporation by its directors and officers as
contemplated by these By-Laws, and three (3) available Directors
shall constitute the Emergency Committee of the Board of
Directors to exercise the full authority of the Board of
Directors until such time as a duly elected Board of Directors
can again assume full responsibility and control of the
Corporation.
ARTICLE XIII. AMENDMENTS TO BY-LAWS
Except as otherwise provided in the Articles of
Incorporation, these By-Laws may be amended upon the vote of the
majority of the Board of Directors at any meeting of the Board of
Directors, subject to the power of the shareholders, provided ten
(10) days notice to the proposed amendment has been given to each
ember of the Board of Directors. No amendment may be made unless
the By-Law, as amended, is consistent with their requirements of
the laws of the Commonwealth of Pennsylvania and of the Articles
of Incorporation of the Corporation. A certified copy of all
amendments to these By-Laws shall be forwarded to the Secretary
of Banking of the Commonwealth of Pennsylvania immediately after
adoption.
ARTICLE XIV. ARTICLES OF INCORPORATION
In the event of any inconsistency between the provisions
hereof and the Articles of Incorporation of the Corporation, the
Articles of Incorporation shall control in every such instance.
All references in these By-Laws to shareholder voting rights
shall only include those shareholders holding shares entitled to
vote as provided in the Articles of Incorporation.
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EXHIBIT E
EXCERPTS FROM SUBCHAPTER D OF
CHAPTER 15 OF THE PENNSYLVANIA
BUSINESS CORPORATION LAW OF 1988, AS AMENDED
CONCERNNG DISSENTERS' RIGHTS
EXHIBIT E
EXCERPTS FROM SUBCHAPTER 19C
Section 1930. Dissenters rights
(A) General rule. If any shareholder of a domestic business
corporation that is to be a party to a merger or consolidation
pursuant to a plan of merger or consolidation objects to the plan
of merger or consolidation and complies with the provisions of
Subchapter D of Chapter 15 (relating to dissenters rights), the
shareholder shall be entitled to the rights and remedies of
dissenting shareholders therein provided, if any. See also
section 1906(c) (relating to dissenters rights upon special
treatment).
SUBCHAPTER 15D
Dissenters Rights
Section:
1571. Application and effect of subchapter.
1572. Definitions.
1573. Record and beneficial holders and owners.
1574. Notice of intention to dissent.
1575. Notice to demand payment.
1576. Failure to comply with notice to demand payment, etc.
1577. Release of restrictions or payment for shares.
1578. Estimate by dissenter of fair value of shares.
1579. Valuation proceedings generally.
1580. Costs and expenses of valuation proceedings.
Section 1571. Application and effect of Subchapter.
(a) General rule. Except as otherwise provided in subsection
(b), any shareholder of a business corporation shall have the
right to dissent from, and to obtain payment of the fair value of
his shares in the event of, any corporate action, or to otherwise
obtain fair value for his shares, where this part expressly
provides that a shareholder shall have the rights and remedies
provided in this subchapter. See:
Section 1906(c) (relating to dissenters rights upon
special treatment).
Section 1930 (relating to dissenters rights).
Section 1931(d) (relating to dissenters rights in share
exchanges).
Section 1932(c) (relating to dissenters rights in asset
transfers).
Section 1952(d) (relating to dissenters rights in
division).
Section 1962(c) (relating to dissenters rights in
conversion).
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Section 2104(b) (relating to procedure).
Section 2324 (relating to corporation option where a
restriction on transfer of a security is held invalid).
Section 2325(b) (relating to minimum vote requirement).
Section 2704(c) (relating to dissenters rights upon
election).
Section 2705(d) (relating to dissenters rights upon
renewal of election).
Section 2907(a) (relating to proceedings to terminate
breach of qualifying conditions).
Section 7104(b)(3) (relating to procedure).
(b) Exceptions.
(1) Except as otherwise provided in paragraph (2), the
holders of the shares of any class or series of shares that, at
the record date fixed to determine the shareholders entitled to
notice of and to vote at the meeting at which a plan specified in
any of section 1930, 1931(d), 1932(c) or 1952(d) is to be voted
on, are either:
(i) listed on a national securities exchange; or
(ii) held of record by more than 2,000 shareholders;
shall not have the right to obtain payment of the
fair value of any such shares under this subchapter.
(2) Paragraph (1) shall not apply to and dissenters rights
shall be available without regard to the exception provided in
that paragraph in the case of:
(i) Shares converted by a plan if the shares are not
converted solely into shares of the acquiring,
surviving, new or other corporation or solely into
such shares and money in lieu of fractional shares.
(ii)Shares of any preferred or special class unless the
articles, the plan or the terms of the transaction
entitle all shareholders of the class to vote thereon
and require for the adoption of the plan or the
effectuation of the transaction the affirmative vote
of a majority of the votes cast by all shareholders
of the class.
(iii) Shares entitled to dissenters rights under section
1906(c) (relating to dissenters rights upon special
treatment).
(3) The shareholders of a corporation that acquires by
purchase, lease, exchange or other disposition all or
substantially all of the shares, property or assets of another
corporation by the issuance of shares, obligations or otherwise,
with or without assuming the liabilities of the other corporation
and with or without the intervention of another corporation or
other person, shall not be entitled to the rights and remedies of
dissenting shareholders provided in this subchapter regardless of
the fact, if it be the case, that the acquisition was
accomplished by the issuance of voting shares of the corporation
to be outstanding immediately after the acquisition sufficient to
elect a majority or more of the directors of the corporation.
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(c) Grant of optional dissenters rights. The bylaws or a
resolution of the board of directors may direct that all or a
part of the shareholders shall have dissenters rights in
connection with any corporate action or other transaction that
would otherwise not entitle such shareholders to dissenters
rights.
(d) Notice of dissenters rights. Unless otherwise provided
by statute, if a proposed corporate action that would give rise
to dissenters rights under this subpart is submitted to a vote at
a meeting of shareholders, there shall be included in or enclosed
with the notice of meeting:
(1) a statement of the proposed action and a statement
that the shareholders have a right to dissent and obtain payment
of the fair value of their shares by complying with the terms of
this subchapter; and
(2) a copy of this subchapter.
(e) Other statutes. The procedures of this subchapter shall
also be applicable to any transaction described in any statute
other than this part that makes reference to this subchapter for
the purpose of granting dissenters rights.
(f) Certain provisions of articles ineffective. This
subchapter may not be relaxed by any provision of the articles.
(g) Cross references. See sections 1105 (relating to
restriction on equitable relief), 1904 (relating to de facto
transaction doctrine abolished) and 2512 (relating to dissenters
rights procedure).
Section 1572. Definitions.
The following words and phrases when used in this
subchapter shall have the meanings given to them in this section
unless the context clearly indicates otherwise:
"Corporation." The issuer of the shares held or owned by the
dissenter before the corporate action or the successor by
merger, consolidation, division, conversion or otherwise of
that issuer. A plan of division may designate which of the
resulting corporations is the successor corporation for
the purposes of this subchapter. The successor corporation
in a division shall have sole responsibility for payments to
dissenters and other liabilities under this subchapter
except as otherwise provided in the plan of division.
"Dissenter." A shareholder or beneficial owner who is
entitled to and does assert dissenters rights under this
subchapter and who has performed every act required up to
the time involved for the Assertion of those rights.
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"Fair value." The fair value of shares immediately before
the effectuation of the corporate action to which the
dissenter objects, taking into account all relevant factors,
but excluding any appreciation or depreciation in
anticipation of the corporate action.
"Interest." Interest from the effective date of the
corporate action until the date of payment at such rate as
is fair and equitable under all of the circumstances, taking
into account all relevant factors including the average rate
currently paid by the corporation on its principal bank
loans.
Section 1573. Record and beneficial holders and owners.
(a) Record holders of shares. A record holder of shares of a
business corporation may assert dissenters rights as to fewer
than all of the shares registered in his name only if he dissents
with respect to all
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the shares of the same class or series beneficially owned by any
one person and discloses the name and address of the person or
persons on whose behalf he dissents. In that event, his rights
shall be determined as if the shares as to which he has dissented
and his other shares were registered in the names of different
shareholders.
(b) Beneficial owners of shares. A beneficial owner of
shares of a business corporation who is not the record holder may
assert dissenters rights with respect to shares held on his
behalf and shall be treated as a dissenting shareholder under the
terms of this subchapter if he submits to the corporation not
later than the time of the assertion of dissenters rights a
written consent of the record holder. A beneficial owner may not
dissent with respect to some but less than all shares of the same
class or series owned by the owner, whether or not the shares so
owned by him are registered in his name.
Section 1574. Notice of intention to dissent.
If the proposed corporate action is submitted to a vote at a
meeting of shareholders of a business corporation, any person who
wishes to dissent and obtain payment of the fair value of his
shares must file with the corporation, prior to the vote, a
written notice of intention to demand that he be paid the fair
value for his shares if the proposed action is effectuated,
must effect no change in the beneficial ownership of his shares
from the date of such filing continuously through the effective
date of the proposed action and must refrain from voting his
shares in approval of such action. A dissenter who fails in any
respect shall not acquire any right to payment of the fair value
of his shares under this subchapter. Neither a proxy nor a vote
against the proposed corporate action shall constitute the
written notice required by this section.
