SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __)
Filed by the Registrant |X|
Filed by the Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
WYMAN PARK BANCORPORATION, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|_| No fee required.
|X| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
Common stock; options to purchase common stock
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2. Aggregate number of securities to which transaction applies:
822,490 shares of common stock; 168,909 options
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3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
$14.55 cash per share of common stock; $8.95 cash per option
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4. Proposed maximum aggregate value of transaction:
$13,478,965.05
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5. Total fee Paid:
$1,240.06
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|_| Fee paid previously with preliminary materials:
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1. Amount previously paid:____________________________________________________
2. Form, Schedule or Registration Statement No.:______________________________
3. Filing Party:______________________________________________________________
4. Date Filed:________________________________________________________________
[WYMAN PARK BANCORPORATION, INC. LETTERHEAD]
September 16, 2002
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Wyman Park
Bancorporation, Inc. (the "Company"), I cordially invite you to attend our 2002
Annual Meeting of Stockholders. The meeting will be held at 3:00 p.m., local
time, on October 16, 2002 at our main office located at 11 West Ridgely Road,
Lutherville, Maryland.
At the meeting, you will be asked to consider and vote upon a proposal to
approve an Agreement and Plan of Merger, dated as of July 9, 2002, between us
and Bradford Bank, a federally-chartered savings bank, under which we will be
merged into Bradford Bank. If the merger is completed, you will be entitled to
receive $14.55 in cash for each share of our common stock that you own. Upon
completion of the merger, you will no longer own any of our stock or any other
interest in either us or Bradford Bank. Please note that completion of the
merger is subject to certain conditions, including receipt of applicable
regulatory approvals, customary closing conditions and the approval of our
stockholders.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND
RECOMMENDS THAT YOU VOTE "FOR" ADOPTION OF THE MERGER AGREEMENT BECAUSE THE
BOARD BELIEVES IT TO BE IN THE BEST INTERESTS OF THE COMPANY AND THE
STOCKHOLDERS. YOU ARE URGED TO CAREFULLY READ THE ACCOMPANYING PROXY STATEMENT
WHICH PROVIDES IMPORTANT INFORMATION REGARDING THE MERGER AND RELATED MATTERS.
In addition to the merger vote, the meeting will include the election of
three directors to our Board of Directors and management's report to you on our
fiscal year 2002 financial and operating performance.
Under Delaware law and our Charter, a majority of the outstanding shares of
our common stock entitled to vote at the meeting must approve the merger. Thus,
a failure to vote or a decision to abstain will have the same effect as a vote
against the merger. Your vote is important, and I urge you to exercise your
rights as a stockholder to vote and participate in this process.
Whether or not you attend the meeting, please complete, sign and date the
enclosed proxy card and return it in the postage prepaid envelope provided. This
will save us the additional expense in soliciting proxies and will ensure that
your shares are represented. Please note that you may vote in person at the
meeting even if you have previously returned the proxy card.
On behalf of the Board of Directors, I wish to thank you for your prompt
attention to this important matter.
Sincerely,
/s/ Ernest A. Moretti
ERNEST A. MORETTI
President and Chief Executive Officer
WYMAN PARK BANCORPORATION, INC.
11 West Ridgely Road
Lutherville, Maryland 21093
(410) 252-6450
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on October 16, 2002
Notice is hereby given that our 2002 Annual Meeting of Stockholders (the
"Meeting") of Wyman Park Bancorporation, Inc., also referred to as "us," "we" or
the "Company," will be held at our main office located at 11 West Ridgely Road,
Lutherville, Maryland at 3:00 p.m., Lutherville, Maryland time, on October 16,
2002.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of three (3) directors to our Board of Directors; and
2. The approval and adoption of an Agreement and Plan of Merger dated
July 9, 2002, also referred to as the "Merger Agreement," between, on
the one hand, us and our subsidiary Wyman Park Federal Savings & Loan
Association, also referred to as "Wyman Park Federal," and, on the
other hand, Bradford Bank. Under the Merger Agreement, (i) Wyman Park
Federal and we will merge with and into Bradford Bank, with Bradford
Bank surviving the merger, (ii) each outstanding share of our common
stock will be converted into the right to receive $14.55 in cash, and
(iii) each outstanding option to acquire our common stock will be
converted into the right to receive $14.55 in cash, less the option's
exercise price; and
3. Such other matters as may properly come before the Meeting, or any
adjournments thereof.
The Board of Directors is not aware of any other business to come before
the Meeting.
Any action may be taken on the foregoing proposals at the Meeting on the
date specified above, or on any date or dates to which the Meeting may be
adjourned. Stockholders of record at the close of business on August 30, 2002,
which is our record date for this Meeting, are the stockholders entitled to vote
at the Meeting and any adjournments thereof.
You are requested to complete and sign the enclosed proxy card, which is
solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend and vote at the
Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Charmaine Snyder
Charmaine Snyder
Corporate Secretary
Lutherville, Maryland
September 16, 2002
IMPORTANT: YOUR PROMPT RETURN OF YOUR PROXY CARD TO US WILL SAVE US THE EXPENSE
OF FURTHER REQUESTS FOR PROXIES NEEDED TO ENSURE A QUORUM AT THE MEETING. WE
HAVE ENCLOSED A SELF-ADDRESSED ENVELOPE FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF YOU MAIL US YOUR PROXY CARD WITHIN THE UNITED STATES.
PROXY STATEMENT
WYMAN PARK BANCORPORATION, INC.
11 West Ridgely Road
Lutherville, Maryland 21093
(410) 252-6450
ANNUAL MEETING OF STOCKHOLDERS
October 16, 2002
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of Wyman Park Bancorporation, Inc. (the
"Company"), the parent company of Wyman Park Federal Savings & Loan Association
(the "Association"), of proxies to be used at our Annual Meeting of Stockholders
(the "Meeting"), which will be held at our main office located at 11 West
Ridgely Road, Lutherville, Maryland on October 16, 2002, at 3:00 p.m., local
time, and all adjournments of the Meeting. The accompanying Notice of Annual
Meeting and this Proxy Statement are first being mailed to stockholders on or
about September 16, 2002.
At the Meeting, you will be asked to consider and vote upon proposals to
o elect three (3) directors to our Board of Directors; and
o approve the Agreement and Plan of Merger, dated as of July 9, 2002, by
and among Bradford Bank, the Company and the Association (the "Merger
Agreement"), and the transactions contemplated thereby. A copy of the
Merger Agreement is attached to this Proxy Statement as Appendix B.
The Merger Agreement provides for the acquisition of the Company and the
Association by Bradford Bank through a series of mergers and liquidations. As a
result of the mergers, collectively referred to as the "Merger," each share of
common stock will be converted into the right to receive $14.55 in cash (the
"Merger Consideration"). In addition, each option to acquire common stock will
be converted into the right to receive the Merger Consideration, less the
exercise price of the option. After the Merger, Bradford Bank will be the sole
surviving bank. The Company and the Association will no longer exist. The Merger
cannot occur unless a majority of the outstanding shares of our common stock
entitled to vote at the Meeting approves it.
For a more complete description of the Merger Agreement and the terms of
the Merger, see "Proposal II - Approval of the Merger."
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATOR HAS DETERMINED THAT THIS DOCUMENT IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
YOU SHOULD BE AWARE THAT THIS IS A COMPLICATED TRANSACTION. WE URGE YOU TO
CAREFULLY READ AND CONSIDER THIS DOCUMENT IN ITS ENTIRETY.
The date of this document is September 16, 2002.
Table of Contents
Page
QUESTIONS AND ANSWERS ABOUT THE MERGER.........................................1
SUMMARY........................................................................4
GENERAL INFORMATION............................................................7
Annual Meeting........................................................7
Vote Required and Proxy Information...................................7
Voting Securities and Principal Holders of Securities.................7
PROPOSAL I - ELECTION OF DIRECTORS.............................................9
PROPOSAL II - APPROVAL OF THE MERGER..........................................13
General..............................................................13
The Merger...........................................................13
The Companies........................................................13
Background; Reasons for the Merger; Recommendation
of the Board of Directors..........................................14
Opinion of Financial Advisor.........................................15
Conduct of Business if the Merger is Not Consummated.................20
Regulatory Filings and Approvals.....................................20
Terms of the Merger..................................................20
Interests of Directors and Executive Officers........................24
Conditions to the Merger.............................................25
Dissenters' Rights of Appraisal......................................26
Material Federal Income Tax Consequences.............................28
Certain Related Agreements...........................................29
Where You Can Find More Information..................................29
INDEPENDENT ACCOUNTANTS.......................................................29
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.......................30
STOCKHOLDER PROPOSALS.........................................................30
OTHER MATTERS.................................................................30
APPENDICES
Appendix A........Audit Committee Report
Appendix B........Agreement and Plan of Merger
Appendix C........Opinion of Trident Securities
Appendix D........Section 262 of the Delaware General Corporation Law
QUESTIONS AND ANSWERS ABOUT THE MERGER
Q: WHY IS THE MERGER PROPOSED?
A: We believe that the consideration being offered to our stockholders is fair
and that Bradford Bank is a sound merger partner. Bradford Bank wants to serve
its customers in our market areas more effectively and expand its presence in
those areas.
Q: WHAT WILL I RECEIVE IN THIS MERGER?
A: Assuming the Merger is consummated, you will receive $14.55 in cash in
exchange for each share of common stock that you own. This amount is subject to
reduction to the extent our total liability resulting from terminating our
participation in our pension plan prior to the Merger exceeds $100,000.
Q: IF I DO NOT FAVOR THE TRANSACTION, WHAT ARE MY RIGHTS?
A: If you were a stockholder as of the record date (August 30, 2002) and you do
not vote in favor of the Merger Agreement, you will have the right under
Delaware General Corporation Law to dissent and seek a separately appraised
amount for your shares. This option will be available only if you comply with
all the appropriate legal requirements. Please read carefully Section 262 of the
Delaware General Corporation Law attached to this Proxy Statement as Appendix D.
These requirements are also summarized in "Proposal II - Approval of the Merger
- - Dissenters' Rights of Appraisal." The appraised value of a share of common
stock could be more or less than the proposed merger price of $14.55 per share.
Q: WILL I OWE ANY FEDERAL INCOME TAX AS A RESULT OF THE MERGER?
A: For federal income tax purposes, you may have a gain or loss, which could be
treated as ordinary or capital in nature for federal tax purposes, with respect
to the cash payment you receive. If you have a gain, then you may have income
tax liability because you will receive cash for your shares. Your gain or loss
per share will be the difference between $14.55 and your basis in your shares.
You should consult your tax advisor for information regarding the tax
consequences of the Merger to you. See "Proposal II - Approval of the Merger -
Material Federal Income Tax Consequences."
Q: WHEN DO YOU EXPECT THE MERGER TO BE COMPLETED?
A: We plan to complete the transaction as soon as possible after the Meeting,
assuming the required stockholder approval is obtained. The transaction is also
subject to the applicable regulatory approvals and the satisfaction of other
customary closing conditions. We currently expect the transaction to be
completed in the fourth quarter of 2002.
Q: WHAT IS THE BOARD OF DIRECTORS' RECOMMENDATION?
A: YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR APPROVAL OF
THE MERGER AGREEMENT AT THE MEETING.
Q: WHAT DO I NEED TO DO NOW?
A: After carefully reading this Proxy Statement, indicate on your enclosed proxy
card how you want your shares to be voted. Then sign, date and mail your proxy
card in the enclosed return envelope as soon as possible so that your shares
will be represented at the Meeting.
Q: WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A STOCKHOLDER OF RECORD AND
AS A BENEFICIAL OWNER?
A: Many of our stockholders hold their shares through a stockbroker, bank or
other nominee rather than directly in their own name, i.e., of record. As
summarized below, there are some distinctions between shares held of record and
those owned beneficially.
STOCKHOLDER OF RECORD
If your shares are registered directly in your name with our transfer
agent, you are considered, with respect to those shares, the stockholder of
record and these proxy materials are being sent directly to you by us. As a
stockholder of record, you have the right to grant your proxy directly to
us or to vote in person at the Meeting. We are enclosing a proxy card for
your use.
BENEFICIAL OWNER
If your shares are held in a stock brokerage account or by a bank or
other nominee, you are considered the beneficial owner of the shares held
in "street name" and these proxy materials are being forwarded to you by
your broker or nominee, who is considered, with respect to those shares,
the stockholder of record. As the beneficial owner, you have the right to
direct your broker on how to vote. Your broker or nominee has enclosed a
voting instruction card for your use. If you are a stockholder whose shares
are not registered in your own name, you will need additional documentation
from your broker if you wish to attend the Meeting and vote your shares at
the Meeting.
Q: IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER VOTE MY
SHARES FOR ME?
A: Your broker will vote your shares ONLY if you provide instructions on how to
vote. Otherwise, your shares will not be voted for or against the Merger but
will have the effect of a vote against the Merger. You should follow the
directions provided by your broker regarding how to instruct your broker to vote
your shares.
Q: MAY I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY CARD?
A: Yes. You may change your vote at any time before your proxy is voted at the
Meeting. If you are the record holder of the shares, you can do this in three
ways:
o send us a written statement that you would like to revoke your proxy,
provided that we receive your written statement prior to the date of
the Meeting;
o send us a new signed and later-dated proxy card, provided that we
receive your signed and later-dated proxy card prior to the date of
the Meeting; or
o attend the Meeting and vote in person; however, your attendance alone
will not revoke your proxy.
For shares held beneficially by you, but not as record holder, you may only
change your vote by submitting new voting instructions to your broker or
nominee. Alternatively, you can attend the Meeting and vote in person, but you
should consult your broker for required proof of ownership if you intend to do
so.
Q: HOW CAN I VOTE MY SHARES IN PERSON AT THE MEETING?
A: Shares held directly in your name as the stockholder of record may be voted
in person at the Meeting. If you choose to attend, please bring the enclosed
proxy card or proof of identification.
Q: HOW WILL MY SHARES BE VOTED IF I RETURN A BLANK PROXY CARD?
A: If you are the record holder of the shares and you sign and send in your
proxy and do not indicate how you want to vote, your proxy will be counted as a
vote in favor of the Merger.
2
Q: WHAT WILL BE THE EFFECT IF I DO NOT VOTE?
A: Not voting will have the same effect as voting against the Merger.
Q: SHOULD I SEND IN MY STOCK CERTIFICATE NOW?
A: No. If the Merger is completed, you will receive written instructions for
exchanging your share certificates.
Q: WHAT STOCKHOLDER VOTE IS REQUIRED TO APPROVE THE MERGER AGREEMENT?
A: The Merger must be approved by the holders of a majority of the outstanding
shares of our common stock entitled to vote at the Meeting.
Q: WHO CAN ANSWER MY QUESTIONS ABOUT THE MERGER OR HOW I SHOULD SUBMIT MY PROXY?
A: If you have more questions about the Merger or how to submit your proxy,
please call Ernest A. Moretti, our President and Chief Executive Officer, at
(410) 252-6450.
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SUMMARY
This summary highlights selected information from this document. It may not
contain all of the information that is important to you. To understand the
Merger more fully and for a complete description of the legal terms of the
Merger, you should read carefully this entire document and the other documents
to which we refer in this Proxy Statement, including the Merger Agreement that
is attached to this Proxy Statement as Appendix B. Section references are
included in this summary to direct you to a more complete description of topics
discussed in this document.
Throughout this document, the term "Company," "we" or "us," or any form of
those terms, means Wyman Park Bancorporation, Inc. and its subsidiaries. When we
use the terms "Wyman Park Federal" or "the Association," it means our
wholly-owned subsidiary Wyman Park Federal Savings & Loan Association. The term
"Merger Agreement" refers to the Agreement and Plan of Merger, dated as of July
9, 2002, by and among Bradford Bank, us and the Association, a copy of which is
attached to this Proxy Statement as Appendix B. Further, the term "Merger"
refers to the proposed merger of the Company and the Association with and into
Bradford Bank under the terms of the Merger Agreement. If the Merger is
consummated, we will be acquired by Bradford Bank in a merger in which Bradford
Bank will be the surviving corporation. Following the Merger, we will be
liquidated into Bradford Bank, after which the Association will be merged with
and into Bradford Bank.
REASONS FOR THE MERGER
Your Board of Directors has proposed the Merger because it believes the
Merger is in your best interests. See "Proposal II - Approval of the Merger -
Background; Reasons for the Merger; Recommendation of the Board of Directors."
OPINION OF FINANCIAL ADVISOR
In deciding to approve the Merger, your Board of Directors considered,
among other things, the July 9, 2002 opinion of our financial advisor, Trident
Securities, a division of McDonald Investments Inc., that the financial
consideration to be received by our stockholders in the Merger is fair to the
stockholders from a financial point of view. A written opinion of Trident
Securities, affirming its earlier opinion as of the date of this Proxy
Statement, is attached as Appendix C to this document. We encourage you to read
the attached opinion. See "Proposal II - Approval of the Merger - Opinion of
Financial Advisor."
CONSIDERATION TO BE PAID IN THE MERGER
In the Merger, unless you properly exercise your dissenters' appraisal
rights, you will receive $14.55 in cash for each share of common stock you own.
This amount is subject to reduction to the extent our total liability resulting
from terminating our participation in our pension plan in connection with the
Merger exceeds $100,000. Holders of options to acquire shares of our common
stock will receive, in the Merger, $14.55 in cash (subject to reduction as noted
above), less the amount of the option's exercise price. We encourage you to read
the Merger Agreement because it is the legal document that governs the Merger.
VOTE REQUIRED
The affirmative vote of the holders of at least a majority of the
outstanding shares of our common stock entitled to vote at the Meeting is
required to adopt the Merger Agreement. Our directors and executive officers are
entitled to vote 148,042 shares, or approximately 18%, of our outstanding common
stock. In connection with the execution of the Merger Agreement, our directors
and executive officers executed a voting agreement, also referred to as a
Support Agreement, which requires them to vote their shares in favor of adoption
of the Merger Agreement. See "General Information - Vote Required and Proxy
Information."
4
DISSENTERS' RIGHTS
Under Delaware law, you have dissenters' appraisal rights with respect to
your common stock. If you do not wish to accept the $14.55 per share merger
consideration, you can dissent from the Merger and instead choose to have the
fair value of your shares judicially determined and paid to you in cash.
However, in order to exercise your rights, you must follow specific procedures.
You should carefully read Section 262 of the Delaware General Corporation Law
which is included as Appendix D. For additional information on your dissenters'
rights, see "Proposal II - Approval of the Merger - Dissenters' Rights of
Appraisal."
RECOMMENDATION TO STOCKHOLDERS
Your Board of Directors unanimously recommends that you vote FOR the
adoption of the Merger Agreement and approval of the transactions contemplated
by the Merger Agreement, including the Merger, so that the Merger may be
consummated. See "Proposal II - Approval of the Merger - Background; Reasons for
the Merger; Recommendation of the Board of Directors."
INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS
Our directors and executive officers have interests in the Merger in
addition to the interests of all other stockholders. Those interests include the
following:
o Messrs. Ernest Moretti and Ronald Robinson and Mmes. Charmaine Snyder
and Joanne Sheckells will be able to exercise change in control
provisions under the terms of their existing contracts and therefore
be eligible to receive severance payments after the Merger.
o Bradford Bank will continue the directors' and officers' liability
insurance of our Board of Directors and officers for six (6) years
after the effective time of the Merger.
o Two of our directors will be appointed to serve as directors on
Bradford Bank's Board of Directors upon the completion of the Merger.
o If Mr. Moretti exercises his rights under the Association's Executive
Supplemental Retirement Plan after the Merger, Mr. Moretti's benefits
under such Executive Supplemental Retirement Plan will be a lump sum
equivalent of $707,216, which amount shall be payable in a lump sum or
in non-annuity installments.
For additional information, see "Proposal II - Approval of the Merger -
Interests of Directors and Executive Officers."
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
You may recognize a gain or loss, taxable as ordinary income or capital
gain, equal to the aggregate amount of the cash consideration you receive in the
Merger, less the aggregate amount of your tax basis in your shares of common
stock. No ruling has been or will be sought from the Internal Revenue Service as
to the federal income tax consequences of the Merger. The tax consequences of
the Merger to you may vary depending upon the facts of your own situation. You
should consult your own tax advisor to understand fully the tax consequences of
the Merger to you. See "Proposal II - Approval of the Merger - Material Federal
Income Tax Consequences."
CONDITIONS TO COMPLETING THE MERGER
Completion of the Merger depends upon the satisfaction of a number of
conditions, including, among others, the following:
o approval by at least a majority of the outstanding shares of common
stock entitled to vote at the Meeting;
5
o approval of the transaction by the Office of Thrift Supervision, or
"OTS"; and
o acceptance by Bradford Bank of all conditions, if any, imposed by the
OTS as a condition of approval.
To the extent permitted by law, the Merger Agreement provides that certain
of the closing conditions may be waived by the party entitled to assert them.
Your Board of Directors does not currently intend to seek stockholder approval
of any waiver of any condition. For additional information on conditions to
completing the Merger, see "Proposal II - Approval of the Merger - Conditions to
the Merger."
REQUIRED REGULATORY APPROVALS
Consummation of the Merger is subject to approval by the OTS. We have made
a filing with the OTS for this purpose.
TERMINATION OF THE MERGER AGREEMENT
The Merger Agreement may be terminated for a number of reasons, including,
among others, the following:
o by mutual written consent of Bradford Bank and us;
o by the Board of Directors of Bradford Bank, the Company or the
Association if the Merger is not completed on or before February 28,
2003, or if any of the conditions of the Merger are not satisfied; or
o by either Bradford Bank or us if the other party breaches the Merger
Agreement and fails to correct the breach in a timely manner.
For additional information on termination, see "Proposal II - Approval of the
Merger - Terms of the Merger."
CONDUCT OF THE BUSINESS IF THE MERGER IS NOT CONSUMMATED
We expect that, if the Merger is not consummated, we will continue to
operate our business and that of the Association in the same manner as they were
operated prior to entering into the Merger Agreement. See "Proposal II -
Approval of the Merger - Conduct of the Business if the Merger is not
Consummated."
ELECTION OF DIRECTORS
If the Merger is not consummated for any reason, your Board of Directors
expects to continue the Company's and the Association's business. Accordingly,
you are being asked to elect the proposed directors, each to serve until the
Merger is consummated or, if the Merger is not consummated for any reason, for a
term of three years, and until their respective successors have been elected and
qualified. The directors are elected by a plurality of the votes cast. See
"Proposal I - Election of Directors."
6
GENERAL INFORMATION
ANNUAL MEETING
This Proxy Statement is being furnished to you in connection with the
solicitation of proxies by the Board of Directors to be used at the Meeting,
which will be held at our main office located at 11 West Ridgely Road,
Lutherville, Maryland on October 16, 2002, at 3:00 p.m., local time, and all
adjournments of the Meeting. At the Meeting, you will be asked to consider and
vote upon proposals to:
o elect three directors to our Board of Directors; and
o approve the Merger Agreement and the Merger.
This Proxy Statement is accompanied by a proxy card for your use at the Meeting.
VOTE REQUIRED AND PROXY INFORMATION
All shares of the common stock represented at the Meeting by properly
executed proxies received prior to or at the Meeting, and not revoked, will be
voted at the Meeting in accordance with the instructions thereon. If no
instructions are indicated, properly executed proxies will be voted FOR the
director nominees set forth in this Proxy Statement and FOR the Merger and
Merger Agreement. We do not know of any matters, other than as described in the
Notice of Annual Meeting, that are to come before the Meeting. If any other
matters are properly presented at the Meeting for action, the persons named in
the enclosed proxy card and acting thereunder will vote on such matters at the
direction of the Board of Directors.
The directors shall be elected by a plurality of the votes present in
person or represented by proxy at the Meeting and entitled to vote on the
election of directors. The Merger requires the approval of a majority of the
outstanding shares of the common stock entitled to vote at the Meeting. Proxies
marked to abstain with respect to a proposal have the same effect as votes
against a proposal. Broker non-votes have no effect on the vote for directors,
but have the same effect as a vote against the Merger. One-third of the shares
of the common stock, present in person or represented by proxy, shall constitute
a quorum for purposes of the Meeting. Abstentions and broker non-votes are
counted for purposes of determining a quorum.
A proxy given pursuant to the solicitation may be revoked at any time
before it is voted. Proxies may be revoked by:
o filing with our Corporate Secretary at or before the Meeting a written
notice of revocation bearing a later date than the proxy;
o duly executing a subsequent proxy relating to the same shares and
delivering it to our Corporate Secretary at or before the Meeting; or
o attending the Meeting and voting in person (although attendance at the
Meeting will not in and of itself constitute revocation of a proxy).
Any written notice revoking a proxy should be delivered to Secretary, Wyman Park
Bancorporation, Inc., 11 West Ridgely Road, Lutherville, Maryland 21093 and must
be received in advance of the Meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS OF SECURITIES
Stockholders of record as of the close of business on August 30, 2002, the
"Record Date," will be entitled to one vote for each share of common stock then
held. As of that date, there were 822,490 shares of common stock issued and
outstanding. The following table sets forth, as of the Record Date, information
regarding share ownership of those persons or entities known by management to
beneficially own more than 5% of the common stock and the share ownership of all
directors and executive officers of the Company and the Association as a group.
7
SHARES
BENEFICIALLY PERCENT
BENEFICIAL OWNER OWNED(1) OF CLASS
---------------- ----- --------
Wyman Park Bancorporation, Inc.'s 143,013 17.39%
Employee Stock Ownership Plan(2)
Directors and executive officers of the Company 268,120 28.47%
and the Association, as a group (11 persons)(3)
(1) Beneficial ownership, for federal securities law purposes, means having the
right to vote shares, or having the right to make investment decisions
about the shares such as disposing of the shares.
(2) The amount reported represents shares held by the Employee Stock Ownership
Plan ("ESOP"), 75,540 of which have been allocated to accounts of
participants through June 30, 2002. Messrs. Allan B. Heaver, H. Douglas
Huether and John K. White, the Trustees of the ESOP, may be deemed
beneficially to own the 67,473 shares held by the ESOP that have not been
allocated to the participants. The Trustees have no independent voting or
dispositive powers as to the shares allocated to the participants.
(3) Amount includes shares held directly, as well as shares held jointly with
family members, shares held in retirement accounts, shares allocated to the
ESOP accounts of the group members, held in a fiduciary capacity or by
certain family members, with respect to which shares the group members may
be deemed to have sole voting and/or investment power. Also includes shares
as to which the respective director has options for purchase and the
options are exercisable within 60 days of the Record Date.
8
PROPOSAL I - ELECTION OF DIRECTORS
Our Board of Directors is presently composed of nine members, each of whom
is also a director of the Association. Directors are elected to serve for
three-year terms or until their respective successors shall have been elected
and shall qualify, with one-third of the directors elected annually. If the
Merger, as described in Proposal II below, is approved by the stockholders, then
our directors will only serve until the Merger is completed. See "Proposal II -
Approval of the Merger."
The following table sets forth certain information regarding our Board of
Directors, including their terms of office and the nominees for election as
directors. It is intended that the proxies solicited on behalf of the Board of
Directors (other than proxies in which the vote is withheld as to the nominees)
will be voted at the Meeting FOR the election of the nominees identified in the
following table. If such nominees are unable to serve, the shares represented by
all such proxies will be voted for the election of such substitutes as the Board
of Directors may recommend. At this time, the Board of Directors knows of no
reason why the nominees might be unable to serve, if elected. Except as
described herein, there are no arrangements or understandings between any
director or nominee and any other person pursuant to which such director or
nominee was selected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES LISTED
BELOW.
CURRENT SHARES OF COMMON
TERM OF STOCK BENEFICIALLY PERCENT
DIRECTOR OFFICE OWNED AT OF
NAME AGE(1) POSITION(S) HELD SINCE EXPIRES RECORD DATE(2) CLASS
---- ------ ---------------- -------- ------- -------------- -----
NOMINEES FOR TERMS TO EXPIRE IN 2005
Ernest A. Moretti 61 Director, President 1989 2002 87,348 10.13%
and Chief Executive
Officer
John K. White 70 Director 1987 2002 15,109 1.82%
G. Scott Barhight 45 Director 1996 2002 10,459 1.38%
- -------------------------------------------------------------------------------------------------------------------
DIRECTORS CONTINUING IN OFFICE
John R. Beever 69 Director 1984 2003 20,109 2.42%
Albert M. Copp 67 Director 1992 2003 11,269 1.36%
Gilbert D. Marsiglia, Sr. 64 Director 1988 2003 14,609 1.76%
Allan B. Heaver 50 Chairman of the Board 1983 2004 17,110 2.06%
H. Douglas Huether 76 Director 1965 2004 22,109 2.66%
Jay H. Salkin 63 Director 1995 2004 25,309 3.05%
- -------------------------------------------------------------------------------------------------------------------
(1) At June 30, 2002.
(2) For the definition of beneficial ownership, see Footnotes 1 and 3 of the
preceding table.
The business experience of each director is set forth below. All directors
have held their present positions for at least the past five years, except as
otherwise indicated.
ERNEST A. MORETTI. Mr. Moretti is President and Chief Executive Officer of
the Association, a position he has held since 1989, and is also President and
Chief Executive Officer of the Company.
JOHN K. WHITE. For over 25 years prior to his retirement in 1996, Mr. White
served as Executive Vice President and is a current member of the Board of
Directors of the Baltimore Life Insurance Company and Life of Maryland
Insurance. From 1996-98, Mr. White was the owner's representative on a
construction project for Villa Julie College.
9
G. SCOTT BARHIGHT. Mr. Barhight has been a partner with the law firm of
Whiteford, Taylor & Preston, LLP located in Towson, Maryland, since 1992.
JOHN R. BEEVER. Mr. Beever has been retired since 1996. From 1967 until
that time, Mr. Beever served as President and Chairman of the Board of John
Dittmar & Sons, Inc., a manufacturer of architectural woodwork headquartered in
Baltimore, Maryland.
ALBERT M. COPP. Since 1983, Mr. Copp has been a co-owner and president of
Woodhall Wine Cellars. He is also a principal of Woodhall Associates, a land
management consulting firm.
GILBERT D. MARSIGLIA, SR. Mr. Marsiglia is the President of the real estate
brokerage firm of Gilbert D. Marsiglia & Co., Inc. located in Lutherville,
Maryland, a position he has held since 1973.
ALLAN B. HEAVER. Since 1986, Mr. Heaver has served as the Managing General
Partner of Heaver Properties, a commercial real estate management/development
company located in Lutherville, Maryland.
H. DOUGLAS HUETHER. Since 1970, Mr. Huether has served as President of
Independent Can Company, a metal can manufacturing company located in Bel Camp,
Maryland and is currently its Chairman of the Board.
JAY H. SALKIN. Since 1981, Mr. Salkin has served as Senior Vice President -
Branch Manager of Advest, Inc., an investment brokerage company. The branch is
located in Lutherville, Maryland. Mr. Salkin is on the Board of Directors of
Advest, Inc., the principal subsidiary of Advest Group, Inc.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Officers are elected annually by our Board of Directors. The business
experiences of the executive officers who are not also directors are set forth
below.
RONALD W. ROBINSON. Mr. Robinson, age 57, currently serves as Treasurer of
the Association and as the Chief Financial Officer of the Company. Mr. Robinson
has been employed by the Association since 1990 and by the Company since its
formation.
CHARMAINE M. SNYDER. Ms. Snyder, age 45, serves as the Association's
Corporate Secretary and Loan Servicing Manager and Corporate Secretary of the
Company. Ms. Snyder has been employed by the Association since 1976 and by the
Company since its formation.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors meets at least monthly. During the fiscal year ended
June 30, 2002, the Board of Directors held 12 meetings. No director attended
fewer than 75% of the total meetings of the Board of Directors and committees on
which such Board member served during this period.
The Company has various standing committees, including nominating, audit
and compensation committees.
The entire Board of Directors acts as the nominating committee to nominate
candidates for membership on the Board of Directors. During fiscal year 2002,
the Board met once in its capacity as a nominating committee.
The audit committee consists of Directors Heaver, Marsiglia and Salkin.
Each of the directors who serves on the audit committee is "independent" of the
Company, as the term "independent" is defined under Rule 4200(a)(15) of the
listing standards of the National Association of Securities Dealers, Inc. The
audit committee meets annually to review our annual audit as conducted by our
independent accountants and to recommend the appointment by the Board of
Directors of independent accountants for the following fiscal year. This
committee met twice in fiscal year 2002.
