<PAGE> 1
REGISTRATION NO. 333-_______________
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 22, 1999
-------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
CENTRA FINANCIAL HOLDINGS, INC.
(IN ORGANIZATION)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
West Virginia 6712 55-0770610
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF INCORPORATION CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
OR ORGANIZATION)
990 ELMER PRINCE DRIVE, P. O. BOX 656, MORGANTOWN, WEST VIRGINIA 26507-0656
(304) 599-8121
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DOUGLAS J. LEECH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CENTRA FINANCIAL HOLDINGS, INC.
990 ELMER PRINCE DRIVE, P. O. BOX 656
MORGANTOWN, WEST VIRGINIA 26507-0656
(304) 599-8121
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
Copies to:
CHARLES D. DUNBAR, ESQUIRE
ELIZABETH OSENTON LORD, ESQUIRE
JACKSON & KELLY PLLC
1600 LAIDLEY TOWER
POST OFFICE BOX 553
CHARLESTON, WEST VIRGINIA 25322
(304) 340-1000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this Form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
AMOUNT TO PROPOSED MAXIMUM PROPOSED
TITLE OF EACH CLASS OF BE OFFERING PRICE MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $1.00 per share
(including associated rights issued under
the Shareholder Protection Rights Plan) 1,200,000 $10.00* $12,000,000* $2,400*
</TABLE>
* Based upon the book value per share of the common stock of Centra Bank, Inc.
as of December 20, 1999.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE> 2
CENTRA BANK, INC.
990 ELMER PRINCE DRIVE
P. O. BOX 656
MORGANTOWN, WEST VIRGINIA 26507-0656
TELEPHONE (304) 599-8121
To the Shareholders of Centra Bank, Inc.
It is my pleasure to invite you to a special meeting of the
shareholders of Centra Bank, Inc. We will hold the meeting on ____________,
_______, at _____.__m., local time, at _______________, Morgantown, West
Virginia.
This meeting is very important to you because you will be asked to
approve the formation of a holding company for the bank. A bank holding company
is a corporation that owns the stock of a bank. The shareholders of the bank
will become the shareholders of the bank holding company. It is very important
that you attend the meeting. The board of directors of the bank will be
available at the meeting to answer any questions you may have.
If the shareholders approve the holding company:
o you will become a shareholder of the holding company;
o the holding company will become the sole shareholder of the
bank; and
o you will receive one share of holding company stock for each
share of your bank stock.
None of this involves the sale of the bank.
We have formed Centra Financial Holdings, Inc., to serve as the holding
company.
The board of directors believes that a holding company would be good
for you and the bank because:
o The holding company can purchase its own stock from
shareholders. Therefore, it can provide a potential market for
the stock of the holding company. Banks are severely
restricted in their ability to purchase their own stock from
shareholders.
<PAGE> 3
o It will allow us to respond efficiently to changes in the law
governing banks and bank-related activities.
o It will allow us to more easily acquire other banks and
operate them as branches of the bank or as separate banks in
areas not now served by the bank.
o It will allow us to compete more effectively with other bank
holding companies.
<PAGE> 4
This letter is followed by a formal notice of the special meeting of
shareholders and a proxy statement/prospectus. The proxy statement/prospectus
serves two purposes:
o The bank's proxy statement describes the proposed transaction
and asks you to send in your proxy to vote on the holding
company. A form of proxy is enclosed separately.
o A prospectus of the holding company describes the holding
company and its stock.
The board of directors of the bank unanimously recommends that you vote
to approve the formation of the holding company. All of the bank's directors
intend to vote in favor of Centra Financial Holdings, Inc., as a holding company
for Centra Bank, Inc., and they encourage you to join them. Please read the
enclosed proxy statement/prospectus carefully before making your decision.
To approve the holding company, a majority of all of the outstanding
bank shares must vote in favor of Centra Financial Holdings, Inc., as a holding
company for the bank. YOUR VOTE IS IMPORTANT, regardless of how many shares you
own. Whether you plan to attend the meeting or not, please complete, date, sign
and return the enclosed proxy form promptly in the enclosed envelope. If you
attend the meeting and prefer to vote in person, you may do so, even if you turn
your proxy in at this time.
Please return the enclosed proxy to ensure that your vote counts. If
you have questions about the holding company or the proxy statement/prospectus,
please call me at (304) 599-8121.
Very truly yours,
Douglas J. Leech
President and Chief Executive Officer
______________________ ___, ______
Morgantown, West Virginia
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CENTRA BANK, INC.
990 ELMER PRINCE DRIVE
P. O. BOX 656
MORGANTOWN, WEST VIRGINIA 26507-0656
(304) 599-8121
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ___________________, ______
A special meeting of shareholders of Centra Bank, Inc. ("Centra Bank")
will be held on _______________, _____, at _______________, Morgantown, West
Virginia, at _________ __.m., local time, for the following purposes:
1. To vote on the following resolution:
RESOLVED, that the formation of a bank holding company for
Centra Bank, Inc., pursuant to the terms and conditions of an
Agreement and Plan of Merger between Centra Bank, Inc., and
Centra Financial Holdings, Inc., whereby (a) Centra Bank,
Inc., will become a wholly-owned subsidiary of Centra
Financial Holdings, Inc., and (b) shareholders of Centra Bank,
Inc., will become shareholders of Centra Financial Holdings,
Inc., is hereby authorized and approved.
2. To transact such other business as may properly come before
the meeting or any adjournments thereof.
At this meeting, holders of record of common stock of Centra Bank at
the close of business on ________________, 1999, will be entitled to vote. A
majority of the issued and outstanding shares of Centra Bank must vote in favor
of the above resolution in order to permit the holding company formation to
proceed.
Shareholders and beneficial shareholders are entitled to assert
dissenters' rights under Sections 31-1-122 and 31-1-123 of the West Virginia
Code. A copy of those sections is attached to the following proxy
statement/prospectus as Appendix II.
THE BOARD OF DIRECTORS OF CENTRA BANK BELIEVES THAT THE PROPOSED
HOLDING COMPANY IS IN THE BEST INTERESTS OF CENTRA BANK AND ITS SHAREHOLDERS AND
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF CENTRA BANK VOTE "FOR" THE PROPOSED
HOLDING COMPANY.
By Order of the Board of Directors,
Douglas J. Leech
President and Chief Executive Officer
________________ __, ______
Morgantown, West Virginia
<PAGE> 6
PROXY STATEMENT/PROSPECTUS
____________________ __, ____
----------------------------
CENTRA BANK, INC.
PROXY STATEMENT
----------------------------
CENTRA FINANCIAL HOLDINGS, INC.
PROSPECTUS
1,200,000 SHARES OF COMMON STOCK
----------------------------
CENTRA BANK, INC.
PROXY STATEMENT
o The board of directors of Centra Bank is furnishing this proxy
statement to you because we are soliciting your proxy to vote at a
special meeting of shareholders on the formation of a bank holding
company for Centra Bank.
o The name of the holding company will be "Centra Financial Holdings,
Inc."
o Date, Time and Place of Special Meeting: _________________, _________
__.m., local time Morgantown, West Virginia
CENTRA FINANCIAL HOLDINGS, INC.
PROSPECTUS
o Centra Financial is furnishing this prospectus to you.
o The prospectus relates to the shares of Centra Financial common stock
that you will receive in exchange for Centra Bank common stock on a
one-for-one basis if you vote to form a bank holding company.
o Neither the SEC nor any state securities commission has determined
whether this prospectus is truthful or complete. Nor have they made,
nor will they make, any representation as to whether anyone should buy
these securities. Any representation to the contrary is a criminal
offense.
THE SHARES OF CENTRA FINANCIAL COMMON STOCK ARE NOT SAVINGS ACCOUNTS,
DEPOSITS OR OTHER BANK OBLIGATIONS, AND NEITHER THE FDIC NOR ANY OTHER
GOVERNMENTAL AGENCY INSURES THESE SHARES.
SHARES OF CENTRA FINANCIAL INVOLVE RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE __.
THE DATE OF THIS PROXY STATEMENT/PROSPECTUS IS __________________, ____.
<PAGE> 7
FORWARD-LOOKING STATEMENTS
When used in this proxy statement/prospectus, in Centra Bank's or
Centra Financial's press releases or other public or shareholder communications,
and in oral statements made with the approval of an authorized executive
officer, the words or phrases "are expected to," "estimate," "is anticipated,"
"project," "will continue," "will likely result," "plans to" or similar
expressions are intended to identify "forward-looking statements." These types
of statements are subject to risks and uncertainties, including changes in
economic conditions in Centra Bank's market area, changes in policies by
regulatory agencies, fluctuation in interest rates, demand for loans in Centra
Bank's market area, and competition, that could cause actual results to differ
materially from what Centra Bank or Centra Financial have presently anticipated
or projected. Centra Bank and Centra Financial wish to caution readers not to
place undue reliance on any forward-looking statements, which speak only as of
the date made. Centra Bank and Centra Financial wish to advise readers that
factors addressed within the proxy statement/prospectus could affect Centra
Bank's financial performance and could cause Centra Bank's actual results for
future periods to differ materially from any opinions or statements expressed
with respect to future periods in any current statements. The factors we list in
the section "Risk Factors" provide examples of risks, uncertainties and events
that may cause our actual results to differ materially from the expectations we
describe in our forward-looking statements.
Where any forward-looking statement includes a statement of the
assumptions or bases underlying the forward-looking statement, Centra Bank and
Centra Financial caution that assumed facts or bases almost always vary from
actual results, and the differences between assumed facts or bases and actual
results can be material. We cannot assure you that any statement of expectation
or belief in any forward-looking statement will result, or be achieved or
accomplished.
<PAGE> 8
QUESTIONS AND ANSWERS
Q: WHY IS CENTRA BANK PROPOSING TO REORGANIZE INTO A HOLDING COMPANY
STRUCTURE?
A. We believe that the reorganization will give Centra Bank greater
flexibility in the services it provides to its customers and in
responding to changing market conditions and the changing needs of the
community.
Q. WHAT DO I NEED TO DO NOW?
A. Just indicate on your proxy card how you want to vote, and sign,
date and return it as soon as possible. If you sign and send in your
proxy and do not indicate how you want to vote, the proxies will vote
your shares in favor of the formation of a holding company. Not
returning your proxy, not voting at the special meeting or abstaining
from voting has the effect of voting against the reorganization.
If you hold Centra Bank common stock, you can choose to attend
the special meeting and vote your shares in person instead of returning
your completed proxy card. If you do return a proxy card, you may
change your vote at any time up to the time of the vote by following
the directions on page__.
Q. WHAT WILL CENTRA BANK'S STOCKHOLDERS RECEIVE?
A. Each non-dissenting shareholder will receive one share of common
stock of Centra Financial for each share of Centra Bank common stock.
Q. WHEN DO YOU EXPECT THE REORGANIZATION TO TAKE PLACE?
A. We are working toward completing the reorganization as quickly as
possible. In addition to the approval of Centra Bank stockholders, we
must obtain a number of regulatory approvals. We expect the
reorganization to take place as soon as practicable after the special
meeting and after we receive all regulatory approvals.
Q. WHAT ARE THE INCOME TAX CONSEQUENCES OF THE MERGER TO ME?
A. To review the tax consequences to Centra Bank's stockholders, see
pages __ to __.
<PAGE> 9
TABLE OF CONTENTS
PAGE
SUMMARY..................................................................... 1
The Special Meeting................................................ 1
Who Is Eligible To Vote............................................ 1
Required Vote...................................................... 1
The Merger......................................................... 1
Recommendation Of Centra Bank's Board of Directors................. 2
Risk Factors....................................................... 2
Antitakeover Provisions............................................ 2
Rights Of Dissenting Stockholders.................................. 2
Board Of Directors................................................. 2
Capitalization Structure After The Merger.......................... 3
Stock Listing...................................................... 3
RISK FACTORS................................................................ 4
THE SPECIAL MEETING......................................................... 6
Matters To Be Voted On At The Special Meeting...................... 6
Who Is Eligible To Vote............................................ 6
Quorum; Required Vote.............................................. 6
Revocability Of Proxies............................................ 7
Proxy Solicitation................................................. 7
PROPOSED MERGER AND REORGANIZATION INTO A BANK HOLDING COMPANY.............. 7
Description Of Proposed Merger And Reorganization.................. 7
Reasons For Forming The Holding Company............................ 8
Recommendation Of Centra Bank's Board Of Directors................. 9
Treatment Of Stock Certificates.................................... 9
Conditions That Must Occur Before The Merger Can Occur............. 9
Federal Tax Consequences Of The Merger And Reorganization
Into A Bank Holding Company............................... 10
COMPARISON OF CENTRA BANK AND CENTRA FINANCIAL STOCK........................ 12
Antitakeover Provisions In Centra Financial's Articles And Bylaws.. 12
Issuance Of Capital Stock.......................................... 15
Dividends And Dividend Rights...................................... 16
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<PAGE> 10
PAGE
Voting Rights...................................................... 16
Preemptive Rights.................................................. 17
Liquidation Rights................................................. 17
Assessment Of Shares............................................... 17
Indemnification.................................................... 17
Shareholder Protection Rights Plan................................. 17
Regulatory Approvals............................................... 18
RIGHTS OF DISSENTING SHAREHOLDERS........................................... 18
MARKET PRICE OF CENTRA BANK'S CAPITAL STOCK AND DIVIDENDS................... 20
MANAGEMENT.................................................................. 20
Directors And Executive Officers................................... 21
Committees Of The Board Of Directors............................... 22
Ownership Of Securities By Directors And Executive Officers........ 22
Executive Compensation............................................. 22
Compensation Of Directors.......................................... 23
Incentive Stock Option Plan........................................ 23
Interests Of Management And Other Related Transactions............. 23
ADDITIONAL INFORMATION ABOUT CENTRA BANK.................................... 23
Status And Operations.............................................. 23
Banking Services................................................... 24
Market Area........................................................ 25
Competition........................................................ 25
Employees.......................................................... 26
Property........................................................... 26
SUPERVISION AND REGULATION.................................................. 26
Introduction....................................................... 26
Monetary Policy.................................................... 27
Deposit Insurance.................................................. 27
Capital Requirements............................................... 27
Federal Deposit Insurance Corporation Improvement Act Of 1991...... 28
Gramm-Leach-Bliley Act Of 1999..................................... 29
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<PAGE> 11
PAGE
ADDITIONAL INFORMATION ABOUT THE HOLDING COMPANY............................ 30
OTHER MATTERS............................................................... 30
LEGAL MATTERS............................................................... 30
WHERE YOU CAN FIND MORE INFORMATION......................................... 31
APPENDIX I - AGREEMENT AND PLAN OF MERGER
APPENDIX II - WEST VIRGINIA CORPORATION ACT,
SECTION 31-1-122 AND SECTION 31-1-123
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<PAGE> 12
SUMMARY
The following is a brief summary of information located elsewhere in
this proxy statement/ prospectus. BEFORE YOU VOTE, YOU SHOULD CAREFULLY CONSIDER
ALL OF THE INFORMATION CONTAINED IN THIS DOCUMENT.
THE SPECIAL MEETING (PAGE __)
TIME AND LOCATION OF THE SPECIAL MEETING. We will hold the special
meeting of Centra Bank's stockholders at _______________________, Morgantown,
West Virginia, on_________, ________, at_____ __.m., local time.
MATTERS WE WILL ASK YOU TO VOTE ON. We will ask you to vote on a plan
of merger where Centra Financial will become the holding company for Centra
Bank. Through this merger, each outstanding share of Centra Bank's common stock
will be converted into one share of common stock of the holding company.
WHO IS ELIGIBLE TO VOTE (PAGE __)
If you held Centra Bank common stock at the close of business on
_________________, _________, you are entitled to vote at the special meeting.
Each share of common stock is entitled to one vote.
REQUIRED VOTE (PAGE __)
Under our articles of incorporation and bylaws, at least a majority of
our outstanding common stock must approve the merger.
THE MERGER (PAGE __)
PARTIES TO THE MERGER (PAGE __)
CENTRA BANK. Centra Bank is a newly formed (September 27, 1999) full
service commercial bank chartered under the laws of the State of West Virginia.
Centra Bank will provide a wide range of financial services for retail and
institutional clients. Its principal executive offices are located at 990 Elmer
Prince Drive, P. O. Box 656, Morgantown, West Virginia 26507-0656, and its
telephone number is (304) 599-8121. Centra Bank will operate under FDIC
regulations and regulations of the West Virginia Commissioner of Banking. The
bank has applied to the FDIC for deposit insurance. Approval for FDIC insurance
was granted, subject to certain conditions by Order of the FDIC dated November
17, 1999.
CENTRA FINANCIAL. Centra Financial is a West Virginia corporation
formed on October 25, 1999. Its principal executive offices are located at 990
Elmer Prince Drive, P. O. Box 656, Morgantown, West Virginia 26507-0656, and its
telephone number is (304) 599-8121.
THE MERGER. After the merger, each shareholder of Centra Bank will
become a shareholder of Centra Financial. Centra Bank will end up being a wholly
owned subsidiary of Centra Financial.
<PAGE> 13
CONDITIONS THAT MUST BE SATISFIED BEFORE THE MERGER CAN OCCUR (PAGE
__). A number of conditions must occur before we can complete the merger,
including stockholder approval, regulatory approvals, and an opinion concerning
the merger's tax consequences.
RECOMMENDATION OF CENTRA BANK'S BOARD OF DIRECTORS
After careful consideration, Centra Bank's board of directors believes
that the merger is in the best interests of Centra Bank and its stockholders and
has approved the agreement and plan of merger. Centra Bank's board of directors
recommends that you vote FOR approval of the agreement and plan of merger.
RISK FACTORS (PAGE __)
Before completing your proxy card, you should read this entire proxy
statement/prospectus, including the "Risk Factors" section.
ANTITAKEOVER PROVISIONS (PAGE __)
Centra Financial's articles of incorporation and bylaws contain
antitakeover provisions that are not contained in Centra Bank's corporate
governance documents. Antitakeover provisions are designed to make unsolicited
takeover attempts more difficult to accomplish. For more information, please see
the section of this proxy statement/prospectus captioned "Differences In
Stockholder Rights."
RIGHTS OF DISSENTING STOCKHOLDERS (PAGE __)
Sections 122 and 123 of the West Virginia Code govern the rights of
dissenting shareholders. If the merger occurs, any Centra Bank stockholder may
receive payment of the value of his or her shares from Centra Bank if the
stockholder (1) does not vote in favor of the reorganization, (2) records with
Centra Bank at the time of the special meeting, or within 10 days after the
meeting, the stockholder's opposition to the reorganization, and (3) demands
payment for the shares. Once the reorganization takes place, a dissenting
stockholder may petition the Circuit Court of Monongalia County, West Virginia,
to have the value of the stockholder's shares appraised. For more information,
please see the section of this proxy statement/prospectus captioned "Proposed
Reorganization Into A Bank Holding Company - Rights Of Dissenting Stockholder."
BOARD OF DIRECTORS (PAGE __)
The following persons, who are presently directors of Centra Bank, make
up the holding company's board of directors: Arthur Gabriel, Douglas J. Leech,
Parry G. Petroplus, Milan Puskar and Bernard G. Westfall. We will deem approval
of the merger by the holders of Centra Bank's common stock to be a confirmation
by the holding company's stockholders of those persons as the directors of the
holding company without further action and without changes in classes or terms.
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<PAGE> 14
CAPITALIZATION STRUCTURE AFTER THE MERGER (PAGE __)
Immediately after the reorganization takes place (and assuming there
are no dissenters), (1) the holding company will have outstanding the same
number of shares of common stock that Centra Bank had issued and outstanding
immediately prior to the merger, (2) the persons who held the Centra Bank common
stock will be the same persons who hold Centra Financial common stock, and (3)
the holding company will own all of the shares of Centra Bank.
STOCK LISTING
Centra Bank's common stock currently is traded in privately negotiated
transactions. After the reorganization takes place and upon meeting listing
qualifications, we may in the future seek listing for trading on the Nasdaq
Stock Market's National Market Tier. We cannot predict when, if ever, we would
become eligible for listing.
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<PAGE> 15
RISK FACTORS
Centra Bank stockholders should consider the following factors in
voting for the agreement and plan of merger.
BECAUSE OF THE BANK'S START-UP NATURE, THERE MAY NOT BE PROFITS, DIVIDENDS OR
APPRECIATION
The bank may not become profitable, the bank may not ultimately declare
any dividends on its shares and the shares may not appreciate in value. The
expenses of operating the bank, including salaries, wages and other payments to
the bank's management, may exceed its income and thereby reduce the bank's
capital and the book value per share of the bank's common stock. Most likely,
the bank will not pay dividends during the early years of its operations. For
the bank to experience profitability, it must conduct successful lending
operations. Repayment of loans that the bank makes will depend on many factors
beyond management's control, including the strength of the national economy and
the strength of the local economy (including labor relations, tax laws and
various other factors).
CENTRA BANK HAS VERY LITTLE OPERATIONAL HISTORY
The bank is a new corporation, has no operational or financial history
and will engage in start-up operations. Because of the start-up nature of the
bank's business, the bank will most likely sustain operating losses, at least
initially. We cannot assure you that the bank will attain or sustain profitable
operations. If the bank sustains losses for a significant period of time,
shareholders could lose their entire investment.
CENTRA BANK'S ABILITY TO PAY DIVIDENDS TO CENTRA FINANCIAL, AND CENTRA
FINANCIAL'S ABILITY TO PAY DIVIDENDS TO YOU, IS RESTRICTED
Because the holding company's principal source of income will consist
initially of dividends, if any, from Centra Bank, the restrictions on Centra
Bank's ability to pay dividends could adversely affect you after the
reorganization. Moreover, the holding company will be subject to restrictions
generally imposed on West Virginia corporations and may be restricted in its
ability to pay dividends by minimum capital requirements that the Board of
Governors of the Federal Reserve system imposes. See "Regulatory Matters -
Holding Company Regulation." Even if stockholders approve Centra Bank's proposed
merger and reorganization into a bank holding company structure, the existing
restrictions on Centra Bank's ability to pay dividends will continue in effect.
NO PUBLIC MARKET EXISTS FOR THE SHARES
You should assume that you will have difficulty liquidating your
investment, and that if you desire to do so, the price or terms of any
liquidation may be unsatisfactory. We cannot assure you that there will be an
active public market for the shares. It is possible that you may not be able to
resell your shares, and if you are able to resell them, it is possible that you
may not be able to receive the purchase price of $10.00 per share or any higher
price.
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<PAGE> 16
THE BANKING INDUSTRY IS HIGHLY COMPETITIVE
Consolidation reduced the number of independent community banks, and
remaining institutions like the bank must compete with established banks,
thrifts and other financial institutions for deposits and lending opportunities.
Many of these institutions have significantly greater financial and marketing
resources than the bank, enhancing their competitive strengths.
SHAREHOLDERS MUST RELY ON MANAGEMENT
The departure of one or more of the bank's officers or other key
personnel could adversely affect the bank's operations and financial position.
The bank's management will make most decisions that involve the bank's
operations. No person should purchase any shares unless he or she is willing to
entrust most aspects of the bank's operations to its management.
CHANGES IN INTEREST RATES MAY REDUCE CENTRA BANK'S PROFITABILITY
If interest rate fluctuations cause Centra Bank's cost of funds to
increase faster than the yield of its interest-earning assets, then its net
interest income will be reduced. Centra Bank's results of operations depend to a
large extent on the level of net interest income, which is the difference
between income from interest-earning assets, such as loans and investment
securities, and interest expense on interest-bearing liabilities, such as
deposits and borrowings. Centra Bank is unable to predict future fluctuations in
interest rates.
COMMERCIAL, LAND ACQUISITION AND CONSTRUCTION AND CONSUMER LENDING ACTIVITIES
INVOLVE GREATER CREDIT RISK THAN RESIDENTIAL REAL ESTATE LENDING
Commercial business loans may involve greater risks than other types of
lending because they are often made based on varying forms of collateral, and
repayment of these loans often depends on the success of the commercial venture.
In addition to residential real estate loans, Centra Bank originates loans for
commercial real estate, commercial business, land acquisition and construction
and consumers. Commercial real estate loans may also involve greater risk
because repayment depends, in large part, on sufficient income from the
properties securing the loans to cover operating expenses and debt service. Land
acquisition and construction loans may involve greater risks because the
borrower may not be able to carry the costs of undeveloped land. Evaluating and
monitoring these types of loans is more difficult than with residential real
estate loans, which also increases risk. The disbursement of principal based on
progress, even though the ultimate completion market value may not be attainable
during the construction process, also may increase risks from these loans.
Consumer loans may involve greater risk because adverse changes in borrowers'
incomes and employment after funding of the loans may impact their abilities to
repay the loans.
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<PAGE> 17
THE BANK MAY EXPERIENCE DIFFICULTY ATTRACTING DEPOSITS OR MAKING LOANS AT RATES
PROFITABLE TO THE BANK
Profitability will depend, to a large extent, upon the bank's net
interest income, which will be the difference between its interest income on
interest earning assets, such as loans and investments, and its interest expense
on interest bearing liabilities such as deposits. These rates are highly
sensitive to many factors that are beyond the bank's control, including general
economic conditions and the policies of various governmental and regulatory
authorities.
FEDERAL AND STATE LAW LIMIT THE AMOUNT THE BANK CAN LEND
The size of the loans which the bank can offer to potential customers
is less than the size of the loans which many of the bank's larger competitors
are able to offer. Although we anticipate that the lending limit will increase
proportionately with the bank's growth, management cannot guarantee that this
will occur or that the bank will successfully attract or maintain larger volume
customers.
A HOLDING COMPANY STRUCTURE ALLOWS THE BANK TO ENGAGE IN MERGER AND ACQUISITION
ACTIVITY
Merger and acquisition activities involve a significant degree of risk.
The success of these activities will depend upon our ability to assess whether
the benefits (including the profitability or potential profitability of the
entity with which the merger occurs or which is being acquired) will prove more
beneficial to shareholders than the liabilities (including potential business
losses, management inefficiencies, and other negative aspects of the entity to
be acquired or with which the bank will merge).
THE SPECIAL MEETING
MATTERS TO BE VOTED ON AT THE SPECIAL MEETING
At the special meeting, you will be asked to vote on an agreement and
plan of merger, dated as of October 26, 1999. Centra Financial Holdings, Inc.,
is the new West Virginia corporation we organized to become the holding company
for Centra Bank. If shareholders approve the agreement and plan of merger, each
outstanding share of common stock of Centra Bank will be converted into one
share of common stock of Centra Financial, and Centra Bank will become a
wholly-owned subsidiary of Centra Financial.
WHO IS ELIGIBLE TO VOTE
If you held Centra Bank common stock at the close of business on
October 26, 1999, you may vote at the special meeting. On December __, 1999,
there were 1,200,000 shares of Centra Bank common stock outstanding, held by 285
stockholders of record. Each share of common stock is entitled to one vote on
each matter properly presented at the special meeting.
QUORUM; REQUIRED VOTE
The presence, in person or by proxy, of at least a majority of the
total number of shares of common stock entitled to vote is necessary to
constitute a quorum at the special meeting. Shares that are
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subject to abstentions and broker non-votes are counted as present for purposes
of determining the presence of a quorum. Neither abstentions nor broker
non-votes are included in tabulations for voting for directors. Abstentions will
be included in tabulations of the votes cast for purposes of determining whether
a proposal other than election of directors has been approved. Broker non-votes
will not be counted for purposes of determining the number of votes cast for a
proposal other than election of directors. In the event there are not sufficient
votes for a quorum, the special meeting may be adjourned or postponed to permit
further solicitation of proxies.
REVOCABILITY OF PROXIES
The proxies we are soliciting under this proxy statement/prospectus, if
properly signed and returned to Centra Bank and not revoked prior to their use,
will be voted in accordance with the instructions contained in the proxies.
EXECUTED PROXIES WITH NO INSTRUCTIONS INDICATED ON THE PROXY CARD WILL BE VOTED
FOR THE MERGER. Any stockholder who submits a proxy card has the power to revoke
it at any time before it is exercised by (1) filing a written notice of
revocation with Mr. Douglas J. Leech, Centra Bank, Inc., 990 Elmer Prince Drive,
P. O. Box 656, Morgantown, West Virginia 26507-0656, (2) submitting a duly
executed proxy card bearing a later date, or (3) appearing at the special
meeting and giving notice of his or her intention to vote in person.
PROXY SOLICITATION
In addition to soliciting proxies by mail, Centra Bank's directors,
officers and employees may solicit proxies personally or by telephone without
receiving additional compensation for these activities. Centra Bank will also
make arrangements with brokerage firms and other custodians, nominees and
fiduciaries to send proxy materials to their principals and will reimburse those
parties for their expenses in doing so.
PROPOSED MERGER AND REORGANIZATION
INTO A BANK HOLDING COMPANY
We have attached a copy of the agreement and plan of merger to this
proxy statement/prospectus as Appendix I. We urge you to read the entire
agreement and plan of merger because it is the document that governs the
reorganization of the bank into a one-bank holding company.
DESCRIPTION OF PROPOSED MERGER AND REORGANIZATION
If Centra Bank's stockholders approve the merger and all of the other
conditions in the agreement and plan of merger are satisfied, on the effective
date of the merger each share of Centra Bank's common stock that is outstanding
immediately prior to the merger (other than dissenting shares) will
automatically by operation of law be exchanged for one share of the holding
company's common stock.
After the merger, the former holders of Centra Bank's outstanding
common stock who do not exercise dissenters' rights will be the holders of all
of the outstanding shares of the holding company's
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common stock. At that point, the holding company will own all of Centra Bank's
outstanding capital stock. Because Centra Financial will hold all of the issued
and outstanding capital stock of Centra Bank after the reorganization takes
place, Centra Bank will be described as a "wholly owned" subsidiary of the
holding company following the merger.
After this reorganization, Centra Bank will continue its existing
business and operations as a wholly owned subsidiary of the holding company. At
that time, the consolidated capitalization, assets, liabilities, income and
financial statements of the holding company immediately following the
reorganization will be substantially the same as those of Centra Bank
immediately prior to when the reorganization takes place. The articles of
incorporation and the bylaws of Centra Bank will continue in effect, and the
transaction will not affect them in any material way. Centra Bank will continue
to use the name "Centra Bank, Inc.," and Centra Bank's corporate existence will
continue unimpaired.
Centra Bank's board of directors and the holding company believe that
the merger and reorganization into a holding company structure is in the best
interests of Centra Bank's stockholders for the reasons we describe below. The
Centra Bank and Centra Financial boards of directors have approved the merger.
If Centra Bank's stockholders approve the agreement and plan of merger and the
other conditions described below under "Conditions That Must Occur Before The
Merger Can Occur" are satisfied, the merger will become effective upon the
filing of the plan of merger with the West Virginia Secretary of State.
REASONS FOR FORMING THE HOLDING COMPANY
The reasons for forming Centra Financial are to permit greater
flexibility to Centra Bank in meeting the financial needs of its customers and
to provide a vehicle for growth and potential geographic diversification.
Generally, West Virginia banks may not own or operate other banks or engage in
any business other than banking, whereas bank holding companies may acquire and
operate more than one bank and engage in activities closely related to banking.
Bank holding companies may also establish or acquire companies engaged
in activities closely related to banking with operations and offices located in
West Virginia and outside the state as well. While the holding company is not
presently engaged in negotiations and there are no current arrangements or
agreements for the acquisition of other banks or companies engaged in activities
closely related to banking, and while we cannot assure you that we will make any
acquisitions, Centra Bank's board of directors believes that the possibility of
making acquisitions which would be permissible if the reorganization takes place
represents a potentially attractive growth possibility.
Centra Bank's board of directors is also forming the holding company to
be in a position to take advantage of the provisions of the Gramm-Leach-Bliley
Act of 1999. This Act was passed by the United States Congress on November 4,
1999, and signed by President Clinton on November 12, 1999. This Act repealed
many of the restrictions on the activities conducted by financial institutions.
Under the Act, a bank holding company can qualify as a "financial holding
company" and engage in business activities which were previously prohibited. The
activities permitted to financial holding companies under the Act are slightly
broader than those permitted to banks.
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Centra Bank's board of directors also believes that the holding company
may provide additional funding sources for Centra Bank, as well as better access
to the capital markets. Additionally, Centra Bank's board believes a bank
holding company will be in a better position to respond to the competitive
environment in which it is operating, characterized in larger part by the
activities of bank holding companies in West Virginia as well as nationally. In
general, the board of directors of Centra Bank believes that operating as a bank
holding company will serve the interests of the banking public and the
stockholders of Centra Bank by improving the capability for service in a highly
competitive environment.
RECOMMENDATION OF CENTRA BANK'S BOARD OF DIRECTORS
After careful consideration, Centra Bank's board of directors has
determined that the merger and reorganization is advisable and in the best
interests of Centra Bank and its stockholders. Accordingly, the board has
approved the agreement and plan of merger and the contemplated reorganization.
CENTRA BANK'S BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE
PLAN OF MERGER AND REORGANIZATION.
TREATMENT OF STOCK CERTIFICATES
After the merger, Centra Bank's shareholders who do not exercise
dissenters' rights will be entitled to exchange their Centra Bank stock
certificates or the right to receive certificates for new certificates
evidencing the same number of shares of holding company common stock. Until
exchanged, Centra Bank stock certificates will, for all purposes, represent the
same number of holding company shares as the number of Centra Bank shares
previously represented. The holders of Centra Bank certificates who do not
exercise dissenters' rights will have all of the rights of holders of the
holding company's shares.
As soon as practicable after the merger takes place, we will send
instructions concerning stock certificates to all holders of record as of the
effective date of the merger.
CONDITIONS THAT MUST OCCUR BEFORE THE MERGER CAN OCCUR
The following summarizes some of the conditions that must occur before
the merger can take place:
o a majority of the issued and outstanding shares of
Centra Bank common stock must approve the agreement
and plan of merger;
o all regulatory approvals (or waiver or exemption from
any required regulatory approval) and satisfaction of
all other requirements required by law which are
necessary to complete the merger, must be obtained,
and all statutory waiting periods must expire,
without the imposition of any condition or
requirements that would materially and adversely
affect the operations or business prospects of the
holding company or Centra Bank;
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o Centra Bank must receive an opinion letter from
Jackson & Kelly PLLC, counsel to Centra Bank,
regarding federal income tax consequences of the
merger; and
o Unless Centra Financial waives this condition,
holders of more than 5% of Centra Bank's common stock
may not dissent from the merger.
FEDERAL TAX CONSEQUENCES OF THE MERGER AND REORGANIZATION INTO A BANK HOLDING
COMPANY
The merger agreement expressly conditions the merger upon Centra Bank
receiving an opinion of counsel from Jackson & Kelly PLLC with respect to United
States federal income taxation.
We qualify the following summary of federal income tax consequences in
its entirety by referring you to the full text of Jackson & Kelly PLLC's
opinion, including that firm's assumptions. We have filed Jackson & Kelly PLLC's
opinion as Exhibit 8 to the registration statement of which this proxy
statement/prospectus is a part.
This summary applies only to Centra Bank's shareholders, if any, who
hold their common stock as a capital asset. This discussion does not address all
aspects of taxation that may be relevant to particular shareholders in light of
their personal investment or tax circumstances, or to certain types of
shareholders subject to special treatment under the federal income tax laws.
This opinion does not address tax issues relating to insurance companies,
financial institutions, broker-dealers, foreign corporations, persons who
receive stock through the exercise of stock options or otherwise as compensation
for services rendered and persons who are not citizens or residents of the
United States. It also does not discuss any state, local or foreign tax
considerations. Accordingly, we urge you to consult your own tax advisor as to
the specific tax consequences of the merger, including the applicable federal,
state, local and foreign tax consequences of the merger.
We have not requested any ruling from the Internal Revenue Service as
to the federal income tax consequences of the merger. Jackson & Kelly PLLC's
opinion is not binding on the IRS or any court, and neither the IRS nor any
court is precluded from taking a different position. The Internal Revenue Code
governs some of the federal income tax consequences of the merger as to which
there are no final regulations and little or no judicial or administrative
guidance. Jackson & Kelly PLLC bases its opinion upon the federal income tax
laws in effect on the date of the opinion and as those laws are currently
interpreted. Future legislation, regulations, administrative rulings or court
decisions could adversely affect the accuracy of the statements.
We condition the federal income tax consequences below upon, and
Jackson & Kelly PLLC bases its opinion upon, the accuracy of assumptions and
representations of fact that the parties to the merger agreement provided to
Jackson & Kelly PLLC. Jackson & Kelly PLLC has not independently verified these
assumptions and representations. These assumptions and representations include,
but are not limited to, the following:
o that following the merger, Centra Financial will
continue the historic business of Centra Bank or use
a significant portion of Centra Bank's historic
business assets in a business;
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o that a bona fide corporate business purpose exists
for the merger; and
o that in the merger shares of stock of Centra Bank
representing control of Centra Bank will be exchanged
solely for Centra Financial common stock. For this
purpose, control means 80% of the total combined
voting power of all classes of stock entitled to vote
and of at least 80% of the total number of shares of
each other class of stock of Centra Bank.
