EXHIBIT 2
RESTATED AND
AMENDED
PLAN OF REORGANIZATION
AND
AGREEMENT OF MERGER
THIS PLAN OF REORGANIZATION AND AGREEMENT OF MERGER ("Agreement") is made and
entered into as of the 17th day of March 1999 and amended and restated as of
this 19th day of May 1999, among Fallbrook National Bank ("Bank"), Community
Bancorp Inc. ("Holding Company") and Fallbrook Interim National Bank
("Subsidiary").
RECITALS
A. Bank is a banking corporation duly organized, validly existing and
doing business in good standing under the laws of the United States, and has
authorized capital of 40,000,000 shares of $0.625 par value Common Stock of
which, at the date hereof, there are 2,407,065 shares issued and outstanding;
and
B. Subsidiary will be a corporation duly organized, validly existing
and doing business in good standing under the laws of the United States, and
will have authorized capital of 160,000 shares of $0.625 par value Common Stock
of which, as of that date of the consummation of the merger contemplated by this
Agreement, there will be 160,000 shares issued and outstanding, of which all
will be owned by Holding Company. Holding Company will borrow $120,000 from a
correspondent bank and use the proceeds of such loan to purchase the 160,000
shares from Subsidiary. Immediately after the Effective Date, the Surviving
National Bank will pay a $120,000 dividend to the Holding Company and the
Holding Company will use the proceeds of such dividend to repay the loan from
the correspondent bank; and
C. Holding Company is a corporation duly organized, validly existing
and doing business in good standing under the laws of Delaware, and has
authorized capital of 10,000,000 shares of $0.625 par value Common Stock of
which, as of the date of the consummation of the merger contemplated by this
Agreement, there will be 1,000 shares of Common Stock issued and outstanding;
and
D. A majority of the entire Boards of Directors of Bank and Holding
Company, respectively, have approved this Agreement and authorized its
execution, and a majority of the Board of Directors of Subsidiary will approve
this Agreement upon the formation of Subsidiary under the laws of the United
States, at which time, Subsidiary shall join in and be bound by this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein set forth and for the purpose of prescribing the
terms and conditions of the merger of Subsidiary with Bank, the parties hereto
agree as follows:
ARTICLE I
TERMS OF MERGER
1.1. MERGER. On the Effective Date, as defined in Section 3.1, Bank
shall be merged with and into Subsidiary ("Merger"), which shall be the
surviving corporation (for purposes of this Agreement, the combined Bank and the
Subsidiary after the Effective Date of the Merger is sometimes referred to as
the "Surviving National Bank") and shall be a subsidiary of Holding Company.
Surviving National Bank's name shall be "Fallbrook National Bank." The Merger
shall be in accordance with the provisions of 12 USC 215a. The business of the
Surviving National Bank shall be that of a national banking association. This
business shall be conducted by the Surviving National Bank at its main office to
be located at 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, and at the
legally established offices of the Bank prior to the Merger.
1.2. CHARTER AND BYLAWS. The Articles of Association of Bank as in
effect immediately prior to the Effective Date (in the form attached hereto as
Exhibit "A" and by this reference incorporated herein) shall, at and after the
Effective Date, be the Articles of Association of the Surviving National Bank,
without change or amendment (until amended or repealed as provided by law) and
the Bylaws of Subsidiary as in effect immediately prior to the Effective Date
shall, at and after the Effective Date, be the Bylaws of the Surviving National
Bank, without change or amendment (until amended or repealed as provided by
law).
1.3. OFFICERS AND DIRECTORS. On and after the Effective Date, the
directors and officers of Bank immediately prior to the Effective Date shall be
the directors and officers of the Surviving National Bank. Directors of the
Surviving National Bank shall serve until the next annual meeting of
shareholders of the Surviving National Bank and until such time as their
successors are elected and have qualified.
1.4. CAPITAL. The amount of capital stock of the Surviving National
Bank shall not be less than $1,504,753, divided into not less than 2,407,065
shares of common stock, each of $0.625 par value, and at the Effective Date of
the Merger, the Surviving National Bank shall have a surplus of not less than
$3,856,000, and undivided profits, including capital reserves, which when
combined with the capital and surplus will be equal to the combined capital
structures of Bank and Subsidiary, adjusted however, for normal earnings and
expenses and issuances of additional shares of Bank common stock between the
date hereof and the Effective Date of the Merger as well as any reduction in
capital approved by the Comptroller of the Currency.
1.5. RIGHTS AND PRIVILEGES. On and after the Effective Date, all the
rights, privileges, powers, franchises, facilities and immunities, as well as
all the properties, real, personal and mixed, tangible and intangible, of Bank
shall continue unaffected and unimpaired by the Merger. On and after the
Effective Date, the Surviving National Bank shall without further transfer,
possess all of the rights, privileges, powers, franchises, facilities, and
immunities, as well as all the properties, real, personal and mixed, tangible
and intangible, of Bank and Subsidiary.
