AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Plan of Merger") dated as of February 9,
1996, by and between MILFORD CO-OPERATIVE BANK ("Milford"), a New Hampshire
state chartered co-operative bank, and CFX BANK ("Bank"), a New Hampshire state
chartered savings bank, and joined in by CFX CORPORATION ("CFX"), a New
Hampshire corporation.
WITNESSETH
WHEREAS, the respective Boards of Directors of Milford, CFX and Bank deem
the merger of Milford with and into Bank, under and pursuant to the terms and
conditions herein set forth or referred to, desirable and in the best interests
of the respective corporations and their respective shareholders, and the
respective Boards of Directors of Milford, CFX and Bank have adopted resolutions
approving this Plan of Merger and an Agreement and Plan of Reorganization dated
of even date herewith ("Reorganization Agreement").
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto do hereby agree as follows:
ARTICLE I
MERGER
Subject to the terms and conditions of this Plan of Merger, on the
Effective Date (as hereinafter defined in Article VI), Milford shall be merged
with and into Bank, pursuant to the provisions of, and with the effect provided
in, Title 35 of the New Hampshire Revised Statutes Annotated (the "Merger"). On
the Effective Date, the separate existence of Milford shall cease and Bank, as
the surviving entity, shall continue unaffected and unimpaired by the Merger.
(Bank, as existing on and after the Effective Date, being hereinafter sometimes
referred to as the "Surviving Bank.")
ARTICLE II
ARTICLES OF AGREEMENT AND BY-LAWS
The Amended and Restated Articles of Agreement and the By-Laws of Bank in
effect immediately prior to the Effective Date shall be the Articles of
Agreement and the By-Laws of the Surviving Bank, amended as set forth below, in
each case until amended in accordance with applicable law. The Articles of
Agreement of Bank shall be amended effective upon the Effective Date to add the
following paragraph to the end of existing Article VI:
"The Bank shall assume the liquidation account initially established
and maintained by Milford Co-Operative Bank, pursuant to the
requirements of the Office of Thrift Supervision's regulations (12
C.F.R. Chapter V, Subchapter D), for the benefit of Milford
Co-Operative Bank's savings account holders as of March 31, 1986
("eligible savers"). Notwithstanding any provision of these Articles
or of the By-laws of the Bank to the contrary, in the event of a
complete liquidation of the Bank, it shall comply with such
regulations with respect to the amount and the priorities on
liquidation of each of the Bank's eligible savers' inchoate interest
in the liquidation account, to the extent it is still in existence;
provided, that an eligible saver's inchoate interest in the
liquidation account shall not entitle such eligible saver to any
voting rights at meetings of the Bank's shareholders."
ARTICLE III
BOARD OF DIRECTORS
On the Effective Date, the Board of Directors of the Surviving Bank shall
consist of those persons serving as directors of Bank immediately prior to the
Effective Date together with two directors to be designated by Milford subject
to Bank's approval.
ARTICLE IV
CAPITAL
The shares of capital stock of the Surviving Bank issued and outstanding
immediately prior to the Effective Date shall, on the Effective Date, continue
to be issued and outstanding.
ARTICLE V
CONVERSION AND EXCHANGE OF MILFORD SHARES;
FRACTIONAL SHARE INTERESTS
1. (a) On the Effective Date, each share of the common stock of
Milford, par value $1.00 per share ("Milford Common Stock"), outstanding
immediately prior to the Effective Date (except as provided in Paragraphs 2, 5
and 7 of this Article) shall, by virtue of the Merger, be converted into an
amount of common stock, par value $0.66 2/3 per share, of CFX ("CFX Common
Stock") equal to one share multiplied by the Exchange Ratio as determined below
(rounded to the nearest four decimal places).
(b) As used herein, the term "CFX Price" means the average closing price
of CFX Common Stock on the American Stock Exchange (as reported by The Wall
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Street Journal) for the ten consecutive trading days ending on the business day
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before the date on which the last regulatory approval required to consummate the
transactions contemplated by this Plan of Merger and the Reorganization
Agreement is obtained.
(c) For purposes of this Plan of Merger, the Exchange Ratio shall be:
(1) 2.6446, if the CFX Price is equal to or greater than $12.86 and
is no greater than $17.39;
(2) $46.00 - CFX Price, if the CFX Price is greater than $17.39 and
no greater than $17.66;
(3) 2.6051, if the CFX Price is greater than $17.66;
(4) $34.00 - CFX Price, if the CFX Price is less than $12.86 and no
less than $12.59; or
(5) 2.7000, if the CFX Price is less than $12.59.
