Registration No. 333-30640
As filed with the Securities and Exchange Commission on
March 31, 2000
===========================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-4/A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
PEOPLES FIRST, INC.
(Exact name of registrant as specified in charter)
Pennsylvania 6021 23-3028825
(State or other (Primary Standard (I.R.S. Employer
Jurisdiction Industrial Identification
incorporation or Classification Number)
organization) Code No.)
24 SOUTH THIRD STREET
OXFORD, PENNSYLVANIA 19363
(610) 932-9294
(Address, including zip code, and
telephone number, including area code,
of registrant's principal executive offices)
GEORGE C. MASON, CHAIRMAN AND CEO
PEOPLES FIRST, INC.
24 SOUTH THIRD STREET
OXFORD, PENNSYLVANIA 19363
(610) 932-9294
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
copies to:
DAVID W. SWARTZ, ESQUIRE
STEVENS & LEE, P.C.
111 North Sixth Street
Reading, Pennsylvania 19603
(610) 478-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public:
AS SOON AS PRACTICABLE AFTER EFFECTIVENESS.
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. [ ]
If this form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. [ ]
If this form is a post-effective amendment filed pursuant
to Rule 462(d) under the Securities Act, check the following box
and list the Securities Act registration statement number of the
earlier effective registration statement for the same
offering.[ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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The Peoples Bank of Oxford
The Board of Directors of The Peoples Bank of Oxford has
approved the formation of a bank holding company for the Bank.
The holding company structure will provide Peoples Bank with
additional flexibility for structuring acquisitions and also for
taking advantage of opportunities under the continually evolving
laws governing financial institutions.
If we complete the holding company formation,
shareholders of Peoples Bank will receive one share of common
stock of the new holding company, Peoples First, Inc., for each
share of common stock of Peoples Bank that they own. The
conversion of Peoples Bank shares into shares of the holding
company generally will be tax-free for U.S. federal income tax
purposes.
We are requesting that shareholders of Peoples Bank
approve the merger agreement that will result in the holding
company formation. Your vote is very important. We have
scheduled a meeting of shareholders to consider the holding
company formation at the following date, time and place:
May 9, 2000
9:30 a.m. local time
Wyncote Golf Club
Oxford, Pennsylvania 19363
At the meeting, you will also consider the election of
eight directors for Peoples Bank. This document gives you
detailed information about the meeting, the proposed holding
company formation and the election of Peoples Bank directors.
We encourage you to read it carefully.
The articles of incorporation and bylaws of the holding
company differ in certain respects from the articles of
incorporation and bylaws of Peoples Bank, and contain provisions
that can be considered "antitakeover" in nature. These
provisions and related issues are described on page __.
We, together with the rest of Peoples Bank's Board of
Directors, enthusiastically support the holding company
formation and recommend that you vote to approve it.
[SIGNATURE] [SIGNATURE] [SIGNATURE]
George C. Mason Carl R. Fretz Hugh J. Garchinsky
Chairman and Chief Vice Chairman and President
Executive Officer Corporate Secretary
________________________________________________________________
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of the proxy
statement/prospectus. Any representation to the contrary is a
criminal offense.
These securities are not savings or deposit accounts or other
obligations of any bank, and they are not insured by the Federal
Deposit Insurance Corporation or any governmental agency.
________________________________________________________________
This proxy statement/prospectus is dated April 7, 2000
and was first mailed to shareholders on April 7, 2000.
THE PEOPLES BANK OF OXFORD
24 SOUTH THIRD STREET
OXFORD, PENNSYLVANIA 19363
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 9, 2000
We will hold the annual meeting of shareholders of The
Peoples Bank of Oxford in the Rose and Thistle Room, at Wyncote
Golf Club, Oxford, Pennsylvania 19363, on Tuesday, May 9, 2000
at 9:30 a.m. local time.
The annual meeting is for the following purposes which are
more completely described in the accompanying proxy
statement/prospectus:
1. The approval of the reorganization of Peoples Bank into
the holding company form of ownership by approving an
agreement of reorganization and merger, pursuant to
which Peoples Bank will become a wholly owned
subsidiary of a holding company, Peoples First, Inc.,
a newly formed Pennsylvania corporation, and each
outstanding share of common stock of Peoples Bank will
be converted into one share of common stock of the
holding company.
2. The election of eight directors of Peoples Bank.
3. The adjournment of the meeting, if necessary, to permit
further solicitation of proxies in the event there are
not sufficient votes at the time of the meeting to
constitute a quorum or to approve the holding company
reorganization.
4. Any other matters as may properly come before the
meeting or any adjournment thereof.
The board of directors of Peoples Bank has fixed the
close of business on March 27, 2000 as the record date for
determining shareholders entitled to notice of, and to vote at,
the annual meeting.
Your vote is important regardless of the number of shares
you own. Whether or not you plan to attend the meeting, we urge
you to complete, sign, date and return the enclosed proxy card
as soon as possible in the enclosed postage-paid envelope. This
will not prevent you from voting in person at the meeting but
will assure that your vote is counted if you are unable to
attend. If you are a shareholder whose shares are not
registered in your own name, you will need additional
documentation from your record holder in order to attend and
vote personally at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Carl R. Fretz, Vice Chairman of
the Board and Corporate Secretary
Oxford, Pennsylvania
April 7, 2000
TABLE OF CONTENTS
Page
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
MAY 9, 2000 . . . . . . . . . . . . . . . . . . . . . . . . .1
QUESTIONS AND ANSWERS REGARDING HOLDING COMPANY
REORGANIZATION. . . . . . . . . . . . . . . . . . . . . . . 5
THE MEETING . . . . . . . . . . . . . . . . . . . . . . . . .12
Date, Time and Place . . . . . . . . . . . . . . . . . . . .12
Matters to Be Considered at the Meeting. . . . . . . . . . .12
Record Date; Stock Entitled to Vote; Quorum . . . . . . . .12
Votes Required . . . . . . . . . . . . . . . . . . . . . . .13
Voting of Proxies . . . . . . . . . . . . . . . . . . . . .13
Revocability of Proxies. . . . . . . . . . . . . . . . . . .14
Solicitation of Proxies. . . . . . . . . . . . . . . . . . .14
Voting Securities and Principal Holders Thereof. . . . . . .16
PROPOSAL I - PROPOSED HOLDING COMPANY REORGANIZATION . . . . .16
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . .16
Reason for the Holding Company Reorganization. . . . . . . .17
Reorganization Agreement . . . . . . . . . . . . . . . . . .19
Effective Date . . . . . . . . . . . . . . . . . . . . . . .21
Exchange of Stock Certificates . . . . . . . . . . . . . . .21
Dissenters Rights. . . . . . . . . . . . . . . . . . . . . .22
General. . . . . . . . . . . . . . . . . . . . . . . . . .22
Notice of Intention to Dissent . . . . . . . . . . . . . .23
Notice to Demand Payment . . . . . . . . . . . . . . . . .23
Failure to Comply with notice to Demand Payment, etc. . . 23
Payment of Fair Value of Shares. . . . . . . . . . . . . .23
Estimate by Dissenting Shareholder of Fair Value of
Shares . . . . . . . . . . . . . . . . . . . . . . . . .24
Valuation Proceedings. . . . . . . . . . . . . . . . . . .24
Costs and Expenses . . . . . . . . . . . . . . . . . . . .25
Tax Consequences . . . . . . . . . . . . . . . . . . . . . .25
Consequences Under Federal Securities Laws . . . . . . . . .27
Conditions to the Holding Company Reorganization . . . . . .29
Regulatory Approvals . . . . . . . . . . . . . . . . . . . .30
Amendment, Termination or Waiver . . . . . . . . . . . . . .30
Comparison of Shareholders' Rights . . . . . . . . . . . . .31
Certain Anti-takeover Provisions . . . . . . . . . . . . . .36
Provisions of the Holding Company's Articles of
Incorporation and Bylaws . . . . . . . . . . . . . . . .37
Applicable Provisions of the Pennsylvania Business
Corporation Law . . . . . . . . . . . . . . . . . . . . 39
"Registered Corporation" Provisions. . . . . . . . . . . .41
Purpose and Takeover Defensive Effects of Charter
Provisions and Pennsylvania Law. . . . . . . . . . . . .42
Business of the Holding Company and Peoples Bank . . . . . .43
General. . . . . . . . . . . . . . . . . . . . . . . . . .43
Regulation . . . . . . . . . . . . . . . . . . . . . . . .44
Properties . . . . . . . . . . . . . . . . . . . . . . . .45
Legal Proceedings. . . . . . . . . . . . . . . . . . . . .45
Employees. . . . . . . . . . . . . . . . . . . . . . . . .46
Competition. . . . . . . . . . . . . . . . . . . . . . . .46
Management of Peoples First, Inc.. . . . . . . . . . . . .47
Regulatory matters . . . . . . . . . . . . . . . . . . . .49
Description of Holding Company Capital Stock . . . . . . .52
Holding Company Common Stock . . . . . . . . . . . . . . .52
Accounting Treatment . . . . . . . . . . . . . . . . . . . .55
Legal Opinion. . . . . . . . . . . . . . . . . . . . . . . .55
Recommendation of Board of Directors . . . . . . . . . . . .55
PROPOSAL II - ELECTION OF DIRECTORS. . . . . . . . . . . . . .56
Nominees for Election as Directors . . . . . . . . . . . . .56
General Information About the Board of Directors . . . . . .58
Executive Compensation . . . . . . . . . . . . . . . . . . .59
Employment Agreement . . . . . . . . . . . . . . . . . . . .61
Compensation Committee Interlocks and Insider Participation.62
Committee Report on Executive Compensation . . . . . . . . .63
Common Stock and Related Shareholder Matters . . . . . . . .64
Stock Performance Graph. . . . . . . . . . . . . . . . . . .65
Certain Indebtedness . . . . . . . . . . . . . . . . . . . .66
Certain Transactions . . . . . . . . . . . . . . . . . . . .66
Financial Statements . . . . . . . . . . . . . . . . . . . .66
Independent Auditors . . . . . . . . . . . . . . . . . . . .67
Shareholder Proposals. . . . . . . . . . . . . . . . . . . .67
Section 16 Reporting . . . . . . . . . . . . . . . . . . . .68
ADJOURNMENT PROPOSAL . . . . . . . . . . . . . . . . . . . . .68
OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . .69
Exhibit A - Agreement of Reorganization and Merger . . . A-1
Exhibit B - Articles of Incorporation of Peoples First, Inc..B-1
Exhibit C - Bylaws of Peoples First, Inc. . . . . . . . . . .C-1
Exhibit D - Excerpts from Pennsylvania Business Corporation
Law Regarding Dissenters Rights . . . . . . . . .D-1
________________________________________________________________
QUESTIONS AND ANSWERS REGARDING
THE HOLDING COMPANY REORGANIZATION
________________________________________________________________
THE FOLLOWING QUESTION AND ANSWER SECTION HIGHLIGHTS
SELECTED INFORMATION FROM THIS PROXY STATEMENT/PROSPECTUS AND
MAY NOT CONTAIN ALL OF THE INFORMATION THAT IS IMPORTANT TO YOU.
TO UNDERSTAND THE HOLDING COMPANY REORGANIZATION FULLY, WE URGE
YOU TO READ CAREFULLY THIS ENTIRE DOCUMENT, INCLUDING THE
ATTACHMENTS.
Why is the board proposing the holding company reorganization?
Your board of directors believes that the holding company
reorganization will provide Peoples Bank with greater financial
and corporate flexibility. With a holding company, we will have
more options for structuring acquisitions, particularly of other
financial institutions organized in a holding company structure.
In addition, the holding company structure will provide
flexibility to address opportunities that may become available
under the evolving laws governing financial institutions,
including the comprehensive banking legislation enacted in
November 1999.
Will the holding company reorganization change the business
of Peoples Bank?
No. The holding company reorganization will not change
the current business of Peoples Bank. Following the
reorganization, the principal activity of the new holding
company, Peoples First, Inc., will be owning and operating
Peoples Bank, which will continue to conduct its current
business from its current offices. The principal executive
offices of both Peoples Bank and the holding company will be
located at 24 South Third Street, Oxford, Pennsylvania 19363 and
their telephone number will be (610) 932-9294.
How will the holding company reorganization affect shareholders?
If shareholders approve the holding company
reorganization, you will receive one share of common stock of
the holding company for each share of common stock of Peoples
Bank which you currently own. Outstanding stock certificates
will no longer represent an interest in stock of Peoples Bank
but will instead represent an interest in stock of the holding
company.
As a result, you will no longer own stock directly in
Peoples Bank but will instead own stock in the holding company.
Your rights will be governed by the holding company's articles
of incorporation and bylaws and the Pennsylvania Business
Corporation Law rather than by Peoples Bank's articles of
incorporation and bylaws and the Pennsylvania Banking Code of
1965. For a detailed discussion of the differences in the
rights of shareholders, see the disclosure beginning on
page 29.
What is the vote required for approval of the holding company
reorganization?
The holding company reorganization must be approved by
at least two-thirds of Peoples Bank's outstanding shares. Your
board of directors has unanimously approved the holding company
reorganization and recommends that you vote for it as well.
Because the vote is based on the total number of shares
outstanding rather than the votes cast at the meeting, your
failure to vote has the same effect as a vote against the
holding company reorganization. As a result, your board of
directors recommends that you sign and return your proxy card at
your earliest convenience even if you currently plan to attend
the meeting. Directors and executive officers of Peoples Bank
currently own 591,494 shares of Peoples Bank's stock, or 19.74%
of the shares outstanding, and have indicated their intention to
vote for the holding company reorganization.
Is the holding company reorganization subject to any other
approvals?
Yes. The holding company reorganization must also be
approved by certain federal and state agencies that regulate
bank holding companies and state-chartered banks. In the case
of the holding company reorganization, these agencies are the
Federal Deposit Insurance Corporation and the Pennsylvania
Department of Banking. We have filed applications for these
approvals. We have also provided a required notice to the Board
of Governors of the Federal Reserve System.
Do shareholders have the right to dissent from the holding
company reorganization?
Yes. Pennsylvania law provides shareholders of Peoples
Bank with the right to dissent from the holding company
reorganization, and to demand and receive cash for the "fair
value" of their shares of stock instead of receiving holding
company common stock in the holding company reorganization. In
order to assert these dissenters rights, shareholders must:
- file a written notice of intent to dissent with the
Bank prior to the shareholder vote at the meeting;
- not vote in favor of the reorganization agreement;
- file a written demand for payment and deposit of the
certificates representing their shares as requested by
the notice to demand payment that will be sent by the
Bank; and
- comply with certain other statutory procedures set forth
in Pennsylvania law.
If you sign and return your proxy without voting instructions,
we will vote your proxy in favor of the holding company
reorganization and you will lose any dissenters rights that you
may have. We have included a copy of the sections of
Pennsylvania law dealing with dissenters rights to this proxy
statement/prospectus as Annex D.
If you do not follow the procedures required by
Pennsylvania law, you may lose your dissenters rights with
respect to the merger. We urge you to read carefully the
complete description of dissenters rights beginning on page 19
and Annex D to this proxy statement/prospectus.
We do not intend to complete the holding company
reorganization if shareholders seek dissenters rights with
respect to more than 10% of Peoples Bank's outstanding shares.
What are the tax consequences to shareholders?
We have received an opinion from our attorneys that
shareholders generally will not recognize gain or loss for
federal income tax purposes for the shares of holding company
common stock they receive in the holding company reorganization.
Our attorneys have issued a legal opinion to this effect, which
we have included as an exhibit to the registration statement
filed with the SEC for the shares to be issued in the holding
company reorganization. Shareholders should note that the
opinion of our attorneys is not binding on the Internal Revenue
Service or any state taxing authority. Shareholders who dissent
from the holding company reorganization will be taxed on cash
received for their shares.
Are there any risk factors that we should consider in the
holding company reorganization?
Certain provisions of the holding company's articles of
incorporation and bylaws may have the effect of deterring or
discouraging, among other things, a nonnegotiated tender or
exchange offer for the holding company's common stock, a proxy
contest for control of the holding company, the assumption of
control of the holding company by a holder of a large block of
the holding company's common stock, and the removal of incumbent
management.
These provisions:
- Require a supermajority vote of shares with at least 75%
of total voting power to approve mergers and similar
transactions with a person or entity holding stock with
more than 5% or more of the holding company's total
voting power if the transaction is not approved in
advance by 75% or more of the members of the board of
directors;
- Divide the holding company's board into three classes
with each class serving a staggered three-year term;
- Do not authorize cumulative voting in the election of
directors;
- Make available for issuance 10,000,000 shares of common
stock (as opposed to 5,000,000 shares of common stock
for Peoples Bank), which under certain circumstances
could be issued by the board without shareholder
approval and result in a dilution of the ownership
interests of shareholders;
- Require 60 to 90 days advance written notice of
nominations for the election of directors at meetings of
shareholders and the presentation of any shareholder
proposals at meetings of shareholders;
- Do not authorize shareholders of the holding company to
call special meetings of shareholders or to propose
amendments to the holding company's articles of
incorporation; and
- Require a supermajority vote of shareholders of the
holding company to amend the holding company's bylaws
and certain provisions of the holding company's articles
of incorporation.
In addition, certain provisions of Pennsylvania law that
will apply to the holding company following the holding company
reorganization may have similar effects. These provisions:
- Prohibit for five years, subject to certain exceptions,
a "business combination," which includes a merger or
consolidation of the corporation or a sale, lease or
exchange of assets, with a shareholder or group of
shareholders owning or controlling 20% of the
corporation's voting stock;
- Prohibit a person or group who or which exceeds certain
stock ownership thresholds (20%, 33-1/3%, and 50%) for
the first time from voting the "control shares" (i.e.,
the shares owned in excess of the applicable threshold)
unless voting rights are restored by a vote of
disinterested shareholders; and
- Require disgorgement to the corporation by any person or
group who or which has acquired or publicly disclosed an
intention to acquire 20% or more of a corporation's
voting stock of any profit realized from the sale of any
shares acquired and sold within specified time periods.
While your board of directors is not aware of any effort
that might be made to obtain control of Peoples Bank, the board
believes that it is appropriate to include these provisions to
protect the interests of the holding company and its
shareholders from non-negotiated takeover attempts which your
board of directors might conclude are not in the best interests
of the holding company or its shareholders. These provisions may
have the effect of discouraging a future takeover attempt which
is not approved by the board of directors but which you might
deem to be in your best interests or in which you might receive
a substantial premium for your shares over the current market
prices. As a result, shareholders who might desire to
participate in such a transaction may not have an opportunity to
do so. Such provisions will also make it more difficult to
remove the current board of directors or management of the
holding company. Approval of the holding company reorganization
will, in effect, constitute approval of these provisions by
shareholders.
Who will serve as management of the holding company?
The holding company reorganization will not result in a
change in management. The executive officers and board of
directors of the holding company will consist of essentially the
same persons who hold those positions with Peoples Bank. The
board of directors of the holding company will, however, be
divided into three classes with each class of directors serving
a three-year term.
What do I need to do now?
Just indicate on your proxy card how you want your shares
to be voted, then sign and mail it in the enclosed prepaid
return envelope as soon as possible, so that your shares may be
represented and voted at the meeting to be held on May 9, 2000.
If my shares are held in "street name" by my broker, will my
broker vote my shares for me?
Maybe. Your broker will vote your shares only if you
provide instructions on how to vote. You should follow the
directions provided by your broker. Without instructions, your
shares will not be voted on the reorganization agreement.
Can I change my vote after I have mailed my signed proxy card?
Yes. There are three ways for you to revoke your proxy and
change your vote. First, you may send a written notice to the
person to whom you submitted your proxy stating that you would
like to revoke your proxy. Second, you may complete and submit
a new proxy card with a later date. Third, you may vote in
person at the meeting. If you have instructed a broker to vote
your shares, you must follow directions received from your
broker to change your vote.
Should I send in my stock certificates now?
No. Shortly after the merger is completed, we will send
you written instructions for exchanging your stock certificates.
Whom should I call with questions or to obtain additional copies
of this proxy statement/prospectus?
You should contact:
The Peoples Bank of Oxford
24 South Third Street
Oxford, Pennsylvania 19363
Attention: Susan H. Reeves, Chief Financial Officer
Telephone: (610) 932-9294
THE MEETING
Date, Time and Place
Peoples Bank will hold the meeting at the Wyncote Golf
Club, Rose and Thistle Room, Oxford, Pennsylvania, at 9:30 a.m.
local time, on May 9, 2000.
Matters To Be Considered at the Meeting
At the meeting, holders of Peoples Bank common stock
will consider and vote upon proposals to:
- approve and adopt the reorganization agreement to form
the holding company;
- elect eight directors of Peoples Bank; and
- approve a proposal to adjourn the meeting if more time is
needed to solicit proxies.
A vote for approval of the reorganization agreement is a
vote for approval of the holding company formation. If the
holding company formation is completed, you will receive one
share of holding company common stock in exchange for each share
of Peoples Bank common stock that you hold.
Record Date; Stock Entitled to Vote; Quorum
Only holders of record of Peoples Bank common stock on
March 27, 2000 will receive notice of, and can vote at, the
meeting. On March 27, 2000, 2,996,290 shares of Peoples Bank
common stock were issued and outstanding and held by
approximately 745 holders of record.
A quorum requires the presence, in person or by proxy,
of shareholders entitled to cast at least a majority of the
votes which all shareholders of Peoples Bank are entitled to
cast on the record date.
We intend to count the following shares as present at the
meeting for the purpose of determining a quorum:
- shares of Peoples Bank common stock present in person at
the meeting but not voting;
- shares of Peoples Bank common stock represented by
proxies on which the shareholder has abstained on any
matter; and
- shares of Peoples Bank common stock represented by
proxies from a broker with no indication of how the
shares are to be voted.
Votes Required
Approval of the reorganization agreement and the holding
company formation requires the affirmative vote of two-thirds of
the outstanding shares of Peoples Bank common stock entitled to
vote at the meeting. Approval of the adjournment proposal
requires the affirmative vote of a majority of the votes cast in
person or by proxy at the meeting. Directors are elected by a
plurality of the votes cast at the meeting.
You have one vote for each share of Peoples Bank common
stock that you hold of record on each matter to be considered at
the meeting.
The directors and executive officers of Peoples Bank
have agreed to vote all shares of Peoples Bank common stock that
they own for approval and adoption of the reorganization
agreement. As of the record date for the meeting, directors and
executive officers of Peoples Bank and their affiliates
beneficially owned and were entitled to vote approximately
591,494 shares of Peoples Bank common stock, which represented
approximately 19.7% of the shares of Peoples Bank common stock
outstanding on the record date.