10
The compensation committee meets on an as-needed basis, but at least once
during a fiscal year for the purpose of reviewing officers' salaries and
bonuses. This committee met two times during fiscal year 2002. The members of
this committee are Directors Copp, Heaver, Huether, Moretti and White. Mr.
Moretti recuses himself from any deliberations or votes of the committee
involving his own compensation.
DIRECTOR COMPENSATION
Directors are currently not compensated for membership on the Board of
Directors. Each director of the Company is also a director of the Association
and, in that capacity, is currently paid a fee of $575 for each regular meeting
attended. Non-employee directors also receive committee fees of $175 for each
committee meeting attended. Directors who are also employees of the Company or
the Association receive fees for Board meetings but do not receive fees for
participation on any committees.
EXECUTIVE COMPENSATION
The Company has not paid any compensation to its executive officers since
its formation. The following table sets forth information concerning the
compensation paid or granted to the Association's Chief Executive Officer. No
other executive officer of the Company has aggregate compensation (salary plus
bonus) in excess of $100,000 in fiscal year 2002.
Summary Compensation Table
--------------------------
Long-Term
Compensation
Annual Compensation Award
------------------------------------------ ---------------------
Restricted
Name and Principal Other Annual Stock Options/ All Other
Position Year Salary($) Bonus($) Compensation($) Award($)(1) SARs(#) Compensation($)
-------- ---- --------- -------- --------------- ----------- ------- ---------------
Ernest A. Moretti, 2002 $115,000 $21,796 --- --- --- $102,306(2)
President, Chief Executive 2001 115,000 17,448 --- --- --- 89,122
Officer and Director 2000 115,000 20,145 --- --- --- 82,243
- ---------------------
(1) Dividends on such shares are payable to the individual in either cash or
common stock of the company, at the discretion of the trustees of the
Company's Revenue Recognition and Retention Plan.
(2) Includes $5,513 of life, health and disability premiums paid by the
Association, $3,004 paid by the Association in discretionary contributions
pursuant to the Association's 401(k) Plan, $28,876 to fund the executive
supplemental retirement plan for Mr. Moretti, the value of a car provided
to Mr. Moretti of $1,372, the $56,641 value of 5,608 shares allocated to
Mr. Moretti under the Company's ESOP at June 30, 2002, and $6,900 in fees
paid to Mr. Moretti in his capacity as a director of the Association.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2002 AND YEAR-END OPTION VALUES.
The following table sets forth information concerning the value of options held
by the named executive officers at the end of the fiscal year.
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal Year End In-the-Money Options at
Exercisable/Unexercisable Fiscal Year End (a)
Shares Acquired on Value ------------------------- -------------------
Name Exercise (#) Realized ($) (Number of Shares) Exercisable/Unexercisable
---- ------------ ------------ ------------------ -------------------------
Ernest Moretti --- --- 39,745/9,936 $178,853/$44,712
- ------------------------
(a) Represents the difference between fair market value of underlying common
stock at year-end (based on the most recent sales price known to
management) and the exercise price. Options are in-the-money if the fair
market value of the underlying securities exceeds the exercise price of the
option and out-of-the-money if the exercise price of unexercisable options
exceeds current fair market value.
11
EMPLOYMENT AGREEMENT. The Association has an employment agreement with Mr.
Moretti for his services as its President which provides for a salary of
$115,000, contains bonus provisions tied to the Association's performance and
has a term of three years (subject to an annual extension for an additional year
following an annual performance review and approval by the Board of Directors).
The agreement provides that under certain circumstances, including a change in
control, Mr. Moretti would be entitled, subject to certain limitations, to a
severance payment in lieu of salary equal to a percentage of his base amount of
compensation, as defined in the agreement, plus health benefits during the
remaining term of the agreement. The contract provides for termination at any
time by the Board of Directors, upon Mr. Moretti's death, for cause or in
certain events specified by regulations of the Office of Thrift Supervision and
other federal banking laws. The employment agreement is terminable by Mr.
Moretti upon 90 days' notice to the Association.
If there is a "change in control" of the Association, as that term is
defined in the agreement, and Mr. Moretti's employment terminates involuntarily
three (3) months before such change in control or within the later of 12 months
after the change in control or the expiration date of the employment agreement,
or if Mr. Moretti voluntarily terminates his employment within 90 days after the
change in control (but not in the event of a termination for cause), the
employment contract provides that Mr. Moretti will be paid 299% of his average
annual taxable compensation over the preceding five-year period.
Under the employment agreement, involuntary termination includes (i) a
change in Mr. Moretti's principal workplace to a location outside of a 30-mile
radius from the Association's principal executive office, (ii) a material
demotion of Mr. Moretti, (iii) a material reduction in the number or seniority
of the personnel reporting to Mr. Moretti, or a material reduction in the
frequency with which, or in the nature of the matters for which, such personnel
are to report to Mr. Moretti (other than as part of a general reduction in staff
by the Company or the Association), (iv) a material adverse change in Mr.
Moretti's salary, perquisites, benefits, contingent benefits or vacation, other
than as part of an overall program applied uniformly and with equitable effect
to all employees, and (v) a material permanent increase in Mr. Moretti's
required hours of work or workload. If the Merger, as described in Proposal II
below, is approved, the aggregate amounts payable to Mr. Moretti pursuant to
this change in control provision would be approximately $470,000 (based on an
assumed closing date on or before December 31, 2002).
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN. The Association adopted the Wyman
Park Federal Savings & Loan Association Executive Supplemental Retirement Plan
(the "SERP") for the benefit of Mr. Moretti. The SERP provides for payment of a
specified amount to Mr. Moretti, as President of the Association, upon
termination of Mr. Moretti's employment for any reason including a voluntary
resignation or termination for cause ("Payment Event"). Upon such termination,
Mr. Moretti will receive from the SERP an annual benefit, payable in 12 monthly
installments over the greater of his life or 120 months, equal to 65% of the
5-year average of his highest annual compensation, less the annual amount he is
entitled to under the defined benefit retirement plan provided by the
Association. If the Merger, as described in Proposal II below, is approved, Mr.
Moretti's benefits under the SERP will be fixed by the Merger Agreement to a
lump sum equivalent of $707,216. See "Proposal II - Approval of the Merger -
Interests of Directors and Executive Officers."
CERTAIN TRANSACTIONS
The Association has followed a policy of granting loans to officers and
directors. Loans to directors and executive officers are made in the ordinary
course of business and on the same terms and conditions as those of comparable
transactions with the general public prevailing at the time, in accordance with
the Association's underwriting guidelines, and do not involve more than the
normal risk of collectibility or present other unfavorable features.
12
PROPOSAL II - APPROVAL OF THE MERGER
GENERAL
The following is a description of the terms of the Merger. This description
does not purport to be complete and is qualified by reference to the Merger
Agreement, which is attached to this proxy statement as Appendix B and which is
incorporated into this description by reference. Consummation of the Merger is
subject to approval by our stockholders, the receipt of OTS regulatory approval,
and other conditions.
THE MERGER
The Association and we entered into a Merger Agreement with Bradford Bank
on July 9, 2002. Under the terms of this agreement, the Association and we would
be merged into Bradford Bank, with Bradford Bank as the surviving entity. Our
stockholders would receive $14.55 in cash in exchange for each share of common
stock, and holders of our options would receive $14.55 in cash, less the
exercise price of the options, for each option. The $14.55 amount is subject to
reduction to the extent our total liability from terminating our participation
in our pension plan prior to the Merger exceeds $100,000. If there is such a
reduction, it will not require another stockholder vote on the Merger Agreement.
THE COMPANIES
Bradford Bank
6900 York Road
Baltimore, Maryland 21212-1550
(410) 377-9600
Bradford Bank is a federally-chartered mutual savings bank with its
principal executive offices in the Rogers Forge area of Baltimore County,
Maryland. Its deposits are insured up to applicable limits by the Federal
Deposit Insurance Corporation. It operates four banking offices in Maryland,
including its main office in Baltimore County, Maryland, a branch in Baltimore
City, Maryland, a branch in Ellicott City in Howard County, Maryland and one
branch in Phoenix in Baltimore County, Maryland. At June 30, 2002, Bradford Bank
had assets of $301 million, deposits of $264 million, and regulatory capital of
$33 million.
Bradford Bank is primarily engaged in the business of attracting deposits
from the general public and investing such funds in permanent mortgage loans
secured by one-to four-family residential real estate located primarily in
central Maryland. Bradford Bank also originates consumer loans, home equity
loans, home equity lines of credit and loans to small to medium sized
businesses. Bradford Bank also invests in U.S. Government obligations,
interest-bearing deposits in other financial institutions, mortgage-backed
securities and other investments permitted by applicable law.
Wyman Park Bancorporation, Inc.
11 West Ridgely Road
Lutherville, Maryland 21093
(410) 252-6450
We are a savings and loan holding company that is the sole stockholder of
the Association. At June 30, 2002, the Company had assets of $71 million,
deposits of $60 million and equity of $9.4 million.
Wyman Park Federal Savings & Loan Association
11 West Ridgely Road
Lutherville, Maryland 21093
(410) 252-6450
The Association is a federally-chartered savings association with its
principal executive offices in Lutherville, Maryland. Its deposits are insured
up to applicable limits by the Federal Deposit Insurance Corporation.
13
The Association is primarily engaged in the business of attracting savings
deposits from the general public and investing such funds in permanent mortgage
loans secured by one- to four-family residential real estate located primarily
in central Baltimore County and northern Baltimore City, Maryland. Through its
branch office located in Glen Burnie, a suburb to the south of Baltimore, the
Association also serves Anne Arundel County, Maryland. In addition to permanent
mortgage loans, the Association also originates, to a lesser extent, loans for
the construction of one- to four-family real estate, commercial loans secured by
multi-family real estate (over four units) and nonresidential real estate, and
consumer loans, including home equity lines of credit, home improvement loans,
and loans secured by savings deposits. The Association invests in U.S.
government obligations, interest-bearing deposits in other financial
institutions, mortgage-backed securities, and other investments permitted by
applicable law.
BACKGROUND; REASONS FOR THE MERGER; RECOMMENDATION OF THE BOARD OF DIRECTORS
BACKGROUND OF THE MERGER. Since our initial public offering in 1998, we
have focused on enhancing long-term stockholder value. As part of this process,
we actively promoted our lending operations and increased our deposit base, and
also considered the possibility of a sale or merger as one of a number of
alternatives considered to generate competitive returns on your long-term
investment in our stock. Among such alternatives was a capital dividend of $6.00
per share that we paid in 1999. The Board of Directors continued to analyze our
long-term business plan on a periodic basis to determine whether, given
prevailing regulatory and economic conditions and other factors, our long-term
business strategies would generate the level of return to stockholders that
could be realized through a sale of the Company. The prospect of heightened
competition from larger commercial banks in our market area, especially
following the consolidation of smaller community banks into larger regional and
national banks, caused the Board of Directors in 2001 to again consider whether
a sale or merger of the Company would be the most effective means of maximizing
long-term stockholder value.
On September 19, 2001, the investment banking firm of Trident Securities,
which is a division of McDonald Investments Inc., met with the Board of
Directors to present an update of trading and merger market conditions, our
potential merger value and a list of potential merger partners. At its October
24, 2001 meeting, the Board of Directors unanimously approved the exploration of
a merger and engaged Trident Securities to act as our financial advisor and to
solicit indications of interest from third parties. Trident Securities met again
with the Board of Directors on November 20, 2001 to review the merger process
and potential strategies.
In early January 2002, we discovered a significant embezzlement at the
Association and took immediate steps to notify our regulator and the proper law
enforcement personnel. The Board of Directors decided to postpone any further
solicitations of indications of interest until the embezzlement had been
resolved. In late March 2002, the Board of Directors authorized Trident
Securities to resume solicitations. As part of this process, Trident Securities
and we identified a group of candidates to merge with or acquire us based on
factors such as perceived desire and ability to consummate a transaction.
Trident Securities contacted the identified companies, including Bradford Bank,
and acquired confidentiality agreements to permit their initial review of
nonpublic information about the Company. Following those companies' review of
the information, Trident Securities then solicited non-binding written
indications of interest for a possible merger transaction with the Company.
On April 17, 2002 Trident Securities met with the Board of Directors to
review the indications of interest received. Trident Securities analyzed the
financial and structural characteristics of each indication as well as the
trading characteristics of those companies whose proposal contained common stock
as consideration. Upon considering all of the information presented, the Board
of Directors determined that Bradford Bank's proposal represented the best total
value to our stockholders. The Board of Directors instructed Trident Securities
to request clarification regarding certain aspects of the indication of interest
received from Bradford Bank. Contingent upon receiving satisfactory responses,
the Board of Directors authorized Trident Securities to invite Bradford Bank to
perform its due diligence review of our operations.
Trident Securities contacted Bradford Bank regarding the outstanding issues
and subsequently received satisfactory responses on the issues. Trident
Securities invited Bradford Bank to begin a comprehensive examination of our
books and records. In late May 2002, Bradford Bank's management informed Trident
Securities that Bradford Bank had concluded its due diligence examination of our
operations and confirmed its indication of
14
interest. Bradford Bank's Board of Directors and our Board of Directors then
directed their respective legal counsel and financial representatives to
negotiate a definitive merger agreement.
On July 9, 2002, our Board of Directors met with our legal counsel, Kutak
Rock LLP, and Trident Securities to consider a proposed merger agreement as
negotiated by Kutak Rock LLP and Bradford Bank's legal counsel. At that meeting,
Kutak Rock LLP advised the Board of Directors of its legal and fiduciary
responsibilities associated with the proposed transaction and also explained the
terms of the proposed agreement. Trident Securities made a presentation
regarding the business and financial aspects of the proposed transaction and
provided its opinion to the Board of Directors regarding the fairness, from a
financial point of view, of the Merger Consideration to be paid by Bradford Bank
to our stockholders.
After receiving advice and discussing the issues, the Board of Directors
unanimously approved the terms of the Merger Agreement and all related
documents.
REASONS FOR THE MERGER. The Board of Directors, with the assistance of our
financial and legal advisors, evaluated the financial, legal and market
considerations involved in the decision to recommend the Merger to you. The
Board of Directors believes that the transactions provided for in the Merger
Agreement are in the best interests of the Company and you. The terms of the
Merger, including the consideration payable to you as stockholders, are the
results of a comprehensive, competitive process conducted at an arms-length
basis. The Board of Directors believes that it conducted a thorough and complete
search for a merger partner from among the companies it believed most likely to
be interested in acquiring the Company on terms favorable to you. The Board of
Directors considered the following factors before concluding that the Merger is
in the best interests of the Company and our stockholders:
o the financial terms of the proposed Merger;
o a review of the terms of the proposed transaction with our outside
financial and legal advisors;
o a comparison of the terms of the proposed Merger with comparable
transactions in Maryland, the Mid-Atlantic United States and
elsewhere;
o competitive factors and consolidation trends in the banking industry;
o Trident Securities' opinion that the consideration you will receive
from the Merger is fair, from a financial point of view;
o alternatives to the Merger, including continuing to operate as an
independent company, in light of economic conditions, the competitive
environment in the financial services industry and our Board of
Directors' analysis of the Company's financial condition, past
performance and future prospects; and
o the effects of the transaction on the Company and our customers,
communities and employees.
In addition, our Board of Directors considered the separate agreements and
benefits proposed for our employees and management, which it found to be
reasonable. While our Board of Directors considered the foregoing factors
individually, it did not assign any specific or relative weights to the factors
considered and did not make any determination with respect to any individual
factor. Our Board of Directors made its determination with respect to the Merger
based on its unanimous conclusion, in light of such factors, that the Merger is
in the best interests of our stockholders.
RECOMMENDATION OF THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR APPROVAL OF THE MERGER AGREEMENT.
15
OPINION OF FINANCIAL ADVISOR
We retained Trident Securities to act as our financial advisor in
connection with a possible merger and related matters. Trident Securities is a
nationally recognized specialist for the financial services industry, in
general, and for banks and thrifts in particular, and is regularly engaged in
evaluations of similar businesses and in advising institutions with regard to
mergers and acquisitions. We selected Trident Securities as our financial
advisor based upon its qualifications, expertise and reputation in such
capacity.
As part of its engagement, Trident Securities agreed, if requested by us,
to render an opinion with respect to the fairness, from a financial point of
view, to our stockholders of the amounts to be paid to our stockholders in a
merger. On July 9, 2002, Trident Securities delivered its opinion to our Board
of Directors that, as of such date, the Merger Consideration was fair to our
stockholders from a financial point of view. In addition, Trident Securities
delivered an updated opinion, dated as of the date of this Proxy Statement,
confirming its July 9, 2002 opinion. We did not impose any limitations on
Trident Securities with respect to its investigations made or procedures
followed in rendering its opinion.
The full text of Trident Securities' updated opinion to the Board of
Directors is attached as Appendix C and is incorporated herein by reference. It
sets forth the assumptions made, the matters considered and the extent of the
review by Trident Securities. Therefore, it should be read carefully and in its
entirety in conjunction with this Proxy Statement. The following summary of
Trident Securities' opinion is qualified in its entirety by reference to the
full text of the opinion at Appendix C. Please note that the opinion of Trident
Securities is addressed to the Board of Directors and does not constitute a
recommendation to any particular stockholder as to how such stockholder should
vote at the Meeting.
Trident Securities, in connection with rendering its opinion:
o reviewed our Annual Reports to Stockholders and Annual Reports on Form
10-KSB for each of the fiscal years ended June 30, 2001, June 30, 2000
and June 30, 1999, including the audited financial statements
contained therein, and the Quarterly Report on Form 10-QSB for the
quarters ended March 31, 2002, December 31, 2001 and September 30,
2001;
o reviewed certain other public and non-public information, primarily
financial in nature, relating to our businesses, earnings, assets and
prospects that we provided to Trident Securities or that was publicly
available;
o participated in meetings and telephone conferences with members of our
senior management concerning our financial condition, business,
assets, financial forecasts and prospects, as well as other matters it
believed relevant to its inquiry;
o reviewed certain stock market information for our common stock and
compared it with similar information for certain companies, the
securities of which are publicly traded;
o compared the results of our operations and our financial condition
with that of certain companies which it deemed to be relevant for
purposes of its opinion;
o reviewed the financial terms, to the extent publicly available, of
certain acquisition transactions that it deemed to be relevant for
purposes of its opinion;
o reviewed the Merger Agreement and its schedules and exhibits and
certain related documents; and
o performed such other reviews and analyses as it deemed appropriate.
The opinions provided by Trident Securities to us were necessarily based
upon economic, monetary, financial market and other relevant conditions as of
the dates thereof.
16
In connection with its review and arriving at its opinion, Trident
Securities relied upon the accuracy and completeness of the financial
information and other pertinent information provided by us and Bradford Bank to
Trident Securities for purposes of rendering its opinion. Trident Securities did
not assume any obligation to independently verify any of the provided
information as being complete and accurate in all material respects. With regard
to the financial forecasts established and developed for us with the input of
our management, as well as projections of cost savings and operating synergies,
Trident Securities assumed that this information reflects our best available
estimates and judgments as to the future performance of the separate and
combined entities and that the projections provided a reasonable basis upon
which Trident Securities could formulate its opinion. We do not publicly
disclose such internal management projections of the type utilized by Trident
Securities in connection with Trident Securities' role as financial advisor to
us. Therefore, such projections cannot be assumed to have been prepared with a
view towards public disclosure. The projections were based upon numerous
variables and assumptions that are inherently uncertain, including, among
others, factors relative to the general economic and competitive conditions
facing us and Bradford Bank. Accordingly, actual results could vary
significantly from those set forth in the respective projections.
Trident Securities does not claim to be an expert in the evaluation of loan
portfolios or the allowance for loan losses with respect thereto and therefore
assumes that such allowances for Bradford Bank and us are adequate to cover such
losses. In addition, Trident Securities does not assume responsibility for the
review of individual credit files and did not make an independent evaluation,
appraisal or physical inspection of the assets or individual properties of
Bradford Bank or us, nor was Trident Securities provided with such appraisals.
Furthermore, Trident Securities assumes that the Merger will be consummated in
accordance with the terms set forth in the Merger Agreement, without any waiver
of any material terms or conditions by us, and that obtaining the necessary
regulatory approvals for the Merger will not have an adverse effect on either
separate institution or the combined entity. Moreover, in each analysis that
involves our per share data, Trident Securities adjusted the data to reflect
full dilution, i.e., the effect of the exercise of all outstanding stock
options.
In connection with rendering its opinion to the Board of Directors, Trident
Securities performed a variety of financial and comparative analyses, which are
briefly summarized below. Such summary of analyses do not purport to be a
complete description of the analyses performed by Trident Securities. Moreover,
Trident Securities believes that these analyses must be considered as a whole
and that selecting portions of such analyses and the factors considered by it,
without considering all such analyses and factors, could create an incomplete
understanding of the scope of the process underlying the analyses and, more
importantly, the opinion derived from them. The preparation of a financial
advisor's opinion is a complex process involving subjective judgments and is not
necessarily susceptible to partial analyses or a summary description of such
analyses. In its full analysis, Trident Securities also included assumptions
with respect to general economic, financial market and other financial
conditions. Furthermore, Trident Securities drew from its past experience in
similar transactions, as well as its experience in the valuation of securities
and its general knowledge of the banking industry as a whole. Any estimates in
Trident Securities' analyses were not necessarily indicative of actual future
results or values, which may significantly diverge more or less favorably from
such estimates. Estimates of company valuations do not purport to be appraisals
or to necessarily reflect the prices at which companies or their respective
securities actually may be sold. None of the analyses performed by Trident
Securities were assigned a greater significance by Trident Securities than any
other in deriving its opinion.
COMPARABLE TRANSACTION ANALYSIS. Trident Securities reviewed and compared
actual information for groups of comparable pending and completed thrift merger
transactions (through July 8, 2002) it deemed pertinent to an analysis of the
Merger. The pricing ratios for the Merger were compared to the median ratios of
(i) price to last twelve months earnings, (ii) price to tangible book value,
(iii) capital adjusted price to tangible book value, (iv) tangible book value
premium to core deposit ratio, and (v) transaction premium to current trading
price for each of the following twelve comparable transaction groups:
o all recent thrift acquisitions in the United States announced within
the preceding 12 months ("All Recent Median");
o all thrift acquisitions in the United States announced within the
preceding 90 days ("Last 90 Days Median");
17
o all pending thrift acquisitions in the United States that have been
announced but have yet to close ("All Pending Median");
o all Mid-Atlantic thrift acquisitions announced within the preceding 12
months ("Mid-Atlantic Recent Median");
o all Maryland thrift acquisitions announced within the preceding 12
months ("Maryland Recent Median");
o all thrift acquisitions in the United States announced within the
preceding 12 months involving acquired thrifts with assets of $50-$100
Million ("Assets $50mm-$100mm Median");
o all thrift acquisitions in the United States announced within the
preceding 12 months with a total deal size of $5-$15 Million ("Deal
Size $5mm-$15mm Median");
o all thrift acquisitions in the United States announced within the
preceding 12 months involving acquired thrifts with returns on average
assets of 0.50%-0.70% ("ROAA 50bp-70bp Median");
o all thrift acquisitions in the United States announced within the
preceding 12 months involving acquired thrifts with returns on average
equity of 3%-6% ("ROAE 3%-6% Median");
o all thrift acquisitions in the United States announced within the
preceding 12 months involving acquired thrifts with tangible capital
of 10%-15% ("Tangible Capital 10%-15% Median");
o all thrift acquisitions in the United States announced within the
preceding 12 months involving acquired thrifts with nonperforming
assets as a percentage of total assets of 0.00%-0.25% ("NPAs
0.00%-0.25%");
Trident Securities also selected thirteen thrift acquisitions announced
since January 1, 2000 involving sellers that Trident Securities believed were
most comparable to us in terms of asset size, tangible capital, profitability,
and market area (the "Guideline Transactions"):
ACQUIROR TARGET
-------- ------
First Federal Bancshares Inc. PFSB Bancorp Inc.
Citizens Bancshares Corp. CFS Bancshares Inc.
Abington Bancorp Inc. Massachusetts Fincorp Inc.
BCSB Bankcorp Inc. (MHC) WHG Bancshares Corp.
Pocahontas Bancorp Inc. North Arkansas Bancshares Inc.
Colony Bankcorp Inc. Quitman Bancorp Inc.
Union Community Bancorp Montgomery Financial Corp.
Polish National Alliance PS Financial Inc.
ESB Financial Corp. WSB Holding Co.
Citco Community Bkshrs, Inc. Twin City Bancorp
Northeast PA Financial Corp. Security of PA Financial Corp.
Patapsco Bancorp Inc. Northfield Bancorp Inc.
Fidelity Bancorp Inc. Pennwood Bancorp Inc.
18
The following table represents a summary analysis of the comparable
transactions analyzed by Trident Securities based on the announced transaction
values:
Capital
Adj. TBV
Price/ Premium/
Price to Price to Tang. Core Premium/
Number of LTM Tang. Book Deposits Trading
Trans. EPS (1) Book (2) (3) Price
----------- ---------- -------- --------- --------------- ----------------
ALL RECENT MEDIAN 48 19.9x 141.5% 172.1% 7.7% 45.2%
LAST 90 DAYS MEDIAN 10 18.5x 144.3% 155.6% 8.7% 41.6%
ALL PENDING MEDIAN 24 18.9x 147.0% 167.4% 8.2% 56.3%
MID-ATLANTIC RECENT MEDIAN 13 26.2x 137.2% 151.7% 6.8% 45.2%
MARYLAND RECENT MEDIAN 4 34.7x 211.4% 142.9% 23.8% 47.3%
ASSETS $50MM-$100MM MEDIAN 6 28.0x 138.0% 146.5% 3.1% 40.4%
DEAL SIZE $5MM-$15MM MEDIAN 11 24.0x 121.3% 155.6% 5.0% 59.2%
ROAA 50BP-70BP MEDIAN 13 25.2x 141.5% 167.9% 8.7% 33.6%
ROAE 3%-6% MEDIAN 14 28.2x 141.8% 182.2% 8.4% 34.2%
TANGIBLE CAPITAL 10%-15% MEDIAN 14 28.4x 132.9% 158.0% 7.4% 46.4%
NPAS 0.00%-0.25% MEDIAN 13 19.6x 155.9% 177.7% 9.1% 48.2%
GUIDELINE MEDIAN 13 26.9x 108.1% 121.3% 2.5% 35.8%
WYMAN PARK 32.6x 148.4% 196.0% 8.6% 44.1%
- -----------------------------------------------------------------------------------------------------------------------
(1) Last 12 months earnings per share
(2) Price and capital are adjusted to eliminate the impact of excess capital
(assumes 7% capital is adequate)
(3) Tangible book value premium as a percentage of core deposits (deposits less
than $100,000)
The pricing multiples of this transaction are within the range of median
pricing multiples observed in the comparable groups.
DISCOUNTED EARNINGS ANALYSIS. Trident Securities calculated an equity value
for us based upon the value, discounted to the present, of estimates of our
projected earnings over a five-year period from the fiscal year ending June 30,
2003 through the fiscal year ending June 30, 2007 and a projected year 2007
terminal value. Estimated annual after-tax cost savings were added to projected
earnings for an alternate scenario.
This analysis utilized a range of discount rates of 11% to 17% and a range
of terminal multiples of 12.5x to 17.5x trailing earnings. Earnings were assumed
to grow at 5% per year. The analyses resulted in a range of present values of
between $8.88 and $14.28 per share for discounted earnings without cost savings
and a range of present values of between $10.24 and $15.85 per share for
discounted earnings including cost savings. Trident Securities noted that the
discounted earnings analysis was included because it is a widely-used valuation
methodology, but that the results of such methodology are highly dependent upon
the numerous assumptions that must be made, including earnings growth rates,
dividend pay-out rates, cost savings opportunities and discount rates.
19
NO COMPANY USED AS A COMPARISON IN THE ABOVE ANALYSES IS IDENTICAL TO
BRADFORD BANK, US OR THE COMBINED ENTITY AND NO OTHER TRANSACTION IS IDENTICAL
TO THE MERGER. ACCORDINGLY, AN ANALYSIS OF THE RESULTS OF THE FOREGOING IS NOT
PURELY MATHEMATICAL; RATHER, SUCH ANALYSES INVOLVE COMPLEX CONSIDERATIONS AND
JUDGMENTS CONCERNING DIFFERENCES IN FINANCIAL MARKET AND OPERATING
CHARACTERISTICS OF THE COMPANIES AND OTHER FACTORS THAT COULD AFFECT THE PUBLIC
TRADING VOLUME OR PRICE OF THE COMPANIES TO WHICH WE, BRADFORD BANK AND THE
COMBINED ENTITY ARE BEING COMPARED.
IN CONNECTION WITH THE DELIVERY OF ITS OPINION DATED AS OF THE DATE OF THIS
PROXY STATEMENT, TRIDENT SECURITIES PERFORMED PROCEDURES TO UPDATE, AS
NECESSARY, CERTAIN OF THE ANALYSES DESCRIBED ABOVE AND REVIEWED THE ASSUMPTIONS
ON WHICH THE ANALYSES DESCRIBED ABOVE WERE BASED AND THE FACTORS CONSIDERED IN
CONNECTION THEREWITH. TRIDENT SECURITIES DID NOT PERFORM ANY ANALYSES IN
ADDITION TO THOSE DESCRIBED ABOVE IN UPDATING THE OPINION.
For its financial advisory services provided to us, we have paid Trident
Securities fees of $60,000 to date and we will pay it an additional fee of
approximately $210,000 at the time of closing of the Merger. In addition, we
have agreed to reimburse it for up to $15,000 of reasonable out-of-pocket
expenses incurred by it on our behalf and to indemnify it against certain
liabilities, including any that may arise under the federal securities laws.
Trident Securities, directly or through McDonald Investments Inc., is a
member of all principal securities exchanges in the United States and in the
conduct of its broker-dealer activities may have from time to time purchased
securities from, and sold securities to, us and/or Bradford Bank. As a market
maker, Trident Securities may also have purchased and sold our common stock for
its own account and for the accounts of its customers.
CONDUCT OF BUSINESS IF THE MERGER IS NOT CONSUMMATED
If the Merger is not consummated, we anticipate that we will continue our
current operations. For reasons discussed under Proposal II - Approval of the
Merger - Background; Reasons for the Merger; Recommendation of the Board of
Directors," we may continue to explore strategic alternatives, including a
business combination or a sale of the Company, if the Merger with Bradford Bank
is not consummated.
REGULATORY FILINGS AND APPROVALS
Bradford Bank and we have agreed to use our reasonable best efforts to
obtain regulatory approvals required to consummate the Merger, which includes
filing of a joint application with the OTS, and have completed the applicable
regulatory filing prior to the date of this document. The Merger cannot proceed
in the absence of OTS regulatory approval. There can be no assurance that this
regulatory approval will be obtained, and, if obtained, there can be no
assurance as to the date of such approval or the absence of any litigation
challenging such approval or that such approval will be on conditions acceptable
to us and/or Bradford Bank. Under the Merger Agreement, Bradford Bank has the
right to terminate the transaction if it determines, at its discretion, that any
of the regulatory conditions imposed by the OTS as a condition of its approval
of the Merger are not acceptable. Neither Bradford Bank nor we are aware of any
material governmental approvals or actions that are required prior to the
parties' consummation of the Merger other than those described above.
TERMS OF THE MERGER
THE MERGER. The Merger Agreement provides for the acquisition of the
Company and the Association by Bradford Bank by means of a four-step process.
First, we will merge with a to-be-formed company ("Interim") created by Bradford
Bank as its second-tier subsidiary solely for the purposes of the Merger. As a
result of this merger, we will be the surviving corporation but a wholly-owned
subsidiary of another to-be-formed interim service subsidiary of Bradford Bank
("Service Subsidiary") created solely for the purposes of the Merger. At the
effective time of the merger of Interim into us, each share of common stock will
be converted into the right to receive the Merger Consideration. In addition,
each option to acquire common stock will be converted into the right to receive
the Merger Consideration, less the exercise price of the option. The second step
of this four-step process will be the liquidation of Service Subsidiary into
Bradford Bank, at which point we will become a wholly-owned subsidiary of
Bradford Bank. The third step will be the liquidation of the Company into
Bradford Bank. Finally, the Association
20
will be merged with and into Bradford Bank, with Bradford Bank being the
surviving bank. We anticipate that steps two through four will occur almost
simultaneously following the Company's merger with Interim. In addition, the
Merger Agreement contemplates that Bradford Bank may change the order of these
steps so long as such change does not adversely affect the financial and tax
consequences to the Company or its stockholders, directors, or officers,
materially delay or jeopardize receipt of any required regulatory approval, or
materially delay the consummation of the Merger.
