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Title: |
Merger Agreement |
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Entities: |
1st State Bancorp, Inc.; Capital Bank Corp.; State Bancorp, Inc. |
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Date: |
2005 |
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Size: |
Preview shows 14KB of 320KB total |
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Price: |
$99 |
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ID: |
#806038 |
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TABLE OF CONTENTS
PAGE
----
ARTICLE I -- DEFINED TERMS .................................................. 1
1.1. DEFINITIONS ....................................................... 1
ARTICLE II -- THE MERGER; CONVERSION AND EXCHANGE OF COMPANY SHARES ......... 10
2.1. THE MERGER ........................................................ 10
2.2 COMPANY SHARES .................................................... 11
2.3 MERGER CONSIDERATION .............................................. 11
2.4 ELECTION AND ALLOCATION PROCEDURES ................................ 13
2.5 EXCHANGE PROCEDURES ............................................... 15
2.6 AVERAGE CLOSING PRICE ADJUSTMENT .................................. 15
2.7 COMPANY STOCK OPTIONS ............................................. 16
2.8 LIQUIDATION ACCOUNT ............................................... 16
ARTICLE III -- THE CLOSING .................................................. 16
3.1 CLOSING ........................................................... 16
3.2 DELIVERIES BY THE COMPANY ......................................... 17
3.3 DELIVERIES BY THE BUYER ........................................... 17
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY .................... 17
4.1 ORGANIZATION, STANDING AND POWER .................................. 17
4.2 AUTHORITY; NO CONFLICTS ........................................... 18
4.3 CAPITAL STOCK; SUBSIDIARIES ....................................... 18
4.4 SEC FILINGS; COMPANY FINANCIAL STATEMENTS ......................... 19
4.5 ABSENCE OF UNDISCLOSED LIABILITIES ................................ 21
4.6 ABSENCE OF CERTAIN CHANGES OR EVENTS .............................. 21
4.7 TAX MATTERS ....................................................... 22
4.8 ASSETS ............................................................ 23
4.9 SECURITIES PORTFOLIO AND INVESTMENTS .............................. 23
4.10 ENVIRONMENTAL MATTERS ............................................. 23
4.11 COMPLIANCE WITH LAWS .............................................. 24
4.12 LABOR RELATIONS ................................................... 25
4.13 EMPLOYEE BENEFIT PLANS ............................................ 25
4.14 MATERIAL CONTRACTS ................................................ 27
4.15 LEGAL PROCEEDINGS ................................................. 27
4.16 REPORTS ........................................................... 27
4.17 REGISTRATION STATEMENT; JOINT PROXY STATEMENT ..................... 28
4.18 ACCOUNTING, TAX, AND REGULATORY MATTERS ........................... 28
4.19 STATE TAKEOVER LAWS ............................................... 28
4.20 CHARTER PROVISIONS ................................................ 28
4.21 RECORDS ........................................................... 29
4.22 DERIVATIVES ....................................................... 29
4.23 CERTAIN REGULATED BUSINESSES ...................................... 29
4.24 LOANS; ALLOWANCE FOR LOAN LOSSES .................................. 29
4.25 REPURCHASE AGREEMENTS; DERIVATIVES ................................ 30
4.26 DEPOSIT ACCOUNTS .................................................. 30
4.27 PERMISSIBLE ACTIVITIES ............................................ 30
4.28 RELATED PARTY TRANSACTIONS ........................................ 30
4.29 COMMISSIONS ....................................................... 30
4.30 VOTING AGREEMENTS ................................................. 31
4.31 OPINION OF FINANCIAL ADVISOR ...................................... 31
ARTICLE V -- REPRESENTATIONS AND WARRANTIES OF THE BUYER .................... 31
i
{PAGE}
5.1 ORGANIZATION, STANDING AND POWER .................................. 31
5.2 AUTHORITY; NO CONFLICTS ........................................... 32
5.3 BUYER'S STOCK; SUBSIDIARIES ....................................... 32
5.4 SEC FILINGS; BUYER FINANCIAL STATEMENTS ........................... 33
5.5 ABSENCE OF UNDISCLOSED LIABILITIES ................................ 34
5.6 ABSENCE OF CERTAIN CHANGES OR EVENTS .............................. 34
5.7 COMPLIANCE WITH LAWS .............................................. 34
5.8 LEGAL PROCEEDINGS ................................................. 35
5.9 REGISTRATION STATEMENT; JOINT PROXY STATEMENT ..................... 35
5.10 ACCOUNTING, TAX, AND REGULATORY MATTERS ........................... 36
5.11 COMMISSIONS ....................................................... 36
5.12 TAX MATTERS ....................................................... 36
5.13 RECORDS ........................................................... 37
5.14 OPINION OF FINANCIAL ADVISOR ...................................... 37
ARTICLE VI -- COVENANTS ..................................................... 37
6.1 COVENANTS OF THE COMPANY .......................................... 37
6.2 COVENANTS OF THE BUYER ............................................ 43
6.3 COVENANTS OF BOTH PARTIES TO THE AGREEMENT ........................ 46
ARTICLE VII -- DISCLOSURE OF ADDITIONAL INFORMATION ......................... 49
7.1 ACCESS TO INFORMATION ............................................. 49
7.2 ACCESS TO PREMISES ................................................ 49
7.3 ENVIRONMENTAL SURVEY .............................................. 49
7.4 CONFIDENTIALITY ................................................... 49
7.5 PUBLICITY ......................................................... 50
ARTICLE VIII -- CONDITIONS CLOSING ......................................... 50
