<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
Centura Banks, Inc.
-------------------
(Name of Issuer)
Common Stock
------------
(Title of Class of Securities)
15640T100
--------------
(CUSIP Number)
Alexander M. Donaldson, Esq.
Executive Vice President
and
General Counsel
Triangle Bancorp, Inc.
4300 Glenwood Avenue
Raleigh, North Carolina 27612
(919) 881-0455
--------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 22, 1999
---------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 (the "Exchange Act") or otherwise subject to the liabilities of that
section of the Exchange Act but shall be subject to all other provisions of the
Exchange Act.
This Document Consists of 12 Pages.
An Exhibit Index Appears on Sequentially Numbered Page 12.
<PAGE> 2
CUSIP No. 15640T100 Schedule 13D Page 2 of 12
1. Name of Reporting Person: Triangle Bancorp, Inc.
I.R.S. Identification No. 56-1764546
2. Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [ ]
3. SEC Use Only
4. Source of Funds: WC, OO
5. Check Box if Disclosure of Legal Proceedings is
Required Pursuant To Items 2(d) or 2(e) [ ]
6. Citizenship or Place of Organization: North Carolina
Number of 7. Sole Voting Power: 0(1)
Shares
Beneficially 8. Shared Voting Power: 0(1)
Owned by
Each 9. Sole Dispositive Power: 0(1)
Reporting
Person 10. Shared Dispositive Power: 0(1)
With
11. Aggregate Amount Beneficially Owned by Each Reporting
Person: 0(1)
12. Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares [X]
13. Percent of Class Represented by Amount in Row 11: 0%(1)
14. Type of Reporting Person: HC, CO
- -----------------------
(1) The Reporting Person and the Issuer have entered into a stock option
agreement covering 2,256,000 shares of Centura Common Stock (as defined herein)
or approximately 7.3% of the total shares that would be outstanding following
exercise (including the shares issued upon exercise). Unless and until the
option granted thereunder is exercised by the Reporting Person, the Reporting
Person disclaims beneficial ownership of the shares covered by the stock option
agreement.
<PAGE> 3
CUSIP No. 15640T100 Schedule 13D Page 3 of 12
Item 1. Security and Issuer.
The title of the class of equity securities to which this Schedule 13D
relates is the common stock, no par value per share, of Centura Banks, Inc.
("Centura") (the "Centura Common Stock"). The address of the principal executive
offices of Centura is 134 North Church Street, Rocky Mount, North Carolina
27804.
Item 2. Identity and Background.
This statement is filed on behalf of Triangle Bancorp, Inc. ("Triangle").
Triangle is a North Carolina corporation with its principal executive offices at
4300 Glenwood Avenue, Raleigh, North Carolina 27612. Triangle is registered as a
bank holding company under the Bank Holding Company Act of 1956, as amended, and
is principally engaged in the business of managing and controlling banks and
activities closely related to banking.
Filed as Schedule I to this Schedule 13D is a list of the executive
officers and directors of Triangle containing the following information with
respect to each such person: (a) name, (b) business address and (c) present
principal occupation or employment, and the name and, if different than such
person's business address, the address of any corporation or other organization
in which such employment is conducted. Each person listed in Schedule I is a
United States citizen.
During the past five years, neither Triangle nor, to the best of Triangle's
knowledge, any person named in Schedule I: (i) has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors), or (ii) has
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result was or is subject to a judgment, decree
or final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws, or finding any
violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
It presently is anticipated that shares of Centura Common Stock as
described in Item 4 would be purchased either with working capital or funds
borrowed from one or more banks in the ordinary course of business; the identity
of such bank or banks has not yet been determined.
Item 4. Purpose of Transaction.
Pursuant to an Agreement and Plan of Reorganization, dated as of August 22,
1999 (the "Reorganization Agreement"), by and between Triangle and Centura, and
in consideration thereof, Centura issued an option to Triangle on August 22,
1999 (the "Option") to purchase, under certain conditions, up to 2,256,000
shares of Centura Common Stock subject to adjustment under certain circumstances
at a purchase price of $56.87 per share, subject to adjustment pursuant to
anti-dilution provisions (the "Purchase Price"). The Option was issued to
Triangle pursuant to a stock option agreement, dated as of August 22, 1999 (the
"Option
<PAGE> 4
CUSIP No. 15640T100 Schedule 13D Page 4 of 12
Agreement"), between Triangle and Centura. Copies of the Reorganization
Agreement and the Option Agreement are attached hereto as Exhibits 1 and 2,
respectively, and are incorporated herein by reference and made a part hereof to
the same extent as though set forth herein in full. Descriptions of certain
provisions of the Reorganization Agreement and the Option Agreement set forth
below are qualified in their entirety by reference to the Exhibits.
The Reorganization Agreement provides, among other things, for the merger
(the "Merger") of Triangle with and into Centura Merger Subsidiary, Inc.
("Merger Subsidiary"), a wholly-owned subsidiary of Centura, with Merger
Subsidiary as the surviving corporation, pursuant to a Plan of Merger to be
entered into by and between Triangle and Merger Subsidiary (the "Plan of
Merger"). A copy of the form of the Plan of Merger is attached hereto as Exhibit
3, and is incorporated herein by reference and made a part hereof to the same
extent as though set forth herein in full. Descriptions of certain provisions of
the Plan of Merger set forth below are qualified in their entirety by reference
to Exhibit 3. Upon consummation of the Merger, which is subject to the approval
of the Triangle and Centura stockholders, regulatory approvals, and the
satisfaction or waiver of various other terms and conditions, each share of
Triangle Common Stock (subject to certain exceptions) issued and outstanding
will be converted into 0.45 shares, subject to possible adjustment under certain
circumstances as set forth in the Plan of Merger, of Centura Common Stock, no
par value per share (the "Exchange Ratio"). The Reorganization Agreement also
provides that both Triangle and Centura will operate its respective business in
the usual, regular and ordinary course and will not take or agree to take
certain actions (described in the Reorganization Agreement) with respect to its
business without the prior written consent of the other party.
Under the Reorganization Agreement, Triangle has the right to terminate the
Reorganization Agreement during the ten-day period commencing two days after the
Determination Date (as defined in the Reorganization Agreement) if (i) the
Average Closing Price (as defined in the Reorganization Agreement) of Centura
Common Stock is less than the product of .80 and the Starting Price (as defined
in the Reorganization Agreement), and (ii) (a) the quotient obtained by dividing
the Average Closing Price by the Starting Price (such number being referred to
herein as the "Centura Ratio") shall be less than (b) the quotient obtained by
dividing the Index Price (as defined in the Reorganization Agreement) on the
Determination Date by the Index Price on the Starting Date (as defined in the
Reorganization Agreement) and subtracting 0.15 from the quotient. Centura has
the right to elect to adjust the Exchange Ratio in accordance with the terms of
the Reorganization Agreement, and thereby eliminate Triangle's right to
terminate the Reorganization Agreement.
The Option Agreement was executed to facilitate the consummation of the
Merger and provides that if (i) Triangle is not in material breach of the Option
Agreement or the Reorganization Agreement, and (ii) no injunction against
delivery of the shares covered by the Option is in effect, Triangle may exercise
the Option in whole or in part, at any time and from time to time following the
occurrence of certain events (each a "Purchase Event") and prior to the
termination of the Option, including, among others:
1. Centura shall have authorized, recommended, publicly proposed or publicly
announced an intention to authorize, recommend or propose, or entered into an
agreement with any person
<PAGE> 5
CUSIP No. 15640T100 Schedule 13D Page 5 of 12
(other than Triangle or any subsidiary of Triangle) to effect (each an
"Acquisition Transaction") (1) a merger, consolidation or similar transaction
involving Centura or its subsidiaries (with certain exceptions), (2) the sale,
lease, exchange or other disposition of 20% or more of the consolidated assets
of Centura and its subsidiaries, or (3) the issuance, sale or other disposition
of 20% or more of the voting securities of Centura or any of its subsidiaries;
or
2. any third party (other than Triangle or any subsidiary of Triangle)
acquires, or obtains the right to acquire, beneficial ownership of 20% or more
of the outstanding shares of Centura Common Stock;
provided, however, that the Option will terminate upon the earliest of: (i) the
Effective Time; (ii) termination of the Reorganization Agreement in accordance
with its terms (other than a termination of the Reorganization Agreement by
Triangle in the event of a material breach of a representation (but only if such
termination was a result of a willful breach by Centura), warranty, covenant or
agreement by Centura (each a "Default Termination")) prior to the occurrence of
a Purchase Event or a Preliminary Purchase Event (as defined below); (iii) 12
months after a Default Termination; and (iv) 12 months after any termination of
the Reorganization Agreement (other than a Default Termination) following the
occurrence of a Purchase Event or a Preliminary Purchase Event. For purposes of
the Option Agreement, a "Preliminary Purchase Event" means (A) the commencement
by any third party of a tender or exchange offer to purchase 15% or more of the
outstanding shares of Centura Common Stock, or (B) the occurrence of certain
circumstances surrounding the failure of the stockholders of Centura to approve
the Reorganization Agreement, the failure to hold a meeting of the Centura
stockholders to approve the Reorganization Agreement or the withdrawal or
modification in a manner adverse to Triangle of the recommendation of Centura's
Board of Directors with respect to the Reorganization Agreement.
At the request of Triangle at any time, beginning on the first occurrence
of certain events (each a "Repurchase Event"), including, among others, the
acquisition by a third party of 50% or more of the outstanding shares of Centura
Common Stock, and ending upon the earlier of 18 months immediately thereafter or
termination of the Option, Centura will repurchase from Triangle (i) the Option,
and (ii) all shares of Centura Common Stock purchased by Triangle pursuant to
the Option Agreement, at a specified price.
Upon the occurrence of certain events set forth in the Option Agreement
generally relating to the merger of Centura with, or sale by Centura of
substantially all of its assets to, a third party (other than Triangle or a
subsidiary of Triangle), the Option will, upon the consummation of any such
transaction and upon the terms and conditions set forth in the Option Agreement,
be converted into, or exchanged for, an option (the "Substitute Option"), at the
election of Triangle, of either the Acquiring Corporation (as defined in the
Option Agreement) or any person that controls the Acquiring Corporation (in each
case, such person being referred to as the "Substitute Option Issuer"). The
Substitute Option will have terms as similar as possible to, and not less
advantageous to Triangle than, those of the Option.
Except as otherwise set forth in Items 4, 5 and 6 hereof and the Exhibits
to this Schedule 13D (which are hereby incorporated by reference herein and made
a part hereof
<PAGE> 6
CUSIP No. 15640T100 Schedule 13D Page 6 of 12
to the same extent as though set forth herein in full), Triangle does not now
have any plans or proposals which relate to or would result in (i) the
acquisition by any person of additional securities of Centura, or the
disposition of securities of Centura; (ii) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving Centura
or any of its subsidiaries; (iii) any change in the present Board of Directors
or management of Centura, including any change in the number or term of Centura
directors or the filling of any existing vacancies on the Board of Directors of
Centura; (iv) any material change in the present capitalization or dividend
policy of Centura; (v) any other material change in the business or corporate
structure of Centura; (vi) changes in Centura's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of Centura by any person; (vii) causing a class of securities of Centura
to be delisted from a national securities exchange or to cease to be authorized
to be quoted in an inter-dealer quotation system of a registered national
securities association; or (viii) a class of equity securities of Centura
becoming eligible for termination of registration pursuant to Section 12(g)(4)
of the Exchange Act.
In connection with executing the Reorganization Agreement, Centura and
Triangle also entered into a stock option agreement pursuant to which Triangle
granted to Centura an option to purchase up to 5,014,000 shares of Triangle
Common Stock (representing 19.9% of the outstanding shares of Triangle Common
Stock without giving effect to the exercise of the option, or approximately
16.6% after taking into consideration the issuance of all 5,014,000 shares), at
a purchase price of $18.00 per share, upon certain terms and in accordance with
certain conditions comparable to those set forth in the Option Agreement.
Under the terms of each of the two stock option agreements between Triangle
and Centura, the Total Profit (as defined in the stock option agreements) and
the Notional Total Profit (as defined in the stock option agreements) that a
holder may realize under the stock option agreement may not exceed $25 million.
Item 5. Interest in Securities of the Issuer.
The 2,256,000 shares of Centura Common Stock which are purchasable by
Triangle upon exercise of the Option are equal to approximately 7.9% of Centura
Common Stock, based on the 28,465,362 shares of Centura Common Stock issued and
outstanding on August 22, 1999, before taking into consideration the 2,256,000
shares of Centura Common Stock that would be issued pursuant to the Option (or
approximately 7.3% after taking into consideration such shares).
The Option Agreement contains anti-dilution provisions which provide that
the number of shares of Centura Common Stock issuable upon exercise of the
Option and the Purchase Price will be adjusted upon the happening of certain
events, including the payment of a stock dividend, stock split, split-up,
recapitalization, combination, exchange of shares or similar transaction, as set
forth in the Option Agreement. If any additional shares of Centura Common Stock
are issued after the date of the Option Agreement other than those described in
the preceding sentence and shares issued upon exercise of the Option, the number
of shares subject to the Option shall be adjusted so that such number of shares
following such issuance (taking
<PAGE> 7
CUSIP No. 15640T100 Schedule 13D Page 7 of 12
into account the shares previously issued pursuant to the Option) shall not
exceed the lesser of (i) 8.2% of the number of shares of Centura Common Stock
then issued and outstanding without giving effect to the Option and (ii) that
minimum number of shares of Centura Common Stock which when aggregated with
other shares of Centura Common Stock beneficially owned by Triangle or any of
its affiliates would cause the provisions of any Takeover Laws (as defined in
the Reorganization Agreement) of the North Carolina Business Corporation Act to
be applicable to the Merger. Triangle expressly disclaims any beneficial
ownership of the shares of Centura Common Stock which are purchasable by
Triangle upon exercise of the Option because the Option is exercisable only in
the circumstances referred to in Item 4 above, none of which has occurred as of
this date.
To the best of Triangle's knowledge, as of September 1, 1999, the
following executive officers and directors of Triangle beneficially owned the
following amounts of Centura Common Stock: Michael S. Patterson--902 shares;(1)
Robert E. Branch--1,005 shares; Debra L. Lee--10,000 shares;(2) Steven R.
Ogburn--430 shares; George W. Holt--704 shares; and William R. Pope--195
shares. On July 21, 1999, Mr. Patterson sold 1,000 shares of Centura Common
Stock at a price of $56.00 per share.
Other than as set forth in this Item 5, (i) neither Triangle nor any
subsidiary or affiliate of Triangle or, to the best of Triangle's knowledge, any
of its or their executive officers or directors beneficially owns any shares of
Centura Common Stock, and (ii) there have been no transactions in the shares of
Centura Common Stock effected during the past 60 days by Triangle, nor to the
best of Triangle's knowledge, by any subsidiary or affiliate of Triangle or any
of its or their executive officers or directors.
No other person is known by Triangle to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
the Centura Common Stock obtainable by Triangle upon exercise of the Option.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Other than the Reorganization Agreement and the Option Agreement, copies of
which (excluding certain exhibits) are incorporated by reference herein, to the
best of Triangle's knowledge there are at present no contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons named in
Item 2 above and between such persons and any person with respect to any
securities of Centura.
Item 7. Material to be Filed as Exhibits.
1. Agreement and Plan of Reorganization, dated as of August 22, 1999, by and
between Centura Banks, Inc. and Triangle Bancorp, Inc.
2. Stock Option Agreement, dated as of August 22, 1999, by and between
Triangle Bancorp, Inc. and Centura Banks, Inc.
3. Form of Plan of Merger by and between Centura Merger Subsidiary, Inc. and
Triangle Bancorp, Inc.
- -------------------------
(1)Includes 149 shares owned by Mr. Patterson's wife and 287 shares owned by
Mr. Patterson's minor children, with respect to which Mr. Patterson acts as
custodian. Mr. Patterson disclaims beneficial ownership of these 436 shares.
(2)Represents 10,000 shares owned by Ms. Lee's husband, as to which Ms. Lee
disclaims beneficial ownership.
<PAGE> 8
CUSIP No. 15640T100 Schedule 13D Page 8 of 12
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Date: September 1, 1999 Triangle Bancorp, Inc.
By: /s/ Alexander M. Donaldson
--------------------------
Alexander M. Donaldson,
Executive Vice President and
General Counsel
<PAGE> 9
CUSIP No. 15640T100 Schedule 13D Page 9 of 12
SCHEDULE I
Following is a list of the executive officers and directors of Triangle Bancorp,
Inc. as of September 1, 1999:
Executive Officers:
<TABLE>
<CAPTION>
Name Office
- ---- ------
<S> <C>
- -------------------------------------------------------------------------------------------------------
Michael S. Patterson President and Chief Executive Officer
- -------------------------------------------------------------------------------------------------------
Robert E. Branch Executive Vice President
- -------------------------------------------------------------------------------------------------------
Debra L. Lee Executive Vice President and Chief Financial Officer
- -------------------------------------------------------------------------------------------------------
Steven R. Ogburn Executive Vice President
- -------------------------------------------------------------------------------------------------------
Edward O. Wessell Executive Vice President
- -------------------------------------------------------------------------------------------------------
</TABLE>
The business address for each executive officer is Triangle Bancorp, Inc., 4300
Glenwood Avenue, Raleigh, North Carolina 27612.
<PAGE> 10
CUSIP No. 15640T100 Schedule 13D Page 10 of 12
Directors:
<TABLE>
<CAPTION>
Name and Occupation Business or Residence Address
- ------------------- -----------------------------
<S> <C>
- -------------------------------------------------------------------------------------------------------
Carole S. Anders 845 Holt Drive
Civic Leader Raleigh, NC 27608
- -------------------------------------------------------------------------------------------------------
Charles H. Ashford, Jr. 111 Bernhurst Road
Retired New Bern, NC 28560-5000
Physician
Former Vice President of Medical Affairs,
Craven Regional Medical Authority
- -------------------------------------------------------------------------------------------------------
John A. Barker 1529 Jeremy Lane
Businessman Rocky Mount, NC 27803
- -------------------------------------------------------------------------------------------------------
Edwin B. Borden Borden Manufacturing Company
President 801 N. William Street
The Borden Manufacturing Company Goldsboro, NC 27533
- -------------------------------------------------------------------------------------------------------
Robert E. Bryan, Jr. Prime Express
Chairman and Partner 2557 Ravenhill Road, Suite 1-C
Prime Express, Inc. Fayetteville, NC 28303
- -------------------------------------------------------------------------------------------------------
David T. Clancy Clancy & Theys Construction Company
President 516 West Cabarrus Street
Clancy & Theys Construction Company Raleigh, NCC 27603
- -------------------------------------------------------------------------------------------------------
N. Leo Daughtry Daughtry, Woodard, Lawrence and Starling
Attorney 405 East Market Street
Daughtry, Woodard, Larence & Starling, Smithfield, NC 27577
L.L.P.
- -------------------------------------------------------------------------------------------------------
Willie S. Edwards 180 Riverwalk Drive
Retired Washington, NC 27889
Former General Partner, L&B Associates
- -------------------------------------------------------------------------------------------------------
James P. Godwin, Sr. Godwin Manufacturing Co., Inc.
President, Godwin Manufacturing Co. Inc., Highway 421 East
and Godwin and Gonzalez Specialty Equipment, Dunn, NC 28334
Inc.
- -------------------------------------------------------------------------------------------------------
Robert L. Guthrie Asura Corporation
President and Chief Executive Officer 4309 Emperor Boulevard
Asura Corporation Durham, NC 27703
- -------------------------------------------------------------------------------------------------------
B.W. Harris, III Harris, Harris & Company
Owner 4235 University Drive
Harris Harris and Company PLLC Durham, NC 27707
- -------------------------------------------------------------------------------------------------------
John B. Harris, Jr. 3343 Ridgecrest Court
Retired Raleigh, NC 27607
Former President, Winston Hospitality, Inc.
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 11
CUSIP No. 15640T100 Schedule 13D Page 11 of 12
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------------
George W. Holt 207 High Street
Retired Whiteville, NC 28472
Former Executive Vice President, Triangle
Bank
- -------------------------------------------------------------------------------------------------------
Earl Johnson, Jr. Carolina Crane Corp.
Chairman 6101 Triangle Drive
Southern Industrial Constructors, Inc. Raleigh, NC 27613
- -------------------------------------------------------------------------------------------------------
Michael A. Maxwell 122 Porter Place
Senior Scientist Chapel Hill, NC 27514
- -------------------------------------------------------------------------------------------------------
Wendell H. Murphy Murphy Family Farms
President 4134 U.S. Highway 117
Murphy Family Farms and Murphy Milling Co. Rose Hill, NC 28458
- -------------------------------------------------------------------------------------------------------
Michael S. Patterson Triangle Bancorp, Inc.
Chairman, President, and Chief Executive 4300 Glenwood Avenue
Officer Raleigh, North Carolina 27612
Triangle Bancorp, Inc.
- -------------------------------------------------------------------------------------------------------
Patrick H. Pope Pope & Tart
Partner 403 West Broad Street
Pope & Tart Dunn, NC 28334
- -------------------------------------------------------------------------------------------------------
William R. Pope Pope Distributing Co.
President and Chairman of the Board 510 South Church Street
Pope Enterprises, Inc. Coats, NC 27521
- -------------------------------------------------------------------------------------------------------
Beverly B. Poston Bahakel Communications, Inc.
Executive Vice President and Chief Operating One Television Place
Officer, Bahakel Communications, Inc. Charlotte, NC 28205
- -------------------------------------------------------------------------------------------------------
Edythe M. Poyner Capital Land Investment Company
President 3600 Glenwood Avenue, #101
Capital Land Investment Company Raleigh, NC 27612
- -------------------------------------------------------------------------------------------------------
J. Dal Snipes Snipes Insurance Service, Inc.
President 608 West Broad Street
Snipes Insurance Service, Inc. Dunn, NC 28334
- -------------------------------------------------------------------------------------------------------
Charles J. Stewart Triangle Bank
Executive Vice President 302 West Main Street
Triangle Bank Durham, NC 27702
- -------------------------------------------------------------------------------------------------------
N. Johnson Tilghman Johnson Tilghman, Attorney
Attorney 141-B Technology Drive
Garner, NC 27529
- -------------------------------------------------------------------------------------------------------
Sydnor M. White, Jr. Graham Realty, Inc.
President 403 East Six Forks Road
Graham Realty, Inc. Raleigh, NC 27609
- -------------------------------------------------------------------------------------------------------
J. Blount Williams Alfred Williams & Company
President 1813 Capital Boulevard
Alfred Williams & Co. Raleigh, NC 27604
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 12
CUSIP No. 15640T100 Schedule 13D Page 12 of 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
Location in
Sequentially
Numbered Copy
-------------
<S> <C> <C>
Exhibit 1 Agreement and Plan of Reorganization,
dated as of August 22, 1999, by and
between Centura Banks, Inc. and
Triangle Bancorp, Inc. Filed herewith.
Exhibit 2 Stock Option Agreement, dated as of
August 22, 1999, by and between
Triangle Bancorp, Inc. and Centura
Banks, Inc. Filed herewith.
Exhibit 3 Form of Plan of Merger by and
between Centura Merger Subsidiary,
Inc. and Triangle Bancorp, Inc. Filed
herewith.
</TABLE>
<PAGE> 1
EXHIBIT 1
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
TRIANGLE BANCORP, INC.
AND
CENTURA BANKS, INC.
DATED AS OF AUGUST 22, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Parties...............................................................................1
Preamble..............................................................................1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER..........................................2
1.1 Merger....................................................................2
1.2 Time and Place of Closing.................................................2
1.3 Effective Time............................................................2
1.4 Execution of Stock Option Agreements......................................2
ARTICLE 2 - TERMS OF MERGER..........................................................3
2.1 Articles of Incorporation.................................................3
2.2 Bylaws....................................................................3
2.3 Directors and Officers....................................................3
ARTICLE 3 - MANNER OF CONVERTING SHARES..............................................3
3.1 Conversion of Shares......................................................3
3.2 Anti-Dilution Provisions..................................................3
3.3 Shares Held by Triangle or Centura........................................4
3.4 Fractional Shares.........................................................4
3.5 Conversion of Stock Rights................................................4
3.6 Conversion of Triangle Warrants...........................................6
ARTICLE 4 - EXCHANGE OF SHARES.......................................................6
4.1 Exchange Procedures.......................................................6
4.2 Rights of Former Triangle Stockholders....................................6
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF TRIANGLE...............................7
5.1 Organization, Standing, and Power.........................................7
5.2 Authority; No Breach By Agreement.........................................8
5.3 Capital Stock.............................................................9
5.4 Triangle Subsidiaries.....................................................9
5.5 SEC Filings; Financial Statements.........................................10
5.6 Absence of Undisclosed Liabilities........................................10
5.7 Absence of Certain Changes or Events......................................10
5.8 Tax Matters...............................................................11
5.9 Assets....................................................................12
5.10 Environmental Matters.....................................................12
5.11 Compliance with Laws......................................................13
5.12 Labor Relations...........................................................14
5.13 Employee Benefit Plans....................................................14
5.14 Material Contracts........................................................17
5.15 Legal Proceedings.........................................................17
5.16 Reports...................................................................18
5.17 Statements True and Correct...............................................18
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
5.18 Accounting, Tax, and Regulatory Matters....................................18
5.19 State Takeover Laws........................................................18
5.20 Derivatives................................................................19
5.21 Year 2000..................................................................19
5.22 Underwriting...............................................................19
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF CENTURA.................................20
6.1 Organization, Standing, and Power..........................................20
6.2 Authority; No Breach By Agreement..........................................20
6.3 Capital Stock..............................................................21
6.4 Centura Subsidiaries.......................................................21
6.5 SEC Filings; Financial Statements..........................................22
6.6 Absence of Undisclosed Liabilities.........................................22
6.7 Absence of Certain Changes or Events.......................................22
6.8 Tax Matters................................................................23
6.9 Assets.....................................................................24
6.10 Environmental Matters......................................................24
6.11 Compliance with Laws.......................................................25
6.12 Labor Relations............................................................26
6.13 Employee Benefit Plans.....................................................26
6.14 Legal Proceedings..........................................................27
6.15 Reports....................................................................27
6.16 Statements True and Correct................................................27
6.17 Accounting, Tax, and Regulatory Matters....................................28
6.18 Derivatives................................................................28
6.19 Year 2000..................................................................28
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION..................................28
7.1 Affirmative Covenants of Both Parties......................................28
7.2 Negative Covenants of Triangle.............................................29
7.3 Adverse Changes in Condition...............................................31
7.4 Reports....................................................................31
ARTICLE 8 - ADDITIONAL AGREEMENTS.....................................................32
8.1 Registration Statement; Joint Proxy Statement; Stockholder
Approvals................................................................32
8.2 Exchange Listing...........................................................32
8.3 Applications...............................................................32
8.4 Filings with State Office..................................................33
8.5 Agreement as to Efforts to Consummate......................................33
8.6 Investigation and Confidentiality..........................................33
8.7 Press Releases.............................................................34
8.8 Certain Actions............................................................34
8.9 Accounting and Tax Treatment...............................................35
8.10 State Takeover Laws........................................................35
8.11 Agreement of Affiliates....................................................35
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
8.12 Employee Benefits and Contracts.............................................35
8.13 Indemnification.............................................................36
8.14 Certain Modifications.......................................................38
8.15 Centura Merger Subsidiary Organization......................................38
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO
CONSUMMATE...........................................................................39
9.1 Conditions to Obligations of Each Party.....................................39
9.2 Conditions to Obligations of Centura........................................40
9.3 Conditions to Obligations of Triangle.......................................41
ARTICLE 10 - TERMINATION................................................................42
10.1 Termination.................................................................42
10.2 Effect of Termination.......................................................45
10.3 Non-Survival of Representations and Covenants...............................46
ARTICLE 11 - MISCELLANEOUS..............................................................46
11.1 Definitions.................................................................46
11.2 Expenses....................................................................55
11.3 Brokers and Finders.........................................................55
11.4 Entire Agreement............................................................56
11.5 Amendments..................................................................56
11.6 Waivers.....................................................................56
11.7 Assignment..................................................................57
11.8 Notices.....................................................................57
11.9 Goveming Law................................................................58
11.10 Counterparts................................................................58
11.11 Captions....................................................................58
11.12 Interpretations.............................................................58
11.13 Enforcement of Agreement....................................................58
11.14 Severability................................................................59
Signatures..............................................................................60
</TABLE>
-iii-
<PAGE> 5
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into as of August 22, 1999, by and between TRIANGLE BANCORP, INC.
