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As filed with the Securities and Exchange Commission
on April 1, 1994
Registration No. 33-_________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
CBT CORPORATION
(Exact name of registrant as specified in its charter)
Kentucky 61-1030727
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
333 Broadway
Paducah, Kentucky 42001
(Address of Principal Executive Offices)
Copy to:
William J. Jones, President Stewart E. Conner, Esq.
CBT Corporation Wyatt, Tarrant & Combs
333 Broadway 2800 Citizens Plaza
Paducah, Kentucky 42001 Louisville, Kentucky 40202
(Name and address of agent for service)
(502) 575-5100
(Telephone number, including area code, of agent for service)
Approximate date of commencement of proposed sale to public: As
promptly as practicable after the effective date of this Registration
Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED REGISTERED PER SHARE OFFERING PRICE REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------
Common Stock, no par value 1,195,560 Not Applicable $22,099,926(2) $7,892.83
shares
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(1) This Registration Statement relates to securities of the
Registrant issuable to holders of Common Stock of BMC Bankcorp, Inc., a
Kentucky corporation ("BMC"), in the proposed merger of BMC with CBT Acquisition
Corporation.
(2) Calculated pursuant to Rule 457(f)(2) and based upon the book
value on March 1, 1994 of the BMC Common Stock to be exchanged in the Merger.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(A)
MAY DETERMINE.
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CBT CORPORATION
CROSS REFERENCE SHEET
PURSUANT TO REGULATION S-K, ITEM 501(B)
FORM S-4 ITEM AND CAPTION LOCATION OR CAPTION IN PROSPECTUS
------------------------- ---------------------------------
A. Information About the Transaction
1. Forepart of the Registration
Statement and Outside Front Cover
Page of Prospectus . . . . . . . . . . . . . Facing page of Registration Statement; Outside
Front Cover Page of Proxy Statement-Prospectus
2. Inside Front and Outside Back Cover
Pages of Prospectus . . . . . . . . . . . . Available Information; Incorporation of Certain
Information by Reference; Table of Contents
3. Risk Factors, Ratio of Earnings to
Fixed Charges and Other Information . . . . Summary; Selected Consolidated Financial Data;
4. Terms of the Transaction . . . . . . . . . . Summary; The Merger; Certain Differences in Rights of Shareholders
5. Pro Forma Financial Information . . . . . . Pro Forma Financial Information
6. Material Contacts with the Company
Being Acquired . . . . . . . . . . . . . . . The Merger
7. Additional Information Required for
Reoffering by Persons and Parties
Deemed to Be Underwriters . . . . . . . . . Not Applicable
8. Interests of Named Experts and Not Applicable
Counsel . . . . . . . . . . . . . . . . . .
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities . . . . . . . . . . . . . . . . Not Applicable
B. Information About the Registrant
10. Information with Respect to S-3
Registrants . . . . . . . . . . . . . . . . Summary; The Merger; Incorporation of Certain
Information by Reference
11. Incorporation of Certain Information
by Reference . . . . . . . . . . . . . . . . Incorporation of Certain Information by Reference
12. Information with Respect to S-2 or
S-3 Registrants . . . . . . . . . . . . . . Not Applicable
13. Incorporation of Certain Information
by Reference . . . . . . . . . . . . . . . . Not Applicable
14. Information with Respect to
Registrants Other Than S-3 or S-2 Not Applicable
Registrants . . . . . . . . . . . . . . . .
C. Information About the Company Being Acquired
15. Information with Respect to S-3
Companies . . . . . . . . . . . . . . . . . Not Applicable
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16. Information with Respect to S-2 or
S-3 Companies . . . . . . . . . . . . . . . Summary; The Merger; Selected Financial
Data of BMC Bankcorp, Inc,; Incorporation of
Certain Information by Reference
17. Information with Respect to Companies
Other Than S-2 or S-3 Companies . . . . . . Not Applicable
18. Information if Proxies, Consents or
Authorizations are to be Solicited . . . . . Incorporation of Certain Information by Reference
Summary; The Special Meeting; The Merger;
Management and Additional Information
19. Information if Proxies, Consents or
Authorizations are not to be
Solicited or in an Exchange Offer . . . . . Not Applicable
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[PLACE ON BMC LETTERHEAD]
__________________, 1994
Dear Shareholder:
You are invited to attend a Special Meeting of Shareholders of BMC
Bankcorp, Inc. ("BMC") to be held on _____________, ___________ ____, 1994 at
_________ __.m. local time, at the main office of the Bank of Marshall County,
201 E. 11th Street, Benton, Kentucky. At this very important meeting you will
be asked to consider and approve the proposed merger of CBT Acquisition
Corporation, a wholly owned subsidiary of CBT Corporation ("CBT"), the parent
company of Citizens Bank and Trust Company of Paducah, Kentucky, into and with
BMC. As a result of the merger, BMC will become a wholly owned subsidiary of
CBT and all of the issued and outstanding common stock of BMC will be converted
into shares of CBT common stock. Details of the proposed merger and additional
related information are set forth in the attached Notice and Proxy
Statement-Prospectus. We urge you to read these materials carefully before
voting your shares at the Special Meeting.
In the merger, each outstanding share of BMC common stock will be
converted into two (2) shares of CBT common stock. The attached proxy
statement also serves as a prospectus for the shares of CBT common stock to be
issued in the merger.
Your Board of Directors has unanimously approved the proposed merger
described in the attached materials and believes the proposed transaction is in
the best interests of the shareholders. The Board therefore recommends that
shareholders vote in favor of the merger at the Special Meeting.
Whether or not you plan to attend the special meeting, your vote and
representation at the meeting are important. Please take time to consider the
enclosed materials and mail your completed proxy form as soon as possible in
the stamped return envelope provided. Even if you have already returned a
signed proxy form you may still vote your shares in person at the meeting by
delivering a written revocation of your proxy form to BMC before or at the
meeting.
Thank you,
Joe Tom Haltom
Chairman
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BMC BANKCORP
201 E. 11th Street
Benton, Kentucky 42025
NOTICE OF SPECIAL MEETING
OF SHAREHOLDERS TO BE
HELD ON __________, 1994
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders
of BMC Bankcorp, Inc. ("BMC"), will be held at the main office of the Bank of
Marshall County, 201 E. 11th Street, Benton, Kentucky, at ________ __.m. (local
time), on __________, ____________, 1994, for the purposes of considering and
acting upon:
(1) Merger. A proposal to ratify, confirm and approve an
Agreement and Plan of Reorganization dated January 10, 1994, and the
related Plan of Merger among CBT Corporation ("CBT"), CBT Acquisition
Corporation and BMC (collectively, the "Merger Agreement"), whereby
CBT Acquisition Corporation would be merged into BMC, BMC would become
a wholly owned subsidiary of CBT, and all of the issued and
outstanding shares of BMC Common Stock would be converted into shares
of CBT Common Stock, and to authorize such further action by the Board
of Directors of BMC and any of its executive or proper officers as may
be necessary or appropriate to carry out the objects, intents or
purposes of the Merger Agreement.
(2) Other Business. Such other business related to the
foregoing as may properly be brought before the Special Meeting or any
adjournment thereof.
Only those holders of record of BMC's common stock at the
close of business on ____________, 1994, are entitled to notice of, and to vote
at, the Special Meeting and any adjournment thereof.
Dissenters' rights will be available to shareholders who
follow certain required procedures summarized in the Proxy Statement-Prospectus
previously delivered to shareholders. Subtitle 13 of the Kentucky Business
Corporation Act, which provides for such rights, is included as Appendix C to
the Proxy Statement-Prospectus.
By Order of the Board of Directors
Joe Tom Haltom, Chairman
YOUR VOTE IS IMPORTANT
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE BMC
SHARES ENTITLED TO VOTE IS REQUIRED TO APPROVE THE MERGER. PLEASE DATE, SIGN
AND PROMPTLY RETURN YOUR PROXY FORM IN THE ENVELOPE PROVIDED.
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PROXY STATEMENT
BMC BANKCORP, INC.
_________________
PROSPECTUS
CBT CORPORATION
_________________
This Prospectus of CBT Corporation ("CBT"), relates to up to 1,195,560
shares of Common Stock of CBT ("CBT Common Stock") issuable to the shareholders
of BMC Bankcorp, Inc. ("BMC") upon consummation of the proposed merger (the
"Merger") herein described between BMC and CBT Acquisition Corporation, a
wholly-owned subsidiary of CBT ("Acquisition Corp"), pursuant to the terms and
subject to the conditions of the Agreement and Plan of Reorganization dated
January 10, 1994, between CBT, Acquisition Corp and BMC and the related Plan of
Merger (collectively, the "Merger Agreement"). The Merger Agreement is
attached as Appendix A to this Proxy Statement-Prospectus and is incorporated
herein by reference. This Prospectus also serves as the Proxy Statement of BMC
for its special meeting of shareholders (the "Special Meeting") to be held on
__________________, 1994. At the Special Meeting, the shareholders of BMC will
be asked to consider and vote on the Merger Agreement and the transactions
contemplated thereby. See "THE SPECIAL MEETING".
This Proxy Statement-Prospectus does not cover any resales of CBT
Common Stock received by affiliates of BMC.
This Proxy Statement-Prospectus is first being mailed to shareholders
of BMC on or about ____________________, 1994 along with the proxy form.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY STATE
SECURITIES COMMISSION NOR HAS SUCH COMMISSION, CORPORATION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT-PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SHARES OF CBT COMMON STOCK OFFERED HEREBY ARE NOT SAVING ACCOUNTS, DEPOSITS
OR OTHER OBLIGATIONS OF ANY BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND OR ANY OTHER
GOVERNMENTAL AGENCY.
____________________________________
The date of this Proxy Statement-Prospectus is ___________________,
1994.
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TABLE OF CONTENTS
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . 4
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
CBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
BMC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Special Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Recommendation of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . 7
Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Conditions to the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Waiver and Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Resales of CBT Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . 9
Stock Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Markets and Market Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Comparative Unaudited Per Share Information . . . . . . . . . . . . . . . . . . . . . . . 11
SELECTED CONSOLIDATED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
THE SPECIAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Date, Place and Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Voting and Revocation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Solicitation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Parties to the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Background of and Reasons for the Merger; Recommendation of the Board of Directors . . . . 25
Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Terms of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Surrender of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Conditions to the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Business Pending the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
No Solicitations of Transactions by BMC . . . . . . . . . . . . . . . . . . . . . . . . . 37
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Waiver and Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Management and Operations After the Merger . . . . . . . . . . . . . . . . . . . . . . . . 38
Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Interest of Certain Persons in the Merger . . . . . . . . . . . . . . . . . . . . . . . . 40
Stock Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . 44
Resales of CBT Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
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Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
DESCRIPTION OF CBT COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
COMPARATIVE STOCK PRICES AND DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
CERTAIN DIFFERENCES IN RIGHTS OF SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
APPENDIX A-1 - Agreement and Plan of Reorganization
APPENDIX A-2 - Plan of Merger
APPENDIX B - Opinion of The Robinson-Humphrey Company, Inc.
APPENDIX C - Subtitle 13 of the Kentucky Business Corporation Act
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROXY STATEMENT-PROSPECTUS AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROXY STATEMENT-PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, THE CBT COMMON STOCK
OFFERED BY THIS PROXY STATEMENT-PROSPECTUS, NOR DOES IT CONSTITUTE THE
SOLICITATION OF A PROXY, IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR
FROM WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROXY STATEMENT-PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF CBT OR BMC SINCE THE DATE HEREOF OR
THAT INFORMATION IN THIS PROXY STATEMENT-PROSPECTUS OR IN THE DOCUMENTS
INCORPORATED HEREIN BY REFERENCE IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE HEREOF OR THE DATES THEREOF.
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AVAILABLE INFORMATION
CBT has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement ("Registration Statement") on Form S-4
relating to the shares of CBT Common Stock to be issued in the Merger. This
Proxy Statement-Prospectus does not contain all of the information set forth in
the Registration Statement and exhibits thereto covering the securities offered
hereby which CBT has filed with the Commission, certain portions of which have
been omitted pursuant to the rules and regulations of the Commission, and to
which portions reference is hereby made for further information with respect to
CBT and the securities offered hereby. The information omitted may be obtained
from the public reference facilities of the Commission or inspected and copied
at the principal and regional offices of the Commission set forth below.
CBT and BMC are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, file reports, other information and, in the case of CBT,
proxy statements with the Commission. Such reports, proxy statements and other
information concerning CBT and BMC can be inspected and copied at the
Commission's public reference room located at 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549, and at the public reference facilities in the
Commission's regional offices located at: 7 World Trade Center, Thirteenth
Floor, New York, New York 10048; and Suite 1400, Northwestern Atrium Center,
500 West Madison Street, Chicago, Illinois 60661. Copies of such material can
be obtained at prescribed rates by writing to the Securities and Exchange
Commission, Public Reference Section, 450 Fifth Street, N.W., Washington, D. C.
20549.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
THIS PROXY STATEMENT-PROSPECTUS INCORPORATES BY REFERENCE DOCUMENTS NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. DOCUMENTS RELATING TO CBT, EXCLUDING
EXHIBITS UNLESS SPECIFICALLY INCORPORATED HEREIN, ARE AVAILABLE WITHOUT CHARGE
UPON REQUEST TO EDDIE L. HOLMAN, VICE PRESIDENT AND SECRETARY, CBT CORPORATION,
333 BROADWAY, PADUCAH, KENTUCKY 42001. TELEPHONE REQUESTS MAY BE DIRECTED TO
MR. HOLMAN AT (502) 575-5372. DOCUMENTS RELATING TO BMC, EXCLUDING EXHIBITS
UNLESS SPECIFICALLY INCORPORATED HEREIN, ARE AVAILABLE WITHOUT CHARGE UPON
REQUEST TO PAUL B. THURMAN, TREASURER, BMC BANKCORP, INC., 11TH AND POPLAR
STREETS, BENTON, KENTUCKY 42025. TELEPHONE REQUESTS MAY BE DIRECTED TO MR.
THURMAN AT (502) 527-1383. IN ORDER TO ENSURE TIMELY DELIVERY OF SUCH
REQUESTS, ANY SUCH REQUEST SHOULD BE MADE BY________________, 1994.
The following documents filed with the Commission are incorporated
herein by reference: (a) CBT's Annual Report on Form
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10-K for the year ended December 31, 1993; and (b) BMC's Annual Report on Form
10-K for the year ended December 31, 1993.
All documents filed by CBT pursuant to Sections 13(a), 13(c), 14, or
15(d) of the Exchange Act after the date of this Proxy Statement-Prospectus and
before the Special Meeting shall be deemed to be incorporated by reference in
this Proxy Statement-Prospectus and to be a part hereof from the respective
dates of filing of such documents.
Any statement contained herein or in a document incorporated or deemed
to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes hereof to the extent that a statement contained herein
or in any other subsequently filed document which also is, or is deemed to be,
incorporated herein by reference modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed to constitute a
part hereof, except as so modified or superseded.
This Proxy Statement-Prospectus is accompanied by BMC's Annual Report
on Form 10-K and Annual Report to Shareholders for the year ended December 31,
1993.
SUMMARY
The following summary is not intended to be complete and is qualified
in all respects by the more detailed information included in this Proxy
Statement-Prospectus, the Appendices hereto and the documents incorporated
herein by reference. As used in this Proxy Statement-Prospectus, the terms
"CBT" and "BMC" refer to such corporations, respectively, and where the context
requires, such corporations and their subsidiaries on a consolidated basis.
All information concerning CBT included in this Proxy Statement-Prospectus has
been furnished by CBT and all information concerning BMC included in this Proxy
Statement-Prospectus has been furnished by BMC. Neither CBT nor BMC warrants
the accuracy or completeness of information relating to the other party.
CBT
CBT is a bank holding company headquartered in Paducah, Kentucky
registered under the Bank Holding Company Act of 1956, as amended (the "BHC
Act"). The principal assets of CBT are the stock of its banking subsidiaries,
Citizens Bank and Trust Company of Paducah, Paducah, Kentucky ("Citizens
Bank"), and Pennyrile Citizens Bank & Trust, Hopkinsville, Kentucky ("Pennyrile
Bank"), and Citizens Bank's consumer finance company subsidiary, Fidelity
Credit Corporation. At December 31, 1993, CBT had consolidated total assets of
approximately $600 million, total deposits of approximately $468 million and
total shareholders' equity of approximately $67 million.
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CBT's principal executive offices are located at 333 Broadway,
Paducah, Kentucky 42002. Its telephone number is (502) 575-5100.
BMC
BMC is a bank holding company registered under the BHC Act and a
savings and loan holding company registered under the Home Owners' Loan Act.
The principal assets of BMC are the stock of its banking subsidiaries, Bank of
Marshall County, Benton, Kentucky, Graves County Bank, Mayfield, Kentucky, and
United Commonwealth Bank, Federal Savings Bank, Murray, Kentucky. At December
31, 1993, BMC had consolidated total assets of approximately $205 million,
total deposits of approximately $180 million and total shareholders' equity of
approximately $22 million.
BMC's principal executive offices are located at 11th and Poplar
Streets, Benton, Kentucky 42025. Its telephone number is (502) 527-1383.
