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EXHIBIT 2.1
REORGANIZATION AGREEMENT
THIS REORGANIZATION AGREEMENT, dated as of April 12, 2001, among NEWNAN
COWETA BANCSHARES, INC., a Georgia business corporation (the "Holding Company"),
NEWNAN COWETA BANK, a Georgia banking corporation (the "Bank"), and NEWNAN
INTERIM CORPORATION, a Georgia business corporation (the "Interim Company").
WITNESSETH:
WHEREAS, the boards of directors of the Holding Company and the Bank
deem it desirable and in the best interests of the Holding Company and the Bank
and the shareholders of the Bank to enter into this Reorganization Agreement,
and in accordance herewith for the Holding Company to acquire all of the
outstanding voting stock of the Bank by means of the merger of the Interim
Company into the Bank, which will thereby become a wholly-owned subsidiary of
the Holding Company, in a transaction qualifying as a reorganization under ss.
368(a)(1)(A) by reason of ss. 368(a)(2)(E) of the Internal Revenue Code of 1986,
as amended (the "Code").
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto have entered into this
Reorganization Agreement on the following terms and conditions:
1. MERGER. The Bank and the Interim Company shall execute the
Merger Agreement attached hereto, which sets out the method, terms and
conditions of the merger of the Interim Company into the Bank and constitutes
the plan of merger contemplated by ss. 7-1-531(a) of the Financial Institutions
Code of Georgia. On the Merger Date (as hereinafter defined) the Interim Company
shall be merged into the Bank, which shall be the surviving corporation. The
Interim Company will cease to exist as a separate corporation, and the Bank will
continue to exist as a wholly-owned subsidiary of the Holding Company with the
name "Newnan Coweta Bank." On the Merger Date all outstanding Bank common stock
will be converted to Holding Company common stock as provided in Paragraph 2
hereof, and all shares of Holding Company stock issued prior to the Merger Date
shall be redeemed by payment of the subscription price of such stock to the
holder thereof.
2. EXCHANGE OF HOLDING COMPANY STOCK. Each Bank shareholder,
except shareholders who elect to dissent and perfect their dissenters' rights as
set forth in Paragraph 5 hereof, on the Merger Date shall receive in exchange
for his or her Bank common stock one share of Holding Company common stock for
each share of Bank stock, par vale $5.00 per share.
3. ASSUMPTION BY HOLDING COMPANY OF BANK'S INCENTIVE STOCK
OPTIONS.
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(a) As of the Merger Date, all rights with respect to the
Bank common stock issuable pursuant to the exercise of stock options ("Bank
Options") granted by the Bank under its 2001 Incentive Stock Option Plan (the
"Plan") which are outstanding on the Merger Date, whether or not such Bank
Options are then exercisable, shall, subject to this section, be assumed by
Holding Company in accordance with the terms of the Plan and the stock option
agreement by which such Bank Options are evidenced. From and after the Merger
Date, (i) each Bank Option assumed by Holding Company hereunder may be exercised
solely for Holding Company common stock and (ii) the number of shares of Holding
Company common stock subject to such Bank Option shall be equal to the number of
shares of Bank common stock subject to such Bank Option immediately prior to the
Merger Date. The per share exercise price under each such Bank Option shall not
change.
(b) At all times after the Merger Date, Holding Company
shall reserve for issuance such number of Holding Company common stock as shall
be necessary to permit the exercise of Bank Options in the manner contemplated
by this Agreement. At or prior to, or at the election of Holding Company within
a reasonable time (not to exceed 30 days) after the Merger Date, Holding Company
shall file a Registration Statement on Form S-8 (or any successor or other
appropriate form) with respect to the Holding Company common stock subject to
the Bank Options and shall use its best efforts to maintain the effectiveness of
such registration statement or registration statements (and maintain the current
status of the prospectus or prospectuses contained therein) for so long as any
of the Bank Options remain outstanding. Holding Company shall make any filings
required under any applicable state securities laws to qualify the Holding
Company common stock subject to such Bank Options for resale thereunder.
(c) The number of shares of Holding Company common stock
subject to the Bank Options to be assumed by Holding Company hereunder and the
exercise price thereof shall, from and after the Merger Date, be subject to
appropriate adjustments in the event of any stock split, reverse stock split,
dividend payable in Holding Company common stock, reclassification or similar
distribution whereby Holding Company issues Holding Company common stock or any
securities convertible into or exchangeable for Holding Company common stock
without receiving any consideration in exchange therefore.
(d) It is intended that the foregoing assumption of Bank
Options shall satisfy all the requirements under Section 424(a) of the Internal
Revenue Code of 1986 (the "Code") and be undertaken in a manner that will not
constitute a "modification" as defined in Section 424(h) of the Code. Except as
otherwise provided herein, (i) the provisions of the Plan that provide for the
issuance or grant of any other interest in respect of the capital stock of the
Bank shall be deleted as of the Merger Date and (ii) the Bank shall take all
reasonable steps to ensure that following the Merger Date no holder of Bank
Options shall have any right thereunder to acquire any equity securities of the
Bank.
