AGREEMENT AND PLAN OF BANK MERGER OF FNB SOUTHEAST INTO LEXINGTON STATE BANK
AGREEMENT
AND
PLAN OF BANK MERGER
OF
FNB
SOUTHEAST
INTO
LEXINGTON
STATE BANK
This
AGREEMENT AND PLAN OF BANK MERGER (the “Bank Agreement”) is made and entered
into as of this 26th
day of
February, 2007 to effect the merger (the “Bank Merger”) of FNB SOUTHEAST with
and into LEXINGTON STATE BANK. The
terms
and conditions of the Bank Merger shall be as follows:
ARTICLE
I
CORPORATE
PARTICIPANTS IN THE BANK MERGER
1.1 In
General.
The
name
of the entity planning to merge is FNB Southeast (“FNB Bank”), a North Carolina
chartered commercial
bank having its principal place of business at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇.
The
name of the entity into which FNB Bank plans to merge is Lexington State Bank
(“LSB Bank” or the “Surviving Bank”), a North Carolina chartered commercial bank
having its principal
place of business
at ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
ARTICLE
II
TERMS
AND CONDITIONS OF THE BANK MERGER
2.1 In
General.
Subject
to the terms and conditions of this Bank Agreement, at the Effective Time
(as defined
herein),
FNB Bank shall be merged with and into LSB Bank (together, the “Merging
Institutions”) pursuant to the provisions
of, and with the effect provided under, Sections 53-12 and 53-13 of the North
Carolina General Statutes.
2.2 Effect
of Bank Merger.
At the
Effective Time, the separate existence of FNB Bank shall cease and LSB Bank,
as
the
surviving entity, shall continue unaffected and unimpaired by the Bank Merger,
except as otherwise provided in this Bank Agreement.
2.3 Headquarters
of the Surviving Bank.
From
and after the Effective Time until otherwise determined by the Board of
Directors of the Surviving Bank, the headquarters and principal executive
offices of the Surviving Bank shall be located in Greensboro, North
Carolina.
2.4 Name
and Business of the Surviving Bank.
The
business of the Surviving Bank shall be that of a North Carolina
chartered commercial bank and shall be conducted at the headquarters of the
Surviving Bank and at its legally established branches, including those branches
of FNB Bank acquired as a result of the Bank Merger. Articles
of Amendment shall be
filed
with the North Carolina Secretary of State changing
the name of the Surviving Bank to a name to be mutually agreed by the parties
(the “New Name”). Following
the Effective Time,
the
Surviving Bank shall operate all
of
the branch offices of FNB Bank and LSB Bank as branch offices under the New
Name.
ARTICLE
III
EFFECTIVE
TIME
3.1 Effective
Time of Bank Merger.
The
Bank Merger shall become effective on the date and at the time specified in
the
Articles of Merger, which shall contain this Bank Agreement, together with
a
certified copy of the approval of the Bank
Merger by the North Carolina Commissioner of Banks, filed with the North
Carolina Secretary of State as
required under Section 53-13 of the North Carolina General Statutes (the
“Effective Time”).
3.2 As
of
the
Effective Time.
As
of
the
Effective Time:
(a) The
corporate existence of each of the Merging Institutions shall be merged into
and
continue in the Surviving
Bank.
(b) All
assets, rights, franchises and interests of the Merging Institutions in and
to
every type of property (real,
personal and mixed) and choses
in
action shall be transferred to and vested in the Surviving Bank by virtue
of
the
Bank Merger without any deed or other transfer. The Surviving Bank, upon the
Bank Merger and without any order or
other
action on the part of any court or otherwise, shall hold and enjoy all rights
of
property, franchises and interest,
including appointments, designations and nominations, and all other rights
and
interests as trustee, executor, administrator, registrar of stocks and bonds,
guardian of estates, assignee and receiver, and in every other fiduciary
capacity,
in the same manner and to the same extent as such rights, franchises and
interests were held or enjoyed by each
of
the Merging Institutions at the time of the Bank Merger.
(c) The
Surviving Bank shall be liable for all liabilities of every kind and description
of the Merging Institutions,
including liabilities arising out of the operation of the trust department
of
each of the Merging Institutions,
existing immediately prior to the Effective Time, to the extent provided by
law.
