Exhibit 10.1
AGREEMENT AND PLAN OF REORGANIZATION
between
Xxxxxxxx & Xxxxxxxxx Investment Advisors, Inc.
and
Independent Community Bankshares, Inc.
and
The Tredegar Trust Company
August 9, 1999
TABLE OF CONTENTS
ARTICLE 1
The Reorganization and Related Matters
Page
1.1 The Reorganization................................................... 1
1.2 The Closing and Effective Date....................................... 2
1.3 Definitions.......................................................... 2
ARTICLE 2
Basis and Manner of Exchange
2.1 Conversion of G&P Common Stock....................................... 4
2.2 Manner of Exchange................................................... 4
2.3 Fractional Shares.................................................... 4
2.4 Dividends............................................................ 4
ARTICLE 3
Representations and Warranties
3.1 Representations and Warranties of G&P................................ 5
(a) Organization and Standing................................... 5
(b) Authority................................................... 5
(c) Capital Structure........................................... 5
(d) Ownership of the Stock...................................... 6
(e) Financial Statements........................................ 6
(f) Absence of Undisclosed Liabilities.......................... 6
(g) Legal Proceedings; Compliance with Laws..................... 6
(h) Investment Advisory Activities.............................. 7
(i) Reports..................................................... 9
(j) Regulatory Approvals........................................ 9
(k) Labor Relations............................................. 10
(l) Tax Matters................................................. 10
(m) Property.................................................... 10
(n) Employee Benefits........................................... 11
(o) Investment Securities....................................... 11
(p) Material Contracts.......................................... 11
(q) Insurance................................................... 11
(r) Absence of Material Changes and Events...................... 12
(s) Brokers and Finders......................................... 12
(t) Environmental Matters....................................... 12
(u) Year 2000 Compliance........................................ 13
3.2 Representations and Warranties of ICBI............................... 13
(a) Organization, Standing and Power............................ 13
(b) Authority................................................... 14
(c) Capital Structure........................................... 14
(d) Financial Statements........................................ 14
(e) Regulatory Approvals........................................ 15
(f) Absence of Material Changes and Events...................... 15
ARTICLE 4
Conduct Prior to the Effective Date
4.1 Access to Records and Properties..................................... 15
4.2 Confidentiality...................................................... 15
4.3 Forbearances of G&P.................................................. 16
(a) Ordinary Course............................................. 16
(b) Capital Stock............................................... 16
(c) Stock Splits, Etc........................................... 16
(d) Compensation; Employment Agreements; Etc.................... 16
(e) Benefit Plans............................................... 16
(f) Dispositions................................................ 16
(g) Acquisitions................................................ 17
(h) Governing Documents......................................... 17
(i) Contracts................................................... 17
(j) Claims...................................................... 17
(k) Adverse Actions............................................. 17
(l) Indebtedness................................................ 17
(m) Commitments................................................. 17
(n) Payables.................................................... 17
4.4 Forbearances of ICBI................................................. 18
4.5 Dividends............................................................ 18
4.6 No Solicitation...................................................... 18
4.7 Regulatory Applications and Approvals................................ 18
4.8 Client Consents...................................................... 18
4.9 Reorganization Consummation.......................................... 19
4.10 Bank Accounts........................................................ 19
4.11 Modification of Transaction.......................................... 19
4.12 Certain Payments..................................................... 19
4.13 Custody ............................................................ 19
4.14 Succession........................................................... 19
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4.15 Fiscal Year.......................................................... 19
ARTICLE 5
Additional Agreements
5.1 Benefit Plans........................................................ 20
5.2 Restricted Stock..................................................... 20
5.3 Indemnification...................................................... 20
ARTICLE 6
Conditions to the Reorganization
6.1 Conditions to Each Party's Obligations to Effect the Reorganization.. 23
(a) Regulatory Approvals........................................ 23
(b) Opinions of Counsel......................................... 23
(c) Legal Proceedings........................................... 23
6.2 Conditions to Obligations of ICBI.................................... 23
(a) Representations and Warranties.............................. 24
(b) Performance of Obligations.................................. 24
(c) Client Consents............................................. 24
6.3 Conditions to Obligations of G&P..................................... 24
(a) Representations and Warranties.............................. 24
(b) Performance of Obligations.................................. 24
ARTICLE 7
Termination
7.1 Termination.......................................................... 24
7.2 Effect of Termination................................................ 25
7.3 Survival of Representations, Warranties and Covenants................ 25
7.4 Expenses............................................................. 25
ARTICLE 8
General Provisions
8.1 Entire Agreement..................................................... 26
8.2 Waiver and Amendment................................................. 26
8.3 Descriptive Headings................................................. 26
8.4 Governing Law........................................................ 26
8.5 Notices.............................................................. 26
8.6 Counterparts......................................................... 27
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Exhibit A - Plan of Merger between The Tredegar Trust Company and Xxxxxxxx &
Xxxxxxxxx Investment Advisors, Inc.
Exhibit B - Schedule of Required Third Party Consents [OMITTED]
Exhibit C - Schedule of Registrations Under Security Laws [OMITTED]
Exhibit D-1 - Investment Advisory Contracts [OMITTED]
Exhibit D-2 - Investment Advisory Contracts [OMITTED]
Exhibit D-3 - Investment Advisory Contracts [OMITTED]
Exhibit D-4 - Investment Advisory Contracts [OMITTED]
Exhibit E - Securities Violations [OMITTED]
Exhibit F - Contracts Involving Annual Payments in Excess of $25,000 [OMITTED]
Exhibit G - Insurance [OMITTED]
The Company will provide the omitted exhibits to the Commission upon
request.
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made and
entered into as of August 9, 1999 by and between Xxxxxxxx & Xxxxxxxxx Investment
Advisors, Inc., a Virginia corporation with its principal office located in
Alexandria, Virginia ("G&P"), Independent Community Bankshares, Inc., a Virginia
corporation with its principal office located in Middleburg, Virginia ("ICBI"),
and The Tredegar Trust Company, a Virginia corporation wholly-owned by ICBI
("TTC" or the "Surviving Corporation").
WITNESSETH:
WHEREAS, pursuant to a Purchase Agreement, dated June 30, 1999 by and
among G&P, Xxxx Brothers Investment Management Corporation ("KBIMC"), Xxxxxx X.
Xxxxxxxx and Xxxxx X. Xxxxxxxxx (the "Xxxx Agreement"), G&P acquired certain
assets and assumed certain liabilities KBIMC; and
WHEREAS, pursuant to the Xxxx Agreement, Xxxxxx X. Xxxxxxxx and Xxxxx
X. Xxxxxxxxx acquired all of the issued and outstanding shares of the common
stock of G&P (the "G&P Common Stock"); and
WHEREAS, G&P and ICBI desire to combine their respective businesses;
and
WHEREAS, the boards of directors of ICBI, TTC and G&P deem it advisable
to merge G&P into TTC pursuant to this Agreement, the Plan of Merger attached as
Exhibit A (the "Plan") and the provisions of Va. Code Section 13.1-716, whereby
the holders of shares of common stock of G&P will receive common stock of ICBI
and cash in exchange therefor; and
WHEREAS, the parties desire to adopt a plan of reorganization in
accordance with the provisions of Section 368(a) of the United States Internal
Revenue Code of 1986, as amended; and
WHEREAS, the respective Boards of Directors of G&P, TTC and ICBI have
resolved that the transactions described herein are in the best interests of the
parties and their respective shareholders and have authorized and approved the
execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the parties hereby agree as follows:
ARTICLE 1
The Reorganization and Related Matters
1.1 The Reorganization. Subject to the terms and conditions of this
Agreement, at the Effective Date as defined in Section 1.2 hereof, G&P will be
merged with and into TTC (the "Reorganization"). The separate corporate
existence of G&P shall thereupon cease, and TTC will be
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the Surviving Corporation in the Reorganization.
1.2 The Closing and Effective Date. The closing of the transactions
contemplated by this Agreement and the Plan shall take place at the offices of
Williams, Mullen, Xxxxx & Xxxxxxx, 0000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx or
at such other place as may be mutually agreed upon by the parties. The
Reorganization shall become effective on the date shown on the Certificate of
Merger issued by the State Corporation Commission of Virginia effecting the
Reorganization (the "Effective Date"). The Effective Date shall not occur before
July 1, 2001. All documents required by the terms of this Agreement to be
delivered at or prior to consummation of the Reorganization will be exchanged by
the parties at the closing of the Reorganization (the "Reorganization Closing"),
which shall be held on or before the Effective Date. At the Reorganization
Closing, TTC and G&P shall execute and deliver to the Virginia State Corporation
Commission (the "SCC") Articles of Merger containing a Plan of Merger in
substantially the form of Exhibit A hereto.
1.3 Definitions. Any term defined anywhere in this Agreement shall have
the meaning ascribed to it for all purposes of this Agreement (unless expressly
noted to the contrary). In addition:
(a) the term "Affiliate" shall mean, with respect to ICBI, any
corporation of which ICBI beneficially owns a majority of the voting stock.
(b) the term "Fair Market Value", with respect to shares of
ICBI Common Stock, shall mean the weighted average sale price for sales of ICBI
Common Stock for the thirty (30) days on which ICBI Common Stock trades
immediately preceding the tenth day before the Effective Date.
(c) the term "ICBI" shall mean Independent Community
Bankshares, Inc., a Virginia corporation, and any corporation with which it may
merge prior to the Effective Date.