THE MERGER
The Merger Agreement provides for the merger of Acquisition Corp, a
wholly-owned subsidiary of CBT, with and into BMC, with BMC being the surviving
corporation in the Merger. At the effective time of the Merger, each issued
and outstanding share of common stock of BMC ("BMC Common Stock") immediately
prior to the effective time of the Merger will be converted, automatically and
without any action on the part of the holder thereof, into 2 shares of CBT
Common Stock (the "Exchange Ratio"). As a result of the Merger, BMC will
become a wholly-owned subsidiary of CBT. Holders of fractional interests in CBT
Common Stock arising out of the conversion of BMC Common Stock into CBT Common
Stock shall 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 on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") Small-Cap Market, for CBT Common Stock on
the trading day which occurs immediately prior to the closing date of the
Merger. See "THE MERGER-Terms of the Merger".
After the Merger, BMC will represent approximately 26% of CBT's
consolidated assets and will contribute approximately 24% to CBT's consolidated
net income (based on the historical financial statements of CBT and BMC as of
December 31, 1993). The former shareholders of BMC will represent
approximately 30% of CBT's shareholders' equity and voting power (based on the
outstanding shares of CBT Common Stock and BMC Common Stock at December 31,
1993). See "THE MERGER-Terms of the Merger" and "PRO FORMA FINANCIAL
INFORMATION".
6
12
THE SPECIAL MEETING
The Special Meeting of BMC's shareholders to consider and vote on the
Merger Agreement will be held on _______________, _________________, 1994 at
______:00 p.m. local time at BMC's offices at 11th and Poplar Streets, Benton,
Kentucky. Only holders of record of BMC Common Stock at the close of business
on ___________________, 1994 will be entitled to vote at the Special Meeting.
At such date, there were outstanding and entitled to vote 597,780 shares of BMC
Common Stock. Each share of BMC Common Stock is entitled to one vote. For
additional information relating to the Special Meeting, see "THE SPECIAL
MEETING".
VOTE REQUIRED
Approval of the Merger Agreement by the shareholders of BMC requires
the affirmative vote of a majority of the votes entitled to be cast by the
holders of record of BMC Common Stock. As of the record date for the Special
Meeting, BMC directors and executive officers and their affiliates held
approximately 31% of the outstanding BMC Common Stock. All currently intend to
vote in favor of the Merger Agreement. See THE SPECIAL MEETING--Vote
Required".
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors of BMC (by a unanimous vote) has approved the
Merger Agreement. The Board of Directors of BMC believe the Merger is fair and
in the best interests of the shareholders of BMC and recommends a vote for the
Merger at the Special Meeting.
The Board of Directors of CBT has also unanimously approved the
Merger. The approval of the Merger by CBT shareholders is not required and
will not be sought. See "THE MERGER--Background of and Reasons for the Merger;
Recommendation of the Board of Directors".
OPINION OF FINANCIAL ADVISOR
BMC's financial advisor, The Robinson-Humphrey Company, Inc., has
rendered its opinion to BMC's Board of Directors that the Merger is fair from a
financial point of view to the shareholders of BMC. A copy of such opinion,
updated to the date hereof, is set forth as Appendix B and should be read in
its entirety with respect to the assumptions made, other matters considered and
limitations of the reviews undertaken. See "THE MERGER--Opinion of Financial
Advisor".
7
13
EFFECTIVE TIME OF THE MERGER
The Merger will become effective on the filing of Articles of Merger
with the Kentucky Secretary of State or at such later date and time as may be
specified therein. The Articles of Merger are expected to be filed on the
fifth day after the receipt of all necessary approvals of the Merger and the
expiration of all applicable waiting periods, or at such other time as CBT and
BMC may agree. Subject to the conditions specified in the Merger Agreement,
the parties currently expect that the Merger will become effective on or about
___________________, 1994 although there can be no assurance as to whether or
when the Merger will occur. See "THE MERGER-Effective Time of the Merger";
"-Conditions To the Merger".
CONDITIONS TO THE MERGER
The respective obligations of CBT and BMC to consummate the Merger are
subject to certain conditions, including (i) the approval by the shareholders
of BMC of the Merger Agreement by the vote required under applicable law at the
Special Meeting, (ii) the receipt of all required regulatory approvals, and
(iii) certain other conditions customary in transactions of this nature. See
"THE MERGER-Conditions To the Merger".
REGULATORY APPROVALS
The Merger is subject to the prior approval of the Federal Reserve
Board, the Office of Thrift Supervision (the "OTS") and the Commissioner of the
Department of Financial Institutions of the Commonwealth of Kentucky (the
"KDFI"). CBT has filed applications for regulatory review and approval or
other action with the Federal Reserve Board, the OTS and the KDFI. There can
be no assurance, however, that the Federal Reserve Board, the OTS or the KDFI
will approve or take other required action with respect to the Merger or as to
the date of such approvals or action. See "THE MERGER-Regulatory Approvals".
WAIVER AND AMENDMENT
Prior to the Effective Time of the Merger, any provision of the Merger
Agreement may be waived by the party entitled to the benefits of such
provision. In addition, the Merger Agreement may be amended at any time upon
the written agreement of CBT and BMC without the approval of shareholders. See
"THE MERGER-Waiver and Amendment".
TERMINATION
The Merger Agreement may be terminated and the Merger abandoned at any
time prior to the Effective Time of the Merger, whether before or after any
requisite shareholder approval, (i) by mutual agreement of the Boards of
Directors of CBT and BMC, (ii) by
8
14
either the Board of Directors of CBT or the Board of Directors of BMC at any
time after September 30, 1994, (iii) in the event of a material breach by the
other party of any representation, warranty, covenant or other agreement
contained in the Merger Agreement, which breach is not cured after 30 days
written notice to the breaching party, or (iv) by CBT in the event that
shareholders owning more than 9.5% of the BMC Common Stock dissent from the
Merger.
In addition, CBT may terminate the Merger Agreement if the "Average
Price Per Share", as defined in the Merger Agreement, of CBT Common Stock is
more than $46.875 and BMC may terminate the Merger Agreement if the Average
Price Per Share of CBT Common Stock is less than $31.875. See "THE
MERGER-Terms of the Merger", "Conditions to the Merger", "Regulatory
Approvals", "Waiver", "Termination" and "Dissenters' Rights".
RESALES OF CBT COMMON STOCK
CBT Common Stock received by affiliates of BMC, generally directors
and executive officers, may not be resold without registration under the
Securities Act except in compliance with Rules 144 and 145 or as otherwise
permitted under the Securities Act. See "THE MERGER-Resales of CBT Common
Stock".
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
To the extent a shareholder of BMC receives shares of BMC Common Stock
for CBT Common Stock in the Merger (i) no gain or loss will be recognized by a
BMC shareholder who receives solely shares of CBT Common Stock pursuant to the
Merger, (ii) the aggregate tax basis of the CBT Common Stock received by a BMC
shareholder will equal the aggregate tax basis of the BMC stock surrendered
therefor by such shareholder, and (iii) the holding period of the CBT Common
Stock received will generally include the holding period of the BMC Common
Stock surrendered. BMC shareholders receiving cash in the Merger in lieu of
fractional shares or upon the exercise of dissenters' rights generally will
recognize a taxable gain or loss for Federal income tax purposes equal to the
difference between the amount of cash received in the Merger and the
shareholder's tax basis in the shares of BMC Common Stock surrendered. For a
more complete description of the Federal income tax consequences of the Merger,
see "THE MERGER-- Certain Federal Income Tax Consequences". Due to the
individual nature of the tax consequences of the Merger, it is recommended that
each BMC shareholder consult his or her own tax advisor concerning the tax
consequences of the Merger.
STOCK OPTION AGREEMENT
Simultaneously with the execution of the Merger Agreement, CBT and BMC
entered into a stock option agreement (the "Stock Option Agreement") pursuant
to which BMC granted to CBT an option (the
9
15
"Option") to purchase 148,512 shares of BMC Common Stock, representing 19.9% of
the issued and outstanding shares of BMC Common Stock when issued, at a price
of $75.00 per share, subject to the terms and conditions set forth in the Stock
Option Agreement. The option price is equal to the average of the bid and
asked prices on the NASDAQ Small-Cap Market for CBT Common Stock on December
28, 1993, multiplied by the Exchange Ratio. The Option may only be exercised
upon the occurrence of certain trigger events, which generally relate to an
acquisition of control of, or a significant equity interest in or significant
assets of, BMC by a third party, or certain proposals or offers with respect
thereto. To the knowledge of CBT and BMC, none of such events has occurred as
of the date hereof. See "THE MERGER-Stock Option Agreement".
The Stock Option Agreement could have the effect of discouraging
persons who now or prior to the Effective Time of the Merger might be
interested in acquiring all of or a significant interest in BMC from
considering or proposing such an acquisition, even if such persons were
prepared to propose greater consideration per share for BMC Common Stock than
the consideration per share represented by the Exchange Ratio. In addition,
the Merger Agreement provides that BMC and its respective subsidiaries will
not, directly or indirectly, solicit or encourage, or take any other action to
facilitate, any inquiries or the making of any proposal that constitutes, or
may reasonably be expected to lead to, any takeover proposal. See "THE
MERGER-No Solicitation of Transactions by BMC".
DISSENTERS' RIGHTS
Any shareholder of BMC will have the right to dissent from the Merger
Agreement and to demand a determination of the fair value of the shareholder's
shares in the event the Merger Agreement is approved and the Merger
consummated. The right of any shareholder to receive the fair value of the
shareholder's shares is contingent upon strict compliance with the provisions
of Subtitle 13 of the Kentucky Business Corporation Act, a copy of which is
included as Appendix C to this Proxy Statement-Prospectus. See "THE
MERGER-Dissenters' Rights".
MARKETS AND MARKET PRICES
CBT Common Stock is traded in the over-the-counter market and quoted
on the NASDAQ Small-Cap Market under the symbol CBTC. Shares of BMC Common
Stock trade infrequently and therefore little meaningful information regarding
a market price of BMC Common Stock exists. See "Comparative Stock Prices and
Dividends". The following table sets forth the average of the bid and asked
prices per share of CBT Common Stock as quoted on the NASDAQ Small-Cap Market
on January 7, 1994, the first business day preceding public announcement of the
execution of the Merger Agreement, and on ___
10
16
______________, 1994 and the equivalent per share price of a share of BMC
Common Stock.
Market Price CBT Equivalent
Per Share At: Common Stock Per Share Price
------------- ------------ ---------------
January 7, 1994 $ 43.50 $ 87.00
_________, 1994 $ $
The equivalent per share price of shares of BMC Common Stock at each
specified date represents the average of the bid and asked prices of a share of
CBT Common Stock on such date multiplied by the Exchange Ratio. Shareholders
are advised to obtain current market quotations for CBT Common Stock on the
NASDAQ Small-Cap Market under the symbol CBTC. No assurance can be given as to
the market price of CBT Common Stock at or after the Effective Time of the
Merger.
COMPARATIVE UNAUDITED PER SHARE INFORMATION
The following summary presents selective comparative unaudited per
share information: (i) for CBT on an historical basis and on a pro forma
combined basis assuming the consummation of the Merger, and (ii) for BMC on an
historical basis and on an equivalent pro forma basis. The comparative per
share information has been prepared giving effect to the Merger as a
pooling-of-interests. For a description of the effects of
pooling-of-interests accounting on the Merger and the historical financial
statements of CBT, see "THE MERGER--Accounting Treatment." The comparative per
share information should be read in conjunction with the historical
consolidated financial statements of CBT and BMC and the related notes thereto,
included in documents incorporated herein by reference, and the pro forma
financial information contained elsewhere in this Proxy Statement-Prospectus.
See "INCORPORATION OF CERTAIN INFORMATION BY REFERENCE" and "PRO FORMA
FINANCIAL INFORMATION".
The following information is not necessarily indicative of the
combined results of operations or financial position that would have resulted
had the Merger been consummated at the beginning of the periods indicated, nor
is it necessarily indicative of the combined results of operations of future
periods or future combined financial position. All per share information for
CBT Common Stock has been adjusted for a 3-for-2 stock split effected in May
1992. All per share information for BMC Common Stock has been adjusted for a
5-for-1 stock split effected in May 1993.
11
17
For the years ended December 31,
-----------------------------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
NET INCOME PER COMMON SHARE:
CBT
Historical $ 2.86 $ 2.75 $ 2.25 $ 1.70 $ 2.16
Pro forma combined 2.64 2.60 2.06 1.55 1.89
BMC
Historical 4.24 4.49 3.25 2.46 2.57
Pro forma equivalent (1) 5.28 5.20 4.12 3.10 3.78
DIVIDENDS DECLARED PER
COMMON SHARE:
CBT - historical 0.78 0.72 0.69 0.67 0.60
CBT - pro forma
combined (2) 0.78 0.72 0.69 0.67 0.60
BMC - historical 0.68 0.60 0.45 0.40 0.40
BMC - pro forma
equivalent (1) 1.56 1.44 1.38 1.34 1.20
STOCKHOLDERS' EQUITY PER
COMMON SHARE AT END OF PERIOD:
CBT - historical 24.19 22.06 19.99 18.37 17.27
CBT - pro forma
combined 22.37 20.37 18.33 16.76 15.63
BMC - historical 36.42 32.89 29.00 26.22 24.17
BMC - pro forma
equivalent (1) 44.74 40.74 36.66 33.52 31.26
- --------------------------
(1) Represents BMC's equivalent pro forma book value, cash dividends and
net income per share based on the Exchange Ratio.
(2) Assumes no change in cash dividends declared per common share on a
pro forma basis.
12
18
SELECTED CONSOLIDATED FINANCIAL DATA
The following tables set forth certain historical financial
information for CBT and BMC and certain pro forma financial information giving
effect to the Merger as if it had been effective during the periods presented.
The selected historical financial information is based on, derived from, and
should be read in conjunction with, the historical consolidated financial
statements of CBT and BMC, and the related notes thereto, included in the
documents incorporated herein by reference. See "INCORPORATION OF CERTAIN
INFORMATION BY REFERENCE". All of the following selected financial information
should be read in conjunction with the pro forma financial information,
including the notes thereto, appearing elsewhere in this Proxy
Statement-Prospectus. See "PRO FORMA FINANCIAL INFORMATION." All per share
informtion for CBT Common Stock has been adjusted for a 3-for-2 stock split
effected in May 1992. All per share information for BMC Common Stock has been
adjusted for 5-for-1 stock split effected in May 1993. The unaudited pro forma
financial information is not necessarily indicative of the results that
actually would have occurred had the Merger been consummated on the dates
indicated or that may be obtained in the future.
13
19
CBT CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER COMMON SHARE DATA)
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
INCOME STATEMENT DATA:
Interest income $ 44,071 $ 46,822 $ 51,871 $ 52,774 $ 50,007
Interest expense 19,014 21,997 29,531 30,851 28,506
Net interest income 25,057 24,825 22,340 21,923 21,501
Provision for loan losses (1,256) (2,199) (2,580) (3,678) (3,837)
Non-interest income 5,909 5,225 4,944 4,350 4,521
Net income 7,912 7,614 6,218 4,696 5,973
PER COMMON SHARE DATA:
Net income $ 2.86 $ 2.75 $ 2.25 $ 1.70 $ 2.16
Stockholders' equity at year-end 24.19 22.06 19.99 18.37 17.27
Cash dividends declared 0.78 0.72 0.69 0.67 0.60
BALANCE SHEET DATA AT
PERIOD-END:
Total assets $600,497 $554,478 $526,445 $529,970 $481,904
Total loans, net 377,725 337,575 325,723 321,319 321,483
Total deposits and
corporate cash
management repur-
chase agreements 498,506 449,834 440,383 447,708 407,323
Long-term debt and other notes payable 23,775 22,346 16,532 15,411 14,883
Total stockholders' equity 66,939 61,049 55,340 50,859 47,833
Allowance for loan losses 8,483 7,658 6,532 5,129 6,421
SELECTED RATIOS:
Return on average assets 1.41% 1.41% 1.17% 0.93% 1.27%
Return on average stockholders' equity 12.34 12.85 11.65 9.43 13.02
Leverage ratio 11.15 11.01 10.51 9.60 9.93
Tier one risk-based capital ratio 16.22 16.02 14.62 12.80 --
Total risk-based capital ratio 17.47 17.27 16.40 14.21 --
14
20
BMC BANKCORP, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER COMMON SHARE DATA)
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
INCOME STATEMENT DATA:
Interest income $ 14,486 $ 14,878 $ 15,830 $ 15,661 $ 14,214
Interest expense 5,946 6,899 8,928 9,359 8,456
Net interest income 8,540 7,979 6,902 6,302 5,758
Provision for loan losses (110) (242) (267) (195) (261)
Non-interest income 1,108 940 589 272 792
Net income 2,536 2,690 1,948 1,498 1,584
PER COMMON SHARE DATA:
Net income $ 4.24 $ 4.49 $ 3.25 $ 2.46 $ 2.57
Stockholders' equity
at year-end 36.42 32.89 29.00 26.22 24.17
Cash dividends declared 0.68 0.60 0.45 0.40 0.40
BALANCE SHEET DATA AT PERIOD
END:
Total assets $204,979 $184,466 $171,344 $162,802 $152,619
Total loans, net 146,460 121,513 107,593 105,037 98,272
Total deposits and corporate
cash management repurchase
agreements 180,350 163,502 152,409 145,401 136,608
Long-term debt and other
notes payable 1,541 -- -- -- --
Total stockholders' equity 21,773 19,702 17,371 15,950 14,672
Allowance for loan losses 2,515 2,364 2,232 2,216 2,089
SELECTED RATIOS:
Return on average assets 1.31% 1.42% 1.16% 0.95% 1.09%
Return on average
stockholders' equity 12.19 13.78 12.06 9.86 11.42
Leverage ratio 10.62 10.68 10.14 9.80 9.61
Tier one risk-based capital ratio 12.17 12.75 12.21 11.65 --
Total risk-based capital ratio 13.42 14.00 13.15 12.61 --
15
21
CBT CORPORATION
SELECTED CONSOLIDATED PRO FORMA FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER COMMON SHARE DATA)
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
INCOME STATEMENT DATA:
Interest income $ 58,557 $ 61,700 $ 67,701 $ 68,435 $ 64,221
Interest expense 24,960 28,896 38,459 40,210 36,962
Net interest income 33,597 32,804 29,242 28,225 27,259
Provision for loan losses (1,366) (2,441) (2,847) (3,873) (4,098)
Non-interest income 7,018 6,165 5,533 4,622 5,313
Net income 10,448 10,304 8,166 6,194 7,557
PER COMMON SHARE DATA:
Net income $ 2.64 $ 2.60 $ 2.06 $ 1.55 $ 1.89
Stockholders' equity
at year-end 22.37 20.37 18.33 16.76 15.63
Cash dividends declared 0.78 0.72 0.69 0.67 0.60
BALANCE SHEET DATA AT
PERIOD END:
Total assets $805,476 $738,944 $697,789 $692,772 $634,523
Total loans, net 524,185 459,088 433,316 426,356 419,755
Total deposits and
corporate cash manage-
ment repurchase agree-
ments 678,856 613,336 592,792 593,109 543,931
Long-term debt and other
notes payable 25,316 22,346 16,532 15,411 14,883
Total stockholders' equity 88,712 80,751 72,711 66,809 62,505
Allowance for loan losses 10,998 10,022 8,764 7,345 8,510
SELECTED RATIOS:
Return on average assets 1.38% 1.44% 1.17% 0.94% 1.24%
Return on average
stockholders' equity 12.30 13.30 11.74 9.51 12.68
Leverage ratio 11.01 10.93 10.42 9.64 9.85
Tier one risk-based 14.97 15.38 14.36 13.44 --
capital ratio
Total risk-based 16.22 16.63 15.91 14.74 --
capital ratio
16
22
PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed balance sheet as of
December 31, 1993, gives effect, as of that date, to the Merger. The pro forma
condensed statements of income for the years ended December 31, 1993, 1992 and
1991 give effect to the Merger as if it had been consummated for all periods.
