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Exhibit 10.4
LOCK-UP AGREEMENT
This LOCK-UP AGREEMENT (this "
Agreement ") is made and entered into as of the 28th day of
February, 2007, by and between the undersigned, a resident of the
State of
(the " Shareholder "), and CapitalSouth Bancorp, a Delaware
corporation and a registered bank holding company ("
CapitalSouth ").
R E C I T A L S:
On even date herewith,
CapitalSouth and Monticello Bancshares, Inc., a Florida corporation
(" Monticello "), have entered into an Agreement and Plan of
Merger joined in by Mr. Jake Bowen, a resident of Duval
County, Florida (the " Merger Agreement "). The Merger
Agreement provides for the merger of Monticello with and into
CapitalSouth (the " Merger ") and the conversion of the
issued and outstanding shares of the $1.00 par value common stock
of Monticello (" Monticello Shares ") into shares of the
$1.00 par value common stock of CapitalSouth (" CapitalSouth
Shares "). The Merger Agreement is subject to the affirmative
vote of the shareholders of Monticello, the receipt of certain
regulatory approvals and the satisfaction of other conditions.
The Shareholder is the owner of
Monticello Shares (the " Shares "). In order to induce
CapitalSouth to enter into the Merger Agreement, the Shareholder is
entering into this Agreement with CapitalSouth to set forth certain
terms and conditions governing the actions to be taken by the
Shareholder solely in his capacity as a shareholder of Monticello
with respect to the Monticello Shares until consummation of the
Merger.
A G R E E M E N T:
NOW, THEREFORE, in consideration
of the transactions provided for in the Merger Agreement and the
mutual promises and covenants contained herein, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby agree as follows:
1. Restrictions on
Transfer . The Shareholder shall not transfer, sell, assign,
convey or encumber any of the Shares during the term of this
Agreement except (i) transfers in which the transferee shall
agree in writing to be bound by the provisions of this Agreement as
fully as the Shareholder, or (ii) to CapitalSouth pursuant to
the terms of the Merger Agreement. Without limiting the generality
of the foregoing, the Shareholder shall not grant to any person any
option or right to purchase the Shares or any interest therein or
enter into any agreement to transfer Shares.
2. Voting . The
Shareholder intends to, and will, vote (or cause to be voted) all
of the Shares over which the Shareholder has voting authority in
favor of the Merger Agreement and all of the transactions provided
for therein, including without limitation the Merger, at any
meeting of shareholders of Monticello called to vote on the Merger
Agreement or the Merger or the adjournment thereof or in any other
circumstance upon which a vote, consent or other approval with
respect to the Merger Agreement or the Merger is sought. Further,
the Shareholder
1
intends to, and will, surrender the certificate or certificates
representing the Shares over which the Shareholder has dispositive
authority to CapitalSouth upon consummation of the Merger as
described in the Merger Agreement and hereby waives any rights of
appraisal, or rights to dissent from the Merger, that the
Shareholder may have.
3. No Authorization of
Certain Transactions . Except as otherwise provided in this
Agreement, at any meeting of shareholders of Monticello or at any
adjournment thereof or any other circumstances upon which their
vote, consent or other approval is sought, the Shareholder will
vote (or cause to be voted) all of the Shares over which the
Shareholder has voting authority against (i) any merger
agreement, share exchange or merger (other than the Merger
Agreement and the Merger), consolidation, combination, sale of
substantial assets, recapitalization, dissolution, liquidation or
winding-up of or by Monticello or (ii) any amendment of
Monticello’s Articles of Incorporation or Bylaws or other
proposal or transaction involving Monticello or any of its
subsidiaries, which amendment or other proposal or transaction
would in any manner delay, impede, frustrate, prevent or nullify
the Merger, the Merger Agreement or any of the other transactions
provided for therein.
4. Non-Competition and
Non-Solicitation; Support of CapitalSouth . (a) For
purposes of this Agreement, the phrase "Non-Competition Period"
shall mean the period commencing on the "Effective Time of the
Merger", as set forth in the Merger Agreement, and continuing to
the second (2 nd )
anniversary hereof, except as such period may be extended by
Section 4(c) hereof. Except as set forth on Exhibit A
hereto, the Shareholder, for the Non-Competition Period, will not,
without the prior written approval of the Board of Directors of
CapitalSouth, directly or indirectly (i) whether through his
own account or as a partner, member, manager, employee, advisor,
consultant, owner, trustee, shareholder, officer, director or agent
of or to any person, corporation, proprietorship, partnership,
limited liability company, joint venture, trust or other entity or
association (any of the foregoing being referred to as a "
Person "), within Duval County, Florida or any county
contiguous thereto, perform services, own, advise, participate in,
support, have an interest in, give financial assistance to, permit
Shareholder’s name to be used in connection with or serve as
a member of management, supervisor, consultant or employee of any
financial service institution, including without limitation any
"insured depository institution" (as such term is defined in 12
U.S.C. § 1813(c)(2)) or any "regulated lending institution"
(as such term is defined in 42 U.S.C. § 4003(a)(10)) or any
other business, or any affiliate, parent, or subsidiary thereof,
which would be competitive with the business of CapitalSouth or any
affiliate or subsidiary thereof; (ii) solicit or i
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