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REGISTRATION NO. 333-93437
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 14, 2000
-------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
PRE-EFFECTIVE AMENDMENT NO. 1
TO
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. [ ]
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.
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PROXY STATEMENT/PROSPECTUS
____________________ __, ____
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CENTRA BANK, INC.
PROXY STATEMENT
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CENTRA FINANCIAL HOLDINGS, INC.
PROSPECTUS
1,200,000 SHARES OF COMMON STOCK
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We are providing this proxy statement/prospectus to you because we are
soliciting your proxy to vote at a special meeting of shareholders. We are
seeking shareholder approval for a merger/corporate reorganization. This
reorganization involves the formation of a bank holding company for Centra Bank,
Inc. If a majority of the bank's shareholders approve the reorganization, you
will become a shareholder of Centra Financial Holdings, Inc., and this holding
company will own all of the outstanding stock of the bank.
If shareholders approve the reorganization, you will receive one share
of holding company stock for each share of the bank's common stock that you
own. You will not recognize any taxable gain or loss for shares you exchange.
The date, time and place of the special meeting is ,
.m., local time, Morgantown, West Virginia
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 __________________, ____.
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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 ________________, 2000, 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
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TABLE OF CONTENTS
PAGE
SUMMARY..................................................................... 1
RISK FACTORS................................................................ 4
FORWARD LOOKING STATEMENTS.................................................. 6
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
Accounting Treatment............................................... 12
COMPARISON OF CENTRA BANK AND CENTRA FINANCIAL STOCK........................ 13
Antitakeover Provisions............................................ 13
Advantages of Centra Financial's Antitakeover Provisions........... 15
Disadvantages of Centra Financial's Antitakeover Provisions........ 15
Issuance Of Capital Stock.......................................... 15
Dividends And Dividend Rights...................................... 16
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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
CENTRA BANK'S PLAN OF OPERATION............................................. 23
Status And Operations.............................................. 23
Banking Services................................................... 24
Market Area........................................................ 25
Competition........................................................ 25
Employees.......................................................... 26
Property........................................................... 26
Cash Requirements.................................................. 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
ADDITIONAL INFORMATION ABOUT THE HOLDING COMPANY............................ 30
OTHER MATTERS............................................................... 30
LEGAL MATTERS............................................................... 30
WHERE YOU CAN FIND MORE INFORMATION......................................... 31
AUDITED FINANCIAL STATEMENTS................................................F-1
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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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. As a result of the reorganization, you will not recognize any gain or
loss when you exchange your bank common stock for holding company
common stock.
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SUMMARY
The following is a brief summary of information located elsewhere in
this proxy statement/ prospectus. BEFORE YOU VOTE, PLEASE CAREFULLY CONSIDER ALL
OF THE INFORMATION CONTAINED IN THIS DOCUMENT.
SHAREHOLDERS WILL RECEIVE ONE SHARE OF CENTRA FINANCIAL COMMON STOCK FOR EACH
SHARE OF CENTRA BANK COMMON STOCK THEY OWN. (PAGE )
If Centra Bank's shareholders approve the reorganization/merger and the
parties satisfy all of the other conditions in the agreement and plan of merger,
each share of Centra Bank's common stock that is outstanding immediately prior
to the merger will automatically become one share of Centra Financial's common
stock on the effective date of the merger.
THIS TRANSACTION WILL BE GENERALLY TAX FREE TO SHAREHOLDERS. (PAGE )
Subject to the limitations and assumptions described in "Federal Tax
Consequences Of The Merger And Reorganization Into A Bank Holding Company," the
shareholders of Centra Bank will not recognize any gain or loss as a result of
exchanging Centra Bank common stock for Centra Financial common stock.
CENTRA FINANCIAL'S GOVERNING DOCUMENTS CONTAIN PROVISIONS DESIGNED TO MAKE
UNSOLICITED TAKEOVER ATTEMPTS MORE DIFFICULT. (PAGE )
Centra Financial's articles and bylaws contain antitakeover provisions.
Centra Bank's corporate governance documents do not contain these types of
provisions. Antitakeover provisions are designed to make unsolicited takeover
attempts more difficult to accomplish.
CENTRA BANK'S SHAREHOLDERS HAVE DISSENTER'S RIGHTS. (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
shareholder may petition the Circuit Court of Monongalia County, West Virginia,
to have the value of the shareholder's shares appraised.
CENTRA FINANCIAL'S COMMON STOCK IS NOT CURRENTLY LISTED ON AN EXCHANGE OR OTHER
TRADING FACILITY. (PAGE )
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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PLEASE CAREFULLY REVIEW THE "RISK FACTORS" SECTION. (PAGE )
Before completing your proxy card, you should read this entire proxy
statement/prospectus, including the "Risk Factors" section.
CENTRA BANK AND CENTRA FINANCIAL ARE THE 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) 598-2000. Centra Bank will operate under FDIC
regulations and regulations of the West Virginia Commissioner of Banking.
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) 598-2000.
THE MERGER. (PAGE ) After the merger, each shareholder of Centra Bank
will become a shareholder of Centra Financial. Centra Bank will be a wholly
owned subsidiary of Centra Financial.
CAPITALIZATION STRUCTURE AFTER THE MERGER. (PAGE ) Immediately after
the reorganization takes place (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.
A MAJORITY OF CENTRA BANK'S SHAREHOLDERS MUST APPROVE THE MERGER. (PAGE )
Under Centra Bank's articles of incorporation and bylaws, at least a
majority of our outstanding common stock must approve the merger.
If you held Centra Bank common stock at the close of business on ,
2000, you are entitled to vote at the special meeting. Each share of common
stock is entitled to one vote.
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.
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CENTRA BANK OPENED FOR BUSINESS ON FEBRUARY 14, 2000. (PAGE )
Centra Bank opened for business on February 14, 2000, and is in the
general banking business with the primary market area being Monongalia County,
West Virginia. We plan on providing customers with a broad range of loan
products including personal lines of credit, commercial, agricultural, real
estate and installment loans, and deposit products. We also plan to provide
trust services.
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RISK FACTORS
Centra Bank stockholders should consider the following factors in
voting for the agreement and plan of merger.
BECAUSE THE BANK IS IN A START-UP PHASE, IT WILL EXPERIENCE OPERATING LOSSES.
The bank will experience operating losses because it is engaging in
start-up operations. If the bank sustains losses for a significant period of
time, shareholders could lose their entire investment. For the bank to become
profitable, it must conduct successful lending operations which is contingent
upon many national and state economic factors beyond the bank's control.
CENTRA BANK HAS NO CURRENT PLANS TO DECLARE DIVIDENDS.
Most likely, the bank will not pay dividends during the early years of
its operations. At least initially, the expenses of operating the bank,
including salaries, wages and other payments to the bank's management, will
exceed the bank's income and therefore prevent the bank from declaring
dividends. Because the holding company's principal source of income will consist
of dividends from Centra Bank, the restrictions on Centra Bank's ability to pay
dividends will result in you not receiving dividends from the holding company.
YOU MAY HAVE DIFFICULTY SELLING YOUR SHARES OF CENTRA FINANCIAL.
Because no public market will exist for the holding company's common
stock, you may have difficulty selling your shares. We cannot predict when, if
ever, we would meet the listing qualifications of the Nasdaq Stock Market's
National Market Tier. We cannot assure you that there will be an active public
market for the shares.
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN CENTRA FINANCIAL.
It is possible that if you sell your shares in Centra Financial, you
may receive less than $10.00 per share. The initial offering price for your
shares of the bank's common stock was $10.00 per share.
THE BANK MAY BE UNABLE TO COMPETE EFFECTIVELY WITH THOSE FINANCIAL
INSTITUTIONS IN ITS MARKET AREA.
The banking business is highly competitive, and it may be difficult for
the bank, as a start-up company, to compete with the established financial
institutions in Monongalia County and throughout West Virginia. For instance, as
of June 30, 1998, there were seven banks and one thrift in the bank's proposed
market area with 24 banking offices and total deposits exceeding $813,820,000.
The bank's competitors will include One Valley Bank, Inc., WesBanco, Inc., and
Huntington National Bank, as well as financial institutions other than
commercial banks. At least initially, these institutions offer a wider array of
products than the bank will be able to offer. The product diversity of these
other institutions may direct customers away from the bank.
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THE BANK'S INITIAL LENDING LIMIT CREATES A COMPETITIVE DISADVANTAGE FOR THE
BANK.
The bank may not be able to attract larger volume customers because the
size of 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 can offer.
Accordingly, the bank may lose customers seeking large loans to One Valley,
WesBanco and Huntington National. Additionally, because the bank is located near
the borders of Pennsylvania and Maryland, larger volume borrowers may seek loans
at out-of-state institutions. Although we anticipate that the lending limit will
increase proportionally with the bank's growth, we cannot guarantee that this
will occur or that the bank can successfully attract or maintain larger volume
customers.
THE BANK INTENDS TO ENGAGE IN COMMERCIAL, LAND ACQUISITION, CONSTRUCTION AND
CONSUMER LENDING ACTIVITIES WHICH ARE RISKIER THAN RESIDENTIAL REAL ESTATE
LENDING.
Centra Bank intends to make loans that involve a greater degree of risk
than loans involving 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. Land acquisition and
construction loans may involve greater risk because the borrower may not be able
to carry the costs of undeveloped land. The disbursement of principal based on
progress also increases risk. 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.
We estimate that the bank's loan portfolio will consist of the
following:
Type of Loan Percentage of Portfolio
------------ -----------------------
Residential Real Estate Loans 10%
Commercial Loans 60%
Undeveloped Real Estate Loans 15%
Construction Loans 5%
Consumer Loans 10%
----
100%
THE BANK HAS LIMITED CONTROL OVER ITS PROFITABILITY BECAUSE THE BANK CANNOT
CONTROL THE VARIOUS FACTORS THAT CAN CAUSE FLUCTUATIONS IN INTEREST RATES.
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. Interest 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.
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THE BANK'S SUCCESS DEPENDS ON THE BANK'S MANAGEMENT TEAM.
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.
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.
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 , 2000,
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
Under our articles of incorporation and bylaws, at least a majority of
our outstanding common stock must approve the merger. 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 the financial institutions conduct.
Under the Act, a bank holding company can qualify as a "financial holding
company" and engage in business activities which the law 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, 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.
ACCOUNTING TREATMENT
The merger and reorganization into a bank holding company will be
accounted for as a change-in corporate form with the historical basis of
Centra's assets, liabilities and shareholders' equity unchanged under the bank
holding company.
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COMPARISON OF CENTRA BANK AND CENTRA FINANCIAL STOCK
The respective articles of incorporation and bylaws of Centra Bank and
Centra Financial govern the bank's and the holding company's shareholders. In
many respects, the rights of Centra Financial shareholders will be similar to
those of Centra Bank shareholders. For example:
o Holders of common stock of each corporation are entitled to
one vote for each share of common stock and to receive pro
rata any assets distributed to shareholders upon liquidation.
o Shareholders of neither corporation have preemptive rights.
o The shareholders of both corporations have the right under
West Virginia law to dissent from certain corporate
transactions and to elect dissenters' rights.
o The board of directors of each corporation 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.
ANTITAKEOVER PROVISIONS
Centra Bank's articles of incorporation and bylaws do not contain
antitakeover provisions. However, Centra Financial's articles of incorporation
and bylaws contain the following antitakeover provisions.
o Staggered Directors' Terms. The directors of Centra Financial
are elected for staggered terms of three years with no more
than one-third of the directors being elected in any one year.
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.
o Advance Notice For Director Candidates. Centra Financial's
bylaws require that shareholders who intend to nominate
candidates for election to the board of directors must give
written notice at least 14 days prior to the date of any
shareholders' meeting called for the purpose of electing
directors. Centra Bank's bylaws do not require prior notice of
shareholders' nominations for directors. The advance notice
requirements in Centra Financial's bylaws affords the board of
directors the opportunity to consider the qualifications of
the proposed nominees and, to the extent necessary, to inform
the shareholders about these qualifications.
o 80% Vote Required To Remove Directors. Centra Financial's
articles of incorporation and bylaws provide that holders of
at least 80% of the voting power of shares entitled to vote
generally in the election of directors may remove a director.
Centra Bank's bylaws only require a majority vote for removal.
This provision in Centra Financial's articles and bylaws makes
it more difficult for a third party to fill vacancies created
by removal with its own nominees.
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o Centra Financial's Articles Of Incorporation Contain
Supermajority Provisions. The supermajority provisions in
Centra Financial's articles of incorporation and bylaws
provide that the affirmative vote of the holders of at least
80% of the outstanding shares of the voting stock of Centra
Financial will be required to amend or repeal articles of
incorporation provisions dealing with the classification of
the board of directors, director nominations, appointment to
newly created directorships, vacancies of directors, removal
of directors and business combinations by unsolicited and
unapproved third parties.
Centra Financial's articles also require a two-thirds
affirmative vote of the members of the board 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 of the directors and the president. The
purpose of a supermajority requirement is to prevent a
shareholder with a majority of Centra Financial's voting power
from avoiding the requirements of the foregoing by simply
repealing them.
o Advance Notice Requirements For Shareholder Proposals. Centra
Financial's bylaws require that a shareholder wishing to bring
business before an annual meeting of shareholders must give 40
days' advance notice to Centra Financial. This advance notice
requirement gives the board the opportunity to consider the
shareholder's proposal and to inform the other shareholders
about the proposal and the board's position regarding it. This
provision could discourage a shareholder from bringing a
matter before an annual meeting. Centra Bank's bylaws do not
contain this provision.
o Fair Price Provision. Centra Financial's articles of
incorporation, unlike Centra Bank's articles of incorporation,
contain what is known as a "fair price provision." The fair
price provision requires the approval of at least 80% of
Centra Financial's shares entitled to vote to approve
transactions with an interested shareholder except in cases
where either (1) price criteria and procedural requirements
are satisfied, or (2) a majority of Centra Financial's board
of directors recommends the transaction to the shareholders.
If the minimum price criteria and procedural requirements are
met or the requisite approval of Centra Financial's board of
directors are given, the normal requirements of West Virginia
law would apply.
An "interested shareholder" is 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 a proposed business combination, the beneficial owner of
more than 10% of Centra Financial's voting power. 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.
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. It also includes any successor to a
disinterested director who is not affiliated with an
interested shareholder and who was recommended by a majority
of the disinterested directors then on the board.
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ADVANTAGES OF CENTRA FINANCIAL'S ANTITAKEOVER PROVISIONS
The provisions discussed above may constitute defensive measures
because they may discourage or deter a third party from attempting to acquire
control of Centra Financial. The purpose of these provisions is to discourage
and to insulate the corporation against hostile takeover efforts which Centra
Financial's board of directors might determine are not in the best interests of
Centra Financial and its shareholders. We believe that these provisions are
reasonable precautions to ensure that a party seeking control will discuss its
proposal with management.
DISADVANTAGES OF CENTRA FINANCIAL'S ANTITAKEOVER PROVISIONS
The classification of the board of directors makes it more difficult to
change directors because they are elected for terms of three years rather than
one year, and at least two annual meetings instead of one are required to change
a majority of the board of directors. Furthermore, because of the smaller number
of directors to be elected at each annual meeting, holders of a minority of the
voting stock may be in a less favorable position to elect directors through the
use of cumulative voting. The supermajority provisions make it more difficult
for shareholders to effect changes in the classification of directors.
The ability of the board of directors to issue additional shares of
common and preferred stock also permits the board of directors to authorize
issuance of the stock which may be dilutive and, in the case of preferred stock,
which may affect the substantive rights of shareholders without requiring an
additional shareholder vote.
Collectively, the provisions may be beneficial to management in a
hostile takeover attempt, making it more difficult to effect changes, and at the
same time, adversely affecting shareholders who might wish to participate in a
takeover attempt.
Although we believe the foregoing describes the material differences
between the rights of Centra Financial and Centra Bank shareholders, it is not
exhaustive, and we encourage you to refer to the West Virginia Corporation Act
and the articles and bylaws of both Centra Financial and Centra Bank.
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. 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 may not contain
all information that is important to investors, even though it contains all
material terms and provisions. We have reproduced for you the provisions of
Section 31-1-123 of the West Virginia Corporation Act, 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. The following is a list of the events that have the effect of
eliminating a shareholders dissenters' rights:
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 upon surrender, we will place a notation on your certificate(s) that you
have made demand. If you fail to surrender your certificate(s) Centra Bank can
terminate your dissenters' rights unless a court, for good cause shown, directs
otherwise.
CENTRA BANK MUST MAKE OFFER. If you demand that Centra Bank pay you the
fair value of your shares, Centra Bank must give you written notice of the
merger and offer to purchase your shares. The notice will contain a price the
bank believes to be the fair value of your shares. The bank must provide this
notice and offer to you within 10 days after the merger becomes effective. 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. You will receive the agreed payment 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 for litigation from any dissenting
shareholder, Centra Bank will file a complaint in the Circuit Court of
Monongalia County, West Virginia. The compliant will request that the court
determine the fair value of the shares. You must give this written demand for
litigation 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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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> 29
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 will continue to serve 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, Mr. Leech has received $88,736
and the executives as a group have received $202,682 through December 31, 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.