The Merger will be accounted for under the pooling-of-interests method
of accounting. Under the pooling-of-interests method of accounting, the
historical basis of the assets and liabilities of CBT and BMC will be combined
at the Effective Time of the Merger and carried forward at their previously
recorded amounts, and the shareholders' equity accounts of CBT and BMC will be
combined on CBT's consolidated balance sheet. No goodwill or other intangible
assets will be created. Financial statements of CBT issued after the Merger
will be restated retroactively to reflect the consolidated operations of CBT
and BMC as if the Merger had taken place prior to the periods covered by such
financial statements. See "THE MERGER-Accounting Treatment".
The pro forma statements are not necessarily indicative of the
financial position or the results of operations of the combined entities as
they may be in the future or as they might have been had the transaction been
consummated during all periods presented.
The pro forma financial information should be read in conjunction with
the separate historical financial statements of CBT and BMC and related notes
thereto included in documents incorporated by reference herein. See
"INCORPORATION OF CERTAIN INFORMATION BY REFERENCE".
17
23
CBT CORPORATION
PRO FORMA COMBINED CONSOLIDATED BALANCE SHEET
As of December 31, 1993
(Unaudited)
(In thousands)
PRO FORMA CBT
ASSETS CBT (1) BMC (1) ADJUSTMENTS (3) PRO FORMA
--------- ---------- ----------- --------------
Cash and cash equivalents $ 21,376 $ 5,155 $ 26,531
Investment securities 40,332 41,049 81,381
Securities available for sale 144,728 -- 144,728
------- --------- --------
Total investments 185,060 41,049 $226,109
Federal funds sold 2,571 8,345 10,916
Loans, net 377,725 146,460 524,185
Reserve for loan losses 8,483 2,515 10,998
-------- --------- --------
Net loans 369,242 143,945 513,187
Premises and equipment 11,963 3,240 15,203
Other assets 10,285 3,245 13,530
-------- --------- --------
Total assets $600,497 $ 204,979 $805,476
======== ========= ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 44,598 $ 16,907 $ 61,505
Interest bearing 423,696 163,443 587,139
-------- -------- ---------
Total deposits 468,294 180,350 648,644
Liabilities for borrowed money 60,221 1,541 61,762
Other liabilites 5,043 1,315 6,358
-------- -------- ---------
Total liabilities 533,558 183,206 716,764
Capital stock 4,100 1,360 $(1,360)(2) 4,100
Surplus 13,298 3,885 1,360 (2) 18,543
Retained earnings 49,541 17,900 (1,372)(2) 66,069
Treasury stock -- (1372) 1,372 (2) --
-------- -------- ---------
Total stockholders' equity 66,939 21,773 -0- 88,712
-------- -------- ---------
Total liabilities and
stockholders' equity $600,497 $ 204,979 $ -0- $805,476
======== ======== ============ ========
___________________________________
(1) Represents the historical balance sheet of the respective entities.
(2) Adjustments to eliminate the BMC capital stock with a corresponding
increase in surplus and to reflect the cancellation of BMC treasury
stock.
(3) Excludes costs of pooling of interests which are not considered
to be material.
18
24
CBT CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
For the year ended December 31, 1993
(Unaudited)
(In thousands except share and per share data)
CBT
CBT BMC PRO FORMA
--------- -------- ---------
Interest income:
Interest and fees on loans $ 33,072 $ 11,169 $ 44,241
Investment securities 10,874 3,095 13,969
Other interest income 125 222 347
---------- -------- ----------
Total interest income 44,071 14,486 58,557
Interest expense:
Deposits 17,147 5,927 23,074
Short-term borrowings 1,539 15 1,554
Long-term debt 328 4 332
---------- -------- ----------
Total interest expense 19,014 5,946 24,960
---------- -------- ----------
Net interest income 25,057 8,540 33,597
Provision for loan losses 1,256 110 1,366
---------- -------- ----------
Net interest income after provision
for loan losses 23,801 8,430 32,231
Non-interest income 5,909 1,109 7,018
Non-interest expenses 19,367 5,869 25,236
---------- -------- ----------
Income before income taxes 10,343 3,670 14,013
Income tax expense 2,431 1,134 3,565
---------- -------- ----------
Net income $ 7,912 $ 2,536 $ 10,448
========== ======== ==========
Net income per common share $ 2.86 $ 4.24 $ 2.64
Average common shares outstanding 2,767,519 598,587 3,964,693
19
25
CBT CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
For the year ended December 31, 1992
(Unaudited)
(In thousands except share and per share data)
CBT
CBT BMC PRO FORMA
---------- -------- ----------
Interest income:
Interest and fees on loans $ 34,340 $ 10,683 $ 45,023
Investment securities 12,110 3,981 16,091
Other interest income 372 214 586
---------- -------- ----------
Total interest income 46,822 14,878 61,700
Interest expense:
Deposits 19,955 6,899 26,584
Short-term borrowings 1,616 0 1,616
Long-term debt 426 0 426
---------- -------- ----------
Total interest expense 21,997 6,899 28,896
---------- -------- ----------
Net interest income 24,825 7,979 32,804
Provision for loan losses 2,199 242 2,441
---------- -------- ----------
Net interest income after
provision for loan losses 22,626 7,737 30,363
Non-interest income 5,225 940 6,165
Non-interest expenses 17,935 5,231 23,166
---------- -------- ----------
Income before income taxes 9,916 3,446 13,362
Income tax expense 2,302 756 3,058
---------- -------- ----------
Net income $ 7,614 $ 2,690 $ 10,304
========== ======== ==========
Net income per common share $ 2.75 $ 4.49 $ 2.60
Average common shares outstanding 2,767,519 598,990 3,965,499
20
26
CBT CORPORATION
PRO FORMA COMBINED STATEMENT OF INCOME
For the year ended December 31, 1991
(Unaudited)
(In thousands except share and per share data)
CBT
CBT BMC PRO FORMA
------- ------- ---------
Interest income:
Interest and fees on loans $ 37,306 $ 11,461 $ 48,767
Investment securities 13,241 3,922 17,163
Other interest income 1,324 447 1,771
---------- -------- ----------
Total interest income 51,871 15,830 67,701
Interest expense:
Deposits 27,706 8,928 36,634
Short-term borrowings 1,382 0 1,382
Long-term debt 443 0 443
---------- -------- ----------
Total interest expense 29,531 8,928 38,459
---------- -------- ----------
Net interest income 22,340 6,902 29,242
Provision for loan losses 2,580 267 2,847
---------- -------- ----------
Net interest income after
provision for loan losses 19,760 6,635 26,395
Non-interest income 4,944 589 5,533
Non-interest expenses 16,718 4,670 21,388
---------- -------- ----------
Income before income taxes 7,986 2,554 10,540
Income tax expense 1,768 606 2,374
---------- -------- ----------
Net income $ 6,218 $ 1,948 $ 8,166
========== ======== ==========
Net income per common share $ 2.25 $ 3.25 $ 2.06
Average common shares outstanding 2,767,519 599,210 3,965,939
21
27
THE SPECIAL MEETING
GENERAL
This Proxy Statement-Prospectus is being furnished to holders of BMC
Common Stock in connection with the solicitation of proxy forms by the Board of
Directors of BMC for use at the Special Meeting to consider and vote upon the
approval of the Merger Agreement and the transactions contemplated thereby and
to transact such other business as may properly come before the Special Meeting
or any adjournments or postponements thereof. Each copy of this Proxy
Statement-Prospectus mailed to holders of BMC Common Stock is accompanied by a
proxy form for use at the Special Meeting.
This Proxy Statement-Prospectus is also furnished by CBT to BMC
shareholders as a prospectus in connection with the issuance by CBT of shares
of CBT Common Stock upon consummation of the Merger.
DATE, PLACE AND TIME
The Special Meeting will be held at the main office of the Bank of
Marshall County, 11th and Poplar Streets, Benton, Kentucky, on ______, _______,
1994, at _:00 p.m. local time.
RECORD DATE
The Board of Directors of BMC has fixed the close of business on
___________, 1994, as the record date for the determination of shareholders of
BMC entitled to receive notice of and to vote at the Special Meeting.
VOTE REQUIRED
As of the record date for the Special Meeting, there were 597,780
shares of BMC Common Stock outstanding. Each share of BMC Common Stock
outstanding on such record date is entitled to one vote on each matter properly
submitted at the Special Meeting. Approval of the Merger Agreement by the
shareholders of BMC requires the affirmative vote of a majority of the votes
entitled to be cast by the holders of record of BMC Common Stock.
As of the record date for the Special Meeting, directors and executive
officers of BMC and their affiliates owned beneficially an aggregate of 185,945
shares of BMC Common stock, or approximately 31% of the shares of BMC Common
Stock outstanding on such date.
THE BOARD OF DIRECTORS OF BMC UNANIMOUSLY RECOMMENDS THAT THE BMC
SHAREHOLDERS VOTE FOR APPROVAL OF THE MERGER.
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VOTING AND REVOCATION OF PROXIES
Shares of BMC Common Stock represented by a proxy form properly signed
and received at or prior to the Special Meeting, unless subsequently revoked,
will be voted in accordance with the instructions thereon. If a proxy form is
signed and returned without indicating any voting instructions, shares of BMC
Common Stock represented by the proxy form will be voted for the proposal to
approve the Merger Agreement. Any proxy form given pursuant to this
solicitation may be revoked by the person giving it at any time before the
shares represented by the proxy form are voted by the filing of an instrument
revoking it or of a duly executed proxy bearing a later date with the Secretary
of BMC prior to or at the Special Meeting, or by voting in person at the
Special Meeting. All written notices of revocation and other communications
with respect to revocation of proxy forms should be addressed as follows: BMC
Bankcorp, Inc., 11th and Poplar Streets, Benton, Kentucky 42025, Attention:
Paul Thurman, Secretary. Attendance at the Special Meeting will not in and of
itself constitute revocation of a proxy form.
The Board of Directors of BMC is not aware of any business to be acted
upon at the Special Meeting of its shareholders other than as described herein.
If, however, other matters are properly brought before the Special Meeting, or
any adjournments or postponements thereof, the persons appointed as proxies
will have discretion to vote or act thereon according to their best judgment.
SOLICITATION OF PROXIES
In addition to solicitation by mail, directors, officers and employees
of BMC, who will not be specifically compensated for such services, may solicit
proxy forms from the shareholders of BMC, personally or by telephone or
telegram or other forms of communication. Brokerage houses, nominees,
fiduciaries and other custodians will be requested to forward soliciting
materials to beneficial owners and will be reimbursed for their reasonable
expenses incurred in doing so. BMC will bear its own expenses in connection
with the solicitation of proxy forms for the Special Meeting, except that CBT
and BMC each will pay one-half of the costs incurred in printing and mailing
this Proxy Statement-Prospectus, the proxy form and other solicitation
materials. See "THE MERGER- Expenses".
THE MERGER
This section of the Proxy Statement-Prospectus describes certain
aspects of the proposed Merger. To the extent that it relates to the Merger
Agreement, the following description does not purport to be complete and is
qualified in its entirety by reference to the Merger Agreement, which is
attached as Appendix A
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to this Proxy Statement-Prospectus and is incorporated herein by reference.
All shareholders are urged to read the Merger Agreement, as well as the other
appendices, in their entirety.
PARTIES TO THE MERGER
CBT Corporation
CBT is a bank holding company under the BHC Act, headquartered in
Paducah, Kentucky. CBT, with consolidated total assets of approximately $600
million at December 31, 1993, conducts its operations through its two bank
subsidiaries, Citizens Bank and Pennyrile Citizens, and through a subsidiary of
Citizens Bank, Fidelity Credit Corporation, a consumer finance company. CBT
provides its banking related services through eight offices of Citizens Bank
located in McCracken County, Kentucky and three offices of Pennyrile Citizens
located in Christian County, Kentucky, and its consumer loan services in eight
cities throughout western Kentucky. In addition to traditional deposit and
lending products and services, CBT provides a full range of retail banking
services including consumer, installment and residential lending, savings and
checking deposit products, estate planning and related trust services and
corporate trust services.
CBT's principal executive offices are located at 333 Broadway,
Paducah, Kentucky 42002 (telephone (502) 575-5100).
BMC Bankcorp, Inc.
BMC is a bank holding company under the BHC Act, headquartered in
Benton, Kentucky. Through its wholly-owned banking subsidiaries, Bank of
Marshall County, Benton, Kentucky, Graves County Bank, Inc., Mayfield,
Kentucky, and United Commonwealth Bank, Federal Savings Bank, Murray, Kentucky,
BMC provides a full range of financial services. At December 31, 1993, BMC had
consolidated total assets of approximately $205 million.
BMC's principal executive offices are located at 11th and Poplar
Streets, Benton, Kentucky 42025 (telephone (502) 527-1383).
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BACKGROUND OF AND REASONS FOR THE MERGER;
RECOMMENDATION OF THE BOARD OF DIRECTORS
Since 1984, directors and executive officers of BMC have received,
from time to time, informal expressions of interest from certain bank holding
companies, including CBT, regarding a possible combination with BMC. In early
October 1993, CBT President William J. Jones called BMC Board Chairman Joe Tom
Haltom to schedule a meeting later in the month. Mr. Jones met with Mr. Haltom
and Kerry Harvey, a BMC director and BMC's general counsel, on October 17,
1993, at which time Mr. Jones expressed CBT's continuing interest in a possible
affiliation with BMC. Mr. Haltom indicated that he would take any proposal from
CBT to the BMC Board for its consideration.
In early November, Mr. Haltom received letters from both CBT and
another Kentucky bank holding company ("Company Two") expressing interest in an
affiliation with BMC. At BMC's regular monthly board meeting on November 12,
1993, Chairman Haltom, with the BMC Board's consent, appointed a special
committee (the "Committee") consisting of Directors Haltom, Morgan, Price and
Harvey to review both expressions of interest and report back to the Board.
During the following weeks, the Committee met separately with Mr. Jones and
the President of Company Two, each of whom presented preliminary affiliation
proposals. The Committee used the meetings as an opportunity to explore with
the two presidents the operating philosphies of their respective organizations,
the process of integrating BMC and its three subsidiary banks into a larger
holding company structure, and the potential impact of an affiliation on BMC's
employees and the communities BMC serves.
At a special board meeting on December 3, 1993, the Committee reported
on its progress to date. Having previously recommended that BMC engage a
financial advisor to assist the Board in its evaluation of any affiliation
proposals, Mr. Harvey reported on his discussions with several investment
banking firms. After discussion, the Board authorized Mr. Harvey to negotiate
and enter into an engagement agreement with The Robinson-Humphrey Company, Inc.
("Robinson-Humphrey") of Atlanta, Georgia to serve as BMC's financial advisor.
The Board also agreed to exchange financial and certain other information with
CBT and Company Two, and authorized Messrs. Haltom and Harvey to negotiate and
enter into a confidentiality agreement with the two parties on BMC's behalf.
