EXHIBIT 2.07
AGREEMENT TO CONSOLIDATE FIRST NATIONAL BANK
AND SURETY BANK, NATIONAL ASSOCIATION UNDER THE
CHARTER OF SURETY BANK, NATIONAL ASSOCIATION AND UNDER
THE TITLE OF SURETY BANK, NATIONAL ASSOCIATION
CONSOLIDATION AGREEMENT made this 16th day of January, 1996, between
SURETY BANK, NATIONAL ASSOCIATION ("Surety Bank") and FIRST NATIONAL BANK
("First Bank") and joined in by SCC, INC., a Texas corporation ("Newco")
(prior to the Holding Company Merger known as "First Midlothian Corporation")
and SURETY CAPITAL CORPORATION, a Delaware corporation ("Surety").
WITNESSETH:
A. Surety Bank is a national banking association duly organized and
existing under the laws of the United States of America having its principal
offices in the City of Lufkin, County of Angelina, State of Texas.
B. First Bank is a national banking association duly organized and
existing under the laws of the United States having its principal offices in the
City of Midlothian, County of Xxxxx, State of Texas.
C. First Bank has, and will have as of the Effective Time, (i) authorized
capital stock of $480,000 consisting of 48,000 shares of common stock, $10.00
par value ("First Bank Common Stock"), of which 48,000 shares are, or will be as
of the Effective Time, issued and outstanding and (ii) surplus of not less than
$1,000,000.
D. All of the issued and outstanding shares of First Bank Common Stock
are and will be as of the Effective Time held of record and beneficially by
Newco.
E. Surety Bank has, and will have as of the Effective Time, (i)
authorized capital stock of $5,460,000 consisting of 6,000,000 shares of common
stock, $0.91 par value ("Surety Bank Common Stock"), of which 3,708,195 shares
are, or will be as of the Effective Time, issued and outstanding and (ii)
surplus of not less than $5,330,000.
F. Over ninety-nine percent (99%) of all of the issued and outstanding
shares of Surety Bank Common Stock are and will be as of the Effective Time held
of record and beneficially by Surety.
G. A majority of the Boards of Directors of First Bank and of Surety Bank
has approved this Consolidation Agreement under which First Bank and Surety Bank
shall be consolidated (the "Bank Consolidation") under the charter of Surety
Bank and has authorized the execution hereof; the Board of Directors of Newco
has approved this Consolidation Agreement, authorized Newco to join in and be
bound by this Consolidation Agreement, and authorized the undertakings herein
made by Newco; and the Board of Directors of Surety
has approved this Consolidation Agreement, authorized Surety to join in and be
bound by this Consolidation Agreement, and authorized the undertakings herein
made by Surety.
H. Surety; Surety Bank; First Midlothian Corporation, a Texas corporation
registered as a bank holding company located in Midlothian, Texas ("First
Midlothian"); certain of the shareholders of First Midlothian (the
"Shareholders"); and First Bank have entered into a Reorganization Agreement
dated October 17, 1995 (the "Reorganization Agreement") which contemplates the
Bank Consolidation provided for in this Consolidation Agreement. All terms not
defined in this Consolidation Agreement shall have the meaning set forth in the
Reorganization Agreement.
I. As and when required by the provisions of this Consolidation Agreement
or the Reorganization Agreement (hereinafter referred to collectively as the
"Consolidation Plan"), all such action as may be necessary or appropriate shall
be taken by Surety Bank, First Bank, Newco and Surety in order to consummate the
Bank Consolidation.
NOW, THEREFORE, in consideration of the premises, Surety Bank and First
Bank, joined by Newco and Surety, hereby agree that First Bank and Surety Bank
shall be consolidated under the charter of Surety Bank on the following terms
and conditions:
1. At the Effective Time, First Bank and Surety Bank shall be
consolidated under the Articles of Association and Charter of Surety Bank. Said
Bank Consolidation shall be pursuant to the provisions of and with the effect
provided in 12 U.S.C. Section 215.