Section 1575. Notice to demand payment.
(a) General rule. If the proposed corporate action is
approved by the required vote at a meeting of shareholders of a
business corporation, the corporation shall mail a further notice
to all dissenters who gave due notice of intention to demand
payment of the fair value of their shares and who refrained
from voting in favor of the proposed action. If the proposed
corporate action is to be taken without a vote of shareholders,
the corporation shall send to all shareholders who are entitled
to dissent and demand payment of the fair value of their shares
a, notice of the adoption of the plan or other corporate action.
In either case, the notice shall:
(1) State where and when a demand for payment must be
sent and certificates for certificated shares must be deposited
in order to obtain payment.
(2) Inform holders of uncertificated shares to what
extent transfer of shares will be restricted from the time that
demand for payment is received.
(3) Supply a form for demanding payment that includes a
request for certification of the date on which the shareholder,
or the person on whose behalf the shareholder dissents, acquired
beneficial ownership of the shares.
(4) Be accompanied by a copy of this subchapter.
(b) Time for receipt of demand for payment. The time set for
receipt of the demand and deposit of certificated shares shall be
not less than 30 days from the mailing of the notice.
Section 1576. Failure to comply with notice to demand payment,
etc.
(a) Effect of failure of shareholder to act. A shareholder
who fails to timely demand payment, or fails (in the case of
certificated shares) to timely deposit certificates, as required
by a notice pursuant to
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section 1575 (relating to notice to demand payment) shall not
have any right under this subchapter to receive payment of the
fair value of his shares.
(b) Restriction on uncertificated shares. If the shares are
not represented by certificates, the business corporation may
restrict their transfer from the time of receipt of demand for
payment until effectuation of the proposed corporate action or
the release of restrictions under the terms of section 1577(a)
(relating to failure to effectuate corporate action).
(c) Rights retained by shareholder. The dissenter shall
retain all other rights of a shareholder until those rights are
modified by effectuation of the proposed corporate action.
Section 1577. Release of restrictions or payment for shares.
(a) Failure to effectuate corporate action. Within 60 days
after the date set for demanding payment and depositing
certificates, if the business corporation has not effectuated the
proposed corporate action, it shall return any certificates that
have been deposited and release uncertificated shares from
any transfer restrictions imposed by reason of the demand for
payment.
(b) Renewal of notice to demand payment. When uncertificated
shares have been released from transfer restrictions and
deposited certificates have been returned, the corporation may at
any later time send a new notice conforming to the requirements
of section 1575 (relating to notice to demand payment), with like
effect.
(c) Payment of fair value of shares. Promptly after
effectuation of the proposed corporate action, or upon timely
receipt of demand for payment if the corporate action has already
been effectuated, the corporation shall either remit to
dissenters who have made demand and (if their shares are
certificated) have deposited their certificates the amount that
the corporation estimates to be the fair value of the shares, or
give written notice that no remittance under this section will be
made. The remittance or notice shall be accompanied by:
(1) The closing balance sheet and statement of income
of the issuer of the shares held or owned by the
dissenter for a fiscal year ending not more than 16
months before the date of remittance or notice
together with the latest available interim
financial statements.
(2) A statement of the corporation's estimate of the
fair value of the shares.
(3) A notice of the right of the dissenter to demand
payment or supplemental payment, as the case may
be, accompanied by a copy of this subchapter.
(d) Failure to make payment. If the corporation does not
remit the amount of its estimate of the fair value of the shares
as provided by subsection (c), it shall return any certificates
that have been deposited and release uncertificated shares from
any transfer restrictions imposed by reason of the demand for
payment. The corporation may make a notation on any such
certificate or on the records of the corporation relating to any
such uncertificated shares that such demand has been made. If
shares with respect to which notation has been so made shall be
transferred, each new certificate issued therefor or the records
relating to any transferred uncertificated shares shall bear a
similar notation, together with the name of the original
dissenting holder or owner of such shares. A transferee of such
shares shall not acquire by such transfer any rights in the
corporation other than those that the original dissenter had
after making demand for payment of their fair value.
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Section 1578. Estimate by dissenter of fair value of shares.
(a) General rule. If the business corporation gives notice
of its estimate of the fair value of the shares, without
remitting such amount, or remits payment of its estimate of the
fair value of a dissenter's shares as permitted by section
1577(c) (relating to payment of fair value of shares) and
the dissenter believes that the amount stated or remitted is less
than the fair value of his shares, he may send to the corporation
his own estimate of the fair value of the shares, which shall be
deemed a demand for payment of the amount or the deficiency.
(b) Effect of failure to file estimate. Where the dissenter
does not file his own estimate under subsection (a) within 30
days after the mailing by the corporation of its remittance or
notice, the dissenter shall be entitled to no more than the
amount stated in the notice or remitted to him by the
corporation.
Section 1579. Valuation proceedings generally.
(a) General rule. Within 60 days after the latest of:
(1) effectuation of the proposed corporate action;
(2) timely receipt of any demands for payment under
Section 1575 (relating to notice to demand payment);
or
(3) timely receipt of any estimates pursuant to section
1578(relating to estimate by dissenter of fair value
of shares);
if any demands for payment remain unsettled, the
business corporation may file in court an application
for relief requesting that the fair value of the shares
be determined by the court.
(b) Mandatory joinder of dissenters. All, dissenters,
wherever residing, whose demands have not been settled shall be
made parties to the proceeding as in an action against their
shares. A copy of the application shall be served on each such
dissenter. If a dissenter is a nonresident, the copy may
be served on him in the manner provided or prescribed by or
pursuant to 42 Pa.C.S. Ch. 53 (relating to bases of jurisdiction
and interstate and international procedure).
(c) Jurisdiction of the court. The jurisdiction of the court
shall be plenary and exclusive. The court may appoint an
appraiser to receive evidence and recommend a decision on the
issue of fair value. The appraiser shall have such power and
authority as may be specified in the order of appointment or in
any amendment thereof.
(d) Measure of recovery. Each dissenter who is made a party
shall be entitled to recover the amount by which the fair value
of his shares is found to exceed the amount, if any, previously
remitted, plus interest.
(e) Effect of corporation's failure to file application. If
the corporation fails to file an application as provided in
subsection (a), any dissenter who made a demand and who has not
already settled his claim against the corporation may do so in
the name of the corporation at any time within 30 days after the
expiration of the 60-day period. If a dissenter does not file an
application within the 30-day period, each dissenter entitled to
file an application shall be paid the corporation's estimate of
the fair value of the shares and no more, and may bring an action
to recover any amount not previously remitted.
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Section 1580. Costs and expenses of valuation proceedings.
(a) General rule. The costs and expenses of any proceeding
under section 1579 (relating to valuation proceedings generally),
including the reasonable compensation and expenses of the
appraiser appointed by the court, shall be determined by the
court and assessed against the business corporation except that
any part of the costs and expenses may be apportioned and
assessed as the court deems appropriate against all or some of
the dissenters who are parties and whose action in demanding
supplemental payment under section 1578 (relating to estimate by
dissenter of fair value of shares) the court finds to be
dilatory, obdurate, arbitrary, vexatious or in bad faith.
(b) Assessment of counsel fees and expert fees where lack of
good faith appears. Fees and expenses of counsel and of experts
for the respective parties may be assessed as the court deems
appropriate against the corporation and in favor of any or all
dissenters if the corporation failed to comply substantially
with the requirements of this subchapter and may be assessed
against either the corporation or a dissenter, in favor of any
other party, if the court finds that the party against whom the
fees and expenses are assessed acted in bad faith or in a
dilatory, obdurate, arbitrary or vexatious manner in respect to
the rights provided by this subchapter.
(c) Award of fees for benefits to other dissenters. If the
court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated and
should not be assessed against the corporation, it may award to
those counsel reasonable fees to be paid out of the amounts
awarded to the dissenters who were benefitted.
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EXHIBIT F
PREMIER BANK
1995 INCENTIVE STOCK OPTION PLAN
<PAGE>
PREMIER BANK
EXHIBIT F
1995 INCENTIVE STOCK OPTION PLAN
1. PURPOSE. The purpose of the Premier Bank (the "Bank") 1995
Stock Option Plan (the "Plan") is to advance the interests of the
Bank, by permitting the Bank to grant options to purchase shares
of its common stock. The purpose of the Plan is to attract
people of experience and ability to the service of the Bank.
2. DEFINITIONS.
(a) "Award" means a grant of Stock Options, or Incentive
Stock Options, under the provisions of this Plan.
(b) "Board of Directors" or "Board" means the board of
directors of the Bank.
(c) "Change in Control" of the Bank shall mean (i) a plan of
reorganization, merger, consolidation or sale of all or
substantially all of the assets of the Bank or a similar
transaction occurs in which the Bank is not the resulting entity;
(ii) individuals who constitute the board of directors of the
Bank on the date hereof cease for any reason to constitute a
majority thereof; or (iii) a change in control within the meaning
of 12 C.F.R. 303.4(a) or 12 C.F.R. 225.41(b) occurs, as
determined by the Board of Directors of the Bank.
(d) "Committee" means a committee consisting of non-employee
members of the Board of Directors.
(e) "Common Stock" means the Common Stock of the Bank, par
value, $1.00 per share.
(f) "Date of Grant" means the date an Award granted by the
Committee is effective pursuant to the terms hereof.