2. On the Effective Date, all shares of Milford Common Stock held in the
treasury of Milford or owned beneficially by any subsidiary of Milford other
than in a fiduciary capacity or in connection with a debt previously contracted
and all shares of Milford Common Stock owned by CFX or owned beneficially by any
subsidiary of CFX other than in a fiduciary capacity or in connection with a
debt previously contracted shall be canceled and no cash, stock or other
property shall be delivered in exchange therefor.
3. (a) Prior to the Effective Date, CFX shall appoint such bank, trust
company or other stock transfer agent selected by CFX and reasonably acceptable
to Milford as the exchange agent (the "Exchange Agent") to effect the exchange
of certificates evidencing shares of Milford Common Stock (any such certificate
being hereinafter referred to as a "Certificate") for shares of CFX Common Stock
to be received in the Merger. On the Effective Date, CFX shall have granted the
Exchange Agent the requisite power and authority to effect for and on behalf of
CFX the issuance of the number of shares of CFX Common Stock issuable in the
Merger.
(b) Within five business days after the Effective Date, the Exchange
Agent shall mail to each holder of record of Milford Common Stock as of the
Effective Date a notice of consummation of the Merger and a form of letter of
transmittal, which shall be in a form reasonably acceptable to Milford, pursuant
to which each such shareholder shall transmit the Certificate or Certificates,
or, in lieu thereof, such evidence of lost, stolen or mutilated Certificate or
Certificates and such surety bond as the Exchange Agent may reasonably require
in accordance with customary exchange practices. Milford shareholders who
satisfy such requirements for lost, stolen or mutilated certificates shall for
purposes of the exchange procedures set forth herein be deemed to have submitted
Certificates for Milford Common Stock. As soon as practicable after surrender
of such Certificate to the Exchange Agent with a properly completed letter of
transmittal, the Exchange Agent will promptly mail by first class mail to such
shareholder a certificate or certificates representing the number of full shares
of CFX Common Stock into which the shares of Milford Common Stock evidenced by
the Certificate surrendered shall have been converted pursuant to this Plan of
Merger.
(c) The Exchange Agent shall accept such Certificates upon compliance
with such reasonable terms and conditions as the Exchange Agent may impose to
effect an orderly exchange thereof in accordance with customary exchange
practices. Until so surrendered, each Certificate shall be deemed for all
purposes to evidence ownership of the number of shares of CFX Common Stock into
which the shares represented by such Certificates have been changed or converted
as aforesaid. No dividends or other distributions declared after the Effective
Date with respect to CFX Common Stock shall be paid to the holder of any
unsurrendered Certificate until the holder thereof shall surrender such
Certificate in accordance with this Article V. After the surrender of a
Certificate in accordance with this Article V, the record holder thereof shall
be entitled to receive any such dividends or other distributions, without any
interest thereon, which theretofore had become payable with respect to shares of
CFX Common Stock represented by such Certificate.
(d) No transfer taxes shall be payable by any shareholders of Milford in
respect of the issuance of certificates for CFX Common Stock and no expenses
shall be imposed on any shareholder of Milford in connection with the conversion
of shares of Milford Common Stock into shares of CFX Common Stock and the
delivery of such shares to the former holder of Milford Common Stock entitled
thereto, except that, if any certificate for shares of CFX Common Stock is to be
issued in a name other than that in which a certificate or certificates for
shares of Milford Common Stock surrendered shall have been registered, it shall
be a condition to such issuance that the person requesting such issuance shall
pay to CFX any transfer taxes payable by reason thereof or of any prior transfer
of such surrendered certificate or certificates or establish to the reasonable
satisfaction of the Exchange Agent that such taxes have been paid or are not
payable.
(e) Certificates surrendered for exchange by any person who is an
"affiliate" of Milford for purposes of Rule 145(c) under the Securities Act of
1933, as amended, shall not be exchanged for certificates representing shares of
CFX Common Stock until CFX has received the written agreement of such person
contemplated by Section 4.9 of the Reorganization Agreement. If any certificate
for shares of Milford Common Stock is to be issued in a name other than that in
which a certificate surrendered for exchange is issued, the certificate so
surrendered shall be properly endorsed and otherwise in proper form for transfer
and the person requesting such exchange shall affix any requisite stock transfer
tax stamps to the certificate surrendered or provide funds for their purchase or
establish to the reasonable satisfaction of CFX or its agent that such taxes
are not payable.
4. Upon the Effective Date, the stock transfer books of Milford shall be
closed and no transfer of Milford Common Stock shall thereafter be made or
recognized. Any other provision of this Plan of Merger notwithstanding, neither
CFX or its agent nor any party to the Merger shall be liable to a holder of
Milford Common Stock for any amount paid or property delivered in good faith to
a public official pursuant to any applicable abandoned property, escheat or
similar law.