2. At the Effective Time, the name of Surety Bank (hereinafter referred
to as "Continuing Bank" whenever reference is made to it as of the time of Bank
Consolidation or thereafter) shall continue to be "Surety Bank, National
Association"; the Articles of Association of Continuing Bank shall be as set
forth in ANNEX A attached hereto and made a part hereof; the bylaws of Surety
Bank in effect immediately prior to the Bank Consolidation shall become the
bylaws of Continuing Bank; the established office and facilities of First Bank
immediately prior to the Bank Consolidation shall become the established office
and facilities of Continuing Bank; and the established office and facilities of
Surety Bank immediately prior to the Bank Consolidation shall continue and be
operated as a branch of Continuing Bank.
3. At the Effective Time, the corporate existence of Surety Bank and
First Bank shall, as provided in 12 U.S.C. Section 215, be merged into and
continued in Continuing Bank; and Continuing Bank shall be deemed to be the same
corporation as Surety Bank and First Bank. All rights, franchises and interests
of Surety Bank and First Bank, respectively, in and to every type of property
(real, personal and mixed) and choses in action shall be transferred to and
vested in Continuing Bank by virtue of such Bank Consolidation without any deed
or other transfer. Continuing Bank at the
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Effective Time and without any order or other action on the part of any court or
otherwise, shall hold and enjoy all rights of property, franchises and
interests, including appointments, designations and nominations, and all other
rights and interests as trustee, executor, administrator, transfer agent and
registrar of stocks and bonds, guardian of estates, assignee, receiver, and in
every other fiduciary capacity, and in every agency capacity, in the same manner
and to the same extent as such rights, franchises and interests were held or
enjoyed by Surety Bank and First Bank, respectively, at the Effective Time,
subject, however, to the provisions of 12 U.S.C. Section 215(f).
4. At the Effective Time, Continuing Bank shall be liable for all
liabilities of Surety Bank and of First Bank, respectively; and all deposits,
debts, liabilities, obligations and contracts of Surety Bank and of First Bank,
respectively, matured or unmatured, whether accrued, absolute, contingent or
otherwise, and whether or not reflected or reserved against on balance sheets,
books of account or records of Surety Bank or First Bank, as the case may be,
including all liabilities of Surety Bank and First Bank for taxes, whether
existing at the Effective Time or arising as a result of or pursuant to the Bank
Consolidation, shall be those of Continuing Bank and shall not be released or
impaired by the Bank Consolidation; and all rights of creditors and other
obligees and all liens on property of either Surety Bank or First Bank shall be
preserved unimpaired.
5. At the Effective Time:
(a) All shares of First Bank Common Stock outstanding at the
Effective Time held by Newco shall, without any action on the part of Newco, be
cancelled and be of no further force and effect.
(b) Each share of Surety Bank Common Stock outstanding at the
Effective Time held by the shareholders of Surety Bank, other than shares of
Surety Bank Common Stock held of record by Surety and Dissenting Shares (as
hereinafter defined), without any action on the part of the shareholders of
Surety Bank, shall be converted into and exchanged for the right to receive cash
equal to: (i) the product obtained by multiplying the number of shares of
common stock of Surety (the "Surety Common Stock") issued and outstanding on the
date of approval of the Bank Consolidation by the Office of the Comptroller of
the Currency (the "Approval Date") by the average of the high and low prices of
such Surety Common Stock on the American Stock Exchange, Inc. on the Approval
Date, divided by (ii) the number of shares of Surety Bank Common Stock issued
and outstanding on the Approval Date (the "Exchange Price").
(c) Each share of Surety Bank Common Stock issued and outstanding at
the Effective Time and held of record by Surety shall be converted into one
share of common stock of Continuing Bank.