As of the date of this proxy statement/prospectus, Centra Financial and
Centra Bank believe that all of these assumptions are now, and will be at, as of
and after the time the merger becomes effective, accurate. If either Centra
Financial or Centra Bank learns before that time that the assumptions are false
and that its counsel therefore believes that the merger is unlikely to be
treated as a tax-free reorganization, then additional shareholder approval will
be obtained before consummation of the merger.
Subject to the limitations and assumptions described above, we
anticipate that Jackson & Kelly PLLC will render an opinion that the merger will
have the following federal income tax consequences:
o The merger will constitute a reorganization within
the meaning of Sections 368(a)(1)(A) and (a)(2)(E) of
the Internal Revenue Code of 1986;
o None of the parties to the merger agreement will
recognize any gain or loss as a result of the merger;
o Shareholders of Centra Bank will not recognize any
gain or loss as a result of their exchange of Centra
Bank common stock for Centra Financial common stock
except to the extent any shareholder receives cash as
a dissenting shareholder;
o The holding period for Centra Bank shareholders of
the Centra Financial common stock they receive in the
merger will include the period during which the
Centra Bank stock was held, provided this stock was a
capital asset in the hands of the holder on the date
of exchange;
o The federal income tax basis for Centra Bank
shareholders of the Centra Financial common stock
they receive in the merger will be the same as the
basis of the Centra Bank common stock shareholders
exchange therefor; and
o Centra Financial's payment of cash to Centra Bank
shareholders in exchange for Centra Bank common stock
relating to the exercise of dissenter's rights will
be treated as having been received as a distribution
in redemption of a dissenting stockholder's Centra
Bank common stock, subject to the provisions and
limitations of Section 302 of the Internal Revenue
Code. Where as a result of such distribution a
stockholder owns no Centra Bank common stock either
directly or through the application of Section 318(a)
of the code, the redemption
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will be a complete termination of interest within the
meaning of Section 302(b)(3) of the Code and the cash
will be treated as a distribution in full payment in
exchange for his or her Centra Bank common stock, as
provided in Section 302(a) of the Code. Under Section
1001 of the Code, gain or (subject to the limitations
of Section 267 of the Code) loss will be realized and
recognized to such stockholders in an amount equal to
the difference between the amount of such cash and
the adjusted basis of the Centra Bank common stock
surrendered, as determined under Section 1011 of the
Code. If the Centra Bank stockholder has held his or
her stock for more than one year, the gain should be
treated as long-term capital gain, provided that the
shares were held as a capital asset on the date of
the exchange.
o Provided that, at the time of the merger, the share
purchase rights remain contingent, non-exercisable,
and subject to redemption if issued, the receipt of
these rights by Centra Bank stockholders will not be
a distribution or receipt of property, an exchange of
stock or property (either taxable or nontaxable), or
any other event giving rise to the realization of
gross income by Centra Bank, Centra Financial, of
Centra Bank stockholders.
The tax consequences of the merger may vary depending upon your
particular circumstances. We urge you to consult your own tax advisor to
determine the particular tax consequences of the merger to you, including the
applicability and effect of any state, local or foreign income, property,
transfer and other tax laws.
COMPARISON OF CENTRA BANK AND CENTRA FINANCIAL STOCK
ANTITAKEOVER PROVISIONS IN CENTRA FINANCIAL'S ARTICLES AND BYLAWS
CLASSIFICATION OF THE BOARD OF DIRECTORS. Article XI.1.A. of the
articles permits the board to fix the number of directors from time to time
under the bylaws. This article also provides that the board will be divided into
three classes of directors, each class to be as nearly equal in number of
directors as possible. This provision has the effect of making it more difficult
and time-consuming for a shareholder who has acquired or controls a majority of
Centra Financial's outstanding common stock to gain immediate control of the
board of directors or otherwise disrupt Centra Financial's management. Unless
that shareholder can give the 80% vote required to amend the provisions
regarding classifications or numbers of directors or to remove directors, it
would not be possible for that shareholder to elect a majority of the directors
at a single shareholders' meeting. Accordingly, it takes at least two annual
meetings to change the composition of a majority of the board of directors.
This provision has the effect of making it more difficult for a
shareholder to elect a director upon exercising cumulative voting rights.
However, the board believes that the benefits to Centra Financial and its
shareholders of encouraging prior consultation and negotiation outweigh the
disadvantages of discouraging proposals.
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NOMINATIONS OF DIRECTORS. Article XI.1.B. of the articles provides that
a shareholder must make nominations for electing directors as provided in the
bylaws. Article III, Section II of the bylaws provides the manner in which a
shareholder may make nominations. Article XI.2 requires the affirmative vote of
over 80% of the voting power of Centra Financial to repeal or amend this
provision regarding shareholder nominations.
By regulating shareholder nominations of directors, the advance notice
requirement affords the board of directors the opportunity to consider the
qualifications of the proposed nominees and, to the extent deemed necessary or
desirable by the board, to inform shareholders about these qualifications.
Although this provision does not give the board of directors any power to
approve or disapprove shareholder nominations for election of directors, it may
have the effect of precluding a contest for the election of directors if a
shareholder does not follow the established procedures. It may also discourage a
third party from conducting a solicitation of proxies to elect its own slate of
directors.
NEWLY-CREATED DIRECTORSHIPS AND VACANCIES. Article XI.1.C. of the
articles and Section 9, Article III, of the bylaws provide that the remaining
directors may fill a vacancy of the board occurring during the course of the
year, including a vacancy created by an increase in the number of directors. The
bylaws also provide that any new director elected to fill a vacancy on the board
resulting from death, resignation, disqualification, removal or other cause will
serve for the remainder of the full term of the class (each class having
staggered three-year terms) in which the vacancy occurred other than until the
next annual meeting of shareholders. However, in accordance with West Virginia
law, the bylaws provide that those directors elected to fill a vacancy resulting
from an increase in the number of directors will hold office only until the next
election of directors. It also provides that no decrease in the number of
directors will shorten the term of any incumbent.
The provision that the board will fill newly-created directorships
could prevent a third party seeking majority representation on the board of
directors from obtaining representation simply by enlarging the board and
immediately filling the new directorships created with its own nominees.
However, these new directors elected by the board would only serve until the
next meeting of shareholders under West Virginia law.
REMOVAL OF DIRECTORS. Article XI.1.D. and Section 13, Article III, of
the bylaws provide that holders of at least 80% of the voting power of the
shares entitled to vote generally in the election of directors may remove a
director, with or without cause. These provisions preclude a third party from
removing incumbent directors and simultaneously gaining control of the board by
filling the vacancies created by removal with its own nominees unless the third
party controls 80% of the voting power of the voting stock and can amend
provisions of the bylaws and the articles.
INCREASED SHAREHOLDER AND DIRECTOR VOTE FOR ALTERATION, AMENDMENT OR
REPEAL OF PROPOSED AMENDMENTS. The articles require the concurrence of the
holders of at least 80% of the voting power of Centra Financial entitled to vote
generally in the election of directors for the alteration, amendment or repeal
of, or the adoption of any provision inconsistent with, all of the foregoing
provisions to the articles and bylaws.
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Under West Virginia corporation law, amendments to Centra Financial's
articles require the approval of the holders of more than one-half of the
outstanding stock entitled to vote thereon and of more than one-half of the
outstanding stock of each class entitled to vote thereon voting as a class.
However, West Virginia corporation law also permits provisions in the articles
which require a greater vote than the minimum vote the law otherwise requires
for any corporate action. In addition, under Article XI.2. of the articles, none
of the bylaw provisions discussed above relating to the articles may be altered,
amended or repealed, nor may any provision inconsistent with those provisions be
adopted, without the concurrence of the holders of at least 80% of the voting
power of Central Financial.
The purpose of the requirement of an increased shareholder vote is to
prevent a shareholder with a majority of Centra Financial's voting power from
avoiding the requirements of the foregoing provisions by simply repealing them.
NOTIFICATION OF SHAREHOLDER BUSINESS AND NOTICE OF PURPOSE OF ANNUAL
MEETING. Article II, Section 1 of Centra Financial's bylaws provides that a
shareholder who wishes to bring business before an annual meeting of
shareholders must give advance notification in a manner similar to that required
for shareholder nominations for election of directors. Shareholders intending to
bring business before an annual meeting are required to deliver or mail notice
not less than 40 days prior to the meeting, unless less than 50 days' notice of
prior disclosure of the date of the meeting is made, in which case the notice
must be received not later than the close of business on the eighth day
following the day on which notice of the date of the annual meeting was mailed
or public disclosure was made. A shareholder must send the notice to the
secretary and must set forth a brief description of the business he or she
intends to bring before the annual meeting, the reasons for conducting the
business at the annual meeting, the name, address, number and class of shares
held by the shareholder, and any material interest of the shareholder in the
proposal.
The advance notice requirement affords the board of directors the
opportunity to consider the shareholder's proposal and, to the extent it deems
necessary or desirable, inform other shareholders about the proposal and the
board's position regarding the proposal. Although the bylaw provision does not
give the board the power to approve or disapprove the consideration of a matter
which a shareholder wishes to bring before the annual meeting, the bylaw
provision may discourage a shareholder from bringing a matter before an annual
meeting.
Additionally, Section 4, Article II of the bylaws requires that a
written notice of all meetings and the purpose or purposes for which a meeting
is to be called must be delivered not less than 10 nor more than 50 days before
the date of the meeting by those persons calling the meeting to each shareholder
of record entitled to vote the meeting.
LIMITATIONS ON AMENDMENTS TO ARTICLES AND BYLAWS. Generally, a majority
vote of the shareholders is sufficient to amend the articles. However, the
following articles all require the affirmative vote of the shareholders of 80%
or more of the shares entitled to vote on these matters: (1) Article XI.1.
(board of directors); (2) Article XI.2. (certain bylaw amendments, including
Article II, Sections 1 (annual meetings), 4 (notice of meetings), and 13 (board
of director nominations); Article III, Sections 2 (number, election and terms of
directors; nominations), 9 (newly created directorships), and 13 (removal); and
Article XIII (amendments), and (3) Article XI (certain business combinations).
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Article XI of the bylaws provides that subject to the laws of the State of West
Virginia, the articles and other provisions of the bylaws may be altered,
amended or repealed at (1) any regular or special meeting for the shareholders
by a majority vote of the shares represented and entitled to vote at the meeting
provided notice of the proposed amendment is given, or by (2) a majority of the
board at any meeting at which a quorum of the directors is present except that a
two-thirds affirmative vote of all members of the board is required to amend the
bylaws to change the principal office, change the number of directors, change
the number of directors on the executive committee or make a substantial change
in the duties of the Chairman of the Board and the President.
The purpose of Article XI of the bylaws is to prohibit directors who
only control a simple majority of the board from amending or repealing those
bylaws which could have significant effects on the operation of Centra
Financial.
FAIR PRICE PROVISION. The Fair Price Provision requires the approval of
the holders of 80% of Centra Financial's shares entitled to vote ("voting
stock") as a condition to specified transactions with an interested shareholder,
except in cases in which either (1) price criteria and procedural requirements
are satisfied, or (2) the transaction is recommended to the shareholders by a
majority of the disinterested directors. If the minimum price criteria and
procedural requirements are met or the requisite approval of the board of
directors of Centra Financial are given, the normal requirements of West
Virginia law would apply.
The Fair Price Amendment defines "interested shareholder" as any
person, other than Centra Financial or any of its subsidiaries, who is, or who
was within the two-year period immediately before the announcement of the
proposed business combination, the beneficial owner of more than 10% of the
voting power of Centra Financial's voting stock. It also includes any person who
is an assignee of, or has succeeded to, any shares of voting stock in a
transaction not involving a public offering which were at any time within the
prior two-year period beneficially owned by interested shareholders. The term
"beneficial owner" includes persons directly or indirectly owing or having the
right to acquire or vote the stock.
A "disinterested director" is any member of the board of directors of
Centra Financial who is not affiliated with an interested shareholder and who
was a director of Centra Financial prior to the time the interested shareholder
became an interested shareholder, and any successor to a disinterested director
who is not affiliated with an interested shareholder who was recommended by a
majority of the disinterested directors then on the board.
ISSUANCE OF CAPITAL STOCK
Under Centra Bank's articles of incorporation, Centra Bank's authorized
capital stock is 1,900,000 shares of common stock, par value $1.00 per share, of
which 1,200,000 shares are issued and outstanding. Under the holding company's
articles of incorporation, the authorized capital stock of the holding company
is 50,000,000 shares of common stock, par value $1.00 per share, and 1,000,000
shares of preferred stock, par value $1.00 per share.
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Under the agreement and plan of merger, Centra Financial will issue
approximately 1,200,000 shares of its common stock in exchange for all of the
outstanding shares of Centra Bank's common stock. The balance of Centra
Financial's authorized capital stock will be available for issuance when and as
the board of directors of Centra Financial determines. While there are no
present plans, understandings, arrangements or agreements to issue any
additional shares of Centra Financial's common stock, Centra Financial could
issue that common stock to raise additional capital in connection with the
acquisition of other businesses or for other appropriate purposes. The board of
directors of Centra Financial will have the authority to issue common stock to
the extent of the present number of authorized and unissued shares, without
obtaining shareholder approval. If additional holding company common stock is
issued, the existing holders of the holding company's common stock would own a
proportionately smaller portion of the total number of issued and outstanding
common stock, unless they acquire a pro-rata portion of the new issue.
DIVIDENDS AND DIVIDEND RIGHTS
Centra Bank's and Centra Financial's stockholders are entitled to
receive dividends when and as declared by their respective boards of directors,
subject to various regulatory restrictions. Dividends of the bank are subject to
the restrictions contained in W. Va. Code ss. 31A-4-25. That statute provides
that not less than one-tenth part of the net profits of the preceding half year
(in the case of quarterly or semi-annual dividends) or the preceding two
consecutive half-year periods (in the case of annual dividends) must be carried
to a bank's surplus fund until the surplus fund equals the amount of its capital
stock. The prior approval of the West Virginia Commissioner of Banking is
required if the total of all dividends declared by a state bank in any calendar
year will exceed the bank's net profits for that year combined with its retained
net profits for the preceding two years. The statute defines "net profits" as
the remainder of all earnings from current operations plus actual recoveries on
loans and investments and other assets after deducting all current operating
expenses, actual losses and all federal and state taxes.
Centra Financial's future cash dividends will depend on its
consolidated earnings, general economic conditions, financial condition of its
subsidiaries and other factors generally affecting dividend policy. Following
the merger's completion, funds for the payment of cash dividends and expenses of
Centra Financial will come from cash dividends from Centra Bank.
VOTING RIGHTS
All voting rights with respect to Centra Bank are vested in the holders
of the bank's common stock. All voting rights with respect to Centra Financial
will be vested in the holders of Centra Financial's common stock.
In the election of directors, the shareholders of Centra Financial and
Centra Bank have the right to vote the number of shares owned by them for as
many persons as there are directors to be elected, or to cumulate such shares
and give one candidate as many votes as the number of directors to be elected
multiplied by the number of shares they own, or to distribute them on the same
principle among as many candidates as they may decide. For all other purposes,
each share is entitled to one vote.
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PREEMPTIVE RIGHTS
Holders of Centra Bank's common stock do not have preemptive rights to
subscribe to a pro-rata share of any future offers of shares by the bank. The
holders of common stock of Centra Financial will have no preemptive rights to
subscribe to any additional securities which Centra Financial may issue. If
Centra Financial should decide to issue any or all of these shares, the effect
would be to dilute the percentage ownership of the shareholders who do not
purchase a pro-rata portion of the shares issued.
LIQUIDATION RIGHTS
The holders of Centra Bank common stock are entitled to share equally
in the net assets of the bank in the event of liquidation or dissolution. After
the merger's completion, holders of Centra Bank's common stock converted to
Centra Financial's common stock will be entitled to share equally in the net
assets of the holding company in the event of liquidation or dissolution,
subject to the preferential rights, if any, of the holders of any outstanding
senior securities. At this time, there are no senior securities of the holding
company issued or outstanding, and the holding company currently has no plan to
issue senior securities.
ASSESSMENT OF SHARES
The shares of Centra Financial's common stock are fully paid and
non-assessable. West Virginia Code section 31A-4-12 provides that the
outstanding shares of Centra Bank held by the officers and directors of the bank
may be assessed if its common stock becomes impaired by losses or otherwise.
INDEMNIFICATION
Directors and officers of Centra Financial or persons serving at the
request of Centra Financial as directors, officers, employees or agents of
another corporation or organization (including any of its subsidiaries) are
entitled to indemnification as provided in its articles of incorporation.
In general, indemnification is provided for reasonable costs and
expenses, fees and reasonable payments in settlement, except in matters in which
the person is adjudged to be liable for gross negligence, willful misconduct, or
criminal acts.
The bank's articles of incorporation contains similar provisions.
SHAREHOLDER PROTECTION RIGHTS PLAN
The board of directors of Centra Financial has approved a Shareholder
Protection Rights Plan which provides that each share of Centra Financial common
stock, including shares Centra Financial will issue in the merger, carries with
it one right, to acquire shares of Centra Financial common stock ("right"). The
rights are not currently exercisable or transferable, and no separate
certificates evidencing these rights have been or will be distributed, unless
particular certain events occur.
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The rights currently attached to the shares of Centra Financial common
stock will expire on _____, 2010. The rights are generally exercisable if a
person or group, as defined, acquired 10% or more of the outstanding shares of
Centra Financial common stock, or after a person commences a tender offer for
the stock. If a person or group acquires 10% or more of the outstanding shares
of Centra Financial common stock, holders of the rights, other than the 10%
holder, could acquire shares of Centra Financial's common stock at a
substantially reduced price or the board of directors could exchange each right
for one share of Centra Financial common stock. In addition, under particular
circumstances, holders of rights could acquire shares of the 10% holder at a
substantially reduced price.
REGULATORY APPROVALS
For the merger to occur, the holding company and Centra Bank must have
received approvals from the West Virginia Board of Banking and Financial
Institutions and the Board of Governors of the Federal Reserve.
The West Virginia Board of Banking approved the formation of Centra
Financial as a bank holding company, the formation of the interim bank and the
merger of the interim bank into Centra Bank by Order dated December 13, 1999.
The Federal Reserve approved the formation of Centra Financial as a bank holding
company on December __, 1999. The FDIC also approved the merger as part of the
application of Centra Bank for FDIC insurance in its Order dated November 17,
1999.
RIGHTS OF DISSENTING SHAREHOLDERS
Centra Bank's shareholders will be voting on the agreement and plan of
merger. If you object to the reorganization and comply with Section 31-1-123 of
the West Virginia Corporation Act, you are entitled to payment of the fair value
of your shares. The fair value of the shares will be determined as of the day
prior to the date of the special meeting without regard to any appreciation or
depreciation in anticipation of the merger.
The following is a brief summary of the steps you must take to perfect
your dissenters' rights under West Virginia law. This summary does not purport
to be complete and is subject in all respects to the provisions of, and is
qualified in its entirety by reference to, the provisions of Section 31-1-123 of
the West Virginia Corporation Act, which we reproduced for you in full as
Appendix II to this proxy statement/prospectus.
YOU MUST OBJECT TO THE MERGER IN WRITING. You must file written
objection to the proposed merger with the Secretary of Centra Bank prior to or
at the special meeting.
YOU MUST NOT VOTE IN FAVOR OF THE MERGER. You must not vote your shares
in favor of the merger. You are not required to vote against the merger, but if
you vote for the merger you will lose your right to exercise dissenters' rights.
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YOU MUST MAKE WRITTEN DEMAND FOR FAIR VALUE. You must make written
demand on Centra Bank for payment of the fair value of your shares within 10
days after the vote is taken at the special meeting. VOTING AGAINST THE
REORGANIZATION DOES NOT CONSTITUTE THE DEMAND FOR PAYMENT REQUIRED BY LAW. If
you fail to make written demand within the 10-day period, you will be bound by
the terms of the agreement and plan of merger. You may address the written
demand to Douglas J. Leech, President, Chief Executive Officer and Chairman of
the Board, Centra Bank, Inc., 990 Elmer Prince Drive, P. O. Box 656, Morgantown,
West Virginia 26507-0656. Once you demand to be paid the fair value of your
shares, you cannot withdraw your demand without the permission of Centra Bank.
YOUR RIGHTS AS A DISSENTING SHAREHOLDER. If you make a demand, you will
be entitled only to payment as a dissenting shareholder as the law provides, and
you will not be entitled to vote or to exercise any other rights of a Centra
Bank shareholder. Your right to be paid the fair value of your shares will
cease, and your status as a shareholder of Centra Bank will be restored, without
prejudice to any corporate proceedings which may have been taken during the
interim, if any of the following events occur:
o you withdraw your demand with the consent of Centra
Bank;
o we abandon or rescind the reorganization;
o the Centra Bank shareholders revoke the authority to
effect the reorganization;
o no demand or petition for the determination of fair
value by a court of general civil jurisdiction has
been made or filed within the time provided by
statute; or
o a court of general civil jurisdiction determines that
you are not entitled to relief as a dissenting
shareholder.
YOU MUST SURRENDER YOUR CERTIFICATE(S). You must surrender your stock
certificates to Centra Bank within 20 days after demanding payment for your
shares so that a notation that you have made demand may be placed on your stock
certificate(s). Your failure to surrender your certificate(s) shall, at Centra
Bank's option, terminate your dissenters' rights unless a court, for good cause
shown, directs otherwise.
CENTRA BANK MUST MAKE OFFER. If you have demanded to be paid the fair
value of your shares, within 10 days after the merger becomes effective, Centra
Bank must give you written notice of the merger and offer, in writing, to
purchase your shares at a price the bank deems the fair value of your shares. A
balance sheet of Centra Bank must accompany the offer. The balance sheet shall
not be dated more than 12 months prior to the offer. Additionally, the bank must
deliver a profit and loss statement for the 12-month period ended on the date of
that balance sheet. If within 30 days after the merger becomes effective, you
and Centra Bank agree upon the fair value, you will be entitled to receive the
agreed payment for your shares within 90 days after the merger becomes effective
upon surrender of your shares. Upon payment of the agreed value, you shall not
have any interest in your shares of Centra Bank common stock.
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FILING SUIT. If you and Centra Bank fail to agree upon the fair value
within 30 days after the reorganization becomes effective then, within 30 days
after Centra Bank receives written demand from any dissenting shareholder,
Centra Bank will file a complaint in the Circuit Court of Monongalia County,
West Virginia, requesting that the court determine the fair value of the shares.
You must give this written demand within 60 days after the effective date of the
merger/reorganization. If Centra Bank fails to institute this proceeding, you or
any other dissenting shareholder may do so in the name of Centra Bank.
To exercise your dissenters' rights you must strictly adhere to the
provisions of West Virginia law. If you think you may exercise your dissenters'
rights, you should carefully review the statutory provisions attached to this
proxy statement/prospectus as Appendix II. As in all legal matters, you should
seek an attorney's guidance.
If you receive cash for the fair value of your shares of Centra Bank
common stock, that cash will be subject to federal income taxes. The amount of
gain or loss and its character as ordinary or capital gain or loss will be
determined in accordance with Sections 302 and 1001 (and in certain cases, other
provisions) of the Internal Revenue Code of 1986. If you are contemplating the
possible exercise of dissenters' rights, we urge you to consult a tax advisor as
to the federal (and any applicable state and local) income tax consequences.
MARKET PRICE OF CENTRA BANK'S CAPITAL STOCK AND DIVIDENDS
Centra Bank was recently formed. Therefore, its common stock is not
actively traded.
Centra Financial does not intend to declare and pay any cash dividend
until it achieves profitability. The declaration and payment of future dividends
by the holding company on its common stock will depend upon its earnings and
financial condition and upon other factors that we cannot presently determine.
After the reorganization takes place, we anticipate that the holding company
will obtain the funds needed for payment of its dividends and expenses from
Centra Bank, chiefly in the form of dividends.
MANAGEMENT
After the merger takes place, the initial directors of the holding
company will be those listed below. We will deem approval of the agreement and
plan of merger by Centra Bank's shareholders to be a confirmation by the holding
company's stockholders of those persons as the directors of the holding company
without further action and without changes in classes or terms.
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<PAGE> 32
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
CLASS PRINCIPAL OCCUPATION
NAME AGE POSITION EXPIRES (PAST FIVE YEARS)
<S> <C> <C> <C> <C>
Douglas J. Leech 45 Director, 2003 President, Southeast Region of
President and CEO Huntington National Bank (1998 to
1999); President and Chief Executive
Officer, Huntington National Bank
(1997-1998); President and Chief
Operating Officer, Huntington National
Bank (1996-1997); President,
North Central West Virginia
Huntington National Bank (1995-1996);
Executive Vice President and Chief
Operating Officer, One Valley Bank
of Morgantown, Inc. (1990-1995)
Kevin D. Lemley 45 Vice President, Senior Vice President, Huntington
CFO, and National Bank West Virginia
Treasurer (Commercial Portfolio Manager/
Manager of Statewide Commercial
Lending) (1997 to 1999); Huntington
National Bank West Virginia, Chief
Financial Officer (1987-1997)
Timothy P. Saab 42 Vice President Vice President and Group Executive,
and Secretary Private Financial Group, Huntington
National Bank (1996 to 1999); Senior
Vice President, Huntington National
Bank, West Virginia (1993-1996);
Corporate Secretary, Huntington
Bancshares West Virginia (1989-1996);
Corporate Secretary, Huntington
National Bank, West Virginia (1994-1997)
Arthur Gabriel 62 Director 2002 Secretary/Treasurer, Gabriel Brothers,
Inc. (Retail Sales)
Parry G. Petroplus 48 Director 2001 President, Petroplus & Associates
(Real Estate)
Milan Puskar 65 Director 2002 Chairman, President and Chief
Executive Officer, Mylan
Pharmaceuticals, Inc.
Bernard G. Westfall 58 Director 2001 President and Chief Executive Officer,
West Virginia United Health Systems
</TABLE>
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<PAGE> 33
COMMITTEES OF THE BOARD OF DIRECTORS
The bank board has a standing audit committee, investment committee and
loan committee. The audit committee will review the bank's administrative,
operating and internal accounting controls to determine whether they comply with
prescribed policies, procedures and regulations. The audit committee will also
review examination reports of state and federal regulators and recommend the
hiring of the external auditors. The audit committee consists of the following
individuals: Robert E. Lynch, Jr., William Maloney and Rita D. Tanner.
The loan committee will evaluate and approve or disapprove loans in
excess of the lending authority designated for management. Initially, Dr. Paul
F. Malone, Parry G. Petroplus, Thomas P. Rogers, Paul T. Swanson and Bernard G.
Westfall will serve as members of the loan committee. The investment committee
will monitor the bank's investments and supervise the investments made by the
bank. Initially, Arthur Gabriel, William Maloney and Mark R. Nesselroad will
serve on the investment committee.
OWNERSHIP OF SECURITIES BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the number of shares of Centra
Financial's common stock that directors and executive officers will own if
shareholders approve the merger. No other person, at the time of the merger,
will own five percent or more of the holding company's common stock.
AMOUNT OF
BENEFICIAL PERCENT OF
NAME OWNERSHIP OWNERSHIP
Douglas J. Leech 50,000 4.17
Kevin D. Lemley 20,000 1.67
Timothy P. Saab 5,000 0.42
Arthur Gabriel 40,000 3.33
Parry G. Petroplus 10,000 0.83
Milan Puskar 50,000 4.17
Bernard G. Westfall 20,000 1.67
All directors and executive
officers as a group (7 Persons) 195,000 16.26
EXECUTIVE COMPENSATION
Douglas J. Leech will serve as chairman, president and chief executive
officer of the holding company, and as chairman, president and chief executive
officer of Centra Bank. The board of directors anticipates negotiating a
three-to-five year contract with Mr. Leech. The terms of any such contracts are
currently unknown, but management expects them to be similar to employment
agreements of the type entered into by other bank executives in West Virginia.
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The holding company has not made any compensation payments to its
executive officers. However, since July 1, 1999, the executives as a group have
received $129,000 through November 30, 1999, as compensation from Centra Bank.
COMPENSATION OF DIRECTORS
Directors are not currently compensated for regular or special board
meetings attended, but the bank and the holding company intend to compensate
directors in the future.
INCENTIVE STOCK OPTION PLAN
Centra Financial is in the process of establishing an incentive stock
option plan. No options have been granted and the plan is subject to regulatory
review. The effect of granting options could have a dilutive effect which could
be material.
INTERESTS OF MANAGEMENT AND OTHER RELATED TRANSACTIONS
Bank directors Parry G. Petroplus and Milan Puskar are members, and
each own approximately one-third, of Platinum Plaza Limited Liability Company,
lessor of the premises that the bank will occupy. In our opinion, the lease is
on terms and conditions which are at least as favorable to the bank as would be
offered by a non-affiliated third party. We base this opinion on two independent
appraisals which the bank obtained.
The bank expects to have banking and other transactions in the ordinary
course of business with its directors and officers and their affiliates,
including members of their families or corporations, partnerships or other
organizations in which officers or directors have a controlling interest, on
substantially the same terms (including documentation, price, interest rates and
collateral, repayment and amortization schedules and default provisions) as
those prevailing at the time for comparable transactions with unrelated parties.
The bank is subject to a limit on the aggregate amount it can lend to
its directors and officers as a group equal to its unimpaired capital and
surplus (or, under a regulatory exemption available under certain circumstances
to banks with less than $100,000,000 in deposits, twice that amount). Loans to
individual directors and officers must also comply with the bank's lending
policies and statutory lending limits, and directors with a personal interest in
any loan application will be excluded from the consideration of that loan
application.
ADDITIONAL INFORMATION ABOUT CENTRA BANK
STATUS AND OPERATIONS
The bank is a West Virginia state-chartered bank which is not a member
of the Federal Reserve System. The organizers incorporated the bank on September
27, 1999. The bank has applied to the Federal Deposit Insurance Corporation for
federal deposit insurance, and this application was approved,
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subject to certain conditions, on November 17, 1999. Management anticipates that
the bank will open for business in the first quarter of 2000. The bank will
engage in general banking business with, at least initially, the primary market
area being Monongalia County, West Virginia. The main office will be located at
990 Elmer Prince Drive, P. O. Box 656, Morgantown, West Virginia 26507-0656.
BANKING SERVICES
The bank anticipates providing customers, businesses, and local
governments with a broad range of loan products, including personal lines of
credit, commercial, agricultural, real estate, and installment loans and deposit
products, including checking, savings, NOW, and money market accounts,
certificates of deposit, and individual retirement accounts. The bank currently
plans to provide trust services.
The FDIC will insure all deposit accounts up to the maximum allowed by
law (generally $100,000 per depositor, subject to aggregation rules). The bank
will solicit these accounts from individuals, businesses, associations,
organizations and governmental authorities.
The bank also plans to offer commercial and personal loans. Commercial
loans will include both secured and unsecured loans for working capital
(including inventory and receivables) and purchase of equipment and machinery.
Consumer loans will include secured and unsecured loans for financing
automobiles, home improvements, education and personal investments. The bank
will also originate mortgage loans and commercial and residential construction
loans.
The principal economic risk associated with each of the categories of
anticipated loans is the creditworthiness of the bank's prospective borrowers.
With any loan category, the level of risk increases or decreases depending on
economic conditions prevailing from time to time. The unsecured loans in all
categories have a higher risk than secured loans.
The bank will make a substantial portion of its loans to working
individuals, small businesses and professional persons. These types of loans
should provide opportunities to establish long-term relationships but may also
be credits that are less able to withstand unforeseen economic, competitive and
financial conditions than borrowers of a more substantial size. The risk
associated with real estate loans and installment loans to individuals varies
based on employment levels, fluctuations in value of residential real estate and
other conditions that affect the ability of customers to repay indebtedness. The
risk associated with commercial loans varies based upon the strength and
activity of the local economies of the bank's proposed market areas. The risk
associated with real estate construction loans varies based upon supply and
demand for the type of real estate under construction. Further, real estate
construction loans are subject to special risks due to conditions beyond a
borrower's control, including cost overruns, adverse weather, labor strikes,
unavailability of materials and inability to obtain governmental approvals.
The bank's loan underwriting criteria are being developed and will be
formulated in its written credit policy. The credit policy is a comprehensive
lending policy which includes underwriting standards for all categories of loans
the bank intends to offer. The bank's lending policy includes provisions which
will promote a diversified loan portfolio to reduce the bank's vulnerability to
risks associated with any specific category of loans.
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<PAGE> 36
The bank's lending activities will be subject to a variety of lending
limits imposed by federal law. While differing limits apply in certain
circumstances based on the type of loan or the nature of the borrower (including
the borrower's relationship to the bank), in general the bank will be subject to
a loan-to-one borrower limit of an amount equal to (1) 15% of the bank's
unimpaired capital and surplus in the case of loans which are not fully secured
by readily marketable collateral, or (2) 25% of the unimpaired capital and
surplus if the excess over 15% is fully secured by readily marketable
collateral. Unless the bank is able to sell participations in its loans to other
financial institutions, the bank will not be able to meet all lending needs of
loan customers requiring aggregate extensions of credit above these limits.
Additionally, the bank may voluntarily choose to impose a policy limit on loans
to a single borrower that is less than the legal limit.
The bank may not make any extensions of credit to any director,
executive officer, or principal shareholder of the bank, or to any related
interest of such person, unless the board of directors approves the extension of
credit, and the bank makes the loan on terms not more favorable to such person
than would be available to a person not affiliated with the bank.
MARKET AREA
The bank's primary market area is Monongalia County, West Virginia,
covering an area of approximately 361 square miles. Morgantown is the County
Seat and the largest town in Monongalia County. According to the 1990 Census,
Morgantown had a population of 25,879, and Monongalia County had a population of
75,509. In the 1990's, Morgantown has been the fastest growing city in West
Virginia.
Morgantown is the home of West Virginia University, the state's largest
university, with an enrollment of approximately 22,000 students. West Virginia
University is the largest employer in Monongalia County, with over 5,200
employees, and WVU Hospitals is the second largest employer, with approximately
2,400 employees.
The bank's first location at 990 Elmer Prince Drive is less than one
mile from WVU Hospitals, the West Virginia University Stadium and several
student housing facilities.
Total employment in Monongalia County as of 1998 was 36,780 with an
unemployment rate of 3.5%, per capita income of $23,099 and mean household
income of $54,833.
COMPETITION
The banking business is a highly competitive business. As of June 30,
1998, the date of the most recent figures available from the FDIC, there were
seven banks and one thrift in the bank's proposed market area. Total deposits of
those commercial banks as of June 30, 1999, with 24 banking offices, were in
excess of $813,820,000. The thrift had one office with approximately $19,607,000
in deposits. With one exception, Citizens Bank of Morgantown, Inc., the bank
will represent Monongalia County's only locally owned bank as the other existing
commercial banks have their parent-company headquarters in Wheeling, West
Virginia (WesBanco), Charleston, West Virginia (One Valley), and Columbus, Ohio
(Huntington National Bank).
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For most of the services which the bank will perform, there is also
competition from financial institutions other than commercial banks. There are
various issuers of commercial paper and money market funds that actively compete
for funds and for various types of loans. In addition, some traditional banking
services or competing services are offered by insurance companies, investment
counseling firms and other business firms and individuals. Many of the bank's
competitors have significantly greater financial and marketing resources than
the bank will have.
The existence of larger financial institutions in Monongalia County,
West Virginia, some of which are owned by larger regional or national companies,
influence the competition in the bank's market area. The principal competitive
factors in the markets for deposits and loans are interest rates, either paid on
deposits or charged on loans. West Virginia law allows state-wide branch banking
which provides increased opportunities for the bank, but it also will increase
the potential competition for the bank in its service area. Out-of-state banks
may form de novo banks or may acquire existing branches of West Virginia banks
on a reciprocal basis.
EMPLOYEES
The bank will initially have approximately 18 full-time employees.
PROPERTY
The bank leases its headquarters at the site of a former bank in
Morgantown, West Virginia. The site consists of approximately 6,500 square feet
for the first floor and 2,700 square feet for the second floor. The bank
anticipates entering into two leases. The bank expects the lease for the first
floor to be for 20 years with four renewable terms at five years each. The cost
of the property is expected to be $16.50 per square foot. The second lease will
be for 2,700 square feet of the second floor at a rental of $15.50 per square
foot. The term of this lease will be year-to-year.
SUPERVISION AND REGULATION
INTRODUCTION
Centra Financial will be subject to supervision, regulation and
examination by the Federal Reserve and the West Virginia Division of Banking.
Centra Bank and virtually all aspects of its operations are subject to
supervision, regulation and examination by the West Virginia Division of Banking
and the FDIC. A summary of some of the major regulatory issues follows. The
summary is not exhaustive, and we refer you to applicable statutes and
regulations for more detailed information regarding supervision and regulation
of entities such as the bank. Statutes, regulations and regulatory policies of
the federal and West Virginia governments and their agencies are subject to
change and it is impossible to predict the effects that any changes may have
upon Centra Bank and its operations.