Voting of Proxies
We will vote shares represented by all properly executed
proxies received in time for the meeting in the manner specified
on each proxy. We will vote properly executed proxies that do
not contain voting instructions in favor of the reorganization
agreement and in favor of the Board's nominees for election as
directors.
If you abstain from voting on any proposal considered at
the meeting, we will not count the abstention as a vote "for" or
"against" the reorganization agreement for purposes of the
meeting. Under rules relating to how brokers vote shares held
in brokerage accounts, brokers who hold your shares in street
name cannot give a proxy to vote your shares on the
reorganization agreement or the adjournment proposal without
receiving specific instructions from you. We will not count
these broker non-votes as a vote "for" or "against" the
reorganization agreement or the adjournment proposal for
purposes of the meeting. As a result:
- because approval of the reorganization agreement and
the holding company formation requires the affir-
mative vote of two-thirds of all outstanding shares,
abstentions and broker non-votes will have the same
effect as a vote against reorganization agreement;
and
- because the adjournment proposal requires the
affirmative vote of a majority of the votes cast at
the meeting and because directors are elected by a
plurality of the votes cast, abstentions and broker
non-votes will not affect the vote on these matters.
Revocability of Proxies
If you grant a proxy, you may revoke your proxy at any
time until it is voted by:
- delivering a notice of revocation or delivering a
later dated proxy to Carl R. Fretz, Corporate
Secretary, The Peoples of Oxford, 24 South Third
Street, Oxford, Pennsylvania 19363;
- submitting a proxy card with a later date; or
- appearing at the meeting and voting in person.
Attendance at the meeting will not in and of itself revoke
a proxy that you submitted prior to the meeting.
Solicitation of Proxies
Peoples Bank will bear the cost of the solicitation of
proxies from its shareholders.
Peoples Bank will solicit proxies by mail. In addition,
the directors, officers and employees of Peoples Bank may
solicit proxies from shareholders by telephone or telegram, in
person or any other lawful means. Peoples Bank will make
arrangements with brokerage houses and other custodians,
nominees and fiduciaries for forwarding proxy solicitation
material to the beneficial owners of stock held of record by
those persons, and Peoples Bank will reimburse them for
reasonable out-of-pocket expenses.
You should not send in your stock certificates with your
proxy card. As described below under the caption "Exchange of
Stock Certificates" on page 20 you will receive shortly after
the holding company reorganization materials for exchanging
shares of Peoples Bank common stock for shares of holding
company common stock.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth, as of January 31, 2000,
certain information as to the common stock beneficially owned by
all persons owning more than 5% of the common stock of Peoples
Bank.
Common Stock
Beneficially Owned(1)
Amount and Percent of
Nature of Shares of
Name and Address Beneficial Common Stock
of Beneficial Owner Ownership Outstanding
George C. Mason 434,163(2) 14.49%
Elizabeth Mason Thun 271,359 9.06%
___________
(1) Based upon information furnished by the respective
individual and/or filings made pursuant to regulations of
the Federal Deposit Insurance Corporation.
Under these regulations, shares are deemed to be
beneficially owned by a person if he or she directly or
indirectly has or shares the power to vote or dispose of
the shares, whether or not he or she has any economic
interest in the shares. Unless otherwise indicated, the
named beneficial owner has sole voting and investment power
with respect to the shares.
(2) Includes 45,152 shares owned by his spouse, and 131,120
shares held in trust for children of which he is trustee.
Mr. Mason disclaims ownership of these shares.
PROPOSAL I -- PROPOSED HOLDING COMPANY REORGANIZATION
Summary
We are seeking your approval of an agreement of
reorganization and merger, dated as of February 15, 2000. The
reorganization agreement provides that Peoples Bank will become
a wholly owned subsidiary of Peoples First, Inc., a Pennsylvania
corporation recently formed by Peoples Bank for the purpose of
becoming a holding company for Peoples Bank.
Under the reorganization agreement, each outstanding
share of Peoples Bank common stock (other than shares as to
which dissenters rights are properly exercised) will convert
automatically into one share of holding company common stock,
and the former holders of Peoples Bank common stock will become
the holders of all of the outstanding shares of holding company
common stock. The holding company was incorporated on
January 28, 2000, and has no prior operating history. Following
the reorganization, Peoples Bank will continue its operations at
the same location, with the same management, and subject to all
the rights, obligations and liabilities of Peoples Bank existing
immediately prior to the reorganization.
Reasons For The Holding Company Reorganization
[C]Your board of directors believes that the formation of a
holding company will provide Peoples Bank with greater
flexibility in structuring acquisitions of banks and other
companies, allow greater diversification in activities and
expand the means by which capital can be raised. Various
provisions of the holding company's articles of incorporation
and bylaws and of Pennsylvania law will also reduce our
vulnerability to attempts to acquire control of our institution
against the board's wishes and help it to remain a locally owned
and oriented community bank.[/R]
Acquisition Flexibility. The holding company structure
can be used to facilitate acquisitions of other banks and
potentially allows the acquisition of a greater range of
organizations. As a state-chartered bank, Peoples Bank is
currently prohibited from having another bank as a subsidiary.
Consequently, any acquisition of another bank must be structured
as a direct merger of that bank with Peoples Bank in which one
of the parties will disappear as a separate entity. Any merger
must also be approved by two-thirds of outstanding shares. With
a holding company, an acquisition may be structured so that the
other bank is acquired as a separate subsidiary that can
continue to operate under its original name and under the
direction of a separate board of directors. The ability to
allow an acquired bank to operate with some degree of autonomy
may be an important factor in negotiating an acquisition and
allows the holding company to take advantage of the acquired
bank's name recognition and goodwill. In addition, an
acquisition of another bank by the holding company can be
structured so that approval of the holding company's
shareholders is not required or, if required, to reduce the
percentage vote required. As a result, the holding company
could avoid the expense of a shareholder meeting and can
negotiate acquisitions with greater certainty that the
transaction will be completed. Greater acquisition flexibility
will, however, also permit the holding company to enter into and
facilitate the completion of transactions that may result in a
dilution of voting power, book value or earnings per share or
provide for other terms which an individual shareholder might
consider disadvantageous.
Financing Flexibility. The holding company structure
will allow us to raise capital in ways that are not available to
Peoples Bank on a stand-alone basis. For example, the holding
company can raise funds through the issuance of debt or trust
preferred securities and invest the proceeds in its banking
subsidiaries in a manner that will qualify as Tier 1 capital.
In this way, capital can be increased at Peoples Bank level
without diluting the percentage ownership interest of current
shareholders. Although the holding company will be subject to
capital requirements that are similar to those applied to
Peoples Bank, bank holding companies are permitted to include a
broader range of instruments in capital. For example, bank
holding companies may include some cumulative preferred stock in
Tier 1 capital while preferred stock will only count as
regulatory capital for Peoples Bank if it is non-cumulative.
Diversification. Bank holding companies are authorized
to engage in a variety of non-banking activities that have been
determined to be closely related to banking under Peoples Bank
Holding Company Act of 1956. As a result, a bank holding
company is permitted to diversify into banking related
activities. Although Peoples Bank may establish operating
subsidiaries that engage in activities that are incidental or
part of the business of banking, the range of pre-approved
activities is currently less extensive than that permitted to
bank holding companies. Additionally, the Gramm-Leach-Bliley
Act of 1999, which significantly changed the landscape for
financial institutions and financial services integration in the
United States, authorizes a bank holding company to elect status
as a "financial holding company" and to conduct a broad array of
financial activities, some of which are or will be unavailable
to banks not organized in a holding company structure.
Insurance underwriting and merchant banking activities are
examples of activities which presently must be conducted through
subsidiaries of a holding company. Although there is no present
plan to engage in such activities at present, the board of
directors may under appropriate circumstances consider these
activities in the future. In addition, the Federal Reserve
Board may in the future authorize additional activities which
are financial in nature or complementary to a financial activity
and which must be conducted other than through a bank
subsidiary. The holding company structure will permit the board
of directors maximum flexibility to take advantage of
appropriate opportunities in the future regardless of the
requirements relating to holding company versus bank
subsidiary.
Corporate Flexibility. As a state-chartered bank, Peoples
Bank is chartered under and governed by the Pennsylvania Banking
Code which was enacted in 1965 and contains many of its original
provisions regarding the corporate governance of state banks.
The Pennsylvania Banking Code does not permit the same operating
flexibility for state banks as Pennsylvania's modern corporate
statute, which was completely revised in 1988, confers on
private corporations. As noted previously, the board of
directors of the holding company will be able to approve certain
acquisitions of other institutions without the need for
incurring the expense of holding a meeting of shareholders.
Also, the shareholder voting requirements for approval of
matters submitted for a vote are generally lower under
Pennsylvania's corporate statute, which will govern the holding
company's activities, then under the Banking Code. Finally, the
holding company structure will make it easier to repurchase
shares should the Board of Directors ever conclude that it would
be in the interests of shareholders and the holding company to
do so. By incorporating the holding company under
Pennsylvania's modern corporate statute, your board of directors
will have greater flexibility to conduct business.
Enhancement of Independence. Your board of directors
believes the formation of a holding company will help Peoples
Bank remain an independent, locally-owned community bank. The
holding company's articles of incorporation and bylaws and
certain provisions of the Pennsylvania Business Corporation Law
also contain provisions that can deter hostile acquisitions of
control. These provisions would not prevent a sale of the
holding company, but would make it difficult for an acquiror to
force a sale of the company without the support of the board of
directors.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE
REORGANIZATION AGREEMENT AND RECOMMENDS THAT YOU VOTE "FOR" THE
REORGANIZATION AGREEMENT.
Reorganization Agreement
The holding company reorganization will be accomplished
under the reorganization agreement, which is attached as Exhibit
A to this proxy statement/prospectus. The following discussion
is qualified in its entirety by reference to the reorganization
agreement which is incorporated into this proxy
statement/prospectus by reference. The reorganization agreement
was unanimously approved by Peoples Bank's board of directors on
February 15, 2000.
The holding company is a newly organized Pennsylvania
corporation formed by Peoples Bank solely for the purpose of
effecting the holding company reorganization. The holding
company has no prior operating history. The holding company,
Peoples Bank, and The Peoples Interim Bank of Oxford, a to-be-
formed interim state bank, are all parties to the reorganization
agreement.
The holding company reorganization will be accomplished by
the following steps:
-- the incorporation of the holding company under the
laws of the Commonwealth of Pennsylvania for the
purpose of becoming the sole shareholder of a newly
formed interim state bank, and subsequently becoming
the sole shareholder of Peoples Bank;
-- the formation of an interim state bank which will be
wholly owned by the holding company; and
-- the merger of Peoples Bank and the interim state
bank, with Peoples Bank as the surviving
corporation in the merger.
In the merger, all of the issued and outstanding shares of
Peoples Bank common stock (other than shares as to which
dissenters rights are properly exercised) will automatically be
converted by operation of law on a one-for-one basis into an
equal number of issued and outstanding shares of holding company
common stock.
After the holding company reorganization, the former
holders of Peoples Bank common stock will be the holders of all
of the outstanding shares of holding company common stock.
Because the holding company will hold all of the issued and
outstanding voting stock of Peoples Bank, Peoples Bank may be
referred to in this proxy statement/prospectus as a "wholly
owned" subsidiary of the holding company following the holding
company reorganization.
After the holding company reorganization, Peoples Bank
will make a capital distribution to the holding company to allow
it to pay for the expenses incurred by the holding company in
the reorganization. Future capitalization of the holding
company will depend primarily upon dividends declared by Peoples
Bank or the raising of additional capital by the holding company
through a future issuance of securities or debt or through other
means. The board of directors of the holding company has no
present plans or intentions with respect to any future issuance
of securities or debt for capital raising purposes.
After the holding company reorganization, Peoples Bank
will continue its existing business and operations as a wholly
owned subsidiary of the holding company. The consolidated
capitalization, assets, liabilities, income and financial
statements of the holding company immediately following the
reorganization will be substantially the same as those of
Peoples Bank immediately prior to the reorganization. The
articles of incorporation and bylaws of Peoples Bank will
continue in effect, and will not be initially affected in any
manner by the reorganization. The corporate existence of Peoples
Bank will continue unaffected and unimpaired by the holding
company reorganization.
Effective Date
The "effective date" of the holding company
reorganization will be the date specified in the certificate to
be issued by the Pennsylvania Department of Banking on or prior
to the Effective Date. Peoples Bank and the interim bank will
file articles of merger with the Pennsylvania Department of
Banking (which, upon receipt of approval of the FDIC, will
forward to the Pennsylvania Department of State). The articles
of merger will set forth the effective date, which the parties
presently expect will occur shortly after the meeting date. We
do not anticipate any significant delay in obtaining required
regulatory approvals or the certificate of merger.
Exchange Of Stock Certificates
The outstanding stock certificates that presently
represent shares of Peoples Bank common stock will be deemed
automatically to represent the same number of shares of holding
company common stock. You will not be required to immediately
exchange your present stock certificates (bearing the name
"Peoples Bank of Oxford") for new stock certificates (bearing
the name "Peoples First, Inc.").
Upon completion of the holding company reorganization,
the holding company will mail you a letter of transmittal and
instructions related to the exchange of your certificates
representing shares of Peoples Bank common stock for
certificates representing the number of shares of holding
company common stock into which your Peoples Bank common stock
has been converted as a result of the reorganization.
YOU SHOULD NOT SEND IN YOUR CERTIFICATES UNTIL WE NOTIFY
YOU TO DO SO.
Dissenters Rights
General
Under Pennsylvania law, you have the right to dissent
from the holding company reorganization and to obtain payment of
the "fair value" of your shares of Peoples Bank common stock in
the event we complete the holding company reorganization.
If you are contemplating exercising your right to dissent,
we urge you to read carefully the provisions of Subchapter D of
Chapter 15 of the Pennsylvania Business Corporation Law of 1988,
which is attached to this proxy statement/prospectus as Annex D.
A discussion of the provisions of the statute is included here.
The discussion describes the steps that you must take if you
want to exercise your right to dissent. You should read this
summary and the full text of the law.
Send any written notice or demand required concerning your
exercise of dissenters rights to Carl R. Fretz, Corporate
Secretary, The Peoples Bank of Oxford, 24 South Third Street,
Oxford, Pennsylvania 19363.
The term "fair value" means the value of a share of common
stock of Peoples Bank immediately before the day of the holding
company reorganization taking into account all relevant factors,
but excluding any appreciation or depreciation in anticipation
of the reorganization.
Notice of Intention to Dissent
If you wish to dissent, you must:
-- prior to the vote of shareholders on the
reorganization agreement at the meeting, file a
written notice of intention to demand payment of the
fair value of your shares of Peoples Bank common
stock if the holding company reorganization is
completed;
-- make no changes in your beneficial ownership of
Peoples Bank common stock from the date you give
notice through the day of the merger; and
-- not vote your Peoples Bank common stock for approval
of the merger agreement.
Neither a proxy nor a vote against approval of the
reorganization agreement is the necessary written notice of
intention to dissent.
Notice to Demand Payment
If the merger agreement is approved by the required vote
of shareholders, we will mail a notice to all dissenters who
gave due notice of intention to demand payment and who did not
vote for approval of the reorganization agreement. The notice
will state where and when you must deliver a written demand for
payment and where you must deposit certificates for Peoples Bank
common stock in order to obtain payment. The notice will
include a form for demanding payment and a copy of the law. The
time set for receipt of the demand for payment and deposit of
stock certificates will be not less than 30 days from the date
of mailing of the notice.
Failure to Comply with Notice to Demand Payment, etc.
You must take each step in the indicated order and in
strict compliance with the statute to keep your dissenters
rights. If you fail to follow the steps, you will lose the
right to dissent and you will receive one share of holding
company common stock for each share of Peoples Bank common stock
that you hold.
Payment of Fair Value of Shares
Promptly after the holding company reorganization, or
upon timely receipt of demand for payment if the reorganization
already has taken place, we will send dissenting shareholders,
who have deposited their stock certificates, the amount that we
estimate to be the fair value of Peoples Bank common stock. The
remittance or notice will be accompanied by:
-- a closing balance sheet and statement of income of
Peoples Bank 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;
-- a statement of our estimate of the fair value of
Peoples Bank common stock; and
-- a notice of the right of the dissenting shareholder
to demand supplemental payment, accompanied by a
copy of the law.
Estimate by Dissenting Shareholder of Fair Value of Shares
If a dissenting shareholder believes that the amount
stated or remitted is less than the fair value of Peoples Bank
common stock, the dissenting shareholder may send an estimate of
the fair value of Peoples Bank common stock. If Peoples Bank
remits payment of estimated value of a dissenting shareholder's
Bank stock and the dissenting shareholder does not file his or
her own estimate within 30 days after the mailing by Peoples
Bank of its remittance, the dissenting shareholder will be
entitled to no more than the amount remitted by Peoples
Bank.
Valuation Proceedings
If any demands for payment remain unsettled within 60 days
after the latest to occur of:
-- the holding company reorganization;
-- timely receipt of any demands for payment; or
-- timely receipt of any estimates by dissenters of the
fair value,
then, Peoples Bank may file an application, in the Court of
Common Pleas of Chester County, requesting that the court
determine the fair value of Peoples Bank common stock. If this
happens, all dissenting shareholders, no matter where they
reside, whose demands have not been settled, will become parties
to the proceeding. In addition, a copy of the application will
be delivered to each dissenting shareholder.
If Peoples Bank were to fail to file the application,
then any dissenting shareholder, on behalf of all dissenting
shareholders who have made a demand and who have not settled
their claim against Peoples Bank, may file an application in the
name of Peoples Bank at any time within the 30-day period after
the expiration of the 60-day period and request that the Chester
County Court determine the fair value of the shares.
The fair value determined by the Chester County Court
may, but need not, equal the dissenting shareholder's estimates
of fair value. If no dissenter files an application, then each
dissenting shareholder entitled to do so shall be paid Peoples
Bank's estimates of the fair value of Peoples Bank common stock
and no more, and may bring an action to recover any amount not
previously remitted, plus interest at a rate the Chester County
Court finds fair and equitable.
Costs and Expenses
The costs and expenses of any valuation proceedings in the
Chester County Court, including the reasonable compensation and
expenses of any appraiser appointed by the Court to recommend a
decision on the issue of fair value, will be determined by the
Court and assessed against Peoples except that any part of the
costs and expenses may be apportioned and assessed by the Court
against all or any of the dissenting shareholders who are
parties and whose action in demanding supplemental payment the
Court finds to be dilatory, obdurate, arbitrary, vexatious or in
bad faith.
The discussion in this section 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, which provisions are reproduced and set forth
in full in Exhibit D to this proxy statement/prospectus. You
should read Exhibit D carefully since if you fail to follow the
procedures set forth in Subchapter D of Chapter 15 of
Pennsylvania Business Corporation Law, regarding dissenters
rights, you will waive your appraisal rights. You may wish to
consult independent legal counsel before exercising dissenters
rights.
Tax Consequences
Peoples Bank expects that, for tax purposes, the holding
company reorganization will be treated as a tax-free
reorganization and that you will not recognize any gain or loss
if you receive holding company common stock in the
reorganization solely in exchange for your shares of Peoples
Bank common stock. The Internal Revenue Service has not been
asked to rule upon the tax consequences of the reorganization.
Instead, Peoples Bank will rely upon the opinion of Stevens &
Lee, P.C., its counsel, as to certain federal income tax
consequences of the holding company reorganization to the
Peoples Bank shareholders. This tax opinion is based upon the
Internal Revenue Code of 1986, as amended, tax regulations now
in effect or proposed, current administrative rulings and
practice and judicial authority, all of which are subject to
change and any change may be made with retroactive effect.
Unlike private letter rulings received from the IRS, an opinion
does not bind the IRS and there can be no assurance that the IRS
will not take a position contrary to the positions reflected in
the opinion, or that the opinion will be upheld by the courts if
challenged by the IRS.
Based upon the opinion of Stevens & Lee, P.C., which is
based upon various representations and subject to various
assumptions and qualifications described below, the following
federal income tax consequences to Peoples Bank's shareholders
will result from the reorganization.
(1) The merger of the interim state bank with and into
Peoples Bank will constitute a reorganization within
the meaning of Section 368(a) of the Internal Revenue
Code.
(2) You will not recognize any gain or loss upon your
exchange of Peoples Bank common stock solely for
shares of holding company common stock.
(3) Your aggregate basis in your shares of holding company
common stock received pursuant to the reorganization
will be equal to the aggregate basis of your shares of
Peoples Bank common stock surrendered in exchange
therefor.
(4) The holding period of your shares of holding company
common stock received pursuant to the reorganization
will include the period during which the shares of
Peoples Bank common stock surrendered in exchange
therefor were held by you, provided that the
Peoples Bank common stock is a capital asset in your
hands on the date of the reorganization.
The opinion of Stevens & Lee, P.C., is based in part
upon, and subject to the continuing validity in all material
respects through the date of the reorganization to, various
representations of Peoples Bank and upon certain assumptions and
qualifications, including that the holding company
reorganization is completed in the manner and according to the
terms provided in the merger agreement. For instance, the
opinion assumes, among other things, the accuracy of the facts
regarding the reorganization as described in this proxy
statement/prospectus, including that only voting stock of the
holding company (i.e., the holding company common stock) will be
used in the reorganization, that Peoples Bank will continue its
historic business operations following the reorganization, and
that there is no plan or intention by the holding company to
liquidate Peoples Bank following the reorganization. In
addition, the opinion is qualified by reference to the
statutory, judicial and administrative tax authorities then in
effect, the subsequent change of which may have retroactive
effect or render the opinion invalid.
The federal income tax discussion set forth above
addresses the material federal income tax consequences.
However, this discussion does not address all aspects of federal
income taxation which may be relevant to you if you are entitled
to special treatment under the Internal Revenue Code, such as
trusts, individual retirement accounts, other employee benefit
plans, exempt organizations, insurance companies, and
shareholders who are not citizens or residents of the United
States. Due to the individual nature of tax consequences, you
are urged to consult your own tax and financial advisor as to
the effect of the federal income tax consequences on your own
facts and circumstances and also as to any state, local, foreign
or other tax consequences arising out of the holding company
reorganization.
Cash payments made to shareholders who exercise their
right to dissent to the holding company reorganization will be
subject to a 31% backup withholding tax under federal income tax
law unless certain requirements are met. Generally, Peoples
Bank will be required to deduct and withhold the tax if:
(1) the shareholder fails to furnish a taxpayer identification
number to Peoples Bank or fails to certify under penalty of
perjury that his or her taxpayer identification number is
correct; (2) the IRS notifies Peoples Bank that the taxpayer
identification number furnished by the shareholder is incorrect;
or (3) the IRS notifies Peoples Bank that the shareholder has
failed to report interest, dividends or original issue discount
in the past. Any amounts withheld by Peoples Bank in collection
of the backup withholding tax will reduce the federal income tax
liability of the shareholder from whom such tax was withheld.