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(d) For purposes of this Merger Agreement, "Dissenting Shares" shall
refer to those shares of Surety Bank Common Stock owned by shareholders of
Surety Bank who, pursuant to 12 U.S.C. Section 215, (i) vote against the Bank
Consolidation at the meeting of the shareholders of Surety Bank to consider and
vote on the Bank Consolidation referred to in Section 4(b) of the Reorganization
Agreement, or who give notice in writing at or prior to such meeting to the
presiding officer of Surety Bank that he dissents from the Bank Consolidation
and (ii) within thirty (30) days after the date of consummation of the Bank
Consolidation, request in writing from Continuing Bank payment of the value of
their shares of Surety Bank Common Stock, accompanied by the surrender of the
stock certificates evidencing such Surety Bank Common Stock. Notwithstanding
anything in this Consolidation Agreement to the contrary, Dissenting Shares
shall not be converted into the right to receive, or be exchangeable for, cash
as provided in SECTION 5(b) hereof, but, instead, the holders thereof shall be
entitled to payment of the value of such Dissenting Shares on the Approval Date
determined in accordance with the provisions of 12 U.S.C. Sections 215(c) and
(d).
6. After the Effective Time:
(a) The shareholders of Surety Bank, other than Surety and the
holders of Dissenting Shares, as the holders of the outstanding certificate or
certificates which prior thereto represented shares of Surety Bank Common Stock,
may surrender same to Continuing Bank, and such shareholders of Surety Bank
shall be entitled upon such surrender to receive from Continuing Bank in
exchange therefor, without cost to such holder, the Exchange Price for each
share of Surety Bank Common Stock represented by such outstanding certificate or
certificates surrendered.
(b) Until so surrendered, each such outstanding certificate which,
prior to the Effective Time, represented shares of Surety Bank Common Stock
shall be deemed for all purposes to evidence solely the right to receive the
amount of cash into and for which such shares of Surety Bank Common Stock shall
have been converted pursuant to SECTION 5(b) hereof. No interest shall be
payable with respect to any such cash payments. If a shareholder of Surety Bank
is unable to locate any of his certificates which prior to the Effective Time
represented shares of Surety Bank Common Stock, Continuing Bank shall issue a
check to such shareholder in the amount which such shareholder would otherwise
be entitled to receive hereunder without surrendering such certificate, upon
receipt by Continuing Bank of an indemnity bond in favor of Continuing Bank and
satisfactory in all respects to Continuing Bank.
(c) The stock transfer books of Surety Bank shall be closed as of the
close of business on the Closing Date (hereinafter defined), and no transfer of
record of any of the shares of Surety Bank Common Stock shall take place
thereafter. From and after the close of business on the Closing Date, shares of
Surety Bank Common
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Stock shall cease to be shares of Surety Bank, irrespective of whether such
shares are ultimately surrendered.
7. The directors, advisory directors and officers, respectively, of
Continuing Bank at the Effective Time shall be those persons who are directors,
advisory directors and officers, respectively, of Surety Bank immediately before
the Effective Time. The committees of the Board of Directors of Continuing Bank
at the Effective Time shall be the same as, and shall be composed of the same
persons who are serving on, committees of the Board of Directors of Surety Bank
as they exist immediately before the Effective Time.
8. This Consolidation Agreement shall be approved by Newco, the sole
shareholder of First Bank pursuant to a Unanimous Consent executed and delivered
by such sole shareholder in accordance with the Reorganization Agreement. This
Consolidation Agreement shall be submitted to the shareholders of Surety Bank,
at a meeting called to be held as promptly as practicable in accordance with the
Reorganization Agreement. Upon approval of the shareholders of Surety Bank and
First Bank, this Consolidation Agreement shall be made effective as soon as
practicable thereafter in the manner provided in SECTION 12 hereof.
9. The Consolidation Plan shall be automatically terminated and abandoned
at any time prior to or on the Closing Date, whether before or after action
thereon by the shareholders of Surety Bank or First Bank, in the event the
Holding Company Merger is not consummated, for any reason whatsoever, and may be
terminated and abandoned at any time prior to or on the Closing Date, whether
before or after action thereon by the shareholders of Surety Bank or First Bank
by the mutual consent in writing of Surety Bank and First Bank.
10. In the event of the termination and abandonment of the Consolidation
Plan pursuant to the provisions of SECTION 9 hereof, the same shall be of no
further force or effect except that the indemnification provisions set forth in
Section 11 and the provisions relating to expenses set forth in Section 9 of the
Reorganization Agreement shall survive any such termination and abandonment.
