(EXHIBIT 2)
PLAN OF REORGANIZATION
AND
MERGER AGREEMENT
AMONG
TEHAMA BANK,
TEHAMA BANCORP
AND
TEHAMA MERGER CORPORATION
FEBRUARY, 1997
PLAN OF REORGANIZATION AND MERGER AGREEMENT
This Plan of Reorganization and Merger Agreement (the "Merger Agreement")
is entered into as of February 12, 1997 by and among Tehama Bank (the "Bank"),
Tehama Merger Corporation (the "Subsidiary"), and Tehama Bancorp (the "Holding
Company").
RECITALS AND UNDERTAKINGS
A. The Bank is a California state-chartered bank with its principal
office in the City of Red Bluff, County of Tehama, State of California. The
Subsidiary and the Holding Company are corporations duly organized and existing
under the laws of the State of California with their principal offices in the
City of Red Bluff, County of Tehama, State of California.
B. As of the date hereof, the Bank has 4,000,000 shares of common stock
and 2,000,000 shares of preferred stock authorized and 1,604,406 shares of
common stock issued and outstanding.
C. As of the date hereof, the Subsidiary has 4,000,000 shares of common
stock and 2,000,000 shares of preferred stock authorized. Immediately prior to
the Effective Date (as such term is defined below), 100 shares of such common
stock will be issued and outstanding, all of which shares will be owned by the
Holding Company.
D. As of the date hereof, the Holding Company has 4,000,000 shares of
common stock and 2,000,000 shares of preferred stock authorized. Immediately
prior to the Effective Date, 100 shares of the Holding Company's common stock
will be issued and outstanding.
E. The Boards of Directors of the Bank, the Holding Company and the
Subsidiary, respectively, have approved this Merger Agreement and authorized its
execution.
AGREEMENT
Section 1. GENERAL
1.1 THE MERGER. On the Effective Date, the Subsidiary shall be merged
with and into the Bank, with the Bank being the surviving corporation. The Bank
shall thereafter be a subsidiary of the Holding Company, and its name shall be
"Tehama Bank."
1.2 EFFECTIVE DATE. The merger described herein shall become effective at
the close of business on the day (the "Effective Date") upon which an executed
counterpart of this
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Merger Agreement shall have been filed with the Secretary of
State of the State of California in accordance with Section 1103 of the
California General Corporation Law.
1.3 ARTICLES OF INCORPORATION AND BYLAWS. On the Effective Date, the
Articles of Incorporation of the Bank, as in effect immediately prior to the
Effective Date, shall remain the Articles of Incorporation of the Bank until
amended; the Bylaws of the Bank, as in effect immediately prior to the Effective
Date, shall remain the Bylaws of the Bank until amended; the certificate of
authority of the Bank issued by the Superintendent of Banks of the State of
California shall remain the certificate of authority of the Bank; and the Bank's
deposit insurance coverage by the Federal Deposit Insurance Corporation shall
remain the deposit insurance of the Bank.
1.4 DIRECTORS AND OFFICERS. On the Effective Date, the directors and
officers of the Bank immediately prior to the Effective Date shall remain the
directors and officers of the Bank. The directors of the Bank shall serve until
the next annual meeting of shareholders of the Bank or until such time as their
successors are elected and have been qualified.
1.5 EFFECT OF THE MERGER.
(a) ASSETS AND RIGHTS. On the Effective Date and thereafter, all
rights, privileges, franchises and property of the Subsidiary and all debts
and liabilities due or to become due to the Subsidiary including choses in
action and every interest or asset of conceivable value or benefit, shall
be deemed fully and finally and without any right of reversion vested in
the Bank without further act or deed; and the Bank shall have and hold the
same in its own right as fully as the same was possessed and held by the
Subsidiary.
(b) LIABILITIES. On the Effective Date and thereafter, all debts,
liabilities and obligations due or to become due of, and all claims and
demands for any cause existing against, the Subsidiary shall be and become
the debts, liabilities or obligations of, or the claims or demands against,
the Bank in the same manner as if the Bank had itself incurred or become
liable for them.
(c) CREDITORS' RIGHTS AND LIENS. On the Effective Date and
thereafter, all rights of creditors of the Subsidiary and all liens upon
the property of the Subsidiary shall be preserved unimpaired, and shall be
limited to the property affected by such liens immediately prior to the
Effective Date.
