PLAN OF REORGANIZATION
This Plan of Reorganization, hereinafter called the Plan, made and entered
into this 21st day of December, 1999, by and among Chestatee Bancshares, Inc., a
Georgia corporation, (the "Holding Company"), Chestatee State Bank, a bank
organized under the laws of the state of Georgia (the "Bank"); and Chestatee
Interim, Inc., a Georgia corporation ("Interim").
W I T N E S S E T H :
WHEREAS, Holding Company owns all the outstanding common shares of Interim;
and
WHEREAS, the Board of Directors of Holding Company, the Bank and Interim
have determined it is desirable to effect a Plan of Reorganization meeting the
requirements of Sec. 368(a) of the Internal Revenue Code of 1954, as amended,
whereby Interim shall be merged with and into the Bank pursuant to Section
14-2-1101, et seq. of the Georgia Business Corporation Code, Sec. 7-1-530, et
seq. of the Financial Institutions Code of Georgia, and the Agreement of Merger,
a copy of which is attached hereto as Exhibit "A". All of the outstanding common
shares of the Bank will be converted into and exchanged for Holding Company
common shares, and all of the issued and outstanding common shares of Interim
will be converted into common shares of the surviving corporation to the Merger.
NOW, THEREFORE, in order to consummate the transaction set forth above and in
consideration of the mutual promises herein made and the mutual benefits to be
derived from this Plan, the Company, the Bank and Interim do represent, warrant
and agree as follows:
EXHIBIT (2)
1. Representation and Warranties of the Bank. The Bank represents and
warrants as follows:
(a) The Bank is a state bank duly organized, validly existing, and in
good standing under the laws of the state of Georgia and has the power to
own its properties and to carry on its business as and where now conducted.
(b) The Bank has complete and unrestricted power to enter into and
consummate the transaction contemplated under this Plan.
(c) The aggregate number of shares that the Bank has issued and
outstanding is 950,000 with $5.00 par value per share.
(d) To the knowledge of the officers of the Bank, the Bank has filed
with the Internal Revenue Service all tax returns by law, all taxes due to
the Internal Revenue Service or properly accruable have been paid or
adequately taken into account in determining the consolidated net worth of
the Bank, and neither the execution and delivery of nor compliance with the
terms and provisions of this Plan on the part of the Bank conflicts with
the terms and provisions of this Plan on the part of the Bank conflicts
with or results in a breach of any of the terms of any judgment or ruling
of any court or governmental authority or breaches any contract entered
into by the Bank.
(e) The execution of this Plan has been duly authorized and approved
by the Board of Directors of the Bank.
(f) No representation or warranty by the Bank in this Plan, nor any
written statement, certificate or document furnished or to be furnished by
or on behalf of the Bank pursuant to this Plan knowingly contains or shall
knowingly contain any untrue statement of a material fact or knowingly
omits or shall omit a material fact necessary to make any statement
contained herein not misleading.
2. Representations and Warranties of Holding Company and Interim. Holding
Company and Interim represent and warrant as follows:
(a) Holding Company and Interim are corporations duly organized,
validly existing, and in good standing under the laws of the state of
Georgia.
(b) The aggregate number of shares that Interim is authorized to issue
is 2,000,000 common shares with no par value per share, of which 950,000
shares are validly issued and outstanding, fully paid and nonassessable and
owned by Holding Company.
(c) Holding Company has been organized with J. Xxxxxx Xxxxxx, Xx. as
the initial shareholder owning 100 common shares with a par value of $5.00
for a total capitalization of $500.00. The Shareholder Agreement, copy of
which is attached hereto as Exhibit "B", executed by the initial
shareholder upon organization of Holding Company restricts the
transferability of the shares and requires him to redeem his shares
immediately following the effective date of the Merger and reorganization
for the par value of the stock. Interim has been organized with
capitalization of $500.00 which is held in the corporation as cash.
Immediately following the effective date of the Merger, the surviving
corporation, the Bank, will pay a special dividend in the amount of $500.00
payable to its then sole stockholder, the Holding Company. This $500.00
will be used to redeem the shares of the initial shareholder of Holding
Company pursuant to the Shareholder Agreement. Following this redemption,
the only shares of the common stock of Holding Company issued and
outstanding will be the shares exchanged for the original shares of the
Bank.