CENTRA BANK'S PLAN OF OPERATION
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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<PAGE> 31
subject to certain conditions, on November 17, 1999. The bank opened for
business on February 14, 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> 32
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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<PAGE> 33
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 and
by year-end expects to employ a total of approximately 21 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.
CASH REQUIREMENTS
Management believes that the capital it raised during 1999 and 2000
will be sufficient to meet its cash requirements for the next 12 months.
Accordingly Centra Financial does not currently anticipate that it will need to
raise additional capital during the next 12 months. Although it may be possible
particularly if an acquisition opportunity presents itself.
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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<PAGE> 34
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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<PAGE> 35
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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<PAGE> 36
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 in the
merger/reorganization. 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 from the following SEC locations.
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W., 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, DC 20549 New York, NY 10048 Suite 1400
Chicago, IL 60661-2511
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. This SEC filing is also available to the public from
commercial document retrieval services and at Internet world wide web site
maintained by the SEC at "http://www.sec.gov."
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AUDITED FINANCIAL STATEMENTS
CENTRA BANK, INC.
December 31, 1999
F-1
<PAGE> 40
Centra Bank, Inc.
Audited Financial Statements
December 31, 1999
CONTENTS
Report of Independent Auditors....................................F-3
Audited Financial Statements
Balance Sheet.....................................................F-4
Statement of Operations...........................................F-5
Statement of Changes in Stockholders' Equity......................F-6
Statement of Cash Flows...........................................F-7
Notes to Financial Statements.....................................F-8
F-2
<PAGE> 41
Report of Independent Auditors
Board of Directors
Centra Bank, Inc.
We have audited the accompanying balance sheet of Centra Bank, Inc. as of
December 31, 1999, and the related statements of operations, changes in
stockholders' equity, and cash flows for the period from inception (September
27, 1999) to December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Centra Bank, Inc. at December
31, 1999 and the results of its operations and its cash flows for the period
from inception (September 27, 1999) to December 31, 1999 in conformity with
accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
Charleston, WV
February 24, 2000
F-3
<PAGE> 42
Centra Bank, Inc.
Balance Sheet
December 31, 1999
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash and due from banks $ 25,000
Interest-bearing deposits in other banks 31,011
Federal fund sold 2,637,541
-----------
Total cash and cash equivalents 2,693,552
Available-for-sale securities (carried at fair value) 7,383,171
Premises and equipment 316,200
Other assets 120,180
-----------
Total assets $10,513,103
===========
LIABILITIES
Accrued expenses $ 199,254
STOCKHOLDERS' EQUITY
Common stock, $1 par value, 1,900,000 authorized, 1,200,000 outstanding 1,200,000
Additional paid-in capital 10,800,000
Stock subscriptions receivable (1,202,000)
Accumulated deficit (464,786)
Accumulated other comprehensive loss (19,365)
-----------
Total stockholders' equity 10,313,849
-----------
Total liabilities and stockholders' equity $10,513,103
===========
</TABLE>
See accompanying notes.
F-4
<PAGE> 43
Centra Bank, Inc.
Statement of Operations
For the Period from Inception (September 27, 1999) to December 31, 1999
Interest income $ 192,790
Interest expense --
----------
Net interest income 192,790
Other expenses:
Salaries and employee benefits 296,707
Occupancy expense 83,270
Advertising 108,556
Professional fees 76,889
Other 92,154
----------
Total other expenses 657,576
----------
Loss before income taxes 464,786
Provision for income taxes --
----------
Net loss $ 464,786
==========
Net loss per share, basic and diluted $ .06
==========
Average common shares outstanding 7,783,000
==========
See accompanying notes.
F-5
<PAGE> 44
Centra Bank, Inc.
Statement of Changes in Stockholders' Equity
For the Period from Inception (September 27, 1999) to December 31, 1999
<TABLE>
<CAPTION>
ACCUMULATED
ADDITIONAL STOCK OTHER
COMMON PAID-IN SUBSCRIPTIONS ACCUMULATED COMPREHENSIVE
STOCK CAPITAL RECEIVABLE DEFICIT LOSS TOTAL
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, September 27, 1999 $ - $ - $ - $ - $ - $ -
Issuance of common stock 1,200,000 10,800,000 (1,202,000) - - 10,798,000
Comprehensive loss:
Net loss - - - (464,786) - (464,786)
Other comprehensive loss:
Unrealized loss on available-
for-sale securities - - - - (19,365) (19,365)
---------------
Total comprehensive loss (484,151)
--------------------------------------------------------------------------------------------
Balance, December 31, 1999 $1,200,000 $10,800,000 $(1,202,000) $(464,786) $(19,365) $10,313,849
============================================================================================
</TABLE>
See accompanying notes.
F-6
<PAGE> 45
Centra Bank, Inc.
Statement of Cash Flows
For the Period from Inception (September 27, 1999) to December 31, 1999
<TABLE>
<CAPTION>
OPERATING ACTIVITIES
<S> <C>
Net loss $ (464,786)
Adjustments to reconcile net loss to net cash used in
operating activities:
Accretion of discounts on securities (36,263)
Increase in accrued expenses 199,254
Increase in other assets (120,180)
------------
Net cash used in operating activities (421,975)
INVESTING ACTIVITIES
Purchases of premises and equipment (316,200)
Purchases of available-for-sale securities (7,366,273)
------------
Net cash used in investing activities (7,682,473)
FINANCING ACTIVITIES
Proceeds of stock offering 10,798,000
------------
Net cash provided by financing activities 10,798,000
------------
Increase in cash and cash equivalents 2,693,552
Cash and cash equivalents at beginning of period --
------------
Cash and cash equivalents at end of period $ 2,693,552
============
</TABLE>
See accompanying notes.
F-7
<PAGE> 46
Centra Bank, Inc.
Notes to Financial Statements
December 31, 1999
NOTE 1. ORGANIZATION
Centra Bank, Inc. (Centra Bank or the Company) is a newly formed (September 27,
1999), full service commercial bank chartered under the laws of the State of
West Virginia. Centra Bank commenced operations on February 14, 2000. Centra
Financial Holdings, Inc. (Centra Financial) was formed on October 25, 1999 for
purposes of becoming a one bank holding company to hold all of the outstanding
stock of Centra Bank. It is anticipated that shares of Centra Bank will be
exchanged for shares of Centra Financial in the first quarter of 2000. The
Company expensed all costs of start-up activities including activities related
to organizing the new entity. Start-up costs include training costs, consulting
fees, utilities and related expenses during the pre-opening period.
NOTE 2. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
BASIS OF FINANCIAL STATEMENT PRESENTATION
The accounting and reporting policies of Centra Bank conform to accounting
principles generally accepted in the United States and to general practices
within the banking industry. The preparation of the financial statements
requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
could differ from those estimates.
CASH AND CASH EQUIVALENTS
The Company considers cash and due from banks, interest-bearing deposits in
other banks, and federal funds sold as cash and cash equivalents.
SECURITIES
Management determines the appropriate classification of securities at the time
of purchase. Debt securities are classified as held-to-maturity when the Company
has the positive intent and ability to hold the securities to maturity.
Held-to-maturity securities are stated at amortized cost.
Debt securities not classified as held-to-maturity are classified as
available-for-sale. Available-for-sale securities are stated at fair market
value with the unrealized gains and losses, net of deferred income taxes,
reported in a separate component of shareholders' equity. Unrealized gains and
losses represent the difference between fair market value and the amortized cost
of available-for-sale securities.
The amortized cost of debt securities classified as held-to-maturity and
available-for-sale is adjusted for amortization of premiums and accretion of
discounts, which are recognized as adjustments to interest income. The specific
identification method is used to determine realized gains and losses on sales of
securities.
F-8
<PAGE> 47
Centra Bank, Inc.
Notes to Financial Statements (continued)
PREMISES AND EQUIPMENT
Premises and equipment and leasehold improvements are stated at cost. Upon
opening for operations on February 14, 2000, the Company will record
depreciation on a straight-line basis over the estimated useful lives of the
assets. Leasehold improvements are amortized on a straight-line basis over the
shorter of the life of the leasehold asset or the lease term.
BASIC AND DILUTED EARNINGS PER SHARE
Basic and diluted earnings per share are the same for the period presented as
Centra Bank has not issued any potentially dilutive securities. Basic and
diluted include the shares included in subscriptions receivable paid subsequent
to year end.
INCOME TAXES
Centra Bank accounts for income taxes under the liability method. Under the
liability method, deferred tax assets and liabilities are recognized for future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
basis.
Deferred income taxes are provided for temporary differences between the tax
basis of an asset or liability and its reported amount in the financial
statements at the statutory tax rate. A deferred tax asset of $110,000 has been
recorded at December 31, 1999. A valuation allowance equal to this amount was
established as these deferred tax assets primarily related to net operating loss
carryforwards.
NOTE 3. RESTRICTIONS ON CASH AND DUE FROM BANK ACCOUNTS
The Company maintains a noninterest bearing account with an unrelated financial
institution subject to a $25,000 compensating balance arrangement. Banks are
required to maintain average balances with the Federal Reserve Bank. This
requirement will not affect Centra Bank until it is officially open for business
on February 14, 2000.
F-9
<PAGE> 48
Centra Bank, Inc.
Notes to Financial Statements (continued)
NOTE 4. SECURITIES
The following is a summary of available-for-sale securities at December 31,
1999:
<TABLE>
<CAPTION>
GROSS UNREALIZED ESTIMATED
AMORTIZED ------------------------------ FAIR
COST GAINS LOSSES VALUE
------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
U.S. Treasury securities and
obligations of the U.S.
government agencies and
corporations $7,402 $ - $(19) $7,383
==================================================================
</TABLE>
The amortized cost and estimated fair value of debt securities at December 31,
1999, by contractual maturity, are shown below. Expected maturities may differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
ESTIMATED
AMORTIZED FAIR
COST VALUE
------------------------------------
AVAILABLE-FOR-SALE
<S> <C> <C>
Due in one year or less $4,897 $4,888
Due after one year through five years 2,480 2,470
Due after five years through ten years - -
Due after ten years - -
------------------------------------
7,377 7,358
Other 25 25
------------------------------------
Total securities $7,402 $7,383
====================================
</TABLE>
NOTE 5. CAPITAL STOCK AND REGULATORY MATTERS
As of December 31, 1999, Centra Bank sold 1.2 million shares of stock at $10 per
share or a total of $12 million in a private offering, of which $10,796,000 had
been collected as of year-end. The stock subscription receivable of $1,202,000,
which is shown as a reduction of shareholders' equity at December 31, 1999, was
collected subsequent to year end.
The Company is subject to various regulatory capital requirements administered
by the federal banking agencies. Under the capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Company must meet
specific capital guidelines that involve quantitative measures of their assets,
liabilities, and certain off-balance sheet items as calculated under regulatory
accounting practices. The capital amounts and classification are also subject to
F-10
<PAGE> 49
Centra Bank, Inc.
Notes to Financial Statements (continued)
qualitative judgments by the regulators about components, risk weightings, and
other factors. Failure to meet minimum capital requirements can initiate certain
mandatory, and possible discretionary, actions by regulators that, if
undertaken, could have a direct material effect on the Company's financial
statements.
The following is a summary of the Company's capital requirements and its actual
amounts at December 31:
<TABLE>
<CAPTION>
WELL CAPITALIZED
UNDER PROMPT
FOR CAPITAL CORRECTIVE ACTION
ACTUAL ADEQUACY PROVISION
---------------------- --------------------- ----------------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
---------------------- --------------------- ----------------------
(Dollars in Thousands)
AS OF DECEMBER 31, 1999
<S> <C> <C> <C> <C> <C> <C>
Total capital (to risk-weighted
assets) $10,437 423% $197 8% $247 10%
Tier 1 (to risk-weighted assets) 10,437 423 99 4 148 6
Tier 1 (to average assets) 10,437 138 302 4 378 5
</TABLE>
The Company may not pay dividends without first obtaining the approval of the
West Virginia Commissioner of Banking.
NOTE 6. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used by Centra in estimating its fair
value disclosures for financial instruments:
Cash and Cash Equivalents
The carrying values of cash and cash equivalents approximate their fair values.
Securities
Fair values of securities are based on quoted market prices, where available. If
quoted market prices are not available, fair values are based on quoted market
prices of comparable instruments.
Accrued Interest
The carrying value of accrued interest approximates its fair value.
F-11
<PAGE> 50
Centra Bank, Inc.
Notes to Financial Statements (continued)
NOTE 7. PREMISES AND EQUIPMENT
Premises and equipment at December 31 are summarized as follows:
Furniture, fixtures and equipment $140,979
Leasehold improvements 175,221
--------
Premises and equipment $316,200
========
Two directors of Centra Bank own two-thirds of a company that leases executive
offices and facilities to Centra Bank. Rent expense was approximately $81,000 in
1999. As of December 31, 1999, the annual minimum rentals under the terms of the
Company's noncancelable operating lease for the aforementioned facilities are as
follows:
2000 $ 203,175
2001 200,053
2002 200,053
2003 200,053
2004 200,053
Thereafter 2,917,446
-----------
Total minimum lease payments $3,920,833
===========
Rental expense is included in occupancy expense.
NOTE 8. INCOME TAXES
The effective income tax rate in the consolidated statement of operations is
less than the statutory corporate tax rate due to the following:
Statutory corporate tax rate 34.0%
Differences in rate resulting from:
Impact of graduated tax rates (13.9)
State income taxes 4.0
Other (.5)
Valuation allowance (23.6)
-----
Effective income tax rate 0.0%
=====
The Company currently has approximately $500,000 of net operating loss
carryforward that will expire in 2019.
F-12
<PAGE> 51
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
I-1
<PAGE> 52
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
I-2
<PAGE> 53
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
I-3
<PAGE> 54
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.
I-4
<PAGE> 55
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
I-5
<PAGE> 56
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.
I-6
<PAGE> 57
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
I-7
<PAGE> 58
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.
I-8
<PAGE> 59
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.
I-9
<PAGE> 60
(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
I-10
<PAGE> 61
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:
I-11
<PAGE> 62
(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
I-12
<PAGE> 63
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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<PAGE> 64
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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<PAGE> 65
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.
I-15
<PAGE> 66
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
I-16
<PAGE> 67
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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<PAGE> 68
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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<PAGE> 69
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
-------------------------
I-19
<PAGE> 70
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
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<PAGE> 71
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> 72
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.
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<PAGE> 73
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> 74
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> 75
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> 76
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)(2)
3.1 Articles of Incorporation(2)
3.2 Bylaws(2)
5 Opinion of Jackson & Kelly PLLC, as to the
validity of the securities registered
hereunder, including the consent of that
firm(2)
8 Form of Opinion of Jackson & Kelly PLLC as
to certain United States tax matters,
including the consent of that firm(1)
10.1 Shareholder Protection Rights Agreement(2)
10.2 Centra Financial Holdings, Inc. Incentive
Stock Option Plan(2)
10.3 Premises Lease Agreement between Platinum
Plaza Limited Liability Company and Centra
Bank, Inc(1)
10.4 Premises Lease Agreement between Platinum
Plaza Limited Liability Company and Centra
Bank, Inc(1)
23.1 Consent of Jackson & Kelly PLLC (included as
part of Exhibit 5 and Exhibit 8)(2)
23.2 Consent of Ernst & Young LLP(1)
24 Power of Attorney(2)
99.1 Form of Proxy Card(2)
(b) Not required.
(c) Not required.
- -----------
(1) Filed herewith.
(2) Previously Filed.
PART II-4
<PAGE> 77
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> 78
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> 79
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 13TH DAY OF MARCH, 2000.