EFFECTIVE TIME. The Merger Agreement provides that the closing of the
Merger will take place on a date no later than fifteen (15) days after
satisfaction or waiver of all conditions set forth in the Merger Agreement, or
such other date mutually agreeable to Bradford Bank and us. At such time the
following actions will be taken:
o Interim and the Company will execute and deliver Articles of Merger,
which will be filed with the Secretary of State of Delaware;
o Any required filings with respect to the liquidations contemplated by
steps two and three above will be executed, delivered and filed with
the Secretary of State of Delaware, with respect to Interim, or the
State Department of Assessments and Taxation of Maryland, with respect
to Service Subsidiary; and
o Bradford Bank and the Association will file an agreement of merger
with the OTS in order to effect the final step of the transaction, the
merger of the Association with and into Bradford Bank.
The Merger will become effective on the date and time as set forth in an
order issued by the OTS with respect to the Merger of Bradford Bank and the
Association. Such date and time is referred to herein as the "Effective Time."
CANCELLATION OF THE COMMON STOCK. If the Merger closes after the
satisfaction or waiver of all closing conditions, each outstanding share of
common stock (other than shares as to which dissenters' rights have been
asserted and perfected in accordance with Delaware law and treasury shares) will
be cancelled and extinguished in consideration for the right to receive the
Merger Consideration from Bradford Bank.
TREATMENT OF OPTIONS. At the Effective Time, each outstanding option to
purchase shares of common stock that has not been exercised prior to completion
of the Merger will be converted into the right to receive a cash payment equal
to the Merger Consideration less the exercise price per share of the option,
multiplied by the number of shares of common stock subject to the option. Any
required tax withholding will also be deducted. Also, the holder of the option
must provide an approved cancellation agreement prior to receipt of such
payment.
EXCHANGE OF CERTIFICATES. As a condition to closing of the Merger, Bradford
Bank will deliver to a duly appointed Exchange Agent an amount of cash equal to
the aggregate Merger Consideration. The Exchange Agent receiving the deposit
will act as a paying agent for the benefit of the holders of common stock in
exchange for the Merger Consideration. No later than five (5) business days
following the Effective Time, the Exchange Agent will mail to each record holder
of shares of common stock a letter of transmittal disclosing the effectiveness
of the Merger and containing instructions for exchanging each such record
holder's shares of common stock. You will be required to follow the instructions
and surrender your certificates representing your shares of common stock,
together with a properly executed letter of transmittal and any other required
documents, to the Exchange Agent. You will then be entitled to receive the
Merger Consideration for each share of common stock held. No payment will be
made for the certificates prior to the Effective Time. No interest will be
payable with respect to the payment of the Merger Consideration made to you
under the Agreement.
YOU SHOULD NOT RETURN YOUR COMMON STOCK CERTIFICATE WITH THIS PROXY
STATEMENT, AND YOU SHOULD NOT SEND YOUR STOCK CERTIFICATES TO THE EXCHANGE AGENT
UNTIL YOU RECEIVE THE LETTER OF TRANSMITTAL.
The Exchange Agent will not deliver the Merger Consideration to you until
you surrender your certificates. If the certificate has been lost, stolen or
destroyed, the Exchange Agent is not obligated to deliver the Merger
21
Consideration to you until you deliver an appropriate affidavit of loss and, if
required by Bradford Bank, an indemnity agreement and bond.
Twelve (12) months after the Effective Time, the Exchange Agent will
deliver to Bradford Bank any part of the Merger Consideration not yet paid to
our stockholders. Afterwards, the payment obligation for any certificate
representing the common stock which has not been satisfied will become the
responsibility of Bradford Bank.
REPRESENTATIONS AND WARRANTIES. In the Merger Agreement, Bradford Bank and
we have each made representations and warranties that are customary in merger
transactions, including, among others, representations and warranties
concerning:
o organization, good standing and authority;
o due authorization, execution, delivery and performance of the Merger
Agreement;
o regulatory approvals required for completion of the Merger;
o our financial statements and those of Bradford Bank;
o securities documents and regulatory applications; and
o material adverse changes.
In addition, we make additional customary representations and warranties in
the Agreement relating to, among other things:
o capital structure;
o securities filings;
o dividends;
o tax matters;
o material contracts;
o title to real property;
o insurance matters;
o legal proceedings;
o compliance with applicable laws;
o employee benefit plans;
o brokers, finders and financial advisors;
o merger-related agreements and expenses;
o environmental matters;
o loan portfolio;
o related party transactions;
o deposits;
o compliance with business combination requirements;
o receipt of fairness opinion; and
o risk management instruments.
In the Merger Agreement, Bradford Bank also makes an additional
representation and warranty that it has sufficient internal funds to pay the
Merger Consideration at the Effective Time.
CONDUCT OF BUSINESS PENDING THE MERGER. We have agreed with Bradford Bank
that until the Merger is effective, we will conduct our business in the ordinary
and usual course, consistent with past practice, and will seek to preserve
intact our business organization and goodwill, maintain good relationships with
employees, and keep in full force and effect all of our material rights. Unless
in the ordinary course of business consistent with past practice, required by
the Merger Agreement, or with the written consent of Bradford Bank, we may not,
and will not permit our subsidiaries to, among other things:
o amend or change any provisions of our charter or bylaws;
o change our capital structure;
o make changes in employees or their compensation;
22
o sell or lease all or any substantial portion of our assets or
business, whether through merger or otherwise;
o purchase all or any substantial portion of the assets or business of
any other person, firm, association, corporation or business
organization;
o enter into a purchase and assumption transaction with respect to
deposits and liabilities;
o permit the revocation or surrender of our certificate of authority to
maintain, or file an application for the relocation of, any existing
branch office, or file an application for a certificate of authority
to establish a new branch office;
o encumber assets;
o borrow money;
o change our method of accounting;
o forgive debt;
o modify loans;
o with certain exceptions, make any change to our operational policies;
o make any capital expenditures in excess of $20,000;
o purchase, acquire, sell, dispose any assets or incur any liabilities;
o make any changes to the pricing of our deposit liabilities except
under certain circumstances or in the ordinary course of business
consistent with past practice; or
o agree to do any of the foregoing.
NO SOLICITATION. The Merger Agreement provides that we shall not initiate,
solicit or encourage inquiries or proposals with respect to furnishing any
information relating to or participate in any discussions or negotiations with
any person or entity in connection with any acquisition or purchase of all or a
substantial portion of the assets of or equity interests in the Company or the
Association. The Merger Agreement does not, however, prohibit us from furnishing
information to, or entering into discussions, negotiations or an agreement with,
any person or entity that makes an unsolicited written proposal for any
transaction described above, if:
o the Board of Directors receives an opinion from an independent
financial advisor that such proposal may be superior to the Merger
from a financial point of view to our stockholders;
o the Board of Directors, after consulting with and being advised by
legal counsel, determines in good faith that such action is required
to fulfill its fiduciary obligations under the law; and
o before providing the information to or entering into discussions or
negotiations with such person or entity, we notify Bradford Bank.
AMENDMENT. The Merger Agreement may be amended at any time prior to the
Effective Time by mutual written agreement of the parties as approved by their
respective Boards of Directors. However, after you have approved the Merger
Agreement, no amendment can modify the form or change the amount of the Merger
Consideration without further stockholder approval.
TERMINATION. The Merger Agreement may be terminated any time prior to the
Effective Time:
o by mutual written consent of the parties authorized by their
respective board of directors.
o by Bradford Bank or us if:
o the Merger is not consummated by February 28, 2003, unless the
party seeking to terminate failed to perform or observe its
agreements under the Merger Agreement that caused or resulted in
the failure of the Merger;
o our stockholders fail to approve the Merger Agreement, unless the
party seeking to terminate failed to perform or observe its
agreements under the Merger Agreement that caused or resulted in
the failure of the Merger; or
o any required regulatory approval is not granted.
23
o by Bradford Bank if:
o our representations and warranties are not true and correct in
all material respects as of the time of such termination;
o we have materially breached any covenant, agreement or obligation
under the Merger Agreement and such breach has not been cured;
o it determines in its reasonable judgment that any applicable
regulatory approvals contain conditions or requirements that, in
the aggregate, would materially reduce the economic or business
benefits of the Merger to Bradford Bank;
o we receive an offer superior to Bradford Bank's offer, and the
Board of Directors has entered into an acquisition agreement with
respect to the superior proposal, terminates, fails to recommend,
withdraws, changes or modifies in any matter adverse to Bradford
Bank, its recommendation for approval of the Merger; or
o any condition which must be fulfilled before Bradford Bank is
obligated to consummate the Merger cannot be fulfilled, and
non-fulfillment is not waived by Bradford Bank.
o by us if:
o the representations and warranties of Bradford Bank are not true
and correct in all material respects as of the time of such
termination;
o Bradford Bank has materially breached any covenant, agreement or
obligation under the Merger Agreement and such breach has not
been cured;
o any condition which must be fulfilled before we are obligated to
consummate the Merger cannot be fulfilled, and non-fulfillment is
not waived by us; or
o we have received an offer superior to Bradford Bank's offer and
the Board of Directors has determined to accept the superior
proposal subject to approval by our stockholders.
EFFECT OF TERMINATION. In the event that the Merger Agreement is
terminated, the Merger Agreement will become void and have no effect except for:
o provisions relating to confidential information;
o provisions relating to Bradford Bank's payment of termination fees and
expenses resulting from the conversion of our data processing and
related electronic informational systems;
o provisions relating to a liquidated damages fee in the amount of
$550,000 payable by us to Bradford Bank following the occurrence of:
o termination of the Merger Agreement by us or Bradford Bank due to
our acceptance of a superior offer from a third party, or
o our entering into an agreement with a third party relating to any
proposal to acquire us, within seven (7) months after: (i)
termination of the Merger Agreement by Bradford Bank due to a
material breach by us of any covenant, agreement or obligation
under the Merger Agreement that is not timely cured; or (ii) the
failure of our stockholders to approve the Merger Agreement after
an alternative acquisition, merger or similar transaction is
proposed; and
o provisions relating to a liquidated damages fee in the amount of
$200,000 payable to us if Bradford Bank terminates the Merger
Agreement because it considers the applicable regulatory approval to
contain unduly burdensome conditions.
A breaching party will not be relieved or released from any liabilities or
damages for its willful or fraudulent breach of any provision of the Merger
Agreement.
24
INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS
TREATMENT OF STOCK OPTIONS AND RECOGNITION AND RETENTION PLAN AWARDS. At
the Effective Time, each outstanding option to purchase common stock will be
cancelled and extinguished, and the holders of such stock option will be
entitled to receive cash from Bradford Bank in the amount of the difference
between (a) the product of (i) the difference between $14.55 and the exercise
price per share of such stock option, multiplied by (ii) the number of shares
subject to such stock option, less (b) applicable federal and state tax
withholding obligations of the holder of such stock option. As of the Record
Date, 822,490 shares of the common stock were outstanding, and as of the Record
Date, our directors and executive officers held options to purchase a total of
168,909 shares. The exercise price of each outstanding option is $5.60 per
share.
At the Effective Time, each unearned award granted pursuant to our
Recognition and Retention Plan will be cancelled and extinguished in
consideration and exchange for (a) the right to receive a cash payment from
Bradford Bank equal to $14.55, multiplied by the number of awarded but unearned
shares of common stock awarded pursuant to the Recognition and Retention Plan;
plus (b) any accrued but undistributed dividend income associated with such
shares, less (c) applicable federal and state tax withholding obligations of
each participant. As of June 30, 2002, there were 9,951 unearned shares of
common stock awarded pursuant to the Recognition and Retention Plan, all of
which were awarded to our directors and executive officers.
Each holder of a stock option or an award under the Recognition and
Retention Plan will be required to execute a cancellation agreement in order to
receive payment for the option or award.
EMPLOYMENT AND CHANGE IN CONTROL AGREEMENTS. Bradford Bank has agreed to
honor all obligations under the employment agreement between the Association and
Mr. Moretti and the change in control agreements between the Association on the
one hand, and Mr. Robinson and Mmes. Snyder and Sheckells on the other. Under
the employment agreement and the change in control agreements, these employees
are eligible for severance payments in certain specified circumstances if the
Association undergoes a change in control, such as a merger with Bradford Bank.
The severance payments to which Mr. Moretti is entitled under his employment
agreement are described in "Proposal I - Election of Directors - Executive
Compensation."
Under Mr. Robinson's and Mmes. Snyder's and Sheckells' change in control
agreements with the Association, each of these executive officers are entitled
to receive a payment equal to such executive's highest annual base salary during
the one-year period before the change in control if (a) the executive
voluntarily terminates his or her employment for any reason within the 30-day
period beginning on the change in control event; (b) during the "protected
period", the executive terminates his or her employment for "good reason" within
90 days of the event occurring during the protected period that gives rise to
such good reason; or (c) the employer terminates the executive at any time
during the protected period other than for cause. The change in control
agreements define the "protected period" as the period beginning three months
before the change in control and ending on the later of (i) one year after the
change in control and (ii) the expiration date of the agreement (June 30, 2003).
"Good reason" means (a) a substantial reduction in the executive's
responsibility and authority, (b) a material breach of the change in control
agreement, or (c) the requirement to relocate the executive's principal office
more than 30 miles from its current location. Assuming the Merger was
consummated at June 30, 2002 and the conditions set forth in each agreement were
satisfied, Messrs. Moretti and Robinson and Mmes. Snyder and Sheckells would
receive change in control payments, respectively, of $470,000, $54,000, $47,000
and $52,000.
TREATMENT OF THE SERP. Mr. Moretti has been the sole participant in the
SERP since 1997. The terms of the SERP are summarized in "Proposal I - Election
of Directors - Executive Compensation." If Mr. Moretti exercises his rights
under the SERP after the Merger, Mr. Moretti's benefits under the SERP will be a
lump sum equivalent of $707,216, which amount shall be payable in a lump sum or
in non-annuity installments.
DIRECTOR AND OFFICER INSURANCE AND INDEMNIFICATION. Bradford Bank will
continue to maintain liability insurance for our Board of Directors and our
officers for six years after the Effective Time. Such insurance will be
comparable to that in effect for such persons prior to the Merger.
EMPLOYEE STOCK OWNERSHIP PLAN AND 401(K) PLAN. We will take all steps
necessary to terminate the employee stock ownership plan and 401(k) plan prior
to the Effective Time. All participants in both plans,
25
including executive officers, will become fully vested in their plan accounts at
the Effective Time. Our shares held in the employee stock ownership plan and the
401(k) plan will be exchanged for $14.55 per share. Any cash held in the
employee stock ownership plan after such exchange and not yet allocated to the
accounts of participants at the time of the plan termination shall be allocated
to the accounts of participants as soon as possible after the termination of the
plan and the receipt of a determination letter from the Internal Revenue
Service.
BOARD OF DIRECTORS. At the Effective Time, Bradford Bank will appoint to
its board of directors two persons who currently serve on our Board of
Directors.
CONDITIONS TO THE MERGER
Our obligation, and those of Bradford Bank, to effect the Merger are
subject to the satisfaction or waiver of the following conditions specified in
the Merger Agreement, among others:
o the receipt of corporate authorizations evidencing the approval of the
Merger Agreement and the transactions contemplated thereunder;
o the performance by the other party of its obligations under the Merger
Agreement in all material respects;
o the accuracy of the other party's representations and warranties in
all material respects;
o the receipt of all required regulatory approvals and the expiration or
termination of all notice and waiting periods;
o the absence of any order, decree or injunction of a governmental
authority which enjoins or prohibits the completion of the Merger; and
o the receipt of certain certificates.
Bradford Bank's obligation to effect the Merger also is subject to the
following conditions:
o From June 20, 2001, we shall not have been affected by any event which
has caused a material adverse effect.
Our obligations to effect the Merger also are subject to the following
conditions:
o Bradford Bank shall have obtained directors' and officers' liability
insurance and provided us with written proof of such insurance; and
o Bradford Bank shall have deposited the aggregate Merger Consideration
with the Exchange Agent.
There can be no assurance that the conditions to consummation of the Merger
will be satisfied or waived. The Merger will become effective when the Articles
of Merger are filed with the Secretary of State of the State of Delaware. It is
currently anticipated that the Merger will occur during the fourth quarter of
2002.
DISSENTERS' RIGHTS OF APPRAISAL
Under Delaware law, if you do not wish to accept the cash payment provided
for in the Merger Agreement, you have the right to dissent from the Merger and
to have an appraisal of the fair value of your shares conducted by the Delaware
Court of Chancery. Stockholders electing to exercise dissenters' rights must
strictly comply with the provisions of Section 262 of the Delaware General
Corporation Law to perfect their rights. A copy of Section 262 is attached as
Appendix D.
Section 262 requires that stockholders be notified not less than 20 days
before the Meeting that dissenters' appraisal rights will be available. A copy
of Section 262 must be included with such notice. This Proxy Statement
constitutes our notice to you of the availability of dissenters' rights in
connection with the Merger.
If you elect to demand appraisal of your shares, you must satisfy all of
the following conditions:
26
o You must deliver to us a written demand for appraisal of your shares
before the vote with respect to the Merger Agreement is taken. This
written demand for appraisal must be in addition to and separate from
any proxy or vote abstaining from or against the Merger Agreement.
Voting against or failing to vote for the Merger by itself does not
constitute a demand for appraisal within the meaning of Section 262.
o You must not vote in favor of the Merger Agreement. An abstention or
failure to vote will satisfy this requirement, but a vote in favor of
the Merger Agreement, by proxy or in person, will constitute a waiver
of your dissenters' rights in respect of the shares so voted and will
nullify any previously filed written demands for appraisal.
o You must continuously hold your shares of common stock through the
Effective Time.
If you fail to comply with all of these conditions and the Merger is
completed, you will be entitled to receive the Merger Consideration for any
shares of common stock you hold as of the Effective Time as provided for in the
Merger Agreement but you will have no dissenters' rights of appraisal for your
shares of common stock.
All demands for appraisal should be addressed to the Corporate Secretary,
Wyman Park Bancorporation, Inc., 11 West Ridgely Road, Lutherville, Maryland
21093, before the vote on the Merger Agreement is taken at the Meeting, and
should be executed by, or on behalf of, the record holder of the shares of
common stock. The demand must reasonably inform us of the identity of the
stockholder and the intention of the stockholder to demand appraisal of his or
her shares.
To be effective, a demand for appraisal by a holder of common stock must be
made by or in the name of such registered stockholder, fully and correctly, as
the stockholder's name appears on his or her stock certificate(s) and cannot be
made by the beneficial owner if he or she does not also hold the shares of
record. The beneficial holder must, in such cases, have the registered owner
submit the required demand in respect of such shares.
If shares are owned of record in a fiduciary capacity, such as by a
trustee, guardian or custodian, execution of a demand for appraisal should be
made in such capacity. If the shares are owned of record by more than one
person, as in a joint tenancy or tenancy in common, the demand should be
executed by or for all joint owners. An authorized agent, including one or two
or more joint owners, may execute the demand for appraisal for a stockholder of
record. However, the agent must identify the record owner or owners and
expressly disclose the fact that, in executing the demand, he or she is acting
as agent for the record owner. A record owner, such as a broker, who holds
shares as a nominee for others, may exercise his or her right of appraisal with
respect to the shares held for one or more beneficial owners, while not
exercising this right for other beneficial owners. In such case, the written
demand should state the number of shares as to which appraisal is sought. Where
no number of shares is expressly mentioned, the demand will be presumed to cover
all shares held in the name of such record owner.
If you hold your shares of common stock in a brokerage account or in other
nominee form and you wish to exercise appraisal rights, you should consult with
your broker or such other nominee to determine the appropriate procedures for
the making of a demand for appraisal by such nominee.
Within ten days after the Effective Time, Bradford Bank must give written
notice that the Merger has become effective to each Company stockholder who has
properly filed a written demand for appraisal and who did not vote in favor of
the Merger Agreement. Within 120 days after the Effective Time, either Bradford
Bank or any stockholder who has complied with the requirements of Section 262
may file a petition in the Delaware Court of Chancery demanding a determination
of the fair value of the shares held by all stockholders entitled to appraisal.
A dissenting stockholder may request from Bradford Bank during this 120-day
period a statement setting forth (a) the aggregate number of shares not voted in
favor of the Merger and with respect to which demands for appraisal have been
received, and (b) the aggregate number of holders of such shares. We have been
informed that Bradford Bank does not presently intend to file such a petition in
the event there are dissenting stockholders and has no obligation to do so.
Accordingly, your failure to timely file a petition could nullify your demand
for appraisal.
27
At any time within 60 days after the Effective Time any stockholder who has
demanded an appraisal has the right to withdraw the demand and to accept the
cash payment specified by the Merger Agreement for his or her shares of common
stock. If a petition for appraisal is duly filed by a stockholder and a copy of
the petition is delivered to Bradford Bank, Bradford Bank will then be obligated
within 20 days after receiving service of a copy of the petition to provide the
Chancery Court with a duly verified list containing the names and addresses of
all stockholders who have demanded an appraisal of their shares and who have not
reached an agreement with Bradford Bank as to the value of their shares. After
notice to dissenting stockholders, the Chancery Court is empowered to conduct a
hearing upon the petition, to determine those stockholders who have complied
with Section 262 and who have become entitled to the appraisal rights provided
thereby. The Chancery Court may require the stockholders who demanded payment
for their shares to submit their stock certificates to the Register in Chancery
for notation thereon of the pendency of the appraisal proceedings, and, if any
stockholder fails to comply with such directions, the court may dismiss the
proceedings as to such stockholder.
After determination of the stockholders entitled to appraisal of their
shares of common stock, the Chancery Court will appraise the shares, determining
their fair value exclusive of any element of value arising from the
accomplishment or expectation of the Merger, together with a fair rate of
interest, if any. When the value is determined, the Chancery Court will direct
the payment of such value, with interest thereon accrued during the pendency of
the proceeding if the Chancery Court so determines, to the stockholders entitled
to receive the same, upon surrender by such holders of the certificates
representing such shares.
In determining fair value, the Chancery Court is required to take into
account all relevant factors. Your should be aware that the fair value of the
shares as determined under Section 262 could be more, the same or less than the
value that your are entitled to receive pursuant to the Merger Agreement.
Costs of the appraisal proceeding may be imposed upon Bradford Bank and the
stockholders participating in the appraisal proceeding by the Chancery Court as
the court deems equitable in the circumstances. Upon the application of a
stockholder, the Chancery Court may order all or a potion of the expenses
incurred by any stockholder in connection with the appraisal proceeding,
including, without limitation, reasonable attorneys' fees and the fees and
expenses of experts, to be charged pro rata against the value of all shares
entitled to appraisal.
Any stockholder who demands appraisal rights will not, after the Effective
Time, be entitled to vote shares subject to such demand for any purpose or to
receive payments of dividends or any other distribution with respect to such
shares, other than with respect to payment as of a record date prior to the
Effective Time; however, if no petition for appraisal is filed within 120 days
after the Effective Time, or if such stockholder delivers a written withdrawal
of his or her demand for appraisal and an acceptance of the Merger within 60
days after the Effective Time, then the right of such stockholder to appraisal
will cease and such stockholder will be entitled to receive the Merger
Consideration for shares of his or her common stock pursuant to the Merger
Agreement. Any withdrawal of a demand for appraisal made more than 60 days after
the effective date of the Merger may only be made with the written approval of
the surviving corporation.
In view of the complexity of Section 262, stockholders who may wish to
dissent from the Merger and pursue appraisal rights should consult their legal
advisors.
The foregoing is intended as a brief summary of the material provisions of
the Delaware statutory procedures required to dissent from the Merger and
perfect a stockholder's dissenters' rights. This summary, however, is not a
complete statement of all applicable requirements and is qualified in its
entirety by reference to the full text of Section 262. If you wish to consider
exercising your dissenters' rights you should carefully review the text of
Section 262 contained in Appendix D because failure to timely and properly
comply with the requirements of Section 262 will result in the loss of your
dissenters' rights under Delaware law.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The exchange of common stock for cash, whether pursuant to the terms of the
Merger Agreement or pursuant to the exercise of dissenter's rights, will be a
taxable transaction for Federal income tax purposes under the Internal Revenue
Code, and may also be a taxable transaction under state, local and other tax
laws. You will recognize gain or loss equal to the difference between the amount
of cash received by you and your tax basis in the
28
common stock exchanged in return. Gain or loss must be determined separately for
each block of common stock surrendered pursuant to the Merger. For purposes of
Federal tax law, a block consists of shares of common stock acquired by the
stockholder at the same time and price.
Gain or loss recognized by you exchanging your common stock pursuant to the
Merger Agreement or pursuant to the exercise of dissenters' rights will be
capital gain or loss if such common stock is a capital asset in your hands. If
the common stock has been held for more than one year, the gain or loss will be
long-term.
Neither Bradford Bank nor we have requested or will request a ruling from
the Internal Revenue Service as to any of the tax effects to our stockholders of
the Merger, and no opinion of counsel has been or will be rendered to you with
respect to any of the tax effects of the Merger to you.
The federal income tax discussion set forth above is based upon current law
and is intended for general information only. You are urged to consult your tax
advisor concerning the specific tax consequences of the Merger to you, including
the applicability and effect of state, local or other tax laws and of any
proposed changes in those tax laws and the Internal Revenue Code.
CERTAIN RELATED AGREEMENTS
SUPPORT AGREEMENT. As an inducement for Bradford Bank to enter into the
Merger Agreement, our executive officers and directors entered into a Support
Agreement with Bradford Bank, a copy of which is attached as an exhibit to the
Merger Agreement. Under the Support Agreement, each of the directors and
executive officers who are parties to the Support Agreement has agreed, among
other things:
o to vote his or her shares for the Merger;
o to promptly advise Bradford Bank of any inquiry or proposal of which
the director or officer has knowledge;
o not to transfer ownership or control of his or her shares that would
prevent voting of the shares for the Merger; and
o subject to any fiduciary obligations as directors of the Company, not
to solicit other offers for the sale of the Company or participate in
discussions or negotiations regarding such sale.
The terms of the Support Agreement expire upon the termination of the
Merger Agreement. As of the Record Date, the directors and officers held 148,042
shares, representing 18% of our voting power, and options to purchase an
additional 119,228 shares thereby increasing their voting power to 28.5%.
WHERE YOU CAN FIND MORE INFORMATION
As a public company, we are obligated to file annual, quarterly and current
reports, proxy statements and other information with the Securities and Exchange
Commission ("SEC"). You may read and copy any reports, statements or other
information that we file with the SEC at the SEC's public reference rooms
located at 450 Fifth Street, N.W., Washington, D.C. 20549 or at the SEC's other
public reference rooms in New York, New York or Chicago, Illinois. Please call
the SEC at 1-800-SEC-0330 for further information on the public reference rooms.
Our SEC filings are also available to the public at the website maintained by
the SEC at http://www.sec.gov.
If you would like to request any documents from us, please do so in writing
or by telephone by September 9, 2002 to receive them before the Meeting at the
following address and telephone number:
Wyman Park Bancorporation, Inc.
11 West Ridgely Road
Lutherville, Maryland 21093
(410) 252-6450
29
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT TO VOTE
YOUR SHARES AT THE MEETING. NEITHER BRADFORD BANK NOR WE HAVE AUTHORIZED ANYONE
TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS
DOCUMENT. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS DOCUMENT
IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE OF THIS DOCUMENT, AND THE MAILING
OF THIS DOCUMENT TO YOU SHALL NOT CREATE ANY IMPLICATION TO THE CONTRARY.
INDEPENDENT ACCOUNTANTS
The Board of Directors appointed Anderson Associates, LLP, independent
accountants, to be our auditors for the fiscal year ended June 30, 2002.
Representatives of Anderson Associates, LLP are expected to attend the Meeting
to respond to appropriate questions and to make a statement if they so desire.
AUDIT FEES
During the year ended June 30, 2002, we incurred the following principal
independent auditor fees:
Audit Fees(a): $25,760
Financial Information Systems Design and Implementation Fees: -0-
All Other Fees: 5,100(b)
- --------------------
(a) Includes fees related to annual report on Form 10-KSB and quarterly reports
on Form 10-QSB.
(b) The audit committee has considered whether the provision of these services
is compatible with maintaining the principal accountant's independence.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our officers
and directors, and persons who own more than 10% of a registered class of our
equity securities, to file reports of ownership and changes in ownership with
the SEC. Based solely on its review of copies of such reports received by it, or
written representation from certain reporting persons that no annual report of
change in beneficial ownership is required, the Company believes that, during
the year ended June 30, 2002, all such filing requirements were satisfied.
STOCKHOLDER PROPOSALS
If the Merger is consummated, there will be no stockholders of the Company
and no future meetings of the stockholders.
However, if the Merger is not consummated, the stockholders will continue
to be entitled to attend and participate in stockholder meetings. In such an
event, in order to be eligible for inclusion in our proxy materials for the next
annual meeting of stockholders, any stockholder proposal to take action at such
meeting must be received at our executive office located at 11 West Ridgely
Road, Lutherville, Maryland 21093, no later than May 19, 2003. Any such proposal
shall be subject to the requirements of the proxy rules adopted under the
Securities Exchange Act of 1934. Otherwise, any stockholder proposal to take
action at such meeting must be received at our executive office, at 11 West
Ridgely Road, Lutherville, Maryland 21093 on or before September 15, 2003 (30
days prior to next year's anticipated annual meeting date).
In the event that the date of next year's annual meeting changes, a
stockholder proposal must be received not later than 30 days prior to the new
date of such annual meeting; provided, however, that in the event that less than
40 days notice of the new date of annual meeting is given or made to
stockholders, notice of a proposal by a stockholder to be timely must be
received not later than the close of business on the tenth day following the day
on which notice of the new date of the annual meeting was mailed. All
stockholder proposals must also comply with our bylaws and with Delaware law.
30
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
We will bear the cost of solicitation of proxies. We will also reimburse
brokerage firms and other custodians, nominees and fiduciaries for reasonable
expenses incurred by them in sending proxy materials to the beneficial owners of
common stock. In addition to solicitation by mail, our directors, officers and
regular employees may solicit proxies personally or by telegraph or telephone
without additional compensation.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Charmaine Snyder
Charmaine Snyder
Corporate Secretary
Lutherville, Maryland
September 16, 2002
31
APPENDIX A
AUDIT COMMITTEE REPORT
The Board of Directors of the Company has appointed an Audit Committee,
consisting of three directors, which assists the Board of Directors in
fulfilling its responsibility for oversight of the quality and integrity of the
accounting, auditing and financial reporting practices of the Company.
In discharging its oversight responsibility as to the audit process, the
Audit Committee obtained from the independent auditors a formal written
statement describing all relationships between the auditors and the Company that
might bear on the auditors' independence consistent with Independence Standards
Board Standard No. 1, Independence Discussions with Audit Committee, as amended,
and has discussed with the auditors any relationships that may impact their
objectivity and independence and satisfied itself as to the auditors'
independence. The Audit Committee also discussed with management, the internal
auditors and the independent auditors the quality and adequacy of the Company's
internal controls and the internal audit function's organization,
responsibilities, budget and staffing. The Audit Committee reviewed with both
the independent and the internal auditors their audit plans, audit scope, and
identification of audit risks.
The Audit Committee reviewed and discussed with the independent auditors
all matters required by generally accepted auditing standards, including those
matters described in Statement on Auditing Standards No. 61, as amended,
Communication with Audit Committee, with and without management present,
discussed and reviewed the results of the independent auditors' examination of
the financial statements.
The Audit Committee reviewed and discussed the audited financial statements
of the Company as of and for the fiscal year ended June 30, 2002, with
management and the independent auditors. Management has the responsibility for
the preparation of the Company's financial statements and the independent
auditors have the responsibility for the examination of those statements and
expressing an opinion on the conformity of those audited financial statements
with generally accounting principles. The Audit Committee held two meetings
during fiscal year 2002.
Based on the above-mentioned review and discussions with management and the
independent auditors, the Audit Committee recommended to the Board of Directors
that the Company's audited financial statements be included in the Company's
Annual Report on Form 10-KSB for the fiscal year ended June 30, 2002, for filing
with the Securities and Exchange Commission.
Jay H. Salkin, Chairman
September 16, 2002 Allan B. Heaver, Member
Gilbert D. Marsiglia, Member
32
APPENDIX B
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
BRADFORD BANK
AND
WYMAN PARK BANCORPORATION, INC.