8.1 MUTUAL CONDITIONS ................................................. 50
8.2 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY ...................... 51
8.3 CONDITIONS TO THE OBLIGATIONS OF THE BUYER ........................ 53
ARTICLE IX -- TERMINATION ................................................... 55
9.1 TERMINATION ....................................................... 55
9.2 PROCEDURE AND EFFECT OF TERMINATION ............................... 56
9.3 TERMINATION EXPENSES AND FEES...................................... 56
ARTICLE X -- MISCELLANEOUS PROVISIONS ....................................... 57
10.1 EXPENSES .......................................................... 57
10.2 SURVIVAL OF REPRESENTATIONS ....................................... 57
10.3 AMENDMENT AND MODIFICATION ........................................ 57
10.4 WAIVER OF COMPLIANCE; CONSENTS .................................... 57
10.5 NOTICES ........................................................... 57
10.6 ASSIGNMENT ........................................................ 58
10.7 SEPARABLE PROVISIONS .............................................. 58
10.8 GOVERNING LAW ..................................................... 59
10.9 COUNTERPARTS ...................................................... 59
10.10 INTERPRETATION .................................................... 59
10.11 ENTIRE AGREEMENT .................................................. 59
EXHIBIT A FORM OF PLAN OF MERGER
EXHIBIT B BAKER EMPLOYMENT AGREEMENT
EXHIBIT C REYNOLDS EMPLOYMENT AGREEMENT
EXHIBIT D McGILL CONSULTING AGREEMENT
EXHIBIT E FORM OF VOTING AGREEMENT
EXHIBIT F FORM OF AFFILIATE LETTER
ii
{PAGE}
MERGER AGREEMENT
THIS MERGER AGREEMENT (this "Agreement"), dated as of the 29th day of
June, 2005, is by and among:
CAPITAL BANK CORPORATION, a North Carolina corporation and a financial
holding company registered with the Board of Governors of the Federal Reserve
System under the Bank Holding Company Act of 1956, as amended, and a North
Carolina bank holding company (the "Buyer"); and
1st STATE BANCORP, INC., a Virginia corporation and a holding company
registered with the Board of Governors of the Federal Reserve System under the
Bank Holding Company Act of 1956, as amended, and a North Carolina bank holding
company (the "Company").
BACKGROUND STATEMENT
The Buyer and the Company desire to effect a merger pursuant to which the
Company will merge into the Buyer, with the Buyer being the surviving
corporation (the "Merger"). In consideration of the Merger, the shareholders of
the Company will receive shares of common stock of the Buyer and/or cash. It is
intended that the Merger qualify as a tax-free reorganization under Section 368
of the Internal Revenue Code of 1986, as amended.
STATEMENT OF AGREEMENT
In consideration of the premises and the mutual representations,
warranties, covenants, agreements and conditions contained herein, the parties
hereto agree as follows:
ARTICLE I
DEFINED TERMS
1.1. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:
"401(k) Plan" has the meaning given to it in Section 6.1(e).
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"Actual Average Closing Price" means, with respect to the Buyer's Stock,
the average of the daily closing sales price thereof on the Nasdaq National
Market System during the twenty (20) trading day period ending three (3)
Business Days prior to the Closing Date, as reported in The Wall Street Journal.
"Acquisition Proposal" has the meaning given to it in Section 6.1(c).
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"Affiliate" means, with respect to any Person, each of the Persons that
directly or indirectly, through one or more intermediaries, owns or controls, or
is controlled by or under common control with, such Person. For the purpose of
this Agreement, "Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of management and policies, whether
through the ownership of voting securities, by contract or otherwise.
{PAGE}
Without limiting the foregoing, as used with respect to the Company, the term
"Affiliates" includes Company Bank, the LLC, and any other of the Company's
Subsidiaries.
"Agreement" means this Merger Agreement.
"Assets" means all of the assets, properties, businesses and rights of a
Person of every kind, nature, character and description, whether real, personal
or mixed, tangible or intangible, accrued or contingent, whether or not carried
on any books and records of such Person, whether or not owned in such Person's
name and wherever located.
"Average Closing Price" means the Actual Average Closing Price; provided,
in the event that the Actual Average Closing Price is greater than $18.00, the
Average Closing Price shall be $18.00; provided, further, in the event that the
Actual Average Closing Price is less than $15.00, the Buyer may set the Average
Closing Price at $15.00 pursuant to Section 2.6.
"Baker Employment Agreement" means the employment agreement to be entered
into at or prior to Closing between the Buyer and A. Christine Baker for a term
of one (1) year commencing on the Closing Date and automatically renewing on
each subsequent anniversary of the Closing Date for an additional one (1) year
renewal term unless either party delivers to the other party written notice of
the party's intent to terminate the employment agreement as of the end of such
initial term or applicable one (1) year renewal term. The employment agreement
shall contain customary terms and conditions (including non-competition and
non-solicitation provisions) applicable to executive employment agreements of
its nature and be substantially in the form attached hereto as EXHIBIT B.
"Benefit Plans" means all pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership, restricted stock,
severance pay, vacation, bonus, or other incentive plan, all other written
employee programs or agreements, all medical, vision, dental, or other health
plans, welfare plans, all life insurance plans, and all other employee benefit
plans, arrangements, fringe benefit plans or perquisites, whether written or
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