SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest reported) January 10,1994
CBT CORPORATION
(Exact name of registrant as specified in charter)
Kentucky 0-16878 61-1030727
(State of other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
333 Broadway, Paducah, Kentucky 42001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (502) 575-5372
Former name of former address, if changed since last report Not Applicable
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
None
ITEM 2. ACQUISITION AND DISPOSITION OF ASSETS
None
ITEM 3. BANKRUPTCY AND RECEIVERSHIP
None
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS
None
ITEM 5. OTHER EVENTS
On January 10, 1994, CBT Corporation (the Corporation)
entered into an Agreement and Plan of Reorganization dated
as of January 10, 1994 (Agreement) with BMC Bankcorp, Inc.
(BMC). The Agreement provides, among other things, for the
merger of BMC with and into a wholly owned subsidiary of the
Corporation upon the terms and conditions of the Plan of
Merger dated as of January 10, 1994 (the Plan).
Terms of the Agreement call for BMC's shareholders to
receive two shares of the Corporation's common stock for
each share of BMC's common stock held.
Consummation of the merger is subject to certain conditions,
including approval of the shareholders of BMC , approval of
the Federal Reserve Board, the Kentucky Department of
Financial Institutions and other requisite regulatory
approvals. The Agreement is also subject to termination by
the parties by mutual consent or upon the occurrence of
certain specified events.
Concurrently with the execution and delivery of the
Agreement, BMC entered into a Stock Option Agreement dated
January 10, 1994 (Option Agreement), pursuant to which BMC
granted to the Corporation an option to purchase up to
148,512 shares of BMC's common stock (representing
approximately 19.9% of the then-outstanding shares of BMC'
common stock), if certain events occur, including if any
person (other than the Corporation) acquires beneficial
ownership of 50% or more of the then-outstanding shares of
BMC's common stock or BMC enters into an agreement with
another person (other than the Corporation) pursuant to
which such person is entitled to acquire 50% or more of the
then-outstanding shares of BMC's common stock.
The Agreement, the Plan of Merger and the Option Agreement
are attached hereto as exhibits and incorporated herein by
reference.
ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS
None
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
(a) Financial statements of business acquired
Not applicable until merger is consummated
(b) Pro forma financial information
Not applicable until merger is consummated
(c) Exhibits See page 4
ITEM 8. CHANGES IN FISCAL YEAR
None
Signatures
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
CBT CORPORATION
/s/ Eddie L. Holman
By: Eddie L. Holman
Vice President and Secretary
EXHIBITS
Item Reference
Agreement and Plan of Reorganization 5-55
Plan of Merger 56-61
Stock Option Agreement 62-67
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION
("Agreement") is made and entered into as of this 10th day
of January, 1994 among CBT CORPORATION, a Kentucky
corporation ("CBT"), CBT ACQUISITION CORP, a Kentucky
corporation ("Acquisition Corp") and BMC BANKCORP, INC., a
Kentucky corporation ("BMC").
W I T N E S S E T H :
The Boards of Directors of CBT, Acquisition Corp
and BMC have approved, and deem it advisable and in their
respective shareholders' best interests to consummate, the
business combination transaction (the "Merger") provided for
herein and in the Plan of Merger executed of even date
herewith and incorporated by reference herein as if fully
set out herein, in which Acquisition Corp will be merged
with and into BMC (the "Plan of Merger" or the "Plan");
CBT, Acquisition Corp and BMC are willing to make
certain representations, warranties and agreements in
connection with the Merger and also to prescribe various
conditions to the Merger.
For federal income tax purposes, it is intended
that the Merger qualify as a reorganization under the
provisions of Section 368 of the Internal Revenue Code of
1986, as amended.
NOW, THEREFORE, in consideration of the premises
and of the respective representations, warranties,
agreements and undertakings herein contained, the parties
hereby agree as follows:
ARTICLE 1
DEFINITIONS
"Average Price Per Share" shall mean the average
of the bid and asked price per share, as quoted by the
National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), for CBT Common Stock for the 20
trading days which occur immediately prior to the third
business day prior to the Closing Date. For purposes of
this Agreement, "trading day" shall mean any day on which
securities are traded on the New York Stock Exchange. If
prior to the date on which the Average Price Per Share is
determined CBT shall effect a stock dividend or make
distributions upon or subdivide, split up, reclassify or
combine its shares of Common Stock, an appropriate
adjustment or adjustments will be made in the Average Price
Per Share.
"Banks" shall mean, collectively, Bank of Marshall
County, Graves County Bank and United Commonwealth Bank,
Federal Savings Bank.
"BHCA" shall mean the Bank Holding Company Act of
1956, as amended.
"BMC Common Stock" and "BMC Preferred Stock" are
defined at Section 4.1B.
"BMC Financial Statements" shall mean (i) the
audited consolidated balance sheets (including related
notes) of BMC as of December 31, 1992, 1991 and 1990, the
related audited consolidated statements of income, changes
in shareholders' equity, and statements of cash flows
(including related notes) for the years ended December 31,
1992, 1991 and 1990, and the unaudited balance sheet as of
September 30, 1993 and the consolidated statements of
income, changes in shareholders' equity and cash flows
(including related notes) of BMC for the nine months ended
September 30, 1993, and (ii) the consolidated balance sheet
and related consolidated statements of income, changes in
shareholders' equity and cash flows (including related
notes) of BMC with respect to periods ending subsequent to
September 30, 1993.
"BMC Subsidiary" is defined at Section 4.1C.
"Closing" shall mean the closing of the
transactions contemplated herein and in the Plan of Merger,
and "Closing Date" shall mean the date and time specified
pursuant to Section 2.4 hereof as the date of the Closing.
"Code" shall mean the Internal Revenue Code of
1986, as amended.
"Commission" shall mean the Securities and
Exchange Commission.
"CBT Common Stock" shall mean the common stock, no
par value, of CBT.
"CBT Financial Statements" shall mean (i) the
audited consolidated balance sheets (including related
notes) of CBT as of December 31, 1992, 1991 and 1990 and the
related audited consolidated statements of income, changes
in shareholders' equity and cash flows (including related
notes) for the years ended December 31, 1992, 1991 and 1990,
and the unaudited consolidated balance sheet as of September
30, 1993 and the related unaudited consolidated statements
of income, changes in shareholders' equity and cash flows
(including related notes) of CBT for the nine months ended
September 30, 1993, and (ii) the consolidated balance sheets
and related consolidated statements of income, changes in
shareholders' equity and cash flows (including related
notes) of CBT with respect to periods ending subsequent to
September 30, 1993.
"CBT Subsidiary" shall mean each company or other
organization of which at least a majority of the securities
or other interests is directly or indirectly owned or
controlled by CBT.
"Effective Time" is defined at Section 2.2.
"Federal Reserve" shall mean the Board of
Governors of the Federal Reserve System.
"KBCA" shall mean the Kentucky Business
Corporation Act.
"KDFI" shall mean the Kentucky Department of
Financial Institutions.
"OTS" shall mean the Office of Thrift
Supervision.
"Previously Disclosed" shall mean disclosed prior
to the execution hereof in the letter dated of even date
herewith from the party making such disclosure and delivered
to the other party contemporaneously with the execution
hereof.
"Proxy Statement/Prospectus" shall mean the proxy
statement/prospectus together with any supplements thereto
sent to the shareholders of BMC to solicit their votes in
connection with this Agreement and the Plan of Merger.
"Registration Statement" shall mean the
registration statement with respect to the CBT Common Stock
to be issued in connection with the Merger as declared
effective by the Commission under the Securities Act of
1933, as amended.
"Securities Laws" shall mean [i] the Securities
Act of 1933, as amended (the "Securities Act"); the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"); the Investment Company Act of 1940, as amended; the
Trust Indenture Act of 1939, as amended; and the rules and
regulations of the Commission promulgated thereunder, and
[ii] all applicable state securities laws.
ARTICLE 2
The Merger
2.1 The Merger. Upon the terms and conditions set
forth in this Agreement and the Plan of Merger, at the
Effective Time (as hereinafter defined), Acquisition Corp
shall be merged with and into BMC in accordance with the
provisions of and with the effect provided in the KBCA. The
terms of the Merger shall be as set forth in this Agreement
and in the Plan of Merger.
2.2 Effective Time of Merger. Upon the terms and
conditions set forth in this Agreement and the Plan of
Merger, Articles of Merger (the "Articles of Merger") shall
be duly prepared and executed by Acquisition Corp and BMC,
and thereafter delivered to the Secretary of State of the
Commonwealth of Kentucky for filing, as provided in the
KBCA, on the Closing Date. The Merger shall become
effective upon the filing with the Kentucky Secretary of
State, or at such time and date thereafter as is provided in
the Articles of Merger (the "Effective Time").
2.3 Conversion of BMC Capital Stock.
A. Conversion of BMC Common Stock. Except for
Dissenting Shares (as defined below), each share of BMC
Common Stock issued and outstanding immediately prior to the
Effective Time shall, automatically, by virtue of the Merger
and at the Effective Time, be exchanged for and converted,
without any further notice to or on the part of the holder
thereof, into two (2) shares of CBT Common Stock, subject to
Section 2.3C hereof and the Plan of Merger. At and after
the Effective Time, the former holders of shares of BMC
Common Stock shall be entitled only to the exchange rights
provided for in this Section 2.3 and in the Plan of Merger
or to the rights to dissent under Subtitle 13 of the KBCA.
Certificates previously representing shares of BMC Common
Stock shall be exchanged for CBT Common Stock issued in
consideration therefor upon the surrender of such
certificates in accordance with the Plan of Merger.
B. Reclassifications. If prior to the Effective
Time the outstanding shares of CBT Common Stock shall have
been increased, decreased or changed into or exchanged for a
different number or kind of shares or securities by
reorganization, recapitalization, reclassification, stock
dividend, stock split or other like changes in CBT's
capitalization, all without CBT receiving consideration
therefor, then an appropriate and proportionate adjustment
shall be made in the number and kind of shares of CBT Common
Stock or the shares of stock of any successor to CBT, to be
thereafter delivered pursuant to this Agreement and the Plan
of Merger, and, with respect to any such successor
corporation, a holder of shares of BMC Common Stock shall
participate in the same manner and to the same extent as a
holder of shares of CBT Common Stock.
C. No Fractional Shares. No certificate or
scrip of any kind will be issued by CBT to any shareholder
of BMC in respect of any fractional interest in CBT Common
Stock arising out of the conversion of BMC Common Stock into
CBT Common Stock in the Merger, and such fractional share
interests will not entitle the owner thereof to vote or to
any rights of a shareholder of CBT. No holder of BMC Common
Stock will have any rights in respect of a fractional
interest in CBT Common Stock arising out of the Merger
except the right to receive in lieu thereof a cash payment
in a dollar amount equal to such fractional interest
multiplied by the average of the bid and asked price per
share, as quoted by NASDAQ, for CBT Common Stock on the
trading day which occurs immediately prior to the Closing
Date. For purposes of this Agreement, "trading day" shall
mean any day on which securities are traded on the New York
Stock Exchange.
D. Dissenting Shareholders. If any holder of
shares of BMC Common Stock shall, in accordance with the
provisions of applicable law, seek appraisal and perfect
dissenting shareholder rights to be paid the fair value of
his or her shares ("Dissenting Shares"), then such holder
shall be entitled to receive such value as may be
established pursuant to such provisions. BMC shall give CBT
prompt notice of any written objections or demands received
from any shareholder pursuant to such provisions, and shall
give CBT the opportunity to participate in all proceedings
with respect to any such objections or demands. BMC will
pay its dissenting shareholders the value of their stock out
of its own funds. No funds will be supplied for that
purchase, directly or indirectly, by CBT, nor will CBT
directly or indirectly reimburse BMC for any payments to
dissenters.
2.4 Closing. The closing of the Merger (the
"Closing") will take place at 10:00 a.m. on a date to be
specified by CBT (the "Closing Date"), which shall be no
later than the fifth business day following the last to
occur of [i] the effective date of the last order, approval,
or exemption of any federal or state regulatory agency
approving or exempting the Merger if such action is
required, and [ii] the expiration of all required waiting
periods after the filing of all notices to all federal or
state regulatory agencies required for consummation of the
Merger, at the offices of Wyatt, Tarrant & Combs, 2800
Citizens Plaza, Louisville, Kentucky, or at such other date
and time, and at such other place, as may be mutually agreed
upon by CBT and BMC.
ARTICLE 3
COVENANTS
3.1 Shareholders' Meeting. Subject to the
Registration Statement becoming effective, this Agreement
and the Plan of Merger shall be submitted for approval to
the shareholders of BMC at a meeting to be called and held
in accordance with the applicable provisions of law and the
Articles of Incorporation and Bylaws of BMC (the "Meeting").
Subject to the Registration Statement becoming effective,
BMC shall cause the Meeting to be held as promptly as
practicable and shall disseminate to its shareholders all
materials required of it under law to be disseminated in
connection with the consideration by the shareholders of
this Agreement and the Plan. Unless inconsistent with its
fiduciary duties, the Board of Directors of BMC shall
recommend that its shareholders adopt and approve this
Agreement and the Plan of Merger at the Meeting and shall
take all action necessary or helpful to secure a vote of its
shareholders in favor of the Merger. Immediately after the
Meeting, BMC shall notify CBT of the results of the Meeting.
3.2 Proxy Statement/Prospectus. As promptly as
practicable after the date hereof, CBT and BMC shall prepare
the Proxy Statement/Prospectus to be mailed to the
shareholders of BMC and CBT in connection with the Merger
and to be filed by CBT as part of the Registration
Statement. CBT and BMC shall cooperate with each other in
order to facilitate the preparation, filing and clearance of
the Registration Statement and the Proxy
Statement/Prospectus under the Securities Laws. Before
filing the Registration Statement, Proxy
Statement/Prospectus, and any amendment thereto with the
Commission, CBT will provide BMC the opportunity to review
and comment on the Registration Statement, Proxy
Statement/Prospectus, and any amendment thereto. Each of
CBT and BMC will promptly advise the other if it determines
that any information furnished by it to the other
specifically for use in the Registration Statement,
including the Proxy Statement/Prospectus included therein,
is or becomes false or misleading in any material respect.
In no event shall either party hereto be liable for, and
each party shall indemnify and hold the other harmless from,
any untrue statement of a material fact or omission to state
a material fact in the Registration Statement made in
reliance upon, and in conformity with, written information
concerning the other party furnished by such other party
specifically for use in the Registration Statement. CBT
will advise BMC, promptly after it receives notice thereof,
of the time when the Registration Statement or any post
effective amendment thereto has become effective or any
supplement or amendment has been filed, of the issuance of
any stop order, of the suspension of the qualification of
the CBT Common Stock issuable in connection with the Merger
or offering or sale in any jurisdiction, or the initiation
or threat of any proceeding for any such purpose, or of any
request by the Commission for the amendment or supplement of
the Registration Statement or for any additional
information. CBT shall take all actions necessary to
register or qualify the shares of CBT Common Stock to be
issued in the Merger pursuant to all applicable state "blue
sky" or securities laws and shall maintain such
registrations or qualifications in effect for all purposes
hereof.
3.3 Cooperation. BMC and CBT shall proceed
expeditiously and cooperate fully in making application for
all necessary regulatory approvals, in the procurement of
any other consents and approvals, and in the taking of any
other action and the satisfaction of all other requirements
prescribed by law or otherwise, necessary for consummation
of the Merger on the terms provided herein and in the Plan
of Merger. Before filing any such application, each party
shall provide the other the opportunity to review and
comment on such application or other document. CBT shall
and BMC shall, and shall cause each BMC Subsidiary to, use
all reasonable efforts (i) to take, or cause to be taken,
all actions necessary to comply promptly with all legal
requirements which may be imposed on such party with respect
to the Merger and to consummate the transactions
contemplated by this Agreement and the Plan of Merger, and
(ii) to obtain (and to cooperate with the other party to
obtain) any consent, authorization, order or approval of, or
any exemption by, any governmental entity or any other
public or private third party which is required to be
obtained or made by such party in connection with the Merger
and the transactions contemplated by this Agreement and the
Plan of Merger. Each of BMC and CBT shall cooperate fully
with, and provide true, complete and accurate information
to, the other in connection with their requests and
applications for consents and governmental clearance,
approvals, licenses or permits, if any, which are necessary
for the Merger and CBT's ownership and operation of BMC's
business following the Merger.