AND
WYMAN PARK FEDERAL SAVINGS & LOAN ASSOCIATION
DATED AS OF JULY 9, 2002
AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
RECITALS ...........................................................1
ARTICLE I CERTAIN DEFINITIONS.............................................2
Section 1.01 Definitions................................................2
ARTICLE II THE MERGER AND EXCHANGE OF SHARES............................7
Section 2.01 Effects of Merger; Surviving Corporation...................7
Section 2.02 Conversion of Shares.......................................8
Section 2.03 Exchange Procedures........................................8
Section 2.04 Stock Options.............................................10
Section 2.05 RRP Awards................................................10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND WYMAN PARK.....10
Section 3.01 Organization..............................................11
Section 3.02 Capitalization............................................11
Section 3.03 Registered Stock..........................................12
Section 3.04 Dividends.................................................12
Section 3.05 Authority; No Violation...................................12
Section 3.06 Consents..................................................13
Section 3.07 Financial Statements......................................14
Section 3.08 Taxes.....................................................15
Section 3.09 No Material Adverse Effect................................15
Section 3.10 Contracts.................................................15
Section 3.11 Ownership of Property; Insurance Coverage.................17
Section 3.12 Legal Proceedings.........................................18
Section 3.13 Compliance With Applicable Law............................18
Section 3.14 ERISA/Employee Compensation...............................19
Section 3.15 Brokers, Finders and Financial Advisors...................22
Section 3.16 Other Transaction-Related Agreements and Expenses.........22
Section 3.17 Environmental Matters.....................................23
Section 3.18 Loan Portfolio............................................24
Section 3.19 Information to be Supplied................................25
Section 3.20 Related Party Transactions................................26
Section 3.21 Schedule of Termination Benefits..........................26
Section 3.22 Deposits..................................................26
Section 3.23 Business Combination......................................26
Section 3.24 Fairness Opinion..........................................27
Section 3.25 Risk Management Instruments...............................27
Section 3.26 Disclosure................................................27
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BRADFORD..................27
Section 4.01 Organization..............................................28
Section 4.02 Authority; No Violation...................................28
Section 4.03 Consents..................................................29
Section 4.04 Financing.................................................29
Section 4.05 Bradford Financials.......................................30
Section 4.06 Information to be Supplied................................30
Section 4.07 Disclosure................................................30
ARTICLE V COVENANTS OF THE PARTIES....................................31
Section 5.01 Conduct of Wyman Park's Business..........................31
Section 5.02 Access; Confidentiality...................................34
Section 5.03 Regulatory Matters and Consents...........................35
Section 5.04 Taking of Necessary Action................................36
Section 5.05 Certain Agreements........................................37
Section 5.06 No Other Bids and Related Matters.........................38
Section 5.07 Duty to Advise; Duty to Update Disclosure Schedules.......39
Section 5.08 Conduct of Bradford's Business............................40
Section 5.09 Board and Committee Minutes...............................40
Section 5.10 Undertakings by the Parties...............................40
Section 5.11 Employee and Termination Benefits.........................42
Section 5.12 Directors.................................................46
Section 5.13 Duty to Advise............................................46
Section 5.14 Reduction of Merger Consideration.........................46
ARTICLE VI CONDITIONS..................................................47
Section 6.01 Conditions to Parent's and Wyman Park's Obligations
under this Agreement..................................47
Section 6.02 Conditions to Bradford's Obligations under this Agreement.48
ARTICLE VII TERMINATION, WAIVER AND AMENDMENT...........................49
Section 7.01 Termination...............................................49
Section 7.02. Effect of Termination.....................................50
ARTICLE VIII MISCELLANEOUS.............................................51
Section 8.01 Expenses..................................................51
Section 8.02 Survival of Representations and Warranties................52
Section 8.03 Amendment, Extension and Waiver...........................52
Section 8.04 Entire Agreement..........................................52
Section 8.05 No Assignment.............................................53
Section 8.06 Notices...................................................53
Section 8.07 Captions..................................................54
Section 8.08 Counterparts..............................................54
Section 8.09 Severability..............................................54
Section 8.10 Governing Law.............................................54
ii
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of July 9,
2002, is by and among Bradford Bank, a federally-chartered savings bank
("Bradford"), and Wyman Park Bancorporation, Inc. ("Parent"), a Delaware
corporation, and Wyman Park Federal Savings & Loan Association, a
federally-chartered savings association ("Wyman Park"). Each of Bradford, Parent
and Wyman Park, is sometimes individually referred to herein as a "party," and
Bradford, Parent and Wyman Park are sometimes collectively referred to herein as
the "parties."
RECITALS
WHEREAS, Bradford is a federally-chartered savings bank organized under the
laws of the United States, with principal offices in Baltimore, Maryland.
WHEREAS, Parent, a registered savings and loan holding company organized
under the laws of the State of Delaware, with principal offices in Lutherville,
Maryland, owns all of the issued and outstanding capital stock of Wyman Park, a
federally-chartered savings association organized under the laws of the United
States, with principal offices in Lutherville, Maryland.
WHEREAS, the Boards of Directors of the respective parties hereto deem it
advisable and in the best interests of the respective companies and, with
respect to Parent and Wyman Park, their stockholders, and, with respect to
Bradford, its members, to consummate the business combination transaction
contemplated herein in which Bradford shall incorporate a to-be-formed company
("Interim"), which shall be merged with and into Parent, with Parent surviving
the merger, and in connection therewith, each share of Parent Common Stock
outstanding immediately prior to the Closing Date shall be
canceled in exchange for the right to receive the cash payments specified
herein, (the "Merger");
WHEREAS, as Bradford's purpose in effecting the Merger is the acquisition
of Wyman Park, the Merger shall be followed immediately by (i) the liquidation
of a to-be-formed Delaware-chartered interim service subsidiary of Bradford
("Service Subsidiary"), of which Parent will be a wholly-owned subsidiary
following the Merger, into Bradford, (ii) the liquidation of Parent into
Bradford, and (iii) the merger of Wyman Park with and into Bradford, with
Bradford surviving the merger (the "Bank Merger"), with the result that Bradford
will acquire all the assets and liabilities of Wyman Park, and Wyman Park shall
cease to exist (the Merger and the Bank Merger are sometimes collectively
referred to as the "Mergers"); and
WHEREAS, the parties hereto desire to provide for certain undertakings,
conditions, representations, warranties and covenants in connection with the
Mergers, and the other transactions contemplated by this Agreement
(collectively, the "Merger Documents").
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained and intending to be
legally bound hereby, the parties hereto do hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01 DEFINITIONS.
Except as otherwise provided herein, as used in this Agreement, the
following terms shall have the indicated meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
2
"Affiliate" means any Person who directly, or indirectly, through one or
more intermediaries, controls, or is controlled by, or is under common control
with, such Person and, without limiting the generality of the foregoing,
includes any executive officer or director of such Person and any Affiliate of
such executive officer or director.
"Agreement" means this agreement, and any amendment or supplement hereto,
which constitutes a "plan of merger" between Bradford, Service Subsidiary,
Interim, Parent and Wyman Park.
"Applications" means the applications for regulatory approval that are
required by the transactions contemplated hereby.
"Bank Merger" means the merger of Wyman Park with and into Bradford, with
Bradford as the surviving institution, and shall include (i) the liquidation of
Service Subsidiary into Bradford and (ii) the liquidation of Parent, as the
surviving corporation of the Merger, into Bradford.
"BIF" means the Bank Insurance Fund, as administered by the FDIC.
"Bradford Employee Plan" means all pension, retirement, group insurance,
and other tax-qualified employee benefit plan and arrangements, including, but
not limited to, "employee benefit plans," as defined in Section 3(3) of ERISA,
incentive and welfare policies, plans and arrangements with respect to employees
of Bradford.
"Bradford Financials" means (i) the audited financial statements of
Bradford as of December 31, 1999, 2000 and 2001 and for the three years ended
December 31, 1999, 2000 and 2001, including the notes thereto, and (ii) the
unaudited interim financial statements of Bradford as of each calendar quarter
thereafter.
"Bradford Regulatory Reports" means the Thrift Financial Reports of
Bradford and accompanying schedules, as filed with the OTS, for each calendar
quarter beginning with the quarter ended March 31, 2001, through the Closing
Date.
"Bradford Subsidiary" means any corporation, 50% or more of the capital
stock of which is owned, either directly or indirectly, by Bradford, except any
corporation the stock of which is held as security by Bradford in the ordinary
course of its lending activities.
"Closing Date" means the date determined by Bradford and Parent not later
than fifteen (15) days after all the conditions precedent pursuant to this
Agreement have been fulfilled or waived (including the expiration of any
applicable waiting period), or such other date as to which Bradford and Parent
shall mutually agree.
"Code" means the Internal Revenue Code of 1986, as amended.
"Compensation and Benefit Plans" has the meaning given to such term in
Section 3.14(a).
3
"Disclosure Schedules" means the Disclosure Schedules delivered by Parent
and Wyman Park to Bradford pursuant to Article III of this Agreement.
"DOL" means the U.S. Department of Labor.
"Embezzlement" shall mean the embezzlement as disclosed in Disclosure
Schedule 3.11(c).
"Environmental Law" means any Federal or state law, statute, rule,
regulation, code, order, judgment, decree, injunction, common law or agreement
with any Federal or state governmental authority relating to (i) the protection,
preservation or restoration of the environment (including air, water vapor,
surface water, groundwater, drinking water supply, surface land, subsurface
land, plant and animal life or any other natural resource), (ii) human health or
safety, or (iii) exposure to, or the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production, release
or disposal of, Hazardous Material, in each case as amended and now in effect.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESOP" means the Parent Employee Stock Ownership Plan.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated from time to time thereunder.
"Exchange Agent" means the entity selected by Bradford to perform the
functions described in Section 2.03 of this Agreement.
"FDIA" means the Federal Deposit Insurance Act, as amended.
"FDIC" means the Federal Deposit Insurance Corporation.
"FHLB of Atlanta" means the Federal Home Loan Bank of Atlanta.
"FRB" means the Board of Governors of the Federal Reserve System.
"GAAP" means generally accepted accounting principles as in effect at the
relevant date and consistently applied.
"GUST" means the Uruguay Round Agreements Act, the Uniformed Services
Employment and Reemployment Rights Act of 1994, the Small Business Job
Protection Act of 1996, the Taxpayer Relief Act of 1997, the Internal Revenue
Service Restructuring and Reform Act of 1998 and the Community Renewal Tax
Relief Act of 2000, pertaining to employee benefit plans that are intended to
qualify under Section 401(a) of the Code.
"Hazardous Material" means any substance (whether solid, liquid or gas)
which is or could be detrimental to human health or safety or to the
environment, currently or
4
hereafter listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, under any Environmental Law,
whether by type or by quantity, including any substance containing any such
substance as a component. Hazardous Material includes, without limitation, any
toxic waste, pollutant, contaminant, hazardous substance, toxic substance,
hazardous waste, special waste, industrial substance, oil or petroleum, or any
derivative or by-product thereof, radon, radioactive material, asbestos,
asbestos-containing material, urea formaldehyde foam insulation, lead and
polychlorinated biphenyl.
"HOLA" means the Home Owners' Loan Act, as amended, 12 U.S.C. ss.ss. 1464
et al.
"Interim" means the to-be-formed subsidiary of Bradford that will be merged
with and into Parent.
"IRS" means the Internal Revenue Service.
"Knowledge" as used with respect to a Person (including references to such
Person being aware of a particular matter) means those facts that are known by
the executive officers and directors of such Person, and includes, without
limitation, any facts, matters or circumstances set forth in any written notice
from a Regulatory Authority or any other material written notice received by
that Person. References to the "Knowledge" of Parent includes the "Knowledge" of
Wyman Park.
"Loan" includes loan participations.
"Loan Property" shall have the meaning given to such term in Section
3.17(b) of this Agreement.
"Material Adverse Effect" shall mean, with respect to Bradford, Parent or
Wyman Park, any adverse effect on its assets, financial condition or results of
operations which is material to its assets, financial condition or results of
operations, except for any material adverse effect caused by (i) any change in
the market value of the assets of Bradford, Parent or Wyman Park resulting from
a change in interest rates generally, (ii) any individual or combination of
changes occurring after the date hereof in any Federal or state law, rule or
regulation or in GAAP, which change(s) or affect(s) financial institutions
generally, (iii) any action taken by Parent, Wyman Park or any other Parent
Subsidiary at the request of Bradford, (iv) expenses incurred to complete the
transaction contemplated by this Agreement; or (v) an increase by the FDIC,
pursuant to Section 327.9 of the FDIC Regulations (12 CFR ss.327.9), in the BIF
or SAIF Assessment Schedule.
"Merger" means the merger of Interim with and into Parent, with Parent as
the surviving entity.
"OTS" means the Office of Thrift Supervision.
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"Parent Common Stock" has the meaning given to that term in Section 3.02(a)
of this Agreement.
"Parent Financials" means (i) the audited consolidated financial statements
of Parent as of June 30, 1999, 2000 and 2001 and for the three years ended June
30, 1999, 2000, 2001, including the notes thereto, and (ii) the unaudited
interim consolidated financial statements of Parent as of each calendar quarter
thereafter included in Securities Documents filed by Parent.
"Parent Regulatory Reports" means the Thrift Financial Reports of Wyman
Park and accompanying schedules, as filed with the OTS, for each calendar
quarter beginning with the quarter ended March 31, 2001, through the Closing
Date, and all Annual, Quarterly and Current Reports filed on Form H(b)-11 with
the OTS by Parent from March 31, 2001 through the Closing Date.
"Parent Subsidiary" means any corporation, 50% or more of the capital stock
of which is owned, either directly or indirectly, by Parent, including Wyman
Park, except any corporation the stock of which is held as security by Parent or
Wyman Park in the ordinary course of its lending activities.
"Participation Facility" shall have the meaning given to such term in
Section 3.17(b) of this Agreement.
"Person" means any individual, corporation, partnership, joint venture,
association, trust or "group" (as that term is defined under the Exchange Act).
"Proxy Statement" means the proxy statement, together with any supplements
thereto, to be transmitted to holders of Parent Common Stock in connection with
the transactions contemplated by this Agreement.
"Regulatory Agreement" has the meaning given to that term in Section 3.13
of this Agreement.
"Regulatory Authority" means any agency or department of any federal or
state government, including without limitation the OTS, the FDIC, the FRB, the
SEC or the respective staffs thereof.
"Rights" means warrants, options, rights, convertible securities and other
capital stock equivalents that obligate an entity to issue its securities.
"SAIF" means the Savings Association Insurance Fund, as administered by the
FDIC.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated from time to time thereunder.
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"Securities Documents" means all registration statements, schedules,
statements, forms, reports, proxy material, and other documents required to be
filed under the Securities Laws.
"Securities Laws" means the Securities Act and the Exchange Act and the
rules and regulations promulgated from time to time thereunder.
"Subsidiary" means any corporation, 50% or more of the capital stock of
which is owned, either directly or indirectly, by another entity, except any
corporation the stock of which is held as security by either Bradford, Parent or
Wyman Park, as the case may be, in the ordinary course of its lending
activities.
"Superior Proposal" has the meaning given to such term in Section 5.06 of
this Agreement.
"Wyman Park 401(k) Plan" means the Wyman Park Federal Savings & Loan
Employees Savings & Profit Sharing Plan and Trust.
ARTICLE II
THE MERGER AND EXCHANGE OF SHARES
SECTION 2.01 EFFECTS OF MERGER; SURVIVING CORPORATION.
(a) (i) On the Closing Date, Interim shall merge with and into Parent;
the separate existence of Interim shall cease; Parent shall be the surviving
corporation in the Merger (the "Surviving Corporation") and a wholly-owned
subsidiary of Service Subsidiary; and all of the property (real, personal and
mixed), rights, powers and duties and obligations of Interim shall be taken and
deemed to be transferred to and vested in Parent, as the Surviving Corporation
in the Merger, without further act or deed; all in accordance with Delaware law.
(ii) On the Closing Date, the Charter of the Surviving Corporation
shall continue as in effect immediately prior to the Closing Date, and the
Bylaws of the Surviving Corporation shall continue as in effect immediately
prior to the Closing Date, until thereafter altered, amended or repealed in
accordance with applicable law.
(iii) On the Closing Date, the directors of Interim duly elected and
holding office immediately prior to the Closing Date shall be the directors of
the Surviving Corporation in the Merger, each to hold office until his or her
successor is elected and qualified or otherwise in accordance with the Charter
and Bylaws of the Surviving Corporation.
(iv) On the Closing Date, the officers of Interim duly elected and
holding office immediately prior to the Closing Date shall be the officers of
the Surviving Corporation in the Merger, each to hold office until his or her
successor is elected and
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qualified or otherwise in accordance with the Charter and the Bylaws of the
Surviving Corporation.
(b) Notwithstanding any provision of this Agreement to the contrary,
Bradford may elect, subject to the filing of all necessary applications and the
receipt of all required regulatory approvals, to modify the structure of the
transactions contemplated hereby, and the parties shall enter into such
alternative transactions, so long as (i) there are no adverse financial or tax
consequences to Parent or the stockholders, directors or officers of Parent as a
result of such modification, (ii) the Merger Consideration is not thereby
changed in kind or reduced in amount because of such modification, (iii) such
modification will not be likely to materially delay or jeopardize receipt of any
required regulatory approvals, and (iv) such modification will not be likely to
materially delay the Closing Date that would otherwise apply.
SECTION 2.02 CONVERSION OF SHARES.
(i) Each outstanding share of Parent Common Stock issued and
outstanding at the Closing Date, except as provided in clauses (ii) of this
Section, shall cease to be outstanding, shall cease to exist and shall be
converted into the right to receive $14.55 in cash (subject to appropriate
adjustment pursuant to Section 5.14 hereof) (the "Merger Consideration").
(ii) Any shares of Parent Common Stock which are owned or held by
either party hereto or any of their respective Subsidiaries (other than in a
fiduciary capacity or in connection with legally binding commitments or debts
contracted prior to the Closing Date, including obligations under the Parent
Stock Option Plan, which obligations under the Parent Stock Option Plan will be
treated as provided in Section 2.04 below) at the Closing Date shall cease to
exist, the certificates for such shares shall as promptly as practicable be
canceled, such shares shall not be converted into the Merger Consideration, and
no cash shall be issued or exchanged therefor.
(iii) The holders of certificates representing shares of Parent
Common Stock as of the Closing Date (any such certificate being hereinafter
referred to as a "Certificate") shall cease to have any rights as stockholders
of Parent, except such rights, if any, as they may have pursuant to applicable
law.
SECTION 2.03 EXCHANGE PROCEDURES.
(a) As promptly as practicable after the Closing Date (but in no event
later than five (5) business days after the Closing Date), the Exchange Agent
shall mail to each holder of record of an outstanding share Certificate or
Certificates a Letter of Transmittal containing instructions for the surrender
of the Certificate or Certificates held by such holder for payment therefor.
Upon surrender of the Certificate or Certificates to the Exchange Agent in
accordance with the instructions set forth in the Letter of Transmittal, such
holder shall promptly receive (but in no event later than five (5) business days
after such surrender) in exchange therefor the Merger Consideration, without
interest thereon.
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Approval of this Agreement by the stockholders of Parent shall constitute
authorization for Bradford to designate and appoint such Exchange Agent who
shall be reasonably acceptable to Parent. Neither Bradford nor the Exchange
Agent shall be obligated to deliver the Merger Consideration to a former
stockholder of Parent until such former stockholder surrenders his Certificate
or Certificates or, in lieu thereof, any such appropriate affidavit of loss and
indemnity agreement and bond as may be reasonably required by Bradford.
(b) If payment of the Merger Consideration is to be made to a person other
than the person in whose name a Certificate surrendered in exchange therefor is
registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed (or accompanied by an appropriate
instrument of transfer) and otherwise in proper form for transfer, and that the
person requesting such payment shall pay any transfer or other taxes required by
reason for the payment to a person other than the registered holder of the
Certificate surrendered, or required for any other reason, or shall establish to
the satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(c) On or prior to the Closing Date, Bradford shall deposit or cause to be
deposited, in trust with the Exchange Agent, an amount of cash equal to the
aggregate Merger Consideration that Parent's stockholders shall be entitled to
receive on the Closing Date pursuant to Section 2.02 hereof and such amounts
payable by Bradford under Sections 2.04 and 2.05 herein.
(d) The payment of the Merger Consideration upon the conversion of Parent
Common Stock in accordance with the above terms and conditions shall be deemed
to have been issued and paid in full satisfaction of all rights pertaining to
such Parent Common Stock.
(e) Promptly following the date which is twelve (12) months after the
Closing Date, the Exchange Agent shall deliver to Bradford all cash,
certificates and other documents in its possession relating to the transactions
described in this Agreement, and the Exchange Agent's duties shall terminate.
Thereafter, each holder of a Certificate formerly representing shares of Parent
Common Stock may surrender such Certificate to Bradford and (subject to
applicable abandoned property, escheat and similar laws) receive in
consideration therefor the Merger Consideration multiplied by the number of
shares of Parent Common Stock formerly represented by such Certificate, without
any interest thereon.
(f) After the close of business on the Closing Date, there shall be no
transfers on the stock transfer books of Parent of the shares of Parent Common
Stock that are outstanding immediately prior to the Closing Date, and the stock
transfer books of Parent shall be closed with respect to such shares. If, after
the Closing Date, Certificates representing such shares are presented to the
Exchange Agent for transfer, they shall be canceled and exchanged for the Merger
Consideration as provided in this Article II.
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(g) In the event any Certificate for Parent Common Stock shall have been
lost, stolen or destroyed, the Exchange Agent shall deliver in exchange for such
lost, stolen or destroyed Certificate, upon the making of an affidavit of the
fact by the holder thereof, the cash to be paid in the Merger as provided for
herein; provided, however, that Bradford may, in its sole discretion and as a
condition precedent to the delivery thereof, require the owner of such lost,
stolen or destroyed certificate to deliver a bond in such reasonable sum as
Bradford may require as indemnity against any claim that may be made against
Parent, Bradford or any other party with respect to the Certificate alleged to
have been lost, stolen or destroyed.
SECTION 2.04 STOCK OPTIONS.
At the Closing Date, each option granted by Parent (a "Parent Option") to
purchase shares of Parent Common Stock issued and outstanding pursuant to the
Parent 1999 Stock Option and Incentive Plan (the "Parent Stock Option Plan"),
whether or not such option is otherwise exercisable on the Closing Date, shall,
by reason of the Merger, cease to be outstanding and each holder of a Parent
Option shall receive from Parent (or if requested by Bradford, from Bradford),
at the Closing Date, cash in an amount equal to (i) the difference (if a
positive number) between (A) $14.55 (subject to appropriate adjustment pursuant
to Section 5.14 hereof) and (B) the exercise price of each such Parent Option
multiplied by (ii) the number of shares of Parent Common Stock subject to the
Parent Option, less applicable tax withholding, provided that such recipient
shall deliver a cancellation agreement in form and substance reasonably
satisfactory to Bradford and Parent prior to receipt of such payment.
SECTION 2.05 RRP AWARDS.
As set forth in DISCLOSURE SCHEDULE 2.05, all stock awards under the Parent
Recognition and Retention Plan ("RRP"), whether or not otherwise vested prior to
the Closing Date, shall become immediately vested on the Closing Date pursuant
to the terms of the RRP and shall be exchanged as provided in Section 2.02
hereof; provided, however, that the recipients of such awards shall deliver a
cancellation agreement in form and substance reasonably satisfactory to Bradford
and Parent prior to receipt of such payment; and provided, further, that such
recipients shall also be entitled to any cash amounts due under the terms of the
RRP at the time the Merger Consideration is paid to such recipients; and
provided, further, that the Merger Consideration and cash amounts associated
with the stock awards shall be reduced by applicable tax withholding.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND WYMAN PARK
Parent and Wyman Park represent and warrant to Bradford that the statements
contained in this Article III are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Article
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III), except as set forth in the Disclosure Schedules delivered by Parent and
Wyman Park to Bradford on or prior to the date hereof. Parent and Wyman Park
have made a good faith effort to ensure that the disclosure on each schedule of
the Disclosure Schedules corresponds to the section reference herein. However,
for purposes of the Disclosure Schedules, any item disclosed on any schedule is
deemed to be fully disclosed with respect to all schedules under which such item
may be relevant.
SECTION 3.01 ORGANIZATION.
(a) Parent is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and is duly registered as a
savings and loan holding company under the HOLA. Wyman Park is the only
subsidiary of Parent.
(b) Wyman Park is a savings association duly organized, validly existing
and in good standing under federal law. The deposits of Wyman Park are insured
by the FDIC through the SAIF to the fullest extent permitted by law, and all
premiums and assessments required to be paid in connection therewith have been
paid by Wyman Park when due. W.P. Financial Corporation ("WP Financial") is the
only subsidiary of Wyman Park.
(c) Wyman Park is a member of the FHLB of Atlanta and owns the requisite
amount of stock therein.
(d) WP Financial is a corporation duly organized, validly existing and in
good standing under the laws of the State of Maryland. WP Financial has full
corporate power and authority to carry on its business as now conducted and is
duly licensed or qualified to do business in the states of the United States and
foreign jurisdictions where its ownership or leasing of property or the conduct
of its business requires such qualification, except where the failure to be so
licensed or qualified would not have a Material Adverse Effect on Parent. WP
Financial has no subsidiaries.
(e) Wyman Park and WP Financial are the only Parent Subsidiaries.
(f) The respective minute books of Parent and each Parent Subsidiary
accurately records, in all material respects, all material corporate actions of
their respective stockholders and boards of directors (including committees)
through the date of this Agreement.
(g) Prior to the date of this Agreement, Parent has made available to
Bradford true and correct copies of the Charter and Bylaws of Parent, Wyman Park
and WP Financial.
SECTION 3.02 CAPITALIZATION.
(a) The authorized capital stock of Parent consists of 2,000,000 shares of
common stock, $0.01 par value ("Parent Common Stock"), of which 822,490 shares
are outstanding, validly issued, fully paid and non-assessable and free of
preemptive rights,
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and 500,000 shares of preferred stock, $0.01 par value, none of which are issued
and outstanding. Parent holds 189,223 shares of Parent Common Stock as treasury
stock. Neither Parent nor any Parent Subsidiary has or is bound by any Rights of
any character relating to the purchase, sale or issuance or voting of, or right
to receive dividends or other distributions on any shares of Parent Common
Stock, or any other security of Parent or any securities representing the right
to vote, purchase or otherwise receive any shares of Parent Common Stock or any
other security of Parent, other than 168,909 shares of Parent Common Stock
issuable under the Parent Stock Option Plan. The shares issuable under the
Parent Stock Option Plan and the Parent RRP were validly authorized and issued
by Parent. DISCLOSURE SCHEDULE 3.02(A) sets forth, as of the date hereof, the
name of each holder of an option to purchase Parent Common Stock, the number of
shares each such individual may acquire pursuant to the exercise of such
options, the vesting dates, and the exercise price relating to the options held,
and the name of each grantee of an award under the RRP, the number of shares
subject to each award, the amount of cash awards under the RRP, and the vesting
schedule of each award.
(b) Parent owns all of the capital stock of Wyman Park, free and clear of
any lien or encumbrance.
(c) Wyman Park owns all of the capital stock of WP Financial, free and
clear of any lien or encumbrance.
SECTION 3.03 REGISTERED STOCK.
The Parent Common Stock is registered under Section 12(g) of the Exchange
Act. Parent has timely filed all reports required to be filed pursuant to the
Exchange Act for the last twelve (12) months and all such reports contain no
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made, in light of the circumstances under which
they were made, not misleading.
SECTION 3.04 DIVIDENDS.
At the date of this Agreement, there are no declared and not yet payable
dividends or distributions on, or with respect to, the Parent Common Stock.
SECTION 3.05 AUTHORITY; NO VIOLATION.
(a) Parent and Wyman Park each has full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Parent and
Wyman Park and the completion by Parent and Wyman Park of the transactions
contemplated hereby (other than the Bank Merger, which shall be approved by the
Board of Directors of Wyman Park and by Bradford, in its capacity as sole
stockholder of Wyman Park following the Merger and the liquidation of each of
Service Subsidiary and Parent into Bradford, after the Merger) have been duly
and validly approved by the Board of Directors of Parent and Wyman Park,
respectively, and, except for approval of the stockholders of Parent and the
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Regulatory Authorities and as contemplated in the parenthetical in the preceding
clause, no other corporate proceedings on the part of Parent or Wyman Park are
necessary to complete the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by Parent and Wyman Park and
subject to approval by the stockholders of Parent, receipt of the required
approvals of the Regulatory Authorities described in Section 5.03 hereof and
approval of the Bank Merger by the Board of Directors of Wyman Park and by
Bradford, in its capacity as sole stockholder of Wyman Park following the Merger
and the liquidation of each of Service Subsidiary and Parent into Bradford,
after the Merger, constitutes the valid and binding obligations of Parent and
Wyman Park, enforceable against Parent and Wyman Park in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and as to Wyman Park, the conservatorship or
receivership provisions of the FDIA, and subject, as to enforceability, to
general principles of equity.
(b) (A) The execution and delivery of this Agreement by Parent and Wyman
Park, (B) subject to receipt of approvals from the Regulatory Authorities
referred to in Section 5.03 hereof, and Parent's and Bradford's compliance with
any conditions contained therein, and subject to the receipt of the approval of
Parent's stockholders, the consummation of the transactions contemplated hereby,
and (C) compliance by Parent and Wyman Park with any of the terms or provisions
hereof, will not: (i) conflict with or result in a breach of any provision of
the Charter or Bylaws of Parent or any Parent Subsidiary; (ii) violate any
statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to Parent or any Parent Subsidiary or any of their
respective properties or assets; or (iii) violate, conflict with, result in a
breach of any provisions of, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default), under, result in
the termination of, accelerate the performance required by, or result in a right
of termination or acceleration or the creation of any lien, security interest,
charge or other encumbrance upon any of the properties or assets of Parent or
any Parent Subsidiary under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other investment or obligation to which Parent or any Parent Subsidiary is a
party, or by which they or any of their respective properties or assets may be
bound or affected, except for such violations, conflicts, breaches or defaults
under clause (ii) or (iii) hereof which, either individually or in the
aggregate, will not have a Material Adverse Effect on Parent and the Parent
Subsidiaries taken as a whole.
SECTION 3.06 CONSENTS.
Except for the consents, waivers, approvals, filings and registrations from
or with the Regulatory Authorities referred to in Section 5.03 hereof and
compliance with any conditions contained therein, the approval of this Agreement
by the requisite vote of the stockholders of Parent and the approval of the Bank
Merger by the Board of Directors of Wyman Park and by Bradford, in its capacity
as sole stockholder of Wyman Park following the Merger and the liquidation of
each of Service Subsidiary and Parent into Bradford, after the Merger, no
consents, waivers or approvals of, or filings or registrations with, any
Regulatory Authority are necessary, and, to Parent's Knowledge,
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no consents, waivers or approvals of, or filings or registrations with, any
other third parties are necessary, in connection with (a) the execution and
delivery of this Agreement by Parent and Wyman Park, and (b) the completion by
Parent and Wyman Park of the Merger and the Bank Merger. Parent and Wyman Park
have no reason to believe that (i) any required Regulatory Approvals or other
required consents or approvals will not be received, or that (ii) any public
body or authority, the consent or approval of which is not required or to which
a filing is not required, will object to the completion of the transactions
contemplated by this Agreement.
SECTION 3.07 FINANCIAL STATEMENTS.
(a) Parent has previously made available to Bradford the Parent Regulatory
Reports. The Parent Regulatory Reports have been prepared in all material
respects in accordance with applicable regulatory accounting principles and
practices throughout the periods covered by such statements, and fairly present
in all material respects, the consolidated financial position, results of
operations and changes in shareholders' equity of Parent as of and for the
periods ended on the dates thereof, in accordance with applicable regulatory
accounting principles applied on a consistent basis.
(b) Parent has previously made available to Bradford the Parent Financials.
The Parent Financials have been prepared in accordance with GAAP, and (including
the related notes where applicable) fairly present in each case in all material
respects (subject in the case of the unaudited interim statements to normal
year-end adjustments), the consolidated financial position, results of
operations and cash flows of Parent and the Parent Subsidiaries on a
consolidated basis as of and for the respective periods ending on the dates
thereof, in accordance with GAAP applied on a consistent basis during the
periods involved, except as indicated in the notes thereto, or in the case of
unaudited statements, as permitted by Form 10-QSB.
