PLAN OF REORGANIZATION
EXHIBIT
2.1
This
Plan
of Reorganization (the “Plan”), dated as of the 18th day of December 2007, is
entered into by and between 1st Century Bank, National Association, a national
banking association (the “Bank”), and 1st Century Bancshares, Inc., a Delaware
corporation (“Holding Company”).
RECITALS
A. WHEREAS,
it is the desire of the parties to this Plan to adopt a plan of reorganization
providing for the formation of a holding company for the Bank (the
“Reorganization”);
B. WHEREAS,
the Board of Directors of the Bank has unanimously determined that it is in
the
best interests of the Bank and its shareholders for the Reorganization to be
consummated in accordance with the terms of this Plan; and
C. WHEREAS,
the Reorganization is to be accomplished pursuant to Section 215a-2 of the
National Bank Act and Section 5.32 regulations of the Office of the Comptroller
of the Currency (the “OCC”) promulgated thereunder which permit a national bank
to become a subsidiary of a bank holding company upon consummation of a
reorganization, and pursuant to Section 3(a)(5)(c) of the Bank Holding
Company Act and Section 225.17(b) of the regulations promulgated thereunder
which set forth certain notification requirements to the Board of Governors
of
the Federal Reserve (the “FRB”) prior to a bank holding company reorganization
becoming effective.
D. WHEREAS,
a form of the certificate of incorporation of Holding Company is attached hereto
as Exhibit A, which sets forth the rights and privileges of the stockholders
of
Holding Company to be effective after the Reorganization.
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual agreements
herein contained, the adequacy and receipt of which consideration is hereby
acknowledged, the parties hereto agree and covenant as follows:
ARTICLE
ONE
EFFECTIVE
DATE OF THE REORGANIZATION
1.1 Effective
Date. Upon satisfaction of each of the
conditions set forth in Article Five, and in the absence of any facts which
would give either party hereto a right to terminate this Plan (unless such
right
has been waived), the parties hereto shall execute and cause to be filed with
the OCC, the FRB, and other federal or state regulatory agencies as may be
required under applicable laws, rules or regulations, such certificates or
other
documents in order to cause the Reorganization provided for in this Plan to
become effective. The effective date of the Reorganization shall be
the date this Plan is certified as effective by the OCC (the “Effective
Date”).
1.2 Continued
Existence of the Bank. Following the
Reorganization, the existence and all the property, rights, privileges,
immunities, powers, franchises and authority of the Bank shall continue and
all
debts, liabilities and duties of the Bank shall remain unaffected and unimpaired
by the Reorganization. The Bank shall continue to operate under its
present name “1st Century Bank, National Association.”
1.3 Directors
and Officers of Holding Company and the
Bank. Those persons who, as of the
Effective Date, are directors of the Bank shall remain directors of the
Bank. Those persons who, as of the Effective Date, are directors or
officers of Holding Company, shall remain directors or officers of Holding
Company.
ARTICLE
TWO
CONVERSION
OF SHARES
2.1 Conversion
of Bank Common Stock.
(a) Exchange
Ratio. Each share of common stock of the Bank (“Bank Common
Stock”) outstanding at the Effective Time (other than shares the holders of
which have exercised their statutory right to receive payment as described
in
Section 2.1(c) hereof and other than shares of treasury stock as described
in Section 2.1(d) hereof), shall, without any action on the part of the
holder thereof, be converted into one share of the common stock of Holding
Company (“Holding Company Common Stock”).
(b) Effect
of Share Exchange. At the Effective Time and as a result of the
exchange of Bank Common Stock for Holding Company Common Stock set forth in
Section 2.1(a), all of the outstanding shares of Bank Common Stock shall be
owned by Holding Company and such ownership shall be evidenced by a stock
certificate issued by the Bank to Holding Company.