1.6. ASSUMPTION OF LIABILITIES. On and after the Effective Date, the
Surviving National Bank shall succeed to and be liable for all debts,
liabilities and other obligations, known or unknown,
contingent or otherwise, of Subsidiary and Bank, of any nature whatsoever,
existing on the Effective Date or attributable to the operations of Subsidiary
or Bank as though the Surviving National Bank had incurred them.
1.7. FURTHER COOPERATION. If at any time after the Effective Date any
further conveyance, assignment or other documents, or any further action is
necessary or desirable to further effectuate the transactions set forth herein
or contemplated hereby, the officers and director of the parties hereto shall
execute and deliver, or cause to be executed and delivered, all such documents
as may be reasonably required to effectuate such transactions.
1.8. OFFICES. Upon the Effective Date, all offices of Bank shall be
offices of the Surviving National Bank and the principal office of Bank shall be
the principal office of the Surviving National Bank.
1.9. SUBSIDIARY. Prior to the Effective Date, Holding Company will
take all necessary action to cause (i) Subsidiary to be organized, (ii)
Subsidiary to become a direct wholly owned subsidiary of Holding Company, (iii)
the directors and the shareholder of Subsidiary to approve the transactions
contemplated by this Agreement, (iv) Subsidiary to execute one or more
counterparts to this Agreement and to deliver at least one such counterpart so
executed to Holding Company, whereupon Subsidiary shall become a party to and be
bound by this Agreement and (v) Subsidiary to take all necessary action to
complete the transactions contemplated by this Agreement.
ARTICLE II
CAPITAL STOCK
2.1. STOCK OF SUBSIDIARY. The shares of common stock of Subsidiary
issued and outstanding immediately prior to the Effective Date shall he
converted into a number of shares of common stock of Surviving National Bank
equal to the number of shares of common stock of the Bank outstanding
immediately prior to the Effective Date.
2.2. STOCK OF BANK. Subject to the provisions of Section 2.6 hereof,
each share of common stock of Bank issued and outstanding immediately prior to
the Effective Date shall be converted into one share of common stock of Holding
Company.
2.3. EXCHANGE OF HOLDING COMPANY STOCK FOR BANK STOCK. On the
Effective Date, each Bank shareholder of record at that date shall be entitled
to receive one share of common stock of Holding Company for each share of common
stock of Bank held on that date and Holding Company shall issue that number of
shares which shareholders are entitled to receive. On and after the Effective
Date, certificates representing the issued and outstanding common stock of Bank
shall thereafter represent shares of common stock of Holding Company, and such
certificates shall be exchanged by the holders thereof, after the Merger becomes
effective, for new certificates for the appropriate number of shares bearing the
name of Holding Company. On and after the Effective Date, there shall be no
registration of transfers on the stock transfer books of Bank of shares of Bank
which were outstanding immediately prior to the Effective Date.
2.4. RIGHTS TO STOCK OPTIONS. On and after the Effective Date, all
outstanding options to purchase shares of common stock of Bank granted pursuant
to Bank's Stock Option Plans shall be assumed by and shall be deemed options to
purchase shares of common stock of Holding Company on the same terms and
conditions, subject to the requirements of the Securities Act of 1933, as
amended, and the California Blue Sky Law, and for the same number of shares as
have been agreed upon and set forth in Bank's Stock Option Plans and stock
option agreements entered into pursuant thereto.
2.5. EMPLOYEE BENEFIT PLANS. On and after the Effective Date, each
share of common stock of Bank held in trust or otherwise in connection with any
and all of Bank's employee benefit plans, shall be converted into one share of
common stock of Holding Company. Such plans and the Bank's obligations
thereunder shall be assumed by the Holding Company at the Effective Date and
shall be subject to the same terms and conditions as existed prior to the
Effective Date, subject to the requirements or the Securities Act of 1933, as
amended, and the California Blue Sky Law.
2.6 DISSENTING SHARES. Holders of shares of Bank common stock shall
have dissenters rights in connection with the Merger pursuant to the provisions
of 12 USC 215a(b).
ARTICLE III
EFFECTIVE DATE
3.1. EFFECTIVE DATE. This Agreement shall become effective at the date
and time specified in a merger approval issued by the Office of the Comptroller
of the Currency. Such date shall be the "Effective Date" of the Merger.
ARTICLE IV
APPROVALS
4.1. SHAREHOLDER APPROVAL. This Agreement shall be submitted to the
shareholders of Bank, Subsidiary and Holding Company for approval and
ratification, as provided by the applicable laws of the United States and
Delaware and in accordance with other applicable law. The approval of this
Agreement by the Bank's shareholders shall be deemed to include approval of such
changes to this Agreement, if any, as may be required from time to time by any
bank regulatory agency or department.