("Triangle"), a corporation organized and existing under the Laws of the State
of North Carolina, with its principal office located in Raleigh, North
Carolina; and CENTURA BANKS, INC. ("Centura"), a corporation organized and
existing under the Laws of the State of North Carolina, with its principal
office located in Rocky Mount, North Carolina.
PREAMBLE
The Boards of Directors of Triangle and Centura are of the opinion that
the transactions described herein are in the best interests of the parties to
this Agreement and their respective stockholders. This Agreement provides for
the acquisition of Triangle by Centura pursuant to the merger (the "Merger") of
Triangle with and into a newly-formed, wholly-owned subsidiary of Centura
("Centura Merger Subsidiary"), organized under the Laws of the State of North
Carolina. Immediately following the Merger, Centura Merger Subsidiary will be
merged with and into Centura. At the effective time of the Merger, the
outstanding shares of the capital stock of Triangle shall be converted into
shares of the common stock of Centura (except as provided herein). As a result,
stockholders of Triangle shall become stockholders of Centura, and Centura
shall continue to conduct Triangle's business and operations. The transactions
described in this Agreement are subject to the approvals of the stockholders of
Triangle, the stockholders of Centura, the Board of Governors of the Federal
Reserve System, and certain state regulatory authorities, and the satisfaction
of certain other conditions described in this Agreement. It is the intention of
the parties to this Agreement that the Merger (i) for federal income tax
purposes shall qualify as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code, and (ii) for accounting purposes shall
qualify for treatment as a pooling of interests.
Immediately after the execution and delivery of this Agreement, as a
condition and inducement to the Parties' willingness to enter into this
Agreement, (i) Triangle is granting to Centura an option to purchase shares of
Triangle Common Stock (the "Triangle Stock Option Agreement"), in substantially
the form of Exhibit 1, and (ii) Centura is granting to Triangle an option to
purchase shares of Centura Common Stock (the "Centura Stock Option Agreement"),
in substantially the form of Exhibit 2.
Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the Parties agree
as follows:
<PAGE> 6
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this Agreement, at
the Effective Time, Triangle shall be merged with and into Centura Merger
Subsidiary in accordance with the provisions of Section 55-11-01 of the NCBCA
and with the effect provided in Section 55-11-06 of the NCBCA (the "Merger").
Centura Merger Subsidiary shall be the Surviving Corporation resulting from the
Merger and shall continue to be governed by the Laws of the State of North
Carolina. The Merger shall be consummated pursuant to the terms of this
Agreement, which has been approved and adopted by the respective Boards of
Directors of Triangle and Centura, and the Plan of Merger, in substantially the
form of Exhibit 3, which has been approved and adopted by the Board of
Directors of Triangle and will be approved and adopted by the Board of
Directors of Centura Merger Subsidiary upon its organization. Immediately
subsequent to the Merger, Centura Merger Subsidiary shall be merged with and
into Centura.
1.2 TIME AND PLACE OF CLOSING. The consummation of the Merger (the
"Closing") shall take place at 9:00 A.M. on the date that the Effective Time
occurs (or the immediately preceding day if the Effective Time is earlier than
9:00 A.M.), or at such other time as the Parties, acting through their duly
authorized officers, may mutually agree. The place of Closing shall be at such
location as may be mutually agreed upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and the other transactions contemplated
by this Agreement shall become effective on the date and at the time the North
Carolina Articles of Merger reflecting the Merger shall become effective with
the Secretary of State of the State of North Carolina (the "Effective Time").
Subject to the terms and conditions hereof, unless otherwise mutually agreed
upon in writing by the duly authorized officers of each Party, the Parties
shall use their reasonable efforts to cause the Effective Time to occur on or
before the 10th business day (as designated by Centura) following the last to
occur of (i) the effective date (including expiration of any applicable waiting
period) of the last required Consent of any Regulatory Authority having
authority over and approving or exempting the Merger, and (ii) the date on
which the stockholders of Centura and Triangle approve the matters relating to
this Agreement required to be approved by such stockholders by applicable Law.
1.4 EXECUTION OF STOCK OPTION AGREEMENTS. Immediately after the
execution of this Agreement and as a condition hereto, (i) Triangle is
executing and delivering to Centura the Triangle Stock Option Agreement, and
(ii) Centura is executing and delivering to Triangle the Centura Stock Option
Agreement.
-2-
<PAGE> 7
ARTICLE 2
TERMS OF MERGER
2.1 ARTICLES OF INCORPORATION. The Articles of Incorporation of
Centura Merger Subsidiary in effect immediately prior to the Effective Time
shall be the Articles of Incorporation of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
2.2 BYLAWS. The Bylaws of Centura Merger Subsidiary in effect
immediately prior to the Effective Time shall be the Bylaws of the Surviving
Corporation after the Effective Time until otherwise amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of Centura Merger Subsidiary
in office immediately prior to the Effective Time shall serve as the directors
of the Surviving Corporation from and after the Effective Time in accordance
with the Bylaws of the Surviving Corporation. The officers of Centura Merger
Subsidiary in office immediately prior to the Effective Time shall serve as the
officers of the Surviving Corporation from and after the Effective Time in
accordance with the Bylaws of the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of this Article 3,
at the Effective Time, by virtue of the Merger and without any action on the
part of Centura or Triangle, or the stockholders of either of the foregoing,
the shares of the constituent corporations shall be converted as follows:
(a) Each share of Centura Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
from and after the Effective Time.
(b) Each share of Centura Merger Subsidiary Common Stock issued
and outstanding immediately prior to the Effective Time shall remain issued
and outstanding from and after the Effective Time.
(c) Each share of Triangle Common Stock (excluding shares held
by any Triangle Company or any Centura Company, in each case other than in a
fiduciary capacity or as a result of debts previously contracted) issued and
outstanding at the Effective Time shall be converted into .45 of a share of
Centura Common Stock (subject to adjustment pursuant to Section 10.1(g) of
this Agreement, the "Exchange Ratio").
3.2 ANTI-DILUTION PROVISIONS. In the event Triangle changes the number
of shares of Triangle Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, recapitalization,
or similar transaction with respect to such stock, the
-3-
<PAGE> 8
Exchange Ratio shall be proportionately adjusted. In the event Centura changes
the number of shares of Centura Common Stock issued and outstanding prior to
the Effective Time as a result of a stock split, stock dividend,
recapitalization, or similar transaction with respect to such stock and the
record date therefor (in the case of a stock dividend) or the effective date
thereof (in the case of a stock split or similar recapitalization for which a
record date is not established) shall be prior to the Effective Time, the
Exchange Ratio shall be proportionately adjusted.
3.3 SHARES HELD BY TRIANGLE OR CENTURA. Each of the shares of Triangle
Common Stock held by any Triangle Company or by any Centura Company, in each
case other than in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
3.4 FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, each holder of shares of Triangle Common Stock exchanged pursuant to
the Merger who would otherwise have been entitled to receive a fraction of a
share of Centura Common Stock (after taking into account all certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share of Centura
Common Stock multiplied by the market value of one share of Centura Common
Stock at the Effective Time. The market value of one share of Centura Common
Stock at the Effective Time shall be the closing price of Centura Common Stock
on the NYSE - Composite Transactions List (as reported by The Wall Street
Journal or, if not reported thereby, any other authoritative source selected by
Centura) on the last trading day preceding the Effective Time. No such holder
will be entitled to dividends, voting rights, or any other rights as a
stockholder in respect of any fractional shares.
3.5 CONVERSION OF STOCK RIGHTS.
(a) At the Effective Time, each award, option, or other right
to purchase or acquire shares of Triangle Common Stock pursuant to stock
options, stock appreciation rights, or stock awards ("Triangle Rights") granted
by Triangle under the Triangle Stock Plans, which are outstanding at the
Effective Time, whether or not exercisable, shall be converted into and become
rights with respect to Centura Common Stock, and Centura shall assume each
Triangle Right, in accordance with the terms of the Triangle Stock Plan and
stock option agreement by which it is evidenced, except that from and after the
Effective Time, (i) Centura and its Compensation Committee shall be substituted
for Triangle and the Committee of Triangle's Board of Directors (including, if
applicable, the entire Board of Directors of Triangle) administering such
Triangle Stock Plan, (ii) each Triangle Right assumed by Centura may be
exercised solely for shares of Centura Common Stock (or cash in the case of
stock appreciation rights), (iii) the number of shares of Centura Common Stock
subject to such Triangle Right shall be equal to the number of shares of
Triangle Common Stock subject to such Triangle Right immediately prior to the
Effective Time multiplied by the Exchange Ratio, and (iv) the per share
exercise price (or similar threshold price, in the case of stock awards) under
each such Triangle Right shall be adjusted by dividing the per share exercise
(or threshold) price under each such Triangle Right by the Exchange Ratio and
rounding up to the nearest cent. Notwithstanding the
-4-
<PAGE> 9
provisions of clause (iii) of the preceding sentence, Centura shall not be
obligated to issue any fraction of a share of Centura Common Stock upon
exercise of Triangle Rights and any fraction of a share of Centura Common Stock
that otherwise would be subject to a converted Triangle Right shall represent
the right to receive a cash payment equal to the product of such fraction and
the difference between the market value of one share of Centura Common Stock
and the per share exercise price of such Right. The market value of one share
of Centura Common Stock shall be the closing price of Centura Common Stock on
the NYSE - Composite Transactions List (as reported by The Wall Street Journal
or, if not reported thereby, any other authoritative source selected by
Centura) on the last trading day preceding the date of exercise of the Triangle
Right. In addition, notwithstanding the provisions of clauses (iii) and (iv) of
the first sentence of this Section 3.5, each Triangle Right which is an
"incentive stock option" shall be adjusted as required by Section 424 of the
Internal Revenue Code, so as not to constitute a modification, extension, or
renewal of the option, within the meaning of Section 424(h) of the Internal
Revenue Code. Centura agrees to take all necessary steps to effectuate the
foregoing provisions of this Section 3.5.
(b) As soon as reasonably practicable after the Effective Time,
Centura shall deliver to the participants in each Triangle Stock Plan an
appropriate notice setting forth such participant's rights pursuant thereto and
the grants pursuant to such Triangle Stock Plan shall continue in effect on the
same terms and conditions (subject to the adjustments required by Section
3.5(a) after giving effect to the Merger), and Centura shall comply with the
terms of each Triangle Stock Plan to ensure, to the extent required by, and
subject to the provisions of, such Triangle Stock Plan, that Triangle Rights
which qualified as incentive stock options prior to the Effective Time continue
to qualify as incentive stock options after the Effective Time. At or prior to
the Effective Time, Centura shall take all corporate action necessary to
reserve for issuance sufficient shares of Centura Common Stock for delivery
upon exercise of Triangle Rights assumed by it in accordance with this Section
3.5. As soon as reasonably practicable after the Effective Time, Centura shall
file a registration statement on Form S-3 or Form S-8, as the case may be (or
any successor or other appropriate forms), with respect to the shares of
Centura Common Stock subject to such options and shall use its reasonable
efforts to maintain the effectiveness of such registration statements (and
maintain the current status of the prospectus or prospectuses contained
therein) for so long as such options remain outstanding. With respect to those
individuals who subsequent to the Merger will be subject to the reporting
requirements under Section 16(a) of the 1934 Act, where applicable, Centura
shall administer the Triangle Stock Plan assumed pursuant to this Section 3.5
in a manner that complies with Rule 16b-3 promulgated under the 1934 Act.
(c) All restrictions or limitations on transfer with respect to
Triangle Common Stock awarded under the Triangle Stock Plans or any other plan,
program, or arrangement of any Triangle Company, to the extent that such
restrictions or limitations shall not have already lapsed, and except as
otherwise expressly provided in such plan, program, or arrangement, shall
remain in full force and effect with respect to shares of Centura Common Stock
into which such restricted stock is converted pursuant to Section 3.1 of this
Agreement.
-5-
<PAGE> 10
3.6 CONVERSION OF TRIANGLE WARRANTS. At the Effective Time, each
Triangle Warrant which is outstanding at the Effective Time, whether or not
exercisable, shall be converted into and become a right with respect to Centura
Common Stock, and Centura shall assume each Triangle Warrant, in accordance
with the terms of the agreement by which the Triangle Warrant is evidenced,
except that from and after the Effective Time, (i) each Triangle Warrant
assumed by Centura may be exercised solely for shares of Centura Common Stock,
(ii) the number of shares of Centura Common Stock subject to such Triangle
Warrant shall be equal to the number of shares of Triangle Common Stock subject
to such Triangle Warrant immediately prior to the Effective Time, multiplied by
the Exchange Ratio, and (iii) the per share exercise price under each such
Triangle Warrant shall be adjusted by dividing the per share exercise price
under each such Triangle Warrant by the Exchange Ratio and rounding up to the
nearest cent.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, Centura
and Triangle shall cause the exchange agent selected by Centura (the "Exchange
Agent") to mail to the former stockholders of Triangle appropriate transmittal
materials (which shall specify that delivery shall be effected, and risk of
loss and title to the certificates theretofore representing shares of Triangle
Common Stock shall pass, only upon proper delivery of such certificates to the
Exchange Agent). After the Effective Time, each holder of shares of Triangle
Common Stock (other than shares to be canceled pursuant to Section 3.3 of this
Agreement) issued and outstanding at the Effective Time shall surrender the
certificate or certificates representing such shares to the Exchange Agent and
shall promptly upon surrender thereof receive in exchange therefor the
consideration provided in Section 3.1 of this Agreement, together with all
undelivered dividends or distributions in respect of such shares (without
interest thereon) pursuant to Section 4.2 of this Agreement. To the extent
required by Section 3.4 of this Agreement, each holder of shares of Triangle
Common Stock issued and outstanding at the Effective Time also shall receive,
upon surrender of the certificate or certificates representing such shares,
cash in lieu of any fractional share of Centura Common Stock to which such
holder may be otherwise entitled (without interest). Centura shall not be
obligated to deliver the consideration to which any former holder of Triangle
Common Stock is entitled as a result of the Merger until such holder surrenders
such holder's certificate or certificates representing the shares of Triangle
Common Stock for exchange as provided in this Section 4.1. The certificate or
certificates of Triangle Common Stock so surrendered shall be duly endorsed as
the Exchange Agent may require. Any other provision of this Agreement
notwithstanding, neither the Surviving Corporation nor the Exchange Agent shall
be liable to a holder of Triangle Common Stock for any amounts paid or property
delivered in good faith to a public official pursuant to any applicable
abandoned property Law.
4.2 RIGHTS OF FORMER TRIANGLE STOCKHOLDERS. At the Effective Time, the
stock transfer books of Triangle shall be closed as to holders of Triangle
Common Stock immediately
-6-
<PAGE> 11
prior to the Effective Time and no transfer of Triangle Common Stock by any
such holder shall thereafter be made or recognized. Until surrendered for
exchange in accordance with the provisions of Section 4.1 of this Agreement,
each certificate theretofore representing shares of Triangle Common Stock
(other than shares to be canceled pursuant to Section 3.3 of this Agreement)
shall from and after the Effective Time represent for all purposes only the
right to receive the consideration provided in Sections 3.1 and 3.4 of this
Agreement in exchange therefor, subject, however, to the Surviving
Corporation's obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Time which have been declared or made
by Triangle in respect of such shares of Triangle Common Stock in accordance
with the terms of this Agreement and which remain unpaid at the Effective Time.
To the extent permitted by Law, former stockholders of record of Triangle shall
be entitled to vote after the Effective Time at any meeting of Centura
stockholders the number of whole shares of Centura Common Stock into which
their respective shares of Triangle Common Stock are converted, regardless of
whether such holders have exchanged their certificates representing Triangle
Common Stock for certificates representing Centura Common Stock in accordance
with the provisions of this Agreement. Whenever a dividend or other
distribution is declared by Centura on the Centura Common Stock, the record
date for which is at or after the Effective Time, the declaration shall include
dividends or other distributions on all shares issuable pursuant to this
Agreement, but beginning 30 days after the Effective Time no dividend or other
distribution payable to the holders of record of Centura Common Stock as of any
time subsequent to the Effective Time shall be delivered to the holder of any
certificate representing shares of Triangle Common Stock issued and outstanding
at the Effective Time until such holder surrenders such certificate for
exchange as provided in Section 4.1 of this Agreement. However, upon surrender
of such Triangle Common Stock certificate, both the Centura Common Stock
certificate (together with all such undelivered dividends or other
distributions without interest) and any undelivered dividends and cash payments
to be paid for fractional share interests (without interest) shall be delivered
and paid with respect to each share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF TRIANGLE
Triangle hereby represents and warrants to Centura as follows:
5.1 ORGANIZATION, STANDING, AND POWER. Triangle is a corporation duly
organized, validly existing, and in good standing under the Laws of the State
of North Carolina, and has the corporate power and authority to carry on its
business as now conducted and to own, lease, and operate its Material Assets.
Triangle is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Triangle.
-7-
<PAGE> 12
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Triangle has the corporate power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and the Plan
of Merger and to consummate the transactions contemplated hereby and thereby.
The execution, delivery, and performance of this Agreement and the Plan of
Merger, and the consummation of the transactions contemplated herein and
therein, including the Merger, have been duly and validly authorized by all
necessary corporate action in respect thereof on the part of Triangle, subject
to the approval of this Agreement and the Plan of Merger by the holders of a
majority of the outstanding shares of Triangle Common Stock entitled to be cast
thereon, which is the only stockholder vote required for approval of this
Agreement and the Plan of Merger and consummation of the Merger by Triangle.
Subject to such requisite stockholder approval, this Agreement and the Plan of
Merger represent legal, valid, and binding obligations of Triangle, enforceable
against Triangle in accordance with their respective terms (except in all cases
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
may be brought).
(b) Neither the execution and delivery of this Agreement and
the Plan of Merger by Triangle, nor the consummation by Triangle of the
transactions contemplated hereby or thereby, nor compliance by Triangle with
any of the provisions hereof or thereof, will (i) conflict with or result in a
breach of any provision of Triangle's Articles of Incorporation or Bylaws, or
(ii) constitute or result in a Default under, or require any Consent pursuant
to, or result in the creation of any Lien on any Asset of any Triangle Company
under, any Contract or Permit of any Triangle Company, where such Default or
Lien, or any failure to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Triangle, or
(iii) subject to receipt of the requisite Consents referred to in Section
9.1(b) of this Agreement, violate any Law or Order applicable to any Triangle
Company or any of their respective Material Assets.
(c) Other than in connection or compliance with the provisions
of the Securities Laws, applicable state corporate and securities Laws, and
rules of the NYSE, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation with respect to any
employee benefit plans, or under the HSR Act, and other than Consents, filings,
or notifications which, if not obtained or made, are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Triangle,
no notice to, filing with, or Consent of, any public body or authority is
necessary for the consummation by Triangle of the Merger and the other
transactions contemplated in this Agreement and the Plan of Merger.
-8-
<PAGE> 13
5.3 CAPITAL STOCK.
(a) The authorized capital stock of Triangle consists, as of
the date of this Agreement, of 50,000,000 shares of Triangle Common Stock, of
which 25,197,731 shares are issued and outstanding as of the date of this
Agreement and not more than 26,833,810 shares (together with such number of
additional shares that will be issued for the fiscal year ending December 31,
1999 under the Management Incentive Compensation Plan of Triangle) will be
issued and outstanding at the Effective Time. All of the issued and outstanding
shares of Triangle Common Stock are duly and validly issued and outstanding and
are fully paid and nonassessable under the NCBCA. None of the outstanding
shares of Triangle Common Stock has been issued in violation of any preemptive
rights of the current or past stockholders of Triangle.
(b) Except as set forth in Section 5.3(a) of this Agreement or
Section 5.3(b) of the Triangle Disclosure Memorandum, or as provided pursuant
to the Triangle Stock Option Agreement, there are no shares of capital stock or
other equity securities of Triangle outstanding and no outstanding Rights
relating to the capital stock of Triangle.
5.4 TRIANGLE SUBSIDIARIES. Triangle has disclosed in Section 5.4 of
the Triangle Disclosure Memorandum all of the Triangle Subsidiaries as of the
date of this Agreement. Except as set forth in Section 5.4 of the Triangle
Disclosure Memorandum, Triangle or one of its Subsidiaries owns all of the
issued and outstanding shares of capital stock of each Triangle Subsidiary. No
equity securities of any Triangle Subsidiary are or may become required to be
issued (other than to another Triangle Company) by reason of any Rights, and
there are no Contracts by which any Triangle Subsidiary is bound to issue
(other than to another Triangle Company) additional shares of its capital stock
or Rights or by which any Triangle Company is or may be bound to transfer any
shares of the capital stock of any Triangle Subsidiary (other than to another
Triangle Company). There are no Contracts relating to the rights of any
Triangle Company to vote or to dispose of any shares of the capital stock of
any Triangle Subsidiary. All of the shares of capital stock of each Triangle
Subsidiary held by a Triangle Company are duly authorized, validly issued, and
fully paid and, except as provided in statutes pursuant to which depository
institution Subsidiaries are organized, nonassessable under the applicable
corporation Law of the jurisdiction in which such Subsidiary is incorporated or
organized and are owned by the Triangle Company free and clear of any Lien.
Except as set forth in Section 5.4 of the Triangle Disclosure Memorandum, each
Triangle Subsidiary is either a bank or a corporation, and is duly organized,
validly existing, and (as to corporations) in good standing under the Laws of
the jurisdiction in which it is incorporated or organized, and has the
corporate power and authority necessary for it to own, lease, and operate its
Assets and to carry on its business as now conducted. Each Triangle Subsidiary
is duly qualified or licensed to transact business as a foreign corporation in
good standing in the States of the United States and foreign jurisdictions
where the character of its Assets or the nature or conduct of its business
requires it to be so qualified or licensed, except for such jurisdictions in
which the failure to be so qualified or licensed is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Triangle.
Each Triangle Subsidiary that is a depository institution is an "insured
-9-
<PAGE> 14
institution" as defined in the Federal Deposit Insurance Act and applicable
regulations thereunder, and the deposits in which are insured by the Bank
Insurance Fund or Savings Association Insurance Fund.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Triangle has filed and made available to Centura all forms,
reports, and documents required to be filed by Triangle with the SEC since
December 31, 1995 (collectively, the "Triangle SEC Reports"). The Triangle SEC
Reports (i) at the time filed, complied in all Material respects with the
applicable requirements of the 1933 Act and the 1934 Act, as the case may be,
and (ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a Material fact or omit to state a Material
fact required to be stated in such Triangle SEC Reports or necessary in order
to make the statements in such Triangle SEC Reports, in light of the
circumstances under which they were made, not misleading. Except for Triangle
Subsidiaries that are registered as a broker, dealer, or investment advisor or
filings required due to fiduciary holdings of the Triangle Subsidiaries, none
of Triangle's Subsidiaries is required to file any forms, reports, or other
documents with the SEC.
(b) Each of the Triangle Financial Statements (including, in
each case, any related notes) contained in the Triangle SEC Reports, including
any Triangle SEC Reports filed after the date of this Agreement until the
Effective Time, complied or will comply as to form in all Material respects
with the applicable published rules and regulations of the SEC with respect
thereto, was prepared or will be prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes to such financial statements, or, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC), and fairly presented or will
fairly present the consolidated financial position of Triangle and its
Subsidiaries as at the respective dates and the consolidated results of its
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring
year-end adjustments which were not or are not expected to be Material in
amount or effect.
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. No Triangle Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Triangle, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Triangle as
of June 30, 1999, included in the Triangle Financial Statements or reflected in
the notes thereto and except for Liabilities incurred in the ordinary course of
business subsequent to June 30, 1999. No Triangle Company has incurred or paid
any Liability since June 30, 1999, except for such Liabilities incurred or paid
in the ordinary course of business consistent with past business practice and
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Triangle.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 1999, except
as disclosed in the Triangle Financial Statements, (i) there have been no
events, changes, or
-10-
<PAGE> 15
occurrences which have had, or are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Triangle, and (ii) the Triangle
Companies have conducted their respective businesses in the ordinary and usual
course (excluding the incurrence of expenses in connection with this Agreement
and the transactions contemplated hereby).
5.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf of any
of the Triangle Companies have been timely filed, or requests for extensions
have been timely filed, granted, and have not expired for Taxable Periods ended
on or before December 31, 1998, and, to the Knowledge of Triangle, all Tax
Returns filed are complete and accurate in all Material respects. All Tax
Returns for Taxable Periods ending on or before the date of the most recent
fiscal year end immediately preceding the Effective Time will be timely filed
or requests for extensions will be timely filed. All Taxes shown on filed Tax
Returns have been paid. There is no audit examination, deficiency, or refund
Litigation with respect to any Taxes, that is reasonably likely to result in a
determination that would have, individually or in the aggregate, a Material
Adverse Effect on Triangle, except to the extent reserved against in the
Triangle Financial Statements dated prior to the date of this Agreement. All
Taxes and other Liabilities due with respect to completed and settled
examinations or concluded Litigation have been paid.
(b) None of the Triangle Companies has executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due (excluding such statutes that relate to years currently under examination
by the Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) Adequate provision for any Taxes due or to become due for
any of the Triangle Companies for the period or periods through and including
the date of the respective Triangle Financial Statements has been made and is
reflected on such Triangle Financial Statements.
(d) Each of the Triangle Companies is in compliance with, and
its records contain all information and documents (including properly completed
IRS Forms W-9) necessary to comply with, all applicable information reporting
and Tax withholding requirements under federal, state, and local Tax Laws, and
such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code, except for such
instances of noncompliance and such omissions as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Triangle.
(e) Except as set forth in Section 5.8(e) of the Triangle
Disclosure Memorandum, none of the Triangle Companies has made any payments, is
obligated to make any payments, or is a party to any contract, agreement, or
other arrangement that could obligate it to make any payments that would be
disallowed as a deduction under Section 280G or 162(m) of the Internal Revenue
Code.
-11-
<PAGE> 16
(f) There are no Material Liens with respect to Taxes upon any
of the Assets of the Triangle Companies.
(g) Except as set forth in Section 5.8(g) of the Triangle
Disclosure Memorandum, there has not been an ownership change, as defined in
Internal Revenue Code Section 382(g), of the Triangle Companies that occurred
during or after any Taxable Period in which the Triangle Companies incurred a
net operating loss that carries over to any Taxable Period ending after
December 31, 1998.
(h) No Triangle Company has filed any consent under Section
341(f) of the Internal Revenue Code concerning collapsible corporations.
