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EXHIBIT (2)-1
APPENDIX A
PLAN OF REORGANIZATION
AND AGREEMENT OF MERGER
This Plan of Reorganization and Agreement of Merger (the "Agreement"),
made and entered into this 14th day of March, 2000, by and among Heritage
Financial Holding Corporation, a Delaware corporation, ("Holding Company"),
Heritage Interim Corporation, an Alabama corporation ("Interim") and Heritage
Bank, an Alabama state banking corporation ("Bank"), (Interim and Bank being
hereinafter sometimes referred to collectively as the "Constituent Companies").
R E C I T A L S:
WHEREAS, Bank is a bank existing under the laws of the State of
Alabama, having its principal offices at 000 Xxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000;
WHEREAS, the directors of Bank have determined it will be in the best
interest of the shareholders of Bank and of Bank to operate Bank through a
holding company structure, and, therefore, the directors have caused to be
formed Holding Company, a corporation existing under the laws of the State of
Delaware, having its principal offices at 000 Xxx Xxxxxx, Xxxxxxx, Xxxxxxx
00000, for purposes of effectuating the transactions described herein, and which
will become a registered financial holding company through ownership of the
Surviving Bank (as hereinafter defined) after approval from certain state and
federal regulatory bodies and at the Effective Time (as hereinafter defined);
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WHEREAS, Holding Company has caused to be formed, and will own all of
the issued and outstanding stock of, Interim solely for the purpose of
effectuating a merger of it with and into Bank to accomplish the formation a
holding company structure to own Bank;
WHEREAS, the respective boards of directors of Holding Company, Interim
and Bank deem it advisable and for the benefit of each of said corporations and
their respective shareholders that Interim merge into and with Bank with Bank
being the surviving entity and with all of the shareholders of the Bank becoming
shareholders in the Holding Company;
WHEREAS, the respective boards of directors of Holding Company, Interim
and Bank have, by resolutions, approved and authorized the execution and
delivery of this Agreement and the reorganization of Holding Company, Interim
and Bank (the "Reorganization") on the terms and conditions set forth herein;
and
WHEREAS, Holding Company, Interim and Bank desire to reorganize in a
transaction intended to qualify as a tax-free incorporation under Section 351 of
the Internal Revenue Code of 1986, as amended.
THEREFORE, in consideration of the mutual covenants, promises,
agreements and provisions contained herein and subject to the satisfaction of
the terms set forth herein, and intending to be legally bound hereby, Interim,
Bank and Holding Company agree as follows:
ARTICLE I-PRINCIPAL TERMS OF THE REORGANIZATION AND MERGER
1.1 The Reorganization and Merger. Upon the terms and conditions
of this Agreement, including the receipt of all requisite government approval
and shareholder approvals, and in accordance with the Delaware General
Corporation Law (the "DGCL"), the Alabama Business
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Corporation Act (the "ABCA") and the Alabama Banking Code (the "ABC"), the
Reorganization will be carried out in the following manner:
(a) Bank shall call a meeting of its shareholders to approve the
Reorganization and shall solicit proxies to vote in favor of the Reorganization.
(b) Subject to the provisions of this Agreement, Articles of
Merger (the "Articles of Merger") and a Certificate of Merger (the "Certificate
of Merger") shall be duly executed and filed with the Alabama Secretary of State
in accordance with the ABCA and the Delaware Secretary of State in accordance
with the DGCL, respectively. Upon the issuance of a Certificate of Approval (the
"Certificate of Approval") from the superintendent of the Alabama State Banking
Department, as required by Section 5-7A-4 of the ABC, a copy of the Certificate
of Approval shall be forwarded to the Alabama Secretary of State for filing. The
Reorganization shall become effective upon the filing of the Articles of Merger
and Certificate of Approval with the Alabama Secretary of State and the
Certificate of Merger with the Delaware Secretary of State (the "Effective
Time").
(c) At the Effective Time, Interim shall be merged with and into
Bank. The separate existence of Interim shall cease, and Bank shall continue as
the surviving entity (Bank, in its capacity as the corporation surviving such
merger, is hereinafter sometimes referred to as the "Surviving Bank").
(d) The manner and basis of converting the shares of capital stock
of each of the Constituent Companies and Holding Company into shares, rights,
obligations, securities of the Surviving Bank, Holding Company, or, into cash or
property shall be as follows:
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(i) At the Effective Time, each share of common stock,
$.01 par value, of Interim, issued and outstanding immediately prior to the
Effective Time shall be converted automatically into one share of common stock,
$.01 par value, of the Surviving Bank;
(ii) At the Effective Time, each share of common stock,
$.01 par value, of Bank (the "Bank Common Stock"), issued and outstanding
immediately prior to the Effective Time shall be converted automatically into
the right to receive one share of common stock, $.01 par value, of Holding
Company (the "Holding Company Common Stock"); and
(iii) At the Effective Time, each share of Holding Company
Common Stock outstanding immediately prior to the Effective Time shall be
converted automatically into the right to receive $.01 in cash.