The TIN of an individual shareholder is that shareholder's
Social Security number.
Consequences under Federal Securities Laws
The holding company has filed with the Securities and
Exchange Commission a registration statement under the
Securities Act for the registration of the holding company
common stock to be issued and exchanged pursuant to the Plan of
Reorganization. This proxy statement and the accompanying
notice of annual meeting constitute the prospectus of the
holding company filed as part of such registration statement.
Upon completion of the holding company reorganization, the
holding company will be required to comply with the periodic
reporting requirements under the Securities Exchange Act of 1934
for as long as it has at least 300 shareholders. Peoples Bank is
presently subject to these reporting requirements under the
Exchange Act, but files with the FDIC not the SEC. The holding
company will also be subject to the general anti-fraud
provisions of the federal securities laws after the
reorganization.
Filings made by Peoples Bank with the FDIC are available
from the FDIC's Registration, Disclosure and Securities
Operations Unit, FDIC, Room F-6043, 550 17th Street NW,
Washington DC 20549 Attention: Marlin Fields (Telephone: (202)
998-8913; Facsimile: (202) 898-3909. Filings made by the
holding company after the reorganization will be available at
the SEC's public reference rooms at 450 Fifth Street NW,
Washington, DC 20549 and at the SEC's regional offices in New
York (7 World Trade Center, Suite 1300, New York, New York
10048) and Chicago (500 West Madison Street, Suite 1400,
Chicago, Illinois 60661). The holding company's filings will
also be available on the SEC's internet site at
http:\\www.sec.gov.
The registration under the Securities Act of shares of
holding company common stock to be issued in connection with the
reorganization does not cover the resale of such shares. The
holding company common stock acquired by persons who are not
affiliates of the holding company or Peoples Bank may be resold
without registration. Shares received by affiliates of Peoples
Bank will be subject to the resale restrictions of Rule 145
under the Securities Act, which are substantially the same as
the restrictions of Rule 144 discussed below. For purposes of
these Rules, an "affiliate" of an issuer is any person that
directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with,
such issuer. The Rule 145 restrictions generally terminate
after one year if the holding company continues to comply with
the reporting requirements under the Securities Exchange Act of
1934, but any affiliate of Peoples Bank who becomes an affiliate
of the holding company will continue to be subject to the
restrictions on sales by affiliates under Rule 144.
If the holding company meets the current public
information requirements of Rule 144 under the Securities Act,
each affiliate of Peoples Bank who complies with the other
conditions of Rule 144, including those that require the
affiliate sales to be aggregated with those of certain other
persons, would be able to sell in the public market, without
registration, in any three-month period, a number of shares not
to exceed the greater of:
- 1.0% of the outstanding shares of the holding company,
or
- the average weekly volume of trading in such shares
during the preceding four calendar weeks.
Provision may be made in the future by the holding company to
permit affiliates to have their shares registered for sale under
the Securities Act under certain circumstances.
Conditions to the Holding Company Reorganization
The reorganization agreement sets forth a number of
conditions which must be met before the reorganization will be
consummated, including, among others:
- the approval of the reorganization agreement by the
holders of two-thirds of the outstanding shares of
Peoples Bank common stock;
- less than 10% of the outstanding shares of Bank common
stock shall have exercised dissenters rights in
connection with the reorganization;
- the receipt of an opinion of counsel that the
reorganization will be treated as a non-taxable
transaction under the Internal Revenue Code;
- the approval of the reorganization by the Federal
Deposit Insurance Corporation and the Pennsylvania
Department of Banking and the receipt of all approvals
from any other governmental agencies which may be
required for completion of the holding company
reorganization; and
- registration of the shares of holding company common
stock to be issued in the reorganization under the
Securities Act, to the extent required by applicable
law, and the compliance by the holding company with all
applicable state securities laws relating to the
issuance of the holding company common stock.
Regulatory Approvals
Applications to charter the interim state bank and for
approval of the reorganization of Peoples Bank and the interim
state bank have been filed with the Pennsylvania Department of
Banking and the Federal Deposit Insurance Corporation. The
holding company has also filed a notice with the Federal Reserve
Board for permission to become a bank holding company.
In general, the regulators may disapprove this
transaction if the reorganization of Peoples 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, we cannot complete the reorganization for
15 days from the date of the later approval by the Pennsylvania
Department of Banking or the Federal Deposit Insurance
Corporation 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 completion may occur may be
extended. The reorganization of Peoples Bank into a one-bank
holding company cannot proceed in the absence of requisite
regulatory approvals. The approval of the Pennsylvania
Department of Banking, the Federal Deposit Insurance Corporation
and Federal Reserve Board reflect only the 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. You should not interpret regulatory
approval as an opinion by the Pennsylvania Department of
Banking, the Federal Deposit Insurance Corporation or the
Federal Reserve Board that the reorganization is favorable to
shareholders. NEITHER THE PENNSYLVANIA DEPARTMENT OF BANKING NOR
THE FEDERAL DEPOSIT INSURANCE CORPORATION NOR ANY OTHER AGENCY
APPROVAL IS AN ENDORSEMENT OR RECOMMENDATION OF THE HOLDING
COMPANY REORGANIZATION.
There can be no assurance that the Pennsylvania Department
of Banking or the Federal Deposit Insurance Corporation will
approve the reorganization, and, if approvals are granted, there
can be no assurance as to the grant date of such approvals.
Amendment, Termination Or Waiver
We may amend or terminate the reorganization agreement
if we determine for any reason that such amendment or
termination is advisable. Such amendment or termination may
occur at any time prior to the effective date of the
reorganization, whether before or after shareholder approval of
the merger agreement, by the mutual consent in writing of the
boards of directors of Peoples Bank, the interim bank and the
holding company or by your board of directors only if the
reorganization would not be in the best interests of Peoples
Bank, its employees, depositors, or shareholders. Additionally,
any of the terms or conditions of the reorganization agreement
may be waived by the party which is entitled to the benefit of
such terms and conditions.
Comparison Of Shareholders' Rights
As a result of the proposed reorganization, you will
become a shareholder in the holding company and your rights in
the future will be governed by the Pennsylvania Business
Corporation Law of 1988. As a shareholder of Peoples Bank, your
rights are now governed by the Pennsylvania Banking Code of 1965
and the regulations of the Pennsylvania Department of Banking.
Another result is that the articles of incorporation and bylaws
of the holding company differ in several aspects from those of
Peoples Bank. The articles of incorporation and bylaws of the
holding company are attached to this proxy statement/prospectus
as Exhibits B and C. You should review them for more detailed
information.
The following table compares your rights as a
shareholder of Peoples Bank with your rights as a shareholder of
the holding company. This table is qualified by the more
detailed information appearing elsewhere in this proxy
statement/ prospectus and in the attached exhibits and is not
intended to be an exhaustive comparison.
CAPITAL STOCK PEOPLES BANK THE HOLDING COMPANY
(a) COMMON STOCK Authorized Authorized
5,000,000 shares, 10,000,000 shares,
$1.00 par value; $1.00 par value;
2,996,290 shares 2,996,290 shares
outstanding. of common stock
expected to be
outstanding immed-
iately following the
reorganization.
(b) PREFERRED STOCK None authorized or None authorized or
outstanding. Any outstanding. Any
issuance of issuance of
preferred stock preferred stock
would require an would require an
amendment to amendment to the
the articles of articles of
incorporation incorporation
approved by the approved by the
shareholders. shareholders.
(c) VOTING RIGHTS One vote per share One vote per share
without cumulative without cumulative
voting in elections voting in elections
of directors. of directors.
(d) ASSESSABILITY Nonassessable. Nonassessable.
OF SHARES
(e) PREEMPTIVE None. None.
RIGHTS
(f) DIVIDENDS As declared by the As declared by the
board of directors board of directors;
out of accumulated Pennsylvania law
net earnings. permits payment of
dividends if, after
giving effect to the
dividend, the hold-
ing company is able
to pay its debts as
they come due in the
usual course of
business and its
assets exceed its
liabilities.
Peoples Bank
dividend restric-
tions apply indir-
ectly to the holding
company as cash
available for
dividend distribu-
tions will initially
come from dividends
paid to the holding
company by Peoples
Bank. Federal
Reserve Board policy
states that a bank
holding company
should pay cash
dividends only out
of income over
the past year and
only if prospective
earnings retention
is consistent with
the organization's
expected future
needs and financial
condition. In
addition, the
holding company may
not pay a dividend
if: (1) after
giving effect to the
dividend, the
holding company
would be insolvent
or (2) the dividend
exceeds the surplus
of the holding
company.
(g) REPURCHASE OF Cannot repurchase Stock can
CAPITAL STOCK or retire any part repurchased without
of its stock without approval if, after
regulatory approval. giving effect to the
purchase, the hold-
ing company is able
to pay its debts as
they become due in
the usual course of
business and its
assets exceed its
liabilities. Per-
mitted under Federal
Reserve Board
regulations with no
prior approval
required for well-
capitalized, well-
managed holding
companies. In all
other cases, no more
than ten percent of
the outstanding
shares of holding
company common stock
may be repurchased
in any 12-month
period without prior
regulatory
approval.
SHAREHOLDER ACTION
(a) MERGERS, Approval by vote of Approval by a vote
CONSOLIDATIONS, at least 66-2/3% of of at least 75% of
LIQUIDATIONS, outstanding shares. outstanding shares
SALE OF SUB- required for certain
STANTIALLY business combina-
ALL ASSETS tions with a 5% or
greater shareholder,
unless approved in
advance by 75% or
more of the direc-
tors in which case
approval requires a
vote of at least a
majority of shares
vested at the
meeting considering
the proposal.
Mergers and consoli-
dations which will
result in no change
to articles of
incorporation and in
which shareholders
will continue to
own at least a
majority of out-
standing shares do
not require share-
holder approval.
(b) CALLING SPECIAL Upon request of a Upon request of a
SHAREHOLDER majority of the majority of the
MEETINGS board of directors, board of directors,
the Chairman of the the Chairman of the
Board, the President, Board, or the
or by shareholders President. Share-
owning not less holders are not
than one-third of entitled to call
outstanding shares. special meetings of
shareholders.
(c) AUTHORIZATION Approval by a vote Approval by a vote
OF ADDITIONAL of at least a of at least a
SHARES majority of out- majority of shares
standing shares. voted at the meeting
considering the
proposal.
(d) AMENDMENT OF Approval by a vote Approval by a vote
ARTICLES OF of at least a of at least a
INCORPORATION majority of out- majority of out-
(OTHER THAN FOR standing shares. standing shares;
PURPOSES STATED Shareholders owning however, certain
ABOVE) not less than 10% articles dealing
of outstanding with cumulative
shares can voting, classified
petition board to board of directors,
propose amendments preemptive rights,
to articles of fundamental trans-
incorporation. actions, and amend-
ment of the bylaws
and articles of
incorporation
require approval
either by 75% of
outstanding shares
or 75% of the
Directors plus a
majority of
outstanding shares.
Shareholders cannot
propose amendments
to articles of
incorporation.
(e) AMENDMENT OF May be amended by a May only be amended
BYLAWS majority vote of the by a majority vote
shareholders or by a of the board of
majority vote of the directors or a
board of directors. 66-2/3% vote of the
outstanding shares;
requires 75% vote of
directors or the
vote of 75% of
outstanding shares
if the amendment
decreases indemnifi-
cation rights or
increases directors'
exposure to
liability.
(f) NOTICE OF No prior notice Written notice must
SHAREHOLDER required. be made not more
PROPOSALS FOR than 90 and not less
CONSIDERATION than 60 days prior
AT SHAREHOLDER to the meeting.
MEETINGS
BOARD OF DIRECTORS
(a) TERM OF All directors Directors have
DIRECTORS elected annually. staggered three-
year terms with
one-third of the
board standing for
election each year.
(b) REMOVAL OF Directors can be Directors cannot be
DIRECTORS removed with or removed without
without cause by cause.
a vote of a
majority of
outstanding shares.
(c) NOTICE OF Must be delivered Must be made in
SHAREHOLDER in writing at least writing, together
NOMINATIONS 15 days before the with specified
meeting at which information set
directors will be forth in the Bylaws,
elected. not more than 90
and not less than
60 days prior to the
meeting.
Certain Anti-Takeover Provisions
The following discussion is a general summary of the
provisions of the articles of incorporation and bylaws of the
holding company and certain other provisions of Pennsylvania law
which may be deemed to have an anti-takeover effect. The
description of these provisions is necessarily general and you
should refer, in each case, to the Articles of Incorporation and
Bylaws of the holding company which are attached as Exhibits B
and C and incorporated into this proxy statement/prospectus by
reference.
While your board of directors is not aware of any effort
that might be made to obtain control of Peoples Bank, the board
of directors believes that it is appropriate to include certain
provisions as part of the holding company's articles of
incorporation and bylaws to protect the interests of the holding
company and its shareholders from non-negotiated takeover
attempts which your board of directors might conclude are not in
the best interests of the holding company or its shareholders.
These provisions may have the effect of discouraging a future
takeover attempt which is not approved by the board of directors
but which you might deem to be in your best interests or in
which you might receive a substantial premium for your shares
over the current market prices. As a result, shareholders who
might desire to participate in such a transaction may not have
an opportunity to do so. Such provisions will also make it more
difficult to remove the current board of directors or management
of the holding company. Because of the possible adverse effect
this provisions may have on Peoples Bank's shareholders, such
discussion and the articles of incorporation and bylaws
themselves should be read carefully. Approval of the holding
company reorganization will, in effect, constitute approval of
these provisions by shareholders.
Provisions of the Holding Company's Articles of
Incorporation and Bylaws
The following summarizes certain provisions of the holding
company's articles of incorporation and bylaws relating to
corporate governance. The description is necessarily general
and qualified by reference to the articles of incorporation and
bylaws attached as Annex B and Annex C to this proxy
statement/prospectus.
Election of Directors. The holding company's articles of
incorporation provide that the board of directors of the holding
company will be divided into three staggered classes, with
directors in each class elected for three-year terms. As a
result of this provision, it would take two annual elections to
replace a majority of the holding company's board. The articles
of incorporation also provide that any vacancy occurring in the
board of directors, including a vacancy created by an increase
in the number of directors, will be filled by the board of
director and any director so chosen shall serve until the annual
meeting at which the other members of his class must stand for
election. Finally, the bylaws impose certain notice and
information requirements in connection with the nomination by
shareholders of candidates for election to the board of
directors or the proposal by shareholders of business to be
acted upon at an annual meeting of shareholders.
Absence of Cumulative Voting. The holding company's
articles of incorporation, as do the articles of incorporation
of Peoples Bank, provide that shareholders may not cumulate
their votes in elections of directors. Cumulative voting would
permit a shareholder to multiply the number of shares owned by
the shareholder by the number of directors to be elected and
then to cast the total numbers of resulting votes for the
directors up for election in whatever manner the shareholder
deems appropriate. With cumulative voting it is mathematically
possible at some share ownership level (depending on the number
of directors to be elected and the number of shares voted at the
meeting) for a shareholder to be assured that the shareholder
can elect at least one director. Without cumulative voting, a
shareholder cannot be assured of the ability to elect a director
unless the shareholder owns at least a majority of the
outstanding shares.
Procedures for Certain Business Combinations. The articles
of incorporation require the affirmative vote of at least 75% of
the outstanding shares of the holding company entitled to vote
in the election of directors in order for the holding company to
engage in or enter into certain business combinations with any
person, corporation, institution or entity that directly or
indirectly owns 5% of the voting stock of the holding company.
These supermajority voting provisions do not apply if proposed
transaction has been approved in advance by 75% or more of the
members of holding company's board of directors.
Amendments to Articles of Incorporation. Amendments to the
holding company's articles of incorporation must be approved by
the holding company's board of directors and also by a majority
of the outstanding shares of the holding company's voting stock,
except that approval by at least 75% of the outstanding voting
stock or at least a majority of the outstanding voting stock
plus the affirmative vote of 75% of the members of the board of
directors is generally required for amendments to provisions
relating to: (1) cumulative voting in the election of
directors; (2) number, classification and election of directors;
(3) pre-emptive rights; (4) amendment of Bylaws relating to
limitations on directors' liabilities and the indemnification of
directors and officers; (5) approval of business combinations;
and (6) amendments to provisions relating to the foregoing in
the Articles of Incorporation).
Amendments to Bylaws. The Bylaws may only be amended by a
majority vote of the board of directors subject always to the
power of the shareholders to change such action by an
affirmative vote of at least 66-2/3% of the votes shareholders
are entitled to cast except that the provisions relating to
director liability and indemnification rights require either a
75% vote by the members of the board of directors or the vote of
75% of outstanding shares.
Applicable Provisions of the Pennsylvania Business
Corporation Law
The following summarizes certain provisions of Pennsylvania
law that will apply to the holding company following the holding
company reorganization.
Removal of Directors. Pennsylvania law provides that a
director of a board of directors classified in respect to the
term of office an only be removed for cause. The holding
company's board of directors will be classified into three
classes with each class serving three-year terms.
Restrictions on Call of Special Meetings. Under
Pennsylvania law, shareholders of a registered corporation, such
as the holding company, are not entitled to call a special
meeting of shareholders unless the articles of incorporation
provide otherwise. The holding company's articles of
incorporation do not grant shareholders the right to call
special meetings of shareholders.
Restrictions on Shareholder Proposals to Amend Articles of
Incorporation. Under Pennsylvania law, shareholders of a
registered corporation, such as the holding company, are not
entitled to propose amendments to the corporation's articles of
incorporation unless the articles of incorporation provide
otherwise. The holding company's articles of incorporation do
not grant shareholders the right to propose amendments to the
articles of incorporation.
Director Fiduciary Duty. Pennsylvania law as it relates to
the statutory duties and responsibilities of directors provides:
-- that directors can consider a number of the factors
and groups (including shareholders) in determining
whether a certain action is in the best interests of
the corporation;
-- that directors need not consider the interests of
any particular group as dominant or controlling;
-- directors, in order to satisfy the presumption that
they have acted in the best interests of the
corporation, need not satisfy any greater obligation
or higher burden of proof for actions relating to an
acquisition or potential acquisition of control;
-- that actions relating to acquisitions of control that
are approved by a majority of "disinterested
directors" are presumed to satisfy the directors'
standard, unless it is proven by clear and
convincing evidence that the directors did not assent
to such action in good faith after reasonable
investigation; and
-- that the fiduciary duty of directors is solely to the
corporation and may be enforced by the corporation or
by a shareholder in a derivative action, but not by a
shareholder directly.
Pennsylvania law also explicitly provides that the
fiduciary duty of directors does not require directors to:
-- redeem any rights under, or to modify or render
inapplicable, any shareholder rights plan;
-- render inapplicable or make determinations under,
provisions of the Pennsylvania Business Corporation
Law of 1988, relating to control transactions,
business combinations, control-share acquisitions
or disgorgement by certain controlling shareholders
following attempts to acquire control; or
-- act as the board of directors, a committee of the
board or an individual director solely because of the
effect such action might have on an acquisition or
potential or proposed acquisition of control of the
corporation or the consideration that might be
offered or paid to shareholders in such an
acquisition.
One of the effects of these provisions may be to make it
more difficult for a shareholder to successfully challenge the
actions of the holding company's board of directors in a
potential change in control context. Pennsylvania case law
appears to grant directors wide latitude to reject or refuse to
consider potential or proposed acquisitions of the corporation.
"Registered Corporation" Provisions.
Chapter 25 of the Pennsylvania Business Corporation Law
contains certain "anti-takeover" provisions which apply to a
"registered corporation," unless the registered corporation
elects not to be governed by such provisions. The holding
company will be a "registered corporation" within the meaning of
Chapter 25 of the Pennsylvania Business Corporation Law because
the common stock of the holding company is entitled to vote
generally in the election of directors and will be registered
under the Securities Exchange Act of 1934. The relevant
provisions are contained in Subchapters 25E through 25J of the
Pennsylvania Business Corporation Law.
Subchapter 25E of the Pennsylvania Business Corporation Law
(relating to control transactions) provides that if any person
or group acquires 20% or more of the voting power of a covered
corporation, the remaining shareholders may demand from such
person or group the fair value of their shares, including a
proportionate amount of any control premium.
Subchapter 25F of the Pennsylvania Business Corporation Law
(relating to business combinations) delays for five years and
imposes conditions upon "business combinations" between an
"interested shareholder" and the corporation. The term
"business combination" is defined broadly to include various
transactions utilizing a corporation's assets for purchase price
amortization or refinancing purposes. For this purpose, an
"interested shareholder" is defined generally as the beneficial
owner of at least 20% of a corporation's voting shares.
Subchapter 25G of the Pennsylvania Business Corporation Law
(relating to control-share acquisitions) prevents a person who
has acquired 20% or more of the voting power of a covered
corporation from voting such shares unless the "disinterested"
shareholders approve such voting rights. Failure to obtain such
approval exposes the owner to the risk of a forced sale of the
shares to the issuer.
Subchapter 25H of the Pennsylvania Business Corporation Law
(relating to disgorgement) applies in the event that (i) any
person or group publicly discloses that the person or group may
acquire control of the corporation or (ii) a person or group
acquires (or publicly discloses an offer or intent to acquire)
20% or more of the voting power of the corporation and, in
either case, sells shares within 18 months thereafter. Any
profits from sales of equity securities of the corporation by
the person or group during the 18-month period belong to the
corporation if the securities that were sold were acquired
during the 18-month period or within 24 months prior thereto.
Subchapter 25I of the Pennsylvania Business Corporation Law
(relating to severance payments) provides for a minimum
severance payment to certain employees terminated within two
years of the approval of a control-share acquisition under
Subchapter 25G of the Pennsylvania Business Corporation Law.
Subchapter 25J of the Pennsylvania Business Corporation Law
(relating to labor contracts) prohibits, in connection with a
control-share acquisition under Subchapter 26G of the
Pennsylvania Business Corporation Law, the abrogation of certain
labor contracts, if any, prior to their stated date of
expiration.
The holding company has elected to opt out of coverage of
Subchapter E (relating to control transactions), but has elected
not to opt out of coverage under the other provisions Chapter 25
of the Pennsylvania Business Corporation Law. Therefore, the
foregoing provisions of Chapter 25 of the Pennsylvania Business
Corporation Law, other than Subchapter E, will be applicable to
the holding company. Subchapters 25E through 25H of the
Pennsylvania Business Corporation Law contain a wide variety of
transactional and status exemptions, exclusions and safe
harbors.