ARTICLE
IV
CONVERSION
OF SHARES
4.1 Capital
Stock of FNB Bank. As
of the
date hereof, the authorized capital stock of FNB Bank consists
of SEVEN HUNDRED FORTY TWO THOUSAND FIVE HUNDRED (742,500)
shares
of common
stock, par value ONE DOLLAR ($1.00) per share. All of the issued and outstanding
capital stock of FNB Bank is owned by FNB Financial Services Corporation, a
North Carolina corporation, also having its principal place of business at
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
(“FNB”).
As of the Effective Time, each outstanding share of the capital stock of FNB
Bank shall be cancelled and retired with no consideration to
be
issued or paid in exchange therefor.
4.2 Capital
Stock of LSB Bank. As
of the
date hereof, the authorized capital stock of LSB Bank consists of FIVE MILLION
(5,000,000) shares of common stock,
par value FIVE DOLLARS ($5.00) per share. All of the issued and outstanding
capital stock of LSB Bank is
2
owned
by
LSB Bancshares, Inc., a North Carolina corporation, also having its principal
place of business at ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(“LSB”).
As of
the Effective Time, each outstanding share of the capital stock of LSB Bank
shall remain
outstanding as a share of common stock of the Surviving Bank.
ARTICLE
V
OFFICERS
AND DIRECTORS OF THE SURVIVING BANK
5.1 Management. At
the
Effective Time, ▇▇▇▇▇▇ ▇. ▇▇▇▇ shall be Chairman of the Board of Directors
and
Chairman of the Executive Committee of the Board of Directors of the Surviving
Bank. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall be Vice Chairman of the Board of Directors of the
Surviving Bank, and Vice Chairman of the Executive Committee of the Board.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall be President and Chief Executive Officer of the
Surviving Bank and a member of the Executive Committee of the Board of Directors
of the Surviving Bank. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall be an Executive Vice President
and Chief Financial Officer of the Surviving Bank.
5.2 Board
of Directors.
(a) From
and
after the Effective Time, until duly changed in compliance with applicable
law,
the Articles of Incorporation and Bylaws of the Surviving Bank, the Board of
Directors of the Surviving Bank shall consist of up to twenty (20) directors,
and shall initially include ▇▇. ▇▇▇▇, ▇▇. ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇ and an equal
number, inclusive of ▇▇. ▇▇▇▇, ▇▇. ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇, of FNB Bank Directors
and LSB Bank Directors (each as defined below). The initial FNB Bank Directors
shall be selected by FNB’s Board of Directors and the initial LSB Bank Directors
shall be selected by LSB’s Board of Directors. Subject to Section 5.2, from and
after the Effective Time and until the second annual meeting of the Surviving
Bank following the 2007 annual meeting, all vacancies on the Board of Directors
of the Surviving Bank created by (i) the cessation of service of a FNB Bank
Director shall be filled by a nominee selected by the continuing FNB Bank
Directors and (ii) the cessation of service of a LSB Bank Director shall be
filled by a nominee selected by the continuing LSB Bank Directors.
(b) Subject
to Section 5.2, from and after the Effective Time until the second annual
meeting of the Surviving Bank following the 2007 annual meeting, each of the
committees of the Board of Directors of the Surviving Bank shall be comprised
of
an equal number of FNB Bank Directors and LSB Bank Directors, the identity
of
the members of such committees to be otherwise mutually determined by ▇▇. ▇▇▇▇
and ▇▇. ▇▇▇▇▇▇; provided, however, that ▇▇. ▇▇▇▇, ▇▇. ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇
shall serve on the Executive Committees of the Board of Directors of the
Surviving Bank during such period, ▇▇. ▇▇▇▇ shall serve as the Chairman of
the
Executive Committee, and ▇▇. ▇▇▇▇▇▇ shall serve as Vice Chair of the Executive
Committee. In the event ▇▇. ▇▇▇▇, ▇▇. ▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇ shall cease to
be a
director of the Surviving Bank during such two year period or unable to assume
or continue in the designated positions during such periods, as applicable,
(i)
an LSB Bank Director selected by the LSB Bank Directors shall succeed ▇▇. ▇▇▇▇
for the remainder of such period as Chairman of the Board of Directors and
Chair
of the Executive Committee of the Surviving Bank, and (ii) an FNB Bank Director
selected by the FNB Bank Directors shall succeed ▇▇. ▇▇▇▇▇▇ for the remainder
of
such period as Vice Chair of the Board of Directors and the Executive Committee
of the Surviving Bank or ▇▇. ▇▇▇▇▇▇▇ for the remainder of such period as a
member of the Executive Committee of the Board of Directors of the Surviving
Bank.