1.2 Effect of Reorganization. The Reorganization shall have the
effect provided in Section 5-7A-2 of the ABC, Section 10-2B-11.06 of the ABCA
and Section 259 of the DGCL. At the Effective Time, Interim shall cease to exist
and Bank will be the Surviving Bank. The articles of incorporation and bylaws of
Bank in effect immediately prior to the Effective Time will remain the articles
of incorporation and bylaws of the Surviving Bank until amended or repealed in
accordance with their provisions and applicable law. At the Effective Time, the
separate existence of Interim shall cease and the Surviving Bank shall thereupon
and thereafter possess all the rights, privileges, immunities and franchises, of
a public as well as of a private nature, of each of the Constituent Companies;
and all property, real, personal and mixed, and all debts due on whatever
account, and each and every other interest of or belonging to or due to each of
the Constituent Companies shall be taken and deemed to be transferred to and
invested in the Surviving Bank without further act or deed; and the title to any
real estate, or any interest therein,
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vested in any of the Constituent Companies shall not revert or be in any way
impaired by reason of such merger. The Surviving Bank shall thenceforth be
responsible and liable for all the liabilities and obligations of each of the
Constituent Companies; and any claim existing or action or proceeding pending by
or against either of the Constituent Companies may be prosecuted as if such
merger had not taken place, or the Surviving Bank may be substituted in its
place. Neither the rights of creditors nor any liens upon the property of either
of the Constituent Companies shall be impaired by such merger.
1.3 Surviving Bank Board of Directors. At the Effective Time, the
directors of the Surviving Bank shall be as follows:
Xxxxxx Xxxx Xxxx Xxxx
Marc Xxxxx Xxxxxx New, M.D.
Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxx
Xxxxxxxx Xxxxxxx Xxxxx Xxxx
Xxxxx Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxxxx, Xx. Xxxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx Xxxx Xxxxxxx
Xxxxx Xxxxxxx Xxxxx Xxxx
Xxxxxx Xxxx
Said persons shall hold office until the next annual meeting of the
shareholders of the Surviving Bank and until their successors are elected in
accordance with the bylaws of the Surviving Bank. If at the Effective Time any
vacancy shall exist on the board of directors of the Surviving Bank, such
vacancy shall be filled in the manner specified in the bylaws of the Surviving
Bank.
Section 1.4 Holding Company Board of Directors. At the Effective Time,
the directors of the Holding Company shall be as follows:
Xxxxxx Xxxx Xxxx Xxxx
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Marc Xxxxx Xxxxxx New, M.D.
Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxx
Xxxxxxxx Xxxxxxx Xxxxx Xxxx
Xxxxx Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxxxx, Xx. Xxxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx Xxxx Xxxxxxx
Xxxxx Xxxxxxx Xxxxx Xxxx
Xxxxxx Xxxx
Said persons shall hold office until the next annual meeting of the
shareholders of Holding Company and until their successors are elected in
accordance with the bylaws of Holding Company. If at the Effective Time any
vacancy shall exist on the board of directors of Holding Company, such vacancy
shall be filled in the manner specified in the bylaws of Holding Company.
ARTICLE II-DISTRIBUTION TO BANK SHAREHOLDERS
2.1 Delivery of Merger Consideration. Holding Company shall
deliver to the holders of certificates evidencing ownership of Bank Common
Stock, immediately upon receipt from the holders thereof of such certificates,
duly executed and in proper form for transfer, Holding Company Common Stock to
which they are entitled to as provided for herein pursuant to the following
provisions:
(a) As soon as practical after the Effective Time,
Holding Company shall send a notice and transmittal form to each record holder
of a certificate evidencing Bank Common Stock, advising such holder of the
Reorganization and the procedure for surrendering to Holding Company such
certificate in exchange for such holder's pro rata share of Holding Company
Common Stock. Each holder of a certificate evidencing Bank Common Stock, upon
surrender
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of the same to Holding Company in accordance with such transmittal form, shall
be entitled to receive such holder's pro rata share of Holding Company Common
Stock.
(b) No transfer taxes shall be payable by any holder of
record of Bank Common Stock at the Effective Time in respect of the exchange of
such certificates for Holding Company Common Stock. If Holding Company Common
Stock provided for herein is to be delivered to any person other than the
registered holder of Bank Common Stock surrendered for exchange, the amount of
any stock-transfer or similar taxes (whether imposed on the holder of record or
such person) payable on account of the transfer to such person shall be paid to
Holding Company by such person. Holding Company may refuse to make such exchange
unless satisfactory evidence of the payment of such taxes or exemption therefrom
is submitted.