After the December 3, 1993 board meeting, both Robinson-Humphrey and
the Committee held additional meetings with representatives of CBT and Company
Two.
BMC's Board held a special meeting on December 28, 1993 to consider
the revised affiliation proposals submitted by CBT and Company Two. The Board
noted several advantages offered by the CBT proposal, including, among others
(i) a combination with CBT could
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more likely be accomplished without the divestiture of any BMC subsidiary bank
or the closing of any bank branches; (ii) the opportunity for BMC's directors,
officers, employees, and shareholders to play a significant role in the future
of the CBT organization; (iii) the likelihood that certain capital projects
planned by BMC would not be affected by an affiliation with CBT; and (iv) the
compatibility of the operating philosophies of CBT and BMC. The financial terms
of CBT's proposal provided, among other things, that BMC shareholders would
receive two shares of CBT Common Stock for each share of BMC Common Stock
currently held. Representatives of Robinson-Humphrey present at the meeting
indicated that both proposals could be considered fair to BMC shareholders from
a financial point of view. However, based on the purely financial terms of the
two proposals and the then current trading prices of the stocks of CBT and
Company Two, Robinson-Humphrey viewed the proposal from Company Two as
providing a greater current financial return to BMC shareholders. The closing
trading price of CBT Common Stock on December 27, 1993 was $36.50. In its
overall evaluation of the nonfinancial as well as the financial terms of the
two proposals, the Board determined that an affiliation with CBT on
substantially the terms set forth in CBT's proposal was the course of action in
the best interests of CBT, its shareholders and employees, and the communities
BMC serves, and voted to enter into a letter of intent with CBT.
During the twelve days following the execution of the letter of intent
on December 28, 1993, BMC engaged special legal counsel, and the parties and
their respective legal and financial advisors met several times to negotiate
the terms of a definitive merger agreement. The definitive agreement was
presented to BMC's Board of Directors at a meeting on January 10, 1994.
Representatives of Robinson-Humphrey were present and made a presentation
analyzing the financial terms of the proposed merger with CBT. The average of
the bid and asked prices of the CBT Common Stock immediately prior to the
meeting on January 10, 1994, as quoted on the NASDAQ Small-Cap Market, was
$44.95. In delivering orally the opinion of Robinson-Humphrey that, from a
financial point of view, the terms of the Merger were fair to the shareholders
of BMC, the Robinson-Humphrey representatives also indicated that, based on
prices for their respective stocks on January 10, 1994, the financial terms of
the proposals of CBT and and Company Two were substantially equivalent. After
discussion of the financial and nonfinancial terms of the proposed Merger, the
BMC Board voted unanimously to approve the Merger Agreement. The Merger
Agreement was executed by duly authorized representatives of CBT and BMC on the
same day.
In reaching its conclusion to approve the Merger, the BMC Board
considered a number of factors, including among others:
(i) The financial terms of the Merger. In this regard, the BMC
Board considered: (a) a comparison of BMC to Midwest banking
institutions with fewer than $2 billion in assets and
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a return on average assets greater than 1.00%; (b) a description of
the proposed CBT transaction, including market and trading information
regarding the form of consideration, CBT Common Stock; (c) a pro forma
analysis of the Merger; and (d) a comparison of the financial terms of
comparable bank mergers, in particular acquisitions of Southeast banks
with fewer than $300 million in assets announced in 1993, indicating
that the financial terms of the Merger compared favorably with other
recent transactions.
(ii) The effect on shareholder value of BMC's continuing as an
independent entity compared to the effect of the Merger with CBT. In
this regard, the BMC Board considered that CBT Common Stock is listed
for trading on NASDAQ. No organized trading market currently exists
for BMC Common Stock and the BMC Board considered it unlikely that BMC
would have opportunities for sufficient growth in the forseeable
future to maintain an organized trading market. In addition, the BMC
Board considered that the dividend yield to BMC shareholders would
increase significantly as a result of the Merger.
(iii) Financial information and other information about CBT.
In this regard, the BMC Board evaluated historical financial and
operational information concerning CBT. The BMC Board believed the
banking and business philosophies of CBT and BMC to be compatible and
the banking markets served by CBT and BMC to be complementary. The BMC
Board also considered that directors, officers, employees and
shareholders of BMC will have the opportunity to take a significant
future role in the CBT organization as a result of the Merger. BMC
shareholders will own approximately 30% of the outstanding CBT Common
Stock after the Merger, and four members of the BMC Board will join
the CBT Board.
(iv) The impact generally of the Merger on the employees,
customers, communities and other constituencies served by BMC. In this
regard, the BMC Board of Directors considered that the Merger was not
likely to require divestiture of any BMC subsidiary banks or the
elimination of any subsidiary bank branches. The Merger also would not
affect two significant capital projects planned by BMC -- construction
of a new main office in Murray, Kentucky for United Commonwealth Bank,
F.S.B. and of a new operations building in Benton, Kentucky. The
affiliation with CBT would enable BMC to offer its customers a greater
variety of banking products than it could as an independent entity. In
addition, the Merger would likely provide BMC's employees career
opportunities within a larger organization not currently available to
them.
(v) Industry conditions generally. The BMC Board considered
the probability of nationwide interstate banking, the continued
disintegration of traditional geographic and
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industry lines, and the likelihood of further consolidation in the
banking industry.
(vi) The terms other than the financial terms and structure of
the Merger. The BMC Board considered in particular the fact that the
Merger would be tax-free to BMC shareholders.
(vii) The opinion of Robinson-Humphrey as to the fairness from
a financial point of view of the exchange ratio to the holders of BMC
common stock. See "Opinion of Financial Advisor".
Based on these factors, and such other matters as members of the BMC
Board deemed relevant, the BMC Board unanimously approved the Merger Agreement
as being in the best interest of BMC and its shareholders and recommended that
BMC shareholders approve the Merger.
The Board of Directors of CBT has also unanimously approved the
Merger. CBT believes that the affiliation of BMC with CBT will provide CBT with
greater geographic diversity and the opportunity to realize increased economies
of scale while serving new customers with the expertise and knowledge of BMC's
current management and employees. The approval of the Merger by CBT
shareholders is not required and will not be sought.
OPINION OF FINANCIAL ADVISOR
General
BMC retained Robinson-Humphrey to act as its financial advisor in
connection with the Merger. Robinson-Humphrey has rendered an opinion to BMC's
Board of Directors dated January 10, 1994, updated as of the date of this Proxy
Statement-Prospectus, that based on the matters set forth therein, the
consideration to be received pursuant to the Merger is fair, from a financial
point of view, to the BMC shareholders. The text of such opinion is set forth
in Appendix B to this Proxy Statement-Prospectus and should be read in its
entirety by stockholders of BMC.
The consideration to be received by BMC shareholders in the Merger was
determined by BMC and CBT in their negotiations. No limitations were imposed
by the Board of Directors or management of BMC upon Robinson-Humphrey with
respect to the investigations made or the procedures followed by
Robinson-Humphrey in rendering its opinion.
In connection with rendering its opinion to BMC's Board of Directors,
Robinson-Humphrey performed a variety of financial analyses. However, the
preparation of a fairness opinion involves various determinations as to the
most appropriate and relevant methods of financial analysis and the application
of those methods to the particular circumstances, and, therefore, such an
opinion is not readily susceptible to summary description. Robinson-Humphrey,
in conducting its analysis and in arriving at its opinion, has not
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conducted a physical inspection of any of the properties or assets of BMC, and
has not made or obtained any independent valuation or appraisals of any
properties, assets or liabilities of BMC. Robinson-Humphrey has assumed and
relied upon the accuracy and completeness of the financial and other
information that was provided to it by BMC or that was publicly available. Its
opinion is necessarily based on economic, market and other conditions as in
effect on, and the information made available to it as of, the date of its
analyses.
Valuation Methodologies
In connection with its opinion on the Merger and the presentation of
that opinion to BMC's Board of Directors, Robinson-Humphrey performed three
valuation analyses with respect to BMC: (i) a comparison with comparable
publicly traded companies; (ii) an analysis of comparable prices and terms of
recent transactions involving banks; and (iii) a discounted cash flow analysis.
For purposes of the comparable company and comparable transaction analyses, CBT
stock was valued at $41.50 per share. Each of these methodologies is discussed
briefly below.
Comparable Company Analysis. In performing its comparable
company analysis, Robinson-Humphrey analyzed the market trading of BMC
Common Stock relative to publicly traded banks that had total assets
comparable to BMC. The institutions included in the comparison to BMC
consisted of Ambanc Corp. (IN), AMCORE Financial, Inc. (IL), ANB
Corporation (IN), BancFirst Ohio corp. (OH), Brenton Banks, Inc. (IA),
CBT Corporation (KY), Chemical Financial Corporation (MI), Citizens
Bancshares (OH), Firstbank of Illinois Co. (IL), First Commerce
Bancshares (NE), First Financial Bancorp (OH), Farmers Capital Bank
Corp. (KY), F&M Bancorporation, Inc. (WI), First Oak Brooks Bancshares
(IL), First Merchants Corp. (IN), Heritage Financial Services (IL),
Hawkeye Bancorporation (IA), Independent Bank Corporation (MI), Iowa
National Bankshares Corp. (IA), Irwin Financial corporation (IN), Lake
Share Bancorp, Inc. (IL), Mid-America Bancorp (KY), Mid Am, Inc. (OH),
First National Bank corp. (MI), Mississippi Valley Bancshares (MO),
National City Bancshares (IN), National City Bancorporation (MN),
Northwest Illinois Bancorp (IL), Park National Corp. (OH), Peoples
Bancorp, Inc. (OH), Peoples First Corporation (KY), Pinnacle Banc
Group, Inc. (IL), Pikeville National Corporation (KY), Princeton
National Bancorp (IL), State Financial Services (WI), Shoreline
Financial Corp. (MI), 1st Source Corporation (IN), Suburban Bancorp,
Inc. (IL), and S.Y. Bancorp, Inc. (KY).
Among the market trading information compared was market price
to book value, of which the mean multiple for the comparables was
166.3%, compared to the multiple of approximately 232.0% of book value
represented by the consideration to be received by BMC Shareholders in
the Merger. Also examined was market price to the latest 12 months
earnings per
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share, for which the average multiple for the comparable banks was
12.6 compared to a multiple of approximately 17.4 represented by the
consideration to be received by BMC shareholders in the Merger.
Comparable Transaction Analysis. Robinson-Humphrey performed
an analysis of premiums paid for selected banks with comparable
characteristics to BMC. Comparable transactions were considered to be
13 transactions during 1993 in which the seller was located in
Kentucky.
Based on the foregoing transactions, the analysis yielded a
range of transaction values to book value of 106.63% to 293.65%, with
a mean of 173.4% and a median of 173.7%. These compare to a
transaction value for the merger of approximately 232.0% of BMC book
value as of September 30, 1993.
In addition, the analysis yielded a range of transaction
values as a percentage of tangible book value for the comparable
transaction ranging from 106.63% to 293.65%, with a mean of 180.47%
and a median of 189.17%. These compare to a transaction value to
tangible book value at September 30, 1993 of approximately 232.0% for
the Merger.
Lastly, the analysis yielded a range of transaction values as
a multiple of trailing twelve-month earnings per share. These values
ranged from 9.78 times to 18.95 times, with a mean of 13.82 times and
a median of 13.72 times. These compare to a transaction value to the
September 30, 1993 trailing twelve-months earnings per share of 17.40
times for the Merger.
No company or transaction used in the comparable company or
comparable transaction analyses is identical to BMC. Accordingly, an
analysis of the foregoing necessarily involves complex considerations
and judgments, as well as other factors that affect the public trading
value or the acquisition value of the company to which it is being
compared.
Discounted Cash Flow Analysis. Using discounted cash flow
analysis, Robinson-Humphrey estimated the present value of the future
stream of after-tax cash flows that BMC could produce through 1998,
under various circumstances assuming that BMC performed in accordance
with the earnings return projections of management at the time that
BMC entered into acquisition discussions in November 1993.
Robinson-Humphrey estimated the terminal value for BMC at the end of
the period by applying multiples of earnings ranging from 10.0 to 12.0
and then discounting the cash flow streams, dividends paid to
shareholders and terminal value using differing discount rates
(ranging from 9.0% to 11.0%) chosen to reflect different assumptions
regarding the required rates of return of BMC and
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the inherent risk surrounding the underlying projections. This
discounted cash flow analysis indicated a reference range of $37.2
million to $43.6 million, or $62.18 to $72.87 per share, for BMC.
Compensation Of Robinson-Humphrey
Pursuant to an engagement letter between BMC and Robinson-Humphrey,
BMC has paid Robinson-Humphrey a fairness opinion fee of $65,000. In addition,
BMC agreed to pay Robinson-Humphrey (at closing) an incremental success fee
equal to 1.5% of any consideration above $44.9 million, less the $65,000
fairness opinion fee. Based upon the approximately $49.6 million aggregate
purchase price for BMC, Robinson-Humphrey will be entitled to an incremental
success fee of approximately $5,500 for its financial advisory services with
respect to the Merger. Robinson-Humphrey is entitled to receive this success
fee only upon the consummation of the Merger. BMC has also agreed to indemnify
and hold harmless Robinson-Humphrey and its officers and employees against
certain liabilities in connection with its services under the engagement
letter, except for liabilities resulting from the negligence of
Robinson-Humphrey.
As part of its investment banking business, Robinson-Humphrey is
regularly engaged in the valuation of securities in connection with mergers and
acquisitions, negotiated underwritings, secondary distributions of listed and
unlisted securities, private placements, and valuations for estate, corporate
and other purposes. BMC's Board of Directors decided to retain Robinson-
Humphrey based on its experience as a financial advisor in mergers and
acquisitions of financial institutions, particularly transactions in the
Southern region of the United States, and its knowledge of financial
institutions and BMC in particular.
TERMS OF THE MERGER
At the Effective Time of the Merger, Acquisition Corp will be merged
into BMC and each share of BMC Common Stock issued and outstanding immediately
prior to the Effective Time shall, automatically, by virtue of the Merger, be
converted into 2 shares of CBT Common Stock. No fractional shares of BMC Common
Stock will be issued in the Merger. Instead, the Merger Agreement provides
that each holder of BMC Common Stock who would otherwise be entitled to receive
a fraction of a share of CBT Common Stock shall receive, in lieu thereof, cash
(without interest) in a dollar amount equal to such fractional interest
multiplied by the average of the bid and asked price per share, as quoted on
the NASDAQ Small-Cap Market for CBT Common Stock on the trading day which
occurs immediately prior to the closing. All shares of BMC Common Stock that
are owned by BMC as treasury stock immediately prior to the Effective Time
shall be canceled and no cash, stock or other property will be delivered in
exchange. CBT has agreed to cause
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the shares of CBT Common Stock to be issued to the BMC shareholders pursuant to
the Merger to be listed for trading on NASDAQ.
The Merger Agreement provides that, in the event the number of
outstanding shares of CBT Common Stock is increased, decreased, or changed
into or exchanged for a different number or kind of shares or securities as a
result of a stock split, stock dividend, recapitalization or other similar
transaction, 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 to be delivered in the Merger.
Based on the outstanding shares of common stock of CBT and BMC as of
December 31, 1993 (2,767,519 and 597,780 shares, respectively), the
shareholders of BMC immediately prior to the consummation of the Merger will
own CBT Common Stock representing approximately 30% of the shares of CBT Common
Stock outstanding following consummation of the Merger. See "PRO FORMA
FINANCIAL INFORMATION".
EFFECTIVE TIME OF THE MERGER
The Merger will become effective on the date Articles of Merger are
filed with the Kentucky Secretary of State or at such later date and time as
may be specified in the Articles of Merger. Such filing will be made, subject
to the terms and conditions of the Merger Agreement, on the fifth business day
following the effective date of the last order, approval or exemption of any
federal or state regulatory agency approving the Merger and the expiration of
all applicable waiting periods or such other time as BMC and CBT may agree.
The parties currently expect that the Effective Time will be on or about
________, 1994, although there can be no assurance as to whether or when the
Merger will occur. See "THE MERGER-Conditions to the Merger" and "Regulatory
Approvals".
SURRENDER OF CERTIFICATES
No later than seven (7) days after the Effective Time, CBT will mail
or deliver to each former holder of record of shares of BMC Common Stock a form
of letter of transmittal, together with instructions for the exchange of BMC
stock certificates for the consideration to which they are entitled in the
Merger.
BMC SHAREHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL THEY
RECEIVE THE LETTER OF TRANSMITTAL FORM AND INSTRUCTIONS.
Upon surrender to CBT of one or more certificates for BMC Common
Stock, together with a properly completed letter of transmittal, there will be
issued and mailed or delivered to the holder thereof a certificate or
certificates representing the number of shares of CBT Common Stock, to which
such holder is entitled, together with all declared but unpaid dividends in
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respect to such shares and, where applicable, a check for the amount
representing any fractional shares (without interest). A certificate for CBT
Common Stock may be issued in a name other than the name in which the
surrendered certificate is registered only if the certificate surrendered is
properly endorsed, accompanied by a guaranteed signature if required by the
letter of transmittal and otherwise in proper form for transfer and the person
requesting the issuance of such certificate either pays to CBT any transfer or
other taxes required by reason of the issuance of the certificate for such
shares in a name other than the registered holder of the certificate
surrendered or establishes to the satisfaction of CBT that such tax has been
paid or is not applicable. Certificates surrendered for exchange by any person
constituting an affiliate of BMC for purposes of Rule 145(c) under the
Securities Act of 1933, as amended, (the "Securities Act"), will not be
exchanged for certificates representing shares of CBT Common Stock until CBT
has received a written agreement for such person as described under "Resales of
CBT Common Stock".