(c) At the date of each balance sheet included in the Parent Financials or
the Parent Regulatory Reports, Parent did not have any liabilities, obligations
or loss contingencies of any nature (whether absolute, accrued, contingent or
otherwise) of a type required to be reflected in such Parent Financials or
Parent Regulatory Reports or in the footnotes thereto which are not fully
reflected or reserved against therein or fully disclosed in a footnote thereto,
except for liabilities, obligations and loss contingencies which are not
material individually or in the aggregate or which are incurred in the ordinary
course of business, consistent with past practice, and except for liabilities,
obligations and loss contingencies which are within the subject matter of a
specific representation and warranty herein and subject, in the case of any
unaudited statements, to normal, recurring audit adjustments and the absence of
footnotes.
(d) Parent has previously made available to Bradford all management letters
either it or Wyman Park has received from their auditors since 1995.
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SECTION 3.08 TAXES.
Parent and the Parent Subsidiaries are members of the same affiliated group
within the meaning of Code Section 1504(a). Parent has duly filed all federal,
state and local tax returns required to be filed by or with respect to Parent
and all Parent Subsidiaries on or prior to the Closing Date (all such amounts
shown to be due have been paid) and has duly paid or made provisions for the
payment of all material federal, state and local taxes which have been incurred
by or are due or claimed to be due from Parent and any Parent Subsidiary by any
taxing authority or pursuant to any written tax sharing agreement on or prior to
the Closing Date other than taxes or other charges which (i) are not delinquent,
(ii) are being contested in good faith, or (iii) have not yet been fully
determined. As of the date of this Agreement, there is no audit examination,
deficiency assessment, tax investigation or refund litigation with respect to
any taxes of Parent or any of its Subsidiaries, and no claim has been made by
any authority in a jurisdiction where Parent or any of its Subsidiaries do not
file tax returns that Parent or any such Subsidiary is subject to taxation in
that jurisdiction. Parent and its Subsidiaries have not executed an extension or
waiver of any statute of limitations on the assessment or collection of any
material tax due that is currently in effect. Parent and each of its
Subsidiaries has withheld and paid all taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other third party, and Parent and each of
its Subsidiaries has timely complied with all applicable information reporting
requirements under Part III, Subchapter A of Chapter 61 of the Code and similar
applicable state and local information reporting requirements.
SECTION 3.09 NO MATERIAL ADVERSE EFFECT.
Except as set forth in DISCLOSURE SCHEDULE 3.09, Parent and the Parent
Subsidiaries, taken as a whole, have not suffered any Material Adverse Effect
since June 30, 2001, and no event has occurred or circumstance arisen since that
date which, in the aggregate, has had or is reasonably likely to have a Material
Adverse Effect on Parent and the Parent Subsidiaries.
SECTION 3.10 CONTRACTS.
(a) Except as set forth in DISCLOSURE SCHEDULE 3.10(A), neither Parent nor
any Parent Subsidiary is a party to or subject to: (i) any employment,
consulting or severance contract or material arrangement with any past or
present officer, director or employee of Parent nor any Parent Subsidiary,
except for "at will" arrangements; (ii) any plan, material arrangement or
contract providing for bonuses, pensions, options, deferred compensation,
retirement payments, profit sharing or similar material arrangements for or with
any past or present officers, directors or employees of Parent or any Parent
Subsidiary; (iii) any collective bargaining agreement with any labor union
relating to employees of Parent or any Parent Subsidiary; (iv) any agreement
which by its terms limits the payment of dividends by Parent or Wyman Park; (v)
any instrument evidencing or related to material indebtedness for borrowed money
whether directly or indirectly, by
15
way of purchase money obligation, conditional sale, lease purchase, guaranty or
otherwise, in respect of which Parent or any Parent Subsidiary is an obligor to
any person, which instrument evidences or relates to indebtedness other than
deposits, borrowings from the FHLB of Atlanta, repurchase agreements, bankers'
acceptances, and "treasury tax and loan" accounts established in the ordinary
course of business and transactions in "federal funds" or which contains
financial covenants or other restrictions (other than those relating to the
payment of principal and interest when due) which would be applicable on or
after the Closing Date to Bradford or any Bradford Subsidiary; (vi) any
agreement, written or oral, that obligates Parent or any Parent Subsidiary for
the payment of more than $15,000 annually; or (vii) any contract (other than
this Agreement) limiting the freedom, in any material respect, of Parent to
engage in any type of banking or bank-related business which it or Wyman Park is
permitted to engage in under applicable law as of the date of this Agreement.
(b) True and correct copies of agreements, plans, contracts, arrangements
and instruments referred to in Section 3.10(a), have been provided to Bradford
on or before the date hereof, are listed on DISCLOSURE SCHEDULE 3.10(A) and are
in full force and effect on the date hereof, and neither Parent nor any Parent
Subsidiary (nor, to the Knowledge of Parent, any other party to any such
contract, plan, arrangement or instrument) has materially breached any provision
of, or is in material default under any term of, any such contract, plan,
arrangement or instrument. Except as set forth in the DISCLOSURE SCHEDULE
3.10(B), no party to any material contract, plan, arrangement or instrument will
have the right to terminate any or all of the provisions of any such contract,
plan, arrangement or instrument as a result of the execution of, and the
transactions contemplated by, this Agreement. Except as set forth in DISCLOSURE
SCHEDULE 3.10(B), none of the employees (including officers) of Parent or any
Parent Subsidiary, possess the right to terminate their employment and receive
or be paid (or cause Parent or any Parent Subsidiary to accrue on their behalf)
benefits solely as a result of the execution of this Agreement or the
consummation of the transactions contemplated hereby. Except as set forth in
DISCLOSURE SCHEDULE 3.10(B), no plan, contract, employment agreement,
termination agreement, or similar agreement or arrangement to which Parent or
any Parent Subsidiary is a party or under which Parent or any Parent Subsidiary
may be liable contains provisions which permit an employee or independent
contractor to terminate it without cause and continue to accrue future benefits
thereunder. Except as set forth in DISCLOSURE SCHEDULE 3.10(B), no such
agreement, plan, contract, or arrangement (x) provides for acceleration in the
vesting of benefits or payments due thereunder upon the occurrence of a change
in ownership or control of Parent or any Parent Subsidiary or upon the
occurrence of a subsequent event; or (y) requires Parent or any Parent
Subsidiary to provide a benefit in the form of Parent Common Stock or determined
by reference to the value of Parent Common Stock.
(c) Each real estate lease that may require the consent of the lessor or
its agent resulting from the Merger by virtue of a prohibition or restriction
relating to assignment, by operation of law or otherwise, or change in control,
is listed in DISCLOSURE SCHEDULE 3.10(C) identifying the section of the lease
that contains such prohibition or restriction.
16
Neither Parent nor any Parent Subsidiary is in default in any material respect
under any material contract, agreement, commitment, arrangement, lease,
insurance policy or other instrument to which it is a party, by which its
assets, business, or operations may be bound or affected, or under which it or
its assets, business, or operations receive benefits, and there has not occurred
any event that, with the lapse of time or the giving of notice or both, would
constitute such a default.
(d) A true and correct copy of the agreement (the "NCR Agreement") between
Wyman Park and NCR Corporation ("NCR") has been provided to Bradford on or
before the date hereof. No amendment or other modification to the NCR Agreement
has been made as of the date hereof, including, without limitation, any change
that would affect Wyman Park's or Bradford's, as the case may be, ability to
terminate the NCR Agreement upon one hundred eighty (180) days notice to NCR and
the payment of a termination fee in the approximate amount of $86,000, assuming,
with respect to the termination fee, that such termination were to occur on
December 31, 2002.
(e) A true and correct copy of the Standard Invest Correspondent Agreement
(the "Invest Agreement") by and between WP Financial and Carrollton Financial
Services, Inc. ("Carrollton") has been provided to Bradford on or before the
date hereof. No amendments or other modifications have been made to the Invest
Agreement as of the date hereof, including, without limitation, any change that
would affect WP Financial's or Bradford's, as the case may be, ability to
terminate the Invest Agreement upon sixty (60) days notice to INVEST Financial
Corporation and Carrollton without penalty, financial or otherwise.
SECTION 3.11 OWNERSHIP OF PROPERTY; INSURANCE COVERAGE.
(a) Parent and the Parent Subsidiaries have good and, as to real property,
marketable title to all material assets and properties owned by Parent or any
Parent Subsidiary in the conduct of their businesses, whether such assets and
properties are real or personal, tangible or intangible, including assets and
property reflected in the balance sheets contained in the Parent Regulatory
Reports and in the Parent Financials or acquired subsequent thereto (except to
the extent that such assets and properties have been disposed of in the ordinary
course of business, since the date of such balance sheets), subject to no
material encumbrances, liens, mortgages, security interests or pledges, except
(i) those items which secure liabilities for public or statutory obligations or
any discount with, borrowing from or other obligations to the FHLB of Atlanta,
inter-bank credit facilities, or any transaction by a Parent Subsidiary acting
in a fiduciary capacity, (ii) statutory liens for amounts not yet delinquent or
which are being contested in good faith, and (iii) items permitted under Article
V. Parent and the Parent Subsidiaries, as lessee, have the right under valid and
subsisting leases of real and personal properties used by Parent and its
Subsidiaries in the conduct of their businesses to occupy or use all such
properties as presently occupied and used by each of them. Except as disclosed
in DISCLOSURE SCHEDULE 3.11(A), such existing leases and commitments to lease
constitute or will constitute operating leases for both tax and financial
accounting purposes and the
17
lease expense and minimum rental commitments with respect to such leases and
lease commitments are as disclosed in the notes to the Parent Financials.
(b) With respect to all material agreements pursuant to which Parent or any
Parent Subsidiary has purchased securities subject to an agreement to resell, if
any, Parent or such Parent Subsidiary, as the case may be, has a lien or
security interest (which to Parent's knowledge is a valid, perfected first lien)
in the securities or other collateral securing the repurchase agreement, and the
value of such collateral equals or exceeds the amount of the debt secured
thereby.
(c) Parent and each Parent Subsidiary currently maintains insurance
considered by Parent to be reasonable for their respective operations, in
accordance with good business practice. Parent has not received notice from any
insurance carrier that (i) such insurance will be canceled or that coverage
thereunder will be reduced or eliminated, or (ii) premium costs with respect to
such policies of insurance will be substantially increased. There are presently
no material claims pending under such policies of insurance and no notices have
been given by Parent or any Parent Subsidiary under such policies. All such
insurance is valid and enforceable and in full force and effect, and within the
last three years Parent and each Parent Subsidiary has received each type of
insurance coverage for which it has applied and during such periods has not been
denied indemnification for any material claims submitted under any of its
insurance policies. DISCLOSURE SCHEDULE 3.11(C) sets forth a complete and
accurate description of the Embezzlement.
SECTION 3.12 LEGAL PROCEEDINGS.
Except as disclosed in DISCLOSURE SCHEDULE 3.12, neither Parent nor any
Parent Subsidiary is a party to any, and there are no pending or, to Parent's
Knowledge, threatened legal, administrative, arbitration or other proceedings,
claims, actions or governmental investigations or inquiries of any nature (i)
against Parent or any Parent Subsidiary, (ii) to which Parent or any Parent
Subsidiary's assets are or may be subject, (iii) challenging the validity or
propriety of any of the transactions contemplated by or relating to this
Agreement, or (iv) which could adversely affect the ability of Parent or Wyman
Park to perform under this Agreement, except for any proceedings, claims,
actions, investigations or inquiries referred to in clauses (i) or (ii) which,
if adversely determined, individually or in the aggregate, could not be
reasonably expected to have a Material Adverse Effect on Parent and the Parent
Subsidiaries, taken as a whole.
SECTION 3.13 COMPLIANCE WITH APPLICABLE LAW.
(a) Parent and the Parent Subsidiaries hold all licenses, franchises,
permits and authorizations necessary for the lawful conduct of their respective
businesses under, and have complied in all material respects with, applicable
laws, statutes, orders, rules or regulations of any Federal, state or local
governmental authority relating to them, other than where such failure to hold
or such noncompliance will neither result in a limitation in any material
respect on the conduct of their respective businesses.
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(b) Except as disclosed in DISCLOSURE SCHEDULE 3.13, neither Parent nor any
Parent Subsidiary has received any notification or communication from any
Regulatory Authority (i) asserting that Parent or any Parent Subsidiary is not
in material compliance with any of the statutes, regulations or ordinances which
such Regulatory Authority enforces; (ii) threatening to revoke any license,
franchise, permit or governmental authorization which is material to Parent or
any Parent Subsidiary; (iii) requiring or threatening to require Parent or any
Parent Subsidiary, or indicating that Parent or any Parent Subsidiary may be
required, to enter into a cease and desist order, agreement or memorandum of
understanding or any other agreement with any Federal or state governmental
agency or authority which is charged with the supervision or regulation of banks
or engages in the insurance of bank deposits restricting or limiting, or
purporting to restrict or limit, in any material respect the operations of
Parent or any Parent Subsidiary, including without limitation any restriction on
the payment of dividends; or (iv) directing, restricting or limiting, or
purporting to direct, restrict or limit, in any manner the operations of Parent
or any Parent Subsidiary, including without limitation any restriction on the
payment of dividends (any such notice, communication, memorandum, agreement or
order described in this sentence is hereinafter referred to as a "Regulatory
Agreement"). Neither Parent nor any Parent Subsidiary has consented to or
entered into any currently effective Regulatory Agreement, except as set forth
in DISCLOSURE SCHEDULE 3.13.
SECTION 3.14 ERISA/EMPLOYEE COMPENSATION.
(a) DISCLOSURE SCHEDULE 3.14(A) includes a descriptive list of all existing
bonus, incentive, deferred compensation, pension, retirement, profit-sharing,
thrift, savings, phantom stock, severance, welfare and fringe benefit plans,
employment, severance and change in control agreements and all other benefit
practices, policies and arrangements maintained by Parent, any Parent Subsidiary
or any other entity (including but not limited to a Parent Subsidiary) which is
considered one employer with Parent under Section 4001(b)(1) of ERISA or Section
414 of the Code (an "ERISA Affiliate"),in which any employee or former employee,
consultant or former consultant or director or former director of Parent, any
Parent Subsidiary or any ERISA Affiliate participates or to which any such
employee, consultant or director, or former employee, former consultant or
former director, is a party or is otherwise entitled to receive benefits (the
"Compensation and Benefit Plans"). A true and correct copy of each Compensation
and Benefit Plan has previously been delivered to Bradford. Neither Parent, any
Parent Subsidiary nor any ERISA Affiliate has any commitment to create any
additional Compensation and Benefit Plan or to modify, change or renew any
existing Compensation and Benefit Plan, except as contemplated by Section 5.11
hereof.
(b) Each Compensation and Benefit Plan has been operated and administered
in accordance with its terms and with applicable law, including, but not limited
to, ERISA, the Code, the Age Discrimination in Employment Act, and any
regulations or rules promulgated thereunder, and all filings, disclosures and
notices required by ERISA, the Code, the Age Discrimination in Employment Act
and any other applicable law have been timely made. Each Compensation and
Benefit Plan which is an "employee pension
19
benefit plan" within the meaning of Section 3(2) of ERISA (a "Pension Plan") and
which is intended to be qualified under Section 401 (a) of the Code is so
qualified, has been fully amended for GUST, has been submitted to the IRS for a
determination letter covering GUST, and has received a favorable determination
letter from the IRS. Parent is not aware of any circumstances which could result
in revocation of such currently effective favorable determination letter. There
is no pending or threatened action, suit or claim relating to any of the
Compensation and Benefit Plans (other than routine claims for benefits). Neither
Parent, any Parent Subsidiary nor any ERISA Affiliate has engaged in a
transaction, or omitted to take any action, with respect to any Compensation and
Benefit Plan that could constitute a "prohibited transaction" within the meaning
of Section 406 of ERISA, or subject Parent, any Parent Subsidiary or any ERISA
Affiliate to a tax or penalty imposed by either Section 502 of ERISA or Section
4975 of the Code.
(c) No liability under Title IV of ERISA has been incurred by Parent, any
Parent Subsidiary or any ERISA Affiliate with respect to any Compensation and
Benefit Plan which is subject to Title IV of ERISA, or with respect to any
"single-employer plan" (as defined in Section 4001 (a) of ERISA) currently or
formerly maintained or contributed to by Parent, any Parent Subsidiary or any
ERISA Affiliate (any such plan is herein referred to as a "Parent Pension Plan")
since the effective date of ERISA that has not been satisfied in full, and, to
their Knowledge, no condition exists that presents a risk to Parent, any Parent
Subsidiary or any ERISA Affiliate of incurring a liability under such Title
(including, but not limited to, the cessation of participation in the Financial
Institutions Retirement Fund, as provided in Section 5.11(a) hereof). Except as
set forth in DISCLOSURE SCHEDULE 3.14(C), the fair market value of the assets of
each Parent Pension Plan exceeds the present value of the "benefit liabilities"
(as defined in Section 4001(a)(16) of ERISA) under such Parent Pension Plan as
of the end of the most recent plan year with respect to the Parent Pension Plan
ending prior to the date hereof, calculated on the basis of the actuarial
assumptions used in the most recent actuarial valuation for such Parent Pension
Plan as of the date hereof, and the assets of each Parent Pension Plan are
sufficient to provide all plan benefits on a termination basis (within the
meaning of Section 4041(b)(2)(A) of ERISA); except as disclosed at DISCLOSURE
SCHEDULE 3.14(C), there is not currently pending with the Pension Benefit
Guaranty Corporation any filing with respect to any reportable event under
Section 4043 of ERISA nor has any reportable event occurred as to which a filing
is required and has not been made (other than as might be required with respect
to this Agreement and the transactions contemplated hereby). Neither Parent, any
Parent Subsidiary nor any ERISA Affiliate has contributed to any "multi-employer
plan," as defined in Section 3(37) of ERISA, on or after September 26, 1980.
Except as set forth in DISCLOSURE SCHEDULE 3.14(C), neither Parent, any Parent
Subsidiary, nor any ERISA Affiliate, nor any Compensation and Benefit Plan,
including any Parent Pension Plan, nor any trust created thereunder, nor any
trustee or administrator thereof has engaged in a transaction in connection with
which Parent, a Parent Subsidiary, an ERISA Affiliate, or any Compensation and
Benefit Plan, including any Parent Pension Plan or any such trust or any trustee
or administrator thereof, could reasonably be expected to be subject to either a
civil liability or penalty
20
pursuant to Section 409, 502(i) or 502(l) of ERISA or a tax imposed pursuant to
Chapter 43 of the Code.
(d) All contributions required to be made under the terms of any
Compensation and Benefit Plan or ERISA Affiliate Plan or any employee benefit
arrangements to which Parent, any Parent Subsidiary or any ERISA Affiliate is a
party or a sponsor have been timely made, and all anticipated contributions and
funding obligations are accrued monthly on Parent's consolidated financial
statements. Parent, each Parent Subsidiary and each ERISA Affiliate have
expensed and accrued as a liability the present value of future benefits under
each applicable Compensation and Benefit Plan for financial reporting purposes
as required by GAAP. Neither any Pension Plan nor any ERISA Affiliate Plan has
an "accumulated funding deficiency" (whether or not waived) within the meaning
of Section 412 of the Code or Section 302 of ERISA. None of Parent, any Parent
Subsidiary or any ERISA Affiliate (x) has provided, or is required to provide,
security to any Pension Plan or to any ERISA Affiliate Plan pursuant to Section
401(a)(29) of the Code, or (y) has taken any action, or omitted to take any
action, that has resulted, or could reasonably be expected to result, in the
imposition of a Lien under Section 412(n) of the Code or pursuant to ERISA.
(e) Except as set forth in DISCLOSURE SCHEDULE 3.14(E), neither Parent, any
Parent Subsidiary nor any ERISA Affiliate has any obligations to provide retiree
medical coverage, life insurance, disability insurance, or other retiree death
benefits under any Compensation and Benefit Plan, other than benefits mandated
by Section 4980B of the Code. There has been no communication to employees by
Parent, any Parent Subsidiary or any ERISA Affiliate that could be construed as
a promise or guarantee to such employees of retiree medical coverage, life
insurance, disability insurance, or other retiree death benefits.
(f) Neither Parent, any Parent Subsidiary nor any ERISA Affiliate maintains
any Compensation and Benefit Plans covering employees who are non-resident
aliens.
(g) With respect to each Compensation and Benefit Plan, if applicable,
Parent has provided or made available to Bradford copies of the: (A) plan
documents, (B) trust instruments and insurance contracts; (C) two (2) most
recent Forms 5500 filed with the Pension and Welfare Benefits Administration;
(D) most recent actuarial report and financial statement; (E) most recent
summary plan description; (F) most recent determination letter issued by the
IRS; (G) any Form 5310 or Form 5330 filed with the IRS; (H) most recent
participant benefits statements; and (J) all agreements granting awards of
options or restricted stock under each applicable Compensation and Benefit Plan.
With respect to the ESOP, in addition to the foregoing, Parent has provided or
made available to Bradford copies of the documentation of the loan or loans
obtained by the ESOP to finance the purchase of Parent Common Stock, a current
statement of the amounts due on such loan or loans (which amounts are also set
forth on DISCLOSURE SCHEDULE 3.14(G)), and copies of all documents used in
connection with obtaining the ESOP participants' approval of the transaction
contemplated hereby.
21
(h) Except as set forth in DISCLOSURE SCHEDULE 3.10(B) or DISCLOSURE
SCHEDULE 3.14(H), the consummation of the Mergers will not, directly or
indirectly (including, without limitation, as a result of any termination of
employment or service at any time prior to or following the Closing Date) (A)
entitle any employee, consultant or director to any payment or benefit
(including severance pay, change in control benefit, or similar compensation) or
any increase in compensation (other than payments or benefits distributed
pursuant to Section 5.11 hereof), (B) result in the vesting or acceleration of
any benefits under any Compensation and Benefit Plan, (C) result in any material
increase in benefits payable under any Compensation and Benefit Plan, or (D)
entitle any employee, consultant or director to any payment or benefit which
constitutes an "excess parachute payment" within the meaning of Section
280(b)(1) of the Code.
(i) DISCLOSURE SCHEDULE 3.14(I) sets forth a list of all employees of
Parent and/or Wyman Park, including the current rate of compensation and the
date of hire for each employee. In addition, DISCLOSURE SCHEDULE 3.14(I) sets
forth all salary adjustments, employee and officer promotions, and changes to
any Compensation and Benefit Plan since June 30, 2001.
(j) DISCLOSURE SCHEDULE 3.14(J) sets forth a list of the assets (including
fair market values) owned by any rabbi trust established by Parent and/or Wyman
Park, or a statement that there are no such assets.
(k) DISCLOSURE SCHEDULE 3.14(K) sets forth the value of the vacation
accruals of employees of Parent and/or Wyman Park, and separately identifies the
amounts, if any, that are payable to such employees with respect to such
accruals on account of the transactions contemplated hereby.
SECTION 3.15 BROKERS, FINDERS AND FINANCIAL ADVISORS.
Except for Parent's engagement of Trident Securities, a division of
McDonald Investments, Inc. ("Trident") in connection with the transactions
contemplated by this Agreement, a copy of which engagement agreement (the
"Trident Agreement") has been provided to Bradford on or before the date hereof,
neither Parent nor any Parent Subsidiary, nor any of their respective officers,
directors, employees or agents, has employed any broker, finder or financial
advisor in connection with the transactions contemplated by this Agreement, or
incurred any liability or commitment for any fees or commissions to any such
person in connection with the transactions contemplated by this Agreement, which
has not been reflected in the Parent Financials. DISCLOSURE SCHEDULE 3.15 sets
forth the fees Parent has paid to Trident as of the date hereof pursuant to the
Trident Agreement and the aggregate amount Parent expects to pay to Trident in
connection with this Agreement and the transactions contemplated hereby.
SECTION 3.16 OTHER TRANSACTION-RELATED AGREEMENTS AND EXPENSES.
Except for the Trident Agreement and Parent's engagement of each of Kutak
Rock LLP and Paul, Hastings, Janofsky & Walker LLP for the provision of legal
services
22
in connection with this Agreement, neither Wyman Park nor Parent is a party to
or subject to any agreements for services to be rendered to Wyman Park or Parent
in connection with this Agreement or the transactions contemplated hereby.
Parent expects that its expenses in connection with this Agreement and the
transactions contemplated hereby (excluding those set forth on DISCLOSURE
SCHEDULE 3.15) shall not exceed $100,000.
SECTION 3.17 ENVIRONMENTAL MATTERS.
(a) With respect to Parent and each of the Parent Subsidiaries, and except
as set forth in DISCLOSURE SCHEDULE 3.17:
(i) To its Knowledge, each of Parent and its Subsidiaries are, and
have been, in substantial compliance with, and are not liable under, any
Environmental Laws;
(ii) There is no suit, claim, action, demand, executive or
administrative order, directive, investigation or proceeding pending or, to
Parent's Knowledge, threatened, before any court, governmental agency or board
or other forum against it or any of the Parent Subsidiaries or any Participation
Facility (x) for alleged noncompliance (including by any predecessor) with, or
liability under, any Environmental Law or (y) relating to the presence of or
release into the environment of any Hazardous Material, whether or not occurring
at or on a site owned, leased or operated by it or any of the Parent
Subsidiaries or any Participation Facility;
(iii) There is no suit, claim, action, demand, executive or
administrative order, directive, investigation or proceeding pending or, to
Parent's Knowledge threatened, before any court, governmental agency or board or
other forum relating to or against any Loan Property (or Wyman Park in respect
of such Loan Property) (x) relating to alleged noncompliance (including by any
predecessor) with, or liability under, any Environmental Law or (y) relating to
the presence of or release into the environment of any Hazardous Material,
whether or not occurring at or on a site owned, leased or operated by a Loan
Property;
(iv) To Parent's Knowledge, the properties currently owned or
operated by Parent or any of the Parent Subsidiaries (including, without
limitation, soil, groundwater or surface water on, under or adjacent to the
properties, and buildings thereon) are not contaminated with and do not
otherwise contain any Hazardous Material other than as permitted under
applicable Environmental Law;
(v) Neither Parent nor any of the Parent Subsidiaries has received
any notice, demand letter, executive or administrative order, directive or
request for information from any Federal, state, local or foreign governmental
entity or any third party indicating that it may be in violation of, or liable
under, any Environmental Law;
(vi) To Parent's Knowledge, (A) there are no underground storage
tanks on, in or under any properties owned or operated by Parent or any of the
Parent Subsidiaries, and (B) no underground storage tanks have been closed or
removed from
23
any properties owned or operated by Parent or any of the Parent Subsidiaries or
any Participation Facility; and
(vii) To Parent's Knowledge, during the period of (s) Parent's or
any of the Parent Subsidiaries' ownership or operation of any of their
respective current properties or (t) Parent's or any of the Parent Subsidiaries'
participation in the management of any Participation Facility, there has been no
contamination by or release of Hazardous Materials in, on, under or affecting
such properties. To Parent's Knowledge, prior to the period of (x) Parent's or
any of the Parent Subsidiaries' ownership or operation of any of their
respective current properties or (y) Parent's or any of the Parent Subsidiaries'
participation in the management of any Participation Facility, there was no
contamination by or release of Hazardous Material in, on, under or affecting
such properties.
(viii) Parent has not conducted any environmental studies during the
past ten (10) years with respect to any properties owned or leased by it or any
of its Subsidiaries.
(b) "Loan Property" means any property in which the applicable party (or a
Subsidiary of it) holds a security interest and includes the owner or operator
of such property, but only with respect to such property. "Participation
Facility" means any facility in which the applicable party (or a Subsidiary of
it) participates in the management (including all property held as trustee or in
any other fiduciary capacity) and, where required by the context, includes the
owner or operator of such property, but only with respect to such property.
SECTION 3.18 LOAN PORTFOLIO.
(a) The allowance for possible losses reflected in Parent's statement of
condition at June 30, 2001 was, and the allowance for possible losses shown on
the balance sheets in Parent's Regulatory Reports for periods ending after June
30, 2001 will be, adequate, as of the dates thereof, under GAAP.
(b) DISCLOSURE SCHEDULE 3.18 sets forth a listing, as of May 31, 2002, by
account, of: (A) all loans (including loan participations) of Wyman Park or any
of the Parent Subsidiaries that have been accelerated during the past twelve
(12) months; (B) all loan commitments or lines of credit of Wyman Park or any of
the Parent Subsidiaries which have been terminated by Wyman Park or any of the
Parent Subsidiaries during the past twelve (12) months by reason of a default or
adverse developments in the condition of the borrower or other events or
circumstances affecting the credit of the borrower; (C) all loans, lines of
credit and loan commitments as to which Wyman Park or any of the Parent
Subsidiaries has given written notice of its intent to terminate during the past
twelve (12) months; (D) with respect to all commercial loans (including
commercial real estate loans), all notification letters and other written
communications from Wyman Park or any of the Parent Subsidiaries to any of their
respective borrowers, customers or other parties during the past twelve (12)
months wherein Wyman Park or any of the Parent
24
Subsidiaries has requested or demanded that actions be taken to correct existing
defaults or facts or circumstances which may become defaults; (E) each borrower,
customer or other party which has notified Wyman Park or any of the Parent
Subsidiaries during the past twelve months of, or has asserted against Wyman
Park or any of the Parent Subsidiaries, in each case in writing, any "lender
liability" or similar claim, and, to the Knowledge of Wyman Park, each borrower,
customer or other party which has given Wyman Park or any of the Parent
Subsidiaries any oral notification of, or orally asserted to or against Wyman
Park or any of the Parent Subsidiaries, any such claim; (F) all loans, (1) that
are contractually past due 90 days or more in the payment of principal and/or
interest, (2) that are on non-accrual status, (3) that as of the date of this
Agreement are classified as "Other Loans Specially Mentioned", "Special
Mention", "Substandard", "Doubtful", "Loss", "Classified", "Criticized", "Watch
list" or words of similar import, together with the principal amount of and
accrued and unpaid interest on each such Loan and the identity of the obligor
thereunder, (4) where the interest rate terms have been reduced and/or the
maturity dates have been extended subsequent to the agreement under which the
loan was originally created due to concerns regarding the borrower's ability to
pay in accordance with such initial terms, or (5) where a specific reserve
allocation exists in connection therewith, and (G) all assets classified by
Parent or any Parent Subsidiary as real estate acquired through foreclosure or
in lieu of foreclosure, including in-substance foreclosures, and all other
assets currently held that were acquired through foreclosure or in lieu of
foreclosure.
(c) All loans receivable (including discounts) and accrued interest entered
on the books of Wyman Park arose out of bona fide arm's-length transactions,
were made for good and valuable consideration in the ordinary course of Wyman
Park's or the appropriate Subsidiary's respective business, and the notes or
other evidences of indebtedness with respect to such loans (including discounts)
are true and genuine and are what they purport to be. To the knowledge of Wyman
Park, the loans, discounts and the accrued interest reflected on the books of
Wyman Park and the Parent Subsidiaries are subject to no defenses, set-offs or
counterclaims (including, without limitation, those afforded by usury or
truth-in-lending laws), except as may be provided by bankruptcy, insolvency or
similar laws affecting creditors' rights generally or by general principles of
equity. All such loans are owned by Wyman Park or the appropriate Subsidiary
free and clear of any Liens.
(d) The notes and other evidences of indebtedness evidencing the loans
described in clause (c) above, and all pledges, mortgages, deeds of trust and
other collateral documents or security instruments relating thereto are, in all
material respects, valid, true and genuine, and what they purport to be.
SECTION 3.19 INFORMATION TO BE SUPPLIED.
The information to be provided by Parent for inclusion in the Proxy
Statement will not, at the time the Proxy Statement is mailed to Parent
stockholders, contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein not
misleading. The information supplied, or to be supplied,
25
by Parent and Wyman Park for inclusion in the Applications will, at the time
such documents are filed with any Regulatory Authority, be accurate in all
material aspects.
SECTION 3.20 RELATED PARTY TRANSACTIONS.
Except as disclosed in DISCLOSURE SCHEDULE 3.20, neither Parent nor any
Parent Subsidiary is a party to any transaction (including any loan or other
credit accommodation) with any Affiliate of Parent. Except as disclosed in
DISCLOSURE SCHEDULE 3.20, all such transactions (a) were made in the ordinary
course of business, (b) were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other Persons, and (c) did not involve more than the normal
risk of collectibility or present other unfavorable features. Except as set
forth on DISCLOSURE SCHEDULE 3.20, no loan or credit accommodation to any
Affiliate of Parent or any Parent Subsidiary is presently in default or, during
the three year period prior to the date of this Agreement, has been in default
or has been restructured, modified or extended. Neither Parent nor any Parent
Subsidiary has been notified that principal and interest with respect to any
such loan or other credit accommodation will not be paid when due or that the
loan grade classification accorded such loan or credit accommodation by Wyman
Park or Parent is inappropriate.