11. Any of the terms or conditions of the Consolidation Plan may be waived
at any time, whether before or after action thereon by the shareholders of
Surety Bank or First Bank, by the party which is entitled to the benefits
thereof; and this Consolidation Agreement or the Reorganization Agreement may be
modified or amended at any time, whether before or after action thereon by the
shareholders of Surety Bank or First Bank; provided, however, that such action
shall be taken only if, in the judgment of Surety Bank and First Bank, such
waiver, modification or amendment will not have a materially adverse effect on
Surety Bank, First Bank or their respective shareholders. Any waiver,
modification or amendment shall be in writing.
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12. The "Closing Date" shall have the meaning set forth in the Holding
Company Merger Agreement. The closing (the "Closing") shall be held at the
offices of Surety located in Hurst, Texas on the Closing Date. At the Closing,
Newco shall deliver to Surety Bank all of the stock certificates evidencing
issued and outstanding shares of common stock of First Bank. Subject to the
terms, and upon satisfaction on or before the Closing Date of all requirements
of law and the conditions specified in the Consolidation Plan, including receipt
of the approval of the Comptroller of the Currency specified in 12 U.S.C.
Section 215, the Bank Consolidation shall become effective at the time
specified in the certificate to be issued by the Comptroller of the Currency
under the seal of his office approving the Bank Consolidation, such time
being herein called the "Effective Time."
13. For the convenience of the parties hereto and to facilitate the filing
and recording of this Consolidation Agreement, any number of counterparts
thereof may be executed, each of which shall for all purposes be deemed to be an
original and all of which shall constitute the same instrument, but only one of
which need be produced.
IN WITNESS WHEREOF, Surety Bank has caused this Consolidation Agreement to
be executed in counterparts by its duly authorized officers and its corporate
seal to be hereunto affixed as of the date first above written, and the
directors constituting all of the Board of Directors of such banking association
have hereunto subscribed their names.
SURETY BANK: SURETY BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, President
ATTEST:
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, Cashier
ALL OF THE DIRECTORS OF
SURETY BANK, NATIONAL ASSOCIATION
/s/ C. Xxxx Xxxx
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C. Xxxx Xxxx
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/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
/s/ Xxxxx X. Xxxxxxx
----------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx
/s/ X. X. Xxxxxxxxxxx, III
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X. X. Xxxxxxxxxxx, III
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
/s/ Xxxxxxx Xxxxxx
----------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
THE STATE OF TEXAS )
)
COUNTY OF TARRANT )
On this 16th day of January, 1996, before me, a Notary Public for the
State and County aforesaid, personally came Xxxxx X. Xxxxxxx as President and
Xxxxxx X. Xxxxx as Cashier, of SURETY BANK, NATIONAL ASSOCIATION, a national
banking association, and each in his said capacity acknowledged the foregoing
instrument to be the act and deed of said association and the seal affixed
thereto to be its seal; and came also C. Xxxx Xxxx, Xxxxxxx X. Xxxx, Xxxxx X.
Xxxxxxx, Xxxxxx X. Xxxxxx, X. X. Xxxxxxxxxxx, III, Xxxxxxx X. Xxxxx, Xxxxxxx
Xxxxxx and Xxxxxx X. Xxxxxx, being all of the Board of Directors of said
association and each of them acknowledged said instrument to be the act and
deed of said association and of himself as director thereof.
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WITNESS my official seal and signature this day and year aforesaid.
/s/ Xxxxxxxx X. Xxxxxxx
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Notary Public, State of Texas
/s/ Xxxxxxxx X. Xxxxxxx
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(Print or Type Notary's Name)
My Commission Expires:
12/11/97
IN WITNESS WHEREOF, First Bank has caused this Consolidation Agreement to
be executed in counterparts by its duly authorized officers and its corporate
seal to be hereunto affixed as of the date first above written, and the
directors constituting all of the Board of Directors of such banking association
have hereunto subscribed their names.