All CBT Common Stock issued pursuant to the Merger will be deemed
issued as of the Effective Time of the Merger. After the Effective Time of the
Merger, former holders of record of BMC Common Stock who receive shares of CBT
Common Stock in the Merger will be entitled to vote the number of shares of CBT
Common Stock into which their BMC shares have been converted, regardless of
whether they have surrendered their BMC certificates. Dividends declared by
CBT after the Effective Time of the Merger will include dividends on all shares
of CBT Common Stock issued in the Merger, but no dividends or other
distributions declared shall be paid to the holder of any unsurrendered
certificate with respect to which shares of CBT Common Stock have been issued
in the Merger until such certificate has been surrendered, promptly after which
time all such dividends or distributions will be paid (without interest).
After the Effective Time of the Merger, there will be no transfers on the
transfer books of BMC of the shares of BMC Common Stock that were outstanding
immediately prior to the Effective Time of the Merger. If, after the Effective
Time of the Merger, certificates representing such shares are presented for
transfer to CBT, they will be canceled and exchanged for certificates
representing shares of CBT Common Stock or cash in accordance with the Merger
Agreement.
CONDITIONS TO THE MERGER
The Merger will occur only if the Merger Agreement is approved by the
requisite vote of the shareholders of BMC. Consummation of the Merger is
subject to the satisfaction of certain other conditions, unless waived, to the
extent waiver is permitted by law. Such conditions include:
(i) the receipt of all necessary regulatory approvals, on terms and
conditions that are satisfactory to CBT;
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(ii) the effectiveness of the Registration Statement and the absence
of a stop order suspending such effectiveness;
(iii) the absence of any action or proceeding before any court or
agency of competent jurisdiction challenging the Merger or seeking to
prohibit consummation of the Merger which, in the reasonable judgment
of the Board of Directors of CBT or BMC, has a reasonable probability
of success;
(iv) except as a result of (a) changes in banking laws or regulations
of general applicability or interpretations thereof, (b) changes in
generally accepted accounting principles or regulatory accounting
principles, (c) changes that could, under the circumstances,
reasonably have been anticipated in light of information previously
disclosed by CBT to BMC, and (d) 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 or BMC since December 31, 1992;
(v) the receipt by CBT of a written release from each of the executive
officers and directors of BMC and its subsidiaries;
(vi) the receipt by BMC of an opinion of CBT's counsel 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 Internal
Revenue Code of 1986, as amended, and that the Merger will not give
rise to the recognition of gain or loss for federal income tax
purposes;
(vii) the receipt by BMC of an opinion from its financial advisor
that, as of the date this Proxy Statement-Prospectus is delivered to
the shareholders of BMC, the Merger is fair to the shareholders of BMC
from a financial viewpoint and, unless the closing of the Merger
occurs within thirty days after the Special Meeting, such opinion has
not been withdrawn;
(viii) the receipt by CBT of a letter from its accountants, Deloitte &
Touche, to the effect that the Merger qualifies for "pooling of
interests" accounting treatment; and
(ix) the continued accuracy in all material respects of
representations and warranties by CBT and BMC contained in the Merger
Agreement.
See "Regulatory Approvals," "Waiver and Amendment," and "Termination".
In addition, unless waived, each parties' obligation to effect the
Merger is subject to performance by the other party of its obligations under
the Merger Agreement, the receipt of certain
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certificates from the other party, and the receipt of certain legal opinions
from the other parties' counsel. No assurances can be provided as to when or
if all of the conditions precedent to the Merger can or will be satisfied or
waived by the party permitted to do so.
Each of CBT and BMC conducted a pre-acquisition investigation and
review of the books, records and facilities of the other. The Merger Agreement
provides that either party could terminate the Merger Agreement within seven
days of the conclusion of the investigation if such investigation disclosed
matters which it believed to be either (i) inconsistent in any material respect
with the other's representation and warranties contained in the Merger
Agreement, or (ii) in the reasonable judgment of its Board of Directors, (x) of
such significance as to materially and adversely affect the financial condition
or the results of the other on a consolidated basis, or (y) to deviate
materially and adversely from the other's audited consolidated financial
statements for the year ended December 31, 1992. Neither CBT nor BMC gave
notice of termination of the Merger Agreement as a result of their pre-
acquisition investigation. Pursuant to the Merger Agreement, therefore, each
of CBT and BMC are deemed to have waived its rights to refuse to consummate the
Merger on account of a breach of the other party's representations and
warranties of which it was aware as a result of its pre-acquisition
investigation.
REGULATORY APPROVALS
The Merger is subject to approval by the Federal Reserve Board under
Sections 3 and 4 of the BHC Act. Applications for such approval were filed by
CBT with the Federal Reserve Board on February 18, 1994. Such applications
were accepted for filing on March 24, 1994 and the Federal Reserve has
indicated that it will act on the applications on or before April 23, 1994.
Under the BHC Act, the Federal Reserve Board is required, in approving a
transaction such as the Merger, to take into consideration, among other things,
the financial and managerial resources and future prospects for the existing
institutions, the convenience and needs of the communities to be served and the
record of performance of the institutions in meeting the credit needs of the
entire community, including low and moderate income neighborhoods served by the
institutions.
The Merger is also subject to the approval of the Commissioner of the
KDFI. Under Kentucky's banking laws, the Commissioner must approve the Merger
if he finds that (i) the terms of the Merger are in accordance with Kentucky
law, (ii) the financial condition, or the competence, experience and integrity
of CBT or its principals are such as will not jeopardize the financial
stability of BMC, (iii) the public convenience and advantage will be served by
the acquisition, and (iv) no federal regulatory authority whose
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approval is required has disapproved the Merger because it would result in a
monopoly or substantially lessen competition.
The Merger is also subject to the approval of the OTS. CBT submitted
an application for approval of the Merger with the OTS on March 9, 1994. Under
the Home Owners' Loan Act, the OTS must withhold approval of the Merger if it
finds that the transaction would result in a monopoly or be in furtherance of
any combination or conspiracy to monopolize or attempt to monopolize the
business of banking in any geographical area. The OTS will also take into
consideration the financial and managerial resources and future prospects of
the institutions following the transaction, as well as the compliance records
of such institutions under the Community Reinvestment Act.
Under the BHC Act, the Merger may not be consummated until the 30th
day following the date of Federal Reserve Board approval, during which time the
United States Department of Justice may challenge the Merger on antitrust
grounds. CBT and BMC believe that the Merger raises no significant antitrust
concerns.
CBT and BMC have filed all applications, and have taken or will take
other appropriate action with respect to any requisite approvals or other
action of any governmental authority. The Merger Agreement provides that the
obligation of each of CBT and BMC to consummate the Merger is conditioned upon
the receipt of all requisite regulatory approvals, and, with respect to CBT, on
terms and subject to conditions satisfactory to CBT. There can be no assurance
that any governmental agency will approve or take any other required action
with respect to the Merger, and, if approvals are received or action is taken,
there can be no assurance as to the date of the such approvals or action, that
such approvals or action will not be conditioned upon matters that would cause
the parties to abandon the Merger or that no action will be brought challenging
such a privilege or action, including a challenge by the Department of Justice
or, if such a challenge is made, the result thereof.
CBT and BMC are not aware of any governmental approvals or actions
that may be required for consummation of the Merger except as described above.
Should any such approval or action be required, it is presently contemplated
that such approval or action will be sought.
BUSINESS PENDING THE MERGER
The Merger Agreement provides that, during the period from the date of
the Merger Agreement to the Effective Time of the Merger, except as provided in
the Merger Agreement, each of CBT and BMC will, and will cause each of their
subsidiaries to, among other things, conduct its business in the usual, regular
and ordinary course.
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NO SOLICITATIONS OF TRANSACTIONS BY BMC
Prior to the Effective Time of the Merger, BMC has agreed that it will
not 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 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. "Takeover proposal"
means any tender or exchange offer, proposal for a merger, consolidation or
other business combination involving BMC or any subsidiary of BMC 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 subsidiary, other than the
Merger.
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 occurs, 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. BMC may 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 occurs 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 will 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 Merger 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.
WAIVER AND AMENDMENT
Prior to or at the Effective Time of the Merger, any provision of the
Merger Agreement, including, without limitation, the conditions to consummation
of the Merger and the restrictions described under "Business Pending the
Merger," may be (i) waived in writing by the party which is entitled to the
benefits thereof, or (ii) amended at any time by written agreement of the
parties, whether before or after the Special Meeting.
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TERMINATION
The Merger Agreement provides that, whether before or after the
Special Meeting and notwithstanding the approval by the shareholders of BMC,
the Merger Agreement may be terminated and the Merger abandoned at any time
prior to the Effective Time of the Merger (i) by mutual consent of the Boards
of Directors of CBT and BMC, or (ii) by either the Board of Directors of CBT or
the Board of Directors of BMC [a] at any time after September 30, 1994, or [b]
in the event of a material breach by the other party of any representation,
warranty, covenant or other agreement contained in the Merger Agreement, which
breach is not cured after 30 days written notice thereof is given to the party
committing such breach, or (iii) by CBT, if BMC shareholders owning greater
than 9.5% of the issued and outstanding shares of BMC Common Stock dissent from
the Merger.
In addition, CBT may terminate the Merger Agreement if the Average
Price Per Share is greater than $46.875 and BMC may terminate the Merger
Agreement if the Average Price Per Share is less than $31.875. "Average Price
Per Share" means the average of the bid and asked price per share, as quoted by
NASDAQ, for CBT Common Stock for the 20 trading days which occur immediately
prior to the third business day prior to the Closing Date. If prior to the
date on which the Average Price Per Share is determined CBT effects a stock
dividend or makes distributions upon or subdivides, splits up, reclassifies or
combines its shares of Common Stock, an appropriate adjustment or adjustments
will be made in the Average Price Per Share.
In the event of the termination and abandonment of the Merger
Agreement pursuant to the termination provisions thereof, the Merger Agreement
will become void and have no effect, except that (i) certain provisions of the
Merger Agreement relating to expenses and confidentiality of information
obtained pursuant to the Merger Agreement or in connection with negotiation
thereof, will survive any such termination and abandonment, and (ii) no party
will be relieved or released from any liability arising out of a breach of any
provision of the Merger Agreement giving rise to such termination.
MANAGEMENT AND OPERATIONS AFTER THE MERGER
After the consummation of the Merger, BMC will become a wholly-owned
subsidiary of CBT. It is anticipated that the operations of BMC and its
subsidiaries will continue after the Effective Time of the Merger substantially
unchanged. During the discussions and negotiations leading up to the Merger
Agreement, CBT and BMC 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. CBT's
intentions with respect to the joint
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conduct of CBT's and BMC's businesses, as set out below and in the Merger
Agreement, are subject to fiduciary duties, regulatory considerations, safe and
sound banking practices, and sound business principles.
CBT intends no substantial reduction in or replacement of, the
officers or employees of BMC's subsidiaries; it is intended that any reduction
in employees be accomplished over a reasonable period of time through natural
attrition as opposed to termination. Nor does CBT intend to change the name of
any of BMC's subsidiaries or to sell, merge or divest any of such subsidiaries
or a material amount of the assets of any of such subsidiaries.
CBT acknowledges that the plans of United Commonwealth Bank, Federal
Savings Bank for construction of a new main office in Murray, Kentucky shall
proceed as currently planned. CBT and BMC intend that the operations center,
which will most likely be constructed on property adjacent to Bank of Marshall
County's main office in Benton, Kentucky, will be utilized for the operations
of BMC's subsidiaries and have the capacity to be considered for future
utilization for the operations of additional CBT affiliates.
Following the Merger, it is anticipated that the Board of Directors of
BMC will consist of those persons currently serving as directors of BMC.
Subject to CBT's expression of intent as contained in the Merger Agreement, as
the owner of all of the outstanding capital stock of BMC, CBT will be entitled
to remove or not reelect such officers and directors of BMC and its
subsidiaries, and to make any other changes in its business or operation in the
future as CBT may deem necessary or appropriate. BMC intends, 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 BMC's
subsidiaries, except after consultation in good faith with the then serving
members of the Board of Directors of the applicable subsidiary, or to impose
any age limitation on directors of such subsidiaries.
EMPLOYEE BENEFITS
CBT has agreed in the Merger Agreement, following the Effective Time
of the Merger, to provide to officers and employees of BMC and its subsidiaries
such employee benefits as CBT generally provides to employees and officers of a
CBT subsidiary, on a non- discriminatory and substantially similar basis. For
purposes of eligibility to participate in such plans and the nonforfeitability
of benefits accrued thereunder, employees of BMC and their subsidiaries will be
credited with all prior years of service and, with respect to health insurance
provided to employees of BMC or its subsidiaries, such employees shall be
provided coverage under
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CBT's group health insurance plan without limitation for lapse of coverage or
preexisting conditions.
At such time as the employees and officers of BMC and its subsidiaries
become participants in CBT's 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 chief executive officer
and other appropriate senior executive officers of BMC and its subsidiaries
will be eligible to participate in CBT's 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.
INTEREST OF CERTAIN PERSONS IN THE MERGER
Directors of CBT. At the Effective Time, CBT has agreed to cause Joe
Tom Haltom, Billy B. Morgan and Kerry B. Harvey (all of whom are directors of
BMC) to become members of the Board of Directors of CBT. If any of Messrs.
Haltom, Morgan and Harvey refuses or is unable to serve, after consultation
with BMC's Board of Directors CBT will 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 will 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
will 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, will 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.
Indemnification of Board of Directors. Conditioned upon the
effectiveness of the Merger, CBT has agreed to 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 subsidiary of BMC 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 the Merger Agreement or any of the
transactions contemplated therein. CBT will 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
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Person to the fullest extent permitted by applicable law, and will use its
reasonable best efforts to assist in the vigorous defense of any such matter;
provided, CBT will not be liable for any settlement effected without its prior
written consent (which consent will not be unreasonably withheld); and
provided, further, that CBT's obligations will 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.
From and after the Effective Time, CBT has agreed to cause all
directors and officers of BMC and its subsidiaries 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. In addition, CBT has agreed that CBT, BMC or any BMC
subsidiary will indemnify any person who on the Effective Time was a director
or officer of BMC or any 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, 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
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 will 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
prior to 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) with respect to any matter asserted or made within the
applicable period, until final disposition of the matter. CBT, BMC or the BMC
subsidiary will 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. After the Effective Time, the
directors and officers of BMC or a BMC subsidiary will have the same
indemnification rights as are provided to the other directors or officers of
CBT's banking subsidiaries. CBT has also agreed not to assert any
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claim, action or suit against any directors or officers of BMC or its
subsidiaries for acts or failures to act of such director or officer occurring
before the Effective Time in such directors or officer's capacity as a director
or officer of BMC or a BMC subsidiary, except for acts involving fraud,
intentional or willful misconduct or bad faith. CBT will 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 its subsidiaries, if such coverage is reasonably available.
STOCK OPTION AGREEMENT
Simultaneously with the execution of the Merger Agreement, CBT and BMC
entered into the Stock Option Agreement. The following summary of the Stock
Option Agreement does not purport to be complete and is qualified in its
entirety by reference to the Stock Option Agreement, which is included as an
exhibit to the Registration Statement of which this Proxy Statement-Prospectus
forms a part.
Pursuant to the Stock Option Agreement, BMC granted to CBT an
irrevocable and exclusive option to purchase an aggregate of 148,512 shares of
BMC's authorized but unissued common stock at an exercise price of $75.00 per
share. The option price is equal to the average of the bid and asked prices
reported on the NASDAQ Small-Cap Market for CBT Common Stock on December 28,
1993, multiplied by the Exchange Ratio. The number of shares exercisable under
the Stock Option Agreement is subject to adjustment as provided therein. Upon
exercise of the Option, CBT would own 19.9% of the then outstanding shares of
BMC Common Stock.
The Option will expire if not exercised prior to the earlier of (an
"Option Termination Event") [i] the time the Merger becomes effective, [ii] CBT
or BMC receive written notice from the Federal Reserve that the exercise of the
Option is not consistent with the BHCA, [iii] termination of the Merger
Agreement by CBT if such termination occurs prior to the occurrence of an
Initial Triggering Event (as defined below), [iv] the first business day after
the 365th calendar day following termination of the Merger Agreement by CBT if
such termination follows the occurrence of an Initial Triggering Event (but not
later than 18 months after such Initial Triggering Event), [v] termination of
the Merger Agreement by BMC (provided such termination is not the result of the
shareholders of BMC failing to approve the Merger), or [vi] termination of the
Merger Agreement by the mutual consent of CBT and BMC.
CBT may exercise the Option, in whole or in part, subject to
regulatory approval, at any time after the occurrence of both an "Initial
Triggering Event" and a "Purchase Event", if both such events have occurred
prior to the occurrence of an Option Termina-
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tion Event. An "Initial Triggering Event" will have occurred at such time as
one of the following events occurs and CBT determines in good faith 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 (other than CBT or any CBT subsidiary or affiliate)
shall have commenced a bona fide offer to purchase shares of BMC
Common Stock such that, upon consummation of the offer, such person
would own or control 10% or more of the outstanding shares of BMC
Common Stock, or shall have entered into an agreement with BMC, or
shall have filed an application or notice with the Federal Reserve
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, or any subsidiary of BMC 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
Stock;
(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 would entitle CBT to terminate the Merger Agreement
and such breach has not been cured pursuant to the terms of the Merger
Agreement.