SECTION 3.21 SCHEDULE OF TERMINATION BENEFITS.
DISCLOSURE SCHEDULE 3.21 includes a schedule of all termination benefits
and related payments that would be payable to the individuals identified
thereon, under any and all employment agreements, special termination
agreements, supplemental executive retirement plans, deferred bonus plans,
deferred compensation plans, salary continuation plans, change in control
agreements, or any compensation arrangement, or other pension benefit or welfare
benefit plan maintained by Parent, any Parent Subsidiary or any ERISA Affiliate
for the benefit of officers or directors of Parent, any Parent Subsidiary or any
ERISA Affiliate (the "Benefits Schedule"), assuming their employment or service
is terminated in connection with, or following, the transactions contemplated
hereby. No other individuals (other than beneficiaries of the individuals
identified on DISCLOSURE SCHEDULE 3.21) are entitled to benefits under any such
plans.
SECTION 3.22 DEPOSITS.
None of the deposits of Wyman Park is a "brokered" deposit as defined in 12
U.S. Code Section 1831f(g).
SECTION 3.23 BUSINESS COMBINATION.
The Board of Directors of Parent has taken, or will take, the necessary
action by board resolution and otherwise to exempt Bradford from the definition
of "Interested Stockholder" and to exempt the Merger under Section 203 of the
Delaware General Corporation Law and Article EIGHTH of the Parent Certificate of
Incorporation, to the extent applicable. The Board of Directors of Wyman Park
has taken, or will take, the
26
necessary action by stockholder resolution and otherwise to exempt Bradford and
the Bank Merger under Section 8 of Wyman Park's Charter, to the extent
applicable.
SECTION 3.24 FAIRNESS OPINION.
Parent has received an opinion from Trident to the effect that, subject to
the terms, conditions and qualifications set forth therein, as of the date
thereof, the Merger Consideration to be received by the stockholders of Parent
pursuant to this Agreement is fair to such stockholders from a financial point
of view. Such opinion has not been amended or rescinded as of the date of this
Agreement.
SECTION 3.25 RISK MANAGEMENT INSTRUMENTS.
All material interest rate swaps, caps, floors, option agreements, futures
and forward contracts and other similar risk management arrangements, whether
entered into for Wyman Park's own account, or for the account of one or more of
its Subsidiaries or their customers (all of which are set forth in DISCLOSURE
SCHEDULE 3.25), were entered into in accordance with prudent business practices
and in all material respects in compliance with all applicable laws, rules,
regulations and regulatory policies and with counterparties believed to be
financially responsible at the time; and each of them constitutes the valid and
legally binding obligation of Parent or one of its Subsidiaries, enforceable in
accordance with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors' rights
or by general equity principles), and is in full force and effect. Neither
Parent nor any of its Subsidiaries, nor to the Knowledge of Parent any other
party thereto, is in breach of any of its obligations under any such agreement
or arrangement in any material respect.
SECTION 3.26 DISCLOSURE.
The representations and warranties contained in this Article III and in the
Disclosure Schedules hereto are true, complete and correct, and no such
representation or warranty contains any untrue statement of material fact or
omits to state any material fact necessary to make the statements made not
misleading. To Parent's Knowledge, there is no fact which Parent has not
disclosed in writing to Bradford which will or could have a Material Adverse
Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
BRADFORD
Bradford represents and warrants to Parent and Wyman Park that the
statements contained in this Article IV are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though
27
the Closing Date were substituted for the date of this Agreement throughout this
Article IV).
SECTION 4.01 ORGANIZATION.
(a) Bradford is a mutual savings association duly organized and validly
existing under the laws of the United States. The deposits of Bradford are
insured by the FDIC through the SAIF to the fullest extent permitted by law, and
all premiums and assessments required to be paid in connection therewith have
been paid when due by Bradford.
(b) Bradford is a member in good standing of the FHLB of Atlanta and owns
the requisite amount of stock therein.
(c) Prior to the date of this Agreement, Bradford has delivered to Wyman
Park true and correct copies of the Charter and Bylaws of Bradford.
SECTION 4.02 AUTHORITY; NO VIOLATION.
(a) Bradford has full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Bradford and the completion by
Bradford of the transactions contemplated hereby have been duly and validly
approved by the Board of Directors of Bradford and, no other corporate
proceedings on the part of Bradford other than (i) the incorporation of Service
Subsidiary, (ii) the incorporation of Interim and (iii) the approval of the Bank
Merger by the Board of Directors of Wyman Park and by Bradford, in its capacity
as the sole stockholder of Wyman Park following the Merger and the liquidation
of each of Service Subsidiary and Parent into Bradford, after the Merger, are
necessary to complete the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by Bradford and, subject to receipt
of the required approvals of Regulatory Authorities described in Section 5.03
hereof and the approval of the Bank Merger by the Board of Directors of Wyman
Park and by Bradford, in its capacity as the sole stockholder of Wyman Park
following the Merger and the liquidation of each of Service Subsidiary and
Parent into Bradford, after the Merger, constitutes the valid and binding
obligation of Bradford enforceable against Bradford in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally.
(b) (A) The execution and delivery of this Agreement by Bradford, (B)
subject to receipt of approvals from the Regulatory Authorities referred to in
Section 5.03 hereof, Parent's and Wyman Park's compliance with any conditions
contained herein and the approval of the Bank Merger by the Board of Directors
of Wyman Park and by Bradford, in its capacity as the sole stockholder of Wyman
Park following the Merger and the liquidation of each of Service Subsidiary and
Parent into Bradford, after the Merger, the consummation of the transactions
contemplated hereby, and (C) compliance by Bradford with any of the terms or
provisions hereof will not (i) conflict with or result in a breach of
28
any provision of the Charter or Bylaws of Bradford; (ii) violate any statute,
code, ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to Bradford or any of its properties or assets; or (iii) violate,
conflict with, result in a breach of any provisions of, constitute a default (or
an event which, with notice or lapse of time, or both, would constitute a
default), under, result in the termination of, accelerate the performance
required by, or result in a right of termination or acceleration or the creation
of any lien, security interest, charge or other encumbrance upon any of the
properties or assets of Bradford under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other investment or obligation to which Bradford is a party,
or by which it or any of its properties or assets may be bound or affected,
except for such violations, conflicts, breaches or defaults under clause (ii) or
(iii) hereof which will not, either individually or in the aggregate, have a
Material Adverse Effect on Bradford.
SECTION 4.03 CONSENTS.
Except for consents, approvals, filings and registrations from or with the
OTS and compliance with any conditions contained herein, and the approval of
this Agreement by the stockholders of Parent, the filing of a such certificates
and other documents with the OTS as necessary, no consents, waivers or approvals
of, or filings or registrations with, any public body or authority are
necessary, and no consents, waivers or approvals of or filings or registrations
with any third parties are necessary, or will be, in connection with (a) the
execution and delivery of this Agreement by Bradford, and (b) the completion by
Bradford of the transactions contemplated hereby. Bradford has no reason to
believe that (i) any required consents or approvals will not be received or will
be received with conditions, limitations or restrictions unacceptable to it or
which would adversely impact Bradford's ability to complete the transactions
contemplated by this Agreement or that (ii) any public body or authority, the
consent or approval of which is not required or any filing with which is not
required, will object to the completion of the transactions contemplated by this
Agreement.
SECTION 4.04 FINANCING.
As of the date hereof Bradford has, and at the Closing Date, Bradford will
have, funds that are sufficient, under all applicable legal and regulatory
standards, and available to meet its obligations under this Agreement and to
consummate in a timely manner the transactions contemplated hereby and thereby.
Based on the Parent Regulatory Reports and the Parent Financials previously made
available to Bradford pursuant to Section 3.07 hereof, immediately following the
Closing Date, Bradford will comply with all regulatory capital requirements
under applicable federal banking law. Bradford shall not enter into any plan of
reorganization or plan of merger with any party to form a new parent corporation
of either entity without such party assuming all obligations of Bradford under
this Agreement, and further provided, that such plan of reorganization or plan
of merger will not cause any material delay, cause the termination of or
increase the expense to Parent or Wyman Park of this transaction.
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SECTION 4.05 BRADFORD FINANCIALS.
(a) Bradford has previously made available to Parent the Bradford
Regulatory Reports. The Bradford Regulatory Reports have been prepared in all
material respects in accordance with applicable regulatory accounting principles
and practices throughout the periods covered by such statements, and fairly
present in all material respects, the consolidated financial position, results
of operations and changes in regulatory capital of Bradford as of and for the
periods ended on the dates thereof, in accordance with applicable regulatory
accounting principles applied on a consistent basis.
(b) Bradford has previously made available to Parent the Bradford
Financials. The Bradford Financials have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered by such statements,
and (including the related notes where applicable) fairly present the
consolidated financial position, results of operations and cash flows of
Bradford and the Bradford Subsidiaries as of and for the respective periods
ending on the dates thereof, except as indicated in the notes thereto.
(c) At the date of each balance sheet included in the Bradford Financials
or the Bradford Regulatory Reports, Bradford did not have any liabilities,
obligations or loss contingencies of any nature (whether absolute, accrued,
contingent or otherwise) of a type required to be reflected in such Bradford
Financials or Bradford Regulatory Reports or in the footnotes thereto which are
not fully reflected or reserved against therein or fully disclosed in a footnote
thereto, except for liabilities, obligations and loss contingencies which are
not material individually or in the aggregate or which are incurred in the
ordinary course of business, consistent with past practice, and except for
liabilities, obligations and loss contingencies which are within the subject
matter of a specific representation and warranty herein and subject, in the case
of any unaudited statements, to normal, recurring audit adjustments and the
absence of footnotes.
SECTION 4.06 INFORMATION TO BE SUPPLIED.
The information to be provided by Bradford for inclusion in the Proxy
Statement will not, at the time the Proxy Statement is mailed to the Parent
stockholders, contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein not
misleading. The information supplied, or to be supplied, by Bradford for
inclusion in the Applications will, at the time such documents are filed with
any Regulatory Authority, be accurate in all material aspects.
SECTION 4.07 DISCLOSURE.
The representations and warranties contained in this Article IV are true,
complete and correct, and no such representation or warranty contains any untrue
statement of material fact or omits to state any material fact necessary to make
the statements made not misleading. To Bradford's Knowledge, there is no fact
which Bradford has not disclosed in writing to Parent which will or could have a
Material Adverse Effect.
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ARTICLE V
COVENANTS OF THE PARTIES
SECTION 5.01 CONDUCT OF WYMAN PARK'S BUSINESS.
(a) From the date of this Agreement to the Closing Date, Parent and each
Parent Subsidiary will use their best efforts to conduct their business and
engage in transactions, including extensions of credit, only in the ordinary
course and consistent with past practice and policies, except as otherwise
required or contemplated by this Agreement or with the written consent of
Bradford (which consent will not be unreasonably withheld or delayed), Parent
and each of the Parent Subsidiaries will use its reasonable good faith efforts,
to (i) preserve their business organizations intact, (ii) maintain good
relationships with employees, and (iii) preserve for themselves the good will of
their customers and others with whom business relationships exist. From the date
hereof to the Closing Date, except as otherwise consented to or approved by
Bradford in writing (which approval will not be unreasonably withheld or
delayed), as contemplated or required by this Agreement or required by
regulatory authorities or applicable law, Parent and Wyman Park will not, and
Parent will not permit any Parent Subsidiary to:
(i) except as contemplated by Section 3.23 hereof, amend or change
any provision of its Charter or Bylaws;
(ii) except as required by the Parent Stock Option Plans and RRP,
and as may be required by legally binding commitments existing on the date
hereof as set forth in DISCLOSURE SCHEDULE 5.01(A)(II), change the number of
authorized or issued shares of its capital stock or issue or grant any right or
agreement of any character relating to its authorized or issued capital stock or
any securities convertible into shares of such stock, or split, combine or
reclassify any shares of capital stock, or declare, set aside or pay any
dividend or other distribution in respect of capital stock;
(iii) materially increase staffing levels or effect changes in
personnel employed as of the date of this Agreement other than in the ordinary
course of business consistent with past practice:
(iv) grant or agree to pay any bonus, severance or termination to,
or enter into or amend any employment agreement, severance agreement,
supplemental executive agreement, or similar agreement or arrangement with any
of its directors, officers or employees, or increase in any manner the
compensation or fringe benefits of any employee, officer or director, except for
normal increases (or practices as to renewal, provided that in no event shall
such renewals increase the amount payable under any severance agreement) in the
ordinary course of business consistent with past practice and except as
contemplated by Sections 5.11(g) and 5.11(h) hereof, and except as may be
31
required pursuant to legally binding commitments existing on the date hereof and
set forth on DISCLOSURE SCHEDULES 3.10 AND 3.14;
(v) enter into or, except as may be required by law, modify any
pension, retirement, stock option, stock purchase, stock appreciation right,
stock grant, savings, profit sharing, deferred compensation, supplemental
retirement, consulting, bonus, group insurance or other employee benefit,
incentive or welfare contract, plan or arrangement, or any trust agreement
related thereto, in respect of any of its directors, officers or employees; or
make any contributions to any defined contribution or defined benefit plan not
in the ordinary course of business consistent with past practice or not
consistent with Section 5.11 herein; or materially amend any Compensation and
Benefit Plan except to the extent such modifications or amendments do not result
in an increase in cost;
(vi) except as permitted by Section 5.06 in connection with a
Superior Proposal, merge or consolidate Parent or any Parent Subsidiary with any
other corporation; except as permitted by Section 5.06 in connection with a
Superior Proposal, sell or lease all or any substantial portion of the assets or
business of Parent or any Parent Subsidiary; make any acquisition of all or any
substantial portion of the business or assets of any other person, firm,
association, corporation or business organization other than in connection with
foreclosures, settlements in lieu of foreclosure, troubled loan or debt
restructuring, or the collection of any loan or credit arrangement between
Parent, or any Parent Subsidiary, and any other person; except as permitted by
Section 5.06 in connection with a Superior Proposal, enter into a purchase and
assumption transaction with respect to deposits and liabilities; permit the
revocation or surrender by any Parent Subsidiary of its certificate of authority
to maintain, or file an application for the relocation of, any existing branch
office, or file an application for a certificate of authority to establish a new
branch office;
(vii) sell or otherwise dispose of the capital stock of Parent or
any Parent Subsidiary or sell or otherwise dispose of any asset of Parent or of
any Parent Subsidiary other than in the ordinary course of business consistent
with past practice; subject any asset of Parent or of any Parent Subsidiary to a
lien, pledge, security interest or other encumbrance (other than in connection
with deposits, repurchase agreements, bankers acceptances, "treasury tax and
loan" accounts established in the ordinary course of business and transactions
in "federal funds" and the satisfaction of legal requirements in the exercise of
trust powers) other than in the ordinary course of business consistent with past
practice; incur any indebtedness for borrowed money (or guarantee any
indebtedness for borrowed money), except in the ordinary course of business
consistent with past practice; provided, however, that the foregoing restriction
shall not prevent Wyman Park from obtaining advances from the FHLB of Atlanta;
(viii) change any method, practice or principle of accounting,
except as may be required from time to time by GAAP (without regard to any
optional early adoption date) or any Regulatory Authority responsible for
regulating Parent or Wyman Park;
32
(ix) waive, release, grant or transfer any material rights of value
or modify or change in any material respect any existing material agreement or
indebtedness to which Parent or any Parent Subsidiary is a party, other than in
the ordinary course of business, consistent with past practice;
(x) purchase any security for its investment portfolio not rated
"A" or higher by either Standard & Poor's Corporation or Moody's Investor
Services, Inc. or otherwise alter, in any material respect, the mix, maturity,
credit or interest rate risk profile of its portfolio of investment securities
or its portfolio of mortgage-backed securities;
(xi) purchase any security with a remaining term to maturity
greater than three (3) years;
(xii) make any new loan or other credit facility commitment
(including without limitation, lines of credit and letters of credit) to any
borrower or group of affiliated borrowers other than in the ordinary course of
business consistent with past practice, or increase, compromise, extend, renew
or modify any existing loan or commitment outstanding other than in the ordinary
course of business consistent with past practice;
(xiii) enter into, renew, extend or modify any other transaction
with any Affiliate; provided, however, that the foregoing restriction shall not
prevent Parent or any Parent Subsidiary from engaging in any transaction with
one another in the ordinary course of business consistent with past practice;
(xiv) enter into any futures contract, option, interest rate caps,
interest rate floors, interest rate exchange agreement or other agreement or
take any other action for purposes of hedging the exposure of its
interest-earning assets and interest-bearing liabilities to changes in market
rates of interest;
(xv) except for the execution of this Agreement and the documents
related to this Agreement and except as permitted by Section 5.06 in connection
with a Superior Proposal, take any action that would give rise to a right of
payment to any individual under any employment agreement, or take any action
that would give rise to a right of payment to any individual under any
Compensation and Benefit Plan;
(xvi) make any change in policies with regard to the extension of
credit, the establishment of reserves with respect to the possible loss thereon
or the charge off of losses incurred thereon, investment, asset/liability
management or other material banking policies in any material respect except as
may be required by changes in applicable law or regulations or in GAAP and
except as may be necessitated in the reasonable opinion of Parent or Wyman Park
due to changes in interest rates, and in accordance with safe and sound banking
practices;
33
(xvii) make any capital expenditures in excess of $20,000, other
than pursuant to binding commitments existing on the date hereof and other than
expenditures necessary to maintain existing assets in good repair;
(xviii) purchase or otherwise acquire, or sell or otherwise dispose
of, any assets or incur any liabilities other than in the ordinary course of
business consistent with past practices and policies;
(xix) undertake or enter into any lease, contract or other
commitment for its account, other than in the normal course of providing credit
to customers as part of its banking business, involving a payment by Parent or
any Parent Subsidiary of more than $25,000 annually, or containing a material
financial commitment and extending beyond twelve (12) months from the date
hereof;
(xx) sell any REO or loan, or capitalize any further expenses
relating to REO, except in the ordinary course of business consistent with past
practice;
(xxi) make any changes to the pricing of its deposit liabilities,
except (A) in the ordinary course of business consistent with past practice, (B)
as may be required by changes in applicable law or regulations and (C) as may be
necessitated in the reasonable opinion of Parent or Wyman Park due to changes in
interest rates and in accordance with safe and sound banking practices;
(xxii) renew, amend or otherwise modify the real estate leases to
which Parent and Wyman Park are currently parties; or
(xxiii) except as permitted by Section 5.06 in connection with a
Superior Proposal, agree to do any of the foregoing.
SECTION 5.02 ACCESS; CONFIDENTIALITY.
(a) Upon reasonable notice and subject to applicable laws relating to the
exchange of information, Parent shall, and shall cause each of its Subsidiaries
to, afford to the officers, employees, accountants, counsel and other
Representatives of Bradford access, during normal business hours during the
period prior to the Closing Date, to all its properties and to all books,
accounts, records, filings with any Regulatory Authority (subject to permission
from such Regulatory Authority as may be required), tax returns, leases,
contracts and documents of Parent, Wyman Park and any Parent Subsidiary with
respect to Parent's, Wyman Park's or any Parent Subsidiary's assets, liabilities
and business, and to its officers, employees, accountants, counsel and other
representatives, in each case in a manner not unreasonably disruptive to the
operation of the business of Parent and its Subsidiaries. and, during such
period, Parent shall, and shall cause its Subsidiaries to, make available to
Bradford (i) a copy of each report, schedule, registration statement and other
document filed or received by it during such period pursuant to the requirements
of Federal securities laws or Federal or state banking, mortgage lending, real
estate or consumer finance or protection laws (other than reports
34
or documents which Parent is not permitted to disclose under applicable law) and
(ii) all other information concerning its business, properties and personnel as
such other party may reasonably request. Neither Parent nor any of its
Subsidiaries shall be required to provide access to or to disclose information
where such access or disclosure would violate or prejudice the rights of its
customers, jeopardize the attorney-client privilege of the institution in
possession or control of such information or contravene any law, rule,
regulation, order, judgment, decree, fiduciary duty or binding agreement entered
into prior to the date of this Agreement in the ordinary course of business
consistent with past practice. The parties hereto will make appropriate and
reasonable substitute disclosure arrangements under circumstances in which the
restrictions of the preceding sentence apply. Wyman Park shall permit Bradford,
at Bradford's sole expense, to cause a "phase I environmental audit" and a
"phase II environmental audit" to be performed at any physical location owned or
occupied by Wyman Park, provided that any phase I environmental audit is
contracted for within thirty (30) days of the date of this Agreement and
commenced as soon as practicable thereafter. Bradford shall provide a copy of
each phase I and phase II audit so conducted to Parent within two (2) business
days after receipt thereof.
(b) Bradford shall hold all information furnished by Parent or any of its
Subsidiaries or representatives pursuant to Section 5.02(a) in confidence to the
extent required by, and in accordance with, the provisions of the
Confidentiality Agreement, dated March 27, 2002, between Bradford and Parent
(the "Confidentiality Agreement").
(c) No investigation by either of the parties or their respective
Representatives shall affect the representations, warranties, covenants or
agreements of the other set forth herein.
SECTION 5.03 REGULATORY MATTERS AND CONSENTS.
(a) Except for the Parent Proxy Statement, Bradford will prepare all
Applications, which Applications shall conform to all applicable legal
requirements, and, subject to review and consent of Parent as to matters
relating to Parent and Wyman Park, make all filings as promptly as practicable
following the preparation thereof, and shall use its best efforts to obtain as
promptly as practicable after the date hereof, all necessary permits, consents,
approvals, waivers and authorizations of all Regulatory Authorities necessary or
advisable to consummate the transactions contemplated by this Agreement.
(b) Wyman Park will furnish Bradford with all information concerning Wyman
Park and the Parent Subsidiaries as may be necessary or advisable in connection
with any Application or filing made by or on behalf of Bradford to any
Regulatory Authority in connection with the transactions contemplated by this
Agreement.
(c) Bradford, Parent, and Wyman Park will promptly furnish each other with
copies of all material written communications to, or received by them from, any
Regulatory Authority in respect of the transactions contemplated hereby, and
advise each
35
other of all material oral communications received by them from any such
Regulatory Authority in respect of the transactions contemplated hereby,
including any requests for additional information, except information that is
filed by either party, which is designated, as confidential.
(d) The parties hereto agree that they will consult with each other with
respect to the obtaining of all permits, consents, approvals and authorizations
of all third parties and Regulatory Authorities. In addition to the foregoing,
Bradford will furnish Parent and Wyman Park with (i) copies of all Applications
prior to filing with any Regulatory Authority and provide Parent a reasonable
opportunity to provide changes to such Applications and (ii) copies of all
Applications filed.
(e) Wyman Park and Bradford will cooperate with each other in the foregoing
matters and will furnish the responsible party with all information concerning
it and its Subsidiaries as may be necessary or advisable in connection with any
Application or filing (including the Proxy Statement) made by or on behalf of
Bradford, Parent or Wyman Park to any Regulatory Authority in connection with
the transactions contemplated by this Agreement, and such information will be
accurate and complete in all material respects. In connection therewith, each
party will provide certificates and other documents reasonably requested by the
other.
SECTION 5.04 TAKING OF NECESSARY ACTION.
(a) Bradford, Parent and Wyman Park shall each use its best efforts in good
faith, and each of them shall cause its Subsidiaries to use their best efforts
in good faith, to (i) furnish such information as may be required in connection
with the preparation of the documents referred to in Section 5.03 of this
Agreement, and (ii) take or cause to be taken all action necessary or desirable
on its part using its best efforts so as to permit completion of the Mergers and
the transactions contemplated by this Agreement, including, without limitation,
(A) obtaining the consent or approval of each individual, partnership,
corporation, association or other business or professional entity whose consent
or approval is required or desirable for consummation of the transactions
contemplated hereby (including assignment of leases without any change in
terms), provided that neither Parent nor any Parent Subsidiary shall agree to
make any payments or modifications to agreements in connection therewith without
the prior written consent of Bradford, and (B) requesting the delivery of
appropriate opinions, consents and letters from its counsel and independent
auditors. No party hereto shall take, or cause, or to the best of its ability
permit to be taken, any action that would substantially impair the prospects of
completing the Mergers pursuant to this Agreement, except for the exercise of
its rights under this Agreement.
(b) Parent shall prepare, subject to the review, and consent of Bradford
with respect to matters relating to Bradford, a Proxy Statement to be mailed to
the stockholders of Parent in connection with the meetings of its stockholders
and transactions contemplated hereby, which Proxy Statement shall conform to all
applicable legal requirements. The parties shall cooperate with each other with
respect to the preparation
36
of the Proxy Statement. Parent shall, as promptly as practicable following the
preparation thereof, file the Proxy Statement with the SEC, and Parent shall use
all reasonable efforts to have the Proxy Statement mailed to stockholders as
promptly as practicable after such filing, subject to receipt by Parent of any
comments from the SEC with respect to the Proxy Statement and satisfaction
thereof and subject to completion the audit of the financial statements of
Parent for the year ended June 30, 2002 as set forth in Section 5.10(a)(iv).
Parent will promptly advise Bradford of the time when the Proxy Statement has
been filed and mailed, or of any comments from the SEC or any request by the SEC
for additional information.
SECTION 5.05 CERTAIN AGREEMENTS.
(a) For a period of six (6) years from and after the Closing Date, Bradford
shall, to the fullest extent permitted to it under applicable law, indemnify,
defend and hold harmless each present and former director and officer of Parent
(the "Indemnified Parties") against all losses, claims, damages, costs, expenses
(including reasonable attorneys' fees and expenses), liabilities, judgments or
amounts paid in settlement (with the prior written approval of Bradford, which
approval shall not be unreasonably withheld) or in connection with any claim,
action, suit, proceeding or investigation arising out of matters existing or
occurring at or prior to the Closing Date (a "Claim") in which an Indemnified
Party is, or is threatened to be made, a party or a witness based in whole or in
part on, or arising in whole or in part out of, the fact that such person is or
was a director or officer of Parent or any Parent Subsidiary, regardless of
whether such Claim is asserted or claimed prior to, at or after the Closing
Date, to the fullest extent to which directors and officers of Parent would have
been entitled under Parent's Charter and applicable law and regulations. All
rights to indemnification in respect of a Claim asserted or made within the
period described in the preceding sentence shall continue until the final
disposition of such Claim.
(b) Any Indemnified Party wishing to claim indemnification under this
Section 5.05, upon learning of any Claim, shall promptly notify Bradford, but
the failure to so notify shall not relieve Bradford of any liability it may have
to such Indemnified Party except to the extent that such failure prejudices
Bradford. In the event of any Claim, (i) Bradford shall have the right to assume
the defense thereof (with counsel reasonably satisfactory to the Indemnified
Party) and shall not be liable to such Indemnified Parties for any legal
expenses of other counsel or any other expenses subsequently incurred by such
Indemnified Parties in connection with the defense thereof, except that, if
Bradford elects not to assume such defense or counsel for the Indemnified
Parties advises that there are issues which raise conflicts of interest between
Bradford and the Indemnified Parties, the Indemnified Parties may retain counsel
satisfactory to them, and Bradford shall pay all reasonable fees and expenses of
such counsel for the Indemnified Parties promptly as statements therefor are
received, provided further that Bradford shall in all cases be obligated
pursuant to this paragraph to pay for only one firm of counsel for all
Indemnified Parties, (ii) the Indemnified Parties will cooperate in the defense
of any such Claim and (iii) Bradford shall not be liable for any settlement
37
effected without its prior written consent (which consent shall not unreasonably
be withheld).
(c) In the event Bradford or any of is successors or assigns (i)
consolidates with or merges into any other Person and shall not continue or
survive such consolidation or merger, or (ii) transfers or conveys all or
substantially all of its properties and assets to any Person, then, and in each
such case, to the extent necessary, proper provision shall be made so that the
successors and assigns of Bradford assume the obligations set forth in this
Section 5.05.
(d) Bradford shall maintain in effect for six (6) years from the Closing
Date, the current directors' and officers' liability insurance policy maintained
by Parent (provided that Bradford may substitute therefor policies of at least
the same coverage containing terms and conditions which are not materially less
favorable) with respect to matters occurring at or prior to the Closing Date. In
connection with the foregoing, Parent agrees to provide such insurer or
substitute insurer with such representations as such insurer may reasonably
request with respect to the reporting of any prior claims. DISCLOSURE SCHEDULE
5.05 sets forth all claims made or notices provided to Parent's present insurers
and the extent to which any present insurance coverage has been impaired due to
either defense expense or settlements.
(e) As soon as practicable following the execution of this Agreement,
Bradford shall afford Parent the opportunity to review the proposed insurance
policy to be obtained by Bradford pursuant to Section 5.05(d).
(f) The provisions of this Section 5.05 are intended to be for the benefit
of, and shall be enforceable by, each Indemnified Party and his or her heirs and
representatives.
SECTION 5.06 NO OTHER BIDS AND RELATED MATTERS.
From and after the date hereof until the termination of this Agreement,
neither Parent, nor any Parent Subsidiary, nor any of their respective officers,
directors, employees, representatives, agents or affiliates (including, without
limitation, any investment banker, attorney or accountant retained by Parent or
any of its Subsidiaries), will, directly or indirectly, (a) initiate, solicit or
knowingly encourage (including by way of furnishing non-public information or
assistance), or (b) facilitate knowingly, any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal (as defined below), or (c) enter into or maintain or
continue discussions or negotiate with any person or entity in furtherance of
such inquiries or to obtain an Acquisition Proposal or agree to or endorse any
Acquisition Proposal, (d) or authorize or permit any of its officers, directors,
or employees or any of its subsidiaries or any investment banker, financial
advisor, attorney, accountant or other representative retained by any of its
subsidiaries to take any such action, and Parent shall notify Bradford orally
(within one (1) business day) and in writing (as promptly as practicable) of all
of the relevant details relating to all inquiries and proposals which it or
38
any of its Subsidiaries or any such officer, director, employee, investment
banker, financial advisor, attorney, accountant or other representative may
receive relating to any of such matters; provided, however, that nothing
contained in this Section 5.06 shall prohibit the Board of Directors of Parent
from (i) furnishing information to, or entering into discussions or negotiations
with any person or entity that makes an unsolicited written, bona fide proposal
to acquire Parent pursuant to a merger, consolidation, share exchange, business
combination, tender or exchange offer or other similar transaction, if, and only
to the extent that, (A) the Board of Directors of Parent receives an opinion
from its independent financial advisor that such proposal may be superior to the
Merger from a financial point-of-view to Parent's stockholders, (B) the Board of
Directors of Parent, after consultation with and after considering the advice of
independent legal counsel, determines in good faith that failure to take such
action may cause the Board of Directors of Parent to breach its fiduciary duties
to stockholders under applicable law (such proposal that satisfies (A) and (B)
being referred to herein as a "Superior Proposal"); and (C) Parent promptly
notifies Bradford of such inquiries, proposals or offers received by, any such
information requested from, or any such discussions or negotiations sought to be
initiated or continued with Parent or any of its representatives indicating, in
connection with such notice, the name of such person and the material terms and
conditions of any inquiries, proposals or offers. For purposes of this
Agreement, "Acquisition Proposal" shall mean any proposal or offer as to any of
the following (other than the transactions contemplated hereunder) involving
Parent or any of its Subsidiaries: (i) any merger, consolidation, share
exchange, business combination, or other similar transactions; (ii) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition of 25% or more
of the assets of Parent, taken as a whole, in a single transaction or series of
transactions; (iii) any tender offer or exchange offer for 25% or more of the
outstanding shares of capital stock of Parent or the filing of a registration
statement under the Securities Act in connection therewith; or (iv) any public
announcement of a proposal, plan or intention to do any of the foregoing or any
agreement to engage in any of the foregoing.
SECTION 5.07 DUTY TO ADVISE; DUTY TO UPDATE THE DISCLOSURE SCHEDULES.
Parent shall promptly advise Bradford of any change or event having a
Material Adverse Effect on it or on any Parent Subsidiary or which it believes
would or would be reasonably likely to cause or constitute a material breach of
any of its representations, warranties or covenants set forth herein or
materially delay the consummation of the transactions contemplated hereby.
