SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of Report (Date of earliest event reported) January 23, 1999
CNB Bancorp, Inc
(Exact Name of Registrant as Specified in its Charter)
New York
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (518) 773-7911
N/A
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events
Registrant entered into a definitive agreement to acquire Adirondack
Financial Services Bancorp, Inc. ("Adirondack") on January 23, 1999. Pursuant
to the terms of the transaction, Registrant will merge Adirondack's wholly
owned subsidiary, Gloversville Federal Savings and Loan Association, into its
banking subsidiary, City National Bank and Trust Company, at the consummation
of the acquisition of Adirondack. Under the terms of the transaction,
shareholders of Adirondack will receive $15 million is cash in the aggregate,
subject to possible adjustment, for all of the outstanding shares of
Adirondack. The transaction is subject to regulatory approval and the
approval of Adirondack's shareholders.
Item 7. Financial Statements and Exhibits
Registrant files as part of this report the following Exhibits:
Exhibit Number Description
2 Agreement of Merger dated January 23, 1999
99 CNB Bancorp, Inc. press release
dated January 25, 1999
Signature
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
CNB Bancorp, Inc.
Dated: February 4, 1999 By /s/ George A. Morgan
---------------- ------------------------------------------
George A. Morgan, Executive Vice President
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Page Number
2 Agreement of Merger dated January 4
23, 1999
99 CNB Bancorp, Inc. press release dated 66
January 25, 1999
<PAGE>
EXHIBIT 2
AGREEMENT OF MERGER
BY AND AMONG
CNB BANCORP, INC., CNB ACQUISITION CORP.
AND
ADIRONDACK FINANCIAL SERVICES BANCORP, INC.
Dated as of January 23, 1999
<PAGE>
TABLE OF CONTENTS
ARTICLE I
THE MERGER.............................. ....................................2
1.1 The Merger... ....................................2
1.2 Exchange Agent....................................3
1.3 Funding of Exchange Agent........ ................4
1.4 Closing; Effective Time...........................4
1.5 Stock Options.....................................4
ARTICLE II
REPRESENTATIONS AND WARRANTIES CONCERNING ADIRONDACK.........................5
2.1 Organization, Good Standing and Authority.........5
2.2 Organizational Documents; Minutes and
Stock Records...................................5
2.3 Capitalization of Adirondack......................5
2.4 Financial Statements and Other Reports............6
2.5 SEC Documents.....................................6
2.6 Undisclosed Liabilities...........................7
2.7 Loan Portfolio and Delinquent Loans...............7
2.8 No Adverse Changes................................8
2.9 Conduct of Business in Normal Course..............8
2.10 Properties and Assets.............................8
2.11 Insurance.........................................9
2.12 Litigation and Compliance with Laws...............9
2.13 Conflict of Interest Transactions................10
2.14 Significant Contracts............................10
2.15 No Defaults......................................11
2.16 Additional Schedules.............................11
2.17 Taxes............................................11
2.18 Employee Compensation and Benefit Plans..........11
2.19 Authorization of Transactions....................12
2.20 Contaminated Properties..........................12
2.21 Change in Business Relationships.................13
2.22 Broker's and Finder's Fees.......................13
2.23 Year 2000 Compliance.............................13
ARTICLE III
REPRESENTATIONS AND WARRANTIES CONCERNING CNB AND ACQUISITION CORP..........13
3.1 Corporate Existence..............................13
3.2 Financial Statements.............................14
3.3 SEC Documents....................................14
3.4 Undisclosed Liabilities..........................14
3.5 No Adverse Change................................15
3.6 Authorization of Transactions....................15
3.7 Financial Resources..............................15
3.8 Year 2000 Compliance.............................15
3.9 Regulatory Matters...............................16
<PAGE>
ARTICLE IV
ADDITIONAL AGREEMENTS.......................................................16
4.1 Conduct of Business of Adirondack................16
4.2 Conduct of Business of CNB.......................18
4.3 Access to Information and Attendance
at Board Meetings .............................18
4.4 Adirondack Stockholders' Meeting.................19
4.5 Adirondack Proxy Materials.......................19
4.6 Reasonable Efforts...............................19
4.7 Regulatory Approvals.............................19
4.8 Business Relations and Publicity.................20
4.9 No Conduct Inconsistent with this Agreement......20
4.10 Confidential Information.........................21
4.11 Maintenance of Capital Levels....................22
4.12 Indemnification and Directors' and
Officers' Liability Insurance..................22
4.13 Board of Directors of CNB........................22
4.14 Employee Benefit Plans...........................22
4.15 Adirondack Employment, Severance and
Supplemental Agreements........................25
4.16 Subsidiary Bank Merger...........................25
4.17 Stockholder Voting Agreements....................25
4.18 Environmental Audits/Remediation.................26
ARTICLE V
CONDITIONS PRECEDENT........................................................27
5.1 Conditions Precedent to Obligations of CNB
and Acquisition................................27
5.2 Conditions Precedent to Obligations
of Adirondack..................................29
ARTICLE VI
GENERAL PROVISIONS..........................................................31
6.1 Non-Survival of Representations and
Warranties and Covenants.......................31
6.2 Further Assurances...............................31
6.3 Expenses.........................................31
6.4 Successors and Assigns...........................32
6.5 Termination......................................32
6.6 Notices..........................................33
6.7 Governing Law....................................34
6.8 Counterparts.....................................34
6.9 Headings.........................................34
6.10 Entire Agreement; Amendment......................34
<PAGE>
EXHIBITS
Exhibit A Form of Stockholder Voting Agreement
Exhibit B Form of Non Competition Agreement
Exhibit C Form of Non Competition Agreement - Kolar
Exhibit D Form of Silver, Freedman & Taff, L.L.P. Opinion
Exhibit E Form of Werner & Blank Co., LPA Opinion
<PAGE>
ADIRONDACK DISCLOSURE SCHEDULES
Schedule 2.1 Organization, Good Standing and Authority.
Schedule 2.3 Capitalization of Adirondack
Schedule 2.6 Undisclosed Liabilities
Schedule 2.7 Loan Portfolio and Delinquent Loans
Schedule 2.9 Conduct of Business in Normal Course
Schedule 2.10 Properties and Assets
Schedule 2.11 Insurance
Schedule 2.12 Litigation and Compliance with Laws
Schedule 2.13 Conflict of Interest Transactions
Schedule 2.14 Significant Contracts
Schedule 2.16 Additional Schedules
Schedule 2.17 Taxes
Schedule 2.18 Employee Compensation and Benefit Plans
Schedule 2.20 Contaminated Properties
Schedule 2.23 Year 2000 Compliance
<PAGE>
AGREEMENT OF MERGER
This Agreement of Merger (this "Agreement") is made and entered into
as of the __ day of January, 1999, by and among CNB BANCORP, INC., a New York
corporation ("CNB"), CNB ACQUISITION CORP., a Delaware corporation and
wholly-owned subsidiary of CNB ("ACQUISITION"), and ADIRONDACK FINANCIAL
SERVICES BANCORP, INC., a Delaware corporation ("Adirondack").
WHEREAS, the respective Boards of Directors of the parties
hereto deem it advisable and in the best interests of the parties hereto and
their respective stockholders to consummate the Merger (as defined in Section
1.1) between Acquisition and Adirondack, upon the terms and subject to the
conditions of this Agreement;
WHEREAS, concurrently with or as soon as practicable after
the Merger, CNB and Adirondack shall cause Adirondack's wholly-owned
depository institution subsidiary, Gloversville Federal Savings (the "Bank"),
to be merged with CNB's wholly-owned depository institution subsidiary, City
National Bank and Trust Company ("City") (the "Bank Merger"), such that City
is the resulting wholly-owned depository institution subsidiary of CNB
(hereinafter sometimes called the ("Surviving Bank") in the Bank Merger;
WHEREAS, subsequent to the Merger and the Bank Merger, CNB
intends to merge Adirondack with and into CNB with CNB surviving such merger
and after such merger and the Bank Merger, City shall continue to be a
wholly-owned subsidiary of CNB; and
WHEREAS, the parties hereto desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement and the Merger;
NOW THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants, agreements and conditions
herein contained, the parties hereto covenant and agree as follows:
<PAGE>
ARTICLE I
THE MERGER
1.1 The Merger. Subject to the terms and conditions of this
Agreement and in accordance with the Delaware General Corporation Law
("DGCL"), at the Effective Time (as defined in Section 1.4 hereof),
Acquisition shall be merged with and into Adirondack (the "Merger"). The
separate corporate existence of Acquisition shall cease, and Adirondack shall
be the surviving corporation (the "Surviving Corporation") in the Merger,
shall be considered the same business and corporate entity as each merging
corporation, and shall have the other properties, liabilities and attributes
as provided by the DGCL. Pursuant to the Merger:
(a) the Certificate of Incorporation of Adirondack, as in
effect immediately prior to the Effective Time, shall be, from and after the
Effective Time, the Certificate of Incorporation of the Surviving
Corporation;
(b) the Bylaws of Acquisition, as in effect immediately
prior to the Effective Time, shall be, from and after the Effective Time, the
Bylaws of the Surviving Corporation;
(c) the directors of Acquisition immediately prior to the
Effective Time shall be, from and after the Effective Time, the directors of
the Surviving Corporation to serve until his or her death, resignation or
removal or until his or her successor is duly elected and qualified;
(d) the officers of Acquisition immediately prior to the
Effective Time shall be, from and after the Effective Time, the officers of
the Surviving Corporation to serve until his or her death, resignation or
removal or until his or her successor is duly elected and qualified;
(e) the 100 shares of common stock, $.01 par value per
share, of Acquisition, issued and outstanding immediately prior to the
Effective Time, shall be converted, without any action by the holder thereof,
into 100 shares of common stock, $0.01 par value per share, of the Surviving
Corporation; and
(f) all shares of common stock, $.01 par value per share,
of Adirondack ("Adirondack Shares"), issued and outstanding immediately prior
to the Effective Time, other than Adirondack Shares (i) the holders of which
have validly demanded appraisal of such shares pursuant to Section 262 of the
DGCL ("Section 262") and have not voted such shares in favor of the Merger
("Dissenting Shares"), (ii) owned by Adirondack as treasury shares, or (iii)
owned by CNB, Acquisition or by any direct or indirect subsidiary of any of
them (the "CNB Shares") if any, shall be converted by virtue of the Merger,
automatically and without action by the holder thereof, into the right to
receive $15 million in the aggregate, less the amount, if any, by which the
Closing Equity (as defined below) is less than $9,114,959 (the "Merger
Price"). The per share consideration ("Per Share Price") shall be determined
by dividing the Merger Price by the total number of Adirondack Shares
outstanding as of the Effective Time (other than the CNB Shares). Closing
Equity is defined as the stockholders' equity of Adirondack as of the month
end prior to the Closing Date determined in accordance with generally
accepted accounting principles, consistently applied, but (i) shall exclude
any unrealized gain and losses pursuant to SFAS 115, and (ii) shall be
reduced by any nonrecurring or extraordinary net gains (including all
cumulative securities gains) in excess of $5,000 since September 30, 1998
through the Closing Date, provided however that up to $50,000 in aggregate
pre tax gains (net of any losses) realized upon the disposition of real
property held as "other real estate owned" by the Bank shall be included
within the definition of Closing Equity for purposes hereof, and (iii) shall
be increased by the amount of transaction costs, provided however, that the
increase relating to financial advisory fees, investment banking fees, legal
and accounting costs associated with the transactions contemplated by this
Agreement shall be limited to $350,000.
The Merger Price shall be payable by CNB, in cash, without
any interest thereon from the Effective Time until the time of payment, at
the Effective Time or such date thereafter as certificates shall be
surrendered in accordance with Section 1.2 of this Agreement.
(g) The Dissenting Shares shall not be converted into the
right to receive the Merger Price at or after the Effective Time unless and
until the holder of such shares withdraws the demand for appraisal of their
shares or otherwise becomes ineligible to pursue appraisal rights under the
DGCL. If converted into the right to receive the Merger Price or other amount
of consideration in settlement of an appraisal demand or by order of a court
of competent jurisdiction, the Dissenting Shares shall be canceled and shall
cease to exist.
(h) At the Effective Time, all Adirondack Shares referred
to in Section 1.1(f)(i), (ii) and (iii) shall be canceled and shall cease to
exist, and no consideration shall be delivered in exchange therefor.
1.2 Exchange Agent. Prior to the Closing (as defined in Section
1.4), CNB shall designate an exchange agent reasonably satisfactory to
Adirondack (the "Exchange Agent") to deliver to the stockholders of
Adirondack the cash to which they are entitled pursuant to the Merger. With
the approval of Adirondack, not to be unreasonably withheld, CNB and the
Exchange Agent shall prepare and communicate to the stockholders of
Adirondack instructions and procedures for the stockholders to tender
certificates evidencing Adirondack Shares to the exchange agent in exchange
for the Merger Price.
<PAGE>
1.3 Funding of Exchange Agent. CNB shall irrevocably deposit with
the Exchange Agent at the Effective Time, by wire, or other acceptable means
approved by Adirondack, the total amount of funds required to be paid at the
Effective Time pursuant to Section 1.1 hereof for exchanges in accordance
with this Agreement.
1.4 Closing; Effective Time. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place on such date
and at such time and place as the parties may mutually agree, which shall be
no later than the last business day of the calendar month following the month
in which all of the conditions precedent to the Merger set forth in Article V
have occurred if such conditions shall have occurred, unless such date is
extended by mutual agreement of the parties (hereinafter referred to
sometimes as the "Closing Date"). The parties hereto agree to file on the
Closing Date a Certificate of Merger, as contemplated by Section 251(c) of
the DGCL. The Merger shall be effective upon the close of business on the day
when the Certificate of Merger has been accepted for filing by the Delaware
Secretary of State (the "Effective Time") unless the parties otherwise
subsequently agree.
1.5 Stock Options. At the Effective Time, options to acquire
Adirondack Shares ("Option") awarded under the Adirondack Financial Services
Bancorp, Inc. 1998 Stock Option and Incentive Plan (the "Adirondack Option
Plan") will be converted into options to purchase shares of CNB, $2.50 par
value per share, common stock ("CNB Shares") as hereinafter provided, and the
Adirondack Option Plan shall be assumed. Each holder of an Option awarded
under the Adirondack Option Plan which is outstanding at the Effective Time
shall receive from CNB, as of the Effective Time, whether or not the Option
is then exercisable under the terms of the Adirondack Option Plan an option
to purchase that number of CNB Shares at the ratio of .575 CNB Shares for
each option to purchase an Adirondack Share. The CNB options shall otherwise
be subject to the terms of the Adirondack Option Plan and the grants
thereunder (including the requirements for Continuous Service and vesting as
defined by the Adirondack Option Plan and the grants made thereunder), as
applicable. The per share exercise price of such CNB option shall similarly
be adjusted.