FIRST BANK: FIRST NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------------
Xxxxx X. Xxxxxxx, President
ATTEST:
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx, Cashier
ALL OF THE DIRECTORS OF
FIRST NATIONAL BANK
/s/ Xxxxxx Xx Xxxxx
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Xxxxxx Xx Xxxxx
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
/s/ X. X. Xxxxxxxxxx, Xx.
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X. X. Xxxxxxxxxx, Xx.
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/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
/s/ X. X. Xxxxxxx
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X. X. Xxxxxxx
/s/ X. X. Xxxxxxx
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X. X. Xxxxxxx
/s/ Xxx X. Xxxxxxx
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Xxx X. Xxxxxxx
/s/ E. L. Xxxx
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E. L. Xxxx
THE STATE OF TEXAS )
)
COUNTY OF XXXXX )
On this 16th day of November, 1995, before me, a Notary Public for the
State and County aforesaid, personally came Xxxxx X. Xxxxxxx as President and
Xxxxx Xxxxxx as Cashier, of FIRST NATIONAL BANK, a national banking
association, and each in his/her said capacity acknowledged the foregoing
instrument to be the act and deed of said association and the seal affixed
thereto to be its seal; and came also Xxxxxx Xx Xxxxx, Xxxxxxx X. Xxxxx, X.
X. Xxxxxxxxxx, Xx., Xxxxx X. Xxxxxxx, X. X. Xxxxxxx, X. X. Xxxxxxx, Xxx X.
Xxxxxxx and E. L. Xxxx, being all of the Board of Directors of said
association and each of them acknowledged said instrument to be the act and
deed of said association and of himself or herself as director thereof.
WITNESS my official seal and signature this day and year aforesaid.
/s/ Xxxx XxXxxxxxx
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Notary Public, State of Texas
/s/ Xxxx XxXxxxxxx
-----------------------------------------------
(Print or Type Notary's Name)
My Commission Expires:
11-3-96
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Newco hereby joins in the foregoing Consolidation Agreement, and undertakes
that it will be bound thereby and will do and perform all acts and things
therein referred to or provided to be done by it.
IN WITNESS WHEREOF, Newco has caused this undertaking to be made in
counterparts by its duly authorized officers and its corporate seal to be
hereunto affixed as of the date first above written.
NEWCO: SCC, INC.
By: /s/ SCC, Inc.
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/s/ Xxxxx X. Xxxxxxx, President
ATTEST:
/s/ X. X. Xxxxxxxxxxx, III, Secretary
Surety hereby joins in the foregoing Consolidation Agreement, and
undertakes that it will be bound thereby and will do and perform all acts and
things therein referred to or provided to be done by it.
IN WITNESS WHEREOF, Surety has caused this undertaking to be made in
counterparts by its duly authorized officers and its corporate seal to be
hereunto affixed as of the date first above written.
SURETY: SURETY CAPITAL CORPORATION
By: /s/ X. X. Xxxxxxxxxxx, III
----------------------------------------------
X. X. Xxxxxxxxxxx, III, President
ATTEST:
/s/ Xxxxx X. Xxxxxxx
----------------------------
Xxxxx X. Xxxxxxx, Secretary
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ANNEX A
ARTICLES OF ASSOCIATION 1995
FIRST. The title of the association shall be Surety Bank, National
Association.
SECOND. The main office of the association shall be in Midlothian, County
of Xxxxx, State of Texas. The general business of the association shall be
conducted at its main office and its branches.
THIRD. The board of directors of the association shall consist of not less
than 5 nor more than 25 persons, the exact number to be fixed and determined
from time to time by resolution of a majority of the full board of directors or
by resolution of a majority of the shareholders at any annual or special meeting
thereof. Each director shall own common or preferred stock of the association
with an aggregate par value of not less than $1,000, or common or preferred
stock of a bank holding company owning the association with an aggregate par,
fair market or equity value of not less than $1,000, as of either (i) the date
of purchase, (ii) the date the person became a director, or (iii) the date of
that person's most recent election to the board of directors, whichever is
greater. Any combination of common or preferred stock of the association or
holding company may be used.
