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Exhibit 99.1
November 29, 2000
Community Bank System, Inc.
5790 Widewaters Parkway
DeWitt, New York 13214
Attention: President and Chief Executive Officer
Dear Ladies and Gentlemen:
The undersigned is a director and/or executive officer of First
Liberty Bank Corp., a Pennsylvania corporation (the "Company"), and is the
beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended) of such number of shares (the "Shares") of common stock, par
value $0.31 per share, of the Company ("Company Common Stock") as is indicated
on the last page hereof.
The undersigned has been made aware that the Company and Community
Bank System, Inc. ("CBSI") are considering the execution of an Agreement and
Plan of Merger (the "Merger Agreement"), providing for certain transactions
pursuant to which the Company would be merged with and into CBSI (the "Merger").
The undersigned understands that CBSI would not enter into the Merger Agreement
unless this letter agreement is executed and delivered (this "Agreement") by
each director and executive officer of the Company, including the undersigned.
In consideration of the substantial expenses that CBSI and its subsidiaries will
incur in connection with the Merger and in order to induce CBSI to execute the
Merger Agreement, the undersigned agrees and undertakes, in his capacity as a
shareholder of the Company, as follows:
1. Voting of Shares. At every meeting of the shareholders of the
Company called for the purpose of voting on a proposal to approve the Merger
Agreement and the Merger (and at every adjournment thereof), and on every
consent or approval by written consent of the shareholders of the Company for
such purpose, the undersigned will vote or cause to be voted in favor of such
proposal all the shares of the Company Common Stock the undersigned is entitled
to vote with respect thereto, including all of the Shares.
2. Pooling Restrictions.
(a) The undersigned agrees not to sell, pledge or otherwise
dispose of, or in any other way reduce the risk of the undersigned relative to,
any of the Shares or any shares of common stock, no par value, of CBSI issuable
to the undersigned in the Merger ("CBSI Common Shares") during the period
commencing 30 days prior to the effective time of the Merger and ending on the
date (the "Publication Date") on which financial results covering at least 30
days of post-merger combined operations of CBSI and the Company have been
published within the meaning of Section 201.01 of the Codification of Financial
Reporting Policies of the Securities and Exchange Commission (the "SEC").
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(b) The undersigned understands that, until the Publication
Date, the certificates representing the CBSI Common Shares received in the
Merger will be subject to stop transfer instructions given to CBSI's transfer
agent, and that there may be placed on the certificate(s) representing such
stock, or any certificate(s) delivered in substitution therefor, a legend
stating in substance:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED
ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THE LETTER
AGREEMENT, DATED AS OF NOVEMBER 29, 2000, RELATING THERETO, A COPY
OF WHICH IS ON FILE WITH THE SECRETARY OF COMMUNITY BANK SYSTEM,
INC."
(c) The undersigned acknowledges and agrees that the
provisions of this paragraph 2 shall also apply to shares of the Company Common
Stock or CBSI Common Shares owned by (a) his or her spouse, (b) any of his or
her relatives or relatives of his or her spouse occupying his or her home, (c)
any trust or estate in which he or she, his or her spouse, or any such relative
owns at least a 10% beneficial interest or of which any of them serves as
trustee, executor or in any similar capacity, and (d) any corporation or other
organization in which the undersigned, any affiliate of the undersigned, his or
her spouse, or any such relative owns at least 10% of any class of equity
securities or of the equity interest. The undersigned agrees to use his or her
best efforts to cause the foregoing persons and entities to comply with this
paragraph 2.
3. Covenants under Rule 145.
(a) The undersigned has been advised that the issuance of CBSI
Common Shares to the undersigned pursuant to the Merger will be registered under
the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
registration statement on Form S-4 (the "S-4 Registration Statement"). The
undersigned has also been advised that the undersigned will or may be deemed an
"affiliate" of the Company at the time the Merger is submitted to a vote of the
shareholders of the Company, and as such, will be subject to Rule 145
promulgated under the Securities Act. Accordingly, the undersigned shall not
sell or otherwise dispose of any CBSI Common Shares, except (i) in accordance
with Rule 145(d) promulgated under the Securities Act, (ii) at such time as a
registration statement under the Securities Act covering sales of such CBSI
Common Shares is effective and a prospectus is made available in accordance with
the Securities Act, or (iii) in a transaction which, in the opinion of counsel
satisfactory to CBSI (which opinion may be based upon a "no-action" or
interpretative letter from the staff of the SEC), is not required to be
registered under the Securities Act.
