LEEDS FEDERAL SAVINGS BANK
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, dated December
27, 1996, as amended, is by and among LEEDS FEDERAL SAVINGS BANK,
a Federal stock savings bank (the "Bank"); LEEDS FEDERAL
BANKSHARES, a federal corporation (the "Stock Holding Company"),
and LEEDS INTERIM SAVINGS BANK, a to-be-formed interim federal
stock savings bank ("Interim").
The parties hereto desire to enter into an Agreement and
Plan of Reorganization whereby the corporate structure of the
Bank will be reorganized into the stock holding company form of
ownership. The result of such reorganization will be that
immediately after the Effective Date (as defined in Article V
below), all of the issued and outstanding shares of common stock,
par value $1.00 per share, of the Bank will be held by the Stock
Holding Company, and the holders of the issued and outstanding
shares of common stock of the Bank will become the holders of the
issued and outstanding shares of common stock of the Stock
Holding Company.
The reorganization of the Bank will be accomplished by the
following steps: (1) the formation by the Bank of the Stock
Holding Company as a wholly owned subsidiary; (2) the formation
of Leeds Interim Savings Bank ("Interim"), an interim federal
stock savings bank which will be wholly owned by the Stock
Holding Company; and (3) the merger of Interim into the Bank,
with the Bank as the surviving corporation. Pursuant to such
merger: (i) each of the issued and outstanding shares of common
stock of the Bank will be converted by operation of law into an
equal number of issued and outstanding shares of common stock of
the Stock Holding Company; and (ii) each of the issued and
outstanding shares of common stock of Interim will automatically
be converted by operation of law into an equal number of issued
and outstanding shares of common stock of the Bank.
NOW, THEREFORE, in order to consummate this Agreement and
Plan of Reorganization, and in consideration of the mutual
covenants herein set forth, the parties agree as follows:
ARTICLE I
MERGER OF INTERIM INTO
THE BANK AND RELATED MATTERS
1.1 On the Effective Date, Interim will be merged with and
into the Bank (the "Merger") and the separate existence of
Interim shall cease, and all assets and property (real, personal
and mixed, tangible and intangible, choses in action, rights and
credits) then owned by Interim, or which would inure to it, shall
immediately and automatically, by operation of law and without
any conveyance, transfer, or further action, become the property
of the Bank. The Bank shall be deemed to be a continuation of
Interim, and the Bank shall succeed to the rights and obligations
of Interim.
1.2 Following the Merger, the existence of the Bank shall
continue unaffected and unimpaired by the Merger, with all the
rights, privileges, immunities and powers, and subject to all the
duties and liabilities, of a corporation organized under Federal
law. The Charter and Bylaws of the Bank, as presently in effect,
shall continue in full force and effect and shall not be changed
in any manner whatsoever by the Merger.
1.3 From and after the Effective Date, and subject to the
actions of the Board of Directors of the Bank, the business
presently conducted by the Bank (whether directly or through its
subsidiaries) will continue to be conducted by it, as a wholly
owned subsidiary of Stock Holding Company, and the present
directors and officers of the Bank will continue in their present
positions. The home office and branch offices of the Bank in
existence immediately prior to the Effective Date shall continue
to be the home office and branch offices, respectively, of the
Bank from and after the Effective Date.
ARTICLE II
CONVERSION OF STOCK
2.1 The terms and conditions of the Merger, the mode of
carrying the same into effect, and the manner and basis of
converting the common stock of the Bank into common stock of the
Stock Holding Company pursuant to this Agreement shall be as
follows:
A. On the Effective Date, each share of common stock,
par value $1.00 per share, of the Bank issued and outstanding
immediately prior to the Effective Date shall automatically by
operation of law be converted into and shall become one share of
Common Stock, par value $1.00 per share, of the Stock Holding
Company (the "Stock Holding Company Common Stock"). Each share
of common stock of Interim issued and outstanding immediately
prior to the Effective Date shall, on the Effective Date,
automatically by operation of law be converted into and become
one share of common stock, $1.00 par value per share, of the Bank
and shall not be further converted into shares of the Stock
Holding Company, so that from and after the Effective Date, all
of the issued and outstanding shares of common stock of the Bank
shall be held by the Stock Holding Company.
B. On the Effective Date, the current stock option
plans and recognition plans of the Bank (collectively, the
"Benefit Plans") shall automatically, by operation of law, be
continued as Benefit Plans of the Bank and/or the Stock Holding
Company. Each option to purchase shares of the Bank common stock
under the Bank's stock option plan outstanding at that time will
be automatically converted into an identical option, with
identical price, terms and conditions, to purchase an identical
number of shares of Stock Holding Company Common Stock in lieu of
shares of the Bank common stock. The Stock Holding Company and
the Bank may make appropriate amendments to the Benefit Plans to
reflect the adoption of the Benefit Plans as the plans of the
Stock Holding Company, without adverse effect on the Benefit
Plans and their participants.
C. From and after the Effective Date, each holder of
an outstanding certificate or certificates that, prior thereto,
represented shares of the Bank common stock, shall, upon
surrender of the same to the designated agent of the Bank, be
entitled to receive in exchange therefor a certificate or
certificates representing the number of whole shares of Stock
Holding Company Common Stock into which the shares theretofore
represented by the certificate or certificates so surrendered
shall have been converted, as provided in the foregoing
provisions of this Section 2.1. Until so surrendered, each such
outstanding certificate which, prior to the Effective Date,
represented shares of Bank common stock shall be automatically
deemed for all purposes to evidence the ownership of the equal
number of whole shares of Stock Holding Company Common Stock.
