Exhibit 2
AGREEMENT AND PLAN OF REORGANIZATION AND MERGER
THIS AGREEMENT AND PLAN OF REORGANIZATION AND MERGER (this
"Agreement"), made and entered into as of February 24, 1997, by and between FOUR
OAKS BANK & TRUST COMPANY, a banking corporation organized under the laws of the
State of North Carolina and having its principal place of business in the City
of Four Oaks, North Carolina (the "Bank"), and FOUR OAKS FINCORP, INC., a North
Carolina business corporation (the "Holding Company"), on its own behalf and on
behalf of NEW FOUR OAKS BANK (Proposed), a banking corporation to be chartered
under the laws of the State of North Carolina (the "New Bank") as a wholly-owned
subsidiary of the Holding Company.
W I T N E S S E T H:
WHEREAS, as of December 31, 1996, the Bank had a common stock account
of $837,949 consisting of 5,000,000 authorized shares of common stock, par value
$1.00 per share, of which 837,949 shares were outstanding, and surplus of
$4,871,623 and undivided profits of $8,604,138; and
WHEREAS, as of the effective date of this reorganization, the Holding
Company shall be authorized to issue 5,000,000 shares of common stock, par value
$1.00 per share, of which no shares will be outstanding, with the exception of
5,000 shares of common stock to be issued for $1.00 per share to directors of
the New Bank as qualifying shares; and
WHEREAS, as of the effective date of this reorganization, the New Bank
shall be authorized to issue 10,000 shares of common stock, par value $1.00 per
share, of which 5,000 shares will be outstanding, all of which shares will be
owned by the Holding Company; and
WHEREAS, the Board of Directors of the Bank and the Holding Company
believe that it is in the best interests of their respective shareholders that
the Bank be reorganized into a one-bank holding company structure through a
merger of the New Bank with and into the Bank pursuant to which the shareholders
of the Bank will receive shares of the common stock of the Holding Company in
exchange for their shares of the common stock of the Bank.
NOW, THEREFORE, in consideration of the mutual promises and conditions
herein contained, the Bank and the Holding Company hereby mutually agree to the
merger of the New Bank with and into the Bank on the terms and conditions and in
the manner and on the basis hereinafter provided:
1. The Merger. Pursuant to the provisions of Sections 53-12 and 53-13
of the General Statutes of North Carolina, the New Bank shall be merged with and
into the Bank (the "Merger") upon receipt of all necessary governmental
approvals, both state and federal, the passage of any required waiting period
and upon the filing of Articles of Merger with the Secretary of State of North
Carolina (the "Effective Time"), as hereinafter set forth. The Bank
and the New Bank shall be referred to collectively herein as the "Merging
Banks." The terms and conditions of the Merger shall be as follows:
(a) The name of the surviving bank (the "Surviving Bank")
shall be "Four Oaks Bank & Trust Company."
(b) The business of the Surviving Bank shall be that of a
banking corporation and shall be conducted at the Surviving Bank's main office
located in Four Oaks, North Carolina and at its legally established branches.
(c) The Articles of Incorporation (Charter) of the Bank, as in
effect at the Effective Time, shall be the Articles of Incorporation (Charter)
of the Surviving Bank until changed as provided by law.
(d) The Bylaws of the Bank, as in effect at the Effective
Time, shall be the Bylaws of the Surviving Bank until altered, amended, or
repealed as therein provided.
(e) At the Effective Time, the corporate existence of the
Merging Banks shall be merged into the Surviving Bank, and the Surviving Bank
shall be deemed to be the same corporation as the Merging Banks. All rights,
franchises, and interests of the Merging Banks, in and to all property, tangible
and intangible, and all choses in action shall automatically and by operation of
law be transferred to and vested in the Surviving Bank by reason of the Merger.
The Surviving Bank shall, from and after the Effective Time, hold and enjoy all
property rights, franchises, and interests, including appointments, powers,
designations and nominations, and all other rights and interests as trustee,
executor, administrator, agent, transfer agent and registrar of stocks and
bonds, administrator of estates, assignee and receiver, and in every other
fiduciary capacity and every agency capacity, in the same manner and to the same
extent as such rights, franchises, and interests were held and enjoyed by the
respective Merging Banks immediately prior to the Effective Time.
(f) From and after the Effective Time, the Surviving Bank
shall be responsible and liable for all obligations of the Merging Banks, and
all deposits, debts, liabilities, obligations, and contracts of the Merging
Banks, matured or unmatured, whether accrued, absolute, contingent, or
otherwise, and whether or not reflected or reserved against the balance sheets,
books of account or records of the Merging Banks, shall be those of, and are
hereby expressly assumed by, the Surviving Bank and shall not be released or
impaired by the Merger.
(g) The directors and officers of the Bank as of the Effective
Time shall be the directors and officers, respectively, of the Surviving Bank
from and after the Effective Time. The committees of the Surviving Bank shall be
the same as, and shall be composed of the same persons who were serving on
committees created and appointed by the Board of Directors of the Bank as of the
Effective Time.