(d) Holding Company's common shares to be delivered pursuant to this
Plan and the Agreement of Merger will be voting shares and, when so
delivered, will have been duly and validly authorized and issued by Holding
Company, will be fully paid and nonaccessable, and will be registered
pursuant to the Securities Act of 1933.
(e) To the knowledge of the officers of Holding Company and Interim,
neither the execution and delivery of this Plan, not compliance with the
terms and conditions of this Plan, on the part of Holding Company or
Interim breaches any laws or regulations of the state of Georgia or the
Untied States; breaches any of the terms or conditions of any judgment or
ruling of any court or governmental authority; or constitutes a breach or
default under the terms of any contract to which Holding Company or Interim
is a party.
(f) The execution of this Plan has been duly authorized by the Board
of Directors of Holding Company and Interim.
(g) No representation or warranty by Holding Company or Interim in
this Plan nor any statement, certificate, or document furnished or to be
furnished by or on behalf of Holding Company or Interim pursuant to this
Plan knowingly contains or shall knowingly contain any untrue statement of
a material fact or knowingly omits or shall omit a material fact necessary
to make any statement contained herein not misleading.
3. Particular Covenants of the Parties.
(a) Interim shall call a special meeting of its shareholders as soon
as practicable after the execution of this Plan, for the purpose of
approving this Plan and Agreement of Merger.
(b) The Bank shall call a special meeting of its shareholders for the
purpose of authorizing, approving and adopting this Plan of Reorganization
and the Agreement of Merger as soon as practicable after the execution of
this Plan and Agreement of Merger.
(c) In the event the Bank should issue any additional shares of its
$5.00 par value common stock subsequent to the execution of this Plan or
Reorganization and the related Agreement of Merger and prior to the
effective date of the merger, Interim shall issue to Holding Company an
additional share of its common stock for each share of common stock of the
Bank subsequently issued, and Holding Company agrees to furnish, in
connection with the proposed merger, additional shares of its no par value
common stock necessary to convert each new Bank share into one (1) share of
Holding Company common stock.
4. Tax Consequences. The parties anticipate the transaction will be a tax
free reorganization and the reorganization will not be consummated until an
opinion has been received from the special counsel of the Bank, Xxxxxxxxx,
Xxxxxxx & Xxxxx, LLP, to the effect that:
(a) The exchange of all the outstanding shares of the Bank for shares
of Holding Company and the conversion of Interim shares into the Bank
shares pursuant to the transaction contemplated by this Plan and the
Agreement of Merger will qualify as a reorganization within the meaning of
Section 368(a)(1)(A) and 368(a)(2)(E) of the Internal Revenue Code.
(b) No gain or loss will be recognized by Holding Company, Interim or
the Bank, or their respective shareholders as a result of the transactions
contemplated under this Plan.
(c) The tax basis of the common stock of Holding Company received by
the shareholders of the Bank pursuant to the Plan of Reorganization and
Agreement of Merger will be the same as the tax basis of the shares of
common stock of the Bank exchanged therefor.
(d) The holding period of the shares of common stock of the Company
received by the shareholders of the Bank will include the holding period of
the shares of common stock of the Bank exchanged therefor; provided the
stock of the Bank is held as a capital asset of the date this Plan and
Agreement of Merger is consummated.
(e) For the purpose of filing a consolidated tax return, Holding
Company will be treated as the new parent corporation of a continuing
affiliated group having the same taxable year as the full taxable year of
the Bank.
5. Terms of Merger.
(a) The Merger of Interim into the Bank shall be in accordance with
the Agreement of Merger attached hereto as Exhibit "A".
(b) Immediately prior to the effective date of the Merger, Holding
Company will issue 950,000 shares of its common stock or such other number
as may be required for the exchange and conversion herein provided to
Interim as a contribution to capital, and the shareholders of the Bank
shall thereafter be entitled to receive upon the effective date of the
Merger 950,000 shares or such other number as may be required for the
exchange and conversion hereinafter provided. In return, Interim shall
simultaneously deliver to Holding Company, (1) a written representation and
warranty by Interim that the Plan of Reorganization and Agreement of Merger
has been duly approved and adopted by the shareholders of the Bank and
Interim, and that all conditions precedent to the Merger of Interim into
the Bank in accordance with the Agreement of Merger have been fully
satisfied, except for the filing of the Agreement of Merger with the
Secretary of the State of Georgia, and that the Agreement of Merger has not
been and will not be terminated or abandoned, and (2) a joint written
undertaking by Interim and the Bank to file the Agreement of Merger and
Articles of Merger forthwith with the Secretary of State of Georgia.