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 March 13, 2000
- ----------------------------------- Chief Executive Officer
Douglas J. Leech, Jr. (Principal Executive Officer)
/s/ Kevin D. Lemley Vice President, Chief March 13, 2000
- ----------------------------------- Financial Officer, and
Kevin D. Lemley Treasurer (Principal
Financial Officer and
Principal Accounting Officer)
* Director March 13, 2000
- -----------------------------------
Arthur Gabriel
* Director March 13, 2000
- -----------------------------------
Parry G. Petroplus
* Director March 13, 2000
- -----------------------------------
Milan Puskar
* Director March 13, 2000
- -----------------------------------
Bernard G. Westfall
* /s/ Douglas J. Leech, Jr. /s/ Kevin D. Lemley
--------------------------------- -----------------------------
Attorney-in-Fact Attorney-in-Fact
</TABLE>
PART II-7
<PAGE> 80
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)(2)
3.1 Articles of Incorporation(2)
3.2 Bylaws(2)
5 Opinion of Jackson & Kelly PLLC, as to the validity of the
securities registered hereunder, including the consent of that
firm(2)
8 Form of Opinion of Jackson & Kelly PLLC as to certain United
States tax matters, including the consent of that firm(1)
10.1 Shareholder Protection Rights Agreement(2)
10.2 Centra Financial Holdings, Inc. Incentive Stock Option
Plan(2)
10.3 Premises Lease Agreement between Platinum Plaza Limited
Liability Company and Centra Bank, Inc(1)
10.4 Premises Lease Agreement between Platinum Plaza Limited
Liability Company and Centra Bank, Inc(1)
23.1 Consent of Jackson & Kelly PLLC (included as part of Exhibit 5
and Exhibit 8)(2)
23.2 Consent of Ernst & Young LLP(1)
24 Power of Attorney(2)
99.1 Form of Proxy Card(2)
- -----------
(1) Filed herewith.
(2) Previously Filed.
<PAGE> 1
EXHIBIT 8
[LETTERHEAD OF JACKSON & KELLY PLLC]
March 13, 2000
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.
March 13, 2000
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.
March 13, 2000
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.
March 13, 2000
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.
March 13, 2000
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.
March 13, 2000
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.
March 13, 2000
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.
March 13, 2000
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.
March 13, 2000
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.
March 13, 2000
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.
March 13, 2000
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.
March 13, 2000
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
the benefit of your shareholders 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.
March 13, 2000
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 10.3
PREMISES LEASE AGREEMENT
Between
PLATINUM PLAZA LIMITED LIABILITY COMPANY
Lessor
and
CENTRA BANK
Tenant
1ST FLOOR COMPRISING 6,464 SQUARE FEET, MORE OR LESS,
PLATINUM PLAZA, MORGANTOWN, WEST VIRGINIA
Premises
<PAGE> 2
TABLE OF CONTENTS
I. Parties.....................................................1
II. Defined Terms...............................................1
III. Premises....................................................3
IV. Term and Possession.........................................4
V. Lessor's Warranty...........................................4
VI. Use.........................................................5
VII. Assignment or Subletting....................................5
VIII. Rent........................................................6
IX. Taxes.......................................................7
X. Insurance...................................................7
XI. Common Area Maintenance.....................................8
XII. Utilities and Services.....................................10
XIII. Alterations, Improvements, and Construction................10
XIV. Repairs....................................................11
XV. Rules and Regulations......................................12
XVI. Mortgages..................................................14
XVII. Tenant's Property..........................................14
XVIII. Insurance & Indemnification................................14
XIX. Environmental..............................................16
XX. Condemnation...............................................17
XXI. Defaults...................................................17
XXII. Surrender..................................................19
XXIII. Right of First Refusal To Lease............................19
XXIV. Miscellaneous..............................................19
i
<PAGE> 3
PREMISES LEASE AGREEMENT
ARTICLE I
PARTIES
1.0.1 This lease ("Lease") is made on or as of this 1st day
of August,1999, by and between PLATINUM PLAZA LIMITED LIABILITY COMPANY,
(hereinafter "Lessor"), and CENTRA BANK, (hereinafter referred to as "Tenant").
1.0.2 The parties hereto, for and in consideration of the
mutual covenants contained herein and with the specific intention of being
legally bound hereby and of so binding their respective heirs, administrators,
executors, successors and assigns, jointly and severally, agree as follows:
ARTICLE II
DEFINED TERMS
2.0.1 Any word or combination of words set forth herein within
quotation marks and with the first letter(s) of the word(s) capitalized shall be
a defined term, and when thereafter used herein with the letter(s) capitalized
shall have the meaning first indicated.
2.0.2 "Premises": 1st Floor Platinum Plaza Building comprising
6,464 square feet, more or less, as further described in Article III.
2.0.3 "Proportionate Share": The fraction or decimal
equivalent obtained by dividing 6464 square feet by the total number of square
feet of floor area within the entire Premises.
2.0.4 "Term": As further defined in Article IV, twenty (20)
years commencing on August 1, 1999.
2.0.5 "Expiration Date": The date set forth in a supplemental
"Term Rider" to be executed and attached hereto in accordance with Section
4.0.1, or if there is no Term Rider than June 30, 2019.
2.0.6 "Use": Tenant will use the Premises for the purposes of
the operation of a lending institution and ancillary financial services. Tenant
will not use the Premises for any other purpose without Lessor's prior written
consent, not to be unreasonably withheld.
2.0.7 "Fixed Rent": for each "Rental Year" (as defined in
Section 8.0.4):
Rental Year 1-3 $16.50 per square feet
$106,656.00 annually
Years 4-20 Inclusive & Option Years: Rent shall be adjusted
every 3 years by multiplying the fixed rent for rental in the
<PAGE> 4
immediately preceding year by the percentage increase of the
consumer price index as reported in the Wall Street Journal.
In the event the Consumer Price Index as reported in the Wall
Street Journal shall become unavailable to the public, the
Lessor will substitute with Tenant's prior approval a
comparable index based upon changes in the cost of living or
purchasing power of the consumer dollar published by any
government agency, or if no such index should then be
available, a comparable index published by a major bank or
other financial institution or by a recognized financial
publication provided by a university.
2.0.8 "Tenant's Share of Taxes": The Proportionate Share of:
(a) All "Taxes" (as defined in Section 9.0.2).
(b) Tenant agrees to pay to Lessor each month in
advance, during the first calendar year of this Lease, Tenant's proportionate
share of Real Estate Taxes pertaining to the Platinum Plaza Building as defined
in Article 9. After the first year and any time thereafter, Lessor may advise
Tenant of any increase in said monthly payment which increased payment shall be
one twelfth (1/12) of the estimated real estate taxes for the current year.
Tenant shall thereafter pay said increased amount to Lessor each month in
advance. The increased payment shall be applied toward Tenant's proportionate
share of real estate taxes pertaining to the Platinum Plaza Building.
(c) Estimated monthly tax expense: $335.00 per month.
2.0.9 "Tenant's Share of Insurance": The Proportionate Share
of:
(a) All "Insurance" (as defined in Section 10.0.2).
(b) Tenant agrees to pay to Lessor each month in
advance, during the first calendar year of this Lease, Tenant's proportionate
share of Insurance pertaining to the Platinum Plaza Building as defined in
Article 10. After the first year and any time thereafter, Lessor may advise
Tenant of any increase in said monthly payment which increased payment shall be
one twelfth (1/12) of the estimated insurance premiums for the current year.
Tenant shall thereafter pay said increased amount to Lessor each month in
advance. The increased payment shall be applied toward Tenant's proportionate
share of insurance premiums pertaining to the Platinum Plaza Building.
(c) Estimated monthly insurance expense: $49.00 per
month .
2.0.10 "Tenant's Share of Lessor's Operating Costs of Common
Area": Amount Equal to:
(a) Proportionate Share of "Lessor's Operating Costs"
(as defined in Article 11).
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<PAGE> 5
(b) Tenant agrees to pay to Lessor each month in
advance, during the first calendar year of this Lease the sum of $1,868.00 per
month and the total amount of said monthly payments accumulated in Tenant's
account shall be applied towards Tenant's proportionate share of Lessor's
Operating Costs pertaining to the Platinum Plaza Building as defined in Article
11. After the first year and any time thereafter, Lessor may advise Tenant of
any increase in said monthly payment which increased payment shall be one
twelfth (1/12) of the estimated Lessor's Operating Costs for the current year.
Tenant shall thereafter pay said increased amount to Lessor each month in
advance. The increased payment shall be applied toward Tenant's proportionate
share of Lessor's Operating Costs pertaining to the Platinum Plaza Building.
2.0.11 "Security Deposit": None
2.0.12 "Tenant's Trade Name and Notice Address": Centra Bank,
Post Office Box 656, Morgantown, WV, 26507.
2.0.13 "Lessor's Notice Address": Platinum Properties, c/o
Petroplus and Associates, Inc., 1000 Hampton Center, Suite C, Morgantown, WV,
26505.
ARTICLE III
PREMISES
3.0.1 Lessor hereby leases to Tenant, and Tenant hereby rents
from Lessor, the Premises as defined in Section 2.0.2, including all
Improvements, as hereinafter defined, and together with all appurtenances,
including use with others of the Common Areas, as hereinafter defined, to have
and to hold unto Tenant for and during the term hereinafter set forth.
3.0.2 Lessor reserves the sole and exclusive right, from time
to time, to change the Premises in any way it may desire, including, but not
limited to, construction of additions, removal of building or parts of buildings
and alteration of Common Areas.
3.0.3 Lessor reserves the sole and exclusive right to use all
or any part of the roof of the Premises for any purpose; to erect additional
stories or other structures over all or any part of the Premises; to erect in
connection with the construction thereof temporary scaffolds and other aids to
construction on the exterior of the Premises, provided that access to the
Premises shall not be denied; to install, maintain, use, repair and replace
within the Premises pipes, ducts, conduits, wires and all other mechanical
equipment servicing other parts of the Premises, the same to be in locations
within the Premises as will not deny Tenant's use thereof; and to make any use
it desires of the side or rear walls of the Premises, provided that such use
shall not encroach on the interior of the Premises.
3.0.4 The Premises have been inspected by Tenant, and Tenant
agrees to accept the same in their present "AS IS" condition and in the
condition in which the Premises may be on the commencement date of this Lease,
with the understanding that the Premises
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<PAGE> 6
will be subject to ordinary wear and tear from the date hereof until
commencement of the term.
ARTICLE IV
TERM AND POSSESSION
4.0.1 The term of this Lease shall commence on August 1, 1999,
and shall be for a period of time set forth in Section 2.0.4.
4.0.2 Lessor, its agents, employees and contractors, shall
have the right to enter all parts of the Premises during Tenant's operating
hours to inspect the same, to enforce and carry out any provision of this Lease,
and, without assuming responsibility to do so, to make repairs or alterations.
In the event of an emergency endangering life or property or in the event of
desertion of the Premises, Lessor shall have the right to enter by force.
4.0.3 Renewal Option - Tenant shall have the option to renew
the term of this lease for five (5) additional five (5) year periods following
the expiration of the original term, provided that this Lease is in full force
and effect and free of defaults by Tenant on the day the renewal option is
exercised and on the day the renewal term begins. The renewal term shall be on
the same terms, covenants and conditions as the original term, except that the
annual rent shall be adjusted as provided in Section 2.0.7 of this Lease, and
there shall be no further right of renewal after the renewal term provided for
herein. Such right of renewal must be exercised by delivery to Lessor of an
unequivocal written notice of election to renew at least one hundred eighty
(180) days prior notice and without any further instrument, this Lease shall be
deemed to be renewed, subject to the conditions hereinbefore provided in this
Section.
4.0.4 Holding over - Should the Tenant, with or without the
express or implied consent of the Lessor, continue to hold and occupy the
Premises after the expiration of the term of this lease, such holding over
beyond the term and the acceptance or collection of rent by Lessor, shall
operate and be construed as creating a tenancy from month to month and not for
any other term whatsoever, but the same may be terminated by the Lessor by
giving the Tenant ten (10) days' written notice thereof, and at any time
thereafter the Lessor may reenter and take possession of the Premises, any rule
in law or equity to the contrary notwithstanding.
ARTICLE V
LESSOR'S WARRANTY
5.0.1 Lessor hereby warrants that it and no other person or
corporation has the right to lease the Premises. Tenant shall have quiet and
peaceful possession of the Premises without hindrance on the part of Lessor, and
Lessor shall warrant and defend Tenant in such quiet and peaceful possession
against the claims of all persons claiming by, through or under Lessor, so long
as Tenant shall not be in default hereunder.
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<PAGE> 7
ARTICLE VI
USE
6.0.1. Tenant shall use the Premises only in a safe and lawful
manner for the purpose set forth in Section 2.0.6.
6.0.2 At all times and in all respects Tenant shall comply
with all statutes, laws, ordinances and regulations of every governmental
authority having jurisdiction.
6.0.3 Tenant will conduct business on the Premises only in the
Tenant's Trade Name as specified in Section 2.0.12, unless the use of some other
name is approved in writing by Lessor.
6.0.4 Lessor reserves the right to completely close the entire
Premises and Common Area to all traffic for a period of 24 hours once every 10
years after 30 days notice to all Tenants. Said closure shall not occur during
normal business operating hours.
ARTICLE VII
ASSIGNMENT OR SUBLETTING
7.0.1 Tenant will not assign this Lease, in whole or in part,
nor sublet all or any part of the Premises, nor license concessions or lease
departments therein, without first obtaining the written consent of Lessor,
which consent shall not be unreasonably withheld, any attempts at assigning or
subletting without Lessors consent shall be null and void. Consent by Lessor to
any assignment or subletting shall not constitute a waiver of the necessity for
such consent to any subsequent assignment or subletting. This prohibition
includes any subletting or assignment, which would otherwise occur by operation
of law, merger, consolidation, reorganization, transfer or other change of
Tenant's corporate or proprietary structure.
7.0.2 If Tenant is a corporation and if at any time during the
Term, any part or all of the corporate shares shall be transferred by sale,
assignment, bequest, inheritance, operation of law or other disposition so as to
result in a change in the present control of said corporation by the person or
persons now owning a majority of said corporate shares, Tenant shall notify
Lessor of this event within fifteen (15) days from the date of such transfer and
if Lessor's financial risk is increased or if the operation of the business is
significantly altered as a result of such change in control Lessor may terminate
this Lease at any time after such change by giving Tenant sixty (60) days
written notice.
7.0.3 If Lessor consents to assignment or sublease the
following shall be applicable:
(a) The proposed Tenant will not be violating any
prohibitive use in this lease or with any existing Tenant in the Premises at the
time of said assignment; and
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<PAGE> 8
(b) The new Tenant assumes in writing, in a form
satisfactory to Lessor, the obligations under this lease on behalf of Tenant;
and
(c) Tenant and any guarantor shall remain fully liable
as the primary obligor under this lease.
(d) The Tenant has not violated any terms or conditions
of this Lease Agreement.
ARTICLE VIII
RENT
8.0.1 Tenant covenants and agrees to pay to Lessor, as rent
for the Premises the Fixed Rent set forth in Section 2.0.7.
8.0.2 Fixed Rent shall be payable without deduction or setoff
in equal monthly installments in advance on the first day of each full calendar
month during the Term, the first such payment to include any prorated Fixed Rent
for the period from the date of the commencement of the Term to the first day of
the first calendar month in the Term. The first such payment of the Fixed Rent
shall be due and payable on August 1, 1999.
8.0.3 A rental year shall consist of twelve (12) calendar
months, beginning on the first day of the first full calendar month of the Term
("Rental Year"). The First Rental Year shall include the period from the date of
the commencement of the Term to the first day of the first full calendar month
in the Term. Any portion of the Term remaining at the end of the last full
Rental Year shall constitute the final Rental Year, and rentals and all other
charges shall be apportioned therefor.
8.0.4 It is understood and agreed that the basic consideration
for this Lease is Tenant's covenant to pay the total sum of the Fixed Rent set
forth in Section 2.0.7 for the original Term, and other amounts payable by
Tenant hereunder. The reason that the rates of installments may differ is to
defer payment of some of the rent from the early part of the Term to the latter
part for the convenience of the Tenant. Under these circumstances, it is not
contemplated that any governmental rent control or freeze will excuse Tenant
from paying any part of the rent as agreed.
8.0.5 All rent and other amounts payable by Tenant hereunder
shall be paid to Lessor without demand or deduction at the Lessor's Notice
Address set forth in Section 2.0.12 or such other place as Lessor from time to
time may designate.
8.0.6 Anything in this Lease to the contrary notwithstanding,
at Lessor's option, Tenant shall pay, as additional rent, a late charge in the
amount of Fifty ($50.00) Dollars for any rent payment not made within seven (7)
days after the due date thereof to cover the extra expense involved in handling
delinquent payments.
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<PAGE> 9
ARTICLE IX
TAXES
9.0.1 Tenant shall pay monthly, in addition to rent hereunder,
Tenant's Share of Taxes (as specified in Section 2.0.8 and as defined in Section
9.0.2).
9.0.2 "Taxes" include all real estate and other ad valorem
taxes and assessments applicable to the Premises and any other tax imposed
against Lessor with respect to the Premises by federal, state or local taxing
authorities as a substitution for or in addition to the current method of
property taxation used for the funding of governmental services and the cost,
including attorneys and appraisers' fees, of any contest or appeal pursued by
the Lessor in an effort to reduce the amount of tax or assessment with respect
to the Premises.
9.0.3 "Tax Year" means each twelve (12) month period (deemed,
for the purpose of this Article, to have 365 days) established as the real
estate Tax Year by the taxing authorities having lawful jurisdiction over the
Premises.
9.0.4 The tax payment if required hereunder shall be paid by
Tenant monthly.