3.4 Conduct of Business Prior to Closing. Except with
the prior written consent of CBT or as expressly
contemplated or permitted by this Agreement, or as
Previously Disclosed, during the period from the date of
this Agreement and continuing until the Effective Time,
neither BMC nor any BMC Subsidiary shall:
A. conduct its business other than in the usual,
regular and ordinary course or fail to use its best efforts
to preserve its business organization intact or to keep
available to CBT the services of its present officers and
employees or to preserve the good will of its customers and
others having business relations with it;
B. fail to comply in all material respects with
all applicable laws and regulations which relate to the
conduct of its business;
C. amend its articles of incorporation or
association or bylaws;
D. issue any shares of authorized capital stock
or securities convertible into such shares, or purchase,
redeem, retire or otherwise acquire any of its outstanding
shares, or sell or give any option or right to purchase,
hypothecate, pledge or otherwise encumber or dispose of any
such shares or any shares held in treasury, if any, make or
effect any other change in the structure or composition of
its capital stock or agree to do any of the foregoing;
E. in the case of BMC only, declare or pay any
dividends or otherwise make distributions with respect to
its capital stock, except for regular quarterly cash
dividends as provided in Section 3.12 of this Agreement;
F. enter into, adopt, amend or terminate any
employee benefit plan, except as required by law, or enter
into any employment agreement with any person or, except in
a manner consistent with past practices, grant any increase
in the compensation (including bonus and benefit plans and
all other non-cash compensation) of any of its employees;
G. solicit or encourage (including by way of
furnishing nonpublic information) inquiries, or authorize or
permit any of its officers, directors, employees, advisors
or representatives to solicit or encourage any takeover
proposal, as defined below, or, if not inconsistent with the
fiduciary duties of BMC's directors, (i) take any other
action to facilitate any inquiries or the making of any
proposal which constitutes, or may reasonably be expected to
lead to, any takeover proposal, or (ii) agree to or endorse
any takeover proposal, or (iii) participate in any
discussions or negotiations or provide third parties with
any nonpublic information, relating to any such inquiry or
proposal. As used in this Agreement, "takeover proposal"
shall mean any tender or exchange offer, proposal for a
merger, consolidation or other business combination
involving BMC or any BMC Subsidiary or any proposal or offer
to acquire in any manner a substantial equity interest in,
or a substantial portion of the assets of, BMC or any BMC
Subsidiary other than the transactions contemplated by this
Agreement;
H. borrow or agree to borrow any amount of funds
or incur any obligation or liability except in the ordinary
course of business consistent with prior practice, or
guarantee or agree to guarantee any material obligations of
others except for letters of credit and guaranties of
signatures in the ordinary course of business;
I. except in the ordinary course of business,
cancel any indebtedness owing to it or any claims that it
might have possessed, waive any material rights of
substantial value or sell, lease, encumber, otherwise
dispose of, or agree to sell, lease, encumber or otherwise
dispose of any of its assets;
J. amend, modify or terminate any material
agreement or contract other than in the ordinary course of
business or commit any act or omit to do any act that would
cause a breach of any material lease, contract or commitment
to which it is a party or by which its property or business
is bound or affected, or which would have a material adverse
effect on its financial condition, operations or assets; or
K. enter into or agree to enter into any
agreement or contract that would have been required to be
Previously Disclosed pursuant to this Agreement, other than
such contracts and agreements entered into in the ordinary
course of business.
3.5 Pre-Acquisition Investigations.
A. CBT will initiate a pre-acquisition
investigation and review of the books, records and
facilities of BMC and the BMC Subsidiaries and will complete
such pre-acquisition investigation not later than February
28, 1994. CBT shall advise BMC at the conclusion of such
pre-acquisition investigation of all matters then known to
CBT which CBT shall in good faith determine to be either (i)
inconsistent in any material and adverse respect with any of
the representations and warranties of BMC contained in this
Agreement, or (ii) in the reasonable judgment of the Board
of Directors of CBT, to be either (x) of such significance
as to materially and adversely affect the financial
condition or results of operations of BMC and the BMC
Subsidiaries on a consolidated basis, or (y) to deviate
materially and adversely from BMC's audited consolidated
financial statements for the period ended December 31, 1992.
CBT shall have the right to terminate this Agreement as set
forth in Section 6.2(ii) of Article 6.
B. BMC will initiate a pre-acquisition
investigation and review of the books, records and
facilities of CBT and the CBT Subsidiaries and will complete
such pre-acquisition investigation not later than February
28, 1994. BMC shall advise CBT at the conclusion of such
pre-acquisition investigation of all matters then known to
BMC which BMC shall in good faith determine to be either (i)
inconsistent in any material and adverse respect with any of
the representations and warranties of CBT and Acquisition
Corp. contained in this Agreement, or (ii) in the reasonable
judgment of the Board of Directors of BMC, to be either (x)
of such significance as to materially and adversely affect
the financial condition or the results of operations of CBT
and the CBT Subsidiaries on a consolidated basis, or (y) to
deviate materially and adversely from CBT's audited
financial statements for the period ended December 31, 1992.
BMC shall have the right to terminate this Agreement as set
forth in Section 6.2(iii) of Article 6.
C. In addition to CBT's pre-acquisition
investigation of BMC and BMC's pre-acquisition investigation
of CBT, CBT and BMC shall each afford to the officers,
employees, accountants, counsel and other representatives of
the other, access, during normal business hours during the
period prior to the Effective Time, to all the properties,
books, contracts, commitments and records of CBT and BMC, as
appropriate, and, during such period, BMC shall (and shall
cause each of the BMC Subsidiaries to), and CBT shall (and
shall cause each of the CBT Subsidiaries to), make available
to the other (i) a copy of each report, schedule,
registration statement and other document filed or received
by it during such period pursuant to the requirements of the
Securities Laws or federal or state banking laws (other than
reports or documents that such party is not permitted to
disclose under applicable law), and (ii) all other
information concerning its business, properties and
personnel as the other party may reasonably request.
3.6 Confidentiality.
A. CBT shall, and shall cause its directors,
officers, attorneys and advisers to, maintain the
confidentiality of all information obtained in CBT's pre
acquisition or other investigations of BMC and BMC's
Subsidiaries (including information obtained prior to the
date hereof) which is not otherwise publicly disclosed,
other than as a result of a disclosure by BMC or BMC's
representatives, unless such information (i) thereafter
becomes lawfully obtainable from other sources, or (ii) is
required to be disclosed in any application required to be
filed hereunder with any governmental agency or authority
and confidential treatment of such information is requested,
and to return all such information, and not retain any
copies, extracts, or other reproductions, in whole or in
part, if this Agreement is terminated pursuant to Article 6,
said undertakings to survive any termination of this
Agreement pursuant to Article 6.
B. BMC shall, and shall cause its directors,
officers, attorneys and advisers to, maintain the
confidentiality of all information obtained in BMC's pre
acquisition or other investigations of CBT (including
information obtained prior to the date hereof) which is not
otherwise publicly disclosed, other than as a result of a
disclosure by CBT or CBT's representatives unless such
information (i) thereafter becomes lawfully obtainable from
other sources or (ii) is required to be disclosed in any
application required to be filed hereunder with any
governmental agency or authority and confidential treatment
of such information is requested, and to return all such
information, and not retain any copies, extracts, or other
reproductions in whole or in part, if this Agreement is
terminated pursuant to Article 6, said undertakings to
survive any termination of this Agreement pursuant to
Article 6.
3.7 Press Releases. All parties to this Agreement
agree that any press release or other public announcement by
either party pertaining to the Merger shall be coordinated
with the other parties hereto; provided, however, that
nothing contained herein shall prohibit either party from
making any disclosure required by law which its counsel
deems necessary, provided the other party is given written
notice thereof.
3.8 Updating of Information.
A. BMC will furnish CBT with all reports and
statements filed by it or any BMC Subsidiary with any
regulatory authority and the BMC Financial Statements, such
reports and statements to be furnished promptly after their
filing or the preparation thereof. Each such report and
statement shall have been prepared in accordance with and
shall comply in all material respects with applicable law
and the regulations governing its preparation.
B. CBT will furnish BMC with all reports and
statements filed by it or any CBT Subsidiary with any
regulatory authority, such reports and statements to be
furnished promptly after their filing or the preparation
thereof. Each such report and statement shall have been
prepared in accordance with and shall comply in all material
respects with applicable law and the regulations governing
its preparation.
3.9 Accounting Treatment. Neither BMC nor CBT shall
intentionally take or cause to be taken any action, whether
before or after the Effective Time, that would disqualify
the Merger as a "pooling of interests" for accounting
purposes and neither CBT nor BMC shall intentionally take or
cause to be taken any action, whether before or after the
Effective Time, that would disqualify the Merger as a
"reorganization" within the meaning of Section 368(a) of the
Code.
3.10 BMC Affiliates. BMC shall, prior to the Closing
Date, cause to be delivered to CBT a list, reviewed by BMC's
counsel, identifying all affiliates of BMC (as such term is
used in Rules 144 and 145 promulgated by the Commission
under the Securities Laws) as of the time of the Meeting and
through the Closing Date. BMC shall furnish such
information and documents as CBT may reasonably request for
the purpose of reviewing such list. BMC shall use its best
efforts to cause each person who is identified as an
"affiliate" in the list furnished pursuant to this Section
and who is to receive any shares of CBT Common Stock
pursuant to the Merger to execute a written agreement on or
before the Closing Date, in substantially the form attached
hereto as Exhibit 3.10 (collectively, the "Affiliate
Agreements"), that such person will not dispose of any
shares of CBT Common Stock received in the Merger until such
time as financial results covering at least 30 days of
combined operations of CBT and BMC shall be published and
that such person, for a period of two years (or three years
if that person becomes an affiliate of CBT) following the
Effective Time, (i) will not offer to sell or otherwise
dispose of any of the shares of CBT Common Stock received
pursuant to the Merger in violation of the Securities Laws,
(ii) will acknowledge the placement of a legend on the
certificate(s) representing the "affiliate's" shares of CBT
Common Stock referring to the issuance of such shares in a
transaction to which said Rule 145 is applicable, and (iii)
will acknowledge the giving of stop-transfer instructions to
Acquisition Corp's transfer agent with respect to the
"affiliate's" certificates evidencing CBT Common Stock
received in the Merger, which shall be effective absent
evidence of compliance with said Rule 145. CBT shall during
the period any "affiliates" hold shares of CBT Common Stock
so restricted comply with the requirements of Rule 144(c)
under the Securities Act of 1933 to allow such shares of CBT
Common Stock held by such "affiliates" to be transferrable
by the "affiliates" in compliance with paragraphs (c), (e),
(f) and (g) of Rule 144. At the end of the three-year
holding period within Rule 144(k), or at the end of two
years as determined in accordance with Rule 144(d) if the
BMC "affiliate" is not an affiliate of CBT and CBT meets the
requirements of Rule 144(c), CBT shall remove from share
certificates the legend referenced above if requested by a
BMC affiliate or remove such legend prior thereto if the BMC
affiliate shall deliver to CBT an opinion of securities
counsel acceptable to CBT that such legend can be removed.
3.11 Employee Benefits. At, or as soon as
administratively feasible after, the Effective Time,
employees and officers of BMC and each BMC Subsidiary shall
be provided with such employee benefits as CBT from time to
time generally provides to employees and officers of a CBT
Subsidiary, including, but not limited to, participation in
CBT's Profit Sharing 401(k) and Money Purchase Pension
Plans, life, medical and hospitalization and disability
insurance, and sick pay, vacation, personal leave and
severance benefits, on a non-discriminatory and
substantially similar basis. For purposes of providing such
benefits to employees and officers of BMC or any BMC
Subsidiary after the Effective Time, CBT shall credit such
employees and officers for years of service at BMC or any
BMC Subsidiary prior to the Effective Time for purposes of
eligibility and vesting. With respect to the CBT group
health insurance plan, [i] coverage shall be provided
without limitation for lapse in coverage and [ii] CBT shall
use its reasonable best efforts to cause coverage to be
provided without limitation for pre-existing conditions. At
such time as the employees and officers of BMC and each BMC
Subsidiary become participants in the CBT Profit Sharing
401(k) and Money Purchase Pension Plans, the BMC Employees'
Profit Sharing Plan will either be terminated or be merged
with the CBT Profit Sharing 401(k) Plan. The CEO's and
other appropriate senior executive officers of BMC and each
BMC Subsidiary, from and after the Effective Time, shall be
eligible to participate in the 1993 CBT Incentive Stock
Option Plan, incentive compensation plans and other plans
maintained by CBT for senior officers on the same basis as
the senior officers of other CBT affiliates.
3.12 Dividends. Beginning with the first calendar
quarter of 1994 and for each succeeding calendar quarter
thereafter prior to the calendar quarter in which the
Effective Time shall occur, BMC may declare and pay
quarterly dividends on shares of BMC Common Stock in an
amount not to exceed $.20 per share of BMC Common Stock;
provided, however, except as hereinbelow provided, BMC shall
not declare or pay any dividends or make any distributions
in any amount on BMC Common Stock in the quarter in which
the Effective Time shall occur and in which the shareholders
of BMC Common Stock are entitled to receive regular
quarterly dividends on the shares of CBT Common Stock into
which the shares of BMC Common Stock have been converted.
The holders of BMC Common Stock shall receive either the
payment of cash dividends on their shares of BMC Common
Stock or the payment of cash dividends as the holders of
shares of CBT Common Stock received in the Exchange for the
calendar quarter in which the Effective Time shall occur,
but will not receive and will not become entitled to receive
for the same calendar quarter both the payment of a cash
dividend as a holder of BMC Common Stock and the payment of
a cash dividend as a holder of CBT Common Stock.
3.13 Indemnification of Directors and Executive Officers.
A. Conditioned upon the effectiveness of the
Merger, CBT shall indemnify and hold harmless, to the
fullest extent permitted by applicable law, each individual
who served as a director or executive officer of BMC or any
BMC Subsidiary at any time prior to the Effective Time (an
"Indemnified Person"), from and against any claim, action,
suit, proceeding, demand, judgment, investigation,
assessment, cost and expense, including reasonable counsel
fees, and amounts paid in settlement, incident to, arising
out of, or caused by this Agreement or any of the
transactions contemplated herein. CBT shall promptly pay
expenses (including reasonable attorneys fees' and expenses)
in advance of the final disposition of any such claim,
action, suit, proceeding or investigation to an Indemnified
Person to the fullest extent permitted by applicable law,
and shall use its reasonable best efforts to assist in the
vigorous defense of any such matter; provided, CBT shall not
be liable for any settlement effected without its prior
written consent (which consent shall not be unreasonably
withheld); and provided, further, that CBT's obligations as
set forth herein shall not apply to any losses, claims,
damages, liabilities, costs, expenses, judgments, fines and
amounts paid in settlement by any Indemnified Person
involving the fraud, bad faith and/or reckless disregard of
such Indemnified Person related to any threatened or actual
claim, action, suit, proceeding or investigation brought by
CBT against any Indemnified Person. Any indemnified Party
wishing to claim indemnification under this Section 3.13
shall, upon learning of any such claim, action, suit,
proceeding or investigation, notify CBT thereof, provided
that the failure to so notify shall not affect the
obligations of CBT under this Section 3.13 except to the
extent such failure materially prejudices it.
B. From and after the Effective Time, CBT shall
cause all directors and officers of BMC and any BMC
Subsidiary to be covered by CBT's directors and officers
liability insurance policy on a basis at least equal to the
coverage currently provided to the directors and officers of
CBT and its banking subsidiaries. CBT covenants and agrees
that, to the extent provided below, CBT, BMC or a BMC
Subsidiary shall indemnify any person who on the Effective
Time was a director or officer of BMC or the BMC Subsidiary
against any losses, claims, damages, liabilities, expenses
(including attorneys fees and expenses), judgments, fines
and amounts paid in settlement in connection with any
threatened or actual claim, action, suit, proceeding or
investigation (whether asserted or arising before or after
the Effective Time) (i) arising out of or based in part upon
any act or failure to act (other than acts involving fraud,
intentional or willful misconduct or bad faith) of such
director or officer, in his or her capacity as an officer or
director of BMC or a BMC Subsidiary, before the Effective
Time; or (ii) arising out of the fact that such person is or
was a director or officer of BMC or the BMC Subsidiary
(collectively, the "Liabilities"). For a period of six
years with respect to taxes and for a period of three years
with respect to other matters, the directors and officers of
BMC or a BMC Subsidiary at the Effective Time shall be
indemnified with respect to a Liability (a) to the extent
such indemnification is permissible under applicable state
or federal law in effect as of the date hereof or as amended
applicable to a time before the Effective Time and, (b) in
each such case, to the extent a court of competent
jurisdiction has not determined the director or officer
failed to discharge his duties as a director or officer in
good faith and in a manner he honestly believed to be in the
best interests of BMC or the BMC Subsidiary, as the case may
be, and (c) the right to indemnification with respect to any
matter asserted or made within the applicable period shall
continue until final disposition of the matter. CBT, BMC or
the BMC Subsidiary shall pay expenses in advance of the
final disposition of any such action or proceeding to each
person entitled to indemnification hereunder to the full
extent permitted by applicable state or federal law upon
receipt of any undertaking required by applicable law. Any
person entitled to indemnification hereunder wishing to
claim indemnification pursuant hereto shall notify CBT, BMC
or the BMC Subsidiary within a reasonable time of learning
of any matter to which indemnification applies and shall
deliver to CBT, BMC or the BMC Subsidiary the undertaking,
if any, required by applicable law. Nothing in this section
shall limit CBT's, BMC's or a BMC Subsidiary's authority to
indemnify directors or officers of BMC or the BMC Subsidiary
under applicable law, and after the Effective Time the
directors and officers of BMC or the BMC Subsidiary shall
have the same indemnification rights as are provided to the
other directors or officers of CBT's banking subsidiaries.
