AGREEMENT AND PLAN OF BANK MERGER OF FNB SOUTHEAST INTO LEXINGTON STATE BANK
AGREEMENT AND PLAN OF BANK MERGER
OF
FNB SOUTHEAST
INTO
LEXINGTON STATE BANK
OF
FNB SOUTHEAST
INTO
LEXINGTON STATE BANK
This AGREEMENT AND PLAN OF BANK MERGER (the “Bank Agreement”) is made and entered into as of
this 26th day of February, 2007 to effect the merger (the “Bank Merger”) of FNB
SOUTHEAST with and into LEXINGTON STATE BANK. The terms and conditions of the Bank Merger shall be
as follows:
ARTICLE I
CORPORATE PARTICIPANTS IN THE BANK MERGER
1.1 In General. The name of the entity planning to merge is FNB Southeast (“FNB
Bank”), a North Carolina chartered commercial bank having its principal place of business at 0000
Xxxxxxxxx Xxxx., Xxxxx 000, Xxxxxxxxxx XX 00000. The name of the entity into which FNB Bank plans
to merge is Lexington State Bank (“LSB Bank” or the “Surviving Bank”), a North Carolina chartered
commercial bank having its principal place of business at Xxx XXX Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000.
ARTICLE II
TERMS AND CONDITIONS OF THE BANK MERGER
2.1 In General. Subject to the terms and conditions of this Bank Agreement, at the
Effective Time (as defined herein), FNB Bank shall be merged with and into LSB Bank (together, the
“Merging Institutions”) pursuant to the provisions of, and with the effect provided under, Sections
53-12 and 53-13 of the North Carolina General Statutes.
2.2 Effect of Bank Merger. At the Effective Time, the separate existence of FNB Bank
shall cease and LSB Bank, as the surviving entity, shall continue unaffected and unimpaired by the
Bank Merger, except as otherwise provided in this Bank Agreement.
2.3 Headquarters of the Surviving Bank. From and after the Effective Time until
otherwise determined by the Board of Directors of the Surviving Bank, the headquarters and
principal executive offices of the Surviving Bank shall be located in Greensboro, North Carolina.
2.4 Name and Business of the Surviving Bank. The business of the Surviving Bank shall
be that of a North Carolina chartered commercial bank and shall be conducted at the headquarters of
the Surviving Bank and at its legally established branches, including those branches of FNB Bank
acquired as a result of the Bank Merger. Articles of Amendment shall be filed with the North
Carolina Secretary of State changing the name of the Surviving Bank to a name to be mutually agreed
by the parties (the “New Name”). Following the Effective Time, the Surviving Bank shall operate all
of the branch offices of FNB Bank and LSB Bank as branch offices under the New Name.
ARTICLE III
EFFECTIVE TIME
3.1 Effective Time of Bank Merger. The Bank Merger shall become effective on the date
and at the time specified in the Articles of Merger, which shall contain this Bank Agreement,
together with a certified copy of the approval of the Bank Merger by the North Carolina
Commissioner of Banks, filed with the North Carolina Secretary of State as required under Section
53-13 of the North Carolina General Statutes (the “Effective Time”).
3.2 As of the Effective Time. As of the Effective Time:
(a) The corporate existence of each of the Merging Institutions shall be merged into and
continue in the Surviving Bank.
(b) All assets, rights, franchises and interests of the Merging Institutions in and to every
type of property (real, personal and mixed) and choses in action shall be transferred to and vested
in the Surviving Bank by virtue of the Bank Merger without any deed or other transfer. The
Surviving Bank, upon the Bank Merger and without any order or other action on the part of any court
or otherwise, shall hold and enjoy all rights of property, franchises and interest, including
appointments, designations and nominations, and all other rights and interests as trustee,
executor, administrator, registrar of stocks and bonds, guardian of estates, assignee and receiver,
and in every other fiduciary capacity, in the same manner and to the same extent as such rights,
franchises and interests were held or enjoyed by each of the Merging Institutions at the time of
the Bank Merger.
(c) The Surviving Bank shall be liable for all liabilities of every kind and description of
the Merging Institutions, including liabilities arising out of the operation of the trust
department of each of the Merging Institutions, existing immediately prior to the Effective Time,
to the extent provided by law.