Any vacancy in the board of directors may be filled by action of a majority
of the remaining directors between meetings of shareholders. The board of
directors may not increase the number of directors between meetings of
shareholders to a number which: (1) exceeds by more than 2 the number of
directors last elected by shareholders where the number was 15 or less; and (2)
exceeds by more than 4 the number of directors last elected by shareholders
where the number was 16 or more, but in no event shall the number of directors
exceed 25.
Terms of directors, including directors selected to fill vacancies, shall
expire at the next regular meeting of shareholders at which directors are
elected, unless the directors resign or are removed from office.
Despite the expiration of a director's term, the director shall continue to
serve until his or her successor is elected and qualifies or until there is a
decrease in the number of directors and his or her position is eliminated.
Honorary or advisory members of the board of directors, without voting
power or power of final decision in matters concerning the business of the
association, may be appointed by resolution of a majority of the full board of
directors, or by resolution of shareholders at any annual or special meeting.
Honorary or advisory directors shall not be counted for purposes of determining
the number of directors of the association or the presence of a quorum in
connection with any board action, and shall not be required to own qualifying
shares.
FOURTH. There shall be an annual meeting of the shareholders to elect
directors and transact whatever other business may be brought before the
meeting. It shall be held at the main office or any other convenient place the
board of directors may designate, on the day of each year specified therefore in
the bylaws, or if that day falls on a legal holiday in the state in which the
association is located, on the next following banking day. If no election is
held on the day fixed or in event of a legal holiday, an election may be held on
any subsequent day within 60 days of the day fixed, to be designated by the
board of directors, or, if the directors fail to fix the day, by shareholders
representing two-thirds of the shares issued and outstanding. In all cases at
least 10 days' advance notice of the meeting shall be given to the shareholders
by first class mail.
In all elections of directors, the number of votes each common
shareholder may cast will be determined by multiplying the number of shares
he or she owns by the number of directors to be elected. Those votes may be
cumulated and cast for a single candidate or may be distributed among two or
more candidates in the manner selected by the shareholder. On all other
questions, each common shareholder shall be entitled to one vote for each
share of stock held by him or her.
Nominations for election to the board of directors may be made by the board
of directors or by any stockholder of any outstanding class of capital stock of
the association entitled to vote for election of directors. Nominations other
than those made by or on behalf of the existing management shall be made in
writing and be delivered or mailed to the president of the association and to
the Comptroller of the Currency, Washington, D.C., not less than 14 days nor
more than 50 days prior to any meeting of shareholders called for the election
of directors; provided, however, that if less than 21 days' notice of the
meeting is given to shareholders, such nominations shall be mailed or delivered
to the president of the association and to the Comptroller of the Currency not
later than the close of business on the seventh day following the date on which
the notice of meeting was mailed. Such notification shall contain the following
information to the extent known to the notifying shareholder:
(1) The name and address of each proposed nominee.
(2) The principal occupation of each proposed nominee.
(3) The total number of shares of capital stock of the association that
will be voted for each proposed nominee.
(4) The name and residence address of the notifying shareholder, and
(5) The number of shares of capital stock of the association owned by the
notifying shareholder.
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Nominations not made in accordance herewith may, in his/her discretion,
be disregarded by the chairperson of the meeting, and the vote tellers may
disregard all votes cast for each such nominee. No bylaw may unreasonably
restrict the nomination of directors by shareholders.
A director may resign at any time by delivering written notice to the board
of directors, its chairperson, or to the association, which resignation shall be
effective when the notice is delivered unless the notice specifies a later
effective date.
A director may be removed by shareholders at a meeting called to remove him
or her, when notice of the meeting stating that the purpose or one of the
purposes is to remove him or her is provided, if there is a failure to fulfill
one of the affirmative requirements for qualification, or for cause; provided,
however, that a director may not be removed if the number of votes sufficient to
elect him or her under cumulative voting is voted against his or her removal.