Purpose and Takeover Defensive Effects of Charter
Provisions and Pennsylvania Law.
We believe that the provisions described above are prudent
and will reduce the holding company's vulnerability to takeover
attempts and certain other transactions which have not been
negotiated with and approved by its board of directors. We
believe these provisions are in the best interest of the holding
company and its shareholders. In our judgment, the board will
be in the best position to determine the true value of the
holding company and to negotiate more effectively for what may
be in the best interests of its shareholders. Accordingly, we
believe that it is in the best interests of the holding company
and its shareholders to encourage potential acquirors to
negotiate directly with the board of directors and that these
provisions will encourage such negotiations and discourage
hostile takeover attempts. It is also our view that these
provisions should not discourage persons from proposing a merger
or other transaction at prices reflective of the true value of
the holding company and which is in the best interests of all
shareholders.
Takeover attempts which have not been negotiated with and
approved by the board of directors present to shareholders the
risk of a takeover on terms which may be less favorable than
might otherwise be available. A transaction which is negotiated
and approved by the board of directors, on the other hand, can
be carefully planned and undertaken at an opportune time in
order to obtain maximum value for the holding company and its
shareholders, with due consideration given to matters such as
the management and business of the acquiring corporation and
maximum strategic development of the holding company's assets.
An unsolicited takeover proposal can seriously disrupt the
business and management of a corporation and cause it great
expense. Although a tender offer or other takeover attempt may
be made at a price substantially above then current market
prices, such offers are sometimes made for less than all of the
outstanding shares of a target company. As a result,
shareholders may be presented with the alternative of partially
liquidating their investment at a time that may be
disadvantageous, or retaining their investment in an enterprise
which is under different management and whose objectives may not
be similar to those of the remaining shareholders. The
concentration of control, which could result from a tender offer
or other takeover attempt, could also deprive the holding
company's remaining shareholders of the benefits of certain
protective provisions of the Securities Exchange Act of 1934 if
the number of beneficial owners becomes less than the 300
required for Exchange Act registration.
Despite our belief as to the benefits of shareholders of
these provisions, the provisions may also have the effect of
discouraging a future takeover attempt which would not be
approved by the holding company's board, but pursuant to which
shareholders may receive a premium for their shares over then
current market prices. As a result, shareholders who might
desire to participate in such a transaction may not have any
opportunity to do so. Such provisions will also render the
removal of the holding company's board of directors and
management more difficult.
Business of the Holding Company and Peoples Bank
General
Upon the completion of the reorganization, Peoples Bank
will become a wholly owned subsidiary of the holding company,
and you will become a shareholder of the holding company with
the same ownership interest in the holding company as you
presently hold in Peoples Bank.
Immediately after completion of the reorganization, we
expect that the holding company will not engage in any business
activity other than to hold all of the stock of Peoples Bank.
The holding company does not presently have any arrangements or
understandings regarding any acquisition or merger
opportunities. It is anticipated, however, that the holding
company in the future may pursue other investment opportunities,
including possible diversification through acquisitions and
mergers.
Peoples Bank is a state-chartered commercial banking
institution which was incorporated under the laws of the
Commonwealth of Pennsylvania, on December 19, 1913. Peoples
Bank's deposits are insured by the Federal Deposit Insurance
Corporation. As of December 31, 1999, Peoples Bank had total
assets of $292,508,000, total deposits of $231,229,000 and total
stockholders' equity of $38,179,000.
Peoples Bank's administrative headquarters and full
service main office are located at 24 South Third Street,
Oxford, Pennsylvania; the main telephone number is (610) 932-
9294.
Regulation
Peoples Bank is subject to extensive regulation and
examination by the Pennsylvania Department of Banking and the
Federal Deposit Insurance Corporation. Peoples Bank's deposit
accounts are insured up to the maximum legal limits by the
Federal Deposit Insurance Corporation. Peoples Bank is not a
member of the Federal Reserve System.
Federal and state banking laws regulate many aspects of
Peoples Bank's business including, but not limited to, capital
requirements, amount of reserves for deposits, loans and
investments Peoples Bank may make, acceptable collateral that
may be taken and consumer protection laws.
Peoples Bank is subject in the course of its activities
to a growing number of federal, state and local environmental
laws and regulations. Peoples Bank does not anticipate that
compliance with environmental laws and regulations will have any
material effect on capital expenditures, earnings or on the
competitive position of Peoples Bank.
Properties
The principal banking office and executive offices of
Peoples Bank are located at 24 South Third Street, Oxford,
Pennsylvania 19363. Peoples Bank owns the office building,
which consists of approximately 21,000 square feet. In
addition, Peoples Bank owns an adjacent parking lot which
consists of approximately 33,000 square feet, providing parking
for customers and employees.
Peoples Bank owns a limited service branch office and
electronic data processing operations center located at
3400 Baltimore Pike, Oxford, in East Nottingham Township,
Pennsylvania, which consists of approximately 2,400 square
feet.
The Avon Grove office, a full service branch, is located at
565 East Baltimore Pike in Avondale, Pennsylvania. The office
consists of approximately 3,800 square feet. Peoples Bank has a
long-term lease on the land with rental payments in 1999
totaling $16,500. The lease term expires in March 2008 and
provides for eight renewal options of five years each.
The Longwood office is a full service branch at 900 East
Baltimore Pike in Kennett Square, Pennsylvania. The office
consists of approximately 3,800 square feet. The rental
payments on the long-term land lease totaled $50,000 in 1999.
The lease term expires in 2015 and provides for one five-year
renewal option and an additional renewal option of four years
and three hundred and sixty-four days.
The Jennersville Office is a full service branch located
at Old Baltimore Pike and Route 796 in Penn Township, Chester
County, Pennsylvania. Peoples Bank has a long-term land lease
which expires in 2017 and provides for one five-year renewal
option and an additional renewal option of four years and eleven
months. Rental payments in 1999 totaled $35,300.
Peoples Bank is constructing an operations center along
Route 10 in Lower Oxford Township, Chester County, Pennsylvania.
As Peoples Bank has continued to grow, additional support
personnel have been added, resulting in the main office and the
current operations center being filled to capacity. This center
alleviates the current overcrowding and provide the space
necessary to handle future growth of Peoples Bank. This
facility is not anticipated to be available for occupancy until
the middle of 2000.
Legal Proceedings
The holding company has not, since its organization, been a
party to any legal proceedings.
Although Peoples Bank from time to time is involved in
various legal proceedings in the normal course of business,
there are no material legal proceedings to which it is a party
or to which its property is subject.
Employees
At the present time, the holding company does not intend
to employ any persons other than its management. It will
utilize Peoples Bank's support staff from time to time and
reimburse Peoples Bank for the time of its employees. If the
holding company acquires other banks or pursues other lines of
business, at such time it may hire additional employees.
At December 31, 1999, Peoples Bank had 107 full-time and
22 part-time employees.
Competition
There is strong competition in Peoples Bank's service
area for banking business among commercial banks, thrift
institutions, other financial institutions and financial
intermediaries. In addition to commercial banks, federal and
state savings and loan associations, savings banks and credit
unions actively compete in Peoples Bank's market area providing
a wide variety of banking services. Mortgage banking firms,
finance companies, insurance companies, leasing companies,
brokerage companies and financial affiliates of industrial
companies provide additional competition for loans and various
financial services. Peoples Bank also currently competes for
interest-bearing funds with a number of other financial
intermediaries which offer a diverse range of investment
alternatives including brokerage firms and mutual funds. Many
competitors of Peoples Bank have substantially greater financial
resources and larger branch systems than those of Peoples
Bank.
There are ten full service commercial banks and two
savings banks with branches in the southern Chester County
portion of Peoples Bank's designated market area. Peoples Bank
maintains the majority of the market share in the Oxford area
and has now gained the largest market share in the Avondale-West
Grove area; in the remainder of the market area Peoples Bank
continues to grow the size of our market share. Peoples Bank is
also subject to competition from banks outside of its service
area for various financial services.
In consumer transactions, Peoples Bank believes that it
is able to compete effectively by offering low cost checking
accounts, comparable banking hours and competitive rates on its
interest bearing accounts. In competing with other banks and
financial institutions, Peoples Bank seeks to provide
personalized services through our management's knowledge and
awareness of Peoples Bank's service area, customers and
borrowers.
With respect to commercial transactions, Peoples Bank's
legal lending limit to a single borrower is generally lower than
the other larger commercial lenders. Management believes that
Peoples Bank's legal lending limit is sufficient to handle the
credit requirements of Peoples Bank's target market. In
addition, Peoples Bank will participate in commercial loans with
other financial institutions if necessary, in order to
accommodate a customer's needs.
Management of Peoples First, Inc.
Directors. The holding company's articles of
incorporation provide that the board of directors will consist
of not less than five nor more than twenty-five members. The
board of directors will initially consist of eight members who
will be divided into three classes. Directors will be elected
for staggered terms of three years so that approximately one-
third of the directors are elected each year. The directors of
the holding company are, and upon completion of the holding
company reorganization will continue to be, the same persons who
are at present the directors of Peoples Bank.
The directors of Peoples Bank and their proposed classes as
directors of the holding company are listed below:
NAME CLASS TERM TO EXPIRE
Ben S. Beiler I 2001
Arthur A. Bernardon I 2001
Clyde L. Cameron II 2002
Hugh J. Garchinsky II 2002
Carl R. Fretz II 2002
George C. Mason III 2003
Ross B. Cameron III 2003
Emidio Frezzo, Jr. III 2003
For information regarding the principal occupation and
business experience of the directors for the past five years,
see "Proposal II -- Election of Directors."
Executive Officers. The executive officers of the
holding company are, and upon completion of the reorganization
will be, the following persons, each of whom is an officer with
Peoples Bank:
NAME POSITION
George C. Mason Chairman of the Board and Chief Executive
Officer
Hugh J. Garchinsky President
Carl R. Fretz Corporate Secretary
Susan H. Reeves Senior Vice President and Chief Financial
Officer
For information regarding the principal occupation and
business experience for the past five years of the executive
officers, see "Proposal II -- Election of Directors."
Executive Compensation. Since the formation of the
holding company, none of its executive officers or directors has
received any remuneration from the holding company. It is
expected that unless and until the holding company becomes
actively involved in additional businesses, no separate
compensation will be paid to its directors and officers in
addition to compensation paid to them by Peoples Bank. The
holding company may, however, determine that such separate
compensation is appropriate in the future. At the present time,
the holding company does not intend to employ any persons other
than its present management. If the holding company acquires
other businesses, it may at such time hire additional
employees.
Limitation of Liability and Indemnification of Directors
and Officers. Section 212 of the holding company's bylaws
provides for (1) indemnification of directors and officers of
the holding company and (2) the elimination of a director's
liability for monetary damages, in each case to the fullest
extent permitted by Pennsylvania law. Pennsylvania law provides
that a Pennsylvania corporation may indemnify directors and
officers of the corporation against liabilities they may incur
in such capacities for any action taken or failure to act,
whether or not the corporation would have the power to indemnify
the person under any provision of law, unless such action or
failure to act is determined by a court to have constituted
recklessness or willful misconduct. Pennsylvania law also
permits the adoption of a bylaw, approved by shareholders,
providing for the elimination of a director's liability 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 or her office and (2) the breach or failure to
perform constitutes self-dealing, willful misconduct or
recklessness.
Regulatory Matters
Activities Restrictions. The holding company is required
to obtain prior approval of the Federal Reserve Board before
acquiring control, directly or indirectly, of more than five
percent 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
of the voting shares of any company engaged in non-banking
activities unless the Federal Reserve Board, 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 Federal
Reserve Board considers whether these activities offer benefits
to the public that outweigh any possible adverse effects.
Further, under the Bank Holding Company Act and the Federal
Reserve Board'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.
Capital Requirements. The Federal Reserve Board has
established guidelines with respect to the maintenance of
appropriate levels of capital by bank holding companies with
consolidated assets of $150 million or more. For bank holding
companies with less than $150 million in consolidated assets,
the Federal Reserve Board applies the guidelines on a bank-only
basis unless the bank holding company has publicly held debt
securities or is engaged in non-bank activities involving
significant leverage.
The regulations impose two sets of capital adequacy
requirements: minimum leverage rules, which require bank
holding companies and state non-member banks to maintain a
specified minimum ratio of capital to total assets, and risk-
based capital rules, which require the maintenance of specified
minimum ratios of capital to "risk-weighted" assets.
The regulations require bank holding companies to maintain
a minimum leverage ratio of "Tier 1 capital" to total assets of
3.0%. Tier 1 capital is the sum of common shareholders' equity,
certain perpetual preferred stock (which must be noncumulative
with respect to banks), including any related surplus, and
minority interests in consolidated subsidiaries; minus all
intangible assets (other than certain purchased mortgage
servicing rights and purchased credit card receivables),
identified losses and investments in certain subsidiaries.
Although setting a minimum 3.0% leverage ratio, the capital
regulations state that only the strongest bank holding
companies, with composite examination ratings of 1 under the
rating system used by the federal bank regulators, would be
permitted to operate at or near such minimum level of capital.
All other bank holding companies are expected to maintain a
leverage ratio of at least 1% to 2% above the minimum ratio,
depending on the assessment of an individual organization's
capital adequacy by its primary regulator. Any bank holding
companies experiencing or anticipating significant growth would
be expected to maintain capital well above the minimum levels.
In addition, the Federal Reserve Board has indicated that
whenever appropriate, and in particular when a bank holding
company is undertaking expansion, seeking to engage in new
activities or otherwise facing unusual or abnormal risks, it
will consider, on a case-by-case basis, the level of an
organization's ratio of tangible Tier 1 capital to total assets
in making an overall assessment of capital.
In addition to the leverage ratio, the regulations of the
Federal Reserve Board require bank holding companies to maintain
a minimum ratio of qualifying total capital to risk-weighted
assets of at least 8.0% of which at least four percentage points
must be Tier 1 capital. Qualifying total capital consists of
Tier 1 capital plus Tier 2 or supplementary capital items which
include allowances for loan losses in an amount of up to 1.25%
of risk-weighted assets, cumulative preferred stock and
preferred stock with a maturity of 20 years or more and certain
other capital instruments. The includable amount of Tier 2
capital cannot exceed the institution's Tier 1 capital.
Qualifying total capital is further reduced by the amount of the
bank's investments in banking and finance subsidiaries that are
not consolidated for regulatory capital purposes, reciprocal
cross-holdings of capital securities issued by other banks and
certain other deductions. The risk-based capital regulations
assign balance sheet assets and the credit equivalent amounts of
certain off-balance sheet items to one of four broad risk weight
categories. The aggregate dollar amount of each category is
multiplied by the risk weight assigned to that category based
principally on the degree of credit risk associated with the
obligor. The sum of these weighted values equals the bank
holding company's risk-weighted assets.
Restrictions on Acquisitions. Bank holding companies are
prohibited from acquiring, without prior approval of the Federal
Reserve Board, (i) control of any other bank or bank holding
company or substantially all the assets thereof or (ii) more
than 5% of the voting shares of a bank or holding company
thereof which is not a subsidiary.
Transactions with Affiliates. Transactions between banks
and any affiliate are governed by Sections 23A and 23B of the
Federal Reserve Act. An affiliate of a bank is any company or
entity which controls, is controlled by or is under common
control with the bank. In a holding company context, the parent
holding company of a bank (such as the holding company) and any
companies which are controlled by such parent holding company
are affiliates of the bank. Generally, Sections 23A and 23B
(i) limit the extent to which the bank or its subsidiaries may
engage in "covered transactions" with any one affiliate to an
amount equal to 10% of such bank's capital stock and surplus,
and contain an aggregate limit on all such transactions with all
affiliates to an amount equal to 20% of such capital stock and
surplus and (ii) require that all such transactions be on terms
substantially the same, or at least as favorable to the
institution or subsidiary, as those provided to a non-affiliate.
The term "covered transaction" includes the making of loans,
purchase of assets, issuance of a guarantee and similar other
types of transactions.
The restrictions contained in Section 22(h) of the Federal
Reserve Act apply to loans by banks to executive officers,
directors and principal shareholders (such as the holding
company). Section 22(h) requires that loans to directors,
executive officers and greater than 10% shareholders be made on
terms substantially the same as offered in comparable
transactions to other persons. Under Section 22(h), loans to an
executive officer and to a greater than 10% shareholder of a
bank (18% in the case of institutions located in an area with
less than 30,000 in population), and certain affiliated entities
of either, may not exceed together with all other outstanding
loans to such person and affiliated entities the bank's loan-to-
one borrower limit (generally equal to 15% of the institution's
unimpaired capital and surplus and an additional 10% of such
capital and surplus for loans fully secured by certain readily
marketable collateral). Section 22(h) also prohibits loans,
above amounts prescribed by the appropriate federal banking
agency, to directors, executive officers and greater than 10%
shareholders of a bank, and their respective affiliates, unless
such loan is approved in advance by a majority of the board of
directors of the association with any "interested" director not
participating in the voting. The Federal Reserve Board has
prescribed the loan amount (which includes all other outstanding
loans to such person), as to which such prior board of director
approval is required, to be the greater of $25,000 or 5% of
capital and surplus (up to $500,000).
Description Of Holding Company Capital Stock
The holding company is authorized to issue 10,000,000
shares of common stock, $1.00 par value per share. The holding
company currently expects to issue up to 2,996,290 shares of
holding company common stock in the holding company
reorganization. Each share of common stock will have the same
relative rights as, and will be identical in all respects with,
each other share of common stock.
Holding Company Common Stock
Voting Rights. Each share of the holding company common
stock will have the same relative rights and will be identical
in all respects with every other share of the common stock. The
holders of the holding company common stock will possess
exclusive voting rights in the holding company, except to the
extent that shares of preferred stock issued in the future may
have voting rights, if any. Each holder of holding company
common stock will be entitled to only one vote for each share
held of record on all matters submitted to a vote of holders of
the holding company common stock and will not be permitted to
cumulate their votes in elections of the holding company's
directors.
Liquidation. In the unlikely event of the complete
liquidation or dissolution of the holding company, the holders
of the common stock will be entitled to receive all assets of
the holding company available for distribution in cash or in
kind, after payment or provision for payment of (1) all debts
and liabilities of the holding company; (2) any accrued dividend
claims; and (3) liquidation preferences of any preferred stock
which may be issued in the future.
Dividends. From time to time, dividends may be declared
and paid to the holders of the holding company common stock, who
will share equally in any such dividends.
Other Characteristics. Holders of the holding company
common stock will not have preemptive rights with respect to any
additional shares of the common stock which may be issued.
Therefore, the board of directors may sell shares of capital
stock of the holding company without first offering such shares
to existing shareholders of the holding company. The common
stock is not subject to call for redemption, and the outstanding
shares of common stock when issued and upon receipt by the
holding company of the full purchase price therefor will be
fully paid and non-assessable.
Registrar and Transfer Agent. American Stock Transfer and
Trust Co. will act as Registrar and Transfer Agent for the
holding company's common stock.
Capitalization
Set forth below is the capitalization of Peoples Bank at
December 31, 1999, and of the interim bank and the holding
company at initial formation, and as adjusted to reflect the
consummation of the merger.
The Peoples
The Peoples Interim Peoples
Bank of Oxford Bank of Oxford First, Inc.
Prior to Merger
Number of shares
authorized or to
be authorized
Common Stock 5,000,000 100,000 10,000,000
Number of shares
outstanding
Common Stock 2,996,000 100,000(1) 0
Capital Accounts
Common Stock 2,996,000 100,000(1) --
Capital Surplus 16,197,000 55,000 --
Undivided Profits 19,320,000 -- --
Accumulated Other
Compensation
Income (Loss) (334,000) -- --
Total Common Equity $38,179,000 $155,000 $ 0
=========== ======== ===========
After Merger
Number of shares
outstanding
Common Stock 2,996,000 -- 2,996,000(3)
Capital Accounts
Common Stock 2,996,000 -- 2,996,000
Capital Surplus 16,197,000 -- 16,197,000
Undivided Profits 19,320,000(3) -- 19,320,000
Accumulated Other
Compensation
Income (Loss) (334,000) -- (334,000)
Total Common Equity $38,179,000(3) $ -- $38,179,000(4)
=========== ======== ===========
______________
(1) Represents 100,000 shares issued upon the initial
capitalization of the Interim Bank for $1.55 per share. All of
such shares were subscribed by the organizers of the interim
bank. At the effective date of the merger, the organizers will
assign their subscription rights to Peoples First Inc.
(2) Represents the maximum number of shares to be issued to the
holders of common stock of Peoples Bank as the result of the
merger.
(3) In order to organize interim bank, the holding company has
subscribed for and will purchase 100,000 shares of $1.00 par
value common stock at a price of $1.55 per share. The holding
company will, immediately before consummation of the
reorganization, borrow approximately $155,000 in order to
purchase these shares. Immediately following consummation of
the proposed reorganization, Peoples Bank will pay a special
dividend to the holding company to enable it to repay this loan.
The temporary loan of $155,000 would have had no significant pro
forma effect, in terms of both total and per share earnings, on
the net income of Peoples Bank for the fiscal year ended
December 31, 1999.
(4) Amounts after the merger are on a consolidated basis. Does
not include approximately $65,000 in expenses related to the
formation of the holding company which will be paid by Peoples
Bank.
Accounting Treatment
reorganization will be accounted for as a
reorganization under common control treated as if a pooling of
interests. Therefore, the consolidated capitalization, assets,
liabilities, income and other financial data of the holding
company immediately following the reorganization will be
substantially the same as those of Peoples Bank immediately
prior to the reorganization, and, after the reorganization, will
be shown in the holding company's consolidated financial
statements at Peoples Bank's historical recorded values.
Because the reorganization will not result in a change in such
financial statements, this proxy statement/prospectus does not
include financial statements of Peoples Bank or the holding
company.
Legal Opinion
The validity of the shares of the holding company common
stock issuable upon consummation of the reorganization will be
passed upon by Stevens & Lee, P.C., Reading, Pennsylvania.
Recommendation of Board of Directors
The board of directors recommends that you vote "FOR" the
approval of the reorganization agreement.
PROPOSAL II -- ELECTION OF DIRECTORS
Nominees for Election as Directors
Peoples Bank's bylaws specify that the board of
directors will consist of not less than five nor more than
twenty-five members as fixed from time to time by resolution of
a majority of the full board of directors or by resolution of a
majority of the shareholders at any meeting thereof. Each
director must stand for election annually. Your board of
directors has fixed the number of directors of Peoples Bank at
eight and has nominated the persons named below, each of whom
currently serves as a director, for election as directors to
serve until the next annual meeting of shareholders of Peoples
Bank and until their successors have been elected and
qualified.