CBT covenants and agrees not to assert any claim, action or
suit against any directors or officers of BMC or any BMC
Subsidiary for acts or failures to act of such director or
officer occurring before the Effective Time in such
director's or officer's capacity as a director or officer of
BMC or a BMC Subsidiary, except that the preceding shall not
apply to acts involving fraud, intentional or willful
misconduct or bad faith. CBT shall provide persons who are
serving as officers or directors of BMC or any BMC
Subsidiary as of the Effective Time such "prior acts"
insurance against Liabilities comparable in scope and
coverage to the directors and officers insurance maintained
by BMC and the BMC Subsidiaries on the date hereof, provided
such coverage is reasonably available.
3.14 Joint Business Plan. During the discussions and
negotiations between CBT and BMC leading up to this
Agreement, CBT and BMC have considered the joint conduct of
their businesses and their future business strategies and
plans. These discussions included certain commitments by
BMC and statements of current intention by CBT (collectively
the "Joint Business Plan") set forth below which were
important considerations in BMC's decision to enter into
this Agreement. Notwithstanding any other provision in this
Agreement to the contrary,the provisions of this Section
3.14 shall survive the Effective Time.
A. Membership of CBT Board. At the Effective Time,
CBT shall cause Joe Tom Haltom, Billy B. Morgan and Kerry B.
Harvey to become members of the Board of Directors of CBT.
Should any of Messrs. Haltom, Morgan and Harvey refuse or be
unable to serve, after consultation with BMC's Board of
Directors, CBT shall cause another member of BMC's Board of
Directors to become, at the Effective Time, a member of
CBT's Board of Directors. Mr. Haltom and Mr. Morgan shall
be eligible to serve as directors of CBT without regard to
any existing or future CBT director age limitations until
such time as they become 80 years of age. Neither Mr.
Morgan nor Mr. Haltom shall be eligible to be elected as a
CBT director at the CBT annual meetings of shareholders
following the date upon which they reach 80 years of age. In
addition, upon the first vacancy to occur on the CBT Board
of Directors following the Effective Time as a result of the
death, disability, retirement, refusal to serve, or failure
to be nominated of a member of CBT's Board of Directors
serving just prior to the Effective Time, CBT, after
consultation with the current members of BMC's Board of
Directors, shall cause the vacancy to be filled with a
current member of the BMC Board of Directors. It is the
intention of CBT that CBT's Board of Directors will include
four members who now serve on BMC's Board of Directors.
B. Agreements Regarding Bank Directors. CBT
acknowledges BMC's intent prior to the Effective time, after
consultation with CBT, to increase the number of members of
the Boards of Directors of each of Graves County Bank and
United Commonwealth Bank, Federal Savings Bank by one
member. CBT intends not to change, replace, delete or add
directors to the Boards of Directors of the Banks, except
after consultation in good faith with the then serving
members of the Board of Directors of the applicable Bank.
CBT intends not to impose any age limitation on directors of
the Banks.
C. Post-Effective Time Operation of Banks. CBT
intends that the Banks' operations will continue
substantially unchanged after the Effective Time. CBT
intends no substantial reduction in or replacement of, the
Banks' officers or employees. CBT intends that any
reduction in employees be accomplished over a reasonable
period of time through natural attrition as opposed to
termination. CBT does not intend to change the name of any
of the Banks. CBT does not intend to sell, merge or divest
itself of any of the Banks or a material amount of the
assets of any of the Banks. Nothing in this Section 3.14C
shall be construed to create any employment rights in any
particular person.
D. Capital Expenditures. CBT acknowledges United
Commonwealth Bank, Federal Savings Bank's plans for
construction of a new main office in Murray, Kentucky, which
shall proceed in accordance with United Commonwealth Bank,
Federal Savings Bank's current main office construction
plans. CBT and BMC intend that the operation center, which
will most likely be constructed on property adjacent to Bank
of Marshall County's main office in Benton, Kentucky upon
expiration of the current tenant's lease in August 1994, be
utilized for the operations of the Banks and have the
capacity to be considered for future utilization for the
operations of additional CBT affiliates. Prior to the
Effective Time, BMC shall consult with CBT regarding the
scope and progress of these capital projects. CBT
acknowledges its belief that these capital projects
currently are in CBT's best long-term interest.
E. Definition. As used in this Section 3.14, the
term "intends" means currently intends as of the date of
this Agreement and as of the Effective Time in good faith,
subject to the intending parties' fiduciary duties,
regulatory considerations, safe and sound banking practices,
and sound business principles.
3.15 Certain Covenants of Corporation.
A. Conduct of Business. Except with the
prior written consent of BMC, during the period from the
date of this Agreement and continuing until the Effective
Time, CBT shall cause each CBT Subsidiary to carry on its
business in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted.
B. NASDAQ Listing. CBT shall cause the
shares of CBT Common Stock to be issued to the BMC
shareholders pursuant to the transactions contemplated by
this Agreement to be listed for trading on the National
Association of Securities Dealers Automated Quotation
System.
3.16 Consummation of Merger. Subject to the terms and
conditions set forth in this Agreement, the Merger shall be
consummated prior to the consummation of any business
combination transaction in which all of the outstanding
shares of CBT Common Stock shall be exchanged for cash or
for stock or securities of any other person.
3.17 Additional Agreements. In case at any time
after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement and
the Plan of Merger, each party to this Agreement shall take
all such necessary action.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1 BMC's Representations and Warranties. Except as
Previously Disclosed, BMC hereby represents and warrants to
CBT and Acquisition Corp as follows:
A. Corporate Standing; Authorization.
[i] BMC is a bank holding company registered
under the BHCA and a savings and loan holding company
registered under the Home Owners' Loan Act. BMC and each
BMC Subsidiary is a Kentucky corporation or banking
corporation, duly organized and validly existing under the
laws of the Commonwealth of Kentucky, or is a federal
savings bank, duly organized, validly existing and in good
standing under the laws of the United States of America. BMC
and each BMC Subsidiary organized under the laws of the
Commonwealth of Kentucky has paid all fees due and owing to
the Office of the Kentucky Secretary of State, has delivered
to that office its most recent annual report as required by
the Act, and has never filed articles of dissolution with
the Kentucky Secretary of State or the KDFI. BMC has
delivered to CBT true and correct copies of the Articles of
Incorporation and Bylaws of BMC and all amendments thereto
through the date hereof. BMC and each BMC Subsidiary has
all requisite power and authority to own, lease and operate
its properties and to carry on its business as now being
conducted and is duly qualified and in good standing to do
business in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes
such qualification necessary.
[ii] The execution and delivery of this
Agreement and the Plan of Merger do not, and the
consummation of the transactions contemplated hereby and
thereby will not, conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or the loss
of a material benefit under, or the creation of a lien,
pledge, security interest, charge or other encumbrance on
assets (any such conflict, violation, default, right of
termination, cancellation or acceleration, loss or creation,
shall be deemed hereunder a "Violation") pursuant to, any
provision of the articles of incorporation or charter or
bylaws of BMC or any BMC Subsidiary, or, subject to
obtaining or making the consents, approvals, orders,
authorizations, registrations, declarations and filings
referred to in paragraph [iii] below, result in any
Violation of any loan or credit agreement, note, mortgage,
indenture, lease, Benefit Plan (as defined in Section 4.1K)
or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to
BMC or any BMC Subsidiary or their respective properties or
assets.
[iii] Except (a) for consents, approvals,
orders, and authorizations from the Federal Reserve, the OTS
and the KDFI, and (b) for the filing of Articles of Merger
with the Kentucky Secretary of State, no consent, approval,
order or authorization of, or registration, declaration or
filing with, any court, administrative agency or commission
or other governmental authority or instrumentality, domestic
or foreign, is required by or with respect to BMC or any BMC
Subsidiary in connection with the execution and delivery of
this Agreement and the Plan of Merger, or the consummation
by BMC of the transactions contemplated hereby and thereby.
[iv] BMC has all requisite corporate power
and authority to enter into and, subject to the approval of
its shareholders, to consummate the transactions
contemplated by this Agreement and the Plan of Merger. The
execution and delivery of this Agreement and the Plan of
Merger and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by all
necessary corporate action on the part of BMC, subject to
the approval of this Agreement and the Plan of Merger by the
shareholders of BMC. This Agreement and the Plan of Merger
have been duly executed and delivered by BMC, and constitute
the legal, valid and binding obligations of BMC enforceable
against it in accordance with their terms.
B. Capital Structure of BMC. The authorized
capital stock of BMC consists of (i) 1,000,000 shares of
preferred stock without par value ("BMC Preferred Stock"),
and (ii) 1,000,000 shares of common stock without par value
("BMC Common Stock"). At the date hereof, (i) no shares of
BMC Preferred Stock are issued or outstanding and (ii)
597,780 shares of BMC Common Stock are validly issued and
outstanding and fully paid and nonassessable and no shares
are held by BMC in treasury. BMC is not a party to any
subscription, option, warrant, call or commitment of any
character relating to shares of BMC's capital stock or any
instruments that can be converted into shares of BMC's
capital stock. None of the shares of BMC Common Stock have
been issued in violation of any preemptive right. There are
no outstanding contractual obligations of BMC or any BMC
Subsidiary to repurchase, redeem or otherwise acquire any
shares of capital stock of BMC. No bonds, debentures, notes
or other indebtedness having the right to vote (or
convertible into or exercisable for securities having the
right to vote) on any matters on which stockholders of BMC
may vote are issued or outstanding.
C. Subsidiaries. BMC has Previously Disclosed
each company or other organization, whether incorporated or
unincorporated, of which BMC is a general partner or at
least a majority of the securities or other interests is
directly or indirectly owned or controlled by BMC (each such
company or other organization Previously Disclosed by BMC is
referred to in this Agreement as a "BMC Subsidiary"). BMC
has delivered to CBT true and correct copies of the articles
of incorporation or charter and bylaws of each BMC
Subsidiary, as amended through the date hereof, and has
Previously Disclosed the authorized, issued and outstanding
capital stock of each BMC Subsidiary. No shares of capital
stock of any BMC Subsidiary are held in treasury. All of
the outstanding shares of capital stock of each BMC
Subsidiary are validly issued and outstanding and are fully
paid and nonassessable and such shares are wholly owned by
BMC directly, free and clear of all liens, claims and
encumbrances. There is outstanding no subscription, option,
warrant, call or commitment of any character relating to or
any instruments that can be converted into shares of the
capital stock of any BMC Subsidiary. No bonds, debentures,
notes or other indebtedness having the right to vote (or
convertible into or exercisable for securities having the
right to vote) of any BMC Subsidiary are issued or
outstanding.
D. SEC Documents. BMC has Previously Disclosed
to CBT a true and complete copy of each report, schedule,
and registration statement filed by BMC with the Commission
since January 1, 1989 through the date hereof (as such
documents have since the time of their filing been amended,
the "BMC SEC Documents"), which are all the documents that
BMC was or will be required to file with the Commission
since such date. As of their respective dates, the BMC SEC
Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as
the case may be, and the rules and regulations of the
Commission thereunder applicable to such BMC SEC Documents,
and none of the BMC SEC Documents contained any untrue
statement of a material fact or omitted to state 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. The financial
statements of BMC included in the BMC SEC Documents comply
as to form in all material respects with applicable
accounting requirements and with the published rules and
regulations of the Commission with respect thereto, have
been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during
the periods involved (except as may be indicated in the
notes thereto or, in the case of the unaudited statements,
as permitted by Form 10-Q of the Commission) and fairly
present the consolidated financial position of BMC and its
consolidated subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for
the periods then ended. All material agreements, contracts
or other documents required to be filed as exhibits to any
of the BMC SEC Documents have been or will be so filed. All
reports, schedules and statements hereafter filed by BMC
with the Commission which BMC shall deliver to CBT pursuant
to Section 3.5C hereof will comply in all material respects
with the requirements of the Securities Laws, and none of
such reports, schedules or statements will contain any
untrue statement of a material fact or omit to state 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. The financial
statements of BMC included in such reports, schedules and
statements will comply as to form in all material respects
with applicable accounting requirements and with the
published rules and regulations of the Commission with
respect thereto, will be prepared in accordance with
generally accepted accounting principles applied on a
consistent basis during the periods involved (except as may
be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q of the
Commission) and will fairly present the consolidated
financial position of BMC and its consolidated subsidiaries
as at the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended.
E. Information Supplied. None of the
information supplied or to be supplied by BMC for inclusion
in (i) the Registration Statement to be filed with the
Commission by CBT in connection with the issuance of shares
of CBT Common Stock in the Merger will, at the time the
Registration Statement is filed with the Commission and at
the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and
(ii) the Proxy Statement/Prospectus will, at the date of
mailing to shareholders of BMC and at the time of the
meeting of such shareholders to be held in connection with
the Merger, contain any untrue statement of a material fact
or omit to state any 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. The Proxy Statement/Prospectus will comply as
to form in all material respects with the provisions of the
Exchange Act and the rules and regulations thereunder.
F. Absence of Undisclosed Liabilities. Except
as disclosed or reflected in the BMC Financial Statements or
the BMC SEC Documents and for obligations and/or liabilities
entered into or incurred in the ordinary course of business
since December 31, 1992, and those incurred in connection
with the transactions contemplated by this Agreement,
neither BMC nor any BMC Subsidiary has any obligations or
liabilities (contingent or otherwise) that might reasonably
be expected to have, individually or in the aggregate, a
material adverse effect on the business, assets, results of
operations or financial condition of BMC and the BMC
Subsidiaries taken as a whole.
G. Loans and Allowance for Credit Losses. All
loans reflected on the books and records of each BMC
Subsidiary have been [i] made for good, valuable and
adequate consideration in the ordinary course of business
and [ii] evidenced by notes or other evidences of
indebtedness that are true and genuine. The allowance for
credit losses ("Allowance") shown on the consolidated
balance sheet of BMC as of September 30, 1993 included in
the BMC Financial Statements was, and the Allowance shown on
the consolidated balance sheets of BMC as of dates
subsequent to the execution of this Agreement included in
the BMC Financial Statements will be, in each case as of the
dates thereof, adequate to provide for losses relating to or
inherent in the loan and lease portfolios of, and other
extensions of credit (including letters of credit and
commitments to make loans or extend credit) made by, BMC and
each BMC Subsidiary.
H. Legal Proceedings. There are no claims of
any kind or any actions, suits, proceedings, arbitrations or
investigations pending or, to the best knowledge of BMC,
threatened against BMC or any BMC Subsidiary or against any
asset, interest or right of any such company that might,
individually or in the aggregate, have a material adverse
effect on the financial condition, results of operation or
business of BMC or any BMC Subsidiary, nor is there any
judgment, decree, injunction, rule or order of any
governmental entity or arbitrator outstanding against BMC or
any BMC Subsidiary having or which, insofar as reasonably
can be foreseen, in the future could have any such effect.
I. Agreements with Regulators. Neither BMC, any
BMC Subsidiary, nor any officer or director of BMC or any
BMC Subsidiary, is a party to any written agreement or
memorandum of understanding with, or a party to any
commitment letter or similar undertaking to, or is subject
to any order or directive by, or is a recipient of any
extraordinary supervisory letters from, any banking
regulator, nor has BMC or any BMC Subsidiary been advised by
any banking regulator that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing
or requesting) any such order, decree, agreement, memorandum
of understanding, extraordinary supervisory letter,
commitment letter or similar submission. No investigation
by any governmental entity with respect to BMC or any BMC
Subsidiary is pending or, to the best knowledge of BMC,
threatened and neither BMC nor any BMC Subsidiary has
knowledge of any basis for the commencement of any
regulatory or enforcement action against BMC or any BMC
Subsidiary by any governmental or regulatory authority.
J. Compliance with Laws. BMC and each BMC
Subsidiary holds all permits, licenses, variances,
exemptions, orders and approvals of all governmental
entities which are material to the operation of the
businesses of BMC and each BMC Subsidiary and is in
compliance in all material respects with the terms thereof.
BMC and each BMC Subsidiary has complied with in all
material respects and is not in any default under (and has
not been charged with or received notice with respect to
nor, to the best of its knowledge, are threatened with or
under investigation with respect to, any charge concerning
any violation of any provision of) any federal, state or
local law, regulation, ordinance, rule or order (whether
executive, judicial, legislative or administrative) or any
order, writ, injunction or decree of any court, agency or
instrumentality, except for possible violations or defaults
that, individually or in the aggregate, would not have a
material adverse effect on BMC or the BMC Subsidiaries.
There are no uncured violations or violations with respect
to which refunds or restitution may be required cited in any
report concerning BMC or any BMC Subsidiary as a result of
examination by any regulatory authority.
K. Employee Benefit Plans.
[i] Since the date of the most recent BMC
Financial Statements, there has not been any adoption or
amendment in any material respect by BMC or any BMC
Subsidiary of any collective bargaining agreement, or any
bonus, pension, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, retirement, vacation,
severance, disability, death benefit, hospitalization,
medical or other plan, arrangement or understanding (whether
or not legally binding) providing benefits to any current or
former employee or director of BMC or any BMC Subsidiary
(collectively, "Benefit Plans"). Except as Previously
Disclosed, there exist no employment, consulting, severance,
termination or indemnification agreements, arrangements or
understandings between BMC or any BMC Subsidiary and any
officer, director or key employee of BMC or any BMC
Subsidiary.