Generally speaking, this means that, in any given three month
period the undersigned may not sell or otherwise dispose of a number of CBSI
Common Shares which exceeds the greater of (i) 1% of the then outstanding number
of CBSI Common Shares, or (ii) the average weekly trading volume of CBSI Common
Shares during the four weeks preceding the sale. In addition, any CBSI Common
Shares must be sold in a brokers' transaction or in a direct transaction with a
market maker. The restrictions discussed in this paragraph are only applicable
for a one year period following the closing of the Merger, unless you become an
"affiliate" of
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CBSI as a result of the Merger or otherwise, in which case you will continue to
be subject to similar restrictions under Rule 144 promulgated under the
Securities Act until at such time as Rule 144(k) becomes applicable.
(b) The undersigned understands and agrees that: (i) CBSI is
under no obligation to register the sale, transfer or other disposition of the
CBSI Common Shares to be received by the undersigned in the Merger under the
Securities Act and any applicable state securities laws, except pursuant to the
S-4 Registration Statement; (ii) stop transfer instructions will be given to the
transfer agent of CBSI with respect to the CBSI Common Shares to be received by
the undersigned in the Merger, and there will be placed on the certificate(s)
representing such stock, or any certificate(s) delivered in substitution
therefor, a legend stating in substance:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 UNDER THE SECURITIES ACT OF 1933 (THE
"ACT") APPLIES. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY
BE TRANSFERRED ONLY IN ACCORDANCE WITH RULE 145(d) OR PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR EXEMPTION FROM REGISTRATION
UNDER THE ACT."
Unless the transfer by the undersigned is a sale made in conformity with the
provisions of Rule 145(d), or is made pursuant to a registration statement under
the Securities Act, CBSI reserves the right to put an appropriate Securities Act
legend on the certificate issued to a transferee of the undersigned. CBSI agrees
that the stop transfer instructions and legends referred to above shall be
promptly terminated or removed if the undersigned or any permissible transferee
shall have delivered to CBSI a copy of a letter from the staff of the SEC or an
opinion of counsel with recognized expertise in securities law matters, in form
and substance reasonably satisfactory to CBSI, to the effect that such
instructions and legends are not required for the purposes of the Securities
Act.
4. No Intent to Sell; Transfers in Violation. The undersigned
represents that he or she has no plan or intention to sell, pledge or otherwise
dispose of any of the Shares or CBSI Common Shares in violation of this
Agreement. The undersigned agrees that any sale, pledge or other disposition of
CBSI Common Shares or shares of Company Common Stock contrary to any provision
of this Agreement shall be null and void, and neither CBSI nor the Company shall
be bound by, or be required to recognize on its transfer books, any such
transaction.
5. Related Actions. The undersigned shall use his or her best
reasonable efforts to cause the completion of the Merger at the earliest
possible date.
6. Termination. This Agreement shall terminate and shall have no
further force or effect only as of such date and time as the Merger Agreement
shall have been terminated pursuant to its terms.
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7. Remedies. The undersigned acknowledges and agrees that any remedy
at law for breach of the foregoing provisions shall be inadequate and that, in
addition to any other relief which may be available, CBSI shall be entitled to
temporary and permanent injunctive relieve without the necessity of proving
monetary damages or posting a bond.
8. Enforcement. The undersigned represents that he or she has the
capacity to enter into this Agreement and that it is a valid and binding
obligation enforceable against the undersigned in accordance with its terms,
subject to bankruptcy, insolvency and other laws affecting creditor's rights and
general equitable principles.
9. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, then the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
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IN WITNESS WHEREOF, the undersigned has executed this Agreement as
of the date of first above written.
Very truly yours,
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Name:
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shares of the Company
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Common Stock Owned.
Accepted and agreed to as of
the date first above written:
COMMUNITY BANK SYSTEM, INC.
By:
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Name: Sanford A. Belden
Title: President and Chief
Executive Officer
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