(c) The 950,000 shares of Holding Company contemplated to be delivered
to Interim for distribution to the shareholders of the Bank, shall be
reduced by the number of shares whose holders elect to dissent from the
Merger and demand payment for fair value of their shares in accordance with
Article 13 of the Georgia Business Corporation Code, and shall be increased
by the number of shares issued by the Bank subsequent to execution of this
agreement but prior to the merger.
(d) The 100 Holding Company common shares outstanding on the date
hereof, shall, as soon as possible after the effective date of the Merger,
be surrendered and retired, and the certificates representing such shares
shall be canceled pursuant to the Shareholder Agreement, a copy of which is
attached hereto as Exhibit "B".
6. Effective Date. Interim and the Bank will effect the Merger provided for
in the Agreement of Merger by executing and filing Articles of Merger with the
Department of Banking and Finance in the manner provided for by the laws of the
State of Georgia. The effective date for the purpose of this Plan of
Reorganization shall be the date a Certificate of Merger is issued by the
Secretary of State of Georgia.
7. Termination and Abandonment. Anything to the contrary herein
notwithstanding, this Plan of Reorganization and Agreement of Merger may be
terminated and the transaction provided for thereby may be abandoned at any time
before and after approval thereof by the stockholders of the parties, but not
later than the effective date, by the vote of the majority of any of the Boards
of Directors of Holding Company, Interim and the Bank.
IN WITNESS WHEREOF, the parties have hereunto set their hands and affixed
their seal by and through their duly authorized corporate officers the day and
year first above written.
CHESTATEE BANCSHARES, INC.
By: /s/ J. Xxxxxx Xxxxxx, Xx.
------------------------------
President
Attest: /s/ Xxxxx X. Xxxxxx
--------------------------
Secretary
CHESTATEE INTERIM, INC.
By: /s/ J. Xxxxxx Xxxxxx, Xx.
------------------------------
President
Attest: /s/ Xxxxx X. Xxxxxx
--------------------------
Secretary
CHESTATEE STATE BANK
By: /s/ J. Xxxxxx Xxxxxx, Xx.
------------------------------
President
Attest: /s/ Xxxxx X. Xxxxxx
--------------------------
Secretary
EXHIBIT "A"
AGREEMENT OF MERGER
This Agreement of Merger entered into this 21st day of March, 1999,
hereinafter called "The Agreement", pursuant to ss.14-2-1101, et seq. of the
Georgia Business Corporation Code and ss.7-1-530, et seq. of the Financial
Institutions Code of Georgia, by and between Chestatee State Bank, a banking
corporation organized under the laws of the State of Georgia (hereinafter
referred to as the "Bank"); and Chestatee Interim, Inc., a corporation duly
organized and existing under the laws of the State of Georgia (hereinafter
referred to as "Interim"), such corporations being hereinafter referred to
jointly as the constituent companies.
W I T N E S S E T H:
WHEREAS, the aggregate number of shares the Bank is authorized to issue is
2,000,000 shares, of which 950,000 are outstanding as common shares with $5.00
par value per shares; and
WHEREAS, the aggregate number of shares Interim is authorized to issue is
2,000,000 common shares with no par value, of which 950,000 shares are
outstanding to Chestatee Bancshares, a Georgia corporation (hereinafter referred
to as "Holding Company"); and
WHEREAS, the Board of Directors of the Bank and Interim deem it advisable
for the general welfare of both corporations and the shareholders of each
thereof that such corporations merge under and pursuant to the provisions of
ss.14-2-1101, et seq. of the Georgia Business Corporation Code and ss.7-1-463,
et seq. of the Financial Institutions Code of Georgia, and the board of
directors of each of such corporations has, by resolution duly adopted and
approved this Agreement; and
WHEREAS, the board of directors of the Bank has directed that this
Agreement be submitted to a vote of its shareholders at a specially called
meeting to be held at such time as designated by the board of directors, and the
board of directors of Interim has recommended the merger to shareholders and
directed that this Agreement be submitted to a vote of Interim shareholders at a
special meeting of such shareholders to be held at such time as directed by the
board of directors of Interim, for the purpose of approving this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein, the parties hereto agree, that in accordance with the
provisions of the Financial Institutions Code of Georgia and the Georgia
Business Corporation Code, Interim shall be merged into the Bank, which shall be
the surviving corporation (hereinafter referred to as the "Surviving Company"),
and that the terms and conditions of such Merger, the mode of carrying it into
effect, the manner of converting and exchanging the shares of the constituent
companies into shares of the surviving company or shares of Holding Company, and
other details and provisions deemed necessary or proper are and shall be as
herein set forth.
