Item 1.01 Entry Into a Material Definitive Agreement.
On March 16, 2021, DLP Bancshares, Inc., a Delaware corporation ("DLP
Bancshares"), DLP Ventures Holdings Inc., a Delaware corporation ("Merger Sub"),
Donald Wenner, Sunnyside Bancorp, Inc., a Maryland corporation ("Sunnyside
Bancorp"), and Sunnyside Federal Savings and Loan Association of Irvington, a
federally-chartered savings and loan association and the wholly owned subsidiary
of Sunnyside Bancorp ("Sunnyside Federal"), entered into an Agreement and Plan
of Merger (the "Merger Agreement"), pursuant to which DLP Bancshares will
acquire Sunnyside Bancorp and Sunnyside Federal.
Under the terms of the Merger Agreement, DLP Bancshares will acquire all of
Sunnyside Bancorp's outstanding common stock at a price of $15.55 per share in
cash, subject to potential adjustment as provided in the Merger Agreement. The
aggregate value of the transaction is expected to be approximately $12.3
million.
Pursuant to the Merger Agreement, and subject to the terms and conditions
thereof, DLP Bancshares' acquisition of Sunnyside Bancorp will be effected by a
merger in which Merger Sub will merge with and into Sunnyside Bancorp, with
Sunnyside Bancorp as the surviving corporation and a wholly-owned subsidiary of
DLP Bancshares.
The Merger Agreement contains customary representations and warranties from DLP
Bancshares, DLP Venture Holdings Inc., Donald Wenner, Sunnyside Bancorp and
Sunnyside Federal, and each party has agreed to customary covenants, including,
among others, covenants relating to (1) the conduct of Sunnyside Bancorp and
Sunnyside Federal's business during the interim period between the execution of
the Merger Agreement and the closing of the merger, (2) Sunnyside Bancorp's
obligations to facilitate its stockholders' consideration of, and voting upon,
the Merger Agreement and the merger, (3) the recommendation by the board of
directors of Sunnyside Bancorp in favor of approval of the Merger Agreement and
the merger by its stockholders, and (4) Sunnyside Bancorp's non-solicitation
obligations relating to alternative business combination transactions.
Consummation of the merger is subject to certain conditions, including, among
others, approval of the merger by Sunnyside Bancorp's stockholders, the receipt
of all required regulatory approvals and expiration of applicable waiting
periods, accuracy of specified representations and warranties of each party, the
performance in all material respects by each party of its obligations under the
Merger Agreement, and the absence of any injunctions or other legal restraints.
The Merger Agreement provides certain termination rights for both DLP Bancshares
and Sunnyside Bancorp, and further provides that upon termination of the Merger
Agreement under certain circumstances, Sunnyside Bancorp will be obligated to
pay DLP Bancshares a termination fee of $615,000. The Merger Agreement further
provides that upon termination of the Merger Agreement under certain
circumstances, either DLP Bancshares or Mr. Wenner will be obligated to pay
Sunnyside Bancorp a termination fee of $615,000. Those funds were placed in
escrow at the time of the execution of the Merger Agreement.
Sunnyside Bancorp will be subject to customary restrictions on soliciting or
initiating discussions with respect to acquisition proposals and restrictions on
its ability to respond to or enter into any agreement with respect to an
acquisition proposal, subject to certain fiduciary duty related exceptions
provided in the Merger Agreement.
Under the Merger Agreement, all current directors of Sunnyside Bancorp and
Sunnyside Federal will resign, except for one current director of Sunnyside
Bancorp to be selected by DLP Bancshares, who will remain a director of
Sunnyside Federal.
In connection with the execution of the Merger Agreement, the directors and
executive officers of Sunnyside Bancorp entered into shareholder support
agreements with pursuant to which such individuals, in their capacities as
stockholders, have agreed, among other things, to vote their respective shares
of Sunnyside Bancorp common stock in favor of the approval of the Merger
Agreement and the transactions contemplated thereby. The foregoing summary of
the shareholder support agreement does not purport to be complete and is
qualified in its entirety by reference to the complete text of such agreement,
which is filed as Exhibit 10.1 and is incorporated herein by reference.
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As of March 16, 2021, the date of the shareholder support agreements, the
directors and executive officers owned 48,588 shares of Sunnyside Bancorp's
common stock, representing approximately 6.1% of the 793,500 outstanding shares
of Sunnyside Bancorp common stock as of such date. The approval of the Merger
Agreement will require the affirmative vote of the holders of at least a
majority of the outstanding shares of Sunnyside Bancorp's common stock.
The foregoing summary of the Merger Agreement does not purport to be complete
and is qualified in its entirety by reference to the complete text of such
document, which is attached hereto as Exhibit 2.1 and is incorporated herein by
reference. The representations, warranties and covenants of each party set forth
in the Merger Agreement have been made only for purposes of, and were and are
solely for the benefit of the parties to, the Merger Agreement, may be subject
to limitations agreed upon by the contracting parties, including being qualified
by confidential disclosures made for the purposes of allocating contractual risk
between the parties to the Merger Agreement instead of establishing these
matters as facts, and may be subject to standards of materiality applicable to
the contracting parties that differ from those applicable to investors.