ARTICLE II
ADIRONDACK REPRESENTATIONS AND WARRANTIES
This Agreement is entered into by CNB upon the understanding, and
Adirondack represents and warrants that the following Representations and
Warranties, being the only representations or warranties made to CNB by or on
behalf of Adirondack in connection with the transactions contemplated by this
Agreement, are true and correct on the date of this Agreement:
2.1 Organization, Good Standing and Authority. Adirondack is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the corporate power and authority to
own its property and assets and to carry on its business as it is now being
conducted. Adirondack is registered as a savings and loan holding company
under the Home Owners' Loan Act ("HOLA"). The Bank is a federal savings
association chartered under the laws of the United States of America and all
of its issued and outstanding shares of common stock are owned of record and
beneficially by Adirondack. The Bank is duly organized, validly existing and
in good standing under the laws of the United States of America and has the
corporate power and authority to own its property and assets and to carry on
its business as it is now being conducted. The Bank is a member in good
standing of the Federal Home Loan Bank System. The deposits of the Bank are
insured up to applicable limits by the Federal Deposit Insurance Corporation
("FDIC") through the Savings Association Insurance Fund. The Bank does not
own or control any voting stock or equity securities of any other entity,
except as set forth in Schedule 2.1.
2.2 Organizational Documents; Minutes and Stock Records. Adirondack
has furnished CNB a copy of its Certificate of Incorporation and bylaws and
the charter and bylaws of the Bank, in each case as amended to the date
hereof, and such other documents relating to the authority of Adirondack and
the Bank to conduct their business as CNB has requested. All such documents
are complete and correct copies of the original documents. The stock register
of Adirondack and minute books of Adirondack and the Bank are complete and
correct in all material respects and accurately reflect all meetings,
consents and other actions of the organizers, incorporators, shareholders and
stockholders (as the case may be), Board of Directors and committees of the
Board of Directors of Adirondack and the Bank and all transactions in the
capital stock of Adirondack and the Bank, occurring since Adirondack's
initial organization.
<PAGE>
2.3 Capitalization of Adirondack. As of the date of this Agreement,
the authorized capital stock of Adirondack consists of 1,200,000 shares of
common stock, $.01 par value per share, of which 689,055 shares are issued
and outstanding and 100,000 shares of preferred stock, $.01 par value per
share, of which no shares are issued and outstanding. As of the date of this
Agreement there are options for 62,820 Adirondack Shares to be issued under
the Adirondack Option Plan. Set forth on Schedule 2.3 is a list of the option
holders and the exercise price for each Option. The issued and outstanding
shares of Adirondack have been duly and validly authorized and issued and are
fully paid and nonassessable. Except for the aforesaid options to purchase
shares of Adirondack Common Stock (which shall be converted into options to
purchase CNB Shares pursuant to Section 1.5 hereof), and except for the
rights of CNB under this Agreement there are or will be at the Closing no
options, agreements, contracts or other rights granted by Adirondack to
purchase or acquire from Adirondack any shares of capital stock of
Adirondack, whether now or hereafter authorized or issued. There are 25,123
Adirondack Shares issued under the Recognition and Retention Plan (as defined
in Section 4.14(d)).
2.4 Financial Statements and Other Reports. Adirondack has furnished
CNB true and complete copies of the following financial statements and
reports of Adirondack and the Bank:
(a) Consolidated Statements of Financial Condition as of
September 30, 1998 and 1997, and Consolidated Statements of Income,
Consolidated Statements of Cash Flows and Consolidated Statements of
Stockholders' Equity of Adirondack as of September 30, 1998 and for each of
the three years then ended (collectively, the "Adirondack Financial
Statements"); and (b) Thrift Financial Reports filed by the Bank with the
Office of Thrift Supervision (the "OTS") for the
fiscal years ended September 30, 1998 and 1997.
The Adirondack Statements described in clause (a) above are
audited and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, and, together with the
notes thereto, present fairly in all material respects the financial position
of Adirondack at the dates shown and the results of operations for the years
then ended.
The information contained in the reports described in
clauses (b) above does not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements made therein not misleading.
2.5 SEC Documents. Adirondack has made available to CNB a true and
complete copy of each report, schedule, registration statement and definitive
proxy statement filed by Adirondack with the Securities and Exchange
Commission (the "SEC") (as such documents have since the time of their filing
been amended, the "Adirondack SEC Documents"), which are all the documents
that Adirondack was required to file with the SEC. As of their respective
dates of filing with the SEC, the Adirondack SEC Documents complied in all
material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case may be, and
the rules and regulations of the SEC thereunder applicable to such Adirondack
SEC Documents, and did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading (provided that certain statements regarding the
number of authorized shares of Adirondack capital stock were incorrect). The
financial statements of Adirondack included in the Adirondack SEC Documents
complied as to form, as of their respective dates of filing with the SEC, in
all material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles applied
on a consistent basis during the periods involved (except as may be indicated
in the notes) and fairly present in all material respects the consolidated
financial position of Adirondack as of the dates thereof and the consolidated
results of operations, changes in stockholders' equity and cash flows for the
years then ended. All material agreements, contracts and other documents
required to be filed as exhibits to any of the Adirondack SEC Documents have
been so filed.
<PAGE>
2.6 Undisclosed Liabilities. As of the date hereof, except for those
liabilities that are fully reflected or reserved against in the Adirondack
Financial Statements, liabilities disclosed in Schedule 2.6 and liabilities
incurred in the ordinary course of business since September 30, 1998, neither
Adirondack nor any of its Subsidiaries has incurred any liability of any
nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether due or to become due) that, either alone or when combined with
similar liabilities, has had, or could reasonably be expected to have, a
Material Adverse Effect on Adirondack. As used in this Agreement, the term
"Material Adverse Effect" means, with respect to Adirondack or CNB, as the
case may be, a material effect (i) on the business, assets, properties,
results of operations or financial condition of such party and its
Subsidiaries, taken as a whole, or (ii) on the consummation of the Merger;
provided, however, that Material Adverse Effect shall not be deemed to
include the impact of (a) changes in laws and regulations or interpretations
thereof that are generally applicable to the banking or savings industries,
(b) changes in generally accepted accounting principles or regulatory
accounting requirements that are generally applicable to the banking or
savings industries, (c) expenses incurred in connection with the transactions
contemplated hereby, (d) changes attributable to or resulting from changes in
general economic conditions, including changes in the prevailing level of
interest rates, and (e) any modifications or changes to valuation policies
and practices in connection with the Merger or restructuring charges taken in
connection with the Merger, in each case in accordance with generally
accepted accounting principles. The word "Subsidiary" or "Subsidiaries" when
used in this Agreement with respect to any party means any bank, corporation,
partnership, limited liability company, or other organization, whether
incorporated or unincorporated, which is consolidated with such party for
financial reporting purposes.
2.7 Loan Portfolio and Delinquent Loans.
(a) The loans contained in the loan portfolio of the Bank
are evidenced by promissory notes or other evidences of indebtedness, which,
with all ancillary security documents, except as set forth in Schedule
2.7(a), and except for matters arising in the ordinary course of business,
constitute valid and binding obligations of the Bank and, to the best of
Adirondack's knowledge, each of the other parties thereto, enforceable in
accordance with their terms except as limited by applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors' rights and remedies generally and by applicable laws or principles
of equity that may affect the availability of equitable remedies. No party
liable to the Bank with respect to such loans has notified the Bank regarding
any defense, set-off or counterclaim and to the best of Adirondack's
knowledge none of such loans is currently subject to any defense, set-off or
counterclaim, and all such loans which are secured, as evidenced by the
ancillary security documents, are so secured by valid and enforceable liens.
(b) Except as set forth in Schedule 2.7(b), neither
Adirondack nor any Adirondack Subsidiary is a party to any written or oral
loan agreement, note or borrowing arrangement the unpaid principal balance of
which exceeds $25,000 and as to which the obligator is more than 90 days
delinquent in payment of principal and interest or on which Adirondack or any
Adirondack Subsidiary has stopped accruing interest.
(c) The Bank's allowance for loan losses as of the date
hereof has been calculated in accordance with prudent and customary banking
practices and is adequate to reflect the risk inherent in the Bank's loan
portfolio.
2.8 No Adverse Changes. Other than as specifically disclosed in this
Agreement, the Adirondack Financial Statements, the schedules or exhibits
provided for herein, or any other writing delivered to CNB, since September
30, 1998, there has not occurred any event which has made a Material Adverse
Effect or any condition, event, circumstance, fact or occurrence (other than
changes resulting from or attributable to changes in laws, regulations and
generally accepted accounting principles or interpretations) that may
reasonably be expected to result in a Material Adverse Effect on Adirondack.
<PAGE>
2.9 Conduct of Business in Normal Course. Except as set forth in
Schedule 2.9, the business of Adirondack has, since September 30, 1998, been
conducted only in the ordinary and usual course consistent with past
practice.
2.10 Properties and Assets. The assets reflected in the most recent
of the Adirondack Financial Statements or identified in this Agreement or the
schedules or exhibits provided for herein include substantially all of the
assets owned by Adirondack, except for those subsequently disposed of for
fair value or otherwise abandoned or disposed of as worthless in the ordinary
course of business. Adirondack has a valid right to use or a valid leasehold
interest in, all real property used by it in the conduct of its business as
it is now being conducted, subject to no mortgage, pledge, lien, option,
conditional sale agreement, encumbrance, security interest, title exceptions
or restrictions or claim or charge of any kind except for (i) liens for taxes
not yet due and payable, (ii) rights of other parties under leases or other
arrangements by which Adirondack uses such real property, and (iii) minor
imperfections of title none of which is substantial in amount, materially
detracts from the value or impairs Adirondack's present use of the property.
To the best of Adirondack's knowledge, all material certificates, licenses,
and permits required for the lawful use and occupancy of such real property
by Adirondack, have been obtained and are in full force and effect. All
material tangible personal property owned by Adirondack, or used by it in its
business and necessary for the operation of its business, is in good working
condition, normal wear and tear excepted.
2.11 Insurance. Adirondack has furnished CNB with a Schedule of
Insurance (Schedule 2.11) that sets forth a complete and correct list of all
policies of insurance in which Adirondack is named as an insured party, which
otherwise relate to or cover any assets, properties, premises, operations and
personnel of Adirondack or which is owned or carried by Adirondack.
Adirondack has in full force and effect the policies of insurance set forth
in such Schedule. There has been no notice given by any party of interest in
or to any such policies claiming any breach or violation of any provisions
thereof, disclaiming or denying any coverage thereof, or canceling or
threatening cancellation of any such insurance contracts. Adirondack's
policies of insurance comply with the requirements of any contracts binding
on Adirondack or its Subsidiaries relating to its assets or properties.
2.12 Litigation and Compliance with Laws. Adirondack and the Bank
are each in substantial compliance with all material applicable federal,
state, county and municipal laws and regulations (a) that regulate or are
concerned in any way with the business of banking or acting as a fiduciary,
including those laws and regulations relating to the investment of funds, the
taking of deposits, the extension of credit, the collection of interest, and
the location and operation of banking facilities or (b) that otherwise relate
to or affect the business or assets of the Bank or the assets owned, used or
occupied by it, except for violations which would not, individually or in the
aggregate, have a Material Adverse Effect on Adirondack. Except as disclosed
in Schedule 2.12, (i) there are no claims, actions, suits, orders or
proceedings pending, or, to the knowledge of Adirondack, threatened against
Adirondack or the Bank, or, to the knowledge of Adirondack, the Bank's
institution-affiliated parties (in their capacities as such), at law or in
equity, or before any federal, state, municipal or other governmental
authority, or before any arbitrator or arbitration panel, whether by contract
or otherwise, as to which an adverse determination is likely and which, if
adversely determined, would have a Material Adverse Effect on Adirondack, and
(ii) there is no decree, judgment, order or supervisory agreement in
existence against or restraining Adirondack or the Bank, or any of the Bank's
institution-affiliated parties from taking any actions of any kind in
connection with the business of Adirondack or the Bank, as the case may be,
which has had or is likely to have a Material Adverse Effect on Adirondack.
Adirondack has not received from any regulatory authority any notice of, nor
to the knowledge of Adirondack does there exist any threat of, enforcement
actions.
2.13 Conflict of Interest Transactions. Except as reflected in
Schedule 2.13, no executive officer or director of Adirondack, or holder of
10% or more of the common stock of Adirondack, or any member of the immediate
family of any such person has, since September 30, 1998, been involved in any
transaction with Adirondack (excluding transactions in deposit accounts) that
involves an amount in excess of $15,000 or has been involved in any other
material transaction with Adirondack or has had loans or any commitment to
loan outstanding from the Bank involving in excess of $15,000.
2.14 Significant Contracts. Schedule 2.14 sets forth a Schedule of
Significant Contracts, and completely and accurately lists the following
contracts, commitments or arrangements (whether written or oral) under which
Adirondack is obligated on the date hereof:
(a) All consulting arrangements, and contracts for
professional and other services, including those under which Adirondack
performs services for others, that are not terminable by Adirondack without
damages or penalty with 30 days notice;
(b) All leases of real estate or personal property,
exclusive of leases of personal property whereunder total annual rentals are,
in each instance, less than $5,000;
<PAGE>
(c) All contracts, commitments and agreements for the
purchase, acquisition, development, sale or disposition of real or personal
property, exclusive of conditional sales contracts and security agreements
for the acquisition of personal property whereunder total future payments
are, in each instance, less than $5,000;
(d) All employee benefit plans (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974 ("ERISA")) under which
Adirondack or the Bank has or may have any obligation ("Adirondack ERISA
Plans"), and all employment contracts, supplemental executive agreements,
severance agreements and all other employee compensation arrangements and all
other bonus, deferred compensation, pension, retirement, salary continuation
agreements, profit sharing, stock option, stock purchase, stock appreciation
and other employee benefit plans, formal or informal, under which Adirondack
or the Bank has or may have any obligation ("Adirondack non-ERISA Plans")
and, together with the Adirondack ERISA Plans, (the "Adirondack Benefit
Plans");
(e) All union and other labor contracts;
(f) All agreements, contracts, mortgages, loans, deeds of
trust, leases, commitments, indentures, notes, instruments and other
arrangements, which are with officers or directors of Adirondack, any
affiliates of Adirondack within the meaning of Section 23A of the Federal
Reserve Act, or any record or beneficial owner of 10% or more of the common
stock of Adirondack, excepting any ordinary and customary banking
relationships that comply with applicable banking regulations; and
(g) Each other material contract to which Adirondack is a
party or under which it is obligated made other than in the usual or ordinary
course of business and which is not terminable by Adirondack without damages
or penalty with 30 days notice.
2.15 No Defaults. To the best of its knowledge, Adirondack has
fulfilled and taken all action reasonably necessary to date to enable it to
fulfill when due, all material obligations under all contracts, commitments
and arrangements to which it is a party, and there are no material defaults
and no events have occurred that, with the lapse of time or election of any
other party, will become material defaults by it under any such contracts,
commitments or arrangements, except for defaults which either individually or
in the aggregate would not have a Material Adverse Effect on Adirondack.