(i) After the date of this Agreement, no Material election with
respect to Taxes will be made without the prior consent of Centura, which
consent will not be unreasonably withheld.
(j) No Triangle Company has or has had a permanent
establishment in any foreign country, as defined in any applicable tax treaty
or convention between the United States and such foreign country.
5.9 ASSETS. The Triangle Companies have good and marketable title,
free and clear of all Liens, to all of their respective Assets. All Material
tangible properties used in the businesses of the Triangle Companies are in
good condition, reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with Triangle's past practices. All
Assets which are Material to Triangle's business on a consolidated basis, held
under leases or subleases by any of the Triangle Companies, are held under
valid Contracts enforceable in accordance with their respective terms (except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceedings may be brought), and each
such Contract is in full force and effect. The Triangle Companies currently
maintain insurance in amounts, scope, and coverage reasonably necessary for
their operations. None of the Triangle Companies has received notice from any
insurance carrier that (i) such insurance will be canceled or that coverage
thereunder will be reduced or eliminated, or (ii) premium costs with respect to
such policies of insurance will be substantially increased, in either case as a
result of extraordinary loss experienced on the part of such Triangle Company.
The Assets of the Triangle Companies include all Assets required to operate the
business of the Triangle Companies as presently conducted in all Material
respects.
5.10 ENVIRONMENTAL MATTERS.
(a) Each Triangle Company, its Participation Facilities, and
its Loan Properties are, and have been, in compliance with all Environmental
Laws, except those
-12-
<PAGE> 17
violations which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Triangle.
(b) There is no Litigation pending or, to the Knowledge of
Triangle, threatened before any court, governmental agency, or authority, or
other forum in which any Triangle Company or any of its Participation
Facilities has been or, with respect to threatened Litigation, may reasonably
be expected to be named as a defendant (i) for alleged noncompliance (including
by any predecessor) with any Environmental Law or (ii) relating to the release
into the environment of any Hazardous Material, whether or not occurring at,
on, under, or involving a site owned, leased, or operated by any Triangle
Company or any of its Participation Facilities, except for such Litigation
pending or threatened that is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Triangle.
(c) There is no Litigation pending, or to the Knowledge of
Triangle, threatened before any court, governmental agency, or board, or other
forum in which any of its Loan Properties (or Triangle in respect of such Loan
Property) has been or, with respect to threatened Litigation, may reasonably be
expected to be named as a defendant or potentially responsible party (i) for
alleged noncompliance (including by any predecessor) with any Environmental Law
or (ii) relating to the release into the environment of any Hazardous Material,
whether or not occurring at, on, under, or involving a Loan Property, except
for such Litigation pending or threatened that is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Triangle.
(d) To the Knowledge of Triangle, during the period of (i) any
Triangle Company's ownership or operation of any of their respective current
properties, (ii) any Triangle Company's participation in the management of any
Participation Facility, or (iii) any Triangle Company's holding of a security
interest in a Loan Property, there have been no releases of Hazardous Material
in, on, under, or affecting (or potentially affecting) such properties, except
such as are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Triangle. Prior to the period of (i) any Triangle
Company's ownership or operation of any of their respective current properties,
(ii) any Triangle Company's participation in the management of any
Participation Facility, or (iii) any Triangle Company's holding of a security
interest in a Loan Property, to the Knowledge of Triangle, there were no
releases of Hazardous Material in, on, under, or affecting any such property,
Participation Facility, or Loan Property, except such as are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Triangle.
5.11 COMPLIANCE WITH LAWS. Triangle is duly registered as a bank
holding company under the BHC Act. Each Triangle Company has in effect all
Permits necessary for it to own, lease, or operate its Material Assets and to
carry on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Triangle, and there has occurred no Default under
any such Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Triangle. None
of the Triangle Companies:
-13-
<PAGE> 18
(a) is in violation of any Laws, Orders, or Permits applicable
to its business or employees conducting its business, except for violations
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Triangle; and
(b) has received any notification or communication from any
agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any Triangle
Company is not in compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Triangle, (ii) threatening to revoke
any Permits, the revocation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Triangle, or
(iii) requiring any Triangle Company (x) to enter into or consent to the
issuance of a cease and desist order, formal agreement, directive,
commitment, or memorandum of understanding, or (y) to adopt any Board
resolution or similar undertaking, which restricts materially the conduct of
its business, or in any manner relates to its capital adequacy, its credit
or reserve policies, its management, or the payment of dividends.
5.12 LABOR RELATIONS. No Triangle Company is the subject of any
Litigation asserting that it or any other Triangle Company has committed an
unfair labor practice (within the meaning of the National Labor Relations Act
or comparable state Law) or seeking to compel it or any other Triangle Company
to bargain with any labor organization as to wages or conditions of employment,
nor is any Triangle Company a party to or bound by any collective bargaining
agreement, Contract, or other agreement or understanding with a labor union or
labor organization, nor is there any strike or other labor dispute involving
any Triangle Company, pending or threatened, or to the Knowledge of Triangle,
is there any activity involving any Triangle Company's employees seeking to
certify a collective bargaining unit or engaging in any other organization
activity.
5.13 EMPLOYEE BENEFIT PLANS.
(a) Triangle has disclosed to Centura in Section 5.13 of the
Triangle Disclosure Memorandum, and has delivered or made available to Centura
prior to the execution of this Agreement correct and complete copies in each
case of, all Material Triangle Benefits Plans. For purposes of this Agreement,
"Triangle Benefit Plans" means all pension, retirement, profit-sharing,
deferred compensation, stock option, employee stock ownership, severance pay,
vacation, bonus, or other incentive plan, all other written employee programs
or agreements, all medical, vision, dental, or other health plans, all life
insurance plans, and all other employee benefit plans or fringe benefit plans,
including, without limitation, "employee benefit plans" as that term is defined
in Section 3(3) of ERISA maintained by, sponsored in whole or in part by, or
contributed to by, any Triangle Company for the benefit of employees, retirees,
dependents, spouses, directors, independent contractors, or other beneficiaries
and under which employees, retirees, dependents, spouses, directors,
independent contractors, or other beneficiaries are
-14-
<PAGE> 19
eligible to participate. Any of the Triangle Benefit Plans which is an
"employee welfare benefit plan," as that term is defined in Section 3(l) of
ERISA, or an "employee pension benefit plan," as that term is defined in
Section 3(2) of ERISA, is referred to herein as a "Triangle ERISA Plan." Any
Triangle ERISA Plan which is also a "defined benefit plan" (as defined in
Section 414(j) of the Internal Revenue Code or Section 3(35) of ERISA) is
referred to herein as a "Triangle Pension Plan." Neither Triangle nor any
Triangle Company has an "obligation to contribute" (as defined in ERISA Section
4212) to a "multiemployer plan" (as defined in ERISA Sections 4001(a)(3) and
3(37)(A)). Each "employee pension benefit plan," as defined in Section 3(2) of
ERISA, ever maintained by any Triangle Company that was intended to qualify
under Section 401(a) of the Internal Revenue Code and with respect to which any
Triangle Company has any Liability, is disclosed as such in Section 5.13 of the
Triangle Disclosure Memorandum.
(b) Triangle has delivered or made available to Centura prior
to the execution of this Agreement correct and complete copies of the following
documents: (i) all trust agreements or other funding arrangements for such
Triangle Benefit Plans (including insurance contracts), and all amendments
thereto, (ii) with respect to any such Triangle Benefit Plans or amendments,
all determination letters, Material rulings, Material opinion letters, Material
information letters, or Material advisory opinions issued by the Internal
Revenue Service, the United States Department of Labor, or the Pension Benefit
Guaranty Corporation after December 31, 1996, (iii) annual reports or returns,
audited or unaudited financial statements, actuarial valuations and reports,
and summary annual reports prepared for any Triangle Benefit Plan with respect
to the most recent plan year, and (iv) the most recent summary plan
descriptions and any Material modifications thereto.
(c) All Triangle Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws, the breach or violation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Triangle. A
favorable determination letter or opinion letter has been issued by the
Internal Revenue Service with respect to each Triangle ERISA Plan which is
intended to be qualified under Section 401(a) of the Internal Revenue Code, and
Triangle is not aware of any circumstances which will or could reasonably be
expected to result in revocation of any such favorable determination letter or
opinion letter. Each trust created under any Triangle ERISA Plan has been
determined to be exempt from Tax under Section 501(a) of the Internal Revenue
Code and Triangle is not aware of any circumstance which will or could
reasonably be expected to result in revocation of such exemption. With respect
to each Triangle Benefit Plan to the Knowledge of Triangle, no event has
occurred which will or could reasonably give rise to a loss of any intended Tax
consequences under the Internal Revenue Code or to any Tax under Section 511 of
the Internal Revenue Code that is reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect on Triangle. There is no Material
pending or, to the Knowledge of Triangle, threatened Litigation relating to any
Triangle ERISA Plan.
(d) No Triangle Company has engaged in a transaction
with respect to any Triangle Benefit Plan that, assuming the Taxable Period of
such transaction expired as of the date
-15-
<PAGE> 20
of this Agreement, would subject any Triangle Company to a Material tax or
penalty imposed by either Section 4975 of the Internal Revenue Code or Section
502(i) of ERISA in amounts which are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Triangle. Neither Triangle nor
any administrator or fiduciary of any Triangle Benefit Plan (or any agent of
any of the foregoing) has engaged in any transaction, or acted or failed to act
in any manner which could reasonably be expected to subject Triangle to any
direct or indirect Liability (by indemnity or otherwise) for breach of any
fiduciary, co-fiduciary, or other duty under ERISA, where such Liability,
individually or in the aggregate, is reasonably likely to have a Material
Adverse Effect on Triangle. No oral or written representation or communication
with respect to any aspect of the Triangle Benefit Plans has been made to
employees of any Triangle Company which is not in accordance with the written
or otherwise preexisting terms and provisions of such plans, where any
Liability with respect to such representation or disclosure is reasonably
likely to have a Material Adverse Effect on Triangle.
(e) No Triangle Pension Plan is subject to Section 302 of ERISA
or Section 412 of the Internal Revenue Code. Neither any Triangle Pension Plan
nor any "single-employer plan," within the meaning of Section 4001(a)(15) of
ERISA, currently or formerly maintained by any Triangle Company, or the
single-employer plan of any entity which is considered one employer with
Triangle under Section 4001 of ERISA or Section 414 of the Internal Revenue
Code or Section 302 of ERISA (whether or not waived) (a "Triangle ERISA
Affiliate") has an "accumulated funding deficiency" within the meaning of
Section 412 of the Internal Revenue Code or Section 302 of ERISA. Any required
contributions with respect to a Triangle Pension Plan or any single-employer
plan of a Triangle ERISA Affiliate have or will be timely made and there is no
lien or expected to be a lien under Internal Revenue Code Section 412(n) or
ERISA Section 302(f) or Tax under Internal Revenue Code Section 4971. No
Triangle Company has provided, or is required to provide, security to a
Triangle Pension Plan or to any single-employer plan of a Triangle ERISA
Affiliate pursuant to Section 401(a)(29) of the Internal Revenue Code.
(f) No Liability under Title IV of ERISA has been or is
expected to be incurred by any Triangle Company with respect to any defined
benefit plan currently or formerly maintained by any of them or by any Triangle
ERISA Affiliate that has not been satisfied in full (other than Liability for
Pension Benefit Guaranty Corporation premiums, which have been paid when due,
except to the extent any failure would not have a Material Adverse Effect on
Triangle).
(g) Except as disclosed in Section 5.13 of the Triangle
Disclosure Memorandum, no Triangle Company has any obligations for retiree
health and retiree life benefits under any of the Triangle Benefit Plans other
than with respect to benefit coverage mandated by applicable Law.
(h) Except as set forth in Section 5.13 of the Triangle
Disclosure Memorandum, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will, by themselves,
(i) result in any payment (including, without limitation, severance,
unemployment compensation, golden parachute, or otherwise)
-16-
<PAGE> 21
becoming due to any director or any employee of any Triangle Company from any
Triangle Company under any Triangle Benefit Plan or otherwise, (ii) increase
any benefits otherwise payable under any Triangle Benefit Plan, or (iii) result
in any acceleration of the time of payment or vesting of any such benefit.
5.14 MATERIAL CONTRACTS. Except as set forth in Section 5.14 of the
Triangle Disclosure Memorandum, none of the Triangle Companies, nor any of
their respective Assets, businesses, or operations, is a party to, or is bound
or affected by, or receives benefits under, (i) any employment, severance,
termination, consulting, or retirement Contract providing for aggregate
payments to any Person in any calendar year in excess of $75,000, (ii) any
Contract relating to the borrowing of money by any Triangle Company or the
guarantee by any Triangle Company of any such obligation (other than Contracts
evidencing deposit liabilities, purchases of federal funds, fully-secured
repurchase agreements, and Federal Home Loan Bank advances of depository
institution Subsidiaries, trade payables, and Contracts relating to borrowings
or guarantees made in the ordinary course of business), and (iii) any other
Contract or amendment thereto that would be required to be filed as an exhibit
to a Form 10-K filed by Triangle with the SEC as of the date of this Agreement
that has not been filed as an exhibit to Triangle's Form 10-K filed for the
fiscal year ended December 31, 1998, or in another SEC Document and identified
to Centura (together with all Contracts referred to in Sections 5.9 and 5.13(a)
of this Agreement, the "Triangle Contracts"). With respect to each Triangle
Contract: (i) the Contract is in full force and effect; (ii) no Triangle
Company is in Default thereunder, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Triangle; (iii) no Triangle Company has repudiated or waived any Material
provision of any such Contract; and (iv) no other party to any such Contract
is, to the Knowledge of Triangle, in Default in any respect, other than
Defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Triangle, or has repudiated or waived
any Material provision thereunder. Except for Federal Home Loan Bank advances,
the junior subordinated debentures associated with the outstanding Capital
Securities of Triangle Capital Trust and other term liabilities incurred in the
ordinary course of business, all of the indebtedness of any Triangle Company
for money borrowed is prepayable at any time by such Triangle Company without
penalty or premium.
5.15 LEGAL PROCEEDINGS.
(a) There is no Litigation instituted or pending, or, to the
Knowledge of Triangle, threatened against any Triangle Company, or against any
Asset, employee benefit plan, interest, or right of any of them, that is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Triangle, nor are there any Orders of any Regulatory Authorities,
other governmental authorities, or arbitrators outstanding against any Triangle
Company, that are reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Triangle.
(b) Section 5.15(b) of the Triangle Disclosure Memorandum
includes a summary report of all Litigation as of the date of this Agreement to
which any Triangle
-17-
<PAGE> 22
Company is a party and which names a Triangle Company as a defendant or
cross-defendant and where the maximum exposure is estimated to be $100,000 or
more.
5.16 REPORTS. Since January 1, 1996, or the date of organization
if later, each Triangle Company has timely filed all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with any Regulatory Authorities, except failures to file
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Triangle. As of their respective dates, each of such
reports and documents, including the financial statements, exhibits, and
schedules thereto, complied in all Material respects with all applicable Laws.
5.17 STATEMENTS TRUE AND CORRECT. None of the information
supplied or to be supplied by any Triangle Company or any Affiliate thereof
regarding Triangle or such Affiliate for inclusion in the Registration
Statement to be filed by Centura with the SEC will, when the Registration
Statement becomes effective, be false or misleading with respect to any
Material fact, or contain any untrue statement of a Material fact, or omit to
state any Material fact required to be stated thereunder or necessary to make
the statements therein not misleading. None of the information supplied or to
be supplied by any Triangle Company or any Affiliate thereof for inclusion in
the Joint Proxy Statement to be mailed to Centura's and Triangle's stockholders
in connection with the Stockholders' Meetings will, when first mailed to the
stockholders of Centura and Triangle, be false or misleading with respect to
any Material fact, or contain any misstatement of Material fact, or omit to
state any Material fact required to be stated thereunder or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, or, in the case of the Joint Proxy Statement or any
amendment thereof or supplement thereto, at the time of the Stockholders'
Meetings, be false or misleading with respect to any Material fact, or omit to
state any Material fact required to be stated thereunder or necessary to
correct any Material statement in any earlier communication with respect to the
solicitation of any proxy for the Stockholders' Meetings. All documents that
any Triangle Company or any Affiliate thereof is responsible for filing with
any Regulatory Authority in connection with the transactions contemplated
hereby will comply as to form in all Material respects with the provisions of
applicable Law.
5.18 ACCOUNTING, TAX, AND REGULATORY MATTERS. No Triangle
Company or any Affiliate thereof has taken or agreed to take any action, and
Triangle has no Knowledge of any fact or circumstance that is reasonably
likely, to (i) prevent the transactions contemplated hereby, including the
Merger, from qualifying for pooling-of-interests accounting treatment, (ii)
prevent the Merger from qualifying as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code, or (iii) materially impede or
delay receipt of any Consents of Regulatory Authorities referred to in Section
9.1(b) of this Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of such Section.
5.19 STATE TAKEOVER LAWS. Each Triangle Company has taken all
necessary action to exempt the transactions contemplated by this Agreement from
any applicable "moratorium,"
-18-
<PAGE> 23
"control share," "fair price," "business combination," or other anti-takeover
laws and regulations of the State of North Carolina (collectively, "Takeover
Laws").
5.20 DERIVATIVES. All interest rate swaps, caps, floors, option
agreements, futures and forward contracts, and other similar risk management
arrangements, whether entered into for Triangle's own account, or for the
account of one or more of the Triangle Subsidiaries or their customers, were
entered into (i) in accordance with prudent business practices and all
applicable Material Laws, and (ii) with counterparties believed to be
financially responsible.
5.21 YEAR 2000. Triangle has completed the four phases of its Year 2000
readiness program, as described in the May 5, 1997, Statement of the Federal
Financial Institutions Examination Council ("FFIEC"), entitled "Year 2000
Project Management Awareness" and the April 10, 1998, "Guidance Concerning
Testing for Year 2000 Readiness." Triangle has made available to Centura
complete and accurate copies of its Year 2000 remediation contingency plan, as
described in the FFIEC Statements of March 17, 1998, and May 13, 1998, entitled
"Guidance Concerning Institution Due Diligence in Connection with Service
Provider and Software Vendor Year 2000 Readiness" and "Guidance Concerning
Contingency Planning in Connection with Year 2000 Readiness," respectively.
Triangle has completed the four phases of the business resumption contingency
planning process, as set forth in the guidance issued by FFIEC on December 11,
1998, and May 13, 1998, and has provided to Centura a complete and accurate
copy of its business resumption contingency plan, written documentation
supporting the plan's development and validation, the results of tests on the
plan, and a schedule for any future tests.
5.22 UNDERWRITING. Triangle has underwritten each loan reflected as an
Asset in the Triangle Financial Statements in accordance with Triangle's
underwriting procedures as set forth in its policies manual previously provided
to Centura and has, in its files, appropriate documentation, including notes
and collateralization documents, for each loan that are the legal, valid,
binding obligations of the obligor of each loan, enforceable in accordance with
their terms (except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought), except to
the extent the failure to underwrite a loan in accordance with Triangle's
underwriting procedures or to maintain appropriate documentation is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Triangle.
-19-
<PAGE> 24
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF CENTURA
Centura hereby represents and warrants to Triangle as follows:
6.1 ORGANIZATION, STANDING, AND POWER. Centura is a corporation duly
organized, validly existing, and in good standing under the Laws of the State
of North Carolina, and has the corporate power and authority to carry on its
business as now conducted and to own, lease, and operate its Material Assets.
Centura is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Centura.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Centura has the corporate power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part of
Centura, subject to the approval of the issuance of the shares of Centura
Common Stock pursuant to the Merger by the holders of a majority of the
outstanding shares of Centura Common Stock present or represented at the
Centura Stockholders' Meeting, which is the only stockholder vote required for
the consummation of the Merger by Centura. Subject to such requisite
stockholder approval, this Agreement represents a legal, valid, and binding
obligation of Centura, enforceable against Centura in accordance with its terms
(except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, conservatorship,
moratorium, or similar Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
Centura, nor the consummation by Centura of the transactions contemplated
hereby, nor compliance by Centura with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of Centura's Articles of
Incorporation or Bylaws, (ii) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
Asset of any Centura Company under, any Contract or Permit of any Centura
Company, where such Default or Lien, or any failure to obtain such Consent, is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Centura, or (iii) subject to receipt of the requisite Consents
referred to in Section 9.1(b) of this Agreement, violate any Law or Order
applicable to any Centura Company or any of their respective Material Assets.
-20-
<PAGE> 25
(c) Other than in connection or compliance with the provisions
of the Securities Laws, applicable state corporate and securities Laws, and
rules of the NYSE, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation with respect to any
employee benefit plans, or under the HSR Act, and other than Consents, filings,
or notifications which, if not obtained or made, are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Centura,
no notice to, filing with, or Consent of, any public body or authority is
necessary for the consummation by Centura of the Merger and the other
transactions contemplated in this Agreement and the Plan of Merger.
6.3 CAPITAL STOCK. The authorized capital stock of Centura consists,
as of the date of this Agreement, of (i) 50,000,000 shares of Centura Common
Stock, of which 28,465,362 shares were issued and outstanding as of June 30,
1999, and (ii) 25,000,000 shares of Centura Preferred Stock, none of which is
issued and outstanding. All of the issued and outstanding shares of Centura
Common Stock are, and all of the shares of Centura Common Stock to be issued in
exchange for shares of Triangle Common Stock upon consummation of the Merger,
when issued in accordance with the terms of this Agreement, will be, duly and
validly issued and outstanding and fully paid and nonassessable under the
NCBCA. None of the outstanding shares of Centura Common Stock has been, and
none of the shares of Centura Common Stock to be issued in exchange for shares
of Triangle Common Stock upon consummation of the Merger will be, issued in
violation of any preemptive rights of the current or past stockholders of
Centura.
6.4 CENTURA SUBSIDIARIES. Centura or one of its Subsidiaries owns all
of the issued and outstanding shares of capital stock of each Centura
Subsidiary. No equity securities of any Centura Subsidiary are or may become
required to be issued (other than to another Centura Company) by reason of any
Rights, and there are no Contracts by which any Centura Subsidiary is bound to
issue (other than to another Centura Company) additional shares of its capital
stock or Rights or by which any Centura Company is or may be bound to transfer
any shares of the capital stock of any Centura Subsidiary (other than to
another Centura Company). There are no Contracts relating to the rights of any
Centura Company to vote or to dispose of any shares of the capital stock of any
Centura Subsidiary. All of the shares of capital stock of each Centura
Subsidiary held by a Centura Company are fully paid and, except as provided in
statutes pursuant to which depository institution Subsidiaries are organized,
nonassessable under the applicable corporation Law of the jurisdiction in which
such Subsidiary is incorporated or organized and are owned by the Centura
Company free and clear of any Lien. Each Centura Subsidiary is either a bank or
a corporation, and is duly organized, validly existing, and (as to
corporations) in good standing under the Laws of the jurisdiction in which it
is incorporated or organized, and has the corporate power and authority
necessary for it to own, lease, and operate its Assets and to carry on its
business as now conducted. Each Centura Subsidiary is duly qualified or
licensed to transact business as a foreign corporation in good standing in the
States of the United States and foreign jurisdictions where the character of
its Assets or the nature or conduct of its business requires it to be so
qualified or licensed, except for such jurisdictions in which the failure to be
so qualified or licensed is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Centura. Each Centura Subsidiary
that is a depository institution is an
-21-
<PAGE> 26
"insured institution" as defined in the Federal Deposit Insurance Act and
applicable regulations thereunder, and the deposits in which are insured by the
Bank Insurance Fund or Savings Association Insurance Fund.
6.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Centura has filed and made available to Triangle all forms,
reports, and documents required to be filed by Centura with the SEC since
December 31, 1995 (collectively, the "Centura SEC Reports"). The Centura SEC
Reports (i) at the time filed, complied in all Material respects with the
applicable requirements of the 1933 Act and the 1934 Act, as the case may be,
and (ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a Material fact or omit to state a Material
fact required to be stated in such Centura SEC Reports or necessary in order to
make the statements in such Centura SEC Reports, in light of the circumstances
under which they were made, not misleading. Except for Centura Subsidiaries
that are registered as a broker, dealer, or investment advisor or filings
required due to fiduciary holdings of the Centura Subsidiaries, none of Centura
Subsidiaries is required to file any forms, reports, or other documents with
the SEC.
(b) Each of the Centura Financial Statements (including, in
each case, any related notes) contained in the Centura SEC Reports, including
any Centura SEC Reports filed after the date of this Agreement until the
Effective Time, complied or will comply as to form in all Material respects
with the applicable published rules and regulations of the SEC with respect
thereto, was or will be prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes to such financial statements or, in the case of unaudited statements,
as permitted by Form 10-Q of the SEC), and fairly presented or will fairly
present the consolidated financial position of Centura and its Subsidiaries as
at the respective dates and the consolidated results of its operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be Material in amount or effect.
6.6 ABSENCE OF UNDISCLOSED LIABILITIES. No Centura Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Centura, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Centura as of
June 30, 1999, included in the Centura Financial Statements or reflected in the
notes thereto and except for Liabilities incurred in the ordinary course of
business subsequent to June 30, 1999. No Centura Company has incurred or paid
any Liability since June 30, 1999, except for such Liabilities incurred or paid
in the ordinary course of business consistent with past business practice and
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Centura.
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 1999, except
as disclosed in the Centura Financial Statements delivered prior to the date of
this Agreement,
-22-
<PAGE> 27
(i) there have been no events, changes or occurrences which have had, or are
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Centura, and (ii) the Centura Companies have conducted their
respective businesses in the ordinary and usual course (excluding the
incurrence of expenses in connection with this Agreement and the transactions
contemplated hereby).
6.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf of any
of the Centura Companies have been timely filed, or requests for extensions
have been timely filed, granted, and have not expired for Taxable Periods ended
on or before December 31, 1998, and, to the Knowledge of Centura, all Tax
Returns filed are complete and accurate in all Material respects. All Tax
Returns for Taxable Periods ending on or before the date of the most recent
fiscal year end immediately preceding the Effective Time will be timely filed
or requests for extensions will be timely filed. All Taxes shown on filed Tax
Returns have been paid. There is no audit examination, deficiency, or refund
Litigation with respect to any Taxes, that is reasonably likely to result in a
determination that would have, individually or in the aggregate, a Material
Adverse Effect on Centura, except to the extent reserved against in the Centura
Financial Statements dated prior to the date of this Agreement. All Taxes and
other Liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid.
(b) None of the Centura Companies has executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due (excluding such statutes that relate to years currently under examination
by the Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) Adequate provision for any Taxes due or to become due for
any of the Centura Companies for the period or periods through and including
the date of the respective Centura Financial Statements has been made and is
reflected on such Centura Financial Statements.
(d) Each of the Centura Companies is in compliance with, and
its records contain all information and documents (including properly completed
IRS Forms W-9) necessary to comply with, all applicable information reporting
and Tax withholding requirements under federal, state, and local Tax Laws, and
such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code, except for such
instances of noncompliance and such omissions as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Centura.
(e) None of the Centura Companies has made any payments, is
obligated to make any payments, or is a party to any contract, agreement, or
other arrangement that could obligate it to make any payments that would be
disallowed as a deduction under Section 280G or 162(m) of the Internal Revenue
Code.
-23-
<PAGE> 28
(f) There are no Material Liens with respect to Taxes upon any
of the Assets of the Centura Companies.
(g) There has not been an ownership change, as defined in
Internal Revenue Code Section 382(g), of the Centura Companies that occurred
during or after any Taxable Period in which the Centura Companies incurred a
net operating loss that carries over to any Taxable Period ending after
December 31, 1998.