(g) "Disability" shall mean the permanent and total inability
by reason of mental or physical infirmity, or both, of an
employee to perform the work customarily assigned to him.
Additionally, a medical doctor selected or approved by the Board
of Directors must advise the Committee that it is either not
possible to determine when such Disability will terminate or that
it appears probable that such Disability will be permanent during
the remainder of said participant's lifetime.
(h) "Fair Market Value" means, when used in connection with
the Common Stock on a certain date, the fair market value of the
Common Stock, as determined by the Committee; provided, however,
that (i) if the Common Stock is admitted to trading on a national
securities exchange on the date the Option is granted, Fair
Market Value shall not be less than the last sale price reported
for the Common Stock on such exchange on such date or, if no
sales are reported on the date the Option is granted, on the date
immediately preceding such date
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on which a sale was reported, or (ii) if the Common Stock is not
admitted to trading on a national securities exchange on the date the Option
is granted, but the Common Stock is admitted to quotation on the National
Association of Securities Dealers Automated Quotation system on the date the
Option is granted, Fair Market Value shall not be less than the
average of the highest bid and lowest asked prices of the Common
Stock on such system on such date.
(i) "Incentive Stock Option" means an Option granted by the
Committee to a Participant, which Option is designed as an
Incentive Stock Option pursuant to Section 8 of the Plan.
(j) "Non-qualified Stock Option" means an Option granted by
the Committee to a Participant and which is not designated by the
Committee as an Incentive Stock Option.
(k) "Option" means Award granted under Section 7 or Section 8
of the Plan.
(l) "Participant" means an employee of the Bank chosen by the
Committee to participate in the Plan or an independent Director.
(m) "Plan year(s)" means a calendar year or years commencing
on or after January 1, 1995.
(n) "Retirement" means termination of employment with the
Bank pursuant to a written notice by the Recipient to the Bank of
such Recipient's intent to retire.
(o) "Termination for Cause" means the termination upon an
intentional failure to perform stated duties, breach of a
fiduciary duty involving personal dishonesty, which results in
material loss to the Bank or willful violation of any law, rule
or regulation (other than traffic violations or similar offenses)
or final cease-and-desist order which results in material loss to
the Bank.
3. ADMINISTRATION.
The Plan shall be administered by the Committee. The
Committee is authorized, subject to the provisions of the Plan,
to establish such rules and regulations as it sees necessary for
the proper administration of the Plan and to make whatever
determinations and interpretations in connection with the Plan it
sees as necessary or advisable. All determinations and
interpretations made by the Committee shall be binding and
conclusive on all Participants in the Plan and on their legal
representatives and beneficiaries.
4. TYPES OF AWARDS.
Awards under the Plan may be granted in any one or a
combination of:
(a) Non-qualified Stock Options; and
(b) Incentive Stock Options.
as defined below in Sections 7 and 8 of the Plan.
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5. STOCK SUBJECT TO THE PLAN.
Subject to adjustment as provided in Section 15 of the Plan, the
maximum number of shares reserved for purchase pursuant to the
exercise of options granted under the Plan is 100,000 shares of
Common Stock of the Bank, par value $1.00 per share. These shares
of Common Stock may be either authorized but unissued shares or
shares previously issued and reacquired by the Bank. To the
extent that Options are granted under the Plan, the shares
underlying such Options will be unavailable for future grants
under the Plan except that, to the extent that Options granted
under the Plan terminate, expire or are canceled without having
been exercised new Awards may be made with respect to these
shares.
6. ELIGIBILITY.
Officers and other employees of the Bank shall be eligible to
receive Incentive Stock Options, Non-qualified Stock Options
under the Plan. Directors who are not employees of the Bank shall
only be eligible to receive Awards under the Plan in the form of
Non-statutory stock options.
7. NON-QUALIFIED STOCK OPTIONS.
7.1 Grant of Non-qualified Stock Options.
The Committee may, from time to time, grant Non-qualified
Stock Options to eligible select employees and Independent
Directors, upon such terms and conditions as the Committee may
determine. Non-qualified Stock Options granted under this Plan
are subject to the following terms and conditions:
(a) Price. The purchase price per share of Common Stock
deliverable upon the exercise of each Non-statutory Stock Option
shall be determined by the Committee on the date the Option is
granted. Such purchase price shall not be less than 100% of the
Fair Market Value of the Bank's Common Stock on the Date of
Grant. Shares may be purchased only upon full payment of the
purchase price. Payment of the purchase price may be made, in
whole or in part, through the surrender of shares of the Common
Stock of the Bank at the Fair Market Value of such shares on the
date of surrender determined in the manner described in Section
2(h).
(b) Terms of Options. The term during which each
Non-qualified Stock Option may be exercised shall be determined
by the Committee, but in no event shall a Non-qualified Stock
Option be exercisable in whole or in part more than 10 years from
the Date of Grant. The Committee shall determine the date on
which each Non-qualified Stock Option shall become exercisable
and may provide that a Non-qualified Stock Option shall become
exercisable in installments. The shares comprising each
installment may be purchased in whole or in part at any time
after such installment becomes purchasable. The Committee may, in
its sole discretion, accelerate the time at which any
Non-qualified Stock Option may be exercised in whole or in part.
Notwithstanding the above, in the event of a Change in Control of
the
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Bank, all Non-qualified Stock Options shall become
immediately exercisable.
(c) Termination of Service. Upon the termination of a
Participant's service for any reason other than Disability,
Retirement, death or Termination for Cause, the Participant's
Non-qualified Stock Options shall be exercisable only as to those
shares which were immediately purchasable by the Participant at
the date of termination and only for a period of three months
following termination. In the event of Termination for Cause, all
rights under the Participant's Non-qualified Stock Options shall
expire upon termination. In the event of death, Disability or
Retirement of any Participant, all Non-qualified Stock Options
held by the Participant, whether or not exercisable at such time,
shall be exercisable by the Participant or his legal
representatives or beneficiaries of the Participant for one year
or such longer period as determined by the Committee following
the date of the Participant's death, Retirement or cessation of
employment due to Disability, provided that in no event shall the
period extend beyond the expiration of the Non-qualified Stock
Option term.
8. INCENTIVE STOCK OPTIONS.
8.1 Grant of Incentive Stock Options.
The Committee may, from time to time, grant Incentive Stock
Options to eligible employees. Incentive Stock Options granted
pursuant to the Plan shall be subject to the following terms and
conditions:
(a) Price. The purchase price per share of Common Stock
deliverable upon the exercise of each Incentive Stock Option
shall be not less than 100% of the Fair Market Value of the
Bank's Common Stock on the Date of Grant. However, if a
Participant beneficially owns more than 10% of the total combined
voting power of all classes of Common Stock of the Bank, the
purchase price per share of Common Stock deliverable upon the
exercise of each Incentive Stock Option shall not be less than
110% of the Fair Market Value of the Bank's Common Stock on the
Date of Grant. Shares may be purchased only upon payment of the
full purchase price. Payment of the purchase price may be made,
in whole or in part, through the surrender of shares of the
Common Stock of the Bank at the Fair Market Value of such shares
on the date of surrender determined in the manner described in
Section 2(h).
(b) Amounts of Options. Incentive Stock Options may be
granted to any eligible employee in such amounts as determined by
the Committee. In the case of an Option intended to qualify as an
Incentive Stock Option, the aggregate Fair Market Value
(determined as of the time the Option is granted) of the Common
Stock with respect to which Incentive Stock Options granted are
exercisable for the first time by the Participant during any
calendar year (under all plans of the Participant's employer
corporation and its parent and subsidiary corporations) shall not
exceed $100,000. The provisions of this Section 8.1(b) shall be
construed and applied in accordance with Section 422(d) of the
Code and the regulations, if any, promulgated thereunder. To the
extent an Award under this Section 8.1 exceeds this $100,000
limit, the portion of the Award in excess of such limit shall be
deemed a Non-statutory Stock Option.
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(c) Terms of Options. The term during which each
Incentive Stock Option may be exercised shall be determined by
the Committee, but in no event shall an Incentive Stock Option be
exercisable, in whole or in part, more than 10 years from the
Date of Grant. If at the time an Incentive Stock Option is
granted to an employee, the employee owns Common Stock
representing more than 10% of the total combined voting power of
the Bank (or, under Section 425(d) of the Code, is deemed to own
Common Stock representing more than 10% of the total combined
voting power of all such classes of Common Stock, by reason of
the ownership of such classes of Common Stock, directly or
indirectly, by or for any brother, sister, spouse, ancestor or
lineal descendent of such employee, or by or for any corporation,
partnership, estate or trust of which such employee is a
shareholder, partner or beneficiary), the Incentive Stock Option
granted to such employee shall not be exercisable after the
expiration of five years from the Date of Grant. No Incentive
Stock Option granted under this Plan is transferable except by
will or the laws of descent and distribution and is exercisable
in his lifetime only by the employee to whom it is granted.
The Committee shall determine the date on which each
Incentive Stock Option shall become exercisable and may provide
that an Incentive Stock Option shall become exercisable in
installments. The shares comprising each installment may be
purchased in whole or in part at any time after such installment
becomes purchasable, provided that the amount able to be first
exercised in a given year is consistent with the terms of Section
422 of the Code. The Committee may, in its sole discretion,
accelerate the time at which any Incentive Stock Option may be
exercised in whole or in part, provided that it is consistent
with the terms of Section 422 of the Code. Notwithstanding the
above, in the event of a Change in Control of the Bank, all
Incentive Stock Options shall become immediately exercisable.