(c) After the Effective Time, each outstanding
certificate which theretofore represented Bank Common Stock shall, until
surrendered for exchange in accordance with this Section 2.1, be deemed for all
purposes to evidence only the right to receive Holding Company Common Stock. No
dividends or other distributions which are declared on Holding Company Common
Stock will be paid to persons otherwise entitled to receive the same until the
certificates representing Bank Common Stock have been surrendered in the manner
herein provided, but upon such surrender, such dividends or other distributions,
from and after the Effective Time, will be paid to such persons. In no event
shall the persons entitled to receive such dividends or other distributions be
entitled to receive interest on such dividends or other distributions.
(d) Notwithstanding anything to the contrary set forth
herein, if any holder of Bank Common Stock shall be unable to surrender his or
her certificates because such certificates
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have been lost or destroyed, such holder may deliver in lieu thereof an
indemnity bond in form and substance and with surety satisfactory to Holding
Company.
2.2 Stock Options. Bank currently has outstanding options for the
purchase of 3,872,000 shares of Bank Common Stock and is authorized to issue
options for the purchase of up to 6,000,000 shares of Bank Common Stock under
its Incentive Stock Option Plan (the "Stock Option Plan"). At the Effective
Time, Holding Company shall assume the Stock Option Plan, and Holding Company
shall be vested with the rights and privileges of Bank under such plan. The
Stock Option Plan shall remain unchanged except that references to Bank shall
refer to Holding Company and all outstanding options or rights to purchase Bank
Common Stock under the Stock Option Plan (the "Bank Options") shall be converted
automatically into substitute options to acquire, on substantially similar terms
and conditions (including without limitation vesting schedule and duration) the
same number of shares of Holding Company Common Stock which the holders of Bank
Options would have been entitled to receive had they exercised their Bank
Options immediately prior to the Effective Time.
2.3 Employee Stock Purchases. Bank currently has an Employee Stock
Purchase Plan (the "Stock Purchase Plan") to allow certain Bank employees to
purchase shares of Bank Common Stock. The Bank is authorized to issue 30,000
shares of Bank Common Stock under the Stock Purchase Plan. At the Effective
Time, Holding Company shall assume the Stock Purchase Plan and Holding Company
shall be vested with the rights and privileges of Bank under such plan. The
Stock Purchase Plan shall remain unchanged except that the right to purchase
shares of Bank Common Stock shall be converted automatically into the right to
purchase Holding Company Common Stock.
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2.4 Dissenting Shareholders. Any shares of Bank Common Stock held
by persons who have perfected their dissenters rights under the ABCA, and have
not effectively withdrawn or lost their dissenters rights under the ABCA, shall
not be converted pursuant to this Agreement but shall be entitled only to such
rights as are granted them by the dissenters rights provisions of the ABCA.
Dissenting shareholders entitled to payment for shares of Bank Common Stock
pursuant to the Alabama dissenters rights statute shall receive payment from
Holding Company in an amount as determined pursuant to the ABCA.
ARTICLE III-MISCELLANEOUS
3.1 Termination. This Agreement may be terminated and the
Reorganization abandoned at any time before or after adoption thereof by the
respective boards of directors or the respective shareholders of Holding
Company, Interim or Bank, notwithstanding favorable action on the merger by such
shareholders, but not later than the issuing of a Certificate of Merger by the
Alabama Secretary of State and a Certificate of Merger by the Delaware Secretary
of State.
3.2 Amendment. The respective boards of directors of Holding
Company, Interim and Bank may amend, modify and supplement this Agreement.
3.3 Counterparts. This Agreement may be executed in counterparts,
each of which when so executed shall be deemed to be an original, and such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have each caused this Plan of
Reorganization and Agreement of Merger to be executed on their respective
behalves and their respective corporate seals affixed hereto on the day and year
above written.
[Corporate Seal] Heritage Financial Holding Corporation
Attest: /s/ Xxxxxxx Xxxx By: /s/ Xxxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxx Name: Xxxxxxxx Xxxxxxx
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Title: Vice President Title: President
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[Corporate Seal] Heritage Interim Corporation
Attest: /s/ Xxxxxxx Xxxx By: /s/ Xxxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxx Name: Xxxxxxxx Xxxxxxx
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Title: Vice President Title: President
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[Bank Seal] Heritage Bank
Attest: /s/ Xxxxxxx Xxxx By: /s/ Xxxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxx Name: Xxxxxxxx Xxxxxxx
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Title: Vice President Title: President
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