Exhibit 10.3
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is entered into as of
the 9th day of August, 1999, by and between INDEPENDENT COMMUNITY BANKSHARES,
INC., a Virginia corporation ("ICBI"), XXXXXX X. XXXXXXXX ("Xxxxxxxx") and XXXXX
X. XXXXXXXXX ("Xxxxxxxxx"), both Virginia residents and each a shareholder of
XXXXXXXX & XXXXXXXXX INVESTMENT ADVISORS, INC., a Virginia corporation ("G&P")
(Xxxxxxxx and Xxxxxxxxx being sometimes individually referred to hereinafter as
a "Shareholder" and collectively referred to hereinafter as the "Shareholders").
RECITALS:
X. Xxxxxxxx and Xxxxxxxxx each own 4,950 of the 10,000 currently
issued and outstanding shares of the common stock of G&P.
B. ICBI owns 100 of the 10,000 currently issued and outstanding
shares of the common stock of G&P.
C. ICBI, Xxxxxxxx and Xxxxxxxxx are parties to a Shareholder
Agreement dated as of the date hereof (the "Shareholder Agreement"), whereby
Xxxxxxxx and Xxxxxxxxx have agreed to vote their shares in favor of the merger
of G&P into The Tredegar Trust Company, a wholly owned subsidiary of ICBI
("TTC"), pursuant to that certain Agreement and Plan of Reorganization dated as
of the date hereof and entered into by and among ICBI, G&P and TTC (the "Merger
Agreement").
D. Under the terms of the Merger Agreement, upon consummation of
the merger of G&P into TTC, Xxxxxxxx and Xxxxxxxxx will each receive a
combination of cash and shares of ICBI common stock with an aggregate value of
One Million, Nine Hundred Thousand Dollars ($1,900,000.00) in return for all of
their respective shares of G&P common stock.
E. In order to ensure that shares of G&P common stock held by
Xxxxxxxx and Xxxxxxxxx are voted in accordance with the terms of the Shareholder
Agreement, and in consideration of the parties' agreements and covenants
therein, the amounts paid to Xxxxxxxx and Xxxxxxxxx thereunder, and the
covenants and agreements herein set forth, the parties agree that it is in their
mutual best interest to provide for the purchase of Xxxxxxxx and/or Xxxxxxxxx'x
shares in the event of their death in the period between the date hereof and the
date upon which the Merger Agreement terminates (the "Termination Date") in the
manner hereafter set forth.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein and of other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree and
covenant as follows:
1. Restricted Shares. All of the shares of G&P common stock now
owned or hereafter acquired by the Shareholders, all shares of stock of G&P
received as a dividend on such shares, and all shares of stock or other
securities of G&P or of any other entity into which such shares shall be
changed, or for which such shares shall be exchanged, whether through
reorganization, recapitalization, stock splits, combinations of shares, merger
or consolidation (collectively, the "Shares") shall be subject to the provisions
of this Agreement.
2. Restriction on Transfer. No Shareholder, nor any successor,
assignee or other representative of any Shareholder, shall sell, pledge, assign,
encumber, hypothecate or otherwise transfer or dispose of (hereafter "Transfer")
all or any portion of his Shares whether by gift, pledge, sale, assignment,
transfer by operation of law, or any other method of disposition, except in
accordance with and subject to the terms of the Shareholder Agreement.
3. Purchase of Stock upon Death. Subject to the limitations set
forth in Sections 8 and 9 hereof, upon the death of any Shareholder (hereinafter
referred to as the "Deceased Shareholder"), ICBI shall purchase from the
Deceased Shareholder's estate, and the personal representative of the Deceased
Shareholder's estate shall sell to ICBI, all of the Shares owned by the Deceased
Shareholder at the date of his death in return for One Million Nine Hundred
Thousand Dollars ($1,900,000.00) in cash (the "Purchase Price"). The Purchase
Price shall be paid to such personal representative of the Deceased
Shareholder's estate in accordance with Section 5 of this Agreement.
4. Full Value of Stock. The parties agree that the Purchase Price
represents the full value of all of the Shares of the Deceased Shareholder;
that, except as otherwise provided in this Agreement, such value shall in no
manner be altered; and that all assets, both tangible and intangible, including
the accounts receivable, good will and trade name of G&P, as well as all
liabilities, including mortgages, liens, or other encumbrances of any kind
whatsoever, if any, of or upon the assets of G&P, have been considered in
determining such Purchase Price.
5. Payment of Purchase Price on Death. Subject to the limitations
set forth in Sections 8 and 9 hereof,, in the event of the death of a
Shareholder, the Purchase Price shall be paid, in full, from the proceeds of the
insurance policies purchased by ICBI in accordance with Section 8 and attached
hereto as Exhibit B to the Deceased Shareholder's personal representative within
ninety (90) days after the later of (i) the date of death of the Deceased
Shareholder and (ii) ICBI's receipt of such proceeds; provided, however, that
ICBI shall apply for such proceeds in the manner set forth in the attached
policy of insurance within thirty (30) days of its receipt of notice of the
death of the Deceased Shareholder..
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6. Transfer of Shares. Simultaneously with the receipt of the
Purchase Price by the personal representative of the Deceased Shareholder's
estate, such personal representative shall endorse and deliver all certificates
evidencing the Deceased Shareholder's Shares to ICBI.