(d) Termination of Employment. Upon the termination of a
Participant's service for any reason other than Disability,
Retirement, Change in Control, death or Termination for Cause,
the Participant's Incentive Stock Options shall be exercisable
only as to those shares which were immediately purchasable by the
Participant at the date of termination and only for a period of
three months following termination. In the event of Termination
for Cause, all rights under the Participant's Incentive Stock
Options shall expire upon termination.
In the event of death or Disability of any employee, all
Incentive Stock Options held by such Participant, whether or not
exercisable at such time, shall be exercisable by the Participant
or the Participant's legal representatives or beneficiaries for
one year following the date of the Participant's death or
cessation of employment due to Disability. Upon termination of
the Participant's service due to Retirement, or a Change in
Control, all Incentive Stock Options held by such Participant,
whether or not exercisable at such time, shall be exercisable for
a period of one year following the date of Participant's
cessation of employment, provided however, that such Option shall
not be eligible for treatment as an Incentive Stock Option in the
event such Option is exercised more than three months following
the date of the Participant's Retirement. In no event shall the
exercise period extend beyond the expiration of the Incentive
Stock Option term.
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(e) Compliance with Code. The Options granted under this
Section 8 of the Plan are intended to qualify as incentive stock
options within the meaning of Section 422 of the Code, but the
Bank makes no warranty as to the qualification of any option as
an incentive stock option within the meaning of Section 422 of
the Code.
9. EXERCISE OF OPTIONS
A person electing to exercise an Option shall give written
notice to the Corporation of such election and of the number of
shares he has elected to purchase, in such form as the Committee
shall have prescribed or approved, and shall at the time of
exercise tender the full purchase price of the shares he has
elected to purchase. The purchase price shall be paid in full,
in cash, upon exercise of the Option, provided, however, that in
lieu of cash, with the approval of the Committee at or prior to
exercise, an Optionee may exercise his Option by tendering to the
Corporation shares of Common Stock owned by him and having a fair
market value of such stock to be determined in the manner
provided in Section 2(h) hereof) or by delivering such
combination of cash and such shares as the Committee in its sole
discretion may approve. Notwithstanding the foregoing, Common
Stock acquired pursuant to the exercise of an Incentive stock
Option may not be tendered as payment unless the holding period
requirements of Code Section 422(a) (1) have been satisfied, and
Common Stock not acquired pursuant to the exercise of an
Incentive Stock Option may not be tendered as payment unless it
has been held, beneficially and of record, for at least one year.
10. SURRENDER OPTION.
In the event of a Participant's termination of employment as
a result of death, Disability or Retirement, the Participant (or
the Participant's personal representative(s), heir(s), or
devisee(s)) may, in a form acceptable to the Committee, make
application to surrender all or part of Options held by such
Participant in exchange for a cash payment from the Bank in an
amount equal to the difference between the Fair Market Value of
the Common Stock on the date of termination of employment and the
exercise price per share of the Option on the Date of Grant.
Whether the Committee accepts such application or determines to
make payment, in whole or part, is within its absolute and sole
discretion. The Committee is under no obligation to any
Participant whatsoever to make such payments. In the event that
the Committee accepts such application and the Bank determines to
make payment, such payment shall be in lieu of the exercise of
the underlying Option and such Option shall cease to be
exercisable.
11. RIGHTS OF A SHAREHOLDER: NON-TRANSFERABILITY.
No Participant shall have any rights as a shareholder with
respect to any shares covered by a Non-statutory and/or Incentive
Stock Option until the date of issuance of a stock certificate
for such shares. Nothing in this Plan or in any Award granted
confers on any person any right to continue in the employ of the
Bank or to continue to perform services for the Bank or
interferes in any way with the right of the Bank to terminate a
Participant's services as an officer or other employee at any
time.
No Award under the Plan shall be transferable by the optionee
other than by will or the laws of descent and distribution and
may only be exercised during his lifetime by the optionee,
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or by a guardian or legal representative.
12. AGREEMENT WITH GRANTEES.
Each Award of Options, will be evidenced by a written
agreement, executed by the Participant and the Bank which
describes the conditions for receiving the Awards including the
Date of Grant, the purchase price if any, applicable periods, and
any other terms and conditions as may be required by the Board of
Directors or applicable securities laws.
13. DESIGNATION OF BENEFICIARY.
A Participant may, with the consent of the Committee,
designate a person or persons to receive, in the event of death,
any Award to which the Participant would then be entitled. Such
designation will be made upon forms supplied by and delivered to
the Bank and may be revoked in writing. If a Participant fails
effectively to designate a beneficiary, then the Participant's
estate will be deemed to be the beneficiary.
14. DILUTION AND OTHER ADJUSTMENTS.
In the event of any change in the outstanding shares of
Common Stock of the Bank by reason of any stock dividend or
split, recapitalization, merger, consolidation, spin-off,
reorganization, combination or exchange of shares, or other
similar corporate change, or other increase or decrease in such
shares without receipt or payment of consideration by the Bank,
the Committee will make such adjustments to previously granted
Awards, to prevent dilution or enlargement of the rights of the
Participant, including any or all of the following:
(a) adjustments in the aggregate number or kind of shares of
Common Stock which may be awarded under the Plan;
(b) adjustments in the aggregate number or kind of shares of
Common Stock covered by Awards already made under the Plan;
(c) adjustments in the purchase price of outstanding
Incentive and/or Non-statutory Stock Options, or any Limited
Rights attached to such Award.
No such adjustments may, however, materially change the
value of benefits available to a Participant under a previously
granted Award.
15. TAX WITHHOLDING.
There shall be deducted from each distribution of cash
and/or Common Stock under the Plan the amount required by any
governmental authority to be withheld for income tax purposes. If
this Plan is qualified under 17 C.F.R. 240.16b-3 of the Exchange
Act Rules, then any withholding shall comply with 17 C.F.R.
240.16b-3(e).
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16. AMENDMENT OF THE PLAN.
The Board of Directors may at any time, and from time to
time, modify or amend the Plan in any respect; provided however,
that the shareholder approval shall be required for any such
modification or amendment which:
(a) increases the maximum number of shares for which options
may be granted under the Plan (subject, however, to the
provisions of Section 15 hereof);
(b) reduces the exercise price at which Awards may be
granted (subject, however, to the provisions of Section 15
hereof):
(c) extends the period during which options may be granted
or exercised beyond the times originally prescribed; or
(d) changes the persons eligible to participate in the Plan.
Failure to ratify or approve amendments or modifications to
subsections (a) through (d) of this Section by shareholders shall
be effective only as to the specific amendment or modification
requiring such ratification. Other provisions, sections, and
subsections of this Plan will remain in full force and effect.
No such termination, modification or amendment may affect
the rights of a Participant under an outstanding Award.
17. EFFECTIVE DATE OF PLAN.
The Plan shall become effective on January 1, 1995. The
Plan shall be presented to shareholders of the Bank for
ratification for purposes of: (i) satisfying one of the
requirements of Section 422 of the Code governing the tax
treatment for Incentive Stock Options; and (ii) if applicable,
maintaining listing on the NASDAQ National Market System. The
failure to obtain shareholder ratification will not effect the
validity of the Plan and the Awards thereunder, provided,
however, that if the Plan is not ratified, the Plan shall remain
in full force and effect, and any Incentive Stock Options granted
under the Plan shall be deemed to be Non-statutory Stock Options.
18. TERMINATION OF THE PLAN.
The right to grant Awards under the Plan will terminate upon
the earlier of ten (10) years after the Effective Date of the
Plan or the issuance of Common Stock or the exercise of options
equivalent to the maximum number of shares reserved under the
Plan as set forth in Section 5 of the Plan. The Board of
Directors has the right to suspend or terminate the Plan at any
time, provided that no such action will, without the consent of a
Participant, adversely affect his rights under a previously
granted Award.
19. APPLICABLE LAW.
The Plan will be administered in accordance with the laws of
the Commonwealth of Pennsylvania.
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20. COMPLIANCE WITH SECTION 16.
If this Plan is qualified under 17 C.F.R. 240.16b-3 of the
Exchange Act Rules, with respect to persons subject to Section 16
of the Exchange Act, transactions under this Plan are intended to
comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any of the
provisions of the Plan or actions by the Committee fail to so
comply, it shall be deemed null and void, to the extent permitted
by law and deemed advisable by the Committee.
________________________ ______________________________
Date Adopted ___________________, President
____________________________ _______________________________
Date Ratified by Shareholders _______________, Corporate
Secretary
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Subchapter D of Chapter 17 of the Pennsylvania Business
Corporation Law of 1988, as amended (15 Pa. C.S. Sections
1741-1750) provides that a business corporation shall have the
power under certain circumstances to indemnify directors,
officers, employees and agents against certain expenses incurred
by them in connection with any threatened, pending or completed
action, suit or proceeding. The following discussion is
qualified, in its entirety, by the full text of Subchapter D of
Chapter 17 of the Pennsylvania Business Corporation Law of 1988,
as amended, attached as Exhibit 99D.