9.0.5 Within sixty (60) days after Lessor's receipt of tax
bills for each Tax Year, or within a reasonable time thereafter in Lessor's
determination, Lessor will certify to Tenant:
(a) The amount of Taxes as specified above, and
(b) The amount of Tenant's Share of Taxes.
9.0.6 The failure of Lessor to Provide such certification
within the time prescribed above shall not relieve Tenant of its obligations
generally or for the specified Tax Year in which any such failure occurs.
9.0.7 For the Tax Year in which the Term commences or
terminates, the provisions of this Article shall apply, but Tenant's liability
for its proportionate share of any Taxes for such year shall be subject to a
pro-rata adjustment based upon the number of days of such Tax Year falling
within the Term.
ARTICLE X
INSURANCE
10.0.1 Tenant shall pay monthly, in addition to rent
hereunder, Tenant's Share of Insurance and Taxes (as defined in Section 2.0.9
and defined in Section 10.0.2).
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<PAGE> 10
10.0.2 "Insurance" includes all insurance premiums and costs
of any kind or payable by the Lessor under or for any insurance policies
applicable during the Term in any respect to the Premises and the Common Area.
10.0.3 "Insurance Period" means each period established by
Lessor or its insurers as the period during which any insurance policies may be
in effect.
10.0.4 The insurance payment if required hereunder shall be
paid by Tenant in monthly installments.
10.0.5 Within sixty (60) days after Lessor's receipt of
insurance bills for each Insurance Period, Lessor will certify to Tenant:
(a) The amount of Insurance;
(b) The amount of Tenant's Share of Insurance; and
(c) The Insurance Period for which such Insurance is
paid or payable.
10.0.6 The failure of Lessor to provide such certification or
to provide bills under this Lease within the time prescribed therefore shall not
relieve Tenant of its obligations generally or for the specific Insurance Period
in which any such failure occurs.
ARTICLE XI
COMMON AREA MAINTENANCE
11.0.1 The Common Area which may be furnished by Lessor in or
near the Premises for the general common use of Tenants, their officers, agents,
employees and customers ("Common Area") including, without limitation, all
parking areas, access roads, employee parking areas, the truck way or ways,
driveways, pedestrian sidewalks, landscaped and planted areas, retaining walls,
stairways, bus stops, lighting facilities, and other areas and improvements,
shall at all times be subject to the exclusive control and management of Lessor.
Lessor shall have the right to establish, modify and enforce reasonable rules
and regulations with respect to the Common Area; to change the areas, locations
and arrangement thereof; to enter into, modify and terminate easement and other
agreements pertaining to the use and maintenance thereof; to restrict parking by
Tenants, their officers, agents, and employees to employee parking areas; to
close all or any portion of said parking areas or other Common Area to such
extent as may, in the opinion of Lessor be necessary to prevent a dedication
thereof or the accrual of any rights to any person or to the public therein; to
close temporarily any or all portions of the said areas or facilities; to
discourage non customer parking; and to do and perform such other acts in and to
said areas and improvements as, in the exercise of good business judgment,
Lessor shall determine to be advisable with a view to the improvement of the
convenience and use thereof by Tenants, their officers, agents, employees and
customers.
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<PAGE> 11
11.0.2 Lessor will operate and maintain the Common Area which
may be provided pursuant to this Section.
11.0.3 Lessor reserves the right in its sole discretion to
change, rearrange, alter, modify, reduce or supplement any or all of the Common
Area so long as adequate facilities in common are made available to the Tenant
herein.
11.0.4 The "Lessor's Operating Costs" shall be the cost and
expense of operating and maintaining the Common Area which may be provided
whether or not located on land within the Premises Area in a manner deemed by
Lessor to be reasonable and appropriate and for the best interests of the
Premises; including, without limitation, all costs and expense of operating,
repairing, lighting, cleaning, painting, striping, policing and providing
security (including the cost of uniforms, equipment and all employment taxes);
operating, maintenance, repairs and replacements of signs, displays, and
decorations; removal of snow, ice and debris; regulation of traffic; inspections
and depreciation of machinery and equipment used in the operation and
maintenance of the Common Area and personal property taxes and other charges
incurred in connection with such equipment; replacement of paving, curbs,
sidewalks, landscaping, drainage, pipes, ducts, conduits and similar items, and
lighting facilities; planting, replanting and replacing flowers, shrubbery and
planters; rental of music program services and loudspeaker systems, including
furnishing electricity therefore; and administrative costs equal to fifteen
percent (15%) of the total cost of operating and maintaining the Common Area.
11.0.5 Tenant shall pay to Lessor, in addition to rent
hereunder, Tenant's share of Lessor's Operating Costs of Common Area Maintenance
(as specified in Section 2.0.10) for and during each calendar year.
11.0.6 The charge required hereunder shall be paid by Tenant
in monthly installments.
11.0.7 If Tenant's Share of Lessor's Operating Costs of Common
Area is specified under Subsection 2.0.10 (a), then within ninety (90) days
after Lessor's calculation of such costs, or within a reasonable time thereafter
in Lessor's determination, Lessor will certify to Tenant:
(a) The amount of Lessor's Operating Costs;
(b) The amount of Tenant's Share of Lessor's Operating
Costs; and
(c) The calendar year for which such Operating Costs
are paid or payable.
11.0.8 The failure of Lessor to provide such certification
under this Lease or to provide bills under this Lease within the time prescribed
therefor shall not relieve Tenant of its obligations generally or for the
specific calendar year for which any such failure occurs.
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11.0.9 For the calendar year in which the Lease commences or
terminates, the provisions of this Article shall apply, but Tenant's liability
for Lessor's Operating Costs of Common Area for such calendar year shall be
subject to a pro-rata adjustment based upon the number of days of such calendar
year falling within the Term.
11.0.10 At Tenants sole cost and expense Tenant hereby
consents and agrees to maintain the canopy and any other fixtures or equipment
associated with the Drive Thru Lanes.
ARTICLE XII
UTILITIES AND SERVICES
12.0.1 Lessor shall incur no liability whatsoever should any
utility become unavailable from any public utility company, public authority or
any other person, firm or corporation, including Lessor, supplying such utility.
Discontinuance of any service shall not constitute an eviction, constructive or
otherwise.
12.0.2 In the event that the charges for water, sewage, waste
disposal, any utilities or services to or for the Premises are included in a
charge for property of which the Premises are only a part and allocation of
which charge or charges is not readily ascertainable, the determination of the
portion thereof applicable to the Premises shall be made by Lessor on the basis
of its best estimate of the amount of use by respective users and such other
factors as may be pertinent for a reasonable division and allocation of the
same.
12.0.3 If Tenant fails to pay any charge for water, sewage or
other utility or service payable by Tenant hereunder, Lessor may elect to pay
the same and shall have the right to collect the same and any expense incurred
by Lessor in connection therewith from Tenant by exercising all remedies
provided by law and provided herein for collection of rent. In addition to other
remedies, Lessor reserves and shall at all times have the right to cut off and
discontinue, without notice to Tenant, water, electricity, heating and air
conditioning, or other utilities and services whenever Tenant has failed to pay
in accordance with the terms of this Lease any amounts due by Tenant for rent or
otherwise. Lessor shall not be liable for any such discontinuance and the same
shall not constitute a termination of this Lease, or eviction, constructive or
otherwise.
ARTICLE XIII
ALTERATIONS, IMPROVEMENTS, AND CONSTRUCTION
13.0.1 Tenant shall not make any alterations or improvements
to, erect any sign on, or remove anything except Tenant's Property (as herein
defined) from the Premises without first obtaining the approval in writing of
Lessor, and Lessor's approval thereof shall
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<PAGE> 13
not be withheld unreasonably. Plans and specifications for alterations,
improvements and exterior signs shall be submitted to Lessor prior to the
commencement of any work on the premises.
13.0.2 All construction work and materials attached to,
affixed to, or installed in, the Premises by any party or person, including but
not limited to heating, air conditioning, ventilating, plumbing and electrical
equipment and facilities, floor, wall and ceiling covering, store fronts,
additions, renovations and replacements (separately and collectively the
"Improvements") immediately shall become part of the Premises and property of
Lessor. However, improvements made by Tenant that do not become permanent
fixtures shall remain the property of Tenant.
13.0.3 All plans and specifications required hereunder shall
be prepared by, and the Improvements to be made pursuant thereto shall be
performed by, persons duly qualified to do the work in the jurisdiction wherein
the Premises are situate and shall comply with all applicable codes, rules,
regulations and ordinances.
13.0.4 Tenant shall secure all permits and licenses necessary
or required for construction, operation, signage and occupancy of the
Improvements. Lessor shall have final approval of all signage. Lessor shall
cooperate with Tenant but shall not be obligated to obtain or be responsible for
failure to obtain such permits and licenses.
13.0.5 All contracts for labor and/or material in excess of
Two Thousand Dollars ($2,000.00) shall be in writing, and shall contain a waiver
of lien provision. Tenant shall not permit mechanic liens to be placed upon the
Premises.
13.0.6 Tenant agrees to pay for all work and materials and
nothing contained in this Lease shall authorize or empower Tenant to do any act
which shall in any way encumber Lessor's title to any claim by way of lien or
encumbrance whether claimed by operation of law or by virtue of any expressed or
implied contract of Tenant, and any claim to a lien upon the Building or
Premises arising from any act or omission of Tenant shall attach only against
Tenant's interest and shall in all respects be subordinate to Lessor's title to
the Building and Premises. If Tenant has not removed any such lien or
encumbrance within fifteen (15) days after written notice to Tenant by Lessor,
Lessor may, but shall not be obligated to pay the amount necessary to remove
such lien or encumbrance, without being responsible for making any investigation
as to the validity or accuracy thereof, and the amount so paid together with all
costs and expenses (including attorneys' fees) incurred by Lessor shall be
deemed additional rent reserved under this Lease due and payable forthwith.
13.0.7 All Improvements approved by Lessor shall be made at
the sole cost and expense of Tenant.
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ARTICLE XIV
REPAIRS
14.0.1 Lessor shall be responsible for all repair to the roof,
exterior, foundation and structural portions of the building not a result of any
action or negligence on the part of the Tenant. The Lessor shall repair any roof
leaks within seven (7) days after receipt of notice from Tenant to Lessor.
14.0.2 Tenant shall keep and maintain the Premises and every
part thereof clean and in good order and condition and shall make all repairs
and replacements thereto and to each and every part thereof which may be
necessary, required or desired. Without limiting the generality of the
foregoing, Lessor shall establish a capital reserve account into which Lessor
shall deposit $.50 per square foot of Tenants rent into said account. The
capital reserve account shall be utilized in the sole discretion of Lessor to
maintain or replace the heating, ventilating, and air conditioning system and
any other capital improvements to the Platinum Plaza Building or Common areas.
14.0.3 Tenant shall install and replace such signs,
decorations, lettering, advertising matter and other things as may be approved
by Lessor, said approval not to be unreasonably withheld, and keep and maintain
the same in good condition and repair and in keeping with the image, character
and standards as may be established from time to time by Lessor for the Premises
and shall make such replacements as may be necessary.
14.0.4 In the event that Tenant shall fail, within thirty (30)
days after notice in writing by Lessor, to make repairs or replacements to the
Premises, the Improvements, the signs or any part thereof which may be necessary
or required, Lessor may make the same and collect the costs thereof and expenses
incurred in connection therewith, together with interest thereon at the then
prevailing commercial rate from Tenant, by exercising all remedies provided by
law and provided herein for collection of rent.
14.0.5 In the event that the portion of the Premises which
Tenant has agreed to maintain, if any, shall be damaged or destroyed as a result
of fire, casualty or other occurrence, Tenant shall remove any resulting debris
and repair or replace such damaged structure promptly, and if Tenant fails to
commence required restoration work within ninety (90) days from the date of such
damage or destruction or fails to diligently proceed to complete the same,
Lessor's remedy shall be the right and option to terminate the Term of this
Lease by giving Tenant written notice of Lessor's election to do so at any time
prior to completion of the repairs or replacements if Tenant shall not then be
actively undertaking such restoration work.
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ARTICLE XV
RULES AND REGULATIONS
15.0.1 In regard to use and occupancy of the Premises and
Common Area, Tenant shall at its expense: (a) keep the inside and outside of all
glass in the doors and windows of the Premises clean; (b) keep all exterior
store surfaces of the Premises clean; (c) replace promptly any cracked or broken
glass of the Premises with glass of like kind and quality; (d) maintain the
Premises in a clean, orderly and sanitary condition and free of insects,
rodents, vermin and other pests; (e) keep any garbage, trash, rubbish or refuse
in rat-proof containers within the interior of the Premises until removed; (f)
have such garbage, trash, rubbish and refuse removed on a daily basis; (g) keep
all mechanical apparatus free of vibration and noise which may be transmitted
beyond the Premises; (h) comply with all laws, ordinances rules and regulations
of governmental authorities and all recommendations of the Fire Underwriters
Rating Bureau now or hereafter in effect; (i) maintain window displays,
advertising matter, signs, merchandise and store fixtures in keeping with the
image, character and standards of the Premises, as determined by Lessor; (j)
maintain such regular service contracts with professionals for air-conditioning
maintenance, pest extermination, refuse removal, cleaning, etc. as may be
required by and subject to the approval of Lessor; and (k) conduct its business
in all respects in a dignified manner in accordance with high standards of store
operation consistent with the quality of operation of the Premises as determined
by Lessor and to provide an appropriate mercantile quality within the entire
Premises.
15.0.2 In regard to use and occupancy of the Premises and
Common Area, Tenant shall not: (a) use or permit the use of any objectionable
advertising medium such as, without limitation; loudspeakers, phonographs,
public address systems, sound amplifiers, reception of radio or television
broadcasts within the Premises which is in any manner audible or visible outside
of the Premises; (b) permit accumulations of garbage, trash, rubbish or other
refuse within or without the Premises; (c) cause or permit objectionable odors
to emanate or be dispelled from the Premises; (d) solicit business in the
parking or other Common Area; (e) distribute handbills or other advertising
matter to, in or upon any automobiles parked in the parking area or in any other
Common Facility; (f) permit the parking of delivery vehicles so as to interfere
with the use of any driveway, foot walk, parking area or other Common Facility
in the Premises; (g) place or suffer to be placed or maintain on the exterior of
the Premises any sign, advertising matter or any other thing of any kind or
maintain any decoration, lettering or advertising matter on the glass of any
window or door of the Premises, or paint or decorate any part of the exterior of
the Premises, or any part of the interior visible from the exterior thereof,
without first obtaining Lessor's written approval; (h) use of foot walk or any
other Common Facility adjacent to the Premises for the sale or display of any
merchandise for any other business, occupation or undertaking; (i) conduct or
permit to be conducted any action, fire, going out of business, bankruptcy, or
other similar type sale in or connected with the Premises; or (j) use or permit
the use of any portion of the Premises for any unlawful purpose.
15.0.3 Tenant shall comply with other rules and regulations
which may be adopted by Lessor from time to time and which are reasonably and
uniformly applied.
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15.0.4 Tenant shall at all times fully comply with the
Americans With Disabilities Act, as the same may be amended from time to time or
any successor statute and any rules and regulations promulgated thereunder
(collectively, the "Act") and shall, at its sole cost and expense, make any and
all alterations and improvements to the Premises necessary to comply with the
Act. However, before Tenant shall make any alterations or improvements to the
Premises in order to comply with the Act, Tenant shall first obtain the approval
in writing of Lessor for such alterations or improvements, which approval shall
not be unreasonably withheld. Tenant shall further comply with Sections 15.0.1,
15.0.2, and 15.0.4 with respect to any alterations or improvements made pursuant
to this Section. Tenant shall fully indemnify Lessor from and against any and
all claims or demands of any person or entity (including, but not limited to,
any governmental entity) arising out of Tenant's failure to fully comply with
the terms of the Act.
ARTICLE XVI
MORTGAGES
16.0.1 This Lease and the rights of Tenant hereunder shall be
subordinate to the lien of any mortgage or security interest on the Premises or
any part thereof or on the property of which the Premises are a part, and shall
be subordinate to the Lessor; provided, however, that subordination to liens
created hereafter shall be contingent upon agreement by the holder or holders of
any subsequent liens that this Lease shall not be divested by foreclosure or
execution on such subsequent mortgage or security interests and that Tenant's
possession of the Premises shall not be disturbed so long as Tenant should not
be in default hereunder.
ARTICLE XVII
TENANT'S PROPERTY
17.0.1 All property, other than Improvements (as defined in
this Lease) placed on the Premises by Tenant, including signs, inventory,
furniture, trade fixtures, appliances, expendable, books, records, cash and
personal items of clothing and sundries, shall be deemed to be "Tenant's
Property".
17.0.2 So long as Tenant is not in default under this Lease,
Tenant may remove any of Tenant's Property without Lessor's consent, provided
such removal does not damage the Premises.