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MONETARY POLICY
The fiscal and monetary policies of the federal government and its
agencies, including the Federal Reserve Board, affect Centra Financial and
Centra Bank. An important purpose of these policies is to curb inflation and
control recessions through control of the supply of money and credit. The
Federal Reserve Board uses its powers to establish reserve requirements of
insured depository institutions, to set the discount rate on its extensions of
credit to insured depository institutions and to conduct open market operations
in United States government securities so as to influence the supply of money
and credit. These policies have a direct effect on the amount of bank loans and
deposits and on the interest rates charged on loans and paid on deposits, with
the result that federal policies have a material effect on bank earnings.
Policies which are directed toward affecting the supply of money and credit and
reducing or increasing interest rates may have an adverse effect on bank
earnings. Future policies of the Federal Reserve Board and other authorities and
changes in state and federal laws and regulations cannot be predicted, nor can
their effect on future earnings be predicted.
DEPOSIT INSURANCE
Centra Bank will be subject to FDIC deposit insurance assessments. The
FDIC places each insured bank in one of nine risk categories based on its level
of capital (See "Capital Requirements") and other relevant information (such as
supervisory evaluations). Assessment rates for deposit insurance premiums are
subject to revision and depend on the assessment category into which the insured
institution is placed.
Centra Bank does not know what its assessment will be. It is possible
that insurance assessments will be increased at some future date, and it is also
possible that there may be a special additional assessment. A large special
assessment could have an adverse impact on the bank's results of operations.
CAPITAL REQUIREMENTS
The Federal Reserve Board and FDIC have issued risk-based capital
guidelines for banking organizations, such as Centra Financial and Centra Bank.
The guidelines establish a systematic analytical framework that makes regulatory
capital requirements more sensitive to differences in risk profiles among
banking organizations, takes off-balance sheet exposures into explicit account
in assessing capital adequacy, and minimizes disincentives to holding liquid,
low-risk assets. The risk-based ratio is determined by allocating assets and
specified off-balance sheet commitments into four weighted categories, with
higher levels of capital being required for categories perceived as representing
greater risk.
Generally, under the applicable guidelines, the financial institution's
capital stock is divided into two tiers. "Tier 1," or core capital, includes
common equity, noncumulative perpetual preferred stock (excluding auction rate
issues) and perpetual preferred stock (excluding auction rate issues) and
minority interests in equity accounts or consolidated subsidiaries, less
goodwill and, with few exceptions, all other intangible assets. "Tier 2," or
supplementary capital, includes, among other items, cumulative and limited-life
preferred stock, hybrid capital instruments, mandatory convertible securities,
qualifying subordinated debt, and the allowance for loan losses, subject to
certain limitations, less
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required deductions. "Total capital" is the sum of Tier 1 and Tier 2 capital.
Financial institutions are required to maintain a risk-based ratio of
8%, of which 4% must be Tier 1 capital. The appropriate regulatory authority may
set higher capital requirements when an institution's particular circumstances
warrant.
Banks are subject to "leverage ratio" guidelines involving a numerator
defined as Tier 1 capital and a denominator defined as adjusted total assets (as
defined by regulation). The bank regulatory agencies have established a 3%
minimum Tier 1 leverage ratio applicable only to banks meeting certain specified
criteria, including excellent assets quality, high liquidity, low interest rate
exposure and the highest regulatory rating. Institutions not meeting these
criteria are expected to maintain a ratio which exceeds the 3% minimum by at
least 100 to 200 basis points.
The guidelines also provide that financial institutions experiencing
internal growth or making acquisitions will be expected to maintain strong
capital positions substantially above the minimum supervisory levels, without
significant reliance on intangible assets.
It is anticipated that Centra Financial and Centra Bank will meet or
exceed all required capital ratios. Failure to meet applicable capital
guidelines could subject the financial institution to a variety of enforcement
remedies available to the federal regulatory authorities, including limitations
on the ability to pay dividends, the issuance by the regulatory authority of a
capital directive to increase capital and the termination of deposit insurance
by the FDIC, as well as to the measures described under "Federal Deposit
Insurance Corporation Improvement Act of 1991" as applicable to undercapitalized
institutions. (See "Supervision and Regulation-Federal Deposit Insurance
Corporation Improvement Act of 1991".)
FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991
In December 1991, Congress enacted the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA"), which substantially revises the
bank regulatory and funding provisions of the Federal Deposit Insurance Act and
makes revisions to several other federal banking statutes.
Among other things, FDICIA requires federal bank regulatory authorities
to take "prompt corrective action" with respect to depository institutions that
do not meet minimum capital requirements. For these purposes, FDICIA establishes
five capital tiers: well capitalized, adequately capitalized, undercapitalized,
significantly undercapitalized and critically undercapitalized.
Regulations define the relevant capital measures for the five
categories. An institution is deemed to be "well capitalized" if it has a total
risk-based capital ratio of 10% or greater, Tier 1 risk-based capital ratio of
6% or greater and a Tier 1 leverage ratio of 5% or greater and is not subject to
a regulatory order, agreement or directive to meet and maintain a regulatory
order, agreement or directive to meet and maintain a specific capital level for
any capital measure. An institution is deemed to be "adequately capitalized" if
it has a total risk-based capital ratio of 8% or greater, a Tier 1 risk-based
ratio of 4% or greater and the institution does not meet the definition of a
"well capitalized" institution. An institution that does not meet one or more of
the "adequately capitalized" tests is deemed to be "undercapitalized." If the
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institution has a total risk-based capital ratio that is less than 6%, a Tier 1
risk-based capital ratio that is less than 3%, or a Tier 1 leverage ratio that
is less than 3%, it is deemed to be "significantly undercapitalized." Finally,
an institution is deemed to be "critically undercapitalized" if it has a ratio
of tangible equity (as defined in the regulations) to total assets that is equal
to or less than 2%.
"Undercapitalized" institutions are subject to growth limitations and
are required to submit a capital restoration plan. If an "undercapitalized"
institution fails to submit an acceptable plan, it is treated as if it is
significantly undercapitalized. "Significantly undercapitalized" institutions
may be subject to a number of requirements and restrictions, including orders to
sell sufficient voting stock to become adequately capitalized, requirements to
reduce total assets and a cessation of receipt of deposits from correspondent
banks. "Critically undercapitalized" institutions may not, beginning 60 days
after becoming "critically undercapitalized" make any payment of principal or
interest on their subordinate debt. In addition, "critically undercapitalized"
institutions are subject to appointment of a receiver or conservator.
Under FDICIA, a depository institution that is not "well capitalized"
is generally prohibited from accepting brokered deposits and offering interest
rates on deposits higher than the prevailing rate in its market. For the
purposes of the brokered deposit rules, a bank is defined to be "well
capitalized" if it maintains a ratio of Tier 1 capital to risk-adjusted assets
of at least 6%, a ratio of total capital to risk-adjusted assets of at least 10%
and a Tier 1 leverage ratio of at least 5% and is not otherwise in a "troubled
condition" as specified by its appropriate federal regulatory agency.
FDICIA directs that each federal banking agency prescribe standards for
depository institutions and depository institution holding companies relating to
internal controls, information systems, internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth,
compensation, a maximum ratio of classified assets to capital, minimum earnings
sufficient to absorb losses, a minimum ratio of market value to book value for
publicly-traded shares and such other standards as the agency deems appropriate.
FDICIA also contains a variety of other provisions that may affect the
operations of the bank, including new reporting requirements, revised regulatory
standards for real estate lending "truth in savings" provisions and the
requirement that a depository institution give 90 days' prior notice to
customers and regulatory authorities before closing any branch.
GRAMM-LEACH-BLILEY ACT OF 1999
On November 4, 1999, Congress adopted the Gramm-Leach-Bliley Act of
1999. This Act, also known as the Financial Modernization Law, repealed a number
of federal limitations on the powers of banks and bank holding companies
originally adopted in the 1930's. Under the Act, banks, insurance companies,
securities firms and other service providers may now affiliate. In addition to
broadening the powers of banks, the Act created a new form of entity, called a
financial holding company, which may engage in any activity that is financial in
nature or incidental or complimentary to financial activities. Centra Financial
intends to become a financial holding company.
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The Federal Reserve Board provides the principal regulatory supervision
of financial services permitted under the Act. However, the Securities and
Exchange Commission and state insurance and securities regulators also assume
substantial supervisory powers and responsibilities.
The Act addresses a variety of other matters, including customer
privacy issues. The obtaining of certain types of information by false or
fraudulent pretenses is a crime. Banks and other financial institutions must
notify their customers about their policies on sharing information with certain
third parties. In some instances, customers may refuse to permit their
information to be shared. The Act also requires disclosures of certain automatic
teller machine fees and contains certain amendments to the federal Community
Reinvestment Act. The Act becomes effective 120 days after its passage.
ADDITIONAL INFORMATION ABOUT THE HOLDING COMPANY
Centra Financial was incorporated on October 25, 1999, under the
general corporation laws of West Virginia as a wholly owned subsidiary of Centra
Bank to serve as a bank holding company in the reorganization and, therefore,
the holding company has no prior operating history. Its principal office is
located at 990 Elmer Prince Drive, P. O. Box 656, Morgantown, West Virginia
26507-0656, and its telephone number is (304) 599-8121.
The holding company is authorized to issue 50,000,000 shares of common
stock, par value $1.00 per share, and 1,000,000 shares of preferred stock, par
value $1.00 per share. Certain bank employees currently own 5,000 shares of the
holding company's common stock, which will constitute all of the issued and
outstanding capital stock of the holding company immediately prior to the
reorganization. On the effective date of the reorganization, all of the stock
held by those employees will be redeemed and canceled.
OTHER MATTERS
As of the date of this proxy statement/prospectus, management is not
aware of any business to come before the special meeting other than the matters
that are described in this proxy statement/ prospectus. However, if any other
matters properly come before the special meeting, we intend that the proxies
solicited by this proxy statement/prospectus will be voted on those other
matters in accordance with the judgment of the persons voting the proxies.
LEGAL MATTERS
Jackson & Kelly PLLC, Charleston, West Virginia, will pass upon the
validity of the holding company stock to be issued in the reorganization and
certain federal tax matters.
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WHERE YOU CAN FIND MORE INFORMATION
Centra Financial has filed with the Securities and Exchange Commission
a Registration Statement on Form S-4 under the Securities Act of 1933, as
amended, with respect to the shares of its stock it will issue under the
agreement and plan of merger. This proxy statement/prospectus does not contain
all information set forth in the Registration Statement and the exhibits
thereto.
You may obtain copies (at prescribed rates) of this additional
information at the public reference facilities the Commission maintains at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and the Commission's
regional offices in New York (7 World Trade Center, New York, New York 10048),
and Chicago (Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661).
The Commission maintains a World Wide web site on the Internet at
http.//www.sec.gov that contains the Registration Statement in its entirety.
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APPENDIX I
AGREEMENT
AND
PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement"), is made and
entered into as of the 26th day of October, 1999, by and between CENTRA
FINANCIAL HOLDINGS, INC., a West Virginia corporation ("Centra"), and CENTRA
BANK, INC., a West Virginia banking corporation ("Bank"), to be joined in by CFH
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, Centra 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, Centra has been formed as a
West Virginia corporation; and
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WHEREAS, Centra will cause a new state banking corporation to
be chartered under the laws of West Virginia under the name CFH 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 Centra, 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
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succeed to all the rights, assets, liabilities and obligations of Interim Bank
in accordance with the West 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
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canceled, shall automatically be converted into and be exchanged for one (1)
share of common stock of Centra.
(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 Centra, 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 Centra or any agent designated by it and, upon such surrender,
Centra shall issue and deliver in substitution therefor, certificates
representing the number of shares of common stock of Centra 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 Centra into
which said shares of Bank shall have been converted as hereinbefore set forth;
provided, however, that management of Centra 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 Centra
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.
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SECTION 4
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE BANK
The Bank represents and warrants to and covenants with Centra
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 sections 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 1,900,000 shares of common stock, par value of $1.00 per share, of
which 1,200,000 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
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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:
(a) That it will promptly advise Centra 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 CENTRA
Centra represents and warrants to and covenants with the Bank
that:
5.1 Corporate Organization of Centra. Centra 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. Centra 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 Centra in accordance with its terms. No action of
Centra shareholders is or will be required to approve this Agreement or the
Merger.
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5.3 Application for Interim Bank. Promptly following the
execution of this Agreement, Centra shall cause to be filed with the West
Virginia Board of Banking and Financial Institutions (the "Banking Board") an
application to organize and incorporate Interim Bank as a West Virginia banking
corporation, in accordance with the provisions of W. Va. Code ss. 31A-4-5, with
all its capital stock owned by Centra. 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, Centra 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, Centra 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. Centra 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, Centra
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 Centra'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
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System ("FRB") under the Bank Holding Company Act of 1956, as amended, for the
formation of Centra as a one-bank holding company owning 100% of the voting
shares of the Bank, and (iv) all other consents and approvals of governmental
agencies as are required by law or otherwise, and shall do any and all things
deemed by Centra 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 Centra
consists of 50,000,000 shares of common stock, par value of $1.00 per share, and
1,000,000 shares of preferred stock, par value of $1.00 per share, of which
2,500 shares of common stock are issued and outstanding and are fully paid and
nonassessable.
5.7 Registration. To the extent required by law, Centra 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 Centra 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.
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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 Centra 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 Centra 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 Centra) to carry out the
transactions contemplated by this Agreement shall have been received.
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(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 Centra, the Bank, or any
of their subsidiaries, and shall not have imposed any other condition, which
divestiture, cessation or condition which Centra or the Bank reasonably deems to
be materially disadvantageous or burdensome;
(j) Centra shall have received an opinion of its counsel,
Jackson & Kelly 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 sections 368(a)(1)(A) and sections 368(a)(2)(E) of the Internal
Revenue Code of 1954, as amended, (ii) the Bank, Centra 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 Centra 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 Centra common stock received in the Merger will include the period for which
the shares of the Bank Common Stock was held, provided that the Bank
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Common Stock was a capital asset in the hands of such Bank shareholder on the
Effective Date; and
(k) Unless waived by Centra, 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 Morgantown, West Virginia, at such time and place as the Bank and
Centra 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 that the last day of the sixth
calendar month next succeeding the Approval Date. Centra shall cause the
Articles of Merger with respect to the Merger to be filed with the Secretary of
State of West Virginia on the Closing Date.
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:
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(a) By mutual consent of the Bank and Centra;
(b) By Centra 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 Centra or Interim
Bank set forth herein; or
(c) By either the Bank or Centra 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 Centra and the Bank under this Agreement shall terminate without further
liability of Centra to the Bank or of the Bank to Centra.
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
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which they are made, not misleading, and which otherwise complies with all
applicable laws, rules and regulations. Information pertaining to Centra or
Interim Bank which has been or will be furnished to the Bank by or on behalf of
Centra 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, Centra will repurchase from
each of the initial directors of Centra those shares of the common stock of
Centra purchased by them, which shares represent the initial capitalization of
Centra, 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 Centra
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and the Bank when one or more counterparts shall have been signed and delivered
by Centra 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 Centra 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
Centra 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, Centra, 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 Centra 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.
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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, Centra 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.
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IN WITNESS WHEREOF, Centra 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.
Seal: CENTRA FINANCIAL HOLDINGS, INC.
By /s/ Douglas J. Leech, Jr.
----------------------------
Its President
------------------------
Attest:
By /s/ Timothy P. Saab
-------------------------
Secretary
Seal: CENTRA BANK, INC.
By /s/ Douglas J. Leech, Jr.
----------------------------
Its President
------------------------
Attest:
By /s/ Timothy P. Saab
-------------------------
Secretary/Cashier
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EXHIBIT A
SUPPLEMENTARY AGREEMENT
THIS SUPPLEMENTARY AGREEMENT, made and entered into as of this
16th day of December, 1999, by and among CFH INTERIM BANK, INC., a West Virginia
banking corporation, ("Interim Bank"), CENTRA BANK, INC., a West Virginia
banking corporation, (the "Bank"), and CENTRA FINANCIAL HOLDINGS, INC., a West
Virginia corporation, ("Centra").
R E C I T A L S
WHEREAS, the Bank and Centra have entered into an Agreement
and Plan of Merger dated as of October 26, 1999, (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, Centra 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 in December 1999, and Interim Bank and Centra are entering into this
Supplementary Agreement pursuant to Section 5.3 of the Agreement.
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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 Centra and the Bank to that end.
(3) Interim Bank represents and warrants to the Bank and
Centra 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.
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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.
CFH INTERIM BANK, INC.
By /s/ Douglas J. Leech
-----------------------------
Its President
-------------------------
CENTRA BANK, INC.
By /s/ Douglas J. Leech
-----------------------------
Its President
-------------------------
CENTRA FINANCIAL HOLDINGS, INC.
By /s/ Douglas J. Leech
-----------------------------
Its President
-------------------------
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APPENDIX II
WEST VIRGINIA CORPORATION ACT
SECTION 31-1-122.
RIGHT OF SHAREHOLDERS TO DISSENT.
Any shareholder of a corporation shall have the right to dissent from any of the
following corporate actions:
(a) Any plan of merger or consolidation to which the corporation is a
party; or
(b) Any sale or exchange of all or substantially all of the property
and assets of the corporation not made in the usual and regular course of its
business, including a sale in dissolution, but not including a sale pursuant to
an order of a court having jurisdiction in the premises or a sale for cash on
terms requiring that all or substantially all of the net proceeds of sale be
distributed to the shareholders in accordance with their respective interests
within one year after the date of sale.
A shareholder may dissent as to less than all of the shares registered
in his name. In that event, his rights shall be determined as if the shares as
to which he has dissented and his other shares were registered in the names of
different shareholders.
SECTION 31-1-123.
RIGHTS OF DISSENTING SHAREHOLDERS; PROCEDURE
FOR PURCHASING OF DISSENTING SHAREHOLDERS' SHARES;
CIVIL ACTION FOR DETERMINING VALUE OF SHARES;
PROCEDURE FOR TRANSFERRING OF SUCH SHARES TO
CORPORATION AND PAYMENT THEREFOR.
(a) Any shareholder electing to exercise his right to dissent, pursuant
to section one hundred twenty-two [Sec. 31-1-122] of this article, shall file
with the corporation, prior to or at the meeting of shareholders at which such
proposed corporate action is submitted to a vote, a written objection to such
proposed corporation action. If such proposed corporate action be approved by
the required vote and such shareholder shall not have voted in favor thereof,
such shareholder may, within ten days after the date on which the vote was taken
or if a corporation is to be merged without a vote of its shareholders into
another corporation, any of its shareholders may, within fifteen days after the
plan of such merger shall have been mailed to such shareholders, make written
demand on the corporation, or, in the case of a merger or consolidation, on the
surviving or new corporation, domestic or foreign, for payment of the fair value
of such shareholder's shares, and, if such proposed corporation action is
effected, such corporation shall pay to such shareholder, upon surrender of the
certificate or certificates representing such shares, the fair value thereof as
of the day prior to the date on which the vote was taken approving the proposed
II-1
<PAGE> 63
corporate action, excluding any appreciation or depreciation in anticipation of
such corporate action. Any shareholder failing to make demand within the ten-day
period shall be bound by the terms of the proposed corporate action. Any
shareholder making such demand shall thereafter be entitled only to payment as
in this section provided and shall not be entitled to vote or to exercise any
other rights of a shareholder.
(b) No such demand may be withdrawn unless the corporation shall
consent thereto. If, however, such demand shall be withdrawn upon consent, or if
the proposed corporate action shall be abandoned or rescinded or the
shareholders shall revoke the authority to effect such action, or if, in the
case of a merger, on the date of the filing of the articles of merger the
surviving corporation, is the owner of all the outstanding shares of the other
corporations, domestic and foreign, that are parties to the merger, or if no
demand or petition for the determination of fair value by a court of general
civil jurisdiction have been made or filed within the time provided in
subsection (e) of this section, or if a court of general civil jurisdiction
shall determine that such shareholder is not entitled to the relief provided by
this section, then the right of such shareholder to be paid the fair value of
his shares shall cease and his status as a shareholder shall be restored,
without prejudice to any corporate proceedings which may have been taken during
the interim.
(c) Within ten days after such corporate action is effected, the
corporation, or, in the case of a merger or consolidation, the surviving or new
corporation, domestic or foreign, shall give written notice thereof to each
dissenting shareholder who has made demand as herein provided, and shall make a
written offer to each shareholder to pay for such shares at a specified price
deemed by such corporation to be fair value thereof. Such notice and offer shall
be accompanied by a balance sheet of the corporation the shares of which the
dissenting shareholder holds, as of the latest available date and not more than
twelve months prior to the making of such offer, and a profit and loss statement
of such corporation for the twelve months' period ended on the date of such
balance sheet.
(d) If within thirty days after the date on which such corporate action
is effected the fair value of such shares is agreed upon between any such
dissenting shareholder and the corporation, payment therefor shall be made
within ninety days after the date on which such corporate action was effected,
upon surrender of the certificate or certificates representing such shares. Upon
payment of the agreed value the dissenting shareholder shall cease to have any
interest in such shares.
(e) If within such period of thirty days, a dissenting shareholder and
the corporation do not so agree, then the corporation shall within thirty days
after receipt of written demand from any dissenting shareholder, which written
demand must be given within sixty days after the date on which such corporation
action was effected, file a complaint in a court of general civil jurisdiction
requesting that the fair value of such shares be found and determined, or the
corporation may file such complaint at any time within such sixty-day period at
its own election. Such complaint shall be filed in any court of general civil
jurisdiction in the county in which the principal office of the corporation is
situated, or, if there be no such office in this State, in the county in which
any dissenting shareholder resides or is found or in which the property of such
corporation, or any part of it, may be. If the corporation shall fail to
institute such proceedings, any dissenting shareholder may do so in the name of
the corporation. All dissenting shareholders wherever residing, may be made
parties to the proceedings as an action against their shares quasi in rem. A
copy of the complaint shall be served on each dissenting shareholder who is a
resident of this State in the same manner as in other civil actions. Dissenting
shareholders who are nonresidents of
II-2
<PAGE> 64
this State shall be served a copy of the complaint by registered or certified
mail, return receipt requested. In addition, service upon such nonresident
shareholders shall be made by publication, as provided in Rule 4(e)(2) of the
West Virginia Rules of Civil Procedure. All shareholders who are parties to the
proceeding shall be entitled to judgment against the corporation for the amount
of the fair value of their shares. The court may, if it so elects, appoint one
or more persons as appraisers to receive evidence and recommend a decision on
the question of fair value. The appraisers shall have such power and authority
as shall be specified in the order of their appointment or any subsequent
appointment. The judgment shall be payable only upon and concurrently with the
surrender to the corporation of the certificate or certificates representing
such shares. Upon payment of the judgment, the dissenting shareholder shall
cease to have any interest in such shares.
The judgment shall include an allowance for interest at such rate as
the court may find to be fair and equitable in all the circumstances, from the
date on which the vote was taken on the proposed corporate action to the date of
payment.
The costs and expenses of any such proceeding shall be determined by
the court and shall be assessed against the corporation, but all or any part of
such costs and expenses may be apportioned and assessed as the court may deem
equitable against any or all of the dissenting shareholders who are parties to
the proceeding to whom the corporation shall have made an offer to pay for the
shares if the court shall find that the action of such shareholders in failing
to accept such offer was arbitrary or vexatious or not in good faith. Such
expenses shall include reasonable compensation for and reasonable expenses of
the appraisers, but shall exclude the fees and expenses of counsel for and
experts employed by any party; but if the fair value of the shares as determined
materially exceeds the amount which the corporation offered to pay therefor, or
if no offer was made, the court in its discretion may award to any shareholder
who is a party to the proceeding such sum as the court may determine to be
reasonable compensation to any expert or experts employed by the shareholder in
the proceeding. Any party to the proceeding may appeal any judgment or ruling of
the court as in other civil cases.
(f) Within twenty days after demanding payment for his shares, each
shareholder demanding payment shall submit the certificate or certificates
representing his shares to the corporation for notation thereon that such demand
has been made. His failure to do so shall, at the option of the corporation,
terminate his rights under this section unless a court of general civil
jurisdiction, for good and sufficient cause shown, shall otherwise direct. If
shares represented by a certificate on which notation has been so made shall be
transferred, each new certificate issued therefor shall bear similar notation,
together with the name of the original dissenting holder of such shares, and a
transferee of such shares shall acquire by such transfer no rights in the
corporation other than those which the original dissenting shareholder had after
making demand for payment of the fair value thereof.
(g) Shares acquired by a corporation pursuant to payment of the agreed
value therefor or to payment of the judgment entered therefor, as in this
section provided, may be held and disposed of by such corporation as in the case
of other treasury shares, except that, in the case of a merger or consolidation,
they may be held and disposed of as the plan of merger or consolidation may
otherwise provide.
II-3
<PAGE> 65
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to the provisions of Article V.1 of Centra Financial
Holdings, Inc.'s articles of incorporation below.
V.1. INDEMNIFICATION:
A. Indemnification. Each person who was or is a party
or is threatened to be made a party to or is involved
(including, without limitation, as a witness or deponent) in
any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative,
investigative or otherwise in nature ("Proceeding"), by reason
of the fact that he or she, or a person of whom he or she is
the legal representative, is or was a director or officer of
the corporation or is or was serving at the written request of
the corporation's Board of Directors, president or their
delegate as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit
plans, whether the basis of such Proceeding is alleged action
or omission in an official capacity as a director, officer,
trustee, employee or agent or in any other capacity, shall be
indemnified and held harmless by the corporation to the
fullest extent authorized by law, including but not limited to
the West Virginia Code, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the
extent that such amendment permits the corporation to provide
broader indemnification rights than said Code permitted the
corporation to provide prior to such amendment), against all
expenses, liability and loss (including, without limitation,
attorneys' fees and disbursements, judgments, fines, ERISA or
other similar or dissimilar excise taxes or penalties and
amounts paid or to be paid in settlement) incurred or suffered
by such person in connection therewith; provided, however,
that the corporation shall indemnify any such person seeking
indemnity in connection with a Proceeding (or part thereof)
initiated by such person only if such Proceeding (or part
thereof) was authorized by the Board of Directors of the
corporation; provided, further, that the corporation shall not
indemnify any person for civil money penalties or other
matters, to the extent such indemnification is specifically
not permissible pursuant to federal or state statute or
regulation, or order or rule of a regulatory agency of the
federal or state government with authority to enter, make or
promulgate such order or rule. Such right shall include the
right to be paid by the corporation expenses, including,
without limitation,
PART II-1
<PAGE> 66
attorneys' fees and disbursements, incurred in defending or
participating in any such Proceeding in advance of its final
disposition; provided, however, that the payment of such
expenses in advance of the final disposition of such
Proceeding shall be made only upon delivery to the corporation
of an undertaking, by or on behalf of such director or
officer, in which such director or officer agrees to repay all
amounts so advanced if it should be ultimately determined that
such person is not entitled to be indemnified under this
Article or otherwise. The termination of any Proceeding by
judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith
and in a manner which he reasonably believed to be in or not
opposed to the best interest of the corporation, or that such
person did have reasonable cause to believe that his conduct
was unlawful.
B. Right of Claimant to Bring Suit. If a claim under
this Article is not paid in full by the corporation within
thirty days after a written claim therefor has been received
by the corporation, the claimant may at any time thereafter
bring suit against the corporation to recover the unpaid
amount of the claim and, if successful, in whole or in part,
the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such
action (other than an action brought to enforce a claim for
expenses incurred in defending or participating in any
Proceeding in advance of its final disposition where the
required undertaking has been tendered to the corporation)
that the claimant has not met the standards of conduct which
make it permissible under the applicable law for the
corporation to indemnify the claimant for the amount claimed,
but the burden of proving such defense shall be on the
corporation.
Neither the failure of the corporation (including its
Board of Directors, independent legal counsel, or its
shareholders) to have made a determination prior to the
commencement of such action that indemnification or
reimbursement of the claimant is permitted in the
circumstances because he or she has met the applicable
standard of conduct, nor an actual determination by the
corporation (including its Board of Directors, independent
legal counsel, or its shareholders) that the claimant has not
met such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not
met the applicable standard of conduct.
C. Contractual Rights: Applicability. The right to be
indemnified or to the reimbursement or advancement of expenses
pursuant hereto (i) is a contract right based upon good and
valuable consideration, pursuant to which the person entitled
thereto may bring
PART II-2
<PAGE> 67
suit as if the provisions hereof were set forth in a separate
written contract between the corporation and the director or
officer, (ii) is intended to be retroactive and shall be
available with respect to events occurring prior to the
adoption hereof, and (iii) shall continue to exist after the
rescission or restrictive modification hereof with respect to
events occurring prior thereto.
D. Requested Service. Any director or officer of the
corporation serving, in any capacity, (i) another corporation
of which five percent (5%) or more of the shares entitled to
vote in the election of its directors is held by the
corporation, or (ii) any employee benefit plan of the
corporation or of any corporation referred to in clause (i),
shall be deemed to be doing so at the request of the
corporation.
E. Non-Exclusivity of Rights. The rights conferred on
any person hereunder shall not be exclusive of and shall be
in addition to any other right which such person may have or
may hereafter acquire under any statute, provision of the
Certificate of Incorporation, Bylaws, agreement, vote of
shareholders or disinterested directors or otherwise.
F. Insurance. The corporation may purchase and
maintain insurance, at its expense, to protect itself and any
director, officer, employee or agent of the corporation or
another corporation, partnership, joint venture, trust or
other enterprise against such expense, liability or loss,
whether or not the corporation would have the power to
indemnify such person against such expense, liability or loss
under West Virginia law.
Centra Financial is a West Virginia corporation subject to the
applicable indemnification provisions of the General Corporation Law of West
Virginia.
The foregoing indemnity provisions have the effect of reducing
directors' and officers' exposure to personal liability for actions taken in
connection with their respective positions.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of Centra Financial pursuant to the foregoing provisions, or otherwise,
Centra Financial has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by Centra Financial of expenses incurred or paid by a director, officer
or controlling person of Centra Financial in the successful defense of any
action, suite or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, Centra
Financial will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
PART II-3
<PAGE> 68
adjudication of such issue.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits.
EXHIBIT NO. EXHIBIT
----------- -------
2.1 Agreement and Plan of Merger, dated as of
October 26, 1999, by and among Centra Bank,
Inc., CFH Interim Bank, Inc., and Centra
Financial Holdings, Inc. (included as
Appendix I to the Proxy Statement/
Prospectus)
3.1 Articles of Incorporation.
3.2 Bylaws.
5 Opinion of Jackson & Kelly PLLC, as to the
validity of the securities registered
hereunder, including the consent of that
firm.
8 Form of Opinion of Jackson & Kelly PLLC as
to certain United States tax matters,
including the consent of that firm.
10.1 Shareholder Protection Rights Agreement.
10.2 Centra Financial Holdings, Inc. Incentive
Stock Option Plan.
23.1 Consent of Jackson & Kelly PLLC (included as
part of Exhibit 5 and Exhibit 8).
24 Power of Attorney.
99.1 Form of Proxy Card.
(b) Not required.
(c) Not required.
PART II-4
<PAGE> 69
ITEM 22. UNDERTAKINGS.
(a) Centra Financial hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of
1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the registration statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the registration
statement. Notwithstanding the foregoing,
any increase or decrease in volume of
securities offered (if the total dollar
value of the securities offered would not
exceed that which was registered) and any
deviation from the low or high end of the
estimated maximum offering range may be
reflected in the form of prospectus filed
with the Securities and Exchange Commission
pursuant to Rule 424(b) (sec. 230.424(b) of
this chapter) if, in the aggregate, the
changes in volume and price represent no
more than a 20% change in the maximum
aggregate offering price set forth in the
"Calculation of the Registration Fee" table
in the effective registration statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) Centra Financial hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder
through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed
to be an underwriter within the meaning of Rule 145(c),
Central Financial undertakes that such reoffering prospectus
will contain the information called for by the applicable
registration form with respect to reofferings by persons who
may be deemed underwriters, in addition to
PART II-5
<PAGE> 70
the information called for by the other items of the
applicable form.
(c) Centra Financial undertakes that every prospectus: (i) that
is filed pursuant to paragraph (b) immediately preceding, or
(ii) that purports to meet the requirements of section
10(a)(3) of the Securities Act of 1933 and is used in
connection with an offering of securities subject to Rule 415
will be filed as a part of an amendment to the registration
statement and will not be used until such amendment is
effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(d) The undertaking concerning indemnification is included as
part of the response to Item 20.
(e) Centra Financial hereby undertakes to respond to requests
for information that is incorporated by reference into the
prospectus pursuant to Items 4, 10(b), 11, or 13 of this
form, within one business day of receipt of such request, and
to send the incorporated documents by first class mail or
other equally prompt means. This includes information
contained in documents filed subsequent to the effective date
of the registration statement through the date of responding
to the request.
(f) Centra Financial hereby undertakes to supply by means of a
post-effective amendment all information concerning a
transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration
statement when it became effective.
PART II-6
<PAGE> 71
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, CENTRA
FINANCIAL HOLDINGS, INC., HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY
OF MORGANTOWN, WEST VIRGINIA, ON THE 16TH DAY OF DECEMBER, 1999.
CENTRA FINANCIAL HOLDINGS, INC.
By /s/ Douglas J. Leech, Jr.
--------------------------------
Douglas J. Leech, Jr.
President and Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Douglas J. Leech, Jr. Director, President, and December 16, 1999
- ----------------------------------- Chief Executive Officer
Douglas J. Leech, Jr. (Principal Executive Officer)
/s/ Kevin D. Lemley Vice President, Chief December 16, 1999
- ----------------------------------- Financial Officer, and
Kevin D. Lemley Treasurer (Principal
Financial Officer and
Principal Accounting Officer)
/s/ Arthur Gabriel Director December 16, 1999
- -----------------------------------
Arthur Gabriel
/s/ Parry G. Petroplus Director December 16, 1999
- -----------------------------------
Parry G. Petroplus
/s/ Milan Puskar Director December 16, 1999
- -----------------------------------
Milan Puskar
/s/ Bernard G. Westfall Director December 16, 1999
- -----------------------------------
Bernard G. Westfall
</TABLE>
PART II-7
<PAGE> 72
EXHIBIT INDEX
2.1 Agreement and Plan of Merger, dated as of October 26, 1999, by
and among Centra Bank, Inc., CFH Interim Bank, Inc., and
Centra Financial Holdings, Inc. (included as Appendix I to the
Proxy Statement/Prospectus)
3.1 Articles of Incorporation.
3.2 Bylaws.
5 Opinion of Jackson & Kelly PLLC, as to the validity of the
securities registered hereunder, including the consent of that
firm.
8 Form of Opinion of Jackson & Kelly PLLC as to certain United
States tax matters, including the consent of that firm.
10.1 Shareholder Protection Rights Agreement.
10.2 Centra Financial Holdings, Inc. Incentive Stock Option Plan.
23.1 Consent of Jackson & Kelly PLLC (included as part of Exhibit 5
and Exhibit 8).
24 Power of Attorney.
99.1 Form of Proxy Card.
<PAGE> 1
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
CENTRA FINANCIAL HOLDINGS, INC.
The undersigned, acting as incorporator of a corporation
under Section 27, Article 1, Chapter 31 of the Code of West Virginia adopts the
following Articles of Incorporation for such corporation, FILED IN DUPLICATE:
ARTICLE I
The undersigned agrees to become a corporation by the name of
Centra Financial Holdings, Inc.
ARTICLE II
The address of the principal office of said corporation will
be located at 990 Elmer Prince Drive, P. O. Box 656, City of Morgantown, County
of Monongalia, and State of West Virginia 26507-0656.
ARTICLE III
The purpose or purposes for which this corporation is formed
are as follows: To transact any or all lawful business for which corporations
may be incorporated under the corporation laws of the State of West Virginia.
ARTICLE IV
No shareholder or other person shall have any preemptive
right whatsoever.
ARTICLE V
Provisions for the regulation of the internal affairs of the
corporation are:
V.1. INDEMNIFICATION:
A. Indemnification. Each person who was or is a party or is
threatened to be made a party to or is involved (including, without limitation,
as a witness or deponent) in any threatened, pending or completed action, suit
or proceeding, whether civil, criminal,
<PAGE> 2
administrative, investigative or otherwise in nature ("Proceeding"), by reason
of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the corporation or is or was
serving at the written request of the corporation's Board of Directors,
president or their delegate as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether the basis of such
Proceeding is alleged action or omission in an official capacity as a director,
officer, trustee, employee or agent or in any other capacity, shall be
indemnified and held harmless by the corporation to the fullest extent
authorized by law, including but not limited to the West Virginia Code, as the
same exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the corporation to provide
broader indemnification rights than said Code permitted the corporation to
provide prior to such amendment), against all expenses, liability and loss
(including, without limitation, attorneys' fees and disbursements, judgments,
fines, ERISA or other similar or dissimilar excise taxes or penalties and
amounts paid or to be paid in settlement) incurred or suffered by such person in
connection therewith; provided, however, that the corporation shall indemnify
any such person seeking indemnity in connection with a Proceeding (or part
thereof) initiated by such person only if such Proceeding (or part thereof) was
authorized by the Board of Directors of the corporation; provided, further, that
the corporation shall not indemnify any person for civil money penalties or
other matters, to the extent such indemnification is specifically not
permissible pursuant to federal or state statute or regulation, or order or rule
of a regulatory agency of the federal or state government with authority to
enter, make or promulgate such order or rule. Such right shall include the right
to be paid by the corporation expenses, including, without limitation,
attorneys' fees and disbursements, incurred in defending or participating in any
such Proceeding in advance of its final disposition; provided, however, that the
payment of such expenses in advance of the final disposition of such Proceeding
shall be made only upon delivery to the corporation of an undertaking, by or on
behalf of such director or officer, in which such director or officer agrees to
repay all amounts so advanced if it should be ultimately determined that such
person is not entitled to be indemnified under this Article or otherwise. The
termination of any Proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interest of the
corporation, or that such person did have reasonable cause to believe that his
conduct was unlawful.