Section 1721 of the Pennsylvania Business Corporation Law of
1988, as amended (the "BCL") (relating to the Board of
Directors), declares that unless otherwise provided by statute or
in a bylaw adopted by the shareholders, all powers enumerated in
section 1502 (relating to general powers) and elsewhere in the
BCL or otherwise vested by law in a business corporation shall be
exercised by or under the authority of, and the business and
affairs of every business corporation shall be managed under the
direction of, a board of directors. If any such provision is
made in the by-laws, the powers and duties conferred or imposed
upon the board of directors under the BCL shall be exercised or
performed to such extent and by such person or persons as shall
be provided in the by-laws.
Section 1712 of the BCL provides that a director of a
business corporation shall stand in a fiduciary relation to the
corporation and shall perform his duties as a director, including
his duties as a member of any committee of the board upon which
he may serve, in good faith, in a manner he reasonably believes
to be in the best interests of the corporation and with such
care, including reasonable inquiry, skill and diligence, as a
person of ordinary prudence would use under similar
circumstances. In performing his duties, a director shall be
entitled to rely in good faith on information, opinions, reports
or statements, including financial statements and other financial
data, in each case prepared or presented by any of the following:
1. one or more officers or employees of the corporation
whom the director reasonably believes to be reliable and
competent in the matters presented;
2. counsel, public accountants or other persons as to
matters which the director reasonably believes to be within the
professional or expert competence of such person; or
3. a committee of the board upon which he does not serve,
duly designated in accordance with law, as to matters within its
designated authority, which committee the director reasonably
believes to merit confidence.
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A director shall not be considered to be acting in good faith, if
he has knowledge concerning the matter in question that would
cause his reliance to be unwarranted.
Section 1716 of the BCL states that in discharging the
duties of their respective positions, the board of directors,
committees of the board and individual directors of a business
corporation may, in considering the best interests of the
corporation, consider the effects of any action upon employees,
upon suppliers and customers of the corporation and upon
communities in which offices or other establishments of the
corporation are located, and all other pertinent factors. The
consideration of those factors shall not constitute a violation
of the preceding paragraph. In addition, absent breach of
fiduciary duty, lack of good faith or self-dealing, actions taken
as a director or any failure to take any action shall be presumed
to be in the best interests of the corporation.
Moreover, Section 1721 addresses the personal liability of
directors and states that if a bylaw adopted by the shareholders
so provides, a director shall not be personally liable, as such,
for monetary damages for any action taken, or any failure to take
any action, unless:
1. the director has breached or failed to perform the
duties of his office under this section; and
2. the breach or failure to perform constitutes
self-dealing, willful misconduct or recklessness.
The provisions discussed above shall not apply to:
1. the responsibility or liability of a director pursuant
to any criminal statute; or
2. the liability of a director for the payment of taxes
pursuant to local, state or federal law.
Section 1714 of the BCL states that a director of a business
corporation who is present at a meeting of its board of
directors, or of a committee of the board, at which action on any
corporate matter is taken on which the director is generally
competent to act, shall be presumed to have assented to the
action taken unless his dissent is entered in the minutes of the
meeting or unless he files his written dissent to the action with
the secretary of the meeting before the adjournment thereof or
transmits the dissent in writing to the secretary of the
corporation immediately after the adjournment of the meeting.
The right to dissent shall not apply to a director who voted in
favor of the action. Nothing in this Section 1714 shall bar a
director from asserting that minutes of the meeting incorrectly
omitted his dissent if, promptly upon receipt of a copy of such
minutes, he notifies the secretary, in writing, of the asserted
omission or inaccuracy.
Section 1741 of the BCL (relating to third party actions)
provides that unless otherwise restricted in its by-laws, a
business corporation shall have the power to indemnify any person
who was or is a party, or is threatened to be made a party to any
threatened, pending or completed action
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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 such person 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
expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by
such person in connection with the action or proceeding if such
person 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. The
termination of any action or proceeding by judgment, order,
settlement or conviction or upon a plea of nolo contendere or its
equivalent shall not of itself create a presumption that the
person did not act in good faith and in a manner that he
reasonably believed to be in, or not opposed to, the best
interests of the corporation, and with respect to any criminal
proceeding, had reasonable cause to believe that his conduct was
not unlawful.
Section 1742 of the BCL (relating to derivative actions)
provides that unless otherwise restricted in its by-laws, a
business corporation shall have the power to 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 such person 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 expenses (including
attorneys' fees) actually and reasonably incurred by such person
in connection with the defense or settlement of the action if
such person acted in good faith and in a manner he reasonably
believed to be in, or not opposed to the best interests of the
corporation. Indemnification shall not be made under this
section in respect of any claim, issue or matter as to which such
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 such
action was brought determines upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the court of common pleas or
such other court shall deem proper.
Section 1743 of the BCL (relating to mandatory
indemnification) provides for mandatory indemnification of
directors and officers such that to the extent that a
representative of the business corporation has been successful on
the merits or otherwise in defense of any action or proceeding
referred to in Sections 1741 (relating to third party actions) or
1742 (relating to derivative actions), or in defense of any
claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
Section 1744 of the BCL (relating to procedure for effecting
indemnification) provides the procedure for effecting
indemnification. Under this section unless ordered by a court,
any indemnification under Section 1741 (relating to third party
actions) or 1742 (relating to derivative actions) shall be made
by the business corporation only as authorized in the specific
case upon a
R-3
<PAGE>
determination that indemnification of the representative is
proper in the circumstances because such person 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 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 shareholders.
Section 1745 of the BCL (relating to advancing expenses)
provides that expenses (including attorneys' fees) incurred in
defending any action or proceeding referred to above may be paid
by the business corporation in advance of the final disposition
of the action or proceeding upon receipt of an undertaking by or
on behalf of the representative to repay such amount if it is
ultimately determined that such person is not entitled to be
indemnified by the corporation as authorized by the BCL or
otherwise.
Section 1746 of the BCL (relating to supplementary coverage)
provides that the indemnification and advancement of expenses
provided by or granted pursuant to the other sections of the BCL
shall not be deemed exclusive of any other rights to which a
person seeking indemnification or advancement of expenses may be
entitled under any other by-law, agreement, vote of shareholders
or disinterested directors or otherwise, both as to action in
such person's official capacity and as to action in another
capacity while holding such office.
Section 1746 of the BCL also provides that indemnification
referred to above shall not be made in any case where the act or
failure to act giving rise to the claim for indemnification is
determined by a court to have constituted willful misconduct or
recklessness.
Section 1746 further declares that indemnification under any
bylaw, agreement, vote of shareholders or directors or otherwise,
may be granted for any action taken or any failure to take any
action and may be made whether or not the corporation would have
the power to indemnify the person under any other provision of
law except as provided in this section and whether or not the
indemnified liability arises or arose from any threatened,
pending or completed action by or in the right of the
corporation. Such indemnification is declared to be consistent
with the public policy of the Commonwealth of Pennsylvania.
Section 1747 of the BCL (relating to the power to purchase
insurance) provides that unless otherwise restricted in its
by-laws, a
business corporation shall have 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
R-4
<PAGE>
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 the BCL. Such insurance is declared to be
consistent with the public policy of the Commonwealth of
Pennsylvania.
Section 1748 of the BCL (relating to application to
surviving or new corporations) provides that for the purposes of
the BCL, references to "the corporation" include all constituent
corporations absorbed in a consolidation, merger or division, as
well as the surviving or new corporations surviving or resulting
therefrom, so that any person who is or was a representative of
the constituent, surviving or new corporation, or is or was
serving at the request of the constituent, surviving or new
corporation as a representative of another domestic or foreign
corporation for profit or not-for-profit, partnership, joint
venture, trust or other enterprise, shall stand in the same
position under the provisions of the BCL with respect to the
surviving or new corporation as he would if he had served the
surviving or new corporation in the same capacity.
Section 1749 of the BCL (referring to application to
employee benefit plans) states that for the purposes of the BCL:
1. references to "other enterprises" shall include employee
benefit plans and references to "serving at the request of the
corporation" shall include any service as a representative of the
business corporation that imposes duties on, or involves services
by, the representative with respect to an employee benefit plan,
its participants or beneficiaries;
2. excise taxes assessed on a person with respect to an
employee benefit plan pursuant to applicable law shall be deemed
"fines"; and
3. action with respect to an employee benefit plan taken or
omitted in good faith by a representative of the corporation in a
manner he reasonably believed to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be
action in a manner that is not opposed to the best interests of
the corporation.
Section 1750 of the BCL (relating to duration and extent of
coverage) declares that the indemnification and advancement of
expenses provided by, or granted pursuant to, the BCL shall,
unless otherwise provided when authorized or ratified, continue
as to a person who has ceased to be a representative of the
corporation and shall inure to the benefit of the heirs and
personal representative of that person.
Article 23 of the By-laws of the Registrant provides for
indemnification to the full extent authorized by Pennsylvania
law.
R-5
<PAGE>
Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is
against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by Registrant of expenses incurred or paid by a director, officer
of controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by a director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of
its counsel the manner has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits.
2.1 Plan of Reorganization dated as of ________, 1997
among
Registrant, Premier Bank and Premier Interim Bank -- incorporated
herein by reference and filed as Exhibit A to the Proxy
Statement/Prospectus included in this Registration Statement.