2.16 Additional Schedules. The following additional schedules are
attached hereto: (a) Schedule 2.16(a), which is a Real Estate Schedule
describing all real estate owned by or in which Adirondack has any interest
as of the date of this Agreement, or which is the subject of pending
foreclosure proceedings by Adirondack, indicating in each case whether such
real estate is improved and the nature of any material encumbrances or
defects of title of which Adirondack has actual knowledge; and (b) Schedule
2.16(b), which is a Securities Schedule of all investment securities owned by
Adirondack as of September 30, 1998. Such schedules are materially complete
and correct.
2.17 Taxes. Except as set forth in Schedule 2.17, no application for
extension of time for filing any tax return or consent to any extension of
time for filing any tax return or consent to any extension of the period of
limitations applicable to the assessment or collection of any tax is in
effect with respect to Adirondack, and all tax returns and information
returns required to be filed by Adirondack with the United States or any
state or local government unit have been, and until the Closing will have
been, timely filed, other than those tax returns the failure of which to file
would not have a Material Adverse Effect on Adirondack. Adirondack is not
delinquent in the payment of any taxes claimed to be due by any taxing
authority and adequate provisions for taxes have been made on its books. None
of Adirondack's federal or state income tax returns is being examined by the
appropriate federal or state agency. Adirondack has not received any notice
of any proposed deficiency for any duty, tax, assessment or governmental
charge, and there are no pending claims with respect thereto. Adirondack is a
member of a consolidated group for purposes of the Internal Revenue Code of
1986, as amended (the "Code").
2.18 Employee Compensation and Benefit Plans. To the best of
Adirondack's knowledge, each of the Adirondack Benefit Plans has been
administered, in all material respects, in compliance with its terms and the
requirements of applicable law. Neither Adirondack nor any of its affiliates,
its employees, directors or agents, or any fiduciary, has engaged in any
"Prohibited Transaction" (as defined in Section 406 of ERISA or 4975(c)(1) of
the Code) that is not exempt under Section 4975(c)(l) or (d) of the Code or
Section 407 or 408 of ERISA with respect to any Adirondack ERISA Plan. Except
as disclosed on Schedule 2.18, each Adirondack ERISA Plan that is intended to
be qualified under Section 401(a) and related provisions of the Code is the
subject of a favorable determination letter from the Internal Revenue Service
to the effect that it is so qualified under the Code. No matter is pending
relating to any Adirondack Benefit Plan before any court or governmental
agency. Except as set forth in Schedule 2.18, neither Adirondack, nor any of
its affiliates is, or has ever been, obligated to contribute to a
multiemployer plan (as defined in Section 3(37) of ERISA). Except as required
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985,
Section 4980B of the Code and Section 601 of ERISA or as reflected on
Schedule 2.18 delivered pursuant hereto, neither Adirondack, nor any other
party on behalf of Adirondack, has any obligation or commitment to provide
health, disability, or life insurance or similar welfare benefits to former
employees or members of their families.
<PAGE>
2.19 Authorization of Transactions. The execution, delivery and
performance of this Agreement by Adirondack have been duly authorized by the
Board of Directors of Adirondack. Subject to approval by the stockholders of
Adirondack as contemplated by Section 5.1(d) hereof, Adirondack has full
corporate power to execute, deliver and perform this Agreement and to
consummate the transactions herein contemplated, and such execution, delivery
and performance does not violate any provisions of the Certificate of
Incorporation or bylaws of Adirondack or the charter or bylaws of the Bank or
any orders, agreements or directives to which Adirondack or the Bank is a
party or is otherwise bound. Except for the regulatory approvals referred to
in Section 5.1(c) or approval of stockholders referred to in Section 5.1(d)
hereof, no consent of any regulatory authority or other person is required to
be obtained by Adirondack in order to permit Adirondack to perform its
obligations hereunder or to permit consummation of the Merger.
2.20 Contaminated Properties. As of the date hereof:
(a) Except as disclosed in Schedule 2.20, none of the
properties owned or leased by Adirondack or, to the knowledge of Adirondack,
held by Adirondack as a fiduciary for the account of others, or which
collateralize any outstanding material loan or line of credit, whether or not
such loan or line of credit is or has been in default, is contaminated with
any wastes or hazardous substances, as defined below, except in compliance
with Environmental Laws, as defined in Section 4.18.
(b) Adirondack neither is nor may it be deemed to be an
"owner or operator" of a "facility" or "vessel" which owns, possesses,
transports, generates, or disposes of a "hazardous substance," as those terms
are defined in Section 9601 of the Comprehensive Environmental Response
Compensation and Liability Act of 1980 and which would subject it to any
liability under such Act.
2.21 Change in Business Relationships. Except as described in
writing to CNB, Adirondack has no actual notice, whether on account of this
Agreement or otherwise, that any customer, agent, representative or supplier
intends to discontinue, diminish, or change its relationships with
Adirondack, the effect of which would have a Material Adverse Effect on
Adirondack.
2.22 Broker's and Finder's Fees. Adirondack has not incurred any
obligation or liability, contingent or otherwise, for any brokerage
commission or finder's fee or like compensation in respect of the
transactions contemplated hereunder except for fees and expenses that may be
owed Capital Resources Group, Inc. for investment banking services, which
fees (including any expenses and fees previous accrued or paid in connection
with the transactions contemplated by this Agreement) shall not exceed
$200,000.
2.23 Year 2000 Compliance. The Bank is in compliance in all material
respects with the Year 2000 guidelines of the Federal Financial Institutions
Examination Counsel as set forth in its Interagency Statement dated May 5,
1997. Schedule 2.23 lists the documents the Bank has provided to CNB that
relate to the Bank's compliance with the Interagency Statement, and all such
documents are true, correct and complete in all material respects as of the
date hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
CONCERNING CNB AND ACQUISITION
This Agreement is entered into by Adirondack upon the understanding,
and CNB and Acquisition represent and warrant, that the following
Representations and Warranties, being the only representations or warranties
made to Adirondack by or on behalf of CNB and Acquisition in connection with
the transactions contemplated by this Agreement, are true and correct on the
date of this Agreement:
3.1 Corporate Existence. CNB is a corporation duly organized,
validly existing, and in good standing under the laws of the State of New
York and has the corporate power and authority to own its property and assets
and to carry on its business as now being conducted. CNB is a bank holding
company registered under the Federal Bank Holding Company Act of 1956, as
amended and City is a national banking association organized under the laws
of the United States. Acquisition is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and
CNB owns all of the issued and outstanding voting stock of Acquisition.
3.2 Financial Statements. CNB has furnished Adirondack true and
complete copies of its Consolidated Balance Sheet, Consolidated Statements of
Income, Consolidated Statements of Cash Flows and Consolidated Statements of
Stockholders' Equity as of and for the years ended December 31, 1997, 1996
and 1995 together with the interim financial statements as of and for the
nine months ended September 30, 1998 (collectively, "CNB Financial
Statements"). The CNB Financial Statements as of and for the three years
ended December 31, 1997 are audited, and together with the unaudited
financial statements as of and for the nine months ended September 30, 1998,
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, and, together with the notes
thereto, present fairly the financial position of CNB at the dates shown and
the results of operations for the periods then ended.
<PAGE>
3.3 SEC Documents. CNB has made available to Adirondack a true and
complete copy of each report, schedule, registration statement and definitive
proxy statement filed by CNB with the Securities and Exchange Commission (the
"SEC") within the two year period prior the date hereof (as such documents
have since the time of their filing been amended, the "CNB SEC Documents"),
which are all the documents that CNB was required to file with the SEC within
such period. As of their respective dates of filing with the SEC, the CNB SEC
Documents complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the Exchange
Act, as the case may be, and the rules and regulations of the SEC thereunder
applicable to such CNB SEC Documents, and did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of CNB included in the CNB SEC Documents complied as to form, as
of their respective dates of filing with the SEC, in all material respects
with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
during the periods involved (except as may be indicated in the notes) and
fairly present in all material respects the consolidated financial position
of CNB as of the dates thereof and the consolidated results of operations,
changes in stockholders' equity and cash flows for the years then ended. All
material agreements, contracts and other documents required to be filed as
exhibits to any of the CNB SEC Documents have been so filed.
3.4 Undisclosed Liabilities. As of the date hereof, except for those
liabilities that are fully reflected or reserved against in the CNB Financial
Statements and liabilities incurred in the ordinary course of business since
September 30, 1998, neither CNB nor any of its Subsidiaries has incurred any
liability of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether due or to become due) that, either alone or when
combined with similar liabilities, has had, or could reasonably be expected
to have, a Material Adverse Effect on CNB.
3.5 No Adverse Changes. Other than as specifically disclosed in this
Agreement or the CNB Financial Statements there has not occurred any event
which has made a Material Adverse Effect or any condition, event,
circumstance, fact or occurrence (other than changes resulting from or
attributable to changes in laws, regulations and generally accepted
accounting principles or interpretations) that may reasonably be expected to
result in a Material Adverse Effect on CNB.
3.6 Authorization of Transactions. The execution, delivery and
performance of this Agreement by CNB have been duly authorized by the Board
of Directors of CNB, this being the only authorization required under CNB's
Certificate of Incorporation, its bylaws, or governing statutes. CNB has full
corporate power to execute, deliver and perform this Agreement and to
consummate the transactions herein contemplated, and such execution, delivery
and performance does not violate any provisions of the Certificate of
Incorporation of CNB, its bylaws, or any orders, agreements or directives to
which CNB is a party or is otherwise bound. The execution, delivery and
performance of this Agreement by Acquisition have been duly authorized by the
Board of Directors of Acquisition, this being the only corporate
authorization required under Acquisition's Certificate of Incorporation, its
bylaws, or governing statutes. CNB, in its capacity as the sole stockholder
of Acquisition, has approved this Agreement as required by the DGCL. Except
for the regulatory approvals referred to in Section 5.1(c) hereof, no consent
of any regulatory authority or other person is required to be obtained by CNB
in order to permit CNB to perform its obligations hereunder or to permit
consummation of the Merger.
3.7 Financial Resources. CNB has the financial wherewithal, whether
by using its internal funds, external financing, or both, to perform its
obligations under this Agreement. CNB and its Subsidiaries are, and will be
following the Merger, in compliance with all applicable capital, debt and
financial and non-financial criteria of state and federal banking agencies
having jurisdiction over them. CNB has no knowledge of any facts or
conditions applicable to it or its Subsidiaries that would reasonably lead
CNB to believe the Merger will not be approved by the Board of Governors of
the Federal Reserve System (the "Federal Reserve") and any other state or
federal banking agencies having jurisdiction over the transactions
contemplated hereby or that such approvals would be delayed.
3.8 Year 2000 Compliance. CNB and City are in compliance in all
material respects with the Year 2000 guidelines of the Federal Financial
Institutions Examination Counsel as set forth in its Interagency Statement
dated May 5, 1997.
3.9 Regulatory Matters. Neither CNB nor City is the subject of, nor
a party to, any regulatory action or agreement such as letter agreements,
memorandum of understanding, cease and desist orders or like agreements. City
has received a Satisfactory or better CRA rating by the Office of the
Comptroller of the Currency.
<PAGE>
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 Conduct of Business of Adirondack. Between the date hereof and
the Closing Date, except as contemplated or permitted by this Agreement,
Adirondack shall conduct its business and shall cause the Bank to conduct its
business in the usual and ordinary course consistent in all material respects
with prudent banking practices. Without limiting the foregoing, without the
prior written consent of CNB, which consent shall not be unreasonably
withheld (provided that CNB shall respond to a request for a consent within
five business days):
(a) Adirondack shall, and shall cause the Bank to, make no
changes in their respective charter or bylaws, the number of issued and
outstanding shares (other than the issuance of up to 1,000 shares that may be
issued under Adirondack's 401(k) Plan and the issuance of shares under the
Adirondack Option Plan), or the number of options except for changes
resulting from the exercise of existing Options in accordance with their
terms;
(b) Adirondack shall, and shall cause the Bank to, not
increase the compensation of their directors, officers or employees.
(c) Adirondack shall, and shall cause the Bank to, make no
loan for $150,000 or more (including aggregation of loans to any one customer
or related entities) except for loans currently committed to be made pursuant
to written commitment letters, and Adirondack shall, and shall cause the Bank
to, make no other loans, or renewals or restructuring of loans except in the
ordinary course of business and consistent in all material respects with
prudent banking practices and policies and applicable rules and regulations
of federal or state banking agencies ("Regulatory Authorities") with respect
to amount, terms, security and quality of the borrower's credit;
(d) Adirondack shall not declare or pay any stock dividend,
cash dividend or other distribution without the prior written consent of CNB;
(e) Adirondack shall, and shall cause the Bank to, use
their best efforts to maintain their present insurance coverage in respect of
their respective properties and businesses;
(f) Adirondack shall, and shall cause the Bank to, make no
significant changes, outside the ordinary course of business, in the general
nature of the business conducted by Adirondack and the Bank, including but
not limited to the investment or use of their assets, the liabilities they
incur, or the facilities they operate;
(g) Adirondack shall, and shall cause the Bank to, not
enter into any employment, consulting or other similar agreements (other than
consulting or employment agreements pursuant to Section 4.1(n)) that isnot
terminable on 30 days' notice or less without penalty;
(h) Adirondack shall, and shall cause the Bank to, not take
any action that would result in a termination, partial termination,
curtailment, discontinuance or merger into another plan or trust of any
Adirondack Benefit Plan, except as provided in this Agreement;
(i) Adirondack shall, and shall cause the Bank to, timely
file or extend all required tax returns with all applicable taxing
authorities and will not make any application for or consent to any extension
of time for filing any tax return or any extension of the period of
limitations applicable thereto;
(j) Except as already reflected in the Financial
Statements, Adirondack shall, and shall cause the Bank to, not make any
expenditure for fixed assets in excess of $10,000 for any single item, or
$25,000 in the aggregate, or enter into any lease of fixed assets;
(k) Adirondack shall, and shall cause the Bank to, not
incur any liabilities or obligations, make any commitments or disbursements,
acquire or dispose of any property or asset, make any contract or agreement,
or engage in any transaction, except in the ordinary course consistent in all
material respects with prudent banking practices;
(l) Adirondack shall, and shall cause the Bank to, only
purchase or invest in instruments permitted by the Bank's investment policy,
including, but not limited to, obligations of the government of the United
States, agencies of the United States or mortgage-backed securities, and to
not execute individual investment transactions of greater than $2,000,000 in
principal amount;
(m) Adirondack shall, and shall cause the Bank to, make no
changes of a material nature in their accounting procedures, methods,
policies or practices or the manner in which they conduct their businesses
and maintain their records, except as may be required by applicable law or
regulation;
(n) Subject to the approval of the selection of and the terms
of the engagement thereof by CNB, Adirondack and the Bank shall, as soon as
reasonably possible following execution of this Agreement, engage consultants
or employees to assist in the management of Adirondack and the Bank pending
the Closing Date, provided that the terms of the engagements shall provide
that agreement to provide such services are cancelable upon the expiration of
one year and shall provide for compensation not to exceed $60,000 per annum
plus usual and customary business expense reimbursement; and
(o) Subject to and only upon the receipt of the prior
written approval of CNB, Adirondack may propose to its stockholders, in
connection with the approval of the Agreement as required by Section 4.4
hereof, that the Adirondack Option Plan and Recognition and Retention Plan be
amended to provide for the acceleration of the vesting of all outstanding
options granted under the Adirondack Option Plan and awards of Adirondack
Shares made under Recognition and Retention Plan upon the Closing.