(d) PENDING ACTIONS. On the Effective Date and thereafter, any
action or proceeding pending by or against the Subsidiary shall not be
deemed to have abated or been discontinued, but may be pursued to judgment
with full right to appeal or review.
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Any such action or proceeding may be pursued as if the merger described
herein had not occurred, or with the Bank substituted in place of the
Subsidiary as the case may be.
1.6 FURTHER ASSURANCES. The Subsidiary agrees that at any time, or from time
to time, as and when requested by the Bank, or by its successors or assigns, it
will execute and deliver, or cause to be executed and delivered, in its name by
its last acting officers, or by the corresponding officers of the Bank, all such
conveyances, assignments, transfers, deeds and other instruments, and will take
or cause to be taken such further or other action as the Bank, or its successors
or assigns, may deem necessary or desirable in order to carry out the vesting,
perfecting, confirming, assignment, devolution or other transfer of the
interests, property, privileges, powers, immunities, franchises and other rights
transferred to the Bank in this Section 1, or otherwise to carry out the intent
and purposes of this Merger Agreement.
Section 2. STOCK
2.1 STOCK OF THE SUBSIDIARY. On the Effective Date, each share of common
stock of the Subsidiary issued and outstanding immediately prior to the
Effective Date shall, by virtue of the merger described herein, be deemed to be
exchanged for and converted into one share of fully paid and (except as provided
by California Financial Code Section 662) nonassessable common stock of the
Bank.
2.2 STOCK OF THE HOLDING COMPANY. On the Effective Date, each share of
common stock of the Holding Company issued and outstanding immediately prior to
the Effective Date shall be repurchased by the Holding Company for the amount
paid for such shares upon their original issuance.
2.3 STOCK OF THE BANK. On the Effective Date, each share of common stock
of the Bank issued and outstanding immediately prior to the Effective Date
shall, by virtue of the merger described herein, be deemed to be exchanged for
and converted into one share of fully paid and nonassessable common stock of the
Holding Company, in accordance with the provisions of Paragraph 2.4 hereof.
2.4 EXCHANGE OF STOCK BY SHAREHOLDERS OF THE BANK. On the Effective Date
or as soon as practicable thereafter, the following actions shall be taken to
effectuate the exchange and conversion specified in Paragraph 2.3 hereof:
(a) The shareholders of the Bank of record immediately prior to the
Effective Date shall be allocated and entitled to receive for each share of
common stock of the Bank then held by them respectively one share of common
stock of the Holding Company.
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(b) Subject to the provisions of Paragraph 2.4(c) hereof, the Holding
Company shall issue to the shareholders of the Bank the shares of common
stock of the Holding Company which said shareholders are entitled to
receive.
(c) Thereafter, outstanding certificates representing shares of
common stock of the Bank shall represent shares of the common stock of the
Holding Company, and such certificates may, but need not, be exchanged by
the holders thereof for new certificates for the appropriate number of
shares of the Holding Company.
2.5 OTHER RIGHTS TO STOCK.
(a) On the Effective Date and thereafter, the Bank's 1994 Stock
Option Plan shall be administered in an appropriate manner to reflect the
merger described herein; any outstanding options to purchase shares of
common stock of the Bank shall be deemed to be options granted by the
Holding Company upon the same terms and conditions, except that appropriate
adjustments shall be deemed to be made to such terms and conditions to
reflect the merger described herein; and any options thereafter granted
pursuant to the 1994 Stock Option Plan, shall be deemed to be options
granted by the Holding Company.
(b) From time to time as and when required by the provisions of any
agreement to which the Bank or the Holding Company shall become a party
after the date hereof that provides for the issuance of shares of common
stock or other securities, either debt or equity, of the Bank or the
Holding Company in connection with a merger into the Bank of any other
banking institution or the acquisition by the Bank of the assets or stock
of any other banking institution or other corporation, the Holding Company
shall issue in accordance with the terms of any such agreement shares of
its common stock or other debt or equity securities as required by such
agreement or in substitution for the shares of common stock or other debt
or equity securities of the Bank required to be issued by such agreement,
as the case may be, which the shareholders of any other such banking
institution or other corporation shall be entitled to receive by virtue of
any such agreement.
