Exhibit 2
AGREEMENT APPENDIX I
AND
PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement"), is made and entered into
as of the 22nd day of August, 2002, by and between ALLEGHENY BANCSHARES, INC., a
West Virginia corporation ("Holding Company"), and ▇▇▇▇▇▇▇▇▇ COUNTY BANK, a West
Virginia banking corporation ("Bank"), to be joined in by ▇▇▇▇▇▇▇▇▇ INTERIM
BANK, INC., a West Virginia banking corporation.
W I T N E S S E T H:
RECITALS
WHEREAS, the parties hereto have agreed that subject to the necessary
approval by the shareholders of the Bank, and subject to obtaining all necessary
approvals as hereinafter provided, Holding Company shall acquire all of the
outstanding stock of the Bank pursuant to a plan of reorganization which
satisfies the requirements of Internal Revenue Code Section 368(a)(1)(A) and
Section 368(a)(2)(E); and
WHEREAS, it has been determined that the "Interim Bank Method" will be
used to implement such plan of reorganization; and
WHEREAS, in furtherance thereof, Holding Company has been formed as a West
Virginia corporation; and
1
WHEREAS, Holding Company will cause a new state banking corporation to be
chartered under the laws of West Virginia under the name ▇▇▇▇▇▇▇▇▇ Interim Bank,
Inc. ("Interim Bank"); and
WHEREAS, the Interim Bank will merge with and into the Bank pursuant to
this Agreement; and
WHEREAS, the Board of Directors of the Bank, by a majority vote of all of
the members thereof, has approved this Agreement and has authorized the
execution hereof in counterparts; and
WHEREAS, the Board of Directors of Holding Company, by a majority vote of
all of the members thereof, has approved this Agreement and has authorized the
execution hereof in counterparts.
AGREEMENT
Now, therefore, for and in consideration of the premises and the mutual
agreements hereinafter set forth, and in accordance with the provisions of
applicable law, the parties agree as follows:
SECTION 1
THE MERGER
1.1 The Merger. On the Effective Date (as defined in Section 7.3), Interim
Bank shall merge with and into the Bank (the "Merger"), under the charter of the
Bank. The Bank shall be the surviving bank (hereinafter sometimes called the
"Surviving Bank").
1.2 Effects of Merger. On the Effective Date, the corporate organization
and separate existence of Interim Bank shall cease and the Bank as the Surviving
Bank shall succeed to all the rights, assets, liabilities and obligations of
Interim Bank in accordance with the West
2
Virginia Corporation Act. The Bank as the Surviving Bank shall continue to be
governed by the laws of the State of West Virginia.
SECTION 2
ARTICLES OF INCORPORATION; BYLAWS;
BOARD OF DIRECTORS AND OFFICERS
2.1 Articles of Incorporation. From and after the Effective Date, the
Articles of Incorporation of the Bank, as the same may be amended from time to
time as provided by law, shall be the Articles of Incorporation of the Surviving
Bank.
2.2 Bylaws. The Bylaws of the Bank as in effect on the Effective Date
shall continue as the Bylaws of the Surviving Bank until the same shall
thereafter be altered, amended or repealed in accordance with the law, its
Articles of Incorporation, or said Bylaws.
2.3 Directors and Officers. The directors and officers of the Bank on the
Effective Date shall continue as the directors and officers of the Surviving
Bank and shall hold office as prescribed in the Bylaws of the Surviving Bank and
applicable law until their successors shall have been elected and shall qualify.
SECTION 3
CONVERSION OF SHARES
3.1 Conversion of Shares. On the Effective Date:
(a) Each share of common stock of the Bank ("Bank Common Stock")
then issued and outstanding, excluding any shares as to which dissenter's rights
are exercised pursuant to the requirements of W. Va. Code Sections 31-1-122 and
123, which shares shall be canceled, shall automatically be converted into and
be exchanged for one (1) share of common stock of Holding Company.
3
(b) From and after the Effective Date, the holders of the
certificates representing Bank Common Stock shall cease to have any rights with
respect to such shares (except such rights as they may have as dissenting
shareholders in accordance with W. Va. Code Sections 31-1-122 and 123), and
their sole right shall be to receive common stock of Holding Company, as herein
provided.
3.2 Closing of Stock Transfer Books. On the Effective Date, the stock
transfer books of the Bank shall be deemed closed, and no shares of Bank Common
Stock outstanding immediately prior to the Effective Date shall thereafter be
transferred.