FIFTH. The authorized amount of capital stock of this association shall be
6,000,000 shares of common stock with a par value of ninety-one cents ($0.91)
each; but said capital stock may be increased or decreased from time to time,
according to the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the association
shall have any preemptive or preferential right of subscription to any shares of
any class of stock of the association, whether now or hereafter authorized, or
to any obligations convertible into stock of the association, issued, or sold,
nor any right of subscription to any thereof other than such, if any, as the
board of directors, in its discretion may from time to time determine and at
such price as the board of directors may from time to time fix.
Unless otherwise specified in the articles of association or required by
law, (1) all matters requiring shareholder action, including amendments to the
articles of association must be approved by shareholders owning a majority
voting interest in the outstanding voting stock, and (2) each shareholder shall
be entitled to one vote per share.
Unless otherwise specified in the articles of association or required by
law, all shares of voting stock shall be voted together as a class on any
matters requiring shareholder approval. If a proposed amendment would affect
two or more classes or series in the same or a substantially similar way, all
the classes or series so affected must vote together as a single voting group on
the proposed amendment.
Shares of the same class or series may be issued as a dividend on a pro
rata basis and without consideration. Shares of another class or series may be
issued as a share dividend in respect of a
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class or series of stock if approved by a majority of the votes entitled to
be cast by the class or series to be issued unless there are no outstanding
shares of the class or series to be issued. Unless otherwise provided by the
board of directors, the record date for determining shareholders entitled to
a share dividend shall be the date the board of directors authorizes the
share dividend.
Unless otherwise provided in the bylaws, the record date for determining
shareholders entitled to notice of and to vote at any meeting is the close of
business on the day before the first notice is mailed or otherwise sent to the
shareholders, provided that in no event may a record date be more than 70 days
before the meeting.
If a shareholder is entitled to fractional shares pursuant to a stock
dividend, consolidation or merger, reverse stock split or otherwise, the
association may (a) issue fractional shares; (b) in lieu of the issuance of
fractional shares, issue script or warrants entitling the holder to receive a
full share upon surrendering enough script or warrants to equal a full share;
(c) if there is an established and active market in the association's stock,
make reasonable arrangements to provide the shareholder with an opportunity
to realize a fair price through sale of the fraction, or purchase of the
additional fraction required for a full share; (d) remit the cash equivalent
of the fraction to the shareholder; or (e) sell full shares representing all
the fractions at public auction or to the highest bidder after having
solicited and received sealed bids from at least 3 licensed stock brokers;
and distribute the proceeds pro rata to shareholders who otherwise would be
entitled to the fractional shares. The holder of a fractional share is
entitled to exercise the rights of a shareholder, including the right to
vote, to receive dividends, and to participate in the assets of the
association upon liquidation, in proportion to the fractional interest. The
holder of script or warrants is not entitled to any of these rights unless
the script or warrants explicitly provide for such rights. The script or
warrants may be subject to such additional conditions as: (1) that the script
or warrants will become void if not exchanged for full shares before a
specified date; and (2) that the shares for which the script or warrants are
exchangeable may be sold at the option of the association and the proceeds
paid to scriptholders.
The association, at any time and from time to time, may authorize and issue
debt obligations, whether or not subordinated, without the approval of the
shareholders. Obligations classified as debt, whether or not subordinated,
which may be issued by the association without the approval of shareholders, do
not carry voting rights on any issue, including an increase or decrease in the
aggregate number of the securities, or the exchange or reclassification of all
or part of securities into securities of another class or series.
SIXTH. The board of directors shall appoint one of its members as
president of this association, and one of its members as
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chairperson of the board and shall have the power to appoint one or more vice
presidents, a secretary who shall keep minutes of the directors' and
shareholders' meetings and be responsible for authenticating the records of
the association, and such other officers and employees as may be required to
transact the business of this association. A duly appointed officer may
appoint one or more officers or assistant officers if authorized by the board
of directors in accordance with the bylaws.
The board of directors shall have the power to:
(1) Define the duties of the officers, employees and agents of the
association.
(2) Delegate the performance of its duties, but not the responsibility for
its duties, to the officers, employees and agents of the association.
(3) Fix the compensation and enter into employment contracts with its
officers and employees upon reasonable terms and conditions consistent with
applicable law.