(e) The Bank shall use its best efforts to procure from
each holder of Bank Options, and shall deliver to Holding Company on the Merger
Date, an executed acknowledgement
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of the treatment and disposition of such holder's Bank Options, as provided for
under this Section 3.
4. ASSUMPTION BY HOLDING COMPANY OF BANK'S WARRANTS.
(a) As of the Merger Date, all rights with respect to the
Bank common stock issuable pursuant to the exercise of stock warrants ("Bank
Warrants") granted by the Bank which are outstanding on the Merger Date, whether
or not such Bank Warrants are then exercisable, shall, subject to this section,
be assumed by Holding Company in accordance with the terms of the warrant
agreement by which such Bank Warrants are evidenced. From and after the Merger
Date, (i) each Bank Warrant assumed by Holding Company hereunder may be
exercised solely for Holding Company common stock and (ii) the number of shares
of Holding Company common stock subject to such Bank Warrant shall be equal to
the number of shares of Bank common stock subject to such Bank Warrant
immediately prior to the Merger Date. The per share exercise price under each
such Bank Warrant shall not change.
(b) At all times after the Merger Date, Holding Company
shall reserve for issuance such number of Holding Company common stock as shall
be necessary to permit the exercise of Bank Warrants in the manner contemplated
by this Agreement. In case Holding Company shall receive a written request from
holders of Holding Company common stock acquired through the exercise of Bank
Warrants ("Warrant Stock") requesting that at least 20,000 shares of their
Warrant Stock be registered by filing a registration statement on Form S-3 (or
any successor form), then Holding Company, should it be entitled to use Form
S-3, shall:
i) within 10 days after the receipt thereof,
give written notice of such request to all holders of Bank
Warrants and Warrant Stock;
ii) allow all holders of Bank Warrants and
Warrant Stock to participate in such request by giving Holding
Company written notice within 20 days of Holding Company's
receipt of the initial request;
iii) use its reasonable efforts to cause all
Warrant Stock which holders of Bank Warrants and Warrant Stock
request to be registered on such form, and
iv) cause the offering and sale of such Warrant
Stock to be qualified in such jurisdictions as the holders of
such Bank Warrants or Warrant Stock may reasonably request.
Holding Company shall use its best efforts to keep such registration statement
effective for a period of at least 6 months. Notwithstanding the foregoing,
Holding Company's obligation to register Warrant Stock shall not apply should
such Warrant Stock be available for sale to the public by Rule 144 or through
other means.
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(c) The number of shares of Holding Company common stock
subject to the Bank Warrants to be assumed by Holding Company hereunder and the
exercise price thereof shall, from and after the Merger Date, be subject to
appropriate adjustments in the event of any stock split, reverse stock split,
dividend payable in Holding Company common stock, reclassification or similar
distribution whereby Holding Company issues Holding Company common stock or any
securities convertible into or exchangeable for Holding Company common stock
without receiving any consideration in exchange therefore.
(d) The Bank shall use its best efforts to procure from
each holder of Bank Options, and shall deliver to Holding Company on the Merger
Date, an executed acknowledgement of the treatment and disposition of such
holder's Bank Options, as provided for under this Section 4.
5. SHAREHOLDER RIGHT TO DISSENT. Any shareholder of the Bank
shall have the right to dissent from the reorganization and merger and obtain
payment of the fair value of his or her outstanding shares of Bank stock,
provided that such shareholder has not voted in favor of the reorganization and
merger and complies with the provisions of ss. 7-1-537 of the Georgia Financial
Institutions Code and Article 13 of Chapter 2 of Title 14 of the Georgia
Business Corporation Code. The fair value of Bank shares owned by dissenting
shareholders shall be paid by the Holding Company, and such stock shall be
deemed to be retired.
6. BANK STOCK CERTIFICATES. After the Merger Date each holder of
certificates theretofore representing Bank stock (except Bank shareholders who
have elected to dissent from the merger and have perfected their dissent in
accordance with applicable law), until any such Bank stock certificate is
surrendered in due course (or suitable arrangements are made for any lost,
stolen or destroyed certificate according to the Bank's or Holding Company's
usual procedures), (a) will be deemed to hold a certificate representing the
shares of Holding Company Stock which such stock certificate may entitle the
shareholder to receive; (b) will be paid any cash which such stock certificate
may entitle the shareholder to receive; (c) will have any voting rights in
respect of the shares of Holding Company Stock which such stock certificate may
entitle the shareholder to receive; and (d) will be paid dividends or other
distributions in respect of the shares of Holding Company Stock which such stock
certificate may entitle the shareholder to receive.