Former holders of shares of Bank common stock will not be
required to exchange their Bank common stock certificates for new
certificates evidencing the same number of shares of Stock
Holding Company Common Stock. If in the future the Stock Holding
Company determines to effect an exchange of stock certificates,
instructions will be sent to all holders of record of Stock
Holding Company Common Stock.
D. All shares of Stock Holding Company Common Stock
into which shares of the Bank common stock shall have been
converted pursuant to this Article II shall be deemed to have
been issued in full satisfaction of all rights pertaining to such
converted shares.
E. On the Effective Date, the holders of certificates
formerly representing the Bank common stock outstanding on the
Effective Date shall cease to have any rights with respect to the
stock of the Bank common stock, and their sole rights shall be
with respect to the Stock Holding Company Common Stock into which
their shares of the Bank common stock shall have been converted
by the Merger.
ARTICLE III
CONDITIONS
3.1 The obligations of the Bank, Stock Holding Company and
Interim to effect the Merger and otherwise consummate the
transactions which are the subject matter hereof shall be subject
to satisfaction of the following conditions:
A. To the extent required by applicable law, rules,
and regulations, the holders of the outstanding shares of the
Bank common stock shall, at a meeting of the stockholders of the
Bank duly called, have approved this Agreement by the affirmative
vote of a majority of the outstanding shares of the Bank common
stock.
B. Any and all approvals from the OTS, the Securities
and Exchange Commission and any other state or federal
governmental agency having jurisdiction necessary for the lawful
consummation of the Merger and the issuance and delivery of Stock
Holding Company Common Stock as contemplated by this Agreement
shall have been obtained.
C. The Bank shall have received either (i) a ruling
from the Internal Revenue Service or (ii) an opinion from its
legal counsel, to the effect that the Merger will be treated as a
non-taxable transaction under applicable provisions of the
Internal Revenue Code of 1986, as amended, and that no gain or
loss will be recognized by the stockholders of the Bank upon the
exchange of the Bank common stock held by them solely for Stock
Holding Company Common Stock.
ARTICLE IV
TERMINATION
4.1 This Agreement may be terminated at the election of any
of the parties hereto if any one or more of the conditions to the
obligations of any of them hereunder shall not have been
satisfied and shall have become incapable of fulfillment and
shall not be waived. This Agreement may also be terminated at
any time prior to the Effective Date by the mutual consent of the
respective Boards of Directors of the parties.
4.2 In the event of the termination of this Agreement
pursuant to any of the foregoing provisions, no party shall have
any further liability or obligation of any nature to any other
party under this Agreement.
ARTICLE V
EFFECTIVE DATE OF MERGER
Upon satisfaction or waiver (in accordance with the
provisions of this Agreement) of each of the conditions set forth
in Article III, the parties hereto shall cause to be filed with
the OTS and applicable state authorities Articles of Combination
and such certificates or further documents as shall be required
by the OTS and applicable state law, and with such other federal
or state regulatory agencies as may be required. Upon approval
by the OTS and endorsement of such Articles of Combination by the
OTS and, if necessary, applicable state authorities, the Merger
and other transactions contemplated by this Agreement shall
become effective. The Effective Date for all purposes hereunder
shall be the date of such endorsement by the OTS.
ARTICLE VI
MISCELLANEOUS
6.1 Any of the terms or conditions of this Agreement, which
may legally be waived, may be waived at any time by any party
hereto that is entitled to the benefit thereof, or any of such
terms or conditions may be amended or modified in whole or in
part at any time, to the extent authorized by applicable law, by
an agreement in writing, executed in the same manner as this
Agreement.
6.2 Any of the terms or conditions of this Agreement may be
amended or modified in whole or in part at any time, to the
extent permitted by applicable law, rules, and regulations, by an
amendment in writing, provided that any such amendment or
modification is not materially adverse to the Bank, Stock Holding
Company or their stockholders. In the event that any
governmental agency requests or requires that the transactions
contemplated herein be modified in any respect as a condition of
providing a necessary regulatory approval or favorable ruling, or
that in the opinion of counsel such modification is necessary to
obtain such approval or ruling, this Agreement may be modified,
at any time before or after adoption thereof by the stockholders
of the Bank, by an instrument in writing, provided that the
effect of such amendment would not be materially adverse to the
Bank, Stock Holding Company or their stockholders.
6.3 This Agreement shall be governed by and construed under
the laws of the United States, except insofar as state law is
deemed to apply.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement and Plan of Reorganization as of the date first
above written.
LEEDS FEDERAL SAVINGS BANK
By: /s/ Gordon E. Clark, Jr.
------------------------------
Gordon E. Clark, Jr.
President and Chief Executive
Officer
LEEDS FEDERAL BANKSHARES, INC.
By: /s/ Gordon E. Clark, Jr.
------------------------------
Gordon E. Clark, Jr.
President and Chief Executive
Officer
LEEDS INTERIM SAVINGS BANK
(to be organized)
By: /s/ Gordon E. Clark, Jr.
------------------------------
Gordon E. Clark, Jr.
President and Chief Executive
Officer