3.3 Exchange of Certificates. As soon as practicable after the Effective
Date, any certificates or the right to receive certificates representing the
outstanding shares of the Bank Common Stock shall be surrendered to Holding
Company or any agent designated by it and, upon such surrender, Holding Company
shall issue and deliver in substitution therefor, certificates representing the
number of shares of common stock of Holding Company into which such surrendered
shares have been converted as hereinabove provided. Certificates representing
shares of Bank Common Stock or the right to receive such certificates which are
not surrendered shall be deemed for all purposes to evidence the ownership of
the number of shares of common stock of Holding Company into which said shares
of Bank shall have been converted as hereinbefore set forth; provided, however,
that management of Holding Company may elect not to distribute to the holder of
an unsurrendered certificate for Bank Common Stock or right to receive such
certificate of dividends declared with respect to common stock of Holding
Company until such owner shall surrender such certificate or right to receive
such certificate, at which time the holder thereof shall be paid the amount of
any dividends previously declared with respect to the common stock without
interest.
4
SECTION 4
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE BANK
The Bank represents and warrants to and covenants with Holding Company and
Interim Bank that:
4.1 Corporate Organization and Qualification of The Bank. The Bank is duly
organized, validly existing and in good standing as a state banking corporation
under the laws of the State of West Virginia and has the corporate power to own
all of its properties and assets and to carry on its business as it is now being
conducted.
4.2 Authorization of Agreement. The Board of Directors of the Bank has
authorized the execution of this Agreement as set forth herein, and subject to
the approval of this Agreement by the shareholders of the Bank as provided in W.
Va. Code Section 31-1-117, the Bank has the corporate power and is duly
authorized to merge with Interim Bank pursuant to this Agreement.
4.3 Capitalization. The authorized capital stock of the Bank consists of
900,000 shares of common stock, par value of $1.00 per share, all of which
shares are issued and outstanding and are fully paid and nonassessable.
4.4 Proxy Statement. The information pertaining to the Bank which has been
or will be furnished by or on behalf of the Bank or its management for inclusion
in the proxy statement referred to in Section 9 or any amendment or supplement
thereto mailed to the holders of the common stock of the Bank will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they are made, not
misleading.
4.5 Additional Covenants. The Bank covenants and agrees:
5
(a) That it will promptly advise Holding Company in writing of the
name and address of, and number of shares of the Bank held by, each shareholder
who elects to exercise his right to dissent to the Merger pursuant to W. Va.
Code Sections 31-1-122 and 123; and
(b) Subsequent to the date of this Agreement and prior to the
Effective Date that it will operate its business only in the normal course and
in a normal manner consistent with past practice.
SECTION 5
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF HOLDING COMPANY
Holding Company represents and warrants to and covenants with the Bank
that:
5.1 Corporate Organization of Holding Company. Holding Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of West Virginia.
5.2 Corporate Power and Action. Holding Company has the corporate power to
execute and deliver this Agreement and has taken all action required by law, its
Articles of Incorporation, its Bylaws or otherwise to authorize such execution
and delivery, the Merger and the consummation of the transactions contemplated
hereby, and upon its execution and delivery, this Agreement is a valid and
binding agreement of Holding Company in accordance with its terms. No action of
Holding Company shareholders is or will be required to approve this Agreement or
the Merger.
5.3 Application for Interim Bank. Promptly following the execution of this
Agreement, Holding Company shall cause to be filed with the West Virginia Board
of Banking and Financial Institutions (the "Banking Board") an application to
organize and incorporate
6
Interim Bank as a West Virginia banking corporation, in accordance with the
provisions of W. Va. Code Section 31A-4-5, with all its capital stock owned by
Holding Company. Upon the approval of such application and the issuance of a
certificate of incorporation for Interim Bank by the Secretary of State of West
Virginia, Holding Company shall promptly cause Interim Bank to execute and enter
into a supplementary agreement in substantially the form attached as Exhibit A
to this Agreement and cause Interim Bank to take such action as it provided in
this Agreement on Interim Bank's part to be taken.
5.4 Approval of Merger of Interim Bank. Prior to the Effective Date,
Holding Company shall cause this Agreement to be submitted to the shareholder of
Interim Bank for approval, ratification and confirmation in accordance with the
applicable law of the State of West Virginia and the certificate of
incorporation and bylaws of Interim Bank. Holding Company shall vote all of the
stock of Interim Bank in favor of the approval, ratification and confirmation of
this Agreement and the Merger.
