EXHIBIT 2.1
PLAN OF REORGANIZATION
THIS PLAN OF REORGANIZATION (the "Agreement"), made and entered into as
of March 28, 2002, among MOUNTAIN NATIONAL BANK (the "Bank"), a national bank
organized under federal law and MOUNTAIN NATIONAL BANCSHARES, INC. (the
"Company"), a Tennessee corporation.
WITNESSETH:
WHEREAS, the principal offices of the Bank and the Company are located
at 000 Xxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000;
WHEREAS, the authorized capital stock of the Bank consists of 2,400,000
shares of common stock ("Bank Stock"), $5.00 par value, of which 1,200,000
shares are issued and outstanding;
WHEREAS, the authorized capital stock of the Company consists of
2,400,000 shares of common stock ("Company Stock"), $1.00 par value, of which 50
shares are issued and outstanding;
WHEREAS, the Boards of Directors of the Company and the Bank deem its
desirable and in the best interests of the Company and the Bank and the
shareholders of the Bank to enter into this Agreement, and in accordance
herewith for the Company to acquire all of the outstanding voting stock of the
Bank by means of a share exchange between the Company and the Bank, which will
thereby become a wholly-owned subsidiary of the Company, in a transaction
qualifying as a tax-free reorganization under ss. 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended (the "Code");
WHEREAS, the Board of Directors of the Company has approved and adopted
this Agreement, and the Company has agreed to join in and be bound hereby and to
issue the shares of Company Stock which shareholders of the Bank will receive
upon consummation of the reorganization and share exchange as herein provided;
WHEREAS, the transactions contemplated by this Agreement are authorized
by Section 1204 of the American Homeownership and Economic Opportunity Act of
2000 ("AHEOA"), codified as 12 U.S.C. ss. 215a-2, and this Agreement shall
constitute the "Reorganization Plan" under Section 1204(b) of AHEOA; and
WHEREAS, the transactions contemplated by this Agreement do not
contravene any provisions of applicable state law;
NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements herein contained, and for the purpose of stating the method, terms
and conditions of the share exchange provided for herein, the mode of carrying
the same into effect, the manner and basis of converting and exchanging the
shares of Bank Stock for Company Stock as hereinafter provided, and such other
provisions relating to the share exchange as the parties deem necessary or
desirable, the parties hereto agree as follows:
SECTION 1.
REORGANIZATION
Pursuant to the provisions of Section 1204 of the AHEOA, and other
applicable provisions of applicable law, the Company shall acquire all of the
issued and outstanding Bank Stock in exchange for Company Stock pursuant to the
terms of this Agreement.
SECTION 2.
EFFECTIVE DATE OF THE REORGANIZATION
The reorganization of the Bank into a holding company structure by
virtue of the share exchange described in this Agreement shall be effective as
of the date (the "Effective Date of the Reorganization") to be determined by the
Bank after all conditions precedent to the Reorganization set forth in Section 9
have been satisfied. At such time, the Company shall prepare Articles of
Exchange to be filed on an informational basis with the Tennessee Secretary of
State. The Effective Date of the Reorganization shall be the date on which the
Tennessee Secretary of State accepts the Articles of Exchange for filing.
Since the share exchange described in this Agreement will effect the
reorganization of the Bank into a holding company structure, such share exchange
and reorganization, collectively, shall hereinafter be referred to as the
"Reorganization."
SECTION 3.
LOCATION, ARTICLES AND BYLAWS, MANAGEMENT
AND CAPITAL STRUCTURE OF THE BANK
On the Effective Date of the Reorganization:
(a) The principal office of the Bank shall be located at 000 Xxxx
Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, or such other location where the Bank is
located immediately prior to the Effective Date of the Reorganization.
(b) The Articles of Association and Bylaws of the Bank shall be
the same as the Articles of Association and Bylaws of the Bank as in effect
immediately prior to the Effective Date of the Reorganization.