(d) the term "ICBI Common Stock" shall mean common stock of
ICBI, par value $5.00 per share, and the common stock of any corporation with
which ICBI may merge prior to the Effective Date.
(e) "Knowledge" of a Person shall mean what the Person should
have known after a reasonable investigation.
(f) "Material Adverse Effect," when used in reference to any
party, shall mean or describe an event, occurrence, or circumstance (including
without limitation, any breach of a representation or warranty contained herein
by such party) which (1) has an effect on the financial condition, results of
operations, or business of such party and its subsidiaries, that, if reduced to
monetary damages, would be in excess of $50,000 or (2) would materially impair
any party's ability to timely perform its obligations under this Agreement or
the consummation of any of the transactions contemplated hereby; provided, that
a Material Adverse Effect with respect to a party shall not include events or
conditions generally affecting the securities industry or the banking industry
or effects resulting from general economic conditions (including changes in
interest
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rates), changes in accounting practices or changes to statutes, regulations or
regulatory policies, that do not have a materially more adverse effect on such
party than that experienced by similarly situated financial services companies.
(g) the term "Merger Consideration" shall mean, with respect
to each share of G&P Common Stock issued and outstanding on the Effective Date,
a pro rata share of (A) $1,300,000.00 in cash and (B) shares of ICBI Common
Stock, with an aggregate Fair Market Value of $2,500,000.00; provided, however,
that ICBI shall not be required to issue more than 150,000 shares of ICBI Common
Stock. If the fair market value of 150,000 shares of ICBI Common Stock is less
than $2,500,000.00, the cash portion of the Merger Consideration shall be
increased by an amount equal to the excess of $2,500,000.00 over the Fair Market
Value of 150,000 shares of ICBI Common Stock, such that the total value of the
Merger Consideration is $3,800,000.00. On the day before the Effective Date, G&P
shall redeem one percent (1%) of the issued and outstanding shares of G&P Common
Stock from ICBI for $60,000.00.
(h) the term "Person" shall mean any individual or entity.
(i) the term "Previously Disclosed" by a party shall mean
information set forth in a written disclosure letter that is delivered by that
party to the other party prior to or contemporaneously with the execution of
this Agreement and on a date not more than 30 days prior to the Effective Date
and, in each case, specifically designated as information "Previously Disclosed"
pursuant to this Agreement.
(j) the term "Shareholders" shall mean Xxxxxx X. Xxxxxxxx and
Xxxxx X. Xxxxxxxxx.
(k) The capitalized terms set forth below are defined in the
following sections:
Company Reports Section 3.1(i)
Investment Contracts Section 3.1(h)(1)
Xxxx Agreement Recitals
Lien Section 3.1(b)(2)
Losses Section 5.3(b)
NASD Section 3.1(i)
Regulatory Authorities Section 3.1(g)(7)
SEC Section 3.1(g)(7)
Self-Regulatory Bodies Section 3.1(i)
Territory Section 3.1(m)(2)
G&P Balance Sheet Section 3.1(e)
G&P Financial Statements Section 3.1(e)
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ARTICLE 2
Effect of Reorganization on Common Stock
2.1 Conversion of G&P Common Stock. (a) At the Effective Date, by
virtue of the Reorganization and without any action on the part of the holders
thereof, each share of G&P Common Stock issued and outstanding on the Effective
Date shall cease to be outstanding and shall be converted into the right to
receive the Merger Consideration.
(b) Each holder of a certificate representing any shares of G&P Common
Stock shall thereafter cease to have any rights with respect to such G&P Common
Stock, except the right to receive the consideration described in Sections 2.1
and 2.3 upon the surrender of such certificate in accordance with Section 2.2.
(c) In the event ICBI changes the number of shares of ICBI Common Stock
issued and outstanding prior to the Effective Date, as a result of any stock
split, stock dividend, recapitalization or similar transaction with respect to
the outstanding ICBI Common Stock and the record date therefor shall be on or
prior to the Effective Date, the number of shares of ICBI Common Stock issued as
part of the Merger Consideration shall be proportionately adjusted.
2.2 Manner of Exchange. As promptly as practicable after the Effective
Date, ICBI shall cause its stock transfer agent, acting as the exchange agent
("Exchange Agent"), to send to each former shareholder of record of G&P
immediately prior to the Effective Date transmittal materials for use in
exchanging such shareholder's certificates of G&P Common Stock for the
consideration set forth in Section 2.1 above and Section 2.3 below. Any
fractional share checks which a G&P shareholder shall be entitled to receive in
exchange for such shareholder's shares of G&P Common Stock, and all dividends
paid on any shares of ICBI Common Stock that such shareholder shall be entitled
to receive prior to the delivery to the Exchange Agent of such shareholder's
certificates representing all of such shareholder's shares of G&P Common Stock
will be delivered to such shareholder only upon delivery to the Exchange Agent
of the certificates representing all of such shares (or indemnity satisfactory
to ICBI and the Exchange Agent, in their judgment, if any of such certificates
are lost, stolen or destroyed). No interest will be paid on any such fractional
share checks or dividends to which the holder of such shares shall be entitled
to receive upon such delivery.
2.3 Fractional Shares. ICBI shall not issue fractional shares. ICBI
will pay the value of such fractional shares in cash on the basis of the Fair
Market Value per share of ICBI Common Stock.
2.4 Dividends. No dividend or other distribution payable to the holders
of record of ICBI Common Stock at or as of any time after the Effective Date
shall be paid to the holder of any certificate representing shares of G&P Common
Stock issued and outstanding at the Effective Date until such holder physically
surrenders such certificate for exchange as provided in Section 2.2 of this
Agreement, promptly after which time all such dividends or distributions shall
be paid (without interest).
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ARTICLE 3
Representation and Warranties
3.1 Representations and Warranties of G&P. G&P represents and warrants
to ICBI as follows:
(a) Organization and Standing. (1) G&P is a corporation, duly
organized, validly existing and in good standing under Virginia law and is duly
qualified to do business and is in good standing in the states of the United
States and foreign jurisdictions where its ownership or leasing of property or
the conduct of its business requires it to be so qualified. G&P has the
corporate power and authority necessary to carry on its business as it is now
being conducted and to own all its material properties and assets. G&P has in
effect all federal, state, local, and foreign governmental authorizations
necessary for it to own or lease its properties and assets and to carry on its
business as it is now conducted.
(2) All of the shares of capital stock of G&P are fully paid
and nonassessable.
(b) Authority. (1) The execution and delivery of this
Agreement and the Plan and the consummation of the Reorganization have been duly
and validly authorized by all necessary corporate action on the part of G&P,
except shareholder approval. The Agreement represents the legal, valid, and
binding obligations of G&P, enforceable against G&P in accordance with its terms
(except in all such cases as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought).
(2) The execution, delivery and performance of this Agreement
by G&P, and the consummation of the transactions contemplated hereby, do not and
will not (i) constitute a breach or violation of, or a default under, or cause
or allow the acceleration or creation of any charge, mortgage, pledge, security
interest, restriction, claim, lien, or encumbrance (a "Lien") (with or without
the giving of notice, passage of time or both) pursuant to any law, rule or
regulation or any judgment, decree, order, governmental or non-governmental
permit or license, or agreement, indenture or instrument of G&P, or to which
G&P, or G&P's properties is subject or bound, (ii) constitute a breach or
violation of, or a default under, G&P's charter or by-laws, or (iii) except as
set forth in Exhibit B, require any consent or approval under any such law,
rule, regulation, judgment, decree, order, governmental or non-governmental
permit or license, or the consent or approval of any other party to any such
agreement, indenture or instrument.
(c) Capital Structure. The authorized capital stock of G&P
consists of 10,000 shares of common stock, par value $1.00 per share, of which,
as of the date hereof, 10,000 shares are issued, outstanding, fully paid and
nonassessable, not subject to shareholder preemptive rights and were not issued
in violation of any agreement to which G&P is a party or otherwise bound, or of
any registration or qualification provisions of any federal or state securities
laws. Xxxxxx X. Xxxxxxxx is the
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record holder and beneficial owner of 4,950 shares of G&P Common Stock; Xxxxx X.
Xxxxxxxxx is the record holder and beneficial owner of 4,950 such shares; and
ICBI is the record holder and beneficial owner of 100 such shares. There are no
outstanding options, warrants or other rights to subscribe for or purchase from
G&P any capital stock of G&P or securities convertible into or exchangeable for
capital stock of G&P.
(d) Ownership of the Stock. Except for investments that are
permissible for a bank holding company under applicable federal laws and
regulations, G&P does not beneficially own, directly or indirectly, any of the
outstanding capital stock or other voting securities of any corporation or other
organization.
(e) Financial Statements. G&P commenced operations on June 30,
1999. G&P has provided ICBI a balance sheet of G&P, dated as of June 30, 1999
(the "G&P Balance Sheet"). From the date hereof until the Effective Date, within
45 days of the end of each calendar quarter, G&P shall furnish to ICBI a
statement of financial condition and related statements of income, cash flows
and changes in shareholders' equity for each calendar quarter (each a "G&P
Financial Statement). The G&P Balance Sheet fairly presents the financial
position of G&P at June 30, 1999 in conformity with generally accepted
accounting principles. Each G&P Financial Statement will fairly present the
financial position of G&P as of the dates indicated and the results of
operations, changes in shareholders' equity and statements of cash flows for the
periods or as of the dates set forth therein (subject, in the case of unaudited
interim statements, to normal recurring audit adjustments that are not material
in amount or effect) in conformity with generally accepted accounting principles
on a consistent basis.