If any nominee is unable to serve, the shares represented
by all valid proxies will be voted for the election of a
substitute that your board of directors may recommend or the
size of the board may be reduced to eliminate the vacancy. At
this time, the board of directors knows of no reason why any
nominee might be unavailable to serve.
The board of directors recommends you vote for the election of
all nominees named below.
The names of the persons presently serving as directors
of Peoples Bank, each of whom has been nominated for reelection
(which also includes the most highly compensated officers), are
listed below, together with their ages, business experience for
at least five years and certain other information supplied by
such person to Peoples Bank, all as of January 31, 2000 (unless
otherwise indicated, the persons named below have sole voting
and investment power with respect to all shares of Peoples Bank
common stock shown as beneficially owned by them);
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(1)
PERCENTAGE
OCCUPATION AND NUMBER OF SHARES
NOMINEE AGE EMPLOYMENT OF SHARES OUTSTANDING
<S> <C> <C> <C> <C>
George C. Mason 64 Chairman of the Board since 1973 434,163(2) 14.49%
Chief Executive Officer since 1992
Director since 1972
Director of HERCO, Inc.
Director of Penn Mutual Insurance Co.
Hugh J. Garchinsky 49 Director since 1997 3,348 0.11%
President, since January 1, 2000
Executive Vice President 1997-1999
Senior Vice President 1996-1997
Vice President of Loan Operations
1994-1995
Ben S. Beiler 57 Director since 1989 21,944(3) 0.73%
President of Beiler Enterprises, Inc.,
and other related entities (all of
which are engaged in real estate
sales, investment, or development
companies)
Arthur A. Bernardon 53 Director since 1998 1,947(4) 0.06%
President of Bernardon & Associates
Architects, PC and partner in real
estate investment and development
companies
Clyde L. Cameron 74 Director since 1979 32,699(5) 1.09%
President of Cameron's Inc. (a retail
and wholesale supplier of hardware
and plumbing supplies)
Ross B. Cameron, Jr. 58 Director since 1999 11,600 0.29%
Partner/Owner in investment
firm RCH Investments, a commercial
real estate development partnership
Carl R. Fretz(8) 69 Vice Chairman and Corporate 50,644(6) 1.69%
Secretary since January 1, 2000
President of Peoples Bank 1973-1999
Director since 1965
Emidio Frezzo, Jr. 63 Director since 1993 3,895(7) 0.13%
President of Emidio Frezzo, Jr., Inc.
(mushroom growing and supply
operation)
Directors and Executive
Officers as a group
(14 persons) 591,494(9) 19.74%
</TABLE>
___________
(1) Based upon information furnished by the respective
individual and/or filings made pursuant to Federal
Deposit Insurance Company regulations. Under these
regulations, shares are deemed to be beneficially owned by
a person if he or she directly or indirectly has or shares
the power to vote or dispose of the shares, whether or not
he or she has any economic interest in the shares. Unless
otherwise indicated, the named beneficial owner has sole
voting and investment power with respect to the shares.
(2) Includes 45,152 shares owned by his spouse, and 131,120
shares in a trust for children of which he is trustee.
Mr. Mason disclaims beneficial ownership of these shares.
(3) Includes 2,270 shares owned jointly with spouse; 1,100
shares are owned by Mr. Beiler's spouse of which
he disclaims beneficial ownership.
(4) Includes 1,947 shares owned jointly with spouse.
(5) Includes 8,756 shares owned by Mr. Cameron's spouse of
which he disclaims beneficial ownership.
(6) Includes 4,158 shares owned jointly with spouse; 17,491
shares are owned by Mr. Fretz' spouse of he disclaims
beneficial ownership.
(7) Includes 595 shares owned jointly with spouse of which he
disclaims beneficial ownership.
(8) Carl R. Fretz is the father-in-law of Jay L. Andress,
Senior Vice President of Operations.
(9) Includes 204,632 shares beneficially owned indirectly by
the directors and executive officers of Peoples Bank for
which beneficial ownership is disclaimed.
General Information About the Board of Directors
Peoples Bank's board of directors held 13 meetings in
1999. During 1999, each incumbent director attended at least
75% of the aggregate of (1) the total number of meetings of the
Board held during the period for which he served as a director
and (2) the total number of meetings of all committees of the
board on which he served during the period that he served as a
member of such committee.
Directors receive an annual fee of $9,000. Directors who
are not employees also receive $50 for each committee meeting
attended.
There are no family relationships between any director,
executive officer or person nominated or chosen by the board to
become a director or executive officer other than as described
in footnote 8 to the Beneficial Ownership table set forth above.
The board of directors has an audit committee and a
compensation committee; it did not have a nominating committee.
For 1999, the audit committee consisted of Messrs. Beiler,
Frezzo and Clyde Cameron. All actions of the audit committee
were reviewed and approved by the board of directors as a whole.
The compensation committee consists of Messrs. Beiler,
Ross Cameron, Frezzo, Garchinsky and Mason. This committee
reviews and approves the compensation of the executive officers
of Peoples Bank. The committee met once in 1999.
Executive Compensation
The following table sets forth for the fiscal years ended
December 31, 1999, 1998 and 1997, certain information as to the
total remuneration paid to or accrued for the benefit of Peoples
Bank's Chief Executive Officer and Peoples Bank's other top four
executive officers receiving total compensation in excess of
$100,000.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation
Other Annual All Other
Name and Salary Bonus Compensation Compensation
Principal Position Year ($)(1) ($) ($)(2) ($)
<S> <C> <C> <C> <C> <C>
George C. Mason 1999 $159,000 $30,000 - $23,207(3)
Chairman and Chief 1998 $155,016 $25,000 - $11,232(3)
Executive Officer 1997 $149,400 $25,000 - $12,202(3)
Carl R. Fretz 1999 $165,400 $47,750 - $32,473(5)
Director and 1998 $165,400 $22,750 - $15,699(5)
Vice Chairman 1997 $160,100 $22,250 - $13,132(5)
and Corporate
Secretary(4)
Hugh J. Garchinsky 1999 $107,800 $25,000 - $ 9,439(7)
Director and 1998 $102,800 $15,000 - $ 8,369(7)
President(6) 1997 $ 94,500 $15,000 - $ 8,362(7)
James F. Taylor 1999 $ 88,500 $14,000 - $ 8,322(8)
Senior Vice 1998 $ 85,000 $10,000 - $ 7,404(8)
President 1997 $ 80,364 $10,000 - $ 8,662(8)
Howard Manheim 1999 $ 85,600 $15,000 - $ 7,892(9)
Senior Vice 1998 $ 72,500 $10,500 - $ 6,424(9)
President 1997 $ 70,000 $10,000 - $ 6,492(9)
</TABLE>
(1) Amounts shown include cash compensation earned and received
as well as amounts earned but deferred at the election of
those officers pursuant to the terms of Peoples Bank's
profit sharing and 401(k) Plan and annual director's
fees.
(2) The value for perquisites and other personal benefits does
not exceed the lesser of $50,000 or ten percent of the
total annual salary and bonus of each named executive
officer.
(3) Consists of Peoples Bank's contributions to Peoples Bank's
profit sharing and 401(k) plan for 1999, 1998 and 1997
totaling $12,178, $11,232, and $12,202, respectively.
Amounts for 1999 also include an economic benefit of $605
to Mr. Mason for life insurance coverage under an
endorsement split-dollar arrangement and the value of the
Bank's contribution made during 1999 ($11,029) to a revenue
neutral plan which will provide a supplemental benefit to
Mr. Mason at his retirement.
(4) Mr. Fretz served as the President of Peoples Bank until
December 31, 1999 when he assumed the position of Vice
Chairman and Corporate Secretary.
(5) Consists of Peoples Bank's contributions to Peoples Bank's
profit sharing and 401(k) plan for 1999, 1998 and 1997
totaling $12,698, $12,028, and $9,461, respectively; and
premiums on term life insurance for 1999, 1998 and 1997
totaling $6,062, $3,671 and $3,671, respectively. Amounts
for 1999 also include an economic benefit of $789 to
Mr. Fretz for life insurance coverage under an endorsement
split-dollar arrangement and the value of the Bank's
contribution made during 1999 ($13,767) to a revenue
neutral plan which will provide a supplemental benefit to
Mr. Fretz at his retirement.
(6) Mr. Garchinsky served as the Executive Vice President of
Peoples Bank until December 31, 1999 when he assumed the
position of President.
(7) Consists of Peoples Bank's contributions to Peoples Bank's
profit sharing and 401(k) plan for 1999, 1998 and 1997
totaling, $9,439, $8,369 and $8,362,
respectively.
(8) Consists of Peoples Bank's contributions to Peoples Bank's
profit and 401(k) plan for 1999, 1998, and 1997 totaling
$8,322, $7,404, and $8,662, respectively.
(9) Consists of Peoples Bank's contributions to Peoples Bank's
profit and 401(k) plan for 1999, 1998 and 1997 totaling
$7,892, $6,434, and $6,492, respectively.
Employment Agreement
Peoples Bank has an employment agreement with
Mr. George C. Mason, Chairman and Chief Executive Officer.
Mr. Mason's employment agreement became effective on January 1,
1996.
The purpose of the employment agreement is to establish
the duties, compensation and continued employment relationship
with Peoples Bank of Mr. Mason. The employment agreement
provides for an initial term of five years, after which such
agreement will automatically renew for successive one year terms
at the end of the initial term and each renewal period unless
notice of termination is given. The employment agreement also
provides that Mr. Mason will receive a minimum annual salary of
$125,000, or such higher annual salary as the compensation
committee of the board of directors may determine, and an annual
bonus of at least $10,000. In addition, Mr. Mason is entitled
to participate in all of the employee benefit plans which are
applicable to executive salaried employees; disability insurance
with a monthly benefit of $2,500; and fringe benefits normally
associated with such officer's position.
The employment agreement terminates upon the death or
disability of Mr. Mason, or for cause, as defined in the
employment agreement. Following the termination of his
employment agreement, Mr. Mason has agreed not to compete with
Peoples Bank within a 30 mile radius of Peoples Bank's executive
office, for a period of two years. The employment agreement
provides that, if Peoples Bank terminates the employment of
Mr. Mason without cause, or Mr. Mason terminates his employment
for specified events of good reason, Mr. Mason would receive his
then current salary for the remainder of the initial term or any
renewal thereof or 300% of the sum of his individual average
annual salary plus average annual bonus for the preceding five
years, whichever is greater. Such amount is payable in equal
monthly installments over the remainder of the term of the
employment agreement. During such period, Mr. Mason and his
dependents would be entitled to all employee benefits, other
than bonuses, as if he were still employed. At the end of the
period, Mr. Mason would be deemed to have retired and be
eligible for all benefits provided to retirees.
The employment agreement also provides that if
Mr. Mason's employment is terminated within one year of a change
in control of Peoples Bank, he will receive as severance all
benefits described above, adjusted so that the total present
value of all such payments and benefits is less than 300% of his
average annual compensation. If Mr. Mason's employment has been
terminated as of December 31, 1999 under these provisions,
Mr. Mason would have received severance payments with an
aggregate present value of approximately $512,000.
A "change in control" is generally defined in the
employment agreements to mean (a) the acquisition by any
"person" (as the term "person" is used in Section 3(a)(9) and
13(d)(3) of the Securities and Exchange Act of 1934), other than
a current shareholder holding as record owner in excess of five
percent (5%) of the outstanding securities of Peoples Bank
directly or indirectly, of securities of Peoples Bank
representing twenty-five percent (25%) or more of the voting
power of the then outstanding securities of Peoples Bank; or
(b) a change in the composition of a majority of the board of
directors of Peoples Bank which occurs within twelve (12) months
after any "person" (as the term "person" is used in
Sections 3(a)(9) and 13(d)(3) of the Securities and Exchange Act
of 1934), other than a current shareholder holding as record
owner in excess of five percent (5%) of the outstanding
securities of Peoples Bank, becomes the beneficial owner,
directly or indirectly, of securities representing twenty-five
percent (25%) of the voting power of the then outstanding
securities of Peoples Bank.
In the event of termination of Mr. Mason's employment under
his employment agreement as a result of disability or death,
Mr. Mason, or his estate, would be entitled to continuation of
base salary for the remainder of the agreement, with a minimum
period of one year in the case of death.
Compensation Committee Interlocks and Insider Participation
The compensation committee of the board of directors
consists of three independent directors, Messrs. Beiler, Frezzo
and Ross Cameron; the Chief Executive Officer, Mr. Mason; and
the President, Mr. Garchinsky. Mr. Mason and Mr. Garchinsky do
not participate in discussions regarding or vote on matters
affecting their own compensation.
Mr. Beiler is the President of Beiler Campbell, Inc.
from whom Peoples Bank leases the ground for the Longwood
Branch. On December 7, 1994, Peoples Bank signed a 20 year land
lease with two five-year renewals with Beiler Campbell, Inc. for
this branch. The term of the lease commenced in August 1995.
Rental payments made in 1999 totaled $50,000. In addition to
the lease payments in 1999, Peoples Bank paid $9,000 to Beiler
Campbell, Inc. for common area expense related to the Longwood
Branch. In addition, Mr. Beiler's company has performed real
estate appraisals for customer loans extended by Peoples Bank.
Substantially all of the $52,700 paid for appraisals was passed
through to the borrowers. Management believes that payments
made by Peoples Bank for these services were comparable to
market rates which would have been charged by unaffiliated third
parties for similar services.
Committee Report on Executive Compensation
The salary structure for executive and senior officers
of Peoples Bank is included in the overall salary structure of
Peoples Bank and is evaluated using the same established
criteria that is used for other employees. Salary levels for
all employees are determined using salary data for similar job
responsibilities from comparable and competitive institutions.
The salary administration committee uses this data to establish
salary ranges for each job description within Peoples Bank. The
overall objective of the salary administration policy is to
provide competitive levels of compensation for all employees
that is directly related to individual performance and
contribution to the success of Peoples Bank.
Peoples Bank's compensation committee reviews the
performance of the Chairman of the Board and President so as to
provide an overall level of compensation that is competitive
within the community banking industry in Pennsylvania. In
addition to using competitive data, the compensation committee
considers individual performance and contributions to Peoples
Bank's annual or long-term results. The compensation committee
uses its discretion to set such compensation where, in its
judgment, external, internal or individual circumstances
warrant. In addition, Peoples Bank has entered into an
employment agreement with the Chairman of the Board which calls
for a minimum annual salary of $125,000 and annual bonuses of at
least $10,000, as described under "Employment Agreement."
The base salary for Mr. Mason, Chairman and Chief
Executive Officer, was set at $140,000 in 1997 and increased to
$146,000 in 1998, and $150,000 in 1999. For 2000, Mr. Mason's
base salary has been set at $160,000 in accordance with the
terms of his employment agreement. Mr. Mason was also paid a
bonus for 1999 in the amount of $30,000. Determination of
Mr. Mason's salary and bonus level by the compensation committee
was based on competitive salary information available, Peoples
Bank's overall performance, including both qualitative and
quantitative measures, as well as Mr. Mason's individual
performance.
Compensation Committee
Ben S. Beiler George C. Mason
Emidio Frezzo, Jr. Carl R. Fretz
Ross B. Cameron, Jr.
Common Stock and Related Shareholder Matters
The authorized capital stock of Peoples Bank consists of
5,000,000 shares of common stock, par value $1.00 per share, of
which 2,996,290 shares were outstanding as of January 31, 2000.
There were approximately 745 stockholders of record as of
January 31, 2000. Peoples Bank's common stock is not listed or
traded on a recognized securities exchange. Peoples Bank's
common stock is traded in the over-the-counter market under the
symbol PPBK and trading in Peoples Bank's common stock is
limited in volume.
The following table sets forth the high and low prices
of Peoples Bank's common stock for each quarterly period for the
last two years. Prices for the sale of stock are based upon
transactions reported by the brokerage firm of F. J. Morrissey
Co., Inc. The quoted high and low bid prices are limited to
those transactions known by management to have occurred and
there may, in fact, have been additional transactions of which
management is unaware.
1999 1998
High Low High Low
First Quarter $36.00 $33.25 $32.00 $27.50
Second Quarter 35.25 30.50 34.50 30.00
Third Quarter 31.00 27.25 38.50 35.00
Fourth Quarter 28.25 23.25 36.00 33.00
Holders of shares of common stock are entitled to
receive such dividends when, as and if declared by the board of
directors of Peoples Bank, out of funds legally available for
dividends. Under Pennsylvania banking law, the payment of
dividends is generally restricted to Peoples Bank's accumulated
net earnings.
Peoples Bank has paid quarterly cash dividends on its
common stock since 1988. The following sets forth the cash
dividends paid per share on Peoples Bank's common stock during
the two years ended December 31, 1999.
Per-Share Dividend
1999 1998
First Quarter $0.100 $0.091
Second Quarter 0.100 0.091
Third Quarter 0.110 0.091
Fourth Quarter 0.110 0.100
American Stock Transfer & Trust Company, 40 Wall Street,
New York, New York serves as Peoples Bank's transfer and
dividend paying agent.
Stock Performance Graph
The following graph presents the five-year cumulative
stockholder return for the years ended December 31, 1995, 1996,
1997, 1998 and 1999 comparing (i) Peoples Bank common stock,
(ii) the S & P 500 Index and (iii) a peer group index. The peer
group index consists of Pennsylvania banks with total assets of
between $250 million and $575 million. The comparison assumes
$100 was invested on December 31, 1994 in Peoples Bank's common
stock and that all dividends were reinvested. The historical
price performance of Peoples Bank's common stock as depicted in
the following graph is not necessarily indicative of future
price performance.
STOCK PERFORMANCE
[INSERT GRAPH]
December 31,
1994 1995 1996 1997 1998 1999
The Peoples Bank
of Oxford $100 $110 $151 $201 $261 $218
S&P 500 $100 $137 $169 $225 $289 $350
Peer Group $100 $120 $143 $205 $223 $209
The peer group index consists of ACNB Corporation; CNB
Financial Corporation; Codorus Valley Bancorp, Inc.;
Commonwealth Bancorp, Inc.; Drovers Bancshares Corporation;
First West Chester Corporation; Franklin Financial Services
Corporation; Penseco Financial Services Corporation; and Pioneer
American Holding Company.
Certain Indebtedness
Peoples Bank has had and intends to continue to have
banking and financial transactions in the ordinary course of
business, including loans, with its directors, officers,
principal stockholders and their associates. The loans are made
on substantially the same terms, including interest rates and
collateral, as those prevailing at the same time for comparable
transactions with unrelated parties and do not involve more than
the normal risk of collectibility or present other unfavorable
features. The aggregate amount of extensions of credit
outstanding since January 1, 1999, to directors, officers,
principal stockholders and any associate of such persons, did
not exceed the lesser of $5.0 million or 10% of Peoples Bank's
equity capital and the aggregate extensions of credit to all
such persons, as a group, did not exceed 20% of Peoples Bank's
equity during such period.
Certain Transactions
Peoples Bank has had and intends to have business
transactions in the ordinary course of business with directors,
officers, principal stockholders and their associates on
comparable terms as those prevailing from time to time for other
nonaffiliated vendors of Peoples Bank.
Director Arthur A. Bernardon is the President of
Bernardon & Associates Architects, P.C., which designed Peoples
Bank's new Operations Center. In total during 1999, Peoples
Bank paid $175,000 to Bernardon & Associates, for the design and
planning and construction of new bank buildings. Management
believes that payments made by Peoples Bank for these services
were comparable to market rates which would have been charged by
unaffiliated third parties for similar services.
Also see "Compensation Committee Interlocks and Insider
Participation."
Financial Statements
The audited financial statements of Peoples Bank for the
fiscal year ended December 31, 1999, prepared in conformity with
generally accepted accounting principles, are included in the
Annual Report to Shareholders which accompanies this proxy
statement/prospectus. No financial statements of the holding
company are presented in this proxy statement/prospectus because
the holding company currently has no significant assets or
liabilities. In addition, no pro forma consolidated financial
statements of the holding company are included herein since such
statements would reflect no material differences from the
consolidated financial statements of Peoples Bank.
Independent Auditors
Beard & Company, Inc. is Peoples Bank's principal
independent auditor. A representative of Beard & Company is
expected to be present at the meeting to respond to
shareholders' questions and he will have the opportunity to make
a statement if he so desires.
Shareholder Proposals
Holding Company. If the holding company reorganization
is completed, the 2001 annual meeting of shareholders will be
held in accordance with the articles of incorporation and bylaws
of the holding company rather than the articles of incorporation
and bylaws of Peoples Bank. A shareholder who desires to submit
a proposal to be considered for inclusion in the holding
company's proxy statement for 2001 must submit the proposal to
the holding company at P.O. Box 500, 24 South Third Street,
Oxford, Pennsylvania 19363 on or before December 8, 2000, and
meet certain other requirements of the SEC's regulations
relating to shareholder proposals.
A shareholder proposal which is not submitted in
accordance with these requirements will not be included in the
holding company's proxy materials but may nonetheless be
presented at the annual meeting of shareholders in 2001. The
holding company's bylaws provide that, to be presented at the
meeting of the holding company's shareholders, a proposal must
be delivered or mailed to the Secretary not more than 90 nor
less than 60 days prior to the meeting, provided that if less
than 31 days' notice is given, shareholder proposals may be
submitted not later than the fifth day following the day on
which notice of the meeting was mailed to shareholders.
Peoples Bank. If the holding company reorganization is
not completed, a shareholder who desires to submit a proposal to
be considered for inclusion in Peoples Bank's proxy statement
for 2001, must submit the proposal to Peoples Bank at P.O.
Box 500, 24 South Third Street, Oxford, Pennsylvania 19363, on
or before December 7, 2000, and meet certain other requirements
of the FDIC's regulations relating to shareholder proposals.
A shareholder proposal which is not submitted in
accordance with these requirements will not be included in
Peoples Bank's proxy materials, but may nonetheless be presented
at the annual meeting of shareholders in 2001. If the
shareholder intending to present such a proposal has not
provided Peoples Bank notice of the matter at least forty-five
days prior to the meeting date, the proxyholders of the board of
directors would have discretionary authority to vote on such
proposal at the meeting.
Section 16 Reporting
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires Peoples Bank's officers and directors, and
persons who own more than 10% of Peoples Bank common stock to
file reports of the ownership and changes in the ownership with
the Federal Deposit Insurance Corporation. Officers, directors
and beneficial owners of more than ten percent of Peoples Bank
common stock are required to furnish Peoples Bank with copies of
all such forms which they file.