3
(c) The
term
“FNB Bank Director” means (i) any person serving as a director of FNB Bank on
the date of this Agreement who continues as a director of the Surviving Bank
at
the Effective Time and (ii) any person who becomes a director of the Surviving
Bank and who is designated as such by the continuing FNB Bank Directors prior
to
his or her election; and the term “LSB Bank Director” means (i) any person
serving as a director of LSB Bank on the date of this Agreement who becomes
a
director of the Surviving Bank at the Effective Time and (ii) any person who
becomes a director of the Surviving Bank and who is designated as such by the
continuing LSB Bank Directors prior to his or her election.
ARTICLE
VI
ARTICLES
OF INCORPORATION AND BYLAWS
OF THE SURVIVING BANK
6.1 Charter. Subject
to the terms and conditions of this Bank Agreement, at the Effective Time,
the
Articles of Incorporation, as amended, of LSB Bank, with such amendments as
to
which the parties may hereafter agree to submit to LSB Bank’s shareholder,
including, without limitation, amendments to change the corporate name of LSB
Bank and which may be properly approved by LSB Bank’s Board of Directors and by
the sole shareholder (the “Charter”), shall be the Charter of the Surviving Bank
until thereafter amended in accordance with applicable law.
6.2 By-Laws. Subject
to the terms and conditions of this Bank Agreement, at the Effective Time,
the
Bylaws of LSB Bank shall be the Bylaws of the Surviving Bank until thereafter
amended in accordance with applicable law; provided, however, that the Bylaws
shall be amended as of the Effective Time to reflect the amendments to the
Charter described in Section 6.1.
ARTICLE
VII
GENERAL
PROVISIONS
7.1 Entire
Agreement.
This
Bank Agreement, along with the Agreement and Plan of Merger by and between
FNB
Financial Services Corporation and LSB Bancshares, Inc., also dated February
26,
2007, contains the entire agreement between the parties with respect to
the
transaction contemplated hereunder and supersedes any and all prior arrangements
or understandings with respect thereto. This Bank Agreement shall inure to
the
benefit of and be binding upon the parties hereto and their respective
successors
and assigns.
7.2 Amendment.
At any
time before the Effective Time, the Merging Institutions, by mutual consent
of
their respective
Boards of Directors, may amend this Bank Agreement.
7.3 Termination.
At any
time before the Effective Time, this Bank Agreement may be terminated
by
mutual
consent of the Boards of Directors of the Merging Institutions,
notwithstanding any
prior
shareholder vote for approval.
4
7.4 Shareholder
Vote.
This
Bank Agreement shall be subject to the approval, ratification and confirmation
by the affirmative
vote of the shareholder of each of the Merging Institutions.
7.5 Applicable
Law.
This
Bank Agreement shall be governed by the laws of the State of North
Carolina.
7.6 Headings.
The
headings contained in this Bank Agreement are for reference purposes only and
are not part of
this
Bank Agreement.
7.7 Counterparts.
This
Bank Agreement may be executed in several counterparts, each of which shall
be
deemed an
original, but all of which together shall constitute one and the same
instrument.
Remainder
of Page Intentionally Left Blank
5
IN
WITNESS WHEREOF, each of the parties has caused this Bank Agreement to be duly
executed UNDER
SEAL on its behalf all as of the day and year first above written.
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FNB
FINANCIAL SERVICES CORPORATION
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By:
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Name:
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▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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Title:
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President
and Chief Executive Officer
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ATTEST:
_________________________________
_______________,
Secretary
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FNB
SOUTHEAST
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By:
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Name:
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▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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Title:
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President
and Chief Executive Officer
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ATTEST:
_________________________________
_______________,
Secretary
6
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LSB
BANCSHARES, INC
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By:
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Name:
|
▇▇▇▇▇▇
▇. ▇▇▇▇
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Title:
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Chairman,
President
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and
Chief Executive Officer
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ATTEST:
_________________________________
_______________,
Secretary
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LEXINGTON
STATE BANK
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By:
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Name:
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▇▇▇▇▇▇
▇. ▇▇▇▇
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Title:
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Chairman,
President
|
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and
Chief Executive Officer
|
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ATTEST:
_________________________________
_______________,
Secretary
7