(f) Absence of Undisclosed Liabilities. At June 30, 1999, G&P
had no obligation or liability (contingent or otherwise) of any nature which was
not reflected in the G&P Balance Sheet, except for those which in the aggregate
are immaterial or have been Previously Disclosed.
(g) Legal Proceedings; Compliance with Laws. (1) There are no
actions, suits or proceedings instituted or pending or, to the best knowledge of
G&P's management, threatened against G&P, or against any property, asset,
interest or right of G&P. G&P is not a party to any agreement or instrument or
subject to any judgment, order, writ, injunction, decree or rule that might
reasonably be expected to have a Material Adverse Effect on the condition
(financial or otherwise), business or prospects of G&P.
(2) The conduct of its business by G&P is not in violation, in
any material respect, of any law, statute, ordinance, license, rule or
regulation (including those of the Self-Regulatory Bodies).
(3) G&P has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations with, all
Regulatory Authorities and Self-Regulatory Bodies that are required in order to
permit it to own and operate its business as presently conducted. All such
permits, licenses, authorizations, orders and approvals are in full
6
force and effect and no suspension or cancellation of any of them is threatened
or reasonably likely. All such filings, applications and registrations are
current. G&P is in good standing with all relevant Regulatory Authorities and is
a member in good standing with all relevant Self-Regulatory Bodies.
(4) G&P has not received any notification or written
communication (or, to its knowledge, any other communication) from any
Regulatory Authority or Self-Regulatory Body (A) asserting that G&P is not in
compliance with any of the statutes, rules, regulations, or ordinances which
such Regulatory Authority or Self-Regulatory Body enforces, or has otherwise
engaged in any unlawful business practice, (B) threatening to revoke any
license, franchise, permit, governmental authorization, or other privilege, (C)
requiring G&P (including any of G&P's directors or controlling persons) to enter
into a cease and desist order, agreement, or memorandum of understanding (or
requiring the board of directors thereof to adopt any resolution or policy) or
(D) restricting or disqualifying the activities of G&P.
(5) G&P is not aware of any pending or threatened
investigation, review or disciplinary proceeding by any Regulatory Authority or
Self-Regulatory Body against G&P or any officer, director or employee thereof.
(6) Neither G&P nor any officer, director or employee thereof,
is a party or subject to any order, directive, decree, condition or similar
arrangement or action (other than exemptive orders) relating to the business of
G&P, with or by any federal, state, local or foreign regulatory authority or
industry trade group.
(7) G&P and each of its officers and employees who are
required to be registered as an investment adviser, investment adviser
representative or agent with the Securities and Exchange Commission (the "SEC"),
the securities commission of any state or any Regulatory Authority or
Self-Regulatory Body (the "Regulatory Authorities"), is duly registered as such
and such registration is in full force and effect, and a list of all such
registrations is disclosed in Exhibit C. All federal, state and foreign
registration requirements have been complied with in all material respects and
such registrations as currently filed, and all periodic reports required to be
filed with respect thereto, are accurate and complete in all material respects.
(h) Investment Advisory Activities. (1) Disclosed in Exhibit D
is a listing of (i) all of the clients to which G&P provides investment
management, investment advisory or sub-advisory services on the date hereof, and
(ii) each contract or agreement, and all amendments thereto, in effect on the
date hereof relating to G&P's rendering of investment advisory or management
services (including without limitation all sub-advisory services) to any client
(together with any such contract or agreement entered into after the date
hereof, the "Investment Contracts"). Each Investment Contract and any subsequent
renewal has been duly authorized, executed and delivered by G&P and each other
party thereto and, to the extent applicable, has been adopted in compliance with
any statute, order, ordinance, rule or regulation to which such Investment
Contract is subject and is a valid and binding agreement of G&P and each other
party thereto, enforceable in accordance with its terms (subject to bankruptcy,
insolvency, moratorium,
7
fraudulent transfer and similar laws affecting creditors' rights generally and
to general equity principles). Each of G&P and client party thereto is in
compliance in all material respects with the terms of each Investment Contract
to which it is a party, and is not currently in default under any of the terms
of any such Investment Contract. Each such Investment Contract is in full force
and effect. Except as disclosed in Exhibit D, none of the Investment Contracts,
or any other arrangements or understandings relating to G&P's rendering of
investment advisory or management services (including without limitation all
sub-advisory services), contains any undertaking by a client to cap fees or to
reimburse any or all fees thereunder, and all such Investment Contracts or other
arrangements or understandings provide for the payment of fees. Copies of each
Investment Contract, including a current fee schedule, have been supplied to
ICBI. Except as Previously Disclosed, G&P is not an adviser or sub-adviser to
any Investment Company.
(2) Except as disclosed in Exhibit D, G&P has not received any
notice (written or otherwise) that any client is terminating or is planning to
terminate its relationship with G&P or will reduce materially its use of the
services of G&P.
(3) G&P has properly administered, in all respects material
and which could reasonably be expected to be material to the business,
operations or financial condition of G&P, all accounts for which it acts as
investment advisor, in accordance with the terms of the governing documents and
applicable law and regulation and common law. To the best knowledge of G&P,
neither G&P nor any director, officer or employee of G&P has committed any
breach with respect to any such account. The accountings for each such account
are true and correct in all respects and accurately reflect the assets of such
account in all respects.
(4) Listed in Exhibit D is each client that is subject to
ERISA. The accounts of each such client have been managed by G&P in compliance
in all material respects with the applicable requirements of ERISA.
(5) No basis exists upon which G&P would have any material
liability to any client except such liabilities arising in the ordinary course
of business.
(6) G&P has adopted a formal code of ethics and a written
policy regarding xxxxxxx xxxxxxx, a copy of each of which has been provided or
supplied to ICBI. Such code and policy comply with Section 17(j) of the
Investment Company Act of 1940 (as amended, the "Investment Company Act"), Rule
17j-1 thereunder and Section 204A of the Investment Advisers Act of 1940 (as
amended, the "Investment Advisers Act"), respectively. The policies of G&P with
respect to avoiding conflicts of interest are as set forth in the most recent
Form ADV thereof, as amended, a copy of which has been delivered or made
available to ICBI, and G&P's "soft-dollar" policies and arrangements satisfy the
requirements of Section 28(e) of the Securities Exchange Act of 1934 (as
amended, the "Exchange Act") and all other applicable laws and regulations.
There have been no violations or allegations of violations of such policies.
(7) Except as disclosed in Exhibit E, neither G&P nor any
other person "associated" (as defined under the Investment Advisers Act) with
G&P, has for a period not less
8
than five years prior to the date hereof been convicted of any crime or is or
has been subject to any disqualification that would be a basis for denial,
suspension or revocation of registration of an investment adviser under Section
203(e) of the Investment Advisers Act or Rule 206(4)-4(b) thereunder or of a
broker-dealer under Section 15 of the Exchange Act, or for disqualification as
an investment adviser for any Investment Company pursuant to Section 9(a) of the
Investment Company Act or as an investment adviser representative under any
applicable state or federal law, and there is no basis for, or proceeding or
investigation that is reasonably likely to become the basis for, any such
disqualification, denial, suspension or revocation.
(8) As of the date of this Agreement, G&P has disclosed to all
clients of KBIMC the transactions contemplated by the Xxxx Agreement, including
but not limited to, the assignment of the Investment Contracts contemplated by
the Xxxx Agreement, which disclosure (i) is true, complete and correct in all
material respects, and (ii) satisfies all applicable requirements of the
Investment Advisers Act and the regulations promulgated thereunder. As to any
client of KBIMC with an Investment Contract that terminates by its terms upon
assignment, G&P has caused such client to enter into a new agreement effective
as of June 30, 1999 on terms and conditions no less favorable than the client's
existing contract with KBIMC which contract complies with the Investment
Advisers Act and the regulations promulgated thereunder. Any such new agreement
shall be deemed an assigned contract for the purposes of the preceding sentence.
(9) G&P is not required to be registered as a broker-dealer
under any state or federal law.
(i) Reports. G&P has timely filed (and, for the past five (5)
years each person associated with G&P has timely filed) all reports,
registrations, statements and other filings, together with any amendments
required to be made with respect thereto, with (i) the SEC, (ii) any other
applicable federal, state or foreign securities, banking, insurance, or other
regulatory authority, and (iii) the National Association of Securities Dealers,
Inc. ("NASD"), or any other self-regulatory body or industry trade group (the
"Self-Regulatory Bodies")(all such reports and statements being collectively
referred to herein as the "Company Reports"), including without limitation all
reports, registrations, statements and filings required under the Investment
Company Act, the Investment Advisers Act, or any applicable state securities. To
the knowledge of G&P and the Shareholders, as of their respective dates, the
Company Reports complied in all material respects with the statutes, rules,
regulations and orders enforced or promulgated by the regulatory authority or
Self-Regulatory Body with which they were filed and did not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.
(j) Regulatory Approvals. To the knowledge of G&P there is no
reason why the regulatory approvals referred to in Section 6.1(a) should not be
obtained without the imposition of any condition of the type referred to in
Section 6.1(a).