1. Merger. Upon the merger becoming effective in accordance with the laws
of the State of Georgia;
(a) Interim shall be merged into the Bank, which shall be the
surviving corporation and its name shall continue to be Chestatee State
Bank. The constituent companies shall be a single corporation and the
separate existence of Interim shall cease, except to the extent provided by
the laws of the State of Georgia.
(b) On the effective date of the merger, for all purposes of the laws
of the State of Georgia, the separate existence of Interim shall cease and
Interim shall be merged into the Bank which shall possess all the rights,
privileges, powers, and franchises both of a public and a private nature,
and shall be subject to all the restrictions, disabilities, and duties of
each of the constituent companies so merged; and all and singular the
rights, privileges, powers and franchises of each of the constituent
companies, in all property, real and personal, and mixed, and all debts due
to any of such constituent companies on whatever account, as well for share
subscriptions as for all other things and actions or belonging to each of
such constituent companies, shall be vested in the surviving company; and
all property, rights, privileges, powers and franchises and all and every
other interest shall be thereafter as effectively the property of the
surviving company as they were of the respective constituent companies, and
the title to any real estate vested by deed or otherwise, under the laws of
this state and any of such constituent companies, shall not revert or be in
any way impaired by reason of the merger, but all rights of creditors and
all liens upon any property of any of such constituent companies shall be
preserved unimpaired, and all debts, liabilities, and duties of the
respective constituent companies shall thenceforth attach to such surviving
company, and may be enforced against it to the same extent as if such
debts, liabilities, and duties had been incurred or contracted by it.
(c) The Articles of Incorporation, capital structure and Bylaws of the
Bank in existence on the effective date of the merger shall not be altered
or amended by the merger and shall continue in effect as that of the Bank
as the surviving company.
(d) The directors and officers of the Bank immediately prior to the
merger becoming effective shall be and constitute the directors and
officers of the surviving company. If on the effective date of the merger a
vacancy shall exist on the board of directors of in any of the offices of
the surviving company, such vacancy may thereafter be filled in the manner
provided by the articles of incorporation and the bylaws of the surviving
company and the laws of the State of Georgia.
2. Articles of Incorporation and Certificate of Incorporation. The articles
of incorporation and certificate of incorporation of the surviving company shall
be the articles of incorporation and certificate of incorporation of the Bank as
in effect on the effective date of the merger and shall constitute the composite
articles of incorporation and certificate of incorporation of the surviving
company.
3. Conversion of Shares. The manner of converting and exchanging the shares
of the constituent companies into the shares of the surviving company or of
Holding Company, as the case may be, shall be as follows:
(a) Each of the 950,000 shares with no par value or Interim to be
issued and outstanding on the effective date of the merger and owned by
Holding Company, or such greater number as may be issued to correspond with
any additional shares of Bank stock issued subsequent to the execution of
this agreement and prior to the merger shall, by virtue of the merger and
without any action on the part of the holder thereof, be converted, upon
the merger becoming effective, into one common share of the surviving
company. Immediately after the merger, Holding Company shall own all of the
950,000 shares of $5.00 par value stock of the surviving company, the Bank,
or such greater number of shares as may then be issued and outstanding. (b)
In consideration for the merger of Interim with and into the Bank, each
share of the 950,000 shares of the $5.00 par value common stock of
Chestatee State Bank, or such greater amount as may be issued and
outstanding on the effective date shall as of the effective date, by virtue
of the merger and without any action on the part of the holders thereof, be
converted into and exchanged for one (1) share of Holding Company's no par
value common stock, resulting in the receipt in the aggregate of not more
than 950,000 shares of Holding Company common stock by the shareholders of
the Bank or such greater number as may be required to implement the terms
of the merger. As soon as practicable after the effective date of the
merger, each holder as of the effective date of any of the shares of the
Bank's common stock owned by him or her shall be entitled, upon
presentation and surrender to Holding Company of the certificates
representing such shares, to receive in exchange therefore a stock
certificate to evidence the whole or fractional shares of Holding Company
common stock to which he or she is entitled to by virtue of the merger.
