Archie L. and Louise B. Honbarrier - Page 10




                                       - 10 -                                         
               From 1982 through 1997, all of Central’s stock was owned by            
          Mr. and Mrs. Honbarrier and their children, Gary L. Honbarrier              
          and Linda Embler.  During the same period, Central had only four            
          directors, consisting of Mr. and Mrs. Honbarrier and their two              
          children.                                                                   
          Merger of Colonial into Central                                             
               On December 31, 1993, Colonial merged into Central in                  
          accordance with the laws of North Carolina.  Central was the                
          surviving corporation.  Prior to the merger, Mr. Odom requested             
          that Mr. Lynch research the income tax implications of a merger.            
          On November 5, 1993, 7 weeks before the merger, Mr. Odom made the           
          following handwritten notes:                                                
               ALH Oks merger of Col. & Central, payout to Cen.                       
               shareholders                                                           
               - if tax free                                                          
               - need bus. purpose                                                    
               On November 11, 1993, after researching the matter, Mr.                
          Lynch sent Mr. Odom a memorandum identifying the following                  
          possible business reasons for the merger:  (1) Obtaining                    
          Colonial’s ICC operating rights to expand Central’s business; (2)           
          reducing and simplifying operating procedures and expenses by               
          utilizing Central’s existing staff and facilities; (3) reducing             
          administrative expenses due to projected increased revenue                  
          without increasing overhead expenses; and (4) use of Colonial’s             








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