7. Legend to be Placed on Stock Certificates. All certificates
for Shares issued by G&P to any Shareholder, whether now outstanding or issued
hereafter, shall bear the following legend:
"The shares of Stock represented by this Certificate are held subject
to the terms, conditions, restrictions on transfer and rights set forth
in a certain Stock Purchase Agreement, dated August 9, 1999, entered
into between the holders of the Stock of this Corporation, as such
Agreement may be amended from time to time. A copy of such Agreement,
together with all amendments thereto, if any, is on file at the
principal office of the Corporation."
8. Insurance. ICBI shall apply for, own, and be the beneficiary
of life insurance policies insuring against the death of each shareholder and
paying to ICBI upon the death of the insured a death benefit equal to not less
than the Purchase Price. Each Shareholder shall take any actions reasonably
required to secure or maintain the insurance policies ICBI is required to own
under this Section 8, including but not limited to submitting to reasonable
physical examinations and providing any medical information required by the
insurer. Upon issuance of such policies, ICBI shall cause the appropriate
information to be recorded on Exhibit A hereto, and the Shareholders and ICBI
shall execute an amendment, consistent with Section 11 hereof, ratifying such
changes and causing the amended Exhibit A to become a part of this Agreement.
ICBI may acquire any additional policies of life insurance that ICBI may deem
necessary or appropriate to carry out this Agreement, and each Shareholder shall
cooperate fully in any such acquisitions.
9. Obligations of ICBI Voidable Upon Failure of Insurance. In the
event that ICBI is with reasonable diligence unable to obtain the policies of
life insurance required by Section 8 hereof, whether due to the uninsurability
of any Shareholder or for any other reason, or the issuer of such policies shall
for any reason fail or refuse to pay to ICBI the death benefits therein set
forth upon the death of any Shareholder, then ICBI may, in its sole and absolute
discretion, unilaterally terminate this Agreement and thereafter be excused from
performance of its obligation to purchase the Deceased Shareholder's Shares as
set forth herein. The parties acknowledge and agree that this Agreement is
intended to protect ICBI against the risk of the death of either or both
Shareholders prior to the termination of the Merger Agreement or the merger of
G&P into TTC in accordance with its terms. The parties therefore further agree
that ICBI shall be under no obligation other than as set forth herein to take
more than reasonable measures to secure the policies of life insurance required
by Section 8 hereof or to contest in any manner a determination by the issuer of
such policies that the death benefits provided thereunder are not payable upon
the death of the insured Shareholder.
10. Payment of Premiums. ICBI shall pay the premiums on any
insurance policies that ICBI is required to own under Section 8 of this
Agreement. All dividends on any such policies will be applied to the payment of
premiums.
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11. Amendment of Agreement. This Agreement may be altered,
amended, waived in whole or in part or terminated only by a writing executed by
ICBI and the Shareholders.
12. Termination. This Agreement shall terminate upon the
occurrence of any of the following events (provided that Section 13 shall
survive a termination of this Agreement for ninety (90) days):
a. The termination of the Merger Agreement in accordance
with its terms;
b. The merger of G&P into TTC in accordance with the
terms of the Merger Agreement;
c. The death of both Shareholders and purchase of such
Shareholders' Shares in accordance with the terms
hereof;
d. The termination of this Agreement by ICBI under
Section 9 hereof; or
e. The written agreement of the Shareholders and ICBI.
13. Sale by ICBI. If ICBI purchases the Shares of Xxxxxxxx or
Xxxxxxxxx (but not both) pursuant to this Agreement, and the Merger Agreement
terminates, the surviving Shareholder shall have the right to purchase from ICBI
the 4,950 Shares formerly held by the deceased Shareholder by cash payment of
$1,900,000.00 within 180 days after the Merger Agreement terminates.
14. Survival. Unless terminated by ICBI under Section 9 hereof,
this Agreement shall survive the death of a Shareholder and continue in
existence between ICBI and the remaining Shareholder.
15. Notice. Any notice required to be given under this Agreement
shall be considered to have been given when delivered in person to the party to
whom it is required to be given, or when delivered in accordance with the notice
provisions set forth in Section 8.5 of the Merger Agreement.
16. Effect of Agreement. This Agreement shall be binding on and
inure to the respective benefit of the parties, their successors, assigns,
estates and personal representatives, and shall supersede any prior written or
oral understanding with regard to the subject matter hereof.
17. Applicable Law. This Agreement shall be interpreted, governed
and enforced in accordance with the laws of the Commonwealth of Virginia
regardless of the place of residence or domicile of any Shareholder.
18. Descriptive Headings. The descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall not be
deemed to affect the meaning or construction of any of the provisions hereof.
[execution page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement or have
caused this Agreement to be executed by their duly authorized representatives,
as the case may be, all as of the day and year first above written.
/s/ Xxxxxx X. Xxxxxxxx
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XXXXXX X. XXXXXXXX
/s/ Xxxxx X. Xxxxxxxxx
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XXXXX X. XXXXXXXXX
INDEPENDENT COMMUNITY BANKSHARES, INC.,
a Virginia corporation
By /s/ X. X. Xxxxxx
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Title: Chairman & CEO
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EXHIBIT A
Schedule of Policies
Owner/Beneficiary Insured Insurance Company Policy Number Amount
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