(c) The directors and officers of the Bank shall be the directors
and officers of the Bank immediately prior to the Effective Date of the
Reorganization. All such directors and officers of the Bank shall serve until
their respective successors are elected or appointed pursuant to the Articles of
Association and Bylaws of the Bank.
(d) The resulting capital structure of the Bank shall be identical
to the capital structure of the Bank immediately prior to the Effective Date of
the Reorganization. The capital structure of the Bank shall not be altered or
amended by the Reorganization and shall continue in effect as that of the Bank.
SECTION 4.
EXISTENCE, RIGHTS, DUTIES, ASSETS AND
LIABILITIES OF THE BANK
(a) As of the Effective Date of the Reorganization, the Bank shall
have, without further act or deed, all of the properties, rights, powers,
trusts, deeds and obligations of the Bank.
(b) As of the Effective Date of the Reorganization, the Bank shall
have the authority to engage only in such businesses and to exercise only such
powers as are then permissible upon the original incorporation of a bank under
federal law and as are provided for in the Articles of Association of the Bank,
and the Bank shall be subject to the same prohibitions and limitations to which
it would be subject upon original incorporation except that the Bank may engage
in any business and may exercise any right that the Bank could lawfully have
exercised or engaged in immediately prior to the Effective Date of the
Reorganization.
(c) No liability of the Bank or of any of its shareholders,
directors or officers shall be affected by the Reorganization, nor shall any
lien on any property of the Bank be impaired by the Reorganization. Any claim
existing or any action pending by or against the Bank may be prosecuted to
judgment as if the Reorganization had not taken place.
SECTION 5.
MANNER AND BASIS OF EXCHANGING SHARES OF BANK STOCK
The manner and basis of exchanging shares of Bank Stock into shares of
Company Stock, excluding those shares of Bank Stock held by shareholders who
have perfected dissenters' rights of appraisal under the applicable provisions
of Section 1204(c) of AHEOA (the "Dissenters' Rights Provisions"), shall be as
follows:
(a) Exchange of Shares. Each share of Bank Stock owned by a
shareholder on the Effective Date of the Reorganization shall, by virtue of the
Reorganization and without any action on the part of such shareholder, be
exchanged for one (1) share of Company Stock. The Company hereby agrees to issue
one (1) share of Company Stock in exchange for each share of Bank Stock issued
and outstanding immediately prior to the Effective Date of the Reorganization.
Therefore, at the Effective Date of the Reorganization, the prior shareholders
of the Bank will hold the same number of shares of Company Stock as the number
of previously held shares in Bank Stock and the Company will hold the number of
shares of Bank Stock that were issued and outstanding immediately prior to the
Effective Date of the Reorganization, less any shares that are cancelled
pursuant to the terms of Section 6 below.
(b) Surrender of Bank Stock Certificates. After the Effective Date
of the Reorganization each holder of certificates theretofore representing Bank
Stock (except Bank shareholders who have elected to dissent from the
Reorganization and have perfected their dissenters' rights in accordance with
applicable law) may surrender his or her Bank Stock certificates to the Company
and shall receive in exchange therefor a certificate representing the number of
shares of Company Stock into which such Bank Stock was exchanged under Paragraph
5(a). Until any such Bank Stock certificate is surrendered in due course (or
suitable arrangements are made for any lost, stolen or destroyed certificate
according to the Bank's or the Company's usual procedures), the holder of the
Bank stock certificate (a) will be deemed to hold a certificate representing the
shares of Company Stock which such stock certificate may entitle the shareholder
to receive; (b) will be paid any cash which such stock certificate may entitle
the shareholder to receive; (c) will have any voting rights in respect of the
shares of Company Stock which such stock certificate may entitle the shareholder
to receive; and (d) will be paid dividends or other distributions in respect of
the shares of Company Stock which such stock certificate may entitle the
shareholder to receive. The Company agrees, subject to the terms and conditions
of this agreement, to issue to each Bank shareholder after the Effective Date of
the Reorganization, upon surrender of his or her Bank stock certificates to the
Company, accompanied by properly completed and signed transmittal instructions,
certificates representing the number of shares of Company Stock in to which Bank
shares shall have been exchanged by operation of this agreement.