<PAGE>
4.2 Conduct of Business of CNB. Between the date hereof and the
Closing Date, the business of CNB shall be conducted (and CNB shall cause the
business of its Subsidiaries to be conducted) in all material respects
consistent with prudent banking.
4.3 Access to Information and Attendance at Board Meetings. Pending
the Closing, Adirondack shall (a) give CNB and its representatives full
access to further information (including, but not limited to the Bank's loan
portfolio, records, files, correspondence, tax work papers and audit work
papers) with respect to Adirondack (other than records, files, correspondence
and findings of the Board of Directors related to the possible sale of
Adirondack), (b) supply to CNB and its representatives, as soon as they
become available, all reports on loans and investments of Adirondack,
month-end prepared balance sheets and profit and loss statements, internal
and external audit reports and such other reports of Adirondack that CNB may
reasonably request, and (c) to the extent permissible under law, transmit to
CNB copies of all notices, minutes, consents, Board packages and other
materials that Adirondack and the Bank provide to their respective directors,
other than materials relating to any possible sale of Adirondack or the Bank.
CNB shall use such information solely for the purpose of conducting business,
legal and financial reviews of Adirondack and for such other purposes as may
be related to this Agreement. Pending the Closing, representatives of CNB
shall, during normal business hours and on reasonable advance notice to
Adirondack, be given full access to Adirondack's records and business
activities and afforded the opportunity to observe its business activities
and consult with its directors and officers regarding the same on an ongoing
basis (without limiting the foregoing, to verify compliance by Adirondack
with all terms of this Agreement), provided that the foregoing do not
interfere with the business operations of Adirondack. Furthermore, pending
the Closing, a director or senior officer of CNB may attend meetings of the
Boards of Directors of Adirondack and the Bank, and Adirondack and the Bank
shall give CNB reasonable advance notice of the date, place and time of such
meetings; provided, however, that Adirondack and the Bank shall have the
right to exclude the CNB representative from any meeting or any portion of a
meeting during which the sale of Adirondack or the Bank is expected to be
discussed. Notwithstanding this Section 4.3 and other than as set forth in
this Agreement, the management of Adirondack and the authority to establish
and implement its business policies shall reside solely in Adirondack's
officers and Board of Directors.
4.4 Adirondack Stockholders' Meeting. As soon as practicable
following the execution and delivery of this Agreement by the parties hereto,
Adirondack shall call and hold a meeting of its stockholders (the
"Stockholders Meeting") to act upon and consider this Agreement and the
transactions contemplated herein in accordance with its Certificate of
Incorporation, its bylaws, and the applicable statutes of the State of
Delaware. Adirondack, acting through its Board of Directors, shall recommend
to its stockholders, consistent with its fiduciary duties, approval of this
Agreement and the Merger.
4.5 Adirondack Proxy Materials. As soon as practicable following the
execution and delivery of this Agreement by the parties hereto, Adirondack
shall prepare and mail to the holders of the Adirondack Shares appropriate
proxy materials (the "Proxy Materials"), including a notice of the meeting,
proxy statement and form of proxy that comply with applicable laws and
regulations. CNB shall furnish to Adirondack all information concerning CNB
required for inclusion in the Proxy Materials, and all such information shall
be true and correct in all material respects without omission of any material
fact required to be stated to make the information stated therein not
misleading. In the Proxy Materials, Adirondack shall present this Agreement
for adoption by the holders of the Adirondack Shares at the Stockholders
Meeting. Before the Proxy Materials are filed with the SEC and again before
the materials are mailed to the holders of the Adirondack Shares,
Adirondack's legal counsel shall deliver a copy of such materials to CNB's
legal counsel, and CNB's legal counsel shall have a reasonable amount of time
to review such materials before filing or mailing, as the case may be.
4.6 Reasonable Efforts. The parties to this Agreement agree to use
their reasonable efforts in good faith to satisfy the various conditions to
Closing and to consummate the Merger as soon as practicable. None of the
parties hereto shall intentionally take or intentionally permit to be taken
any action that would be in breach of the terms or provisions of this
Agreement or that would cause any of the representations contained herein to
be or become untrue.
4.7 Regulatory Approvals. Within 45 calendar days after the date of
this Agreement, CNB shall make all appropriate initial filings necessary to
obtain the regulatory approvals referred to in Section 5.1(c) hereof, and
Adirondack shall cooperate fully in the process of obtaining all such
approvals. CNB shall provide Adirondack and its legal counsel with copies of
all applications when filed and all correspondence, notices and approvals
when received.
<PAGE>
4.8 Business Relations and Publicity. Adirondack shall use
reasonable efforts to preserve its reputation and relationships with
suppliers, clients, depositors, customers, employees and others having
business relations with Adirondack. No press release or other communication
in connection with or relating to this Agreement or the transactions
contemplated hereby (other than communications with appropriate regulatory
authorities) shall be issued or made without the prior mutual consent of the
parties hereto; provided, however, that either party may release information
in connection with or relating to this Agreement or the transactions
contemplated hereby if the party releasing the information believes such
release is required by law.
4.9 No Conduct Inconsistent with this Agreement.
(a) Adirondack agrees that it will not, during the term of
this Agreement, solicit, encourage or authorize or take any other action to
facilitate any inquiries or proposals that constitute, or may be reasonably
expected to lead to, any Transaction Proposal, as defined below, or discuss
or negotiate with any Person, as defined below, in furtherance of such
inquiries or to obtain a Transaction Proposal, or agree to or endorse any
Transaction Proposal, or authorize or permit any of its officers, directors,
or employees or any investment banker, financial advisor, attorney,
accountant, or other representative retained by it or any of its Subsidiaries
to take any such action; provided, however, that the Board of Directors of
Adirondack may, in response to an unsolicited written proposal from a third
party regarding a Superior Proposal, as defined below, furnish or cause to be
furnished information to and engage in discussions with such third party, but
only if the Board of Directors of Adirondack shall determine in good faith
and based upon an opinion of its outside counsel that failure to take such
action could be reasonably expected to result in a breach of the fiduciary
duties of such Board under applicable law. In the event that the Board
furnishes information to or engages in such discussions with any Person,
Adirondack shall promptly notify CNB orally and in writing of all of the
relevant details relating to all inquiries and proposals that it may receive
relating to any of such matters and provide CNB with copies of all materials
delivered to such Person.
(b) As used herein, "Superior Proposal" means a bona fide,
written and unsolicited proposal or offer made by any Person with respect to
a Transaction Proposal, as defined below, on terms that the Board of
Directors of Adirondack determines in good faith, and in the exercise of its
reasonable judgment, based on the advice of independent financial advisors
and legal counsel, to be more favorable to Adirondack and its stockholders
than the transactions contemplated by this Agreement.
(c) "Transaction Proposal" as used in this Agreement means
(in each case other than transactions contemplated hereby) (A) a bona fide
tender offer or exchange offer for 25% or more of the then outstanding
Adirondack Shares that shall have been publicly proposed to be made or shall
have been commenced or made by any Person; (B) a merger, consolidation, or
other business combination with Adirondack, or with any of the Subsidiaries
of Adirondack, which shall have been effected by any Person, or an agreement
relating to any such transaction which shall have been entered into; (C) any
sale, lease, exchange, mortgage, pledge, transfer, or other disposition
(whether in one transaction or a series of related transactions) involving a
substantial part of Adirondack's consolidated assets (including any stock of
the Bank), or all or a substantial part of the assets of any of the
Subsidiaries of Adirondack, to any Person which shall have been effected, or
any agreement relating to such transaction which shall have been entered
into; (D) the acquisition after the date hereof by any Person (other than CNB
or any of the Subsidiaries of Adirondack in a fiduciary capacity for third
parties, none of whom beneficially owns 10% or more of the outstanding
Adirondack Shares) of beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act, which will be deemed for purposes hereof to provide
that a Person beneficially owns any Adirondack Shares that may be acquired by
such person pursuant to any right, option, warrant, or other agreement,
regardless of when such acquisition would be permitted by the terms thereof)
of 25% or more of the outstanding Adirondack Shares (including Adirondack
Shares currently beneficially owned by such Person); (E) any reclassification
of securities or recapitalization of Adirondack or other transaction that has
the effect, directly or indirectly, of increasing the proportionate share of
any class of equity security (including securities convertible into equity
securities) of Adirondack that is owned by any Person which shall have been
effected, or any agreement relating to such transaction which shall have been
entered into or plan with respect thereto adopted; (F) any transaction having
an effect similar to those described in (A) through (E) above; or (G) a
public announcement with respect to a proposal, plan, or intention by
Adirondack or another Person to effect any of the foregoing transactions
(which may include publication of notice of filing or any similar notice
under applicable law).
(d) The term "Person" for purposes of this Section 4.9
shall mean any corporation (excluding CNB or any of its Subsidiaries),
partnership, person or other entity or group (as defined in Section 13(d)(3)
of the Exchange Act).
<PAGE>
4.10 Confidential Information. Adirondack, CNB and Acquisition
shall, and shall direct all of their agents, employees and advisors to keep
in strict confidence any information concerning the Merger and the
properties, business and assets of the other party that may have been
obtained in the course of negotiations or examination of the affairs of the
other party either prior or subsequent to the execution of this Agreement
(other than such information as shall be in the public domain or otherwise
ascertainable from public or sources) and shall, in the event the
transactions contemplated in this Agreement are not consummated, return all
documents to the other party containing such information.
4.11 Maintenance of Capital Levels. CNB and its financial
institution Subsidiary or Subsidiaries shall maintain at least the minimum
capital levels as required by Regulatory Authorities.
4.12 Indemnification and Directors' and Officers' Liability
Insurance. CNB agrees that from and after the Effective Time it shall
indemnify and hold harmless each present and former director and officer of
Adirondack and the Bank (the "Indemnified Parties") against any costs or
expenses (including reasonable attorneys' fees), judgments, fines, losses,
claims, damages or liabilities (collectively, "Costs") incurred in connection
with any threatened or actual claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative,
arising out of matters existing or occurring at or prior to the Effective
Time, whether asserted or claimed prior to, at or after the Effective Time,
to the full extent permitted under applicable law. CNB shall cause to be
maintained in effect for three years from the Effective Time for the benefit
of Adirondack's current directors' and officers' either CNB's current
directors' and officers' liability insurance policy or a "tail" policy on
Adirondack's current directors' and officers' liability insurance policy, in
both instances if such insurance is obtainable (provided that CNB may
substitute therefor, in either case, policies of equivalent coverage so long
as no lapse in coverage occurs as a result of substitution with respect to
matters occurring prior to the Effective Time); and provided further that CNB
shall not be obligated to expend for such insurance an amount greater than
150 percent of the cost of the most recent policy of one year, and in the
event it shall cost more than such amount for such policy, CNB shall be
obligated to purchase only such insurance as may be purchased with such cost
4.13 Board of Directors of CNB. At the Effective Time, CNB shall
cause two persons to be added to the Board of Directors of CNB, who shall
also be added to the Board of Directors of City. In addition, any person
serving as a director of Adirondack or the Bank as of the Effective Time
shall be entitled to serve as either a director of: (i) CNB or City or (ii)
as an advisory director of CNB or City until October 9, 2003. The duties and
compensation of any such advisory director shall be determined from time to
time at the sole discretion of CNB or City as the case may be.
4.14 Employee Benefit Plans.
(a) At and after the Effective Time employees of Adirondack
and the Bank who are employed by CNB or its Subsidiaries and affiliates,
shall be eligible to participate in the employee welfare and other similar
fringe benefits of CNB or its subsidiaries, on the same terms and conditions
to those that CNB and its Subsidiaries may make available to similarly
situated officers and employees, including, without limitation, any health,
life, long-term disability, severance, vacation or paid time off programs
(the "CNB Welfare Plans") without any pre existing condition, and with credit
for co-payments and deductibles during the comparable plan year. The period
of employment and compensation of each employee of Adirondack and its
Subsidiaries with Adirondack and its Subsidiaries shall be counted for all
purposes (except for purposes of benefit accrual) under the CNB Welfare
Plans, including, without limitation, for purposes of service credit and
eligibility.
<PAGE>
(b) As of the Effective Time or as soon as practicable
thereafter, the loan between Adirondack and The Gloversville Federal Savings
Employee Stock Ownership Plan (the "ESOP") shall be repaid in full with the
cash consideration received from CNB for the unallocated Adirondack Shares
held in the ESOP in the amount equal to the Merger Price multiplied by the
number of unallocated Adirondack Shares held by the ESOP, and any unallocated
portion of the consideration remaining after such repayment shall be
allocated to the ESOP accounts of the employees of Adirondack and its
Subsidiaries who are participants and beneficiaries (such individuals
hereinafter referred to as the "ESOP Participants") as earnings and not as
"annual additions," in accordance with the terms of the ESOP as amended. As
of the day before the Effective Time the ESOP shall be terminated. Following
the receipt of a favorable determination letter from the Internal Revenue
Service ("IRS") as to the tax qualified status of the ESOP upon its
termination under Section 401(a) and 4975(e)(7) of the Code (the "Final
Determination Letter"), distributions of the account balances under the ESOP
shall be made to the ESOP Participants. From and after the date of this
Agreement, in anticipation of such termination and distribution, CNB,
Adirondack and their respective representatives prior to the Effective Time,
and CNB and its representatives after the Effective Time, shall use their
best efforts to apply for and obtain a favorable Final Determination Letter
from the IRS. In the event that CNB, Adirondack and their respective
representatives, prior to the Effective Time, and CNB and its representatives
after the Effective Time, reasonably determine that the ESOP cannot obtain a
favorable Final Determination Letter, or that the amounts held therein cannot
be so applied, allocated or distributed without causing the ESOP to lose its
qualified status, Adirondack prior to the Effective Time and CNB after the
Effective Time shall take such action as they may reasonably determine with
respect to the distribution of account balances to the ESOP Participants,
provided that the assets of the ESOP shall be held or paid for the benefit of
the ESOP Participants and provided further that in no event shall any portion
of the amounts held in the ESOP revert, directly or indirectly, to Adirondack
or any affiliate thereof, or to CNB or any affiliate thereof. All ESOP
Participants shall fully vest and have a nonforfeitable interest in their
accounts under the ESOP determined as of the termination date.