ARTICLE XVIII
INSURANCE AND INDEMNIFICATION
18.0.1 Tenant shall maintain and keep in force policies of
public liability insurance against claims for personal injury, death and
property damage occurring in or about the Premises or arising out of the use or
occupancy thereof, naming both Lessor and Tenant
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as Insured with coverage in the amounts of not less than Five Hundred Thousand
Dollars ($500,000.00) for bodily injury or death to one person, not less than
One Million Dollars ($1,000,000.00) for bodily injuries or deaths arising out of
one occurrence and not less than One Hundred Thousand Dollars ($100,000.00) for
property damage.
18.0.2 Tenant shall maintain and keep in force policies of
insurance against loss to the contents on the Premises, including but not
limited to Tenant's Property as a result of fire, theft or other insurance
casualty, in adequate amounts, including any damages resulting from
environmental pollutant discharges caused by Tenant's negligence in the
operation of the Premises, the clean up of such spills or discharges and/or any
resulting liability for the spill, discharge, or remediation shall be the sole
responsibility of the Tenant. In addition, it is further agreed that the Tenant
shall fully indemnify the Lessor from any fines or penalties assessed by any
governmental agency, damages and losses that the Lessor may incur as the result
of any environmental pollutant or hazard discharges caused by the Tenant's
negligence or from any other sources or acts of third parties not the result of
any acts or negligence of the Lessor.
18.0.3 Tenant shall maintain and keep in force policies of
insurance against loss by vandalism, malicious mischief or breakage of glass in
adequate amounts.
18.0.4 All policies of insurance required to be maintained by
Tenant hereunder shall be obtained from insurance companies authorized to engage
in business in the Commonwealth or State in which the Premises are located.
Copies of the policies and certificates evidencing the effective dates and that
they will not be canceled without at least ten (10) days notice in writing shall
be delivered to Lessor.
18.0.5 All losses resulting from vandalism, malicious mischief
or broken glass not covered by insurance shall be the sole responsibility of
Tenant.
18.0.6 Tenant hereby waive any right of subrogation that
Tenant's insurance carrier at any time may have against Lessor or Lessor's
agents and employees, and shall release Lessor from any liability for any loss
of or damage to any property or person on the Premises.
18.0.7 Lessor hereby waive any right of subrogation that
Lessor's insurance carrier at any time may have against Tenant or Tenant's
agents and employees, and shall release Tenant from any liability for any loss
of or damage to any property or person on the Premises.
18.0.8 Tenant shall keep and save Lessor harmless from any
penalty, claim, demand, loss, damage, charge, cost or expense including but not
limited to attorneys' fees imposed or incurred for violation of any ordinance or
law, whether occasioned due to the neglect of Tenant or any agent of or
contractor under Tenant then upon or using the Premises, or otherwise howsoever,
or arising or allegedly arising out of any accident or other occurrence causing
injury to any person or property and due directly or indirectly to the condition
of or the use or occupancy of the Premises.
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18.0.9 Tenant will not do or suffer to be done, or keep or
suffer to be kept, anything in, upon or about the Premises which will contravene
Lessor's policies insuring against loss or damage by fire or other hazards
(including, without limitation, public liability) or which will prevent Lessor
from procuring such policies in companies acceptable to Lessor. If anything
done, omitted to be done or suffered by Tenant to be kept in, upon or about the
Premises shall cause the rate of fire or other insurance upon the Premises or on
other property of Lessor or of others within the Premises to be increased beyond
the minimum rate from time to time applicable thereto, Tenant will pay, as
additional rent, the amount of any such increase upon Lessor's demand.
ARTICLE XIX
ENVIRONMENTAL
19.0.1 In the event Tenant will be using any materials in the
operation of its business on the Premises which are or may be deemed to be toxic
or hazardous materials, Tenant's storage and use of such materials on the
Premises shall be subject to all laws and regulations now in effect or hereafter
enacted which deal with or relate to the regulation or protection of the
environment (Environmental Laws), including the ambient air, ground water,
surface water, and land use, including substrata land. In addition, Tenant
agrees to the following:
(a) Tenant shall, at Tenant's own expense, comply with
all present and hereafter enacted Environmental Laws, and any amendments
thereto, affecting Tenant's use or occupancy of the Premises or any operation of
Tenant thereon or therefrom.
(b) Tenant shall immediately notify Lessor of any of
the following:
(i) Receipt of any correspondence or any other
communication from any governmental entity regarding
the application of any Environmental Laws to the
Premises or Tenant's use or occupancy of or operation
on the Premises.
(ii) Any change in Tenant's operation on the
Premises which will change or has the potential to
change Tenant's or Lessor's obligations or liabilities
under any of the Environmental Laws.
(c) Tenant shall indemnify, protect, defend, and hold
Lessor, its partners, officers, directors, employees, and agents, and their
successors and assigns, harmless from and against any and all losses,
liabilities, damages, expenses (including, but not limited to, reasonable
investigation and legal fees and expenses), claims, and actions resulting from
or relating to any alleged or actual injury, liability, or damage to persons or
property; and any and all claims or actions brought by any person, firm,
governmental body, or other entity alleging or resulting or arising from or in
connection with contamination or adverse effects on the environment, or
violation of any Environmental Law or other statute, law, ordinance, rule,
regulation, judgment, or order of any governmental or judicial entity;
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and from and against any and all damages, liabilities, costs, fines, and
penalties assessed as a result of any activity or operation on the Premises
during the term of this Lease, except for damage or injury caused by Lessor or
Lessor's agents. Tenant's obligations and liabilities under this Section shall
continue as long as Lessor bears any liability or responsibility under the
Environmental Laws or any other statute or law for any act which occurred on the
Premises during the term of this Lease. Tenant's failure to abide by the terms
of this Section shall be restrainable by injunction. The obligations set forth
in this Section shall survive the expiration or sooner termination of this
Lease. Tenant shall require all of its Subtenants and licensees to agree to the
provisions of this Section in favor of Lessor and the other persons set forth
above.
19.0.2 Lessor has received no written notice from any
governmental authority having jurisdiction over the Premises that the Premises
are in violation of the Comprehensive Environmental Response, Compensation and
Liability Act of 1989, as amended (CER-CLA(c)), the Resources Conservation and
Recovery Act of 1976, as amended (ARCRA(c)), the Toxic Substance Control Act, as
amended, the Hazardous Materials Transportation Act, as amended, or any statute
governing underground storage tanks or asbestos. Lessor shall indemnify and hold
Tenant harmless from and against any and all claims, demands, or losses in
connection with the release of hazardous materials caused by Lessor.
ARTICLE XX
CONDEMNATION
20.0.1 If the whole or any part of the Premises shall be taken
under the power of eminent domain, this Lease shall terminate as to the part so
taken on the date Tenant is required to yield possession thereof to the
condemning authority. Lessor shall make such repairs and alterations as may be
necessary in order to restore the part not taken to useful condition and the
Annual Basic Rental shall be reduced proportionately as to the portion of the
Premises so taken. If the portion of the Premises so taken substantially impairs
the usefulness of the Premises for the purposes set forth in Section 2.0.6 in
the opinion of either party, either party may terminate this Lease as of the
date when Tenant is required to yield possession. Tenant shall not be entitled
to any portion of the award for the fee or leasehold of the Premises, the
property of Lessor of which the Premises are a part or any part thereof, and the
entire award shall belong to Lessor; provided, however, Tenant may apply for
reimbursement from the condemning authority for moving expenses, dislocation
damages and other special benefits, if any allowed by law, with the
understanding that Lessor's portion of any award shall not be diminished by any
claim on behalf of Tenant to a bonus value as a result of the amount of rent
payable hereunder being less than the fair market rental value of the Premises
or by any other claim of Tenant.
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ARTICLE XXI
DEFAULTS
21.0.1 If Tenant shall fail at any time to make any payment or
to perform any act on its part to be made or performed under this Lease in
accordance with the terms hereof, Lessor, at its sole discretion, without notice
or demand, and without waiving or releasing Tenant from any obligation of Tenant
hereunder may make such payment or perform such act to the extent that Lessor
may deem desirable, and in connection therewith may employ attorneys and pay
expenses. All sums so paid by Lessor and all reasonable expenses in connection
therewith and all rent and other charges payable by Tenant hereunder shall bear
interest thereon at the then prevailing commercial rate from the date of such
payment by Lessor or the date such payment by Tenant was due, as the case may
be, and shall be deemed to be payable by Tenant to Lessor and may be collected
by exercising all remedies provided by law and provided herein for collection of
rent.
21.0.2 If Tenant shall default in the payment of any
installment of rent, additional rent or other amount provided for under this
Lease as the same becomes due and payable, or should an execution be issued
against the Tenant and a levy made upon the Tenant's interest in the Premises or
any part thereof, or bankruptcy proceedings be commenced by or against Tenant,
or an assignment be made by Tenant for the benefit or creditors, or a receiver
be appointed for Tenant, then and in such event the entire rent for the balance
of the term, at the option of Lessor, shall become due and payable at once as if
by the terms of this Lease it were all payable in advance.
21.0.3 Lessor shall have the right to distrain upon any
property on the Premises for unpaid rent, additional rent and other amounts
payable by Tenant hereunder.
21.0.4 If Tenant shall default in the payment of any
installment of rent, additional rent or other amount provided for under this
Lease or in the performance of any covenant or condition of this Lease and fail
to cure or commence and diligently proceed to cure such default within ten (10)
days after written demand by Lessor that the default be cured, Lessor, at its
option, may enter upon the Premises without process of law and take possession
thereof, together with all Improvements and appurtenances.
21.0.5 No waiver by Lessor of any breach by Tenant of any
covenants or conditions contained herein shall be construed to be a waiver of
any other covenant or condition or any succeeding breach of the same covenant or
condition. Termination of the Term, or the receipt of rent after default or
after judgment or after execution shall not deprive Lessor of any other actions
against Tenant for possession or for rent or for damages. Lessor may use the
remedies herein given or other prescribed by law, or both, as often as it may
deem necessary.
21.0.6 Bankruptcy of Tenant.
(a) Insolvency - If, at or before the commencement date
of the term of this lease, or if at any time during the term, there shall be
filed by or against Tenant in any Court pursuant to any statute, either of the
United States or of any state, a petition in
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bankruptcy or insolvency or for reorganization of for the appointment of a
receiver or trustee of all or a portion of the Tenant's property, and if within
sixty (60) days thereof Tenant fails to secure a discharge thereof, or if Tenant
makes an assignment for the benefit of creditors or petitions for or enters into
an arrangement, then this lease, at the option of Lessor, may be terminated, in
which event neither Tenant nor any person claiming through or under Tenant by
virtue of any statute or of an order of any Court, shall be entitle to
possession or to remain in possession of the Premises, but shall forthwith quit
and surrender the Premises, and Lessor, in addition to the other rights and
remedies it has by virtue of any other provision herein or else where in this
lease contained, or by virtue of any statute or rule of law, may retain as
liquidated damages any rent or monies received by Lessor from Tenant or others
in behalf of Tenant.
(b) Acceleration - It is agreed that in the event of
the termination of this lease pursuant to paragraph (a) of this Section, Lessor
shall forthwith, notwithstanding any other provisions of this lease to the
contrary, be entitled to recover from Tenant as and for liquidated damages an
amount equal to the then cash value of the rent and other charges payable by
Tenant hereunder for the unexpired portion of the term demised, less they then
cash rental value of the Premises for the same period. Nothing herein contained
shall limit or prejudice the right of Lessor to prove for and obtain as
liquidated damages by reason of such termination, an amount equal to the maximum
allowed by any statute or rule of law in effect at the time when, and governing
the proceedings in which, such damages are to be proved, whether or not such
amount is greater, equal to, or less than the amount of the difference referred
to above.
ARTICLE XXII
SURRENDER
22.0.1 Tenant may, and at Lessor's request shall, remove all
Tenant's Property as defined herein, and Tenant agrees to repair any damage
caused by such removal promptly and at its sole cost and expense. Any property
not removed from the Premises at the expiration or earlier termination of this
Lease, at the option of Lessor, may forthwith become the property of Lessor.
ARTICLE XXIII
RIGHT OF FIRST REFUSAL TO LEAVE
23.0.1 Lessor hereby grants to Tenant the first right to lease
any vacant space which becomes available during the term of this lease or any
extension thereof. Lessor shall notify Tenant of a vacancy within the Platinum
Plaza Building, the square footage available and the rent for said space. Tenant
shall have 30 days from date of notification to exercise this First Right to
Lease. Should Tenant elect to occupy the newly vacant space, Tenant shall
execute a lease within 15 days from notifying Lessor of Tenant's intent to
occupy said space. Failure to execute the lease within the prescribed time
period terminates Tenants First Right to Lease.
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ARTICLE XXIV
MISCELLANEOUS
24.0.1 In the event Tenant does not receive authorization to
operate a lending institution in the State of West Virginia, Tenant may upon
thirty (30) days written notice to Lessor, terminate this Lease.
24.0.2 Notwithstanding any other provisions contained in this
lease, in the event a) Lessee or its successors or assignees shall become
insolvent or bankrupt, or if it or their interests under this lease shall be
levied upon or sold under execution or other legal process, or b) the depository
institution then operating on the Premises is closed, or is taken over by any
depository institution supervisory authority ("Authority"), Lessor may, in
either such event, terminate this Lease only with the concurrence of any
Receiver or Liquidator appointed by such Authority; provided, that in the event
this lease is terminated by the Receiver or Liquidator, the maximum claim of
Lessor for rent, damages, or indemnity for injury resulting from the
termination, rejection, or abandonment of the unexpired Lease shall by law in no
event be in an amount equal to all accrued and unpaid rent to the date of
termination.
24.0.3 Permit the Lessor and its agents to enter upon the
Premises at all reasonable times to examine the condition thereof.
24.0.4 All notices, demands and requests which may be or are
required to be given hereunder shall be given in writing and shall be deemed to
have been duly given if sent by United States Registered or Certified Mail
addressed to Tenant as set forth in Section 2.0.12 and to Lessor as set forth in
Section 2.0.13 or to such other places as the parties hereto may for themselves
designate in writing from time to time for the purpose of receiving notices
hereunder.
24.0.5 This Lease shall be deemed to be executed and delivered
at the County in which the Premises are situate, and the laws of the State or
Commonwealth in which the Premises are situate shall be applicable thereto. The
division of this Lease into Articles and Sections and the use of headings for
said Articles is for the purpose of convenience only and not for the purpose of
construing this Lease.
24.0.6 If any term or provision, or any portion thereof, of
this Lease, or the application thereof to any person or circumstances shall, to
any extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby, and each term and provision of this Lease shall be valid and be
enforced to the fullest extent permitted by law.
24.0.7 Tenant shall, at any time and from time to time upon
not less than ten (10) days prior written request by Lessor execute, acknowledge
and deliver to Lessor an estoppel certificate stating whether or not this Lease
is unmodified and in full force and
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effect (or if there have been modifications, that the same is in full force and
effect as modified and stating the modifications), and, if the Lease is in full
force and effect, the dates to which the rent and other charges have been paid
in advance, and such other matters relating to this Lease as reasonably may be
requested by Lessor, it being intended that any such statement delivered
pursuant to this Section may be relied upon by any prospective purchaser,
assignee or encumbrancer of the Premises or the Property of which the Premises
are a part.
24.0.8 Tenant agrees to attorn to any successor in interest to
Lessor whether by purchase, foreclosure, sale in lieu of foreclosure, power of
sale, termination of ground lease or otherwise, if so requested or required by
such successor in interest, and Tenant agrees, upon demand, to execute
agreements in confirmation of such attornment.
24.0.9 All provisions of this Lease shall apply during the
Term of this Lease, during any and all extensions hereof and during all periods
before and after the Term hereof while Tenant occupies or has the right to
occupy the Premises.
24.0.10 If two or more individuals, corporations, partnerships
or other business associates (or any combination of two or more thereof) shall
sign this Lease as Tenant, the liability of each such individual, corporation,
partnership or other business associate to pay rent and perform all other
obligations hereunder shall be deemed to be joint and several. In like manner,
if the Tenant named in this Lease shall be a partnership or other business
association, the members of which are, by virtue of statute or general law,
subject to personal liability, the liability of each such member shall be joint
and several.
24.0.11 To secure payment of all amounts payable by Tenant
under this Lease, Lessor shall have a security interest in all Tenant's
Property, goods, equipment, inventory, accounts receivable, contract rights,
licenses, permits, other general intangibles and all assets and proceeds thereof
of Tenant, and upon request of Lessor, Tenant shall sign, deliver and pay for
filing any instruments reasonably requested by Lessor to separately document,
perfect and/or continue such security interest. Lessor shall sign such documents
as required to assist Tenant in obtaining loans or credit.
24.0.12 This Lease constitutes the entire contract between the
parties hereto, and there are no other understandings, oral or written, relating
to the subject matter hereof. This Lease may not be changed, modified or
amended, in whole or in part, except in writing signed by the parties.
