Opinion ID: 1816952
Heading Depth: 1
Heading Rank: 3

Heading: merger agreement

Text: In yet another separate agreement, LSB & T agreed to merge with UNB, which merger was to occur contemporaneously with the consummation of the stock purchase agreements. The merger was to proceed in three steps. First, the stock purchase agreements would be executed. Second, LBI would merge with UNFC with LBI surviving, resulting in LBI acquiring all of UNB's outstanding voting shares. Third, UNB and LSB & T would merge, with UNB as the survivor, and LBI would change its name to UNFC. Upon completion of the third step, all outstanding voting shares of LSB & T were to be canceled, with the minority shareholders receiving $700 per share in cash, and each share of common stock owned by LBI was to be converted into 1.91 shares of UNFC's common stock. The above transactions would result in UNFC's being a one-bank holding company, with UNB as its wholly owned subsidiary. These transactions effected a cash-out merger, which left the minority shareholders with no equity in the resultant corporation. A cash-out merger may be accomplished without regard to the wishes of the minority shareholders and forces them to accept cash for their shares rather than stock in the newly merged business, thus giving the majority 100-percent control. Such mergers are variously referred to as cash-outs, take-outs, squeeze-outs, and freeze-outs.