5.5 Regulatory Approvals. Prior to the Effective Date, Holding Company
separately and jointly with the Bank, shall use and cause Interim Bank to use
its best efforts in good faith to take or cause to be taken as promptly as
practicable all such steps as shall be necessary to obtain (i) the prior
approval of the Banking Board for the organization of the Interim Bank, for the
Merger and for Holding Company's acquisition of the shares of the Bank; (ii) the
prior approval of the Federal Deposit Insurance Corporation ("FDIC") for the
organization of Interim Bank and the Merger; (iii) the prior approval of the
Board of Governors of the Federal Reserve System ("FRB") under the Bank Holding
Company Act of 1956, as amended, for the formation of Holding Company as a
one-bank holding company owning 100% of the voting shares of the Bank, and (iv)
all other consents and approvals of governmental
7
agencies as are required by law or otherwise, and shall do any and all things
deemed by Holding Company and the Bank to be necessary or appropriate in order
to cause the Merger to be consummated on the terms provided herein.
5.6 Capitalization. The authorized capital stock of Holding Company
consists of 2,000,000 shares of common stock, par value of $1.00 per share, of
which 5,000 shares of common stock are issued and outstanding and are fully paid
and nonassessable.
5.7 Registration. To the extent required by law, Holding Company will
cause a Registration Statement (or other appropriate form) to be filed with and
declared effective by the Securities and Exchange Commission, appropriate
agencies regulating securities, and other governmental agencies having
jurisdiction. The information pertaining to Holding Company and Interim Bank
which will appear in any required Registration Statement will contain no untrue
statement of any material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading.
SECTION 6
NON-SURVIVAL
The representations and warranties included or provided herein shall not
survive the Effective Date.
8
SECTION 7
CONDITIONS PRECEDENT; CLOSING DATE AND EFFECTIVE DATE
7.1 Conditions Precedent. The consummation of this Agreement and the
Merger is conditioned upon the following:
(a) The shareholders of the Bank and Interim Bank shall have
approved this Agreement by vote as required by law and final approval of this
Agreement shall have taken place as provided in Section 9 hereof;
(b) The Banking Board shall have granted its final approval of the
incorporation of Interim Bank as a West Virginia banking corporation, the
Merger, and the acquisition of the Bank by Holding Company pursuant to this
Agreement;
(c) The Secretary of State of West Virginia shall have issued a
Certificate of Incorporation for Interim Bank;
(d) The FDIC shall have approved the formation of Interim Bank and
the Merger;
(e) The FRB shall have approved the application of Holding Company
to acquire the Bank pursuant to this Agreement;
(f) Any required Registration Statement shall have become effective
under the Securities Act of 1933. No stop order suspending the effectiveness of
such Registration Statement shall be in effect and no proceedings for such
purpose shall have been initiated or threatened by or before the Securities and
Exchange Commission. All state securities and "blue sky" permits or approvals
required (in the opinion of Holding Company) to carry out the transactions
contemplated by this Agreement shall have been received.
9
(g) All other consents, approvals and permissions and the
satisfaction of all the requirements prescribed by law which are necessary to
the carrying out of the transactions contemplated hereby shall have been
procured;
(h) All delay periods and all periods for review, objection or
appeal of or to any of the consents, approvals or permissions required with
respect to the consummation of the Merger and this Agreement shall have expired;
(i) The approvals referred to in subparagraphs (b) and (d) of this
section 7.1 shall not have required the divestiture or cessation of any
significant part of the present operations conducted by Holding Company, the
Bank, or any of their subsidiaries, and shall not have imposed any other
condition, which divestiture, cessation or condition which Holding Company or
the Bank reasonably deems to be materially disadvantageous or burdensome;
(j) Holding Company shall have received an opinion of its counsel,
▇▇▇▇▇▇▇ & ▇▇▇▇▇ PLLC, that if the Merger is consummated in accordance with the
terms of this Agreement (i) the Merger will constitute a reorganization in the
meaning of Section 368(a)(1)(A) and Section 368(a)(2)(E) of the Internal Revenue
Code of 1954, as amended, (ii) the Bank, Holding Company and Interim Bank will
each be a party to the reorganization within the meaning of 368(b) of the Code;
(iii) no gain or loss will be recognized to the Bank as a consequence of the
Merger; (iv) no gain or loss will be recognized by any Bank shareholder as a
result of the Merger except in respect of cash received in conjunction with the
perfection of dissenter's rights; (v) the basis of Holding Company common stock
received by Bank shareholders will be the same as the basis of their shares of
Bank Common Stock exchanged; and (vi) the holding period for any Bank
shareholder of the Holding Company common stock received in the Merger will
include
10
the period for which the shares of the Bank Common Stock was held, provided that
the Bank Common Stock was a capital asset in the hands of such Bank shareholder
on the Effective Date; and
(k) Unless waived by Holding Company, the holders of not more than
5% of the outstanding shares of the Bank Common Stock shall have elected to
exercise their statutory right to dissent from the transactions contemplated
hereby at the special meeting of Bank shareholders referred to in Section 9
hereof.