24.0.13 The submission of this Lease to Tenant for examination
does not constitute a reservation of any rights to Tenant or option and this
Lease becomes effective only upon execution and delivery thereof by Lessor.
24.0.14 Advertisement of Premises - In the event the parties
hereto have not executed a renewal lease within one hundred eighty (180) days
prior to the termination of this lease, then the Lessor or its agents shall have
the right to enter the Premises at all reasonable times for the purpose of
exhibiting the same to others.
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24.0.15 Sale of Property by Lessor - In the event of the sale
of the real estate by Lessor, it shall be sold subject to this lease, but the
original Lessor shall then be released of all obligations under this lease and
the new owner shall be responsible, as the new Lessor, under the terms and
conditions of this lease. It is the intent that this lease shall run with the
land and not be personal to the landowners.
24.0.16 Limitation of Lessor's Liability - Notwithstanding
anything to the contrary contained herein, any liability incurred by the Lessor
to the Tenant shall not be of a personal nature and Tenant'S sole means of
recovery shall be against the real estate owned by Lessor at the location herein
leased, it being the specific intention to not encumber other assets of the
Lessor in this regard.
24.0.17 Force Majeure - In the event that there is a strike,
riot, shortage of material or other thing or item beyond the control of the
Lessor preventing the Lessor from performing under this lease, it shall not
constitute a breach or other violation of this lease for so long as the Lessor
is disabled by such act or governmental regulation from performing hereunder.
24.0.18 Relationship of Parties - Nothing contained in this
Lease shall be deemed or construed by the parties hereto or by any third party
to create a relationship of principal and agent or of partnership or of joint
venture or of any association whatsoever between Lessor and Tenant, it being
expressly understood and agreed that neither the computation of rent nor any
other provisions contained in this Lease nor any act or acts of the parties
hereto shall be deemed to create any relationship between Lessor and Tenant
other than the relationship of Lessor and Tenant.
IN WITNESS WHEREOF, the parties have duly executed and sealed
this Lease as of the date first above written.
WITNESS: Lessor:
PLATINUM PROPERTIES, LIMITED
LIABILITY COMPANY
/s/ BETH A. CORWIN By: /s/ PARRY PETROPLUS
- ------------------------------------ -------------------------------------
Its: Member
---------------------------------
WITNESS: Tenant:
CENTRA BANK
/s/ TIMOTHY P. SAAB By: /s/ DOUGLAS LEECH
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Its: President & CEO
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Exhibit 10.4
PREMISES LEASE AGREEMENT
Between
PLATINUM PLAZA LIMITED LIABILITY COMPANY
Lessor
and
CENTRA BANK
Tenant
2ND FLOOR COMPRISING 2,700 SQUARE FEET, MORE OR LESS,
PLATINUM PLAZA, MORGANTOWN, WEST VIRGINIA
Premises
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TABLE OF CONTENTS
I. Parties.................................................1
II. Defined Terms...........................................1
III. Premises................................................3
IV. Term and Possession.....................................4
V. Lessor's Warranty.......................................4
VI. Use.....................................................4
VII. Assignment or Subletting................................4
VIII. Rent....................................................5
IX. Taxes...................................................6
X. Insurance...............................................6
XI. Common Area Maintenance.................................7
XII. Utilities and Services..................................9
XIII. Alterations, Improvements, and Construction.............9
XIV. Repairs................................................10
XV. Rules and Regulations..................................11
XVI. Mortgages..............................................13
XVII. Tenant's Property......................................13
XVIII. Insurance & Indemnification............................13
XIX. Environmental..........................................15
XX. Condemnation...........................................16
XXI. Defaults...............................................16
XXII. Surrender..............................................18
XXIII. Miscellaneous..........................................18
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PREMISES LEASE AGREEMENT
ARTICLE I
PARTIES
1.1 This lease ("Lease") is made on or as of this ____ day of
August,1999, by and between PLATINUM PLAZA LIMITED LIABILITY COMPANY,
(hereinafter "Lessor"), and CENTRA BANK, (hereinafter referred to as "Tenant").
1.2 The parties hereto, for and in consideration of the mutual
covenants contained herein and with the specific intention of being legally
bound hereby and of so binding their respective heirs, administrators,
executors, successors and assigns, jointly and severally, agree as follows:
ARTICLE II
DEFINED TERMS
2.1 Any word or combination of words set forth herein within
quotation marks and with the first letter(s) of the word(s) capitalized shall be
a defined term, and when thereafter used herein with the letter(s) capitalized
shall have the meaning first indicated.
2.2 "Premises": 2nd Floor, Platinum Plaza Building, comprising
2,700 square feet, more or less, as further described in Article III.
2.3 " Proportionate Share ": The fraction or decimal
equivalent obtained by dividing 2,700 square feet by the total number of square
feet of floor area within the entire Premises.
2.4 "Term": Commencing on August 1, 1999, Tenant shall be
permitted to occupy the premises on a month-to-month basis. Lessor or Tenant may
terminate this Lease upon giving the non-terminating party 30-days written
notice of such intent to terminate the lease.
2.5 "Use": Tenant will use the Premises for the purposes of
the operation of a lending institution and ancillary financial services. Tenant
will not use the Premises for any other purpose without Lessor's prior written
consent, not to be unreasonably withheld.
2.6 "Fixed Rent": for each "Month" (as defined in Article 8):
Rental Rate: $15.50 per square feet
2.7 "Tenant's Share of Taxes": The Proportionate Share of:
(a) All "Taxes" (as defined in Section 9.2).
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(b) Tenant agrees to pay to Lessor each month in
advance, during the first calendar year of this Lease, Tenant's proportionate
share of Real Estate Taxes pertaining to the Platinum Plaza Building as defined
in Article 9. After the first year and any time thereafter, Lessor may advise
Tenant of any increase in said monthly payment which increased payment shall be
one twelfth (1/12) of the estimated real estate taxes for the current year.
Tenant shall thereafter pay said increased amount to Lessor each month in
advance. The increased payment shall be applied toward Tenant's proportionate
share of real estate taxes pertaining to the Platinum Plaza Building.
(c) Estimated monthly tax expense: $233.00 per month.
2.8 "Tenant's Share of Insurance": The Proportionate Share of:
(a) All "Insurance" (as defined in Section 10.2).
(b) Tenant agrees to pay to Lessor each month in advance,
during the first calendar year of this Lease, Tenant's proportionate share of
Insurance pertaining to the Platinum Plaza Building as defined in Article 10.
After the first year and any time thereafter, Lessor may advise Tenant of any
increase in said monthly payment which increased payment shall be one twelfth
(1/12) of the estimated insurance premiums for the current year. Tenant shall
thereafter pay said increased amount to Lessor each month in advance. The
increased payment shall be applied toward Tenant's proportionate share of
insurance premiums pertaining to the Platinum Plaza Building.
(c) Estimated monthly insurance expense: $34.00 per month.
2.9 "Tenant's Share of Lessor's Operating Costs of Common
Area": Amount Equal to:
(a) Proportionate Share of "Lessor's Operating Costs" (as
defined in Article 11).
(b) Tenant agrees to pay to Lessor each month in advance,
during the first calendar year of this Lease the sum of $1,299.00 per month and
the total amount of said monthly payments accumulated in Tenant's account shall
be applied towards Tenant's proportionate share of Lessor's Operating Costs
pertaining to the Platinum Plaza Building as defined in Article 11. After the
first year and any time thereafter, Lessor may advise Tenant of any increase in
said monthly payment which increased payment shall be one twelfth (1/12) of the
estimated Lessor's Operating Costs for the current year. Tenant shall thereafter
pay said increased amount to Lessor each month in advance. The increased payment
shall be applied toward Tenant's proportionate share of Lessor's Operating Costs
pertaining to the Platinum Plaza Building.
2.10 " Security Deposit": None
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2.11 "Tenant's Trade Name and Notice Address": Centra Bank,
Post Office Box 656, Morgantown, West Virginia 26507.
2.12 "Lessor's Notice Address": Platinum Properties, c/o
Petroplus and Associates, Inc., 1000 Hampton Center, Suite C, Morgantown, WV
26505
ARTICLE III
PREMISES
3.1 Lessor hereby leases to Tenant, and Tenant hereby rents
from Lessor, the Premises as defined in Section 2.2, including all Improvements,
as hereinafter defined, and together with all appurtenances, including use with
others of the Common Areas, as hereinafter defined, to have and to hold unto
Tenant for and during the term hereinafter set forth.
3.2 Lessor reserves the sole and exclusive right, from time to
time, to change the Premises in any way it may desire, including, but not
limited to, construction of additions, removal of building or parts of buildings
and alteration of Common Areas.
3.3 Lessor reserves the sole and exclusive right to use all or
any part of the roof of the Premises for any purpose; to erect additional
stories or other structures over all or any part of the Premises; to erect in
connection with the construction thereof temporary scaffolds and other aids to
construction on the exterior of the Premises, provided that access to the
Premises shall not be denied; to install, maintain, use, repair and replace
within the Premises pipes, ducts, conduits, wires and all other mechanical
equipment servicing other parts of the Premises, the same to be in locations
within the Premises as will not deny Tenant's use thereof; and to make any use
it desires of the side or rear walls of the Premises, provided that such use
shall not encroach on the interior of the Premises.
3.4 The Premises have been inspected by Tenant, and Tenant
agrees to accept the same in their present "AS IS" condition and in the
condition in which the Premises may be on the commencement date of this Lease,
with the understanding that the Premises will be subject to ordinary wear and
tear from the date hereof until commencement of the term.
ARTICLE IV
TERM AND POSSESSION
4.1 The term of this Lease shall commence on August 1, 1999,
and shall be for a period of time set forth in Section 2.4.
4.2 Lessor, its agents, employees and contractors, shall have
the right to enter all parts of the Premises during Tenant's operating hours to
inspect the same, to enforce and carry out any provision of this Lease, and,
without assuming responsibility to do so, to
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make repairs or alterations. In the event of an emergency endangering life or
property or in the event of desertion of the Premises, Lessor shall have the
right to enter by force.
ARTICLE V
LESSOR'S WARRANTY
5.1 Lessor hereby warrants that it and no other person or
corporation has the right to lease the Premises. Tenant shall have quiet and
peaceful possession of the Premises without hindrance on the part of Lessor, and
Lessor shall warrant and defend Tenant in such quiet and peaceful possession
against the claims of all persons claiming by, through or under Lessor, so long
as Tenant shall not be in default hereunder.
ARTICLE VI
USE
6.1 Tenant shall use the Premises only in a safe and lawful
manner for the purpose set forth in Section 2.5.
6.2 At all times and in all respects Tenant shall comply with
all statutes, laws, ordinances and regulations of every governmental authority
having jurisdiction.
6.3 Tenant will conduct business on the Premises only in the
Tenant's Trade Name as specified in Section 2.11, unless the use of some other
name is approved in writing by Lessor.
6.4 Lessor reserves the right to completely close the entire
Premises and Common Area to all traffic for a period of 24 hours once every 10
years after 30 days notice to all Tenants. Said closure shall not occur during
normal business operating hours.
ARTICLE VII
ASSIGNMENT OR SUBLETTING
7.1 Tenant will not assign this Lease, in whole or in part,
nor sublet all or any part of the Premises, nor license concessions or lease
departments therein, without first obtaining the written consent of Lessor,
which consent shall not be unreasonably withheld, any attempts at assigning or
subletting without Lessors consent shall be null and void. Consent by Lessor to
any assignment or subletting shall not constitute a waiver of the necessity for
such consent to any subsequent assignment or subletting. This prohibition
includes any subletting or assignment, which would otherwise occur by operation
of law, merger, consolidation, reorganization, transfer or other change of
Tenant's corporate or proprietary structure.
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7.2 If Tenant is a corporation and if at any time during the
Term, any part or all of the corporate shares shall be transferred by sale,
assignment, bequest, inheritance, operation of law or other disposition so as to
result in a change in the present control of said corporation by the person or
persons now owning a majority of said corporate shares, Tenant shall notify
Lessor of this event within fifteen (15) days from the date of such transfer and
if Lessor's financial risk is increased or if the operation of the business is
significantly altered as a result of such change in control Lessor may terminate
this Lease at any time after such change by giving Tenant sixty (60) days
written notice.
7.3 If Lessor consents to assignment or sublease the following
shall be applicable:
(a) The proposed Tenant will not be violating any
prohibitive use in this lease or with any existing Tenant in the Premises at the
time of said assignment; and
(b) The new Tenant assumes in writing, in a form
satisfactory to Lessor, the obligations under this lease on behalf of Tenant;
and
(c) Tenant and any guarantor shall remain fully liable as
the primary obligor under this lease.
(d) The Tenant has not violated any terms or conditions of
this Lease Agreement.
ARTICLE VIII
RENT
8.1 Tenant covenants and agrees to pay to Lessor, as rent for
the Premises the Fixed Rent set forth in Section 2.6.
8.2 Fixed Rent shall be payable without deduction or setoff in
equal monthly installments in advance on the first day of each full calendar
month during the Term, the first such payment to include any prorated Fixed Rent
for the period from the date of the commencement of the Term to the first day of
the first calendar month in the Term. The first such payment of the Fixed Rent
shall be due and payable on August 1, 1999.
8.3 It is understood and agreed that the basic consideration
for this Lease is Tenant's covenant to pay the total sum of the Fixed Rent set
forth in Section 2.6 for the original Term, and other amounts payable by Tenant
hereunder. The reason that the rates of installments may differ is to defer
payment of some of the rent from the early part of the Term to the latter part
for the convenience of the Tenant. Under these circumstances, it is not
contemplated that any governmental rent control or freeze will excuse Tenant
from paying any part of the rent as agreed.
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8.4 All rent and other amounts payable by Tenant hereunder
shall be paid to Lessor without demand or deduction at the Lessor's Notice
Address set forth in Section 2.12 or such other place as Lessor from time to
time may designate.
8.5 Anything in this Lease to the contrary notwithstanding, at
Lessor's option, Tenant shall pay, as additional rent, a late charge in the
amount of Fifty ($50.00) Dollars for any rent payment not made within seven (7)
days after the due date thereof to cover the extra expense involved in handling
delinquent payments.
ARTICLE IX
TAXES
9.1 Tenant shall pay monthly, in addition to rent hereunder,
Tenant's pro-rata Share of Taxes (as specified in Section 2.7 and as defined in
Section 9.2).
9.2 "Taxes" include all real estate and other ad valorem taxes
and assessments applicable to the Premises and any other tax imposed against
Lessor with respect to the Premises by federal, state or local taxing
authorities as a substitution for or in addition to the current method of
property taxation used for the funding of governmental services and the cost,
including attorneys and appraisers' fees, of any contest or appeal pursued by
the Lessor in an effort to reduce the amount of tax or assessment with respect
to the Premises.
9.3 "Tax Year" means each twelve (12) month period (deemed,
for the purpose of this Article, to have 365 days) established as the real
estate Tax Year by the taxing authorities having lawful jurisdiction over the
Premises.
9.4 The tax payment if required hereunder shall be paid by
Tenant monthly.
9.5 Within sixty (60) days after Lessor's receipt of tax bills
for each Tax Year, or within a reasonable time thereafter in Lessor's
determination, Lessor will certify to Tenant:
(a) The amount of Taxes as specified above, and
(b) The amount of Tenant's Share of Taxes.
9.6 The failure of Lessor to Provide such certification within
the time prescribed above shall not relieve Tenant of its obligations generally
or for the specified Tax Year in which any such failure occurs.
9.7 For the Tax Year in which the Term commences or
terminates, the provisions of this Article shall apply, but Tenant's liability
for its proportionate share of any Taxes for such year shall be subject to a
pro-rata adjustment based upon the number of days of such Tax Year falling
within the Term.
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ARTICLE X
INSURANCE
10.1 Tenant shall pay monthly, in addition to rent hereunder,
Tenant's pro-rata Share of Insurance (as defined in Section 2.8 and defined in
Section 10.2).
10.2 "Insurance" includes all insurance premiums and costs of
any kind or payable by the Lessor under or for any insurance policies applicable
during the Term in any respect to the Premises and the Common Area.
10.3 "Insurance Period" means each period established by
Lessor or its insurers as the period during which any insurance policies may be
in effect.
10.4 The insurance payment if required hereunder shall be paid
by Tenant in monthly installments.
10.5 Within sixty (60) days after Lessor's receipt of
insurance bills for each Insurance Period, Lessor will certify to Tenant:
(a) The amount of Insurance;
(b) The amount of Tenant's Share of Insurance; and
(c) The Insurance Period for which such Insurance is paid
or payable.
10.6 The failure of Lessor to provide such certification or to
provide bills under this Lease within the time prescribed therefore shall not
relieve Tenant of its obligations generally or for the specific Insurance Period
in which any such failure occurs.