(c) Rights
of Holders of Certificates of Bank Common Stock. At the Effective
Time, the existing shareholders of the Bank shall own all of the outstanding
shares of Holding Company Common Stock. Certificates theretofore
representing shares of Bank Common Stock shall be deemed to be certificates
representing an equal number of shares of Holding Company Common Stock without
any physical exchange therefor. Bank Common Stock certificates may,
but need not be, surrendered and exchanged by the holders thereof after the
Effective Date, for new certificates representing the number of shares of
Holding Company Common Stock to which such holders are entitled as set forth
in
this Plan. Certificates evidencing ownership of shares of Holding
Company Common Stock shall be issued to the holders of lost or destroyed shares
of Bank Common Stock upon presentation to Holding Company of such evidence
of
ownership and agreement of indemnity as Holding Company may reasonably
require.
(d) Dissenters’
Rights. Following the approval of the Reorganization by the OCC,
any person who is then, or was immediately prior to the Effective Time, a
shareholder of the Bank and who either (a) voted against the Reorganization
at
the meeting of the shareholders at which the Reorganization was approved or
(b)
gave written notice at or prior to such meeting to the presiding officer that
he
or she dissents from the Plan (each a “Dissenting Shareholder”), shall, pursuant
to Section 215a-2 of the National Bank Act, be entitled to receive the value
of
the shares so held by him or her when the Reorganization is consummated and
such
shareholder shall have, prior to thirty days after the date of consummation
of
the Reorganization, made written request to the Bank, accompanied by such
shareholder’s stock certificates.
(e) Cancellation
of Treasury Stock. Each share of Bank Common Stock that is owned
by the Bank as treasury stock shall automatically be cancelled and returned
and
shall cease to exist, and no consideration shall be delivered in exchange
therefor.
(f) Sole
Rights. On the Effective Date, the holders of certificates
formerly representing Bank Common Stock issued and outstanding on the Effective
Date shall cease to have any rights with respect to such Bank Common Stock,
and
their sole rights on and following the Effective Date shall be with respect
to
Holding Company Common Stock into which their shares of Bank Common Stock shall
have been converted as a result of the Reorganization.
2.2 Stock
Benefit Plans.
(a) Effect
of the Reorganization. On the Effective Date, and subject to any
requirements of applicable law, the Bank’s 2004 Director and Employee Stock
Option Plan (the “Director and Employee Plan”), Amended and Restated 2005 Equity
Incentive Plan (the “Equity Incentive Plan”), and 2004 Founder Stock Option Plan
(the “Founder Plan”) (the Director and Employee Plan, The Equity Incentive Plan,
and the Founder Plan are, collectively, the “Plans”) shall be assumed by Holding
Company and shall become the Plans of Holding Company. Each
unexercised option or other right to acquire Bank Common Stock granted under
the
Plans, shall become an unexercised option to purchase the same number of shares
(adjusted thereafter where appropriate pursuant to the anti-dilution provisions
of the Plans, if any) of Holding Company Common Stock on the same terms and
conditions (including, but not limited to, the same option exercise price),
or,
in the case of the Equity Incentive Plan, shall become the right to receive
Holding Company Common Stock as equity incentives on the same terms and
conditions and shall no longer represent any right to acquire Bank Common Stock
nor any interest in Bank Common Stock.
(b) Amendment
to Awards under the Plans. Holding Company shall enter into
amended award agreements under each of the Plans (collectively, the “Amended
Agreements”) with each holder of awards under the Plans. The Amended
Agreements shall provide that the holders of each outstanding award granted
pursuant to the Plans shall accept Holding Company Common Stock in lieu of
Bank
Common Stock upon the exercise of options, as an award of restricted stock,
or
upon the receipt of any other form of award, as applicable, under each of the
Plans.
2.3 Other
Employment Agreements and Benefit
Plans. On the Effective Date, and
subject to any adjustments in the Bank’s capitalization between the date hereof
and the Effective Date, all rights to purchase, sell or receive Bank Common
Stock and all rights to elect to make payment in Bank Common Stock under any
agreement between the Bank and any director, officer or employee thereof or
under any plan or program of the Bank shall automatically, by operation of
law,
be converted into and shall become an identical right to purchase, sell or
receive Holding Company Common Stock and an identical right to make payment
in
Holding Company Common Stock under such agreement between the Bank and any
director, officer or employee thereof or under such plan or program of the
Bank.