ARTICLE IV
CONVERSION OF SHARES
4.1 Capital Stock of FNB Bank. As of the date hereof, the authorized capital stock of
FNB Bank consists of SEVEN HUNDRED FORTY TWO THOUSAND FIVE HUNDRED (742,500) shares of common
stock, par value ONE DOLLAR ($1.00) per share. All of the issued and outstanding capital stock of
FNB Bank is owned by FNB Financial Services Corporation, a North Carolina corporation, also having
its principal place of business at 0000 Xxxxxxxxx Xxxx., Xxxxx 000, Xxxxxxxxxx XX 00000 (“FNB”).
As of the Effective Time, each outstanding share of the capital stock of FNB Bank shall be
cancelled and retired with no consideration to be issued or paid in exchange therefor.
4.2 Capital Stock of LSB Bank. As of the date hereof, the authorized capital stock of
LSB Bank consists of FIVE MILLION (5,000,000) shares of common stock, par value FIVE DOLLARS
($5.00) per share. All of the issued and outstanding capital stock of LSB Bank is owned by LSB
Bancshares, Inc., a North Carolina corporation, also having its principal place of
2
business at Xxx XXX Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 (“LSB”). As of the Effective Time,
each outstanding share of the capital stock of LSB Bank shall remain outstanding as a share of
common stock of the Surviving Bank.
ARTICLE V
OFFICERS AND DIRECTORS OF THE SURVIVING BANK
5.1 Management. At the Effective Time, Xxxxxx X. Xxxx shall be Chairman of the Board
of Directors and Chairman of the Executive Committee of the Board of Directors of the Surviving
Bank. Xxxxx X. Xxxxxx shall be Vice Chairman of the Board of Directors of the Surviving Bank, and
Vice Chairman of the Executive Committee of the Board. Xxxxxxx X. Xxxxxxx shall be President and
Chief Executive Officer of the Surviving Bank and a member of the Executive Committee of the Board
of Directors of the Surviving Bank. Xxxxxxx X. Xxxxxxx shall be an Executive Vice President and
Chief Financial Officer of the Surviving Bank.
5.2 Board of Directors.
(a) From and after the Effective Time, until duly changed in compliance with applicable law,
the Articles of Incorporation and Bylaws of the Surviving Bank, the Board of Directors of the
Surviving Bank shall consist of up to twenty (20) directors, and shall initially include Xx. Xxxx,
Xx. Xxxxxx and Xx. Xxxxxxx and an equal number, inclusive of Xx. Xxxx, Xx. Xxxxxx and Xx. Xxxxxxx,
of FNB Bank Directors and LSB Bank Directors (each as defined below). The initial FNB Bank
Directors shall be selected by FNB’s Board of Directors and the initial LSB Bank Directors shall be
selected by LSB’s Board of Directors. Subject to Section 5.2, from and after the Effective Time and
until the second annual meeting of the Surviving Bank following the 2007 annual meeting, all
vacancies on the Board of Directors of the Surviving Bank created by (i) the cessation of service
of a FNB Bank Director shall be filled by a nominee selected by the continuing FNB Bank Directors
and (ii) the cessation of service of a LSB Bank Director shall be filled by a nominee selected by
the continuing LSB Bank Directors.
(b) Subject to Section 5.2, from and after the Effective Time until the second annual meeting
of the Surviving Bank following the 2007 annual meeting, each of the committees of the Board of
Directors of the Surviving Bank shall be comprised of an equal number of FNB Bank Directors and LSB
Bank Directors, the identity of the members of such committees to be otherwise mutually determined
by Xx. Xxxx and Xx. Xxxxxx; provided, however, that Xx. Xxxx, Xx. Xxxxxx and Xx. Xxxxxxx shall
serve on the Executive Committees of the Board of Directors of the Surviving Bank during such
period, Xx. Xxxx shall serve as the Chairman of the Executive Committee, and Xx. Xxxxxx shall serve
as Vice Chair of the Executive Committee. In the event Xx. Xxxx, Xx. Xxxxxx or Xx. Xxxxxxx shall
cease to be a director of the Surviving Bank during such two year period or unable to assume or
continue in the designated positions during such periods, as applicable, (i) an LSB Bank Director
selected by the LSB Bank Directors shall succeed Xx. Xxxx for the remainder of such period as
Chairman of the Board of Directors and Chair of the Executive Committee of the Surviving Bank, and
(ii) an FNB Bank Director selected by the FNB Bank Directors shall succeed Xx. Xxxxxx for the
remainder of such period as Vice Chair of the Board of Directors and the Executive Committee of the
Surviving Bank or Xx. Xxxxxxx for the remainder of such period as a member of the Executive
Committee of the Board of Directors of the Surviving Bank.