Based solely upon Peoples Bank's review of such forms
received by it, or written representations from certain
reporting persons that no Forms F-8A were required for those
persons, Peoples Bank believes that during the fiscal year ended
December 31, 1999, all filing requirements applicable to its
officers, directors and persons who own more than ten percent of
the common stock of Peoples Bank were complied with except that
one transaction was inadvertently reported late by director
Emidio Frezzo, Jr.
ADJOURNMENT PROPOSAL
In the event that there are not sufficient votes to
constitute a quorum or approve the adoption of the holding
company reorganization at the time of the meeting, such proposal
could not be approved unless the meeting is adjourned in order
to permit further solicitation of proxies. In order to allow
proxies which have been received by Peoples Bank, at the time of
the applicable meeting to be voted for such adjournment, if
necessary, Peoples Bank has submitted the question of
adjournment under such circumstances to its shareholders as a
separate matter for their consideration.
The board of directors of Peoples Bank recommends that
shareholders vote their proxies in favor of the adjournment
proposal so that their proxies may be used for such purposes in
the event it becomes necessary. Properly executed proxies will
be voted in favor of the adjournment proposal unless otherwise
indicated thereon. If it is necessary to adjourn the meeting,
no notice of the time and place of the adjourned meeting is
required to be given to shareholders other than an announcement
of such time and place at the meeting.
OTHER MATTERS
The Board of Directors is not aware of any other matters to
be presented at the meeting. If any other matter properly comes
before the meeting requiring a vote of the shareholders it is
the intention of the persons names in the accompanying proxy to
vote the shares represented thereby on such matters in
accordance with their best judgment.
Peoples Bank's Annual Report to Shareholders for the
year ended December 31, 1999, accompanies this proxy
statement/prospectus.
PEOPLES BANK WILL PROVIDE TO EACH PERSON SOLICITED, UPON
WRITTEN REQUEST, WITHOUT CHARGE EXCEPT FOR EXHIBITS, A COPY OF
ITS ANNUAL REPORT ON FORM 10-K, WHICH ALSO SERVES AS THE BANK'S
ANNUAL DISCLOSURE STATEMENT UNDER PART 350 OF THE FDIC'S
REGULATIONS. SUCH REPORT WILL BE FILED WITH THE FEDERAL DEPOSIT
INSURANCE CORPORATION ON OR ABOUT MARCH 30, 2000. REQUESTS
SHOULD BE ADDRESSED TO SUSAN H. REEVES, SENIOR VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER, THE PEOPLES BANK OF OXFORD, P.O.
BOX 500, OXFORD, PENNSYLVANIA 19363.
By Order of the Board of Directors
Carl R. Fretz, Vice-Chairman &
Corporate Secretary
Oxford, Pennsylvania
EXHIBIT A
AGREEMENT OF REORGANIZATION AND MERGER
THIS AGREEMENT OF REORGANIZATION AND MERGER made as of this
15th day of February, 2000, between PEOPLES FIRST, INC., a
Pennsylvania corporation (the "Holding Company"), and THE
PEOPLES BANK OF OXFORD, a state-chartered banking institution
organized and existing under the laws of the Commonwealth of
Pennsylvania (the "Bank"). In addition, as soon as reasonably
and legally possible, the Holding Company will form as a wholly-
owned subsidiary, a new state-chartered interim bank organized
and existing under the laws of the Commonwealth of Pennsylvania
(the "Interim Bank") and under the name "THE PEOPLES INTERIM
BANK OF OXFORD," which will upon such formation become a party
to this Agreement and to the Plan of Merger attached hereto as
Exhibit A. All obligations of the Interim Bank will, until
properly assumed by the Interim Bank by its execution of this
Agreement, be made and assumed on its behalf by the Holding
Company.
BACKGROUND
The Holding Company, Peoples Bank, and the Interim Bank
desire to effect the formation of a bank holding company whereby
the Bank and the Interim Bank will be merged, the Bank, as the
surviving bank in the merger, will become a wholly-owned
subsidiary of the Holding Company, and the present shareholders
of the Bank (except for those who properly perfect dissenters'
rights) will become shareholders of the Holding Company, on the
terms and conditions hereinafter set forth;
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants
and agreements contained herein, and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE I
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 Interim Bank a sufficient number of
shares of the common stock, par value $1.00 per share (the
"Holding Company Common Stock"), of the Holding Company to
effect the Merger in accordance with the provisions of the Plan
of Merger.
ARTICLE II
SHARES OF THE HOLDING COMPANY AND OF THE SURVIVING BANK
2.1 CONVERSION OF SHARES. The manner of converting the
shares of common stock, par value $1.00 per share, of the Bank
(the "Bank Common Stock") into shares of Holding Company Common
Stock and the shares of common stock, par value $1.00 per share,
of the Interim Bank into shares of common stock, par value $1.00
per share, of the surviving bank in the Merger shall be as set
forth in Article IV of the Plan of Merger.
ARTICLE III
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 laws
of the Commonwealth of Pennsylvania.
3.2 CAPITALIZATION. The Holding Company is authorized to
issue 10,000,000 shares of common stock, par value $1.00 per
share, of which no shares are issued and outstanding on the date
hereof. There are no outstanding options, warrants, calls,
convertible securities, subscriptions, or other commitments or
rights of any nature with respect to the Holding Company Common
Stock.
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 or the Plan
of Merger nor the consummation of the transactions provided for
herein or therein will violate any agreement to which the
Holding Company is a party or by which it is bound or any law,
order, or decree applicable to the Holding Company, or any
provision of its Articles of Incorporation or Bylaws.
3.4 ABSENCE OF LIABILITIES. Immediately 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.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PEOPLES BANK
The Bank represents, warrants and agrees as follows:
4.1 ORGANIZATION AND STANDING. The Bank is a banking
institution duly organized and existing under the laws of the
Commonwealth of Pennsylvania.
4.2 CAPITALIZATION. The Bank is authorized to issue
5,000,000 shares of common stock, par value $1.00 per share, of
which 2,996,290 shares are issued and outstanding on the date
hereof. There are no options, warrants, calls, convertible
securities, subscriptions, or other commitments or rights of any
nature with respect to the Bank Common Stock outstanding on the
date hereof.
4.3 AUTHORITY RELATIVE TO THIS AGREEMENT. The execution,
delivery, and performance of this Agreement and of the Merger
Agreement 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, decree applicable to the Bank, or any provision of its
Articles of Incorporation or Bylaws.
ARTICLE V
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 an
interim Pennsylvania state chartered bank in the process of
formation under the Act.
5.2 CAPITALIZATION. Upon its formation, the Interim Bank
will be authorized to issue 5,000,000 shares of common stock,
par value $1.00 per share, of which 20,000 shares will be issued
and outstanding and owned by the Holding Company immediately
prior to the Merger.
5.3 AUTHORITY RELATIVE TO THIS AGREEMENT. The execution,
delivery, and performance of this Agreement and the Merger
Agreement will be 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 applicable to the Interim Bank,
or any provision of its Articles of Incorporation or Bylaws.
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.
ARTICLE VI
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 20,000 shares of common stock,
par value $1.00 per share, of the Interim Bank for $10.00 per
share and cause the Interim Bank to do all things necessary to
obtain a charter as an interim Pennsylvania state chartered
bank, pursuant to the Banking Code, so as to permit the
consummation of the Merger provided for in the Plan of Merger.
6.2 APPROVAL OF MERGER. The Holding Company, as the sole
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 shall 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 and receipt of required
regulatory approvals.
ARTICLE VII
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 the annual meeting of shareholders of the
Bank to be held on or about May 9, 2000, and any adjournment or
postponement thereof.
7.2 BEST EFFORTS. The Bank shall 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 and receipt of required
regulatory approvals.
ARTICLE VIII
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 THE BANK SHAREHOLDER APPROVAL. The shareholders of
the Bank shall have duly approved this Agreement and the Plan of
Merger in accordance with the requirements of the Banking Code
and applicable law.
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 on
Form S-4 (the "Registration Statement") filed by the Holding
Company under the Securities Act of 1933, as amended, covering
the shares of the Holding Company Common Stock to be issued
pursuant to this Agreement and 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 or the
transactions contemplated by this Agreement or the Plan of
Merger, or otherwise claiming that consummation of the Merger is
improper.
8.6 TAX OPINION. A tax opinion shall have been obtained
from Stevens & Lee, P.C., satisfactory in form and substance to
the parties, to the effect that, among other things, (i) no gain
or loss will be recognized by the Holding Company, the Interim
Bank or the Bank by reason of the Merger; (ii) no gain or loss
will be recognized by the Bank's shareholders by reason of the
conversion of shares of Bank Common Stock into shares of Holding
Company Common Stock; (iii) the Merger will constitute a
reorganization under Sections 368(a)(1)(A) and 368(a)(2)(D) of
the Internal Revenue Code of 1986, as amended (the "Code"); and
(iv) each of the parties will be considered a "party to a
reorganization" within the meaning of Section 368(b) of the
Code.
8.7 DISSENTING SHAREHOLDERS. Holders of no more than nine
percent (9%) of the outstanding shares of Bank Common Stock
shall have exercised rights as dissenting shareholders under
Section 1607 of the Pennsylvania Banking Code of 1965, as
amended.
ARTICLE IX
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.
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 1.2 of this Agreement and Section 7 of the
Plan of Merger Agreement may not be amended after the meeting of
the Bank's stockholders referred to in Section 7.1 hereof except
by the vote of the Bank's shareholders required for the approval
of the Merger by such shareholders.
ARTICLE X
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 CAPITAL DISTRIBUTION. Upon the effective time of the
Merger, the surviving bank shall make a capital distribution 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; and
(b) the principal amount of any loan together with
interest thereon that the Holding Company shall have
obtained to purchase shares of common stock, par value
$1.00 per share, of the Interim Bank as provided in
Section 6.1 hereof.
ARTICLE XI
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.
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 or thereby.
11.3 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.
11.4 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.
11.5 APPLICABLE LAW. This Agreement and the Plan of
Merger shall be governed by the laws of the Commonwealth of
Pennsylvania without regard to its conflicts of laws principles.
11.6 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.
IN WITNESS WHEREOF, this Agreement has been executed as of
the day, month and year first above mentioned.
PEOPLES FIRST, INC.
By: /s/ George C. Mason
George C. Mason,
Chief Executive Officer
THE PEOPLES BANK OF OXFORD
By: /s/ George C. Mason
George C. Mason,
Chief Executive Officer
THE PEOPLES INTERIM BANK OF OXFORD hereby agrees to and
assumes all of the obligations and agreements contained herein
which were agreed to and assumed on its behalf by Peoples First,
Inc.
Date:____________________
THE PEOPLES INTERIM BANK OF OXFORD
By: _______________________________
PLAN OF MERGER
THIS PLAN OF MERGER (the "Plan of Merger") dated as of
_________, 2000, is by and between THE PEOPLES BANK OF OXFORD, a
Pennsylvania banking institution ("Bank"), and THE PEOPLES
INTERIM BANK OF OXFORD, a Pennsylvania interim banking
institution ("Interim Bank").
BACKGROUND
1. The Bank is a Pennsylvania banking institution.
The authorized capital stock of the Bank consists of 5,000,000
shares of common stock, par value $1.00 per share ("Bank Common
Stock"), 2,996,290 of which at the date hereof are issued and
outstanding.
2. Interim Bank is a Pennsylvania interim banking
institution and a wholly-owned subsidiary of Peoples First, Inc.
(the "Holding Company"). The authorized capital stock of
Interim Bank consists of 5,000,000 shares of common stock, par
value $1.00 per share ("Interim Bank Common Stock"), of which at
the date hereof 20,000 shares are issued and outstanding.
3. The respective Boards of Directors of the Bank and
the Interim Bank deem the merger of the Interim Bank with and
into the Bank, pursuant to the terms and conditions set forth or
referred to herein, to be desirable and in the best interests of
the respective corporations and their respective shareholders.
4. The respective Boards of Directors of the Bank,
the Interim Bank, and the Holding Company have adopted
resolutions approving (i) this Plan of Merger and (ii) an
Agreement of Reorganization and Merger, dated as of February 1,
2000 (the "Agreement") pursuant to which this Plan of Merger is
being executed by the Bank and the Interim Bank.
AGREEMENT
In consideration of the premises and of the mutual
covenants and agreements herein contained, and in accordance
with the applicable laws and regulations of the Commonwealth of
Pennsylvania, the Bank and the Interim Bank, intending to be
legally bound hereby, agree:
ARTICLE I
MERGER; BUSINESS
1.1 Merger. Subject to the terms and conditions of
this Plan of Merger and in accordance with the applicable laws
and regulations of the Commonwealth of Pennsylvania, on the
Effective Date (as that term is defined in Article V hereof):
the Interim Bank shall merge with and into the Bank; the
separate existence of the Interim Bank shall cease; and the Bank
shall be the surviving corporation (such transaction referred to
herein as the "Merger" and the Bank, as the surviving
corporation in the Merger, referred to herein as the "Surviving
Bank").
1.2 Name and Business. The business of the Surviving
Bank shall be conducted under the name "The Peoples Bank of
Oxford" at its main office, which shall be located at 24 South
Third Street, P.O. Box 500, Oxford, Pennsylvania 19363-0500, and
at its legally established branches existing immediately prior
to the Effective Date.
ARTICLE II
CHARTER AND BYLAWS
On and after the Effective Date, the Articles of
Incorporation and Bylaws of the Bank, as in effect immediately
prior to the Effective Date, shall automatically be and remain
the Articles of Incorporation and Bylaws of the Surviving Bank,
until altered, amended or repealed.
ARTICLE III
BOARD OF DIRECTORS, OFFICERS AND EMPLOYEES
3.1 Board of Directors. On and after the Effective
Date, the directors of the Surviving Bank shall consist of the
directors of the Bank duly elected and holding office
immediately prior to the Effective Date, who shall serve as such
until their successors have been elected and qualified.
3.2 Officers and Employees. On and after the
Effective Date, the officers and employees of the Surviving Bank
shall consist of the officers and employees of the Bank duly
elected and holding office immediately prior to the Effective
Date.
ARTICLE IV
CONVERSION OF SHARES
4.1 Stock of the Interim Bank. All shares of Interim
Bank Common Stock issued and outstanding immediately prior to
the Effective Date shall, on and after the Effective Date, be
converted into and become such number of shares of common stock,
par value $1.00 per share, of the Surviving Bank as shall be
equal to (i) the number of shares of Bank Common Stock issued
and outstanding immediately prior to the Effective Date, less
(ii) the number of shares of Bank Common Stock with respect to
which any shareholders of the Bank shall have duly asserted
dissenters' rights in accordance with this Plan of Merger and
applicable law. Each share of common stock of the Surviving
Bank issued pursuant to this section shall be fully paid and
nonassessable.
4.2 Stock of the Bank. Each share of Bank Common
Stock issued and outstanding immediately prior to the Effective
Date (except for shares owned by holders of Bank Common Stock
who have duly asserted dissenters' rights in accordance with
this Plan of Merger and applicable law), shall, on the Effective
Date, by virtue of the Merger and without any action on the part
of the holder thereof, be exchanged for and converted into and
become one share of fully paid and nonassessable common stock,
par value $1.00 per share, of the Holding Company ("Holding
Company Common Stock"). Each share of Bank Common Stock issued
and held in the treasury of the Bank as of the Effective Date,
if any, shall be cancelled and no shares of Holding Company
Common Stock shall be exchanged therefor. From and after the
Effective Date, each certificate which, prior to the Effective
Date, represented shares of Bank Common Stock, shall evidence
ownership of shares of Holding Company Common Stock on the basis
hereinbefore set forth and there shall be no need for a physical
exchange of stock certificates unless and until requested by the
Holding Company.
4.3 Dissenters' Rights. Shareholders of the Bank
shall be entitled to exercise the rights, with respect to this
Plan of Merger, provided in Section 1607 of the Pennsylvania
Banking Code of 1965, as amended.
ARTICLE V
EFFECTIVE DATE OF THE MERGER
The Merger shall be effective on the date and at the
time specified in the certificate to be issued by the Department
of Banking of the Commonwealth of Pennsylvania approving this
Merger (the "Effective Date").
ARTICLE VI
EFFECT OF THE MERGER
On the Effective Date: the separate existence of
Interim Bank shall cease; and all of the property (real,
personal and mixed), rights, powers, duties and obligations of
Interim Bank shall be taken and deemed to be transferred to and
vested in the Surviving Bank, without further act or deed, as
provided by applicable laws and regulations.
ARTICLE VII
CONDITIONS PRECEDENT
The obligations of the Bank and the Interim Bank to
effect the Merger shall be subject to satisfaction, unless duly
waived by the party permitted to do so, of the conditions
precedent set forth in the Agreement.
ARTICLE VIII
TERMINATION
This Plan of Merger shall terminate upon any
termination of the Agreement in accordance with its terms;
provided, however, that any such termination of this Plan of
Merger shall not relieve any party hereto from liability on
account of a breach by such party of any of the terms hereof or
thereof.
ARTICLE IX
AMENDMENT
Subject to applicable law, this Plan of Merger may be
amended at any time prior to consummation of the Merger, but
only an instrument in writing signed by duly authorized officers
on behalf of the parties hereto in the manner provided in the
Agreement.
ARTICLE X
MISCELLANEOUS
10.1 Extensions; Waivers. Each party, by a written
instrument signed by a duly authorized officer, may extend the
time for the performance of any of the obligations or other acts
of the other party hereto and may waive compliance with any of
the covenants, or performance of any of the obligations, of the
other party contained in this Plan of Merger.
10.2 Captions. The headings of the several Articles
and Sections herein are inserted for convenience of reference
only and not intended to be part of, or to affect the meaning of
interpretation of, this Plan of Merger.
10.3 Counterparts. For the convenience of the
parties hereto, this Plan of Merger may be executed in several
counterparts, each of which shall be deemed the original, but
all of which together shall constitute one and the same
instrument.
10.4 Governing Law. This Plan of Merger shall be
governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania without regard to its conflicts of
law principles.
IN WITNESS WHEREOF, the Bank and the Interim Bank have
caused this Plan of Merger to be executed by their duly
authorized officers and their corporate seals to be hereunto
affixed on the date first written above.
THE PEOPLES BANK OF OXFORD
(SEAL) By________________________________
Attest:___________________________
THE PEOPLES INTERIM BANK OF OXFORD
(SEAL) By________________________________
Attest:___________________________
EXHIBIT B
ARTICLES OF INCORPORATION
OF
PEOPLES FIRST, INC.
FIRST. The name of the Corporation is Peoples First, Inc.
SECOND. The location and post office address of the
Corporation's registered office in this Commonwealth is 24 South
Third Street, Oxford, Chester County, Pennsylvania 19363.
THIRD. The purpose of the Corporation is and it shall have
unlimited power to engage in and to do any lawful act concerning
any or all lawful business for which corporations may be
incorporated under provisions of the Business Corporation Law of
1988, as amended.
FOURTH. The term of the Corporation's existence is
perpetual.
FIFTH. The aggregate number of shares of capital stock
which the Corporation shall have authority to issue is
10,000,000 shares of common stock with a par value of One Dollar
($1.00) per share ("Common Stock").
SIXTH. Each holder of record of Common Stock shall have
the right to one vote for each share of Common Stock standing in
such holder's name on the books of the Corporation. No
shareholder shall be entitled to cumulate any votes for the
election of directors.
SEVENTH. The management, control and government of the
Corporation shall be vested in a board of directors consisting
of not less than five (5) nor more than twenty-five (25) members
in number, as fixed by the board of directors of the Corporation
from time to time. The directors of the Corporation shall be
divided into three classes: Class I, Class II and Class III.
Each Class shall be as nearly equal in number as possible. If
the number of Class I, Class II or Class III directors is fixed
for any term of office, it shall not be increased during that
term, except by a majority vote of the board of directors. The
term of office of the initial Class I directors shall expire at
the annual election of directors by the shareholders of the
Corporation in 2001; the term of office of the initial Class II
directors shall expire at the annual election of directors by
the shareholders of the Corporation in 2002; and the term of
office of the initial Class III directors shall expire at the
annual election of directors by the shareholders of the
Corporation in 2003. After the initial term of each Class, the
term of office of each Class shall be three (3) years, so that
the term of office of one class of directors shall expire each
year when their respective successors have been duly elected by
the shareholders and qualified. At each annual election by the
shareholders of the Corporation, the directors chosen to succeed
those whose terms then expire shall be identified as being of
the same class as the directors they succeed. If a vacancy
occurs on the board of directors of the Corporation, for any
reason, including a vacancy resulting from an increase in the
size of the Board of Directors, a majority of the remaining
directors though less than a quorum shall have the exclusive
power to fill the vacancy by electing a director to hold office
for the unexpired term in respect of which the vacancy occurred.
The names and Class designations of the Board of Directors
of the Corporation to be effective upon the filing of these
Articles of Incorporation, who shall sit until the first annual
election of directors for the Class in which such directors are
serving are as follows: Class I (serving until the 2001 Annual
Meeting of Shareholders) - Ben S. Beiler and Arthur A.
Bernardon; Class II (serving until the 2002 Annual Meeting of
Shareholders) - Clyde L. Cameron, Carl R. Fretz, and Hugh J.
Garchinsky; and Class III (serving until the 2003 Annual Meeting
of Shareholders) - Ross B. Cameron, Emidio Frezzo, and George C.
Mason.
EIGHTH. No holder of any class of capital stock of the
Corporation shall have preemptive rights, and the Corporation
shall have the right to issue and to sell to any person or
persons any shares of its capital stock or any option, warrant
or right to acquire capital stock, or any securities having
conversion or option rights without first offering such shares,
rights or securities to any holder of any class of capital stock
of the Corporation.
NINTH. Except as set forth below, the affirmative vote of
shareholders entitled to cast at least seventy-five percent
(75%) of the votes which all shareholders of the Corporation are
entitled to cast, and if any class of shares is entitled to vote
as a separate class, the affirmative vote of shareholders
entitled to cast at least a majority of the votes entitled to be
cast by the outstanding shares of such class (or such greater
amount as required by the provisions of these Articles of
Incorporation establishing such class) shall be required to
approve any of the following:
(a) any merger or consolidation of the Corporation
with or into any other corporation;
(b) any share exchange in which a corporation, person
or entity acquires the issued or outstanding shares of capital
stock of the Corporation pursuant to a vote of shareholders;
(c) any sale, lease, exchange or other transfer of
all, or substantially all, of the assets of the Corporation to
any other corporation, person or entity; or
(d) any transaction similar to, or having similar
effect as, any of the foregoing transactions, if, in any case,
as of the record date for the determination of shareholders
entitled to notice thereof and to vote thereon, such other
corporation, institution, person or entity is the beneficial
owner (within the meaning of the Securities Exchange Act of
1934, as amended, and the regulations thereunder), directly or
indirectly, of shares of capital stock of the Corporation
issued, outstanding and entitled to cast five percent (5%) or
more of the votes which all shareholders of the Corporation are
then entitled to cast.
