Agreement of Merger
between
Russell Federal Savings Bank of Russell, Kentucky
and
Catlettsburg Federal Savings Bank of Catlettsburg, Kentucky
under the Charter of
Catlettsburg Federal Savings Bank
under the title of
Peoples Bank FSB
This Agreement of Merger ("Agreement"), made this 13th day of October,
1998, by and between Russell Federal Savings Bank, a federal savings bank,
the principal office of which is 404 Ferry Street, Russell, Kentucky,
(hereinafter called "Russell Federal Savings Bank"), and Catlettsburg Federal
Savings Bank, a federal savings bank, the principal office of which is 2717
Louisa Street, Catlettsburg, Kentucky, (hereinafter called "Catlettsburg
Federal Savings Bank"), said banking corporations being together hereinafter
sometimes called the "Constituent Federal Savings Banks".
RECITALS
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1) The amended Federal Stock Charter of the Russell Federal Savings
Bank was originally filed in the Office of Thrift Supervision effective
on January 1, 1997. The Russell Federal Savings Bank is authorized to
issue 10,000 common shares with no par value, of which 10,000 shares
are now issued and outstanding.
2) The amended Federal Stock Charter of Catlettsburg Federal Savings
Bank was originally filed in the Office of Thrift Supervision effective
on January 18, 1995. Catlettsburg Federal Savings Bank is authorized
to issue 1,000,000 common shares with par value of $.01, of which 100
shares are now issued and outstanding.
3) The respective Boards of Directors of the Constituent Federal
Savings Banks deem it advisable that the Constituent Federal Savings
Banks be merged and the respective Boards of Directors at meetings duly
called and held have approved this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and promises set forth below, the Constituent Federal Savings
Banks do hereby agree that Russell Federal Savings Bank be merged with and
into Catlettsburg Federal Savings Bank, hereinafter sometimes called the
"Resulting Federal Savings Bank"; and that the terms and conditions of the
merger, the mode of the carrying it into effect and the manner and basis of
converting the respective shares into shares of the Resulting Federal
Savings Bank are and shall be as follows:
FIRST. The name of the Resulting Federal Savings Bank shall be Peoples
Bank FSB, and its principal office shall be at 1410 Eagle Drive, Ashland,
Kentucky, 41102.
SECOND. At the Effective Time, as defined below, the amount of capital
of the Resulting Federal Savings Bank shall be at least $14,900,000.
THIRD. The Bylaws of Catlettsburg Federal Savings Bank shall be amended
at the Effective Time as attached hereto as Exhibit "A", and shall be the
Bylaws of the Resulting Federal Savings Bank until changed or repealed
according to the provisions of Article XI.
FOURTH. The Federal Stock Charter of Catlettsburg Federal Savings Bank
shall be amended at the Effective Time as attached hereto as Exhibit "B",
and shall be the Federal Stock Charter of the Resulting Federal Savings Bank.
FIFTH. RobRoy Walters, a natural person, whose address is Rt. 1, Box 266,
Flatwoods, KY 41139, is hereby appointed as the Statutory Agent of the
Resulting Federal Savings Bank on whom any process, notice or demand against
Catlettsburg Federal Savings Bank or either of the Constituent Federal
Savings Banks may be served.
SIXTH. The names and addresses of the members of the Board of Directors
of the Resulting Federal Savings Bank, as of the Effective Time and until the
next annual meeting or until such time as their successors have been elected
and qualified, shall be as listed on the attached Exhibit "C" hereto.
SEVENTH. The mode of carrying into effect the merger and the manner and
basis of converting the shares of Russell Federal Savings Bank into shares
of Catlettsburg Federal Savings Bank shall be as follows:
The capital stock of the Resulting Federal Savings Bank shall be
divided into 10,000 shares of common stock, each of no par value, and
at the Effective Time the Resulting Federal Savings Bank shall have a
surplus of at least $29,035,000, and undivided profits, including capital
reserves, which, when combined with the capital and surplus, will be equal
to the combined capital structures of the Constituent Federal Savings
Banks as stated in the preamble of this Agreement, adjusted, however, for
normal earnings and expenses (and, if applicable, purchase accounting
adjustments) between December 31, 1997, and the effective time of the
merger.
All assets as they exist at the Effective Time shall pass to and vest
in the Resulting Federal Savings Bank without any conveyance or other
transfer. The Resulting Federal Savings Bank shall be responsible for all
of the liabilities of every kind and description, including liabilities
arising from the operation of a trust department of each of the
Constituent Federal Savings Banks existing as of the effective time of
the merger. A committee of examiners, three to be appointed by the Board
of Directors of each federal savings bank at the time of the merger,
shall have satisfied themselves that the Statement of Condition of each
federal savings bank as of December 31, 1997, and subsequent quarterly
statements, fairly presents its financial condition and since such date
there has been no material adverse change in the financial condition or
business of either federal savings bank.
Russell Federal Savings Bank shall contribute to the Resulting
Federal Savings Bank acceptable assets having a book value, over and
above its liability to its creditors, of at least $4,100,000, and having
an estimated fair value, over and above its liability to its creditors,
of at least $4,300,000, or 28.0% of the estimated fair value of excess
acceptable assets, over and above liabilities to creditors, to the
Resulting Federal Savings Bank adjusted, however, for normal earnings and
expenses between December 31, 1997, and the Effective Time , and for
allowances of cash payments, if any, permitted under this Agreement.
At the Effective Time, Catlettsburg Federal Savings Bank shall have
on hand acceptable assets having book value of at least $10,700,000, over
and above its liabilities to its creditors, and having a fair value, over
and above its liability to its creditors, of at least $11,050,000, or
72.0% of the estimated fair value of excess acceptable assets, over and
above its liabilities to its creditors, of the Resulting Federal Savings
Bank, adjusted, however, for normal earnings and expenses between December
31, 1997, and the Effective Time, and for allowances of cash payments, if
any, permitted under this Agreement.
Of the capital stock of the Resulting Federal Savings Bank, the Sole
Shareholder shall be entitled to receive 10,000 shares of common stock to
be issued upon consummation of the transaction, each of no par value, with
contribution to be allocated according the the percentages referenced
above and representing 100% of the total outstanding common stock of the
Resulting Federal Savings Bank.
EIGHTH. The merger shall become effective upon the filing of the Articles
of Combination in the Office of Thrift Supervision, or at other such date as
specified by the Office (the "Effective Time"), but not earlier than the
close of business on December 31, 1998.
NINTH. The amount of the earned surplus of the Resulting Federal Savings
Bank shall be the combined total of the earned surplus of the Constituent
Federal Savings Banks as of the Effective Time.
TENTH. This Agreement may be signed in any number of duplicate copies,
and all signed duplicate copies shall be deemed to constitute an original
instrument.
ELEVENTH. This Agreement may be terminated at any time prior to the
merger becoming effective by mutual agreement of the Boards of Directors of
the Constituent Federal Savings Banks.
IN WITNESS WHEREOF, the Constituent Federal Savings Banks have caused this
Agreement to be signed in their respective corporate names by their
respective Presidents and Secretaries thereunto duly authorized by their
respective Boards of Directors and Shareholders.
CATLETTSBURG FEDERAL RUSSELL FEDERAL
SAVINGS BANK SAVINGS BANK
By /s/ REBECCA R. JACKSON By /s/ ROBROY WALTERS
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Rebecca R. Jackson RobRoy Walters
President & CEO President & CEO
By /s/ ROBROY WALTERS By /s/ RONALD L. FRALEY
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RobRoy Walters Ronald L. Fraley
Secretary/Treasurer Secretary/Treasurer