[ii] BMC has Previously Disclosed a list and
brief description of all "employee pension benefit plans"
(as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"))
(sometimes referred to herein as "Pension Plans"), all
"employee welfare benefit plans" (as defined in Section 3(1)
of ERISA) and all other Benefit Plans maintained, or
contributed to, by BMC or any BMC Subsidiary for the benefit
of any officers or employees of BMC or any BMC Subsidiary.
BMC has delivered to CBT true, complete and correct copies
of (1) each Benefit Plan (or, in the case of any unwritten
Benefit Plans, descriptions thereof), (2) the most recent
annual report on Form 5500 filed with the Internal Revenue
Service with respect to each Benefit Plan, (if any such
report was required), (3) the most recent summary plan
description for each Benefit Plan for which such summary
plan description is required, and (4) each trust agreement
and group annuity contract relating to any Benefit Plan. No
Benefit Plan provides medical or hospitalization benefits to
retirees or other former employees, other than medical
benefits required to be provided to qualified beneficiaries
under the provisions of Section 4980B(f) of the Code and
paid for entirely by the individual electing such coverage
under Section 4980B(f) of the Code.
[iii] Each Benefit Plan has been
administered in all material respects in accordance with its
terms. BMC, each BMC Subsidiary and all the Benefit Plans
are in compliance with the applicable provisions of ERISA
and the Code. All reports, returns and similar documents
with respect to the Benefit Plans required to be filed with
any governmental agency or distributed to any Benefit Plan
participant have been duly and timely filed or distributed.
There are no investigations by any governmental agency,
termination proceedings or other claims (except claims for
benefits payable in the normal operation of the Benefit
Plans), suits or proceedings against or involving any
Benefit Plan or asserting any rights or claims to benefits
under any Benefit Plan that could give rise to any
liability, and, to the best knowledge of BMC, there are not
any facts that could give rise to any liability in the event
of any such investigation, claim, suit or proceeding.
[iv] All Pension Plans have been the subject
of determination letters from the Internal Revenue Service
to the effect that such Pension Plans are qualified and
exempt from Federal income taxes under Sections 401(a) and
501(a), respectively, of the Code. No such determination
letter has been revoked nor, to the best knowledge of BMC,
has revocation been threatened, nor has any such Pension
Plan been amended since the date of its most recent
determination letter or application therefor in any respect
that would adversely affect its qualification or materially
increase its costs.
[v] No Pension Plan that BMC, any BMC
Subsidiary or any other company under common control with
BMC (within the meaning of Section 4001(a)(14) of ERISA)
maintains, or to which BMC, any BMC Subsidiary or any other
company under common control with BMC (within the meaning of
Section 4001(a)(14) of ERISA) is obligated to contribute,
other than any Pension Plan that is a "multiemployer plan"
(as such term is defined in Section 4001(a)(3) of ERISA)
(collectively, the "Multiemployer Pension Plans"), had, as
of the respective last annual valuation date for each such
Pension Plan, an "unfunded benefit liability" (as such term
is defined in Section 4001(a)(18) of ERISA). BMC is not
aware of any facts or circumstances that would change the
funded status of any such Pension Plan. None of the Pension
Plans has an "accumulated funding deficiency" (as such term
is defined in Section 302 of ERISA or Section 412 of the
Code), whether or not waived. All contributions to, and
payments from, the Benefit Plans required to be made in
accordance with the Benefit Plans and, when applicable,
Section 302 of ERISA or Section 412 of the Code, have been
timely made, and there has been no application for or waiver
of the minimum funding standards imposed by Section 412 of
the Code with respect to any Pension Plan. All such
contributions to, and payments from, the Benefit Plans
(except those payments to be made from a trust qualified
under Section 401(a) of the Code), for any period ending
before the Effective Time that are not yet, but will be,
required to be made, will be properly accrued and reflected
in the proper books and records of BMC at the Effective
Time. None of BMC, any BMC Subsidiary or any officer of BMC
or any BMC Subsidiary or any of the Benefit Plans of BMC and
any BMC Subsidiary which are subject to ERISA, including the
Pension Plans, or any trusts created thereunder, any
administrator or, to the best knowledge of BMC, any trustee
thereof, has engaged in a "prohibited transaction" (as such
term is defined in Section 406 of ERISA or Section 4975 of
the Code) or any other breach of fiduciary responsibility
under Part 4, Subtitle B, Title I of ERISA that could
subject BMC, any BMC Subsidiary or any officer of BMC or any
BMC Subsidiary to the tax or penalty on prohibited
transactions imposed by such Section 4975 or to any
liability under Section 502(i) or (1) of ERISA. Neither any
of such plans nor any of such trusts have been terminated,
nor has there been any "reportable event" (as that term is
defined in Section 4043 of ERISA) with respect thereto
during the last five years. Neither BMC, any BMC
Subsidiary, any administrator, nor, to the best knowledge of
BMC, any trustee or other fiduciary, of any Benefit Plan nor
any agent of any of the foregoing has engaged in any
transaction or acted or failed to act in a manner that could
subject BMC or any BMC Subsidiary to any material liability
for breach of fiduciary duty under ERISA or any other
applicable law. Neither BMC nor any BMC Subsidiary (or any
other employer that since September 2, 1974 has ever been
treated as a "single employer" under Section 414(b)(c) or
(m) of the Code with BMC or any BMC Subsidiary) has ever
been required to contribute to any Multiemployer Pension
Plans.
[vi] With respect to any Pension Plan subject
to Title IV of ERISA (including for purposes of clause (1)
below, any Pension Plan maintained or contributed to by BMC
or any other company under common control with BMC within
the meaning of Section 414 of the Code and, for purposes of
clause (2) below, any Pension Plan maintained or contributed
to by BMC or any other company under common control with BMC
within the meaning of Section 4001(a)(14) of ERISA): BMC
has not incurred any material liability on or prior to the
date hereof (1) to such Pension Plan or (2) to the Pension
Benefit Guaranty Corporation other than for the payment of
premiums, all of which have been paid when due. BMC has
furnished to CBT the most recent actuarial report or
valuation with respect to each Pension Plan that is a
"defined benefit pension plan" (as defined in Section 3(35)
of ERISA). The information supplied to the actuary by BMC
for use in preparing those reports or valuations was
complete and accurate and BMC has no reason to believe that
the conclusions expressed in those reports or valuations are
incorrect.
[vii] With respect to any Benefit Plan that
is an employee welfare benefit plan: (1) no such Benefit
Plan is unfunded or funded through a welfare benefits fund,
as such term is defined in Section 419(e) of the Code, (2)
each such Benefit Plan that is a group health plan, as such
term is defined in Section 5000(b)(1) of the Code, complies
with the applicable requirements of Section 4980B(f) of the
Code and (3) each such Benefit Plan (including any such Plan
covering retirees or other former employees) may be
prospectively amended or terminated without material
liability to BMC or any BMC Subsidiary on or at any time
after the Effective Time.
[viii] Each employee bonus or profit
sharing plan providing benefits to any current or former
officer, director or employee of BMC or any BMC Subsidiary
is terminable by BMC or such BMC Subsidiary without notice
at any time.
L. Labor Matters.
[i] BMC and each BMC Subsidiary is in
compliance in all material respects with all applicable laws
respecting employment and employment practices, terms and
conditions of employment and wages and hours and
occupational safety and health;
[ii] There is no unfair labor practice charge
or complaint or any other matter against or involving BMC or
any BMC Subsidiary pending or, to the knowledge of BMC,
threatened before the National Labor Relations Board or any
court of law;
[iii] Neither BMC nor any BMC Subsidiary is a
party to or bound by any collective bargaining agreement or
any similar labor union arrangement;
[iv] There are no charges, investigations,
administrative proceedings or formal complaints of
discrimination (including discrimination based upon sex,
age, marital status, race, color, religion, national origin,
sexual preference, disability, handicap or veteran status)
pending or, to the knowledge of BMC threatened, before the
Equal Employment Opportunity Commission or any federal,
state or local agency or court against BMC or any BMC
Subsidiary;
[v] There have been no governmental audits of
the equal employment opportunity practices of BMC or any BMC
Subsidiary and, to the knowledge of BMC, no basis for any
such claim exists; and
[vi] BMC and each BMC Subsidiary is in
compliance in all material respects with the requirements of
the Americans With Disabilities Act.
M. Brokers. Except as Previously Disclosed,
neither BMC, any BMC Subsidiary, nor any of their respective
officers, directors or employees, has employed any broker,
finder or financial advisor or incurred any liability for
fees or commissions payable to any broker, finder or
financial advisor in connection with the negotiations
relating to or the transactions contemplated by this
Agreement.
N. Assets. BMC and each BMC Subsidiary has good
and marketable title to all of the properties and assets,
real and personal, tangible and intangible, reflected on the
BMC Financial Statements or acquired after the dates
thereof, free and clear of all liens, charges, security
interests, encumbrances and claims, except for [i] liens for
current taxes not yet due and payable, [ii] pledges to
secure deposits and other liens incurred in the ordinary
course of its business, and [iii] such imperfections or
irregularities of title, easements, claims, liens, charges,
security interests and encumbrances, if any, as do not
materially affect the use of the properties or assets
subject thereto or affected thereby or otherwise materially
impair business operations at such properties. All leases
by which either of BMC or any BMC Subsidiary leases real or
personal property as lessee (other than leases that are the
equivalent of extensions of credit) are valid without
default in any material respect thereunder by the lessee or,
to the best knowledge of BMC, the lessor, and are in full
force and effect in accordance with their respective terms.
O. Material Contracts. Neither BMC nor any BMC
Subsidiary is a party to any:
[i] agreement, arrangement or commitment not
made in the ordinary course of business consistent with past
practices;
[ii] employment agreement or any bonus,
incentive, deferred compensation, severance pay, profit
sharing, retirement, stock purchase, stock option agreement
or arrangement or employee benefit plan for or in respect of
any employee or former employee;
[iii] material agreement, indenture or other
instrument as the borrower of money, or the guarantor of any
obligation for the borrowing of money or any agreement that
involves a potential material liability to BMC or any BMC
Subsidiary (other than in the ordinary course of its
business);
[iv] any agreement, contract or commitment
containing any covenant materially limiting the freedom of
BMC or any BMC Subsidiary to engage in any line of business
in any geographic area or to compete with any person; or
[v] agreement for loans or the provision,
purchase or sale of goods, services or property, or other
contract or commitment with any director or officer.
P. Good Standing of Contracts. No event or
condition has occurred or exists, or, to the best knowledge
of BMC, is alleged by any of the other parties thereto to
have occurred or existed, which constitutes, or with lapse
of time or giving of notice or both might constitute, a
default or breach under any of the leases, contracts or
agreements to which BMC or any BMC Subsidiary is a party,
which default is reasonably likely to result in a material
adverse change in the financial condition, results of
operation or business of BMC or any BMC Subsidiary.
Q. Insurance. BMC has Previously Disclosed all
policies of fire, theft, liability and other insurance and
bonds maintained with respect to the assets or businesses of
BMC and each BMC Subsidiary. All such policies and bonds
are valid and enforceable and in full force and effect and
neither BMC nor any BMC Subsidiary has received any notice
of premium increases or cancellations with respect to any of
such policies and bonds. To the best knowledge of BMC,
neither BMC nor any BMC Subsidiary is liable for any
material retroactive premium adjustments with respect to any
of its insurance policies or bonds.
R. Tax Matters. Each member of the consolidated
group of which BMC is a member or has ever been a member
(the "Group") has timely filed or caused to be filed all
federal, state, foreign and local income, franchise, gross
receipts, payroll, sales, use, withholding, occupancy,
excise, real and personal property, employment and other tax
returns, tax information returns and reports required to be
filed, and has paid, or made adequate provisions for the
payment of, all taxes, duties or assessments of any nature
whatsoever, interest payments, penalties and additions
(whether or not reflected in its returns as filed) due and
payable (and/or properly accruable for all periods ending on
or before the date of this Agreement) to any city, county,
state, foreign country, the United States or any other
taxing authority. The most recent BMC Financial Statements
reflect an adequate reserve for all taxes payable by BMC and
each BMC Subsidiary accrued through the date of such
Financial Statements. No material deficiencies for any
taxes have been proposed, asserted or assessed against BMC
or any BMC Subsidiary that are not adequately reserved for.
Except with respect to claims for refund, the federal income
tax returns of BMC and each BMC Subsidiary consolidated in
such returns have been examined by and settled with the
United States Internal Revenue Service (the "IRS"), or the
statute of limitations with respect to such years has
expired (and no waiver extending the statute of limitations
has been requested or granted) for all years through 1989.
The consolidated federal income tax returns of the Group
have not been audited during the last five (5) fiscal years
of BMC. No audit, examination or investigation is presently
being conducted or, to the best knowledge of BMC, threatened
by any taxing authority; no unpaid tax deficiencies or
additional liabilities of any sort have been proposed by any
governmental representative; and no agreements for the
extension of time for the assessment of any amounts of tax
have been entered into by or on behalf of any member of the
Group.
S. Fiduciary Activities. The fiduciary and
custodial activities of each BMC Subsidiary have been and
are being conducted in all material respects in accordance
with all applicable law.
T. Environmental Matters. To the best knowledge
of BMC, except for matters that individually or in the
aggregate would not have a material adverse effect on the
business, assets, results of operations or financial
condition of BMC and the BMC Subsidiaries taken as a whole:
[i] BMC and each BMC Subsidiary is in substantial
compliance with all applicable federal, state and local
laws, rules, regulations, ordinances and requirements
relating to the environment ("Environmental Laws");
[ii] No "Hazardous Wastes" (as hereinafter
defined) have ever been generated, transported, treated,
stored, released or disposed of on any real property owned
or leased by BMC or BMC Subsidiary;
[iii] Neither BMC nor any BMC Subsidiary has
transported or disposed or caused or permitted any person to
transport or dispose of any Hazardous Wastes other than in
substantial compliance with all Environmental Laws;
[iv] Neither BMC nor any BMC Subsidiary has ever
violated any of the Environmental Laws;
[v] No asbestos, PCBs or other Hazardous Wastes or
any petroleum product or constituents thereof is present on,
in or under any of the property owned by BMC or any BMC
Subsidiary, whether owned or leased or held as OREO (as such
term is customarily used) or in which BMC or any BMC
Subsidiary has any legal or equitable interest;
[vi] There are no loans or other credits included
in the loan portfolio of any BMC Subsidiary with respect to
which BMC or any BMC Subsidiary is or could incur or become
responsible for liability under the Environmental Laws; and
[vii] No Hazardous Wastes have ever been utilized
on any of the property now held or previously held by BMC or
any BMC Subsidiary as collateral or otherwise securing any
loan made by BMC or any BMC Subsidiary.
Hazardous Wastes" for purposes of this Agreement shall
include, without limitation: [i] hazardous substances or
hazardous wastes, as those terms are defined by the
Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq., and any other applicable federal, state or local law,
rule, regulation, ordinance or requirement, all as amended
or hereafter amended; [ii] petroleum, including without
limitation crude oil or any fraction thereof which is liquid
at standard conditions of temperature and pressure (60
degrees Fahrenheit and 14.7 pounds per square inch
absolute); [iii] any radioactive material, including
without limitation any source, special nuclear, or byproduct
material as defined in 42 U.S.C. Section 2011 et seq.; and
[iv] asbestos or any asbestiform minerals in any form or
condition.
U. Insider Loans. All loans, loan commitments
and any other extensions of credit and commitments to extend
credit that are currently outstanding by BMC or any BMC
Subsidiary to directors, officers, or principal shareholders
of BMC or any BMC Subsidiary or any of their related
interests (as defined in 12 CFR 215), were made on
substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with other persons, and substantially comply
with all applicable provisions of federal and state law.
Such loans, extensions and commitments do not involve more
than a normal risk of collectability.
V. Adjustable Rate Mortgages. Each BMC
Subsidiary has properly calculated, in substantial
compliance with the contractual terms thereof and all
applicable law, all adjustments required in its portfolio of
adjustable rate mortgage notes.
W. Regulatory Matters. Neither BMC nor any BMC
Subsidiary has, through the date hereof, taken or agreed to
take any action or has knowledge of any fact or circumstance
that would materially impede or delay receipt of any
approval referred to in Section 5.2E hereof.
X. Absence of Certain Changes or Events. Except
as disclosed in the BMC SEC Documents, since December 31,
1992, BMC and the BMC Subsidiaries have not incurred any
material liability, except in the ordinary course of their
business consistent with their past practices, nor has BMC
or any BMC Subsidiary suffered any change in the business,
assets, financial condition or results of operations of BMC
or any of the BMC Subsidiaries that has had, or is
reasonably likely to have, a material adverse effect on BMC
and BMC's Subsidiaries taken as a whole.
Y. Full Disclosure. No representation or
warranty of BMC contained in this Agreement and no statement
contained in this Agreement or in any certificate or other
instrument furnished to CBT hereunder contains or will
contain any untrue statement of a material fact or omits or
will omit to state any material fact necessary to make the
statements contained herein or therein not misleading.