(c) At the Effective Time, the Gloversville Federal Savings
Profit Sharing Plan (the "Bank PSP") shall be adopted by CNB and continued in
effect. Thereafter, CNB may elect to terminate the Bank PSP or merge it with
a tax-qualified plan maintained by CNB. Employees of Adirondack and its
Subsidiaries shall receive credit for eligibility and vesting purposes for
periods of employment with Adirondack or its Subsidiaries. At the Effective
Time, all participants in the Bank PSP shall fully vest and have a
nonforfeitable interest in their accounts under the Bank PSP determined as of
the Effective Time. If the Bank PSP is terminated, all participants shall be
offered the option of a lump-sum cash payment or, with CNB's consent, the
option of rolling or transferring such amount to the CNB plan, subject in all
cases to applicable provisions of the Code.
(d) CNB acknowledges and agrees that the Adirondack Option
Plan and all awards granted under the Adirondack Financial Services Bancorp,
Inc. Recognition and Retention Plan (the "Recognition and Retention Plan")
shall be continued after the Effective Time until at least October 9, 2003,
provided however that Adirondack and CNB acknowledge and agree that any
person holding an unvested option or award under the terms of the Adirondack
Option Plan or the Recognition and Retention Plan and who is not an employee,
director or advisory director of CNB or City after the Closing, shall have
terminated Continuous Service as defined by such plans. Shares of Adirondack
held in the Recognition and Retention Plan shall be converted to cash in
accordance with the terms of paragraph 1.1 hereof, and thereafter the cash
balance shall accrue interest until distributed in accordance with the terms
of such plans and the grants thereunder at the published federal funds rate.
The Adirondack Option Plan and the Recognition and Retention Plan shall be
frozen and no new options, or in the case of the Recognition and Retention
Plan, shares, shall be awarded pursuant to such plans. After the Effective
Time, participants holding options under the Adirondack Option Plan and
participants having an interest in the cash held by the Recognition and
Retention Plan shall, subject to all of the terms and conditions of such
plans and the grants and agreements thereunder, including the requirement of
continued service, continue to vest in the respective options and the cash
balances. No person shall have any right of continued employment at or after
the Effective Time with CNB or any of its then affiliated companies, by
reason of this subparagraph.
(e) At or prior to the Effective Time, CNB shall take all
corporate action necessary to reserve for issuance a sufficient number of
shares of CNB Common Stock for delivery upon exercise of options to purchase
Adirondack Common Stock assumed by it in accordance with Section 1.5 hereof.
Within 60 days following the Effective Time, CNB shall file a registration
statement on Form S-3 or Form S-8, as the case may be (or any successor or
other appropriate forms), or another appropriate form with respect to the
shares of CNB Common Stock subject to such options and shall use its best
efforts to maintain the effectiveness of such registration statement (and
maintain the current status of the prospectus or prospectuses contained
therein) for so long as such options remain outstanding.
<PAGE>
4.15 Adirondack Employment, Severance and Supplemental Agreements.
CNB agrees to perform and satisfy the terms of (a) the Change of Control
Agreement by and among Adirondack, the Bank and Lewis E. Kolar (the "Kolar
Agreement") (CNB acknowledges hereby that the Merger will constitute an
Involuntary Termination in connection with a Change in Control for purposes
of the Kolar Agreement), and (b) the Gloversville Federal Employee Severance
Compensation Plan (the "Severance Plan"), and (c) to pay such additional
severance pay to terminated employees of Adirondack or the Bank as may be
determined by the parties, but in no event shall the additional severance
amount exceed one year of compensation for any individual so terminated.
4.16 Subsidiary Bank Merger. Adirondack and CNB agree to cooperate
and to take such steps as may be necessary to obtain all requisite
regulatory, corporate and other approvals for the Bank Merger, subject to
consummation of the Merger, to be effective concurrently with the Merger or
as soon as practicable thereafter. The Surviving Bank shall be City, and
shall continue to be known as "City National Bank and Trust Company." In
furtherance of such agreement, each of Adirondack and CNB agrees, as
applicable:
(a) to cause the board of directors of the Bank and City,
respectively, to approve the Bank Merger and to submit it to the sole
stockholder of each bank for its approval;
(b) to vote the shares of stock of the Bank and City owned
by them in favor of the Bank Merger; and
(c) to take, or cause to be taken, all steps necessary to
consummate the Bank Merger concurrently with or as soon as is practicable
after consummation of the Merger.
The Bank Merger shall be accomplished pursuant to a merger
agreement containing such terms and conditions as are ordinary and customary
for affiliated bank merger transactions of such type. Immediately after the
Effective Time, the officers of the Surviving Corporation shall take, or
cause to be taken, whatever additional steps may be necessary to effectuate
the Bank Merger.
4.17 Stockholder Voting Agreements. Contemporaneously with the
execution of this Agreement, Adirondack shall obtain and deliver to CNB a
Stockholder Voting Agreement, in the form attached hereto as Exhibit A,
executed by each stockholder of Adirondack who is a director of Adirondack or
the Bank.
<PAGE>
4.18 Environmental Audits/Remediation
(a) CNB shall have the right to engage an environmental consulting
engineering firm reasonably acceptable to Adirondack, to perform
environmental site assessments of the owned or leased real properties of
Adirondack or its Subsidiaries (but excluding property held in trust or in a
fiduciary capacity and space in retail or similar establishments leased by
Adirondack or any of its Subsidiaries for automatic teller machines or bank
branch facilities where the space leased comprises less than 30% of the total
space leased to all tenants of such property) (collectively, the "Audited
Properties"), which shall satisfy the American Society of Testing and
Materials "Standard Practice for Environmental Site Assessments: Phase I
Environmental Site Assessment Process," except that such assessment shall
also include a review of compliance with Environmental Laws, as defined below
(the "Environmental Audits"), and render reports of the Environmental Audits
(the "Environmental Reports) to determine whether there are any indications
or evidence that (i) any toxic substance has been stored, deposited, treated,
recycled, used or accidentally or intentionally disposed of, discharged,
spilled, released, dumped, emitted or otherwise placed on, under or at, or
used in any construction on, any such Audited Property, (ii) any such Audited
Property is contaminated by or contains any toxic substance or (iii) any
violations of Environmental Laws have occurred or are likely to occur on any
Audited Property. The scope of the Environmental Audits may also include any
testing or sampling of materials to determine, to CNB's reasonable
satisfaction, whether any clean up, removal, remedial action or other
response ("Remediation Action") is required to bring the Audited Properties
into material compliance with Environmental Laws or to eliminate any
condition that could result in a material liability as a result of the
ownership, lease, operation or use of any Audited Property, and the estimated
cost of such Remediation Action (the "Remediation Costs"). All Environmental
Audits shall initially be provided to CNB and Adirondack in draft form. CNB
shall require that the environmental consulting firm not disclose (except as
required by law) any information in the Environmental Audits to anyone other
than CNB and Adirondack. CNB will cause the Phase I Environmental Audits to
be completed within 45 days of the date hereof. Within 15 days of the receipt
of the Phase I Environmental Audit by CNB, CNB shall determine whether, in
its reasonable judgment, a Phase II Environmental Audit is necessary and
shall notify Adirondack of its determination in this regard. If CNB desires
to cause a Phase II Environmental Audit to be conducted, CNB shall use its
reasonable efforts to cause an environmental consulting engineering firm to
commence such Phase II Environmental Audit within such 15 day period;
provided, that prior to commencing such Phase II Environmental Audit, CNB's
environmental consultant shall consult with an environmental consultant
selected by Adirondack (at its sole expense) on the monitoring and testing
methodologies, including conducting joint testing or taking separate samples
for processing at different labs. Such Phase II Environmental Audit shall be
completed not later than 45 days after the date of such firm's engagement.
Adirondack agrees to cooperate with CNB's environmental consultant. Except
for the expense of its own environmental consultant if it shall select one as
provided for herein, CNB shall be solely responsible for all costs associated
with the Environmental Audits and Environmental Reports. As used in this
Agreement, the term "Environmental Laws" shall mean all applicable federal,
state, and local environmental laws relating to pollution or protection of
the environment including, without limitation, the Solid Waste Disposal Act,
the Hazardous Materials Transportation Act, the Clean Water Act, the Clean
Air Act, the Resource Conservation and Recovery Act, the Toxic Substances
Control Act, the Occupational Safety and Health Act and the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
their state and local laws, their state and local law counterparts and all
rules and regulations promulgated thereunder.
(b) In the event that the Environmental Audits disclose that any
remediation at any of the Audited Properties is required under Environmental
Laws, the after-tax costs (based on the highest federal marginal tax rate) of
such remediation up to $ 50,000 shall be paid by CNB. Such after-tax costs so
required which exceed $50,000 shall be the responsibility of Adirondack and
shall be deducted from the Merger Price; provided that in the event such
after-tax costs exceed $300,000 Adirondack shall have the right pursuant to
Section 6.5(f) to terminate this Agreement.
<PAGE>
ARTICLE V
CONDITIONS PRECEDENT
5.1. Conditions Precedent to Obligations of CNB and Acquisition
Corp. Unless the conditions are waived by CNB or Acquisition, all obligations
of CNB and Acquisition under this Agreement are subject to the fulfillment,
prior to or at the Closing, of each of the following conditions:
(a) Representations and Warranties; Performance of
Agreements. The Representations and Warranties of Adirondack contained in
Article II of this Agreement, as amended or supplemented by the Adirondack
Updated Statements (as defined in Section 5.1(h) hereof) shall have been true
and correct in all material respects as of this date (except to the extent
such representations and warranties speak as of an earlier date) and shall be
true and correct in all material respects at the Closing as though made on
and as of the Closing Date, and Adirondack shall have performed all
agreements herein required to be performed by it on or prior to the Closing.
(b) Closing Certificate. CNB shall have received a
certificate signed by the chief executive officer of Adirondack, dated as of
the Closing Date, certifying as to the fulfillment of the conditions to the
obligations of CNB as set forth in this Agreement.
(c) Regulatory and Other Approvals. CNB shall have obtained
the approval of all appropriate federal and state regulatory agencies
(including, without limitation, the approval of the Federal Reserve)
necessary to complete the transactions contemplated by this Agreement, all
required waiting periods shall have expired, and there shall have been no
motion for rehearing or appeal from any such approval or commencement of any
suit or action by any governmental authority seeking to enjoin the
transactions provided for herein or to obtain other relief with respect
thereto.
(d) Approval of Merger and Execution of Certificate of
Merger. This Agreement and the transactions contemplated hereby shall have
been approved by the Board of Directors and the stockholders of Adirondack
shall have adopted the Merger Agreement at the Stockholder Meeting in
accordance with applicable law and the Certificate of Incorporation and
bylaws of Adirondack. The proper officers of Adirondack shall have executed
and delivered to CNB such certificates, statements or other instruments as
may be necessary or appropriate to effect the filing of the Certificate of
Merger.
(e) No Litigation with Respect to Transactions. No suit or
other action shall have been instituted seeking to enjoin the consummation of
the transactions contemplated hereby or to obtain other relief in connection
with this Agreement or the transactions contemplated hereby, that reasonably
could be expected to result in the issuance of an order enjoining such
transactions.
<PAGE>
(f) Opinion of Counsel. CNB shall have received the opinion
of Silver Freedman and Taff, LLP special counsel for Adirondack, dated as of
the Closing Date, and in substantially the form attached hereto as Exhibit D.
In rendering the foregoing opinion, such counsel may rely on certificates of
corporate officers or governmental officials as to factual matters.
(g) Other Documents. CNB shall receive at the Closing all
such other documents, certificates or instruments as it may have reasonably
requested evidencing compliance by Adirondack with the terms of this
Agreement.
(h) Updated Statements. Adirondack shall have provided CNB
any information necessary to make the Representations and Warranties of
Adirondack set forth in Article II true and correct as of the Closing Date
(the "Adirondack Updated Statements"), and none of such Adirondack Updated
Statements shall reflect a change from the Representations and Warranties of
Adirondack made as of the date of this Agreement that reflect a Material
Adverse Effect of Adirondack.
(i) Other Employee Matters. At or prior to the Effective
Time of the Merger, Menzo D. Case shall have ceased to be an employee of
Adirondack and the Bank and any and all Adirondack Shares held for his
benefit in the Recognition and Retention Plan and any and all option shares
held by him under the Adirondack Option Plan shall have been forfeited
without expense or liability to Adirondack or the Bank.
(j) Limitation on Recognition Shares and Options. At the
Effective Time of the Merger there shall be not more than 20,749 Adirondack
shares issued under the Recognition and Retention Plan and not more than
49,595 outstanding options under the Adirondack Option Plan.
(k) Non Competition Agreement. At the Effective Time CNB
shall have received executed Non Competition Agreements in the form of
Exhibit B from each director of Adirondack and the Bank other than Lewis E.
Kolar, and shall have received the Non Competition Agreement in the form of
Exhibit C from Lewis E. Kolar.
5.2 Conditions Precedent to Obligations of Adirondack. Unless the
conditions are waived by Adirondack, all obligations of Adirondack under this
Agreement are subject to the fulfillment, prior to or at Closing, of each of
the following conditions:
(a) Representations and Warranties; Performance of
Agreements. The Representations and Warranties of CNB and Acquisition
contained in Article III of this Agreement, as amended or supplemented by the
CNB and Acquisition Updated Statements (as defined in Section 5.2(j)) shall
have been true and correct in all material respects as of this date (except
to the extent such representations and warranties speak as of an earlier
date) and shall be true and correct in all material respects at the Closing
as though made on and as of the Closing Date, and CNB shall have performed
all agreements herein required to be performed by it on or prior to the
Closing.
<PAGE>
(b) Closing Certificate. Adirondack shall have received a
certificate signed by the chief executive officers of CNB and Acquisition and
dated as of the Closing Date, certifying as to the fulfillment of the
conditions to the obligations of Adirondack as set forth in this Agreement.
(c) Regulatory and Other Approvals. CNB shall have obtained
the approval of all appropriate federal and state banking regulatory agencies
(including, without limitation, the approval of the Federal Reserve Board)
necessary to complete the transactions contemplated by this Agreement, all
required waiting periods shall have expired, and there shall have been no
motion for rehearing or appeal from such approval or commencement of any suit
or action by any governmental authority seeking to enjoin the transactions
provided for herein or to obtain other relief with respect thereto.
(d) Fairness Opinion. Capital Resources Group, Inc. shall
have delivered to the Board of Directors of Adirondack, as of the date of
this Agreement, its opinion to the effect that the consideration to be
received in the Merger is fair, from a financial point of view, to the
stockholders of Adirondack, and such opinion shall not have been withdrawn,
amended or modified in any material respect at or prior to the Closing.
(e) No Litigation. No suit or other action shall have been
instituted or threatened seeking to enjoin the consummation of the
transactions contemplated hereby or to obtain other relief in connection with
this Agreement or the transactions contemplated hereby (including, but not
limited to, substantial damages) that reasonably could be expected to result
in the issuance of an order enjoining such transactions or result in a
determination that CNB has failed to comply with applicable legal
requirements of a material nature in connection with the transactions
contemplated hereby or actions preparatory thereto.