B. Right of Claimant to Bring Suit. If a claim under this
Article is not paid in full by the corporation within thirty days after a
written claim therefor has been received by the corporation, the claimant may at
any time thereafter bring suit against the corporation to recover the unpaid
amount of the claim and, if successful, in whole or in part, the claimant shall
be entitled to be paid also the expense of prosecuting such claim. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in defending or participating in any Proceeding in advance of
its final disposition where the required undertaking has been tendered to the
corporation) that the claimant has not met the
2
<PAGE> 3
standards of conduct which make it permissible under the applicable law for the
corporation to indemnify the claimant for the amount claimed, but the burden of
proving such defense shall be on the corporation.
Neither the failure of the corporation (including its Board
of Directors, independent legal counsel, or its shareholders) to have made a
determination prior to the commencement of such action that indemnification or
reimbursement of the claimant is permitted in the circumstances because he or
she has met the applicable standard of conduct, nor an actual determination by
the corporation (including its Board of Directors, independent legal counsel, or
its shareholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
C. Contractual Rights: Applicability. The right to be
indemnified or to the reimbursement or advancement of expenses pursuant hereto
(i) is a contract right based upon good and valuable consideration, pursuant to
which the person entitled thereto may bring suit as if the provisions hereof
were set forth in a separate written contract between the corporation and the
director or officer, (ii) is intended to be retroactive and shall be available
with respect to events occurring prior to the adoption hereof, and (iii) shall
continue to exist after the rescission or restrictive modification hereof with
respect to events occurring prior thereto.
D. Requested Service. Any director or officer of the
corporation serving, in any capacity, (i) another corporation of which five
percent (5%) or more of the shares entitled to vote in the election of its
directors is held by the corporation, or (ii) any employee benefit plan of the
corporation or of any corporation referred to in clause (i), shall be deemed to
be doing so at the request of the corporation.
E. Non-Exclusivity of Rights. The rights conferred on any
person hereunder shall not be exclusive of and shall be in addition to any other
right which such person may have or may hereafter acquire under any statute,
provision of the Certificate of Incorporation, Bylaws, agreement, vote of
shareholders or disinterested directors or otherwise.
F. Insurance. The corporation may purchase and maintain
insurance, at its expense, to protect itself and any director, officer, employee
or agent of the corporation or another corporation, partnership, joint venture,
trust or other enterprise against such expense, liability or loss, whether or
not the corporation would have the power to indemnify such person against such
expense, liability or loss under West Virginia law.
V.2. VOTE REQUIRED FOR CERTAIN BUSINESS COMBINATIONS
A. Higher Vote for Certain Business Combinations. In addition
to any affirmative vote required by law or these Articles of Incorporation, and
except as otherwise expressly provided in Section V.3 of this Article V:
3
<PAGE> 4
(i) any merger or consolidation of the corporation or
any subsidiary (as hereinafter defined) with (a) any Interested Stockholder (as
hereinafter defined) or (b) any other corporation (whether or not itself an
Interested Stockholder) which is, or after such merger or consolidation would
be, an Affiliate (as hereinafter defined) of any Interested Stockholder; or
(ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of transactions)
to or with any Interested Stockholder or any Affiliate of any Interested
Stockholder of any assets of the corporation or any subsidiary having an
aggregate Fair Market Value of $2,000,000 or more; or
(iii) the issuance or transfer by the corporation or
any subsidiary (in one transaction or a series of transactions) of any
securities of the corporation or any subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash, securities or
other property (or a combination thereof) having an aggregate Fair Market Value
of $2,000,000 or more; or
(iv) the adoption of any plan or proposal for the
liquidation or dissolution of the corporation proposed by or on behalf of an
Interested Stockholder or any Affiliate of any Interested Stockholder; or
(v) any reclassification of securities (including any
reverse stock split), or recapitalization of the corporation, or any merger or
consolidation of the corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of equity or
convertible securities of the corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder or any Affiliate of any
Interested Stockholder, shall require the affirmative vote of the holders of at
least 80% of the voting power of the then outstanding shares of capital stock of
the corporation entitled to vote (the "Voting Stock"), voting together as a
single class (it being understood that for purpose of this Article V, each share
of the Voting Stock shall have the number of votes granted to it pursuant to
Article V of these Articles of Incorporation). Such affirmative vote shall be
required, notwithstanding the fact that no vote may be required, or that a
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
B. Definition of "Business Combination." The term "Business
Combination" as used in this Article V shall mean any transaction which is
referred to in any one or more of clauses (i) through (v) of paragraph A of this
Section V.2.
V.3. WHEN HIGHER VOTE IS NOT REQUIRED
The provisions of Section V.2 of this Article V shall not be
applicable to any particular Business Combination, and such Business Combination
shall require only such
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affirmative vote as is required by law and any other provision of these Articles
of Incorporation, if all of the conditions specified in either of the following
paragraphs A and B are met:
A. Approval by Disinterested Directors. The Business
Combination shall have been approved by a majority of the Disinterested
Directors (as hereinafter defined).
B. Price and Procedure Requirements. All of the following
conditions shall have been met:
(i) the aggregate amount of the cash and the Fair
Market Value (as hereinafter defined) as of the date of the consummation of the
Business Combination of consideration other than cash to be received per share
by holders of Common Stock in such Business Combination shall be at least equal
to the higher of the following:
(a) (if applicable) the highest per share
price (including any brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by the Interested Stockholder for any shares of Common Stock
acquired by it (1) within the two-year period immediately prior to the first
public announcement of the proposal of the Business Combination (the
"Announcement Date") or (2) in the transaction in which it became an Interested
Stockholder, whichever is higher; and
(b) the Fair Market Value per share of
Common Stock on the Announcement Date or on the date on which the Interested
Stockholder became an Interested Stockholder (such latter date is referred to in
this Article V as the "Determination Date"), whichever is higher.
(ii) The aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the Business Combination of
consideration other than cash to be received per share by holders of shares of
any other class of outstanding Voting Stock shall be at least equal to the
highest of the following (it being intended that the requirements of this
paragraph B(ii) shall be required to be met with respect to every class of
outstanding Voting Stock, whether or not the Interested Stockholder has
previously acquired any shares of a particular class of Voting Stock);
(a) (if applicable) the highest per share
price (including any brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by the Interested Stockholder for any shares of such class
of Voting Stock acquired by it (1) within the three-year period immediately
prior to the Announcement Date or (2) in the transaction in which it became an
Interested Stockholder, whichever is higher;
(b) (if applicable) the highest preferential
amount per share to which the holders of shares of such class of Voting Stock
are entitled in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the corporation; and
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<PAGE> 6
(c) the Fair Market Value per share of such
class of Voting Stock on the Announcement Date or on the Determination Date,
whichever is higher.
(iii) The Consideration to be received by holders of
a particular class of outstanding Voting Stock (including Common Stock) shall be
in cash or in the same form as the Interested Stockholder has previously paid
for shares of such class of Voting Stock. If the Interested Stockholder has paid
for shares of any class of Voting Stock with varying forms of consideration, the
form of consideration for such class of Voting Stock shall be either cash or the
form used to acquire the largest number of shares of such class of Voting Stock
previously acquired by it. The price determined in accordance with paragraphs
B(i) and B(ii) of this Section V.3 shall be subject to appropriate adjustment in
the event of any stock dividend, stock split, combination of shares or similar
event.
(iv) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such Business
Combination: (a) there shall have been (1) no reduction in the annual rate of
dividends paid on the Common Stock (except as necessary to reflect any
subdivision of the Common Stock), except as approved by a majority of the
Disinterested Directors, and (2) an increase in such annual rate of dividends as
necessary to reflect any reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which has the effect
of reducing the number of outstanding shares of the Common Stock, unless the
failure so to increase such annual rate is approved by a majority of the
Disinterested Directors; and (b) such Interested Stockholder shall not have
become the beneficial owner of any additional shares of Voting Stock except as
part of the transaction which results in such Interested Stockholder becoming an
Interested Stockholder.
(v) After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall not have received the
benefit, directly or indirectly (except proportionate as a stockholder), of any
loans, advances, guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided by the corporation, whether in
anticipation of or in connection with such Business Combination or otherwise.
(vi) A proxy or information statement describing the
proposed Business Combination and complying with the requirements of the
Securities Exchange Act of 1934 and the rules and regulations thereunder (or any
subsequent provisions replacing such Act, rules or regulations) shall be mailed
to stockholders of the corporation at least 30 days prior to the consummation of
such Business Combination (whether or not such proxy or information statement is
required to be mailed pursuant to such Act or subsequent provisions).
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<PAGE> 7
V.4. CERTAIN DEFINITIONS
For the purpose of this Article V:
A. A "person" shall mean any individual, firm, corporation or
other entity.
B. "Interested Stockholder" shall mean any person (other than
the corporation or any Subsidiary) who or which:
(i) is the beneficial owner, directly or indirectly,
of more than 10% of the voting power of the outstanding Voting Stock; or
(ii) is an Affiliate of the corporation and at any
time within the two-year period immediately prior to the date in question was
the beneficial owner, directly or indirectly, of 10% or more of the voting power
of the then outstanding Voting Stock; or
(iii) is an assignee of or has otherwise succeeded
to any shares of Voting Stock which were at any time within the three-year
period immediately prior to the date in question beneficially owned by any
Interested Stockholder, if such assignment or succession shall have occurred in
the course of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
C. A person shall be a "beneficial owner" of any Voting
Stock:
(i) which such person or any of its Affiliates or
Associates (as hereinafter defined) owns, directly or indirectly; or
(ii) which such person or any of its Affiliates or
Associates has (a) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights, exchange
rights, warrants or options, or otherwise, or (b) the right to vote pursuant to
any agreement, arrangement or understanding; or
(iii) which are owned, directly or indirectly, by
any other person with which such person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of Voting Stock.
D. For the purposes of determining whether a person is an
Interested Stockholder pursuant to paragraph B of this Section V.4, the number
of shares of Voting Stock deemed to be outstanding shall include shares deemed
owned through application of paragraph C of this Section V.4 but shall not
include any other shares of Voting Stock which may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of conversion rights,
warrants or options, or otherwise.
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<PAGE> 8
E. "Affiliate" or "Associates" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934.
F. "Subsidiary" means any corporation of which a majority of
any class of equity security is owned, directly or indirectly, by the
corporation; provided, however, that for the purposes of the definition of
Interested Stockholder set forth in paragraph B of this Section V.4, the term
"Subsidiary" shall mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the corporation.
G. "Disinterested Director" means any member of the Board of
Directors of the corporation (the "Board") who is unaffiliated with the
Interested Stockholder and was a member of the Board prior to the time that the
Interested Stockholder became an Interested Stockholder, and any successor of a
Disinterested Director who is unaffiliated with the Interested Stockholder and
is recommended to succeed a Disinterested Director by a majority of
Disinterested Directors then on the Board; provided, however, that all Directors
of the corporation who are elected as Directors as of the 2000 Annual Meeting of
Shareholders of the corporation shall be deemed to be Disinterested Directors,
notwithstanding the above provisions.
H. "Fair Market Value" means: (i) in the case of stock, the
highest closing sale price during the 30-day period immediately preceding the
date in question of a share of such stock on the Composite Tape for New York
Stock Exchange-Listed Stocks, or, if such stock is not quoted on the Composite
Tape, on the New York Stock Exchange or the American Stock Exchange, or, if such
stock is not listed on such Exchange, or the principal United States securities
exchange registered under the Securities Exchange Act of 1934 on which such
stock is listed, or, if such stock is not listed on any such exchange, the
highest closing bid quotation with respect to a share of such stock during the
30-day period preceding the date in question on the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or any system
then in use, or if not listed with NASDAQ, the average bid and ask prices
available from brokerage firms in Charleston, West Virginia, or if such
information is not available, the fair market value on the date in question of a
share of such stock as determined by the Board in good faith; and (ii) in the
case of property other than cash or stock, the fair market value of such
property on the date in question as determined by the Board in good faith.
I. In the event of any Business Combination in which the
corporation survives, the phrase "other consideration to be received" as used in
paragraphs B(i) and (ii) of Section V.3 of this Article V shall include the
shares of Common Stock and/or the shares of any other class of outstanding
Voting Stock retained by the holders of such shares.
V.5. POWERS OF THE BOARD OF DIRECTORS
A majority of the Directors of the corporation shall have the
power and duty to determine for the purposes of this Article V, on the basis of
information known to them
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<PAGE> 9
after reasonable inquiry, (A) whether a person is an Interested Stockholder, (B)
the number of shares of Voting Stock beneficially owned by any person, (C)
whether a person is an Affiliate or Associate of another, (D) whether the assets
which are the subject of any Business Combination have, or the consideration to
be received for the issuance or transfer of securities by the corporation or any
Subsidiary in any Business Combination has, an aggregate Fair Market Value of
$2,000,000 or more. A majority of the Directors of the corporation shall have
the further power to interpret all of the terms and provisions of this Article
V.
V.6. NO EFFECT ON FIDUCIARY OBLIGATIONS OF INTERESTED
STOCKHOLDERS
Nothing contained in this Article V shall be construed to
relieve any Interested Stockholder from any fiduciary obligation imposed by law.
V.7. AMENDMENT, REPEAL, ETC.
Notwithstanding any other provisions of these Articles of
Incorporation or the Bylaws of the corporation (and notwithstanding the fact
that a lesser percentage may be specified by law, these Articles of
Incorporation or the Bylaws of the corporation), the affirmative vote of the
holders of 80% or more of the outstanding Voting Stock entitled to vote, voting
together as a single class, shall be required to amend or repeal, or adopt any
provisions inconsistent with this Article V.
ARTICLE VI
The amount of the total authorized capital stock of said
corporation shall be Fifty-One Million Dollars ($51,000,000.00), which shall be
divided into fifty million (50,000,000) shares of common stock with a par value
of One Dollar ($1.00) each per share and one million (1,000,000) shares of
Preferred Stock with a par value of One Dollar ($1.00) per share.
The Board of Directors shall have the power and authority at
any time and from time to time to issue, sell or otherwise dispose of any
unissued but authorized shares of any class or classes of stock presently
provided for in the Certificate of Incorporation, or that may hereafter be
provided for by a subsequent amendment to the Certificate of Incorporation, to
such persons or parties, including the holders of Common Stock or Preferred
Stock or of any such other class of stock, for such considerations (not less
than the par value, if any, thereof) and upon such terms and conditions as the
Board of Directors in its discretion may deem to be in the best interests of the
corporation. Except as expressly provided to the contrary hereinafter, such
issuance, sale or other disposition may be made without offering such shares, or
any part or class thereof, to the holders of Common Stock or Preferred Stock or
any such other class of stock, and no such holder shall have any preemptive
right to subscribe for any such shares.
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<PAGE> 10
Each holder of Common Stock of the corporation entitled to
vote shall have one vote for each share thereof held.
The voting powers, designations, preferences, limitations,
restrictions and relative rights of the Preferred Stock are as follows:
A. Issuance in Series. Preferred Stock may be issued from
time to time in one or more series. All shares of Preferred Stock shall be of
equal rank and shall be identical, except in respect of the particulars that are
fixed in the Certificate of Incorporation or may be fixed by the Board of
Directors as hereinafter provided pursuant to authority which is hereby
expressly vested in the Board of Directors; and each share of Preferred Stock,
whether of the same or a different series, shall be identical in all respects
with the other shares of Preferred Stock, except as to the following relative
rights and preferences, as to which there may be variations between different
series:
(i) the rate of dividends;
(ii) whether shares may be redeemed and, if so, the
redemption price and the terms and conditions of redemption;
(iii) whether shares may be converted to common
stock and if so, the terms and conditions of conversion;
(iv) the amount payable upon shares in event of
voluntary and involuntary liquidation;
(v) sinking fund provisions, if any, for the
redemption or purchase of shares;
(vi) the terms and conditions, if any, on which
shares may be converted; and
(vii) voting rights, if any.
The Board of Directors of the corporation shall have all of
the power and authority with respect to the shares of Preferred Stock that the
shareholders may delegate to the Board of Directors pursuant to the terms and
provisions of Chapter 31, Article I, Sections 78 and 79 of the Code of West
Virginia, as amended, and shall exercise such power and authority by the
adoption of a resolution or resolutions as prescribed by law.
B. Dividends. The holders of the Preferred Stock shall be
entitled to receive, when and as declared by the Board of Directors, out of any
funds legally available therefor, cumulative preferential dividends in cash, at
the rate per annum fixed for such series, and no more. Dividends on shares of
the Preferred Stock shall accrue from the date of the initial issue of shares of
such series, or from such other date as may be fixed by the
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<PAGE> 11
Board of Directors, shall be cumulative, and shall be payable quarterly on the
15th day of April, July, October and January in each year to shareholders of
record on the last day of the calendar month prior to which such dividends are
payable, with the first dividend on the Preferred Stock being payable on the
respective dividend date which follows the first full calendar quarter after the
initial issue of shares. Each share of Preferred Stock shall rank on a parity
with each other share of Preferred Stock, irrespective of series, with respect
to preferential dividends at the respective rates fixed for such series, and no
dividend shall be declared or paid or set apart for payment for the Preferred
Stock of any series unless at the same time a dividend in like proportion to the
accrued and unpaid dividends upon the Preferred Stock of each other series shall
be declared or paid or set apart for payment, as the case may be, on Preferred
Stock of each other series then outstanding. Accrued and unpaid dividends on the
Preferred Stock shall not bear interest.
C. Dividend Restriction on Junior Stock. So long as any
shares of Preferred Stock are outstanding, the corporation shall not pay or
declare any cash dividends whatsoever on the Common Stock or any other class of
stock ranking junior to the Preferred Stock unless (i) all dividends on the
Preferred Stock of all series for all past dividend periods shall have been
paid, or declared and a sum sufficient for the payment thereof set apart, and
(ii) there shall exist no default in respect of any sinking fund or purchase
fund for the redemption or purchase of shares of Preferred Stock of any series
or such default shall have been waived by the holders of at least a majority of
the then issued and outstanding shares of Preferred Stock of such series by a
vote at a meeting called for such purpose or by written waiver with or without a
meeting.
D. Liquidation or Dissolution. In the event of any voluntary
or involuntary liquidation, dissolution or winding up of the affairs of the
corporation, then, before any distribution or payment shall be made to the
holders of the Common Stock or any other class of stock of the corporation
ranking junior to the Preferred Stock in respect of dividends or distribution of
assets upon liquidation, the holders of the Preferred Stock shall be entitled to
be paid in full, in the event of a voluntary or involuntary liquidation,
dissolution or winding up, the respective amounts fixed for such series, plus in
each case a sum equal to accrued and unpaid dividends thereon to the date of
payment thereof. After such payment shall have been made in full to the holders
of the Preferred Stock, the remaining assets and funds of the corporation shall
be distributed among the holders of the stock of the corporation ranking junior
to the Preferred Stock in respect of dividends or distribution of assets upon
liquidation according to their respective rights and preferences and in each
case according to their respective shares. In the event that the assets of the
corporation available for distribution to holders of Preferred Stock shall not
be sufficient to make the payment herein required to be made in full, such
assets shall be distributed to the holders of the respective shares of Preferred
Stock pro rata in proportion to the amounts payable upon such share thereof.
Neither the merger or consolidation of the corporation into or with another
corporation nor the merger or consolidation of any other corporation into or
with the corporation, shall be deemed to be a liquidation, dissolution or
winding up of the corporation within the meaning of this Section 4, but the
sale, lease or conveyance of all or substantially all of its assets shall
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<PAGE> 12
be deemed to be a liquidation, dissolution or winding up of the corporation
within the meaning of this Section 4.
E. Status of Shares Redeemed or Retired. Preferred Stock
redeemed or otherwise retired by the corporation shall, upon the filing of such
statement as may be required by law, assume the status of authorized but
unissued Preferred Stock and may thereafter be reissued in the same manner as
other authorized but unissued Preferred Stock.
F. Amendments. Subject to such requirements as may be
prescribed by law or as may be expressly set forth in the foregoing provisions
of this Article VI or in any amendment to these Articles establishing and
designating a series of shares of Preferred Stock, any of the foregoing terms
and provisions of this Article VI may be altered, amended or repealed or the
application thereof suspended or waived in any particular case and changes in
any of the designations, preferences, limitations and relative rights of the
Preferred Stock may be made with the affirmative vote, at a meeting called for
that purpose, or the written consent with or without a meeting, of the holders
of at least two-thirds of the then issued and outstanding shares of Preferred
Stock; provided that neither the rate of dividend nor the amount payable upon
the redemption or in the event of voluntary or involuntary liquidation on any
share of Preferred Stock may be reduced without the consent of all of the
holders thereof.
ARTICLE VII
The full name and address of the incorporator is:
NAME ADDRESS
---- -------
Douglas J. Leech, Jr. 3957 Eastlake Drive
Morgantown, WV 26508
ARTICLE VIII
The existence of this corporation is to be perpetual.
ARTICLE IX
The full name and address of the appointed person to whom
notice or process may be sent is Centra Financial Holdings, Inc., Attention:
President, 990 Elmer Prince Drive, P. O. Box 656, Morgantown, West Virginia
26507-0656.
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ARTICLE X
The number of directors constituting the initial Board of
Directors of the corporation is five and the names and addresses of the persons
who shall serve as directors until the first annual meeting of shareholders or
until their successors are elected and shall qualify are:
NAME ADDRESS
---- -------
Douglas J. Leech, Jr. 3957 Eastlake Drive
Morgantown, WV 26508
Kevin D. Lemley R D #2, Box 192A
Waynesburg, PA 15370
Timothy P. Saab 887 Riverview Drive
Morgantown, WV 26505
Ann O'Neal 532 Meridan Street
Morgantown, WV 26505
Nancy Benjamin 708 Madison Avenue
Morgantown, WV 26505
ARTICLE XI
XI.1. BOARD OF DIRECTORS
A. Number, Election and Terms. The number of the Directors of
the corporation shall be fixed from time to time by or pursuant to the Bylaws of
the corporation. The Directors shall be classified, with respect to the time for
which they severally hold office, into three classes, as nearly equal in number
as possible, as shall be provided in the manner specified in the Bylaws of the
corporation, with each class to hold office until its successor is elected and
qualified. At each Annual Meeting of the stockholders of the corporation, the
successors of the class of Directors whose term expires at that meeting shall be
elected to hold office for a term expiring at the Annual Meeting of Stockholders
held in the third year following the year of their election.
B. Stockholder Nomination of Director Candidates. Advance
notice of stockholder nominations for the election of Directors shall be given
in the manner provided in the Bylaws of the corporation.
C. Newly Created Directorships and Vacancies. Newly created
Directorships resulting from any increase in the number of Directors and any
vacancies on
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<PAGE> 14
the Board of Directors resulting from death, resignation, disqualification,
removal or other cause shall be filled by the affirmative vote of a majority of
the remaining Directors then in office, even though less than a quorum of the
Board of Directors. Any Director elected in accordance with the preceding
sentence to fill a vacancy resulting from death, resignation, disqualification,
removal or other cause shall hold office for the remainder of the full term of
the class of Directors in which the vacancy occurred and until such Director's
successor shall have been elected and qualified and Directors elected in
accordance with the preceding sentence by reason of an increase in the number of
Directors shall hold office only until the next election of Directors by the
shareholders and until such Director's successor shall have been elected and
qualified. No decrease in number of Directors constituting the Board of
Directors shall shorten the term of any incumbent Director.
D. Removal. Any Director may be removed from office, with or
without cause, and only by the affirmative vote of the holders of 80% of the
combined voting power of the then outstanding shares of stock entitled to vote
generally in the election of Directors, voting together as a single class.
E. Amendment, Repeal, Etc. Notwithstanding anything contained
in these Articles of Incorporation to the contrary, the affirmative vote of the
holders of at least 80% of the voting power of all shares of the corporation
entitled to vote generally to the election of Directors, voting together as a
single class, shall be required to alter, amend, or adopt any provision
inconsistent with or repeal this Article XI.
XI.2. BYLAW AMENDMENTS
The Board of Directors shall have power to make, alter, amend
and repeal the Bylaws of the corporation (except so far as the Bylaws of the
corporation adopted by the stockholders shall otherwise provide). Any Bylaws
made by the Directors under the powers conferred hereby may be altered, amended
or repealed by the Directors or by the stockholders. Notwithstanding the
foregoing and anything contained in these Articles of Incorporation to the
contrary, Article II, Sections 1, 4 and 13, Article III, Sections 2, 9, 13 and
15, and Article XI of the Bylaws shall not be altered, amended or repealed and
no provision inconsistent therewith shall be adopted without the affirmative
vote of the holders of at least 80% of the voting power of all the shares of the
corporation entitled to vote generally in the election of Directors, voting
together as a single class. Notwithstanding anything contained in these Articles
of Incorporation to the contrary, except as otherwise provided by law for
separate class votes, the affirmative vote of the holders of at least 80% of the
voting power of all the shares of the corporation entitled to vote generally in
the election of Directors, voting together as a single class, shall be required
to alter, amend or adopt any provision inconsistent with or repeal this Article
XI.2.
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<PAGE> 15
THE UNDERSIGNED, for the purpose of forming a corporation
under the laws of the State of West Virginia, does make and file these Articles
of Incorporation, and I have accordingly hereto set my hand this 25 day of
October, 1999.
/s/ Douglas J. Leech, Jr.
--------------------------
DOUGLAS J. LEECH, JR.
Articles of Incorporation prepared by:
Charles D. Dunbar, Esquire
JACKSON & KELLY PLLC
1600 Laidley Tower
P. O. Box 553
Charleston, West Virginia 25322
STATE OF WEST VIRGINIA,
COUNTY OF KANAWHA, to-wit:
I, Teresa L. Hoskins, a Notary Public in and for the County
and State aforesaid, hereby certify that Douglas J. Leech, Jr., whose name is
signed to the foregoing Articles of Incorporation, bearing date the 25th day of
October, 1999, this day personally appeared before me in my said County and
acknowledged his signature to be the same.
Given under my hand and official seal this the 25th day of
October, 1999.
My commission expires: July 2, 2007.
--------------
/s/ Teresa L. Hoskins
---------------------------
Notary Public
[NOTARIAL SEAL]
15
<PAGE> 1
EXHIBIT 3.2
BYLAWS
OF
CENTRA FINANCIAL HOLDINGS, INC.
ARTICLE I. OFFICES
The principal offices of the Corporation shall be located in the City
of Morgantown, County of Monongalia, State of West Virginia. The Corporation may
have such other offices, either within or without the State of West Virginia, as
the Board of Directors may designate or as the business of the Corporation may
require from time to time.
ARTICLE II. SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders
shall be held on the third Thursday in the month of April in each year, at the
hour of 2:00 P.M., local time, or at such other time on such other day as shall
be fixed by the Board of Directors. If the day fixed for the annual meeting
shall be a legal holiday in the State of the principal office of the
Corporation, such meeting shall be held on the next succeeding business day. At
an annual meeting of the shareholders, only such business shall be conducted as
shall have been properly brought before the meeting. To be properly brought
before an annual meeting business must be (a) specified in the notice of meeting
(or any supplement thereto) given by or at the direction of the Board of
Directors, (b) otherwise properly brought before the meeting by or at the
direction of the Board of Directors, or (c) otherwise properly brought before
the meeting by a shareholder. For business to be properly brought before an
annual meeting by a shareholder, the shareholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To be timely, a
shareholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation, not less than forty days prior
to the meeting; provided, however, that in the event that less than fifty days'
notice or prior public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be so received not
later than the close of business on the 8th day following the day on which such
notice of the date of the annual meeting was mailed or such public disclosure
was made. A shareholder's notice to the Secretary shall set forth as to each
matter the shareholder proposes to bring before the annual meeting (a) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (b) the name and
address, as they appear on the Corporation's books, of the shareholder proposing
such business, (c) the class and number of shares of the Corporation which are
beneficially owned by the shareholder, and (d) any material interest of the
shareholder in such business. Notwithstanding anything in the Bylaws to the
contrary, no business shall be conducted at an annual meeting except in
accordance with the procedures set forth in this Section 1. The Chairman of an
annual
<PAGE> 2
meeting shall, if the facts warrant, determine and declare to the meeting that
business was not properly brought before the meeting and in accordance with the
provisions of this Section 1, and if he should so determine, he shall so declare
to the meeting and any such business not properly brought before the meeting
shall not be transacted.
Section 2. Special Meetings. Special meetings of the shareholders, for
any purpose or purposes, may be called by the Chairman of the Board, if any,
President, Secretary, or by the Board of Directors, and shall be called by the
President at the request of the holders of not less than one-tenth of all
outstanding shares of the Corporation entitled to vote at the meeting.
Section 3. Place of Meeting. The Board of Directors may designate any
place, either within or without the State of West Virginia, as the place of
meeting for any annual meeting or for any special meeting called by the Board of
Directors. If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal office of the Corporation.
Section 4. Notice of Meeting. Written notice stating the place, day
and hour of the meeting and, the purpose or purposes for which the meeting is
called, shall be delivered not less than ten nor more than fifty days before the
date of the meeting, either personally or by mail, by or at the direction of the
Chairman of the Board, President, Secretary or the officer of other persons
calling the meeting, to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail, addressed to the shareholder at his address as it
appears on the stock transfer books of the Corporation, with postage thereon
prepaid.
Section 5. Closing of Transfer Books or Fixing of Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, fifty days. If the stock transfer
books shall be closed for the purpose of determining shareholders entitled to
notice of or to vote at a meeting of shareholders, such books shall be closed
for at least ten days immediately preceding such meeting. In lieu of closing the
stock transfer books, the Board of Directors may fix in advance a date as the
record date for any such determination of shareholders, such date in any case to
be not more than fifty days and, in case of a meeting of shareholders, not less
than ten days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record date
for such determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this section, such
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determination shall apply to any adjournment thereof.
Section 6. Voting Record. The officer or agent having charge of the
stock transfer books for shares of the Corporation shall make a complete record
of the shareholders entitled to vote at each meeting of shareholders or any
adjournment thereof, arranged in alphabetical order, with the address of and the
number of shares held by each. Such record shall be produced and kept open at
the time and place of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting for the purposes thereof.
Section 7. Quorum. A majority of the outstanding shares of the
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If less than a majority of the
outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally noticed. The shareholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough shareholders to leave less than a quorum.
Section 8. Proxies. At all meetings of shareholders, a shareholder may
vote in person or by proxy executed in writing by the shareholder or by his duly
authorized attorney-in-fact. Such proxy shall be filed with the Secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
eleven months from the date of its execution, unless otherwise provided in the
proxy.
Section 9. Voting of Shares. Subject to the provisions of Section 12
of this Article II, each outstanding share entitled to vote shall be entitled to
one vote upon each matter submitted to a vote at a meeting of shareholders.
Section 10. Voting of Shares by Certain Holders. Shares standing in
the name of another corporation may be voted by such officer, agent or proxy as
the bylaws of such corporation may prescribe, or, in the absence of such
provision, as the Board of Directors of such other corporation may determine.
Shares held by an administrator, executor, guardian, committee,
curator, or conservator may be voted by him, either in person or by proxy,
without a transfer of such shares into his name. Shares standing in the name of
a trustee may be voted by him, either in person or by proxy, but no trustee
shall be entitled to vote shares held by him without a transfer of such shares
into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority to do so
be contained in an appropriate order of the court by which such receiver was
appointed.
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A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither treasury shares of its own stock held by the Corporation nor
shares held by another corporation if a majority of the shares entitled to vote
for the election of directors of such other corporation are held by the
Corporation, shall be voted at any meeting or counted in determining the total
number of outstanding shares at any given time for purposes of any meeting.
Section 11. Informal Action by Shareholders. Any action required or
permitted to be taken at a meeting of the shareholders may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the shareholders entitled to vote with respect to the subject
matter thereof.
Section 12. Cumulative Voting. At each election for directors every
shareholder entitled to vote at such election shall have the right to vote, in
person or by proxy, the number of shares owned by him for as many persons as
there are directors to be elected and for whose election he has a right to vote,
or to cumulate his votes by giving one candidate as many votes as the number of
such directors multiplied by the number of his shares shall equal, or by
distributing such votes on the same principle among any number of such
candidates.
Section 13. Nominations for Election to the Board of Directors. The
nominations for election to the Board of Directors other than those made by or
on behalf of the existing management of the Corporation, shall be made by a
shareholder in writing delivered or mailed to the President not less than
fourteen days nor more than fifty days prior to the meeting called for the
election of directors; provided, however, that if less than twenty-one days'
notice of the meeting is given to shareholders, the nominations shall be mailed
or delivered to the President not later than the close of business on the
seventh day following the day on which the notice of meeting was mailed. The
notice of nomination shall include: (a) name and address of proposed nominee(s);
(b) principal occupation of nominee(s); (c) total shares to be voted for each
nominee; (d) name and address of notifying shareholder; and (e) number of shares
owned by notifying shareholder. Nominations not made in accordance with these
requirements may be disregarded by the Chairman of the meeting and in such case
the votes cast for each such nominee shall likewise be disregarded.
Section 14. Rules of Conduct at the Annual Meeting. The chairman of
the annual meeting of shareholders shall have the right and authority to
prescribe such rules, regulations and procedures and to do all such acts and
things as are necessary or desirable for the proper conduct of the meeting,
including, without limitation: maintenance of order; safety; limitations on the
time allotted to questions or comments on the affairs of the Corporation; ruling
motions or comments out of order as in poor taste, unworkable, moot, repetitious
of another proposal on the agenda, or otherwise; restrictions on entry to the
meeting after the time prescribed for the commencement thereof; and the opening
and closing of the voting polls.
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ARTICLE III. BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of the Corporation
shall be managed by its Board of Directors.
Section 2. Number, Election and Terms; Nominations. Except as
otherwise fixed by or pursuant to the provisions of Article VI of the Articles
of Incorporation relating to the rights of the holders of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation to elect additional directors under specified circumstances, the
number of the directors of the Corporation shall be fixed from time to time by
resolution of the Board of Directors but shall not be less than six nor more
than thirty. The directors, other than those who may be elected by the holders
of any class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, shall be classified, with respect to the time for
which they severally hold office, into three classes, as nearly equal in number
as possible, as determined by the Board of Directors of the Corporation, one
class to be originally elected for a term expiring at the annual meeting of
stockholders to be held in 2000, another class to be originally elected for a
term expiring at the annual meeting of shareholders to be held in 2001, and
another class to be originally elected for a term expiring at the annual meeting
of shareholders to be held in 2002, with each class to hold office until its
successor is elected and qualified. At each annual meeting of the shareholders
of the Corporation, the successors of the class of directors whose term expires
at that meeting shall be elected to hold office for a term expiring at the
annual meeting of shareholders held in the third year following the year of
their election. Nominations for the election of directors shall be given in the
manner provided in Article II, Section 13, of these bylaws. Directors need not
be residents of the State of West Virginia, but shall hold not less than five
hundred shares of the capital stock of the Corporation in order to be eligible
to serve as a director of the Corporation. After he or she attains the age of 72
years, each director may serve only until the next annual meeting or other
meeting in which directors are elected.
Section 3. Regular Meetings. A regular meeting of the Board of
Directors shall be held without notice other than this bylaw, immediately after,
and at the same place as, the annual meeting of shareholders. The Board of
Directors may provide, by resolution, the time and place, either within or
without the State of West Virginia, for the holding of additional regular
meetings without other notice than such resolution.
Section 4. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the Chairman of the Board, if
any, the President or the majority of the directors. The person or persons
authorized to call special meetings of the Board of Directors may fix any place,
either within or without the State of West Virginia, as the place for holding
any special meeting of the Board of Directors called by them.
Section 5. Notice. Notice of any special meeting shall be given at
least three days previously thereto by written notice delivered personally or
mailed to each director at his business address, or by telegram. If mailed at
least five days prior to the date of meeting,
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such notice shall be deemed to be delivered when deposited in the United States
mail, so addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company. Any director may waive notice of any
meeting. The attendance of a director at a meeting shall constitute a waiver of
notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice or waiver of notice of such
meeting, except as otherwise provided by statute.
Section 6. Quorum. A majority of the number of directors fixed by
Section 2 of this Article III shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors, but if less than such
majority is present at the meeting a majority of the directors present may
adjourn the meeting from time to time without further notice.
