AGREEMENT AND PLAN OF REORGANIZATION
Exhibit
2.1
AGREEMENT
AND PLAN OF REORGANIZATION
This
Agreement and Plan of Reorganization ("Reorganization Agreement") dated as
of
November 15,2005, is made and entered into by and among Commonwealth National
Bank ("Bank"), a national bank, CNB Interim National Bank ("Interim Bank"),
an
interim national bank organized under federal law, and CNB Financial Corp.,
a
Massachusetts corporation, as follows:
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Section
1.
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Outstanding
Shares, Option and Warrants.
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(a)
Bank
is a
national bank. Bank has 4,000,000 authorized shares of common stock, par value
$5.00 per share, of which 2,113,291 are issued and outstanding and of which
196,055 are subject to outstanding stock options and 272,246 are subject to
outstanding warrants.
(b)
CNB
Financial Corp. is a Massachusetts corporation. CNB Financial Corp. has
10,000,000 authorized shares of common stock, $1.00 par value, of which 1,000
are issued and outstanding. All of the outstanding shares of common stock of
CNB
Financial Corp. are owned by Xxxx X. Xxxxxx.
(c)
Interim
Bank is an interim national bank organized under federal law to facilitate
the
reorganization of the Bank into a bank holding company structure. Interim Bank
has 1,000 authorized shares of common stock, no par value, of which 1,000 are
issued and outstanding. All of the outstanding shares of common stock of Interim
Bank are owned by CNB Financial Corp.
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Section
2.
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The
Consolidation.
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Pursuant
to federal law, Bank shall be consolidated with Interim Bank ("Merger") with
Bank as the surviving entity ("Surviving Bank").
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Section
3.
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Stock,
Options and Warrants.
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(a)
Stock
of
Interim Bank. On the effective date of the Merger ("Effective Date") each share
of common stock of Interim Bank issued and outstanding immediately prior to
the
Effective Date shall, by virtue of the Merger, be deemed to be exchanged for
and
converted into one share of fully paid and nonassessable common stock of Bank,
and there shall thereafter be outstanding no other shares, options, warrants
or
other rights to acquire shares of Bank.
(b) Stock
of
CNB Financial Corp. On the Effective Date, each share of common stock of CNB
Financial Corp. issued and outstanding immediately prior to the Effective Date
shall be repurchased by CNB Financial Corp. for $1 .OO per share.
(c)
Stock,
Options and Warrants of Bank. On the Effective Date: (i) each share of common
stock of Bank issued and outstanding immediately prior to the Effective Date
shall, by virtue of the Merger, be deemed to be exchanged for and converted
into
the right to receive one share of fully paid and nonassessable common stock
of
CNB Financial Corp. in
accordance
with the provisions of Paragraph 3(d) hereof and certificates representing
shares of common stock of Bank shall represent solely the right to receive
shares of CNB Financial Corp. in exchange therefore; (ii) each option to acquire
shares of common stock of Bank ("Bank Option") issued and outstanding
immediately prior to the Effective Date shall, by virtue of the Merger, be
deemed to be exchanged for and converted into an option to acquire shares of
common stock of CNB Financial Corp. on the same terms and conditions as the
Bank
Option in accordance with the provisions of Paragraph 3(d) hereof and agreements
representing options to acquire shares of the common stock of Bank shall
represent solely options to acquire shares of CNB Financial ,Xxx; and (iii)
each
warrant to acquire shares of common stock of Bank ("Bank Warrant") issued and
outstanding immediately prior to the Effective Date shall, by virtue of the
Merger, be deemed to be exchanged for and converted into a warrant to acquire
shares of common stock of CNB Financial Corp. on the same terms and conditions
as the Bank Warrant in accordance with the provisions of Paragraph 3(d) hereof
and certificates representing warrants to acquire shares of the common stock
of
Bank shall represent solely warrants to acquire shares of CNB Financial
Corp.
(d)
Exchange
of Stock, Options and Warrants of Bank. On the Effective Date or as soon as
practicable thereafter, the following actions shall be taken to effectuate
the
exchange and conversion specified in Paragraph 3(c) hereof:
(i) The
holders of common stock of Bank of record immediately prior to the Effective
Date shall be allocated and entitled to receive for each share of common stock
of Bank then held by them one share of common stock of CNB Financial Corp.
(ii) Subject
to the provisions of Paragraph 3(d)(iii) hereof, CNB Financial Corp. shall
issue
to the shareholders of Bank the shares of common stock of CNB Financial Corp.
which said shareholders are entitled to receive hereunder.
(iii) Thereafter,
outstanding certificates representing shares of common stock of Bank (except
for
certificates issued to CNB Financial Corp. in connection with the Merger
described in Paragraph 3(a)) shall represent shares of the common stock of
CNB
Financial Corp. and such certificates may, but need not, be exchanged by the
holders thereof for new certificates for the appropriate number of shares of
CNB
Financial Corp.