ARTICLE XI
COMMON AREA MAINTENANCE
11.1 The Common Area which may be furnished by Lessor in or
near the Premises for the general common use of Tenants, their officers, agents,
employees and customers ("Common Area") including, without limitation, all
parking areas, access roads, employee parking areas, the truck way or ways,
driveways, pedestrian sidewalks, landscaped and planted areas, retaining walls,
stairways, bus stops, lighting facilities, and other areas and improvements,
shall at all times be subject to the exclusive control and management of Lessor.
Lessor shall have the right to establish, modify and enforce reasonable rules
and regulations with respect to the Common Area; to change the areas, locations
and arrangement thereof; to enter into, modify and terminate easement and other
agreements pertaining to the use and maintenance thereof; to restrict parking by
Tenants, their officers, agents, and employees to employee parking areas; to
close all or any portion of said parking areas or other Common Area to such
extent as may, in the opinion of Lessor be necessary to prevent
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a dedication thereof or the accrual of any rights to any person or to the public
therein; to close temporarily any or all portions of the said areas or
facilities; to discourage non customer parking; and to do and perform such other
acts in and to said areas and improvements as, in the exercise of good business
judgment, Lessor shall determine to be advisable with a view to the improvement
of the convenience and use thereof by Tenants, their officers, agents, employees
and customers.
11.2 Lessor will operate and maintain the Common Area which
may be provided pursuant to this Section.
11.3 Lessor reserves the right in its sole discretion to
change, rearrange, alter, modify, reduce or supplement any or all of the Common
Area so long as adequate facilities in common are made available to the Tenant
herein.
11.4 The "Lessor's Operating Costs" shall be the cost and
expense of operating and maintaining the Common Area which may be provided
whether or not located on land within the Premises Area in a manner deemed by
Lessor to be reasonable and appropriate and for the best interests of the
Premises; including, without limitation, all costs and expense of operating,
repairing, lighting, cleaning, painting, striping, policing and providing
security (including the cost of uniforms, equipment and all employment taxes);
operating, maintenance, repairs and replacements of signs, displays, and
decorations; removal of snow, ice and debris; regulation of traffic; inspections
and depreciation of machinery and equipment used in the operation and
maintenance of the Common Area and personal property taxes and other charges
incurred in connection with such equipment; replacement of paving, curbs,
sidewalks, landscaping, drainage, pipes, ducts, conduits and similar items, and
lighting facilities; planting, replanting and replacing flowers, shrubbery and
planters; rental of music program services and loudspeaker systems, including
furnishing electricity therefore; and administrative costs equal to fifteen
percent (15%) of the total cost of operating and maintaining the Common Area.
11.5 Tenant shall pay to Lessor, in addition to rent
hereunder, Tenant's share of Lessor's Operating Costs of Common Area Maintenance
(as specified in Section 2.9) for and during each calendar year.
11.6 The charge required hereunder shall be paid by Tenant in
monthly installments.
11.7 If Tenant's Share of Lessor's Operating Costs of Common
Area is specified under Subsection 2.10 (a), then within ninety (90) days after
Lessor's calculation of such costs, or within a reasonable time thereafter in
Lessor's determination, Lessor will certify to Tenant:
(a) The amount of Lessor's Operating Costs;
(b) The amount of Tenant's Share of Lessor's Operating
Costs; and
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(c) The calendar year for which such Operating Costs are
paid or payable.
11.8 The failure of Lessor to provide such certification under
this Lease or to provide bills under this Lease within the time prescribed
therefor shall not relieve Tenant of its obligations generally or for the
specific calendar year for which any such failure occurs.
11.9 For the calendar year in which the Lease commences or
terminates, the provisions of this Article shall apply, but Tenant's liability
for Lessor's Operating Costs of Common Area for such calendar year shall be
subject to a pro-rata adjustment based upon the number of days of such calendar
year falling within the Term.
ARTICLE XII
UTILITIES AND SERVICES
12.1 Lessor shall incur no liability whatsoever should any
utility become unavailable from any public utility company, public authority or
any other person, firm or corporation, including Lessor, supplying such utility.
Discontinuance of any service shall not constitute an eviction, constructive or
otherwise.
12.2 In the event that the charges for water, sewage, waste
disposal, any utilities or services to or for the Premises are included in a
charge for property of which the Premises are only a part and allocation of
which charge or charges is not readily ascertainable, the determination of the
portion thereof applicable to the Premises shall be made by Lessor on the basis
of its best estimate of the amount of use by respective users and such other
factors as may be pertinent for a reasonable division and allocation of the
same.
12.3 If Tenant fails to pay any charge for water, sewage or
other utility or service payable by Tenant hereunder, Lessor may elect to pay
the same and shall have the right to collect the same and any expense incurred
by Lessor in connection therewith from Tenant by exercising all remedies
provided by law and provided herein for collection of rent. In addition to other
remedies, Lessor reserves and shall at all times have the right to cut off and
discontinue, without notice to Tenant, water, electricity, heating and air
conditioning, or other utilities and services whenever Tenant has failed to pay
in accordance with the terms of this Lease any amounts due by Tenant for rent or
otherwise. Lessor shall not be liable for any such discontinuance and the same
shall not constitute a termination of this Lease, or eviction, constructive or
otherwise.
ARTICLE XIII
ALTERATIONS, IMPROVEMENTS, AND CONSTRUCTION
13.1 Tenant shall not make any alterations or improvements to,
erect any sign on, or remove anything except Tenant's Property (as herein
defined) from the Premises without first obtaining the approval in writing of
Lessor, and Lessor's approval thereof shall
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not be withheld unreasonably. Plans and specifications for alterations,
improvements and exterior signs shall be submitted to Lessor prior to the
commencement of any work on the premises.
13.2 All construction work and materials attached to, affixed
to, or installed in, the Premises by any party or person, including but not
limited to heating, air conditioning, ventilating, plumbing and electrical
equipment and facilities, floor, wall and ceiling covering, store fronts,
additions, renovations and replacements (separately and collectively the
"Improvements") immediately shall become part of the Premises and property of
Lessor. However, improvements made by Tenant that do not become permanent
fixtures shall remain the property of Tenant.
13.3 All plans and specifications required hereunder shall be
prepared by, and the Improvements to be made pursuant thereto shall be performed
by, persons duly qualified to do the work in the jurisdiction wherein the
Premises are situate and shall comply with all applicable codes, rules,
regulations and ordinances.
13.4 Tenant shall secure all permits and licenses necessary or
required for construction, operation, signage and occupancy of the Improvements.
Lessor shall have final approval of all signage. Lessor shall cooperate with
Tenant but shall not be obligated to obtain or be responsible for failure to
obtain such permits and licenses.
13.5 All contracts for labor and/or material in excess of Two
Thousand Dollars ($2,000.00) shall be in writing, and shall contain a waiver of
lien provision. Tenant shall not permit mechanic liens to be placed upon the
Premises.
13.6 Tenant agrees to pay for all work and materials and
nothing contained in this Lease shall authorize or empower Tenant to do any act
which shall in any way encumber Lessor's title to any claim by way of lien or
encumbrance whether claimed by operation of law or by virtue of any expressed or
implied contract of Tenant, and any claim to a lien upon the Building or
Premises arising from any act or omission of Tenant shall attach only against
Tenant's interest and shall in all respects be subordinate to Lessor's title to
the Building and Premises. If Tenant has not removed any such lien or
encumbrance within fifteen (15) days after written notice to Tenant by Lessor,
Lessor may, but shall not be obligated to pay the amount necessary to remove
such lien or encumbrance, without being responsible for making any investigation
as to the validity or accuracy thereof, and the amount so paid together with all
costs and expenses (including attorneys' fees) incurred by Lessor shall be
deemed additional rent reserved under this Lease due and payable forthwith.
13.7 All Improvements approved by Lessor shall be made at the
sole cost and expense of Tenant.
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ARTICLE XIV
REPAIRS
14.1 Lessor shall be responsible for all repair to the roof,
exterior, foundation and structural portions of the building not a result of any
action or negligence on the part of the Tenant. The Lessor shall repair any roof
leaks within seven (7) days after receipt of notice from Tenant to Lessor.
14.2 Tenant shall keep and maintain the Premises and every
part thereof clean and in good order and condition and shall make all repairs
and replacements thereto and to each and every part thereof which may be
necessary, required or desired. Without limiting the generality of the
foregoing, Lessor shall establish a capital reserve account into which Lessor
shall deposit $.50 per square foot of Tenants rent into said account. The
capital revenue account shall be utilized in the sole discretion of Lessor to
maintain or replace the heating, ventilating, and air conditioning system and
any other capital improvements to the Platinum Plaza Building or Common areas.
14.3 Tenant shall install and replace such signs, decorations,
lettering, advertising matter and other things as may be approved by Lessor,
said approval not to be unreasonably withheld, and keep and maintain the same in
good condition and repair and in keeping with the image, character and standards
as may be established from time to time by Lessor for the Premises and shall
make such replacements as may be necessary.
14.4 In the event that Tenant shall fail, within thirty (30)
days after notice in writing by Lessor, to make repairs or replacements to the
Premises, the Improvements, the signs or any part thereof which may be necessary
or required, Lessor may make the same and collect the costs thereof and expenses
incurred in connection therewith, together with interest thereon at the then
prevailing commercial rate from Tenant, by exercising all remedies provided by
law and provided herein for collection of rent.
14.5 In the event that the portion of the Premises which
Tenant has agreed to maintain, if any, shall be damaged or destroyed as a result
of fire, casualty or other occurrence, Tenant shall remove any resulting debris
and repair or replace such damaged structure promptly, and if Tenant fails to
commence required restoration work within ninety (90) days from the date of such
damage or destruction or fails to diligently proceed to complete the same,
Lessor's remedy shall be the right and option to terminate the Term of this
Lease by giving Tenant written notice of Lessor's election to do so at any time
prior to completion of the repairs or replacements if Tenant shall not then be
actively undertaking such restoration work.
ARTICLE XV
RULES AND REGULATIONS
15.1 In regard to use and occupancy of the Premises and Common
Area, Tenant shall at its expense: (a) keep the inside and outside of all glass
in the doors and windows of the Premises clean; (b) keep all exterior store
surfaces of the Premises clean; (c) replace promptly any cracked or broken glass
of the Premises with glass of like kind and quality; (d) maintain the Premises
in a clean, orderly and sanitary condition and free of
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insects, rodents, vermin and other pests; (e) keep any garbage, trash, rubbish
or refuse in rat-proof containers within the interior of the Premises until
removed; (f) have such garbage, trash, rubbish and refuse removed on a daily
basis; (g) keep all mechanical apparatus free of vibration and noise which may
be transmitted beyond the Premises; (h) comply with all laws, ordinances rules
and regulations of governmental authorities and all recommendations of the Fire
Underwriters Rating Bureau now or hereafter in effect; (i) maintain window
displays, advertising matter, signs, merchandise and store fixtures in keeping
with the image, character and standards of the Premises, as determined by
Lessor; (j) maintain such regular service contracts with professionals for
air-conditioning maintenance, pest extermination, refuse removal, cleaning, etc.
as may be required by and subject to the approval of Lessor; and (k) conduct its
business in all respects in a dignified manner in accordance with high standards
of store operation consistent with the quality of operation of the Premises as
determined by Lessor and to provide an appropriate mercantile quality within the
entire Premises.
15.2 In regard to use and occupancy of the Premises and Common
Area, Tenant shall not: (a) use or permit the use of any objectionable
advertising medium such as, without limitation; loudspeakers, phonographs,
public address systems, sound amplifiers, reception of radio or television
broadcasts within the Premises which is in any manner audible or visible outside
of the Premises; (b) permit accumulations of garbage, trash, rubbish or other
refuse within or without the Premises; (c) cause or permit objectionable odors
to emanate or be dispelled from the Premises; (d) solicit business in the
parking or other Common Area; (e) distribute handbills or other advertising
matter to, in or upon any automobiles parked in the parking area or in any other
Common Facility; (f) permit the parking of delivery vehicles so as to interfere
with the use of any driveway, foot walk, parking area or other Common Facility
in the Premises; (g) place or suffer to be placed or maintain on the exterior of
the Premises any sign, advertising matter or any other thing of any kind or
maintain any decoration, lettering or advertising matter on the glass of any
window or door of the Premises, or paint or decorate any part of the exterior of
the Premises, or any part of the interior visible from the exterior thereof,
without first obtaining Lessor's written approval; (h) use of foot walk or any
other Common Facility adjacent to the Premises for the sale or display of any
merchandise for any other business, occupation or undertaking; (i) conduct or
permit to be conducted any action, fire, going out of business, bankruptcy, or
other similar type sale in or connected with the Premises; or (j) use or permit
the use of any portion of the Premises for any unlawful purpose.
15.3 Tenant shall comply with other rules and regulations
which may be adopted by Lessor from time to time and which are reasonably and
uniformly applied.
15.4 Tenant shall at all times fully comply with the Americans
With Disabilities Act, as the same may be amended from time to time or any
successor statute and any rules and regulations promulgated thereunder
(collectively, the "Act") and shall, at its sole cost and expense, make any and
all alterations and improvements to the Premises necessary to comply with the
Act. However, before Tenant shall make any alterations or improvements to the
Premises in order to comply with the Act, Tenant shall first obtain the approval
in writing of Lessor for such alterations or improvements, which approval shall
not be unreasonably withheld. Tenant shall further comply with Sections 15.1,
15.2, and 15.4
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with respect to any alterations or improvements made pursuant to this Section.
Tenant shall fully indemnify Lessor from and against any and all claims or
demands of any person or entity (including, but not limited to, any governmental
entity) arising out of Tenant's failure to fully comply with the terms of the
Act.
ARTICLE XVI
MORTGAGES
16.1 This Lease and the rights of Tenant hereunder shall be
subordinate to the lien of any mortgage or security interest on the Premises or
any part thereof or on the property of which the Premises are a part, and shall
be subordinate to the Lessor; provided, however, that subordination to liens
created hereafter shall be contingent upon agreement by the holder or holders of
any subsequent liens that this Lease shall not be divested by foreclosure or
execution on such subsequent mortgage or security interests and that Tenant's
possession of the Premises shall not be disturbed so long as Tenant should not
be in default hereunder.
ARTICLE XVII
TENANT'S PROPERTY
17.1 All property, other than Improvements (as defined in this
Lease) placed on the Premises by Tenant, including signs, inventory, furniture,
trade fixtures, appliances, expendable, books, records, cash and personal items
of clothing and sundries, shall be deemed to be "Tenant's Property".
17.2 So long as Tenant is not in default under this Lease,
Tenant may remove any of Tenant's Property without Lessor's consent, provided
such removal does not damage the Premises.
ARTICLE XVIII
INSURANCE AND INDEMNIFICATION
18.1 Tenant shall maintain and keep in force policies of
public liability insurance against claims for personal injury, death and
property damage occurring in or about the Premises or arising out of the use or
occupancy thereof, naming both Lessor and Tenant as Insured with coverage in the
amounts of not less than Five Hundred Thousand Dollars ($500,000.00) for bodily
injury or death to one person, not less than One Million Dollars ($1,000,000.00)
for bodily injuries or deaths arising out of one occurrence and not less than
One Hundred Thousand Dollars ($100,000.00) for property damage.
18.2 Tenant shall maintain and keep in force policies of
insurance against loss to the contents on the Premises, including but not
limited to Tenant's Property as a result of fire, theft or other insurance
casualty, in adequate amounts, including any damages
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resulting from environmental pollutant discharges caused by Tenant's negligence
in the operation of the Premises, the clean up of such spills or discharges
and/or any resulting liability for the spill, discharge, or remediation shall be
the sole responsibility of the Tenant. In addition, it is further agreed that
the Tenant shall fully indemnify the Lessor from any fines or penalties assessed
by any governmental agency, damages and losses that the Lessor may incur as the
result of any environmental pollutant or hazard discharges caused by the
Tenant's negligence or from any other sources or acts of third parties not the
result of any acts or negligence of the Lessor.
18.3 Tenant shall maintain and keep in force policies of
insurance against loss by vandalism, malicious mischief or breakage of glass in
adequate amounts.
18.4 All policies of insurance required to be maintained by
Tenant hereunder shall be obtained from insurance companies authorized to engage
in business in the Commonwealth or State in which the Premises are located.
Copies of the policies and certificates evidencing the effective dates and that
they will not be canceled without at least ten (10) days notice in writing shall
be delivered to Lessor.
18.5 All losses resulting from vandalism, malicious mischief
or broken glass not covered by insurance shall be the sole responsibility of
Tenant.
18.6 Tenant hereby waive any right of subrogation that
Tenant's insurance carrier at any time may have against Lessor or Lessor's
agents and employees, and shall release Lessor from any liability for any loss
of or damage to any property or person on the Premises.