SECTION 6.
ASSUMPTION OF OPTIONS
(a) As of the Effective Date of the Reorganization, all rights
with respect to the Bank Stock issuable pursuant to the exercise of stock
options (the "Bank Options") granted by the Bank under stock option plans of the
Bank (the "Bank Stock Option Plans"), which are outstanding at the Effective
Date of the Reorganization, whether or not such Bank Options are then
exercisable, shall, subject to this section, be assumed by the Company in
accordance with the terms of the particular Bank Stock Option Plan under which
such Bank Options were issued
and the agreement by which such Bank Options are evidenced. From and after the
Effective Date of the Reorganization, (i) each Bank Option assumed by the
Company hereunder may be exercised solely for Company Stock, (ii) the number of
shares of Company Stock subject to such Bank Option shall be equal to the number
of shares of Bank Stock subject to such Bank Option immediately prior to the
Effective Date, and (iii) the per share exercise price under each such Bank
Option shall be the per share price of the Bank Stock as of the Effective Date.
(b) At all times after the Effective Date of the Reorganization
the Company shall reserve for issuance such number of shares of Company Stock as
shall be necessary to permit the exercise of the Bank Options in the manner
contemplated by the Agreement.
(c) It is intended that the foregoing assumption of the Bank
Options shall satisfy all the requirements under Section 424(a) of the Code and
be undertaken in a manner that will not constitute a "modification" as defined
in Section 424(h) of the Code as to any stock option which is an incentive stock
option as defined in Section 422 of the Code. All restrictions or limitations on
transfer with respect to Bank Stock awarded under a Bank Stock Option Plan
("Restricted Stock"), to the extent that such restrictions or limitations shall
not have already lapsed, shall remain in full force and effect with respect to
the Company Stock into which such Restricted Stock is converted pursuant to the
Agreement. Except as otherwise provided herein, the provisions of the Bank
Option Plans that provide for the issuance or grant of any other interest in
respect of the capital stock of the Bank shall be deleted as of the Effective
Date of the Reorganization.
SECTION 7.
ACQUISITION OF DISSENTERS' BANK STOCK
Any shareholder of the Bank who votes against the Reorganization or
gives notice in writing at or prior to the meeting of Bank shareholders in
compliance with the Dissenters' Rights Provisions shall be paid an amount of
cash (as determined under such provisions) for his or her shares of Bank Stock
by the Bank. The shares of Bank Stock so acquired by the Bank shall thereafter
be cancelled.
SECTION 8.
REDEMPTION OF COMPANY STOCK
As soon as practicable after the Effective Date of the Reorganization,
the Company shall redeem any shares of Company Stock which may have been issued
prior to the Effective Date of the Reorganization at a redemption price equal to
the same consideration paid for such shares, so that immediately after such
redemption the then outstanding shares of Company Stock shall consist solely of
the shares to be issued by the Company upon the exchange of shares of Bank Stock
as provided herein.
SECTION 9.
FURTHER ACTIONS
From time to time, as and when requested by either the Company or the
Bank, or by their successors or assigns, the Company or the Bank shall execute
and deliver or cause to be executed and delivered all such instruments, and
shall take or cause to be taken all such other actions, as the Company or the
Bank, or their successors and assigns, may deem necessary or desirable in order
to carry out the intent and purposes of this Agreement.
SECTION 10.