(h) No Centura Company has filed any consent under Section
341(f) of the Internal Revenue Code concerning collapsible corporations.
(i) After the date of this Agreement, no Material election with
respect to Taxes will be made without the prior consent of Triangle, which
consent will not be unreasonably withheld.
(j) No Centura Company has or has had a permanent establishment
in any foreign country, as defined in any applicable tax treaty or convention
between the United States and such foreign country.
6.9 ASSETS. The Centura Companies have good and marketable title, free
and clear of all Liens, to all of their respective Assets. All Material
tangible properties used in the businesses of the Centura Companies are in good
condition, reasonable wear and tear excepted, and are usable in the ordinary
course of business consistent with Centura's past practices. All Assets which
are Material to Centura's business on a consolidated basis, held under leases
or subleases by any of the Centura Companies, are held under valid Contracts
enforceable in accordance with their respective terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or other Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceedings may be brought), and each such Contract is in full
force and effect. The Centura Companies currently maintain insurance similar in
amounts, scope, and coverage reasonably necessary for their operations. None of
the Centura Companies has received notice from any insurance carrier that (i)
such insurance will be canceled or that coverage thereunder will be reduced or
eliminated, or (ii) premium costs with respect to such policies of insurance
will be substantially increased, in either case as a result of extraordinary
loss experienced on the part of such Centura Company. The Assets of the Centura
Companies include all Assets required to operate the business of the Centura
Companies as presently conducted in all Material respects.
6.10 ENVIRONMENTAL MATTERS.
(a) Each Centura Company, its Participation Facilities, and its
Loan Properties are, and have been, in compliance with all Environmental Laws,
except those violations which are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Centura.
-24-
<PAGE> 29
(b) There is no Litigation pending or, to the Knowledge of
Centura, threatened before any court, governmental agency, or authority, or
other forum in which any Centura Company or any of its Participation Facilities
has been or, with respect to threatened Litigation, may reasonably be expected
to be named as a defendant (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the release into
the environment of any Hazardous Material, whether or not occurring at, on,
under, or involving a site owned, leased, or operated by any Centura Company or
any of its Participation Facilities, except for such Litigation pending or
threatened that is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Centura.
(c) There is no Litigation pending or, to the Knowledge of
Centura, threatened before any court, governmental agency, or board, or other
forum in which any of its Loan Properties (or Centura in respect of such Loan
Property) has been or, with respect to threatened Litigation, may reasonably be
expected to be named as a defendant or potentially responsible party (i) for
alleged noncompliance (including by any predecessor) with any Environmental Law
or (ii) relating to the release into the environment of any Hazardous Material,
whether or not occurring at, on, under, or involving a Loan Property, except
for such Litigation pending or threatened that is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Centura.
(d) To the Knowledge of Centura, during the period of (i) any
Centura Company's ownership or operation of any of their respective current
properties, (ii) any Centura Company's participation in the management of any
Participation Facility, or (iii) any Centura Company's holding of a security
interest in a Loan Property, there have been no releases of Hazardous Material
in, on, under, or affecting (or potentially affecting) such properties, except
such as are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Centura. Prior to the period of (i) any Centura
Company's ownership or operation of any of their respective current properties,
(ii) any Centura Company's participation in the management of any Participation
Facility, or (iii) any Centura Company's holding of a security interest in a
Loan Property, to the Knowledge of Centura, there were no releases of Hazardous
Material in, on, under, or affecting any such property, Participation Facility,
or Loan Property, except such as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Centura.
6.11 COMPLIANCE WITH LAWS. Centura is duly registered as a bank holding
company under the BHC Act. Each Centura Company has in effect all Permits
necessary for it to own, lease, or operate its Material Assets and to carry on
its business as now conducted, except for those Permits the absence of which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Centura, and there has occurred no Default under any such
Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Centura. None of
the Centura Companies:
-25-
<PAGE> 30
(a) is in violation of any Laws, Orders, or Permits applicable
to its business or employees conducting its business, except for violations
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Centura; and
(b) has received any notification or communication from any
agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any Centura
Company is not in compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Centura, (ii) threatening to revoke
any Permits, the revocation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Centura, or
(iii) requiring any Centura Company (x) to enter into or consent to the
issuance of a cease and desist order, formal agreement, directive,
commitment, or memorandum of understanding, or (y) to adopt any Board
resolution or similar undertaking, which restricts materially the conduct of
its business, or in any manner relates to its capital adequacy, its credit
or reserve policies, its management, or the payment of dividends.
6.12 LABOR RELATIONS. No Centura Company is the subject of any
Litigation asserting that it or any other Centura Company has committed an
unfair labor practice (within the meaning of the National Labor Relations Act
or comparable state Law) or seeking to compel it or any other Centura Company
to bargain with any labor organization as to wages or conditions of employment,
nor is any Centura Company a party to or bound by any collective bargaining
agreement, Contract, or other agreement or understanding with a labor union or
labor organization, nor is there any strike or other labor dispute involving
any Centura Company, pending or threatened, or to the Knowledge of Centura, is
there any activity involving any Centura Company's employees seeking to certify
a collective bargaining unit or engaging in any other organization activity.
6.13 EMPLOYEE BENEFIT PLANS. All Centura Plans are in compliance with
the applicable terms of ERISA, the Internal Revenue Code, and any other
applicable Laws, the breach or violation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Centura. For
purposes of this Agreement, the term "Centura Plan" means each bonus, incentive
compensation, severance pay, medical, or other insurance program, retirement
plan, or other employee benefit plan program, agreement, or arrangement
sponsored, maintained, or contributed to by Centura or any trade or business,
whether or not incorporated, that together with Centura or any of its
Subsidiaries would be deemed a "single employer" under Section 414 of the
Internal Revenue Code (a "Centura ERISA Affiliate") or under which Centura or
any Centura ERISA Affiliate has any Liability or obligation. No Liability under
Title IV of ERISA has been incurred by Centura or any Centura ERISA Affiliate
that has not been satisfied in full, and no condition exists that presents a
Material risk to Centura or any Centura ERISA Affiliate of incurring any such
Liability. With respect to any Centura Plan that is subject to Title IV of
ERISA, full payment has been made, or will be made in accordance with Section
404(a)(6) of the Internal Revenue Code, of all amounts that Centura or any
Centura ERISA Affiliate is required to pay under Section 412 of the Internal
Revenue Code or under the terms of the
-26-
<PAGE> 31
Centura Plans, and no accumulated funding deficiency (within the meaning of
Section 412 of the Internal Revenue Code) exists with respect to any Centura
Plan. There are no Material actions, suits, or claims pending, or, to the
Knowledge of Centura, threatened or anticipated relating to any Centura Plan.
There has been no Material adverse change in the financial position or funded
status of any Centura Plan that is subject to Title IV of ERISA since the date
of the information relating to the financial position and funded status of each
such plan contained in Centura's Form 10-K filed for the fiscal year ended
December 31, 1998.
6.14 LEGAL PROCEEDINGS. Except as disclosed in the Centura Financial
Statements, there is no Litigation instituted or pending, or, to the Knowledge
of Centura, threatened against any Centura Company, or against any Asset,
employee benefit plan, interest, or right of any of them, that is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Centura, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any Centura
Company, that are reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Centura.
6.15 REPORTS. Since January 1, 1996, or the date of organization if
later, each Centura Company has timely filed all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with any Regulatory Authorities, except failures to file
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Centura. As of their respective dates, each of such
reports and documents, including the financial statements, exhibits, and
schedules thereto, complied in all Material respects with all applicable Laws.
6.16 STATEMENTS TRUE AND CORRECT. None of the information supplied or
to be supplied by any Centura Company or any Affiliate thereof regarding
Centura or such Affiliate for inclusion in the Registration Statement to be
filed by Centura with the SEC will, when the Registration Statement becomes
effective, be false or misleading with respect to any Material fact, or contain
any untrue statement of a Material fact, or omit to state any Material fact
required to be stated thereunder or necessary to make the statements therein
not misleading. None of the information supplied or to be supplied by any
Centura Company or any Affiliate thereof for inclusion in the Joint Proxy
Statement to be mailed to Triangle's and Centura's stockholders in connection
with the Stockholders' Meetings, will, when first mailed to the stockholders of
Triangle and Centura, be false or misleading with respect to any Material fact,
or contain any misstatement of Material fact, or omit to state any Material
fact required to be stated thereunder or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or, in the case of the Joint Proxy Statement or any amendment
thereof or supplement thereto, at the time of the Stockholders' Meetings, be
false or misleading with respect to any Material fact, or omit to state any
Material fact required to be stated thereunder or necessary to correct any
Material statement in any earlier communication with respect to the
solicitation of any proxy for the Stockholders' Meetings. All documents that
any Centura Company or any Affiliate thereof is responsible for filing with any
Regulatory Authority in connection with the transactions contemplated hereby
will comply as to form in all Material respects with the provisions of
applicable Law.
-27-
<PAGE> 32
6.17 ACCOUNTING, TAX, AND REGULATORY MATTERS. No Centura Company or any
Affiliate thereof has taken or agreed to take any action, and Centura has no
Knowledge of any fact or circumstance that is reasonably likely, to (i) prevent
the transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment, (ii) prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code, or (iii) materially impede or delay receipt of any
Consents of Regulatory Authorities referred to in Section 9.1(b) of this
Agreement or result in the imposition of a condition or restriction of the type
referred to in the last sentence of such Section.
6.18 DERIVATIVES. All interest rate swaps, caps, floors, option
agreements, futures and forward contracts, and other similar risk management
arrangements, whether entered into for Centura's own account, or for the
account of one or more the Centura Subsidiaries or their customers, were
entered into (i) in accordance with prudent business practices and all
applicable Laws, and (ii) with counterparties believed to be financially
responsible.
6.19 YEAR 2000. Centura has completed the four phases of its Year 2000
readiness program, as described in the May 5, 1997, Statement of the FFIEC,
entitled "Year 2000 Project Management Awareness" and the April 10, 1998,
"Guidance Concerning Testing for Year 2000 Readiness." Centura has made
available to Triangle complete and accurate copies of its Year 2000 remediation
contingency plan, as described in the FFIEC Statements of March 17, 1998, and
May 13, 1998, entitled "Guidance Concerning Institution Due Diligence in
Connection with Service Provider and Software Vendor Year 2000 Readiness" and
"Guidance Concerning Contingency Planning in Connection with Year 2000
Readiness," respectively. Centura has completed the four phases of the business
resumption contingency planning process, as set forth in the guidance issued by
FFIEC on December 11, 1998, and May 13, 1998, and has provided to Triangle a
complete and accurate copy of its business resumption contingency plan, written
documentation supporting the plan's development and validation, the results of
tests on the plan, and a schedule for any future tests.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF BOTH PARTIES. Unless the prior written
consent of the other Party shall have been obtained, and except as otherwise
expressly contemplated herein, each Party shall and shall cause each of its
Subsidiaries to (i) operate its business only in the usual, regular, and
ordinary course, (ii) preserve intact its business organization and Assets and
maintain its rights and franchises, (iii) use its reasonable efforts to
maintain its current employee relationships, and (iv) take no action which
would (a) adversely affect the ability of any Party to obtain any Consents
required for the transactions contemplated hereby without imposition of a
condition or restriction of the type referred to in the last sentence of
Section 9.1(b) of this Agreement, or (b) adversely affect the ability of any
Party to perform its covenants and agreements under this Agreement; provided
that in the case of Centura, the provisions of this
-28-
<PAGE> 33
Section 7.1 (other than the provisions of clause (iv) above) shall not be
deemed to preclude Centura from continuing to implement its program of
acquiring unaffiliated depository and nondepository institutions.
7.2 NEGATIVE COVENANTS OF TRIANGLE. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
Triangle covenants and agrees that it will not do or agree or commit to do, or
permit any of its Subsidiaries to do or agree or commit to do, any of the
following without the prior written consent of the chief executive officer or
chief financial officer of Centura, which consent shall not be unreasonably
withheld:
(a) amend the Articles of Incorporation, Bylaws, or other
governing instruments of any Triangle Company; or
(b) incur, guarantee, or otherwise become responsible for, any
additional debt obligation or other obligation for borrowed money (other
than indebtedness of a Triangle Company to another Triangle Company) in
excess of an aggregate of $500,000 (for the Triangle Companies on a
consolidated basis), except in the ordinary course of the business
consistent with past practices (which shall include, for Triangle
Subsidiaries that are depository institutions, creation of deposit
liabilities, purchases of federal funds, advances from the Federal Reserve
Bank or Federal Home Loan Bank, and entry into repurchase agreements fully
secured by U.S. government or agency securities), or impose, or suffer the
imposition, on any Asset of any Triangle Company of any Lien or permit any
such Lien to exist (other than in connection with deposits, repurchase
agreements, bankers acceptances, "treasury tax and loan" accounts
established in the ordinary course of business, the satisfaction of legal
requirements in the exercise of trust powers, and Liens in effect as of the
date hereof that are disclosed in the Triangle Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange (other
than exchanges in the ordinary course under employee benefit plans),
directly or indirectly, any shares, or any securities convertible into any
shares, of the capital stock of any Triangle Company, or declare or pay any
dividend or make any other distribution in respect of Triangle's capital
stock, provided that Triangle may (to the extent legally and contractually
permitted to do so), but shall not be obligated to, declare and pay regular
quarterly cash dividends on the shares of Triangle Common Stock at a rate of
$.10 per share with usual and regular record and payment dates in accordance
with past practice as disclosed in Section 7.2(c) of the Triangle Disclosure
Memorandum and such dates may not be changed without the prior written
consent of Centura; provided, that, notwithstanding the provisions of
Section 1.3 of this Agreement, the Parties shall cooperate in selecting the
Effective Time to ensure that, with respect to the quarterly period in which
the Effective Time occurs, the holders of Triangle Common Stock do not
receive both a dividend in respect of their Triangle Common Stock and a
dividend in respect of Centura Common Stock or fail to receive any dividend;
or
-29-
<PAGE> 34
(d) except for this Agreement, or pursuant to the Triangle
Stock Option Agreement or pursuant to the exercise of Rights outstanding as
of the date of this Agreement and pursuant to the terms thereof in existence
on the date of this Agreement (or, in the case of the Management Incentive
Compensation Plan, additional Rights that will be issued for the fiscal year
ending December 31, 1999), issue, sell, pledge, encumber, authorize the
issuance of, enter into any Contract to issue, sell, pledge, encumber, or
authorize the issuance of, or otherwise permit to become outstanding, any
additional shares of Triangle Common Stock or any other capital stock of any
Triangle Company, or any stock appreciation rights, or any option, warrant,
conversion, or other right to acquire any such stock, or any security
convertible into any such stock; or
(e) adjust, split, combine, or reclassify any capital stock of
any Triangle Company or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of Triangle Common
Stock, or sell, lease, mortgage, or otherwise dispose of or otherwise
encumber (i) any shares of capital stock of any Triangle Subsidiary (unless
any such shares of stock are sold or otherwise transferred to another
Triangle Company) or (ii) any Asset other than in the ordinary course of
business for reasonable and adequate consideration; or
(f) except for purchases of U.S. Treasury securities or U.S.
Government agency securities and for purchases of other securities in the
ordinary course of business consistent with past practice, which in either
case have maturities of three years or less, purchase any securities or make
any Material investment, either by purchase of stock or securities,
contributions to capital, Asset transfers, or purchase of any Assets, in any
Person other than a wholly-owned Triangle Subsidiary, or otherwise acquire
direct or indirect control over any Person, other than in connection with
(i) foreclosures in the ordinary course of business, (ii) acquisitions of
control by a depository institution Subsidiary in its fiduciary capacity, or
(iii) the creation of new wholly-owned Subsidiaries organized to conduct or
continue activities otherwise permitted by this Agreement; or
(g) grant any increase in compensation or benefits to the
employees or officers of any Triangle Company, except in accordance with
past practice and consistent with budget data previously provided to Centura
or as required by Law; pay any severance or termination pay or any bonus
other than pursuant to written policies or written Contracts in effect on
the date of this Agreement; enter into or amend any severance agreements
with officers of any Triangle Company; grant any increase in fees or other
increases in compensation or other benefits to directors of any Triangle
Company; or voluntarily accelerate the vesting of any stock options or other
stock-based compensation or employee benefits; or
(h) enter into or amend any employment Contract between any
Triangle Company and any Person (unless such amendment is required by Law)
that the Triangle Company does not have the unconditional right to terminate
without Liability (other than Liability for services already rendered), at
any time on or after the Effective Time; or
-30-
<PAGE> 35
(i) adopt any new employee benefit plan of any Triangle Company
or make any Material change in or to any existing employee benefit plans of
any Triangle Company other than any such change that is required by Law or
that, in the opinion of counsel, is necessary or advisable to maintain the
tax qualified status of any such plan; or
(j) make any significant change in any Tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in Tax Laws or regulatory accounting
requirements or GAAP; or
(k) commence any Litigation other than as necessary for the
prudent operation of its business or settle any Litigation involving any
Liability of any Triangle Company for Material money damages or restrictions
upon the operations of any Triangle Company; or
(l) except in the ordinary course of business, modify, amend,
or terminate any Material Contract or waive, release, compromise, or assign
any Material rights or claims.
7.3 ADVERSE CHANGES IN CONDITION. Each Party agrees to give written
notice promptly to the other Party upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) would cause or constitute a
Material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the same.
7.4 REPORTS. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to the other Party copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the SEC, such financial statements
will fairly present the consolidated financial position of the entity filing
such statements as of the dates indicated and the consolidated results of
operations, changes in stockholders' equity, and cash flows for the periods
then ended in accordance with GAAP (subject in the case of interim financial
statements to normal recurring year-end adjustments that are not Material). As
of their respective dates, such reports filed with the SEC will comply in all
Material respects with the Securities Laws and will not contain any untrue
statement of a Material fact or omit to state a Material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. Any financial
statements contained in any other reports to another Regulatory Authority shall
be prepared in accordance with Laws applicable to such reports.
-31-
<PAGE> 36
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT; JOINT PROXY STATEMENT; STOCKHOLDER
APPROVALS. As soon as reasonably practicable after execution of this Agreement,
Centura shall file the Registration Statement with the SEC, and shall use its
reasonable efforts to cause the Registration Statement to become effective
under the 1933 Act and take any action required to be taken under the
applicable state Blue Sky or securities Laws in connection with the issuance of
the shares of Centura Common Stock upon consummation of the Merger. Triangle
shall furnish all information concerning it and the holders of its capital
stock as Centura may reasonably request in connection with such action.
Triangle shall call a Stockholders' Meeting, to be held as soon as reasonably
practicable after the Registration Statement is declared effective by the SEC,
for the purpose of voting upon approval of this Agreement and such other
related matters as it deems appropriate. Centura shall call a Stockholders'
Meeting, to be held as soon as reasonably practicable after the Registration
Statement is declared effective by the SEC, for the purpose of voting upon
approval of the issuance of shares of Centura Common Stock pursuant to the
Merger and such other related matters as it deems appropriate. In connection
with the Stockholders' Meetings, (i) Centura and Triangle shall prepare and
file with the SEC a Joint Proxy Statement and mail such Joint Proxy Statement
to their respective stockholders, (ii) the Parties shall furnish to each other
all information concerning them that they may reasonably request in connection
with such Joint Proxy Statement, (iii) the Boards of Directors of Centura and
Triangle shall recommend to their respective stockholders the approval of the
matters submitted for approval, and (iv) the Boards of Directors and officers
of Centura and Triangle shall use their reasonable efforts to obtain such
stockholders' approvals, provided that each of Centura and Triangle may
withdraw, modify, or change in an adverse manner to the other Party its
recommendations if the Board of Directors of such Party, after having consulted
with and based upon the advice of outside counsel, determines in good faith
that the failure to so withdraw, modify, or change its recommendation could
constitute a breach of the fiduciary duties of such Party's Board of Directors
under applicable Law. In addition, nothing in this Section 8.1 or elsewhere in
this Agreement shall prohibit accurate disclosure by either Party of
information that is required to be disclosed in the Registration Statement or
the Joint Proxy Statement or in any other document required to be filed with
the SEC (including, without limitation, a Solicitation/Recommendation Statement
on Schedule 14D-9) or otherwise required to be publicly disclosed by applicable
Law or regulations or rules of the NYSE.
8.2 EXCHANGE LISTING. Centura shall use its reasonable efforts to
list, prior to the Effective Time, on the NYSE, subject to official notice of
issuance, the shares of Centura Common Stock to be issued to the holders of
Triangle Common Stock pursuant to the Merger.
8.3 APPLICATIONS. Centura shall promptly prepare and file, and
Triangle shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement.
-32-
<PAGE> 37
8.4 FILINGS WITH STATE OFFICE. Upon the terms and subject to the
conditions of this Agreement, Centura Merger Subsidiary shall execute and file
the North Carolina Articles of Merger with the Secretary of State of the State
of North Carolina in connection with the Closing.
8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including, without limitation, using its
reasonable efforts to lift or rescind any Order adversely affecting its ability
to consummate the transactions contemplated herein and to cause to be satisfied
the conditions referred to in Article 9 of this Agreement; provided, that
nothing herein shall preclude either Party from exercising its rights under
this Agreement. Each Party shall use, and shall cause each of its Subsidiaries
to use, its reasonable efforts to obtain all Consents necessary or desirable
for the consummation of the transactions contemplated by this Agreement.
8.6 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each Party shall keep the
other Party advised of all Material developments relevant to its business and
to consummation of the Merger and shall permit the other Party to make or cause
to be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the
other Party reasonably requests, provided that such investigation shall be
reasonably related to the transactions contemplated hereby and shall not
interfere unnecessarily with normal operations. No investigation by a Party
shall affect the representations and warranties of the other Party.
(b) Each Party shall, and shall cause its advisers and agents
to, maintain the confidentiality of all confidential information furnished to
it by the other Party concerning its and its Subsidiaries' businesses,
operations, and financial positions and shall not use such information for any
purpose except in furtherance of the transactions contemplated by this
Agreement. If this Agreement is terminated prior to the Effective Time, each
Party shall promptly return or certify the destruction of all documents and
copies thereof, and all work papers containing confidential information
received from the other Party.
(c) Each Party agrees to give the other Party notice as soon as
practicable after any determination by it of any fact or occurrence relating to
the other Party which it has discovered through the course of its investigation
and which represents, or is reasonably likely to represent, either a Material
breach of any representation, warranty, covenant, or agreement of the other
Party or which has had or is reasonably likely to have a Material Adverse
Effect on the other Party.
-33-
<PAGE> 38
(d) Neither Party nor any of their respective Subsidiaries
shall be required to provide access to or to disclose information where such
access or disclosure would violate or prejudice the rights of its customers,
jeopardize the attorney-client or similar privilege with respect to such
information or contravene any Law, rule, regulation, Order, judgment, decree,
fiduciary duty, or agreement entered into prior to the date of this Agreement.
The Parties will use their reasonable efforts to make appropriate substitute
disclosure arrangements, to the extent practicable, in circumstances in which
the restrictions of the preceding sentence apply.
8.7 PRESS RELEASES. Prior to the Effective Time, Centura and Triangle
shall consult with each other as to the form and substance of any press release
or other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 8.7
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's
disclosure obligations imposed by Law.
8.8 CERTAIN ACTIONS. Except with respect to this Agreement and the
transactions contemplated hereby, no Triangle Company nor any Affiliate thereof
nor any Representative thereof retained by any Triangle Company shall, directly
or indirectly, initiate, solicit, encourage or knowingly facilitate (including
by way of furnishing information) any inquiries or the making of any
Acquisition Proposal. Notwithstanding anything herein to the contrary, Triangle
and its Board of Directors shall be permitted (i) to the extent applicable, to
comply with Rule 14d-9 and Rule 14e-2 promulgated under the 1934 Act with
regard to an Acquisition Proposal, (ii) to engage in any discussions or
negotiations with, or provide any information to, any Person in response to an
unsolicited bona fide written Acquisition Proposal by any such Person, if and
only to the extent that (a) Triangle's Board of Directors concludes in good
faith and consistent with its fiduciary duties to Triangle's stockholders under
applicable Law that such Acquisition Proposal could reasonably be expected to
result in a Superior Proposal, (b) prior to providing any information or data
to any Person in connection with an Acquisition Proposal by any such Person,
Triangle's Board of Directors receives from such Person an executed
confidentiality agreement containing confidentiality terms at least as
stringent as those contained in the Confidentiality Agreements, and (c) prior
to providing any information or data to any Person or entering into discussions
or negotiations with any Person, Triangle's Board of Directors notifies Centura
promptly of such inquiries, proposals, or offers received by, any such
information requested from, or any such discussions or negotiations sought to
be initiated or continued with, any of its Representatives indicating, in
connection with such notice, the name of such Person and the material terms and
conditions of any inquiries, proposals or offers. Triangle agrees that it will
promptly keep Centura informed of the status and terms of any such proposals or
offers and the status and terms of any such discussions or negotiations.
Triangle agrees that it will, and will cause its officers, directors and
Representatives to, immediately cease and cause to be terminated any
activities, discussions, or negotiations existing as of the date of this
Agreement with any parties conducted heretofore with respect to any Acquisition
Proposal. Triangle agrees that it will use reasonable best efforts to promptly
inform its directors, officers, key employees, agents, and Representatives of
the obligations undertaken in this Section 8.8. Nothing in this Section 8.8
-34-
<PAGE> 39
shall (i) permit Triangle to terminate this Agreement (except as specifically
provided in Article 10) or (ii) affect any other obligation of Centura or
Triangle under this Agreement.
8.9 ACCOUNTING AND TAX TREATMENT. Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Merger to qualify, and to
take no action which would cause the Merger not to qualify, for treatment as a
pooling of interests for accounting purposes and as a "reorganization" within
the meaning of Section 368(a) of the Internal Revenue Code for federal income
tax purposes.
8.10 STATE TAKEOVER LAWS. Each Triangle Company shall take all
necessary steps to exempt the transactions contemplated by this Agreement from,
or if necessary challenge the validity or applicability of, any applicable
Takeover Laws.
8.11 AGREEMENT OF AFFILIATES. Triangle has disclosed in Section 8.11
of the Triangle Disclosure Memorandum each Person whom it reasonably believes
may be deemed an "affiliate" of Triangle for purposes of Rule 145 under the
1933 Act. Triangle shall use its reasonable efforts to cause each such Person
to deliver to Centura not later than 30 days prior to the Effective Time, a
written agreement, in substantially the form of Exhibit 4, providing that such
Person will not sell, pledge, transfer, or otherwise dispose of the shares of
Triangle Common Stock held by such Person except as contemplated by such
agreement or by this Agreement and will not sell, pledge, transfer, or
otherwise dispose of the shares of Centura Common Stock to be received by such
Person upon consummation of the Merger except in compliance with applicable
provisions of the 1933 Act and the rules and regulations thereunder and until
such time as financial results covering at least 30 days of combined operations
of Centura and Triangle have been published within the meaning of Section
201.01 of the SEC's Codification of Financial Reporting Policies. Shares of
Centura Common Stock issued to such affiliates of Triangle in exchange for
shares of Triangle Common Stock shall not be transferable until such time as
financial results covering at least 30 days of combined operations of Centura
and Triangle have been published within the meaning of Section 201.01 of the
SEC's Codification of Financial Reporting Policies, regardless of whether each
such affiliate has provided the written agreement referred to in this Section
8.11 (and Centura shall be entitled to place restrictive legends upon
certificates for shares of Centura Common Stock issued to affiliates of
Triangle pursuant to this Agreement to enforce the provisions of this Section
8.11). Centura shall not be required to maintain the effectiveness of the
Registration Statement under the 1933 Act for the purposes of resale of Centura
Common Stock by such affiliates.