Until so surrendered, each outstanding certificate which prior to the
merger date represented stock of the Bank shall be deemed for all corporate
purposes to evidence the holder's entitlement to certificates evidencing
his or her ownership in Holding Company, and shall not evidence the
holder's entitlement to certificates evidencing his or her ownership in
Holding Company, and shall not evidence any shares of stock of the Bank,
all of which shall, upon the effective date of the merger, be owned by
Holding Company. Unless and until each such certificate owned by holders of
common stock of the Bank immediately prior to the effective date of the
merger is surrendered, the holder of any such certificate shall not have
any right to receive any cash or stock dividends paid with respect to the
shares of Holding Company to which the holder is entitled to as a result of
the merger, but upon surrender of such certificates, Holding Company shall
issue to the holder stock certificates evidencing the holder's ownership of
shares of company stock to which he or she is entitled under the terms of
the merger.
4. Further Instruments. If at any time the surviving company shall consider
or be advised that any further assignment or assurance in law is necessary or
desirable to vest in surviving company the title to any property or rights of
Interim, the proper officers and directors of Interim shall, and will, execute
and make all such proper assignments and assurances in law and do all things
necessary or proper to vest such property or rights in the surviving company,
and otherwise to carry out the purposes of this agreement.
5. Shareholder Approval. Adoption of this agreement by each party thereto
shall require the affirmative vote of at least:
(a) The majority vote of the directors of each corporation which is a
party hereto; and
(b) The holders of at least two-thirds of the outstanding voting
shares of each corporate party's common stock entitled to vote at any
special meeting called by such corporation for purposes of approving the
plan of reorganization and this agreement of merger. The notices to
shareholders of the meeting shall include a copy or summary of this
agreement and a full statement of the rights and remedies of dissenting
shareholders, the method of exercising them, the limitations on such rights
and remedies and all other information required by law.
(c) Any modification of this agreement after it has been adopted shall
be made by the same vote as that required for adoption.
6. Dissenting Shareholders of the Bank or Interim. Any shareholder of the
Bank or Interim may object to the merger and demand payment to him or her of the
fair value of his or her shares of the Bank or Interim. Any holder of record
intending to exercise his right to dissent shall file with the respective
corporation, before the meeting of shareholders at which the proposed plan of
merger is submitted to a vote, or at such meeting but before the vote, a written
notice of his or her intent to demand payment for his or her shares if the
proposed merger is effectuated. The shareholder must also refrain from voting in
favor of the proposed merger.
No later than ten days after the proposed merger is effectuated, the Bank
will deliver to each shareholder who shall have perfected his or her rights as a
dissenter written notice advising of the approval of the proposed merger and
enclosing a copy of Article 13 of the Georgia Business Corporation Code. The
notice will further advise the dissenting shareholder where the demand for
payment must be sent and where and when certificates must be deposited, inform
holders to what extent transfer of the shares will be restricted after the
payment demand is received, and will set a date by which the corporation must
receive the payment demand, which date may not be fewer than thirty (30) nor
more than sixty (60) days after the date the notice to the shareholder is
delivered. With the time provided by such notice, the dissenting shareholder
must demand payment and deposit his certificates with the Bank in accordance
with the terms of the notice.
If all of the preceding conditions are fully satisfied, the Bank will be
required within ten (10) days of the later of the date the proposed merger is
effectuated or reciept of a payment demand to offer to pay each dissenter who
has complied with all of the conditions set forth the amount the Bank estimates
to be the fair value of his or her shares, plus accrued interest. The offer of
payment will be accompanied by certain recent financial statements of the Bank
and will advise the dissenter of his or her right to demand payment under
O.C.G.A. ss.14-2-1327, and will include a copy of Article 13 of the Georgia
Business Corporation Code. If the merger is not completed within sixty (60) days
after the date set for demanding payment and depositing share certificates, the
deposited certificates must be returned, and if the proposed merger is later
effectuated, the applicable corporation must send a new notice to those
shareholders who perfected their dissenter's rights under O.C.G.A. ss.14-2-1322.
