Opinion ID: 1816952
Heading Depth: 1
Heading Rank: 2

Heading: stock purchase agreements

Text: The preferred share agreement was between UNFC and the holders of LSB & T's preferred shares. UNFC's purchase of LBI's preferred shares was to occur contemporaneously with UNFC's purchase of LBI's common shares, and all conditions precedent under the common share agreement were to be met or waived by LBI prior to closing. The common share agreement was between UNFC and certain individuals, including Lexington Bank and Trust Co., trustee of LSB & T's employee stock ownership plan. In the common share agreement, UNFC agreed to purchase all of LBI's common shares, conditioned upon the closing of the purchase of LBI's preferred shares and the obtaining [of] all necessary regulatory approvals including approval for [UNFC] to merge [LSB & T] into its [sic] subsidiary bank. In addition, UNFC agreed to purchase 439.01 shares of LSB & T's common stock owned by Stuckey for $470,713, payable at closing, which would yield $1,072 a share. Stuckey was also to be paid an amount equal to any cash recoveries by [LSB & T] of the principal amount of and interest on a loan by [LSB & T] ... in the principal amount of $156,000, which loan was charged off in full by [LSB & T]. Finally, the common share agreement required Stuckey to execute an agreement not to compete, for which Stuckey would be compensated in the amount of $450,000. Upon the closing of the sale of LBI's common shares and Stuckey's 439.01 shares in LSB & T, UNFC would control all but 8.4 percent of LSB & T's issued and outstanding shares. Although the common share agreement clearly contemplated a merger and provided for the purchase of Stuckey's minority shares in LSB & T, it made no provisions concerning LSB & T's remaining minority shareholders. The purchase price of LBI's shares provided for in the common share agreement was based upon LSB & T's equity capital. The value of [LSB & T] shall be determined by adding to the amount of [LSB & T's] equity capital ... the amount of $8,250,000, provided that [LSB & T's] equity capital ... is not less than $8,800,000. The value of [LSB & T] as thus computed shall be divided by the total number of shares of [LSB & T] common stock issued and outstanding, which shall then be multiplied by the number of [LSB & T] shares owned by [LBI] to determine the value of the [LSB & T] shares owned by [LBI]. (Emphasis supplied.) Application of the above formula resulted in a value of approximately $1,217.86 per LSB & T share.