5. In the event that, between the date hereof and prior to the Effective
Date, the outstanding shares of CFX Common Stock shall have been increased,
decreased or changed into or exchanged for a different number or kind of shares
or securities by reorganization, recapitalization, reclassification, stock split
or other like changes in CFX's capitalization, or if a stock dividend thereon is
declared with a record date within such period, then an appropriate and
proportionate adjustment shall be made in the number and kind of shares of CFX
Common Stock to be thereafter delivered pursuant to this Plan of Merger so that
each shareholder of Milford shall be entitled to receive such number of shares
of CFX Common Stock or other securities as such shareholder would have received
pursuant to such reorganization, recapitalization, reclassification, stock
split, exchange or shares or readjustment or other like changes in CFX's
capitalization, or as a result of such stock dividend, had the record date
therefor been immediately following the Effective Date.
6. Notwithstanding any other provision hereof, each holder of shares who
would otherwise have been entitled to receive a fraction of a share of CFX
Common Stock (after taking into account all Certificates delivered by such
holder) shall receive (by check from the Exchange Agent, mailed to the
shareholder with the certificate(s) for CFX Common Stock for which such holder
is to receive pursuant to the Merger), in lieu thereof, cash in an amount equal
to such fractional part of a share of CFX Common Stock multiplied by the "market
value" of such Common Stock. The "market value" of one share of CFX Common
Stock shall be the closing price of CFX Common Stock on the American Stock
Exchange (as reported by The Wall Street Journal) on the last business day
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preceding the Effective Date. No such holder shall be entitled to dividends,
voting rights or any other shareholder right in respect of any fractional share.
ARTICLE VI
EFFECTIVE DATE OF THE MERGER
Certificates of merger evidencing the transactions contemplated herein
shall be delivered in accordance with applicable New Hampshire law. The Merger
shall be effective at the time and on the date specified in such certificates of
merger (such date and time being herein referred to as the "Effective Date").
ARTICLE VII
FURTHER ASSURANCES
If at any time the Surviving Bank shall consider or be advised that any
further assignments, conveyances or assurances are necessary or desirable to
vest, perfect or confirm in the Surviving Bank title to any property or rights
of Milford, or otherwise carry out the provisions hereof, the proper officers
and directors of Milford, as of the Effective Date, and thereafter the officers
of the Surviving Bank acting on behalf of Milford, shall execute and deliver any
and all proper assignments, conveyances and assurances, and do all things
necessary or desirable to vest, perfect or confirm title to such property or
rights in the Surviving Bank and otherwise carry out the provisions hereof.
ARTICLE VIII
CONDITIONS PRECEDENT
The obligations of Bank, CFX and Milford to effect the Merger as herein
provided shall be subject to satisfaction, unless duly waived, of the conditions
set forth in the Reorganization Agreement.
ARTICLE IX
TERMINATION
Anything contained in the Plan of Merger to the contrary notwithstanding,
and notwithstanding adoption hereof by the shareholders of Milford, this Plan of
Merger may be terminated and the Merger abandoned as provided in the
Reorganization Agreement.
ARTICLE X
MISCELLANEOUS
1. This Plan of Merger may be amended or supplemented at any time prior to
its Effective Date by mutual agreement of CFX, Bank and Milford. Any such
amendment or supplement must be in writing and approved by their respective
Boards of Directors and/or by officers authorized thereby and shall be subject
to the proviso in Section 6.4 of the Reorganization Agreement.
2. Any notice or other communication required or permitted under this Plan
of Merger shall be given, and shall be effective, in accordance with the
provisions of the Reorganization Agreement.
3.The headings of the several Articles herein are inserted for convenience
of reference only and are not intended to be a part of or to affect the meaning
or interpretation of this Plan of Merger.
4. This Plan of Merger shall be governed by and construed in accordance
with the laws of New Hampshire applicable to the internal affairs of Milford,
CFX and the Bank.
[Remainder of page left intentionally blank; signatures appear on next page.]
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement and Plan of Merger to be executed in
counterparts by their duly authorized officers and their corporate seals to be
hereunto affixed and attested by their officers thereunto duly authorized, all
as of the day and year first above written.
MILFORD CO-OPERATIVE BANK
By: /s/
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Richard D. D'Amato
President and Chief Executive Officer
CFX CORPORATION
By: /s/
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Peter J. Baxter,
President and Chief Executive Officer
CFX BANK
By: /s/
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Peter J. Baxter,
President and Chief Executive Officer