(f) Opinion of Counsel. Adirondack shall have received the
opinion of Werner & Blank Co., LPA, special counsel for CNB and Acquisition,
dated as of the Closing Date, in substantially the form of Exhibit E hereto.
(g) Approval of Merger and Delivery of the Certificate of
Merger. This Agreement and the transactions contemplated hereby shall have
been approved by the Board of Directors of CNB and Acquisition and by CNB as
the sole stockholder of Acquisition in accordance with governing statutes and
the Certificate of Incorporation and bylaws of CNB and the Certificate of
Incorporation and bylaws of Acquisition, and the stockholders of Adirondack
shall have adopted the Merger Agreement at the Stockholders Meeting. The
proper officers of each of CNB, Acquisition and Adirondack, as applicable,
shall have executed the Certificate of Merger in form suitable for filing
with the Delaware Secretary of State and shall have executed and delivered
all such other certificates, statements or other instruments as may be
necessary or appropriate to effect such filings.
(h) Merger Consideration. CNB shall have deposited funds
with the exchange agent or made other arrangements to provide funds to the
exchange agent, sufficient to enable the exchange agent to pay in full the
total amount of funds required to be paid at the Effective Time pursuant to
Section 1.1 hereof for exchanges in accordance with this Agreement.
(i) Other Documents. Adirondack shall receive at the
Closing all such other documents, certificates or instruments as it may have
reasonably requested evidencing compliance by CNB and Acquisition with the
terms of this Agreement.
(j) Updated Statements. CNB and Acquisition shall have
provided Adirondack any information necessary to make the Representations and
Warranties of CNB and Acquisition set forth in Article III true and correct
as of the Closing Date (the "CNB and Acquisition Updated Statements"), and
none of such CNB and Acquisition Updated Statements shall reflect a change
from the Representations and Warranties of CNB and Acquisition made as of the
date of this Agreement that reflect a Material Adverse Effect of CNB.
ARTICLE VI
GENERAL PROVISIONS
6.1 Non-Survival of Representations and Warranties and Covenants.
None of the Representations and Warranties and covenants in this Agreement
shall survive the Effective Time, except for such other covenants and
agreements contained in this Agreement that by their terms apply in whole or
in part after the Effective Time. In the event of the termination of this
Agreement pursuant to Section 6.5 hereof, none of the representations and
warranties and covenants in this Agreement shall survive except that the
covenants in this Agreement with respect to confidentiality contained in
Section 4.10, payment of expenses contained in Section 6.3 and this Section
6.1 shall survive.
6.2 Further Assurances. Each of the parties hereto agrees that at
any time and from time to time after the Effective Time it shall cause to be
executed and delivered to any party such further instruments or documents as
such other party may reasonably require to give effect to the transactions
contemplated hereby.
<PAGE>
6.3 Expenses and Termination Rights. Each of the parties to this
Agreement shall bear their respective costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby;
provided, however, that:
(a) in the event this Agreement is validly terminated by
CNB pursuant to Section 6.5(d) hereof or by Adirondack pursuant to Section
6.5(e) hereof, Adirondack shall pay to CNB a termination fee of $500,000 in
cash on demand;
(b) in the event this Agreement is validly terminated by
Adirondack pursuant to Section 6.5(d), CNB shall pay to Adirondack a
termination fee of $500,000 in cash on demand;
(c) in the event this Agreement is terminated either (i) by
Adirondack pursuant to Section 6.5(e), or (ii) by CNB as provided in Section
6.5(d) as a result of Adirondack's breach of Section 4.4 or by CNB as
provided in Section 6.5(d) following a failure of Adirondack's stockholders
to grant the necessary approval in Section 5.1(d) and contemporaneously with
the termination provided in this paragraph (ii) there is a Transaction
Proposal and, prior to or within 12 months of such termination, Adirondack
shall have entered into a definitive agreement relating to such Transaction
Proposal, then, with respect to a termination under either paragraph (i) or
(ii) of this Section 6.3(d), Adirondack shall pay to CNB, in immediately
available funds, an amount equal to $750,000 within ten business days after
demand for payment by CNB following such termination, which amount, however,
shall be reduced by any amount Adirondack shall have previously paid or shall
be obligated to pay to CNB pursuant to Section 6.3(a) hereof.
(d) In the event of termination of this Agreement as
provided in Sections 6.5(a), 6.5(b), 6.5(c), 6.5(f) or 6.5(g) this Agreement
shall forthwith become void and there shall be no liability under this
Agreement on the part of CNB or Adirondack or their respective officers or
directors expect as set forth in Section 6.1.
(e) Notwithstanding anything in this Agreement to the
contrary, the parties hereto agree that irreparable damage would occur in the
event that the provisions of this Agreement were not performed in accordance
with its specific terms or was otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having
jurisdiction, and to be awarded reasonable attorneys' fees, this being in
addition to any other remedy to which they are entitled hereunder.
6.4 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the respective heirs, successors, assigns of the
parties hereto; provided, however, that no party may assign this Agreement
without the written consent of the other parties, and except that CNB may
assign this Agreement to any entity, a majority of the stock of which is
owned directly or indirectly by CNB. Any assignment shall only be done upon
prior notice to Adirondack and will not relieve CNB from any of its
responsibilities, duties, liabilities and obligations set forth herein.
<PAGE>
6.5 Termination. This Agreement may be terminated (a) at any time by
agreement of CNB and Adirondack, (b) by either CNB or Adirondack if the
regulatory approvals referred to in Section 5.1(c) hereof have not been
obtained on or before September 30, 1999, provided that both parties have
used reasonable efforts to secure such approvals (for purposes hereof "
reasonable efforts" shall not require CNB to assent to any condition or
affirmative requirement of a regulatory agency which would, in the reasonable
opinion of CNB, cost CNB in excess of $100,000), (c) by either CNB or
Adirondack if the Closing has not occurred by December 31, 1999 (provided
that the terminating party is not then in material breach of any
representation, warranty, covenant or other agreement contained herein), (d)
by either CNB or Adirondack if a material default shall be made by the other
party in the observance or in the due and timely performance of any of its
covenants and agreements contained in this Agreement and such default by its
nature cannot be cured prior to the Closing and which breach has had,
individually or in the aggregate, a Material Adverse Effect on the
non-breaching party, (e) by Adirondack if its Board of Directors shall
determine that a Transaction Proposal constitutes a Superior Proposal and the
Board shall have received a written opinion of its outside counsel that the
failure to accept such Superior Proposal could reasonably be expected to
result in a breach of the fiduciary duties of the Board under applicable law,
or (f) by Adirondack pursuant to Section 4.18(b).
6.6 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given (a) when delivered personally; (b) the
second business day after being deposited in the United States mail
registered or certified (return receipt requested); (c) the first business
day after being deposited with Federal Express or any other recognized
national overnight courier service; or (d) on the business day on which it is
sent and received by facsimile, in each case to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) If to CNB addressed to:
Mr. William N. Smith
Chairman, President & CEO
CNB Bancorp (City National Bank & Trust Company)
12-24 North Main Street
Gloversville, NY 12078
Phone: (518) 773-7911
Fax: (518) 725-2730
with a copy to:
Martin D. Werner, Esq.
Werner & Blank Co. L.P.A.
7205 West Central Avenue
Toledo, Ohio 43617
Phone: (419) 841-8051
Fax: (419) 841-8380
<PAGE>
(b) If to Adirondack, addressed to:
Mr. Lewis E. Kolar
President
Adirondack Financial Services Bancorp, Inc.
52 N. Main Street
Gloversville, New York 12078-3084
Phone:
Fax:
with a copy to:
Kip A. Weissman, Esq.
Silver, Freedman & Taff, L.L.P.
1100 New York Avenue, N.W., Suite 700
Washington, D.C. 20005-3934
Phone: (202) 414-6100
Fax: (202) 682-0354
6.7 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of
Delaware, without giving effect to the conflict of laws principles thereof.
6.8 Counterparts. This Agreement may be executed in any number of
counterparts, and each such executed counterpart will be an original
instrument.
6.9 Headings. Descriptive headings appearing in this Agreement are
for convenience only and will not be deemed to explain, limit or amplify any
of the provisions hereof.
6.10 Entire Agreement; Amendment. This Agreement, with its exhibits
and the schedules delivered pursuant to it, sets forth the entire
understanding of the parties and supersedes all prior agreements,
arrangements and communications, whether oral or written. This Agreement may
only be modified or amended by an agreement in writing signed by CNB and
Adirondack.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year hereinabove first written.
CNB BANCORP, INC. CNB ACQUISITION CORP.
By: ________________________________ By: ________________________________
Title: _____________________________ Title: _____________________________
ADIRONDACK FINANCIAL SERVICES BANCORP, INC.
By: ________________________________
Title: _____________________________
<PAGE>
EXHIBIT A
STOCKHOLDER VOTING AGREEMENT
STOCKHOLDER VOTING AGREEMENT, dated as of ____________,
1999 (this "Agreement"), by and among the undersigned (hereinafter the
"Stockholder), CNB BANCORP, INC., a New York corporation ("CNB") and CNB
ACQUISITION CORP., a Delaware corporation ("Acquisition").
WHEREAS, CNB, Acquisition and Adirondack Financial Services
Bancorp, Inc., have entered into an Agreement of Merger, dated as of
___________________, 1999 (the "Merger Agreement"), which provides, among
other things, that Acquisition shall be merged with and into the Company
pursuant to the merger contemplated by the Merger Agreement (the "Merger"),
WHEREAS, as of the date hereof, the Stockholder is the
Beneficial Owner (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) of _____ shares of common stock,
$.01 par value, of the Company (the "Company Common Stock"), and
WHEREAS, as a condition to the willingness of CNB and
Acquisition to enter into the Merger Agreement, CNB and Acquisition have
required that the Stockholder and the Company agree, and in order to induce
CNB and Acquisition to enter into the Merger Agreement, the Stockholder and
the Company have agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, and intending to be legally
bound hereby, the parties hereto hereby agree as follows:
ARTICLE I
VOTING OF SHARES
Section I.1 Voting Agreement. The Stockholder hereby agrees to: (a)
appear in person or by proxy, or cause the holder of record on the applicable
record date (the "Record Holder") to appear, at any annual or special meeting
of stockholders of the Company called for the purpose of adopting the Merger
Agreement for the purpose of obtaining a quorum; (b) vote, or cause the
Record Holder to vote, in person or by proxy, all of the shares of the
Company Common Stock owned or with respect to which the Stockholder has or
shares voting power and shares of Company Common Stock which shall, or with
respect to which voting power shall, hereafter be acquired by the Stockholder
(collectively, the "Shares") in favor of the adoption of the Merger Agreement
(as in effect on the date hereof); (c) vote, or cause the Record Holder to
vote, the Shares against any action, proposal or agreement that could
reasonably be expected to result in a breach in any material respect of any
covenant, representation or warranty or any other obligation of the Company
under the Merger Agreement, or which could reasonably be expected to result
in any of the conditions to the Company's obligations under the Merger
Agreement not being fulfilled; and (d) vote, or cause the Record Holder to
vote, such Shares against: (i) any extraordinary corporate transaction (other
than the Merger), such as a merger, consolidation, business combination,
reorganization, recapitalization or liquidation involving the Company or any
of its subsidiaries; and (ii) a sale or transfer of a material amount of the
assets of the Company or any of its subsidiaries (each of the events
described in (i) and (ii) above as an "Alternative Transaction"). The
Stockholder acknowledges receipt and review of a copy of the Merger
Agreement. Notwithstanding any other provision of this Article I, the
provisions of such Article I shall not prohibit or restrain the Stockholder
from complying with his fiduciary obligations as a director or officer of the
Company.
<PAGE>
Section I.2 No Ownership Interest. Nothing contained in this
Agreement shall be deemed to vest in CNB or Acquisition any direct or
indirect ownership or incidence of ownership of or with respect to any
Shares. All rights, ownership, and economic benefits of and relating to the
Shares or Company Options shall remain and belong to the Stockholder, and
neither CNB nor Acquisition shall have any authority to manage, direct,
superintend, restrict, regulate, govern, or administer any of the policies or
operations of the Company or exercise any power or authority to direct the
Stockholder in the voting of any of the Shares, except as otherwise expressly
provided herein, or the performance of its duties or responsibilities as a
stockholder of the Company.
Section I.3 No Inconsistent Agreements. The Stockholder hereby
covenants and agrees that, except as contemplated by this Agreement and the
Merger Agreement, the Stockholder shall not enter into any voting agreement
or grant a proxy or power of attorney with respect to the Shares which is
inconsistent with this Agreement.
ARTICLE II
RESTRICTIONS ON TRANSFER
Section II.1 Transfer of Title. (a) The Stockholder hereby covenants
and agrees that the Stockholder will not, until after the meeting of
stockholders of the Company called for the purpose of adopting the Merger
Agreement, either directly or indirectly, offer, agree or otherwise sell,
assign, pledge, hypothecate, transfer, exchange, or dispose of any Shares or
Company Options or any other securities or rights convertible into or
exchangeable for shares of Company Common Stock, owned either directly or
indirectly by the Stockholder or with respect to which the Stockholder has
the power of disposition, whether now or hereafter acquired, other than
pursuant to the Merger, without the prior written consent of CNB.
(b) The Stockholder hereby agrees and consents to the entry
of stop transfer instructions with the Company against the transfer of any
Shares consistent with the terms of Section II.1(a).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to CNB and
Acquisition as follows:
Section III.1 Authority Relative to This Agreement. The Stockholder
is competent to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement has been duly and validly executed and
delivered by the Stockholder.
Section III.2 Title to the Shares. The Shares held by the
Stockholder are owned free and clear of all security interests, liens,
claims, pledges, options, rights of first refusal, agreements, limitations on
the Stockholder's voting rights, charges and other encumbrances of any nature
whatsoever, and the Stockholder has not appointed or granted any proxy, which
appointment or grant is still effective, with respect to the Shares.
<PAGE>
ARTICLE IV
MISCELLANEOUS
Section IV.1 Termination. This Agreement shall terminate upon the
earliest to occur of (a) the termination of the Merger Agreement or (b) the
Effective Time (as defined in the Merger Agreement).
Section IV.2 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with its specified terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this
Agreement and to specific performance of the terms and provisions hereof in
addition to any other remedy to which they are entitled at law or in equity.
Section IV.3 Successors and Affiliates. This Agreement shall inure
to the benefit of and shall be binding upon the parties hereto and their
respective heirs, legal representatives and assigns. If the Stockholder shall
acquire ownership of, or voting power with respect to, any additional Shares
in any manner, whether by the exercise of any Options or any securities or
rights convertible into or exchangeable for Shares, operation of law or
otherwise, such Shares shall be held subject to all of the terms and
provisions of this Agreement. Without limiting the foregoing, the Stockholder
specifically agrees that the obligations of the Stockholder hereunder shall
not be terminated by operation of law, whether by death or incapacity of the
Stockholder or otherwise.
