SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) June 2, 2000
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Security of Pennsylvania Financial Corp.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-14577 23-2980576
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
31 West Broad Street, Hazleton, Pennsylvania 18201-0770
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(Address of Principal Executive Offices) (Zip Code)
(570) 454-0824
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(Registrant's telephone number, including area code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events
On June 2, 2000, Northeast Pennsylvania Financial Corp., a Delaware
corporation ("Northeast"), and Security of Pennsylvania Financial Corp.
("Security") issued a joint press release announcing the execution of a
definitive Agreement and Plan of Merger dated June 2, 2000 between Security
and Northeast (the "Merger Agreement"). Under the terms of the Merger
Agreement, Security will merge with a recently formed wholly owned subsidiary
of Northeast (the "Merger") with Security being the survivor thereof.
Immediately following the Merger, Security Savings Association of Hazleton, a
wholly owned subsidiary of Security, will merge with and into First Federal
Bank, a wholly owned subsidiary of Northeast.
Pursuant to the Merger Agreement, each issued and outstanding share of
Security common stock, par value $.01 (other than dissenting shares), shall be
converted into and represent the right to receive $17.50 in cash. However,
any shares of Security common stock owned beneficially or as of record by
Northeast or any of its subsidiaries (other than shares held in a fiduciary
capacity or obtained in satisfaction of a debt previously contracted) or
treasury shares held by Security shall be canceled. Upon receipt of all
required federal regulatory approvals of the Merger, all unvested stock
options and grants of restricted stock awarded under Security's 1999 Stock-
Based Incentive Plan will immediately vest. Each holder of an option to
purchase Security common stock who continues to serve as a director or to be
employed by Northeast or a subsidiary thereof after the Merger will have the
option to (i) convert each such option into an option to purchase shares of
Northeast common stock or (ii) receive cash in an amount equal to the
difference between $17.50 and the option exercise price multiplied by the
number of shares subject to the option held thereby at the time of the Merger.
If an option holder elects to convert his or her Security option, the option
holder's converted option will maintain in all material respects the same
economic equivalent position he or she had with the Security options.
Directors and employees who do not continue to be employed will receive cash
in an amount equal to the difference between $17.50 and the option exercise
price multiplied by the number of shares subject to the option held thereby at
the time of the Merger.
The Merger is intended to qualify as a tax-free reorganization under the
Internal Revenue Code of 1986, as amended. The receipt of cash by the
stockholders of Security will be a taxable event for the stockholders.
Consummation of the Merger is subject to various conditions, including:
(1) receipt of approval by the stockholders of Security; (2) receipt of all
requisite regulatory approvals; and (3) satisfaction of certain other
conditions.
Under certain circumstances, if the Merger Agreement is terminated by
Northeast in the manner and for the reasons set forth in the Merger Agreement
before the consummation of the Merger, Security may be required to pay
Northeast either $300,000 or $900,000 in immediately available funds, with the
specific amount depending on the situation under which termination is being
effected or the occurrence of certain events.
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The Merger Agreement is attached as an exhibit to this report and is
incorporated herein by reference. The foregoing summary of the Merger
Agreement does not purport to be complete and is qualified in its entirety by
reference to such agreement.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) and (b) not applicable.
(c) The following exhibit is filed with this report:
Exhibit Number Description
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2.1 Agreement and Plan of
Merger, dated as of June 2,
2000, between Northeast and
Security, excluding exhibits
thereto
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SECURITY OF PENNSYLVANIA
FINANCIAL CORP.
Date: June 15, 2000 By: /s/ David P. Marchetti, Sr.
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David P. Marchetti, Sr.
Vice President and Chief Financial Officer
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