4.2 REGULATORY APPROVALS. The parties hereto agree that each shall
proceed to and cooperate fully to obtain the regulatory approvals and consents
and to satisfy the requirements prescribed by applicable law and/or regulation
or which are otherwise necessary or desirable in connection with the completion
of the Merger as outlined herein. Such regulatory approvals, consents and
requirements shall include, but shall not be limited to the approvals and
consents set forth in Article V herein.
ARTICLE V
CONDITIONS PRECEDENT
5.1. CONDITIONS PRECEDENT TO THE MERGER. The Merger is subject to and
conditioned upon the following:
(a) Approval and ratification of this Agreement by the holders of not
less than two-thirds of the outstanding shares of Bank, Subsidiary and Holding
Company as required by applicable law;
(b) Receipt of all other approvals and consents, and satisfaction of
all other requirements as are prescribed by applicable law in connection with
the Merger including, but not limited to, approval of the Office of the
Comptroller of the Currency and notice to the Board of Governors of the Federal
Reserve System pursuant to the Bank Holding Company Act of 1956, as amended and
Section 225.17 of Regulation Y promulgated pursuant thereto;
(c) Listing of the shares of Holding Company on the Nasdaq National
Market;
(d) Issuance (unless the same is waived by the parties hereto) of a
favorable opinion from a law firm or accounting firm, in form and substance
satisfactory to the parties and their counsel, with respect to the tax
consequences to the parties and their shareholders resulting from the Merger;
and
(e) Performance by each party hereto of all its obligations under this
Agreement.
ARTICLE VI
TERMINATION
6.1. The Agreement may be terminated at any time upon the occurrence of
any of the following events:
(a) If any of the conditions set forth in Article V are not fulfilled
within a reasonable period of time, such reasonable period of time to be
determined by a majority of the Board of Directors of any of the parties, in
their sole and absolute discretion; or
(b) If any action, suit, proceeding or claim has been instituted, made
or threatened, relating to the proposed Merger which makes consummation of the
Merger inadvisable in the opinion of a majority of the Board of Directors of any
of the parties; or
(c) If for any reason consummation of the Merger is inadvisable in the
opinion of a majority of the Board of Directors of any of the parties.
Upon termination, this Agreement shall be void and of no further effect,
and there shall be no liability by reason of this Agreement or the termination
thereof on the part of the parties hereto or their respective directors,
officers, employees, agents or shareholders.
ARTICLE VII
EXPENSES
7.1 EXPENSES OF THE MERGER. All of the expenses of the Merger,
including filing fees, printing and mailing costs, and accountants' fees and
legal fees shall be borne by Surviving National Bank or the Holding Company, as
applicable. In the event that the Merger is abandoned or terminated for any
reason, all expenses shall be borne by Bank.
ARTICLE VIII
AMENDMENT, MODIFICATION, ETC.
8.1 AMENDMENT, MODIFICATION, ETC. Bank, Subsidiary and Holding
Company, by mutual consent of their respective Boards of Directors, to the
extent permitted by law, may amend, modify, supplement and interpret this
Agreement in such manner as may be mutually agreed upon by them in writing at
any time before or after adoption thereof by shareholders of Bank, Subsidiary
and Holding Company; provided, however, that no such amendment, modification or
supplement shall change any principal term hereof or the number or kind of
shares to be issued by Holding Company in exchange for each share of Bank,
except (i) by the affirmative action of such shareholders as required by law or
(ii) the initial approval of this Agreement by the Bank's shareholders shall be
deemed to include approval of such changes to this Agreement, if any, as may be
required from time to time by any bank regulatory agency or department.
8.2 COUNTERPARTS. This Agreement may be executed in one or more
counterparts.
8.3 GOVERNING LAWS. This Agreement shall be governed by and construed
in accordance with the laws of the United States.
IN WITNESS WHEREOF. the parties hereto have caused this Amended and Restated
Agreement to be executed in counterparts by their duly authorized officers as of
the date first above written, pursuant to a resolution of its board of
directors, acting by a majority.
FALLBROOK NATIONAL BANK
By /S/ Xxxxxx X. Xxxxxxx
---------------------
President and Chief Executive Officer
ATTEST:
By /S/ L. Xxxxx Xxxxx, Jr.
-----------------------
Cashier
COMMUNITY BANCORP INC.
By /S/ Xxxxxx X. Xxxxxxx
---------------------
President and Chief Executive Officer
ATTEST:
By /S/ L. Xxxxx Xxxxx, Jr.
-----------------------
Secretary
FALLBROOK INTERIM NATIONAL BANK
By /S/ Xxxxxx X. Xxxxxxx
---------------------
President and Chief Executive Officer
ATTEST:
By /S/ L. Xxxxx Xxxxx, Jr.
-----------------------
Cashier