(iv) The
holders of Bank Options immediately prior to the Effective Date shall be
allocated and entitled to receive for each Bank Option then held by them one
option to acquire shares of the common stock of CNB Financial Corp. on the
same
terms and conditions as the Bank Option. (v) Subject to the provisions of
Paragraph 3(d)(vi) hereof, CNB Financial Corp. shall grant to the holders of
Bank Options the options of CNB Financial Corp. which they are entitled to
receive hereunder.
(vi)
Thereafter,
outstanding agreements representing Bank Options shall represent agreements
to
acquire shares of the common stock of CNB Financial Corp. and
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such
agreements may, but need not, be exchanged by the holders thereof for new
agreements for the appropriate number of options for shares of CNB Financial
Corp.
(vii)
The
holders of Bank Warrants immediately prior to the Effective Date shall be
allocated and entitled to receive for each Bank Warrant then held by them one
warrant to acquire shares of the common stock of CNB Financial Corp. on the
same
terms and conditions as the Bank Warrant.
(viii)
Subject
to the provisions of Paragraph 3(d)(ix) hereof, CNB Financial Corp. shall issue
to the holders of Bank Warrants the warrants of CNB Financial Corp. which they
are entitled to receive hereunder.
(ix)
Thereafter,
outstanding certificates representing Bank Warrants shall represent warrants
to
acquire shares of the common stock of CNB Financial Corp. and such certificates
may, but need not, be exchanged by the holders thereof for new certificates
for
the appropriate number of warrants for shares of CNB Financial Corp.
(e)
Stock
Option Plan of Bank. On the Effective Date and thereafter (i) Bank's 2001 Stock
Option Plan (the "Plan") shall be assumed and restated by CNB Financial Corp.
on
the same terms and conditions applicable to the Plan on the Effective Date;
(ii)
all shares of common stock of Bank under the Plan which remain available on
the
Effective Date for issuance of options shall be converted into the same number
of shares of common stock of CNB Financial Corp. and shall be available for
future option grants made by CNB Financial Corp.; and (iii) any options
thereafter granted pursuant to the Plan shall be options granted by CNB
Financial Corp. and shall relate to the common stock of CNB Financial Corp.
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Section
4.
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Approvals.
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(a)
Shareholder
Approvals. This Reorganization Agreement shall be submitted to the shareholders
of CNB Financial Cop, Interim Bank, and Bank for ratification and confirmation
to the extent required by, and in accordance with, applicable provisions of
law.
(b)
Regulatory
Approvals. Each of the parties hereto shall proceed expeditiously and cooperate
fully in procuring all other consents and approvals, and in satisfying all
other
requirements, prescribed by law or otherwise, necessary or desirable for the
Merger to be consummated. The obligations of each of the parties to consummate
the Merger shall be subject to the receipt, on or before the Effective Date,
of
all required regulatory consents and approvals.
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Section
5.
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Articles
of Incorporation and By-Laws.
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(a)
After
the
Effective Date, the Articles of Incorporation and By-Laws of CNB Financial
Corp.
shall remain in full force and effect in the same form in which they exist
on
the Effective Date. It is the intention of the parties that the Merger will
be
treated as a tax free reorganization pursuant to Section 368 of the Internal
Revenue Code.
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(b)
After
the
Effective Date, the Articles of Association and By-Laws of Bank (as attached)
shall remain in full force and effect in the same form in which they exist
on
the Effective Date, as the Articles of Association and By-Laws of Surviving
Bank.
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Section
6.
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Effect
of Merger and Effective Date.
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The
effective date of the Merger (the "Effective Date") shall be a date chosen
by
the Bank and CNB Financial Corp. after receipt of all required approvals.
The
effect of the Merger provided for herein shall be as prescribed by law.
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Section
7.
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Officers
and Directors.
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(a)
The
officers and directors of Bank holding office on the Effective Date shall be
the
officers and directors of Surviving Bank after the Effective Date, until death,
resignation or removal as provided by law or until the election and
qualification of their respective successors.
(b)
The
officers and directors of CNB Financial Corp. holding office on the Effective
Date shall be the officers and directors of CNB Financial Corp. after the
Effective Date, until death, resignation or removal as provided by law or until
the election and qualification of their respective successors.
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Section
8.
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Further
Acts.
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The
parties, shall from time to time, execute and deliver all such documents and
instruments and take all such action necessary or desirable to evidence or
carry
out this Reorganization Agreement.
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In
witness whereof the parties have executed this Reorganization Agreement as
of
the date first written above.
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CNB
INTERIM NATIONAL BANK
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By:
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/s/
Xxxxxxx X. Xxxxxx
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Xxxxxxx
X. Xxxxxx, President
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CNB
FINANCIAL CORP.
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By:
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/s/
Xxxxxxx X. Xxxxxx
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Xxxxxxx
X. Xxxxxx, President
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COMMONWEALTH
NATIONAL BANK
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By:
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/s/
Xxxxxxx X. Xxxxxx
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Xxxxxxx
X. Xxxxxx, President
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