A "Purchase Event" will 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 Stock, or
(ii) BMC enters into an agreement with another person (other than CBT or any
CBT subsidiary) pursuant to
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which such person is entitled to acquire 50% or more of the then outstanding
shares of BMC Common Stock.
The Stock Option Agreement could have the effect of discouraging
persons who now or prior to the Effective Time of the Merger might be
interested in acquiring all of or a significant interest in BMC from
considering or proposing such an acquisition, even if such persons were
prepared to propose greater consideration per share for BMC Common Stock than
the consideration per share represented by the Exchange Ratio. To the best of
CBT's and BMC's knowledge, no event giving rise to the exercise of the Option
has occurred as of the date of this Proxy Statement-Prospectus.
ACCOUNTING TREATMENT
Consummation of the Merger is conditioned upon the receipt by CBT of
an opinion from Deloitte & Touche, CBT's independent public accountants, to the
effect that the Merger qualifies for pooling-of-interests accounting treatment
if consummated in accordance with the Merger Agreement. CBT and BMC have
agreed to use their best efforts to cause the Merger to qualify for pooling-
of-interests treatment by CBT.
Under the pooling-of-interests method of accounting, the historical
basis of the assets and liabilities of CBT and BMC will be combined at the
Effective Time of the Merger and carried forward at their previously recorded
amounts, and the shareholders' equity accounts of CBT and BMC will be combined
on CBT's consolidated balance sheet and no goodwill or other intangible assets
will be created. Financial statements of CBT issued after the Merger will be
restated retroactively to reflect the consolidated operations of CBT and BMC as
if the Merger had taken place prior to the periods covered by such financial
statements.
The unaudited pro forma financial information contained in this Proxy
Statement-Prospectus has been prepared using the pooling-of-interests
accounting method to account for the Merger. See "COMPARATIVE UNAUDITED PER
SHARE INFORMATION", "SELECTED CONSOLIDATED FINANCIAL DATA", AND "PRO FORMA
FINANCIAL INFORMATION".
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary description of the material federal income
tax consequences of the Merger, This summary is not a complete description of
all the consequences of the Merger. Each shareholder's individual
circumstances may affect the tax consequences of the Merger to such
shareholder. In addition, no information is provided herein with respect to
the tax consequences of the Merger under applicable foreign, state or local
laws. Consequently, each BMC shareholder is advised to consult his or her own
tax advisor as to the specific tax consequences of the Merger.
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Consummation of the Merger is conditioned upon BMC's receipt of an
opinion of CBT's counsel, in form and substance reasonably satisfactory to BMC
and its counsel 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 Internal Revenue Code (the "Code") and that, except with respect to the
payment of cash for fractional shares or in connection with the exercise of
dissenters' 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. If the Merger constitutes a
reorganization within the meaning of Section 368 of the Code, it will have the
federal income tax consequences described below, among others.
1. No gain or loss will be recognized by shareholders of BMC who
receive solely shares of CBT Common Stock as a result of the Merger.
2. The basis of the shares of BMC Common Stock received by
shareholders of BMC (including any fractional share interests to which they may
be entitled) will be the same as their basis in the shares of BMC Common Stock
surrendered by them in exchange for CBT Common Stock.
3. The holding period of the shares of CBT Common Stock received by
the shareholders of BMC will include the holding period during which they held
their shares of BMC Common Stock surrendered by them in exchange for CBT Common
Stock, provided the shares of BMC Common Stock were held as capital assets at
the Effective Time of the Merger.
4. A dissenting shareholder of BMC who receives cash in exchange for
his or her shares of BMC Common Stock will be treated as having received such
cash in a distribution in redemption of his or her BMC Common Stock if the
requirements of Section 302(b) of the Code are met, taking into account the
attribution rules of Code Section 318 pursuant to Code Section 302(c). Under
Code Section 1001, gain or loss (subject to the limitations of Code Section
267) will be realized and recognized by any such dissenting shareholder in an
amount equal to the difference between the amount of cash received and the
adjusted basis of the shares of BMC Common Stock surrendered, as determined
under Code Section 1011.
5. A shareholder of BMC who receives cash in lieu of fractional share
interests of CBT Common Stock will be treated for federal income tax purposes
as if the fractional shares were distributed as part of the Merger and then
were redeemed by CBT. These cash payments will be treated as having been
received as distributions in full payment in exchange for the stock redeemed as
provided in Code Section 302(a). As provided in Code Section 1001, gain or
loss will be realized and recognized by such shareholder in
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an amount equal to the difference between the redemption price and the adjusted
basis of CBT Common Stock surrendered therefor.
6. No gain or loss will be recognized by BMC or CBT by reason of the
Merger.
THE FOREGOING IS INTENDED TO BE ONLY A GENERAL OVERVIEW OF CERTAIN
FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER AND SHOULD NOT BE CONSIDERED TO
BE TAX ADVICE. IT DOES NOT ADDRESS THE STATE OR LOCAL TAX ASPECTS OF THE
MERGER, NOR DOES IT ADDRESS FEDERAL TAX ISSUES THAT MAY BE AFFECTED BY THE
SHAREHOLDER'S PARTICULAR TAX CIRCUMSTANCES (e.g. ALTERNATIVE MINIMUM TAX,
FOREIGN TAX, etc.). THE DISCUSSION IS BASED ON CURRENTLY EXISTING PROVISIONS
OF THE INTERNAL REVENUE CODE, EXISTING AND PROPOSED TREASURY REGULATIONS
THEREUNDER AND CURRENT ADMINISTRATIVE RULINGS AND COURT DECISIONS. BMC
SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE FEDERAL,
STATE AND LOCAL TAX CONSEQUENCES WITH RESPECT TO THE FOREGOING MATTERS AND ANY
OTHER CONSIDERATIONS THAT MAY BE APPLICABLE TO THEM.
RESALES OF CBT COMMON STOCK
The shares of CBT Common Stock issuable to shareholders of BMC upon
consummation of the Merger have been registered under the Securities Act. Such
shares may be traded freely and without restriction by those shareholders not
deemed to be affiliates of BMC as that term is defined in the rules under the
Securities Act. Affiliates are generally defined as persons who control, are
controlled by or are under common control with BMC at the time of the Special
Meeting. Accordingly, the directors and executive officers of BMC may be
deemed to be affiliates of BMC. CBT Common Stock received by those
shareholders of BMC who are deemed to be affiliates of BMC may be resold
without registration as provided for by Rules 144 and 145, or as otherwise
permitted under the Securities Act. This Proxy Statement-Prospectus does not
cover any resales of CBT Common Stock received by affiliates of BMC, or by
certain of their family members or related interests.
BMC has agreed to use its best efforts to cause each holder of BMC
Common Stock who may be deemed to be an affiliate to enter into an agreement
providing that such person will not sell, pledge, transfer or otherwise dispose
of the shares of CBT Common Stock to be received by such person in the Merger
except in compliance with the applicable provisions of the Securities Act and
the rules and regulations thereunder. In addition, BMC has agreed to use its
best efforts to cause each such person to enter into an agreement providing
that such person will not sell, pledge, transfer or otherwise dispose of shares
of BMC Common Stock until such time as financial results covering at least 30
days of combined operations of CBT and BMC have been published.
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EXPENSES
The Merger Agreement provides that CBT and BMC will each pay its own
expenses in connection with the Merger and the transactions contemplated
thereby, including fees and expenses of its financial or other consultants,
investment bankers, accountants and counsel, except that, BMC and CBT will
divide equally all printing and mailing costs in connection with this Proxy
Statement-Prospectus.
DISSENTERS' RIGHTS
Under Kentucky law, a shareholder entitled to vote on the Merger may
dissent and obtain payment of the fair value of his or her shares if the Merger
is approved by the shareholders of BMC. Generally, dissenters' rights are a
shareholder's sole remedy for objecting to the Merger Agreement. The following
summary is not intended to and does not constitute a complete statement or
summary of each provision of the Kentucky Revised Statutes relating to the
rights of dissenting shareholders and is qualified in its entirety by reference
to Subtitle 13 of the Kentucky Business Corporation Act which is attached as
Appendix C hereto. Accordingly, any holder of BMC Common Stock intending to
exercise dissenters' rights is urged to review Appendix C carefully and to
consult his or her own legal counsel. Each step must be taken in strict
compliance with the applicable provisions of the statutes in order for a holder
of BMC Common Stock to perfect dissenters' rights.
A shareholder wishing to exercise dissenters' rights must deliver to
BMC, prior to the vote on the Merger at the Special Meeting, a written notice
of intent to demand payment for his or her shares if the Merger is consummated
and must refrain from voting in favor of the Merger. The written notice of
intent must be given in addition to and separate from any vote, in person or by
proxy, against approval of the Merger Agreement; a vote, in person or by proxy,
against approval of the Merger Agreement will not constitute such a written
notice. The written notice of intent should be sent to any BMC Bankcorp, Inc.,
11th and Poplar Streets, Benton, Kentucky 42025. It is recommended that all
required documents to be delivered by mail be sent registered or certified mail
with return receipt requested.
BMC SHAREHOLDERS ELECTING TO EXERCISE THEIR DISSENTERS' RIGHTS UNDER
SUBTITLE 13 OF THE KENTUCKY BUSINESS CORPORATION ACT MUST NOT VOTE FOR APPROVAL
OF THE MERGER AGREEMENT. A VOTE BY A SHAREHOLDER AGAINST APPROVAL OF THE
MERGER AGREEMENT IS NOT REQUIRED IN ORDER FOR THAT SHAREHOLDER TO EXERCISE
DISSENTERS' RIGHTS. HOWEVER, IF A SHAREHOLDER RETURNS A SIGNED PROXY FORM BUT
DOES NOT SPECIFY A VOTE AGAINST APPROVAL OF THE MERGER AGREEMENT OR A DIRECTION
TO ABSTAIN, THE PROXY FORM, IF NOT REVOKED, WILL BE VOTED FOR APPROVAL OF THE
MERGER AGREEMENT, WHICH WILL HAVE THE EFFECT OF WAIVING THAT SHAREHOLDER'S
DISSENTERS' RIGHTS.
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If the Merger is approved, within ten days after the Special Meeting
(or any adjournment thereof), BMC will send to all shareholders exercising
their dissenters' rights a dissenters' notice which will state where the
shareholder must send a demand for payment and where and when his or her share
certificates must be deposited; encloses a form for demanding payment to be
completed by the dissenter and returned to BMC; establishes the date (not less
than 30 no more than 60 days after the delivery of the Dissenters' Notice) by
which BMC must receive the demand for payment from the shareholder; and
encloses a copy of Subtitle 13 of the Kentucky Business Corporation Act. After
a shareholder receives the dissenters' notice, he or she must deliver the
demand for payment to BMC and deposit his or her shares in accordance with the
dissenters' notice.
Upon its receipt of the demand for payment, BMC will send to each
dissenting shareholder a statement containing an estimate by BMC of the fair
value of the dissenter's shares as of the day before the date of the Special
Meeting, excluding any appreciation or depreciation in anticipation of the
Merger (unless exclusion would be inequitable), and payment based on that
estimate plus accrued interest. The payment will be accompanied by an
explanation of how interest was calculated along with the balance sheet of BMC
as of the end of the most recent fiscal year, an income statement, a statement
of changes in shareholders' equity and the latest available interim financial
statement. In addition, the dissenter will be informed of his or her right to
demand payment according to the dissenter's own estimate of the fair value.
BMC is not required to send payment with the statement of its estimate
of fair value to a dissenter who was not a beneficial owner of the shares at
the time of the first public announcement of the Merger Agreement, but rather
may offer to purchase the shares based on the estimate. Any such owner must
either accept that amount in full satisfaction or proceed with the exercise of
his or her dissenters' rights.
Within 30 days after BMC has delivered its estimate of fair value, a
dissenting shareholder may notify BMC of his or her own estimate of the fair
value of the shares and demand payment of the balance due under such estimate.
If an agreement is not reached as to the fair value of the shares,
then within 60 days after receiving the dissenter's payment demand, BMC must
file a petition in the circuit court of Marshall County requesting the court to
determine the fair value of the shares and the accrued interest. If BMC fails
to institute such a proceeding, it will be required to pay each dissenter whose
demand remains unsettled the amount demanded.
Each dissenting BMC shareholder who is a party to the proceeding is
entitled to the amount, if any, by which the court
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finds the fair value of his or her shares, plus interest, exceeds the amount
paid by BMC. In an appraisal proceeding, the Marshall County Circuit Court will
determine all costs of the proceeding, including the reasonable compensation
and expenses of appraisers appointed by the court. The court will assess costs
against BMC, except that the court may assess costs against all or some of the
dissenters, in amounts the court finds equitable, to the extent the court finds
the dissenters acted arbitrarily, vexatiously or not in good faith in demanding
payment. The court may also assess the fees and expenses of counsel and
experts for the respective parties, in amounts the court finds equitable as
follows: (i) against BMC and in favor of any or all dissenters' if the court
finds BMC did not substantially comply with the statutory requirements set
forth in Sections 271B.13-200 through 271B.13-280 of the Kentucky Revised
Statutes; or (ii) against either BMC or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and expenses are
assessed acted arbitrarily, vexatiously or not in good faith with respect to
the rights provided by Subtitle 13 of the Kentucky Business Corporation Act.
If the court finds that the services of counsel for any dissenter were of
substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against BMC, the court may award to
these counsel reasonable fees to be paid out of the amounts awarded the
dissenters who benefited.
If BMC does not consummate the Merger within 60 days after the
deadline for demanding payment and depositing certificates, it must return all
deposited shares. If BMC fails to do so, the dissenter may nevertheless
proceed with the exercise of his or her dissenters' rights, and BMC will have
no further right to terminate the dissenters' rights by returning deposited
shares.
A record shareholder may dissent as to less than all of the shares
registered in his or her name only if he or she dissents with respect to all of
the shares beneficially owned by any one person and notifies BMC in writing of
the name and address of each person on whose behalf the shareholder is
asserting dissenters' rights. In that event, such dissenters' rights shall be
determined as if the shares as to which the shareholder has dissented and the
shareholder's other shares were registered in the names of different
shareholders.
A beneficial shareholder may assert dissenters' rights as to shares
held on his or her behalf only if he or she submits to BMC the record
shareholder's written consent to the dissent no later than the time such
beneficial shareholder asserts his or her dissenters' rights, and he or she
dissents as to all shares of which he or she is the beneficial owner or over
which he or she has the power to direct the vote.
SHAREHOLDERS OF BMC SHOULD BE AWARE THAT FAILURE TO PROCEED IN
ACCORDANCE WITH THE PROVISIONS OF SUBCHAPTER 13 OF THE KENTUCKY
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BUSINESS CORPORATION ACT WILL RESULT IN A LOSS OF ALL DISSENTERS' RIGHTS AND
RESULT IN THEIR BEING BOUND BY THE MERGER AGREEMENT AND THE MERGER.
DESCRIPTION OF CBT COMMON STOCK
Shares of CBT Common Stock issued in the Merger will be fully paid and
nonassessable. Each share of CBT Common Stock is entitled to one vote on all
matters on which holders of common stock are entitled to vote, except in the
election of directors. In the election of directors, cumulative voting rules
apply and each shareholder is entitled to cast a number of votes equal to the
number of such shareholder's shares multiplied by the number of directors to be
elected and to distribute such votes among one or more of the nominees to be
elected. Holders of CBT Common Stock are entitled to receive such dividends as
may be declared by the Board of Directors. Holders of CBT Common Stock are
entitled to receive distributions upon liquidation of CBT. Holders of CBT
Common Stock are not entitled to preemptive or other subscription rights. See
"CERTAIN DIFFERENCES IN RIGHTS OF SHAREHOLDERS".
COMPARATIVE STOCK PRICES AND DIVIDENDS
CBT Common Stock is traded in the over-the-counter market and quoted
on the NASDAQ Small-Cap Market under the symbol CBTC. The following table sets
out the high and low bid prices in the CBT Common Stock and cash dividends
declared during the years 1992 and 1993 and the first quarter of 1994.
Historically, CBT Common Stock has not been actively traded, and there has been
little trading volume in the market for CBT Common Stock. The sales price
information reflects the range of sales prices for CBT Common Stock as reported
by NASDAQ.
Price Per Quarterly
Common Share Dividends
------------ Per Common
High Low Share
---- --- ----------
1992
1st Quarter 22.67 20.00 $.17
2nd Quarter 30.25 22.67 .17
3rd Quarter 30.50 26.50 .18
4th Quarter 29.00 26.50 .18
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1993
1st Quarter $31.50 $27.00 $.18
2nd Quarter 34.50 31.50 .20
3rd Quarter 35.50 32.50 .20
4th Quarter 37.00 35.50 .20
1994
1st Quarter $ . $.20
-----
At December 31, 1993, CBT Common Stock was held of record by
approximately 1,000 shareholders.
CBT's policy is to declare regular quarterly dividends based upon its
earnings, financial position, capital requirements and such other factors
deemed relevant by the Board of Directors. This dividend policy is subject to
change, however, and the payment of dividends by CBT is necessarily dependent
upon the availability of earnings and CBT's financial condition in the future.
The payment of dividends on CBT Common Stock is also subject to applicable
regulatory capital requirements.
