EUREKA BANK
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, dated as of September 16, 2002,
by and among EUREKA BANK, a federally chartered stock savings bank (the "Bank");
EUREKA FINANCIAL CORP., a to-be-formed federal corporation (the "Holding
Company"); and EUREKA INTERIM SAVINGS BANK, a to-be-formed interim stock savings
institution ("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 "Reorganization"). The
result of the Reorganization will be that, immediately after the Effective Date
(as defined herein), all of the issued and outstanding shares of Common Stock of
the Bank will be held by the Holding Company and the holders of the issued and
outstanding shares of Common Stock of the Bank (i.e., the mutual holding
company, Eureka Bancorp, MHC, and the minority public stockholders) will become
the holders of the issued and outstanding shares of Common Stock of the Holding
Company.
The Reorganization of the Bank will be accomplished by the following steps:
(1) the formation by the Bank of the Holding Company as a wholly-owned
subsidiary of the Bank, incorporated under the laws of the United States for the
primary purpose of becoming the sole stockholder of a newly-formed interim stock
savings institution, and subsequently becoming the sole stockholder of the
Common Stock of the Bank, which formation will include the issuance of up to
100,000 shares of the Holding Company Common Stock to the Bank for a price of
$10.00 per share ($1,000,000) for the purpose of initially capitalizing the
Holding Company; (2) the formation of an interim federally chartered savings
institution, "Interim," which will be wholly-owned by the Holding Company; and
(3) the merger of Interim into the Bank (the "Merger"), with the Bank as the
surviving entity. Pursuant to such Merger: (i) all of the issued and outstanding
shares of Common Stock of the Holding Company held by the Bank will be canceled;
(ii) each issued and outstanding share of Common Stock of the Bank will
automatically be converted by operation of law into one share of Common Stock of
the Holding Company; (iii) all 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, which
will be all of the issued and outstanding stock of the Bank.
NOW, THEREFORE, in order to consummate this Agreement and Plan of
Reorganization (the "Agreement"), 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 and
the separate existence of Interim shall cease, and all assets and property
(real, personal and mixed, tangible and intangible, chooses 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,
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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 of the duties and liabilities, of a
corporation organized under the laws of the United States. 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 the 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 of the Bank from and after the Effective
Date.
1.4 The Reorganization will have no effect on the corporate structure of the
Mutual Holding Company, Eureka Bancorp, MHC, which will continue to operate
under its current charter and bylaws, and the present directors and
officers of the Mutual Holding Company will continue in their present
positions.
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
parties to this Agreement shall be as follows:
A. On the Effective Date, all shares of Common Stock of the Holding
Company held by the Bank shall be canceled and shall no longer be
deemed to be issued or outstanding for any purpose.
B. On the Effective Date, shares of Common Stock, $.10 par value, of the
Bank ("Bank Common Stock') 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, $.10 par
value, of the Holding Company ("Holding Company Common Stock") with
the rights, privileges, preferences and voting power incident to each
share of Bank Common Stock prior to such Effective Date. Each person
who, but for the provisions of this Section 2.1B., would be entitled
to a fractional share interest in the Holding Company Common Stock as
a result of the Reorganization, upon surrender of certificates
theretofore representing shares of Holding Company Common Stock, shall
receive in lieu thereof an amount in cash equal to such fraction
multiplied by the average of the bid and ask price of the Bank Common
Stock on the last full trading day of the Bank Common Stock prior to
the Effective Date. 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, $.10 par value, of the Bank and
shall not be further converted into shares of the
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Holding Company Common Stock, 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 Holding Company.
C. As soon as practicable after the Effective Date, the certificates
representing the outstanding Bank Common Stock may be surrendered to
the Bank or the designated agent of the Bank ("Exchange Agent") and,
upon such surrender, the Exchange Agent shall issue and deliver in
substitution therefore, cash and certificates representing the number
of shares of Holding Company Common Stock into which such surrendered
shares have been converted as hereinbefore provided, and cash in lieu
of fractional shares (without interest). Certificates representing
Bank Common Stock which are not surrendered shall be deemed for all
purposes to evidence the ownership of the number of shares of Holding
Company Common Stock into which said shares of the Bank shall have
been converted as hereinbefore set forth and the right to receive cash
in the amount determined pursuant to Section 2.1B.
D. All shares of Holding Company Common Stock into which shares of Bank
Common Stock shall have been converted pursuant to this Article 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 Bank Common Stock outstanding on the Effective Date shall
cease to have any rights with respect to Bank Common Stock, and their
sole rights shall be with respect to the Holding Company Common Stock
into which their shares of Bank Common Stock shall have been converted
by the Merger.
F. On the Effective Date, each option to purchase shares of Bank Common
Stock under the Bank's Stock Option Plan, or shares of restricted
stock outstanding under the Bank's Restrictive Stock Plan, outstanding
at that time will be converted into an identical award, with identical
price, terms and conditions, to purchase or receive an identical
number of shares of Holding Company Common Stock in lieu of shares of
Bank Common Stock, and further, the Bank's Stock Option Plan shall
become the Holding Company's Stock Option Plan.