2. Conversion of Shares. As of the Effective Time, the manner
and basis of converting the shares of capital stock of the parties hereto shall
be as follows:
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(a) Each share of common stock of the Bank outstanding as of
the Effective Time shall automatically and without further action of the holder
thereof be converted into one (1) share of common stock of the Holding Company
(with any outstanding fractional shares of the Bank being converted into an
identical number of fractional shares of the Holding Company).
(b) The shares of common stock of the New Bank outstanding as
of the Effective Time shall automatically and without further action of the
holder thereof be converted into such number of shares of common stock of the
Surviving Bank, such that the number of shares of common stock of the Surviving
Bank outstanding upon completion of the Merger shall be equal to the aggregate
number of outstanding shares of common stock of the Bank and the New Bank
combined immediately before the Merger.
(c) All shares of common stock of the Holding Company
outstanding immediately prior to the Effective Time shall be redeemed from the
holders thereof for the sum of $1.00 per share.
3. Redemption of Shares. Subject to the approval of the Commissioner of
Banks of the State of North Carolina, immediately following the Merger, the
Surviving Bank shall redeem 5,000 shares of its common stock from the Holding
Company for the sum of $1.00 per share, with the effect that immediately after
the Effective Time, the number of outstanding shares of common stock of the
Surviving Bank shall be the same as the number of outstanding shares of common
stock of the Bank immediately before the Effective Time.
4. Exchange of Shares. Each shareholder of record of the Bank as of the
Effective Time shall be entitled, upon surrender by him or her to the Holding
Company of all certificates evidencing the ownership of shares of common stock
of the Bank held by him or her of record immediately prior to the Effective
Time, to receive in exchange therefor a certificate or certificates representing
the number of shares of common stock of the Holding Company which he or she is
entitled, and, as soon as possible after the Effective Time, the Holding Company
shall furnish to each such shareholder transmittal forms and written
instructions with respect to such exchange. Until so surrendered, each
outstanding certificate which, prior to the Effective Time, represented shares
of common stock of the Bank, shall be deemed for all purposes to evidence the
ownership of the shares of common stock of the Holding Company into which such
shares shall have been converted by reason of the Merger; provided that the
Holding Company may in its discretion elect not to treat any such unsurrendered
shares as shares of common stock of the Holding Company for purposes of the
payment of dividends. If the Holding Company in its discretion so elects, then
unless and until any outstanding certificate evidencing common stock of the Bank
shall be so surrendered, no dividends payable to the owner of common stock of
the Holding Company represented by the unsurrendered certificate shall be paid;
provided, however, that upon surrender and exchange of each outstanding
certificate evidencing common stock of the Bank for a certificate evidencing
outstanding common stock of the Holding Company, there shall be paid to the
holder thereof the amount, without interest, of all dividends and other
distributions, if any, which therefore were declared and became payable, but
were not paid, with respect to said shares. Shares of the Bank's common stock
that are owned by a
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shareholder of record as of the Effective Time through the Bank's Dividend
Reinvestment and Stock Purchase Plan ("DRSPP") are held by or through the agent
under the DRSPP shall automatically and without further action on the part of
such shareholder be converted, as of the Effective Time, into shares of common
stock of the Holding Company pursuant to Paragraph 2(a) of this Agreement. Such
conversion shall be reflected in and under the DRSPP and in the account of such
shareholder under the DRSPP. All such converted shares shall continue to be held
by or through the agent under the DRSPP. The provisions of this Paragraph 4
shall not apply to any share of common stock of the Bank as to which the holder
thereof shall have pursued his or her right to dissent from the Merger pursuant
to Article 13 of the North Carolina Business Corporation Act.
5. Stock Option and Other Plans.
(a) At the Effective Time, all outstanding options under the
Bank's Nonqualified Stock Option Plan ("NSOP") shall be converted into options
to acquire the number of shares of common stock of the Holding Company that the
holders of such options were entitled to acquire of common stock of the Bank
immediately prior to the Merger on the same terms and conditions as set forth in
the NSOP.
(b) At the Effective Time, all rights to acquire common stock
of the Bank under the Bank's Employee Stock Purchase and Bonus Plan ("ESPBP")
shall be converted into rights to acquire common stock of the Holding Company,
on the same terms and conditions as set forth in the ESPBP.
(c) At the Effective Time, all rights to acquire common stock
of the Bank under the DRSPP shall be converted into rights to acquire common
stock of the Holding Company, on the same terms and conditions as set forth in
the DRSPP.
6. Rights of Dissenting Shareholders. Any shareholder of the Bank who
has not voted for the Merger at the meeting of shareholders for consideration of
the Merger, and who has given notice in writing at or prior to such meeting that
he or she dissents from the Merger, and who complies with the provisions of Part
2 of Article 13 of the North Carolina Business Corporation Act, shall be
entitled to receive the fair value of the shares held by him or her.