8.12 EMPLOYEE BENEFITS AND CONTRACTS. Following the Effective Time, but
in no event earlier than the consolidation of Triangle's depository institution
Subsidiaries with Centura's depository institution Subsidiaries, Centura shall
provide generally to officers and employees of the Triangle Companies, who at
or after the Effective Time become employees of a Centura Company (the
"Continuing Employees"), employee benefits under employee benefit plans on
terms and conditions which when taken as a whole are substantially equivalent
to those currently provided by the Centura Companies to their similarly
situated officers and employees. For purposes of participation and vesting (but
not accrual of benefits) under such employee
-35-
<PAGE> 40
benefit plans, (i) service under any qualified plans of Triangle shall be
treated as service under Centura's qualified plans, and (ii) service under any
other employee benefit plans of Triangle shall be treated as service under any
similar employee benefit plans maintained by Centura. Centura shall cause the
Centura welfare benefit plans that cover the Continuing Employees after the
Effective Time to (i) waive any waiting period and restrictions and limitations
for preexisting conditions or insurability, and (ii) cause any deductible,
co-insurance, or maximum out-of-pocket payments made by the Continuing
Employees under Triangle's welfare benefit plans to be credited to such
Continuing Employees under the Centura welfare benefit plans, so as to reduce
the amount of any deductible, co-insurance, or maximum out-of-pocket payments
payable by the Continuing Employees under the Centura welfare benefit plans.
The continued coverage of the Continuing Employees under the employee benefits
plans maintained by Triangle and/or any Triangle Subsidiary immediately prior
to the Effective Time during a transition period not to exceed six months shall
be deemed to provide the Continuing Employees with benefits that are no less
favorable than those offered to other employees of Centura and its
Subsidiaries, provided that after the Effective Time there is no Material
reduction (determined on an overall basis) in the benefits provided under the
Triangle employee benefit plans. Except as expressly provided in the
Supplemental Letter, Centura also shall cause Triangle and its Subsidiaries to
honor all employment, severance, consulting, and other compensation Contracts
disclosed in Section 8.12 of the Triangle Disclosure Memorandum to Centura
between any Triangle Company and any current or former director, officer, or
employee thereof, and all provisions of the Triangle Benefit Plans. To the
extent that Centura has agreed to cause Triangle or the appropriate Triangle
Subsidiary to honor the Contracts as set forth in the preceding sentence (the
"Triangle Compensation Contracts"), Centura acknowledges that (i) the Merger
constitutes a "Change of Control" and "Change in Control" (as applicable) for
all purposes pursuant to any such Triangle Compensation Contracts, and (ii)
that a "Termination Event" will exist under such Triangle Compensation
Contracts throughout the one-year period (or such shorter period as may be
provided for in the particular Triangle Compensation Contract) following the
Effective Time. Centura shall use all reasonable efforts to identify, and offer
employment opportunities to, qualified, satisfactorily performing employees of
Triangle or any Triangle Company in vacant positions within the business
operations of Centura and the Centura Companies for which such employees are
qualified. Centura shall give, and shall cause each Centura Company to give,
priority consideration to all such employees vis-a-vis all individuals other
than current employees of Centura or any Centura Company.
8.13 INDEMNIFICATION.
(a) From and after the Effective Time, in the event of any
threatened or actual claim, action, suit, proceeding, or investigation, whether
civil, criminal, or administrative, including, without limitation, any such
claim, action, suit, proceeding or investigation in which any person who is
now, or has been at any time prior to the date of this Agreement, or who
becomes prior to the Effective Time, a director or officer of Triangle or any
Triangle Subsidiary (the "Indemnified Parties") is, or is threatened to be,
made a party based in whole or in part on, or arising in whole or in part out
of, or pertaining to (i) the fact that he is or was a director, officer,
trustee administering an employee benefit plan, or employee of Triangle, any of
the Triangle
-36-
<PAGE> 41
Subsidiaries, or any of their respective predecessors or (ii) this Agreement or
any of the transactions contemplated hereby, whether in any case asserted or
arising before or after the Effective Time, Centura shall indemnify and hold
harmless, as and to the fullest extent permitted by Law, each such Indemnified
Party against any Liability (including reasonable attorneys' fees and expenses
in advance of the final disposition of any claim, suit, proceeding, or
investigation to each Indemnified Party to the fullest extent permitted by Law
upon receipt of any undertaking required by applicable Law), judgments, fines,
and amounts paid in settlement in connection with any such threatened or actual
claim, action, suit, proceeding, or investigation, and in the event of any such
threatened or actual claim, action, suit, proceeding, or investigation (whether
asserted or arising before or after the Effective Time), the Indemnified
Parties may retain counsel reasonably satisfactory to them; provided, however,
that (a) Centura shall have the right to assume the defense thereof and upon
such assumption Centura shall not be liable to any Indemnified Party for any
legal expenses of other counsel or any other expenses subsequently incurred by
any Indemnified Party in connection with the defense thereof, except that if
Centura elects not to assume such defense or counsel for the Indemnified
Parties reasonably advises the Indemnified Parties that there are issues which
raise conflicts of interest between Centura and the Indemnified Parties, the
Indemnified Parties may retain counsel reasonably satisfactory to them, and
Centura shall pay the reasonable fees and expenses of such counsel for the
Indemnified Parties, (b) Centura shall not be liable for any settlement
effected without its prior written consent (which consent shall not be
unreasonably withheld), and (c) Centura shall have no obligation hereunder to
any Indemnified Party when and if a court of competent jurisdiction shall
ultimately determine, and such determination shall have become final and
nonappealable, that indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable Law. Centura's obligations
under this Section 8.13(a) continue in full force and effect for a period of
six years after the Effective Time; provided, however, that all rights to
indemnification in respect of any claim (a "Claim") asserted or made within
such period shall continue until the final disposition of such Claim.
(b) Centura agrees that all rights to indemnification and all
limitations on Liability existing in favor of the directors, officers, and
employees of Triangle and its Subsidiaries (the "Covered Parties") as provided
in their respective Articles of Incorporation, Bylaws, or similar governing
instruments as in effect as of the date of this Agreement with respect to
matters occurring prior to the Effective Time shall survive the Merger and
shall continue in full force and effect, and shall be honored by such entities
or their respective successors as if they were the indemnifying party
thereunder, without any amendment thereto, for a period of six years after the
Effective Time; provided, however, that all rights to indemnification in
respect of any Claim asserted or made within such period shall continue until
the final disposition of such Claim; provided, further, however, that nothing
contained in this Section 8.13(b) shall be deemed to preclude the liquidation,
consolidation, or merger of Triangle or any Triangle Subsidiary, in which case
all of such rights to indemnification and limitations on Liability shall be
deemed to so survive and continue notwithstanding any such liquidation,
consolidation, or merger. Without limiting the foregoing, in any case in which
approval by Centura is required to effectuate any indemnification, Centura
shall direct, at the election of the
-37-
<PAGE> 42
Indemnified Party, that the determination of any such approval shall be made by
independent counsel mutually agreed upon between Centura and the Indemnified
Party.
(c) Centura, from and after the Effective Time, will directly
or indirectly cause the persons who served as directors or officers of any
Triangle Company at or before the Effective Time to be covered by Triangle's
existing directors' and officers' liability insurance policy (provided that
Centura may substitute therefor policies of at least the same coverage and
amounts containing terms and conditions which are not less advantageous than
such policy). Such insurance coverage shall commence at the Effective Time and
will be provided for a period of no less than three years after the Effective
Time.
(d) If Centura or any of its successors or assigns shall
consolidate with or merge into any other Person and shall not be the continuing
or surviving Person of such consolidation or merger or shall transfer all or
substantially all of its Assets to any Person, then and in each case, proper
provision shall be made so that the successors and assigns of Centura shall
assume the obligations set forth in this Section 8.13.
(e) The provisions of this Section 8.13 are intended to be for
the benefit of and shall be enforceable by, each Indemnified Party, his or her
heirs and representatives.
8.14 CERTAIN MODIFICATIONS. Centura and Triangle shall consult with
respect to their loan, litigation, and real estate valuation policies and
practices (including loan classifications and levels of reserves) and Triangle
shall make such modifications or changes to its policies and practices, if any,
prior to the Effective Time, as may be mutually agreed upon. Centura and
Triangle also shall consult with respect to the character, amount, and timing
of restructuring and Merger-related expense charges to be taken by each of the
Parties in connection with the transactions contemplated by this Agreement and
shall take such charges in accordance with GAAP as may be mutually agreed upon
by the Parties. Neither Party's representations, warranties, and covenants
contained in this Agreement shall be deemed to be inaccurate or breached in any
respect as a consequence of any modifications or charges undertaken solely on
account of this Section 8.14.
8.15 CENTURA MERGER SUBSIDIARY ORGANIZATION. Centura shall organize
Centura Merger Subsidiary under the Laws of the State of North Carolina. Prior
to the Effective Time, the outstanding capital stock of Centura Merger
Subsidiary shall consist of 1,000 shares of Centura Merger Subsidiary Common
Stock, all of which shall be owned by Centura. Prior to the Effective Time,
Centura Merger Subsidiary shall not (i) conduct any business operations
whatsoever or (ii) enter into any contract or agreement of any kind, acquire
any assets, or incur any Liability, except as may be specifically contemplated
by this Agreement or the Plan of Merger or as the Parties may otherwise agree.
Centura, as the sole stockholder of Centura Merger Subsidiary, shall vote prior
to the Effective Time the shares of Centura Merger Subsidiary Common Stock in
favor of the Plan of Merger. At the Effective Time, Centura Merger Subsidiary
shall be a corporation duly organized and validly existing under the Laws of
the State of North Carolina, with the corporate power and authority necessary
to execute, deliver,
-38-
<PAGE> 43
and perform its obligations under the Plan of Merger and to consummate the
transactions contemplated by the Plan of Merger.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligations of each Party to perform this Agreement and to consummate the
Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by both Parties
pursuant to Section 11.6 of this Agreement:
(a) STOCKHOLDER APPROVALS. The stockholders of Triangle shall
have approved this Agreement and the Plan of Merger, and the consummation of
the transactions contemplated hereby and thereby, including the Merger, as
and to the extent required by Law, by the provisions of any governing
instruments, and by the rules of the NYSE. The stockholders of Centura shall
have approved the issuance of shares of Centura Common Stock pursuant to the
Merger, as and to the extent required by Law, by the provisions of any
governing instruments, and by the rules of the NYSE.
(b) REGULATORY APPROVALS. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities
required for consummation of the Merger shall have been obtained or made and
shall be in full force and effect and all waiting periods required by Law
shall have expired. No Consent obtained from any Regulatory Authority which
is necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in a manner (excluding such matters agreed to by
the Parties in the Supplemental Letter) which in the reasonable good faith
judgment of the Board of Directors of Centura would so materially adversely
impact the economic or business benefits of the transactions contemplated by
this Agreement, that had such condition or requirement been known as of the
date of this Agreement, Centura would not, in its reasonable judgment, have
entered into this Agreement.
(c) CONSENTS AND APPROVALS. Each Party shall have obtained any
and all Consents required for consummation of the Merger (other than those
referred to in Section 9.1(b) of this Agreement) or for the preventing of
any Default under any Contract or Permit of such Party which, if not
obtained or made, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on such Party.
(d) LEGAL PROCEEDINGS. No court or governmental or Regulatory
Authority of competent jurisdiction shall have enacted, issued, promulgated,
enforced, or entered any Law or Order (whether temporary, preliminary, or
permanent) or taken any other action which prohibits, restricts, or makes
illegal consummation of the transactions contemplated by this Agreement.
-39-
<PAGE> 44
(e) REGISTRATION STATEMENT. The Registration Statement shall
be effective under the 1933 Act, no stop orders suspending the effectiveness
of the Registration Statement shall have been issued, no action, suit,
proceeding, or investigation by the SEC to suspend the effectiveness thereof
shall have been initiated and be continuing, and all necessary approvals
under state securities Laws or the 1933 Act or 1934 Act relating to the
issuance or trading of the shares of Centura Common Stock issuable pursuant
to the Merger shall have been received.
(f) EXCHANGE LISTING. The shares of Centura Common Stock
issuable pursuant to the Merger shall have been approved for listing on the
NYSE, subject to official notice of issuance.
(g) TAX MATTERS. Each Party shall have received a written
opinion or opinions from Alston & Bird LLP, in a form reasonably
satisfactory to such Party (the "Tax Opinion"), substantially to the effect
that: (i) the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code; (ii) no gain or loss will be
recognized by holders of Triangle Common Stock who exchange all of their
Triangle Common Stock solely for Centura Common Stock pursuant to the Merger
(except with respect to any cash received in lieu of a fractional share
interest in Centura Common Stock); (iii) the tax basis of the Centura Common
Stock received by holders of Triangle Common Stock who exchange all of their
Triangle Common Stock solely for Centura Common Stock in the Merger (plus
cash received in lieu of a fractional share interest in Centura Common
Stock) will be the same as the tax basis of the Triangle Common Stock
surrendered in exchange for the Centura Common Stock (reduced by an amount
allocable to a fractional share interest in Centura Common Stock for which
cash is received); and (iv) the holding period of the Centura Common Stock
received by holders who exchange all of their Triangle Common Stock solely
for Centura Common Stock in the Merger (plus cash received in lieu of a
fractional share interest in Centura Common Stock) will be the same as the
holding period of the Triangle Common Stock surrendered in exchange
therefor, provided that such Triangle Common Stock is held as a capital
asset at the Effective Time.
(h) POOLING LETTER. Each Party shall have received a letter,
dated as of the Effective Time, in a form reasonably acceptable to such
Party, from KPMG LLP to the effect that the Merger will qualify for
pooling-of-interests accounting treatment. Each Party shall have received a
letter, dated as of the Effective Time, in a form reasonably acceptable to
such Party, from PricewaterhouseCoopers LLP to the effect that such firm is
not aware of any matters relating to Triangle and its Subsidiaries which
would preclude the Merger from qualifying for pooling-of-interests
accounting treatment.
9.2 CONDITIONS TO OBLIGATIONS OF CENTURA. The obligations of Centura
to perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following
conditions, unless waived by Centura pursuant to Section 11.6(a) of this
Agreement:
-40-
<PAGE> 45
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 9.2(a), the accuracy of the representations and warranties of
Triangle set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect as though
all such representations and warranties had been made on and as of the
Effective Time (provided that representations and warranties which are
confined to a specified date shall speak only as of such date). The
representations and warranties of Triangle set forth in Section 5.3 of this
Agreement shall be true and correct (except for inaccuracies which are de
minimis in amount). The representations and warranties of Triangle set forth
in Sections 5.18 and 5.19 of this Agreement shall be true and correct in all
Material respects. There shall not exist inaccuracies in the representations
and warranties of Triangle set forth in this Agreement (including the
representations and warranties set forth in Sections 5.3, 5.18, and 5.19)
such that the aggregate effect of such inaccuracies has, or is reasonably
likely to have, a Material Adverse Effect on Triangle; provided that, for
purposes of this sentence only, those representations and warranties which
are qualified by references to "material, "Material," "Material Adverse
Effect," or variations thereof, or to the "Knowledge" of Triangle or to a
matter being "known" by Triangle shall be deemed not to include such
qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
the agreements and covenants of Triangle to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied with
in all Material respects.
(c) CERTIFICATES. Triangle shall have delivered to Centura (i)
a certificate, dated as of the Effective Time and signed on its behalf by
its duly authorized officers, to the effect that the conditions of its
obligations set forth in Section 9.2(a) and 9.2(b) of this Agreement have
been satisfied, and (ii) certified copies of resolutions duly adopted by
Triangle's Board of Directors and stockholders evidencing the taking of all
corporate action necessary to authorize the execution, delivery, and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Centura and its
counsel shall request.
(d) AFFILIATE AGREEMENTS. Centura shall have received from
each affiliate of Triangle the affiliates agreement referred to in Section
8.11 of this Agreement, to the extent necessary to assure in the reasonable
judgment of Centura that the transactions contemplated hereby will qualify
for pooling-of-interests accounting treatment.
9.3 CONDITIONS TO OBLIGATIONS OF TRIANGLE. The obligations of Triangle
to perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following
conditions, unless waived by Triangle pursuant to Section 11.6(b) of this
Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 9.3(a), the accuracy of the representations and warranties of
Centura set forth in this Agreement
-41-
<PAGE> 46
shall be assessed as of the date of this Agreement and as of the Effective
Time with the same effect as though all such representations and warranties
had been made on and as of the Effective Time (provided that representations
and warranties which are confined to a specified date shall speak only as of
such date). The representations and warranties of Centura set forth in
Section 6.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimis in amount). The representations and
warranties of Centura set forth in Section 6.17 of this Agreement shall be
true and correct in all Material respects. There shall not exist
inaccuracies in the representations and warranties of Centura set forth in
this Agreement (including the representations and warranties set forth in
Sections 6.3 and 6.17) such that the aggregate effect of such inaccuracies
has, or is reasonably likely to have, a Material Adverse Effect on Centura;
provided that, for purposes of this sentence only, those representations and
warranties which are qualified by references to "material," "Material,"
"Material Adverse Effect," or variations thereof, or to the "Knowledge" of
Centura or to a matter being "known" by Centura shall be deemed not to
include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
the agreements and covenants of Centura to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied with
in all Material respects.
(c) CERTIFICATES. Centura shall have delivered to Triangle (i)
a certificate, dated as of the Effective Time and signed on its behalf by
its duly authorized officers, to the effect that the conditions of its
obligations set forth in Section 9.3(a) and 9.3(b) of this Agreement have
been satisfied, and (ii) certified copies of resolutions duly adopted by
Centura's Board of Directors and stockholders evidencing the taking of all
corporate action necessary to authorize the execution, delivery, and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Triangle and its
counsel shall request.
ARTICLE 10
TERMINATION
10.1 TERMINATION. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
stockholders of Triangle or Centura, this Agreement may be terminated and the
Merger abandoned at any time prior to the Effective Time:
(a) By mutual consent of the Board of Directors of Centura and
the Board of Directors of Triangle; or
(b) By the Board of Directors of either Party (provided that
the terminating Party is not then in breach of any representation or
warranty contained in this Agreement under the applicable standard set
forth in Section 9.2(a) of this Agreement in the case of Triangle and
Section 9.3(a) of this Agreement in the case of Centura or in Material
breach
-42-
<PAGE> 47
of any covenant or other agreement contained in this Agreement) in the
event of an inaccuracy of any representation or warranty of the other Party
contained in this Agreement which cannot be or has not been cured within 30
days after the giving of written notice to the breaching Party of such
inaccuracy and which inaccuracy would provide the terminating Party the
ability to refuse to consummate the Merger under the applicable standard
set forth in Section 9.2(a) of this Agreement in the case of Triangle and
Section 9.3(a) of this Agreement in the case of Centura; or
(c) By the Board of Directors of either Party (provided that
the terminating Party is not then in breach of any representation or
warranty contained in this Agreement under the applicable standard set forth
in Section 9.2(a) of this Agreement in the case of Triangle and Section
9.3(a) in the case of Centura) in the event of a Material breach by the
other Party of any covenant or agreement contained in this Agreement which
cannot be or has not been cured within 30 days after the giving of written
notice to the breaching Party of such breach; or
(d) By the Board of Directors of either Party in the event (i)
any Consent of any Regulatory Authority required for consummation of the
Merger and the other transactions contemplated hereby shall have been denied
by final nonappealable action of such authority or if any action taken by
such authority is not appealed within the time limit for appeal, or (ii) the
stockholders of Centura or Triangle fail to vote their approval of the
matters submitted for the approval by such stockholders at the Stockholders'
Meetings where the transactions were presented to such stockholders for
approval and voted upon; or
(e) By the Board of Directors of either Party in the event that
the Merger shall not have been consummated by June 30, 2000, if the failure
to consummate the transactions contemplated hereby on or before such date is
not caused by any breach of this Agreement by the Party electing to
terminate pursuant to this Section 10.1(e); or
(f) By the Board of Directors of either Party (provided that
the terminating Party is not then in breach of any representation or
warranty contained in this Agreement under the applicable standard set forth
in Section 9.2(a) of this Agreement in the case of Triangle and Section
9.3(a) of this Agreement in the case of Centura or in Material breach of any
covenant or other agreement contained in this Agreement) in the event that
any of the conditions precedent to the obligations of such Party to
consummate the Merger cannot be satisfied or fulfilled by the date specified
in Section 10.1(e) of this Agreement; or
(g) By the Board of Directors of Triangle, if it determines by
a vote of a majority of the members of its entire Board, at any time during
the ten-day period commencing two days after the Determination Date, if both
of the following conditions are satisfied:
(1) the Average Closing Price shall be less than the
product of (i) 0.80 and (ii) the Starting Price; and
-43-
<PAGE> 48
(2) (i) the quotient obtained by dividing the Average
Closing Price by the Starting Price (such number being referred to herein
as the "Centura Ratio") shall be less than (ii) the quotient obtained by
dividing the Index Price on the Determination Date by the Index Price on
the Starting Date and subtracting 0.15 from the quotient in this clause
(2)(ii) (such number being referred to herein as the "Index Ratio");
subject, however, to the following three sentences. If Triangle refuses to
consummate the Merger pursuant to this Section 10.1(g), it shall give prompt
written notice thereof to Centura; provided, that such notice of election to
terminate may be withdrawn at any time within the aforementioned ten-day
period. During the five-day period commencing with its receipt of such notice,
Centura shall have the option to elect to increase the Exchange Ratio to equal
the lesser of (i) the quotient (rounded to the nearest one-ten-thousandth)
obtained by dividing (1) the product of 0.80, the Starting Price, and the
Exchange Ratio (as then in effect) by (2) the Average Closing Price, and (ii)
the quotient (rounded to the nearest one-ten-thousandth) obtained by dividing
(1) the product of the Index Ratio and the Exchange Ratio (as then in effect)
by (2) the Centura Ratio. If Centura makes an election contemplated by the
preceding sentence, within such five-day period, it shall give prompt written
notice to Triangle of such election and the revised Exchange Ratio, whereupon
no termination shall have occurred pursuant to this Section 10.1(g) and this
Agreement shall remain in effect in accordance with its terms (except as the
Exchange Ratio shall have been so modified), and any references in this
Agreement to "Exchange Ratio" shall thereafter be deemed to refer to the
Exchange Ratio as adjusted pursuant to this Section 10.1(g).
For purposes of this Section 10.1(g), the following terms shall have the
meanings indicated:
"Average Closing Price" shall mean the average of the daily last
sales prices of Centura Common Stock as reported on the NYSE - Composite
Transactions List (as reported by The Wall Street Journal or, if not
reported thereby, another authoritative source as chosen by Centura) for
the ten consecutive full trading days in which such shares are traded on
the NYSE - Composite Transactions List ending at the close of trading on
the Determination Date.
"Determination Date" shall mean the later of the date on which (i)
the Consent of the Board of Governors of the Federal Reserve System
(without regard to any requisite waiting period thereof) to the Merger
shall be received and (ii) the Triangle and Centura stockholders approve
the Merger at the Stockholders' Meetings.
"Index Group" shall mean the 13 bank holding companies listed
below, the common stocks of all of which shall be publicly traded and as
to which there shall not have been, since the Starting Date and before
the Determination Date, any public announcement of a proposal for such
company to
-44-
<PAGE> 49
be acquired or for such company to acquire another company or companies
in transactions with a value exceeding 25% of the acquiror's market
capitalization. In the event that any such company or companies are
removed from the Index Group, the weights (which shall be determined
based upon the number of outstanding shares of common stock) shall be
redistributed proportionately for purposes of determining the Index
Price. The 13 bank holding companies and the weights attributed to them
are as follows:
<TABLE>
<CAPTION>
BANK HOLDING COMPANIES WEIGHTING
------------------------------------------------------------------------- ------------
<S> <C>
CCB Financial Corporation 4.30%
Colonial BancGroup, Inc. 11.80
Compass Bancshares, Inc. 12.00
First Virginia Banks, Inc. 5.30
FirstMerit Corporation 9.60
Hibernia Corporation 16.90
Mercantile Bankshares Corporation 7.30
National Commerce Bancorporation 11.40
One Valley Bancorp, Inc. 3.50
Provident Bankshares Corporation 2.70
Riggs National Corporation 3.00
Trustmark Corporation 7.60
United Bankshares, Inc. 4.60
------------------------------------------------------------------------- ------------
Total 100.00%
=======
</TABLE>
"Index Price" on a given date shall mean the weighted average
(weighted in accordance with the factors listed above) of the last sales
prices of the companies composing the Index Group.
"Starting Date" shall mean the last full trading day immediately
preceding the date of the announcement by press release of the Merger.
"Starting Price" shall mean the last sale price per share of
Centura Common Stock as reported on the NYSE - Composite Transactions
List (as reported by The Wall Street Journal or, if not reported thereby,
another authoritative source as chosen by Centura) on the Starting Date.
If any company belonging to the Index Group or Centura declares or
effects a stock dividend, reclassification, recapitalization, split-up,
combination, exchange of shares, or similar transaction between the date of
this Agreement and the Determination Date, the prices for the common stock of
such company or Centura shall be appropriately adjusted for the purposes of
applying this Section 10.1(g).
10.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement and the
-45-
<PAGE> 50
Supplemental Letter shall become void and have no effect, except that (i) the
provisions of this Section 10.2 and Article 11 and Section 8.6(b) of this
Agreement shall survive any such termination and abandonment, and (ii) a
termination pursuant to Sections 10.1(b), 10.1(c), or 10.1(f) of this Agreement
shall not relieve the breaching Party from Liability for an uncured willful
breach of a representation, warranty, covenant, or agreement giving rise to
such termination. The Triangle Stock Option Agreement and the Centura Stock
Option Agreement shall be governed by their respective terms.
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 10.3 and
Articles 2, 3, 4, and 11 and Sections 8.11 and 8.13 of this Agreement.
ARTICLE 11
MISCELLANEOUS
11.1 DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized terms
set forth below shall have the following meanings:
"ACQUISITION PROPOSAL" with respect to a Party shall mean any
tender offer or exchange offer or any proposal for a merger, acquisition
of all of the stock or Assets of, or other business combination involving
such Party or any of its Subsidiaries or the acquisition of a substantial
equity interest in, or a substantial portion of the Assets of, such Party
or any of its Subsidiaries.
"AFFILIATE" of a Person shall mean: (i) any other Person directly,
or indirectly through one or more intermediaries, controlling, controlled
by or under common control with such Person; (ii) any officer, director,
partner, employer, or direct or indirect beneficial owner of any 10% or
greater equity or voting interest of such Person; or (iii) any other
Person for which a Person described in clause (ii) acts in any such
capacity.
"AGREEMENT" shall mean this Agreement and Plan of Reorganization,
including the Exhibits (and excepting the Triangle Stock Option Agreement
and the Centura Stock Option Agreement) delivered pursuant hereto and
incorporated herein by reference.
"ASSETS" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature, character,
and description, whether real, personal, or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or utilized
in such Person's business, directly or indirectly, in whole or in part,
whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of such
Person and wherever located.
-46-
<PAGE> 51
"BHC ACT" shall mean the federal Bank Holding Company Act of 1956,
as amended.