BMC Common Stock has never been traded on any securities exchange and
an established continuing public market has never been developed. Private
trading has been limited to the Western Kentucky market area, primarily
Marshall County. BMC provided an offer to purchase up to 31,453 outstanding
shares of BMC Common Stock at $47.69 per share in cash from a period June 28,
1993 to August 31, 1993. The offer was made to all holders of record as of
June 25, 1993 and was not extended. As a result of the offer, private trading
of BMC Common Stock increased as 12,190 shares changed hands at the $47.69
price. In addition, BMC acquired 1,210 shares during the offer period. The
price per share of the BMC Common Stock did not drop after the expiration of
the offer to purchase.
The following table sets out, to the best knowledge of BMC management,
the high and low sale prices in the BMC Common Stock during the years 1992 and
1993 and the first quarter of 1994. BMC Common Stock is traded infrequently and
market information regarding BMC Common Stock has been derived from prices
reported to BMC. Because the price of some private trades are not reported to
BMC, the ranges presented may not be accurate.
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Price Per
Common Share
------------
High Low
---- ---
1992
1st Quarter $29.00 $28.00
2nd Quarter 30.00 30.00
3rd Quarter 31.20 30.00
4th Quarter 32.52 32.40
1993
1st Quarter 33.60 32.40
2nd Quarter 34.00 33.60
3rd Quarter 47.69 34.00
4th Quarter 52.00 47.69
1994
1st Quarter
At December 31, 1993, BMC Common Stock was held of record by 374
shareholders. BMC declared and paid semi-annual dividends of $.30 per share in
1992 and $.34 per share in 1993.
CERTAIN DIFFERENCES IN RIGHTS OF SHAREHOLDERS
Both CBT and BMC are Kentucky corporations subject to the provisions
of the Kentucky Business Corporation Act. Shareholders of BMC whose rights are
governed by BMC's Articles of Incorporation and Bylaws will, upon consummation
of the Merger, become shareholders of CBT. The rights of such shareholders as
shareholders of CBT will then be governed by the Articles of Incorporation of
CBT and all amendments thereto, the Bylaws of CBT, and the Kentucky Business
Corporation Act.
Except as set forth below, there are no material differences between
the rights of a BMC shareholder under BMC's Articles of Incorporation and
Bylaws, on the one hand, and the rights of a CBT shareholder under the Articles
of Incorporation and all amendments thereto and Bylaws of CBT, on the other
hand. This summary does not purport to be a complete discussion of and is
qualified in its entirety by reference to the governing law and the Articles of
Incorporation and Bylaws of each corporation.
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APPROVAL OF CERTAIN BUSINESS COMBINATIONS
Under the Articles of Incorporation of BMC, the approval of the
holders of two-thirds of the BMC Common Stock generally would be required for a
merger, consolidation or sale of assets of BMC or its subsidiaries, or for the
sale of all or part of the shares of its subsidiaries, or for the distribution
of any of the shares or assets of its subsidiaries. The specified voting
requirements do not apply where (i) any other provision of BMC's Articles of
Incorporation specify a higher voting requirement, or (ii) the proposed action
was approved by a majority of BMC's board of directors.
In addition, BMC's Articles of Incorporation require the affirmative
vote of the holders of 80% of the outstanding shares of BMC Common Stock to
approve certain Business Combinations (defined to include a merger,
consolidation, sale, lease, exchange or encumbrance of all or a substantial
part of the assets, issuance of securities in exchange for cash or property
having an aggregate fair market value of $250,000 or more other than the
issuance of securities upon conversion of convertible securities, of BMC or its
subsidiaries, or the adoption of a plan or proposal for the liquidation or
dissolution of BMC, and similar extraordinary transactions), with an
"Interested Shareholder" (defined as a person or entity owning 20% or more of
the outstanding BMC Common Stock or who is an affiliate of BMC who, at any time
within a two-year period immediately prior to the date in question, was the
beneficial owner of 20% or more of the outstanding common stock or who is an
assignee or has otherwise succeeded to the beneficial ownership of any shares
that were at any time within the two-year period immediately prior to the date
in question beneficially owned by an Interested Shareholder, if such assignment
or succession did not involve a public offering), unless (i) the transaction is
approved by a majority of the Disinterested Directors (defined as members of
the Board of Directors who are unaffiliated with the Interested Shareholder and
who were directors prior to the time when the Interested Shareholder became an
Interested Shareholder, or a successor of a Disinterested Director who is
recommended to succeed a Disinterested Director by a majority of the remaining
Disinterested Directors), or (ii) certain other requirements, including
requirements as to the consideration to be paid to shareholders and the payment
of dividends, among others, shall have been met.
Article VII of CBT's Articles of Incorporation requires an affirmative
vote of not less than 67% of the outstanding CBT Common Stock for the approval
of any sale, exchange, lease, transfer or disposition of all or substantially
all of its business or assets, any merger or consolidation, or any amendment,
alteration or repeal of Article VII.
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The provisions contained in CBT's Articles of Incorporation discussed
above regarding approval of certain business combinations may deter takeover
attempts of CBT in the same manner as the limitations on Business Combinations
contained in BMC's Articles of Incorporation. The management of CBT presently
is aware of no specific efforts to obtain control of CBT, either in a friendly
or hostile manner.
CLASSIFICATION OF DIRECTORS
BMC's Articles of Incorporation provide that when the Board of
Directors consists of nine or more members, its directors shall be divided into
three classes, each class to be nearly as equal as possible. Each of the
directors serves for a term of three years, and one class of directors is
elected annually. The Articles of Incorporation of CBT do not provide for a
classified board of directors. Each of its directors is elected annually.
REMOVAL OF DIRECTORS
Under BMC's Articles of Incorporation, directors of BMC may be removed
from office before the expiration of their term only with the approval of the
holders of 80% of the outstanding BMC Common Stock entitled to vote thereon.
The Articles of Incorporation and Bylaws of CBT contain no similar provision.
Under Kentucky law, CBT shareholders may remove directors with or without cause
with the approval of the holders of a majority of the outstanding CBT Common
Stock; however, a director may not be removed if the number of votes sufficient
to elect him under cumulative voting is voted against his removal.
EXPERTS
The consolidated financial statements of CBT and subsidiaries as of
December 31, 1993 and 1992, and for each of the three years in the period ended
December 31, 1993, incorporated by reference from CBT's Annual Report on Form
10-K for the year ended December 31, 1993, have been audited by Deloitte &
Touche, independent auditors, as stated in their report, which is incorporated
by reference herein, and have been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
The consolidated financial statements of BMC and subsidiaries as of
December 31, 1993 and 1992, and for each of the years in the three-year period
ended December 31, 1993, incorporated by reference herein and elsewhere in the
Registration Statement have been incorporated by reference herein and in the
Registration Statement in reliance upon the report of Williams, Williams &
Lentz, independent certified public accountants, and upon the authority of said
firm as experts in accounting and auditing.
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LEGAL OPINION
The validity of the shares of CBT Common Stock to be issued to the
shareholders of BMC pursuant to the Merger will be passed upon by Wyatt,
Tarrant & Combs, Louisville, Kentucky.
ADDITIONAL INFORMATION
Certain information relating to the executive compensation, various
benefit plans (including stock option plans), voting securities and the
principal holders thereof, certain relationships and related transactions and
other related matters as to CBT are incorporated by reference or set forth in
CBT's Annual Report on Form 10-K for the year ended December 31, 1993 and as to
BMC are incorporated by reference or set forth in BMC's Annual Report on Form
10-K for the year ended December 31, 1993, each of which is incorporated herein
by reference. See "INCORPORATION OF CERTAIN INFORMATION BY REFERENCE".
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Appendix A-1
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.
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"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.
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"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.
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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
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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
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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
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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;
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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.
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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.
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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,
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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
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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
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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
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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
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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
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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.
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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,
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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 unincorpo-
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rated, 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
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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
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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
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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
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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
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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
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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
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(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
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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
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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
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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 by-product 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 Section 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.
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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
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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
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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
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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
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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
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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 threat-
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ened, 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
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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
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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
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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
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(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;
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(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 Section 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
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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
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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
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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
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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.
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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
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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
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(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
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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
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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.
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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 /s/ William J. Jones
--------------------------------------
William J. Jones, President
CBT ACQUISITION CORP
By /s/ William J. Jones
--------------------------------------
William J. Jones, President
BMC BANKCORP, INC.
By /s/ Joe T. Haltom
--------------------------------------
Joe T. Haltom, Chairman
By /s/ Larry D. Wright
--------------------------------------
Larry D. Wright, President
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Appendix A-2
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:
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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
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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.
3
115
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
4
116
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
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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 /s/ William J. Jones
-----------------------------------
William J. Jones, President
CBT ACQUISITION CORP
By /s/ William J. Jones
-----------------------------------
William J. Jones, President
BMC BANKCORP, INC.
By /s/ Joe T. Haltom
-----------------------------------
Joe T. Haltom, Chairman
By /s/ Larry D. Wright
-----------------------------------
Larry D. Wright, President
6
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Appendix B
_________________ , 1994
Board of Directors
BMC Bankcorp, Inc,.
201 East 11th Street
Benton, Kentucky 42025
Gentlemen:
In connection with the proposed acquisition of BMC Bankcorp, Inc.
("BMC") by CBT Corporation ("CBTC") (the "Merger"), you have asked us to render
an opinion as to whether the financial terms of the Merger, as provided in the
Agreement and Plan of Reorganization dated as of January 10, 1994 among such
parties (the "Merger Agreement"), are fair, from a financial point of view, to
the stockholders of BMC. Under the terms of the Merger, holders of all
outstanding shares of BMC stock will receive consideration of 2.0 CBTC shares
of common stock for each share of BMC common stock issued and outstanding
immediately prior to the effectiveness of the Merger, subject to adjustment
under certain circumstances.
Our firm, as part of its investment banking business, is frequently
involved in the valuation of securities as related to public underwriting,
private placements, mergers, acquisitions, recapitulations and other purposes.
In connection with our study for rendering this opinion, we have
reviewed the Merger Agreement, BMC's financial results for fiscal years 1988,
1989, 1990, 1991 and 1992 and the first three quarters of 1993, and certain
documents and information we deem relevant to our analysis. We have also held
discussions with senior management of BMC for the purpose of reviewing the
historical and current operations of, and outlook for BMC, industry trends, the
terms of the proposed Merger, and related matters.
We have also studied published financial data concerning certain other
publicly traded banks which we deem comparable to BMC as well as certain
financial data relating to acquisitions of other banks that we deem relevant or
comparable. In addition, we have reviewed other published information,
performed certain financial analyses and considered other factors which we deem
relevant.
119
Board of Directors
BMC Bankcorp, Inc.
_____________, 1994
Page 2.
As the proposed Merger Agreement entails the issuance of shares of
CBTC as the consideration to be paid to BMC stockholders, we have reviewed
similar information and data relating to CBTC including its historical
financial statements, from 1988 up through and including the third quarter
ended September 30, 1993.
In rendering this opinion, we have relied upon the accuracy of the
Merger Agreement, the financial information listed above, and other information
furnished to us by BMC and CBTC. We have not separately verified this
information nor have we made an independent evaluation of any of the assets or
liabilities of BMC and CBTC.
Based upon the foregoing and upon current market and economic
conditions, we are of the opinion that, from a financial point of view, the
terms of the Merger as provided in the Merger Agreement are fair to the
stockholders of BMC.
Very truly yours,
/s/ THE ROBINSON-HUMPHREY COMPANY, INC.
120
Appendix C
SUBTITLE 13. DISSENTERS' RIGHTS
RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES
271B.13-010. Definitions. -- As used in this subtitle:
(1) "Corporation" means the issuer of the shares held by a
dissenter before the corporate action, or the surviving or acquiring
corporation by merger or share exchange of that issuer.
(2) "Dissenter" means a shareholder who is entitled to dissent
from corporate action under KRS 271B.13-020 and who excercises that
right when and in the manner required by KRS 271B.13-200 to
271B.13-280.
(3) "Fair value," with respect to a dissenter's shares, means
the value of the shares immediately before the effectuation of the
corporate action to which the dissenter objects, excluding any
appreciation or depreciation in anticipation of the corporate action
unless exclusion would be inequitable. In any transaction subject to
the requirements of KRS 271B.12-210 or exempted by KRS 271B.12-220(2)
in order to be exempt from the requirements of KRS 271B.12-210.
(4) "Interest" means from the effective date of the corporate
action until the date of payment, at the average rate currently paid
by the corporation on its principal bank loans or, if none, at a rate
that is fair and equitable under all the circumstances.
(5) "Record shareholder" means the person in whose name shares
are registered in the records of a corporation or the beneficial owner
of shares
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to the extent of the rights granted by a nominee certificate on file with a
corporation.
(6) "Beneficial shareholder" means the person who is a beneficial owner
of shares held in a voting trust or by a nominee as the record shareholder.
(7) "Shareholder" means the record shareholder or the beneficial shareholder.
(Enact. Acts 1988, ch. 23, sec. 123, effective January 1, 1989.)
271B.13-020. Right to dissent. -- (1) A shareholder shall be entitled to
dissent from, and obtain payment of the fair value of his shares in the event
of, any of the following corporate actions:
(a) Consummation of a plan of merger to which the corporation is a party:
1. If shareholder approval is required for the merger by KRS 271B.11-040 or
the articles of incorporation and the shareholder is entitle to vote on the
merger; or
2. If the corporation is a subsidiary that is merged with its parent under
KRS 271B.11-040;
(b) Consummation of a plan of share exchange to which the corporation is a
party as the corporation whose shares will be acquired, if the shareholder
is entitled to vote on the plan;
(c) Consummation of a sale or exchange of all, or substantially all, of the
property of the corporation other than in the usual and regular course of
business, if the shareholder is entitled to vote on the sale or exchange,
including a sale in dissolution, but not including a sale pursuant to court
order or a sale for cash pursuant to a plan by which all or substantially all of
the net proceeds of the sale will be distributed to the shareholders within one
(1) year after their date of sale;
(d) An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:
1. Alters or abolishes a preferential right of the shares to a distribution
or in dissolution;
2. Creates, alters, or abolishes a right in respect of redemption, including
a provision respecting a sinking fund for the redemption or repurchase, of the
shares;
3. Excludes or limits the right of the shares to vote on any matter other
than a limitation by dilution through issuance of shares or other securities
with similar voting rights; or
4. Reduces the number of shares owned by the shareholder to a fraction of a
share if the fractional share so created is to be acquired for cash under KRS
271B.6-040;
(e) Any transaction subject to the requirements of KRS 271B.12-210 or exempted
by KRS 271B.12-220(2); or
(f) Any corporate action taken pursuant to a shareholder vote to the extent
the articles of incorporation, bylaws, or a resolution of the board of
directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.
(2) A shareholder entitled to dissent and obtain payment for his shares under
this chapter shall not challenge the corporate action creating his
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entitlement unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation. (Enact. Acts 1988, ch. 23, sec. 124, effective
January 1, 1989.)
271B.13-030. Dissent by nominees and beneficial owners. -- (1) A record
shareholder may assert dissenters' rights as to fewer than all the shares
registered in his name only if he shall dissent with respect to all shares
beneficially owned by any one (1) person and notify the corporation in writing
of the name and address of each person on whose behalf he asserts dissenters'
rights. The rights of a partial dissenter, under this subsection shall be
determined as if the shares as to which he dissents and his other shares were
registered in the names of different shareholders.
(2) A beneficial shareholder may assert dissenters' rights as to shares held
on his behalf only if:
123
(a) He submits to the corporation the record shareholder's written consent to
the dissent not later than the time the beneficial shareholder asserts
dissenters' rights; and
(b) He does so with respect to all shares of which he is the beneficial
shareholder or over which he has power to direct the vote. (Enact. Acts 1988,
ch. 23, sec. 125, effective January 1, 1989.)
PROCEDURES FOR EXERCISE OF DISSENTERS' RIGHTS
271B.13-200. Notice of dissenters' rights. -- (1) If proposed corporate
action creating dissenters' rights under KRS 271B.13-020 is submitted to a
vote at a shareholders' meeting, the meeting notice must state that
shareholders are or may be entitled to assert dissenters' rights under this
subtitle and the corporation shall undertake to provide a copy of this subtitle
to any shareholder entitled to vote at the shareholders' meeting upon request
of that shareholder.
(2) If corporate action creating dissenters' rights under KRS 271B.13-020 is
taken without a vote of shareholders, the corporation shall notify in writing
all shareholders entitled to assert dissenters' rights that the action was taken
and send them the dissenters' notice described in KRS 271B.13-220. (Enact.
Acts 1988, ch. 23, sec. 126, effective January 1, 1989.)
271B.13-210. Notie of intent to demand payment. -- (1) If proposed
corporate action creating dissenters' rights under KRS 271B.13-020 is
submitted to a vote at a shareholders' meeting, a shareholder who wishes to
assert dissenters' rights:
(a) Shall deliver to the corporation before the vote is taken written notice
of his intent to demand payment for his shares if the proposed action is
effectuated; and
(b) Shall not vote his shares in favor of the proposed action.
(2) A shareholder who does not satisfy the requirements of subsection (1) of
this section shall not be entitled to payment for his shares under this
chapter. (Enact. Acts 1988, ch. 23, sec. 127, effective January 1, 1989.)