9
(k) Labor Relations. G&P is not a party to or bound by any
collective bargaining agreement, contract or other agreement or understanding
with a labor union or labor organization, nor is it the subject of a proceeding
asserting that it has committed an unfair labor practice (within the meaning of
the National Labor Relations Act) or seeking to compel it to bargain with any
labor organization as to wages and conditions of employment, nor is there any
strike or other labor dispute involving it pending or, to the best of its
knowledge, threatened, nor is it aware of any activity involving its employees
seeking to certify a collective bargaining unit or engaging in any other
organization activity.
(l) Tax Matters. G&P shall file all federal, state and local
tax returns and reports required to be filed, and pay all taxes shown by such
returns to be due and payable. Except as Previously Disclosed, no tax return or
report of G&P is under examination by any taxing authority or the subject of any
administrative or judicial proceeding, and no unpaid tax deficiency has been
asserted against G&P by any taxing authority.
(m) (1) Property. Except as Previously Disclosed or reserved
against in the G&P Balance Sheet or G&P Financial Statements, G&P has good and
marketable title free and clear of all material liens, encumbrances, charges,
defaults or equities of whatever character to all of the material properties and
assets, tangible or intangible, reflected in the G&P Financial Statements as
being owned by G&P as of the dates thereof. To the best knowledge of G&P, all
buildings, and all fixtures, equipment, and other property and assets which are
material to its business on a consolidated basis, held under leases or subleases
by G&P are held under valid instruments enforceable in accordance with their
respective terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought). The
buildings, structures, and appurtenances owned, leased, or occupied by G&P are
in good operating condition and in a state of good maintenance and repair, and
to the best knowledge of G&P (i) comply with applicable zoning and other
municipal laws and regulations, and (ii) there are no latent defects therein.
(2) The Company has the right to use within the geographic
territory in which it conducts its business (the "Territory"), and after
consummation of the transactions contemplated hereby will have the right to use
in the Territory, free and clear of any claims of others, all patents, patent
applications, trademarks, service marks (whether registered or unregistered),
trade names, copyrights and other proprietary rights necessary to own and
operate its properties and to carry on its business as currently conducted.
(3) The Company owns or licenses all computer software
developed or currently used by it which is material to the conduct of its
business and has the right to use such software without infringing upon the
intellectual property rights (including trade secrets rights) of a third party.
10
(n) Employee Benefit Plans. (1) G&P will deliver for ICBI's
review, as soon as practicable, true and complete copies of all material
pension, retirement, profit-sharing, deferred compensation, stock option, bonus,
vacation or other material incentive plans or agreements, all material medical,
dental or other health plans, all life insurance plans and all other material
employee benefit plans or fringe benefit plans, including, without limitation,
all "employee benefit plans" as that term is defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), currently
adopted, maintained, sponsored in whole or in part, or contributed to by G&P for
the benefit of employees, retirees or other beneficiaries eligible to
participate (collectively, the "G&P Benefit Plans"). Any of the G&P Benefit
Plans which is an "employee pension benefit plan," as that term is defined in
Section (32) of ERISA, is referred to herein as a "G&P ERISA Plan." No G&P
Benefit Plan is or has been a multi-employer plan within the meaning of Section
3(37) of ERISA.
(2) Except as Previously Disclosed, all G&P Benefit Plans are
in compliance with the applicable terms of ERISA and the Internal Revenue Code
of 1986, as amended (the "IRC") and any other applicable laws, rules and
regulations, the breach or violation of which could result in a material
liability to G&P on a consolidated basis.
(3) No G&P ERISA Plan is a defined benefit pension plan.
(o) Investment Securities. Except as Previously Disclosed,
none of the investment securities reflected in the G&P Financial Statements is
(i) subject to any restriction, contractual, statutory, or otherwise, which
would impair materially the ability of the holder of such investment to dispose
freely of any such investment at any time or (ii) of a type or in an amount that
ICBI would be prohibited from holding under the Bank Holding Company Act of 1956
(as amended, the "Bank Holding Company Act") or regulations of the Federal
Reserve thereunder.
(p) Material Contracts. Except as disclosed in Exhibit F,
neither G&P nor any of its assets, businesses or operations, is a party to, or
is bound or subject to, or receives benefits under, any material contract, lease
or agreement (i.e., a contract, lease or agreement providing for annual payments
in excess of $25,000). Copies of such contracts or agreements have been supplied
or made available to ICBI. G&P is not in default under any such material
contract, agreement, commitment, arrangement, lease, insurance policy or other
instrument to which it is a party, by which its assets, business or operations
may be bound or subject to, or under which it or any of its assets, business or
operations receives benefits, and there has not occurred any event that, with
the lapse of time or the giving of notice or both, would constitute such a
default by G&P. G&P is not subject to or bound by any contract containing
covenants which limit the ability of G&P to compete in any line of business or
with any person or which involves any restriction of geographical area in which,
or method by which, G&P may carry on its business (other than as may be required
by law or any applicable regulatory authority). Except as disclosed in Exhibit
F, there are no contracts between any affiliate of G&P, on the one hand, and G&P
on the other hand.
(q) Insurance. G&P is insured with reputable insurers against
such risks and in
11
such amounts as the management of G&P reasonably has determined to be prudent in
accordance with industry practices. Disclosed in Exhibit G is a complete list,
as of the date hereof, of the material insurance policies related to the
business currently conducted by G&P (copies of which have been supplied to
ICBI). The fidelity insurance of G&P has been and will be maintained in
accordance with all requirements of applicable law. G&P has not made any claim
under any insurance policy and is not aware of any event or condition that is
reasonably likely to give rise to any such claim. G&P is not in default with
respect to any provision contained in any such policy or binder and has not
failed to give any notice or present any claim under any such policy or binder
in due and timely fashion. G&P has not received notice of cancellation or
non-renewal of any such policy or binder. G&P has no knowledge of any inaccuracy
in any application for such policies or binders, any failure to pay premiums
when due or any similar state of facts or the occurrence of any event that is
reasonably likely to form the basis for any material claim against it not fully
covered (except to the extent of any applicable deductible) by the policies or
binders referred to above. G&P has not received notice from any of its insurance
carriers that any insurance premiums will be increased materially in the future
or that any such insurance coverage will not be available in the future on
substantially the same terms as now in effect.
(r) Absence of Material Changes and Events. Since July 1,
1999, there has not been any material adverse change in the condition (financial
or otherwise), aggregate assets or liabilities, assets under management, cash
flow, earnings or business of G&P, and except for entering into this Agreement,
G&P has conducted its business only in the ordinary course consistent with past
practice.
(s) Brokers and Finders. Neither G&P nor any of its officers,
directors or employees, has employed any broker, finder or financial advisor or
incurred any liability for any fees or commissions in connection with the
transactions contemplated herein.
(t) Environmental Matters. (1) There are no legal,
administrative, arbitral or other claims, causes of action or governmental
investigations of any nature, seeking to impose, or that could result in the
imposition, on G&P of any liability arising under any Environmental Laws pending
or, to the best knowledge of G&P, threatened against (A) G&P, (B) any person or
entity whose liability for any Environmental Claim G&P has or may have retained
or assumed either contractually or by operation of law, or (C) any real or
personal property which G&P owns or leases, or has been or is judged to have
managed, supervised or participated in the management of, which liability might
have a Material Adverse Effect on the business, financial condition or results
of operations of G&P. G&P is not subject to any agreement, order, judgment,
decree or memorandum by or with any court, governmental authority, regulatory
agency or third party imposing any such liability.
(2) To the best knowledge of G&P, there are no past or present
actions, activities, circumstances, conditions, events or incidents, including,
without limitation, the release, emission, discharge or disposal of any
Materials of Environmental Concern, that could reasonably form the basis of any
Environmental Claim or other claim or action or governmental investigation that
could result in the imposition of any liability arising under any Environmental
Laws currently in effect or adopted but not yet effective against G&P or against
any person or entity whose liability for any Environmental
12
Claim G&P or any G&P Subsidiary has or may have retained or assumed either
contractually or by operation of law.
(3) For the purpose of this Agreement, the following terms
shall have the following meanings:
(i) "Communication" means a communication which is of a
substantive nature and which is made (A) in writing to G&P or any G&P Subsidiary
on the one hand or to ICBI or any ICBI Subsidiary on the other hand, or (B)
orally to a senior officer of G&P or any G&P Subsidiary or of ICBI or any ICBI
Subsidiary, whether from a governmental authority or a third party.
(ii) "Environmental Claim" means any Communication from any
governmental authority or third party alleging potential liability (including,
without limitation, potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, or penalties) arising out of, based on or resulting from the
presence, or release into the environment, of any Material of Environmental
Concern.
(iii) "Environmental Laws" means all applicable federal, state
and local laws and regulations, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, that relate to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata). This definition includes, without limitation, laws and regulations
relating to emissions, discharges, releases or threatened releases of Materials
of Environmental Concern, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern.
(iv) "Materials of Environmental Concern" means pollutants,
contaminants, wastes, toxic substances, petroleum and petroleum products and any
other materials regulated under Environmental Laws.
(u) Year 2000 Compliance. G&P, to its best knowledge,
satisfies all requirements of the Securities and Exchange Commission as to Year
2000 readiness and has made all necessary filings with the Securities and
Exchange Commission related thereto, including but not limited to timely filings
of Form ADV-Y2K.