Parent and Wyman Park shall update the Parent Disclosure Schedules as promptly
as practicable after the occurrence of an event or fact that, if such event or
fact had occurred prior to the date of this Agreement, would have been disclosed
in the Disclosure Schedules. The delivery of such updated Disclosure Schedule
shall not relieve Parent or Wyman Park from any breach or violation of this
Agreement and shall not have any effect for the purposes of determining the
satisfaction of the condition set forth in Section 6.02 (c) hereof.
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SECTION 5.08 CONDUCT OF BRADFORD'S BUSINESS.
From the date of this Agreement to the Closing Date, Bradford will use its
best efforts to (x) preserve its business organizations intact, (y) maintain
good relationships with employees, and (z) preserve for itself the goodwill of
its customers and others with whom it maintains business relationships. From the
date of this Agreement to the Closing Date, Bradford will not (i) amend its
Charter or Bylaws in any manner inconsistent with the prompt and timely
consummation of the transactions contemplated by this Agreement, (ii) take any
action which would or is reasonably likely to adversely affect or materially
delay the receipt of the necessary approvals from the Regulatory Authorities;
(iii) take action which would or is reasonably likely to materially and
adversely affect Bradford's ability to perform its covenants and agreements
under this Agreement; (iv) reorganize into a mutual holding company; (v) convert
from a mutual for savings bank to a stock form savings bank or a commercial
bank; or (vi) agree to do any of the foregoing.
SECTION 5.09 BOARD AND COMMITTEE MINUTES.
Parent and Wyman Park shall provide to Bradford, within thirty (30) days
after any meeting of their respective Board of Directors, or any executive
committee thereof, a copy of the minutes of such meeting, excluding any matters
related to this Agreement or the transactions contemplated hereby, except that
with respect to any meeting held within fifteen (15) days of the Closing Date,
such minutes shall be provided to each party prior to the Closing Date.
SECTION 5.10 UNDERTAKINGS BY THE PARTIES.
(a) From and after the date of this Agreement:
(i) Voting by Directors and Executive Officers. Concurrent with
the execution of this Agreement, the directors and executive officers of Parent
shall have entered into and delivered to Bradford the Support Agreement set
forth as EXHIBIT A to this Agreement;
(ii) Systems Conversions. Wyman Park and Bradford shall meet on a
regular basis to discuss and plan for the conversion of Wyman Park's data
processing and related electronic informational systems to those used by
Bradford, which planning shall include, but not be limited to, discussion of the
possible termination by Wyman Park of third-party service provider arrangements
effective at the Closing Date or at a date thereafter, non-renewal of personal
property leases and software licenses used by Wyman Park in connection with its
systems operations, retention of outside consultants and additional employees to
assist with the conversion, and outsourcing, as appropriate, of proprietary or
self-provided system services, it being understood that Wyman Park shall not be
obligated to take any such action prior to the Closing Date and, unless Wyman
Park otherwise agrees, no conversion shall take place prior to the Closing Date.
In the event that Wyman Park takes, at the request of Bradford, any action
relative to third parties to facilitate the conversion that results in the
imposition of any termination fees or
40
charges, Bradford shall indemnify Wyman Park for any such fee and charges, and
the costs of reversing the conversion process, if for any reason the Bank Merger
is not consummated for any reason other than a breach of this Agreement by Wyman
Park, or a termination of this Agreement under Section 7.01(c)(iv) or (d)(iv).
(iii) List of Nonperforming Assets and Lending Activities. Wyman
Park shall provide Bradford, within ten (10) days of the end of each calendar
month, a written list (which shall include the outstanding principal amount of
the loan, where applicable) of the following: (i) loans on nonaccrual, (ii) real
estate owned, (iii) all loans delinquent sixty (60) days or more as to principal
or interest as of the end of such month and (iv) and impaired loans, subject to
Wyman Park's obligations under relevant privacy laws. Also within twenty (20)
days of the end of each calendar month, Wyman Park shall also provide Bradford
with a status report on each loan with an unpaid principal balance of $500,000
or more, subject to Wyman Park's obligations under relevant privacy laws. On a
monthly basis, Wyman Park shall provide Bradford with a listing of all loan
approvals, which listing shall indicate the loan amount, loan type and other
material features of the loan; and
(iv) Stockholders' Meeting. Subject to delays, if any, which may be
occasioned by the review of proxy materials by a Regulatory Authority, Parent
shall mail proxy materials relating to this Agreement and the transactions
contemplated hereby to the stockholders of Parent within thirty (30) days after
the completion of the audit of Parent's financial statements for the year ended
June 30, 2002, or as soon as is practicable, and, if consistent with its
fiduciary obligation at the time and subject to Section 5.06, its Board of
Directors shall recommend approval of this Agreement to the Parent stockholders.
(b) From and after the date of this Agreement, Bradford, Parent and Wyman
Park shall each:
(i) Filings and Approvals. Cooperate with the other in the
preparation and filing, as soon as practicable, of (A) the Applications, (B) the
Proxy Statement, (C) all other documents necessary to obtain any other approvals
and consents required to effect the completion of the Merger, and the
transactions contemplated by this Agreement, (D) all other documents
contemplated by this Agreement;
(ii) Public Announcements. Cooperate and cause their respective
officers, directors, employees and agents to cooperate in good faith, consistent
with their respective legal obligations, in the preparation and distribution of,
and agree upon the form and substance of, any press release related to this
Agreement and the transactions contemplated hereby, and any other public
disclosures related thereto, including without limitation communications to
stockholders, internal announcements and customer disclosures, and neither
Bradford nor Parent shall issue, or cause to be issued, any such press release
or make any such public statement without the prior consent of the other party,
which consent shall not be unreasonably withheld; provided, however, that
nothing contained herein shall prohibit either party from making any disclosure
which its counsel
41
deems necessary, provided that the disclosing party notifies the other party
reasonably in advance of the timing and contents of such disclosure;
(iii) Maintenance of Insurance. Maintain, and cause their
respective Subsidiaries to maintain, insurance in such amounts as are reasonable
to cover such risks as are customary in relation to the character and location
of its properties and the nature of its business;
(iv) Maintenance of Books and Records. Maintain, and cause their
respective Subsidiaries to maintain, books of account and records in accordance
with GAAP applied on a basis consistent with those principles used in preparing
the financial statements heretofore delivered; or
(v) Taxes. File all federal, state, and local tax returns required
to be filed by them or their respective Subsidiaries on or before the date such
returns are due (including any extensions) and pay all taxes shown to be due on
such returns on or before the date such payment is due.
SECTION 5.11 EMPLOYEE AND TERMINATION BENEFITS.
(a) Except as provided in the next sentence and in Sections 5.11(c),
5.11(d) and 5.11(e) hereof, as of or after the Closing Date, and at Bradford's
election and subject to the requirements of the Code and ERISA, the Compensation
and Benefit Plans may be continued and maintained separately, consolidated, or
terminated. Notwithstanding the foregoing, the ESOP and the Wyman Park 401(k)
Plan will be terminated by Parent and/or Wyman Park prior to the Closing Date,
and Parent and/or Wyman Park will withdraw from the Financial Institutions
Retirement Fund as adopted by Wyman Park before the Closing Date (or as soon
thereafter as is practicable, if it is not practicable due to the requirements
of applicable law to withdraw prior to the Closing Date). Wyman Park employees
who continue employment with Bradford following the Closing Date ("Continuing
Employees") shall, to the extent determined by Bradford, participate in
Bradford's employee benefit plans as of the first entry date coincident with or
following the Closing Date (or such later date determined by Bradford), with
recognition of prior service with Wyman Park for purposes of eligibility to
participate and vesting, but not benefit accrual.
Continuing Employees shall be enrolled in the Bradford medical, dental,
life insurance and disability insurance programs available to other Bradford
Federal employees immediately upon the termination of the Wyman Park plans (or
as soon thereafter as is practicable, if it is not practicable to enroll such
Continuing Employees immediately) without such Continuing Employees incurring
any uninsured waiting periods or pre-existing conditions exclusions for such
Continuing Employees and dependents participating in such similar Wyman Park
plans at such time. Further, any plan year deductibles under such plans incurred
as of the date of termination of the respective Wyman Park plans shall be
credited to the first plan year deductibles under the comparable Bradford plans
upon enrollment in such Bradford plans. The terms of this
42
paragraph shall be operative only to the extent that the insurance carrier of
each plan agrees, under reasonable conditions, to such terms.
(b) At and for a period of six months following the Closing Date, any
person who is an employee of Parent or Wyman Park five (5) business days prior
to the Closing Date (other than an employee who is a party to an employment or
change in control agreement) and whose employment is terminated by Bradford
(other than by voluntary termination or termination for cause) during the period
ending six (6) months after the Closing Date, shall be provided with severance
benefits equal to two (2) weeks pay for every year of service with Parent or
Wyman Park, up to a maximum of twenty-six (26) weeks. The benefits shall be paid
within ten (10) days of the date of termination of employment.
(c) The employment-related agreements identified in DISCLOSURE SCHEDULE
3.21 will be honored by Bradford, and Bradford will provide written notice to
each individual who is a party to any such employment-related agreement of
Bradford's assumption of the employment-related agreement, in accordance with
the terms of such employment-related agreement. The payments that would be
required to be made under those agreements as a result of the transactions
contemplated by this agreement and/or the termination of the employment of the
individuals covered by such employment-related agreements are set forth in
DISCLOSURE SCHEDULE 3.21 (which payments, if applicable, shall be made by Wyman
Park, or if requested by Bradford, by Bradford), shall be in complete
satisfaction of all of the individual's rights under the employment-related
agreement, neither Bradford, Parent nor Wyman Park shall have further obligation
under the employment-related agreements, and each individual shall execute a
cancellation agreement and release, in form and substance reasonably
satisfactory to Bradford and Parent in connection with such payments. To the
extent that Bradford has notified Parent prior to the Closing Date that
employees with employment agreements or change in control severance agreements
will not be retained by Bradford after the Closing Date, or to the extent that
Parent has notified Bradford prior to the Closing Date that employees with
employment agreements or change in control severance agreements shall resign on
the Closing Date, then Parent shall make such termination payments in accordance
with such agreements as of the Closing Date (which payments, at the request of
Bradford, may be made by Bradford).
(d) The following shall apply to the ESOP:
(i) Parent and/or Wyman Park shall take all steps necessary to
provide the trustees of the ESOP with the appropriate amount of proxy materials
to be used by Parent in connection with the transactions contemplated hereby
pursuant to Section 5.10(a)(iv), as such trustees deem appropriate to comply
with the requirements of ERISA and the terms of the ESOP, and Parent shall cause
its transfer agent to cooperate with the ESOP trustees in connection with the
distribution to the ESOP participants of such proxy materials and, as requested
by the trustees, any additional communications required under ERISA and the
terms of the ESOP; provided, however, that prior to the mailing of any
43
such additional communications to the participants of the ESOP, Bradford shall
have a reasonable opportunity to review such additional communications.
(ii) The outstanding ESOP indebtedness shall be repaid from the
Merger Consideration received by the ESOP in exchange for its unallocated shares
of Parent Common Stock. If the Merger Consideration received by the ESOP with
respect to its unallocated shares of Parent Common Stock exceeds the balance of
the outstanding ESOP indebtedness, the balance of such Merger Consideration
(after repayment of the outstanding ESOP indebtedness) shall be allocated and
distributed to the ESOP participants in accordance with the terms of the ESOP
(as amended pursuant to (iii) below). However, if the Merger Consideration
received by the ESOP with respect to its unallocated shares of Parent Common
Stock is less than the balance of the outstanding ESOP indebtedness, Bradford
will repay any such outstanding ESOP indebtedness.
(iii) The ESOP shall be amended by Parent and/or Wyman Park prior
to the Closing Date in a manner reasonably satisfactory to Bradford to address
issues required to be addressed by amendment prior to the termination of the
ESOP. The amendment shall include the following:
(A) The amendment shall clarify that, as set forth in (ii)
above, the outstanding ESOP indebtedness shall be repaid from the Merger
Consideration received by the ESOP in exchange for its unallocated shares of
Parent Common Stock.
(B) The amendment shall provide that the provisions of Section
13.2 of the ESOP (as amended by amendment dated November 17, 1999) relating to
payments to ESOP participants in respect of amounts which could not be allocated
due to the limitations of IRC Section 415, shall become operative only if the
IRS approves a reversion from the ESOP to Bradford of such excess amounts.
(C) The amendment shall provide that an IRS determination
letter will be sought in connection with the ESOP termination, and that final
distributions will not be made until such a letter is obtained.
(D) The amendment shall provide that the ESOP will be converted
to a profit sharing plan, and thus, any distributions from the ESOP on or after
the Closing Date will be made in cash, and not employer securities.
(E) The amendment shall provide that the ESOP is terminated
effective prior to the Closing Date.
(iv) Parent and/or Wyman Park may, to the extent permitted under
the Code, and in accordance with their past practices, make contributions to the
ESOP in an amount equal to the normal contribution amount for the plan year
ending June 30, 2002, and make pro-rata contributions to the ESOP with respect
to the period beginning July 1, 2002 to the Closing Date proportionately with
the normal contribution amount for the plan year.
44
(v) Parent and/or Wyman Park shall provide to Bradford a favorable
IRS determination letter with respect to the ESOP that takes into account all of
the requirements of GUST.
(e) The following shall apply to the Wyman Park 401(k) Plan:
(i) Parent or Wyman Park shall provide to Bradford prior to the
Closing Date a signed copy of the adoption agreement for the Wyman Park 401(k)
Plan, and the most recent IRS determination letter issued directly to the Wyman
Park 401(k) Plan (not to the prototype sponsor), if any.
(ii) The Wyman Park 401(k) Plan shall be terminated by Parent
and/or Wyman Park prior to the Closing Date.
(iii) Parent and/or Wyman Park may make contributions to the Wyman
Park 401(k) Plan with respect to the period ending on the Closing Date in
accordance with the terms of the Wyman Park 401(k) Plan as currently in effect
and consistent with its past practice, subject to Parent's and/or Wyman Park's
right to make contributions accrued through the Closing Date as if the Closing
Date were the last day of the plan year.
(iv) Parent and/or Wyman Park shall take all steps necessary to
provide the plan sponsor of the Wyman Park 401(k) Plan with the appropriate
amount of proxy materials to be used by Parent in connection with the
transactions contemplated hereby pursuant to Section 5.10(a)(iv), as such plan
sponsor deems appropriate to comply with applicable law and the terms of the
Wyman Park 401(k) Plan, and Parent shall cause its transfer agent to cooperate
with the plan sponsor in connection with the distribution to the Wyman Park
401(k) participants whose accounts are invested in employer securities of such
proxy materials and, as requested by the plan sponsor, any additional
communications required under applicable law and the terms of the Wyman Park
401(k) Plan; provided, however, that prior to the mailing of any such additional
communications to such participants, Bradford shall have a reasonable
opportunity to review such additional communications.
(v) Prior to the Closing Date, the Wyman Park 401(k) Plan shall be
amended to provide that, effective as of the Closing Date, employer securities
will not be available as an investment option under the Wyman Park 401(k) Plan.
45
(f) Prior to the Closing Date, Parent and/or Wyman Park shall obtain and
provide to Bradford a written statement from the administrator of the Financial
Institutions Retirement Fund (the "Fund") setting forth the amount that will be
required to be paid to the Fund in connection with the termination of Parent
and/or Wyman Park's participation in the Fund. Such amount shall not exceed
$100,000. The statement shall provide information as of an estimated Closing
Date to be determined by mutual agreement of Bradford and Parent and/or Wyman
Park and shall set forth the basis for the determination of the liability set
forth therein, including any actuarial or other assumptions.
(g) Prior to the Closing Date, Wyman Park and Ernest A. Moretti shall
execute an amendment to the Executive Supplemental Retirement Plan and
Compensation Continuation Agreement (the "SERP") in form and substance
reasonably satisfactory to Bradford and Parent such that as of the Closing Date
all future benefit accruals under the SERP shall cease and the total benefit
payable to Mr. Moretti thereunder shall be fixed at $707,216, which amount shall
be payable in a lump sum, or in non-annuity installments, at the time otherwise
provided under the terms of the SERP.
(h) Prior to the Closing Date, Wyman Park and each of Joanne E. Sheckells,
Ronald W. Robinson and Charmaine M. Snyder (each, an "Executive") shall execute
an amendment to such Executive's Change in Control Protective Agreement, dated
November 17, 1999 (each, a "Change in Control Agreement"), in form and substance
reasonably satisfactory to Bradford and Parent, limiting the required funding of
the rabbi trust provided for thereunder to the maximum benefits payable to the
Executive thereunder and immediately renewing such Change in Control Agreement
for a term expiring June 30, 2003.
SECTION 5.12 DIRECTORS.
At the Closing Date, two (2) of the existing directors of Parent shall be
appointed to the Board of Directors of Bradford.
SECTION 5.13 DUTY TO ADVISE.
Bradford shall promptly advise Parent of any change or event having a
Material Adverse Effect on it or which it believes would or would be reasonably
likely to cause or constitute a material breach of any of its representations,
warranties or covenants set forth herein or materially delay the consummation of
the transactions contemplated hereby.
SECTION 5.14 REDUCTION OF MERGER CONSIDERATION.
(a) If the amount set forth on Schedule 3.14(c) with respect to the
required payments by Wyman Park as a result of the termination of its
participation in the Financial Institutions Retirement Fund shall exceed
$100,000, the aggregate amount of the Merger Consideration to be paid to the
stockholders of Parent pursuant to Section 2.02 and the holders of Parent
Options pursuant to Section 2.04 shall be reduced by the
46
amount of such excess (net of any tax deduction to which Parent and/or Wyman
Park is entitled with respect to the payment of such excess), and the reduction
of the per share Merger Consideration shall be determined by dividing such
excess amount by (i) the number of shares of Parent Common Stock to be converted
pursuant to Sections 2.02 plus (ii) the number of shares of Parent Common Stock
represented by Parent Options to be exchanged for cash pursuant to 2.04 hereof.
(b) If a reduction of the Merger Consideration is required pursuant to this
Section 5.14, Bradford will not have any other rights or claims against Parent
or Wyman Park, their Subsidiaries, and their respective officers and directors,
under this Agreement with respect to any breach of the representation set forth
in Section 3.14(c) (as modified by DISCLOSURE SCHEDULE 3.14(C)) with respect to
the required payments by Wyman Park as a result of the termination of its
participation in the Financial Institutions Retirement Fund or the covenant set
forth in Section 5.11(f), it being agreed that the reduction in the Merger
Consideration pursuant to this Section 5.14 will constitute the sole and
exclusive remedy of Bradford against Parent and Wyman Park, their Subsidiaries
and their respective officers and directors with respect to the aforementioned
breaches.
ARTICLE VI
CONDITIONS
SECTION 6.01 CONDITIONS TO PARENT'S AND WYMAN PARK'S OBLIGATIONS UNDER THIS
AGREEMENT.
The obligations of Parent and Wyman Park hereunder shall be subject to
satisfaction at or prior to the Closing Date of each of the following
conditions, unless waived by Parent and Wyman Park pursuant to Section 8.03
hereof:
(a) Corporate Proceedings. All action required to be taken by, or on the
part of, Bradford to authorize the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated by this
Agreement, shall have been duly and validly taken by Bradford; and Wyman Park
and Parent shall have received certified copies of the resolutions evidencing
such authorizations;
(b) Covenants. The obligations and covenants of Bradford required by this
Agreement to be performed by Bradford at or prior to the Closing Date shall have
been duly performed and complied with in all material respects;
(c) Insurance Coverage. Bradford shall have obtained the insurance coverage
as provided in Section 5.05(d) and shall provide Parent with written proof
thereof.
(d) Representations and Warranties. Each of the representations and
warranties of Bradford set forth in this Agreement which is qualified as to
materiality shall be true and correct and each such representational warranty
that is not so qualified shall be true and correct in all material respects, in
each case as of the date of this
47
Agreement, and as of the Closing Date as though made on and as of the Closing
Date (except as to any representation or warranty which specifically relates to
an earlier date);
(e) Approvals of Regulatory Authorities. The parties to this Agreement
shall have received all required approvals from the Regulatory Authorities with
respect to the Mergers; and all notice and waiting periods required thereunder
shall have expired or been terminated;
(f) No Injunction. There shall not be in effect any order, decree or
injunction of a court or agency of competent jurisdiction that enjoins or
prohibits consummation of the transactions contemplated hereby;
(g) Approval of Parent's Stockholders. This Agreement shall have been
approved by the stockholders of Parent by such vote as is required under
applicable law, and Parent's Charter and Bylaws;
(h) Officer's Certificate. Bradford shall have delivered to Wyman Park a
certificate, dated the Closing Date and signed, without personal liability, by
its president, to the effect that the conditions set forth in subsections (a)
through (f) of this Section 6.01 have been satisfied; and
(i) Funds Deposited with the Exchange Agent. Bradford shall have deposited
or caused to be deposited, in trust with the Exchange Agent, an amount of cash
equal to the aggregate Merger Consideration that the holders of Parent Common
Stock shall be entitled to receive on the Closing Date pursuant to Section 2.02,
Section 2.04 and Section 2.05 of this Agreement and shall provide Parent with
sufficient evidence of the same.
SECTION 6.02 CONDITIONS TO BRADFORD'S OBLIGATIONS UNDER THIS AGREEMENT.
The obligations of Bradford hereunder shall be subject to satisfaction at
or prior to the Closing Date of each of the following conditions, unless waived
by Bradford pursuant to Section 8.03 hereof:
(a) Corporate Proceedings. All action required to be taken by, or on the
part of, Parent and Wyman Park to authorize the execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated by this Agreement, shall have been duly and validly taken by Parent
and Wyman Park; and Bradford shall have received certified copies of the
resolutions evidencing such authorizations;
(b) Covenants. The obligations and covenants of Parent and each Parent
Subsidiary required by this Agreement to be performed at or prior to the Closing
Date shall have been duly performed and complied with in all material respects;
(c) Representations and Warranties. Each of the representations and
warranties of Parent, Wyman Park and each Parent Subsidiary set forth in this
Agreement which is qualified as to materiality shall be true and correct and
each such representation and warranty that is not so qualified shall be true and
correct in all material respects, in
48
each case as of the date of this Agreement, and as of the Closing Date as though
made on and as of the Closing Date (except as to any representation or warranty
which specifically relates to an earlier date);
(d) Approvals of Regulatory Authorities. All required approvals from the
Regulatory Authorities with respect to the Mergers shall have been received; and
all notice and waiting periods required thereunder shall have expired or been
terminated; provided, however, that no approval or consent referred to herein
shall be deemed to have been received if it shall include any condition or
requirement that, in the aggregate, would so materially reduce the economic or
business benefits of the Mergers to Bradford that had such condition or
requirement been known, Bradford, in its reasonable judgment, would not have
entered into this Agreement.
(e) No Injunction. There shall not be in effect any order, decree or
injunction of a court or agency of competent jurisdiction that enjoins or
prohibits consummation of the transactions contemplated hereby;
(f) No Material Adverse Effect. Since June 30, 2001, there shall not have
occurred any Material Adverse Effect with respect to Parent or Wyman Park; and
(g) Officer's Certificate. Parent and Wyman Park shall have delivered to
Bradford, certificates, dated the Closing Date and signed, without personal
liability, by their respective chairman of the board or president, to the effect
that the conditions set forth in subsections (a) through (f) of this Section
6.02 have been satisfied.
ARTICLE VII
TERMINATION, WAIVER AND AMENDMENT
SECTION 7.01 TERMINATION.
This Agreement may be terminated at any time prior to the Closing Date:
(a) by mutual written consent of the parties authorized by their respective
boards of directors;
(b) by Bradford, or Parent or Wyman Park (i) if the Closing Date shall not
have occurred on or prior to February 28, 2003, (ii) if a vote of the
stockholders of Parent is taken and such stockholders fail to approve this
Agreement at the meeting of stockholders (or any adjournment thereof) of Parent
contemplated by Section 5.04(b) hereof, or (iii) any applicable regulatory
authority formally disapproves the issuance of any required regulatory approval,
unless in the case of clauses (i) and (ii) of this Section 7.01(b) such failure
is due to the failure of the party seeking to terminate this Agreement to
perform or observe its agreements set forth herein to be performed or observed
by such party on or before February 28, 2003.
49
(c) by Bradford if (i) at the time of such termination any of the
representations and warranties of Parent or Wyman Park contained in this
Agreement shall not be true and correct to the extent that the condition set
forth in Section 6.02(b) or (c) hereof cannot be satisfied, (ii) there shall
have been any material breach of any covenant, agreement or obligation of Parent
or Wyman Park hereunder and such breach shall have not been remedied by Parent
or Wyman Park within fifteen (15) business days after receipt by them of notice
in writing from Bradford specifying the nature of such breach and requesting
that it be remedied, (iii) any applicable Regulatory Authority approves the
transactions contemplated but with conditions attached such that the
requirements of Section 6.02(d) are not satisfied, (iv) Parent has received a
Superior Proposal, and in accordance with Section 5.06 of this Agreement, the
Board of Directors of Parent has entered into an acquisition agreement with
respect to the Superior Proposal, terminated this Agreement or withdrawn its
recommendation of this Agreement, failed to make such recommendation or modified
or qualified its recommendation in a manner adverse to Bradford, or (v) any
event occurs such that a condition set forth in Section 6.02 hereof which must
be fulfilled before Bradford is obligated to consummate the Mergers cannot be
fulfilled and non-fulfillment is not waived by Bradford.
(d) by Parent or Wyman Park if (i) at the time of such termination any of
the representations and warranties of Bradford contained in this Agreement shall
not be true and correct to the extent that the condition set forth in Section
6.01(b) or (d) hereof cannot be satisfied, (ii) there shall have been any
material breach of any covenant, agreement or obligation of Bradford hereunder
and such breach shall not have been remedied within fifteen (15) business days
after receipt by Bradford of notice in writing from Parent specifying the nature
of such breach and requesting that it be remedied, (iii) any event occurs such
that a condition set forth in Section 6.01 hereof which must be fulfilled before
Parent is obligated to consummate the Merger cannot be fulfilled and
non-fulfillment is not waived by Parent, or (iv) Parent has received a Superior
Proposal, and in accordance with Section 5.06 of this Agreement, the Board of
Directors of Parent has made a determination to accept such Superior Proposal;
provided that Parent shall not terminate this Agreement pursuant to this Section
7.01(d)(iv) and enter in a definitive agreement with respect to the Superior
Proposal until the expiration of three (3) business days following Bradford's
receipt of written notice advising Bradford that Parent has received a Superior
Proposal, specifying the material terms and conditions of such Superior Proposal
(and including a copy thereof with all accompanying documentation, if in
writing) identifying the person making the Superior Proposal and stating whether
Parent intends to enter into a definitive agreement with respect to the Superior
Proposal. After providing such notice, Parent shall provide a reasonable
opportunity to Bradford during the three-day period to make such adjustments in
the terms and conditions of this Agreement as would enable Parent to proceed
with the Mergers on such adjusted terms.
SECTION 7.02 EFFECT OF TERMINATION.
Except as otherwise provided in this Agreement, if this Agreement is
terminated pursuant to Section 7.01 hereof, this Agreement shall forthwith
become void (other than Section 8.01 (Expenses), Sections 5.02 (Access;
Confidentiality) and the last sentences
50
of 5.10(a)(ii) (Systems Conversion), which shall remain in full force and
effect), and there shall be no further liability on the part of Bradford, Parent
or Wyman Park to the other, except that no party shall be relieved or released
from any liabilities or damages arising out of its willful or fraudulent breach
of any provision of this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 EXPENSES.
(a) Except as provided herein, each party hereto shall bear and pay all
costs and expenses incurred by it in connection with the transactions
contemplated hereby, including fees and expenses of its own financial
consultants, accountants and counsel. Section 8.01(a) shall not be construed to
relieve or release a breaching party from any liability or damages arising out
of its willful breach of any provision of this Agreement.
(b) As a condition of Bradford's willingness, and in order to induce
Bradford to enter into this Agreement and to reimburse Bradford for incurring
the costs and expenses related to entering into this Agreement and consummating
the transactions contemplated by this Agreement, Parent and Wyman Park hereby
agree to pay Bradford, and Bradford shall be entitled to payment of a fee of,
five hundred fifty thousand dollars ($550,000) (the " Bradford Termination
Fee"), within five (5) business days after written demand for payment is made by
Bradford, following the occurrence of any of the events set forth below:
(i) Parent terminates this Agreement pursuant to Section 7.01(d)(iv)
or Bradford terminates this Agreement pursuant to Section 7.01 (c)(iv); or
(ii) the entering into a definitive agreement by Parent relating to
an Acquisition Proposal or the consummation of an Acquisition Proposal involving
Parent within seven (7) months after the occurrence of any of the following: (i)
the termination of the Agreement by Bradford pursuant to Section 7.01(c)(ii); or
(ii) the failure of the stockholders of Parent to approve this Agreement after
the occurrence of an Acquisition Proposal.
If demand for payment of the Bradford Termination Fee is made pursuant to
this Section 8.01(b) and payment is timely made, then Bradford will not have any
other rights or claims against Parent or Wyman Park, their Subsidiaries, and
their respective officers and directors, under this Agreement, it being agreed
that the acceptance of the Bradford Termination Fee under this Section 8.01(b)
will constitute the sole and exclusive remedy of Bradford against Parent and
Wyman Park, their Subsidiaries and their respective officers and directors.
(c) As a condition of Parent's willingness, and in order to induce Parent
to enter into this Agreement and to reimburse Parent for incurring the costs and
expenses related to entering into this Agreement and consummating the
transactions
51
contemplated by this Agreement, Bradford hereby agrees to pay Parent, and Parent
shall be entitled to payment of a fee of, two hundred thousand dollars
($200,000) (the "Wyman Termination Fee"), within five (5) business days after
written demand for payment is made by Parent, following the termination of this
Agreement by Bradford pursuant to Section 7.01(c)(iii).
If demand for payment of the Wyman Termination Fee is made pursuant to this
Section 8.01(c) and payment is timely made, then Parent and Wyman will not have
any other rights or claims against Bradford, its Subsidiaries, and its officers
and directors, under this Agreement, it being agreed that the acceptance of the
Wyman Termination Fee under this Section 8.01(c) will constitute the sole and
exclusive remedy of Parent and Wyman against Bradford, its Subsidiaries and its
officers and directors.
SECTION 8.02 SURVIVAL OF REPRESENTATIONS AND WARRANTIES .
All representations and warranties shall terminate on the Closing Date.
SECTION 8.03 AMENDMENT, EXTENSION AND WAIVER.
Subject to applicable law, at any time prior to the consummation of the
transactions contemplated by this Agreement, the parties may (a) amend this
Agreement, (b) extend the time for the performance of any of the obligations or
other acts of either party hereto, (c) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, or (d) waive compliance with any of the agreements or
conditions contained in Articles V and VI hereof or otherwise. This Agreement
may not be amended except by an instrument in writing authorized by the
respective Boards of Directors and signed, by duly authorized officers, on
behalf of the parties hereto. Any agreement on the part of a party hereto to any
extension or waiver shall be valid only if set forth in an instrument in writing
signed by a duly authorized officer on behalf of such party, but such waiver or
failure to insist on strict compliance with such obligation, covenant, agreement
or condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
SECTION 8.04 ENTIRE AGREEMENT.
This Agreement, including the documents and other writings referred to
herein or delivered pursuant hereto, contains the entire agreement and
understanding of the parties with respect to its subject matter. This Agreement
supersedes all prior arrangements and understandings between the parties, both
written and oral with respect to its subject matter, except as expressly
referenced herein, including, without limitation, the Confidentiality Agreement
referenced in Section 5.02. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors; provided,
however, that nothing in this Agreement, expressed or implied, is intended to
confer upon any party, other than the parties hereto and their respective
successors, any rights, remedies, obligations or liabilities other than pursuant
to Sections 2.02, 2.03, 5.05 and 5.11(c), (d) and (e).
52
SECTION 8.05 NO ASSIGNMENT.
Notwithstanding anything to the contrary in this Agreement, neither party
hereto may assign any of its rights or obligations hereunder to any other
person, without the prior written consent of the other party hereto.
SECTION 8.06 NOTICES.
All notices or other communications hereunder shall be in writing and shall
be deemed given if delivered personally, mailed by prepaid registered or
certified mail (return receipt requested), or sent by telecopy, addressed as
follows:
(a) If to Bradford to:
Bradford Bank
6900 York Road
Baltimore, Maryland 21212-1550
Attention: Dallas Arthur
President
with a copy to:
Venable, Baetjer and Howard, LLP
1800 Mercantile Bank & Trust Building
2 Hopkins Plaza
Baltimore, MD 21201
Attention: Elizabeth R. Hughes, Esq.