ARTICLE III
CONDITIONS
3.1 The obligations of the Bank, the 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 Bank Common Stock shall, at a
meeting of the stockholders of the Bank duly called, have approved
this Agreement by the affirmative vote of two-thirds of the
outstanding shares of Bank Common Stock.
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B. The shares of Holding Company Common Stock to be issued to the Bank
stockholders pursuant to the Merger shall have been, if required by
law, duly registered pursuant to the Securities Act of 1933, as
amended, and the Bank shall have complied with all applicable state
securities or "blue sky" laws relating to the issuance of the Holding
Company Common Stock.
C. Any and all approvals from the Office of Thrift Supervision (the
"OTS"), the Federal Deposit Insurance Corporation, the Securities and
Exchange Commission and any other governmental agency having
jurisdiction necessary for the lawful consummation of the Merger and
the issuance and delivery of the Holding Company Common Stock as
contemplated by this Agreement shall have been obtained.
D. 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 Reorganization will be treated as a non-taxable
transaction under applicable provisions of the Internal Revenue Code
and that no gain or loss will be recognized by the stockholders of the
Bank upon the exchange of Bank Stock held by them for Holding Company
Stock.
E. The number of shares of Bank Common Stock held by persons who have
indicated their intent to exercise, or have perfected, dissenters'
rights of appraisal pursuant to Section 552.14 of the OTS Rules and
Regulations, as amended, shall not have made consummation of the
reorganization inadvisable in the opinion of the Boards of Directors
of the Bank, Interim or the Holding Company.
ARTICLE IV
EFFECTIVE DATE OF MERGER
Upon satisfaction or waiver (in accordance with the provisions of this
Agreement) of each of the conditions set forth herein, the parties hereto shall
execute and cause to be filed Articles of Combination, and/or such certificates
or further documents as shall be required by the OTS, the Office of the
Secretary of the OTS, and with such other federal or state regulatory agencies
as may be required. Upon approval by the OTS, and endorsement of such
certificates, 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.
ARTICLE V
AMENDMENT AND TERMINATION
5.1 The Bank, the Holding Company and Interim, by mutual consent of their
respective Boards of Directors or Incorporators, as the case may be, to the
extent permitted by law, may amend, modify, supplement and interpret this
Agreement in such manner as may be mutually agreed upon by them at any time
before or after the approval and adoption thereof by the stockholders of
the Bank; provided, however, that no such amendment, modification,
supplement or interpretation shall have a materially adverse impact on the
Bank or its stockholders except with the approval of the stockholders of
the Bank.
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5.2 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 have been satisfied and become incapable of
fulfillment and shall have not been 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.
5.3 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 VI
MISCELLANEOUS
6.1 Any of the terms or conditions of this Agreement (other than the necessary
approvals of stockholders and government authorities) may be waived at any
time by any party hereto which is entitled to the benefit thereof, by
action taken by its Board of Directors; provided, however, that such action
shall be taken only if, in the judgment of the Board of Directors taking
the action, such waiver will not have a materially adverse effect on the
benefits intended under this Agreement to be afforded to the stockholders
of the Bank.
6.2 This Agreement embodies the entire agreement among the parties and there
have been and are no agreements, representations or warranties among the
parties other than those set forth or provided for herein.
6.3 Any number of counterparts hereof may be executed and each such counterpart
shall be deemed to be an original instrument, but all such counterparts
together shall constitute but one instrument.
6.4 Any notice or waiver to be given to any party shall be in writing and shall
be deemed to have been duly given if delivered, mailed, or sent by prepaid
telegram, addressed to such party at 3455 Forbes Avenue at McKee Place,
Pittsburgh, Pennsylvania 15213.
6.5 The captions contained in this Agreement are solely for convenient
reference and shall not be deemed to affect the meaning or interpretation
of any paragraph hereof.
6.6 The Bank will pay all fees and expenses incurred in connection with the
transactions contemplated by this Agreement. After the Reorganization, the
Holding Company will incur certain expenses that arise from its creation
for the purpose of serving as, and continued existence as, the holding
company of the Bank, such as the costs associated with the filing of
reports with the OTS, holding of directors and stockholders meetings and
maintaining relations with and providing reports to stockholders. The Bank
agrees that it will reimburse the Holding Company for such ordinary and
usual expenses when and as payable by the Holding Company.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
and Plan of Reorganization as of the date first above written.
EUREKA BANK
BY: /s/ Edward F. Seserko
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Edward F. Seserko, President
and Chief Executive Officer
ATTEST: /s/ Barbara A. Rota
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Barbara A. Rota, Secretary
EUREKA FINANCIAL CORP. (In Formation)
BY: /s/ Edward F. Seserko
-------------------------------------------
Edward F. Seserko, President
and Chief Executive Officer
ATTEST: /s/ Barbara A. Rota
-------------------------------------------
Barbara A. Rota, Secretary
EUREKA INTERIM SAVINGS BANK (In formation)
BY: /s/ Edward F. Seserko
-------------------------------------------
Edward F. Seserko, President
and Chief Executive Officer
ATTEST: /s/ Barbara A. Rota
-------------------------------------------
Barbara A. Rota, Secretary
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