7. Lost, Destroyed, or Stolen Certificates. Shareholders of the Bank
whose certificates evidencing shares of common stock of the Bank have been lost,
destroyed or stolen shall be entitled to receive certificates evidencing the
shares of common stock of the Bank into which such shares were converted in
compliance with the provisions of the Bylaws of the Surviving Bank.
8. Obligations of the Parties Pending the Effective Time of the
Merger. The Bank and the Holding Company shall, as soon as practicable take the
following action:
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(a) The Holding Company shall cause the New Bank to complete
its organization and to issue and sell to the Holding Company 5,000 shares of
common stock of the New Bank, par value $1.00 per share, at a purchase price of
$1.00 per share;
(b) The Holding Company shall cause five (5) persons to be
elected to the Board of Directors of the New Bank, which persons shall each own
common stock of the Holding Company with a book value of at least $1,000;
(c) This Agreement shall be duly submitted to the shareholders
of the Bank and the New Bank for the purpose of considering and acting upon the
Merger in the manner required by law and their respective articles of
incorporation and bylaws. The Bank and the New Bank shall use their best efforts
to obtain the requisite approval of their shareholders of the Merger and the
transactions contemplated thereby, and the Bank, the New Bank and the Holding
Company shall, through their respective officers, execute and file with the
appropriate regulatory authorities, including the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System and the North
Carolina Commission of Banks, such applications, exhibits, documents and papers
as shall be necessary or appropriate to secure approval of the Agreement, the
Merger and the transactions contemplated thereby, as required by applicable
statutes, rules and regulations;
(d) The Holding Company use its best efforts to cause the
issuance of common stock of the Holding Company made pursuant to this Agreement
and the Merger to be qualified or exempted under the Securities Act of 1933 and
the Blue Sky Laws of each state in which it deems such qualification or
exemption to be required;
(e) Until the Effective Time, neither the Bank nor the New
Bank shall dispose of its assets except in the ordinary and normal course of
business.
9. Conditions Precedent to the Merger. The Merger shall be subject to
the satisfaction of the following conditions:
(a) Ratification and confirmation of this Agreement by
approval of holders of at least two-thirds of the outstanding shares of common
stock of the Bank and by approval of the sole shareholder of the New Bank as
required by law;
(b) Approval of the North Carolina Commissioner of Banks;
(c) No objection by the Board of Governors of the Federal
Reserve System to the Merger and the transactions related thereto within 30 days
of a notice filing made pursuant to Section 225.15 of Regulation Y promulgated
pursuant to the Bank Holding Company Act of 1956, as amended;
(d) Approval of the Federal Deposit Insurance Corporation
pursuant to Section 18(c) of the Federal Deposit Insurance Act;
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(e) Receipt of a favorable opinion with respect to the tax
consequences of the proposed Merger from legal counsel to the Bank; and
(f) Expiration of any waiting period required by any
supervisory authority.
10. Effective Date. The Merger shall become effective at the time
specified in the Articles of Merger to be filed with the Secretary of State of
North Carolina.
11. Termination. This Agreement may be terminated prior to the
Effective Time for any of the following reasons by written notice by either
Merging Bank to the other upon authorization by resolution adopted by either
Board of Directors:
(a) Any condition precedent contained in Paragraph 9 has not
been fulfilled or waived;
(b) Any action, suit, proceeding, or claim has been
instituted, made or threatened, relating to the proposed Merger that makes
consummation of the Merger inadvisable in the opinion of the Board of Directors
of either Merging Bank;
(c) The Board of Directors of the Bank determines that the
holders of a sufficient number of shares of common stock of the Bank have
dissented from the Merger so that consummation of the Merger is not in the best
interests of the Bank; and
(d) A determination by the Board of Directors of either
Merging Bank that consummation of the Merger is inadvisable in the opinion of
such Board of Directors.
12. Entire Agreement. This Agreement contains the entire agreement of
the parties with respect to the transactions contemplated hereby.
13. Effect of Agreement. The terms and conditions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
14. Expenses. Each of the parties will pay its own fees and expenses
incurred in connection with the transaction contemplated by this Agreement.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina.
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IN WITNESS WHEREOF, the Bank and the Holding Company have caused this
Agreement to be executed by their duly authorized officers and their corporate
seals to be affixed hereto as of the date first above written.
FOUR OAKS BANK & TRUST COMPANY
By: /s/ Ayden X. Xxx, Xx.
Ayden X. Xxx, Xx., President
and Chief Executive Officer
ATTEST:
By: /s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx, Secretary
[CORPORATE SEAL]
FOUR OAKS FINCORP, INC.
By: /s/ Ayden X. Xxx, Xx.
----------------------------
Ayden X. Xxx, Xx., President
and Chief Executive Officer
ATTEST:
By: /s/ Xxxxx X. Xxxxx
------------------------
Xxxxx X. Xxxxx, Secretary
[CORPORATE SEAL]
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