If any of the transactions identified above in this Article
NINTH is with a corporation, institution, person or entity that
is not the beneficial owner, directly or indirectly, of shares
of capital stock of the Corporation, issued, outstanding and
entitled to cast five percent (5%) or more of the votes which
all shareholders of the Corporation are then entitled to cast, a
majority of the votes which all shareholders are entitled to
cast shall be required to approve any such transaction. An
affirmative vote as provided in the foregoing provisions shall
be, to the extent permitted by law, in lieu of the vote of the
shareholders otherwise required by law.
The board of directors of the Corporation shall have the
power and duty to determine, for purposes of this Article NINTH,
on the basis of information known to the board, if such other
corporation, institution, person or entity is the beneficial
owner, directly or indirectly, of shares of capital stock of the
Corporation issued, outstanding and entitled to cast five
percent (5%) or more of the votes which all shareholders of the
Corporation are then entitled to cast, and/or if any transaction
is similar to, or has an effect similar to, any of the
transactions identified above in this Article NINTH. Any such
determination shall be conclusive and binding for all purposes
of this Article NINTH.
The Corporation may voluntarily completely liquidate and/or
dissolve only in accordance with all applicable laws and only if
the proposed liquidation and/or dissolution is approved by the
affirmative vote of shareholders entitled to cast at least
seventy-five percent (75%) of the votes which all shareholders
are entitled to cast.
The provisions of this Article NINTH shall not apply to any
transaction which is approved in advance by the vote of at least
seventy-five percent (75%) or more of the members of the board
of directors of the Corporation then in office, at a meeting
duly called and held.
TENTH. The authority to make, amend, alter, change or
repeal the Bylaws of the Corporation is hereby expressly and
solely granted to and vested in the board of directors of the
Corporation, subject always to the power of the shareholders to
change such action by the affirmative vote of shareholders of
the Corporation entitled to cast at least sixty-six and two-
thirds percent (66-2/3%) of the votes which all shareholders are
entitled to cast, except that provisions of the Bylaws of the
Corporation relating to limitations on directors' liabilities
and indemnification of directors and officers may not be amended
to increase the exposure to liability for directors or to
decrease the indemnification of directors and officers except by
the affirmative vote of seventy-five percent (75%) of the entire
board of directors then in office or by the affirmative vote of
shareholders of the Corporation entitled to cast at least
seventy-five percent (75%) of the votes which all shareholders
are entitled to cast.
ELEVENTH. The control transaction provisions contained in
Sections 2541-2548 of the Pennsylvania Business Corporation Law
of 1988, as it may be amended, shall not be applicable to the
Corporation.
TWELFTH. Notwithstanding any other provision of law or the
articles of incorporation or Bylaws of the Corporation to the
contrary, the provisions set forth in Articles SIXTH, SEVENTH,
EIGHTH, NINTH, TENTH, and TWELFTH, of these Articles of
Incorporation may not be repealed, altered or amended, in any
respect whatsoever, unless such repeal, alteration or amendment
is approved by either (a) the affirmative vote of shareholders
of the Corporation entitled to cast at least seventy-five
percent (75%) of the votes which all shareholders of the
Corporation are then entitled to cast or (b) the affirmative
vote of seventy-five percent (75%) of the members of the board
of directors of the Corporation and the affirmative vote of
shareholders of the Corporation entitled to cast at least a
majority of the votes which all shareholders of the Corporation
are then entitled to cast.
Exhibit C
BYLAWS
OF
PEOPLES FIRST, INC.
ARTICLE I. SHAREHOLDERS.
Section 101. Place of Meetings. All meetings of the
shareholders shall be held at such place or places, within or
without the Commonwealth of Pennsylvania, as shall be determined
by the Board of Directors from time to time.
Section 102. Annual Meetings. An annual meeting of the
shareholders for the election of directors or the transaction or
such other business as may properly come before the meeting
shall be held in each calendar year on such date and at such
time as may be fixed by the Board of Directors.
Section 103. Special Meetings. Special meetings of the
shareholders may be called at any time by (i) the Board of
Directors, (ii) the Chairman of the Board of Directors, or (iii)
the President. Upon written request of any person or persons
entitled to call a special meeting of the shareholders, it shall
be the duty of the Secretary to fix the time of the meeting,
which shall be held not more than ninety (90) days after the
receipt of the request. If the Secretary neglects or refuses to
fix the time of the meeting, the person or persons duly calling
the meeting may do so.
Section 104. Notice of Meetings of Shareholders. Except
as provided otherwise in these bylaws or otherwise required by
law, written notice of every meeting of the shareholders shall
be given by, or at the direction of, the Secretary or other
authorized person, to each shareholder of record entitled to
vote at the meeting at least twenty (20) days prior to the day
named for the meeting. The notice of the meeting shall specify
the place, day and hour of the meeting and, in the case of a
special meeting, the general nature of the business to be
transacted. If the purpose, or one of the purposes, of the
meeting is to consider the adoption, amendment or repeal of the
bylaws, there shall be included in, enclosed with, or
accompanied by, the notice a copy of the proposed amendment or a
summary of the changes to be made by the amendment.
Section 105. Quorum. A shareholders meeting duly called
shall not be organized for the transaction of business unless a
quorum is present. The presence in person or by proxy of
shareholders entitled to cast at least a majority of the votes
that all shareholders are entitled to cast on a particular
matter to be acted upon at the meeting shall constitute a quorum
for the purposes of consideration and action on such matter.
The shareholders present at a duly organized meeting can
continue to do business until adjournment even though the
withdrawal of shareholders leaves less than a quorum. If a
meeting cannot be organized because a quorum has not attended,
those present may adjourn the meeting to a time and place that
they may determine. Those shareholders entitled to vote who
attend a meeting called for the election of directors that has
previously been adjourned for lack of a quorum, although less
than a quorum as fixed herein, shall nevertheless constitute a
quorum for the purpose of electing directors. In other cases,
those shareholders entitled to vote who attend a meeting of
shareholders that has been previously adjourned for one or more
periods totaling at least fifteen (15) days because of an
absence of a quorum, although less than a quorum as fixed
herein, shall nevertheless constitute a quorum for the purpose
of acting upon any matter set forth in the notice of the
meeting, provided that the notice of the meeting states that
those shareholders who attend such adjourned meeting shall
nevertheless constitute a quorum for the purpose of acting upon
the matter set forth in the notice.
Section 106. Adjournments. Adjournment or adjournments
of any annual or special meeting of shareholders, other than one
at which directors are to be elected, may be taken for a period
or periods directed by the shareholders present in person or by
proxy and entitled to vote. A meeting at which directors are to
be elected shall be adjourned only from day to day, or for
longer periods not exceeding fifteen (15) days each as the
shareholders present and entitled to vote shall direct, until
the directors have been elected. When a meeting of the
shareholders is adjourned, it shall not be necessary to give any
notice of the adjourned meeting or of the business to be
transacted at the adjourned meeting other than by announcement
at the meeting at which the adjournment is taken, unless the
Board of Directors fixes a new record date for the adjourned
meeting or unless notice of the business to be transacted was
required by the Pennsylvania Business Corporation Law of 1988,
as it may be amended, to be stated in the original notice of the
meeting and such notice had not been previously provided.
Section 107. Conduct of Shareholders' Meetings. The
Chairman of the Board shall preside at all shareholders'
meetings. In the absence of the Chairman of the Board, the
President shall preside or, in the absence of both of them, the
officer designated by the Chairman of the Board, the President
or the majority of the members of the Board of Directors (in
that order) shall preside. The officer presiding over a
shareholders' meeting shall have any and all powers and
authority necessary, in such officer's sole discretion, to
conduct an orderly meeting, preserve order and determine any and
all procedural matters. The officer presiding over a
shareholders' meeting may also establish such rules and
regulations for the conduct of the meeting as such officer may
deem to be reasonably necessary or desirable for the orderly and
expeditious conduct of the meeting, including the ability to
impose reasonable limits on the amount of time at the meeting
taken up in remarks by any one shareholder or group of
shareholders. In addition, until the business to be completed
at a meeting of shareholders is completed, the officer presiding
over the shareholders' meeting is expressly authorized to
temporarily adjourn and postpone the meeting from time to time
subject to any limitations for adjournment specified in
Section 106.
Section 108. Business at Meetings of Shareholders.
(a) Except as otherwise provided by law or in these
bylaws, or except as permitted by the presiding officer of the
meeting in the exercise of such officer's sole discretion in any
specific instance, the business which shall be voted upon or
discussed at any annual or special meeting of the shareholders
shall (i) have been specified in the written notice of the
meeting (or any supplement thereto) given by the corporation,
(ii) be brought before the meeting at the direction of the Board
of Directors, or (iii) in the case of an annual meeting of
shareholders, have been specified in a written notice given to
the corporation by or on behalf of any shareholder who shall
have been a shareholder of record on the record date for such
meeting and who shall continue to be entitled to vote thereat
(the "Shareholder Notice"), in accordance with all of the
requirements set forth below.
(b) Each Shareholder Notice must be delivered to, or
mailed and received at, the principal executive offices of the
corporation addressed to the attention of the President or
Secretary (i) in the case of an annual meeting that is called
for a date that is within 30 days before or after the
anniversary date of the immediately preceding annual meeting of
shareholders, not less than sixty (60) days nor more than ninety
(90) days prior to such anniversary date, provided, that a
proposal submitted by shareholder for inclusion in the
corporation's proxy statement for an annual meeting which is
appropriate for inclusion therein and otherwise complies with
Securities Exchange Act of 1934 Rule 14a-8 (including
timeliness), or any successor rule, shall be deemed to have also
been submitted timely pursuant to these bylaws and (ii) in the
case of an annual meeting that is called for a date that is not
within thirty (30) days before or after the anniversary date of
the immediately preceding annual meeting, or in the case of a
special meeting, not later than the close of business on the
fifth (5) day following the earlier of the day on which notice
of the date of the meeting was mailed or public disclosure of
the meeting date (which shall include disclosure of the meeting
date given to a national securities exchange or the National
Association of Securities Dealers) was made. Each such
Shareholder Notice must set forth (A) the name and address of
the shareholder who intends to bring the business before the
meeting ("Proposing Shareholder"); (B) the name and address of
the beneficial owner, if different than the proposing
Shareholder, of any of the shares of the corporation which are
owned of record and beneficially by the Proposing Shareholder
and the number which are owned beneficially by any Beneficial
owner; (D) any interest (other than an interest solely as a
shareholder) which the Proposing Shareholder or a Beneficial
Owner has in the business being proposed by the Proposing
Shareholder; (E) a description of all arrangements and
understandings between the Proposing Shareholder and any
Beneficial Owner and any other person or persons (naming such
person or persons) pursuant to which the proposal in the
Shareholder Notice is being made; (F) a description of the
business which the Proposing Shareholder seeks to bring before
the meeting, the reason for doing so and, if a specific action
is to be proposed, the text of the resolution or resolutions
which the Proposing Shareholder proposes that the corporation
adopt; and (G) a representation that the Proposing Shareholder
is at the time of giving the Shareholder Notice, was or will be
on the record date for the meeting, and will be on the meeting
date a holder of record of shares of the corporation entitled to
vote at such meeting, and intends to appear in person or by
proxy at the meeting to bring the business specified in the
Shareholder Notice before the meeting. The presiding officer of
the meeting may, in such officer's sole discretion, refuse to
acknowledge any business proposed by a shareholder which the
presiding officer determines is not made in compliance with the
foregoing procedure.
Section 109. Action by Shareholders. Whenever any
corporate action is to be taken by vote of the shareholders, it
shall be authorized upon receiving the affirmative vote of a
majority of the votes cast by all shareholders entitled to vote
thereon and, if any shareholders are entitled to vote thereon as
a class, upon receiving the affirmative vote of the majority of
the votes cast by the shareholders entitled to vote as a class
on the matter, except when a different vote is required by law,
by the articles of incorporation, or by these bylaws.
Section 110. Voting Rights of Shareholders. Unless
otherwise provided in the articles of incorporation, every
shareholder of the corporation shall be entitled to one vote for
every share outstanding in the name of the shareholder on the
books of the corporation.
Section 111. Voting and Other Action by Proxy.
Section 111.1. General. Every shareholder entitled
to vote at a meeting of shareholders or to express consent or
dissent to corporate action in writing without a meeting may
authorize another person or persons to act for that shareholder
by proxy. The presence of, or vote or other action at a meeting
of shareholders, or the expression of consent or dissent to
corporate action in writing, by a proxy of a shareholder shall
constitute the presence of, or vote or action by, or written
consent or dissent of the shareholder. Where two or more
proxies of a shareholder are present, the corporation shall,
unless otherwise expressly provided in the proxy, accept as the
vote of all shares represented thereby the vote cast by a
majority of them and, if a majority of the proxies cannot agree
whether the shares represented shall be voted, or upon the
manner of voting the shares, the voting of the shares shall be
divided equally among those persons.
Section 111.2. Minimum Requirements. Every proxy
shall be executed in writing by the shareholder or by the duly
authorized attorney-in-fact of the shareholder and filed with
the Secretary of the corporation. A telegram, telex, cablegram,
datagram or any other similar transmission permitted by law from
a shareholder or attorney-in-fact, or a photographic, facsimile
or similar reproduction of a writing executed by a shareholder
or attorney-in-fact:
(1) may be treated as properly executed; and
(2) shall be so treated if it sets forth a
confidential and unique identification number or other mark
furnished by the corporation to the shareholder for the purposes
of a particular meeting or transaction.
Section 111.3. Revocation. 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 written notice thereof has been given to the Secretary of
the corporation. An unrevoked proxy shall not be valid after
three (3) years from the date of its execution unless a longer
time is expressly provided therein. A proxy shall not be
revoked by the death or incapacity of the maker unless, before
the vote is counted or the authority is exercised, written
notice of the death or incapacity is given to the Secretary of
the corporation.
Section 112. Voting by Fiduciaries and Pledgees. Shares
of the corporation standing in the name of a trustee or other
fiduciary and shares held by an assignee for the benefit of
creditors or by a receiver may be voted by the trustee,
fiduciary, assignee or receiver. A shareholder whose shares are
pledged shall be entitled to vote the shares until the shares
have been transferred into the name of the pledgee, or a nominee
of the pledgee, but nothing in this section shall affect the
validity of a proxy given to a pledgee or nominee.
Section 113. Voting by Joint Holders of Shares.
Section 113.1. General. Where shares of the
corporation are held jointly or as tenants in common by two or
more persons, as fiduciaries or otherwise:
(1) if only one or more of such persons is present in
person or by proxy, all of the shares standing in the name of
such persons shall be deemed to be represented for the purpose
of determining a quorum and the corporation shall accept as the
vote of all the shares the vote cast by a joint owner or a
majority of them; and
(2) if the persons are equally divided upon whether
the shares held by them shall be voted or upon the manner of
voting the shares, the voting of the shares shall be divided
equally among the persons without prejudice to the rights of the
joint owners or the beneficial owners thereof among themselves.
Section 113.2. Exception. If there has been filed
with the Secretary of the corporation a copy, certified by an
attorney at law to be correct, of the relevant portions of the
agreement under which the shares are held or the instrument by
which the trust or estate was created or the order of court
appointing them or of an order of court directing the voting of
the shares, the persons specified as having such voting power in
the document latest in date of operative effect so filed, and
only those persons, shall be entitled to vote the shares but
only in accordance with that document.
Section 114. Voting by Corporations. Any corporation
that is a shareholder of the corporation may vote by any of its
officers or agents, or by proxy appointed by any officer or
agent, unless some other person, by resolution of the Board of
Directors of the other corporation or a provision of its
articles of incorporation or bylaws, a copy of which resolution
or provision certified to be correct by one of its officers has
been filed with the Secretary of this corporation, is appointed
its general or special proxy in which case that person shall be
entitled to vote the shares.
Section 115. Record Date for Shareholder Meetings. The
Board of Directors may fix a time prior to the date of any
meeting of shareholders as a record date for the determination
of the shareholders entitled to notice of, or to vote at, the
meeting, which time, except in the case of an adjourned meeting,
shall be not more than ninety (90) days prior to the date of the
meeting of shareholders. Only shareholders of record on the
date fixed shall be so entitled notwithstanding any transfer of
shares on the books of the corporation after any record date
fixed as provided in this section. The Board of Directors may
similarly fix a record date for the determination of
shareholders of record for any other purpose. When a
determination of shareholders of record has been made as
provided in this section for purposes of a meeting, the
determination shall apply to any adjournment thereof unless the
Board fixes a new record date for the adjourned meeting.
Section 116. Voting List. The officer or agent having
charge of the transfer books for shares of the corporation shall
make a complete list of the shareholders entitled to vote at any
meeting of shareholders, arranged in alphabetical order, with
the address of and the number of shares held by each. The list
shall be produced and kept open at the time and place of the
meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting for the
purposes thereof.
Failure to comply with the requirements of this section shall
not affect the validity of any action taken at a meeting prior
to a demand at the meeting by any shareholder entitled to vote
thereat to examine the list. The original share register or
transfer book, or a duplicate thereof kept in Pennsylvania,
shall be prima facie evidence as to who are the shareholders
entitled to examine the list or share register or transfer book
or to vote at any meeting of shareholders.
Section 117. Judges of Election. In advance of any
meeting of shareholders of the corporation, the Board of
Directors may appoint judges of election, who need not be
shareholders, to act at the meeting or any adjournment thereof.
If judges of election are not so appointed, the presiding
officer of the meeting may, and on the request of any
shareholder shall, appoint judges of election at the meeting.
The number of judges shall be one or three. No person who is a
candidate for office to be filled at the meeting shall act as a
judge of election. In the event any person appointed as a judge
fails to appear or fails or refuses to act, the vacancy may be
filled by appointment made by the Board of Directors in advance
of the convening of the meeting or at the meeting by the
presiding officer thereof. The judges of election shall
determine the number of shares outstanding and the voting power
of each, the shares represented at the meeting, the existence of
a quorum, the authenticity, validity and effect of proxies,
receive votes or ballots, hear and determine all challenges and
questions in any way arising in connection with the right to
vote, count and tabulate all votes, determine the result and do
such acts as may be proper to conduct the election or vote with
fairness to all shareholders. The judge or judges of election
shall perform their duties impartially, in good faith, to the
best of their ability and as expeditiously as is practical. If
there are three judges of election, the decision, act or
certificate of a majority shall be effective in all respects as
the decision, act or certificate of all. On request of the
presiding officer of the meeting, or of any shareholder, the
judge or judges shall make a report in writing of any challenge
or question or matter determined by such judge or judges and
execute a certificate of any fact found by such judge or judges.
Any report or certificate made by such judge or judges shall be
prima facie evidence of the facts stated therein.
ARTICLE II. BOARD OF DIRECTORS.
Section 201. General. All powers vested by law in the
corporation shall be exercised by or under the authority of, and
the business and affairs of the corporation shall be managed
under the direction of, the Board of Directors.
Section 202. Number, Qualifications, and Term of Office.
The Board of Directors shall consist of not less than five (5)
nor more than twenty-five (25) members, the exact number to be
fixed and determined from time to time by resolution of a
majority of the full Board of Directors. Each director shall be
a natural person of full age and shall meet such other
qualifications and serve for such term as described in the
articles of incorporation. The Board of Directors shall be
divided into three (3) classes as provided in the articles of
incorporation Each director shall hold office until the
expiration of the term for which he or she was selected and
until a successor has been selected and qualified or until such
director's earlier death, resignation, removal or
disqualification. A decrease in the number of directors shall
not have the effect of shortening the term of any incumbent
director.
Section 203. Nominations for Director. Notwithstanding
the provisions of Section 108 of these Bylaws (dealing with
business at meetings of shareholders), nominations for the
election of directors may be made by the Board of Directors, by
a committee appointed by the Board of Directors with authority
to do so or by any shareholder of record entitled to vote in the
election of directors who is a shareholder at the record date of
the meeting and also on the date of the meeting at which
directors are to be elected; provided, however, that with
respect to a nomination made by a shareholder, such shareholder
must provide timely written notice to the President of the
corporation in accordance with the following requirements:
(a) to be timely, a shareholder's notice must be
delivered to, or mailed and received at, the principal executive
offices of the corporation addressed to the attention of the
president (i) in the case of an annual meeting that is called
for a date that is within thirty (30) days before or after the
anniversary date of the immediately preceding annual meeting of
shareholders, not less than sixty (60) days nor more than ninety
(90) days before or after the anniversary date of the
immediately preceding annual meeting, or (ii) in the case of a
special meeting of shareholders called for the purpose of
electing directors, not later than the close of business on the
fifth day following the earlier of the day on which notice of
the date of the meeting was mailed or public disclosure of the
meeting date (which shall include disclosure of the meeting date
given to a national securities exchange or the National
Association of Securities dealers) was made; and
(b) each such written notice must set forth: (i) the
name and address of the shareholder who intends to make the
nomination ("Nominating Shareholder"); (ii) the name and address
of the beneficial owner, if different than the Nominating
Shareholder, of any of the shares owned of record by the
Nominating Shareholder ("Beneficial Holder"); (iii) the number
of shares of each class and series of shares of the corporation
which are owned of record and beneficially by the Nominating
Shareholder and the number which are owned beneficially by any
Beneficial Holder; (iv) a description of all arrangements and
understandings between the Nominating Shareholder and any
Beneficial Holder and any other person or persons (naming such
person or persons) pursuant to which the nomination is being
made; (v) the name and address of the person or persons to be
nominated; (vi) a representation that the Nominating Shareholder
is at the time of giving of the notice, was or will be on the
record date for the meeting, and will be on the meeting date a
holder of record of shares of the Corporation entitled to vote
at such meeting, and intends to appear in person or by proxy at
the meeting to nominate the person or persons specified in the
notice; (vii) such other information regarding each nominee
proposed by the Nominating Shareholder as would have been
required to be included in a proxy statement filed pursuant to
the proxy rules of the Securities and Exchange Commission had
the nominee been nominated, or intended to be nominated, by the
Board of Directors; and (viii) the written consent of each
nominee to serve as a director of the corporation if so elected.
The presiding officer of the meeting may, in such officer's sole
discretion, refuse to acknowledge the nomination of any person
which the presiding officer determines is not made in compliance
with the foregoing procedure.