Phone: (410) 244-7400
Fax: (410) 244-7742
Email: bhughes@venable.com
(b) If to Parent or Wyman Park, to:
Wyman Park Federal Savings & Loan Association
11 West Ridgely Road
Lutherville, MD 21093-5113
Attention: Ernest A. Moretti
President
with a copy to:
Kutak Rock LLP
1101 Connecticut Avenue, N.W.
Suite 1000
Washington, DC 20036
Attention: Paul D. Borja, Esq.
Phone: (202) 828-2400
Fax: (202) 828-2488
Email: paul.borja@kutakrock.com
53
SECTION 8.07 CAPTIONS; INTERPRETATION.
(a) The captions contained in this Agreement are for reference purposes
only and are not part of this Agreement.
(b) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section references are to
this Agreement unless otherwise specified. Whenever the words "include" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. No provision of this Agreement
shall be construed to require Bradford, Parent, Wyman Park, or any of their
respective officers, directors, Subsidiaries or affiliates to take any action
which would violate or conflict with any applicable law (whether statutory or
common), rule or regulation.
SECTION 8.08 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute one and the same agreement and shall
become effective when counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart.
SECTION 8.09 SEVERABILITY.
If any provision of this Agreement or the application thereof to any person
or circumstance shall be invalid or unenforceable to any extent, the remainder
of this Agreement and the application of such provisions to other persons or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
SECTION 8.10 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Maryland, without regard to conflict of law principles.
54
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as of the day and year first above written.
ATTEST: BRADFORD BANK
_________________________ By: _________________________
Jean Quinn Dallas Arthur
Secretary President
WYMAN PARK BANCORPORATION, INC.
_________________________ By: _________________________
Charmaine Snyder Ernest A. Moretti
Secretary President
WYMAN PARK FEDERAL SAVINGS
& LOAN ASSOCIATION
_________________________ By: _________________________
Charmaine Snyder Ernest A. Moretti
Secretary President
[Signature Page of Agreement and Plan of Merger]
EXHIBIT A
SUPPORT AGREEMENT
-----------------
THIS SUPPORT AGREEMENT (the "Agreement") dated as of July 9, 2002, between
Bradford Bank, a federally-chartered savings bank ("Bradford"), and each of the
individuals listed on Schedule A attached hereto (collectively, the
"Stockholders").
WHEREAS, the Stockholders (i) collectively possess the sole or joint right
to vote, or direct the voting of, an aggregate of 257,287 shares of common
stock, $.01 par value ("Shares"), of Wyman Park Bancorporation, Inc., a Delaware
corporation ("Parent"), which constitute approximately 31.3% of the outstanding
capital stock of Parent, no other shares of any other class of capital stock of
Parent being issued or outstanding, and (ii) individually possess the right to
vote, or direct the voting of, the number of Shares set forth opposite such
Stockholder's name on Schedule A hereto; and
WHEREAS, the Stockholders (i) collectively possess the sole or joint power
to dispose of, or to direct the disposition of, an aggregate of 257,287 Shares,
which constitute approximately 31.3% of the outstanding capital stock of Parent,
and (ii) individually possess the power to dispose of, or direct the disposition
of, the number of Shares set forth opposite such Stockholder's name on Schedule
A hereto; and
WHEREAS, Bradford has entered into an Agreement and Plan of Merger with
Parent and Parent's wholly owned subsidiary, Wyman Park Federal Savings & Loan
Association ("Wyman Park"), dated July 9, 2002 (the "Merger Agreement"),
pursuant to which Bradford would acquire Parent and Wyman Park through the
conversion of each outstanding Share into the right to receive $14.55 pursuant
to a merger of Parent into a to-be-formed subsidiary of Bradford, with the
subsequent mergers of both Parent and Wyman Park into Bradford (collectively,
the "Merger"); and
WHEREAS, as a condition to entering into the Merger Agreement, Bradford has
requested that the Stockholders agree, and the Stockholders have agreed, to
support the Merger.
NOW, THEREFORE, to induce Bradford to enter into the Merger Agreement and
in consideration of the mutual covenants and agreements set forth herein and in
the Merger Agreement, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. Representations of Stockholders. Each of the Stockholders, severally,
and not jointly, represents that:
(a) (1) such Stockholder possesses the sole or joint right to vote,
or direct the voting of, all of the Shares set forth on Schedule A opposite the
Stockholder's name, (2) such number of Shares constitutes all of the Shares with
respect to which the Stockholder possesses the sole or joint right to vote, or
direct the voting of, as the case may be, and (3) such Stockholder has good and
merchantable title to all of the Shares indicated on said list opposite the
Stockholder's name, free of all restrictions and encumbrances of every kind and
character, except as indicated on Schedule A.
(b) (1) such Stockholder possesses the sole or joint power to
dispose of, or direct the disposition of, the Shares set forth on Schedule A
opposite the Stockholder's name, (2) such number of Shares constitutes all of
the Shares with respect to which the Stockholder possesses or will possess the
sole or joint power to dispose of or direct the disposition of, and (3) such
Stockholder has good and merchantable title to all of the Shares indicated on
said list opposite the Stockholder's name free of all restrictions and
encumbrances of any kind or character except as indicated on Schedule A.
(c) such Stockholder does not own, of record or beneficially, any
Shares that are not reflected on Schedule A. For the purposes of this Agreement,
beneficial ownership has the meaning set forth in Rule 13d-3 of the Securities
Exchange Act of 1934, as amended.
(d) such Stockholder has full right, power and authority to enter
into, deliver and perform this Agreement; this Agreement has been duly executed
and delivered by such Stockholder; and this Agreement constitutes the legal,
valid and binding obligation of the Stockholder, and is enforceable in
accordance with its terms.
2. Covenants of Stockholders. Each of the Stockholders, severally and not
jointly, covenants as follows:
(a) Restrictions on Transfer. Subject to the provisions of Section
5.06 of the Merger Agreement with respect to the fiduciary obligations, as
directors, of Stockholders who are also directors of Parent, with respect to
Shares listed on Schedule A, during the term of this Agreement, such Stockholder
shall not pledge, hypothecate, grant a security interest in, sell, transfer or
otherwise dispose of or encumber any of such Shares and will not enter into any
agreement, arrangement or understanding (other than a proxy for the purpose of
voting his or her Shares in accordance with Subparagraph 2(c) hereof) which
would, during that term (i) restrict, (ii) establish a right of first refusal
to, or (iii) otherwise relate to the transfer or voting of such Shares.
(b) Other Restrictions. Subject to the provisions of Section 5.06
of the Merger Agreement with respect to the fiduciary obligations, as directors,
of Stockholders who are also directors of Parent, during the term of this
Agreement, such Stockholder shall not, directly or indirectly, solicit, initiate
or encourage inquiries or proposals from, or participate in any discussions or
negotiations with, or provide any information to, any individual, corporation,
partnership, or other person, entity or group (other than Bradford and its
affiliates, officers, employees, representatives and agents) concerning any sale
of assets, sale of shares of capital stock, merger, consolidation, share
exchange or similar transactions involving Parent and Wyman Park, and such
Stockholder will use all commercially reasonable efforts to assure that Parent
and Wyman Park take no such steps. Such Stockholder shall promptly advise
Bradford of, and communicate to Bradford the terms of, any such inquiry or
proposal addressed either to such Stockholder or to Parent or Wyman Park that
such Stockholder receives or of which such Stockholder has knowledge.
(c) Merger. With respect to the Shares listed on Schedule A
pursuant to Subparagraph 1(a) hereof, each of the Stockholders shall vote such
Shares in favor of the Merger Agreement, as defined therein, and the
transactions contemplated thereby; each of the Stockholders, as a Stockholder,
further agrees to support the effectuation of the Merger, subject to the
provisions of Section 5.06 of the Merger Agreement with respect to the fiduciary
obligations, as directors, of stockholders who are also directors of Parent.
Notwithstanding the foregoing or anything else in this Agreement or the Merger
Agreement to the contrary, the Stockholders shall not be required to exercise
any options as a result of this Agreement or withdraw any shares from any plan
in connection with this Agreement.
(d) Additional Shares. The provisions of subparagraphs (a) and (c)
above shall apply to all Shares currently owned and hereafter acquired, of
record or beneficially, by each of the Stockholders.
3. Termination. This Agreement shall terminate upon the termination of the
Merger Agreement.
4. Governing Law. This Agreement shall in all respects be governed by and
construed under the laws of Maryland, all rights and remedies being governed by
such laws, without regard to conflict of law principles.
5. Benefit of Agreement. This Agreement shall be binding upon and inure to
the benefit of, and shall be enforceable by, the parties hereto and their
respective personal representatives, successors and assigns, except that neither
party may transfer or assign any of its respective rights or obligations
hereunder without the prior written consent of the other party or, if by
Bradford Federal, in accordance with the Merger Agreement.
-2-
6. Counterparts. For convenience of the parties hereto, this Agreement may
be executed in several counterparts, each of which shall be deemed an original,
all of which together shall constitute one and the same instrument.
-3-
IN WITNESS WHEREOF, Bradford and the Stockholders have caused this
Agreement to be duly executed as of the day and year first above written.
BRADFORD BANK
By:
---------------------------------
Dallas Arthur
President
-4-
STOCKHOLDERS
------------
------------------------------------
Ernest A. Moretti
------------------------------------
Kathleen H. Moretti
------------------------------------
Allan B. Heaver
------------------------------------
H. Douglas Huether
------------------------------------
Anne Lee Huether
------------------------------------
Gilbert D. Marsiglia, Sr.
------------------------------------
G. Scott Barhight
------------------------------------
Yvonne Barhight
------------------------------------
John K. White
------------------------------------
John R. Beever
------------------------------------
Rosemary M. Beever
------------------------------------
Albert M. Copp
------------------------------------
Laurie B. Schwartz
------------------------------------
Jay H. Salkin
------------------------------------
Ronald W. Robinson
------------------------------------
Elizabeth J. Robinson
------------------------------------
Charmaine M. Snyder
------------------------------------
Mark E. Snyder
-5-
SCHEDULE A
----------
- --------------------------------------------------------------------------------------------------------------
Number of
Number of Shares as to
Number of Shares as to which Holder
Shares Number of which Holder has Sole or
as to which Shares as to has Direct or Shared Power
Holder has which Holder Indirect to
Sole has joint Control of Dispose or
Power to Power to Power to Direct
Name Vote Vote Vote Disposition Encumbrance
- -------------------------------------------------------------------------------------------------------------
Ernest A. Moretti 79,418 1 1,920 2 81,338 3 81,338 4
- -------------------------------------------------------------------------------------------------------------
Allan B. Heaver 17,110 5 0 17,110 17,110
- -------------------------------------------------------------------------------------------------------------
H. Douglas Huether 20,609 6 1,500 7 22,109 8 22,109 9
- -------------------------------------------------------------------------------------------------------------
Gilbert D. Marsiglia, Sr. 14,609 10 0 14,609 14,609
- -------------------------------------------------------------------------------------------------------------
G. Scott Barhight 10,109 11 350 12 10,459 13 10,459 14
- -------------------------------------------------------------------------------------------------------------
John K. White 15,109 15 0 15,109 15,109
- -------------------------------------------------------------------------------------------------------------
- ---------------------------
1 Includes 10,805 shares received pursuant to Wyman Park Bancorporation, Inc.
Recognition and Retention Plan (the "RRP"), 39,744 shares subject to currently
exercisable options granted under the Wyman Park Bancorporation, Inc. 1999 Stock
Option and Incentive Plan (the "Stock Option Plan"), 20,989 shares allocated
pursuant to the Wyman Park Bancorporation, Inc. Employee Stock Ownership Plan
(the "ESOP"), and 7,879 shares held in the Wyman Park Savings & Loan Employees
Savings & Profit Sharing Plan and Trust (the "401(k) Plan").
2 Shares held jointly by Mr. Moretti and Kathleen H. Moretti, his spouse.
3 See Notes 1 and 2 above.
4 See Notes 1 and 2 above.
5 Includes 2,161 shares received pursuant to the RRP and 7,949 shares subject to
currently exercisable options granted under the Stock Option Plan.
6 Includes 2,161 shares received pursuant to the RRP and 7,948 shares subject to
currently exercisable options granted under the Stock Option Plan.
7 Shares held jointly by Mr. Huether and Anne Lee Huether, his spouse.
8 See Notes 6 and 7 above.
9 See Notes 6 and 7 above.
10 Includes 2,161 shares received pursuant to the RRP and 7,948 shares subject
to currently exercisable options granted under the Stock Option Plan.
11 Includes 2,161 shares received pursuant to the RRP and 7,948 shares subject
to currently exercisable options granted under the Stock Option Plan.
12 Shares held jointly by Mr. Barhight and Yvonne Barhight, his spouse.
13 See Notes 11 and 12 above.
14 See Notes 11 and 12 above.
-6-
- --------------------------------------------------------------------------------------------------------------
Number of
Number of Shares as to
Number of Shares as to which Holder
Shares Number of which Holder has Sole or
as to which Shares as to has Direct or Shared Power
Holder has which Holder Indirect to
Sole has joint Control of Dispose or
Power to Power to Power to Direct
Name Vote Vote Vote Disposition Encumbrance
- -------------------------------------------------------------------------------------------------------------
John R. Beever 12,609 16 7,500 17 20,109 18 20,109 19
- -------------------------------------------------------------------------------------------------------------
Albert M. Copp 10,689 20 580 21 11,269 22 11,269 23
- -------------------------------------------------------------------------------------------------------------
Jay H. Salkin 25,309 24 0 25,309 25,309
- -------------------------------------------------------------------------------------------------------------
Ronald W. Robinson 20,731 25 1,450 26 22,181 27 22,181 28
- -------------------------------------------------------------------------------------------------------------
Charmaine M. Snyder 16,685 29 1,000 30 17,685 31 17,685 32
- -------------------------------------------------------------------------------------------------------------
Aggregate Total 242,987 14,300 257,287 257,287
- -------------------------------------------------------------------------------------------------------------
- ---------------------------
15 Includes 2,161 shares received pursuant to the RRP and 7,948 shares subject
to currently exercisable options granted under the Stock Option Plan.
16 Includes 2,500 shares held in an IRA, 2,161 shares received pursuant to the
RRP and 7,948 shares subject to currently exercisable options granted under the
Stock Option Plan.
17 Shares held jointly by Mr. Beever and Rosemary M. Beever, his spouse.
18 See Notes 16 and 17 above.
19 See Notes 16 and 17 above.
20 Includes 2,161 shares received pursuant to the RRP and 7,948 shares subject
to currently exercisable options granted under the Stock Option Plan.
21 Shares held jointly by Mr. Copp and Laurie B. Schwarz, his spouse.
22 See Notes 20 and 21 above.
23 See Notes 20 and 21 above.
24 Includes 2,161 shares received pursuant to the RRP and 7,948 shares subject
to currently exercisable options granted under the Stock Option Plan.
25 Includes 2,593 shares received pursuant to the RRP, 7,949 shares subject to
currently exercisable options granted under the Stock Option Plan, 7,635 shares
allocated pursuant to the ESOP, and 2,554 shares held in the 401(k) Plan.
26 Shares held jointly by Mr. Robinson and Elizabeth J. Robinson, his spouse.
27 See Notes 25 and 26 above.
28 See Notes 25 and 26 above.
29 Includes 1,891 shares received pursuant to the RRP, 7,949 shares subject to
currently exercisable options granted under the Stock Option Plan, 6,412 shares
allocated pursuant to the ESOP, and 433 shares held in the 401(k) Plan.
30 Shares held jointly by Ms. Snyder and Mark E. Snyder, her spouse.
31 See Notes 29 and 30 above.
32 See Notes 29 and 30 above.
-7-
APPENDIX C
OPINION OF TRIDENT SECURITIES
August 9, 2002
Board of Directors
Wyman Park Bancorporation, Inc.
11 W. Ridgely Road
Lutherville, Maryland 21093
Members of the Board:
You have requested our opinion as to the fairness, from a financial point
of view, to the holders of the issued and outstanding shares of common stock
(the "Wyman Common Stock") of Wyman Park Bancorporation, Inc. ("Wyman"), of the
consideration to be paid by Bradford Federal Savings Bank ("Bradford") pursuant
to the Agreement and Plan of Merger, dated as of July 9, 2002 (the "Merger
Agreement") by and between Wyman and Bradford. Unless otherwise noted, all terms
used herein will have the same meaning as defined in the Merger Agreement.
As more specifically set forth in the Merger Agreement, and subject to a
number of conditions and procedures described in the Merger Agreement, at the
effective time (the "Effective Time"), Wyman will be merged with and into
Bradford (the "Merger"), the separate corporate existence of Wyman will cease
and each share of Wyman Common Stock issued and outstanding prior to the
Effective Time of the Merger will be converted into the right to receive $14.55
in cash (the "Consideration").
Trident Securities ("Trident"), a division of McDonald Investments Inc., as
part of its investment banking business, is customarily engaged in the valuation
of businesses and their securities in connection with mergers and acquisitions,
negotiated underwritings, competitive biddings, secondary distributions of
listed and unlisted securities, private placements and valuations for estate,
corporate and other purposes.
We have acted as Wyman's financial advisor in connection with rendering our
opinion set forth herein, we have among other things:
(i) Reviewed certain publicly available information concerning Wyman,
including the Annual Report for the three fiscal years ending June
30, 2001 and the Quarterly Report on Form 10-QSB for the quarters
ended March 31, 2002, December 31, 2001 and September 30, 2001;
(ii) Reviewed certain other internal information, primarily financial in
nature relating to the business, earnings, assets and prospects of
Wyman provided to us or publicly available for purposes of our
analysis;
Board of Directors
August 9, 2002
Page 2
(iii) Participated in meetings and telephone conferences with members of
senior management of Wyman concerning the financial condition,
business, assets, financial forecasts and prospects of the company,
as well as other matters we believed relevant to our inquiry;
(iv) Reviewed certain stock market information for Wyman Common Stock and
compared it with similar information for certain companies, the
securities of which are publicly traded;
(v) Compared the results of operations and financial condition of Wyman
with that of certain companies, which we deemed to be relevant for
purposes of this opinion;
(vi) Reviewed the financial terms, to the extent publicly available, of
certain acquisition transactions, which we deemed to be relevant for
purposes of this opinion;
(vii)Reviewed the Merger Agreement and certain related documents; and
(viii) Performed such other reviews and analyses as we have deemed
appropriate.
In our review and analysis and in arriving at our opinion, we have assumed
and relied upon the accuracy and completeness of all of the financial and other
information reviewed by us and have relied upon the accuracy and completeness of
the representations, warranties and covenants of Wyman contained in the Merger
Agreement. We have not been engaged to undertake, and have not assumed any
responsibility for, nor have we conducted, an independent investigation or
verification of such matters. We have not been engaged to and we have not
conducted a physical inspection of any of the assets, properties or facilities
of either Wyman or Bradford, nor have we made or obtained or been furnished with
any independent valuation or appraisal of any of such assets, properties or
facilities or any of the liabilities of either Wyman or Bradford. With respect
to financial forecasts used in our analysis, we have assumed that such forecasts
have been reasonably prepared by management of Wyman on a basis reflecting the
best currently available estimates and judgments of the management of Wyman as
to the future performance of Wyman. We have not been engaged to and we have not
assumed any responsibility for, nor have we conducted any independent
investigation or verification of such matters, and we express no view as to such
financial forecasts or the assumptions on which they are based. We have also
assumed that all of the conditions to the consummation of the Merger, as set
forth in the Merger Agreement, would be satisfied and that the Merger would be
consummated on a timely basis in the manner contemplated by the Merger
Agreement.
Board of Directors
August 9, 2002
Page 3
This opinion is based on economic and market conditions and other
circumstances existing on, and information made available as of, the date
hereof. In addition, our opinion is, in any event, limited to the fairness, as
of the date hereof, from a financial point of view, of the Consideration, to the
holders of Wyman Common Stock, and does not address the underlying business
decision by Wyman's Board of Directors to effect the Merger, does not compare or
discuss the relative merits of any competing proposal or any other terms of the
Merger, and does not constitute a recommendation to any Wyman shareholder as to
how such shareholder should vote with respect to the Merger. This opinion does
not represent an opinion as to what the value of Wyman Common Stock may be at
the Effective Time of the Merger or as to the prospects of Wyman's business or
Bradford's business.
We have acted as financial advisor to Wyman in connection with the Merger
and will receive from Wyman a fee for our services in rendering this opinion, as
well as Wyman's agreement to indemnify us under certain circumstances. In the
past, we have also provided certain other investment banking services for Wyman
and have received compensation for such services.
In the ordinary course of business, we may actively trade securities of
Wyman for our own account and for the accounts of customers and, accordingly,
may at any time hold a long or short position in such securities.
It is understood that this opinion was prepared solely for the confidential
use of the Board of Directors and senior management of Wyman and may not be
disclosed, summarized, excerpted from or otherwise publicly referred to without
our prior written consent. Notwithstanding the foregoing, this opinion may be
included in the proxy statement to be mailed to the holders of Wyman Common
Stock in connection with the Merger, provided that this opinion will be
reproduced in such proxy statement in full, and any description of or reference
to us or our actions, or any summary of the opinion in such proxy statement,
will be in a form reasonably acceptable to us and our counsel.
Board of Directors
August 9, 2002
Page 4
Based upon and subject to the foregoing and such other matters, as we
consider relevant, it is our opinion that as of the date hereof, the
Consideration is fair, from a financial point of view, to the stockholders of
Wyman.
Very truly yours,
TRIDENT SECURITIES,
a division of McDonald Investments Inc.
APPENDIX D
DELAWARE CODE
TITLE 8. CORPORATIONS
CHAPTER 1. GENERAL CORPORATION LAW
SUBCHAPTER IX. MERGER, CONSOLIDATION OR CONVERSION
SS. 262. APPRAISAL RIGHTS.
(a) Any stockholder of a corporation of this State who holds shares of stock on
the date of the making of a demand pursuant to subsection (d) of this section
with respect to such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise complied with
subsection (d) of this section and who has neither voted in favor of the merger
or consolidation nor consented thereto in writing pursuant to ss. 228 of this
title shall be entitled to an appraisal by the Court of Chancery of the fair
value of the stockholder's shares of stock under the circumstances described in
subsections (b) and (c) of this section. As used in this section, the word
"stockholder" means a holder of record of stock in a stock corporation and also
a member of record of a nonstock corporation; the words "stock" and "share" mean
and include what is ordinarily meant by those words and also membership or
membership interest of a member of a nonstock corporation; and the words
"depository receipt" mean a receipt or other instrument issued by a depository
representing an interest in one or more shares, or fractions thereof, solely of
stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or series of
stock of a constituent corporation in a merger or consolidation to be effected
pursuant to ss. 251 (other than a merger effected pursuant to ss. 251(g) of this
title), ss. 252, ss. 254, ss. 257, ss. 258, ss. 263 or ss. 264 of this title:
(1) Provided, however, that no appraisal rights under this section shall be
available for the shares of any class or series of stock, which stock, or
depository receipts in respect thereof, at the record date fixed to determine
the stockholders entitled to receive notice of and to vote at the meeting of
stockholders to act upon the agreement of merger or consolidation, were either
(i) listed on a national securities exchange or designated as a national market
system security on an interdealer quotation system by the National Association
of Securities Dealers, Inc. or (ii) held of record by more than 2,000 holders;
and further provided that no appraisal rights shall be available for any shares
of stock of the constituent corporation surviving a merger if the merger did not
require for its approval the vote of the stockholders of the surviving
corporation as provided in subsection (f) of ss. 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights under
this section shall be available for the shares of any class or series of stock
of a constituent corporation if the holders thereof are required by the terms of
an agreement of merger or consolidation pursuant to ss.ss. 251, 252, 254, 257,
258, 263 and 264 of this title to accept for such stock anything except:
a. Shares of stock of the corporation surviving or resulting from such merger or
consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts in respect
thereof, which shares of stock (or depository receipts in respect thereof) or
depository receipts at the effective date of the merger or consolidation will be
either listed on a national securities exchange or designated as a national
market system security on an interdealer quotation system by the National
Association of Securities Dealers, Inc. or held of record by more than 2,000
holders;
c. Cash in lieu of fractional shares or fractional depository receipts described
in the foregoing subparagraphs a. and b. of this paragraph; or
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d. Any combination of the shares of stock, depository receipts and cash in lieu
of fractional shares or fractional depository receipts described in the
foregoing subparagraphs a., b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation party to
a merger effected under ss. 253 of this title is not owned by the parent
corporation immediately prior to the merger, appraisal rights shall be available
for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
stockholders, the corporation, not less than 20 days prior to the meeting, shall
notify each of its stockholders who was such on the record date for such meeting
with respect to shares for which appraisal rights are available pursuant to
subsection (b) or (c) hereof that appraisal rights are available for any or all
of the shares of the constituent corporations, and shall include in such notice
a copy of this section. Each stockholder electing to demand the appraisal of
such stockholder's shares shall deliver to the corporation, before the taking of
the vote on the merger or consolidation, a written demand for appraisal of such
stockholder's shares. Such demand will be sufficient if it reasonably informs
the corporation of the identity of the stockholder and that the stockholder
intends thereby to demand the appraisal of such stockholder's shares. A proxy or
vote against the merger or consolidation shall not constitute such a demand. A
stockholder electing to take such action must do so by a separate written demand
as herein provided. Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become effective;
or
(2) If the merger or consolidation was approved pursuant to ss. 228 or ss. 253
of this title, then either a constituent corporation before the effective date
of the merger or consolidation or the surviving or resulting corporation within
10 days thereafter shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights of
the approval of the merger or consolidation and that appraisal rights are
available for any or all shares of such class or series of stock of such
constituent corporation, and shall include in such notice a copy of this
section. Such notice may, and, if given on or after the effective date of the
merger or consolidation, shall, also notify such stockholders of the effective
date of the merger or consolidation. Any stockholder entitled to appraisal
rights may, within 20 days after the date of mailing of such notice, demand in
writing from the surviving or resulting corporation the appraisal of such
holder's shares. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the stockholder intends
thereby to demand the appraisal of such holder's shares. If such notice did not
notify stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders of
any class or series of stock of such constituent corporation that are entitled
to appraisal rights of the effective date of the merger or consolidation or (ii)
the surviving or resulting corporation shall send such a second notice to all
such holders on or within 10 days after such effective date; provided, however,
that if such second notice is sent more than 20 days following the sending of
the first notice, such second notice need only be sent to each stockholder who
is entitled to appraisal rights and who has demanded appraisal of such holder's
shares in accordance with this subsection. An affidavit of the secretary or
assistant secretary or of the transfer agent of the corporation that is required
to give either notice that such notice has been given shall, in the absence of
fraud, be prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each constituent
corporation may fix, in advance, a record date that shall be not more than 10
days prior to the date the notice is given, provided, that if the notice is
given on or after the effective date of the merger or consolidation, the record
date shall be such effective date. If no record date is fixed and the notice is
given prior to the effective date, the record date shall be the close of
business on the day next preceding the day on which the notice is given.
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(e) Within 120 days after the effective date of the merger or consolidation, the
surviving or resulting corporation or any stockholder who has complied with
subsections (a) and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition in the Court of Chancery demanding a determination
of the value of the stock of all such stockholders. Notwithstanding the
foregoing, at any time within 60 days after the effective date of the merger or
consolidation, any stockholder shall have the right to withdraw such
stockholder's demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not voted
in favor of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the stockholder within 10 days after
such stockholder's written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the
period for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which shall
within 20 days after such service file in the office of the Register in Chancery
in which the petition was filed a duly verified list containing the names and
addresses of all stockholders who have demanded payment for their shares and
with whom agreements as to the value of their shares have not been reached by
the surviving or resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be accompanied by such a
duly verified list. The Register in Chancery, if so ordered by the Court, shall
give notice of the time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting corporation and to
the stockholders shown on the list at the addresses therein stated. Such notice
shall also be given by 1 or more publications at least 1 week before the day of
the hearing, in a newspaper of general circulation published in the City of
Wilmington, Delaware or such publication as the Court deems advisable. The forms
of the notices by mail and by publication shall be approved by the Court, and
the costs thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the stockholders
who have complied with this section and who have become entitled to appraisal
rights. The Court may require the stockholders who have demanded an appraisal
for their shares and who hold stock represented by certificates to submit their
certificates of stock to the Register in Chancery for notation thereon of the
pendency of the appraisal proceedings; and if any stockholder fails to comply
with such direction, the Court may dismiss the proceedings as to such
stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court shall
appraise the shares, determining their fair value exclusive of any element of
value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted
such stockholder's certificates of stock to the Register in Chancery, if such is
required, may participate fully in all proceedings until it is finally
determined that such stockholder is not entitled to appraisal rights under this
section.
(i) The Court shall direct the payment of the fair value of the shares, together
with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
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(j) The costs of the proceeding may be determined by the Court and taxed upon
the parties as the Court deems equitable in the circumstances. Upon application
of a stockholder, the Court may order all or a portion of the expenses incurred
by any stockholder in connection with the appraisal proceeding, including,
without limitation, reasonable attorney's fees and the fees and expenses of
experts, to be charged pro rata against the value of all the shares entitled to
an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of
this section shall be entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except dividends or
other distributions payable to stockholders of record at a date which is prior
to the effective date of the merger or consolidation); provided, however, that
if no petition for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder shall deliver to the
surviving or resulting corporation a written withdrawal of such stockholder's
demand for an appraisal and an acceptance of the merger or consolidation, either
within 60 days after the effective date of the merger or consolidation as
provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court
of Chancery shall be dismissed as to any stockholder without the approval of the
Court, and such approval may be conditioned upon such terms as the Court deems
just.
(l) The shares of the surviving or resulting corporation to which the shares of
such objecting stockholders would have been converted had they assented to the
merger or consolidation shall have the status of authorized and unissued shares
of the surviving or resulting corporation.
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WYMAN PARK BANCORPORATION, INC.
11 WEST RIDGLEY ROAD
LUTHERVILLE, MARYLAND 21093
REVOCABLE PROXY FOR THE ANNUAL MEETING
OF STOCKHOLDERS
October 16, 2002
The undersigned hereby constitutes and appoints Ernest A. Moretti, John K.
White and G. Scott Barhight, and each of them, the proxies of the undersigned,
with full powers of substitution, to attend the Annual Meeting of Stockholders
of Wyman Park Bancorporation, Inc. (the "Company") to be held at the main office
located at 11 West Ridgely Road, Lutherville, Maryland, on October 16, 2002 at
3:00 p.m., local time, and any adjournments thereof, and to vote all the shares
of stock of the Company which the undersigned may be entitled to vote, upon the
following matters.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY, WILL BE
VOTED IN ACCORDANCE WITH THE INSTRUCTIONS MARKED HEREIN, AND WILL BE VOTED FOR
THE ELECTION OF DIRECTORS AND AS DETERMINED BY A MAJORITY OF THE BOARD OF
DIRECTORS AS TO OTHER MATTERS, IF NO INSTRUCTIONS TO THE CONTRARY ARE MARKED
HEREIN.
1. The Election of Directors: Ernest A. Moretti, John K. White and G.
Scott Barhight
| | FOR all nominees listed above | | WITHHOLD AUTHORITY to
(except as marked to the contrary below). vote for all nominees
listed above.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, PRINT
THAT NOMINEE'S NAME BELOW.)
2. The adoption and approval of the Agreement and Plan of Merger dated
July 9, 2002, by and among Bradford Bank, Wyman Park Bancorporation,
Inc. and Wyman Park Federal Savings & Loan Association, and the
transactions contemplated by that agreement:
| | FOR | | AGAINST | | ABSTAIN
3. The transaction of such other business as may properly come before the
Annual Meeting or any adjournments thereof.
The undersigned hereby acknowledges receipt of a copy of the accompanying
Notice of Annual Meeting of the Stockholders and Proxy Statement and the Annual
Report to Stockholders for the fiscal year ended June 30, 2002, and hereby
revokes any proxy heretofore given. THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE
ITS EXERCISE.
Date:
-------------------------------------------------------
Signature:
--------------------------------------------------
Signature:
--------------------------------------------------
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PLEASE MARK, DATE AND SIGN AS YOUR NAME APPEARS HEREIN AND RETURN IN THE
ENCLOSED ENVELOPE. If acting as executor, administrator, trustee, guardian, etc.
you should so indicate when signing. If the signor is a corporation, please sign
the full name by duly appointed officer. If a partnership, please sign in
partnership name by authorized person. If shares are held jointly, each
stockholder named should sign.
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