"CENTURA COMMON STOCK" shall mean the no par value common stock of
Centura.
"CENTURA COMPANIES" shall mean, collectively, Centura and all
Centura Subsidiaries.
"CENTURA FINANCIAL STATEMENTS" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any)
of Centura as of June 30, 1999, and as of December 31, 1998 and 1997, and
the related statements of income, changes in stockholders' equity, and
cash flows (including related notes and schedules, if any) for the six
months ended June 30, 1999, and for each of the three years ended
December 31, 1998, 1997, and 1996, as filed by Centura in SEC Documents,
and (ii) the consolidated statements of condition of Centura (including
related notes and schedules, if any) and related statements of income,
changes in stockholders' equity, and cash flows (including related notes
and schedules, if any) included in SEC Documents filed with respect to
periods ended subsequent to June 30, 1999.
"CENTURA MERGER SUBSIDIARY COMMON STOCK" shall mean the no par
value common stock of Centura Merger Subsidiary.
"CENTURA PREFERRED STOCK" shall mean the no par value preferred
stock of Centura.
"CENTURA STOCK OPTION AGREEMENT" shall mean the stock option
agreement by and between Centura and Triangle, in substantially the form
of Exhibit 2.
"CENTURA SUBSIDIARIES" shall mean the Subsidiaries of Centura and
any corporation, bank, savings association, or other organization
acquired as a Subsidiary of Centura in the future and owned by Centura at
the Effective Time.
"CONFIDENTIALITY AGREEMENTS" shall mean those certain
Confidentiality Agreements, entered into prior to the date of this
Agreement, between Triangle and Centura.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding, or undertaking of
any kind or character, or other document to which any Person is a party
or that is binding on any Person or its capital stock, Assets, or
business.
-47-
<PAGE> 52
"DEFAULT" shall mean (i) any breach or violation of or default
under any Contract, Order, or Permit, (ii) any occurrence of any event
that with the passage of time or the giving of notice or both would
constitute a breach or violation of or default under any Contract, Order,
or Permit, or (iii) any occurrence of any event that with or without the
passage of time or the giving of notice would give rise to a right to
terminate or revoke, change the current terms of, or renegotiate, or to
accelerate, increase, or impose any Liability under, any Contract, Order,
or Permit, where, in any such event, such Default is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on a
Party.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air,
surface water, ground water, land surface, or subsurface strata) and
which are administered, interpreted, or enforced by the United States
Environmental Protection Agency and state and local agencies with
jurisdiction over, and including common law in respect of, pollution or
protection of the environment, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended, 42 U.S.C. 9601 et
seq. ("CERCLA"), the Resource Conservation and Recovery Act, as amended,
42 U.S.C. 6901 et seq. ("RCRA"), and other Laws relating to emissions,
discharges, releases, or threatened releases of any Hazardous Material,
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of any Hazardous
Material.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"EXHIBITS" 1 through 4, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits are
hereby incorporated by reference herein and made a part hereof, and may
be referred to in this Agreement and any other related instrument or
document without being attached hereto.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil (and specifically shall include asbestos
requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HSR ACT" shall mean Section 7A of the Clayton Act, as added by
Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.
-48-
<PAGE> 53
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of
1986, as amended, and the rules and regulations promulgated thereunder.
"JOINT PROXY STATEMENT" shall mean the joint proxy statement used
by Centura and Triangle to solicit the approval of their respective
stockholders of the transactions contemplated by this Agreement, which
shall include the prospectus of Centura relating to the issuance of the
Centura Common Stock to holders of Triangle Common Stock.
"KNOWLEDGE" as used with respect to a Person (including references
to such Person being aware of a particular matter) shall mean the
personal knowledge of the chairman, president, chief financial officer,
chief accounting officer, chief credit officer, general counsel, or any
executive vice president of such Person.
"LAW" shall mean any code, law, ordinance, regulation, reporting
or licensing requirement, rule, or statute applicable to a Person or its
Assets, Liabilities, or business, including those promulgated,
interpreted, or enforced by any Regulatory Authority.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost, or expense
(including costs of investigation, collection, and defense), claim,
deficiency, guaranty, or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for collection
or deposit in the ordinary course of business) of any type, whether
accrued, absolute or contingent, liquidated or unliquidated, matured or
unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement,
lien, mortgage, pledge, reservation, restriction, security interest,
title retention, or other security arrangement, or any adverse right or
interest, charge, or claim of any nature whatsoever of, on, or with
respect to any property or property interest, other than (i) Liens for
property Taxes not yet due and payable, and (ii) for depository
institution Subsidiaries of a Party, pledges to secure deposits, and
other Liens incurred in the ordinary course of the banking business.
"LITIGATION" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, demand letter, governmental or
other examination or investigation, hearing, inquiry, administrative or
other proceeding, or notice (written or oral) by any Person alleging
potential Liability or requesting information relating to or affecting a
Party, its business, its Assets (including Contracts related to it), or
the transactions contemplated by this Agreement, but shall not include
regular, periodic examinations of depository institutions and their
Affiliates by Regulatory Authorities.
"LOAN PROPERTY" shall mean any property owned, leased, or operated
by the Party in question or by any of its Subsidiaries or in which such
Party or Subsidiary holds a security or other interest (including an
interest in a fiduciary capacity), and, where required by the
-49-
<PAGE> 54
context, includes the owner or operator of such property, but only with
respect to such property.
"MATERIAL" for purposes of this Agreement shall be determined in
light of the facts and circumstances of the matter in question; provided
that any specific monetary amount stated in this Agreement shall
determine materiality in that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event, change,
or occurrence which, individually or together with any other event,
change, or occurrence, has a Material adverse impact on (i) the financial
condition, results of operations, or business of such Party and its
Subsidiaries, taken as a whole, or (ii) the ability of such Party to
perform its obligations under this Agreement or to consummate the Merger
or the other transactions contemplated by this Agreement, provided that
"Material Adverse Effect" shall not be deemed to include the impact of
(a) changes in banking and similar Laws of general applicability or
interpretations thereof by courts or governmental authorities, (b)
changes in GAAP or regulatory accounting principles generally applicable
to banks and their holding companies, (c) actions and omissions of a
Party (or any of its Subsidiaries) taken with the prior consent of the
other Party in contemplation of the transactions contemplated hereby, and
(d) the Merger and compliance with the provisions of this Agreement on
the operating performance of the Parties.
"NASD" shall mean the National Association of Securities Dealers,
Inc.
"NCBCA" shall mean the North Carolina Business Corporation Act.
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"NORTH CAROLINA ARTICLES OF MERGER" shall mean the Articles of
Merger to be executed by Centura Merger Subsidiary and filed with the
Secretary of State of the State of North Carolina relating to the Merger
as contemplated by Section 1.1 of this Agreement.
"NYSE" shall mean the New York Stock Exchange, Inc.
"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or
writ of any federal, state, local, or foreign or other court, arbitrator,
mediator, tribunal, administrative agency, or Regulatory Authority.
"PARTICIPATION FACILITY" shall mean any facility or property in
which the Party in question or any of its Subsidiaries participates in
the management (including, but not limited to, participating in a
fiduciary capacity) and, where required by the context, said
-50-
<PAGE> 55
term means the owner or operator of such facility or property, but only
with respect to such facility or property.
"PARTY" shall mean either Triangle or Centura, and "PARTIES" shall
mean both Triangle and Centura.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets, or business.
"PERSON" shall mean a natural person or any legal, commercial, or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability
company, trust, business association, group acting in concert, or any
person acting in a representative capacity.
"PLAN OF MERGER" shall mean the plan of merger by and between
Triangle and Centura Merger Subsidiary, in substantially the form of
Exhibit 3.
"REGISTRATION STATEMENT" shall mean the Registration Statement on
Form S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by
Centura under the 1933 Act with respect to the shares of Centura Common
Stock to be issued to the stockholders of Triangle in connection with the
transactions contemplated by this Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively, the Federal
Trade Commission, the United States Department of Justice, the Board of
the Governors of the Federal Reserve System, the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation,
the Office of Thrift Supervision, all state regulatory agencies having
jurisdiction over the Parties and their respective Subsidiaries, the
NASD, and the SEC.
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative of a
Person.
"RIGHTS" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations of any character whatsoever
relating to, or securities or rights convertible into or exchangeable
for, shares of the capital stock of a Person or by which a Person is or
may be bound to issue additional shares of its capital stock or other
Rights.
"SEC" shall mean the United States Securities and Exchange
Commission.
-51-
<PAGE> 56
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed,
or required to be filed, by a Party or any of its Subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act
of 1940, as amended, the Trust Indenture Act of 1939, as amended, and the
rules and regulations of any Regulatory Authority promulgated thereunder.
"STOCKHOLDERS' MEETINGS" shall mean the respective meetings of the
stockholders of Centura and Triangle to be held pursuant to Section 8.1
of this Agreement, including any adjournment or adjournments thereof.
"SUBSIDIARIES" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or
controls 50% or more of the outstanding equity securities either directly
or through an unbroken chain of entities as to each of which 50% or more
of the outstanding equity securities is owned directly or indirectly by
its parent; provided, there shall not be included any such entity
acquired through foreclosure or any such entity the equity securities of
which are owned or controlled in a fiduciary capacity.
"SUPERIOR PROPOSAL" means, with respect to Triangle, any written
Acquisition Proposal made by a Person other than Centura which is for (i)
(a) a merger, reorganization, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution, or similar
transaction involving Triangle as a result of which either (1) Triangle's
stockholders prior to such transaction (by virtue of their ownership of
Triangle's shares) in the aggregate cease to own at least 50% of the
voting securities of the entity surviving or resulting from such
transaction (or the ultimate parent entity thereof) or (2) the
individuals comprising the Board of Directors of Triangle prior to such
transaction do not constitute a majority of the board of directors of
such ultimate parent entity, (b) a sale, lease, exchange, transfer, or
other disposition of at least 50% of the assets of Triangle and its
Subsidiaries, taken as a whole, in a single transaction or a series of
related transactions, or (c) the acquisition, directly or indirectly, by
a Person of beneficial ownership of 25% or more of the common stock of
Triangle whether by merger, consolidation, share exchange, business
combination, tender, or exchange offer or otherwise, and (ii) which is
otherwise on terms which the Board of Directors of Triangle in good faith
concludes (after consultation with its financial advisors and outside
counsel), taking into account, among other things, all legal, financial,
regulatory, and other aspects of the proposal and the Person making the
proposal, (a) would, if consummated, result in a transaction that is more
favorable to its stockholders (in their capacities as stockholders), from
a financial point of view, than the transactions contemplated by this
Agreement (after giving effect to the Triangle Stock Option Agreement)
and (b) is reasonably capable of being completed.
-52-
<PAGE> 57
"SUPPLEMENTAL LETTER" shall mean the supplemental letter of even
date herewith between the Parties relating to certain understandings and
agreements in addition to those included in this Agreement.
"SURVIVING CORPORATION" shall mean Centura Merger Subsidiary as
the surviving corporation resulting from the Merger.
"TAX" OR "TAXES" shall mean all federal, state, local, and foreign
taxes, charges, fees, levies, imposts, duties, or other assessments,
including income, gross receipts, excise, employment, sales, use,
transfer, license, payroll, franchise, severance, stamp, occupation,
windfall profits, environmental, federal highway use, commercial rent,
customs duties, capital stock, paid-up capital, profits, withholding,
Social Security, single business and unemployment, disability, real
property, personal property, registration, ad valorem, value added,
alternative or add-on minimum, estimated, or other tax or governmental
fee of any kind whatsoever, imposed or required to be withheld by the
United States or any state, local, or foreign government or subdivision
or agency thereof, including any interest, penalties, or additions
thereto.
"TAXABLE PERIOD" shall mean any period prescribed by any
governmental authority, including the United States or any state, local,
or foreign government or subdivision or agency thereof for which a Tax
Return is required to be filed or Tax is required to be paid.
"TAX RETURN" shall mean any report, return, information return, or
other information required to be supplied to a taxing authority in
connection with Taxes, including any return of an affiliated or combined
or unitary group that includes a Party or its Subsidiaries.
"TRIANGLE COMMON STOCK" shall mean the no par value common stock
of Triangle.
"TRIANGLE COMPANIES" shall mean, collectively, Triangle and all
Triangle Subsidiaries.
"TRIANGLE DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Triangle Disclosure Memorandum" delivered prior to
the execution of this Agreement to Centura describing in reasonable
detail the matters contained therein and, with respect to each disclosure
made therein, specifically referencing each Section or subsection of this
Agreement under which such disclosure is being made. Information
disclosed with respect to one Section or subsection shall not be deemed
to be disclosed for any other purpose hereunder. The inclusion of any
matter in this document shall not be deemed an admission or otherwise to
imply that any such matter is Material for purposes of this Agreement.
"TRIANGLE FINANCIAL STATEMENTS" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any)
of Triangle as of June 30, 1999, and as of December 31, 1998 and 1997,
and the related statements of income, changes in stockholders' equity,
and cash flows (including related notes and schedules, if any) for the
-53-
<PAGE> 58
six months ended June 30, 1999, and for each of the three years ended
December 31, 1998, 1997, and 1996, as filed by Triangle in SEC Documents,
and (ii) the consolidated statements of condition of Triangle (including
related notes and schedules, if any) and related statements of income,
changes in stockholders' equity, and cash flows (including related notes
and schedules, if any) included in SEC Documents filed with respect to
periods ended subsequent to June 30, 1999.
"TRIANGLE STOCK OPTION AGREEMENT" shall mean the stock option
agreement by and between Triangle and Centura, in substantially the form
of Exhibit 1.
"TRIANGLE STOCK PLANS" shall mean the following stock plans of
Triangle: (i) 1998 Omnibus Stock Plan; (ii) 1988 Incentive Stock Option
Plan; (iii) 1998 Non-qualified Stock Option Plan for Directors; (iv)
stock options assumed in connection with acquisitions of other financial
institutions; and (v) the Management Incentive Compensation Plan.
"TRIANGLE SUBSIDIARIES" shall mean the Subsidiaries of Triangle,
which shall include the Triangle Subsidiaries described in Section 5.4 of
this Agreement and any corporation, bank, savings association, or other
organization acquired as a Subsidiary of Triangle in the future and owned
by Triangle at the Effective Time.
"TRIANGLE WARRANTS" shall mean the warrants issued by Unity Bank &
Trust Company and assumed by Triangle in connection with the acquisition
of Unity Bank & Trust Company.
(b) The terms set forth below shall have the meanings
ascribed thereto in the referenced sections:
<TABLE>
<S> <C>
Average Closing Price Section 10.1(g)
Centura ERISA Affiliate Section 6.13
Centura Ratio Section 10.1(g)
Centura SEC Reports Section 6.5(a)
Claim Section 8.13(a)
Closing Section 1.2
Covered Party Section 8.13(b)
Determination Date Section 10.1(g)
Effective Time Section 1.3
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(b)
FFIEC Section 5.21
Indemnified Party Section 8.13
Index Group Section 10.1(g)
Index Price Section 10.1(g)
Index Ratio Section 10.1(g)
Merger Section 1.1
</TABLE>
-54-
<PAGE> 59
<TABLE>
<S> <C>
Starting Date Section 10.1(g)
Starting Price Section 10.1(g)
Takeover Laws Section 5.19
Tax Opinion Section 9.1(g)
Triangle Benefit Plans Section 5.13(a)
Triangle Contracts Section 5.14
Triangle ERISA Affiliate Section 5.13(e)
Triangle ERISA Plan Section 5.13(a)
Triangle Rights Section 3.6(a)
Triangle Pension Plan Section 5.13(a)
Triangle SEC Reports Section 5.5(a)
</TABLE>
(c) Any singular term in this Agreement shall be deemed
to include the plural, and any plural term the singular. Whenever the words
"include," "includes," or "including" are used in this Agreement, they shall be
deemed followed by the words "without limitation."
11.2 EXPENSES.
(a) Except as otherwise provided in this Section 11.2,
each of the Parties shall bear and pay all direct costs and expenses incurred
by it or on its behalf in connection with the transactions contemplated
hereunder, including filing, registration, and application fees, printing fees,
and fees and expenses of its own financial or other consultants, investment
bankers, accountants, and counsel, except that each of the Parties shall bear
and pay one-half of the printing costs incurred in connection with the printing
of the Registration Statement and the Joint Proxy Statement.
(b) Nothing contained in this Section 11.2 shall
constitute or shall be deemed to constitute liquidated damages for the willful
breach by a Party of the terms of this Agreement or otherwise limit the rights
of the nonbreaching Party.
11.3 BROKERS AND FINDERS. Except for Keefe, Bruyette & Woods,
Inc. as to Centura and except for Wheat First Securities, a division of First
Union Capital Markets Corp., as to Triangle, each of the Parties represents and
warrants that neither it nor any of its officers, directors, employees, or
Affiliates has employed any broker or finder or incurred any Liability for any
financial advisory fees, investment bankers' fees, brokerage fees, commissions,
or finders' fees in connection with this Agreement or the transactions
contemplated hereby. In the event of a claim by any broker or finder based upon
his, her, or its representing or being retained by or allegedly representing or
being retained by Triangle or Centura, each of Triangle and Centura, as the
case may be, agrees to indemnify and hold the other Party harmless of and from
any Liability in respect of any such claim.
-55-
<PAGE> 60
11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided
herein, this Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement between the Parties with respect to
the transactions contemplated hereunder and supersedes all prior arrangements
or understandings with respect thereto, written or oral (including any
provision of the Confidentiality Agreements which would act to preclude Centura
or Triangle, as the case may be, (or any Holder as defined in the Triangle
Stock Option Agreement or the Centura Stock Option Agreement, as the case may
be, from exercising its rights under such stock option agreement) to the extent
that the Triangle Stock Option Agreement or the Centura Stock Option Agreement,
as the case may be, is in force and effect, but excluding the Supplemental
Letter). Nothing in this Agreement expressed or implied, is intended to confer
upon any Person, other than the Parties or their respective successors, any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, other than as provided in Sections 8.11 and 8.13 of this Agreement.
11.5 AMENDMENTS. To the extent permitted by Law, this Agreement
may be amended by a subsequent writing signed by each of the Parties upon the
approval of the Boards of Directors of each of the Parties, whether before or
after stockholder approval of this Agreement has been obtained; provided, that
the provisions of this Agreement relating to the manner or basis in which shares
of Triangle Common Stock will be exchanged for Centura Common Stock shall not be
amended (except in accordance with Section 10.1(g) of this Agreement) after the
Stockholders' Meetings without the requisite approval of the holders of the
issued and outstanding shares of Centura Common Stock and Triangle Common Stock,
as the case may be, entitled to vote thereon.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, Centura, acting
through its Board of Directors, chief executive officer, chief financial
officer, or other authorized officer, shall have the right to waive any Default
in the performance of any term of this Agreement by Triangle, to waive or
extend the time for the compliance or fulfillment by Triangle of any and all of
its obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of Centura under this Agreement, except any
condition which, if not satisfied, would result in the violation of any Law. No
such waiver shall be effective unless in writing signed by a duly authorized
officer of Centura.
(b) Prior to or at the Effective Time, Triangle, acting
through its Board of Directors, chief executive officer, chief financial
officer, or other authorized officer, shall have the right to waive any Default
in the performance of any term of this Agreement by Centura, to waive or extend
the time for the compliance or fulfillment by Centura of any and all of its
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of Triangle under this Agreement, except any
condition which, if not satisfied, would result in the violation of any Law. No
such waiver shall be effective unless in writing signed by a duly authorized
officer of Triangle.
-56-
<PAGE> 61
(c) The failure of any Party at any time or times to
require performance of any provision hereof shall in no manner affect the right
of such Party at a later time to enforce the same or any other provision of
this Agreement. No waiver of any condition or of the breach of any term
contained in this Agreement in one or more instances shall be deemed to be or
construed as a further or continuing waiver of such condition or breach or a
waiver of any other condition or of the breach of any other term of this
Agreement.
11.7 ASSIGNMENT. Except as expressly contemplated hereby,
neither this Agreement nor any of the rights, interests, or obligations
hereunder shall be assigned by any Party hereto (whether by operation of Law or
otherwise) without the prior written consent of the other Party. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by the Parties and their respective successors and
assigns.
11.8 NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail, postage
pre-paid, or by courier or overnight carrier, to the persons at the addresses
set forth below (or at such other address as may be provided hereunder), and
shall be deemed to have been delivered as of the date so delivered:
<TABLE>
<S> <C>
Triangle: TRIANGLE BANCORP, INC.
4300 Glenwood Avenue
Raleigh, North Carolina 27612
Telecopy Number: (919) 781-6042
Attention: Michael S. Patterson
President, Chief Executive Officer, and
Chairman of the Board
and
Alexander M. Donaldson
General Counsel
Copy to Counsel: ARNOLD & PORTER
Thurman Arnold Building
555 Twelfth Street, N.W.
Washington, D.C. 20004-1202
Telecopy Number: (202) 942-5999
Attention: Steven Kaplan
</TABLE>
-57-
<PAGE> 62
<TABLE>
<S> <C>
Centura: CENTURA BANKS, INC.
134 North Church Street
Rocky Mount, North Carolina
Telecopy Number: (252) 454-8283
Attention: Cecil W. Sewell, Jr.
Chairman of the Board and
Chief Executive Officer
and
Joseph A. Smith, Jr.
General Counsel
Copy to Counsel: ALSTON & BIRD LLP
601 Pennsylvania Avenue, N.W.
North Building, 11th Floor
Washington, D.C. 20004-2601
Telecopy Number: (202) 756-3333
Attention: Frank M. Conner III
</TABLE>
11.9 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the Laws of the State of North Carolina.
11.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.11 CAPTIONS. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
11.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed or resolved against any Party, whether
under any rule of construction or otherwise. No Party to this Agreement shall
be considered the draftsman. The Parties acknowledge and agree that this
Agreement has been reviewed, negotiated, and accepted by all Parties and their
attorneys and shall be construed and interpreted according to the ordinary
meaning of the words used so as fairly to accomplish the purposes and
intentions of the Parties.
11.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
-58-
<PAGE> 63
11.14 SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
-59-
<PAGE> 64
IN WITNESS WHEREOF, each of the Parties has caused this Agreement
to be executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
<TABLE>
<CAPTION>
ATTEST: TRIANGLE BANCORP, INC.
<S> <C>
By:/s/ Susan C. Gilbert By:/s/ Michael S. Patterson
---------------------------------------- ----------------------------------------
Susan C. Gilbert Michael S. Patterson
Secretary President, Chief Executive Officer, and
Chairman of the Board
[CORPORATE SEAL]
ATTEST: CENTURA BANKS, INC.
By: /s/ Joseph A. Smith, Jr. By:/s/ Cecil W. Sewell, Jr.
---------------------------------------- ----------------------------------------
Joseph A. Smith, Jr. Cecil W. Sewell, Jr.
Corporate Secretary Chairman of the Board and
Chief Executive Officer
[CORPORATE SEAL]
</TABLE>
-60-
<PAGE> 1
EXHIBIT 2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into as
of August 22, 1999, by and between Centura Banks, Inc., a North Carolina
corporation ("Issuer"), and Triangle Bancorp, Inc., a North Carolina
corporation ("Grantee").
WHEREAS, Grantee and Issuer have entered into that certain Agreement and
Plan of Reorganization, dated as of August 22, 1999 (the "Merger Agreement"),
providing for, among other things, the merger of Grantee with and into a
subsidiary of Issuer, with the subsidiary as the surviving entity; and
WHEREAS, as a condition and inducement to Grantee's execution of the
Merger Agreement, Grantee has required that Issuer agree, and Issuer has
agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements set forth herein and in the Merger
Agreement, and intending to be legally bound hereby, Issuer and Grantee agree
as follows:
1. DEFINED TERMS. Capitalized terms which are used but not defined herein
shall have the meanings ascribed to such terms in the Merger Agreement.
2. GRANT OF OPTION. Subject to the terms and conditions set forth herein,
Issuer hereby grants to Grantee an irrevocable option (the "Option") to
purchase up to 2,256,000 shares (as adjusted as set forth herein, the "Option
Shares," which shall include the Option Shares before and after any transfer of
such Option Shares) of common stock, no par value per share ("Issuer Common
Stock"), of Issuer at a purchase price per Option Share (subject to adjustment
as set forth herein, the "Purchase Price") equal to $56.87; provided, however,
that in no event shall the number of shares of Issuer Common Stock for which
this Option is exercisable exceed the lesser of (i) 8.2% of the Issuer's issued
and outstanding shares of Issuer Common Stock without giving effect to any
shares subject to or issued pursuant to the Option and (ii) that minimum number
of shares of Issuer Common Stock which when aggregated with any other shares of
Issuer Common Stock beneficially owned by Grantee or any Affiliate thereof
would cause the provisions of any Takeover Laws of the NCBCA to be applicable
to the Merger.
3. EXERCISE OF OPTION.
(a) Provided that (i) Grantee or Holder (as hereinafter defined), as
applicable, shall not be in material breach of its agreements or covenants
contained in this Agreement or the Merger Agreement, and (ii) no preliminary or
permanent injunction or other order against the delivery of shares covered by
the Option issued by any court of competent jurisdiction in the United States
shall be in effect, Holder may exercise the Option, in whole or in part, at any
time and from time to time following the occurrence of a Purchase Event and
prior to the termination of the Option. The Option shall terminate and be of no
further force and effect upon the earliest to occur of (A) the Effective Time,
(B) termination of the Merger Agreement in accordance with
<PAGE> 2
the terms thereof prior to the occurrence of a Purchase Event or a Preliminary
Purchase Event (other than a termination of the Merger Agreement by Grantee
pursuant to (i) Section 10.1(b) thereof (but only if such termination was a
result of a willful breach by Issuer) or (ii) Section 10.1(c) thereof (each a
"Default Termination")), (C) 12 months after a Default Termination, and (D) 12
months after any termination of the Merger Agreement following the occurrence
of a Purchase Event or a Preliminary Purchase Event. Any purchase of shares
upon exercise of the Option shall be subject to compliance with applicable law,
including, without limitation, the Bank Holding Company Act of 1956, as amended
(the "BHC Act"). The term "Holder" shall mean the holder or holders of the
Option from time to time, and which initially is the Grantee. The rights set
forth in Section 8 shall terminate when the right to exercise the Option
terminates (other than as a result of a complete exercise of the Option) as set
forth herein.
(b) As used herein, a "Purchase Event" means any of the following
events subsequent to the date of this Agreement:
(i) without Grantee's prior written consent, Issuer shall have
authorized, recommended, publicly proposed or publicly announced an
intention to authorize, recommend or propose, or entered into an agreement
with any person (other than Grantee or any Subsidiary of Grantee) to
effect an Acquisition Transaction (as defined below). As used herein, the
term Acquisition Transaction shall mean (A) a merger, consolidation or
similar transaction involving Issuer or any of its Subsidiaries (other
than transactions solely between Issuer's Subsidiaries and transactions
involving Issuer or any Subsidiary in which the voting securities of
Issuer outstanding immediately prior thereto continue to represent (by
either remaining outstanding or being converted into securities of the
surviving entity or the parent thereof) at least 75% of the combined
voting power of the voting securities of the Issuer or the surviving
entity or the parent thereof outstanding immediately after the
consummation of the transaction), (B) except as permitted pursuant to
Section 7.1 of the Merger Agreement, the disposition, by sale, lease,
exchange or otherwise, of Assets of Issuer or any of its Subsidiaries
representing in either case 20% or more of the consolidated assets of
Issuer and its Subsidiaries, or (C) the issuance, sale or other
disposition of (including by way of merger, consolidation, share exchange
or any similar transaction) securities representing 20% or more of the
voting power of Issuer or any of its Subsidiaries (any of the foregoing,
an "Acquisition Transaction"); or
(ii) any person (other than Grantee or any Subsidiary of Grantee)
shall have acquired beneficial ownership (as such term is defined in Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), of or the right to acquire beneficial ownership of,
or any "group" (as such term is defined under the Exchange Act), other
than a group of which Grantee or any of its Subsidiaries is a member,
shall have been formed which beneficially owns or has the right to acquire
beneficial ownership of, 20% or more of the then-outstanding shares of
Issuer Common Stock.