Section 3. APPROVALS
3.1 SHAREHOLDER APPROVAL. This Merger Agreement shall be submitted to the
shareholder(s) of the Holding Company, the Subsidiary and the Bank for
ratification and confirmation to the extent required by, and in accordance with,
applicable provisions of law.
3.2 REGULATORY APPROVALS. Each of the parties hereto shall proceed
expeditiously and cooperate fully in procuring all other consents and approvals,
and in satisfying all other requirements, prescribed by law or otherwise,
necessary or desirable for the merger described
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herein to be consummated, including without limitation the consents and
approvals referred to in Paragraphs 4.1(b), 4.1(c) and 4.1(d) hereof.
Section 4. CONDITIONS PRECEDENT, TERMINATION AND PAYMENT
OF EXPENSES
4.1 CONDITIONS PRECEDENT TO THE MERGER. Consummation of the merger
described herein is conditioned upon the following:
(a) Ratification and confirmation of this Merger Agreement by the
shareholders of the Holding Company, the Subsidiary and the Bank in
accordance with applicable provisions of law;
(b) Procuring all other consents and approvals and satisfying all
other requirements, prescribed by law or otherwise, which are necessary for
the merger described herein to be consummated, including without
limitation: (i) approval from the Federal Deposit Insurance Corporation,
the Superintendent of Banks of the State of California, and the Board of
Governors of the Federal Reserve System; (ii) approval of the California
Commissioner of Corporations under the California Corporate Securities Law
of 1968, and securities administrators of other applicable jurisdictions,
with respect to the securities of the Holding Company issuable upon
consummation of the merger, and (iii) the declaration by the Securities and
Exchange Commission of the effectiveness of a registration statement under
the Securities Act of 1933 with respect to the securities of the Holding
Company issuable upon consummation of the merger or the automatic
effectiveness of such registration statement;
(c) Receipt (unless waived by each of the parties hereto) of an
opinion of counsel and/or accountants with respect to the tax consequences
to the parties and their shareholders of the merger described herein;
(d) Procuring all consents or approvals, governmental or otherwise,
which in the opinion of counsel for the Bank are or may be necessary to
permit or to enable the Bank to conduct, upon and after the merger
described herein, all or any part of the businesses and other activities
that the Bank engages in immediately prior to such merger, in the same
manner and to the same extent that the Bank engaged in such businesses and
other activities immediately prior to such merger; and
(e) Performance by each of the parties hereto of all obligations
under this Merger Agreement which are to be performed prior to the
consummation of the merger described herein.
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4.2 TERMINATION OF THE MERGER. In the event that any condition specified
in Paragraph 4.1 hereof cannot be fulfilled, or prior to the Effective Date the
Board of Directors of any of the parties hereto reaches any of the following
determinations:
(a) The number of shares of common stock of the Bank voting against
the merger described herein makes consummation of such merger inadvisable;
or
(b) Any action, suit, proceeding or claim relating to the merger
described herein, whether initiated or threatened, makes consummation of
such merger inadvisable; or
(c) Consummation of the merger described herein is inadvisable for
any other reason;
then this Merger Agreement shall terminate. Upon termination, this Merger
Agreement shall be void and of no further effect, and there shall be no
liability by reason of this Merger Agreement or the termination hereof on the
part of any of the parties hereto or their respective directors, officers,
employees, agents or shareholders.
4.3 EXPENSES OF THE MERGER. All of the expenses of the merger described
herein, including without limitation filing fees, printing costs, mailing costs,
accountant's fees and legal fees, shall be borne initially by the Bank but shall
after the Effective Date be apportioned and adjusted between the Bank and the
Holding Company as shall be required by applicable regulation or rules of
accounting, provided that, nothing herein shall forbid the Bank from paying any
dividend to the Holding Company which the Holding Company may use for the
payment (including reimbursement of the Bank) of any such expenses.
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IN WITNESS WHEREOF, the parties hereto have caused this Merger Agreement to
be executed by their duly authorized officers as of the day and year first above
written.
TEHAMA BANK
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxx, President
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxxxx
Secretary
TEHAMA MERGER CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxx, President
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxxx
Secretary
TEHAMA BANCORP
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxx, President
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxxxx
Secretary
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