4.2 CBT's and Acquisition Corp's Representations and
Warranties. Except as Previously Disclosed, CBT and
Acquisition Corp hereby represent and warrant to BMC that:
A. Corporate Standing; Authorization.
[i] CBT is a bank holding company registered
under the BHCA. CBT and each CBT Subsidiary is a Kentucky
corporation or banking corporation, duly organized and
validly existing under the laws of the Commonwealth of
Kentucky. CBT and each CBT Subsidiary has paid all fees due
and owing to the Office of the Kentucky Secretary of State,
has delivered to that office its most recent annual report
as required by the Act, and has never filed articles of
dissolution with the Kentucky Secretary of State or the
KDFI. CBT has delivered to BMC true and correct copies of
the Articles of Incorporation and Bylaws of CBT and all
amendments thereto through the date hereof. CBT and each
CBT Subsidiary has all requisite power and authority to own,
lease and operate its properties and to carry on its
business as now being conducted and is duly qualified and in
good standing to do business in each jurisdiction in which
the nature of its business or the ownership or leasing of
its properties makes such qualification necessary.
[ii] The execution and delivery of this
Agreement and the Plan of Merger by CBT and Acquisition Corp
do not, and the consummation of the transactions
contemplated hereby and thereby will not, conflict with, or
result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any
obligation or the loss of a material benefit under, or the
creation of a lien, pledge, security interest, charge or
other encumbrance on assets (any such conflict, violation,
default, right of termination, cancellation or acceleration,
loss or creation, shall be deemed hereunder a "Violation")
pursuant to, any provision of the articles of incorporation
or bylaws of CBT or any CBT Subsidiary, or, subject to
obtaining or making the consents, approvals, orders,
authorizations, registrations, declaration and filings
referred to in paragraph [iii] below, result in any
Violation of any loan or credit agreement, note, mortgage,
indenture, lease, Benefit Plan (as defined in Section 4.2K)
or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to
CBT or any CBT Subsidiary or their respective properties or
assets.
[iii] Except (a) for consents, approvals,
orders, and authorizations from the Federal Reserve, the OTS
and the KDFI, and (b) for the filing of Articles of Merger
with the Kentucky Secretary of State, no consent, approval,
order or authorization of, or registration, declaration or
filing with, any court, administrative agency or commission
or other governmental authority or instrumentality, domestic
or foreign, is required by or with respect to CBT or any CBT
Subsidiary in connection with the execution and delivery of
this Agreement and the Plan of Merger, or the consummation
by CBT or Acquisition Corp of the transactions contemplated
hereby and thereby.
[iv] Each of CBT and Acquisition Corp has all
requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Agreement
and the Plan of Merger. The execution and delivery of this
Agreement and the Plan of Merger and the consummation of the
transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of
CBT and Acquisition Corp. This Agreement and the Plan of
Merger have been duly executed and delivered by CBT and
Acquisition Corp, and constitute the legal, valid and
binding obligations of CBT and Acquisition Corp enforceable
against each of them in accordance with their terms.
B. Capital Structure of CBT. The authorized
capital stock of CBT consists of 6,000,000 shares of common
stock without par value ("CBT Common Stock"). At the date
hereof, 2,767,519 shares of CBT Common Stock are validly
issued and outstanding and fully paid and nonassessable and
no shares are held by CBT in treasury. CBT is not a party
to any subscription, option, warrant, call or commitment of
any character relating to shares of CBT's capital stock or
any instruments that can be converted into shares of CBT's
capital stock. None of the shares of CBT Common Stock have
been issued in violation of any preemptive right. There are
no outstanding contractual obligations of CBT or any CBT
Subsidiary to repurchase, redeem or otherwise acquire any
shares of capital stock of CBT. No bonds, debentures, notes
or other indebtedness having the right to vote (or
convertible into or exercisable for securities having the
right to vote) on any matters on which stockholders of CBT
may vote are issued or outstanding.
C. Subsidiaries. CBT has Previously Disclosed
each company or other organization, whether incorporated or
unincorporated, of which CBT is a general partner or at
least a majority of the securities or other interests is
directly or indirectly owned or controlled by CBT (each such
company or other organization Previously Disclosed by CBT is
referred to in this Agreement as a "CBT Subsidiary"). No
shares of capital stock of any CBT Subsidiary are held in
treasury. All of the outstanding shares of capital stock of
each CBT Subsidiary are validly issued and outstanding and
are fully paid and nonassessable and such shares are wholly
owned by CBT directly, free and clear of all liens, claims
and encumbrances. There is outstanding no subscription,
option, warrant, call or commitment of any character
relating to or any instruments that can be converted into
shares of the capital stock of any CBT Subsidiary. No
bonds, debentures, notes or other indebtedness having the
right to vote (or convertible into or exercisable for
securities having the right to vote) of any CBT Subsidiary
are issued or outstanding.
D. SEC Documents. CBT has delivered to BMC a
true and complete copy of each report, schedule, and
registration statement filed by CBT with the Commission
since January 1, 1991 through the date hereof (as such
documents have since the time of their filing been amended,
the "CBT SEC Documents"), which are all the documents that
CBT was or will be required to file with the Commission
since such date. As of their respective dates, the CBT SEC
Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as
the case may be, and the rules and regulations of the
Commission thereunder applicable to such CBT SEC Documents,
and none of the CBT SEC Documents contained any untrue
statement of a material fact or omitted to state 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. The financial
statements of CBT included in the CBT SEC Documents comply
as to form in all material respects with applicable
accounting requirements and with the published rules and
regulations of the Commission with respect thereto, have
been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during
the periods involved (except as may be indicated in the
notes thereto or, in the case of the unaudited statements,
as permitted by Form 10-Q of the Commission) and fairly
present the consolidated financial position of CBT and its
consolidated subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for
the periods then ended. All material agreements, contracts
or other documents required to be filed as exhibits to any
of the CBT SEC Documents have been or will be so filed. All
reports, schedules and statements hereafter filed by CBT
with the Commission which CBT shall deliver to CBT pursuant
to Section 3.5 hereof will comply in all material respects
with the requirements of the Securities Laws, and none of
such reports, schedules or statements will contain any
untrue statement of a material fact or omit to state 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. The financial
statements of CBT included in such reports, schedules and
statements will comply as to form in all material respects
with applicable accounting requirements and with the
published rules and regulations of the Commission with
respect thereto, will be prepared in accordance with
generally accepted accounting principles applied on a
consistent basis during the periods involved (except as may
be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q of the
Commission) and will fairly present the consolidated
financial position of CBT and its consolidated subsidiaries
as at the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended.
E. Information Supplied. None of the
information supplied or to be supplied by CBT for inclusion
in (i) the Registration Statement to be filed with the
Commission by CBT in connection with the issuance of shares
of CBT Common Stock in the Merger will, at the time the
Registration Statement is filed with the Commission and at
the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and
(ii) the Proxy Statement/Prospectus will, at the date of
mailing to shareholders of BMC and at the time of the
meeting of such shareholders to be held in connection with
the Merger, contain any untrue statement of a material fact
or omit to state any 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. The Proxy Statement/Prospectus will comply as
to form in all material respects with the provisions of the
Exchange Act and the rules and regulations thereunder.
F. Absence of Undisclosed Liabilities. Except
as disclosed or reflected in the CBT Financial Statements or
the CBT SEC Documents and for obligations and/or liabilities
entered into or incurred in the ordinary course of business
since December 31, 1992, and those incurred in connection
with the transactions contemplated hereby, neither CBT nor
any CBT Subsidiary has any obligations or liabilities
(contingent or otherwise) that might reasonably be expected
to have, individually or in the aggregate, a material
adverse effect on the business, assets, results of
operations or financial condition of CBT and the CBT
Subsidiaries taken as a whole.
G. Loans and Allowance for Credit Losses. All
loans reflected on the books and records of each CBT
Subsidiary have been [i] made for good, valuable and
adequate consideration in the ordinary course of business
and [ii] evidenced by notes or other evidences of
indebtedness that are true and genuine. The allowance for
credit losses ("Allowance") shown on the consolidated
balance sheet of CBT as of September 30, 1993 included in
the CBT Financial Statements was, and the Allowance shown on
the consolidated balance sheets of CBT as of dates
subsequent to the execution of this Agreement included in
the CBT Financial Statements will be, in each case as of the
dates thereof, adequate to provide for losses relating to or
inherent in the loan and lease portfolios of, and other
extensions of credit (including letters of credit and
commitments to make loans or extend credit) made by, CBT and
each CBT Subsidiary.
H. Legal Proceedings. There are no claims of
any kind or any actions, suits, proceedings, arbitrations or
investigations pending or, to the best knowledge of CBT,
threatened against CBT or any CBT Subsidiary or against any
asset, interest or right of any such company that might,
individually or in the aggregate, have a material adverse
effect on the financial condition, results of operation or
business of CBT or any CBT Subsidiary, nor is there any
judgment, decree, injunction, rule or order of any
governmental entity or arbitrator outstanding against CBT or
any CBT Subsidiary having or which, insofar as reasonably
can be foreseen, in the future could have any such effect.
I. Agreements with Regulators. Neither CBT, any
CBT Subsidiary, nor any officer or director of CBT or any
CBT Subsidiary, is a party to any written agreement or
memorandum of understanding with, or a party to any
commitment letter or similar undertaking to, or is subject
to any order or directive by, or is a recipient of any
extraordinary supervisory letters from, any banking
regulator, nor has CBT or any CBT Subsidiary been advised by
any banking regulator that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing
or requesting) any such order, decree, agreement, memorandum
of understanding, extraordinary supervisory letter,
commitment letter or similar submission. No investigation
by any governmental entity with respect to CBT or any CBT
Subsidiary is pending or, to the best knowledge of CBT,
threatened and neither CBT nor any CBT Subsidiary has
knowledge of any basis for the commencement of any
regulatory or enforcement action against CBT or any CBT
Subsidiary by any governmental or regulatory authority.
J. Compliance with Laws. CBT and each CBT
Subsidiary holds all permits, licenses, variances,
exemptions, orders and approvals of all governmental
entities which are material to the operation of the
businesses of CBT and each CBT Subsidiary and is in
compliance in all material respects with the terms thereof.
CBT and each CBT Subsidiary has complied with in all
material respects and is not in any default under (and has
not been charged with or received notice with respect to
nor, to the best knowledge of CBT and Acquisition Corp, are
threatened with or under investigation with respect to, any
charge concerning any violation of any provision of) any
federal, state or local law, regulation, ordinance, rule or
order (whether executive, judicial, legislative or
administrative) or any order, writ, injunction or decree of
any court, agency or instrumentality, except for possible
violations or defaults that, individually or in the
aggregate, would not have a material adverse effect on CBT
or the CBT Subsidiaries. There are no uncured violations or
violations with respect to which refunds or restitution may
be required cited in any report concerning CBT or any CBT
Subsidiary as a result of examination by any regulatory
authority.
K. Employee Benefit Plans.
[i] Since the date of the most recent CBT
Financial Statements, there has not been any adoption or
amendment in any material respect by CBT or any CBT
Subsidiary of any collective bargaining agreement, or any
bonus, pension, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, retirement, vacation,
severance, disability, death benefit, hospitalization,
medical or other plan, arrangement or understanding (whether
or not legally binding) providing benefits to any current or
former employee or director of CBT or any CBT Subsidiary
(collectively, "Benefit Plans"). Except as Previously
Disclosed, there exist no employment, consulting, severance,
termination or indemnification agreements, arrangements or
understandings between CBT or any CBT Subsidiary and any
officer, director or key employee of CBT or any CBT
Subsidiary.
[ii] Each Benefit Plan has been administered
in all material respects in accordance with its terms. CBT,
each CBT Subsidiary and all the Benefit Plans are in
compliance in all material respects with the applicable
provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") and the Code. All reports,
returns and similar documents with respect to the Benefit
Plans required to be filed with any governmental agency or
distributed to any Benefit Plan participant have been duly
and timely filed or distributed. There are no
investigations by any governmental agency, termination
proceedings or other claims (except claims for benefits
payable in the normal operation of the Benefit Plans), suits
or proceedings against or involving any Benefit Plan or
asserting any rights or claims to benefits under any Benefit
Plan that could give rise to any liability, and, to the best
knowledge of CBT, there are not any facts that could give
rise to any liability in the event of any such
investigation, claim, suit or proceeding.
[iii] All "employee pension benefit
plans" (as defined in Section 3(2) of ERISA (sometimes
referred to herein as "Pension Plans") have been the subject
of determination letters from the Internal Revenue Service
to the effect that such Pension Plans are qualified and
exempt from Federal income taxes under Sections 401(a) and
501(a), respectively, of the Code. No such determination
letter has been revoked nor, to the best knowledge of CBT,
has revocation been threatened, nor has any such Pension
Plan been amended since the date of its most recent
determination letter or application therefor in any respect
that would adversely affect its qualification or materially
increase its costs.
[iv] No Pension Plan that CBT, any CBT
Subsidiary or any other company under common control with
CBT (within the meaning of Section 4001(a)(14) of ERISA)
maintains, or to which CBT, any CBT Subsidiary or any other
company under common control with CBT (within the meaning of
Section 4001(a)(14) of ERISA) is obligated to contribute,
other than any Pension Plan that is a "multiemployer plan"
(as such term is defined in Section 4001(a)(3) of ERISA)
(collectively, the "Multiemployer Pension Plans"), had, as
of the respective last annual valuation date for each such
Pension Plan, an "unfunded benefit liability" (as such term
is defined in Section 4001(a)(18) of ERISA). CBT is not
aware of any facts or circumstances that would change the
funded status of any such Pension Plan. None of the Pension
Plans has an "accumulated funding deficiency" (as such term
is defined in Section 302 of ERISA or Section 412 of the
Code), whether or not waived. All contributions to, and
payments from, the Benefit Plans required to be made in
accordance with the Benefit Plans and, when applicable,
Section 302 of ERISA or Section 412 of the Code, have been
timely made, and there has been no application for or waiver
of the minimum funding standards imposed by Section 412 of
the Code with respect to any Pension Plan. All such
contributions to, and payments from, the Benefit Plans
(except those payments to be made from a trust qualified
under Section 401(a) of the Code), for any period ending
before the Effective Time that are not yet, but will be,
required to be made, will be properly accrued and reflected
in the proper books and records of CBT at the Effective
Time. None of CBT, any CBT Subsidiary or any officer of CBT
or any CBT Subsidiary or any of the Benefit Plans of CBT and
any CBT Subsidiary which are subject to ERISA, including the
Pension Plans, or any trusts created thereunder, any
administrator or, to the best knowledge of CBT, any trustee
thereof, has engaged in a "prohibited transaction" (as such
term is defined in Section 406 of ERISA or Section 4975 of
the Code) or any other breach of fiduciary responsibility
under Part 4, Subtitle B, Title I of ERISA that could
subject CBT, any CBT Subsidiary or any officer of CBT or any
CBT Subsidiary to the tax or penalty on prohibited
transactions imposed by such Section 4975 or to any
liability under Section 502(i) or (1) of ERISA. Neither any
of such plans nor any of such trusts have been terminated,
nor has there been any "reportable event" (as that term is
defined in Section 4043 of ERISA) with respect thereto
during the last five years. Neither CBT, any CBT
Subsidiary, any administrator, nor, to the best knowledge of
CBT, any trustee or other fiduciary, of any Benefit Plan nor
any agent of any of the foregoing has engaged in any
transaction or acted or failed to act in a manner that could
subject CBT or any CBT Subsidiary to any material liability
for breach of fiduciary duty under ERISA or any other
applicable law. Neither CBT nor any CBT Subsidiary (or any
other employer that since September 2, 1974 has ever been
treated as a "single employer" under Section 414(b)(c) or
(m) of the Code with CBT or any CBT Subsidiary) has ever
been required to contribute to any Multiemployer Pension
Plans.
[v] With respect to any Pension Plan subject
to Title IV of ERISA (including for purposes of clause (1)
below, any Pension Plan maintained or contributed to by CBT
or any other company under common control with CBT within
the meaning of Section 414 of the Code and, for purposes of
clause (2) below, any Pension Plan maintained or contributed
to by CBT or any other company under common control with CBT
within the meaning of Section 4001(a)(14) of ERISA): CBT
has not incurred any material liability on or prior to the
date hereof (1) to such Pension Plan or (2) to the Pension
Benefit Guaranty Corporation other than for the payment of
premiums, all of which have been paid when due. CBT has
furnished to CBT the most recent actuarial report or
valuation with respect to each Pension Plan that is a
"defined benefit pension plan" (as defined in Section 3(35)
of ERISA). The information supplied to the actuary by CBT
for use in preparing those reports or valuations was
complete and accurate and CBT has no reason to believe that
the conclusions expressed in those reports or valuations are
incorrect.
[vi] With respect to any Benefit Plan that
is an employee welfare benefit plan: (1) no such Benefit
Plan is unfunded or funded through a welfare benefits fund,
as such term is defined in Section 419(e) of the Code, (2)
each such Benefit Plan that is a group health plan, as such
term is defined in Section 5000(b)(1) of the Code, complies
with the applicable requirements of Section 4980B(f) of the
Code and (3) each such Benefit Plan (including any such Plan
covering retirees or other former employees) may be
prospectively amended or terminated without material
liability to CBT or any CBT Subsidiary on or at any time
after the Effective Time.
[vii] Each employee bonus or profit
sharing plan providing benefits to any current or former
officer, director or employee of CBT or any CBT Subsidiary
is terminable by CBT or such CBT Subsidiary without notice
at any time.