7.2 Closing Date. The closing shall be held at the Bank's offices in
Franklin, West Virginia, at such time and place as the Bank and Holding Company
shall agree. The time and date of closing are herein called the "Closing Date".
The Closing Date shall not be earlier than the 15th day following the date (the
"Approval Date") on which the approvals referred to in Section 5.5 shall have
been received, and shall not be later than the last day of the sixth calendar
month next succeeding the Approval Date. Holding Company shall cause the
Articles of Merger with respect to the Merger to be filed with the Secretary of
State of West Virginia as soon after the Closing Date as practicable.
7.3 Effective Date. The Merger shall become effective (the "Effective
Date") on the date on which the certificate of merger approving the Merger is
issued by the Secretary of State of West Virginia.
SECTION 8
TERMINATION OF AGREEMENT
8.1 Grounds for Termination. This Agreement and the transactions
contemplated hereby may be terminated at any time prior to the Closing Date
either before or after the meeting of the shareholders of the Bank:
11
(a) By mutual consent of the Bank and Holding Company;
(b) By Holding Company if there has been a material
misrepresentation or breach of warranty in the representations and warranties of
the Bank set forth herein, or by the Bank if there has been a material
misrepresentation or breach of warrant in the representations and warranties of
Holding Company or Interim Bank set forth herein; or
(c) By either the Bank or Holding Company if the Merger shall
violate any nonappealable final order, decree or judgment of any court or
governmental body having competent jurisdiction.
8.2 Effect of Termination; Right to Proceed. In the event this Agreement
shall be terminated pursuant to Section 8.1, all further obligations of Holding
Company and the Bank under this Agreement shall terminate without further
liability of Holding Company to the Bank or of the Bank to Holding Company.
SECTION 9
MEETING OF SHAREHOLDERS
OF THE BANK
The Bank shall take all steps necessary to call and hold a special meeting
of its shareholders, in accordance with applicable law and the Articles of
Incorporation and Bylaws of the Bank, as soon as practicable for the purpose of
submitting this Agreement to its shareholders for their consideration and
approval and will send to its shareholders for purposes of such meeting a proxy
statement, which as to information pertaining the Bank which has been furnished
by or on behalf of the Bank or its management, will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements contained therein, in light
of the circumstances under which they are made,
12
not misleading, and which otherwise complies with all applicable laws, rules and
regulations. Information pertaining to Holding Company or Interim Bank which has
been or will be furnished to the Bank by or on behalf of Holding Company or its
management for inclusion in such proxy statement will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements contained therein, in light
of the circumstances under which they are made, not misleading.
SECTION 10
REDEMPTION OF SHARES
Subsequent to the Effective Date, Holding Company will repurchase from
each of the initial directors of Holding Company those shares of the common
stock of Holding Company purchased by them, which shares represent the initial
capitalization of Holding Company, in an amount equal to the price paid per
share plus an amount equal to the interest, if any, paid by said directors on
funds borrowed to purchase such shares.
SECTION 11
GOVERNING LAW; SUCCESSORS AND ASSIGNS;
COUNTERPARTS; ENTIRE AGREEMENT
This Agreement (a) shall be governed by and construed under and in
accordance with the laws of the State of West Virginia; (b) shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that this Agreement may not be
assigned by any party without the written consent of the other parties hereto;
(c) may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective and binding as
to Holding Company and the Bank when one or more counterparts shall have been
signed and delivered by Holding Company
13
and the Bank, and shall become effective and binding as to Interim Bank when
Interim Bank receives its Certificate of Incorporation and its officers execute
the Supplemental Agreement; and (d) embodies the entire agreement and
understanding, and supersedes all prior agreements and understandings, between
the Bank and Holding Company relating to the subject matter hereof.
SECTION 12
EFFECT OF CAPTIONS
The captions in this Agreement are included for convenience only and shall
not in any way affect the interpretation or construction of any of the
provisions hereof.
SECTION 13
AMENDMENTS
This Agreement may be amended by the written agreement of Holding Company
and the Bank and without the approval of the shareholders of the Bank before or
after the meeting of Bank shareholders at any time prior to the Closing Date
with respect to any of the terms contained herein; provided, however, that after
any such shareholder approval, no amendment shall be made to and of this
Agreement, which substantially and adversely changes the terms of the particular
Agreement as to the Bank, Holding Company, or both, without obtaining the
further approval of the shareholders of the Bank. If this Agreement is amended
after the meeting of shareholders of the Bank provided for in Section 9 of this
Agreement, the number of shares of Holding Company common stock into which each
share of common stock of the Bank shall be converted in the Merger shall not be
amended after such meeting of Bank shareholders.