3.2 Representations and Warranties of ICBI. ICBI represents and
warrants to G&P as follows:
(a) Organization, Standing and Power. ICBI is a corporation
duly organized, validly existing and in good standing under the laws of
Virginia. It has all requisite corporate power and authority to carry on its
business as now being conducted and to own and operate its assets, properties
and business, and ICBI has the corporate power and authority to execute and
deliver this
13
Agreement and perform the respective terms of this Agreement and of the Plan.
ICBI is duly registered as a bank holding company under the Bank Holding Company
Act.
(b) Authority. (1) The execution and delivery of this
Agreement and the Plan and the consummation of the Reorganization have been duly
and validly authorized by all necessary corporate action on the part of ICBI.
The Agreement represents the legal, valid, and binding obligation of ICBI,
enforceable against ICBI in accordance with its terms (except in all such cases
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
(2) Neither the execution and delivery of the Agreement, the
consummation of the transactions contemplated therein, nor the compliance by
ICBI with any of the provisions thereof will (i) conflict with or result in a
breach of any provision of the Articles of Incorporation or Bylaws of ICBI, (ii)
except as Previously Disclosed, constitute or result in the breach of any term,
condition or provision of, or constitute default under, or give rise to any
right of termination, cancellation or acceleration with respect to, or result in
the creation of any lien, charge or encumbrance upon, any property or assets of
the ICBI Companies pursuant to (A) any note, bond, mortgage, indenture, or (B)
any material license, agreement, lease or other instrument or obligation, to
which any of the ICBI Companies is a party or by which any of them or any of
their properties or assets may be bound, or (iii) subject to the receipt of the
requisite approvals referred to in Section 4.6, violate any order, writ,
injunction, decree, statute, rule or regulation applicable to any of the ICBI
Companies or any of their properties or assets.
(c) Capital Structure. The authorized capital stock of ICBI
consists of: 10,000,000 shares of ICBI Common Stock, of which 1,778,994 shares
are issued and outstanding, fully paid and nonassessable, not subject to
shareholder preemptive rights, and not issued in violation of any agreement to
which ICBI is a party or otherwise bound, or of any registration or
qualification provisions of any federal or state securities laws. The shares of
ICBI Common Stock to be issued upon consummation of the Reorganization will have
been duly authorized and, when issued in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable and subject to
no preemptive rights.
(d) Financial Statements. ICBI has previously furnished to G&P
true and complete copies of its audited consolidated balance sheets and related
consolidated statements of income, statements of cash flows, and statements of
stockholders equity for the three year period ended December 31, 1998 (together
with the notes thereto, the "ICBI Financial Statement"). The ICBI Financial
Statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis during the periods presented, and
present fairly the financial position of ICBI as of the respective dates thereof
and the results of its operations for the three year period then ended.
14
(e) Regulatory Approvals. ICBI knows of no reason why the
regulatory approvals referred to in Section 6.1(a) should not be obtained
without the imposition of any condition of the type referred to in Section
6.1(a).
(f) Absence of Material Changes and Events. Since December 31,
1998, there has not been any material adverse change in the condition (financial
or otherwise), aggregate assets or liabilities, cash flow, earnings or business
or ICBI, and ICBI has conducted its business only in the ordinary course
consistent with past practice.
ARTICLE 4
Conduct Prior to the Effective Date
4.1 Access to Records; Current Information. (a) Prior to the Effective
Date, ICBI, on the one hand, and G&P on the other, agree to give to the other
party reasonable access to all the premises and books and records (including tax
returns filed and those in preparation) of it and its subsidiaries and to cause
its officers to furnish the other with such financial and operating data and
other information with respect to the business and properties as the other shall
from time to time request for the purposes of verifying the warranties and
representations set forth herein; provided, however, that any such investigation
shall be conducted in such manner as not to interfere unreasonably with the
operation of the respective business of the other.
(b) During the period from the date of this Agreement to the Effective
Date, each of G&P and ICBI shall, and shall cause its representatives to,
promptly notify the other of (1) any material change in its business or
operations, (2) any material complaints, investigations or hearings (or
communications indicating that the same may be contemplated) of any Regulatory
Authority relating to it, (3) any denial of any application filed by it with any
Regulatory Authority with respect to this Agreement, (4) the institution or the
threat of material litigation involving or relating to it, or (5) any event or
condition that might be reasonably expected to cause any of its representations
or warranties set forth herein not to be true and correct as of the Effective
Date (and will use its best efforts to prevent or promptly remedy the same) or
prevent it from fulfilling its obligations hereunder; and in each case shall
keep the other informed with respect thereto.
4.2 Confidentiality. Between the date of this Agreement and the
Effective Date, ICBI and G&P each will maintain in confidence, and cause its
directors, officers, employees, agents and advisors to maintain in confidence,
and not use to the detriment of the other party, any written, oral or other
information obtained in confidence from the other party or a third party in
connection with this Agreement or the transactions contemplated hereby unless
such information is already known to such party or to others not bound by a duty
of confidentiality or such information becomes publicly available through no
fault of such party, unless use of such information is necessary or appropriate
in making any filing or obtaining any consent or approval required for the
consummation of the transactions contemplated hereby or unless the furnishing or
use of such information is required by or necessary or appropriate in connection
with legal proceedings. If the Reorganization is not consummated, each party
will return or destroy as much of such written information as may reasonably be
requested.
15
4.3. Forbearances of G&P. From the date hereof until the Effective
Date, except as expressly contemplated by this Agreement, without the prior
written consent of ICBI, G&P will not:
(a) Ordinary Course. Conduct the business of G&P other than in
the ordinary and usual course or fail to use reasonable efforts to preserve
intact its business organization and assets and maintain its rights, franchises
and existing relations with clients, customers, suppliers, employees and
business associates, engage in any new activities or lines of business, or take
any action reasonably likely to have a Material Adverse Effect upon G&P's
ability to perform any of its material obligations under this Agreement. G&P
shall not engage in any business or activity that is impermissible for a bank
holding company under the Bank Holding Company Act or the rules and regulations
of the Board of Governors of the Federal Reserve System. Upon request by G&P,
ICBI will promptly advise G&P whether any particular business, activity or
investment is impermissible for a bank holding company.
(b) Capital Stock. Issue, sell or otherwise permit to become
outstanding, or authorize the creation of, any additional shares of capital
stock of G&P or any rights to acquire capital stock of G&P, or enter into any
agreement with respect to the foregoing, or permit any additional shares of
capital stock of G&P to become subject to new grants of employee options, other
rights to acquire capital stock of G&P or similar stock-based employee rights.
(c) Stock Splits, Etc. Directly or indirectly adjust, split,
combine, redeem, reclassify, purchase or otherwise acquire, any shares of its
capital stock.
(d) Compensation; Employment Agreements; Etc. Enter into,
amend, modify or renew any employment, consulting, severance or similar
agreements or arrangements with any director, officer or employee of G&P, or
grant any salary, wage or other compensation increase or increase any employee
benefit (including incentive or bonus payments), except (1) for normal
individual increases in compensation to employees in the ordinary course of
business consistent with past practice, or (2) for employment arrangements for
newly hired employees in the ordinary course of business consistent with past
practice.
(e) Benefit Plans. Enter into, establish, adopt or amend any
pension, retirement, stock option, stock purchase, savings, profit sharing,
deferred compensation, consulting, bonus, group insurance or other employee
benefit, incentive or welfare contract, plan or arrangement, or any trust
agreement (or similar arrangement) related thereto, in respect of any director,
officer or employee of G&P; provided, however, G&P may maintain a profit sharing
plan and a defined contribution pension plan similar to the profit sharing plan
and defined contribution pension plan previously maintained by KBIMC.
(f) Dispositions. Except for the sale of securities or other
investments or assets in the ordinary course of business consistent with past
practice, sell, transfer, mortgage, encumber or otherwise dispose of or
discontinue any of its material assets, business or properties.
16
(g) Acquisitions. Except for the purchase of securities or
other investments or assets in the ordinary course of business consistent with
past practice, acquire any material assets, business, securities or properties
of any other entity.
(h) Governing Documents. Amend G&P's Articles of Incorporation
or By-Laws.
(i) Contracts. Except in the ordinary course of business,
enter into or terminate any material contract or amend or modify in any material
respect any of its existing material contracts.
(j) Claims. Settle any claim, action or proceeding, except for
any claim, action or proceeding involving solely money damages in an amount,
individually and in the aggregate for all such settlements, not more than
$25,000 and which is not reasonably likely to establish an adverse precedent or
basis for subsequent settlements.
(k) Adverse Actions. Knowingly take any action that is
intended or is reasonably likely to (1) result in any of its representations and
warranties set forth in this Agreement being or becoming untrue in any material
respect at any time at or prior to the Effective Date, (2) result in any of the
conditions to the Merger set forth in Article 6 not being materially satisfied
or (3) result in a material violation of any provision of this Agreement except,
in each case, as may be required by applicable law or regulation.
(l) Indebtedness. Other than the indebtedness to ICBI (1)
incur any indebtedness for borrowed money or (2) settle, modify or forgive any
indebtedness for borrowed money owed to G&P.
(m) Commitments. Agree, commit to or enter into any agreement
to take any of the actions prohibited by Sections 4.3(a) through (l).
(n) Payables. Fail to pay all bills as they become due in the
ordinary course of business.
4.4 Forbearances of ICBI. From the date hereof until the Effective
Date, except as expressly contemplated by this Agreement, without the prior
written consent of G&P, which consent shall not be unreasonably withheld, ICBI
will not knowingly take any action that is intended or is reasonably likely to
(1) result in any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect at any time at or
prior to the Effective Date, (2) result in any of the conditions to the Merger
set forth in Article 6 not being materially satisfied or (3) result in a
material violation of any provision of this Agreement except, in each case, as
may be required by applicable law or regulation.