Section IV.4 Entire Agreement. This Agreement constitutes the entire
agreement among CNB, the Company and the Stockholder with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
both written and oral, among CNB, Acquisition, the Company and the
Stockholder with respect to the subject matter hereof.
Section IV.5 Captions and Counterparts. The captions in this
Agreement are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.
This Agreement may be executed in several counterparts, each of which shall
constitute one and the same instrument.
Section IV.6 Amendment. This Agreement may not be amended except by
an instrument in writing signed by the parties hereto.
Section IV.7 Waivers. Except as provided in this Agreement, no
action taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any
representations, warranties, covenants or agreements contained in this
Agreement. The waiver by any party hereto of a breach of any provision
hereunder shall not operate or be construed as a waiver of any prior or
subsequent breach of the same or any other provision hereunder.
Section IV.8 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in a mutually
acceptable manner in order that the terms of this Agreement remain as
originally contemplated to the fullest extent possible.
Section IV.9 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been
duly given or made and shall be effective upon receipt, if delivered
personally, mailed by registered or certified mail (postage prepaid, return
receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like changes of address)
or sent by electronic transmission (provided that a confirmation copy is sent
by another approved means) to the telecopier number specified below:
<PAGE>
If to Stockholder:
At the address set forth on the signature page hereto
If to CNB or Acquisition, addressed to:
Mr. William N. Smith
Chairman, President and CEO
CNB Bancorp (City National Bank & Trust Company)
12-24 North Main Street
Gloversville, New York 12078
Phone: (518) 773-7911
Fax: (518) 725-2730
with a copy to:
Martin D. Werner, Esq.
Werner & Blank Co. L.P.A.
7205 West Central Avenue
Toledo, Ohio 43617
Phone: (419) 841-8051
Fax: (419) 841-8380
If to the Stockholder, addressed to:
[Stockholder]
c/o Adirondack Financial Services Bancorp, Inc.
52 N. Main Street
Gloversville, New York 12078-3084
Phone:
Fax:
with a copy to:
Kip A. Weissman, Esq.
Silver, Freedman & Taff, L.L.P.
1100 New York Avenue, N.W., Suite 700
Washington, D.C. 20005-3934
Phone: (202) 414-6100
Fax: (202)-682-0354
Section IV.10 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware
regardless of the laws that might otherwise govern under applicable
principles of conflicts of law.
IN WITNESS WHEREOF, each of the parties hereto have caused
this Agreement to be duly executed on the date hereof.
CNB BANCORP, INC.
By: _________________________________
Name: _________________________________
Title: _________________________________
CNB ACQUISITION CORP.
By: __________________________________
Name: __________________________________
Title: __________________________________
STOCKHOLDER
By: ___________________________________
Name: ___________________________________
Title: ___________________________________
Address: ___________________________________
___________________________________
<PAGE>
EXHIBIT B
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (the "Noncompetition Agreement") is
made as of the _____ day of __________, 1999 by and among ___________________
(the "Shareholder") and CNB Bancorp, Inc., ("CNB"), Adirondack Financial
Services Bancorp, Inc. ("Adirondack") and Gloversville Federal Savings Bank
("Bank") (CNB, Adirondack and Bank being sometimes referred to collectively
as the "Protected Parties").
RECITALS
WHEREAS, CNB is this day acquiring Adirondack and Bank pursuant to
the Agreement and Plan of Merger dated as of _______________, 1999 by and
among CNB, CNB Acquisition Corp., a wholly-owned subsidiary of CNB
("Acquisition") and Adirondack (the "Agreement"), and capitalized terms not
otherwise defined herein have the same meaning assigned to them in the
Agreement; and
WHEREAS, the Shareholder is an Adirondack Shareholder and a member
of Adirondack management by means of his service as a director and/or officer
of Adirondack and/or the Bank; and
WHEREAS, one of the conditions to the consummation of the
transactions contemplated by the Agreement is the execution and delivery of
the Noncompetition Agreement.
NOW, THEREFORE, in consideration of One Dollar ($1.00), the
performance of the covenants and agreements herein, the performance of the
Agreement by CNB and Acquisition, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
it is hereby agreed that:
1. Noncompetition. The Shareholder agrees that he will not, directly
or indirectly, for three years from and after the date of this Noncompetition
Agreement, in Fulton, Saratoga and Montgomery counties within the State of
New York, manage, act as a director or officer of, operate, control, be
employed by, participate in, consult with, or be connected in any manner with
the operation, ownership, management or control of any bank, trust company,
savings bank or savings association, or any holding company of any such
institution (other than Adirondack, the Bank or any affiliate of CNB)
(collectively the "Competing Financial Institutions"). Notwithstanding the
foregoing: (i) the ownership of less than three percent (3%) of the equity
interest in a corporation shall not, without more, be deemed a violation of
this section; (ii) the sale, purchase or leasing of real property to or from
a Competing Financial Institution shall not, without more, be deemed a
violation of this section; or (iii) the provision of legal services to a
Competing Financial Institution shall not, without more, be deemed a
violation of this section.
<PAGE>
2. Confidential Information. The parties agree that the business
connections, customers, customer lists, marketing techniques, procedures,
operations and other aspects of Adirondack's and the Bank's business, which
are being acquired by CNB, have been established and maintained at great
expense, protected as confidential information and trade secrets and are of
great value to the Protected Parties and will provide them with a substantial
competitive advantage in their businesses. The parties further agree that as
an employee, officer, director and/or beneficial owner of Adirondack's
equity, the Shareholder has had access to and has been entrusted with secret,
confidential and proprietary information, and that the Protected Parties
would suffer great loss and injury if he would disclose this information or
use it to compete with the Protected Parties. Therefore, the Shareholder
agrees that he will not directly or indirectly, either individually or as an
employee, agent, partner, director, officer, shareholder, consultant or in
any other capacity, use or disclose, or cause to be used or disclosed, any
secret, confidential or proprietary information acquired by the Shareholder
as an employee, director or officer of, or as an owner of stock in,
Adirondack or the Bank whether or not such information was owned by
Adirondack or the Bank prior to or discovered and developed by the Protected
Parties subsequent to their relationship with the Shareholder, and regardless
of the fact that the Shareholder may have participated in the discovery and
development of that information.
3. Relationship with Others. The parties agree that the
profitability and reputation of Adirondack and the Bank depends on
continued amicable relationship with their suppliers, customers and
employees. The Shareholder agrees that he will not cause, request, solicit
or advise any suppliers, customers or employees of Adirondack or the Bank
to curtail, cancel or terminate their business, employment or other
relationship with Adirondack or the Bank.
4. Common Law of Torts or Trade Secrets. The parties agree that
nothing in this Noncompetition Agreement shall be construed to limit or
negate the common law of torts or trade secrets where it provides the
Protected Parties with broader protection that that provided herein.
5. Remedies.
(a) In addition to other remedies provided by law or equity, upon a
breach by the Shareholder of any of the covenants contained herein, then the
Protected Parties shall be entitled to have a court of competent jurisdiction
enter an injunction against that party prohibiting any further breach of the
covenants contained herein.
(b) The parties agree that it is impossible to measure in money the
damages that may accrue to a party hereto by reason of a failure to perform
any of the obligations hereunder. Therefore, in the event of any controversy
concerning the rights or obligations under this Noncompetition Agreement such
rights or obligations shall be enforceable in a court of equity by a decree
of specific performance. Such remedy, however, shall be cumulative and
nonexclusive and shall be in addition to any other remedy which the parties
may have.
6. Miscellaneous.
(a) This Noncompetition Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original but all
of which shall together constitute one and the same agreement.
(b) The Section headings herein are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Noncompetition Agreement.
(c) This Noncompetition Agreement shall not be assigned by the
Shareholder without the prior written consent of the Protected Parties. The
Protected Parties shall have the right to assign all or any portion of their
rights under this Noncompetition Agreement, provided that the Protected
Parties give notice of any such assignment to the Shareholder.
(d) The Noncompetition Agreement shall be construed and governed by
the laws of the State of New York.
(e) All communications or notices required or permitted by this
Noncompetition Agreement shall be in writing and shall be deemed to have been
given at the earlier of the date when actually delivered to an individual
party, to an officer of a corporate party, sent via facsimile (receipt
electronically confirmed) to the fax number(s) provided below, or when
deposited in the United States mail, certified or registered mail, postage
prepaid, return receipt requested, and addressed as follows, unless and until
any of such parties notifies the others in accordance with this Section of a
change of address or fax:
<PAGE>
If to any Protected Party: Mr. William N. Smith
Chairman, President & CEO
CNB Bancorp, Inc.
12-24 North Main Street
Gloversville, NY 12078
Phone: (518) 773-7911
Fax: (518) 725-2730
with a copy to:
Martin D. Werner, Esq.
Werner & Blank Co., L.P.A.
7205 West Central Avenue
Toledo, Ohio 43617
Phone: (419) 841-8051
Fax: (419) 841-8380
If to the Shareholder: To the address set forth at the signature page
with a copy to:
Kip A. Weissman, Esq.
Silver, Freedman & Taff, LLP
1100 New York Avenue, N.W., Suite 700
New York, New York 10005-3934
Phone: (202) 414-6100
Fax: (202) 682-0354
(f) The invalidity or unenforceability of any provision hereof shall
not affect or impair any other provisions.
(g) No amendment of this Noncompetition Agreement shall be effective
unless in writing and signed by all parties hereto.
(h) This Noncompetition Agreement, together with the Agreement and
other documents and materials referred to herein or therein, constitutes the
entire understanding of the parties with respect to the subject matter
hereof. There are no restrictions, promises, warranties, covenants or
undertakings other than those expressly set forth herein and therein. This
Noncompetition Agreement supersedes all prior negotiations, agreements (other
than the Agreement) and undertakings between the parties with respect to such
subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this
Noncompetition Agreement as of the date first above written.
SHAREHOLDER
__________________________________
__________________________________
Name
__________________________________
__________________________________
Address
CNB BANCORP, INC.
By: _____________________________
__________________________________
Name
__________________________________
Title
ADIRONDACK FINANCIAL SERVICES
BANCORP, INC.
By: _____________________________
__________________________________
Name
__________________________________
Title
GLOVERSVILLE FEDERAL SAVINGS
By: _____________________________
__________________________________
Name
__________________________________
Title
<PAGE>
EXHIBIT C
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (the "Noncompetition Agreement") is
made as of the _____ day of __________, 1999 by and among Lewis E. Kolar (the
"Shareholder") and CNB Bancorp, Inc., ("CNB"), Adirondack Financial Services
Bancorp, Inc. ("Adirondack") and Gloversville Federal Savings Bank ("Bank")
(CNB, Adirondack and Bank being sometimes referred to collectively as the
"Protected Parties").
RECITALS
WHEREAS, CNB is this day acquiring Adirondack and Bank pursuant to
the Agreement and Plan of Merger dated as of _______________, 1999 by and
among CNB, CNB Acquisition Corp., a wholly-owned subsidiary of CNB
("Acquisition") and Adirondack (the "Agreement"), and capitalized terms not
otherwise defined herein have the same meaning assigned to them in the
Agreement; and
WHEREAS, the Shareholder is an Adirondack Shareholder and a member
of Adirondack management by means of his service as a director and/or officer
of Adirondack and/or the Bank; and
WHEREAS, one of the conditions to the consummation of the
transactions contemplated by the Agreement is the execution and delivery of
the Noncompetition Agreement.
NOW, THEREFORE, in consideration of One Dollar ($1.00), the
performance of the covenants and agreements herein, the performance of the
Agreement by CNB and Acquisition, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
it is hereby agreed that:
1. Noncompetition. The Shareholder agrees that he will not, directly
or indirectly, during the period following the Effective Time that
Shareholder shall serve as a director (including that of an advisory
director) of CNB or City and for a period of one year after such service, in
Fulton, Saratoga and Montgomery counties within the State of New York,
manage, act as a director or officer of, operate, control, be employed by,
participate in, consult with, or be connected in any manner with the
operation, ownership, management or control of any bank, trust company,
savings bank or savings association, or any holding company of any such
institution (other than Adirondack, the Bank or any affiliate of CNB)
(collectively the "Competing Financial Institutions"). Notwithstanding the
foregoing: (i) the ownership of less than three percent (3%) of the equity
interest in a corporation shall not, without more, be deemed a violation of
this section; (ii) the sale, purchase or leasing of real property to or from
a Competing Financial Institution shall not, without more, be deemed a
violation of this section; or (iii) the provision of legal services to a
Competing Financial Institution shall not, without more, be deemed a
violation of this section.
2. Confidential Information. The parties agree that the business
connections, customers, customer lists, marketing techniques, procedures,
operations and other aspects of Adirondack's and the Bank's business, which
are being acquired by CNB, have been established and maintained at great
expense, protected as confidential information and trade secrets and are of
great value to the Protected Parties and will provide them with a substantial
competitive advantage in their businesses. The parties further agree that as
an employee, officer, director and/or beneficial owner of Adirondack's
equity, the Shareholder has had access to and has been entrusted with secret,
confidential and proprietary information, and that the Protected Parties
would suffer great loss and injury if he would disclose this information or
use it to compete with the Protected Parties. Therefore, the Shareholder
agrees that he will not directly or indirectly, either individually or as an
employee, agent, partner, director, officer, shareholder, consultant or in
any other capacity, use or disclose, or cause to be used or disclosed, any
secret, confidential or proprietary information acquired by the Shareholder
as an employee, director or officer of, or as an owner of stock in,
Adirondack or the Bank whether or not such information was owned by
Adirondack or the Bank prior to or discovered and developed by the Protected
Parties subsequent to their relationship with the Shareholder, and regardless
of the fact that the Shareholder may have participated in the discovery and
development of that information.
<PAGE>
3. Relationship with Others. The parties agree that the
profitability and reputation of Adirondack and the Bank depends on
continued amicable relationship with their suppliers, customers and
employees. The Shareholder agrees that he will not cause, request, solicit
or advise any suppliers, customers or employees of Adirondack or the Bank
to curtail, cancel or terminate their business, employment or other
relationship with Adirondack or the Bank.
4. Common Law of Torts or Trade Secrets. The parties agree that
nothing in this Noncompetition Agreement shall be construed to limit or
negate the common law of torts or trade secrets where it provides the
Protected Parties with broader protection that that provided herein.
5. Remedies.
(a) In addition to other remedies provided by law or equity, upon a
breach by the Shareholder of any of the covenants contained herein, then the
Protected Parties shall be entitled to have a court of competent jurisdiction
enter an injunction against that party prohibiting any further breach of the
covenants contained herein.
(b) The parties agree that it is impossible to measure in money the
damages that may accrue to a party hereto by reason of a failure to perform
any of the obligations hereunder. Therefore, in the event of any controversy
concerning the rights or obligations under this Noncompetition Agreement such
rights or obligations shall be enforceable in a court of equity by a decree
of specific performance. Such remedy, however, shall be cumulative and
nonexclusive and shall be in addition to any other remedy which the parties
may have.
