Exhibit 10.2
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (the "Agreement") is made and entered into
as of August 9, 1999 by and between XXXXXX X. XXXXXXXX ("Xxxxxxxx"), XXXXX X.
XXXXXXXXX ("Xxxxxxxxx"), INDEPENDENT COMMUNITY BANKSHARES, INC., a Virginia
corporation ("ICBI") and XXXXXXXX & XXXXXXXXX INVESTMENT ADVISORS, INC., a
Virginia corporation ("G&P").
RECITALS
1. Xxxxxxxx and Xxxxxxxxx, together, own 9,900 shares of the
common stock of G&P, par value $1.00 per share ("G&P Common Stock"), which are
ninety-nine percent (99%) of the issued and outstanding shares of G&P Common
Stock;
2. ICBI owns the remaining one percent (1%) of the issued and
outstanding shares of G&P Common Stock.
3. The shares of G&P Common Stock owned by Xxxxxxxx, Xxxxxxxxx
and ICBI represent one hundred percent (100%) of the authorized, issued and
outstanding shares of G&P Common Stock. G&P has no other class of authorized
capital stock.
4. The parties desire to provide for the merger of G&P into The
Tredegar Trust Company, a wholly-owned subsidiary of ICBI ("Tredegar") at the
option of ICBI, and, pending such merger, for certain matters concerning the
corporate governance of G&P.
5. The parties also intend that certain provisions of this
Agreement relating to voting rights and other matters shall constitute an
agreement pursuant to Section 13.1-671.1 of the Code of Virginia (1950), as the
same may be from time to time amended as amended, the "Code").
6. G&P has acquired the investment advisory business of Xxxx
Brothers Investment Management Corporation, a Virginia corporation ("KBIMC"). In
connection with the transfer of the KBIMC investment advisory business to G&P,
each client has the right to consent to such transfer.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the parties hereby agree as follows:
1. Consideration. (a) In consideration of the rights granted to
ICBI under this Agreement, including the option to acquire G&P by merger, ICBI
shall pay each of Xxxxxxxx and Xxxxxxxxx in cash, as follows:
(i) Two Hundred Thousand Dollars ($200,000.00) each when G&P
has obtained consents from former KBIMC clients who account for One Million Two
Hundred Fifty Thousand Dollars ($1,250,000.00) of annual revenue; and
(ii) An additional Two Hundred Thousand Dollars ($200,000.00)
each when G&P has obtained consents from former KBIMC clients who account for
One Million Eight Hundred Seventy Five Thousand Dollars ($1,875,000.00) of
annual revenue; and
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(iii) An additional Two Hundred Thousand Dollars ($200,000.00)
each when G&P has obtained consents from former KBIMC clients who account for
Two Million Two Hundred Fifty Thousand Dollars ($2,250,000.00) of annual
revenue.
(b) For purposes of Section 1(a), the amount of revenue a
former KBIMC client accounts for shall be the amount billed such client by KBIMC
for the quarter ended June 30, 1999, multiplied by four. Further, if G&P obtains
clients who were not former KBIMC clients, the parties shall make a good faith
estimate of the annual amount of investment advisory fees expected to be
received from each such client and, for purposes of applying Section 1(a), such
estimated fees shall be counted, just as if such fees were from a former KBIMC
client.
(c) If (i) ICBI rightfully terminates the Merger
Agreement because any representation or warranty of G&P is materially false as
of the date hereof or because G&P materially breaches any covenant of G&P
contained in Article 4 of the Merger Agreement, or (ii) G&P, Xxxxxxxx or
Xxxxxxxxx breaches this Agreement, Xxxxxxxx and Xxxxxxxxx each shall immediately
pay to ICBI all amounts paid by ICBI under Section 1(a).
2. The Merger. For purposes of this Agreement, "Merger" shall
mean the Merger of G&P with and into Tredegar pursuant to the Agreement and Plan
of Reorganization of even date herewith, entered into by and among ICBI, G&P and
Tredegar (the "Merger Agreement").
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3. Voting Rights and Agreements.
(a) The provision of this Section 3 shall constitute an
agreement under Section 13.1-671 of the Code.
(b) The Merger may be considered only at a special
meeting of shareholders of G&P to vote on the Merger, which may be called only
by ICBI. Such a meeting may be called by ICBI on thirty (30) days notice to
Xxxxxxxx and Xxxxxxxxx. ICBI shall not be under any obligation to call a special
meeting of shareholders of G&P to vote on the Merger.
(c) Xxxxxxxx and Xxxxxxxxx each agrees to vote all shares
of G&P Common Stock held by him at the time of a meeting of shareholders called
by ICBI pursuant to Section 3(a) in favor of the Merger. If ICBI calls a meeting
of shareholders of G&P to vote on the Merger, ICBI shall vote its shares of G&P
Common Stock in favor of the Merger. This Section 3(c) is intended to be
specifically enforceable in accordance with Section 13.1-671 of the Code.