17
4.5 Dividends. G&P agrees that it will not declare or pay any cash
dividend from the date of this Agreement through the Effective Date.
4.6 No Solicitation. Unless and until this Agreement shall have been
terminated pursuant to its terms, neither G&P nor any of its officers,
directors, representatives or agents shall, directly or indirectly, (i)
encourage, solicit or initiate discussions or negotiations with any person other
than ICBI concerning any merger, share exchange, sale of substantial assets,
tender offer, sale of shares of capital stock or similar transaction involving
G&P, (ii) enter into any agreement with any third party providing for a business
combination transaction, equity investment or sale of a significant amount of
assets, or (iii) furnish any information to any other person relating to or in
support of such transaction.
4.7. Regulatory Applications and Approvals. Each of the parties hereto
shall use its reasonable best efforts (A) promptly to prepare and submit
applications to the appropriate Regulatory Authorities for approval of the
Reorganization, and (B) promptly to make all other appropriate filings to secure
all other approvals, consents and rulings which are necessary for the
consummation of the Reorganization. Each of G&P and ICBI agrees to cooperate
with the other and, subject to the terms and conditions set forth in this
Agreement, use its reasonable best efforts to prepare and file all necessary
permits, consents, orders, approvals and authorizations of, or any exemption by,
all third parties and Regulatory Authorities necessary or advisable to
consummate the transactions contemplated by this Agreement. Each of G&P and ICBI
shall have the right to review in advance, and to the extent practicable each
will consult with the other, in each case subject to applicable laws relating to
the exchange of information, with respect to all written information submitted
to any third party or any regulatory authorities in connection with the
transactions contemplated by this Agreement. In exercising the foregoing right,
each of the parties hereto agrees to act reasonably and as promptly as
practicable. Each party hereto agrees that it will consult with the other party
hereto with respect to the obtaining of all material permits, consents,
approvals and authorizations of all third parties and regulatory authorities
necessary or advisable to consummate the transactions contemplated by this
Agreement and each party will keep the other party apprised of the status of
material matters relating to completion of the transactions contemplated hereby.
4.8. Client Consents. As soon as reasonably practicable after the
receipt of a written request from ICBI (which request shall not be made until
ICBI has called a special meeting of the shareholders of G&P to vote on the
Reorganization), G&P shall inform its clients of the transactions contemplated
by this Agreement. G&P shall, in compliance with the Investment Advisers Act,
request written consent of each such client to the assignment to TTC of its
Investment Contract and use its reasonable best efforts to obtain such consent,
or in the case of agreements which prohibit assignment or state by their terms
that they terminate upon assignment, use its reasonable best efforts to enter
into new agreements effective upon the Effective Date. ICBI agrees that, except
in the case of Investment Contracts with respect to clients which prohibit
assignment or state by their terms that they terminate upon assignment or do
not, by their terms, require written consent of the client, G&P may obtain
consent by requesting written consent as aforesaid and informing such client of:
(a) G&P's intention to assign such Investment Contract to TTC; (b) TTC's
intention to continue the advisory services, pursuant to the existing Investment
18
Contract with such client after the Effective Date if such client does not
terminate such agreement prior to the Effective Date; and (c) that the consent
of such client will be implied if such client continues to accept such advisory
services for at least 30 days after receipt of such notice without termination.
4.9 Reorganization Consummation. Subject to the terms and conditions of
this Agreement, each party shall use its best efforts in good faith to take, or
cause to be taken, all actions, and to do or cause to be done all things
necessary, proper or desirable, or advisable under applicable laws, as promptly
as practicable so as to permit consummation of the Reorganization at the
earliest possible date, consistent with Section 1.2 herein, and to otherwise
enable consummation of the transactions contemplated hereby and shall cooperate
fully with the other parties hereto to that end, and each of G&P and ICBI shall
use, and shall cause each of their respective subsidiaries to use, its best
efforts to obtain all consents (governmental or other) necessary or desirable
for the consummation of the transactions contemplated by this Agreement.
4.10 Bank Accounts. G&P intends to maintain its principal bank accounts
with The Middleburg Bank, a wholly-owned subsidiary of ICBI, but shall be
permitted to maintain accounts at other banks.
4.11 Modification of Transaction. At the request of ICBI, G&P agrees to
take such actions as may be reasonably necessary to modify the structure of, or
to substitute parties to (as long as such substitute is ICBI or a wholly-owned
subsidiary of ICBI) the transactions contemplated hereby, provided that such
modifications do not change the Merger Consideration or abrogate the covenants
and other agreements contained in this Agreement.
4.12 Certain Payments. The Shareholders shall indemnify, defend and
hold G&P harmless from and against any and all claims, demands, losses,
liabilities, costs, damages and expenses that are asserted against G&P or that
G&P sustains under the Xxxx Agreement.
4.13 Custody. G&P will use its best efforts to transfer custody of all
client funds and securities to TTC as expeditiously as possible; provided that
ICBI and TTC understand that certain clients' relationships with brokers and
banks are such that it is impracticable or impossible to transfer custody of
those clients' assets and that any effort to do so is likely to be unsuccessful.
4.14 Succession. G&P will cooperate with ICBI to identify and hire an
individual acceptable to ICBI and TTC who is intended to be capable of marketing
the services of G&P and learning to perform the duties currently performed by
Xxxxxx X. Xxxxxxxx or Xxxxx X. Xxxxxxxxx.
4.15 Fiscal Year. G&P will adopt a fiscal year ending December 31.
19
ARTICLE 5
Additional Agreements
5.1 Benefit Plans. Upon consummation of the Reorganization, as soon as
administratively practicable and subject to ICBI's best efforts, employees of
G&P shall be entitled to participate in ICBI pension, benefit, health and
similar plans on the same terms and conditions as employees of ICBI and its
subsidiaries, without waiting periods and giving effect to years of service with
KBIMC and G&P as if such service were with ICBI; provided, however, that no G&P
employee shall receive credit for service with KBIMC or G&P for benefit accrual
purposes under the ICBI defined benefit pension plan. ICBI also shall cause G&P
to honor in accordance with their terms as in effect on the date hereof (or as
amended after the date hereof with the prior written consent of ICBI), all
employment, severance, consulting and other compensation contracts and
agreements Previously Disclosed and executed in writing by G&P on the one hand
and any individual current or former director, officer or employee thereof on
the other hand, copies of which have previously been delivered by G&P to ICBI.
5.2 Restricted Stock. The offer and sale of ICBI Common Stock
contemplated by this Agreement is intended to be exempt from the registration
requirements of the Securities Act of 1933 and applicable state law. ICBI will
not file any registration statement with the Securities and Exchange Commission
or any state. Transfer of the shares of ICBI Common Stock issued as Merger
Consideration will be restricted to the extent necessary to comply with the
Securities Act of 1933 and any applicable state laws. Each share certificate for
shares of ICBI Common Stock issued pursuant to this Agreement shall bear the
following legend:
The shares of stock represented by this Certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), and no transfer, sale, assignment, pledge,
hypothecation or other disposition of the shares represented by this
Certificate may be made except (a) pursuant to an effective
registration statement under the Securities Act and any applicable
state securities laws or (b) pursuant to an exemption from the
provisions of Section 5 of the Securities Act, and the rules and
regulations in effect thereunder, and applicable state securities laws.
5.3 Indemnification.
(a) Survival of Representations, Warranties and Covenants. All
representations and warranties of the parties contained in this Agreement,
including any exhibits made a part hereof, and any covenants or other agreements
the performance of which is specified to occur on or prior to the Effective
Date, shall survive the Effective Date for the applicable statute of
limitations. Any covenant or other agreement herein any portion of the
performance of which may or is specified to occur after the Effective Date shall
survive the Effective Date.
(b) Obligations of Shareholders. Subject to Section 5.3(e), the
Shareholders hereby agree to indemnify, defend and hold harmless ICBI and its
employees, officers, partners and other affiliates from and against any and all
claims, losses, liabilities, costs, penalties, fines and expenses
20
(including reasonable expenses for attorneys, accountants, consultants and
experts), damages, obligations to third parties, expenditures, proceedings,
Taxes, judgments, awards or demands (collectively, "Losses") which any of them
may suffer, incur or sustain arising out of, attributable to, or resulting from:
(a) any inaccuracy in or breach of any of the representations or warranties of
G&P made in or pursuant to this Agreement or in any other agreement, certificate
or document executed in connection herewith or (b) any breach or nonperformance
of any of the covenants or other agreements made by G&P in or pursuant to this
Agreement.
(c) Obligations of ICBI. Subject to Section 5.3(e), ICBI hereby agrees
to indemnify, defend and hold harmless the Shareholder from and against any and
all Losses which either of them may suffer, incur or sustain arising out of,
attributable to, or resulting from: (a) any inaccuracy in or breach of any of
the representations or warranties of ICBI made in or pursuant to this Agreement
or in any other agreement, certificate or document executed in connection
herewith or (b) any breach or nonperformance of any of the covenants or other
agreements made by ICBI in or pursuant to this Agreement.