Section 7. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
Section 8. Action Without a Meeting. Any action required or permitted
to be taken by the Board of Directors at a meeting may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all the directors.
Section 9. Newly Created Directorships and Vacancies. Except as
otherwise provided for or fixed by or pursuant to the provisions of Article VI
of the Articles of Incorporation relating to the rights of the holders of any
class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect directors under specified circumstances,
newly created directorships resulting from any increase in the number of
directors and any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal or other cause shall be filled by the
affirmative vote of a majority of the remaining Directors then in office, even
though less than a quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence to fill a vacancy resulting from the
death, resignation, disqualification, removal or other cause shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred and until such director's successor shall have been elected and
qualified, and any director elected in accordance with the preceding sentence by
reason of an increase in the number of directors shall hold office only until
the next election of directors by shareholders and until his successor shall
have been elected and qualified. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director.
Section 10. Compensation. By resolution of the Board of Directors,
each director may be paid his expenses, if any, of attendance at each meeting of
the Board of Directors, or committee thereof, and may be compensated as a
director. No such compensation shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.
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Section 11. Presumption of Assent. A director of the Corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action taken
unless his dissent shall be entered in the minutes of the meeting or unless he
shall file his written dissent to such action with the person acting as the
Secretary of the meeting before the adjournment thereof or shall forward such
dissent by registered mail to the Secretary of the Corporation immediately after
the adjournment of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.
Section 12. Committees.
(a) Appointment. The Board of Directors, by resolution adopted by a
majority of the full board, may establish an Executive Committee and such other
standing or special committees of the board as it may deem advisable, each of
which shall consist of two or more members of the Board of Directors. The
designation of a committee and the delegation thereto of authority shall not
operate to relieve the Board of Directors, or any member thereof, of any
responsibility imposed by law.
(b) Authority. The Executive Committee, when the Board of Directors is
not in session shall have and may exercise all of the authority of the Board of
Directors except to the extent, if any, that such authority shall be limited by
the resolution appointing the Executive Committee and except also that the
Executive Committee shall not have the authority of the Board of Directors in
reference to amending the Articles of Incorporation, adopting a plan of merger
or consolidation, recommending to the shareholders the sale, lease or other
disposition of all or substantially all of the property and assets of the
Corporation otherwise than in the usual and regular course of its business,
recommending to the shareholders a voluntary dissolution of the Corporation or a
revocation thereof, or amending the bylaws of the Corporation. The authority of
other committees of the board shall be set forth in the resolutions, as amended
from time to time, establishing the same.
(c) Tenure and Qualifications. Committees of the board shall consist
only of members of the Board of Directors. Each member of the Executive
Committee shall hold office until the next regular annual meeting of the Board
of Directors following his designation and until his successor is designated as
a member of the Executive Committee and is elected and qualified. The tenure of
members of other committees of the board shall be set forth in the resolutions,
as amended from time to time, establishing the same.
(d) Meetings. Regular meetings of the committees of the board may be
held without notice at such times and places as each committee may fix from time
to time by resolution. Special meetings of any committee may be called by any
member thereof upon not less than one day's notice stating the place, date and
hour of the meeting, which notice may be written or oral, and if mailed at least
five days prior to the date of the meeting, shall be deemed to be delivered when
deposited in the United States mail addressed to the member of the committee at
his business address. Any member of a committee may waive notice of any meeting
and no notice of any meeting need be given to any member thereof who attends
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in person. The notice of a meeting of a committee need not state the business
proposed to be transacted at the meeting.
(e) Quorum. A majority of the members of a committee shall constitute
a quorum for the transaction of business at any meeting thereof, and action of
the committee must be authorized by the affirmative vote of a majority of the
members present at a meeting at which a quorum is present.
(f) Action Without a Meeting. Any action required or permitted to be
taken by a committee at a meeting may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
members of the committee.
(g) Vacancies. Any vacancy in a committee may be filled by a
resolution adopted by a majority of the full Board of Directors.
(h) Resignations and Removal. Any member of a committee may be removed
at any time with or without cause by resolution adopted by a majority of the
full Board of Directors. Any member of a committee may resign from the committee
at any time by giving written notice to the President or Secretary of the
Corporation, and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
(i) Procedure. A committee shall elect a presiding officer from its
members and may fix its own rules of procedure which shall not be inconsistent
with these bylaws. It shall keep regular minutes of its proceedings and report
the same to the Board of Directors for its information at the meeting thereof
held next after the proceedings shall have been taken.
Section 13. Removal. Subject to the rights of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation to elect directors under the specified circumstances, any director
may be removed from office, with or without cause and only by the affirmative
vote of the holders of eighty percent of the full Board of Directors or of
combined voting power of the then outstanding shares of stock entitled to vote
generally in the election of directors, voting together as a single class.
Section 14. Participation in Meetings by Means of Conference Telephone
or Similar Instrument. Any or all directors may participate in a meeting of the
Board of Directors or in a meeting of a committee of the Board of Directors by
means of a conference telephone or any similar electronic communications
equipment by which all persons participating in the meeting can hear each other.
Section 15. Evaluation of Business Combinations. The Board of
Directors of the Corporation, when evaluating any offer of another party to (a)
make a tender or exchange offer for any equity security of the Corporation, (b)
merge or consolidate the Corporation with such party or an affiliate thereof, or
(c) purchase or otherwise acquire all or substantially all of the properties and
assets of the Corporation, shall, in connection with the exercise of
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its judgment in determining what is in the best interests of the Corporation,
give due consideration to all relevant factors, including, without limitation,
the social and economic effects on the employees, customers and other
constituents of the Corporation and its subsidiaries and on the communities in
which the Corporation and its subsidiaries are located.
ARTICLE IV. OFFICERS
Section 1. Number. The officers of the Corporation shall be a
President, one or more Vice Presidents (the number thereof to be determined by
the Board of Directors), a Secretary, and a Treasurer, each of whom shall be
elected by the Board of Directors. A Chairman of the Board of Directors and such
other officers and assistant officers as may be deemed necessary may be elected
or appointed by the Board of Directors. Any two or more offices may be held by
the same person, except the offices of President and Secretary. The President
and the Chairman of the Board, if any, shall be elected from the membership of
the Board of Directors.
Section 2. Election and Term of Office. The officers of the
Corporation to be elected by the Board of Directors shall be elected annually by
the Board of Directors at the first meeting of the Board of Directors held after
each annual meeting of the shareholders. If the election of officers shall not
be held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his successor shall
have been duly elected and shall have qualified or until his death or until he
shall resign or shall have been removed in the manner hereinafter provided.
Section 3. Removal. Any officer or agent may be removed by the Board
of Directors whenever in its judgment the best interests of the Corporation will
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment of an officer
or agent shall not of itself create contract rights.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.
Section 5. Chairman of the Board. The Board of Directors may appoint
one of its members to be Chairman of the Board. If so appointed, he shall
preside at all meetings of the Board of Directors and at all meetings of the
shareholders and shall have and exercise such further powers and duties as may
from time to time be conferred upon, or assigned to, him by the Board of
Directors.
Section 6. Vice Chairman of the Board. The Board of Directors may
appoint one of its members to be Vice Chairman of the Board. In addition to any
specific powers conferred upon him by these Bylaws, the Vice Chairman of the
Board shall have and exercise such
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further powers and duties as from time to time may be conferred upon, or
assigned to, him by the Board of Directors or the Chairman of the Board.
Section 7. President. The Board of Directors shall appoint a
President. He shall have and exercise such powers and duties as may from time to
time be conferred upon, or assigned to, him by the Board of Directors. If the
office of the Chairman of the Board be vacant, or if the Chairman of the Board
be absent or unable to attend, the President (or if the President be so absent
or unable to attend, the Vice Chairman of the Board, or in the event of the
absence or inability to attend of the Vice Chairman of the Board, an Executive
Vice President) shall preside at all meetings of the shareholders and of the
Board of Directors.
Section 8. The Vice Presidents. In the absence of the Chairman of the
Board and President or in the event of their death, inability or refusal to act,
the Vice President (or in the event there be more than one Vice President, the
Vice Presidents in the order designated at the time of their election, or in the
absence of any designation, then in the order of their election) shall perform
the duties of the Chairman of the Board and President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the Chairman
of the Board and President. Any Vice President may sign, with the Secretary or
an Assistant Secretary, certificates for shares of the Corporation; and shall
perform such other duties as from time to time may be assigned to him by the
principal executive officer of the Corporation, the bylaws or the Board of
Directors.
Section 9. Chief Executive Officer. The Board of Directors shall
select a Chief Executive Officer, who shall also be either the Chairman of the
Board, the Vice Chairman of the Board, the President, or an Executive Vice
President. The Chief Executive Officer shall be charged with the carrying out of
the policies adopted or approved by the Board of Directors. In addition to any
specific powers conferred on him by these Bylaws, the Chief Executive Officer
shall have supervision over, and exercise general powers concerning, all the
operations and business of the Corporation. He shall have and exercise such
further powers and duties as may from time to time be conferred upon, or
assigned to him by the Board of Directors.
Section 10. The Secretary. The Secretary shall: (a) keep the minutes
of the proceedings of the shareholders and of the Board of Directors in one or
more books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these bylaws or as required by law; (c) be
custodian of the corporate records and of the seal of the Corporation and see
that the seal of the Corporation is affixed to all documents the execution of
which on behalf of the Corporation under its seal is duly authorized; (d) keep a
register of the post office address of each shareholder which shall be furnished
to the Secretary by such shareholder; (e) sign with the President, or a Vice
President, certificates for shares of the Corporation, the issuance of which
shall have been authorized by resolution of the Board of Directors; (f) have
general charge of the stock transfer books of the Corporation; and (g) in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him by the principal executive
officer of the Corporation, the bylaws or by the Board of Directors.
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Section 11. The Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the Corporation;
(b) receive and give receipts for moneys due and payable to the Corporation from
any source whatsoever, and deposit all such moneys in the name of the
Corporation in such banks, trust companies or other depositories as shall be
selected in accordance with the provisions of Article V of these bylaws; and (c)
in general perform all of the duties incident to the office of Treasurer and
such other duties as from time to time may be assigned to him by the principal
executive officer of the Corporation, the bylaws or by the Board of Directors.
If required by the Board of Directors, the Treasurer shall give a bond for the
faithful discharge of his duties in such sum and with such surety or sureties as
the Board of Directors shall determine.
Section 12. Assistant Secretaries and Assistant Treasurers. The
Assistant Secretaries, when authorized by the Board of Directors, may sign with
the President or a Vice President certificates for shares of the Corporation the
issuance of which shall have been authorized by a resolution of the Board of
Directors. The Assistant Treasurers shall respectively, if required by the Board
of Directors, give bonds for the faithful discharge of their duties in such sums
and with such sureties as the Board of Directors shall determine. The Assistant
Secretaries and Assistant Treasurers, in general, shall perform such duties as
shall be assigned to them by the Secretary or the Treasurer, respectively, or by
the principal executive officer of the Corporation, the bylaws or by the Board
of Directors.
Section 13. Officers' Salaries. The salaries of the officers shall be
fixed from time to time by the Board of Directors and no officer shall be
prevented from receiving such salary by reason of the fact that he is also a
director of the Corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the Corporation, and such
authority may be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances. The Board of Directors may encumber
and mortgage real estate and pledge, encumber and mortgage stocks, bonds and
other securities and other personal property of all types, tangible and
intangible, and convey any such property in trust to secure the payment of
corporate obligations.
Section 3. Checks, Drafts, Etc. All checks, drafts and other orders
for the payment of money, notes or other evidences of indebtedness issued in the
name of the Corporation shall be signed by such officer or officers, agent or
agents of the Corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
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Section 4. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board of Directors
may select.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. Certificates representing shares
of the Corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the President or a Vice
President and by the Secretary or an Assistant Secretary and sealed with the
Corporate Seal or a facsimile thereof. The signatures of such officers upon a
certificate may be facsimiles if the certificate is manually signed on behalf of
a transfer agent or a registrar, other than the Corporation itself or one of its
employees. Each certificate for shares shall be consecutively numbered or
otherwise identified. The name and address of the person to whom the shares
represented thereby are issued, with the number of shares and date of issue,
shall be entered on the stock transfer books of the Corporation. All
certificates surrendered to the Corporation for transfer shall be canceled and
no new certificate shall be issued until the former certificate for a like
number of shares shall have been surrendered and canceled, except that in case
of a lost, destroyed or mutilated certificate a new one may be issued therefor
upon such terms and indemnity to the Corporation as the Board of Directors may
prescribe.
Section 2. Transfer of Shares. Transfer of shares of the Corporation
shall be made only on the stock transfer books of the Corporation by the holder
of record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the Corporation,
and on surrender for cancellation of the certificate for such shares. The person
in whose name shares stand on the books of the Corporation shall be deemed by
the Corporation to be the owner thereof for all purposes.
Section 3. Lost Certificates. Any person claiming a certificate of
shares to be lost or destroyed shall make an affidavit or affirmation of that
fact, and if requested do so by the Chief Executive Officer of the Corporation
shall advertise such fact in such manner as the Chief Executive Officer may
require, and shall give the Corporation a bond of indemnity in such sum as the
Chief Executive Officer may direct, but not less than double the value of shares
represented by such certificate, in form satisfactory to the Chief Executive
Officer and with or without sureties as the Chief Executive Officer may
prescribe; whereupon the President and the Secretary may cause to be issued a
new certificate of the same tenor and for the same number of shares as the one
alleged to have been lost or destroyed, but always subject to the approval of
the Chief Executive Officer.
Section 4. Stock Transfer Books. The stock transfer books of the
Corporation shall be kept in the principal office of the Corporation and shares
shall be transferred under such regulations as may be prescribed by the Board of
Directors.
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ARTICLE VII. FISCAL YEAR
The fiscal year of the Corporation may be fixed and may be changed
from time to time by resolution of the Board of Directors. Until the Board of
Directors has acted to fix such fiscal year, the fiscal year of the Corporation
shall begin on the first day of January and end on the thirty-first day of
December in each year.
ARTICLE VIII. DIVIDENDS
The Board of Directors may, from time to time, declare and the
Corporation may pay dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law and its Articles of Incorporation.
ARTICLE IX. CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the Corporation
and the state of incorporation and the words "Corporate Seal".
ARTICLE X. WAIVER OF NOTICE
Whenever any notice is required to be given to any shareholder or
director of the Corporation under the provisions of these bylaws or under the
provisions of the Articles of Incorporation or by law, a waiver thereof in
writing signed by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be deemed equivalent to the giving of
such notice.
ARTICLE XI. AMENDMENTS
Subject to the provisions of the Articles of Incorporation, these
Bylaws may be altered, amended or repealed at any regular meeting of the Board
of Directors (or at any special meeting thereof duly called for that purpose)
provided that in the notice of such meeting notice of such purpose shall be
given. Subject to the laws of the State of West Virginia, the Articles of
Incorporation and these Bylaws, the Board of Directors may by majority vote of
those present at any meeting at which a quorum is present amend these Bylaws, or
enact such other bylaws as in their judgment may be advisable for the regulation
of the conduct of the affairs of the Corporation; provided, however, that,
without the affirmative vote of two-thirds of all members of the Board, the
Board may not amend the Bylaws to (i) change the principal office of the
Corporation, (ii) change the number of directors, (iii) change the number of
directors on the Executive Committee, or (iv) make a substantial change in the
duties of the Chairman of the Board and the President.
13
<PAGE> 14
ARTICLE XII. MISCELLANEOUS
Section 1. Voting Shares of Other Corporations. Unless otherwise
ordered by the Board of Directors, shares in other corporations held by this
Corporation may be voted by the Chairman of the Board or the President of this
Corporation.
Section 2. Gender. Whenever these Bylaws refer to the masculine, the
reference shall include the feminine and vice versa.
14
<PAGE> 1
EXHIBIT 5
[LETTERHEAD OF JACKSON & KELLY PLLC]
December 21, 1999
Centra Financial Holdings, Inc.
990 Elmer Prince Drive
P. O. Box 656
Morgantown, West Virginia 26507-0656
Re: Registration Statement on Form S-4 (the "Registration
Statement") with respect to shares to be issued
pursuant to the Agreement and Plan of Merger by and
between Centra Financial Holdings, Inc. ("Centra
Financial") and Centra Bank, Inc., and to be joined
in by CFH Interim Bank, Inc., dated as of October 26,
1999 (the "Merger Agreement")
Ladies and Gentlemen:
We have acted as counsel to Centra Financial in connection with the
registration of 1,200,000 shares of its common stock, par value $1.00 per share,
with associated preferred stock purchase rights (the "Common Stock"), issuable
pursuant to the Merger Agreement, as set forth in the Registration Statement
that is being filed on the date hereof by Centra Financial with the Securities
and Exchange Commission (the "Commission") pursuant to the Securities Act of
1933, as amended (the "Securities Act"). This opinion is provided pursuant to
the requirements of Item 21(a) of Form S-4 and Item 601(b)(5) of Regulation S-K.
In connection with the foregoing, we have examined such records,
documents, and proceedings as we have deemed relevant as a basis for the opinion
expressed herein, and we have relied upon an officer's certificate as to certain
factual matters.
Based on the foregoing, we are of the opinion that, when the shares of
Common Stock have been issued upon the terms and conditions set forth in the
Merger Agreement, the shares of Common Stock will be validly issued, fully paid
and nonassessable.
<PAGE> 2
Centra Financial Holdings, Inc.
December 21, 1999
Page 2
We hereby consent to be named in the Registration Statement under the
heading "LEGAL MATTERS" as attorneys who passed upon the validity of the shares
of Common Stock and to the filing of a copy of this opinion as Exhibit 5 to the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required by Section 7 of the
Securities Act or other rules and regulations of the Commission thereunder.
Very truly yours,
JACKSON & KELLY PLLC
By: /s/ Elizabeth Lord
-------------------------
Elizabeth Lord, Member
<PAGE> 1
EXHIBIT 8
[LETTERHEAD OF JACKSON & KELLY PLLC]
December 16, 1999
Centra Bank, Inc.
990 Elmer Prince Drive
P. O. Box 656
Morgantown, West Virginia 26507-0656
Re: Certain Federal Income Tax Consequences of Merger of
CFH Interim Bank, Inc., a wholly-owned Subsidiary of
Centra Financial Holdings, Inc., with and into Centra
Bank, Inc.
Ladies and Gentlemen:
We have acted as special counsel to Centra Bank, Inc.
("Centra"), in connection with the proposed merger (the "Merger") of CFH Interim
Bank, Inc. ("Merger Sub"), a wholly-owned subsidiary of Centra Financial
Holdings, Inc. ("CFH") into Centra. The Merger will be effected pursuant to the
Agreement and Plan of Merger by and among Centra, CFH and Merger Sub, dated as
of October 26, 1999 (the "Agreement").
In our capacity as counsel to Centra, our opinion has been
requested with respect to certain federal income tax consequences associated
with the proposed Merger. In rendering this opinion, we have examined (i) the
Internal Revenue Code of 1986, as amended (the "Code"), and Treasury Regulations
promulgated thereunder, (ii) the legislative history of applicable sections of
the Code, and (iii) appropriate Internal Revenue Service and judicial
authorities. In addition, we have relied upon certain information made known to
us as more fully described below. All capitalized terms used herein without
definition shall have the respective meanings specified in the Agreement, and,
unless otherwise specified, all section references herein are to the Code.
In our capacity as counsel to Centra in the Merger, and for
purposes of rendering the opinions expressed herein, we have examined and relied
upon such documents as we have deemed appropriate, including:
(1) the Agreement and exhibits thereto;
(2) the Registration Statement and Proxy
Statement/Prospectus being filed with the Securities
and Exchange Commission regarding the Merger; and
(3) such additional documents as we have considered
relevant.
<PAGE> 2
Centra Bank, Inc.
December 16, 1999
Page 2
We have also obtained written certification letters (the
"Certification Letters") from CFH, Merger Sub and Centra to verify certain facts
that we have assumed in rendering this opinion. Before rendering our opinion in
connection with the closing of the Merger, we intend to obtain appropriate
written certificates to confirm certain material facts that we have assumed
herein.
In connection with our review of the Agreement, the written
certificates described above, and the other documents described herein, we have
assumed, with your consent, that all documents submitted to us as photocopies
faithfully reproduce the originals thereof, that such originals are authentic,
that all such documents have been or will be duly executed to the extent
required and that all statements set forth in such documents are accurate. We
also have assumed, without independent verification or investigation, that (i)
we have been provided with true, correct and complete copies of all such
documents, (ii) none of the documents has been amended or modified; (iii) all
such documents are in full force and effect in accordance with the terms
thereof; (iv) there are no other documents which affect the opinions hereinafter
set forth; and (v) the documents reviewed by us reflect the entire agreement of
the parties thereto with respect to the subject matter thereof. We have further
assumed that any representations or statements made "to the best knowledge of"
or similarly qualified, are true and correct without such qualification. With
your permission, we have also assumed certain other factual matters set forth
more fully below.
We have not made an independent investigation of the
Registration Statement. Consequently, we have relied upon your representation
that the information presented in the Registration Statement or otherwise
furnished to us accurately and completely describes all material relevant facts.
You have advised us that the proposed Merger: (i) will permit
greater flexibility to Centra in meeting financial needs of its customers; (ii)
will provide a vehicle for growth and potential geographic diversification; and
(iii) may provide additional funding sources for Centra, as well as better
access to capital markets. To achieve these goals, the following will occur
pursuant to the Agreement:
(1) Merger Sub will merge with and into Centra pursuant to
the terms of the Agreement and the laws of the State of West Virginia. Merger
Sub's separate corporate existence will cease to exist, and Centra will be the
surviving corporation. Thereafter, Centra will be a wholly-owned subsidiary of
CFH, and will continue to operate the businesses of Centra conducted prior to
the Merger;
(2) The only class of Centra Stock outstanding is Common
Stock, par value of $1.00 per share ("Centra Common Stock"). Each share of
Centra Common Stock (excluding shares held by Centra stockholders who perfect
their dissenters' rights of appraisal) issued and outstanding immediately prior
to the Effective Time of the Merger, as defined in the Agreement, (the
"Effective
<PAGE> 3
Centra Bank, Inc.
December 16, 1999
Page 3
Time") shall, as of the Effective Time, by virtue of the Merger and without any
action on the part of the holders thereof, be converted into and exchanged for
the right to receive shares of CFH Common Stock (as defined in the Agreement) in
accordance with the Agreement;
(3) At the Effective Time the holders of certificates
representing Centra Common Stock, including holders of Dissenting Shares, shall
cease to have any rights as stockholders of Centra; and
(4) Fractional shares of CFH Common Stock will be issued as a
result of the proposed Merger.
With your consent, and the consent of CFH and Merger Sub, we
have also assumed that the following statements are true as of the date hereof
and will be true as of the Effective Time and that you, CFH, and Merger Sub will
reaffirm these representations at the Effective Time. Jackson & Kelly PLLC has
not independently verified the completeness and accuracy of any of the following
representations. Jackson & Kelly PLLC is relying on these representations in
rendering the opinions contained herein:
(1) The Merger will be consummated in compliance with the
material terms of the Agreement, and none of the material terms and conditions
therein have been waived or modified, and neither Centra nor CFH has any plan or
intention to waive or modify any material conditions of the Agreement.
(2) The ratio for the exchange of shares of CFH Common Stock
in exchange for shares of Centra Common Stock was negotiated through arm's
length bargaining. The fair market value of CFH Common Stock (including any
fractional share interest) received by the stockholders of Centra will be, in
each instance, approximately equal to the fair market value of the Centra Common
Stock surrendered in exchange therefor;
(3) Following the Merger, Centra will hold at least 90% of
the fair market value of its net assets and at least 70% of the fair market
value of its gross assets (including assets disposed of by Centra prior to or
subsequent to the merger and in contemplation thereof) (including without
limitation any asset disposed of by Centra, other than in the ordinary course of
business, pursuant to a plan or intent existing during the period ending on the
Effective Date and beginning with the commencement of negotiations; whether
formal or informal, with CFH regarding the Merger) and at least 90% of the fair
market value of Merger Sub's net assets and at least 70% of the fair market
value of Merger Sub's gross assets held immediately prior to the Merger. For
purposes of this representation, amounts paid by Centra or Merger Sub to
dissenters, amounts paid by Centra or Merger Sub to stockholders who receive
cash or other property, amounts used by Centra or Merger Sub to pay
reorganization expenses or other expenses incurred in connection with the
Merger, amounts, if any, used by Centra to make payments to employees, for
severance and termination of employment contracts, and all redemptions and
distributions (except for regular, normal dividends) made by Centra will be
included as assets of Centra or Merger Sub, respectively, immediately prior to
the Merger;
<PAGE> 4
Centra Bank, Inc.
December 16, 1999
Page 4
(4) Prior to the Merger, CFH will be in control of Merger Sub
within the meaning of Section 368(c) of the Code which means ownership of stock
possessing at least 80% of the total combined voting power of all classes of
stock entitled to vote and at least 80% of the total number of shares of each
other class of stock of the corporation;
(5) Centra has no plan or intention to issue additional
shares of its stock that would result in CFH losing control of Centra within the
meaning of Section 368(c) of the Code;
(6) During the five year period beginning on the Effective
Date, neither CFH nor any "CFH Related Person" (as defined below) has (i) any
plan or intention to purchase, redeem or otherwise acquire any of the CFH Common
Stock that will be issued pursuant to the Merger or (ii) participated in or will
participate in any purchase, redemption or other acquisition of Centra Common
Stock in contemplation or as part of the Merger. For purposes of this paragraph,
any arrangement that would result in a reduction of the risk of loss with
respect to the holding of any interest in the shares of CFH Common Stock or
Centra Common Stock as the case may be shall constitute an acquisition of such
shares.
"CFH Related Person" is (i) a member of its affiliated group
within the meaning of Section 1504 of the Code, (ii) a corporation as to which
CFH owns, actually or constructively, fifty percent or more of the total voting
power or total value of the shares of all classes of stock outstanding, (iii) a
corporation which owns, actually or constructively, fifty percent or more of the
total voting power or total value of the shares of all classes of stock of CFH,
or (iv) any other person related to CFH within the meaning of Treasury
Regulation Section 1.368-1(e)(3). A person will be related to CFH for this
purpose if such relationship exists either immediately before or immediately
after such acquisition or arises in connection with the Merger, and a person
that is a partner in a partnership will be deemed to own or have acquired stock
that such partnership acquired in accordance with the partner's interest in the
partnership;
(7) During the five-year period ending on the Effective Date,
neither Centra nor any "Centra Related Person" (as defined below) has (i)
purchased, redeemed or otherwise acquired any Centra Common Stock in
contemplation or as part of the Merger or (ii) will acquire any Centra Common
Stock prior to the Merger. During the five-year period ending on the Effective
Date, neither Centra nor any Centra Related Person has made any extraordinary
distribution with respect to Centra stock. For purposes of this paragraph, any
arrangement that would result in a reduction of the risk of loss with respect to
the holding of any interest in the shares of Centra Common Stock shall
constitute an acquisition of such shares.
A "Centra Related Person" is (i) a corporation as to which
Centra owns actually or constructively fifty percent or more of the total voting
power or total value of the shares of all classes of stock outstanding, or (ii)
a corporation which owns actually or constructively fifty percent or more
<PAGE> 5
Centra Bank, Inc.
December 16, 1999
Page 5
of the total voting power or total value of all shares of all classes of stock
of Centra. A person will be deemed related to Centra for this purpose if such
relationship exists either immediately before or immediately after such
acquisition, and a person that is a partner in a partnership will be deemed to
own or have acquired any stock that such partnership acquired in accordance with
the partner's interest in the partnership;
(8) CFH has no plan or intention to liquidate Centra; to
merge Centra with or into another corporation other than Merger Sub; to sell or
otherwise dispose of the stock of Centra except for transfers of stock to
corporations controlled by CFH; or to cause Centra to sell or otherwise dispose
of any of its assets or of any of the assets acquired from Merger Sub, except
for dispositions made in the ordinary course of business or transfers of assets
to a corporation controlled by Centra;
(9) Merger Sub will have no liabilities assumed by Centra,
and it will not transfer to Centra any assets subject to liabilities, in the
Merger;
(10) At the time of the Merger, the only class of issued and
outstanding stock of Centra will be the Centra Common Stock;
(11) In the Merger, shares of Centra stock representing
control of Centra, as defined in Section 368(c) of the Code, will be exchanged
solely for CFH Common Stock. For purposes of this representation, shares of
Centra stock exchanged for cash or other property originating with CFH will be
treated as outstanding Centra stock on the date of the Merger;
(12) The Centra Common Stock to be surrendered by each
stockholder of Centra will not be subject to any liability, and neither Centra
nor CFH will assume any liability with respect to the surrendered Centra Common
Stock;
(13) At the time of the Merger, Centra will not have
outstanding any warrants, options, convertible securities, or any other type of
right pursuant to which any person could acquire stock in Centra that, if
exercised or converted, would affect CFH's acquisition or retention of control
of Centra, as defined in Section 368(c) of the Code;
(14) Neither CFH nor any CFH Related Person owns, directly or
indirectly, nor has it or any CFH Related Person owned during the past five
years, directly or indirectly, any shares of the stock of Centra;
(15) Following the Merger, Centra will either continue its
historic business or use a significant portion of its historic business assets
in a business;
(16) CFH, Merger Sub, Centra and the stockholders of Centra
will pay their respective expenses, if any, incurred in connection with the
Merger;
<PAGE> 6
Centra Bank, Inc.
December 16, 1999
Page 6
(17) There is no intercorporate indebtedness existing between
CFH and Centra or between Merger Sub and Centra that was issued, acquired, or
will be settled at a discount;
(18) CFH will not issue cash in lieu of fractional share
interests;
(19) None of the compensation received, or to be received, by
any stockholder-employees of Centra will be separate consideration for, or
allocable to, any of their shares of Centra Common Stock; none of the shares of
CFH Common Stock or cash received, or to be received, by any
stockholder-employees of Centra pursuant to the Merger will be separate
consideration for, or allocable to, any employment agreement; and the
compensation paid to any stockholder-employees of Centra will be for services
actually rendered, or to be rendered, and will be commensurate with amounts paid
to third parties bargaining at arm's length for similar services;
(20) The only consideration to be received, directly or
indirectly, by holders of Centra Common Stock in the Merger is CFH Common Stock.
CFH has not agreed to assume, nor will it, directly or indirectly, assume any
expense or liability, whether contingent or fixed, of any holder of Centra
Common Stock. CFH has no plan or intention to contribute any additional capital
to Centra, to purchase additional Stock of Centra or to make any loans to Centra
following the Merger for the purpose of directly or indirectly paying any
additional consideration to any holders of Centra Common Stock. None of the
Centra Common Stock exchanged for CFH Common Stock in the Merger will be subject
to any liabilities. No part of the consideration exchanged for Centra Common
Stock will be received by a shareholder as a creditor, employee, or in any
capacity other than that of a stockholder of Centra;
(21) The Agreement and documents, agreements and other
matters specifically identified therein represent the entire understanding of
CFH, Merger Sub and Centra with respect to the Merger contemplated thereby, and
the Merger will be effected in accordance with the Agreement;
(22) The Merger is being undertaken for one or more valid
business purposes, including those described herein;
(23) Merger Sub is a corporation newly formed for the purpose
of participating in the Merger and at no time prior to the Merger has had assets
or business operations; and
(24) Either (a) no shares of Centra Common Stock, if any,
that were acquired in connection with the performance of services are subject to
a substantial risk of forfeiture within the meaning of Section 83(c) of the Code
or (b) any shares of CFH Common Stock received in exchange for shares of Centra
Common Stock that were acquired in connection with the performance of services
and are subject to a substantial risk of forfeiture within the meaning of
Section 83(c) of the
<PAGE> 7
Centra Bank, Inc.
December 16, 1999
Page 7
Code will be subject to substantially the same risk of forfeiture after the
Merger.
In addition to the mutual representations you, CFH and Merger
Sub have made to us, with your consent, we have also assumed that the following
statements are true as of the date hereof and will be true as of the Effective
Time and that you will reaffirm these representations at the Effective Time.
Jackson & Kelly PLLC has not independently verified the completeness and
accuracy of any of the following representations. Jackson & Kelly PLLC is
relying on these representations in rending the opinions contained herein:
(1) For Centra, not more than 25% of the fair market value of
its adjusted total assets consists of stock and securities of any one issuer,
and not more than 50% of the fair market value of its adjusted total assets
consists of stock and securities of five or fewer issuers. For purposes of the
preceding sentence, (i) a corporation's adjusted total assets exclude cash, cash
items (including accounts receivable and cash equivalents), and United States
government securities, (ii) a corporation's adjusted total assets exclude stock
and securities issued by any subsidiary at least 50% of the voting power or 50%
of the total fair market value of the stock of which is owned by the
corporation, but the corporation is treated as owning directly a ratable share
(based on the percentage of the fair market value of the subsidiary's stock
owned by the corporation) of the assets owned by any such subsidiary, and (iii)
all corporations that are members of the same "controlled group" within the
meaning of Section 1563(a) of the Code are treated as a single issuer.
(2) Centra is not under the jurisdiction of a court in a case
under Title 11 of the United States Code, a receivership, foreclosure, or
similar proceeding in a federal or state court.
(3) At the Effective Time, the fair market value of the
assets of Centra will exceed the liabilities plus the amount of liabilities, if
any, to which the assets are subject.
(4) At all times during the five-year period ending on the
Effective Date, the fair market value of all of Centra's United States real
property interests was and will have been less than 50 percent of the total fair
market value of, (a) its United States real property interests, (b) its
interests in real property located outside the United States and (c) its other
assets used or held for use in a trade or business. For purposes of the
preceding sentence, (x) United States real property interests include all
interests (other than an interest solely as a creditor) in real property and
associated personal property (such as movable walls and furnishings) located in
the United States
<PAGE> 8
Centra Bank, Inc.
December 16, 1999
Page 8
or the Virgin Islands and interests in any corporation (other than a controlled
corporation) owning any United States real property interest, (y) Centra is
treated as owning its proportionate share (based on the relative fair market
value of its ownership interest to all ownership interests) of the assets owned
by any controlled corporation or any partnership, trust, or estate in which
Centra is a partner or beneficiary, and (z) any such entity in turn is treated
as owning its proportionate share of the assets owned by any controlled
corporation or any partnership, trust, or estate in which the entity is a
partner or beneficiary. As used in this paragraph, "controlled corporation"
means any corporation at least 50 percent of the fair market value of the stock
of which is owned by Centra, in the case of a first-tier subsidiary of Centra,
or by a controlled corporation, in the case of a lower-tier subsidiary.
(5) Centra will not take any position on any Federal, state
or local income tax return or franchise tax return, or take any other action or
reporting position, that is inconsistent with the treatment of the Merger as a
reorganization within the meaning of Section 368(a) of the Code or with the
representations made herein.
(6) No outstanding Centra Common Stock acquired in connection
with the performance of services was or will have been acquired within six
months before the Effective Date by any person subject to section 16(b) of the
Securities Exchange Act of 1934 other than pursuant to an award (a) granted
under a plan that satisfies the requirements under S.E.C. Rule 16b-3 or (b)
granted more than six months before the Effective Date.
(7) Centra has not filed, and does not hold any asset subject
to, a consent pursuant to Section 341(f) of the Code and regulations thereunder.
(8) Centra is not a party to, and does not hold any asset
subject to, a "safe harbor lease" under former Section 168(f)(8) of the Code and
regulations thereunder.
(9) There is no plan or intention by the stockholders of
Centra who own 1% or more of the Centra Common Stock, and to the best of the
knowledge of management of Centra, there is no plan or intention by the
remaining stockholders of Centra to sell, exchange or otherwise transfer
ownership (including by derivative transactions such as an equity swap which
would have the economic effect of a transfer of ownership) to CFH or any CFH
Related Person, directly or indirectly, of a number of CFH shares received in
the Merger that would reduce the stockholders' ownership of CFH Common Stock to
a number of shares having a value, as of the date of the Merger, of less than
50% of the value of all of the formerly outstanding Centra Common Stock as of
the same date. For purposes of this representation, Centra Common Stock
exchanged for cash or other property will be treated as outstanding Centra
Common Stock at the date of the Merger. Moreover, Centra Common Stock and CFH
Common Stock held by the stockholders of Centra and otherwise sold, redeemed, or
disposed of prior or subsequent to the Merger are considered in making this
representation.
<PAGE> 9
Centra Bank, Inc.
December 16, 1999
Page 9
(10) During the five-year period prior to the Effective Time,
Centra did not declare any dividends with respect to its outstanding stock other
than regular, normal dividends consistent in amount and effect with prior
dividend distributions.
Also, in addition to the mutual representations you, CFH and
Merger Sub have made to us, and the specific representations that you have made
to us, with the consent of CFH and Merger Sub, we have also assumed that the
following statements are true as of the date hereof and will be true as of the
Effective Time and that CFH and Merger Sub will reaffirm these representations
at the Effective Time. Jackson & Kelly PLLC has not independently verified the
completeness and accuracy of any of the following representations. Jackson &
Kelly PLLC is relying on these representations in rending the opinions contained
herein:
(1) For each of CFH and Merger Sub, not more than 25% of the
fair market value of its adjusted total assets consists of stock and securities
of any one issuer, and not more than 50% of the fair market value of its
adjusted total assets consists of stock and securities of five or fewer issuers.