L. Labor Matters.
[i] CBT and each CBT Subsidiary is in
compliance in all material respects with all applicable laws
respecting employment and employment practices, terms and
conditions of employment and wages and hours and
occupational safety and health;
[ii] There is no unfair labor practice charge
or complaint or any other matter against or involving CBT or
any CBT Subsidiary pending or, to the knowledge of CBT,
threatened before the National Labor Relations Board or any
court of law;
[iii] Neither CBT nor any CBT Subsidiary is a
party to or bound by any collective bargaining agreement or
any similar labor union arrangement;
[iv] There are no charges, investigations,
administrative proceedings or formal complaints of
discrimination (including discrimination based upon sex,
age, marital status, race, color, religion, national origin,
sexual preference, disability, handicap or veteran status)
pending or, to the knowledge of CBT threatened, before the
Equal Employment Opportunity Commission or any federal,
state or local agency or court against CBT or any CBT
Subsidiary;
[v] There have been no governmental audits of
the equal employment opportunity practices of CBT or any CBT
Subsidiary and, to the knowledge of CBT, no basis for any
such claim exists; and
[vi] CBT and each CBT Subsidiary is in
compliance in all material respects with the requirements of
the Americans With Disabilities Act.
M. Brokers. Except as Previously Disclosed,
neither CBT, any CBT Subsidiary, nor any of their respective
officers, directors or employees, has employed any broker,
finder or financial advisor or incurred any liability for
fees or commissions payable to any broker, finder or
financial advisor in connection with the negotiations
relating to or the transactions contemplated by this
Agreement.
N. Assets. CBT and each CBT Subsidiary has good
and marketable title to all of the properties and assets,
real and personal, tangible and intangible, reflected on the
CBT Financial Statements or acquired after the dates
thereof, free and clear of all liens, charges, security
interests, encumbrances and claims, except for [i] liens for
current taxes not yet due and payable, [ii] pledges to
secure deposits and other liens incurred in the ordinary
course of its business, and [iii] such imperfections or
irregularities of title, easements, claims, liens, charges,
security interests and encumbrances, if any, as do not
materially affect the use of the properties or assets
subject thereto or affected thereby or otherwise materially
impair business operations at such properties. All leases
by which either of CBT or any CBT Subsidiary leases real or
personal property as lessee (other than leases that are the
equivalent of extensions of credit) are valid without
default in any material respect thereunder by the lessee or,
to the best knowledge of CBT, the lessor, and are in full
force and effect in accordance with their respective terms.
O. Material Contracts. Neither CBT nor any CBT
Subsidiary is a party to any:
[i] agreement, arrangement or commitment not
made in the ordinary course of business consistent with past
practices;
[ii] employment agreement or any bonus,
incentive, deferred compensation, severance pay, profit
sharing, retirement, stock purchase, stock option agreement
or arrangement or employee benefit plan for or in respect of
any employee or former employee;
[iii] material agreement, indenture or other
instrument as the borrower of money, or the guarantor of any
obligation for the borrowing of money or any agreement that
involves a potential material liability to CBT or any CBT
Subsidiary (other than in the ordinary course of its
business);
[iv] any agreement, contract or commitment
containing any covenant materially limiting the freedom of
CBT or any CBT Subsidiary to engage in any line of business
in any geographic area or to compete with any person; or
[v] agreement for loans or the provision,
purchase or sale of goods, services or property, or other
contract or commitment with any director or officer.
P. Good Standing of Contracts. No event or
condition has occurred or exists, or, to the best knowledge
of CBT and Acquisition Corp, is alleged by any of the other
parties thereto to have occurred or existed, which
constitutes, or with lapse of time or giving of notice or
both might constitute, a default or breach under any of the
leases, contracts or agreements to which CBT or any CBT
Subsidiary is a party, which default is reasonably likely to
result in a material adverse change in the financial
condition, results of operation or business of CBT or any
CBT Subsidiary.
Q. Tax Matters. Each member of the consolidated
group of which CBT is a member or has ever been a member
(the "Group") has timely filed or caused to be filed all
federal, state, foreign and local income, franchise, gross
receipts, payroll, sales, use, withholding, occupancy,
excise, real and personal property, employment and other tax
returns, tax information returns and reports required to be
filed, and has paid, or made adequate provisions for the
payment of, all taxes, duties or assessments of any nature
whatsoever, interest payments, penalties and additions
(whether or not reflected in its returns as filed) due and
payable (and/or properly accruable for all periods ending on
or before the date of this Agreement) to any city, county,
state, foreign country, the United States or any other
taxing authority. The most recent CBT Financial Statements
reflect an adequate reserve for all taxes payable by CBT and
each CBT Subsidiary accrued through the date of such
Financial Statements. No material deficiencies for any
taxes have been proposed, asserted or assessed against CBT
or any CBT Subsidiary that are not adequately reserved for.
Except with respect to claims for refund, the federal income
tax returns of CBT and each CBT Subsidiary consolidated in
such returns have been examined by and settled with the
United States Internal Revenue Service (the "IRS"), or the
statute of limitations with respect to such years has
expired (and no waiver extending the statute of limitations
has been requested or granted) for all years through 1989.
The consolidated federal income tax returns of the Group
have not been audited during the last five (5) fiscal years
of CBT. No audit, examination or investigation is presently
being conducted or, to the best knowledge of CBT, threatened
by any taxing authority; no unpaid tax deficiencies or
additional liabilities of any sort have been proposed by any
governmental representative; and no agreements for the
extension of time for the assessment of any amounts of tax
have been entered into by or on behalf of any member of the
Group.
R. Fiduciary Activities. The fiduciary and
custodial activities of each CBT Subsidiary have been and
are being conducted in all material respects in accordance
with all applicable law.
S. Environmental Matters. To the best knowledge
of CBT and Acquisition Corp, except for matters that
individually or in the aggregate would not have a material
adverse effect on the business, assets, results of
operations or financial condition of CBT and the CBT
Subsidiaries taken as a whole:
[i] CBT and each CBT Subsidiary is in substantial
compliance with all applicable federal, state and local
laws, rules, regulations, ordinances and requirements
relating to the environment ("Environmental Laws");
[ii] No "Hazardous Wastes" (as hereinafter
defined) have ever been generated, transported, treated,
stored, released or disposed of on any real property owned
or leased by CBT or any CBT Subsidiary;
[iii] Neither CBT nor any CBT Subsidiary has
transported or disposed or caused or permitted any person to
transport or dispose of any Hazardous Wastes other than in
substantial with all Environmental Laws;
[iv] Neither CBT nor any CBT Subsidiary has ever
violated any of the Environmental Laws;
[v] No asbestos, PCBs or other Hazardous Wastes or
any petroleum product or constituents thereof is present on,
in or under any of the property owned by CBT or any CBT
Subsidiary, whether owned or leased or held as OREO (as such
term is customarily used) or in which CBT or any CBT
Subsidiary has any legal or equitable interest;
[vi] There are no loans or other credits included
in the loan portfolio of any CBT Subsidiary with respect to
which CBT or any CBT Subsidiary is or could incur or become
responsible for liability under the Environmental Laws; and
[vii] No Hazardous Wastes have ever been utilized
on any of the property now held or previously held by CBT or
any CBT Subsidiary as collateral or otherwise securing any
loan made by CBT or any CBT Subsidiary.
T. Insider Loans. All loans, loan commitments
and any other extensions of credit and commitments to extend
credit that are currently outstanding by CBT or any CBT
Subsidiary to directors, officers, or principal shareholders
of CBT or any CBT Subsidiary or any of their related
interests (as defined in 12 CFR 215), were made on
substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with other persons, and substantially comply
with all applicable provisions of federal and state law.
Such loans, extensions and commitments do not involve more
than a normal risk of collectability.
U. Adjustable Rate Mortgages. Each CBT
Subsidiary has properly calculated, in substantial with the
contractual terms thereof and all applicable law, all
adjustments required in its portfolio of adjustable rate
mortgage notes.
V. Regulatory Matters. Neither CBT nor any CBT
Subsidiary has, through the date hereof, taken or agreed to
take any action or has knowledge of any fact or circumstance
that would materially impede or delay receipt of any
approval referred to in Section 5.2E hereof.
W. Absence of Certain Changes or Events. Except
as disclosed in the CBT SEC Documents, since December 31,
1992, CBT and the CBT Subsidiaries have not incurred any
material liability, except in the ordinary course of their
business consistent with their past practices, nor has CBT
or any CBT Subsidiary suffered any change in the business,
assets, financial condition or results of operations of CBT
or any of the CBT Subsidiaries that has had, or is
reasonably likely to have, a material adverse effect on CBT
and CBT's Subsidiaries taken as a whole.
X. Full Disclosure. No representation or
warranty of CBT contained in this Agreement and no statement
contained in this Agreement or in any certificate or other
instrument furnished to CBT hereunder contains or will
contain any untrue statement of a material fact or omits or
will omit to state any material fact necessary to make the
statements contained herein or therein not misleading.
4.3 Non-Survival of Representations and
Warranties. All representations and warranties contained in
this Agreement by any party hereto or set forth in any
certificate or other instrument delivered by or on behalf of
the parties pursuant to this Agreement shall expire at the
Effective Time.
ARTICLE 5
CONDITIONS PRECEDENT
5.1 Conditions to Obligations of BMC. Subject to
Section 5.3, the obligation of BMC to consummate the
transactions contemplated by this Agreement and the Plan of
Merger, including the Merger, is subject to the satisfaction
of the following conditions precedent on or before the
Closing Date, any of which may be waived by BMC:
A. Approval of this Agreement and the Plan of
Merger by the shareholders of BMC at the Meeting.
B. There shall not be threatened, instituted or
pending any action or proceeding before any domestic or
foreign court or governmental agency or other regulatory or
administrative agency or commission, or by any other person
[i] challenging the Merger or the other transactions
contemplated by this Agreement or the terms thereof, or [ii]
seeking to prohibit the Merger or the other transactions
contemplated by this Agreement, which, in the reasonable
opinion of BMC's Board of Directors, has a reasonable
probability of success.
C. The representations and warranties of CBT and
Acquisition Corp set forth in Section 4.2 of this Agreement
shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Date as if made
on the Closing Date, and CBT and Acquisition Corp shall have
furnished to BMC a certificate executed by the President of
CBT and Acquisition Corp to that effect.
D. The representations and warranties made by
CBT in Section 4.2S (Environmental Matters) shall be true
and correct in all material respects as of the Closing Date
without giving effect to the knowledge qualification
contained therein.
E. CBT and Acquisition Corp in all material
respects shall have performed and observed their respective
obligations and covenants as set forth in this Agreement
prior to or on the Closing Date and shall have delivered to
BMC a certificate executed by the President of CBT and
Acquisition Corp to that effect and evidence, in form and
substance satisfactory to counsel for BMC, that the
transactions contemplated by this Agreement and the Plan of
Merger were duly authorized by all necessary corporate
action of CBT and Acquisition Corp.
F. Except as a result of [i] changes in banking
laws or regulations of general applicability or
interpretations thereof, [ii] changes in generally accepted
accounting principles or regulatory accounting principles,
[iii] changes that could, under the circumstances,
reasonably have been anticipated in light of information
Previously Disclosed by CBT to BMC, and [iv] changes in the
banking and/or savings and loan business which impact or are
likely to impact both CBT and BMC in a similar manner, there
shall not have been any material adverse change in the
business, financial condition, prospects or operations of
CBT since December 31, 1992.
G. Receipt of all permits, consents, approvals
and authorizations from federal and state governmental
authorities and regulatory agencies necessary to effect the
Merger (including the expiration of all applicable waiting
periods) and the other transactions contemplated herein, and
the satisfaction of all other requirements prescribed by law
which are necessary to the carrying out of the Merger.
H. BMC shall have received an opinion of counsel
of CBT dated as of the Closing Date, in substantially the
form attached hereto as Exhibit 5.1H.
I. BMC shall have received the opinion of CBT's
counsel in form and substance reasonably satisfactory to BMC
and its counsel, dated the Closing Date, to the effect that
the Merger will be treated for Federal income tax purposes
as a reorganization within the meaning of Section 368 of the
Code and that, except with respect to the payment of cash
for fractional shares or in connection with the exercise of
appraisal rights, the conversion of BMC Common Stock into
CBT Common Stock will not give rise to the recognition of
gain or loss for federal income tax purposes to the
shareholders of BMC.
J. BMC shall have received an opinion from its
financial advisor to the effect that, as of the date the
Proxy Statement/Prospectus was mailed to shareholders of
BMC, the Merger is fair to the shareholders of BMC from a
financial viewpoint, and, unless the Closing shall have
occurred within thirty (30) days after the Meeting, such
opinion has not been withdrawn.
K. The Registration Statement (including any
post effective amendments thereto) shall be effective under
the Securities Act of 1933, as amended, and no proceedings
shall be pending or to the knowledge of BMC threatened by
the Commission to suspend the effectiveness of such
Registration Statement.
L. CBT shall have delivered to BMC a certificate
of its President to the effect that it is the current
intention of CBT to carry out in all material respects the
Joint Business Plan.
5.2 Conditions to Obligations of CBT and Acquisition
Corp. Subject to Section 5.3, the obligation of CBT and
Acquisition Corp to consummate the transactions contemplated
by this Agreement and the Plan of Merger, including the
Merger, is subject to the satisfaction of the following
conditions precedent on or before the Closing Date, any of
which may be waived by CBT or Acquisition Corp:
A. Approval of this Agreement and the Plan of
Merger by the shareholders of BMC at the Meeting.
B. There shall not be threatened, instituted or
pending any action or proceeding before any domestic or
foreign court or governmental agency or other regulatory or
administrative agency or commission, or by any other person
[i] challenging the Merger or the other transactions
contemplated by this Agreement or the terms thereof, or [ii]
seeking to prohibit the Merger or the other transactions
contemplated by this Agreement, which, in the reasonable
opinion of CBT's Board of Directors, has a reasonable
probability of success.
C. The representations and warranties of BMC set
forth in Section 4.1 of this Agreement shall be true and
correct in all material respects as of the date of this
Agreement and as of the Closing Date as if made on the
Closing Date, and BMC shall have furnished to CBT and
Acquisition Corp a certificate executed by the President of
BMC to that effect.
D. BMC in all material respects shall have
performed and observed its obligations and covenants as set
forth in this Agreement prior to or on the Closing Date and
shall have delivered to CBT and Acquisition Corp a
certificate executed by the President of BMC to that effect
and evidence, in form and substance satisfactory to counsel
for CBT, that the transactions contemplated by this
Agreement and the Plan of Merger were duly authorized by all
necessary corporate action of BMC.
E. Receipt of all permits, consents, approvals
and authorizations from federal and state governmental
authorities and regulatory agencies necessary to effect the
Merger (including the expiration of all applicable waiting
periods) and the other transactions contemplated herein, on
terms and conditions satisfactory to CBT (other than
standard terms and conditions), and the satisfaction of all
other requirements prescribed by law which are necessary to
the carrying out of the Merger.
F. Except as a result of [i] changes in banking
laws or regulations of general applicability or
interpretations thereof, [ii] changes in generally accepted
accounting principles or regulatory accounting principles,
[iii] changes that could, under the circumstances,
reasonably have been anticipated in light of information
Previously Disclosed by BMC to CBT, and [iv] changes in the
banking and/or savings and loan business which impact or are
likely to impact both CBT and BMC in a similar manner,there
shall not have been any material adverse change in the
business, financial condition, prospects or operations of
BMC or any BMC Subsidiary since December 31, 1992.
G. CBT shall have received an opinion of counsel
for BMC dated as of the Closing Date, in substantially the
form attached hereto as Exhibit 5.2G.
H. CBT shall have received a written release
from each of the executive officers and directors of BMC and
each BMC Subsidiary which releases CBT, BMC and each BMC
Subsidiary from any and all claims, known or unknown,
contingent or direct, which he or she may have against CBT,
BMC or any BMC Subsidiary as of the Closing Date, other than
(i) claims arising under this Agreement and the transactions
contemplated hereby, including, without limitation, claims
of a nature described in Section 3.13 of this Agreement,
(ii) claims arising out of moneys on deposit or property
held in trust or as a custodian by a BMC Subsidiary or
compensation accrued but not yet payable or in payment for
services rendered to BMC or any BMC Subsidiary as reflected
on the books and records of BMC or any BMC Subsidiary, (iii)
claims under BMC's articles of incorporation, bylaws, by
agreement Previously Disclosed to CBT, or under statutory or
common law or pursuant to any directors' and officers'
insurance policy, for indemnification against liabilities or
claims made against them resulting from their service as an
executive officer or director of BMC before the Effective
Time, including, without limitation, the advancement or
reimbursement of expenses and costs, or (iv) claims arising
under any employee benefit plan or agreement Previously
Disclosed.
I. CBT shall have received a letter from
Deloitte & Touche to the effect that the Merger qualifies
for "pooling of interests" accounting treatment if
consummated in accordance with this Agreement and the Plan
of Merger.
J. The Registration Statement (including any
post effective amendments thereto) shall be effective under
the Securities Act of 1933, as amended, and no proceedings
shall be pending or to the knowledge of CBT threatened by
the Commission to suspend the effectiveness of such
Registration Statement.