6. Miscellaneous.
(a) This Noncompetition Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original but all
of which shall together constitute one and the same agreement.
(b) The Section headings herein are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Noncompetition Agreement.
(c) This Noncompetition Agreement shall not be assigned by the
Shareholder without the prior written consent of the Protected Parties. The
Protected Parties shall have the right to assign all or any portion of their
rights under this Noncompetition Agreement, provided that the Protected
Parties give notice of any such assignment to the Shareholder.
(d) The Noncompetition Agreement shall be construed and governed by
the laws of the State of New York.
(e) All communications or notices required or permitted by this
Noncompetition Agreement shall be in writing and shall be deemed to have been
given at the earlier of the date when actually delivered to an individual
party, to an officer of a corporate party, sent via facsimile (receipt
electronically confirmed) to the fax number(s) provided below, or when
deposited in the United States mail, certified or registered mail, postage
prepaid, return receipt requested, and addressed as follows, unless and until
any of such parties notifies the others in accordance with this Section of a
change of address or fax:
If to any Protected Party: Mr. William N. Smith
Chairman, President & CEO
CNB Bancorp, Inc.
12-24 North Main Street
Gloversville, NY 12078
Phone: (518) 773-7911
Fax: (518) 725-2730
with a copy to:
Martin D. Werner, Esq.
Werner & Blank Co., L.P.A.
7205 West Central Avenue
Toledo, Ohio 43617
Phone: (419) 841-8051
Fax: (419) 841-8380
<PAGE>
If to the Shareholder: To the address set forth at the signature page
with a copy to:
Kip A. Weissman, Esq.
Silver, Freedman & Taff, LLP
1100 New York Avenue, N.W., Suite 700
New York, New York 10005-3934
Phone: (202) 414-6100
Fax: (202) 682-0354
(f) The invalidity or unenforceability of any provision hereof shall
not affect or impair any other provisions.
(g) No amendment of this Noncompetition Agreement shall be effective
unless in writing and signed by all parties hereto.
(h) This Noncompetition Agreement, together with the Agreement and
other documents and materials referred to herein or therein, constitutes the
entire understanding of the parties with respect to the subject matter
hereof. There are no restrictions, promises, warranties, covenants or
undertakings other than those expressly set forth herein and therein. This
Noncompetition Agreement supersedes all prior negotiations, agreements (other
than the Agreement) and undertakings between the parties with respect to such
subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this
Noncompetition Agreement as of the date first above written.
SHAREHOLDER
__________________________________
__________________________________
Name
__________________________________
__________________________________
Address
CNB BANCORP, INC.
By: _____________________________
__________________________________
Name
__________________________________
Title
ADIRONDACK FINANCIAL SERVICES
BANCORP, INC.
By: _____________________________
__________________________________
Name
__________________________________
Title
GLOVERSVILLE FEDERAL SAVINGS
By: _____________________________
__________________________________
Name
__________________________________
Title
<PAGE>
Exhibit D
Form of Silver, Freedman & Taff, L.L.P. Legal Opinion
________________, 1999
CNB Bancorp, Inc.
12-24 North Main Street
Gloversville, New York 12078
Re: Adirondack Financial Services Bancorp, Inc.
Ladies and Gentlemen:
We have acted as special counsel to Adirondack Financial Services
Bancorp, Inc., a Delaware corporation ("Adirondack"), in connection with the
merger (the "Merger") of CNB Acquisition Corp., a Delaware corporation
("Acquisition"), with and into Adirondack pursuant to the Agreement of Merger
dated as of January ___, 1999 (the "Agreement"), by and between CNB Bancorp,
Inc., Acquisition and Adirondack. We are rendering this opinion to you
pursuant to Section 5.1(f) of the Agreement.
This opinion is governed by, and shall be interpreted in accordance
with, the Legal Opinion Accord (the "Accord") of the American Bar
Association's Section of Business Law (1991). As a consequence, it is subject
to a number of qualifications, exceptions, definitions, limitations on
coverage and other limitations, all as more particularly described in the
Accord, and this opinion should be read in conjunction therewith. The law
covered by the opinions expressed herein is limited to the federal law of the
United States and the General Corporation Law of the State of Delaware. Terms
defined in the Agreement or in the Accord and not otherwise defined herein
are used with the meanings defined therein.
With respect to matters of fact material to the opinions expressed
herein, we have relied solely upon the representations of the parties
contained in the Agreement, and upon certifications of officers of Adirondack
and of public officials. We have assumed that the certifications and
representations dated earlier than the date hereof on which we have relied
continue to remain accurate, insofar as material to our opinions, from such
earlier date through the date hereof. We have not undertaken any independent
investigation to determine the existence or absence of such facts and no
inference as to our knowledge of the existence or absence of such facts
should be drawn from our representation of Adirondack or any of its
subsidiaries.
Our opinion in paragraph (iv) regarding the enforceability of the
Agreement is subject to the General Qualifications set forth in the Accord,
and to the following specific qualifications:
(a) We assume that all parties will seek to enforce their rights in
connection with the Agreement only in circumstances and in a manner
in which it is commercially reasonable to do so.
(b) We express no opinion (1) that a course of dealing by any party, or
a failure on its part to exercise, in whole or in part, a right or
remedy provided in the Agreement, shall not constitute a waiver of
its rights or remedies of any default under the Agreement; (2) as to
the enforceability of any provision or accumulation of provisions
that may be deemed to be unconscionable; (3) as to provisions
relating to venue, governing law, waiver of remedies (or the delay
or omission of enforcement thereof), disclaimers or liability
limitations with respect to third parties; (4) as to the payment of
any liquidated damages or termination fee by any party; (5) as to
the payment of any interest, charge or expense to the extent that
the same are determined to be unenforceable penalties; (6) as to
the payment of attorneys' and paralegals' fees and other costs and
expenses incurred in connection with enforcement of the Agreement;
(7) as to the exclusivity of the rights and remedies provided under
the Agreement to any party; or (8) as to the enforceability of any
requirement in the Agreement or other related documents specifying
that provisions thereof may only be waived in writing, to the
extent that an oral agreement or an implied agreement by trade
practice or course of conduct has been created modifying any
provision of such Agreement or related documents.
(c) We express no opinion as to the enforceability of any provision of
the Agreement which does not continue in effect beyond the date of
this letter.
<PAGE>
Based on the foregoing, and solely in reliance thereon, we are of
the opinion that:
(i) Adirondack is a corporation validly existing and in good
standing under the laws of the State of Delaware.
Adirondack is a savings and loan holding company registered
under HOLA.
(ii) The Bank is chartered under the laws of the United States
to transact the business of a federal savings association,
and the charter of the Bank is in full force and effect.
(iii) The authorized capital stock of Adirondack is (i) 1,200,000
shares of common stock, $.01 par value per share, and (ii)
100,000 shares of preferred stock, $.01 par value per
share.
(iv) The execution, delivery, and performance of this Agreement,
and the transactions contemplated herein have been duly
authorized by the Board of Directors and the stockholders
of Adirondack, these being the only authorizations required
under its Certificate of Incorporation, its bylaws, and the
DGCL. This Agreement constitutes the legal, valid and
binding obligation of Adirondack enforceable in accordance
with their respective terms.
(v) The execution, delivery and performance of this Agreement
does not violate any provisions of the Certificate of
Incorporation or bylaws of Adirondack.
(vi) To the best knowledge of counsel, there are no actions,
suits or proceedings pending or threatened against
Adirondack to enjoin consummation of the Merger or to
obtain other relief (other than payment to dissenting
stockholders) in connection with this Agreement or the
transactions contemplated hereby.
This opinion is given to you for your sole benefit in connection
with the Agreement, and no other person or entity is entitled to rely
thereon, nor may copies be delivered or furnished to any other party, nor may
all or portions of this opinion be quoted, circulated, or referred to in any
other document without our prior written consent.
Very truly yours,
SILVER, FREEDMAN & TAFF, L.L.P.
<PAGE>
Exhibit E
Form of Werner & Blank Co., LPA Legal Opinion
________________, 1999
Adirondack Financial Services Bancorp, Inc.
52 N. Main Street
Gloversville, New York 12078-3084
Re: CNB Bancorp, Inc.
Ladies and Gentlemen:
We have acted as special counsel to CNB Bancorp, Inc., a New York
corporation ("CNB") and CNB Acquisition Corp., a Delaware corporation
("Acquisition"), in connection with the merger of Acquisition (the "Merger")
with and into Adirondack Financial Services Bancorp, Inc ("Adirondack")
pursuant to the Agreement of Merger dated as of January ___, 1999 (the
"Agreement"), by and between CNB Bancorp, Inc., Acquisition and Adirondack.
We are rendering this opinion to you pursuant to Section 5.2(f) of the
Agreement.
This opinion is governed by, and shall be interpreted in accordance
with, the Legal Opinion Accord (the "Accord") of the American Bar
Association's Section of Business Law (1991). As a consequence, it is subject
to a number of qualifications, exceptions, definitions, limitations on
coverage and other limitations, all as more particularly described in the
Accord, and this opinion should be read in conjunction therewith. The law
covered by the opinions expressed herein is limited to the federal law of the
United States and the corporation laws of the State of Delaware and New York.
Terms defined in the Agreement or in the Accord and not otherwise defined
herein are used with the meanings defined therein.
With respect to matters of fact material to the opinions expressed
herein, we have relied solely upon the representations of the parties
contained in the Agreement, and upon certifications of officers of CNB and of
public officials. We have assumed that the certifications and representations
dated earlier than the date hereof on which we have relied continue to remain
accurate, insofar as material to our opinions, from such earlier date through
the date hereof. We have not undertaken any independent investigation to
determine the existence or absence of such facts and no inference as to our
knowledge of the existence or absence of such facts should be drawn from our
representation of CNB, Acquisition or any of their subsidiaries.
Our opinion in paragraph (iv) regarding the enforceability of the
Agreement is subject to the General Qualifications set forth in the Accord,
and to the following specific qualifications:
(d) We assume that all parties will seek to enforce their rights in
connection with the Agreement only in circumstances and in a manner
in which it is commercially reasonable to do so.
(e) We express no opinion (1) that a course of dealing by any party,
or a failure on its part to exercise, in whole or in part, a right or
remedy provided in the Agreement, shall not constitute a waiver of
its rights or remedies of any default under the Agreement; (2) as to
the enforceability of any provision or accumulation of provisions
that may be deemed to be unconscionable; (3) as to provisions
relating to venue, governing law, waiver of remedies (or the delay
or omission of enforcement thereof), disclaimers or liability
limitations with respect to third parties; (4) as to the payment of
any liquidated damages or termination fee by any party; (5) as to
the payment of any interest, charge or expense to the extent that
the same are determined to be unenforceable penalties; (6) as to
the payment of attorneys' and paralegals' fees and other costs and
expenses incurred in connection with enforcement of the Agreement;
(7) as to the exclusivity of the rights and remedies provided under
the Agreement to any party; or (8) as to the enforceability of any
requirement in the Agreement or other related documents specifying
that provisions thereof may only be waived in writing, to the
extent that an oral agreement or an implied agreement by trade
practice or course of conduct has been created modifying any
provision of such Agreement or related documents.
(f) We express no opinion as to the enforceability of any provision of
the Agreement which does not continue in effect beyond the date of
this letter.
<PAGE>
Based on the foregoing, and solely in reliance thereon, we are of
the opinion that:
(vii) CNB is a corporation validly existing and in good standing
under the laws of the State of New York and Acquisition is
a corporation validly existing and in good standing under
the laws of the State of Delaware. CNB is a bank holding
company registered under Federal Bank Holding Company Act.
(viii) City is a national banking association chartered under the
laws of the United States to transact the business of a
national banking association, and the charter of the Bank
is in full force and effect.
(ix) The authorized capital stock of CNB consists of 5,000,000 shares of
common stock, $2.50 par value per share.
(x) The execution, delivery, and performance of this Agreement,
and the transactions contemplated herein have been duly
authorized by the Board of Directors of CNB and Acquisition
and the Stockholders of Acquisition, these being the only
authorizations required under their respective Certificates
of Incorporation, bylaws, the DGCL and the New York
Business Corporation Law. This Agreement constitutes the
legal, valid and binding obligation of CNB and Acquisition
enforceable in accordance with its terms.
(xi) The execution, delivery and performance of this Agreement
does not violate any provisions of the Certificate of
Incorporation or bylaws of CNB or Acquisition.
(xii) To the best knowledge of counsel, there are no actions,
suits or proceedings pending or threatened against CNB or
Acquisition to enjoin consummation of the Merger or to
obtain other relief in connection with this Agreement or
the transactions contemplated hereby.
This opinion is given to you for your sole benefit in connection
with the Agreement, and no other person or entity is entitled to rely
thereon, nor may copies be delivered or furnished to any other party, nor may
all or portions of this opinion be quoted, circulated, or referred to in any
other document without our prior written consent.
Very truly yours,
WERNER & BLANK CO., LPA
<PAGE>
EXHIBIT 99
- ------------------------------------------------------------------------------
PRESS RELEASE
- ------------------------------------------------------------------------------
CNB Bancorp, Inc.
12-24 North Main Street
Gloversville, New York 12078
Contact: William N. Smith, Chairman, President and Chief Executive Officer
or George Morgan, Executive Vice President
Phone: (518) 773-7911
FAX: (518) 725-2730
FOR IMMEDIATE RELEASE
CNB BANCORP, INC. ANNOUNCES ACQUISITION OF
ADIRONDACK FINANCIAL SERVICES BANCORP, INC.,
GLOVERSVILLE, NEW YORK
Gloversville, New York, January 25, 1999 - CNB Bancorp, Inc., headquartered
in Gloversville, New York has announced plans to acquire Adirondack Financial
Services Bancorp, Inc., Gloversville, New York. A definitive agreement of
merger has been reached between the parties. Completion of the transaction is
subject to approval by Adirondack's shareholders and regulatory authorities.
Completion of the transaction is expected to occur in the second quarter of
1999.
Adirondack is the parent company for Gloversville Federal Savings and Loan
Association, which, in addition to its office in Gloversville, operates a
branch in Saratoga Springs, New York. Adirondack was formed in December 1997
to acquire all the common stock of Gloversville Federal Savings upon its
conversion from a mutual savings institution to a stock institution. On April
6, 1998, Adirondack completed its initial public offering. The Gloversville
Federal Savings charter dates back to 1923.
CNB Bancorp is the parent company for City National Bank and Trust Company,
which operates offices in the communities of Gloversville, Perth, Johnstown
and Northville. The company is highly respected with a history that dates
back to 1887, and has total assets of approximately $250 million.
The terms of the acquisition call for CNB Bancorp to pay $15 million in cash
in the aggregate for all of the outstanding shares of Adirondack (subject to
possible adjustment). The per share purchase price is expected to be
approximately $21.88 per share at closing. The transaction will be accounted
for as a purchase.
CNB Bancorp is publicly traded on the over-the-counter market under the
symbol CNBB. Adirondack is publicly traded on the over the counter market
under the symbol AFSB.