18.7 Lessor hereby waive any right of subrogation that
Lessor's insurance carrier at any time may have against Tenant or Tenant's
agents and employees, and shall release Tenant from any liability for any loss
of or damage to any property or person on the Premises.
18.8 Tenant shall keep and save Lessor harmless from any
penalty, claim, demand, loss, damage, charge, cost or expense including but not
limited to attorneys' fees imposed or incurred for violation of any ordinance or
law, whether occasioned due to the neglect of Tenant or any agent of or
contractor under Tenant then upon or using the Premises, or otherwise howsoever,
or arising or allegedly arising out of any accident or other occurrence causing
injury to any person or property and due directly or indirectly to the condition
of or the use or occupancy of the Premises.
18.9 Tenant will not do or suffer to be done, or keep or
suffer to be kept, anything in, upon or about the Premises which will contravene
Lessor's policies insuring against loss or damage by fire or other hazards
(including, without limitation, public liability) or which will prevent Lessor
from procuring such policies in companies acceptable to Lessor. If anything
done, omitted to be done or suffered by Tenant to be kept in, upon or about the
Premises shall cause the rate of fire or other insurance upon the Premises or on
other property of Lessor or of others within the Premises to be increased beyond
the minimum rate from time to time applicable thereto, Tenant will pay, as
additional rent, the amount of any such increase upon Lessor's demand.
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ARTICLE XIX
ENVIRONMENTAL
19.1 In the event Tenant will be using any materials in the
operation of its business on the Premises which are or may be deemed to be toxic
or hazardous materials, Tenant's storage and use of such materials on the
Premises shall be subject to all laws and regulations now in effect or hereafter
enacted which deal with or relate to the regulation or protection of the
environment (Environmental Laws), including the ambient air, ground water,
surface water, and land use, including substrata land. In addition, Tenant
agrees to the following:
(a) Tenant shall, at Tenant's own expense, comply with
all present and hereafter enacted Environmental Laws, and any amendments
thereto, affecting Tenant's use or occupancy of the Premises or any operation of
Tenant thereon or therefrom.
(b) Tenant shall immediately notify Lessor of any of the
following:
(i) Receipt of any correspondence or any other
communication from any governmental entity regarding the
application of any Environmental Laws to the Premises or
Tenant's use or occupancy of or operation on the
Premises.
(ii) Any change in Tenant's operation on the Premises
which will change or has the potential to change Tenant's
or Lessor's obligations or liabilities under any of the
Environmental Laws.
(c) Tenant shall indemnify, protect, defend, and hold
Lessor, its partners, officers, directors, employees, and agents, and their
successors and assigns, harmless from and against any and all losses,
liabilities, damages, expenses (including, but not limited to, reasonable
investigation and legal fees and expenses), claims, and actions resulting from
or relating to any alleged or actual injury, liability, or damage to persons or
property; and any and all claims or actions brought by any person, firm,
governmental body, or other entity alleging or resulting or arising from or in
connection with contamination or adverse effects on the environment, or
violation of any Environmental Law or other statute, law, ordinance, rule,
regulation, judgment, or order of any governmental or judicial entity; and from
and against any and all damages, liabilities, costs, fines, and penalties
assessed as a result of any activity or operation on the Premises during the
term of this Lease, except for damage or injury caused by Lessor or Lessor's
agents. Tenant's obligations and liabilities under this section shall continue
as long as Lessor bears any liability or responsibility under the Environmental
Laws or any other statute or law for any act which occurred on the Premises
during the term of this Lease. Tenant's failure to abide by the terms of this
Section shall be restrainable by injunction. The obligations set forth in this
section shall survive the
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expiration or sooner termination of this Lease. Tenant shall require all of its
Subtenants and licensees to agree to the provisions of this Section in favor of
Lessor and the other persons set forth above.
19.2 Lessor has received no written notice from any
governmental authority having jurisdiction over the Premises that the Premises
are in violation of the Comprehensive Environmental Response, Compensation and
Liability Act of 1989, as amended (CER-CLA(c)), the Resources Conservation and
Recovery Act of 1976, as amended (ARCRA(c)), the Toxic Substance Control Act, as
amended, the Hazardous Materials Transportation Act, as amended, or any statute
governing underground storage tanks or asbestos. Lessor shall indemnify and hold
Tenant harmless from and against any and all claims, demands, or losses in
connection with the release of hazardous materials caused by Lessor.
ARTICLE XX
CONDEMNATION
20.1 If the whole or any part of the Premises shall be taken
under the power of eminent domain, this Lease shall terminate as to the part so
taken on the date Tenant is required to yield possession thereof to the
condemning authority. Lessor shall make such repairs and alterations as may be
necessary in order to restore the part not taken to useful condition and the
Annual Basic Rental shall be reduced proportionately as to the portion of the
Premises so taken. If the portion of the Premises so taken substantially impairs
the usefulness of the Premises for the purposes set forth in Section 2.6 in the
opinion of either party, either party may terminate this Lease as of the date
when Tenant is required to yield possession. Tenant shall not be entitled to any
portion of the award for the fee or leasehold of the Premises, the property of
Lessor of which the Premises are a part or any part thereof, and the entire
award shall belong to Lessor; provided, however, Tenant may apply for
reimbursement from the condemning authority for moving expenses, dislocation
damages and other special benefits, if any allowed by law, with the
understanding that Lessor's portion of any award shall not be diminished by any
claim on behalf of Tenant to a bonus value as a result of the amount of rent
payable hereunder being less than the fair market rental value of the Premises
or by any other claim of Tenant.
ARTICLE XXI
DEFAULTS
21.1 If Tenant shall fail at any time to make any payment or
to perform any act on its part to be made or performed under this Lease in
accordance with the terms hereof, Lessor, at its sole discretion, without notice
or demand, and without waiving or releasing Tenant from any obligation of Tenant
hereunder may make such payment or perform such act to the extent that Lessor
may deem desirable, and in connection therewith may employ attorneys and pay
expenses. All sums so paid by Lessor and all reasonable expenses in connection
therewith and all rent and other charges payable by Tenant hereunder shall bear
interest thereon at the then prevailing commercial rate from the date of such
payment by
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Lessor or the date such payment by Tenant was due, as the case may be, and shall
be deemed to be payable by Tenant to Lessor and may be collected by exercising
all remedies provided by law and provided herein for collection of rent.
21.2 If Tenant shall default in the payment of any installment
of rent, additional rent or other amount provided for under this Lease as the
same becomes due and payable, or should an execution be issued against the
Tenant and a levy made upon the Tenant's interest in the Premises or any part
thereof, or bankruptcy proceedings be commenced by or against Tenant, or an
assignment be made by Tenant for the benefit or creditors, or a receiver be
appointed for Tenant, then and in such event the entire rent for the balance of
the term, at the option of Lessor, shall become due and payable at once as if by
the terms of this Lease it were all payable in advance.
21.3 Lessor shall have the right to distrain upon any property
on the Premises for unpaid rent, additional rent and other amounts payable by
Tenant hereunder.
21.4 If Tenant shall default in the payment of any installment
of rent, additional rent or other amount provided for under this Lease or in the
performance of any covenant or condition of this Lease and fail to cure or
commence and diligently proceed to cure such default within ten (10) days after
written demand by Lessor that the default be cured, Lessor, at its option, may
enter upon the Premises without process of law and take possession thereof,
together with all Improvements and appurtenances.
21.5 No waiver by Lessor of any breach by Tenant of any
covenants or conditions contained herein shall be construed to be a waiver of
any other covenant or condition or any succeeding breach of the same covenant or
condition. Termination of the Term, or the receipt of rent after default or
after judgment or after execution shall not deprive Lessor of any other actions
against Tenant for possession or for rent or for damages. Lessor may use the
remedies herein given or other prescribed by law, or both, as often as it may
deem necessary.
21.6 Bankruptcy of Tenant.
(a) Insolvency -If, at or before the commencement date of
the term of this lease, or if at any time during the term, there shall be filed
by or against Tenant in any Court pursuant to any statute, either of the United
States or of any state, a petition in bankruptcy or insolvency or for
reorganization of for the appointment of a receiver or trustee of all or a
portion of the Tenant'S property, and if within sixty (60) days thereof Tenant
fails to secure a discharge thereof, or if Tenant makes an assignment for the
benefit of creditors or petitions for or enters into an arrangement, then this
lease, at the option of Lessor, may be terminated, in which event neither Tenant
nor any person claiming through or under Tenant by virtue of any statute or of
an order of any Court, shall be entitle to possession or to remain in possession
of the Premises, but shall forthwith quit and surrender the Premises, and
Lessor, in addition to the other rights and remedies it has by virtue of any
other provision herein or else where in this lease contained, or by virtue of
any statute or rule of law, may
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retain as liquidated damages any rent or monies received by Lessor from Tenant
or others in behalf of Tenant.
(b) Acceleration - It is agreed that in the event of the
termination of this lease pursuant to paragraph (a) of this Section, Lessor
shall forthwith, notwithstanding any other provisions of this lease to the
contrary, be entitled to recover from Tenant as and for liquidated damages an
amount equal to the then cash value of the rent and other charges payable by
Tenant hereunder for the unexpired portion of the term demised, less they then
cash rental value of the Premises for the same period. Nothing herein contained
shall limit or prejudice the right of Lessor to prove for and obtain as
liquidated damages by reason of such termination, an amount equal to the maximum
allowed by any statute or rule of law in effect at the time when, and governing
the proceedings in which, such damages are to be proved, whether or not such
amount is greater, equal to, or less than the amount of the difference referred
to above.
ARTICLE XXII
SURRENDER
22.1 Tenant may, and at Lessor's request shall, remove all
Tenant's Property as defined herein, and Tenant agrees to repair any damage
caused by such removal promptly and at its sole cost and expense. Any property
not removed from the Premises at the expiration or earlier termination of this
Lease, at the option of Lessor, may forthwith become the property of Lessor.
ARTICLE XXIII
MISCELLANEOUS
23.1 In the event Tenant does not receive authorization to
operate a lending institution in the State of West Virginia, Tenant may upon
thirty (30) days written notice to Lessor, terminate this Lease.
23.2 Notwithstanding any other provisions contained in this
lease, in the event a) Lessee or its successors or assignees shall become
insolvent or bankrupt, or if it or their interests under this lease shall be
levied upon or sold under execution or other legal process, or b) the depository
institution then operating on the Premises is closed, or is taken over by any
depository institution supervisory authority ("Authority"), Lessor may, in
either such event, terminate this Lease only with the concurrence of any
Receiver or Liquidator appointed by such Authority; provided, that in the event
this lease is terminated by the Receiver or Liquidator, the maximum claim of
Lessor for rent, damages, or indemnity for injury resulting from the
termination, rejection, or abandonment of the unexpired Lease shall by law in no
event be in an amount equal to all accrued and unpaid rent to the date of
termination.
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23.3 Permit the Lessor and its agents to enter upon the
Premises at all reasonable times to examine the condition thereof.
23.4 All notices, demands and requests which may be or are
required to be given hereunder shall be given in writing and shall be deemed to
have been duly given if sent by United States Registered or Certified Mail
addressed to Tenant as set forth in Section 2.12 and to Lessor as set forth in
Section 2.13 or to such other places as the parties hereto may for themselves
designate in writing from time to time for the purpose of receiving notices
hereunder.
23.5 This Lease shall be deemed to be executed and delivered
at the County in which the Premises are situate, and the laws of the State or
Commonwealth in which the Premises are situate shall be applicable thereto. The
division of this Lease into Articles and Sections and the use of headings for
said Articles is for the purpose of convenience only and not for the purpose of
construing this Lease.
23.6 If any term or provision, or any portion thereof, of this
Lease, or the application thereof to any person or circumstances shall, to any
extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby, and each term and provision of this Lease shall be valid and be
enforced to the fullest extent permitted by law.
23.7 Tenant shall, at any time and from time to time upon not
less than ten (10) days prior written request by Lessor execute, acknowledge and
deliver to Lessor an estoppel certificate stating whether or not this Lease is
unmodified and in full force and effect (or if there have been modifications,
that the same is in full force and effect as modified and stating the
modifications), and, if the Lease is in full force and effect, the dates to
which the rent and other charges have been paid in advance, and such other
matters relating to this Lease as reasonably may be requested by Lessor, it
being intended that any such statement delivered pursuant to this Section may be
relied upon by any prospective purchaser, assignee or encumbrancer of the
Premises or the Property of which the Premises are a part.
23.8 Tenant agrees to attorn to any successor in interest to
Lessor whether by purchase, foreclosure, sale in lieu of foreclosure, power of
sale, termination of ground lease or otherwise, if so requested or required by
such successor in interest, and Tenant agrees, upon demand, to execute
agreements in confirmation of such attornment.
23.9 All provisions of this Lease shall apply during the Term
of this Lease, during any and all extensions hereof and during all periods
before and after the Term hereof while Tenant occupies or has the right to
occupy the Premises.
23.10 If two or more individuals, corporations, partnerships
or other business associates (or any combination of two or more thereof) shall
sign this Lease as Tenant, the liability of each such individual, corporation,
partnership or other business associate to pay
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rent and perform all other obligations hereunder shall be deemed to be joint and
several. In like manner, if the Tenant named in this Lease shall be a
partnership or other business association, the members of which are, by virtue
of statute or general law, subject to personal liability, the liability of each
such member shall be joint and several.
23.11 To secure payment of all amounts payable by Tenant under
this Lease, Lessor shall have a security interest in all Tenant's Property,
goods, equipment, inventory, accounts receivable, contract rights, licenses,
permits, other general intangibles and all assets and proceeds thereof of
Tenant, and upon request of Lessor, Tenant shall sign, deliver and pay for
filing any instruments reasonably requested by Lessor to separately document,
perfect and/or continue such security interest. Lessor shall sign such documents
as required to assist Tenant in obtaining loans or credit.
23.12 This Lease constitutes the entire contract between the
parties hereto, and there are no other understandings, oral or written, relating
to the subject matter hereof. This Lease may not be changed, modified or
amended, in whole or in part, except in writing signed by the parties.
23.13 The submission of this Lease to Tenant for examination
does not constitute a reservation of any rights to Tenant or option and this
Lease becomes effective only upon execution and delivery thereof by Lessor.
23.14 Advertisement of Premises - In the event the parties
hereto have not executed a renewal lease within one hundred eighty (180) days
prior to the termination of this lease, then the Lessor or its agents shall have
the right to enter the Premises at all reasonable times for the purpose of
exhibiting the same to others.
23.15 Sale of Property by Lessor - In the event of the sale of
the real estate by Lessor, it shall be sold subject to this lease, but the
original Lessor shall then be released of all obligations under this lease and
the new owner shall be responsible, as the new Lessor, under the terms and
conditions of this lease. It is the intent that this lease shall run with the
land and not be personal to the landowners.
23.16 Limitation of Lessor's Liability - Notwithstanding
anything to the contrary contained herein, any liability incurred by the Lessor
to the Tenant shall not be of a personal nature and Tenant's sole means of
recovery shall be against the real estate owned by Lessor at the location herein
leased, it being the specific intention to not encumber other assets of the
Lessor in this regard.
23.17 Force Majeure - In the event that there is a strike,
riot, shortage of material or other thing or item beyond the control of the
Lessor preventing the Lessor from performing under this lease, it shall not
constitute a breach or other violation of this lease for so long as the Lessor
is disabled by such act or governmental regulation from performing hereunder.
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23.18 Relationship of Parties - Nothing contained in this
Lease shall be deemed or construed by the parties hereto or by any third party
to create a relationship of principal and agent or of partnership or of joint
venture or of any association whatsoever between Lessor and Tenant, it being
expressly understood and agreed that neither the computation of rent nor any
other provisions contained in this Lease nor any act or acts of the parties
hereto shall be deemed to create any relationship between Lessor and Tenant
other than the relationship of Lessor and Tenant.
IN WITNESS WHEREOF, the parties have duly executed and sealed
this Lease as of the date first above written.
WITNESS: Lessor:
PLATINUM PROPERTIES, LIMITED
LIABILITY COMPANY
/s/ BETH A. CORWIN By: /s/ PARRY PETROPLUS
- ------------------------------------ -------------------------------------
Its: Member
---------------------------------
WITNESS: Tenant:
CENTRA BANK
/s/ TIMOTHY P. SAAB By: /s/ DOUGLAS LEECH
- ------------------------------------ -------------------------------------
Its: President & CEO
---------------------------------
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Exhibit 23.2
CONSENT OF ERNST & YOUNG LLP
We consent to the use of our report dated February 24, 2000, with respect to the
financial statements of Centra Bank, Inc. for the period ended December 31,
1999, included in the Pre-effective Amendment No. 1 to the Registration
statement of Centra Financial Holdings, Inc. (Form S-4 No 333-93437) and related
prospectus for the Registration of 1,200,000 shares, both filed with the
Securities and Exchange Commission.
March 10, 2000 /s/ Ernst & Young LLP