Any dissenting shareholder who is dissatisfied with the Bank's offer of
payment may demand payment of his or her estimate of the fair value of his or
her shares, together with interest due, if the shareholder believes the amount
offered by the corporation is less than the fair value of his or her shares or
that the interest due is incorrectly calculated, or if the corporation, having
failed to effectuate the proposed merger, does not return the deposited
certificates within sixty (60) days after the date set for demanding payment.
Any shareholder who fails to notify the corporation of his demand in writing
within thirty (30) days after the Bank made or offered payment for his or her
shares will not be entitled to receive payment for his or her estimated value of
the shares.
If the shareholder's demand for payment remains unsettled, the corporation
will commence legal proceedings within sixty (60) days after receiving the
payment demand in the Superior Court of Xxxxxx County to determine the fair
value of the shares and accrued interest. If it fails to take that action, it
must pay to each dissenter whose demand remains unsettled the amount demanded.
All dissenters whose demand remains unsettled will be made parties to the
proceedings.
The provisions of Article 13 of the Georgia Business Corporation Code shall
prevail to the extent of any inconsistency between the provisions of this
agreement of merger and the provisions of the Georgia Business Corporation Code.
7. Payments to Dissenters. With respect to payments to the holders of any
shares which may be voted in dissent to this agreement of merger and related
plan of reorganization, Holding Company may, at its election, provide the Bank
with the monetary consideration in an amount sufficient to redeem any and all
dissenting shares, or any portion thereof.
8. Conditions Precedent to the Merger. This merger is subject to, and
consummation of the merger herein provided for, is conditioned upon receiving
all consents and approvals required by law, including but not limited to the
following:
(a) Approval by the Georgia Department of Banking as required by the
Georgia Financial Institution Code.
(b) Approval by the Federal Deposit Insurance Corporation as required
by the Federal Deposit Insurance Act.
(c) Registration by the Company as a bank holding company with the
Georgia Department of Banking and Finance.
(d) Prior approval of the Federal Reserve Board for Holding Company to
become a holding company pursuant to the Bank Holding Company Act of 1956,
as amended.
(e) As to the securities issued by the Company in exchange for the
common stock of the Bank in compliance with the registration provision of
the Securities Act of 1933, as amended.
(f) Receipt by the Bank from Xxxxxxxxx, Xxxxxxx & Xxxxx, LLP, its
special counsel, that the transaction will be a tax free reorganization
pursuant to ss.368 of the Internal Revenue Code and that no gain or loss
will be recognized for federal income tax purposes by the Bank, Holding
Company or the shareholders of the Bank who receive stock of Holding
Company in connection with the merger provided for herein.
(g) Compliance by Holding Company with the Blue Sky Laws of the
various states wherein the shareholders of the Bank reside on the effective
date of the merger.
9. Abandonment of Merger Plan. This plan of reorganization and agreement of
merger may be terminated and abandoned before it becomes effective by a
resolution passed by a majority of the board of directors of any of the parties
to this agreement. In the event of termination and abandonment of this agreement
of merger by the board of directors of any of the parties, this agreement of
merger shall become wholly void and of no effect and there shall be no liability
on the part of either of the parties, their respective boards of directors,
officers, employees or shareholders.
10. Expenses of the Merger. All of the expenses of the merger, including
filing fees, printing costs, mailing costs, accountant's fees and legal fees
shall be borne by Holding Company. In the event the merger is abandoned for any
reason, the expenses shall be paid by Holding Company.
11. Effective Date. This merger agreement shall become effective at the
close of business on the day on which a certificate of merger is issued by the
Secretary of State of Georgia.
IN WITNESS WHEREOF, the parties have hereunto set their hands and affixed
their seals by and through their duly authorized corporate officers the day and
year first above written.
CHESTATEE INTERIM, INC.