14
SECTION 14
EXPENSES
Each of the parties hereto agrees to pay, without a right of reimbursement
from the other party and whether or not the transactions contemplated by this
Agreement shall be consummated, the costs incurred by it incident to the
performance of its obligations under this Agreement and to the consummation of
the Merger and of the other transactions contemplated herein, including the fees
and disbursements of counsel, accountants and consultants employed by such party
in connection therewith.
SECTION 15
AGREEMENT TO TAKE NECESSARY AND DESIRABLE ACTIONS
The Bank, Holding Company and Interim Bank each agree to execute and
deliver such other documents, certificates and other writings and to take such
other actions as may be necessary or desirable in order to consummate or
implement expeditiously the transactions contemplated by this Agreement.
15
IN WITNESS WHEREOF, Holding Company and the Bank have each caused this
Agreement to be executed on its behalf by its officers thereunto duly authorized
all as of the day and year first above written.
ALLEGHENY BANCSHARES, INC.
Seal: By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------------
Its Executive Vice President and
Chief Executive Officer
----------------------------------
Attest:
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Secretary
▇▇▇▇▇▇▇▇▇ COUNTY BANK
Seal: By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------------
Its Executive Vice President and
Chief Executive Officer
----------------------------------
Attest:
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Secretary/Cashier
16
EXHIBIT A
SUPPLEMENTARY AGREEMENT
THIS SUPPLEMENTARY AGREEMENT, made and entered into as of this 19th day
of December, 2002, by and among ▇▇▇▇▇▇▇▇▇ INTERIM BANK, INC., a West Virginia
banking corporation, ("Interim Bank"), ▇▇▇▇▇▇▇▇▇ COUNTY BANK, a West Virginia
banking corporation, (the "Bank"), and ALLEGHENY BANCSHARES, INC., a West
Virginia corporation, ("Holding Company").
R E C I T A L S
WHEREAS, the Bank and Holding Company have entered into an Agreement and
Plan of Merger dated as of August 22, 2002, (the "Agreement"), a copy of which
is attached hereto and by this reference incorporated herein and made a part
hereof; and
WHEREAS, it is provided in Section 5.3 of the Agreement that upon issuance
of the Certificate of Incorporation for Interim Bank by the Secretary of State
of the State of West Virginia, Holding Company shall cause Interim Bank to
execute and enter into a Supplementary Agreement so as to cause Interim Bank to
be bound by the applicable terms and provisions of the Agreement; and
WHEREAS, the Certificate of Incorporation for Interim Bank was issued on
December 13, 2002, and Interim Bank and Holding Company are entering into this
Supplementary Agreement pursuant to Section 5.3 of the Agreement.
17
NOW, THEREFORE, THIS AGREEMENT WITNESSETH: That for and in consideration
of the premises and the mutual agreements of the parties, it is hereby agreed as
follows:
(1) Interim Bank hereby joins in and agrees to be bound by the terms and
conditions of the Agreement applicable to it, to the same extent as if Interim
Bank were an original party thereto.
(2) Interim Bank agrees that it shall use its best efforts in good faith
to take or cause to be taken as promptly as practicable all action on its part
to be taken so as to permit the consummation of the Agreement and the Merger (as
defined in the Agreement) at the earliest possible date and that it shall
cooperate fully with Holding Company and the Bank to that end.
(3) Interim Bank represents and warrants to the Bank and Holding Company
as follows:
(a) Interim Bank is a state banking corporation duly organized,
validly existing and in good standing of the laws of the State
of West Virginia; and
(b) Interim Bank has the corporate power to execute and deliver
this Supplementary Agreement and has taken all action as
required by law, its Articles of Incorporation, its Bylaws or
otherwise to authorize such execution and delivery, said
Merger and the consummation of the transaction as contemplated
by the Agreement, and this Supplementary Agreement is a valid
and binding agreement of Interim Bank.
18
IN WITNESS WHEREOF, the parties have caused this Supplementary Agreement
to be executed by their officers thereunto duly authorized as of the date and
year first above written.
▇▇▇▇▇▇▇▇▇ INTERIM BANK, INC.
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------------
Its Executive Vice President and
Chief Executive Officer
-----------------------------
▇▇▇▇▇▇▇▇▇ COUNTY BANK
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------------
Its Executive Vice President and
Chief Executive Officer
-----------------------------
ALLEGHENY BANCSHARES, INC.
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------------
Its Executive Vice President and
Chief Executive Officer
-----------------------------
19