For purposes of the preceding sentence, (i) a corporation's adjusted total
assets exclude cash, cash items (including accounts receivable and cash
equivalents), and United States government securities, (ii) a corporation's
adjusted total assets exclude stock and securities issued by any subsidiary at
least 50% of the voting power or 50% of the total fair market value of the stock
of which is owned by the corporation, but the corporation is treated as owning
directly a ratable share (based on the percentage of the fair market value of
the subsidiary's stock owned by the corporation) of the assets owned by any such
subsidiary, and (iii) all corporations that are members of the same "controlled
group" within the meaning of Section 1563(a) of the Code are treated as a single
issuer.
(2) Neither CFH nor Merger Sub is under the jurisdiction of a
court in a case under Title 11 of the United States Code, a receivership,
foreclosure, or similar proceeding in a federal or state court.
(3) At the Effective Time, the fair market value of the
assets of CFH will exceed the sum of its liabilities plus the amount of
liabilities, if any, to which the assets are subject. At the Effective Time, the
fair market value of the assets of Merger Sub will exceed the sum of its
liabilities plus the amount of liabilities, if any, to which the assets are
subject.
(4) Currently, CFH has no ongoing stock repurchase program
where it acquires its own stock through repurchases in the open market. No such
stock repurchase program will be created in connection with the Merger.
<PAGE> 10
Centra Bank, Inc.
December 16, 1999
Page 10
(5) Neither CFH nor Merger Sub will take any position on any
Federal, state or local income tax return or franchise tax return, or take any
other action or reporting position, that is inconsistent with the treatment of
the Merger as a reorganization within the meaning of Section 368(a) of the Code
or with the representations made herein.
(6) There is no plan or intention by the stockholders of
Centra who own 1% or more of the Centra Common Stock, and to the best of the
knowledge of management of CFH, there is no plan or intention by the remaining
stockholders of Centra to sell, exchange or otherwise transfer ownership
(including by derivative transactions such as an equity swap which would have
the economic effect of a transfer of ownership) to CFH or any CFH Related
Person, directly or indirectly, of a number of CFH shares received in the Merger
that would reduce the stockholders' ownership of CFH Common Stock to a number of
shares having a value, as of the date of the Merger, of less than 50% of the
value of all of the formerly outstanding Centra Common Stock as of the same
date. For purposes of this representation, Centra Common Stock exchanged for
cash or other property will be treated as outstanding Centra Common Stock at the
date of the Merger. Moreover, Centra Common Stock and CFH Common Stock held by
the stockholders of Centra and otherwise sold, redeemed, or disposed of prior or
subsequent to the Merger are considered in making this representation.
(7) The share purchase rights attached to CFH Common Stock
will not be traded apart from CFH Common Stock before the occurrence of certain
triggering events. Before the occurrence of the events to be specified, the
share purchase rights may be redeemed by CFH. At the time CFH Common Stock is
issued to Centra stockholders, and at the time of the Merger, the likelihood
that the share purchase rights would be exercised will be both remote and
uncertain.
On the basis of the foregoing in reliance upon the
representations and assumptions described herein, and assuming that (a) with
respect to any nonresident alien or foreign entity that is a shareholder of
Centra, Centra will comply with all applicable statement and notification
requirements (if any) of Treasury Regulation Section 1.897-2(g) & (h) and the
Merger will be consummated in accordance with the Plan of Merger, therefore, we
are of the opinion that for federal income tax purposes:
(1) The Merger will constitute a reorganization within the
meaning of Section 368(a)(1)(A) and Section 368(a)(2)(E) of the Code. CFH,
Merger Sub and Centra will each be a "party to a reorganization" within the
meaning of Section 368(b) of the Code;
(2) No gain or loss will be recognized by Centra, CFH, or
Merger Sub as a result of the Merger;
(3) The holders of Centra Common Stock will recognize no gain
or loss upon the exchange of their shares of Centra Common Stock solely for
shares of CFH Common Stock. Code Section 354(a)(1);
(4) The tax basis of the CFH Common Stock received by the
holders of Centra Common Stock in the Merger will, in each case, be the same as
the basis of the Centra Common Stock surrendered in exchange therefor. Code
Section 358(a)(l);
<PAGE> 11
Centra Bank, Inc.
December 16, 1999
Page 11
(5) The holding period of the CFH Common Stock received by
the holders of Centra Common Stock in the Merger will, in each case, include the
period during which the Centra Common Stock surrendered in exchange therefor was
held by the exchanging stockholders, provided that the Centra Common Stock was
held as a capital asset in the hands of the exchanging stockholders on the date
of the Merger. Code Section 1223(1);
(6) The payment of cash to Centra stockholders in exchange
for Centra Common Stock pursuant to the exercise of dissenter's rights will be
treated as having been received as a distribution in redemption of such
stockholder's Centra Common Stock, subject to the provisions and limitations of
Section 302 of the Code. Where as a result of such distribution a stockholder
owns no Centra Common Stock either directly or through the application of
Section 318(a) of the Code, the redemption will be a complete termination of
interest within the meaning of Section 302(b)(3) of the Code and such cash will
be treated as a distribution in full payment in exchange for his or her Centra
Common Stock, as provided in Section 302(a) of the Code. Under Section 1001 of
the Code, gain or (subject to the limitations of Section 267 of the Code) loss
will be realized and recognized to such stockholders in an amount equal to the
difference between the amount of such cash and the adjusted basis of the Centra
Common Stock surrendered, as determined under Section 1011 of the Code. If a
Centra stockholder has held his or her stock for more than one year, the gain
should be treated as long-term capital gain, provided that the shares were held
as a capital asset on the date of the exchange; and
(7) Provided that, at the time of the Merger, the share
purchase rights remain contingent, non-exercisable, and subject to redemption if
issued, the receipt of these rights by Centra stockholders will not be a
distribution or receipt of property, an exchange of stock or property (either
taxable or nontaxable), or any other event giving rise to the realization of
gross income by Centra, CFH, or Centra stockholders. Rev. Rul. 90-11, 1990-1
C.B. 10.
Our opinion represents our best judgement of how a court
would decide, if presented with the issues addressed herein and is not binding
on the Internal Revenue Service or any court. Our opinion is not the equivalent
of a ruling from the Internal Revenue Service and may upon audit be challenged
by the Internal Revenue Service. Thus, no assurances can be given that a
position taken in reliance on our opinion will not be challenged by the IRS or
rejected by a court.
Our opinion is based on the understanding that the relevant
facts are, and will be at the Effective Time, as set forth in this letter. It is
also based on the Code, Treasury Regulations, case law and Internal Revenue
Service rulings as they now exist. These authorities are all subject to change
and such change may be made with retroactive effect. Were there to be such
changes either before or after the Effective Time, or should the relevant facts
prove to be other than as we have reviewed, our opinion could be affected. We
can give no assurance that after any such change our opinion would not be
different. We
<PAGE> 12
Centra Bank, Inc.
December 16, 1999
Page 12
do not undertake to advise you of matters that may come to our attention
subsequent to the date hereof and that may affect the opinions expressed herein,
including, without limitation, future changes in applicable law.
Also, our opinion is based on the assumption, and we have
assumed with your permission that the cash paid to Centra stockholders pursuant
to the Merger (including, pursuant to a shareholder's statutory dissent) will
not exceed twenty percent (20%) of the value of all rights to shares of Centra
outstanding as of the Effective Time.
In addition, our opinions are based solely on the documents
that we have examined, the additional information that we have obtained
(including, by way of example, but not limitation, the representations) and the
statements set out herein, which we have assumed and you, CFH and Merger Sub
have confirmed to be true on the date hereof and the date the Merger is
consummated. Our opinions cannot be relied upon if any of the facts contained in
such documents or if such additional information is, or later becomes,
inaccurate, or if any of the statements set out herein is, or later becomes,
inaccurate.
Our opinions do not address the tax consequences to certain
Centra stockholders in light of their particular circumstances, including, by
way of example, but not limitation, some or all of the following: Centra
stockholders who hold their Centra Common Stock other than as a capital asset,
foreign stockholders, stockholders who are not United States citizens, tax
exempt organizations, financial institutions, persons subject to the alternative
minimum tax, insurance companies, retirement plans, and persons who acquired
their Centra Common Stock as compensation. Finally, our opinions are limited to
the federal income tax matters specifically covered hereby, and we have not been
asked to address, nor have we addressed, any other tax consequences of the
Merger to any party, whether federal, state, local or foreign including, by way
of example, but not limitation, tax consequences of a required change in
accounting method, if any, or the termination of a bad debt reserve, if any.
The opinions expressed herein are solely for your benefit and
are being furnished only to you in connection with the Merger and solely for
your benefit in connection therewith and may not be used or relied upon in any
manner or for any purpose by any other person nor any copies published,
communicated, quoted or otherwise made available in whole or in part to any
other person or entity without our express prior written consent. This letter is
our opinion as to certain legal conclusions as specifically set forth herein and
is not and shall not be deemed to be a representation or opinion as to any
factual matters.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement. We also consent to the references to Jackson &
Kelly PLLC under the heading "Certain Federal Income
<PAGE> 13
Centra Bank, Inc.
December 16, 1999
Page 13
Tax Consequences" in the Registration Statement. In giving this consent, we do
not admit that we are within the category of persons whose consent is required
by Section 7 of the Securities Act or other rules and regulations of the
Securities and Exchange Commission thereunder.
Respectfully,
JACKSON & KELLY PLLC
/s/ Louis S. Southworth
-------------------------------
Louis S. Southworth, II, Member
AJF/RGT:mh
<PAGE> 1
EXHIBIT 10.1
================================================================================
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
, 1999,
between
CENTRA FINANCIAL HOLDINGS, INC.
and
CENTRA BANK, INC.,
as Rights Agent
================================================================================
<PAGE> 2
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Article I
CERTAIN DEFINITIONS
1.1 Certain Definitions.................................................................................2
Article II
THE RIGHTS
2.1 Summary of Rights..................................................................................10
2.2 Legend on Common Stock Certificates................................................................10
2.3 Exercise of Rights; Separation of Rights...........................................................11
2.4 Adjustments to Exercise Price; Number of Rights....................................................14
2.5 Date on Which Exercise is Effective................................................................16
2.6 Execution, Authentication, Delivery and Dating of
Rights Certificates................................................................................16
2.7 Registration, Registration of Transfer and Exchange................................................17
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates..........................................18
2.9 Persons Deemed Owners..............................................................................19
2.10 Delivery and Cancellation of Certificates..........................................................20
2.11 Agreement of Rights Holders........................................................................20
Article III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in............................................................................................21
3.2 Flip-over..........................................................................................24
Article IV
THE RIGHTS AGENT
4.1 General............................................................................................26
4.2 Merger or Consolidation or Change of Name of Rights Agent..........................................27
4.3 Duties of Rights Agent.............................................................................28
4.4 Change of Rights Agent.............................................................................30
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
Article V
MISCELLANEOUS
5.1 Redemption.........................................................................................32
5.2 Expiration.........................................................................................33
5.3 Issuance of New Rights Certificates................................................................33
5.4 Supplements and Amendments.........................................................................34
5.5 Fractional Shares..................................................................................34
5.6 Rights of Action...................................................................................35
5.7 Holder of Rights Not Deemed a Shareholder..........................................................35
5.8 Notice of Proposed Actions.........................................................................36
5.9 Notices............................................................................................36
5.10 Suspension of Exercisability.......................................................................37
5.11 Cost of Enforcement................................................................................37
5.12 Successors.........................................................................................37
5.13 Benefits of this Agreement.........................................................................38
5.14 Determination and Actions of the Board of Directors, etc...........................................38
5.15 Descriptive Headings...............................................................................38
5.16 Governing Law......................................................................................38
5.17 Counterparts.......................................................................................39
5.18 Severability.......................................................................................39
EXHIBITS
EXHIBIT A Form of Rights Certificate
(Together with Form of Election to Exercise)
EXHIBIT B Form of Resolutions of Designation
of Participating Preferred Stock
</TABLE>
ii
<PAGE> 4
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
SHAREHOLDER PROTECTION RIGHTS AGREEMENT (as amended from
time to time, this "Agreement"), dated as of _______________, 1999, between
Centra Financial Holdings, Inc., a West Virginia corporation (the "Company"),
and Centra Bank, Inc., as Rights Agent (the "Rights Agent", which term shall
include any successor Rights Agent hereunder).
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has (a)
authorized and declared a dividend of one right ("Right") in respect of each
share of Common Stock (as hereinafter defined) held of record as of the close of
business on ___________________, 1999 (the "Record Time") and (b) as provided in
Section 2.4, authorized the issuance of one Right in respect of each share of
Common Stock issued after the Record Time and prior to the Separation Time (as
hereinafter defined) and, to the extent provided in Section 5.3, each share of
Common Stock issued after the Separation Time;
WHEREAS, subject to Sections 3.1, 5.1 and 5.10, each Right
entitles the holder thereof, after the Separation Time, to purchase securities
of the Company (or, in certain cases, of certain other entities) pursuant to the
terms and subject to the conditions set forth herein; and
WHEREAS, the Company desires to appoint the Rights Agent to
act on behalf of the Company, and the Rights Agent is willing so to act, in
connection with the issuance, transfer, exchange or replacement of Rights
Certificates (as hereinafter defined), the exercise
<PAGE> 5
of Rights and other matters referred to herein;
NOW, THEREFORE, in consideration of the premises and the
respective agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial
Owner of 10% or more of the outstanding shares of Common Stock; provided,
however, that the term "Acquiring Person" shall not include any Person (i) who
is the Beneficial Owner of 10% or more of the outstanding shares of Common Stock
on the date of this Agreement or who shall become the Beneficial Owner of 10% or
more of the outstanding shares of Common Stock solely as a result of an
acquisition by the Company of shares of Common Stock, until such time hereafter
or thereafter as any of such Persons shall become the Beneficial Owner (other
than by means of a stock dividend or stock split) of any additional shares of
Common Stock, (ii) who is the Beneficial Owner of 10% or more of the outstanding
shares of Common Stock but who acquired Beneficial Ownership of shares of Common
Stock without any plan or intention to seek or affect control of the Company, if
such Person promptly enters into an irrevocable commitment promptly to divest,
and thereafter promptly divests (without exercising or retaining any power,
including voting, with respect to such shares), sufficient shares of Common
Stock (or securities convertible into, exchangeable into or exercisable for
Common Stock) so that such Person ceases to be the Beneficial Owner of 10% or
more of
2
<PAGE> 6
the outstanding shares of Common Stock or (iii) who Beneficially Owns shares of
Common Stock consisting solely of one or more of (A) shares of Common Stock
Beneficially Owned pursuant to the grant or exercise of an option granted to
such Person by the Company in connection with an agreement to merge with, or
acquire, the Company entered into prior to a Flip-in Date, (B) shares of Common
Stock (or securities convertible into, exchangeable into or exercisable for
Common Stock), Beneficially Owned by such Person or its Affiliates or Associates
at the time of grant of such option, (C) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock) acquired by
Affiliates or Associates of such Person after the time of such grant which, in
the aggregate, amount to less than 1% of the outstanding shares of Common Stock
or (D) Common Stock (or securities convertible into, exchangeable into or
exercisable for Common Stock) which are held by such Person in trust accounts,
managed accounts and the like or otherwise held in a fiduciary capacity, that
are beneficially owned by third persons who are not Affiliates or Associates of
such Person or acting together with such Person to hold such shares, or which
are held by such Person in respect of a debt previously contracted. In addition,
the Company, any wholly-owned Subsidiary of the Company and any employee stock
ownership or other employee benefit plan of the Company or a wholly-owned
Subsidiary of the Company shall not be an Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Securities Exchange Act of 1934,
as such Rule is in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own", any securities as to which
such Person or any of
3
<PAGE> 7
such Person's Affiliates or Associates is or may be deemed to be the beneficial
owner of pursuant to Rule 13d-3 and 13d-5 under the Securities Exchange Act, as
such Rules are in effect on the date of this Agreement as well as any securities
as to which such Person or any of such Person's Affiliates or Associates has the
right to become Beneficial Owner (whether such right is exercisable immediately
or only after the passage of time or the occurrence of conditions) pursuant to
any agreement, arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the "Beneficial
Owner", or to have "Beneficial Ownership" of, or to "Beneficially Own", any
security (i) solely because such security has been tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's Affiliates or
Associates until such tendered security is accepted for payment or exchange or
(ii) solely because such Person or any of such Person's Affiliates or Associates
has or shares the power to vote or direct the voting of such security pursuant
to a revocable proxy given in response to a public proxy or consent solicitation
made to more than ten holders of shares of a class of stock of the Company
registered under Section 12 of the Securities Exchange Act of 1934 and pursuant
to, and in accordance with, the applicable rules and regulations under the
Securities Exchange Act of 1934, except if such power (or the arrangements
relating thereto) is then reportable under Item 6 of Schedule 13D under the
Securities Exchange Act of 1934 (or any similar provisions of a comparable or
successor report). Notwithstanding the foregoing, no officer or director of the
Company shall be deemed to Beneficially Own any securities of any other Person
by virtue of any actions such officer or director takes in such capacity. For
purposes of this Agreement, in determining the percentage of the outstanding
shares of Common Stock with respect to which a Person is the
4
<PAGE> 8
Beneficial Owner, all shares as to which such Person is deemed the Beneficial
Owner shall be deemed outstanding.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in Morgantown, West Virginia are
generally authorized or obligated by law or executive order to close.
"Close of business" on any given date shall mean 5:00 p.m.
Morgantown, West Virginia time on such date (or, if such date is not a Business
Day, 5:00 p.m. Morgantown, West Virginia time on the next succeeding Business
Day).
"Common Stock" shall mean the shares of Common Stock, par
value $1.00 per share, of the Company.
"Exchange Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at
which a holder may purchase the securities issuable upon exercise of one whole
Right. Until adjustment thereof in accordance with the terms hereof, the
Exercise Price shall equal $1.00.
"Expiration Time" shall mean the earliest of (i) the Exchange
Time, (ii) the Redemption Time, (iii) ________________, 2010, and (iv) upon the
merger of the Company into another corporation pursuant to an agreement entered
into prior to a Flip-in Date.
"Flip-in Date" shall mean the tenth business day after any
Stock Acquisition Date or such earlier or later date as the Board of Directors
of the Company may from time to time fix by resolution adopted prior to the
Flip-in Date that would otherwise have occurred.
"Flip-over Entity," for purposes of Section 3.2, shall mean
(i) in the case of a
5
<PAGE> 9
Flip-over Transaction or Event described in clause (i) of the definition
thereof, the Person issuing any securities into which shares of Common Stock are
being converted or exchanged and, if no such securities are being issued, the
other party to such Flip-over Transaction or Event and (ii) in the case of a
Flip-over Transaction or Event referred to in clause (ii) of the definition
thereof, the Person receiving the greatest portion of the assets or earning
power being transferred in such Flip-over Transaction or Event, provided in all
cases if such Person is a subsidiary of a corporation, the parent corporation
shall be the Flip-over Entity.
"Flip-over Stock" shall mean the capital stock (or similar
equity interest) with the greatest voting power in respect of the election of
directors (or other persons similarly responsible for direction of the business
and affairs) of the Flip-over Entity.
"Flip-over Transaction or Event" shall mean a transaction or
series of transactions after the Flip-in Date in which, directly or indirectly,
(i) the Company shall consolidate or merge or participate in a share exchange
with any other Person if, at the time of the consolidation, merger or share
exchange or at the time the Company enters into any agreement with respect to
any such consolidation, merger or share exchange, the Acquiring Person controls
the Board of Directors of the Company and either (A) any term or arrangement
concerning the treatment of shares of capital stock in such consolidation,
merger or share exchange relating to the Acquiring Person is not identical to
the terms and arrangements relating to other holders of the Common Stock or (B)
the Person with whom the transaction or series of transactions occurs is the
Acquiring Person or any Affiliate or Associate of the Acquiring Person or (ii)
the Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer) assets (A) aggregating more than 50% of the
assets (measured by either book value or fair market value) or (B) generating
6
<PAGE> 10
more than 50% of the operating income or cash flow, of the Company and its
Subsidiaries (taken as a whole) to any Person (other than the Company or one or
more of its wholly-owned Subsidiaries) or to two or more such Persons which are
Affiliates or Associates or otherwise acting in concert, if, at the time of the
entry by the Company (or any such Subsidiary) into an agreement with respect to
such sale or transfer of assets, the Acquiring Person Controls the Board of
Directors of the Company. An Acquiring Person shall be deemed to Control the
Company's Board of Directors when, following a Flip-in Date, the persons who
were directors of the Company before the Flip-in Date shall cease to constitute
a majority of the Company's Board of Directors.
"Market Price" per share of any securities on any date shall
mean the average of the daily closing prices per share of such securities
(determined as described below) on each of the 20 consecutive Trading Days
through and including the Trading Day immediately preceding such date; provided,
however, that if an event of a type analogous to any of the events described in
Section 2.4 hereof shall have caused the closing prices used to determine the
Market Price on any Trading Days during such period of 20 Trading Days not to be
fully comparable with the closing price on such date, each such closing price so
used shall be appropriately adjusted in order to make it fully comparable with
the closing price on such date. The closing price per share of any securities on
any date shall be the last reported sale price, regular way, or, in case no such
sale takes place or is quoted on such date, the average of the closing bid and
asked prices, regular way, for each share of such securities, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange, Inc.
or, if the securities are not listed or admitted to trading on any national
securities exchange, as
7
<PAGE> 11
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
securities are listed or admitted to trading or, if the securities are not
listed or admitted to trading on any national securities exchange, as reported
by the National Association of Securities Dealers, Inc. Automated Quotation
System or such other system then in use, or, if on any such date the securities
are not listed or admitted to trading on any national securities exchange or
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the securities
selected by the Board of Directors of the Company; provided, however, that if on
any such date the securities are not listed or admitted to trading on a national
securities exchange or traded in the over-the-counter market, the closing price
per share of such securities on such date shall mean the fair value per share of
securities on such date as determined in good faith by the Board of Directors of
the Company, after consultation with a nationally recognized investment banking
firm, and set forth in a certificate delivered to the Rights Agent.
"Person" shall mean any individual, firm, partnership,
association, group (as such term is used in Rule 13d-5 under the Securities
Exchange Act of 1934, as such Rule is in effect on the date of this Agreement),
corporation or other entity.
"Preferred Stock" shall mean the series of Participating
Preferred Stock, par value $1.00 per share, of the Company created by a
Resolution of Designation in substantially the form set forth in Exhibit B
hereto appropriately completed.
"Redemption Price" shall mean an amount equal to one cent,
$0.01.
"Redemption Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 5.1 hereof.
8
<PAGE> 12
"Separation Time" shall mean the close of business on the
earlier of (i) the tenth business day (or such later date as the Board of
Directors of the Company may from time to time fix by resolution adopted prior
to the Separation Time that would otherwise have occurred) after the date on
which any Person commences a tender or exchange offer which, if consummated,
would result in such Person's becoming an Acquiring Person and (ii) the Flip-in
Date; provided, that if the foregoing results in the Separation Time being prior
to the Record Time, the Separation Time shall be the Record Time and provided
further, that if any tender or exchange offer referred to in clause (i) of this
paragraph is cancelled, terminated or otherwise withdrawn prior to the
Separation Time without the purchase of any shares of Common Stock pursuant
thereto, such offer shall be deemed, for purposes of this paragraph, never to
have been made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) that an Acquiring Person has become
such.
"Subsidiary" of any specified Person shall mean any
corporation or other entity of which a majority of the voting power of the
equity securities or a majority of the equity interest is Beneficially Owned,
directly or indirectly, by such Person.
"Trading Day", when used with respect to any securities, shall
mean a day on which the New York Stock Exchange, Inc. is open for the
transaction of business or, if such securities are not listed or admitted to
trading on the New York Stock Exchange, Inc., a day on which the principal
national securities exchange on which such securities are listed or admitted to
trading is open for the transaction of business or, if such securities are not
listed or admitted to trading on any national securities exchange, a Business
Day.
9
<PAGE> 13
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record
Time, the Company will mail a letter summarizing the terms of the Rights to each
holder of record of Common Stock as of the Record Time, at such holder's address
as shown by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for the
Common Stock issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
Until the Separation Time (as defined in the Rights Agreement
referred to below), this certificate also evidences and
entitles the holder hereof to certain Rights as set forth in
the Rights Agreement, dated as of ________________, 1999 (as
such may be amended from time to time, the "Rights
Agreement"), between Centra Financial Holdings, Inc. (the
"Company") and Centra Bank, Inc., as Rights Agent, the terms
of which are hereby incorporated herein by reference and a
copy of which is on file at the principal executive offices of
the Company. Under certain circumstances, as set forth in the
Rights Agreement, such Rights may be redeemed, may become
exercisable for securities or assets of the Company or of
another entity, may be exchanged for shares of Common Stock or
other securities or assets of the Company, may expire, may
become void (if they are "Beneficially Owned" by an "Acquiring
Person" or an Affiliate or Associate thereof, as such terms
are defined in the Rights Agreement, or by any transferee of
any of the foregoing) or may be evidenced by separate
certificates and may no longer be evidenced by this
certificate. The Company will mail or arrange for the mailing
of a copy of the Rights Agreement to the holder of this
certificate without charge promptly after the receipt of a
written request therefor.
10
<PAGE> 14
Certificates representing shares of Common Stock that are issued and outstanding
at the Record Time shall evidence one Right for each share of Common Stock
evidenced thereby notwithstanding the absence of the foregoing legend.
2.3 Exercise of Rights; Separation of Rights.
(a) Subject to Sections 3.1, 5.1 or 5.10 and subject to
adjustment as herein set forth, each Right will entitle the holder thereof,
after the Separation Time and prior to the Expiration Time, to purchase, for the
Exercise Price, one one-hundredth of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised
and (ii) each Right will be evidenced by the certificate for the associated
share of Common Stock (together, in the case of certificates issued prior to the
Record Time, with the letter mailed to the record holder thereof pursuant to
Section 2.1) and will be transferable only together with, and will be
transferred by a transfer (whether with or without such letter) of, such
associated share.
(c) Subject to this Section 2.3 and to Sections 3.1, 5.1 and
5.10, after the Separation Time and prior to the Expiration Time, the Rights (i)
may be exercised and (ii) may be transferred independent of shares of Common
Stock. Promptly following the Separation Time, the Rights Agent will mail to
each holder of record of Common Stock as of the Separation Time (other than any
Person whose Rights have become void pursuant to Section 3.1(b)), at such
holder's address as shown by the records of the Company (the Company hereby
agreeing to furnish copies of such records to the Rights Agent for this
purpose), (x) a certificate (a "Rights Certificate") in substantially the form
of Exhibit A hereto appropriately completed, representing the number of Rights
held by such holder at the
11
<PAGE> 15
Separation Time and having such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any national securities
exchange or quotation system on which the Rights may from time to time be listed
or traded, or to conform the usage, and (y) a disclosure statement describing
the Rights.
(d) Subject to Sections 3.1, 5.1 and 5.10, Rights may be
exercised on any Business Day after the Separation Time and prior to the
Expiration Time by submitting to the Rights Agent the Rights Certificate
evidencing such Rights with an Election to Exercise (an "Election to Exercise")
substantially in the form attached to the Rights Certificate duly completed,
accompanied by payment in cash, or by certified or official bank check or money
order payable to the order of the Company, of a sum equal to the Exercise Price
multiplied by the number of Rights being exercised and a sum sufficient to cover
any transfer tax or charge which may be payable in respect of any transfer
involved in the transfer or delivery of Rights Certificates or the issuance or
delivery of certificates for shares or depositary receipts (or both) in a name
other than that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 2.3(d), and subject to
Sections 3.1, 5.1 and 5.10, the Rights Agent will thereupon promptly (i) (A)
requisition from a transfer agent stock certificates evidencing such number of
shares or other securities to be purchased (the Company hereby irrevocably
authorizing its transfer agents to comply with all such requisitions) and (B) if
the Company elects pursuant to Section 5.5 not to issue certificates
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representing fractional shares, requisition from the depositary selected by the
Company depositary receipts representing the fractional shares to be purchased
or requisition from the Company the amount of cash to be paid in lieu of
fractional shares in accordance with Section 5.5 and (ii) after receipt of such
certificates, depositary receipts and/or cash, deliver the same to or upon the
order of the registered holder of such Rights Certificate, registered (in the
case of certificates or depositary receipts) in such name or names as may be
designated by such holder.
(f) In case the holder of any Rights shall exercise less than
all the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all
such action as may be necessary to ensure that all shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered and fully paid and nonassessable;
(ii) take all such action as may be necessary to comply with any applicable
requirements of the Securities Act of 1933 or the Securities Exchange Act of
1934, and the rules and regulations thereunder, and any other applicable law,
rule or regulation, in connection with the issuance of any shares upon exercise
of Rights; and (iii) pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of Rights, provided that the Company shall not be required to pay any
transfer tax or charge which may be payable in respect of any transfer involved
in the transfer or delivery of Rights Certificates
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or the issuance or delivery of certificates for shares in a name other than that
of the holder of the Rights being transferred or exercised.
2.4. Adjustments to Exercise Price; Number of Rights.
(a) In the event the Company shall at any time after the
Record Time and prior to the Separation Time (i) declare or pay a dividend on
Common Stock payable in Common Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller number of
shares of Common Stock, (x) the Exercise Price in effect after such adjustment
will be equal to the Exercise Price in effect immediately prior to such
adjustment divided by the number of shares of Common Stock (the "Expansion
Factor") that a holder of one share of Common Stock immediately prior to such
dividend, subdivision or combination would hold thereafter as a result thereof
and (y) each Right held prior to such adjustment will become that number of
Rights equal to the Expansion Factor, and the adjusted number of Rights will be
deemed to be distributed among the shares of Common Stock with respect to which
the original Rights were associated (if they remain outstanding) and the shares
issued in respect of such dividend, subdivision or combination, so that each
such share of Common Stock will have exactly one Right associated with it. Each
adjustment made pursuant to this paragraph shall be made as of the payment or
effective date for the applicable dividend, subdivision or combination.
In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue any shares of Common Stock otherwise
than in a transaction referred to in the preceding paragraph, each such shares
of Common Stock so issued shall automatically have one new Right associated with
it, which Right shall be evidenced by the certificate representing such share.
To the extent provided in Section 5.3, Rights shall be
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issued by the Company in respect of shares of Common Stock that are issued or
sold by the Company after the Separation Time.
(b) In the event the Company shall at any time after the
Record Time and prior to the Separation Time issue or distribute any securities
or assets in respect of, in lieu of or in exchange of Common Stock (other than
pursuant to a regular periodic cash dividend or a dividend paid solely in Common
Stock) whether by dividend, in a reclassification or recapitalization (including
any such transaction involving a merger, consolidation or share exchange), or
otherwise, the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property purchasable upon
exercise of Rights as the Board of Directors of the Company, in its sole
discretion, may deem to be appropriate under the circumstances in order to
adequately protect the interests of the holders of Rights generally, and the
Company and the Rights Agent shall amend this Agreement as necessary to provide
for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to
this Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment
to the Exercise Price is made pursuant to this Section 2.4, the Company shall
(i) promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment and (ii) promptly file
with the Rights Agent and with each transfer agent for the Common Stock a copy
of such certificate.
(d) Rights certificates shall represent the securities
purchasable under the terms of this Agreement, including any adjustment or
change in the securities purchasable upon exercise of the Rights, even though
such certificates may continue to express the securities purchasable at the time
of issuance of the initial Rights Certificates.
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2.5. Date on Which Exercise is Effective. Each person in whose
name any certificate for shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the shares
represented thereby on the date upon which the Rights Certificate evidencing
such Rights was duly surrendered and payment of the Exercise Price for such
Rights (and any applicable taxes and other governmental charges payable by the
exercising holder hereunder) was made; provided, however, that if the date of
such surrender and payment is a date upon which the stock transfer books of the
Company are closed, such person shall be deemed to have become the record holder
of such shares on, and such certificate shall be dated, the next succeeding
Business Day on which the stock transfer books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or one of its Vice Presidents,
under its corporate seal reproduced thereon attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the countersignature and delivery of such
Rights Certificates.
Promptly after the Separation Time, the Company will notify
the Rights Agent of such Separation Time and will deliver Rights Certificates
executed by the Company to the Rights Agent for countersignature, and, subject
to Section 3.1(b), the Rights Agent shall manually countersign and deliver such
Rights Certificates to the holders of the Rights
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pursuant to Section 2.3(c) hereof. No Rights Certificate shall be valid for any
purpose unless manually countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.7 Registration, Registration of Transfer and Exchange.
(a) After the Separation Time, the Company will cause to be
kept a register (the "Rights Register") in which, subject to such reasonable
regulations as it may prescribe, the Company will provide for the registration
and transfer of Rights. The Rights Agent is hereby appointed the "Rights
Registrar" for the purposes of maintaining the Rights Register for the Company
and registering Rights and transfers of Rights after the Separation Time as
herein provided. In the event that the Rights Agent shall cease to be the Rights
Registrar, the Rights Agent will have the right to examine the Rights Register
at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Section 2.7(c) and (d), the
Company will execute, and the Rights Agent will countersign and deliver, in the
name of the holder or the designated transferee or transferees, as required
pursuant to the holder's instructions, one or more new Rights Certificates
evidencing the same aggregate number of Rights as did the Rights Certificate so
surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be entitled
to the same benefit under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
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(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent,
as the case may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. As a condition to the issuance of any new
Rights Certificate under this Section 2.7, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
(d) The Company shall not be required to register the transfer
or exchange of any Rights after such Rights have become void under Section
3.1(b), been exchanged under Section 3.1(c) or been redeemed or terminated under
Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates.
(a) If any mutilated Rights Certificate is surrendered to the
Rights Agent prior to the Expiration Time, then, subject to Sections 3.1(b),
3.1(c) and 5.1, the Company shall execute and the Rights Agent shall countersign
and deliver in exchange therefor a new Rights Certificate evidencing the same
number of Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights
Agent prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen
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Rights Certificate, a new Rights Certificate evidencing the same number of
Rights as did the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights
Certificate under this Section 2.8, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this
Section 2.8 in lieu of any destroyed, lost or stolen Rights Certificate shall
evidence an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and, subject to Section 3.1(b), shall be entitled to all
the benefits of this Agreement equally and proportionately with any and all
other Rights duly issued hereunder.
2.9 Persons Deemed Owners. Prior to the presentment of a
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock certificate) for registration of transfer, the Company, the Rights Agent
and any agent of the Company or the Rights Agent may deem and treat the person
in whose name the Rights Certificate (or, prior to the Separation Time, such
Common Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby for all purposes whatsoever, including the payment of
the Redemption Price and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary. As used in this Agreement, unless the
context otherwise requires, the term "holder" of any Rights shall mean the
registered holder of such Rights (or, prior to the Separation Time, the
associated shares of Common Stock).
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2.10 Delivery and Cancellation of Certificates. All Rights
Certificates surrendered upon exercise or for registration of transfer or
exchange shall, if surrendered to any person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly cancelled by
the Rights Agent. The Company may at any time deliver to the Rights Agent for
cancellation any Rights Certificates previously countersigned and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Rights Certificates so delivered shall be promptly cancelled by the Rights
Agent. No Rights Certificates shall be countersigned in lieu of or in exchange
for any Rights Certificate cancelled as provided in this Section 2.10, except as
expressly permitted by this Agreement. The Rights Agent shall return all
cancelled Rights Certificates to the Company.
2.11 Agreement of Rights Holders. Every holder of Rights by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of Rights that:
(a) Prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a transfer of, the
associated share of Common Stock;
(b) After the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) Prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated Common Stock Certificate) for
registration of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in whose name the
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock Certificate) is registered as the absolute owner thereof and of the
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Rights evidenced thereby for all purposes whatsoever, and neither the Company
nor the Rights Agent shall be affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will, under
the circumstances set forth in Section 3.1(b), become void; and
(e) This Agreement may be supplemented or amended from time to
time pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT
OF CERTAIN TRANSACTIONS
3.1 Flip-in.
(a) In the event that prior to the Expiration Time a Flip-in
Date shall occur, except as provided in this Section 3.1, each Right shall
constitute the right to purchase from the Company, upon exercise thereof in
accordance with the terms hereof (but subject to Section 5.10), that number of
shares of Common Stock having an aggregate Market Price on the Stock Acquisition
Date equal to twice the Exercise Price for an amount in cash equal to the
Exercise Price (such right to be appropriately adjusted in order to protect the
interests of the holders of Rights generally in the event that on or after such
Stock Acquisition Date an event of a type analogous to any of the events
described in Section 2.4(a) or (b) shall have occurred with respect to the
Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring Person
or an Affiliate or Associate thereof or by any transferee, direct or indirect,
of any of the foregoing shall
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become void and any holder of such Rights (including transferees) shall
thereafter have no right to exercise or transfer such Rights under any provision
of this Agreement. If any Rights Certificate is presented for assignment or
exercise and the Person presenting the same will not complete the certification
set forth at the end of the form of assignment or notice of election to exercise
and provide such additional evidence of the identity of the Beneficial Owner and
its Affiliates and Associates (or former Beneficial Owners and their Affiliates
and Associates) as the Company shall reasonably request, then the Company shall
be entitled conclusively to deem the Beneficial Owner thereof to be an Acquiring
Person or an Affiliate or Associate thereof or a transferee of any of the
foregoing and accordingly will deem the Rights evidenced thereby to be void and
not transferable or exercisable.