By:
President
Attest:
Secretary
(Affix Corporate Seal)
CHESTATEE STATE BANK
By:
President
Attest:
Secretary
(Affix Corporate Seal)
EXHIBIT "B"
SHAREHOLDER AGREEMENT
THIS AGREEMENT entered into effective October 13, 1999, by and between J.
Xxxxxx Xxxxxx, Xx. (hereinafter referred to as "Shareholder") and Chestatee
Bancshares, Inc., a Georgia corporation (hereinafter referred to as "Holding
Company").
W I T N E S S E T H:
WHEREAS, on December 21, 1999, the Board of Directors of Chestatee State
Bank, Dawsonville, Xxxxxx County, Georgia, a state bank organized under the laws
of the State of Georgia, adopted a Plan of Reorganization and Merger and Holding
Company was organized for the purpose of being a party to said merger; and
WHEREAS, the Shareholder is presently the holder of all of the issued and
outstanding shares of Holding Company, but Holding Company contemplates that
additional shares will be outstanding to the public after the consummation of
the Plan of Reorganization and Merger herein referred to; and
WHEREAS, in the event the Plan of Reorganization and Merger is concluded,
the Shareholder believes it to be in the best interest of Holding Company to
provide for restrictions on the transferability and require compulsory
redemption of the initial one hundred (100) shares issued to Shareholder in the
organization of Holding Company.
NOW, THEREFORE, in consideration of Holding Company issuing to the
Shareholder one hundred (100) of its common shares and in consideration of the
mutual promises contained herein, the parties agree as follows:
1. Holding Company has issued to Shareholder one hundred (100) of its
common shares at a price of $5.00 per share.
2. The Shareholder agrees that the one hundred (100) initial shares issued
to him shall not be sold, assigned, transferred, pledged, encumbered, or in any
other way disposed or; and any sale, assignment, transfer, pledge, encumbrance,
or other disposition whatsoever of the initial shares shall be void; and no
transfer of any right, title or interest therein, shall be valid or binding,
except in compliance with the terms, covenants and conditions of this agreement.
3. After consummation of the Plan of Reorganization and Merger by and among
Holding Company, Chestatee Interim, Inc., and Chestatee State Bank, the
Shareholder agrees to surrender upon demand by Holding Company the initial one
hundred (100) shares of Holding Company to Holding Company for redemption, at a
price of $5.00 per share, the same price for which they were issued. Holding
Company agrees to redeem the initial one hundred (100) shares at a price of
$5.00 per share after consummation of the Reorganization and Merger. Upon
redemption, the initial one hundred (100) shares shall be canceled.
4. In the event the Plan of Reorganization and Agreement of Merger by and
among Holding Company, Chestatee Interim, Inc. and Chestatee State Bank is not
consummated, the Shareholder agrees Holding Company shall be liquidated and
dissolved pursuant to the laws of the State of Georgia.
5. The Shareholder agrees to vote his shares in favor of the Plan of
Reorganization and Agreement of Merger by and between Holding Company, Chestatee
Interim, Inc. and Chestatee State Bank, and to vote his shares in whatever
manner is required and to take whatever action is necessary to conclude the Plan
of Reorganization and Merger.
6. Upon written notice given by regular mail to the Shareholder at his last
known address by Holding Company of its intent to redeem the shares subject to
the terms of this Agreement, the shares subject hereto shall automatically be
canceled and the Shareholder shall have no further rights as Shareholder by and
through the shares subject to the terms of this Agreement. Upon presentation of
the stock certificates to Holding Company, the redemption price shall be paid in
cash to the Shareholder.
7. The certificate issued to the Shareholder as the initial shares of
Holding Company, in addition to any legend required thereon, shall be endorsed
on the face as follows:
"The shares represented by this certificate are subject to an
agreement, effective October 13, 1999, which restricts the
transferability of the shares and requires redemption of the shares at
a fixed price. A copy of said agreement is on file at the office of the
corporation."
8. Holding Company is authorized to enter into this agreement by virtue of
a resolution adopted by the board of directors at its organizational meeting and
the Shareholder consents by execution of this Agreement.
9. This Agreement shall be binding upon and shall operate for the benefit
of the Shareholder and his respective executors, administrators, successors and
assigns.
J. XXXXXX XXXXXX, XX.
Shareholder
CHESTATEE BANCSHARES, INC.
By:
President
Attest:
Secretary
(Seal)