2.4 Reservation
and Issuance of Stock. On the Effective Date, the
Board of Directors of Holding Company shall be deemed to have reserved, or
authorized the issuance of, as the case may be, an amount of shares of Holding
Company Common Stock, and such shares shall automatically be so reserved or
so
authorized, as the case may be, in respect of the agreements, plans and programs
referred to in the foregoing Sections 2.2 and 2.3 equal to the amount of shares
of Bank Common Stock that the Bank had reserved or authorized for issuance,
as
the case may be, in respect of such agreements, plans and programs immediately
prior to the Effective Date.
ARTICLE
THREE
REPRESENTATIONS
AND WARRANTIES
3.1 Representations
and Warranties of the Bank. The Bank
represents and warrants as follows:
(a) Corporate
Standing of the Bank. The Bank is a national association duly
incorporated, validly existing and in good standing under the laws of the United
States; it has the corporate power and certificates of authority, licenses,
permits and other documentation to own its property and to carry on its business
as presently conducted; and it is qualified to transact business as a
corporation in the State of California and is in good standing in the
jurisdictions in which its principal properties are located.
(b) Authorized
Stock of the Bank. As of the date hereof, the Bank is authorized
to issue 50,000,000 shares of Bank Common Stock, of which (A) 9,913,884
shares are issued and outstanding; (B) 1,155,673 shares are subject to
outstanding stock options under the Director and Employee Plan, (C) 133,700
shares are subject to outstanding stock options under the Founder Plan; (D)
304,250 shares are subject to restrictions on transferability or vesting or
other lapse restrictions pursuant to the Equity Incentive Plan.
3.2 Representations
and Warranties of Holding
Company. Holding Company represents and
warrants as follows:
(a) Corporate
Standing of Holding Company. Holding Company is a corporation
duly incorporated, validly existing and in good standing under the laws of
the
State of California; it has the corporate power to own its property and to
carry
on its business as now conducted; and it is qualified to transact business
as a
foreign corporation and is in good standing in the jurisdictions in which its
principal properties are located.
(b) Authorized
Stock of Holding Company. As of the date hereof, Holding Company
is authorized to issue 50,000,000 shares of Holding Company Common Stock of
which none is issued and outstanding and 10,000,000 shares of preferred stock
of
which none is issued and outstanding.
ARTICLE
FOUR
CONDITIONS
4.1 Conditions
to Performance by Holding Company and
Bank. The obligations of Holding
Company and the Bank to effect the Reorganization hereunder shall be subject
to
the following conditions:
(a) Representations
and Warranties. The representations and warranties of each party
herein contained shall be true on and as of the Effective Date with the same
effect as though made as of such date, except for any variations permitted
by
this Plan. Each party shall have performed all covenants and
obligations and complied with all conditions required by this Plan to be
performed or complied with by it prior to the Effective Date and shall have
delivered to the other party a certificate, dated the Effective Date, and signed
by its President and Chief Executive Officer to the foregoing
effect.
(b) Authorization
of Directors. The execution and delivery of this Plan shall have
been duly authorized and approved by the Boards of Directors of Holding Company
and the Bank.
(c) Approval
of Shareholders. The holders of two-thirds of the issued and
outstanding shares of the Bank Common Stock shall, at a meeting of the
shareholders of the Bank, have voted in favor of the adoption and approval
of
this Plan.
(d) Registration
of Shares of Holding Company Common Stock. The shares of Holding
Company Common Stock to be issued to the holders of Bank Common Stock pursuant
to this Plan: (i) shall have been registered or qualified for such
issuance under the Securities Act of 1933, as amended (the “Securities Act”); or
(ii) shall have been determined by counsel for Holding Company to be exempt
from
registration under the Securities Act; and (iii) shall have been registered
or qualified for issuance under all applicable state securities laws; or
(iv) shall have been determined by counsel for Holding Company to be exempt
from registration or qualification under such state securities
laws.