7. CONDITIONS TO THE REORGANIZATION. The reorganization is
subject to the satisfaction of the following conditions prior to September 30,
2001:
(a) The Commissioner of the Georgia Department of Banking
and Finance and the Board of Governors of the Federal Reserve System or its
authorized delegate shall have approved the application of the Holding Company
to become a bank holding company by reason of its acquisition of all of the
outstanding stock of the Bank;
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(b) The Commissioner of the Georgia Department of Banking
and Finance and the Federal Deposit Insurance Corporation shall have approved
the merger of the Interim Company with and into the Bank;
(c) The holders of at least two-thirds of the issued and
outstanding shares of common stock of the Bank shall have voted in favor of the
reorganization and merger at a shareholders meeting called and held to act
thereon;
(d) At the time of the mailing of the Bank's proxy
statement to its shareholders and thereafter through the closing of the
reorganization, the Holding Company stock to be received by Bank shareholders
shall be the subject of an effective registration statement under the Securities
Act of 1933 and shall be duly registered or qualified under the securities laws
of all states in which such registration or qualification is required, or the
Holding Company stock shall be exempt from the registration requirements of such
laws; and
(e) The Holding Company and the Bank shall have received
an opinion from Xxxxxx & Xxxxxx LLP in form and substance satisfactory to the
Holding Company and the Bank to the effect that:
i) The merger will qualify as a reorganization
under ss. 368(a)(1)(A) of the Code by reason of ss.
368(a)(2)(E) thereof;
ii) No gain or loss will be recognized by the
holders of Bank common stock on the conversion of such stock
into Holding Company common stock;
iii) The cost basis of Holding Company stock
received in the merger by holders of Bank stock will be the
same as their cost basis in the Bank stock exchanged therefor;
iv) The holding period of Holding Company stock
received will include the period during which the Bank common
stock exchanged therefor was held, provided the Bank common
stock was held as a capital asset;
v) No gain or loss will be recognized by the
Bank, the Holding Company or the Interim Company as a result
of the merger; and
vi) Cash received by Bank shareholders
exercising their dissenters' rights and receiving cash in
exchange for their Bank stock pursuant to a dissenter's
proceeding, will be treated as having been received as a
taxable redemption of their Bak common stock under the
provisions of ss. 302 of the Code.
vii) The assumption by Holding Company of the
Bank's incentive stock options will satisfy the requirements
of Section 424(a) of the Code and will not constitute a
modification of such options under Section 424(h) of the Code.
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In rendering such tax opinion Xxxxxx & Xxxxxx LLP shall be entitled to
rely upon representations of officers of Bank and Holding Company reasonably
satisfactory in form and substance to Xxxxxx & Xxxxxx LLP.
8. TERMINATION. The Bank reserves the right to terminate the plan
of reorganization and abandon the proposal to form a holding company at any time
prior to the Merger Date, in the event of the occurrence of any one or more of
the following circumstances which, in the sole judgment of the Bank's Board of
Directors, makes the reorganization undesirable for the Bank and its
shareholders:
(a) Any act, suit, proceeding or claim relating to the
reorganization has been instituted before any court or administrative body or
threatened to be instituted before such court or body; or
(b) For any other reason the consummation of the
reorganization is deemed inadvisable in the opinion of the Bank's Board of
Directors.
9. CLOSING: MERGER DATE.
(a) Closing. The closing of the reorganization shall take
place on a date fixed by the Board of Directors of the Bank promptly after all
conditions set forth in this agreement have been satisfied or waived; and
(b) Merger Date. The Merger Date shall be the date on
which the Georgia Secretary of State issues a certificate of merger evidencing
the merger of the Interim Company into the Bank.
10. WAIVER OF CONDITIONS. At any time prior to the Merger Date any
party hereto may by action of its board of directors waive compliance with any
conditions to this agreement. No waiver shall be effective unless given in
writing. No delay in enforcing any provision of this agreement shall constitute
a waiver of such provision.
11. AMENDMENTS. This agreement may be amended at any time prior to
the Merger Date by agreement among the parties hereto approved by their
respective boards of directors, provided that after the meeting of Bank
shareholders called to act on the reorganization and merger no amendment
changing the exchange rate for Bank stock as set out in Paragraph 2 shall be
valid without having been submitted to and approved by Bank shareholders in the
manner required for approval of this agreement.
12. MISCELLANEOUS. This agreement is made under and shall be
controlled by the applicable laws of the United States. In the absence of
federal law or where federal law provides that state law shall be controlling,
the laws of the State of Georgia shall control. The headings to the numbered
paragraphs in this agreement are for convenience of reference only and shall not
limit or otherwise affect any of the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their officers thereunto duly authorized effective as of
the date first above written.
NEWNAN COWETA BANCSHARES, INC.
[SEAL]
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, President
Attest: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Secretary
NEWNAN COWETA BANK
[SEAL]
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, President
Attest: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Secretary
NEWNAN INTERIM CORPORATION
[SEAL]
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, President
Attest: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Secretary