(d) In a vote on the Merger (and only with respect to a
vote on the Merger), each share held by Xxxxxxxx and Xxxxxxxxx shall have one
vote and each share held by ICBI shall have 201 votes, such that if ICBI votes
its shares of G&P Common Stock in favor of the Merger, the Merger will have been
approved by the shareholders of G&P.
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4. Other Agreements.
(a) From and after the date of this Agreement, the Board
of Directors of G&P shall consist of Xxxxxxxx, Xxxxxxxxx and the Chief Executive
Officer of ICBI (currently Xxxxxx X. Xxxxxx). If Xx. Xxxxxx ceases to serve as
the Chief Executive Officer of ICBI, his successor as Chief Executive Officer of
ICBI shall automatically become a director of G&P. If either Xxxxxxxx or
Xxxxxxxxx is unable to continue to serve, as a result of death or disability,
the other shall designate his successor.
(b) Neither the Articles of Incorporation nor the Bylaws
of G&P shall be amended except by the unanimous vote of the holders of G&P
Common Stock.
(c) Neither Xxxxxxxx nor Xxxxxxxxx may sell, assign or
otherwise transfer any shares of G&P Common Stock, except to ICBI. ICBI shall
not sell, assign or otherwise transfer any shares of G&P Common Stock, except to
G&P pursuant to Section 4(f). However, no merger or share exchange involving
ICBI shall be deemed a sale, assignment or transfer of G&P Common Stock for
purposes of this Section 4(c) and no change of control of ICBI shall affect the
right of ICBI or its successor in interest to enforce this Agreement.
(d) G&P shall not engage in any business or activity that
is impermissible for a bank holding company under the Bank Holding Company Act
of 1956, as amended, or the rules and regulations of the Board of Governors of
the Federal Reserve System.
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(e) Xxxxxxxx and G&P are parties to an Employment
Agreement of even date herewith. Xxxxxxxxx and G&P are parties to an Employment
Agreement of even date herewith. G&P will not take action to terminate or amend
either of such employment agreements without the written consent of all
directors of G&P. No contract between ICBI (or any subsidiary of ICBI) and G&P
shall be terminated by G&P without the written consent of all directors of G&P.
(f) If the Merger Agreement terminates, G&P will purchase
and redeem all shares of G&P Common Stock purchased by ICBI pursuant to that
certain Stock Purchase and Redemption Agreement between ICBI and G&P, of even
date herewith, and held by ICBI as of the termination date, at a price of Sixty
Thousand Dollars ($60,000.00). If the Merger is to be consummated, then on or
before the effective date of the Merger, G&P shall redeem all such shares of G&P
Common Stock held by ICBI at a price of Sixty Thousand Dollars ($60,000.00).
(g) Upon approval of the Merger by the shareholders, the
proper officers of G&P shall execute articles of merger at the request of ICBI
or, alternatively, ICBI shall have the right to designate an individual as a
vice-president of G&P with authority to execute the articles of merger on behalf
of G&P.
5. Share Certificates. Each certificate representing shares of
G&P Common Stock shall bear the following legend on the back of the certificate.
ALL SHAREHOLDERS OF XXXXXXXX & XXXXXXXXX INVESTMENT ADVISORS, INC. (THE
"CORPORATION") ARE PARTIES TO AN AGREEMENT DATED AUGUST 9, 1999,
PORTIONS OF WHICH CONSTITUTE AN AGREEMENT UNDER ss.13.1-671.1 OF THE
CODE OF VIRGINIA. SUCH AGREEMENT ESTABLISHES WHO SHALL BE THE DIRECTORS
OF THE CORPORATION;
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GOVERNS THE VOTING POWER OF THE SHARES REPRESENTED BY THIS CERTIFICATE
IN REGARD TO SPECIFIC MATTERS; RESTRICTS THE RIGHT TO TRANSFER THE
SHARES REPRESENTED BY THIS CERTIFICATE AND OTHERWISE GOVERNS THE
EXERCISE OF CORPORATE POWERS BY THE DIRECTORS AND SHAREHOLDERS. A COPY
OF SUCH AGREEMENT MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
CORPORATION AT 000 X. XXXXXXXXXX XXXXXX, XXXXX 000, XXXXXXXXXX,
XXXXXXXX.
6. Amendment. This Agreement may be amended only by a writing
signed by all persons who are shareholders of G&P at the time of any such
amendment.
7. Termination. This Agreement shall terminate on the earlier of
the termination of the Merger Agreement, the effective date of the Merger or
December 31, 2001.
[execution page to follow]
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WITNESS the following signatures:
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Xxxxx X. Xxxxxxxxx
INDEPENDENT COMMUNITY BANKSHARES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
XXXXXXXX & XXXXXXXXX INVESTMENT
ADVISORS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
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President