(c) As used herein, a "Preliminary Purchase Event" means any of the
following events:
-2-
<PAGE> 3
(i) any person (other than Grantee or any Subsidiary of Grantee)
shall have commenced (as such term is defined in Rule 14d-2 under the
Exchange Act), or shall have filed a registration statement under the
Securities Act of 1933, as amended (the "Securities Act") with respect to,
a tender offer or exchange offer to purchase any shares of Issuer Common
Stock such that, upon consummation of such offer, such person would own or
control 15% or more of the then-outstanding shares of Issuer Common Stock
(such an offer being referred to herein as a "Tender Offer" or an
"Exchange Offer," respectively); or
(ii) the holders of Issuer Common Stock shall not have approved the
Merger Agreement at the meeting of such shareholders held for the purpose
of voting on the Merger Agreement, such meeting shall not have been held
or shall have been canceled prior to termination of the Merger Agreement,
or Issuer's Board of Directors shall have withdrawn or modified in a
manner adverse to Grantee the recommendation of Issuer's Board of
Directors with respect to the Merger Agreement, in each case after it
shall have been publicly announced that any person (other than Grantee or
any Subsidiary of Grantee) shall have (A) made a proposal to engage in an
Acquisition Transaction, (B) commenced a Tender Offer or filed a
registration statement under the Securities Act with respect to an
Exchange Offer, or (C) filed an application (or given a notice), whether
in draft or final form, under any federal or state statute or regulation
(including a notice filed under the HSR Act and an application or notice
filed under the BHC Act, the Bank Merger Act, or the Change in Bank
Control Act of 1978) seeking the Consent to an Acquisition Transaction
from any federal or state governmental or regulatory authority or agency.
As used in this Agreement, "person" shall have the meaning specified in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(d) In the event Holder wishes to exercise the Option, it shall send
to Issuer a written notice (the date of which being herein referred to as the
"Notice Date") specifying (i) the total number of Option Shares it intends to
purchase pursuant to such exercise and (ii) a place and date not earlier than
three business days nor later than 30 business days from the Notice Date for
the closing (the "Closing") of such purchase (the "Closing Date"). If prior
Consent of any governmental or regulatory agency or authority is required in
connection with such purchase, Issuer shall cooperate with Holder in the filing
of the required notice or application for such Consent and the obtaining of
such Consent and the Closing shall occur immediately following receipt of such
Consents (and expiration of any mandatory waiting periods).
(e) Notwithstanding any other provision of this Agreement to the
contrary, in no event shall:
(i) Holder's (taking into account all other Holders) Total Profit
(as defined below) exceed $25 million and, if it otherwise would exceed
such amount, Holder, at its sole election, shall either (A) reduce the
number of shares of Issuer Common Stock subject to the Option, (B) deliver
to Issuer for cancellation without consideration Option Shares
-3-
<PAGE> 4
previously purchased by Holder, (C) pay cash to Issuer, or (D) any
combination of the foregoing, so that Holder's actually realized Total
Profit (together with the Total Profit realized by all other Holders)
shall not exceed $25 million after taking into account the foregoing
actions; and
(ii) the Option be exercised for a number of shares of Issuer
Common Stock as would, as of the date of exercise, result in Holder's
(taking into account all other Holders) Notional Total Profit (as defined
below) of more than $25 million; provided, that nothing in this clause
(ii) shall restrict any exercise of the Option permitted hereby on any
subsequent date.
As used in this Agreement, the term "Total Profit" shall mean the aggregate sum
(prior to the payment of taxes) of the following: (i) the amount received by
Holder pursuant to Issuer's repurchase of the Option (or any portion thereof)
pursuant to Section 8; (ii) (x) the amount received by Holder pursuant to
Issuer's repurchase of Option Shares pursuant to Section 8, less (y) Holder's
purchase price for such Option Shares; (iii) (x) the net cash amounts received
by Holder pursuant to the sale of Option Shares (or any other securities into
which such Option Shares shall be converted or exchanged) to any unaffiliated
person, less (y) Holder's purchase price of such Option Shares; and (iv) any
amounts received by Grantee on the transfer of the Option (or any portion
thereof) to any unaffiliated person.
As used in this Agreement, the term "Notional Total Profit" with respect to any
number of shares of Issuer Common Stock as to which Holder may propose to
exercise the Option shall be the Total Profit determined as of the date of such
proposed exercise, assuming that the Option were exercised on such date for
such number of shares and assuming that such shares, together with all other
Option Shares held by Holder and its affiliates as of such date, were sold for
cash at the closing sale price per share of Issuer Common Stock as quoted on
the NYSE - Composite Transactions List (or, if Issuer Common Stock is not then
quoted on the NYSE - Composite Transactions List, the highest bid price per
share as quoted on the principal trading market or securities exchange on which
such shares are traded as reported by a recognized source chosen by Holder) as
of the close of business on the preceding trading day (less customary brokerage
commissions).
The provisions of this Section 3(e) shall apply to any Substitute
Option (as defined below).
4. PAYMENT AND DELIVERY OF CERTIFICATES.
(a) On each Closing Date, Holder shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account designated by
Issuer, an amount equal to the Purchase Price multiplied by the number of
Option Shares to be purchased on such Closing Date, and (ii) present and
surrender this Agreement to the Issuer at the address of the Issuer specified
in Section 13(f) hereof.
-4-
<PAGE> 5
(b) At each Closing, simultaneously with the delivery of immediately
available funds and surrender of this Agreement as provided in Section 4(a),
(i) Issuer shall deliver to Holder (A) a certificate or certificates
representing the Option Shares to be purchased at such Closing, which Option
Shares shall be free and clear of all liens, claims, charges and encumbrances
of any kind whatsoever and subject to no pre-emptive rights, and (B) if the
Option is exercised in part only, an executed new agreement with the same terms
as this Agreement evidencing the right to purchase the balance of the shares of
Issuer Common Stock purchasable hereunder, and (ii) Holder shall deliver to
Issuer a letter agreeing that Holder shall not offer to sell or otherwise
dispose of such Option Shares in violation of applicable federal and state law
or of the provisions of this Agreement.
(c) In addition to any other legend that is required by applicable
law, certificates for the Option Shares delivered at each Closing shall be
endorsed with a restrictive legend which shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF AUGUST 22,
1999. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF
WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that: (i) the references in the above legend to
resale restrictions of the Securities Act shall be removed by delivery of
substitute certificate(s) without such reference if Holder shall have delivered
to Issuer a copy of a letter from the staff of the SEC, or an opinion of
counsel in form and substance reasonably satisfactory to Issuer and its
counsel, to the effect that such legend is not required for purposes of the
Securities Act; (ii) the references in the above legend to the provisions of
this Agreement shall be removed by delivery of substitute certificate(s)
without such reference if the shares have been sold or transferred in
compliance with the provisions of this Agreement and under circumstances that
do not require the retention of such reference; and (iii) the legend shall be
removed in its entirety if the conditions in the preceding clauses (i) and (ii)
are both satisfied.
5. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby represents and
warrants to Grantee as follows:
(a) Issuer has all requisite corporate power and authority to enter into
this Agreement and, subject to any approvals referred to herein, to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action on the part of Issuer. This Agreement has been duly executed and
delivered by Issuer.
-5-
<PAGE> 6
(b) Issuer has taken all necessary corporate action to authorize and
reserve and to permit it to issue, and, at all times from the date hereof
until the obligation to deliver Issuer Common Stock upon the exercise of
the Option terminates, will have reserved for issuance, upon exercise of
the Option, the number of shares of Issuer Common Stock necessary for
Holder to exercise the Option, and Issuer will take all necessary
corporate action to authorize and reserve for issuance all additional
shares of Issuer Common Stock or other securities which may be issued
pursuant to Section 7 upon exercise of the Option. The shares of Issuer
Common Stock to be issued upon due exercise of the Option, including all
additional shares of Issuer Common Stock or other securities which may be
issuable pursuant to Section 7, upon issuance pursuant hereto, shall be
duly and validly issued, fully paid, and nonassessable, and shall be
delivered free and clear of all liens, claims, charges, and encumbrances
of any kind or nature whatsoever, including any preemptive rights of any
shareholder of Issuer.
6. REPRESENTATIONS AND WARRANTIES OF GRANTEE. Grantee hereby represents
and warrants to Issuer that:
(a) Grantee has all requisite corporate power and authority to enter in
to this Agreement and, subject to any approvals or consents referred to
herein, to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action on the part of Grantee. This Agreement has been duly executed and
delivered by Grantee.
(b) This Option is not being, and any Option Shares or other securities
acquired by Grantee upon exercise of the Option will not be, acquired with
a view to the public distribution thereof and will not be transferred or
otherwise disposed of except in a transaction registered or exempt from
registration under the Securities Laws.
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in Issuer Common Stock by reason of a
stock dividend, stock split, split-up, recapitalization, combination, exchange
of shares or similar transaction, the type and number of shares or securities
subject to the Option, and the Purchase Price therefor, shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
such transaction, if any, so that Holder shall receive, upon exercise of the
Option, the number and class of shares or other securities or property that
Holder would have received in respect of Issuer Common Stock if the Option had
been exercised immediately prior to such event, or the record date therefor, as
applicable. If any additional shares of Issuer Common Stock are issued after
the date of this Agreement (other than pursuant to an event described in the
first sentence of this Section 7(a) or pursuant to this Option), the number of
shares of Issuer Common Stock subject to the Option shall be adjusted so that,
after such issuance, it, together with any shares of Issuer Common Stock
previously issued pursuant hereto, shall not exceed the lesser of (i) 8.2% of
the number of shares of Issuer Common Stock then
-6-
<PAGE> 7
issued and outstanding, without giving effect to any shares subject to or
issued pursuant to the Option and (ii) that minimum number of shares of Issuer
Common Stock which when aggregated with any other shares of Issuer Common Stock
beneficially owned by Grantee or any Affiliate thereof would cause the
provisions of any Takeover Laws of the NCBCA to be applicable to the Merger.
(b) In the event that Issuer shall enter in an agreement: (i) to
consolidate with or merge into any person, other than Grantee or one of its
Subsidiaries, and shall not be the continuing or surviving corporation of such
consolidation or merger; (ii) to permit any person, other than Grantee or one
of its Subsidiaries, to merge into Issuer and Issuer shall be the continuing or
surviving corporation, but, in connection with such merger, the then
outstanding shares of Issuer Common Stock shall be changed into or exchanged
for stock or other securities of Issuer or any other person or cash or any
other property or the outstanding shares of Issuer Common Stock immediately
prior to such merger shall after such merger represent less than 50% of the
outstanding shares and share equivalents of the merged company; or (iii) to
sell or otherwise transfer all or substantially all of its Assets to any
person, other than Grantee or one of its Subsidiaries, then, and in each such
case, the agreement governing such transaction shall make proper provisions so
that the Option shall, upon the consummation of any such transaction and upon
the terms and conditions set forth herein, be converted into, or exchanged for,
an option (the "Substitute Option"), at the election of Grantee, of either (x)
the Acquiring Corporation (as defined below) or (y) any person that controls
the Acquiring Corporation (in each case, such person being referred to as the
"Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the Option,
provided that, if the terms of the Substitute Option cannot, for legal reasons,
be the same as the Option, such terms shall be as similar as possible and in no
event less advantageous to Grantee. The Substitute Option Issuer shall also
enter into an agreement with the then-holder or holders of the Substitute
Option in substantially the same form as this Agreement, which shall be
applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of
shares of the Substitute Common Stock (as hereinafter defined) as is equal to
the Assigned Value (as hereinafter defined) multiplied by the number of shares
of the Issuer Common Stock for which the Option was theretofore exercisable,
divided by the Average Price (as hereinafter defined). The exercise price of
the Substitute Option per share of the Substitute Common Stock (the "Substitute
Purchase Price") shall then be equal to the Purchase Price multiplied by a
fraction in which the numerator is the number of shares of the Issuer Common
Stock for which the Option was theretofore exercisable and the denominator is
the number of shares for which the Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (x) the continuing or
surviving corporation of a consolidation or merger with Issuer (if other
than Issuer), (y) Issuer in a
-7-
<PAGE> 8
merger in which Issuer is the continuing or surviving person, and (z) the
transferee of all or any substantial part of the Issuer's assets (or the
assets of its Subsidiaries).
(ii) "Substitute Common Stock" shall mean the common stock issued
by the Substitute Option Issuer upon exercise of the Substitute Option.
(iii) "Assigned Value" shall mean the highest of (x) the price per
share of the Issuer Common Stock at which a Tender Offer or Exchange Offer
therefor has been made by any person (other than Grantee), (y) the price
per share of the Issuer Common Stock to be paid by any person (other than
the Grantee) pursuant to an agreement with Issuer, and (z) the highest
last sale price per share of Issuer Common Stock quoted on the NYSE
-Composite Transactions List (or if Issuer Common Stock is not quoted on
the NYSE-Composite Transactions List, the highest bid price per share on
any day as quoted on the principal trading market or securities exchange
on which such shares are traded as reported by a recognized source chosen
by Grantee) within the six-month period immediately preceding the
agreement; provided, that in the event of a sale of less than all of
Issuer's assets, the Assigned Value shall be the sum of the price paid in
such sale for such assets and the current market value of the remaining
assets of Issuer as determined by a nationally recognized investment
banking firm selected by Grantee (or by a majority in interest of the
Grantees if there shall be more than one Grantee (a "Grantee Majority"))
and reasonably acceptable to Issuer, divided by the number of shares of
the Issuer Common Stock outstanding at the time of such sale. In the event
that an exchange offer is made for the Issuer Common Stock or an agreement
is entered into for a merger or consolidation involving consideration
other than cash, the value of the securities or other property issuable or
deliverable in exchange for the Issuer Common Stock shall be determined by
a nationally recognized investment banking firm selected by Grantee and
reasonably acceptable to Issuer (or if applicable, Acquiring Corporation).
(If there shall be more than one Grantee, any such selection shall be made
by a Grantee Majority.)
(iv) "Average Price" shall mean the average closing price of a
share of the Substitute Common Stock for the one year immediately
preceding the consolidation, merger or sale in question, but in no event
higher than the last sale price of the shares of the Substitute Common
Stock on the day preceding such consolidation, merger or sale; provided
that if Issuer is the issuer of the Substitute Option, the Average Price
shall be computed with respect to a share of common stock issued by
Issuer, the person merging into Issuer or by any company which controls or
is controlled by such merger person, as Grantee may elect.
(f) In no event pursuant to any of the foregoing paragraphs shall the
Substitute Option be exercisable for more than 8.2% of the aggregate of the
shares of the Substitute Common Stock outstanding prior to exercise of the
Substitute Option. In the event that the Substitute Option would be exercisable
for more than 8.2% of the aggregate of the shares of Substitute Common Stock
but for this clause (f), the Substitute Option Issuer shall make a cash payment
to Grantee equal to the excess of (i) the value of the Substitute Option
without giving
-8-
<PAGE> 9
effect to the limitation in this clause (f) over (ii) the value of the
Substitute Option after giving effect to the limitation in this clause (f).
This difference in value shall be determined by a nationally recognized
investment banking firm selected by Grantee (or a Grantee Majority) and
reasonably acceptable to the Acquiring Corporation.
(g) Issuer shall not enter into any transaction described in
subsection (b) of this Section 7 unless the Acquiring Corporation and any
person that controls the Acquiring Corporation assume in writing all the
obligations of Issuer hereunder and take all other actions that may be
necessary so that the provisions of this Section 7 are given full force and
effect (including, without limitation, any action that may be necessary so that
the shares of Substitute Common Stock are in no way distinguishable from or
have lesser economic value than other shares of common stock issued by the
Substitute Option Issuer).
(h) The provisions of Sections 8, 9, 10, and 11 shall apply, with
appropriate adjustments, to any securities for which the Option becomes
exercisable pursuant to this Section 7 and, as applicable, references in such
sections to "Issuer," "Option," "Purchase Price" and "Issuer Common Stock"
shall be deemed to be references to "Substitute Option Issuer," "Substitute
Option," "Substitute Purchase Price" and "Substitute Common Stock,"
respectively.
8. REPURCHASE AT THE OPTION OF HOLDER.
(a) Subject to Section 3(e) and to the last sentence of Section 3(a),
at the request of Holder at any time commencing upon the first occurrence of a
Repurchase Event (as defined in Section 8(d)) and ending 18 months immediately
thereafter, Issuer shall repurchase from Holder the Option and all shares of
Issuer Common Stock purchased by Holder pursuant hereto with respect to which
Holder then has beneficial ownership. The date on which Holder exercises its
rights under this Section 8 is referred to as the "Request Date." Such
repurchase shall be at an aggregate price (the "Section 8 Repurchase
Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Holder for any shares of
Issuer Common Stock acquired by Holder pursuant to the Option with respect
to which Holder then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable Price (as defined
below) for each share of Issuer Common Stock over (y) the Purchase Price
(subject to adjustment pursuant to Section 7), multiplied by the number of
shares of Issuer Common Stock with respect to which the Option has not
been exercised; and
(iii) the excess, if any, of the Applicable Price over the Purchase
Price (subject to adjustment pursuant to Section 7) paid (or, in the case
of Option Shares with respect to which the Option has been exercised but
the Closing Date has not occurred, payable) by Holder for each share of
Issuer Common Stock with respect to which the Option has been exercised
and with respect to which Holder then has beneficial ownership, multiplied
by the number of such shares.
-9-
<PAGE> 10
(b) If Holder exercises its rights under this Section 8, Issuer shall,
within ten business days after the Request Date, pay the Section 8 Repurchase
Consideration to Holder in immediately available funds, and contemporaneously
with such payment Holder shall surrender to Issuer the Option and the
certificates evidencing the shares of Issuer Common Stock purchased thereunder
with respect to which Holder then has beneficial ownership, and Holder shall
warrant that it has sole record and beneficial ownership of such shares and
that the same are then free and clear of all liens, claims, charges and
encumbrances of any kind whatsoever. Notwithstanding the foregoing, to the
extent that prior notification to or Consent of any governmental or regulatory
agency or authority is required in connection with the payment of all or any
portion of the Section 8 Repurchase Consideration, Holder shall have the
ongoing option to revoke its request for repurchase pursuant to Section 8, in
whole or in part, or to require that Issuer deliver from time to time that
portion of the Section 8 Repurchase Consideration that it is not then so
prohibited from paying and promptly file the required notice or application for
Consent and expeditiously process the same (and each party shall cooperate with
the other in the filing of any such notice or application and the obtaining of
any such Consent). If any governmental or regulatory agency or authority
disapproves of any part of Issuer's proposed repurchase pursuant to this
Section 8, Issuer shall promptly give notice of such fact to Holder. If any
governmental or regulatory agency or authority prohibits the repurchase in part
but not in whole, then Holder shall have the right (i) to revoke the repurchase
request or (ii) to the extent permitted by such agency or authority, determine
whether the repurchase should apply to the Option and/or Option Shares and to
what extent to each, and Holder shall thereupon have the right to exercise the
Option as to the number of Option Shares for which the Option was exercisable
at the Request Date less the sum of the number of shares covered by the Option
in respect of which payment has been made pursuant to Section 8(a)(ii) and the
number of shares covered by the portion of the Option (if any) that has been
repurchased. Holder shall notify Issuer of its determination under the
preceding sentence within five business days of receipt of notice of
disapproval of the repurchase.
Notwithstanding anything herein to the contrary, all of Holder's
rights under this Section 8 shall terminate on the date of termination of this
Option pursuant to Section 3(a).
(c) For purposes of this Agreement, the "Applicable Price" means the
highest of (i) the highest price per share of Issuer Common Stock paid for any
such share by the person or groups described in Section 8(d)(i), (ii) the price
per share of Issuer Common Stock received by holders of Issuer Common Stock in
connection with any merger or other business combination transaction described
in Section 7(b)(i), 7(b)(ii) or 7(b)(iii), or (iii) the highest last sale price
per share of Issuer Common Stock quoted on the NYSE = Composite Transactions
List (or if Issuer Common Stock is not quoted on the NYSE - Composite
Transactions List, the highest bid price per share as quoted on the principal
trading market or securities exchange on which such shares are traded as
reported by a recognized source chosen by Holder) during the 60 business days
preceding the Request Date; provided, however, that in the event of a sale of
less than all of Issuer's Assets, the Applicable Price shall be the sum of the
price paid in such sale for such assets and the current market value of the
remaining assets of Issuer as determined by an independent
-10-
<PAGE> 11
nationally recognized investment banking firm selected by Holder and reasonably
acceptable to Issuer (which determination shall be conclusive for all purposes
of this Agreement), divided by the number of shares of the Issuer Common Stock
outstanding at the time of such sale. If the consideration to be offered, paid
or received pursuant to either of the foregoing clauses (i) or (ii) shall be
other than in cash, the value of such consideration shall be determined in good
faith by an independent nationally recognized investment banking firm selected
by Holder and reasonably acceptable to Issuer, which determination shall be
conclusive for all purposes of this Agreement.
(d) As used herein, a "Repurchase Event" shall occur if (i) any person
(other than Grantee or any subsidiary of Grantee shall have acquired beneficial
ownership (as such term is defined in Rule 13d-3 promulgated under the Exchange
Act), or the right to acquire beneficial ownership, or any "group" (as such
term is defined under the Exchange Act) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of 50% or
more of the then-outstanding shares of Issuer Common Stock, or (ii) any of the
transactions described in Section 7(b)(i), 7(b)(ii), or 7(iii) shall be
consummated.
9. REGISTRATION RIGHTS.
(a) Issuer shall, subject to the conditions of subparagraph (c) below,
if requested by any Holder, including Grantee and any permitted transferee
("Selling Holder"), as expeditiously as possible prepare and file a
registration statement under the Securities Laws if necessary in order to
permit the sale or other disposition of any or all shares of Issuer Common
Stock or other securities that have been acquired by or are issuable to Selling
Holder upon exercise of the Option in accordance with the intended method of
sale or other disposition stated by Holder in such request (it being understood
and agreed that any such sale or other disposition shall be effected on a
widely distributed basis so that, upon consummation thereof, no purchaser or
transferee shall beneficially own more than 5% of the shares of Issuer Common
Stock then outstanding), including, without limitation, a "shelf" registration
statement under Rule 415 under the Securities Act or any successor provision,
and Issuer shall use its best efforts to qualify such shares or other
securities for sale under any applicable state securities laws. Each such
Holder shall provide all information reasonably requested by Issuer for
inclusion in any registration statement to be filed hereunder.
(b) If Issuer at any time after the exercise of the Option, but prior
to the termination of the Option, proposes to register any shares of Issuer
Common Stock under the Securities Laws in connection with an underwritten
public offering of such Issuer Common Stock, Issuer will promptly give written
notice to Holder of its intention to do so and, upon the written request of
Holder given within 30 days after receipt of any such notice (which request
shall specify the number of shares of Issuer Common Stock intended to be
included in such underwritten public offering by Selling Holder), Issuer will
use all reasonable efforts to cause all such shares, the holders of which shall
have requested participation in such registration, to be so registered and
included in such underwritten public offering; provided, that Issuer may elect
to not cause any such shares to be so registered (i) if the underwriters in
good faith determine that the inclusion of
-11-
<PAGE> 12
such shares would interfere with the successful marketing of the shares of
Issuer Common Stock for the account of Issuer, or (ii) in the case of a
registration solely to implement a dividend reinvestment or similar plan, an
employee benefit plan or a registration filed on Form S-4 or any successor
form, or a registration filed on a form which does not permit registrations of
resales; provided, further, that such election pursuant to clause (i) may only
be made once. If some but not all the shares of Issuer Common Stock, with
respect to which Issuer shall have received requests for registration pursuant
to this subparagraph (b), shall be excluded from such registration, Issuer
shall make appropriate allocation of shares to be registered among Selling
Holders and any other person (other than Issuer or any person exercising demand
registration rights in connection with such registration) who or which is
permitted to register their shares of Issuer Common Stock in connection with
such registration pro rata in the proportion that the number of shares
requested to be registered by each Selling Holder bears to the total number of
shares requested to be registered by all persons then desiring to have Issuer
Common Stock registered for sale (other than Issuer or any person exercising
demand registration rights in connection with such registration).
(c) Issuer shall use all reasonable efforts to cause the registration
statement referred to in subparagraph (a) above to become effective and to
obtain all consents or waivers of other parties which are required therefor and
to keep such registration statement effective, provided, that Issuer may delay
any registration of Option Shares required pursuant to subparagraph (a) above
for a period not exceeding 90 days, provided Issuer shall in good faith
determine that any such registration would adversely affect an offering or
contemplated offering of other securities by Issuer. Notwithstanding anything
to the contrary contained herein, Issuer shall not be required to register
Option Shares under the Securities Laws pursuant to subparagraph (a) above:
(i) prior to the occurrence of a Purchase Event and following the
termination of the Option;
(ii) more than twice;
(iii) within 90 days after the effective date of a registration
referred to in subparagraph (b) above pursuant to which the Selling
Holders concerned were afforded the opportunity to register such shares
under the Securities Laws and such shares were registered as requested;
and
(iv) unless a request therefor is made to Issuer by Selling Holders
holding at least 15% or more of the aggregate number of Option Shares then
outstanding or the right to acquire at least 15% of the Option Shares.
In addition to the foregoing, Issuer shall not be required to
maintain the effectiveness of any registration statement after the expiration
of 120 days from the effective date of such registration statement. Issuer
shall use all reasonable efforts to make any filings, and take all steps, under
all applicable state securities laws to the extent necessary to permit the sale
or other disposition of the Option Shares so registered in accordance with the
intended method of
-12-
<PAGE> 13
distribution for such shares, provided, that Issuer shall not be required to
consent to general jurisdiction or qualify to do business in any state where it
is not otherwise required to so consent to such jurisdiction or to so qualify
to do business.
(d) Except where applicable state law prohibits such payments, Issuer
will pay all expenses (including without limitation registration fees,
qualification fees, blue sky fees and expenses (including the fees and expenses
of Issuer's counsel), accounting expenses, printing expenses, expenses of
underwriters, excluding discounts and commissions but including liability
insurance if Issuer so desires or the underwriters so require, and the
reasonable fees and expenses of any necessary special experts) in connection
with each registration pursuant to subparagraph (a) or (b) above (including the
related offerings and sales by Selling Holders) and all other qualifications,
notifications or exemptions pursuant to subparagraph (a) or (b) above.
Underwriting discounts and commissions relating to Option Shares and any other
expenses incurred by such Selling Holders in connection with any such
registration (including expenses of Selling Holders' counsel) shall be borne by
such Selling Holders.