2.2 Plan of Merger dated as of _________, 1997 between
Premier Bank and Premier Interim Bank -- incorporated herein by
reference and filed as Exhibit B to the Proxy
Statement/Prospectus included in this Registration Statement.
3(i) Articles of Incorporation of Registrant --
incorporated herein by reference and filed as Exhibit C to the
Proxy Statement/Prospectus included in this Registration
Statement.
3(ii) By-laws of Registrant -- incorporated herein by
reference and filed as Exhibit D to the Proxy
Statement/Prospectus included in this Registration Statement.
5 Opinion of Shumaker Williams, P.C. of Camp Hill,
Pennsylvania, Special Counsel to Registrant, as to the legality
of the shares of Registrant's stock being registered.
23 Consent of Shumaker Williams, P.C. of Camp Hill,
Pennsylvania, Special Counsel to Registrant.
24 Power of Attorney given by the Officers and Directors of
the Registrant.
99.1 Definitive copy of Letter to Shareholders of Premier
Bank.
99.2 Definitive copy of Notice of Special Meeting of
Shareholders of Premier Bank.
99.3 Definitive copy of Form of Proxy for use by the
Shareholders of Premier Bank.
R-6
<PAGE>
99.4 Subchapter D of Chapter 17 of the Pennsylvania Business
Corporation Law of 1988, as amended (15 Pa. C.S. Sections
1741-1750),
relating to indemnification.
99.5 Excerpts from Subchapter D of Chapter 15 of the
Pennsylvania Business Corporation Law of 1988, as amended (15 Pa.
C.S.A. Sections 1571-1580, as amended) -- incorporated herein by
reference and filed as Exhibit E to the Proxy
Statement/Prospectus included in this Registration Statement.
99.6 Premier Bank 1995 Incentive Stock Option Plan
(Incorporated by reference from Exhibit F to the Proxy
Statement/Prospectus,included in this Registration Statement).
(b) Not Applicable.
(c) Not Applicable.
Item 22. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the Proxy Statement/Prospectus any
facts or events arising after the effective date of the
registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end
of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule
424(b) (Section 230.424(b) of this chapter) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the
R-7
<PAGE>
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b)(1) The undersigned Registrant hereby undertakes as follows:
that prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to
be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other Items of
the applicable form.
(2) The Registrant undertakes that every prospectus (i) that
is filed pursuant to paragraph (b)(1) immediately preceding, or
(ii) that purports to meet the requirements of section 10(a)(3)
of the Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used
until such amendment is effective, and that, for purposes of
determining any liability under the Securities Act of 1933, each
such post-effective amendment 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.
(c) Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is
against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by Registrant of expenses incurred or paid by a director, officer
of controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by a director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of
its counsel the manner has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
(d) The undersigned Registrant hereby undertakes to respond to
requests for information that is incorporated by reference into
the Proxy Statement/ Prospectus pursuant to Items 4, 10(b), 11,
or 13 of this Form, within one business day of receipt of such
request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes
R-8
information contained in documents filed subsequent to the
effective date of the registration statement through the date of
responding to the request.
(e) The undersigned Registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration
statement when it became effective.
R-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Doylestown, Commonwealth of
Pennsylvania on August 22, 1997.
PREMIER BANCORP, INC.
By: /s/ John C. Soffronoff
-------------------------
John C. Soffronoff
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints John C.
Soffronoff and Bruce E. Sickel, and each of them, his true and
lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this
registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or either of them, or
their or his substitutes, may lawfully do or cause to be done by
virtue thereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following
persons in the capacities and on the dates indicated.
Capacity Date
--------- ----
/s/ John C. Soffronoff President and Chief August 22, 1997
- --------------------- Executive Officer
John C. Soffronoff (Principal Executive
Officer)
/s/ Clark S. Frame Chairman of the August 22, 1997
- --------------------- Board, Director
Clark S. Frame
/s/ Barry J. Miles, Sr. Director August 22, 1997
- ----------------------
Barry J. Miles, Sr.
/s/ Bruce E. Sickel Chief Financial August 22, 1997
- ---------------------- Officer, Director
Bruce E. Sickel (Principal Financial
Officer)
/s/ Daniel E. Cohen Director August 22, 1997
- ---------------------
Daniel E. Cohen
/s/ Peter A. Cooper Director August 22, 1997
- ---------------------
Peter A. Cooper
<PAGE>
/s/ HelenBeth Garofalo- Director August 22, 1997
Vilcek
- ----------------------
HelenBeth Garofalo-Vilcek
/s/ Dr. Thomas E. Mackell Director August 22, 1997
- -------------------------
Dr. Thomas E. Mackell
/s/ Dr. Daniel A. Nesi Director August 22, 1997
- ------------------------
Dr. Daniel A. Nesi
/s/ Neil Norton Director August 22, 1997
- ------------------------
Neil Norton
/s/ Thomas M. O'Mara Director August 22, 1997
- -----------------------
Thomas M. O'Mara
/s/ Michael Perrucci Director August 22, 1997
- -----------------------
Michael Perrucci
/s/ Brian E. Rossi Director August 22, 1997
- -----------------------
Brian E. Rossi
/s/ Richard F. Ryon Director August 22, 1997
- ----------------------
Richard F. Ryon
/s/ Gerald Schatz Director August 22, 1997
- ----------------------
Gerald Schatz
/s/ Irving N. Stein Director August 22, 1997
- ----------------------
Irving N. Stein
Thomas P. Stitt Director August 22, 1997
- ----------------------
Thomas P. Stitt
/s/ George H. Wetherill Director August 22, 1997
- -----------------------
George H. Wetherill
/s/ John A. Zebrowski Director August 22, 1997
- -----------------------
John A. Zebrowski
<PAGE>
INDEX TO EXHIBITS
Page Number
Exhibit Index in Manually
Signed
Number Original
- -------------- --------
2.1 Plan of Reorganization dated as of
________, 1997, among Registrant,
Premier Bank and Premier Interim
Bank (Incorporated by reference
from Exhibit A to the Proxy Statement
/Prospectus, included in this
Registration Statement).
2.2 Plan of Merger dated as of ________,
1997 between Premier Bank and Premier
Interim Bank (Incorporated by reference
from Exhibit B to the Proxy Statement
/Prospectus, included in this Registration
Statement).
3(i) Articles of Incorporation of Registrant
(Incorporated by reference from Exhibit C
to the Proxy Statement/Prospectus, included
in this Registration Statement).
3(ii) By-laws of Registrant (Incorporated
by reference from Exhibit D to the Proxy
Statement/Prospectus, included in this
Registration Statement).
5 Opinion of Shumaker Williams, P.C. of
Camp Hill, Pennsylvania, Special Counsel
to Registrant.
23 Consent of Shumaker Williams, P.C. of
Camp Hill, Pennsylvania, Special Counsel
to Registrant, (Included in Exhibit 5).
24 Power of Attorney (Included on Signature
Page).
99.1 Letter to Shareholders of Premier Bank.
99.2 Notice of Special Meeting of Shareholders
of Premier Bank.
99.3 Form of Proxy.
99.4 Subchapter D of Chapter 17 of the
Pennsylvania Business Corporation Law of
1988, as amended (15 Pa. C.S. Sections 1741-
1750).
99.5 Excerpts from Subchapter D of Chapter 15 of
the Pennsylvania Business Corporation Law
of 1988, as amended (15 Pa. C.S.A.
Sections 1571-1580) (Incorporated by reference
from Exhibit E to the Proxy Statement/
Prospectus included in this Registration
Statement).
99.6 Premier Bank 1995 Incentive Stock Option
Plan (Incorporated by reference from Exhibit
F to the Proxy Statement/Prospectus, included
in this Registration Statement).
EXHIBIT 2.1
PLAN OF REORGANIZATION DATED AS OF ________, 1997
AMONG REGISTRANT, PREMIER BANK AND
PREMIER INTERIM BANK -- INCORPORATED
HEREIN BY REFERENCE AND FILED AS EXHIBIT A TO
THE PROXY STATEMENT/PROSPECTUS INCLUDED
IN THIS REGISTRATION STATEMENT
EXHIBIT 2.2
PLAN OF MERGER DATED AS OF ________, 1997
BETWEEN PREMIER BANK AND
PREMIER INTERIM BANK --
INCORPORATED HEREIN BY REFERENCE AND FILED
AS EXHIBIT B TO THE PROXY STATEMENT/PROSPECTUS
INCLUDED IN THIS REGISTRATION STATEMENT.
EXHIBIT 3i
ARTICLES OF INCORPORATION OF REGISTRANT --
INCORPORATED HEREIN BY REFERENCE AND
FILED AS EXHIBIT C TO THE PROXY STATEMENT/PROSPECTUS
INCLUDED IN THIS REGISTRATION STATEMENT
EXHIBIT 3ii
BY-LAWS OF REGISTRANT -- INCORPORATED HEREIN
BY REFERENCE AND FILED AS EXHIBIT D TO THE PROXY
STATEMENT/PROSPECTUS INCLUDED IN THIS
REGISTRATION STATEMENT
EXHIBIT 5
OPINION OF SHUMAKER WILLIAMS, P.C.