(e) Government
Approvals. Any and all approvals of the OCC and the FRB, and any
and all additional necessary or appropriate governmental agencies required
for
the lawful consummation of the Reorganization and the issuance and delivery
of
Holding Company Common Stock as contemplated by this Plan shall have been
obtained.
(f) Consents
of Third Parties. Holding Company and the Bank shall have
obtained all such consents, permissions and approvals from third parties,
including governmental bodies or agencies, as required by Section 5.1(e) above,
as may be required to permit it to perform this Plan in accordance with its
terms, except for such consents with regard to agreements and arrangements
which
are not, in the aggregate, material to Holding Company and the
Bank.
ARTICLE
FIVE
TERMINATION
5.1 Termination. This
Plan may be terminated: (i) at the election of either party if any
one or more of the conditions to its obligations herein shall not have been
fulfilled and shall have become incapable of fulfillment, or (ii) by mutual
consent of the respective Boards of Directors of the parties
hereto.
5.2 No
Further Liability. In the event of the
termination of this Plan pursuant to any of the foregoing provisions, each
party
shall pay all costs and expenses incurred by it in connection with this Plan
and
the transactions contemplated hereby, and no party shall have any further
liability or obligation of any nature to any other party.
ARTICLE
SIX
MISCELLANEOUS
6.1 Waiver,
Amendment, etc. Any of the terms or
conditions of this Plan which may legally be waived may be waived at any time
by
any party hereto which is, or the shareholders of which are, entitled to the
benefit thereof, by action taken or authorized by the Board of Directors of
such
party. Any of the terms or conditions of this Plan which may legally
be amended or modified may be amended or modified in whole or in part at any
time by an agreement in writing, executed in the same manner as this Plan after
authorization to do so by the Boards of Directors of the parties hereto and
by
the shareholders of the parties hereto if such amendment would change the
principal terms of this Plan. Any such amendment or modification made subsequent
to the approval of this Plan by the shareholders of the Bank shall require
the
prior approval of the OCC and the FRB if, in the opinion of counsel for the
Bank, such approval is necessary or appropriate.
6.2 Notices. All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed given if and when delivered personally or mailed
by
certified or registered mail, postage prepaid, addressed as
follows:
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If
to the Bank:
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Xxxxx
X. XxXxxxxx
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1st
Century Bank, N. A.
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0000
Xxxxxxx Xxxx Xxxx, Xxxxx 0000
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Xxx
Xxxxxxx, XX 00000
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If
to Holding Company:
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Xxxxx
X. XxXxxxxx
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0000
Xxxxxxx Xxxx Xxxx, Xxxxx 0000
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Xxx
Xxxxxxx, XX 00000
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6.3 Governing
Law. This Plan is
made pursuant to, and shall be construed under and be governed by the laws
of
the State of Delaware, except to the extent federal law is mandatorily
applicable.
6.4 Counterparts. This
Plan may be executed in any number of counterparts, each of which shall be
an
original, but such counterparts together shall constitute one and the same
instrument.
6.5 Entire
Agreement. This Plan sets forth all the
terms, conditions, agreements, understandings and provisions of the Bank and
Holding Company with respect to the Reorganization.
IN
WITNESS WHEREOF, the parties below have caused this Plan to be signed on its
behalf by an officer thereunto duly authorized, all as of the date first set
forth above.
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1ST
CENTURY BANK, N.A.
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By:
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/s/
Xxxxx X. XxXxxxxx
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Xxxxx
X. XxXxxxxx
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President
and Chief Operating Officer
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By:
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/s/
Xxxxx X. XxXxxxxx
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Xxxxx
X. XxXxxxxx
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President
and Chief Operating Officer
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