3
(c) The term “FNB Bank Director” means (i) any person serving as a director of FNB Bank on the
date of this Agreement who continues as a director of the Surviving Bank at the Effective Time and
(ii) any person who becomes a director of the Surviving Bank and who is designated as such by the
continuing FNB Bank Directors prior to his or her election; and the term “LSB Bank Director” means
(i) any person serving as a director of LSB Bank on the date of this Agreement who becomes a
director of the Surviving Bank at the Effective Time and (ii) any person who becomes a director of
the Surviving Bank and who is designated as such by the continuing LSB Bank Directors prior to his
or her election.
ARTICLE VI
ARTICLES OF INCORPORATION AND BYLAWS OF THE SURVIVING BANK
6.1 Charter. Subject to the terms and conditions of this Bank Agreement, at the
Effective Time, the Articles of Incorporation, as amended, of LSB Bank, with such amendments as to
which the parties may hereafter agree to submit to LSB Bank’s shareholder, including, without
limitation, amendments to change the corporate name of LSB Bank and which may be properly approved
by LSB Bank’s Board of Directors and by the sole shareholder (the “Charter”), shall be the Charter
of the Surviving Bank until thereafter amended in accordance with applicable law.
6.2 By-Laws. Subject to the terms and conditions of this Bank Agreement, at the
Effective Time, the Bylaws of LSB Bank shall be the Bylaws of the Surviving Bank until thereafter
amended in accordance with applicable law; provided, however, that the Bylaws shall be amended as
of the Effective Time to reflect the amendments to the Charter described in Section 6.1.
ARTICLE VII
GENERAL PROVISIONS
7.1 Entire Agreement. This Bank Agreement, along with the Agreement and Plan of
Merger by and between FNB Financial Services Corporation and LSB Bancshares, Inc., also dated
February 26, 2007, contains the entire agreement between the parties with respect to the
transaction contemplated hereunder and supersedes any and all prior arrangements or understandings
with respect thereto. This Bank Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
7.2 Amendment. At any time before the Effective Time, the Merging Institutions, by
mutual consent of their respective Boards of Directors, may amend this Bank Agreement.
7.3 Termination. At any time before the Effective Time, this Bank Agreement may be
terminated by mutual consent of the Boards of Directors of the Merging Institutions,
notwithstanding any prior shareholder vote for approval.
7.4 Shareholder Vote. This Bank Agreement shall be subject to the approval,
ratification and confirmation by the affirmative vote of the shareholder of each of the Merging
Institutions.
4
7.5 Applicable Law. This Bank Agreement shall be governed by the laws of the State of
North Carolina.
7.6 Headings. The headings contained in this Bank Agreement are for reference
purposes only and are not part of this Bank Agreement.
7.7 Counterparts. This Bank Agreement may be executed in several counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
Remainder of Page Intentionally Left Blank
5
IN WITNESS WHEREOF, each of the parties has caused this Bank Agreement to be duly executed
UNDER SEAL on its behalf all as of the day and year first above written.
| FNB FINANCIAL SERVICES CORPORATION | ||||||
| By: | ||||||
| Name: Xxxxxxxx X. Xxxxxxx Title: President and Chief Executive Officer |
||||||
ATTEST:
, Secretary
| FNB SOUTHEAST | ||||||
| By: | ||||||
| Name: Xxxxxxxx X. Xxxxxxx Title: President and Chief Executive Officer |
||||||
ATTEST:
, Secretary
6
| LSB BANCSHARES, INC | ||||||
| By: | ||||||
| Name: Xxxxxx X. Xxxx Title: Chairman, President and Chief Executive Officer |
||||||
ATTEST:
, Secretary
| LEXINGTON STATE BANK | ||||||
| By: | ||||||
| Name: Xxxxxx X. Xxxx Title: Chairman, President and Chief Executive Officer |
||||||
ATTEST:
, Secretary
7