(e) In connection with any registration under subparagraph (a) or (b)
above Issuer hereby agrees to indemnify the Selling Holders, and each
underwriter thereof, including each person, if any, who controls such holder or
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, losses, claims, damages and liabilities caused by any untrue
statement of a material fact contained in any registration statement or
prospectus (including any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, except insofar as
such expenses, losses, claims, damages or liabilities of such indemnified party
are caused by any untrue statement or alleged untrue statement or any omission
or alleged omission made in reliance upon and in conformity with, information
furnished in writing to Issuer by such indemnified party expressly for use
therein, and Issuer and each officer, director and controlling person of Issuer
shall be indemnified by such Selling Holder, or by such underwriter, as the
case may be, for all such expenses, losses, claims, damages and liabilities
caused by any untrue, or alleged untrue, statement or omission made in reliance
upon, and in conformity with, information furnished in writing to Issuer by
such holder or such underwriter, as the case may be, expressly for such use.
Promptly upon receipt by a party indemnified under this
subparagraph (e) of notice of the commencement of any action against such
indemnified party in respect of which indemnity or reimbursement may be sought
against any indemnifying party under this subparagraph (e), such indemnified
party shall notify the indemnifying party in writing of the commencement of
such action, but the failure so to notify the indemnifying party shall not
relieve it of any liability which it may otherwise have to any indemnified
party under this subparagraph (e), except to the extent such failure to notify
materially prejudices the indemnifying party. In case notice of commencement of
any such action shall be given to the indemnifying party as above provided, the
indemnifying party shall be entitled to participate in and, to the extent it
may wish, jointly with any other indemnifying party similarly notified, to
-13-
<PAGE> 14
assume the defense of such action at its own expense, with counsel chosen by it
and reasonably satisfactory to such indemnified party. The indemnified party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
(other than reasonable costs of investigation) shall be paid by the indemnified
party unless (i) the indemnifying party either agrees to pay the same, (ii) the
indemnifying party falls to assume the defense of such action with counsel
satisfactory to the indemnified party, or (iii) the indemnified party has been
advised by counsel that one or more legal defenses may be available to the
indemnifying party that may be contrary to the interest of the indemnified
party, in which case the indemnifying party shall be entitled to assume the
defense of such action notwithstanding its obligation to bear fees and expenses
of such counsel; provided, however, that the indemnifying party shall not be
liable for the expenses of more than one firm of counsel for all indemnified
parties in any jurisdiction. No indemnifying party shall be liable for any
settlement entered into without its consent, which consent may not be
unreasonably withheld.
If the indemnification provided for in this subparagraph (e) is
unavailable to a party otherwise entitled to be indemnified in respect of any
expenses, losses, claims, damages or liabilities referred to herein, then the
indemnifying party, in lieu of indemnifying such party otherwise entitled to be
indemnified, shall contribute to the amount paid or payable by such party to be
indemnified as a result of such expenses, losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative
benefits received by Issuer, all Selling Holders and the underwriters from the
offering of the securities and also the relative fault of Issuer, all Selling
Holders and the underwriters in connection with the statements or omissions
which resulted in such expenses, losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The amount paid or payable
by a party as a result of the expenses, losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim; provided, that in no case shall any Selling
Holder be responsible, in the aggregate, for any amount in excess of the net
offering proceeds attributable to its Option Shares included in the offering.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Any obligation by any
holder to indemnify shall be several and not joint with other holders.
In connection with any registration pursuant to subparagraph (a)
or (b) above, Issuer and each Selling Holder (other than Grantee) shall enter
into an agreement containing the indemnification provisions of this
subparagraph (e).
(f) Issuer shall use its best efforts to comply with all reporting
requirements and will do all such other things as may be necessary to permit
the expeditious sale at any time of any Option Shares by Holder in accordance
with and to the extent permitted by any rule or regulation promulgated by the
SEC from time to time, including, without limitation, Rules 144 and 144A.
-14-
<PAGE> 15
(g) Issuer will pay all stamp taxes in connection with the issuance
and the sale of the Option Shares and in connection with the exercise of the
Option, and will save Holder harmless, without limitation as to time, against
any and all liabilities, with respect to all such taxes.
10. QUOTATION; LISTING. If Issuer Common Stock or any other securities to
be acquired upon exercise of the Option are then authorized for quotation or
trading or listing on the NYSE or any other securities exchange or any
automated quotations system maintained by a self-regulatory organization,
Issuer, upon the request of Holder, will promptly file an application, if
required, to authorize for quotation or trading or listing the shares of Issuer
Common Stock or other securities to be acquired upon exercise of the Option on
the NYSE or any other securities exchange or any automated quotations system
maintained by a self-regulatory organization and will use its best efforts to
obtain approval, if required, of such quotation or listing as soon as
practicable.
11. DIVISION OF OPTION. This Agreement (and the Option granted hereby) are
exchangeable, without expense, at the option of Holder, upon presentation and
surrender of this Agreement at the principal office of Issuer for other
Agreements providing for Options of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of Issuer
Common Stock purchasable hereunder. The terms "Agreement" and "Option" as used
herein include any other Agreements and related Options for which this
Agreement (and the Option granted hereby) may be exchanged. Upon receipt by
Issuer of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, Issuer will execute and deliver a
new Agreement of like tenor and date. Any such new Agreement executed and
delivered shall constitute an additional contractual obligation on the part of
Issuer, whether or not the Agreement so lost, stolen, destroyed or mutilated
shall at any time be enforceable by anyone.
12. MISCELLANEOUS.
(a) EXPENSES. Except as otherwise provided in Section 9, each of the
parties hereto shall bear and pay all costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.
(b) WAIVER AND AMENDMENT. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(c) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARY; SEVERABILITY. This
Agreement, together with the Merger Agreement and the other documents and
instruments referred to herein
-15-
<PAGE> 16
and therein, between Grantee and Issuer (a) constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and (b) is not
intended to confer upon any person other than the parties hereto (other than
any transferees of the Option Shares or any permitted transferee of this
Agreement pursuant to Section 12(h) and other than as provided in the Merger
Agreement) any rights or remedies hereunder. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction
or a federal or state governmental or regulatory agency or authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. If for any
reason such court or regulatory agency determines that the Option does not
permit Holder to acquire, or does not require Issuer to repurchase, the full
number of shares of Issuer Common Stock as provided in Sections 3 and 8 (as
adjusted pursuant to Section 7), it is the express intention of Issuer to allow
Holder to acquire or to require Issuer to repurchase such lesser number of
shares as may be permissible without any amendment or modification hereof.
(d) GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of North Carolina without regard to any
applicable conflicts of law rules.
(e) DESCRIPTIVE HEADINGS. The descriptive headings contained herein
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
(f) NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the addresses set forth in the Merger Agreement(or
at such other address for a party as shall be specified by like notice).
(g) COUNTERPARTS. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the
same agreement and shall become effective when both counterparts have been
signed, it being understood that both parties need not sign the same
counterpart.
(h) ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder or under the Option shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other party, except that Grantee may assign this
Agreement to a wholly owned Subsidiary of Grantee and Grantee may assign its
rights hereunder in whole or in part after the occurrence of a Purchase Event.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties and their respective
successors and assigns.
(i) FURTHER ASSURANCES. In the event of any exercise of the Option by
Holder, Issuer and Holder shall execute and deliver all other documents and
instruments and take all
-16-
<PAGE> 17
other action that may be reasonably necessary in order to consummate the
transactions provided for by such exercise.
(j) SPECIFIC PERFORMANCE. The parties hereto agree that this Agreement
may be enforced by either party through specific performance, injunctive relief
and other equitable relief. Both parties further agree to waive any requirement
for the securing or posting of any bond in connection with the obtaining of any
such equitable relief and that this provision is without prejudice to any other
rights that the parties hereto may have for any failure to perform this
Agreement.
(k) CONFIDENTIALITY AGREEMENTS. The parties hereto agree that this
Agreement supersedes any provision of the Confidentiality Agreements that could
be interpreted to preclude the exercise of any rights or the fulfillment of any
obligations under this Agreement, and that none of the provisions included in
the Confidentiality Agreements will act to preclude Holder from exercising the
Option or exercising any other rights under this Agreement or act to preclude
Issuer from fulfilling any of its obligations under this Agreement.
-17-
<PAGE> 18
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.
ATTEST: CENTURA BANKS, INC.
By: /s/ Joseph A. Smith, Jr. By: /s/ Cecil W. Sewell, Jr.
---------------------------- ----------------------------------------
Joseph A. Smith, Jr. Cecil W. Sewell, Jr.
Corporate Secretary Chairman of the Board and
Chief Executive Officer
[CORPORATE SEAL]
ATTEST: TRIANGLE BANCORP, INC.
By: /s/ Susan C. Gilbert By: /s/ Michael S. Patterson
---------------------------- ----------------------------------------
Susan C. Gilbert Michael S. Patterson
Secretary President, Chief Executive Officer and
Chairman of the Board
[CORPORATE SEAL]
-18-
<PAGE> 1
EXHIBIT 3
PLAN OF MERGER
OF
TRIANGLE BANCORP, INC.
WITH AND INTO
CENTURA MERGER SUBSIDIARY, INC.
Pursuant to this Plan of Merger dated as of __________, 1999 ("Plan
of Merger"), TRIANGLE BANCORP, INC. ("Triangle"), a corporation organized and
existing under the Laws of the State of North Carolina, shall be merged with
and into CENTURA MERGER SUBSIDIARY, INC. ("Centura Merger Subsidiary"), a
corporation organized and existing under the laws of the State of North
Carolina and a wholly-owned subsidiary of CENTURA BANKS, INC., a corporation
organized and existing under the laws of the State of North Carolina
("Centura").
ARTICLE 1
DEFINITIONS
Except as otherwise provided herein, the capitalized terms set
forth below shall have the following meanings:
1.1 "ARTICLES OF MERGER" shall mean the Articles of Merger to be
executed by Centura Merger Subsidiary and filed with the Secretary of State of
the State of North Carolina relating to the Merger as contemplated by Section
2.1 of this Plan of Merger.
1.2 "CENTURA COMMON STOCK" shall mean the no par value common stock
of Centura.
1.3 "CENTURA COMPANIES" shall mean, collectively, Centura and all
Centura Subsidiaries.
1.4 "CENTURA MERGER SUBSIDIARY COMMON STOCK" shall mean the no par
value common stock of Centura Merger Subsidiary.
1.5 "CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person pursuant to
any Contract, Law, Order, or Permit.
1.6 "EFFECTIVE TIME" shall mean the date and time on which the
Merger becomes effective pursuant to the Laws of the State of North Carolina as
defined in Section 2.2 of this Plan of Merger.
<PAGE> 2
1.7 "EXCHANGE AGENT" shall mean the exchange agent selected by
Centura.
1.8 "INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of
1986, as amended, and the rules and regulations promulgated thereunder.
1.9 "LAW" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable to a person or
its assets, liabilities, or business, including those promulgated, interpreted,
or enforced by any Regulatory Authority.
1.10 "MERGER" shall mean the merger of Triangle into and with
Centura Merger Subsidiary as provided in Section 2.1 of this Plan of Merger.
1.11 "MERGER AGREEMENT" shall mean the Agreement and Plan of
Reorganization, dated as of August 22, 1999, by and between Centura and
Triangle.
1.12 "NCBCA" shall mean the North Carolina Business Corporation
Act.
1.13 "NYSE" shall mean the New York Stock Exchange, Inc.
1.14 "PARTY" shall mean either Triangle or Centura Merger
Subsidiary, and "PARTIES" shall mean both Triangle and Centura Merger
Subsidiary.
1.15 "REGULATORY AUTHORITIES" shall mean, collectively, the Federal
Trade Commission, the United States Department of Justice, the Board of the
Governors of the Federal Reserve System, the Office of the Comptroller of the
Currency, the Federal Deposit Insurance Corporation, the Office of Thrift
Supervision, all state regulatory agencies having jurisdiction over the Parties
and their respective Subsidiaries, the NYSE, and the SEC.
1.16 "SEC" shall mean the United States Securities and Exchange
Commission.
1.17 "SUBSIDIARIES" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or
controls 50% or more of the outstanding equity securities either directly or
through an unbroken chain of entities as to each of which 50% or more of the
outstanding equity securities is owned directly or indirectly by its parent;
provided, there shall not be included any such entity acquired through
foreclosure or any such entity the equity securities of which are owned or
controlled in a fiduciary capacity.
1.18 "SUPPLEMENTAL LETTER" shall mean the supplemental letter of
even date herewith between Triangle and Centura relating to certain
understandings and agreements in addition to those included in this Plan of
Merger.
1.19 "SURVIVING CORPORATION" shall refer to Centura Merger
Subsidiary as the surviving corporation resulting from the Merger.
-2-
<PAGE> 3
1.20 "TRIANGLE COMMON STOCK" shall mean the no par value common
stock of Triangle.
1.21 "TRIANGLE COMPANIES" shall mean, collectively, Triangle and
all Triangle Subsidiaries.
1.22 "TRIANGLE STOCK PLANS" shall have the meaning set forth in the
Merger Agreement.
1.23 "TRIANGLE WARRANTS" shall mean the warrants issued by Unity
Bank & Trust Company and assumed by Triangle in connection with the acquisition
of Unity Bank & Trust Company.
Any capitalized term not defined herein shall have the meaning
ascribed to it in the Merger Agreement.
ARTICLE 2
TRANSACTIONS AND TERMS OF MERGER
2.1 MERGER. Subject to the terms and conditions of this Plan of
Merger, at the Effective Time, Triangle shall be merged with and into Centura
Merger Subsidiary in accordance with the provisions of Section 55-11-01 of the
NCBCA and with the effect provided in Section 55-11-06 of the NCBCA (the
"Merger"). Centura Merger Subsidiary shall be the Surviving Corporation
resulting from the Merger and shall continue to be governed by the Laws of the
State of North Carolina.
2.2 EFFECTIVE TIME. The Merger and the other transactions
contemplated by this Plan of Merger shall become effective on the date and at
the time the Articles of Merger become effective with the Secretary of State of
the State of North Carolina (the "Effective Time"). Subject to the terms and
conditions hereof, unless otherwise mutually agreed upon in writing by the duly
authorized officers of each Party, the Parties shall use their reasonable
efforts to cause the Effective Time to occur on or before the 10th business day
(as designated by Centura) following the last to occur of (i) the effective
date (including expiration of any applicable waiting period) of the last
required Consent of any Regulatory Authority having authority over and
approving or exempting the Merger, and (ii) the date on which the stockholders
of Centura and Triangle approve the matters relating to this Plan of Merger
required to be approved by such stockholders by applicable Law.
2.3 ARTICLES OF INCORPORATION. The Articles of Incorporation of
Centura Merger Subsidiary in effect immediately prior to the Effective Time
shall be the Articles of Incorporation of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
-3-
<PAGE> 4
2.4 BYLAWS. The Bylaws of Centura Merger Subsidiary in effect
immediately prior to the Effective Time shall be the Bylaws of the Surviving
Corporation after the Effective Time until otherwise amended or repealed.
2.5 DIRECTORS AND OFFICERS. The directors of Centura Merger
Subsidiary in office immediately prior to the Effective Time shall serve as the
directors of the Surviving Corporation from and after the Effective Time in
accordance with the Bylaws of the Surviving Corporation. The officers of
Centura Merger Subsidiary in office immediately prior to the Effective Time
shall serve as the officers of the Surviving Corporation from and after the
Effective Time in accordance with the Bylaws of the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of this
Article 3, at the Effective Time, by virtue of the Merger and without any
action on the part of Centura or Triangle, or the stockholders of either of the
foregoing, the shares of the constituent corporations shall be converted as
follows:
(a) Each share of Centura Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(b) Each share of Centura Merger Subsidiary Common Stock
issued and outstanding immediately prior to the Effective Time shall
remain issued and outstanding from and after the Effective Time.
(c) Each share of Triangle Common Stock (excluding shares
held by any Triangle Company or any Centura Company, in each case other
than in a fiduciary capacity or as a result of debts previously
contracted) issued and outstanding at the Effective Time shall be
converted into .45 of a share of Centura Common Stock (subject to
adjustment pursuant to Section 10.1(g) of the Merger Agreement, the
"Exchange Ratio").
3.2 ANTI-DILUTION PROVISIONS. In the event Triangle changes the
number of shares of Triangle Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, recapitalization,
or similar transaction with respect to such stock, the Exchange Ratio shall be
proportionately adjusted. In the event Centura changes the number of shares of
Centura Common Stock issued and outstanding prior to the Effective Time as a
result of a stock split, stock dividend, recapitalization, or similar
transaction with respect to such stock and the record date therefor (in the
case of a stock dividend) or the effective date thereof (in the case of a stock
split or similar recapitalization for which a record date is not established)
shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
-4-
<PAGE> 5
3.3 SHARES HELD BY TRIANGLE OR CENTURA. Each of the shares of
Triangle Common Stock held by any Triangle Company or by any Centura Company,
in each case other than in a fiduciary capacity or as a result of debts
previously contracted, shall be canceled and retired at the Effective Time and
no consideration shall be issued in exchange therefor.
3.4 FRACTIONAL SHARES. Notwithstanding any other provision of
this Plan of Merger, each holder of shares of Triangle Common Stock exchanged
pursuant to the Merger who would otherwise have been entitled to receive a
fraction of a share of Centura Common Stock (after taking into account all
certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a share of
Centura Common Stock multiplied by the market value of one share of Centura
Common Stock at the Effective Time. The market value of one share of Centura
Common Stock at the Effective Time shall be the last sale price of Centura
Common Stock on the NYSE - Composite Transactions List (as reported by The Wall
Street Journal or, if not reported thereby, any other authoritative source
selected by Centura) on the last trading day preceding the Effective Time. No
such holder will be entitled to dividends, voting rights, or any other rights
as a stockholder in respect of any fractional shares.
3.5 CONVERSION OF STOCK RIGHTS.
(a) At the Effective Time, each award, option, or other right
to purchase or acquire shares of Triangle Common Stock pursuant to stock
options, stock appreciation rights, or stock awards ("Triangle Rights") granted
by Triangle under the Triangle Stock Plans, which are outstanding at the
Effective Time, whether or not exercisable, shall be converted into and become
rights with respect to Centura Common Stock, and Centura shall assume each
Triangle Right, in accordance with the terms of the Triangle Stock Plan and
stock option agreement by which it is evidenced, except that from and after the
Effective Time, (i) Centura and its Compensation Committee shall be substituted
for Triangle and the Committee of Triangle's Board of Directors (including, if
applicable, the entire Board of Directors of Triangle) administering such
Triangle Stock Plan, (ii) each Triangle Right assumed by Centura may be
exercised solely for shares of Centura Common Stock (or cash in the case of
stock appreciation rights), (iii) the number of shares of Centura Common Stock
subject to such Triangle Right shall be equal to the number of shares of
Triangle Common Stock subject to such Triangle Right immediately prior to the
Effective Time multiplied by the Exchange Ratio and rounded down to the nearest
whole share, and (iv) the per share exercise price (or similar threshold price,
in the case of stock awards) under each such Triangle Right shall be adjusted
by dividing the per share exercise (or threshold) price under each such
Triangle Right by the Exchange Ratio and rounding up to the nearest cent.
Notwithstanding the provisions of clause (iii) of the preceding sentence, each
Triangle Right which is an "incentive stock option" shall be adjusted as
required by Section 424 of the Internal Revenue Code, so as not to constitute a
modification, extension, or renewal of the option, within the meaning of
Section 424(h) of the Internal Revenue Code. Centura agrees to take all
necessary steps to effectuate the foregoing provisions of this Section 3.5.
-5-
<PAGE> 6
(b) As soon as reasonably practicable after the Effective
Time, Centura shall deliver to the participants in each Triangle Stock Plan an
appropriate notice setting forth such participant's rights pursuant thereto and
the grants pursuant to such Triangle Stock Plan shall continue in effect on the
same terms and conditions (subject to the adjustments required by Section
3.5(a) after giving effect to the Merger), and Centura shall comply with the
terms of each Triangle Stock Plan to ensure, to the extent required by, and
subject to the provisions of, such Triangle Stock Plan, that Triangle Rights
which qualified as incentive stock options prior to the Effective Time continue
to qualify as incentive stock options after the Effective Time. At or prior to
the Effective Time, Centura shall take all corporate action necessary to
reserve for issuance sufficient shares of Centura Common Stock for delivery
upon exercise of Triangle Rights assumed by it in accordance with this Section
3.5. As soon as reasonably practicable after the Effective Time, Centura shall
file a registration statement on Form S-3 or Form S-8, as the case may be (or
any successor or other appropriate forms), with respect to the shares of
Centura Common Stock subject to such options and shall use its reasonable
efforts to maintain the effectiveness of such registration statements (and
maintain the current status of the prospectus or prospectuses contained
therein) for so long as such options remain outstanding. With respect to those
individuals who subsequent to the Merger will be subject to the reporting
requirements under Section 16(a) of the 1934 Act, where applicable, Centura
shall administer the Triangle Stock Plan assumed pursuant to this Section 3.5
in a manner that complies with Rule 16b-3 promulgated under the 1934 Act.
(c) All restrictions or limitations on transfer with respect
to Triangle Common Stock awarded under the Triangle Stock Plans or any other
plan, program, or arrangement of any Triangle Company, to the extent that such
restrictions or limitations shall not have already lapsed, and except as
otherwise expressly provided in such plan, program, or arrangement, shall
remain in full force and effect with respect to shares of Centura Common Stock
into which such restricted stock is converted pursuant to Section 3.1 of this
Plan of Merger.
3.6 CONVERSION OF TRIANGLE WARRANTS. At the Effective Time, each
Triangle Warrant which is outstanding at the Effective Time, whether or not
exercisable, shall be converted into and become a right with respect to Centura
Common Stock, and Centura shall assume each Triangle Warrant, in accordance
with the terms of the agreement by which the Triangle Warrant is evidenced,
except that from and after the Effective Time, (i) each Triangle Warrant
assumed by Centura may be exercised solely for shares of Centura Common Stock,
(ii) the number of shares of Centura Common Stock subject to such Triangle
Warrant shall be equal to the number of shares of Triangle Common Stock subject
to such Triangle Warrant immediately prior to the Effective Time, multiplied by
the Exchange Ratio, and (iii) the per share exercise price under each such
Triangle Warrant shall be adjusted by dividing the per share exercise price
under each such Triangle Warrant by the Exchange Ratio and rounding up to the
nearest cent.
-6-
<PAGE> 7
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, Centura
and Triangle shall cause the exchange agent selected by Centura (the "Exchange
Agent") to mail to the former stockholders of Triangle appropriate transmittal
materials (which shall specify that delivery shall be effected, and risk of
loss and title to the certificates theretofore representing shares of Triangle
Common Stock shall pass, only upon proper delivery of such certificates to the
Exchange Agent). After the Effective Time, each holder of shares of Triangle
Common Stock (other than shares to be canceled pursuant to Section 3.3 of this
Plan of Merger) issued and outstanding at the Effective Time shall surrender
the certificate or certificates representing such shares to the Exchange Agent
and shall promptly upon surrender thereof receive in exchange therefor the
consideration provided in Section 3.1 of this Plan of Merger, together with all
undelivered dividends or distributions in respect of such shares (without
interest thereon) pursuant to Section 4.2 of this Plan of Merger. To the extent
required by Section 3.4 of this Plan of Merger, each holder of shares of
Triangle Common Stock issued and outstanding at the Effective Time also shall
receive, upon surrender of the certificate or certificates representing such
shares, cash in lieu of any fractional share of Centura Common Stock to which
such holder may be otherwise entitled (without interest). Centura shall not be
obligated to deliver the consideration to which any former holder of Triangle
Common Stock is entitled as a result of the Merger until such holder surrenders
such holder's certificate or certificates representing the shares of Triangle
Common Stock for exchange as provided in this Section 4.1. The certificate or
certificates of Triangle Common Stock so surrendered shall be duly endorsed as
the Exchange Agent may require. Any other provision of this Plan of Merger
notwithstanding, neither the Surviving Corporation nor the Exchange Agent shall
be liable to a holder of Triangle Common Stock for any amounts paid or property
delivered in good faith to a public official pursuant to any applicable
abandoned property Law.
4.2 RIGHTS OF FORMER TRIANGLE STOCKHOLDERS. At the Effective Time,
the stock transfer books of Triangle shall be closed as to holders of Triangle
Common Stock immediately prior to the Effective Time and no transfer of
Triangle Common Stock by any such holder shall thereafter be made or
recognized. Until surrendered for exchange in accordance with the provisions of
Section 4.1 of this Plan of Merger, each certificate theretofore representing
shares of Triangle Common Stock (other than shares to be canceled pursuant to
Section 3.3 of this Plan of Merger) shall from and after the Effective Time
represent for all purposes only the right to receive the consideration provided
in Sections 3.1 and 3.4 of this Plan of Merger in exchange therefor, subject,
however, to the Surviving Corporation's obligation to pay any dividends or make
any other distributions with a record date prior to the Effective Time which
have been declared or made by Triangle in respect of such shares of Triangle
Common Stock in accordance with the terms of this Plan of Merger and which
remain unpaid at the Effective Time. To the extent permitted by Law, former
stockholders of record of Triangle shall be entitled to vote after the
Effective Time at any meeting of Centura stockholders the number of whole
shares of Centura Common Stock into which their respective shares of Triangle
Common Stock are converted, regardless of whether such holders have exchanged
their certificates representing
-7-
<PAGE> 8
Triangle Common Stock for certificates representing Centura Common Stock in
accordance with the provisions of this Plan of Merger. Whenever a dividend or
other distribution is declared by Centura on the Centura Common Stock, the
record date for which is at or after the Effective Time, the declaration shall
include dividends or other distributions on all shares issuable pursuant to
this Plan of Merger, but beginning 30 days after the Effective Time no dividend
or other distribution payable to the holders of record of Centura Common Stock
as of any time subsequent to the Effective Time shall be delivered to the
holder of any certificate representing shares of Triangle Common Stock issued
and outstanding at the Effective Time until such holder surrenders such
certificate for exchange as provided in Section 4.1 of this Plan of Merger.
However, upon surrender of such Triangle Common Stock certificate, both the
Centura Common Stock certificate (together with all such undelivered dividends
or other distributions without interest) and any undelivered dividends and cash
payments to be paid for fractional share interests (without interest) shall be
delivered and paid with respect to each share represented by such certificate.
ARTICLE 5
MISCELLANEOUS
5.1 CONDITIONS PRECEDENT. Consummation of the Merger by Centura
Merger Subsidiary shall be conditioned on the satisfaction of, or waiver by
Centura of the conditions precedent to the Merger set forth in Sections 9.1 and
9.2 of the Merger Agreement. Consummation of the Merger by Triangle shall be
conditioned on the satisfaction of, or waiver by Triangle of, of the conditions
precedent to the Merger set forth in Sections 9.1 and 9.3 of the Merger
Agreement.
5.2 TERMINATION. This Plan of Merger may be terminated at any time
prior to the Effective Time by the parties hereto as provided in Article 10 of
the Merger Agreement.
5.3 COUNTERPARTS. This Plan of Merger may be executed in
counterparts, each of which shall be an original; but all of such counterparts
together shall constitute one and the same instrument.
-8-
<PAGE> 9
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Plan of Merger as of the date first above written.
<TABLE>
<CAPTION>
TRIANGLE BANCORP, INC.
<S> <C>
ATTEST: By:
------------------------- ---------------------------------------
Susan C. Gilbert Michael S. Patterson
Secretary President, Chief Executive Officer, and
Chairman of the Board
CENTURA MERGER SUBSIDIARY, INC.
ATTEST: By:
-------------------------- ---------------------------------------
Joseph A. Smith, Jr. Cecil W. Sewell, Jr.
Secretary President
</TABLE>
-9-