CONDITIONS PRECEDENT TO CONSUMMATION OF THE REORGANIZATION
This Agreement is subject to, and consummation of the Reorganization
herein provided for is conditioned upon, the fulfillment prior to the Effective
Date of the Reorganization of each of the following conditions:
(a) The Board of Governors of the Federal Reserve System
or its authorized delegate shall have approved the application of the Company to
become a bank holding company by reason of its acquisition of all of the
outstanding Bank Stock;
(b) The Office of the Comptroller of the Currency and the
Federal Deposit Insurance Corporation shall have approved the Reorganization;
(c) The holders of at least two-thirds of the issued and
outstanding shares of common stock of the Bank shall have voted in favor of the
Reorganization at a shareholders meeting duly called and held to act thereon;
and
(d) At the time of the mailing of the proxy
statement/prospectus to the Bank's shareholders and thereafter through the
closing of the Reorganization, the Company Stock to be received by Bank
shareholders shall be the subject of an effective registration statement under
the Securities Act of 1933 and shall be duly registered or qualified under the
securities laws of all states in which such registration or qualification is
required, or the Company Stock shall be exempt from the registration
requirements of such laws;
SECTION 11.
TERMINATION
In the event that:
(a) Any action, suit, proceeding or claim has been
instituted, made or threatened relating to the proposed Reorganization which
shall make consummation of the Reorganization inadvisable in the opinion of the
Board of Directors of the Bank or the Company;
(b) Any action, consent, approval, opinion, ruling or
condition required by Section 9 of this Agreement shall not have been obtained
or met;
(c) The Bank's Board of Directors determines in its sole
discretion that the consummation of the Reorganization may result in having to
pay dissenting shareholders an amount of cash that would cause a materially
adverse impact on the Bank's operations; or
(d) For any other reason the consummation of the
Reorganization is deemed inadvisable in the opinion of the Bank's or the
Company's Boards of Directors;
then this Agreement may be terminated at any time before consummation of the
Reorganization by written notice, approved or authorized by the Board of
Directors of the party wishing to terminate, to the other party. Upon
termination by written notice as provided by this Section 10, this Agreement
shall be void and of no further effect, and there shall be no liability by
reason of this Agreement or the termination hereof on the part of the Bank, the
Company or their directors, officers, employees, agents or shareholders.
SECTION 12.
AMENDMENT; WAIVER
(a) At any time before or after approval and adoption
hereof by the respective shareholders of the Bank and the Company, this
Agreement may be amended by agreement among the Bank and the Company; provided,
however, that after the approval and adoption of this Agreement by the
shareholders of the Bank, no amendment reducing the consideration payable to
Bank shareholders pursuant to Section 5(a) hereof shall be valid without having
been approved by the shareholders of the Bank in the manner required for
approval of this Agreement.
(b) A waiver by any party hereto of any breach of a term
or condition of this Agreement shall not operate as a waiver of any other breach
of such term or condition or of other terms or conditions, nor shall failure to
enforce any term or condition operate as a waiver or release of any other right,
at law or in equity, or claim which any party may have against another party for
anything arising out of, connected with or based upon this Agreement. A waiver
shall
be effective only if evidenced by a writing signed by the party who is entitled
to the benefit of the term or condition of this Agreement which is to be waived.
A waiver of a term or condition on one occasion shall not be deemed to be a
waiver of the same or of any other term or condition on a future occasion.
SECTION 13.
COUNTERPARTS; HEADINGS; GOVERNING LAW
This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument. The title of this Agreement and the
headings herein set out are for convenience or reference only and shall not be
deemed a part of this Agreement. This Agreement shall be governed by and
construed in accordance with the federal laws of the United States.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their bank and corporate seals to
be affixed hereto all as of the day and year first above written.
MOUNTAIN NATIONAL BANK
[BANK SEAL] By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
President
ATTEST: /s/ Xxx Xxxxxx
Xxx Xxxxxx
Secretary
MOUNTAIN NATIONAL
BANCSHARES, INC.
[CORPORATE SEAL] By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------
Xxxxxx X. Xxxxxxxx
President
ATTEST: /s/ Xxx Xxxxxx
Xxx Xxxxxx
Secretary