Section 204. Eligibility and Mandatory Retirement. No
person shall be eligible for nomination or for election to the
Board of Directors of the corporation if such person would
attain the age of seventy (70) years at any time during such
person's term as a director, if elected; provided, however, that
the preceding provisions of this sentence shall not apply to
persons elected as directors of the corporation pursuant to the
terms or a definitive agreement of acquisition or merger
approved by the Board of Directors of the Company to the extent,
but only to the extent, specifically provided in such agreement.
This Section 204 shall not apply to individuals exempt from the
retirement policies of The Peoples Bank of Oxford pursuant to a
resolution adopted by its Board of Directors on February 28,
1989.
Section 205. Vacancies. Vacancies in the Board of
Directors, including vacancies resulting from an increase in the
number of directors, may be filled by the remaining directors
even though less than a quorum. Any director elected to fill a
vacancy in the Board of Directors shall become a member of the
same class of directors in which the vacancy existed; but, if
the vacancy is due to an increase in the number of Directors, a
majority of the directors shall designate such directorship as
belonging to Class I, Class II or Class III so as to maintain
the three (3) classes of directors as nearly equal in number as
possible. Each director so elected shall serve as a director
for the remaining term of the Class to which such director was
elected and until such director's successor is elected by the
shareholders.
Section 206. Regular Meetings. The Board of Directors
shall hold an annual meeting for the election of officers and
the transaction of other proper business either as soon as
practical after, and at the same place as, the annual meeting of
shareholders or at such other day, hour and place as may be
fixed by the Board. The Board of Directors may designate by
resolution the day, hour and place, within or outside the
Commonwealth of Pennsylvania, of other regular meetings.
Section 207. Special Meetings. Special meetings of the
Board of Directors may be called by the Chairman, the President
or one-third (1/3) of the directors then in office. The person
or persons calling the special meeting may fix the day, hour and
place, within or outside the Commonwealth of Pennsylvania, of
the meeting, provided that the place shall be within ten (10)
miles of the corporation's registered office unless all of the
directors agree that the meeting can be held outside of such
radius.
Section 208. Notice of Meetings. No notice of any annual
or regular meeting of the Board of Directors need be given.
Written notice of each special meeting of the Board of
Directors, specifying the place, day and hour of the meeting,
shall be given in any manner permitted by law to each director
at least forty-eight (48) hours before the time set for the
meeting. Neither the business to be transacted at, nor the
purpose of, any annual, regular or special meeting of the Board
need be specified in the notice of the meeting.
Section 209. Quorum of and Action by Directors. A
majority of the directors in office shall constitute a quorum
for the transaction of business, and the acts of a majority of
directors present at a meeting at which a quorum is present
shall be the acts of the Board of Directors except where a
different vote is required by law, the articles of
incorporation, or these bylaws. Every director shall be
entitled to one vote.
Section 210. Compensation. By resolution of the Board of
Directors, each director may be paid his or her expenses, if
any, of attendance at each meeting of the Board of Directors or
any committee thereof, and may be paid a stated salary as
director or a fixed sum for attendance at each meeting of the
Board of Directors or committee thereof or both or may receive
such other remuneration as the Board of Directors shall
determine. No such payment shall prevent any director from
serving the corporation in any other capacity and receiving
compensation therefor, and a director may be a salaried officer
or employee of the corporation.
Section 211. Presumption of Assent. A director of the
corporation who is present at a meeting of the 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 or her dissent is entered in the minutes
of the meeting or unless that director files his or her written
dissent to the action with the secretary of the meeting before
its adjournment or transmits the dissent in writing to the
Secretary of the corporation immediately after the adjournment
of the meeting. Such right to dissent shall not apply to a
director who voted in favor of the action. Nothing in this
section shall bar a director from asserting that minutes of a
meeting incorrectly omitted that director's dissent if, promptly
upon receipt of a copy of those minutes, the director notified
the Secretary of the corporation, in writing, of the asserted
omission or inaccuracy.
Section 212. Reports and Records. The reports of
officers and committees of the Board of Directors and the
records of the proceedings of all committees shall be filed with
the Secretary of the corporation and presented or made available
to the Board of Directors. The Board of Directors shall keep
complete records of its proceedings in a minute book kept for
that purpose. When a director shall request it, the vote of
each director upon a particular question shall be recorded in
the minutes.
Section 213. Personal Liability of Directors;
Indemnification.
Section 213.1. Personal Liability of Directors. To
the fullest extent permitted by Pennsylvania law, a director of
the corporation shall not be personally liable to the
corporation, its shareholders or others for monetary damages for
any action taken or any failure to take any action unless the
director has breached or failed to perform the duties of his or
her office as set forth in the Pennsylvania Business Corporation
Law of 1988 and such breach or failure constitutes self-dealing,
willful misconduct, or recklessness. The provisions of this
Section shall not apply with respect to the responsibility or
liability of a director under any criminal statute or the
liability of a director for the payment of taxes pursuant to
local, state or federal law. Any repeal, modification, or
adoption of any provision inconsistent with this Section 213.1
shall be prospective only, and neither the repeal or
modification of this bylaw nor the adoption of any provision
inconsistent with this bylaw shall adversely affect any
limitation on the personal liability of a director of the
corporation existing at the time of such repeal or modification
or the adoption of such inconsistent provision.
Section 213.2. Indemnification.
(a) The corporation shall indemnify and hold
harmless, to the full extent not prohibited by law, as it now
exists or may be amended, interpreted or implemented (but, in
the case of any amendment, only to the extent that the amendment
permits the corporation to provide broader indemnification
rights than were permitted prior to the amendment), each person
who was or is made a party or is threatened to be made a party
to or is otherwise involved in (as a witness or otherwise) any
threatened, pending or completed action, suit, or proceeding,
whether civil, criminal, administrative or investigative and
whether or not by or in the right of the corporation or
otherwise (hereinafter, a "proceeding"), by reason of the fact
that he or she, or a person of whom he or she is the heir,
executor, or administrator, is or was a director or officer of
the corporation or is or was serving at the request of the
corporation as a director, officer or trustee of another
corporation or of a partnership, joint venture, trust or other
enterprise (including without limitation service with respect to
employee benefit plans), or where the basis of the proceeding is
any alleged action or failure to take any action by that person
while acting in an official capacity as a director or officer of
the corporation or in any other capacity on behalf of the
corporation while that person is or was serving as a director or
officer of the corporation, against all expenses, liability and
loss, including but not limited to attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be
paid in settlement (whether with or without court approval),
actually incurred or paid by that person in connection with the
proceeding.
(b) Notwithstanding the foregoing, except as provided
in Section 213.3 below, the corporation shall indemnify any
person seeking indemnification in connection with a proceeding
(or part of it) initiated by that person only if the proceeding
(or part of it) was authorized by the Board of Directors of the
corporation.
(c) Subject to the limitation stated above concerning
proceedings initiated by the person seeking indemnification, the
right to indemnification conferred in this Section 213.2 shall
be a contract right and shall include the right to be paid by
the corporation the expenses incurred in defending any such
proceeding (or part of it) or in enforcing his or her rights
under this Section 213.2 in advance of the final disposition of
the proceeding. Such payment shall be made promptly after
receipt by the corporation of a request for payment stating in
reasonable detail the expenses incurred. However, to the extent
required by law, the payment of such expenses incurred by a
director or officer of the corporation in advance of the final
disposition of a proceeding shall be made only upon receipt of
an undertaking, by or on behalf of that person, to repay all
amounts so advanced if and to the extent it shall ultimately be
determined by a court that he or she is not entitled to be
indemnified by the corporation under this Section 213.2 or
otherwise.
(d) The right to indemnification and advancement of
expenses provided herein shall continue for a person who has
ceased to be a director or officer of the corporation or to
serve in any of the other capacities described herein, and shall
inure to the benefit of the heirs, executors and administrators
of such person.
Section 213.3. Payment of Indemnification. If a
claim for indemnification under Section 213.2 of these bylaws is
not paid in full by the corporation within thirty (30) days
after a written claim for indemnification has been received by
the corporation, the claimant may, at any time afterwards, bring
suit against the corporation to recover the unpaid amount of the
claim and, if successful in whole or in part on the merits or
otherwise in establishing his or her right to indemnification or
to the advancements of expenses, the claimant shall be entitled
to be paid also the expense of prosecuting the claim.
Section 213.4. Nonexclusivity of Rights. The right
to indemnification and the payment of expenses incurred in
defending a proceeding in advance of a final disposition
conferred in Section 213.2 and the right to payment of expenses
conferred in Section 213.3 shall not be deemed exclusive of any
other rights to which those seeking indemnification or
advancement of expenses hereunder may be entitled under any
bylaw, agreement, vote of shareholders, vote of directors or
otherwise, both as to actions in his or her official capacity
and as to actions in any other capacity while holding that
office. The corporation shall have the express authority to
enter into such agreements or arrangements as the Board of
Directors deems appropriate for the indemnification of and
advancement of expenses to present or future directors and
officers as well as employees, representatives or agents of the
corporation in connection with their status with or services to
or on behalf of the corporation or any other corporation,
partnership, joint venture, trust or other enterprise, including
any employee benefit plan, for which the person is serving at
the request of the corporation.
Section 213.5. Funding. 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, including its obligation
to advance expenses, whether arising under or pursuant to this
Section 213 or otherwise.
Section 213.6. Insurance. The corporation may
purchase and maintain insurance on behalf of any person who is
or was a director or officer or representative of the
corporation, or is or was serving at the request of the
corporation as a representative of another corporation,
partnership, joint venture, trust or other enterprise, against
any liability asserted against that person and incurred by that
person in any such capacity, or arising out of his or her status
as such, whether or not the corporation has the power to
indemnify that person against such liability under the laws of
this Commonwealth or of any other state.
Section 213.7. Modification or Repeal. Neither the
modification, amendment, alteration or repeal of this
Section 213 or any of its provisions nor the adoption of any
provision inconsistent with this Section 213 or any of its
provisions shall adversely affect the rights of any person to
indemnification and advancement of expenses existing at the time
of such modification, amendment, alteration or repeal or the
adoption of such inconsistent provision.
ARTICLE III. COMMITTEES.
Section 301. Committees. The Board of Directors may, by
resolution adopted by a majority of the directors in office,
establish one or more committees, each committee to consist of
one or more of the directors of the corporation. The Board of
Directors may designate one or more directors as alternate
members of any committee who may replace any absent or
disqualified member at any meeting of the committee or for
purposes of any written action of the committee. A committee,
to the extent provided in the resolution of the Board of
Directors creating it, shall have and may exercise all of the
powers and authority of the Board of Directors except as limited
by law. Each committee of the Board shall serve at the pleasure
of the Board.
Section 302. Committee Rules. Unless the Board of
Directors provides otherwise by resolution, each committee
established by the Board may adopt and amend rules for the
conduct of its business. In the absence of a resolution of the
Board to the contrary, a majority of the entire authorized
number of members of such committee shall be necessary to
constitute a quorum for the transaction of business. The acts
of a majority of the members present at a meeting if a quorum is
then present shall be the acts of the committee.
ARTICLE IV. OFFICERS.
Section 401. Officers. The officers of the corporation
shall consist of a Chairman of the Board, a President, a
Secretary, and a Treasurer. The Board of Directors may also
elect one or more other officers or assistant officers as deemed
advisable. All officers of the corporation shall be elected by
the Board of Directors for such terms as the Board of Directors
shall determine from time to time. Any officer may be removed
at any time with or without cause, and regardless of the term
for which such officer was elected, but without prejudice to any
contract rights of such officer. Each officer shall hold his or
her office for the term for which he or she was elected or
appointed by the Board unless such officer shall resign, become
disqualified or be removed at the pleasure of the Board.
Section 402. Chairman of the Board. The Board of
Directors shall elect one of its members to be Chairman of the
Board at the first regular meeting of the Board following each
annual meeting of shareholders at which directors are elected.
The Chairman of the Board shall preside at the meetings of the
Board and the shareholders, and shall perform such other duties
as may be assigned by the Board of Directors. The Chairman of
the Board shall be an ex officio member of all committees of the
Board of Directors, except the Audit Committee.
Section 403. President. In the absence of the Chairman
of the Board, the President shall preside at all meetings of the
shareholders and directors. The President shall have general
and active management of the business of the corporation, shall
see that all orders and resolutions of the Board of Directors
are carried into effect, subject, however, to the right of the
directors to delegate any specific powers, except such as may be
by statute exclusively conferred on the President, to any other
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 an ex officio member of all
committees of the Board of Directors, except the Audit
Committee, and shall have the general powers and duties of
supervision and management usually vested in the office of the
chief operating officer of a corporation. In the absence or
upon the incapacity of the President, the Chairman of the Board
shall designate an officer to perform the duties and exercise
the powers of the President until such time as the Board of
Directors shall determine otherwise.
Section 404. Secretary. The Secretary shall (a) keep or
cause to be kept the minutes of all meetings of the
shareholders, the Board of Directors, and any committees of the
Board of Directors in one or more books kept for that purpose,
(b) have custody of the corporate records, stock books and stock
ledgers of the corporation, (c) keep or cause to be kept a
register of the address of each shareholder, (d) see that all
notices are duly given in accordance with law, the articles of
incorporation, and these bylaws, and (e) in general perform all
the usual duties incident to the office of secretary and such
other duties as may be assigned to him or her by the Board of
Directors, the Chairman of the Board or the President. The
Secretary may delegate any of his or her duties to any
management officer or to any duly elected or appointed assistant
secretary and may delegate custody of the corporation's stock
books, stock ledgers, shareholder lists and the like to a duly
appointed stock transfer agent and/or registrar or, in the case
of records regarding debt instruments, to an indenture or bond
trustee, registrar or similar entity.
Section 405. Treasurer. The Treasurer shall act under
the supervision of the Chairman of the Board or the President or
such other officer as the Chairman of the Board or the President
may designate. The Treasurer shall have general supervision of
the fiscal affairs of the corporation. The Treasurer shall,
with the assistance of the President and managerial staff of the
corporation: (a) see that a full and accurate accounting of all
financial transactions is made; (b) invest and reinvest the
capital funds of the corporation in such manner as may be
directed by the Board of Directors, unless that function shall
have been delegated to a nominee or agent; (c) deposit or cause
to be deposited in the name and to the credit of the
corporation, in such depositories as the Board of Directors
shall designate, all monies and other valuable effects of the
corporation not otherwise employed; (d) prepare financial
reports that may be requested from time to time by the Board;
(e) cooperate in the conduct of any annual audit of the
Corporation's financial records by certified public accountants
duly appointed by the Board; and (f) in general perform all the
usual duties incident to the office of the treasurer and such
other duties as may be assigned to him or her by the Board of
Directors or the President. The Treasurer shall also be ex
officio an assistant secretary of the corporation.
Section 406. Other Officers. Each other officer or
assistant officer shall perform such duties as shall be
designated by the Board of Directors, the Chairman of the Board
or the President.
Section 407. Compensation. Unless otherwise provided by
the Board of Directors, the salaries and compensation of all
officers and assistant officers shall be fixed by or in the
manner designated by the Board of Directors.
ARTICLE V. SHARES OF CAPITAL STOCK.
Section 501. Authority to Sign share Certificates. Every
share certificate of the corporation shall be signed by the
Chairman of the Board or the President and by the Secretary or
one of the Assistant Secretaries. Certificates may be signed by
a facsimile signature.
Section 502. Transfer of Shares. Transfer of shares of
the corporation shall be made only on the stock transfer records
of the corporation (which may be kept in written or computer
form). Transfers shall be made by the corporation or its duly
authorized agent as required by law. The corporation shall be
entitled to treat the person in whose name shares stand on the
books of the corporation as the owner thereof for all purposes.
Section 503. Lost or Destroyed Certificates. Any person
claiming a share certificate to be lost, destroyed or wrongfully
taken shall receive a replacement certificate if such person
shall have: (a) requested such replacement certificate before
the corporation has notice that the shares have been acquired by
a bona fide purchaser; (b) provided the corporation with an
indemnity agreement satisfactory in form and substance to the
Board of Directors, the Chairman of the Board or the President;
and (c) satisfied any other requirements (including providing an
affidavit of loss and a surety bond) fixed by the Board of
Directors, the Chairman of the Board or the President.
ARTICLE VI. GENERAL.
Section 601. Fiscal year. The fiscal year of the
Corporation shall begin on the first (1st) day of January in each
year and end on the thirty-first (31st) day of December in each
year.
Section 602. Record Date for Distributions, Etc. The
Board of Directors may fix any time whatsoever (but not more
than ninety (90) days) prior to the date 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 will go into effect, as a record date for
the determination of the shareholders entitled to receive
payment of any such dividend or distribution, or to receive any
such allotment of rights, or to exercise the rights in respect
to any such change, conversion or exchange of shares.
Section 603. Absentee Participation in Meetings. One (1)
or more directors may participate in a meeting of the Board of
Directors, or of a Committee of the Board, by means of a
conference telephone or similar communications equipment, by
means of which all persons participating in the meeting can hear
each other.
Section 604. Emergency Bylaws. In the event any emergency
resulting from a nuclear attack or similar disaster, and during
the continuance of such emergency, the following Bylaw
provisions shall be in effect, notwithstanding any other
provisions of the Bylaws:
(a) a meeting of the Board of Directors or of any
Committee thereof may be called by the Chairman of the Board,
the President or any director upon two (2) hour's notice to all
persons entitled to notice whom, in the sole judgment of the
notifier, it is feasible to notify;
(b) the director or directors in attendance at the
meeting of the Board of Directors or of any Committee thereof
shall constitute a quorum; and
(c) these Bylaws may be amended or repealed, in whole
or in part, by a majority vote of the directors attending any
meeting of the Board of Directors, provided such amendment or
repeal shall only be effective for the duration of such
emergency.
Section 605. Severability. If any provision of these
Bylaws is illegal or unenforceable as such, such illegality or
unenforceability shall not affect any other provision of these
Bylaws and such other provisions shall continue in full force
and effect.
ARTICLE VII. AMENDMENT OR REPEAL.
Section 701. Amendment or Repeal by the Board of
Directors. The authority to amend, alter, change or repeal
these Bylaws is vested in the Board of Directors, subject to the
power of the shareholders to change such action, all in
accordance with the provisions of the articles of incorporation.
Section 702. Recording Amendments and Repeals. The text
of all amendments and repeals to these Bylaws shall be attached
to the Bylaws with a notation of the date and vote of such
amendment or repeal.
EXHIBIT D
SUBCHAPTER D OF CHAPTER 15 OF THE
PENNSYLVANIA BUSINESS CORPORATION LAW OF 1988
Subchapter D.-Dissenters Rights
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).
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.
(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.
"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 the shares 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 of 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 beneficial 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 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 uncertified
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 which the original dissenter had
after making demand for payment of their fair value.
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.
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 arc 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 benefited.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pennsylvania law provides that a Pennsylvania
corporation may indemnify directors, officers, employees and
agents of the corporation against liabilities they may incur in
such capacities for any action taken or any failure to act,
whether or not the corporation would have the power to indemnify
the person under any provision of law, unless such action or
failure to act is determined by a court to have constituted
recklessness or willful misconduct. Pennsylvania law also
permits the adoption of a bylaw amendment, approved by
shareholders, providing for the elimination of a director's
liability 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 and (2) the breach
or failure to perform constitutes self-dealing, willful
misconduct or recklessness.
The bylaws of Peoples First, Inc. provide for (1) the
indemnification of directors, officers, employees and agents of
the registrant and its subsidiaries and (2) the elimination of a
director's liability for monetary damages, to the fullest extent
permitted by Pennsylvania law.
Directors and officers will also be insured against
certain liabilities for their actions, as such, by an insurance
policy to be obtained by Peoples First, Inc.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The exhibits and financial statement schedules filed as
part of this Registration Statement are as follows:
(a) Exhibits
The following is a list and index of the exhibits filed
with this Registration Statement.
Exhibit
Number Description of Document
2 Agreement and Plan of Reorganization (attached as
Exhibit A to the Proxy Statement/Prospectus filed as
part of this registration statement).
3.1 Articles of Incorporation of Peoples First, Inc.
(attached as Exhibit B to the Proxy Statement/
Prospectus filed as part of this registration
statement).
3.2 Bylaws of Peoples First, Inc. (attached as
Exhibit C to the Proxy Statement/ Prospectus filed as
part of this registration statement).
5 Opinion of Stevens & Lee, P.C. regarding legality of
securities.*
8 Form of Tax Opinion of Stevens & Lee, P.C.*
23 Consents of Stevens & Lee, P.C. (contained in its
opinions filed as Exhibits 5 and 8).
99 Form of proxy to be mailed to shareholders of The
Peoples Bank of Oxford.*
(b) Financial Statement Schedules
Not applicable.
(c) Report or Appraisal
Not applicable.
____________________
* Previously Filed.
ITEM 22. UNDERTAKINGS
(a) Rule 415 Offering. 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 prospectus any facts or
events arising after the effective date of the registration
statement (or 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;
(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 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 a 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) Registration on Form S-4 of Securities Offered for
Resale.
(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 (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 the 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 Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the bylaws of the registrant, 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 Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter 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 Act and will be
governed by the final adjudication of such issue.
(d) 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.
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in Oxford, Pennsylvania on January 27, 2000.
PEOPLES FIRST, INC.
Date: March 21, 2000 By: /s/ George C. Mason
George C. Mason,
Chief Executive Officer
(Duly Authorized
Representative)
Pursuant to the requirements of the Securities Act of 1933,
as amended, this registration statement has been signed below by
the following persons in the capacities and on the dates
indicated.
Signature Title Date
/s/ George C. Mason Chairman of the March 21, 2000
George C. Mason Board, Chief
Executive Officer
and Director
(Principal
Executive Officer)
/s/ Susan H. Reeves Senior Vice March 21, 2000
Susan H. Reeves President (Princi-
pal Financial and
Accounting Officer)
/s/ Carl R. Fretz_____ Vice Chairman, March 21, 2000
Carl R. Fretz Corporate Secretary
and Director
/s/ Hugh J. Garchinsky President and March 21, 2000
Hugh J. Garchinsky Director
/s/ Ross B. Cameron Director March 21, 2000
Ross B. Cameron
/s/ Ben S. Beiler Director March 21, 2000
Ben S. Beiler
/s/ Arthur A. Bernardon Director March 21, 2000
Arthur A. Bernardon
/s/ Clyde L. Cameron Director March 21, 2000
Clyde L. Cameron
/s/ Emidio Frezzo, Jr. Director March 21, 2000
Emidio Frezzo, Jr.
4
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B-5
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D-9
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