OF CAMP HILL, PENNSYLVANIA
SPECIAL COUNSEL TO REGISTRANT AS TO THE
LEGALITY OF THE SHARES OF REGISTRANT'S
STOCK BEING REGISTERED
<PAGE>
EXHIBIT 5
OPINION OF SHUMAKER WILLIAMS, P.C.
<PAGE>
SHUMAKER WILLIAMS, P.C.
P.O. Box 88
Harrisburg, Pennsylvania 17108
Telephone: (717) 763-1121
Telecopier: (717) 763-7419
August 22, 1997
Mr. John C. Soffronoff
President and Chief Executive Officer
PREMIER BANCORP, INC.
379 North Main Street
Doylestown, PA 18901
RE: Premier Bancorp, Inc.
Formation of a One-Bank Holding Company
Our File No. 700-97
Dear Mr. Soffronoff:
We have been engaged as Special Counsel to Premier Bank (the
"Bank") and Premier Bancorp, Inc., a Pennsylvania business
corporation (the "Company"), in connection with the organization
of the Company as a bank holding company and the preparation and
filing of all relevant documents with the Federal Reserve Board,
the Pennsylvania Department of Banking, applicable state
securities law administrators, and the Securities and Exchange
Commission ("SEC").
We have prepared a Registration Statement on Form S-4 to be
filed with the SEC that includes a Proxy Statement/Prospectus,
under the provisions and regulations of the Securities Act of
1933, as amended, relating to the offering by the Company of a
maximum of 1,122,576 shares of its common stock, par value $1.00
per share (the "Common Stock"). The Common Stock will be issued
pursuant to the Plan of Reorganization (the "Plan of
Reorganization") among the Company, the Bank, and Premier Interim
Bank (the "Interim Bank"). Under the Plan of Reorganization, the
Interim Bank will merge with and into the Bank, and each share of
the Bank's outstanding common stock, par value $1.00 per share,
(other than shares as to which dissenters' rights have been
perfected and fractional shares, for which cash will be paid in
lieu thereof) will be converted into one (1) share of the Common
Stock, par value $1.00 per share, of the Company.
<PAGE>
Mr. John C. Soffronoff
President and Chief Executive Officer
PREMIER BANK
August 22, 1997
Page 2
As Special Counsel to the Company and the Bank, we have
supervised all corporate proceedings in connection with the
preparation and filing of the Registration Statement, including
the Proxy Statement/Prospectus, with the SEC and with the
appropriate state securities administrators. We have reviewed
the Company's Articles of Incorporation and By-laws, as presently
in effect. We have prepared and reviewed an executed copy of the
Plan of Reorganization, copies of the Company's corporate minutes
and other proceedings and records relating to the authorization
and issuance of the Common Stock, and such other documents and
matters of law as we have deemed necessary in order to render
this opinion.
Based upon the foregoing, and in reliance thereon, it is our
opinion that, upon the consummation of the Plan of Reorganization
and the Plan of Merger in accordance with their respective terms,
each of the shares of Common Stock issued pursuant to the
Registration Statement will be duly authorized, legally and
validly issued and outstanding, and fully paid and non-assessable
on the basis of present legislation.
We hereby consent to the use of this opinion in the
Registration Statement, and we further consent to the reference
to our name in the Proxy Statement/Prospectus included in the
Registration Statement under the caption "Description of the
Holding Company's Stock - Legal Opinion".
Sincerely yours,
SHUMAKER WILLIAMS, P.C.
By Nicholas Bybel, Jr.
------------------------
Nicholas Bybel, Jr.
NB/tb
EXHIBIT 23
CONSENT OF SHUMAKER WILLIAMS, P.C.
OF CAMP HILL, PENNSYLVANIA
SPECIAL COUNSEL TO REGISTRANT
CONTAINED IN OPINION LETTER AS EXHIBIT 5
EXHIBIT 24
POWER OF ATTORNEY
(INCLUDED ON SIGNATURE PAGE)
EXHIBIT 99.1
DEFINITIVE COPY OF LETTER TO SHAREHOLDERS
OF PREMIER BANK
<PAGE>
PREMIER BANK
379 NORTH MAIN STREET
DOYLESTOWN, PA 18901
(215) 345-5100
- -----------------------------------------------------------------
September 9, 1997
TO OUR SHAREHOLDERS:
The Board of Directors of Premier Bank (the "Bank")
cordially invites you to attend the Special Meeting of
Shareholders which will commence at 9:00 a.m., prevailing time on
Thursday, October 9, 1997, at Barley Sheaf Farm Bed and Breakfast
Inn, Route 202, Holicong, Pennsylvania.
The Notice of Special Meeting and the Proxy Statement on the
following pages address the formal business of the meeting. The
formal business schedule for the Special Meeting includes a
proposal to approve and adopt a Plan of Reorganization and a Plan
of Merger to form a bank holding company for the Bank. The Board
of Directors recommends that you vote in favor of the proposal
and believes that the formaion of a bank holding company at this
time is an important and necessary part of the Bank's plans for
the future. The Board of Directors believes that the formation
of a Holding Company at this time will provide the Bank with
flexibility to utilize alternative sources of capital that are
not available to the Bank to support its current growth. These
alternatives include, but are not limited to, the inssuance of
Trust Preferred Stock.
Under the proposed Plan of Reorganization, each share of
Common Stock of the Bank presently held by you would be converted
into one (1) share of Common Stock of Premier Bancorp, Inc., a
bank holding company whose only substantial asset would be all of
the Common Stock of the Bank (the "Holding Company"). If the
Plan of Reorganization is approved and adopted, the Bank's
shareholders (other than dissenting shareholders) will
automatically become shareholders of the Holding Company. Since
the Holding Company will own all of the outstanding shares of the
Bank, your interest in the Bank at the time of the reorganization
will remain essentially the same, except that it will be indirect
rather than direct. The conversion of Common Stock of the Bank
into Common Stock of the Holding Company will be tax free for
federal income tax purposes, with the exception of money received
for fractional shares owned.
<PAGE>
THE BOARD OF DIRECTORS BELIEVES THAT THE PLAN OF
REORGANIZATION AND PLAN OF MERGER ARE IN THE BEST INTERESTS OF
THE BANK AND ITS SHAREHOLDERS AND URGES YOU TO VOTE IN FAVOR OF
THE PLAN OF REORGANIZATION AND PLAN OF MERGER. THE APPROVAL AND
ADOPTION OF THE PLAN OF REORGANIZATION AND PLAN OF MERGER
REQUIRES AN AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST SIXTY-SIX
AND TWO-THIRDS PERCENT (66-2/3%) OF THE OUTSTANDING SHARES OF THE
BANK'S COMMON STOCK. IT IS, THEREFORE, EXTREMELY IMPORTANT FOR
YOU TO SIGN, DATE AND RETURN YOUR ENCLOSED PROXY AS SOON AS
POSSIBLE IN THE PRE-ADDRESSED AND STAMPED ENVELOPE SUPPLIED FOR
YOUR CONVENIENCE, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL
MEETING.
We urge you to carefully review the enclosed Proxy
Statement/Prospectus that describes the Plan of Reorganization
and the Plan of Merger proposal in detail. Again, your Board of
Directors strongly recommends that you vote FOR the proposal.
On behalf of the Board of Directors, thank you for your
cooperation and continued support.
Very truly yours,
Clark S. Frame, Chairman of the Board
EXHIBIT 99.2
DEFINITIVE COPY OF NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS
OF PREMIER BANK
<PAGE>
_________________________________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 9, 1997
_________________________________________
TO THE SHAREHOLDERS OF PREMIER BANK:
Notice is hereby given that the Special Meeting of
Shareholders of Premier Bank (the "Bank") will be held at 9:00
a.m., prevailing time, on Thursday, October 9, 1997, at Barley
Sheaf Farm Bed and Breakfast Inn, Route 202, Holicong,
Pennsylvania, for the following purposes:
1. To consider and act upon a proposal to approve and adopt a
Plan of Reorganization and Plan of Merger, dated as of
, providing, among other things, for the merger of
the Bank and Premier Interim Bank (the "Interim Bank"), a
Pennsylvania state-chartered banking association and a subsidiary
of Premier Bancorp, Inc. (the "Holding Company"), and for the
automatic conversion of each share of the Common Stock of the
Bank into one (1) share of the Common Stock of the Holding
Company; and
2. To transact such other business as may properly come before
the Special Meeting and any adjournment or postponement thereof.
You are urged to mark, sign, date and promptly return your
Proxy in the enclosed envelope so that your shares may be voted
in accordance with your wishes and in order that the presence of
a quorum may be assured. The prompt return of your signed Proxy,
regardless of the number of shares you hold, will aid the Bank in
reducing the expense of additional proxy solicitation. The
giving of such Proxy does not affect your right to vote in person
if you attend the meeting and give notice to the Secretary of the
Bank.
Only those shareholders of record at the close of business
on September 1, 1997 , will be entitled to notice of and to vote
at the Special Meeting and any adjournment or postponement
thereof.
A copy of the Bank's Annual Report for the fiscal year ended
December 31, 1996, was mailed to Shareholders on or about April
1, 1997. Additional copies of the Bank's Annual Report for the
1995 fiscal year and 1994 fiscal year may be obtained at no cost
by contacting John C. Soffronoff, President, Premier Bank, 379
North Main Street, Doylestown, Pennsylvania 18901; telephone:
(215) 345-5100.