K. CBT shall have received all state securities
or "blue sky" permits and other authorizations necessary to
consummate the Merger.
L. The "affiliates" of BMC shall have executed
and delivered the Affiliate Agreements.
M. The representations and warranties made by
BMC in Section 4.1T (Environmental Matters) shall be true
and correct in all material respects as of the Closing Date
without giving effect to the knowledge qualification
contained therein.
5.3 Effect of Pre-Acquisition Investigations.
Notwithstanding any other provision contained herein, if
either CBT or BMC shall be aware of any breach of any of the
other party's representations or warranties contained herein
on or before the end of the period prescribed by Sections
6.2(ii) and 6.2(iii) of Article 6, whether by virtue of such
party's pre-acquisition investigation of the other party
described in Section 3.5 of this Agreement or otherwise, and
such party has not elected to terminate this Agreement in
accordance with Sections 6.2(ii) or 6.2(iii) of Article 6,
as appropriate, such party shall be deemed to have waived
its rights contained herein to refuse to consummate the
Merger on account of such breach and the existence or
occurrence of such breach or any event or fact related to
such breach shall not be deemed to constitute an unsatisfied
condition to such party's obligations to consummate the
Merger, including, without limitation, the conditions
contained in Sections 5.1C, 5.1D, 5.1F, 5.2C, 5.2F and 5.2M.
ARTICLE 6
TERMINATION
6.1 Dissenting Shares. Prior to the Effective Time,
this Agreement and the Plan of Merger may be declared void
and of no effect by CBT if the number of Dissenting Shares
is greater than 9.5% of the issued and outstanding shares of
BMC.
6.2 Termination. This Agreement and the Plan of
Merger may be terminated:
(i) by the mutual agreement of CBT, Acquisition
Corp and BMC;
(ii) by CBT, by giving written notice of
termination to BMC within seven (7) days of the conclusion
of CBT's pre-acquisition investigation of BMC described in
Section 3.5A of this Agreement, if CBT's pre-acquisition
investigation and review of BMC as described in Section 3.5A
of this Agreement discloses matters which CBT in good faith
believes to be either (i) inconsistent in any material
respect with any of the representations and warranties of
BMC contained in this Agreement, or (ii) in the reasonable
judgment of the Board of Directors of CBT, to be either (x)
of such significance as to materially and adversely affect
the financial condition or the results of operations of BMC
and the BMC Subsidiaries on a consolidated basis, or (y) to
deviate materially and adversely from BMC's audited
consolidated financial statements for the period ended
December 31, 1992;
(iii) by BMC, by giving written notice of
termination to CBT within seven (7) days of the conclusion
of BMC's pre-acquisition investigation of CBT described in
Section 3.5B of this Agreement, if BMC's pre-acquisition
investigation and review of CBT as described in Section 3.5B
of this Agreement discloses matters which BMC in good faith
believes to be either (i) inconsistent in any material
respect with any of the representations and warranties of
CBT contained in this Agreement, or (ii) in the reasonable
judgment of the Board of Directors of BMC, to be either (x)
of such significance as to materially and adversely affect
the financial condition or the results of operations of CBT
and the CBT Subsidiaries on a consolidated basis, or (y) to
deviate materially and adversely from CBT's audited
consolidated financial statements for the period ended
December 31, 1992;
(iv) by CBT or Acquisition Corp, upon prior
written notice, if BMC materially breaches any
representation or warranty set out in Section 4.1 of this
Agreement or materially breaches any covenant in this
Agreement, or upon the failure and nonwaiver of any
condition precedent set out in Section 5.2 unless, in the
case of a material breach of a covenant or failure of a
condition, within thirty (30) days after written notice from
CBT or Acquisition Corp, BMC shall have cured such breach or
failure;
(v) by BMC, upon prior written notice, if CBT or
Acquisition Corp materially breaches any representation or
warranty set out in Section 4.2 of this Agreement or
materially breaches any covenant in this Agreement or upon
the failure and nonwaiver of any condition precedent set out
in Section 5.1 unless, in the case of a material breach of a
covenant or failure of a condition, within thirty (30) days
after written notice from BMC, CBT or Acquisition Corp shall
have cured such breach or failure;
(vi) by BMC or CBT if the Effective Time shall not
have occurred on or before September 30, 1994;
(vii) by CBT if the Average Price Per Share shall
be greater than $46.875; or
(viii) by BMC if the Average Price Per Share shall
be less than $31.875.
6.3 Declaration. Any declaration of termination under
this Article 6 by CBT, Acquisition Corp or BMC shall be
pursuant to resolution of its Board of Directors or by
executive officers thereof duly authorized by its Board of
Directors to make such a declaration; shall be made by
written notice given to the other parties setting forth the
grounds for the termination, including, if applicable, the
alleged material misrepresentation, breach or failure, and,
unless, in the case of a material breach of a covenant or a
failure of a condition, such material breach or failure is
timely cured, shall have the effect of terminating this
Agreement and the Plan of Merger effective upon the delivery
of such written notice or the expiration of any applicable
cure period, whichever is later, whereupon the same shall
have no further effect and the Merger provided for herein
and therein shall not be effected. Notwithstanding the
foregoing, no termination of this Agreement shall affect the
covenants set forth in Section 3.6 relating to
confidentiality or the provisions set forth in Section 8.5
relating to expenses, which shall survive any such
termination. None of BMC, CBT or Acquisition Corp shall
have any liability arising out of the rightful termination
of this Agreement pursuant to Article 6 unless such
termination results from such party's intentional
misrepresentation or intentional breach of any covenant or
representation or warranty contained herein.
ARTICLE 7
INDEMNIFICATION
BMC shall indemnify, defend and hold CBT and
Acquisition Corp harmless, and CBT and Acquisition Corp
shall indemnify, defend and hold BMC harmless, against and
in respect of any intentional nonfulfillment of any covenant
or agreement or the intentional or fraudulent breach of any
representation or warranty on the part of the indemnifying
party under this Agreement and any claim, action, suit,
proceeding, demand, judgment, assessment, cost and expense,
including reasonable counsel fees, incident to the
foregoing. A party seeking indemnification hereunder shall
use its best efforts to minimize any liabilities, damages,
deficiencies, claims, judgments, assessments, cost and
expenses in respect of which indemnity is sought hereunder.
ARTICLE 8
GENERAL PROVISIONS
8.1 Law and Section Headings. This Agreement shall be
construed and interpreted in accordance with the laws of the
Commonwealth of Kentucky. Section headings are used in this
Agreement for convenience only and are to be ignored in the
construction of the terms of this Agreement.
8.2 Modifications. The parties hereto may amend,
modify or supplement this Agreement, before or after
approval thereof by the shareholders of BMC, in such manner
as may be agreed by them in writing.
8.3 Severability. The invalidity or unenforceability
of any provision of this Agreement shall not affect the
validity or enforceability of the remaining provisions.
8.4 Notices. All notices hereunder shall be in
writing and shall be deemed to have been given or made when
delivered or telecopied (with confirmation) mailed, first
class, registered or certified mail, return receipt
requested, postage prepaid, addressed as follows, until
notice of another address or additional addresses have been
received by the other parties:
If to CBT or Acquisition Corp, to:
CBT Corporation
333 Broadway
Paducah, Kentucky 42001
Telecopier No.: (502) 575-5180
Attention: William J. Jones, President and Chief
Executive Officer
With a copy to:
Stewart E. Conner, Esq.
WYATT, TARRANT & COMBS
2800 Citizens Plaza
Louisville, Kentucky 40202
Telecopier No.: (502) 589-0309
If to BMC, to:
BMC Bankcorp, Inc.
11th and Poplar Streets
Benton, Kentucky 42045
Attention: Joe T. Haltom, Chairman
Telecopier No: (502) 527-1055
With copies to:
Kerry Harvey, Esq.
Owen, Harvey & Carter
1113 Poplar Street
Benton, Kentucky 42025
Telecopier No: (502) 527-2110
R. James Straus
Brown, Todd & Heyburn
3200 Capital Holding Center
Louisville, Kentucky 40202
Telecopier No: (502) 581-1087
8.5 Expenses; Risk of Loss. Whether or not the Merger
is consummated, each of the parties hereto will pay its own
fees and expenses incurred in connection with the Merger and
the other transactions contemplated by this Agreement and
the Plan of Merger. CBT and BMC shall share equally the
cost incurred in printing and mailing to shareholders of BMC
the Proxy Statement/Prospectus. Until the Effective Time,
the risk of loss to the assets of BMC shall remain with BMC.
8.6 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be an
original, but such counterparts shall together constitute
one and the same instrument.
8.7 Time of Essence; Best Efforts. Time is of the
essence to the performance of the obligations set forth in
this Agreement. BMC and CBT each agrees to use its
respective best efforts to obtain the satisfaction of the
conditions to its respective obligations specified herein,
and to advise the other parties hereto in writing as to any
unusual delays or impediments in obtaining the same.
8.8 Closing. At the Closing, each party shall execute
and deliver all documents required by this Agreement, and
such further documents as the other party shall reasonably
request in order to satisfy the fulfillment of each party's
agreements and undertakings hereunder.
8.9 Records and Further Assurances. After the
Closing, each party shall make available to the other on
reasonable request such books and records of that party as
may be appropriate for use in connection with their
respective tax returns, including any review thereof, and
for any other reasonable purpose.
8.10 Parties in Interest; Third Party Rights. All
covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure
to the benefit of their respective successors and permitted
assigns. No party to this Agreement may however, assign its
rights hereunder or delegate its obligations hereunder to
any other person or entity without the express prior written
consent of the other parties hereto. It is the intention of
the parties that, except as provided in Section 3.13,
nothing in this Agreement or the Plan of Merger shall be
deemed to create any right with respect to any person or
entity not a party to this Agreement or the Plan of Merger.
8.11 Entire Agreement; Waiver. This Agreement,
including all information Previously Disclosed, the Exhibits
hereto, the Plan of Merger and the Stock Option Agreement
constitute and contain the entire agreement of BMC and CBT
with respect to the Merger and supersede any prior agreement
by the parties, whether written or oral. The waiver of a
breach of any term or condition of this Agreement must be in
writing signed by the party sought to be charged with such
waiver and such waiver shall not be deemed to constitute the
waiver of any other breach of the same or of any other term
or condition of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their duly authorized
officers as of the date first above written.
CBT CORPORATION
By______________________________
William J. Jones, President
CBT ACQUISITION CORP
By_____________________________
William J. Jones, President
BMC BANKCORP, INC.
By_____________________________
Joe T. Haltom, Chairman
By_____________________________
Larry D. Wright, President
I:\PRICE\CBTBMC.AGM
PLAN OF MERGER
THIS PLAN OF MERGER ("Plan") is made and entered
into as of this 10th day of January, 1994, by and among CBT
CORPORATION, a Kentucky corporation ("CBT"), CBT ACQUISITION
CORP, a Kentucky corporation ("Acquisition Corp"), and BMC
BANKCORP, INC., a Kentucky corporation ("BMC").
W I T N E S S E T H :
BMC is a corporation organized and existing under
the laws of the Commonwealth of Kentucky, the authorized
capital stock of which consists of [i] 1,000,000 shares of
preferred stock without par value, of which at the date
hereof no shares are issued or outstanding, and [ii]
1,000,000 shares of common stock without par value ("BMC
Common Stock"), of which at the date hereof 597,780 shares
are issued and outstanding and fully paid and nonassessable.
Acquisition Corp is a corporation organized and
existing under the laws of the Commonwealth of Kentucky, the
authorized capital stock of which consists of 1,000 shares
of common stock without par value, of which at the date
hereof 1,000 shares are issued and outstanding and owned by
CBT.
The respective Boards of Directors of CBT,
Acquisition Corp and BMC have determined that it is
desirable to effect a Plan and Agreement of Reorganization
(the "Agreement"), for the general welfare and advantage of
their respective shareholders, under which plan Acquisition
Corp would be merged into BMC, in accordance with the terms
of the Agreement and this Plan.
The respective Boards of Directors of CBT,
Acquisition Corp and BMC have approved and adopted the
Agreement and this Plan and have authorized the execution
hereof.
NOW, THEREFORE, in consideration of the premises
and of the mutual agreements and undertakings herein
contained, the parties hereby agree as follows:
ARTICLE 1
THE MERGER
1.1 The Merger. Upon the terms and conditions set
forth in this Plan and the Agreement, at the Effective Time
(as hereinafter defined), Acquisition Corp shall be merged
with and into BMC (the "Merger") in accordance with the
provisions of and with the effect provided in the Kentucky
Business Corporation Act (the "KBCA"). The terms of the
Merger shall be as set forth in the Agreement and in this
Plan.
1.2 Articles of Merger. Upon the terms and conditions
set forth in the Agreement and this Plan, Articles of Merger
(the "Articles of Merger") shall be duly prepared and
executed by Acquisition Corp and BMC, and thereafter
delivered to the Secretary of State of the Commonwealth of
Kentucky for filing, as provided in the KBCA on the Closing
Date, as defined in the Agreement. The Merger shall become
effective upon filing with the Kentucky Secretary of State
or at such time and date thereafter as is provided in the
Articles of Merger (the "Effective Time").
1.3 Effect of Filing.
A. At the Effective Time, [i] the separate
existence of Acquisition Corp shall cease, and Acquisition
Corp shall be merged with and into BMC (sometimes herein
referred to as the "Surviving Corporation"), and [ii] the
Articles of Incorporation and Bylaws of Acquisition Corp as
in effect immediately prior to the Effective Time shall be
the Articles of Incorporation and Bylaws of the Surviving
Corporation.
B. At the Effective Time, the officers and Board
of Directors of the Surviving Corporation shall consist of
those persons serving as the officers and directors of
Acquisition Corp immediately prior to the Effective Time.
C. At and after the Effective Time, the Merger
will have the effects set forth in Section 271B.11-060 of
the KBCA and as otherwise provided by law.
ARTICLE 2
CONVERSION OF SHARES
2.1 Conversion of BMC Capital Stock.
A. Conversion of BMC Common Stock. Except for
Dissenting Shares (as defined below), each share of BMC
Common Stock issued and outstanding immediately prior to the
Effective Time shall, automatically, by virtue of the Merger
and at the Effective Time, be exchanged for and converted,
without any further notice to or on the part of the holder
thereof, into two (2) shares of the common capital stock of
CBT, no par value ("CBT Common Stock"), subject to Section
2.1C hereof. At and after the Effective Time, the former
holders of shares of BMC Common Stock shall be entitled only
to the exchange rights provided for in this Section 2.1 or
to the rights to dissent under Subtitle 13 of the KBCA.
Certificates previously representing shares of BMC Common
Stock shall be exchanged for CBT Common Stock issued in
consideration therefor upon the surrender of such
certificates in accordance with Section 2.2.
B. Reclassifications. If prior to the Effective
Time the outstanding shares of CBT Common Stock shall have
been increased, decreased or changed into or exchanged for a
different number or kind of shares or securities by
reorganization, recapitalization, reclassification, stock
dividend, stock split or other like changes in CBT's
capitalization, all without CBT receiving consideration
therefor, then an appropriate and proportionate adjustment
shall be made in the number and kind of shares of CBT Common
Stock, or the shares of stock of any successor to CBT, to be
thereafter delivered pursuant to this Plan of Merger, and,
with respect to any such successor corporation, a holder of
shares of BMC Common Stock shall participate in the same
manner and to the same extent as a holder of shares of CBT
Common Stock.
C. No Fractional Shares. No certificate or
scrip of any kind will be issued by CBT to any shareholder
of BMC in respect of any fractional interest in CBT Common
Stock arising out of the conversion of BMC Common Stock into
CBT Common Stock in the Merger, and such fractional share
interests will not entitle the owner thereof to vote or to
any rights of a shareholder of CBT. No holder of BMC Common
Stock will have any rights in respect of a fractional
interest in CBT Common Stock arising out of the Merger
except the right to receive in lieu thereof a cash payment
in a dollar amount equal to such fractional interest
multiplied by the average of the bid and asked price per
share, as quoted by the National Association of Securities
Dealers Automated Quotation System ("NASDAQ"), for CBT
Common Stock on the trading day which occurs immediately
prior to the Closing Date. For purposes of this Agreement,
"trading day" shall mean any day on which securities are
traded on the New York Stock Exchange.
2.2 Exchange of Certificates.
A. At and after the Effective Time, each person
who immediately prior to the Effective Time held of record
shares of BMC Common Stock shall be entitled to receive,
upon the surrender of the certificate(s) which represented
such shares (individually a "Certificate" and collectively
the "Certificates") to CBT, together with a letter of
transmittal (in the form contemplated by Section 2.2.B) duly
executed, the consideration specified in Section 2.1.
B. On, or within seven (7) days after the
Effective Time, CBT shall mail or deliver to each holder who
immediately prior to the Effective Time held of record
shares of BMC Common Stock, a form letter of transmittal
(which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only
upon proper delivery of the Certificates to CBT) and
instructions for use in effecting the surrender of the
Certificates or payment therefor. No interest will be paid
or accrue on any consideration payable on the surrender of
such Certificate. If delivery of certificates of CBT Common
Stock is to be made to a person other than the person in
whose name the Certificate surrendered is registered, it
shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or otherwise in
proper form for transfer and that the person requesting such
payment shall pay any transfer or other taxes required by
reason of the payment to a person other than the registered
holder of the Certificate surrendered or establish to the
satisfaction of CBT that such tax has been paid or is not
applicable.