(d) Procedure. (i) Any party entitled to the benefits of
indemnification hereunder (an "Indemnified Party") and seeking indemnification
for any Losses or potential Losses from a claim asserted by a third party
against the Indemnified Party (a "Third Party Claim") shall give written notice
to the party obligated to provide indemnification hereunder (an "Indemnifying
Party") specifying in detail the source of the Loss or potential Loss under
Section 5.3(b) or Section 5.3(c), as the case may be. Written notice to the
Indemnifying Party of the existence of a Third Party Claim shall be given by the
Indemnified Party promptly after notice of the potential claim; provided,
however, that the Indemnified Party shall not be foreclosed from seeking
indemnification pursuant to this Section 5.3 by any failure to provide such
prompt notice of the existence of a Third Party Claim to the Indemnifying Party
except and only to the extent that the Indemnifying Party actually incurs an
incremental out-of-pocket expense or otherwise has been materially damaged or
prejudiced as a result of such delay.
(ii) Defense. Except as otherwise provided herein, the Indemnifying
Party may elect to compromise or defend, at such Indemnifying Party's own
expense and by such Indemnifying Party's own counsel (which counsel shall be
reasonably satisfactory to the Indemnified Party), any Third Party Claim. If the
Indemnifying Party elects to compromise or defend such Third Party Claim, it
shall, within 30 days after receiving notice of the Third Party Claim (10 days
if the Indemnifying Party states in such notice that prompt action is required),
notify the Indemnified Party of its intent to do so, and the Indemnified Party
shall cooperate, at the expense of the Indemnifying Party, in the compromise of,
or defense against, such Third Party Claim. If the Indemnifying Party elects not
to compromise or defend against the third Party Claim, or fails to notify the
Indemnified Party of its election to do so as herein provided, or otherwise
abandons the defense of such Third Party Claim, (A) the Indemnified Party may
pay (without prejudice of any of its rights as against the Indemnifying Party),
compromise or defend such Third Party Claim (until such defense is assumed by
the Indemnifying Party) and (B) the costs and expenses of the Indemnified Party
incurred in connection therewith shall be indemnifiable by the Indemnifying
Party pursuant to the terms of this Agreement. Notwithstanding anything to the
contrary
21
contained herein, in connection with any Third Party Claim in which the
Indemnified Party shall reasonably conclude, based upon the written advice of
its counsel, that (x) there is a conflict of interest between the Indemnifying
Party and the Indemnified Party in the conduct of the defense of such Third
Party Claim or (y) there are specific defenses available to the Indemnified
Party which are different from or additional to those available to the
Indemnifying Party and which could be materially adverse to the Indemnifying
Party, then the Indemnified Party shall have the right to assume and direct the
defense of such Third Party Claim. In such an event, the Indemnifying Party
shall pay the reasonable fees and disbursements of counsel of the Indemnifying
Party and one counsel to all the Indemnified Parties. Notwithstanding the
foregoing, neither the Indemnifying Party nor the Indemnified Party may settle
or compromise any claim over the objection of the other, provided, however, that
consent to settlement or compromise shall not be unreasonably withheld by the
Indemnified Party and provided further, that if the sole settlement relief
payable to a Third Party in respect of such Third Party Claim is monetary
damages that are paid in full by the Indemnifying Party, the Indemnifying Party
may settle such claim without the consent of the Indemnified Party. In any
event, except as otherwise provided herein, the Indemnified Party and the
Indemnifying Party may each participate, at its own expense, in the defense of
such Third Party Claim. If the Indemnifying Party chooses to defend any claim,
the Indemnified Party shall make available to the Indemnifying Party any
personnel or any books, records or other documents within its control that are
reasonably necessary or appropriate for such defense, subject to the receipt of
appropriate confidentiality agreements.
(iii) Miscellaneous. The procedures set forth in Section 5.3(d)(i) and
(ii) above shall apply solely with respect to Third Party Claims and shall not
be deemed to apply to, or otherwise affect or limit, an Indemnified Party's
rights under this Agreement with respect to any claim other than a Third Party
Claim.
(iv) Notice of Non-Third Party Claims. Any Indemnified Party seeking
indemnification for any Loss or potential Loss arising from a claim asserted by
any party to this Agreement against the Indemnifying Party (a "Non-Third Party
Claim") shall give written notice to the Indemnifying Party specifying in detail
the source of the Loss or potential Loss under Section 5.3(b) or Section 5.3(c),
as the case may be. Written notice to the Indemnifying Party of the existence of
a Non-Third Party Claim shall be given by the Indemnified Party promptly after
the Indemnified Party becomes aware of the potential claim; provided, however,
that the Indemnified Party shall not be foreclosed from seeking indemnification
pursuant to this Section 5.3 by any failure to provide such prompt notice of the
existence of a Non-Third Party Claim to the Indemnifying Party except and only
to the extent that the Indemnifying Party actually incurs an incremental
out-of-pocket expense or otherwise has been materially damaged or prejudiced as
a result of such.
(e) Survival of Indemnity. Notwithstanding anything to the contrary in
this Article VIII, no Indemnified Party shall have any right to indemnification
with respect to any matter as to which formal notice satisfying the requirements
of Section 5.3(d)(i) or Section 5.3(d)(iv) shall not have been provided by the
Indemnified Party to the Indemnifying Party prior to the expiration of the
survival period set forth in Section 5.3(a). Any matter as to which a claim has
been asserted by formal notice pursuant to Section 5.3(d) and within the time
limitation applicable by reason of
22
the immediately preceding sentence that is pending or unresolved at the end of
any applicable limitation period under this Section 5.3 or applicable law shall
continue to be covered by this Section 5.3 notwithstanding any applicable statue
of limitations (which the parties hereby waive) until such matter is finally
terminated or otherwise resolved by the parties under this Agreement or by a
court of competent jurisdiction and any amounts payable hereunder are finally
determined and paid.
(f) Minimum and Maximum Losses. No party shall have any right to seek
indemnification under this Agreement for any inaccuracy in or breach of any
representation or warranty made in or pursuant to this Agreement or in any other
agreement, certificate or document executed in connection herewith or for the
breach or nonperformance of the covenants or other agreements made in or
pursuant to this Agreement until Losses of such party exceed $50,000, after
which time only the aggregate amount of such losses in excess of $50,000 shall
be recoverable in accordance with the terms hereof. No party shall have the
right to recover Losses in excess of $4,800,000.00 hereunder.
ARTICLE 6
Conditions to the Reorganization
6.1 Conditions to Each Party's Obligations to Effect the
Reorganization. The respective obligations of each of ICBI and G&P to effect the
Reorganization and the other transactions contemplated by this Agreement shall
be subject to the fulfillment or waiver at or prior to the Effective Date of the
following conditions:
(a) Regulatory Approvals. This Agreement and the Plan of
Merger shall have been approved by the Board of Governors of the Federal Reserve
System and, if required, the Virginia State Corporation Commission, and any
other regulatory authority whose approval is required for consummation of the
transactions contemplated hereby, and such approvals shall not have imposed any
condition or requirement which would so materially adversely impact the economic
or business benefits of the transactions contemplated by this Agreement as to
render inadvisable the consummation of the Reorganization in the reasonable
opinion of the Board of Directors of ICBI or G&P.
(b) Opinions of Counsel. G&P shall have delivered to ICBI and
ICBI shall have delivered to G&P opinions of counsel, dated as of the Effective
Date, as to such matters as they may each reasonably request with respect to the
transactions contemplated by this Agreement and in a form reasonably acceptable
to each of them.
(c) Legal Proceedings. Neither ICBI nor G&P shall be subject
to any order, decree or injunction of a court or agency of competent
jurisdiction which enjoins or prohibits the consummation of the Reorganization.
6.2 Conditions to Obligations of ICBI. The obligations of ICBI to
effect the Reorganization shall be subject to the fulfillment or waiver at or
prior to the Effective Date of the following additional conditions:
23
(a) Representations and Warranties. Each of the
representations and warranties contained herein of G&P shall be true and correct
as of the date of this Agreement and upon the Effective Date with the same
effect as though all such representations and warranties had been made on the
Effective Date, except (i) for any such representations and warranties made as
of a specified date, which shall be true and correct as of such date, (ii) as
expressly contemplated by this Agreement, or (iii) for representations and
warranties the inaccuracies of which relate to matters that, individually or in
the aggregate, do not materially adversely affect the Reorganization and the
other transactions contemplated by this Agreement, and ICBI shall have received
a certificate or certificates signed by the Chief Executive Officer and Chief
Financial Officer of G&P dated the Effective Date, to such effect.
(b) Performance of Obligations. G&P shall have performed in
all material respects all obligations required to be performed by it under this
Agreement prior to the Effective Date, and ICBI shall have received a
certificate signed by the Chief Executive Officer of G&P to that effect.
(c) Client Consents. Clients of G&P representing at least
ninety percent (90%) of funds under management shall have consented to the
assignments of any Investment Contract to TTC.
6.3 Conditions to Obligations of G&P. The obligations of G&P to effect
the Reorganization shall be subject to the fulfillment or waiver at or prior to
the Effective Date of the following additional conditions:
(a) Representations and Warranties. Each of the
representations and warranties contained herein of ICBI shall be true and
correct as of the date of this Agreement and upon the Effective Date with the
same effect as though all such representations and warranties had been made on
the Effective date, except (i) for any such representations and warranties made
as of a specified date, which shall be true and correct as of such date, (ii) as
expressly contemplated by this Agreement, or (iii) for representations and
warranties the inaccuracies of which relate to matters that, individually or in
the aggregate, do not materially adversely affect the Reorganization and the
other transactions contemplated by this Agreement, and G&P shall have received a
certificate or certificates signed by the Chief Executive Officer and Chief
Financial Officer of ICBI dated the Effective Date, to such effect.