(c) The Board of Directors of the Company may, at its option,
at any time after a Flip-in Date and prior to the time that an Acquiring Person
becomes the beneficial Owner of more than 50% of the outstanding shares of
Common Stock, elect to exchange all (but not less than all) of the then
outstanding Rights (which shall not include Rights that have become void
pursuant to the provisions of the Section 3.1(b)) for shares of Common Stock at
an exchange ratio of one share of Common Stock per Right, appropriately adjusted
in order to protect the interests of holders of Rights generally in the event
that after the Separation Time an event of a type analogous to any of the events
described in Section 2.4(a) or (b) shall have occurred with respect to the
Common Stock (such exchange ratio, as adjusted from time to time, being
hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the
Company electing to exchange the Rights, without any further action and without
any notice, the right to exercise the Rights will terminate and each Right
(other than Rights that have become void
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pursuant to Section 3.1(b)) will thereafter represent only the right to receive
a number of shares of Common Stock equal to the Exchange Ratio. Promptly after
the action of the Board of Directors electing to exchange the Rights, the
Company shall give notice thereof (specifying the steps to be taken to receive
shares of Common Stock in exchange for Rights) to the Rights Agent and the
holders of the Rights (other than Rights that have become void pursuant to
Section 3.1(b)) outstanding immediately prior thereto by mailing such notice in
accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued
upon the exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d)
shall for all purposes be deemed to have become the holder of record of the
shares represented thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of any applicable taxes and other governmental charges payable by
the holder was made; provided, however, that if the date of such surrender and
payment is a date upon which the stock transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding Business Day on which
the stock transfer books of the Company are open.
(d) Whenever the Company shall become obligated under Section
3.1(a) or (c) to issue shares of Common Stock upon exercise of or in exchange
for Rights, the Company, at its option, may substitute therefor shares of
Preferred Stock, at a ratio of one one-hundredth of a share of Preferred Stock
for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient treasury
shares or
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authorized but unissued shares of Common Stock or Preferred Stock of the Company
to permit the exercise or exchange in full of the Rights in accordance with
Section 3.1(a) or (c), the Company shall either (i) call a meeting of
shareholders seeking approval to cause sufficient additional shares to be
authorized (provided that if such approval is not obtained the Company will take
the action specified in clause (ii) of this sentence) or (ii) take such action
as shall be necessary to ensure and provide, to the extent permitted by
applicable law and any agreements or instruments in effect on the Stock
Acquisition Date to which it is a party, that each Right shall thereafter
constitute the right to receive, (x) at the Company's option, either (A) in
return for the Exercise Price, debt or equity securities or other assets (or a
combination thereof) having a fair value equal to twice the Exercise Price, or
(B) without payment of consideration (except as otherwise required by applicable
law), debt or equity securities or other assets (or a combination thereof)
having a fair value equal to the Exercise Price, or (y) if the Board of
Directors of the Company elects to exchange the Rights in accordance with
Section 3.1(c), debt or equity securities or other assets (or a combination
thereof) having a fair value equal to the product of the Market Price of a share
of Common Stock on the Flip-in Date times the Exchange Ratio in effect on the
Flip-in Date, where in any case set forth in (x) or (y) above the fair value of
such debt or equity securities or other assets shall be as determined in good
faith by the Board of Directors of the Company, after consultation with a
nationally recognized investment banking firm.
3.2 Flip-over.
(a) Prior to the Expiration Time, the Company shall not enter
into any agreement with respect to, consummate or permit to occur any Flip-over
Transaction or Event unless and until it shall have entered into a supplemental
agreement with the Flip-over
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Entity, for the benefit of the holders of the Rights, providing that, upon
consummation or occurrence of the Flip-over Transaction or Event (i) each Right
shall thereafter constitute the right to purchase from the Flip-over Entity,
upon exercise thereof in accordance with the terms hereof, that number of shares
of Flip-over Stock of the Flip-over Entity having an aggregate Market Price on
the date of consummation or occurrence of such Flip-over Transaction or Event
equal to twice the Exercise Price for an amount in cash equal to the Exercise
Price (such right to be appropriately adjusted in order to protect the interests
of the holders of Rights generally in the event that after such date of
consummation or occurrence an event of a type analogous to any of the events
described in Section 2.4(a) or (b) shall have occurred with respect to the
Flip-over Stock) and (ii) the Flip-over Entity shall thereafter be liable for,
and shall assume, by virtue of such Flip-over Transaction or Event and such
supplemental agreement, all the obligations and duties of the Company pursuant
to this Agreement. The provisions of this Section 3.2 shall apply to successive
Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be
redeemed pursuant to Section 5.1 hereof in connection therewith, the Company
shall not enter into any agreement with respect to, consummate or permit to
occur any Flip-over Transaction or Event if at the time thereof there are any
rights, warrants or securities outstanding or any other arrangements, agreements
or instruments that would eliminate or otherwise diminish in any material
respect the benefits intended to be afforded by this Rights Agreement to the
holders of Rights upon consummation of such transaction.
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ARTICLE IV
THE RIGHTS AGENT
4.1 General.
(a) The Company hereby appoints the Rights Agent to act as
agent for the Company in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted to be done by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
certificate for securities purchasable upon exercise of the Rights, Rights
Certificate, certificate for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and where necessary,
verified or acknowledged, by the proper person or persons.
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4.2 Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent is a party, or any corporation succeeding to
the shareholder services business of the Rights Agent or any successor Rights
Agent, will be the successor to the Rights Agent under this Agreement without
the execution or filling of any paper or any further act of the part of any of
the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 4.4
hereof. In case at the time such successor Rights Agent succeeds to the agency
created by this Agreement any of the Rights Certificates have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificate so countersigned; and in case at that time any of the Rights
Certificates have not been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates will have the full force provided in the Rights
Certificate and in this Agreement.
(b) In case at any time the name of the Rights Agent is
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior
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name or in its changed name; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel will be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by a person believed by the Rights Agent to
be the Chairman of the Board, the President or Vice President and by the
Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and such certificate will be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or willful misconduct.
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(d) The Rights Agent will not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have been
made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the Rights
Agent) or in respect of the validity or execution of any certificate for
securities purchasable upon exercise of Rights or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificates; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 3.1(b) hereof) or any adjustment required under the provisions of
Section 2.5, 3.1 or 3.2 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights after
receipt of the certificate contemplated by Section 2.4 describing any such
adjustment); nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
securities purchasable upon exercise of Rights or any Rights or as to whether
any securities purchasable upon exercise of Rights will, when issued, be duly
and validly authorized, executed, issued and delivered and fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and
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other acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any person believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President or the Secretary or any Assistant Secretary or
the Treasurer or any Assistant Treasurer of the Company, and to apply to such
persons for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in accordance
with instructions of any such person.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either by
itself or by or through its attorneys or agents, and the Rights Agent will not
be answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
4.4 Change of Rights Agent. The Rights Agent may resign and be
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discharged from its duties under this Agreement upon 90 days' notice (or such
lesser notice as is acceptable to the Company ) in writing mailed to the Company
and to each transfer agent of Common Stock by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.9. The Company may
remove the Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. If the
Rights Agent should resign or be removed or otherwise become incapable of
acting, the Company will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then the holder of any Rights may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of the State of West Virginia or any other State of the United States,
in good standing, which is authorized under such laws to exercise the powers of
the Rights Agent contemplated by this Agreement and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$____________ . After appointment, the successor Rights Agent will be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and
31
<PAGE> 35
deliver any further assurance, conveyance, act or deed necessary for that
purpose. Not later than the effective date of any such appointment,the Company
will file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock, and mail a notice thereof in writing to the
holders of the Rights. Failure to give any notice provided for in this Section
4.4, however, or any defect therein, shall not affect the legality or validity
of the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
ARTICLE V
MISCELLANEOUS
5.1 Redemption.
(a) The Board of Directors of the Company may, at its option,
at any time prior to the close of business on the Flip-in Date, elect to redeem
all (but not less than all) of the then outstanding Rights at the Redemption
Price and the Company, at its option, may pay the Redemption Price either in
cash or shares of Common Stock or other securities of the Company deemed by the
Board of Directors, in the exercise of its sole discretion, to be at least
equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights (or if the resolution of the Board of
Directors electing to redeem the Rights states that the redemption will not be
effective until the occurrence of a specified future time or event, upon the
occurrence of a specified future time or event, upon the occurrence of such
future time or event), without any further action and without any notice, the
right to exercise the Rights will terminate and each Right will thereafter
represent
32
<PAGE> 36
only the right to receive the Redemption Price in cash or securities, as
determined by the Board of Directors. Promptly after the Rights are redeemed,
the Company shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice in accordance with
Section 5.9.
5.2 Expiration. The Rights and this Agreement shall expire at
the Expiration Time and no Person shall have any rights pursuant to this
Agreement or any Right after the Expiration Time, except, if the Rights are
exchanged or redeemed, as provided in section 3.1 or 5.1 hereof.
5.3 Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the number or kind or class of shares of stock purchasable upon
exercise of Rights made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock by
the Company following the Separation Time and prior to the Expiration Time
pursuant to the terms of securities convertible or redeemable into shares of
Common Stock or to options, in each case issued or granted prior to, and
outstanding at, the Separation Time, the Company shall issue to the holders of
such shares of Common Stock, the Rights Certificates representing the
appropriate number of Rights in connection with the issuance or sale of such
shares of Common Stock; provided, however, in each case, (i) no such Rights
Certificates shall be issued, if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or to the Person to whom such
Rights Certificates would be
33
<PAGE> 37
issued, (ii) no such Rights Certificates shall be issued if, and to the extent
that, appropriate adjustment shall have otherwise been made in lieu of the
issuance thereof, and (iii) the Company shall have no obligation to distribute
Rights Certificates to any Acquiring Person or Affiliate or Associate of an
Acquiring person or any transferee of any of the foregoing.
5.4 Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Rights (i) prior to the close of business on the
Flip-in Date, in any respect and (ii) after the close of business on the Flip-in
Date, to make any changes that the Company may deem necessary or desirable and
which shall not materially adversely affect the interests of the holders of
Rights generally or in order to cure any ambiguity or to correct or supplement
any provision contained herein which may be inconsistent with any other
provisions herein or otherwise defective. The Rights Agent will duly execute and
deliver any supplement or amendment hereto requested by the Company which
satisfies the terms of the preceding sentence.
5.5 Fractional Shares. If the Company elects not to issue
certificates representing fractional shares upon exercise or redemption of
Rights, the Company shall, in lieu thereof, in the sole discretion of the Board
of Directors, either (a) evidence such fractional shares by depositary receipts
issued pursuant to an appropriate agreement between the Company and a depositary
selected by it, providing that each holder of a depositary receipt shall have
all of the rights, privileges and preferences to which such holder would be
entitled as a beneficial owner of such fractional share, or (b) sell such shares
on behalf of the holders of Rights and pay to the registered holder of such
Rights the appropriate fraction or price per share received upon such sale.
34
<PAGE> 38
5.6 Rights of Action. Subject to the terms of this Agreement
(including Section 3.1(b)), rights of action in respect of this Agreement, other
than rights of action vested solely in the Rights Agent, are vested in the
respective holders of the Rights; and any holder of any Rights, without the
consent of the Rights Agent or of the holder of any other Rights, may, on such
holder's own behalf and for such holder's own benefit and the benefit of other
holders of Rights, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, such
holder's right to exercise such holder's Rights in the manner provided in such
holder's Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
5.7 Holder of Rights Not Deemed a Shareholder. No holder, as
such, of any Rights shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of shares or any other securities which may at any
time be issuable on the exercise of such Rights, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 5.8 hereof), or to receive dividends
or subscription rights, or otherwise, until such Rights shall have been
exercised or exchanged in accordance with the provisions hereof.
35
<PAGE> 39
5.8 Notice of Proposed Actions. In case the Company shall
propose after the Separation Time and prior to the Expiration Time (i) to effect
or permit occurrence of any Flip-over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section 5.9
hereof, a notice of such proposed action, which shall specify the date on which
such Flip-over Transaction or Event, liquidation, dissolution, or winding up is
to take place, and such notice shall be so given at least 20 Business Days prior
to the date of the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Centra Financial Holdings, Inc.
990 Elmer Prince Drive
Morgantown, West Virginia 26505
Attention: Secretary
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Centra Bank, Inc.
990 Elmer Prince Drive
Morgantown, West Virginia 26505
Attention: [Stock Transfer Department]
Notices and demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given
36
<PAGE> 40
or made if delivered or sent by first-class mail, postage prepaid, addressed to
such holder at the address of such holder as it appears upon the registry books
of the Rights Agent or, prior to the Separation Time, on the registry books of
the transfer agent for the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice.
5.10 Suspension of Exercisability. To the extent that the
Company determines in good faith that some action will or need be taken pursuant
to Section 3.1 or to comply with federal or state securities laws, the Company
may suspend the exercisability of the Rights for a reasonable period in order to
take such action or comply with such laws. In the event of any such suspension,
the Company shall issue as promptly as practicable a public announcement stating
that the exercisability or exchangeability of the Rights has been temporarily
suspended. Notice thereof pursuant to Section 5.9 shall not be required.
Failure to give a notice pursuant to the provisions of this
Agreement shall not affect the validity of any action taken hereunder.
5.11 Costs of Enforcement. The Company agrees that if the
Company or any other Person the securities of which are purchasable upon
exercise of Rights fails to fulfill any of its obligations pursuant to this
Agreement, then the Company or such Person will reimburse the holder of any
Rights for the costs and expenses (including legal fees) incurred by such holder
in actions to enforce such holder's rights pursuant to any Rights or this
Agreement.
5.12 Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
37
<PAGE> 41
5.13 Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the holders of the Rights any legal or equitable right, remedy or
claim under this Agreement and this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of the
Rights.
5.14 Determination and Actions by the Board of Directors, etc.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board of Directors of the Company to any liability to the holders of
the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT ISSUED
HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
WEST VIRGINIA AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE AND
PERFORMED ENTIRELY WITH SUCH STATE.
38
<PAGE> 42
5.17 Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
5.18 Severability. If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining terms and
provisions hereof or the application of such term or provision to circumstances
other than those as to which it is held invalid or unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
CENTRA FINANCIAL HOLDINGS, INC.
By:_____________________________
Name:
Title:
CENTRA BANK, INC.
By:_____________________________
Name:
Title:
39
<PAGE> 43
EXHIBIT A
[Form of Rights Certificate]
Certificate No. W ____________ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT
THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE
FOREGOING WILL BE VOID.
Rights Certificate
CENTRA FINANCIAL HOLDINGS, INC.
This certifies that ________________________________________,
or registered assigns, is the registered holder of the number of Rights set
forth above, each of which entitles the registered holder thereof, subject to
the terms, provisions and conditions of the Shareholder Protection Rights
Agreement, dated as of ______________________, 1999 (as amended from time to
time, the "Rights Agreement"), between Centra Financial Holdings, Inc., a West
Virginia corporation (the "Company"), and Centra Bank, Inc., as Rights Agent
(the "Rights Agent", which term shall include any successor Rights Agent under
the Rights Agreement), to purchase from the Company at any time after the
Separation Time (as such term is defined in the Rights Agreement) and prior to
the close of business on ____________________, 2010, one one-hundredth of a
fully paid share of Participating Preferred Stock, par value $1.00 per share
(the "Preferred Stock"), of the Company (subject to adjustment as provided in
the Rights Agreement) at the Exercise Price referred to below,
<PAGE> 44
upon presentation and surrender of this Rights Certificate with the Form of
Election to Exercise duly executed at the principal office of the Rights Agent
in Morgantown, West Virginia. The Exercise Price shall initially be $1.00 per
Right and shall be subject to adjustment in certain events as provided in the
Rights Agreement.
In certain circumstances described in the Rights Agreement,
the Rights evidenced hereby may entitle the registered holder thereof to
purchase securities of an entity other than the Company or securities or assets
of the Company other than Preferred Stock, all as provided in the Rights
Agreement.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights Certificates.
Copies of the Rights Agreement are on file at the principal office of the
Company and are available without cost upon written request.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor evidencing an aggregate number of Rights equal to the
aggregate number of Rights evidenced by the Rights Certificate or Rights
Certificates surrendered. If this Rights Certificate shall be exercised in part,
the registered holder shall be entitled to receive, upon surrender hereof,
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
A-2
<PAGE> 45
Subject to the provisions of the Rights Agreement, each Right
evidenced by this Certificate may be (a) redeemed by the Company under certain
circumstances, at its option, at a redemption price of $0.01 per Right or (b)
exchanged by the Company under certain circumstances, at its option, for one
share of Common Stock or one one-hundredth of a share of Preferred Stock per
Right (or, in certain cases, other securities or assets of the Company), subject
in each case to adjustment in certain events as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
any securities which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a shareholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or without
consent to any corporate action, or to receive notice of meeting or other
actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by this Rights Certificate shall have been exercised or exchanged as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
A-3
<PAGE> 46
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Date: ______________________
ATTEST: CENTRA FINANCIAL HOLDINGS, INC.
___________________________________ By___________________________
Secretary President
Countersigned:
CENTRA BANK, INC.
By _____________________________
Authorized Signature
A-4
<PAGE> 47
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer this Rights Certificate.)
FOR VALUE RECEIVED _________________________________________
hereby sells, assigns and transfers unto _______________________________________
(Please print name
________________________________________________________________________________
and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ____________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ________________________________, 19__
Signature Guaranteed: ____________________________________________
Signature
(Signature must correspond to name
as written upon the face of this Rights
Certificate in every particular,
without alteration or enlargement or
any change whatsoever)
Signatures must be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee Medallion program),
pursuant to SEC Rule 17Ad-15.
A-5
<PAGE> 48
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
________________________________________
Signature
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
NOTICE
In the event the certification set forth above is not
completed in connection with a purported assignment, the Company will deem the
Beneficial Owner of the Rights evidenced by the enclosed Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
A-6
<PAGE> 49
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to exercise the Rights Certificate)
TO: CENTRA FINANCIAL HOLDINGS, INC.
The undersigned hereby irrevocably elects to exercise ________
__________________________________ Whole Rights represented by the attached
Rights Certificate to purchase the shares of Participating Preferred Stock
issuable upon the exercise of such Rights and requests that certificates for
such shares be issued in the name of:
_______________________________________________
Address _______________________________________
_______________________________________________
Social Security or Other Taxpayer
Identification Number _________________________
Dated: __________________, 19__
Signature Guaranteed: ________________________________________
Signature
(Signature must correspond to name
as written upon the face of this Rights
Certificate in every particular,
without alteration or enlargement or
any change whatsoever)
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
A-7
<PAGE> 50
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(To be completed if true)
The undersigned hereby represents, for the benefit of all
holders of the Rights and shares of Common Stock, that the Rights evidenced by
the attached Rights Certificate are not, and, to the knowledge of the
undersigned, have never been, Beneficially Owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
_________________________________________
Signature
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
NOTICE
In the event the certification set forth above is not
completed in connection with a purported exercise, the Company will deem the
Beneficial Owner of the Rights evidenced by the attached Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof, (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
A-8
<PAGE> 51
EXHIBIT B
FORM OF RESOLUTIONS OF DESIGNATION
OF PARTICIPATING PREFERRED STOCK OF
CENTRA FINANCIAL HOLDINGS, INC.
Pursuant to Section 31-1-79(b) of the
West Virginia Corporation Act
We, the undersigned, _________________ and __________________,
the _______________, and _____________, respectively, of Centra Financial
Holdings, Inc., a West Virginia corporation (the "Corporation"), do hereby
certify as follows:
Pursuant to authority granted by Article VI of the Articles of
Incorporation of the Corporation and in accordance with the provisions of
Section 31-1-79(b) of the West Virginia Corporation Act, the Board of Directors
of the Corporation has adopted the following resolutions fixing the designation
and certain terms, powers, preferences and other rights of a new series of the
Corporation's Preferred Stock, par value $1.00 per share, and certain
qualifications, limitations and restrictions thereon:
RESOLVED, that there is hereby established a series of
Preferred Stock, par value $1.00 per share, of the Corporation,
and the designation and certain terms, powers, preferences and
other rights of the shares of such series, and certain
qualifications, limitations and restrictions thereon, are hereby
fixed as follows:
(i) The distinctive serial designation of this series
shall be "Participating Preferred Stock" (hereinafter called
"this Series"). Each share of this Series shall be identical
in all respects with the other shares of this Series except as
to the dates from and after which dividends thereon shall be
cumulative.
(ii) The number of shares of this Series shall
initially be _____, which number may from time to time be
increased or decreased (but not below the number then
outstanding) by the Board of Directors. Shares of this Series
purchased by the
<PAGE> 52
Corporation shall be cancelled and shall revert to authorized
but unissued shares of Preferred Stock undesignated as to
series. Shares of this Stock may be issued in fractional
shares, which fractional shares shall entitle the holder, in
proportion to such holders' fractional share, to all rights of
a holder of a whole share of this Series.
(iii) The holders of full or fractional shares of
this Series shall be entitled to receive, when and as declared
by the Board of Directors, but only out of funds legally
available therefor, dividends, (A) on each date that dividends
or other distributions (other than dividends or distributions
payable in Common Stock of the Corporation) are payable on or
in respect of Common Stock comprising part of the Reference
Package (as defined below), in an amount per whole share of
this Series equal to the aggregate amount of dividends or
other distributions payable in Common Stock of the
Corporation) that would be payable on such date to a holder of
the Reference Package and (B) on the last day of March, June,
September and December in each year, in an amount per whole
share of this Series equal to the excess (if any) of $____(1)
over the aggregate dividends paid per whole share of this
Series during the three month period ending on such last day.
Each such dividend shall be paid to the holders of record of
shares of this Series on the date, not exceeding sixty days
preceding such dividend or distributing payment date, fixed
for the purpose by the Board of Directors in advance of
payment of each particular dividend or distribution. Dividends
on each full and each fractional share of this Series shall be
cumulative from the date such full or fractional share is
originally issued; provided that any such full or fractional
share originally issued after a dividend record date or on or
prior to the dividend payment date to which such record date
relates shall not be entitled to receive the dividend payable
on such dividend payment date or any amount in respect of the
period from such original issuance to such dividend payment
date.
- --------
(1)Insert an amount equal to 1/4 of 1% of the Exercise Price
divided by the number of shares of Preferred Stock purchasable upon exercise of
one Right (i.e., a guaranteed 1% dividend). Where a Right is exercisable for one
one-hundredth of a share, this simplifies to one-fourth the Exercise Price.
B-2
<PAGE> 53
The term "Reference Package" shall initially mean 100
shares of Common Stock, par value $1.00 per share ("Common
Stock"), of the Corporation. In the event the Corporation
shall at any time after the close of business on ___________,
19__(2) (A) declare or pay a dividend on any Common Stock
payable in Common Stock, (B) subdivide any Common Stock or (C)
combine any Common Stock into a smaller number of shares, then
and in each such case the Reference Package after such event
shall be the Common Stock that a holder of the Reference
Package immediately prior to such event would hold thereafter
as a result thereof.
Holders of shares of this Series shall not be
entitled to any dividends, whether payable in cash property or
stock, in excess of full cumulative dividends, as herein
provided on this Series.
So long as any shares of this Series are outstanding,
no dividend (other than a dividend in Common Stock or in any
other stock ranking junior to this Series as to dividends and
upon liquidation) shall be declared or paid or set aside for
payment or other distribution declared or made upon the Common
Stock or upon any other stock ranking junior to this Series as
to dividends or upon liquidation, nor shall any Common Stock
nor any other stock of the Corporation ranking junior to or on
a parity with this Series as to dividends or upon liquidation
be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for
a sinking fund for the redemption of any shares of any such
stock) by the Corporation (except by conversion into or
exchange for stock of the Corporation ranking junior to this
Series as to dividends and upon liquidation), unless, in each
case, the full cumulative dividends (including the dividends
to be due upon payment of such dividend, distribution,
redemption, purchase or other acquisition) on all outstanding
shares of this Series shall have been, or shall
contemporaneously be, paid.
- --------
(2)For a certificate of designation relating to shares to be
issued pursuant to Section 2.3 of the Rights Agreement, insert the Separation
Time. For a certificate of designation relating to shares to be issued pursuant
to Section 3.1(d) of the Rights Agreement, insert the Flip-in Date.
B-3
<PAGE> 54
(iv) In the event of any merger, consolidation,
reclassification or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such
case the shares of this Series shall at the same time be
similarly exchanged or changed in an amount per whole share
equal to the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may
be, that a holder of the Reference Package would be entitled
to receive as a result of such transaction.
(v) In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether
voluntary or involuntary, the holders of full and fractional
shares of this Series shall be entitled, before any
distribution or payment is made on any date to the holders of
the Common Stock or any other stock of the Corporation ranking
junior to this Series upon liquidation, to be paid in full an
amount per whole share of this Series equal to the greater of
(A) $________(3) or (B) the aggregate amount distributed or to
be distributed prior to such date in connection with such
liquidation, dissolution or winding up to a holder of the
Reference Package (such greater amount being hereinafter
referred to as the "Liquidation Preference"), together with
accrued dividends to such distribution or payment date,
whether or not earned or declared. If such payment shall have
been made in full to all holders of shares of this Series, the
holders of shares of this Series as such shall have no right
or claim to any of the remaining assets of the Corporation.
In the event the assets of the Corporation available
for distribution to the holders of shares of this Series upon
any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, shall be insufficient to pay
in full all amounts to which such holders are entitled
pursuant to the first paragraph of this Section (v), no such
distribution shall be made on account of any shares of any
other class or series of Preferred Stock ranking on a parity
with the shares of this Series upon such liquidation,
dissolution or winding up unless proportionate distributive
amounts shall be paid on account of the shares of this Series,
ratably in proportion to the full
- --------
(3)Insert an amount equal to 100 times the Exercise Price in
effect as of the Separation Time. Also note that the "100" in the footnote
should be changed if the number of shares in the Reference Package (see p. 3) is
other than 100.
B-4
<PAGE> 55
distributable amounts for which holders of all such parity
shares are respectively entitled upon such liquidation,
dissolution or winding up.
Upon the liquidation, dissolution or winding up of
the Corporation, the holders of shares of this Series then
outstanding shall be entitled to be paid out of assets of the
Corporation available for distribution to its shareholders all
amounts to which such holders are entitled pursuant to the
first paragraph of this Section (v) before any payment shall
be made to the holders of Common Stock or any other stock of
the Corporation ranking junior upon liquidation of this
Series.
For the purposes of this Section (v), the
consolidation or merger of, or binding share exchange by, the
Corporation with any other corporation shall not be deemed to
constitute a liquidation, dissolution or winding up of the
Corporation.
(vi) The shares of this Series shall not be
redeemable.
(vii) In addition to any other vote or consent of
shareholders required by law or by the Certificate of
Incorporation of the Corporation, each whole share of this
Series shall, on any matter, vote as a class with any other
capital stock comprising part of the Reference package and
voting on such matter and shall have the number of votes
thereon that a holder of the Reference Package would have.
IN WITNESS WHEREOF, the undersigned have signed and attested
this certificate on the ____ day of ______________, ____.
_____________________________
Attest:
_________________________________
B-5
<PAGE> 1
EXHIBIT 10.2
CENTRA FINANCIAL HOLDINGS, INC.
1999 STOCK INCENTIVE PLAN
ARTICLE I
PURPOSE
The purposes of this Stock Incentive Plan (the "Plan") are to
enable Centra Financial Holdings, Inc. ("Company") to (i) provide opportunities
for certain persons, including officers, directors, consultants and other
independent advisors who provide services to Company and its Subsidiary and key
employees of the Company and its Subsidiary, as determined by the Committee, to
acquire a proprietary interest in the Company, (ii) increase incentives for the
Eligible Participants to contribute to the Company's performance and future
success and (iii) attract and retain individuals with exceptional business,
managerial and administrative talent upon whom, in large measure, the sustained
progress, growth and profitability of the Company depend.
ARTICLE II
PLAN OVERVIEW
The Plan provides for the grant of Incentive Stock Options and
Nonqualified Stock Options, as those terms are defined below, as contemplated by
Sections 422 and 421 of Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder (the "Code").
ARTICLE III
DEFINITIONS
For Plan purposes, except where the context clearly indicates
otherwise, the following terms shall have the following meanings:
3.01 "Adoption Date" shall have the meaning set forth in
Article XIII.
3.02 "Board" shall mean the Board of Directors of the Company.
3.03 "Committee" shall mean the Compensation Committee of the
Board, or such other Committee of the Board as the Board shall designate from
time to time, which other Committee shall consist of three or more directors
appointed by the Board from time to time, each of whom is a Disinterested
Person.
3.04 "Common Stock" shall mean both the voting Common Stock of
the Company.
3.05 "Company" shall mean Centra Financial Holdings, Inc.
<PAGE> 2
3.06 "Disinterested Person" shall mean an administrator of
this Plan who is not, at the time he exercises discretion in administering the
Plan, eligible, and has not at any time within one year prior thereto been
eligible, to be selected as an Eligible Participant of this Plan or any other
plan of the Company entitling such participant a right to acquire stock, stock
options or stock appreciation rights of the Company; provided, however, that
Committee members may be eligible for grants or awards under this or another
Plan of the Company which constitute "Formula Awards," as that term is defined
in Section 16b-3 of the Securities Exchange Act of 1934.
3.07 "Effective Date" shall have the meaning set forth in
Article XIII.
3.08 "Eligible Participants" shall mean Employees, members of
the Board of Directors, consultants and other independent advisors who provide
services to the Company, except that no Disinterested Person shall be an
Eligible Participant.
3.09 "Employee" shall mean an individual in the employ of the
Company and/or its Subsidiary, subject to the control and direction of the
employer entity as to both work to be performed and the manner and method of
performance.
3.10 "Exercise Price" shall have the meaning set forth in
Article VII.
3.11 "Fair Market Value" of the Common Stock shall mean the
value per share of the Company's Common Stock, determined without regard to any
restriction other than a restriction which, by its terms, will never lapse, as
determined through the good faith efforts of the Committee, consistent with
applicable requirements of the Code.
3.12 "Incentive Stock Option" or "ISO" shall mean a stock
option granted under this Plan which complies with all the terms and conditions
for an incentive stock option, as set forth in the Code.
3.13 "Nonqualified Stock Option" or "NQO" shall mean a stock
option granted under this Plan which does not comply with one or more
requirements for an incentive stock option, as set forth in the Code.
3.14 "Option" shall mean an Incentive Stock Option or a
Nonqualified Stock Option granted under this Plan.
3.15 "Option Shares" shall mean shares of the Company's Common
Stock received by an Optionee upon exercise of an Option.
3.16 "Optionee" shall mean an Eligible Participant who has
been granted one or more Options.
3.17 "Reorganization" shall have the meaning set forth in
Article IX.
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<PAGE> 3
3.18 "Stock Adjustment" shall have the meaning set forth in
Article VIII.
3.19 "Stock Option Agreement" shall mean the written agreement
entered into by the Company and each Optionee evidencing the terms and
conditions of an Option.
3.20 "Subsidiary" shall mean a subsidiary corporation within
the meaning of 424(f) of the Code.
3.21 "Ten Percent Share Owner" shall mean an employee of the
Company who owns, whether outright or by attribution under Section 424(d) of the
Code, Common Stock possessing more than ten percent of the total combined voting
power of all classes of stock of the Company.
ARTICLE IV
ADMINISTRATION
4.01 The Committee. The Committee shall administer the Plan
and shall have full power and authority to, in addition to other powers set
forth herein, construe and interpret the Plan, establish any and all rules and
regulations for the operation of the Plan, establish any and all rules and
regulations for the operation of the Committee and the performance by the
Committee of its purposes and functions, and perform all other acts, including
the delegation of administrative responsibilities, that it deems reasonable and
proper.
The Committee shall hold its meetings at such times and places
as it shall deem advisable. A majority of the members of the Committee shall
constitute a quorum of the Committee. All action of the Committee shall be taken
by a majority of its members. Any action of the Committee may be taken by a
written instrument signed by a majority of the Committee's members, and any
action so taken shall be as effective as if it had been taken by a vote of the
Committee.
4.02 Powers of the Committee. The Committee, without
limitation and in its sole discretion, shall have full power and authority to,
among other things:
(a) determine those persons who are Eligible
Participants;
(b) determine any conditions precedent and other
applicable criteria in allocating and granting Options;
(c) determine the number and type of each Option and
the number of shares of Common Stock covered by each Option and whether the
option is for voting or nonvoting common;
(d) determine the Exercise Price of each Option
(subject to the terms
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<PAGE> 4
and conditions set forth in this Plan and in any Stock Option Agreement);
(e) determine the grant date and exercise date of any
Option;
(f) impose any vesting restrictions or other
restrictions on exercise of an Option;
(g) accelerate the exercise or vesting date of an
Option;
(h) impose cancellation, transfer, forfeiture and
other repurchase restrictions and limitations on any Option and the Option
Shares; and
(i) determine any and all other terms, provisions
and/or conditions upon the grant or exercise of an Option or the sale, exchange,
gift, transfer, pledge or other disposition of Options and/or the Option Shares.
The terms and conditions of each Stock Option Agreement shall
be determined solely in the discretion of the Committee, subject to the terms
and conditions of this Plan. The terms and conditions of each Option and related
Stock Option Agreement may be different as among Optionees and/or as among
Options granted to the same Optionee, except as otherwise provided herein.
4.03 Corrective Measures. The Committee may correct any
defect, supply any omission or reconcile any inconsistency in the Plan, any
Option, or any Stock Option Agreement, in the manner and to the extent it shall
deem necessary, including amendments hereto or thereto approved by not less than
a majority of the Committee; provided, however, that any such Committee action
shall be effective only if (i) any stockholder consent required by applicable
provisions of the Code is obtained, and (ii) such action is otherwise consistent
with the applicable provisions of the Code.
4.04 Decisions Final. Any decision made or action taken by the
Committee or the Board arising out of or in connection with the interpretation
and administration of the Plan shall be final and conclusive and shall be
binding upon Optionees and their assigns.
ARTICLE V
NUMBER OF SHARES SUBJECT TO THE PLAN
The aggregate number of shares of Common Stock available for
grants of Options under this Plan shall be _______ shares, subject to adjustment
in accordance with Article VIII of the Plan, and the aggregate number of shares
of Common Stock for which Options may be granted under this Plan shall not
exceed such number. Such shares may be either authorized but unissued shares or
treasury shares. If an Option or portion thereof shall expire or terminate for
any reason without having been exercised, the unpurchased shares covered by such
Option shall be available for future grants of Options;
4
<PAGE> 5
provided, however, that in no event shall the Committee have any obligation to
make such shares available for the granting of other Options under the Plan.
ARTICLE VI
ELIGIBILITY
Consistent with this Plan's purposes and the terms herein,
Options may be granted to Eligible Participants at times and based on criteria
the Committee, in its sole discretion, determines are appropriate.
ARTICLE VI
OPTION TERMS AND CONDITIONS
All Options granted under this Plan shall be evidenced by a
Stock Option Agreement in substantially the form attached hereto, or such other
form as the Committee shall approve from time to time. The Stock Option
Agreement shall be subject to the provisions of the Plan and such other
provisions as the Committee may adopt, including the following provisions:
A. Exercise Price. The exercise price per share for each
Option granted under this Plan shall be set forth in the Stock Option Agreement;
provided, however, that if such Option is an ISO, the exercise price per share
shall not be less than the Fair Market Value of a share of Common Stock on the
date such ISO is granted (the "Exercise Price").
B. Term of Option. No Option shall be granted pursuant to the
Plan after the date ten (10) years after the earlier of the Adoption Date and
the Effective Date, as those terms are defined in Article XIII. Options which
are outstanding after such date will, however, remain in effect until such
Options are exercised or expire pursuant to their terms. An Option shall not be
exercisable after the expiration of ten years from the date such Option is
granted.
C. Assignability of Option. An Option shall be exercisable
only by the Optionee, his guardian or legal representative during his or her
lifetime and shall not be assignable or transferable by the Optionee otherwise
than by will or the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code. Executors, administrators,
heirs, successors and assigns of the Optionee shall be bound by the terms of the
Stock Option Agreement and this Plan.
