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 Delaware; 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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