(b) Performance of Obligations. ICBI shall have performed in
all material respects all obligations required to be performed by it under this
Agreement prior to the Effective Date, and G&P shall have received a certificate
signed by Chief Executive Officer of ICBI to that effect.
ARTICLE 7
Termination
7.1 Termination. Notwithstanding any other provision of this Agreement,
this Agreement may be terminated and the Reorganization abandoned at any time
prior to the Effective Date:
24
(a) By the mutual consent in writing of the parties hereto.
(b) By ICBI or G&P (i) in the event of a material breach by
the other party of any covenant or agreement contained in this Agreement, or
(ii) in the event of an inaccuracy of any representation or warranty of the
other party contained in this Agreement, which inaccuracy would provide the
nonbreaching party the ability to refuse to consummate the Reorganization under
the applicable standard set forth in Section 6.2(a) in the case of ICBI and
Section 6.3(a) in the case of G&P; and, in the case of (i) or (ii), if such
breach or inaccuracy has not been cured by the earlier of 30 days following
written notice of such breach to the party committing such breach or the
Effective Date.
(c) At any time prior to the Effective Date, by ICBI or G&P in
writing, if any of the conditions precedent to the obligations of the other
party to consummate the transactions contemplated hereby cannot be satisfied or
fulfilled prior to the Reorganization Closing, and the party giving the notice
is not in breach of any of its representations, warranties, covenants or
undertakings herein.
(d) At any time, by either party hereto in writing, if any of
the applications for prior approval referred to in Section 6.1(a) are denied,
and the time period for appeals and requests for reconsideration has run.
(e) At any time following December 31, 2001, by either party
hereto in writing, if the Effective Date has not occurred by the close of
business on such date, and the party giving the notice is not in breach of any
of its representations, warranties, covenants or undertakings herein.
7.2 Effect of Termination. In the event of the termination of this
Agreement and the Reorganization pursuant to Section 7.1, this Agreement shall
become void and have no effect, except that (i) the last sentence of Section 4.2
and all of Section 7.4 shall survive any such termination and (ii) a termination
pursuant to Section 7.1(b) shall not relieve or release the breaching party from
any liability for an uncured breach of the covenant, agreement, understanding,
representation or warranty giving rise to such termination.
7.3 Survival of Representations, Warranties and Covenants. All
representations, warranties and covenants in this Agreement shall survive the
Effective Date.
7.4 Expenses. Each of the parties shall bear and pay all costs and
expenses incurred by it or on its behalf in connection with the transactions
contemplated herein, including fees and expenses of its own consultants,
investment bankers, accountants and counsel.
25
ARTICLE 8
General Provisions
8.1 Entire Agreement. This Agreement contains the entire agreement
among ICBI, TTC and G&P with respect to the Reorganization and the related
transactions and supersedes all prior arrangements or understandings with
respect thereto.
8.2 Waiver and Amendment. Any term or provision of this Agreement may
be waived in writing at any time by the party which is entitled to the benefits
thereof, and this Agreement may be amended or supplemented by written
instructions duly executed by the parties hereto at any time, except statutory
requirements and requisite approvals of regulatory authorities.
8.3 Descriptive Headings. Descriptive headings are for convenience only
and shall not control or affect the meaning and construction of any provisions
of this Agreement.
8.4 Governing Law. Except as otherwise required or indicated herein,
this Agreement shall be construed and enforced according to the laws of the
Commonwealth of Virginia.
8.5 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by registered or certified mail, postage prepaid, addressed as follows:
If to ICBI:
Xxxxxx X. Xxxxxx
Independent Community Bankshares, Inc.
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
(Tel. 000-000-0000)
Copy to:
Xxxxx X. Xxxxxxx, Xx.
Williams, Mullen, Xxxxx & Xxxxxxx
0000 Xxxx Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
(Tel. 000-000-0000)
26
If to G&P:
Xxxxxxxx & Xxxxxxxxx Investment Advisors, Inc.
0000 X. Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
(Tel. 000- 000-0000)
Copy to:
Xxxxxxx X. Xxxxxx, Esq.
Fettmann, Xxxxxxx & Majors, PC
00000 Xxxxxxxx Xxxxx, #000
Xxxxxxx, XX 00000
(Tel. 000-000-0000)
8.6 Counterparts. This Agreement 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 agreement.
[execution pages follow]
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers and their corporate
seals to be affixed hereto, all as of the dates first written above.
Independent Community Bankshares, Inc.
By:/s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx,
Chairman and Chief Executive Officer
ATTEST:
/s/ Xxxxx X. Xxxxxxx
------------------------
---------------------
Secretary
Xxxxxxxx & Xxxxxxxxx Investment Advisors, Inc.
By:/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxx, Chairman
ATTEST:
/s/ Xxxxx X. Xxxxxxxxx
------------------------
---------------------
Secretary
28
The Tredegar Trust Company
By:/s/ X. X. Xxxxxx, III
-----------------------------------
X. X. Xxxxxx, III, President
ATTEST:
/s/ Xxxxx X. Xxxxxxx
------------------------
---------------------
Secretary
Each of the undersigned hereby agrees that he is personally bound by
the provisions of Section 4.12 and Section 5.3 of this Agreement.
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxxxx
29
EXHIBIT A
PLAN OF MERGER
OF
XXXXXXXX & XXXXXXXXX INVESTMENT ADVISORS, INC.
INTO
the tredegar trust company
ARTICLE 1
Xxxxxxxx & Xxxxxxxxx Investment Advisors, Inc., a Virginia corporation
("G&P") shall upon the time that the Articles of Merger are made effective by
the State Corporation Commission of Virginia (the "Effective Time"), be merged
(the "Merger") into The Tredegar Trust Company, a Virginia corporation. The
Tredegar Trust Company shall be the Surviving Corporation (the "Surviving
Corporation"). The Surviving Corporation is a wholly-owned subsidiary of
Independent Community Bankshares, Inc., a Virginia corporation ("ICBI").
ARTICLE 2
Definitions
For all purposes of this Plan:
(a) the term "Fair Market Value", with respect to shares of
ICBI Common Stock, shall mean the weighted average sale price for sales of ICBI
Common Stock for the thirty (30) days on which ICBI Common Stock trades
immediately preceding the tenth day before the Effective Date.
(b) the term "Merger Consideration" shall mean, with respect
to each share of G&P Common Stock issued and outstanding on the Effective Date,
a pro rata share of (A) $1,300,000.00 in cash and (B) shares of ICBI Common
Stock, with an aggregate Fair Market Value of $2,500,000.00; provided, however,
that ICBI shall not be required to issue more than 150,000 shares of ICBI Common
Stock. If the fair market value of 150,000 shares of ICBI Common Stock is less
than $2,500,000.00, the cash portion of the Merger Consideration shall be
increased by an amount equal to the excess of $2,500,000.00 over the Fair Market
Value of 150,000 shares of ICBI Common Stock, such that the total value of the
Merger Consideration is $3,800,000.00.
1
ARTICLE 3
Effect of Reorganization on Common Stock
3.1 (a) At the Effective Time, by virtue of the Merger and without any
action on the part of the holders thereof, each share of G&P Common Stock, par
value $1.00 per share, issued and outstanding immediately prior to the Effective
Time shall cease to be outstanding and shall be converted into the right to
receive the Merger Consideration.
(b) Each holder of a certificate representing any shares of G&P Common
Stock shall thereafter cease to have any rights with respect to such G&P Common
Stock, except the right to receive the consideration described in Sections 3.1
and 3.3 upon the surrender of such certificate in accordance with Section 3.2.
3.2 Manner of Conversion. As promptly as practicable after the
Effective Date, ICBI shall cause its stock transfer agent, acting as the
exchange agent ("Exchange Agent"), to send to each former shareholder of record
of G&P immediately prior to the Effective Date transmittal materials for use in
exchanging such shareholder's certificates of G&P Common Stock for the
consideration set forth in Section 3.1 above and Section 3.3 below. Any
fractional share checks which a G&P shareholder shall be entitled to receive in
exchange for such shareholder's shares of G&P Common Stock, and all dividends
paid on any shares of ICBI Common Stock that such shareholder shall be entitled
to receive prior to the delivery to the Exchange Agent of such shareholder's
certificates representing all of such shareholder's shares of G&P Common Stock
will be delivered to such shareholder only upon delivery to the Exchange Agent
of the certificates representing all of such shares (or indemnity satisfactory
to ICBI and the Exchange Agent, in their judgment, if any of such certificates
are lost, stolen or destroyed). No interest will be paid on any such fractional
share checks or dividends to which the holder of such shares shall be entitled
to receive upon such delivery.
3.3 Fractional Shares. ICBI shall issue cash in lieu of fractional
shares. ICBI will pay the value of such fractional shares in cash on the basis
of the Fair Market Value per share of ICBI Common Stock.
3.4 Dividends. No dividend or other distribution payable to the holders
of record of ICBI Common Stock at or as of any time after the Effective Date
shall be paid to the holder of any certificate representing shares of G&P Common
Stock issued and outstanding at the Effective Date until such holder physically
surrenders such certificate for exchange as provided in Section 3.2, promptly
after which time all such dividends or distributions shall be paid (without
interest).
2