(4) Dismiss officers and employees.
(5) Require bonds from officers and employees and fix the penalty thereof.
(6) Ratify written policies authorized by the association's management or
committees of the board.
(7) Regulate the manner in which any increase or decrease of the
capital of the association shall be made, provided that nothing herein shall
restrict the power of shareholders to increase or decrease the capital of the
association in accordance with law, and nothing shall raise or lower from
two-thirds the percentage required for shareholder approval to increase or
reduce the capital.
(8) Manage and administer the business and affairs of the association.
(9) Adopt initial bylaws, not inconsistent with law or the articles of
association, for managing the business and regulating the affairs of the
association.
(10) Amend or repeal bylaws, except to the extent that the articles of
association reserve this power in whole or in part to shareholders.
(11) Make contracts.
(12) Generally perform all acts that are legal for a board of directors to
perform.
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SEVENTH. The board of directors shall have the power to change the
location of the main office to any other place within the limits of Midlothian,
Texas without the approval of the shareholders, and shall have the power to
establish or change the location of any branch or branches of the association to
any other location permitted under applicable law, without the approval of the
shareholders subject to approval by the Office of the Comptroller of the
Currency.
EIGHTH. The corporate existence of this association shall continue until
terminated according to the laws of the United States.
NINTH. The board of directors of this association, or any 3 or more
shareholders owning, in the aggregate, not less than 10% of the stock of this
association, may call a special meeting of shareholders at any time. Unless
otherwise provided by the bylaws or the laws of the United States, or waived by
shareholders, a notice of the time, place and purpose of every annual and
special meeting of the shareholders shall be given by first-class mail, postage
prepaid, mailed at least 10, and no more than 60, days prior to the date of the
meeting to each shareholder of record at his/her address as shown upon the books
of this association. Unless otherwise provided by the bylaws, any action
requiring approval of shareholders must be effected at a duly called annual or
special meeting.
TENTH. The association shall indemnify to the fullest extent permitted
under the Texas Business Corporation Act any person who is made a named
defendant or respondent in any action, suit or proceeding, other than in an
administrative proceeding or action instituted by an appropriate bank regulatory
agency which proceeding or action results in a final order assessing civil
monetary penalties or requiring affirmative action by such person in the form of
payments to the association, whether civil, criminal, administrative,
arbitrative or investigative, or in any appeal in such an action, suit or
proceeding, by reason of the fact that he or she is or was a director, advisory
director or officer of the association, against all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such director, advisory director or officer in connection
with any such action, suit or proceeding. The association may indemnify other
persons, as permitted by the Texas Business Corporation Act and other applicable
laws. The association may purchase and maintain insurance on behalf of
directors, advisory directors, officers or other persons against any liability
asserted against such persons in their capacities as directors, advisory
directors, officers or otherwise, other than for liability asserted against such
persons pursuant to a formal order assessing civil monetary penalties.
ELEVENTH. No director of the association shall be liable to the
association or its shareholders for monetary damages for an act or omission in
such director's capacity as a director of the
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association, except that this Article Eleventh shall not eliminate or limit
the liability of a director of the association for:
(i) a breach of such director's duty of loyalty to the association or
its shareholders;
(ii) an act or omission not in good faith or that involves intentional
misconduct or a knowing violation of the law;
(iii) a transaction from which a director received an improper benefit,
whether or not the benefit resulted from an action taken within the scope of the
director's office; or
(iv) an act or omission for which the liability of a director is
expressly provided for by statute.
Any repeal or amendment of this Article Eleventh by the shareholders of the
association shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the association existing
at the time of such repeal or amendment. Anything herein to the contrary
notwithstanding, if the Texas Miscellaneous Corporation Laws Act is amended
after approval by the shareholders of this Article Eleventh to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the association shall be
eliminated or limited to the full extent then permitted by the Texas
Miscellaneous Corporation Laws Act, as so amended from time to time.
TWELFTH. These articles of association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this association, unless the vote of the holders of a
greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount. The association's board of directors may
propose one or more amendments to the articles of association for submission to
the shareholders.
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