D. Time of Exercise. Each Option granted under this Plan shall
be exercisable on the date or dates, and during the period, and for the number
of shares specified in the Stock Option Agreement. The Committee may establish
vesting provisions applicable to an Option such that the Option becomes fully
exercisable, for example, in a series of cumulating portions. The Committee may,
upon request, permit the accelerated exercise
5
<PAGE> 6
of any Option, the exercise of all or a portion of which is subject to vesting
provisions. Also, exercise of an Option shall be accelerated upon the occurrence
of an event of acceleration as described in any applicable Stock Option
Agreement or this Plan.
E. Exercise. An Option or portion thereof shall be exercised
by delivery of a written notice of exercise to the Secretary of the Company and
payment of the full Exercise Price. Until the certificates for Option Shares
represented by an exercised Option are issued to an Optionee, such Optionee
shall have none of the rights of a stockholder. No Option Shares shall be
delivered upon any exercise of an Option until the requirements of all
applicable laws, rules and regulations have, in the opinion of the Company's
counsel, been satisfied. Under normal circumstances, certificates for Option
Shares to be delivered upon exercise of an Option shall be delivered within
thirty (30) days following exercise of an Option.
F. Payment. The Exercise Price payable upon exercise of an
Option or portion thereof may be paid:
(i) in United States dollars in cash or by check,
bank draft or money order,
(ii) by delivery of shares of Common Stock with an
aggregate value equal to the Exercise Price, or
(iii) by a combination of both (i) and (ii) above.
If the Optionee delivers shares of Common Stock as payment
upon exercise of an Option, the Committee shall determine acceptable methods for
tendering such shares by the Optionee, and may impose such limitations and
prohibitions on the use of Common Stock for such purposes as it deems
appropriate.
G. Termination of Service. Subject to the terms set forth in
any employment or other binding agreement, in the event an Optionee's Current
Position, as defined below, with the Company shall terminate (i) "for cause," as
defined below, while holding one or more Options, that portion of each Option
which is not then currently exercisable shall expire coincident with the
termination of the Optionee's Current Position, or (ii) for a reason other than
"for cause," other than by reason of disability or death as discussed below, any
Options or portion thereof which are exercisable on the date of such termination
shall be exercisable until a date three (3) months after such date of
termination or shall expire coincident with such three (3) month period, except
to the extent the Committee shall determine otherwise by rules established and
administered in a consistent and nondiscriminatory manner in compliance with the
terms of this Plan and the Code. For purposes hereof, "Current Position" shall
mean the Optionee's position with the Company as an employee, officer or
independent contractor. For purposes hereof, "for cause" shall mean termination
of an Eligible Participant's Current Position with the Company because of such
Eligible Participant's (i) willful misfeasance, willful waste of corporate
assets, gross
6
<PAGE> 7
negligence or willful and continued failure to substantially perform his
reasonably assigned duties or (ii) willful engagement and dishonest or illegal
conduct that is demonstratably injurious to the Company.
7
<PAGE> 8
Upon the termination of an Eligible Participant's Current
Position with the Company by reason of disability or death, the Option may be
exercised during the following periods, but only to the extent that the Option
was outstanding and exercisable on any such date of disability or death:
(i) One (1) year after termination of Current
Position due to disability within the meaning of
Section 22(e)(3) of the Code; or
(ii) Six (6) months after termination of Current
Position due to the Optionee's death.
For the purposes of this Plan, it shall not be considered a
termination of Current Position when an Optionee is placed by the Company on
military or sick leave or such other type of leave of absence that is deemed by
the Committee to continue intact the employment relationship.
Notwithstanding anything in this Section VII.G. to the
contrary, the Committee, in its sole discretion, may waive any restrictions,
including applicable exercise periods.
H. Special Rules for Incentive Stock Options.
(a) Employment Status. An ISO may only be granted to
Employees and must be granted for a reason connected with employment, as defined
in the Code, by the Company and shall not be exercisable unless the Optionee
was, at all times during the period beginning on the date of the grant of the
Option and ending on the date three (3) months (one year if the Optionee is
disabled, within the meaning of Section 22(e)(3) of the Code) before the
exercise of the Option, an employee of the Company or a Subsidiary, except that
such employment requirement does not apply in the event of an Optionee's death
as provided in Section 421(c)(1) of the Code.
(b) Ten Percent Stockholder. No ISO shall be granted
under this Plan to a Ten Percent Share Owner unless (a) such ISO is granted at
an exercise price not less than 110% of Fair Market Value of the Common Stock on
the date of grant, and (b) such ISO expires on a date not later than five years
from the date of grant.
(c) Aggregate Value of Options. The aggregate Fair
Market Value (determined at the time the ISO is granted) of ISOs granted by the
Company (under this and all other Plans) to an Optionee which are exercisable
for the first time by such Optionee in any single calendar year shall not exceed
$100,000.
(d) Notification of Disqualifying Dispositions. Any
Optionee who disposes of Option Shares acquired pursuant to the exercise of an
ISO during the period within two years from the date such Option is granted or
within one year after the transfer of the Option Shares to such Optionee
pursuant to the ISO's exercise (the "ISO
8
<PAGE> 9
Nontransfer Periods") shall notify the Company of such disposition and of the
amount realized upon such disposition.
ARTICLE VIII
ADJUSTMENTS
In the event of a stock dividend, stock split or other
subdivision, consolidation, reorganization or similar change in the outstanding
shares of Common Stock or capital structure of the Company (collectively, a
"Stock Adjustment"), the following shall occur under the Plan: (i) the number of
shares of Common Stock reserved or otherwise available under Article V for
Options, and subject to outstanding Options, shall be adjusted proportionately
(and automatically reduced by any fraction resulting from such adjustment); and
(ii) the Exercise Price per share of outstanding Options shall be adjusted so
that the aggregate Exercise Price payable pursuant to each outstanding Option
after the Stock Adjustment shall equal the aggregate amount so payable prior to
the Stock Adjustment. In the event of any dispute concerning such adjustment,
the decision of the Committee shall be conclusive. If a Stock Adjustment is
made, the Committee shall notify all Optionees of such adjustment within thirty
(30) days of making such an adjustment, which notification shall state the
adjusted number of shares of Common Stock for which a particular Option is
exercisable.
ARTICLE IX
CORPORATE REORGANIZATION OR INITIAL PUBLIC OFFERING
9.01 Merger, Consolidation or Change of Control. In the
connection with any merger, consolidation, change in control or similar
reorganization, excluding an initial public offering ("Reorganization"), the
Committee may in its discretion:
(i) Negotiate a binding agreement whereby any
acquiring or successor corporation will assume
each Option then outstanding or substitute an
equivalent option meeting the requirements of
Section 424(a) of the Code for each Option
outstanding.
(ii) Accelerate any applicable vesting provisions;
or
(iii) Authorize cash payments to Optionees equal to
the difference between the aggregate Exercise
Price of each Option then outstanding
irrespective of the Option's current
exercisability, and (i) in the event the Common
Stock is not publicly traded, the Fair Market
Value of the shares covered by such Option or,
(ii) the average of the daily Closing Prices,
as defined below, per share of Common Stock for
the ten (10) consecutive trading days
commencing fifteen (15) trading days before
such date.
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<PAGE> 10
For purposes hereof, "Closing Price" shall
mean, with respect to each share of Common
Stock for any day, (a) the last reported
sale price or, in case no such sale takes
place on such day, the average of the
closing bid and asking price, in either case
as reported on the principal national
securities exchange on which the Common
Stock is listed or admitted for trading or
(b) if the Common Stock is not listed or
admitted for trading on any national
securities exchange, the last reported sale
price, or in the case no such sale takes
place on such day, the average of the
highest reported bid and the lowest reported
asked quotation for the Common Stock, in
either case as reported on the Automatic
Quotation System of NASDAQ or a similar
service if NASDAQ in no longer reporting
such information. Any cash payment which the
Company may be required to make pursuant to
such Committee authorization shall be made
within sixty days following such
authorization and fully discharge any and
all obligation the Company may have in
connection with the Options.
Notwithstanding the forgoing, the Committee shall have no obligation to take any
action in connection with a Reorganization.
ARTICLE X
SECURITIES AND OTHER REGULATION
10.01 Applicable Law. The obligation of the Company to issue
Common Stock upon the exercise of Options shall be subject to all applicable
laws, regulations, rules and orders which shall then be in effect and required
by governmental entities and the stock exchanges on which the Common Stock may
then be traded.
10.02 Disclosure and Certificate Legend. Any person exercising
an Option shall make such representations and furnish such information as may,
in the opinion of counsel for the Company, be appropriate to permit the Company
to issue the Option Shares in compliance with the provisions of the Securities
Act of 1933 and any applicable state securities laws or any comparable laws. If
appropriate under applicable law, the Company may legend the stock certificates
evidencing the shares in a manner that is the same or similar to that which
follows: "The securities evidenced by this certificate have been issued to the
registered owner in reliance upon written representations that these shares have
been purchased for investment. These shares may not be sold, transferred, or
assigned unless, in the opinion of the Company and its legal counsel, such sale,
transfer, or assignment will not be in violation of the Securities Act of 1933,
as amended, applicable rules and regulations of the Securities and Exchange
Commission, and any applicable state securities laws."
Nothing contained herein shall be deemed to require the
Company to file any
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<PAGE> 11
registration statement under the Securities Act of 1933 or other applicable
securities laws with respect to any Options or Option Shares.
ARTICLE XI
AMENDMENT AND TERMINATION OF PLAN
11.01 Amendment or Termination. The Board, without further
approval of the stockholders of the Company, may at any time and from time to
time suspend or terminate the Plan in whole or in part or amend the Plan in such
respects as the Board may deem appropriate and in the best interests of the
Company; provided, however, that no such amendment shall be made more than once
every six months, other than to comport with changes in the Code, or without
approval of a majority of the stockholders entitled to vote thereon which would:
(a) change the class of persons from which Eligible
Participants are selected;
(b) increase the total number of shares of Common
Stock which may be issued pursuant to Options, except as provided in Article
VIII;
(c) reduce the Exercise Price;
(d) extend the period for granting Options; or
(e) otherwise materially increase the benefits
accruing to Optionees.
11.02 No Impairment. No amendment, suspension or termination
of the Plan shall, without the Optionee's written consent, alter or impair any
of the rights or obligations under any Option theretofore granted to such
Optionee under this Plan.
11.03 Conforming Amendments. The Board may amend the Plan,
subject to the limitations cited above, in such manner as it deems necessary to
permit the granting of Options meeting the requirements of future amendments, if
any, to the Code.
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<PAGE> 12
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.01 Right to Continued Employment. No person shall have any
claim or right to be granted an Option, and the grant of Options shall not be
construed as giving an Optionee the right to be retained in the employ of, or
retain any other relationship with, the Company. Further, the Company expressly
reserves the right at any time to dismiss an Optionee with or without cause,
free from any liability or claim under the Plan, except as provided herein or in
another binding agreement.
12.02 Rights as Stockholders. No Optionee or his heirs,
successors or assigns shall have any rights with respect to any shares of Common
Stock subject to an Option until the date of the issuance of stock certificates
for such Option Shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or other rights
distributed with respect to the Common Stock for which the record date is prior
to the date such stock certificate is issued, except as provided in Article
VIII.
12.03 Non-Transferability. Except by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Code, no right or interest in any Option granted under the Plan
shall be assignable or transferable, and no right or interest of any Optionee
shall be subject to attachment or garnishment proceedings.
12.04 Withholding Taxes. To cover applicable withholding for
income and employment taxes in the event of the exercise of an NQO or upon a
disqualifying disposition during the ISO Nontransfer Periods, or at such times
as it may be necessary, the Company shall withhold shares of Common Stock
otherwise to be received by the Optionee equal in value to the federal and state
withholding taxes due upon said exercise. The withholding by the Company for
such tax liability shall be mandatory; provided, however, the payment of such
liability by the Company on behalf of the Optionee does not cause the Company to
be in violation of any loan covenant or other agreement or law to which it may
be subject. In such event, the Optionee must satisfy such liability in cash upon
the request of the Company and comply with all applicable securities laws.
12.05 Plan Expenses. Any expenses of administering the Plan
shall be borne by the Company.
12.06 Use of Exercise Proceeds. The Payment received from
Optionees from the exercise of Options shall be used for the general corporate
purposes of the Company.
12.07 No Liability of Committee Members and Indemnification
Thereof. No member of the Committee shall be personally liable by reason of any
contract or other instrument executed by him or on his behalf in his capacity as
a member of the Committee, nor for any mistake of judgment made in good faith,
and the Company shall indemnify and
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<PAGE> 13
hold harmless each member of the Committee and each other officer, employee or
director of the Company to whom any duty or power relating to the administration
or interpretation of the Plan may be allocated or delegated, against any cost
and expense, including legal fees and costs, or liability, including any sum
paid in settlement of a claim with the approval of the Board, arising out of any
act or omission to act in connection with the Plan unless arising out of such
person's own fraud or bad faith, provided that within fifteen business days
after the institution of any such action, suit or proceeding by service of
process on the Committee member, such member shall give the Company written
notice thereof and an opportunity, at the Company's expense, to undertake to
defend the same before such Committee member undertakes such defense on his own
behalf, and provided that the Committee member cooperates with the Company in
such defense and takes no actions (including inaction) which would materially
prejudice the Company. The foregoing right to indemnification shall be in
addition to such other rights as the Committee member or other person may enjoy
as a matter of law or by reason of insurance coverage of any kind. Rights
granted hereunder shall be in addition to and not in lieu of any rights to
indemnification to which the Committee member or other person may be entitled
pursuant to the bylaws of the Company or its subsidiaries.
12.08 Severability. In the event any provision of the Plan
shall be held to be illegal, invalid or unenforceable for any reason, the
illegality, invalidity or unenforceability of such provision shall not affect
the remaining provisions of the Plan, but shall be fully severable and the Plan
shall be construed and enforced as if the illegal, invalid or unenforceable
provision had never been included herein.
ARTICLE XIII
BOARD OF DIRECTOR ADOPTION AND STOCKHOLDER APPROVAL OF THE PLAN
This Plan was adopted by the Board on _______________________,
(the "Adoption Date") and shall be approved by the Company's stockholders at the
first stockholders' meeting following such date which shall be within twelve
(12) months of the Adoption Date. The plan shall be effective on the date the
Plan is approved by the Company's stockholders (the "Effective Date").
Stockholder approval shall comply with all applicable provisions of the
Company's charter, bylaws, and applicable state law prescribing the method and
degree of stockholder approval required for the issuance of corporate stock or
options. In the event stockholder approval is not obtained within the requisite
period, any Options granted under this Plan between the Adoption Date and the
date twelve (12) months thereafter shall be void.
CENTRA FINANCIAL HOLDINGS, INC.
By
-----------------------------
Its
--------------------------
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Optionee:
-----------------------------
STOCK OPTION AGREEMENT
PURSUANT TO THE CENTRA FINANCIAL HOLDINGS, INC.
1999 STOCK INCENTIVE PLAN
The Compensation Committee of Centra Financial Holdings (the
"Company") has determined that you (the "Optionee") are eligible and deserving
of an award under the Centra Financial Holdings 1999 Stock Incentive Plan (the
"Plan"). This Agreement is subject to the terms of the Plan in all respects, and
specific reference shall be made to the Plan in determining the Optionee's
rights and obligations hereunder. If any provisions of this Agreement and the
Plan conflict, the provisions of the Plan shall control. Capitalized terms,
which are used herein and not otherwise defined, shall have the meanings set
forth in the Plan.
This Agreement is made by and between the Company and the
Optionee as follows:
1. Grant of Option. The Optionee is hereby granted, as of the
Grant Date set forth on Exhibit A attached hereto (the "Grant Date"), an Option
to purchase the number and type of shares of Common Stock set forth on Exhibit A
hereto (the "Option Shares"). Such Option is intended to qualify as an Incentive
Stock Option under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"). The Compensation Committee may, from time to time, grant the
Optionee one or more additional Options, each of which will be governed by a
separate Stock Option Agreement.
2. Exercise Price. The exercise price pursuant to this Option
will be the amount per share set forth on Exhibit A hereto (the "Exercise
Price") which is not less than the Fair Market Value of the Common Stock on the
date of grant. The number of Option Shares and Exercise Price per Option Share
under this Option are subject to adjustment as provided in the Plan.
3. Term. This Option shall have the term, subject to earlier
termination as provided in the Plan, set forth on Exhibit A hereto.
4. Exercise of Option. Subject to the provisions of this Stock
Option agreement and the Plan, this Option shall vest and become exercisable
according to the schedule set forth on Exhibit A hereto. To the extent
exercisable, this Option may be exercised in whole or in part and from time to
time until fully exercised or until the Option expiration date set forth on
Exhibit A hereto or until this Option terminates under the Plan and this Stock
Option Agreement. In no event, however, shall this Option be exercisable in
whole or in part after the expiration of ten years from the Grant Date.
14
<PAGE> 15
This Option may be exercised only by the Optionee, his
guardian or legal representative during the Optionee's lifetime and, thereafter,
as provided in the Plan. Neither this Option nor any portion thereof or interest
therein may be sold, pledged, assigned or transferred in any manner otherwise
than by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order, as defined in the Code, and then only within
the limitations set forth in the Plan.
Exercise of this Option shall not be effective until the
Committee has received written notice of exercise, specifying the number of
whole Option Shares to be purchased. Such notice shall be accompanied by full
payment of the aggregate Exercise Price for the number of Option Shares so
purchased in cash, by cashier's check, certified check, bank draft or money
order or, through the delivery of shares of the Company's Common Stock.
Thereafter, a certificate or certificates representing the Option Shares so
purchased shall, within a reasonable time, be issued in the Optionee's (or other
proper purchasing party's) name and delivered to the Optionee (or other
purchaser), subject to the terms of the Plan regarding compliance with
applicable securities laws. Upon a partial exercise of this Option, this
Agreement shall be automatically amended to reduce the number of Option Shares
covered by this Option by the number of Option Shares so purchased without the
necessity of the execution of a new agreement or a formal written amendment of
this Agreement.
5. Certain Taxes. The Optionee authorizes the Company to
withhold, in accordance with applicable law, from any Option Shares to be issued
to an Optionee upon exercise by the Optionee of all or a portion of this Option,
a number of Option Shares based on their Fair Market Value equal to the amount
of any taxes required to be withheld by any federal, state or local law or
regulation as a result of the exercise of this Option. In this regard, the
Optionee acknowledges and agrees that this withholding is mandatory and the
determination by the Committee of the Fair Market Value of any Option Shares on
the date of exercise of this Option shall be final and conclusive in all
respects.
6. Transfer of Option Shares. The Optionee agrees that the
Option Shares acquired upon exercise of this Option shall be acquired for his or
her own account for investment purposes only and not with a view to any
distribution or public offering thereof within the meaning of the Securities Act
of 1933 (the "Act") or other applicable securities laws. If the Board so
determines, any stock certificates issued upon exercise of this Option shall
bear a legend to the effect that the Option Shares have been so acquired. The
Company shall not be required to bear any expenses of compliance with the Act,
other applicable securities laws or the rules and regulations of any national
securities exchange or other regulatory authority in connection with the
registration, qualification or transfer, as the case may be, of this Option or
any Option Shares acquired upon the exercise thereof. The foregoing restrictions
on the transfer of the Option Shares shall not apply if (a) the Company shall
have been furnished with an opinion of counsel satisfactory in form and
substance to the Company to the effect that such transfer will be in compliance
with the Act and other applicable securities laws, or (b) the Option Shares
shall have been duly registered in compliance with the Act and other applicable
securities laws.
15
<PAGE> 16
The Optionee agrees that, upon any sale of Option Shares
acquired pursuant to exercise of that portion of this Option constituting an
Incentive Stock Option within two years from the date of grant of this Option or
within one year after transfer of such Option Shares to the Optionee's
ownership, then the Optionee shall immediately notify the Company in writing of
such disposition and the amount realized by the Optionee upon such disposition.
7. Transfer and Repurchase Restrictions. All Option Shares
received upon exercise of an Option shall be subject to the following
restrictions:
(a) Transfer Restrictions. All Option Shares received
upon exercise of an Option shall be subject to the Share Transfer Restrictions
set forth on Exhibit A hereto.
(b) Legends. The Company may legend the stock
certificates evidencing Option Shares acquired pursuant to the Plan in such
manner it deems appropriate to carry out the intent and purposes of the Plan.
8. Acceptance of Stock Option Agreement and the Plan. The
Optionee hereby approves and accepts the terms, conditions, and provisions of
this Stock Option Agreement and the Plan and agrees to be bound hereby and
thereby, and further agrees that his or her executors, administrators, heirs,
successors, and assigns shall be bound hereby and thereby. Without limitation of
the foregoing, the Optionee hereby agrees, individually and for his or her
executors, administrators, heirs, successors, and assigns, that all decisions or
interpretations of the Committee or its duly authorized representatives with
regard to any and all aspects of the Plan and the administration thereof shall
be binding, conclusive, and final.
9. Address for Notices. The parties hereto designate as the
respective addresses for the receipt of any notice under this Stock Option
Agreement or the Plan the addresses set forth below their signatures on this
Stock Option Agreement.
10. Conformity with the Plan. This Stock Option is intended to
conform in all respects with, and is subject to all applicable provisions of,
the Plan, which is incorporated herein by reference. Inconsistencies between
this Agreement and the Plan shall be resolved in accordance with the terms of
the Plan. By executing and returning the enclosed copy of this Stock Option
Agreement, you acknowledge your receipt of the Plan and agree to be bound by all
of the terms of the Plan. All definitions stated in the Plan shall apply to this
Agreement.
11. Use of Services; Successors. Nothing herein confers any
right or obligation on the Optionee to continue rendering services to the
Company or shall affect in any way the Optionee's right or the right of the
Company, as the case may be, to terminate the Optionee's services at any time.
12. Entire Agreement. This Agreement constitutes the entire
understanding between the Optionee and the Company, and supersedes all other
agreements, whether written or oral, with respect to the acquisition by the
Optionee of his/her Option and/or Option Shares.
16
<PAGE> 17
Executed as of the ____ day of _________, 19__.
CENTRA FINANCIAL HOLDINGS, INC. OPTIONEE
COMPENSATION COMMITTEE
By: By:
-------------------------- --------------------------
Title:
-----------------------
17
<PAGE> 18
EXHIBIT A
STOCK OPTION AGREEMENT
Name of Optionee:
----------------------------------------
Status with the Company Employee
(the "Current Position"):
Option Grant Date:
----------------------------------------
Type of Option Granted: Incentive Stock Options
Number of Shares Covered
by the Option ("Total Option Voting Common
Shares"): -------
Option Exercise Price Per Share: The greater of $_____ or the fair market value
of the underlying stock on the Grant Date
Option Term: Ten years from the Grant Date
Vesting Schedule: This Option shall be exercisable as follows:
The Option to purchase twenty percent (20%)
of the Total Option Shares shall be
exercisable for the first time beginning on
the date six (6) months after the Grant Date
(the "First Vesting Date") and the Option to
purchase the remaining eighty percent (80%)
of the Total Option Shares shall be
exercisable in four (4) equal annual
installments beginning one, two, three and
four years, respectively, after the First
Vesting Date.
Termination: If Optionee's Current Position with the
Company terminates "for cause," as defined
in the Plan, the Optionee will forfeit all
unexercised Options held on the date of
termination. If termination of the Optionee's
Current Position is for a reason other than
for cause, other than death or disability,
the Optionee shall have three (3) months
from the date of such termination to exercise
all vested and unexercised Options existing
as of the date of termination. If the
Optionee's Current Position is terminated by
reason of death or disability,
<PAGE> 19
the Optionee shall have six (6) months and one
(1) year, respectively, from the date of such
termination to exercise all vested and
unexercised Options existing as of the date of
termination. The Committee shall have
discretion to modify these terms.
Share Transfer Restrictions: Optionees may be subject to the share transfer
restrictions of the Securities Act of 1933
or other requirements of applicable securities
laws. Optionee is urged to consult his own
advisor with respect to the securities law
consequences related to transferring his
Shares.
CENTRA FINANCIAL HOLDINGS, INC. OPTIONEE
COMPENSATION COMMITTEE
By: By:
-------------------------------- --------------------------------
Title:
-----------------------------
A-2
<PAGE> 20
Optionee:
-----------------------------------
STOCK OPTION AGREEMENT
PURSUANT TO THE CENTRA FINANCIAL HOLDINGS, INC.
1999 STOCK INCENTIVE PLAN
The Compensation Committee of Centra Financial Holdings, Inc.
(the "Company") has determined that you (the "Optionee") are eligible and
deserving of an award under the Centra Financial Holdings, Inc. 1999 Stock
Incentive Plan (the "Plan"). This Agreement is subject to the terms of the Plan
in all respects, and specific reference shall be made to the Plan in determining
the Optionee's rights and obligations hereunder. If any provisions of this
Agreement and the Plan conflict, the provisions of the Plan shall control.
Capitalized terms, which are used herein and not otherwise defined, shall have
the meanings set forth in the Plan.
This Agreement is made by and between the Company and the
Optionee as follows:
1. Grant of Option. The Optionee is hereby granted, as of the
Grant Date set forth on Exhibit A attached hereto (the "Grant Date"), an Option
to purchase the number and type of shares of Common Stock set forth on Exhibit A
hereto (the "Option Shares"). Such Option is intended to be a nonqualified stock
option. The Compensation Committee may, from time to time, grant the Optionee
one or more additional Options, each of which will be governed by a separate
Stock Option Agreement.
2. Exercise Price. The exercise price pursuant to this Option
will be the amount per share set forth on Exhibit A hereto (the "Exercise
Price"). The number of Option Shares and Exercise Price per Option Share under
this Option are subject to adjustment as provided in the Plan.
3. Term. This Option shall have the term, subject to earlier
termination as provided in the Plan, set forth on Exhibit A hereto.
4. Exercise of Option. Subject to the provisions of this Stock
Option agreement and the Plan, this Option shall vest and become exercisable
according to the schedule set forth on Exhibit A hereto. To the extent
exercisable, this Option may be exercised in whole or in part and from time to
time until fully exercised or until the Option expiration date set forth on
Exhibit A hereto or until this Option terminates under the Plan and this Stock
Option Agreement. In no event, however, shall this Option be exercisable in
whole or in part after the expiration of ten years from the Grant Date.
This Option may be exercised only by the Optionee, his
guardian or legal representative during the Optionee's lifetime and, thereafter,
as provided in the Plan. Neither
A-3
<PAGE> 21
this Option nor any portion thereof or interest therein may be sold, pledged,
assigned or transferred in any manner otherwise than by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations order, as
defined in the Code, and then only within the limitations set forth in the Plan.
Exercise of this Option shall not be effective until the
Committee has received written notice of exercise, specifying the number of
whole Option Shares to be purchased. Such notice shall be accompanied by full
payment of the aggregate Exercise Price for the number of Option Shares so
purchased in cash, by cashier's check, certified check, bank draft or money
order or, through the delivery of shares of the Company's Common Stock.
Thereafter, a certificate or certificates representing the Option Shares so
purchased shall, within a reasonable time, be issued in the Optionee's (or other
proper purchasing party's) name and delivered to the Optionee (or other
purchaser), subject to the terms of the Plan regarding compliance with
applicable securities laws. Upon a partial exercise of this Option, this
Agreement shall be automatically amended to reduce the number of Option Shares
covered by this Option by the number of Option Shares so purchased without the
necessity of the execution of a new agreement or a formal written amendment of
this Agreement.
5. Certain Taxes. The Optionee authorizes the Company to
withhold, in accordance with applicable law, from any Option Shares to be issued
to an Optionee upon exercise by the Optionee of all or a portion of this Option,
a number of Option Shares based on their Fair Market Value equal to the amount
of any taxes required to be withheld by any federal, state or local law or
regulation as a result of the exercise of this Option. In this regard, the
Optionee acknowledges and agrees that this withholding is mandatory and the
determination by the Committee of the Fair Market Value of any Option Shares on
the date of exercise of this Option shall be final and conclusive in all
respects.
6. Transfer of Option Shares. The Optionee agrees that the
Option Shares acquired upon exercise of this Option shall be acquired for his or
her own account for investment purposes only and not with a view to any
distribution or public offering thereof within the meaning of the Securities Act
of 1933 (the "Act") or other applicable securities laws. If the Board so
determines, any stock certificates issued upon exercise of this Option shall
bear a legend to the effect that the Option Shares have been so acquired. The
Company shall not be required to bear any expenses of compliance with the Act,
other applicable securities laws or the rules and regulations of any national
securities exchange or other regulatory authority in connection with the
registration, qualification or transfer, as the case may be, of this Option or
any Option Shares acquired upon the exercise thereof. The foregoing restrictions
on the transfer of the Option Shares shall not apply if (a) the Company shall
have been furnished with an opinion of counsel satisfactory in form and
substance to the Company to the effect that such transfer will be in compliance
with the Act and other applicable securities laws, or (b) the Option Shares
shall have been duly registered in compliance with the Act and other applicable
securities laws.
7. Transfer and Repurchase Restrictions. All Option Shares
received upon exercise of an Option shall be subject to the following
restrictions:
A-4
<PAGE> 22
(a) Transfer Restrictions. All Option Shares received
upon exercise of an Option shall be subject to the Share Transfer Restrictions
set forth on Exhibit A hereto.
(b) Legends. The Company may legend the stock
certificates evidencing Option Shares acquired pursuant to the Plan in such
manner it deems appropriate to carry out the intent and purposes of the Plan.
8. Acceptance of Stock Option Agreement and the Plan. The
Optionee hereby approves and accepts the terms, conditions, and provisions of
this Stock Option Agreement and the Plan and agrees to be bound hereby and
thereby, and further agrees that his or her executors, administrators, heirs,
successors, and assigns shall be bound hereby and thereby. Without limitation of
the foregoing, the Optionee hereby agrees, individually and for his or her
executors, administrators, heirs, successors, and assigns, that all decisions or
interpretations of the Committee or its duly authorized representatives with
regard to any and all aspects of the Plan and the administration thereof shall
be binding, conclusive, and final.
9. Address for Notices. The parties hereto designate as the
respective addresses for the receipt of any notice under this Stock Option
Agreement or the Plan the addresses set forth below their signatures on this
Stock Option Agreement.
10. Conformity with the Plan. This Stock Option is intended to
conform in all respects with, and is subject to all applicable provisions of,
the Plan, which is incorporated herein by reference. Inconsistencies between
this Agreement and the Plan shall be resolved in accordance with the terms of
the Plan. By executing and returning the enclosed copy of this Stock Option
Agreement, you acknowledge your receipt of the Plan and agree to be bound by all
of the terms of the Plan. All definitions stated in the Plan shall apply to this
Agreement.
11. Use of Services; Successors. Nothing herein confers any
right or obligation on the Optionee to continue rendering services to the
Company or shall affect in any way the Optionee's right or the right of the
Company, as the case may be, to terminate the Optionee's services at any time.
12. Entire Agreement. This Agreement constitutes the entire
understanding between the Optionee and the Company, and supersedes all other
agreements, whether written or oral, with respect to the acquisition by the
Optionee of his/her Option and/or Option Shares.
Executed as of the ____ day of ______________, 19__.
CENTRA FINANCIAL HOLDINGS, INC. OPTIONEE
COMPENSATION COMMITTEE
By: By:
-------------------------------- --------------------------------
Title:
-----------------------------
A-5
<PAGE> 23
EXHIBIT A
STOCK OPTION AGREEMENT
Name of Optionee:
-------------------------------------
Status with the Company Employee
------------
(the "Current Position"): Other
------------
Option Grant Date:
-------------------------------------
Type of Option Granted: Nonqualified Option
Number of Shares Covered
by the Option ("Total Option Voting Common
Shares"): --------
Option Exercise Price Per Share: $
-----------------
Option Term: Ten years from the Grant Date
Vesting Schedule: This Option shall be exercisable as follows:
The Option to purchase twenty percent (20%)
of the Total Option Shares shall be
exercisable for the first time beginning on
the date six (6) months after the Grant Date
(the "First Vesting Date") and the Option to
purchase the remaining eighty percent (80%)
of the Total Option Shares shall be
exercisable in four (4) equal annual
installments beginning one, two, three and
four years, respectively, after the First
Vesting Date.
Termination: If Optionee's Current Position with the
Company terminates "for cause," as defined
in the Plan, the Optionee will forfeit all
unexercised Options held on the date of
termination. If termination of the
Optionee's Current Position is for a reason
other than for cause, other than death or
disability, the Optionee shall have three
(3) months from the date of such termination
to exercise all vested and unexercised
Options existing as of the date of
termination. If the Optionee's Current
Position is terminated by reason of death or
disability, the Optionee shall have six (6)
months and one (1) year,
<PAGE> 24
respectively, from the date of such
termination to exercise all vested and
unexercised Options existing as of the date
of termination. The Committee shall have
discretion to modify these terms.
Share Transfer Restrictions: Optionees may be subject to the share
transfer restrictions of the Securities Act
of 1933 or other requirements of applicable
securities laws. Optionee is urged to
consult his own advisor with respect to the
securities law consequences related to
transferring his Shares.
CENTRA FINANCIAL HOLDINGS, INC. OPTIONEE
COMPENSATION COMMITTEE
By:
------------------------------ ------------------------------
Title:
---------------------------
A-2
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned do hereby
constitute and appoint DOUGLAS J. LEECH, JR. (whose address is 3957 Eastlake
Drive, Morgantown, West Virginia 26508) and KEVIN D. LEMLEY (whose address is
RD2, Box 192A, Waynesburg, Pennsylvania 15370) and each of them severally, the
true and lawful agents and attorneys-in-fact (the "Agents" and, severally, an
"Agent") of the undersigned with full power to act, upon the terms and
conditions herein set forth, for and in the name, place and stead of the
undersigned in any way which the undersigned could do, if the undersigned were
personally present, to execute in their name, place and stead (in any such
capacity), all applications, certificates, letters, registration statements,
amendments to registration statements or other documents addressed to or filed
with the Securities and Exchange Commission which may be required in connection
with the registration under the Securities Act of 1933, as amended, of the
common stock of Centra Financial Holdings, Inc., which may be issued to
shareholders of Centra Bank, Inc., under the Agreement and Plan of Merger dated
as of October 26, 1999, by and between Centra Financial Holdings, Inc., and
Centra Bank, Inc., and to file the same with the Securities and Exchange
Commission and other appropriate agencies or departments, each of said attorneys
and agents to have power to act with or without the other, and to have full
power and authority to do and perform in the name and on behalf of each of the
undersigned directors every act whatsoever necessary or advisable to be done in
the premises as fully and to all intents and purposes as the undersigned may or
could do in person.
Dated this 16th day of December, 1999.
WITNESS the following signatures and seals:
/s/ Douglas J. Leech, Jr. /s/ Parry G. Petroplus
- -------------------------------- --------------------------------
Douglas J. Leech, Jr. Parry G. Petroplus
/s/ Kevin D. Lemley /s/ Milan Puskar
- -------------------------------- --------------------------------
Kevin D. Lemley Milan Puskar
/s/ Arthur Gabriel /s/ Bernard G. Westfall
- -------------------------------- --------------------------------
Arthur Gabriel Bernard G. Westfall
<PAGE> 1
EXHIBIT 99.1
CENTRA BANK, INC.
990 ELMER PRINCE DRIVE, P. O. BOX 656
MORGANTOWN, WEST VIRGINIA 26507-0656
(304) 599-8121
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
,
-------------- --- ----
KNOW ALL MEN BY THESE PRESENTS, That I, the undersigned
shareholder of Centra Bank, Inc., Morgantown, West Virginia ("Centra Bank"), do
hereby nominate, constitute and appoint _________________ and __________________
____________________ or either one of them, with full power to act alone as my
true and lawful attorney(s) with full power of substitution, for me in my name,
place and stead to vote all the common stock of Centra Bank, standing in my name
on the books of Centra Bank at the close of business on ________, ____, at the
Special Meeting of Shareholders of Centra Bank, called for and to be held at
____________________, Morgantown, West Virginia, on __________________, ____, at
_.m., local time, and at any and all adjournments of said meeting as follows:
1. A proposal to approve an Agreement and Plan of Merger dated as
of October 26, 1999 ("Plan of Merger"), whereby CFH Interim Bank, Inc., a
wholly-owned subsidiary of Centra Financial Holdings, Inc. ("Centra Financial")
will merge with and into Centra Bank. Under the Plan of Merger, Centra Bank will
become a wholly-owned subsidiary of Centra Financial and each share of common
stock of Centra Bank will be converted into the right to receive one share of
common stock of Centra Financial.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. Any other business which may properly come before the meeting
or any adjournment thereof.
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned. If no specification is made, the shares of
common stock of Centra Bank represented by this Proxy will be voted "FOR"
proposal 1. If any other business is presented at said meeting, this Proxy shall
be voted in accordance with the recommendations of the Board of Directors of
Centra Bank.
The Board of Directors of Centra Bank recommends a vote "FOR" the
listed proposition.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
CENTRA BANK AND MAY BE REVOKED PRIOR TO ITS EXERCISE.
Dated:_____________________, ____
_________________________________
_________________________________
(Signature(s) of Shareholder)
When signing as attorney, executor, administrator, trustee or
guardian, please give full title. If more than one trustee, all should sign. All
joint owners must sign.