<PAGE>
AN AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST SIXTY-SIX AND
TWO-THIRDS PERCENT (66-2/3%) OF THE OUTSTANDING SHARES IS
REQUIRED FOR APPROVAL AND ADOPTION OF THE PLAN OF REORGANIZATION
AND PLAN OF MERGER. THEREFORE, WHETHER OR NOT YOU EXPECT TO
ATTEND THE SPECIAL MEETING IN PERSON, YOU ARE URGED TO SIGN, DATE
AND PROMPTLY RETURN THE ENCLOSED PROXY. A SELF-ADDRESSED STAMPED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
By Order of the Board of Directors,
Clark S. Frame, Chairman of the Board
September 9, 1997
EXHIBIT 99.3
DEFINITIVE COPY OF FORM OF PROXY
FOR USE BY THE SHAREHOLDERS OF
PREMIER BANK
<PAGE>
PREMIER BANK
PROXY
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON [MEETING DATE]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Mr. John J.
Ginley and Mr. Mark Mann and each or any of them, proxies of the
undersigned, with full power of substitution, to vote all of the
shares of Premier Bank (the "Bank") that the undersigned may be
entitled to vote at the Special Meeting of Shareholders of the
Bank to be held at Barley Sheaf Farm Bed and Breakfast Inn, Route
202, Holicong, Pennsylvania on Thursday, October 9, 1997, at 9:00
a.m., prevailing time, and at any adjournment or postponement
thereof as follows:
1. PROPOSAL TO APPROVE AND ADOPT THE PLAN OF REORGANIZATION AND
PLAN OF MERGER DATED AS OF ________, 1997, PROVIDING, AMONG OTHER
THINGS, FOR THE MERGER OF THE BANK AND PREMIER INTERIM BANK (THE
"INTERIM BANK"), A PENNSYLVANIA STATE- CHARTERED BANKING
INSTITUTION AND A SUBSIDIARY OF PREMIER BANCORP, INC. (THE
"HOLDING COMPANY"), AND FOR THE AUTOMATIC CONVERSION OF EACH
SHARE OF THE COMMON STOCK OF THE BANK INTO ONE (1) SHARE OF THE
COMMON STOCK OF THE HOLDING COMPANY.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Board of Directors recommends a vote FOR this proposal.
- ----------------------------------------------------------------
2. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the Special
Meeting and any adjournment or other postponement thereof.
THIS PROXY, WHEN PROPERLY SIGNED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1.
Dated: , 1997
/s/
--------------------------
Signature
/s/
--------------------------
Signature
Number of Shares Held of
Record on September 1, 1997
THIS PROXY MUST BE DATED, SIGNED BY THE SHAREHOLDERS AND
RETURNED PROMPTLY TO THE BANK IN THE ENCLOSED ENVELOPE. WHEN
SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE. IF MORE THAN ONE TRUSTEE, ALL
SHOULD SIGN. IF STOCK IS HELD JOINTLY, EACH OWNER SHOULD SIGN.
EXHIBIT 99.4
STATUTES RELATING TO INDEMNIFICATION
SUBCHAPTER D OF CHAPTER 17 OF THE PENNSYLVANIA
BUSINESS CORPORATION LAW OF 1988,
(15 PA. C.S. SECTIONS 1741-1750, AS AMENDED)
<PAGE>
EXHIBIT 99.4
STATUTES RELATING TO INDEMNIFICATION
Subchapter D of Chapter 17 of the Pennsylvania
Business Corporation Law of 1988, (15 Pa. C.S.
Sections 1741-1750), as amended
Subchapter D. - Indemnification
Section 1741. Third party actions.
Unless otherwise restricted in its bylaws, a business
corporation shall have power to 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 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 expenses (including attorneys' 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. The termination of any action or proceeding by
judgment, order, settlement or conviction or upon a plea of nolo
contendere or its equivalent shall not of itself create a
presumption that the person did not act in good faith and in a
manner that he reasonably believed to be in, or not opposed to,
the best interests of the corporation and, with respect to any
criminal proceeding, had reasonable cause to believe that his
conduct was unlawful.
Section 1742. Derivative actions.
Unless otherwise restricted in its bylaws, a business
corporation shall have power to 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 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 expenses (including attorneys' 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. Indemnification shall not
be made under this section 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
<PAGE>
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.
Section 1743. Mandatory indemnification.
To the extent that a representative of a business
corporation has been successful on the merits or otherwise in
defense of any action or proceeding referred to in section 1741
(relating to third-party actions) or 1742 (relating to derivative
and corporate actions) or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses
(including attorney fees) actually and reasonably incurred by him
in connection therewith.
Section 1744. Procedure for effecting indemnification.
Unless ordered by a court, any indemnification under section
1741 (relating to third-party actions) or 1742 (relating to
derivative and corporate actions) shall be made by the business
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 proceedings;
(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 shareholders.
Section 1745. Advancing expenses.
Expenses (including attorneys' fees) incurred in defending
any action or proceeding referred to in this subchapter may be
paid by a business corporation in advance of the final
disposition of the action or proceeding upon receipt of an
undertaking by or on behalf of the representative to repay the
amount if it is ultimately determined that he is not entitled to
be indemnified by the corporation as authorized in this
subchapter or otherwise.
Section 1746. Supplementary coverage.
(a) General rule - The indemnification and advancement of
expenses provided by, or granted pursuant to, the other section
of this subchapter shall not be deemed exclusive of any other
rights which a person seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another
capacity while
<PAGE>
holding that office. Section 1728 (relating to interested
directors or officers; quorum) and, in the case of a registered
corporation, section 2538 relating to approval of transactions
with interested shareholders) shall be applicable to any bylaw,
contract or transaction authorized by the directors under this
section. A corporation may create a fund of any nature, which
may, but need not be, under the control of a trustee, or to
otherwise secure or insure in any manner its indemnification
obligations, whether arising under or pursuant to this section or
otherwise.
(b) When indemnification is not to be made - Indemnification
pursuant to subsection (a) shall not be made in any case where
the act or failure to act giving rise to the claim for
indemnification is determined by a court to have constituted
willful misconduct or recklessness. The articles may not provide
for indemnification in the case of willful misconduct or
recklessness.
(c) Grounds - Indemnification pursuant to subsection (a)
under any bylaw, agreement, vote of shareholders or directors or
otherwise may be granted for any action taken and may be made
whether or not the corporation would have the power to indemnify
the person under any other provision of law except as provided in
this section and whether or not the indemnified liability arises
or arose from any threatened, pending or completed action by or
in the right of the corporation. Such indemnification is
declared to be consistent with the public policy of this
Commonwealth.
Section 1747. Power to purchase insurance.
Unless otherwise restricted in its bylaws, a business
corporation shall have 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 subchapter. Such insurance is declared to be
consistent with the public policy of this Commonwealth.
Section 1748. Application to surviving or new corporations.
For the purposes of this subchapter, references to the
"corporation" include all constituent corporations absorbed in a
consolidation, merger or division, as well as the surviving or
new corporations surviving or resulting therefrom, so that any
person who is or was a representative f the constituent,
surviving or new corporation ,or is or was serving at the request
of the constituent, surviving or new corporation as a
representative of another domestic or foreign corporation for
profit or not-for-profit, partnership, joint venture, trust or
other enterprise, shall stand in the same position under the
provisions of this subchapter with respect to the surviving or
new corporation as he would if he had served the surviving or new
corporation in the same capacity.
<PAGE>
Section 1749. Application to employee benefit plans.
For the purposes of this subchapter:
(1) References to "other enterprises" shall include
employee benefit plans and references to "serving at the request
of the corporation" shall include any service as a representative
of the business corporation that imposes duties on, or involves
services by, the representative with respect to an employee
benefit plan, its participants or beneficiaries
(2) Excise taxes assessed on a person with respect to an
employee benefit plan pursuant to applicable law shall be deemed
"fines".
(3) Action with respect to an employee benefit plan taken
or omitted in good faith by a representative of the corporation
in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be
action in a manner that is not opposed to the best interests of
the corporation.
Section 1750. Duration and extent of coverage.
The indemnification and advancement of expenses provided by,
or granted pursuant to, this subchapter shall, unless otherwise
provided when authorized or ratified, continue as to a person who
has ceased to be a representative of the corporation and shall
inure to the benefit of the heirs and personal representative of
that person.
:68937
EXHIBIT 99.5
EXCERPTS FROM SUBCHAPTER D OF CHAPTER 15
OF THE PENNSYLVANIA BUSINESS CORPORATION
LAW OF 1988, AS AMENDED (15 PA.C.S.A. SECTIONS 1571-1580)
RELATING TO DISSENTERS' RIGHTS--INCORPORATED
HEREIN BY REFERENCE AND FILED AS EXHIBIT E TO
THE PROXY STATEMENT/PROSPECTUS INCLUDED IN
THIS REGISTRATION STATEMENT
EXHIBIT 99.6
PREMIER BANK 1995 INCENTIVE STOCK OPTION PLAN
(INCORPORATED BY REFERENCE FROM EXHIBIT F TO
THE PROXY STATEMENT/PROSPECTUS, INCLUDED
IN THIS REGISTRATION STATEMENT)