C. At and after the Effective Time, holders of
Certificates shall cease to have any rights as shareholders
of BMC except for the right to receive upon such surrender
the consideration specified in Section 2.1.
D. No dividends or other distributions declared
or made after the Effective Time with respect to CBT Common
Stock with a record date after the Effective Time shall be
paid to the holder of any unsurrendered Certificate with
respect to the shares of CBT Common Stock represented
thereby, and no cash payment in lieu of fractional shares
shall be paid to any such holder pursuant to Section 2.1.C
until the holder of such Certificate shall surrender such
Certificate. Subject to the effect of applicable laws,
following the surrender of any such Certificate, there shall
be paid to the holder of such Certificate(s) representing
whole shares of CBT Common Stock issued in exchange
therefor, without interest, (i) at the time of such
surrender the amount of any cash payable with respect to a
fractional share of CBT Common Stock to which such holder is
entitled pursuant to Section 2.1.C and the amount of
dividends or other distributions with a record date after
the Effective Time theretofore paid with respect to such
whole shares of CBT Common Stock, and (ii) at the
appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time
but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole shares of CBT
Common Stock.
E. After the Effective Time, except to the
extent necessary to issue replacement Certificates for any
Certificates which may have been lost or stolen or to comply
with the payment instructions contained in a letter of
transmittal contemplated by Section 2.2.B., there shall be
no further registration of transfers on the stock transfer
books of BMC of any Certificates formerly evidencing the
shares of BMC Common Stock which were outstanding
immediately prior to the Effective Time.
F. Neither BMC nor CBT shall be liable to any
holder of shares of BMC Common Stock for such shares or CBT
Common Stock into which they are converted (or dividends or
distributions with respect thereto) or cash in lieu of
fractional shares delivered to a public official pursuant to
any abandoned property, escheat or similar law.
2.3 Dissenting Shareholders. If any holder of shares
of BMC Common Stock shall, in accordance with the provisions
of applicable law, seek appraisal and perfect dissenting
shareholder rights to be paid the fair value of his or her
shares ("Dissenting Shares"), then such holder shall be
entitled to receive such value as may be established
pursuant to such provisions. BMC shall give CBT prompt
notice of any written objections or demands received from
any shareholder pursuant to such provisions, and shall give
CBT the opportunity to participate in all proceedings with
respect to any such objections or demands. BMC will pay its
dissenting shareholders the value of their stock out of its
own funds. No funds will be supplied for that purchase,
directly or indirectly, by CBT, nor will CBT directly or
indirectly reimburse BMC for any payments to dissenters.
2.4 Conversion of Acquisition Corp Common Stock. Each
share of Acquisition Corp Common Stock issued and
outstanding immediately prior to the Effective Time shall,
automatically, by virtue of the Merger and at the Effective
Time, be exchanged for and converted, without any further
notice to or on the part of the holder thereof, into one
share of common stock of the Surviving Corporation.
2.5 CBT Common Stock. The shares of common stock of
CBT issued and outstanding immediately prior to the
Effective Time shall remain issued and outstanding at the
Effective Time and shall not be effected by the Merger.
ARTICLE 3
TERMINATION
Anything contained in this Plan notwithstanding
and notwithstanding adoption hereof by the shareholders of
CBT and/or BMC, this Plan may be terminated and the Merger
abandoned as provided in the Agreement.
ARTICLE 4
CONDITIONS PRECEDENT
The obligations of CBT, Acquisition Corp and BMC
to effect the Merger as herein provided shall be subject to
satisfaction, unless duly waived, of the conditions set
forth in the Agreement.
ARTICLE 5
GENERAL PROVISIONS
5.1 Law and Section Headings. This Plan shall be
construed and interpreted in accordance with the laws of the
Commonwealth of Kentucky. Section headings are used in this
Plan for convenience only and are to be ignored in the
construction of the terms of this Plan.
5.2 Modifications. The parties hereto may amend,
modify or supplement this Plan, before or after approval
thereof by the shareholders of CBT and/or BMC, in such
manner as may be agreed by them in writing.
IN WITNESS WHEREOF, the parties hereto have caused
this Plan to be executed by their duly authorized officers
as of the date first above written.
CBT CORPORATION
By______________________________
William J. Jones, President
CBT ACQUISITION CORP
By______________________________
William J. Jones, President
BMC BANKCORP, INC.
By______________________________
Joe T. Haltom, Chairman
By_______________________________
Larry D. Wright, President
I:\PRICE\CBTBMC.POM
STOCK OPTION AGREEMENT
This is a Stock Option Agreement dated as of January
10, 1994 (this "Agreement"), by and between BMC Bankcorp,
Inc., a corporation organized under the laws of the
Commonwealth of Kentucky ("BMC"), and CBT Corporation, a
corporation organized under the laws of the Commonwealth of
Kentucky ("CBT").
Recitals
WHEREAS, BMC, CBT and CBT Acquisition Corp, a
Kentucky corporation and a wholly owned subsidiary of CBT
("Acquisition Corp"), propose to enter into an
Agreement and Plan of Reorganization dated as of January 10, 1994
(the "Merger Agreement"), providing for, among other things,
the merger of Acquisition Corp with and into BMC pursuant
to which CBT will acquire BMC as the surviving corporation; and
WHEREAS, as a condition and inducement to CBT's
willingness to enter into the Merger Agreement, CBT has
requested that BMC agree, and BMC has agreed, to grant to
CBT the Option (as defined below);
NOW THEREFORE, in consideration of said Merger
Agreement and their mutual promises and obligations
contained herein, the parties hereto adopt and make this
Agreement as follows:
1. BMC hereby grants to CBT an irrevocable option (the
"Option") to purchase, in accordance with the terms of
this Agreement, at $75.00 per share (the "Per Share
Price") in cash, up to 148,512 authorized but
unissued shares (the "Optioned Shares") of the common
stock without par value of BMC ("BMC Common"), a
number of shares of BMC Common which when issued shall
equal 19.9% of the then-outstanding shares of BMC
Common. The Option shall expire (such event being
referred to herein as the "Option Termination Event")
if not exercised as permitted under this Agreement
prior to the earlier of (i) at the time the merger
of Acquisition Corp into BMC becomes effective as set
forth and defined in the Merger Agreement (the
"Effective Time"), (ii) CBT or BMC receiving written
notice from the Board of Governors of the Federal
Reserve System (the "Board") or its staff to the
effect that the exercise of the Option pursuant to the
terms of this Agreement is not consistent with Section
3 of the Bank Holding Company Act of 1956, as
amended, (iii) termination of the Merger Agreement
by CBT in accordance with the provisions of Article 6
of the Merger Agreement if such termination occurs
prior to the occurrence of an Initial Triggering
Event (as hereinafter defined), (iv) the first
business day after the three hundred and sixty-fifth
calendar day following termination of the Merger
Agreement by CBT in accordance with the provisions
of Article 6 thereof, if such termination follows
the occurrence of an Initial Triggering Event,
provided that the Option shall in all events expire
not later than 18 months after such Initial
Triggering Event, (v) termination of the Merger
Agreement by BMC in accordance with the
provisions of Article 6 thereof, or (vi)
termination of the Merger Agreement by mutual
consent of CBT and BMC. If, in the case of clause
(iv) above, the Option is otherwise exercisable
but cannot be exercised on such day solely because of
any injunction, order or similar restraint issued by a
court of competent jurisdiction, the Option shall expire on
the twentieth business day after such injunction,
order or restraint shall have been dissolved or when such
injunction, order or restraint shall have become
permanent and no longer subject to appeal, as the case
may be. For purposes of this Agreement, a
termination of the Merger Agreement by BMC solely
because of the failure of BMC's shareholders to
approve the Agreement and the Plan of Merger shall be
deemed a termination of the Merger Agreement by CBT in
accordance with the provisions of Article 6 thereof.
2. Provided that (i) no preliminary or permanent
injunction or other order issued by any Federal or state
court of competent jurisdiction in the United States prohibiting
the exercise of the Option or the delivery of the
Optioned Shares shall be in effect, (ii) any such
exercise shall otherwise comply with applicable law,
and (iii) CBT is not then in material breach of the
Merger Agreement, CBT may exercise the Option in
whole or in part at any time or from time to time
after the occurrence of both an Initial Triggering
Event and a Purchase Event (as defined in Section 4 of
this Agreement) if, but only if, both the Initial
Triggering Event and the Purchase Event shall have
occurred prior to the occurrence of an Option
Termination Event. In the event that CBT wishes to
exercise the Option, CBT shall give written notice
of such exercise (the date of such notice being herein
called the "Notice Date") within 30 days following such
Purchase Event to BMC specifying the number of Optioned Shares it
will purchase pursuant to such exercise and a
place and date for the closing of such purchase
which date shall be within 60 days of the Purchase
Event, subject to reasonable extensions in order for
CBT to obtain required regulatory approvals.
3. At any closing of the exercise of the Option, (i) CBT will
make payment to BMC of the aggregate price for the
Optioned Shares in immediately available funds, in an
amount equal to the product of the Per Share Price
multiplied by the number of Optioned Shares being
purchased at such closing, and (ii) BMC will deliver
to CBT a duly executed certificate or
certificates representing the number of Optioned
Shares so purchased, registered in the name of CBT or its
nominee in the denominations designated by CBT in its
notice of exercise. Unless counsel for BMC and CBT agree that
such shares are not "restricted shares" under
federal and/or state securities laws, certificates
for such shares shall bear a legend to that effect.
4. For purposes of this Agreement, an "Initial Triggering
Event" shall have occurred at such time as one of
the following events shall have occurred and CBT
shall have determined in good faith (and shall have
notified BMC in writing of such determination) that there is a
reasonable likelihood that, as a result of the
occurrence of any of the following events, consummation
of the Merger pursuant to the terms of the Merger
Agreement is jeopardized: (i) any person as defined in 3(a)(9)
or 13(d)(3) of the Securities Exchange Act of 1934,
as amended (the "1934 Act") (other than CBT or any CBT subsidiary or
affiliate) shall have commenced a bona fide offer to
purchase shares of BMC Common such that, upon
consummation of said offer, such person would own
or control 10% or more of the outstanding shares of
BMC Common, or shall have entered into an
agreement with BMC, or shall have filed an
application or notice with the Board or any other federal or
state regulatory agency for clearance or approval, to
(A) merge or consolidate or enter into any similar
transaction, with BMC, (B) purchase, lease or
otherwise acquire all or substantially all of the assets of BMC, or (C)
purchase or otherwise acquire (including by way of merger,
consolidation, share exchange or any similar
transaction) securities representing 10% or more of the
voting power of BMC; (ii) any person (other than CBT, Acquisition Corp,
any CBT subsidiary or affiliate, any subsidiary of
BMC ("BMC Subsidiary") in a fiduciary capacity) shall
have acquired beneficial ownership or the right to
acquire beneficial ownership of 10% or more of the
outstanding shares of BMC Common (the term
"beneficial ownership" for purposes of this Agreement
having the meaning assigned thereto in Section 13(d)
of the 1934 Act); (iii) any person (other than CBT or
any CBT subsidiary or affiliate) shall have made a bona
fide proposal to BMC after the date of the Merger
Agreement by public announcement or written communication that is
the subject of public disclosure or regulatory report
or filing to (A) acquire BMC by merger, consolidation,
purchase of all or substantially all of its assets or
any other similar transaction, or (B) make an offer
described in clause (i) above; (iv) any person
shall have solicited proxies in a proxy solicitation
in opposition to approval of the Merger Agreement by
BMC's shareholders; or (v) BMC shall have willfully
breached any provision of the Merger Agreement, which
breach would entitle CBT to terminate the Merger
Agreement and such breach shall not have been cured
pursuant to the terms of the Merger Agreement. For
purposes of this Agreement, a "Purchase Event" shall
have occurred at such time as (i) any person (other
than CBT or any CBT subsidiary or affiliate) acquires
beneficial ownership of 50% or more of the then-
outstanding shares of BMC Common, or (ii) BMC enters
into an agreement with another person (other than CBT
or any CBT subsidiary) pursuant to which such
person is entitled to acquire 50% or more of the then-
outstanding shares of BMC Common.
5. If between the date of the Merger Agreement and
Effective Time, the shares of BMC Common shall be changed
into a different number of shares by reason of any
reclassification, recapitalization, split-up,
combination or exchange of shares, or if a stock
dividend thereon shall be declared with a record date
within said period (an "Event"), the number of Optioned Shares
and the Per Share Price shall be adjusted appropriately so as to
restore CBT to its rights hereunder, including, without limitation,
its right to purchase that number of additional shares (the
"Additional Optioned Share") representing ownership of
the voting power of the capital stock of BMC (in
addition to shares of BMC Common acquired other than
pursuant to any exercise of the Option) so that the
ratio of (x) the sum of (A) the Optioned Shares
(including such Additional Optioned Shares, if any,
calculated as a result of one or more earlier Events)
plus (B) the Additional Optioned Shares, over the total
number of shares of BMC Common issued and outstanding
after each such Event, shall be equal to the ratio of
(y) the sum of (C) 148,512 plus (D) such Additional
Optioned Shares, if any, calculated as a result of
one or more earlier Events, over the total number
of shares of BMC Common issued and outstanding
immediately prior to each such Event, at an
adjusted per share purchase price equal to the Per
Share Price multiplied by a fraction, the numerator of
which shall be equal to the number of shares of BMC
Common purchasable prior to the adjustment and the
denominator of which shall be equal to the number of shares
of BMC Common purchasable after the adjustment; provided, however,
that nothing in this Option shall be construed as permitting BMC to
take any action or enter into any transaction
prohibited by the Merger Agreement.
6. BMC shall, if requested by CBT, as expeditiously as
possible file a registration statement on a form of general use
under the Securities Act of 1933, as amended, if
necessary in order to permit the sale or other disposition of the
shares of BMC Common that have been acquired upon
exercise of the Option in accordance with the
intended method of sale or other disposition requested by CBT.
CBT shall provide all information reasonably requested by BMC for
inclusion in any registration statement to be filed
hereunder. BMC will use its best efforts to cause
such registration statement first to become effective
and then to remain effective for such period not in
excess of two hundred and seventy calendar days from
the day such registration statement first becomes
effective as may be reasonably necessary to effect
such sales or other dispositions. The registration
effected under this Section 6 shall be at BMC'S
expense except for all filing and agency fees and
commissions and underwriting discounts and commissions
attributable to the sale of such securities and
fees and disbursements of CBT's counsel related
thereto, which amounts shall be borne by CBT. In no
event shall BMC be required to effect more than
one registration hereunder. The filing of any
registration statement hereunder may be delayed for
such period of time as may reasonably be required
if BMC determines that any such filing or the
offering of any such shares of BMC Common would (i)
impede, delay or otherwise interfere with any
financing, offer or sale of BMC Common or any
other securities of BMC, or (ii) require disclosure
of material information which, if disclosed at that
time, would be materially harmful to the interests of BMC and its
shareholders. If requested by CBT in connection with
any such registration, BMC will become a party to any
underwriting agreement relating to the sale of such
shares, but only to the extent of obligating itself
in respect of representations, warranties, indemnities and
other agreements customarily required of issuers.
Neither this Agreement nor the Option are assignable
by CBT. CBT and BMC agree to use their respective
reasonable efforts to cause, and to cause any
underwriters of any sale or other disposition to
cause, any sale or other disposition of the Optioned
Shares and any Additional Optioned Shares to be
effected on a widely distributed basis so that insofar
as it is reasonably possible, upon consummation
thereof no purchaser or transferee shall own beneficially more
than 2% of the then-outstanding voting power of BMC.
7. All notices and other communications hereunder may be
made by mail, hand-delivery or by courier service. If
notices and other communications are made by
nationally recognized overnight courier service for
overnight delivery, such notice shall be deemed to
have been given one business day after being
forwarded to such a nationally recognized courier
service for overnight delivery. All notices and
other communications hereunder given to any party
shall be communicated to the remaining party to this
Agreement bymail or by hand-delivery in the same
manner as herein provided.
(a) If to CBT, to:
CBT Corporation
333 Broadway
Paducah, Kentucky 42001
Attention: William J. Jones, President
With a copy to:
Wyatt, Tarrant & Combs
2800 Citizens Plaza
Louisville, Kentucky 40202
Attention: Stewart E. Conner
(b) If to BMC, to:
BMC Bankcorp, Inc.
11th and Poplar
Benton, Kentucky 42025
Attention: Joe T. Haltom, Chairman
With a copies to:
Owen, Harvey & Carter
1113 Poplar Street
Benton, Kentucky 42025
Attention: Kerry Harvey
And with a copy to:
Brown, Todd & Heyburn
3200 Capital Holding Center
Louisville, Kentucky 40202-3363
Attention: R. James Straus
IN WITNESS WHEREOF, this Agreement has been executed the
day and year first above written.
CBT CORPORATION
By_____________________________
William J. Jones, President
BMC BANKCORP, INC.
By_____________________________
Joe T. Haltom, Chairman
And by_________________________
Larry D. Wright, President
KZV.E0990
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