Accordingly, the representations and warranties may not describe the actual
state of affairs at the date they were made or at any other time, and investors
should not rely on them as statements of fact. In addition, such representations
and warranties (1) will not survive consummation of the merger, unless otherwise
specified therein, and (2) were made only as of the date of the Merger Agreement
or such other date as is specified in the Merger Agreement. Moreover,
information concerning the subject matter of the representations and warranties
may change after the date of the Merger Agreement, which subsequent information
may or may not be fully reflected in any public disclosure. Accordingly, the
Merger Agreement is included with this filing only to provide investors with
information regarding the terms of the Merger Agreement, and not to provide
investors with other factual information regarding Sunnyside Bancorp, Sunnyside
Federal or DLP Bancshares, their respective affiliates or their respective
businesses.
Forward-Looking Statements
This Form 8-K contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act. Forward-looking statements include
statements regarding the anticipated closing date of the transaction and
anticipated future results. Forward-looking statements can be identified by the
fact that they do not relate strictly to historical or current facts. They often
include words like "believe", "expect", "anticipate", "estimate", and "intend"
or future or conditional verbs such as "will", "would", "should", "could" or
"may". Certain factors that could cause actual results to differ materially from
expected results include: the merger may involve unexpected costs, liabilities
or delays; the inability to obtain the necessary regulatory or shareholder
approvals or to obtain them in a timely fashion; the reaction of the companies'
customers, employees and counterparties to the proposed merger; the outcome of
any legal proceedings related to the merger; the occurrence of any event, change
or other circumstances that could give rise to the termination of the merger
agreement; increased competitive pressures; changes in the interest rate
environment; changes in general economic conditions; legislative and regulatory
changes that adversely affect the business in which Sunnyside Bancorp, Inc.,
Sunnyside Federal and DLP Bancshares are engaged; changes in the securities
markets; and other risks and uncertainties set forth in Sunnyside Bancorp's
filings with the Securities and Exchange Commission, including its most recently
filed Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K and other filings with the SEC, which are available
on the SEC's website at www.sec.gov. Undue reliance should not be placed on the
forward-looking statements, which speak only as of the date hereof. None of
Sunnyside Bancorp, Inc., Sunnyside Federal or DLP Bancshares undertake, and
specifically disclaim any obligation, to publicly release the result of any
revisions that may be made to update any forward-looking statement to reflect
the events or circumstances after the date on which the forward-looking
statement is made, or reflect the occurrence of unanticipated events, except to
the extent required by law.
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Additional Information Regarding the Merger and Where to Find It
This communication does not constitute an offer to sell or the solicitation of
an offer to buy the securities of Sunnyside Bancorp or the solicitation of any
vote or approval. In connection with the proposed merger, Sunnyside Bancorp,
Inc. will provide its shareholders with a proxy statement and other relevant
documents concerning the proposed merger. Shareholders of Sunnyside Bancorp,
Inc. are urged to read the proxy statement and other relevant documents and any
amendments or supplements to those documents, because they will contain
important information which should be considered before making any decision
regarding proposed the merger. Shareholders of Sunnyside Bancorp, Inc. will be
able to obtain a copy of the proxy statement, and any other relevant documents,
without charge, when they become available, at the Securities and Exchange
Commission website (www.sec.gov), or by directing a request to:
Timothy D. Sullivan
President and Chief Executive Officer
Sunnyside Bancorp, Inc.
56 Main Street
Irvington, New York 10533
Certain Information Regarding Participants in the Solicitation
Sunnyside Bancorp, Inc. and certain of its directors, executive officers and
employees may be deemed to be participants in the solicitation of proxies from
the shareholders of Sunnyside Bancorp, Inc. in connection with the proposed
merger. Information about the directors and executive officers of Sunnyside
Bancorp, Inc. is set forth in Sunnyside Bancorp, Inc.'s Annual Report on Form
10-K filed with the Securities Exchange Commission on March 27, 2020, Sunnyside
Bancorp, Inc.'s Amendment No. 1 to Annual Report on Form 10-K/A filed with the
Securities Exchange Commission on April 29, 2020 and in the proxy statement for
Sunnyside Bancorp, Inc.'s 2020 annual meeting of shareholders, as filed with the
Securities and Exchange Commission on May 27, 2020, as modified or supplemented
by any Form 3 or Form 4 filed with the SEC since the date of such definitive
proxy statement, and in subsequent documents filed with the SEC. Additional
information regarding the interests of these participants and any other persons
who may be deemed participants in the transaction may be obtained by reading the
proxy statement regarding the proposed merger when it becomes available. Free
copies of this document may be obtained as described in the preceding paragraph.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
2.1* Agreement and Plan of Merger, dated as of March 16,
2021, by and among DLP Bancshares, Inc., DLP Ventures
Holdings Inc., Donald Wenner, Sunnyside Bancorp, Inc. and
Sunnyside Federal Savings and Loan Association of
Irvington
10.1 Form of Company Shareholder Support Agreement
99.1 Joint Press Release dated March 16, 2021
* Sunnyside Bancorp has omitted schedules and similar attachments to the subject
agreement pursuant to Item 601(b) of Regulation S-K. Sunnyside Bancorp will
furnish a copy of any omitted schedule or similar attachment to the SEC upon
request.
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