271B.13-220. Dissenters' notice. -- (1) If proposed corporate action
creating dissenters' rights under KRS 271B.13-020 is authorized at a
shareholders' meeting, the corporation shall deliver a written dissenters'
notice to all shareholders who satified the requirements of KRS 271B.13-210.
(2) The dissenters' notice shall be sent no later than ten (10) days after
the date the proposed corporation action was authorized by the shareholders,
or, if no shareholder authorization was obtained, by the board of directors,
and shall:
(a) State where the payment demand must be sent and where and when
certificates for certified shares must be deposited;
(b) Inform holders of uncertified shares to what extent transfer of the
shares will be restricted after the payment demand is received;
(c) Supply a form for demanding payment that includes the date of the first
announcement to news media or to shareholders of the terms of the
124
proposed corporate action and requires that the person asserting dissenters'
rights certify whether or not he acquired beneficial ownership of the shares
before that date;
(d) Set a date by which the corporation must receive the payment demand,
which date may not be fewer than thirty (30), nor more than sixty (60) days
after the date the notice provided in subsection (1) of this section is
delivered; and
(e) Be accompanied by a copy of this subtitle. (Enact. Acts 1988, ch.23,
sec. 128, effective January 1, 1989.)
271B.13-230. Duty to demand payment. --(1) A shareholder who
is sent a dissenters' notice described in KRS 271B.13-220 shall demand payment,
certify whether he acquired beneficial ownership of the shares before the date
required to be set forth in the dissenters' notice pursuant to subsection
(2)(c) of KRS 271B.13-220, and deposit his certificates in accordance with the
terms of the notice.
(2) The shareholder who demands payment and deposits his share
certificates under subsection (1) of this section shall retain all other rights
of a shareholder until these rights are cancelled or modified by the taking of
the proposed corporate action.
(3) A shareholder who does not demand payment or deposit his share
certificates where required, each by the date set in the dissenters' notice,
shall not be entitled to payment for his shares under this subtitle. (Enact.
Acts 1988, ch. 23, sec. 129, effective January 1,1989.)
271B.13-240. Share restrictions. -- (1) The corporation may restrict the
transfer of uncertificated shares from the date the demand for their payment
is received until the proposed corporate action is taken or the restrictions
released under KRS 271B.13-260.
(2) The person for whom dissenters' rights are asserted as to
uncertificated shares shall retain all other rights of a shareholder until
these rights are cancelled or modified by the taking of the proposed corporate
action. (Enact. Acts 1988, ch. 23, sec. 130, effective January 1, 1989.)
271B.13-250. Payment. -- (1) Except as provided in KRS 271B.13-270, as soon
as the proposed corporate action is taken, or upon receipt of a payment demand,
the corporation shall pay each dissenter who complied with KRS 271B.13-230 the
amount the corporation estimates to be the fair value of his shares, plus
accrued interest.
(2) The payment shall be accompanied by:
(a) The corporation's balance sheet as of the end of a fiscal year ending
not more than sixteen (16) months before the date of payment, an income
statement for that year, a statement of changes in shareholders' equity for
that year, and the latest available interim financial statements, if any;
(b) A statement of the corporation's estimate of the fair value of the
shares;
(c) An explanation of how the interest was calculated; and
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(d) A statement of the dissenter's right to demand payment under KRS
271B.13-280. (Enact. Acts 1988, ch. 23 sec. 131, effective January 1, 1989.)
271B.13-260. Failure to take action. - (1) If the corporation does not
take the proposed action within sixty (60) days after the date set for demanding
payment and depositing share certificates, the corporation shall return the
deposited certificates and release the transfer restrictions imposed on
uncertificated shares.
(2) If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it shall send a new
dissenters' notice under KRS 271B.13-220 and repeat the payment demand
procedure. (Enact. Acts 1988, ch. 23, sec. 132, effective January 1, 1989.)
271B.13-270. After-acquired shares.- (1) A corporation may elect to
withhold payment required by KRS 271B.13-250 from a dissenter unless he was the
beneficial owner of the shares before the date set forth in the dissenters'
notice as the date of the first announcement to news media or to shareholders
of the terms of the proposed corporate action.
(2) To the extent the corporation elects to withhold payment under
subsection (1) of this section, after taking the proposed corporate action, it
shall estimate the fair value of the shares, plus accrued interest, and shall
pay this amount to each dissenter who agrees to accept it in full satisfaction
of his demand. The corporation shall send with its offer a statement of its
estimate of the fair value of the shares, an explanation of how the interest was
calculated, and a statement of the dissenter's right to demand payment under
KRS 271B.13-280. (Enact. Acts 1988, ch. 23 sec. 133, effective January 1, 1989.)
271B.13-280. Procedure if shareholder dissatisfied with paymnent or offer. -
(1) A dissenter may notify the corporation in writing of his own estimate of
the fair value of his shares and amount of interest due, and demand payment of
his estimate (less any payment under KRS 271B.13-250), or reject the
corporation's offer under KRS 271B.13-270 and demand payment of the fair value
of his shares and interest due, if:
(a) The dissenter believes that the amount paid under KRS 271B.13-250 or
offered under KRS 271B.13-270 is less than the fair value of his shares or that
the interest due is incorrectly calculated;
(b) The corporation fails to make payment under KRS 271B.13-250 within
sixty (60) days after the date set for demanding payment; or
(c) The corporation, having failed to take the proposed action, does not
return the deposited cerfificates or release the transfer restrictions imposed
on uncertificated shares within sixty (60) days after the date set for
demanding payment.
(2) A dissenter waives his right to demand payment under this section
unless he shall notify the corporation of his demand in writing under
subsection (1) of this section within thirty (30) days after the corporation
made or offered payment for his shares. (Enact. Acts 1988, ch. 23 sec. 134,
effective January 1, 1989.)
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JUDICIAL APPRAISAL OF SHARES
271B.13-300. Court action. -- (1) If a demand for payment under KRS
271B.13-280 remains unsettled, the corporation shall commence a proceeding
within sixty (60) days after receiving the payment demand and petition the
court to determine the fair value of the shares and accrued interest. If the
corporation does not commence the proceeding within the sixty (60) day period,
it shall pay each dissenter whose demand remains unsettled the amount demanded.
(2) The corporation shall commence the proceeding in the circuit court of the
county where a corporation's principal office (or, if none in this state, its
registered office) is located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence the proceeding in
the county in this state where the registered office of the domestic
corporation was located.
(3) The corporation shall make all dissenters (whether or not residents of
this state) whose demands remain unsettled parties to the proceeding as in an
action against their shares and all parties shall be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
(4) The jurisdiction of the court in which the proceeding is commenced under
subsection (2) of this section shall be plenary and exclusive. The court may
appoint one (1) or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the power
described in the order appointing them, or in any amendment to it. The
dissenters shall be entitled to the same discovery rights as parties in other
civil proceedings.
(5) Each dissenter made a party to the proceeding shall be entitled to
judgment:
(a) For the amount, if any, by which the court finds the fair value of his
shares, plus interest, exceeds the amount paid by the corporation; or
(b) For the fair value, plus accrued interest, of his after-aquired shares
for which the corporation elected to withhold payment under KRS 271B.13-270.
(Enact. Acts 1988, ch. 23, sec.135, effective January 1, 1989.)
271B.13-310. Court costs and counsel fees. -- (1) The court in an appraisal
proceeding commenced under KRS 271B.13-300 shall determine all costs of the
proceeding, including the reasonable compensation and expenses of appraisers
appointed by the court. The court shall assess the costs against the
corporation, except that the court may assess costs against all or some of the
dissenters, in amounts the court finds equitable, to the extent the court finds
the dissenters acted arbitrarily, vexatiously, or not in good faith in
demanding payment under KRS 271B.13-280.
(2) The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable:
127
(a) Against the corporation and in favor of any or all dissenters, if the
court finds the corporation did not substantially comply with the requirements
of KRS 271B.13-200 to 271B.13-280; or
(b) Against either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and expenses are
assessed acted arbitrarily, vexatiously, or not in good faith with respect to
the rights provided by this subtitle.
(3) If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the corporation, the
court may award to these counsel reasonable fees to be paid out of the amounts
awarded the dissenters who were benefited. (Enact. Acts 1988, ch. 23, Sec. 136,
effective January 1, 1989.)
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article XII of the registrant's Articles of Incorporation, as amended,
limits the liability of directors of the registrant pursuant to the Kentucky
Business Corporation Act. Under this Article, directors generally will be
personally liable to the registrant or its shareholders for monetary damages
only for transactions involving conflicts of interest or from which a director
derives an improper personal benefit, intentional misconduct or violations of
law, and unlawful distributions.
The Bylaws of the registrant acknowledge the provisions for
indemnification set out in the Kentucky Business Corporation Act. The
circumstances under which Kentucky law requires or permits a corporation to
indemnify its directors, officers, employees and/or agents are set forth at KRS
271B.8-500 et seq.
Generally, under KRS 271B8-500et seq., a corporation may indemnify an
individual made a party to a proceeding because he is or was a director against
liability incurred in the proceeding if (a) he conducted himself in good faith,
and (b) he reasonably believed: in the case of conduct in his official capacity
with the corporation, that his conduct was in its best interests; and, in all
other cases, that his conduct was at least not opposed to its best interests;
and (c) in the case of any criminal proceeding, he had no reasonable cause to
believe his conduct was unlawful.
A corporation may not indemnify a director: (a) in connection with a
proceeding by or in the right of the corporation in which the director was
adjudged liable to the corporation; or (b) in connection with any other
proceeding charging improper personal benefit to him, whether or not involving
action in his official capacity, in which he was adjudged liable on the basis
that personal benefit was improperly received by him.
Indemnification permitted in connection with a proceeding by or in the
right of the corporation is limited to reasonable expenses incurred in
connection with the proceeding.
In addition, the registrant maintains directors' and officers'
liability insurance covering certain liabilities which may be incurred by the
directors and officers of the registrant in connection with the performance of
their duties.
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129
ITEM 21. EXHIBITS
The following exhibits are filed herewith or incorporated herein by
reference
2 Agreement and Plan or Reorganization and Plan of
Merger dated January 10, 1994 among CBT Corporation,
CBT Acquisition Corporation and BMC Bankcorp, Inc.
(including as Appendix A to the Proxy
Statement-Prospectus).
4(a) Articles of Incorporation of the Corporation are
incorporated by reference to Exhibit 3 of
Registration statement on Form S-14 of the
Corporation (File No. 2-83583).
4(b) Articles of Amendment to the Articles of
Incorporation of the Corporation are incorporated by
reference to Exhibit 3(b) of the Corporation's Report
on Form 10-K for the year ended December 31, 1987.
4(c) Articles of Amendment to the Articles of
Incorporation of the Corporation are incorporated by
reference to Exhibit 3(c) of the Corporation's Report
on Form 10-K for the year ended December 31, 1989.
4(d) Articles of Amendment to the Articles of
Incorporation of the Corporation are incorporated by
reference to Exhibit 3(d) of the Corporation's report
on Form 10-K for the year ended December 31, 1992.
4(e) Articles of Amendment to the Articles of
Incorporation of the Corporation are incorporated by
reference to Exhibit 4(e) of the Registration
Statement on Form S-3 of the Corporation (File No.
33-68334).
4(f) Bylaws of the Corporation are incorporated by
reference to Exhibit 3 of Registration Statement on
Form S-14 of the Corporation (File No. 2-83583).
(5) Opinion of Wyatt, Tarrant & Combs regarding the
validity of the Common Stock being registered.
(8) Opinion of Wyatt, Tarrant & Combs as to certain
federal income tax consequences.
(10) (a) CBT Corporation 1986 Stock Option Plan is
incorporated by reference to Exhibit 4 of the
Registration Statement on Form S-8 of the
Registrant (File No. 33-28512).
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130
(b) CBT Corporation 1993 Stock Option Plan
incorporated by reference to Exhibit 1 of the
Registrant's report on Form 10-Q for the
quarter ended March 31, 1993.
(c) Salary Continuance Agreement incorporated by
reference to Exhibit 10(c) of the
Registrant's report on Form 10-K for the year
ended December 31, 1990.
(d) Incentive Compensation Plans incorporated by
reference to Exhibit 10(d) of the
Registrant's report on Form 10-K for the year
ended December 31, 1990.
(e) Agreement to Purchase Assets and Assume
Liabilities dated February 1, 1993 between
CBT Corporation, Citizens Bank and Trust
Company, Union Planters Corporation and
Security Trust Federal Savings and Loan
Association incorporated by reference to
Exhibit 10(e) of the Registrant's report on
Form 10-Q for the year ended December 31,
1992.
(f) CBT Corporation Dividend Reinvestment and
Stock Purchase Plan is incorporated by
reference to the Registration Statement on
Form S-3 of Registrant (File No. 33-68334).
(g) Share Exchange Agreement and Plan of Exchange
each dated July 19, 1993, between CBT
Corporation and Pennyrile Bancshares, Inc.
incorporated by reference to Exhibit 2 of
Registration Statement on Form S-4 of the
Corporation (File No. 33-69644).
(h) Guaranty of CBT Corporation to Union Planters
National Bank dated July 17, 1991
incorporated by reference to Exhibit 10(h) of
Registration Statement on Form S-4 of the
Corporation (File No. 33-69644).
(i) Guaranty of CBT Corporation to Associates
Financial Services Company, Inc. dated
February 18, 1993 incorporated by reference
to Exhibit 2 of the Registrant's report on
Form 10-Q for the quarter ended March 31,
1993.
II-3
131
(21) List of Subsidiaries of the Registrant
incorporated by reference to Exhibit 21 of
the Registrant's report on Form 10-K for the
year ended December 31, 1993.
(23) (a) Consent of Deloitte & Touche, independent
auditors for the Registrant.
(b) Consent of Williams, Williams & Lentz,
independent auditors for BMC Bankcorp, Inc.
(c) Consent of Wyatt, Tarrant & Combs, contained
in the opinion filed as Exhibit 5 hereto.
(d) Consent of Wyatt, Tarrant & Combs, contained
in the opinion filed as Exhibit 8 hereto.
(e) Consent of The Robinson-Humphrey Company, Inc.
(24) Powers of Attorney, included on the signature
pages to this Registration Statement.
(99) (a) Opinion of The Robinson-Humphrey Company,
Inc. (included in the Proxy Statement-
Prospectus as Appendix B).
(b) Stock Option Agreement between CBT
Corporation and BMC Bankcorp, Inc.
incorporated by reference to registrant's
Current Report on Form 8-K dated January
10, 1994.
(c) Proxy form for special meeting of
shareholders of BMC Bankcorp, Inc.
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(b) Insofar as indemnification for liabilities arises under the
Securities Act of 1933 may be permitted to directors or officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised
II-4
132
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(c) The undersigned registrant hereby undertakes that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(d) The undersigned registrant hereby undertakes that every
prospectus (i) that is filed pursuant to paragraph (d) immediately preceding,
or (ii) that purports to meet the requirements of Sections 10(a)(3) of the
Securities Act and is used in connection with an offering of securities subject
to Rule 415, will be filed as a part of an amendment to the registration
statement and will not be used until such amendment is effective, and that for
purposes of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(e) The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the prospectus
pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day of
receipt of such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding the request.
(f) The undersigned registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning a transaction,
and the company being acquired involved therein, that was not the subject of
and included in the registration statement when it became effective.
II-5
133
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Paducah,
Commonwealth of Kentucky, on March 16, 1994.
CBT Corporation
By /s/ William J. Jones
-----------------------------------
William J. Jones,
President and Chief Executive
Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints William J. Jones his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him, and his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about
the premises, as fully and to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on the
16th day of March, 1994 in the capacities indicated:
SIGNATURE TITLE
--------- -----
/s/ William J. Jones President, Chief Executive
- ---------------------------------- Officer and Director (Principal
William J. Jones Executive Officer)
/s/ Eddie L. Holman Secretary (Principal Financial
- ---------------------------------- and Accounting Officer)
Eddie L. Holman
II-6
134
/s/ Irving P. Bright, Jr.
- ----------------------------------
Irving P. Bright, Jr. Director
- ----------------------------------
John Burman Director
- ----------------------------------
Patrick J. Cvengros Director
/s/ William H. Dyer
- ----------------------------------
William H. Dyer Director
/s/ Louis A. Haas
- ----------------------------------
Louis A. Haas Director
/s/ F. Donald Higdon
- ----------------------------------
F. Donald Higdon Director
/s/ M. Leon Johnson
- ----------------------------------
M. Leon Johnson Director
/s/ William J. Jones
- ----------------------------------
William J. Jones Director
- ----------------------------------
Louis M. Michelson Director
- ----------------------------------
Louis D. Myre, M.D. Director
/s/ David M. Paxton
- ----------------------------------
David M. Paxton Director
- ----------------------------------
Robert P. Petter Director
II-7
135
- ----------------------------------
Joseph A. Powell Director
/s/ Allan R. Rhodes
- ----------------------------------
Allan R. Rhodes Director
- ----------------------------------
William A. Usher Director
II-8
136
Form S-4
CBT Corporation
Index to Exhibits
Exhibit
-----------
2 Agreement and Plan or Reorganization and Plan of
Merger dated January 10, 1994 among CBT Corporation,
CBT Acquisition Corporation and BMC Bankcorp, Inc.
(included as Appendix A to the Proxy
Statement-Prospectus).
4(a) Articles of Incorporation of the Corporation are
incorporated by reference to Exhibit 3 of
Registration Statement on Form S-14 of the
Corporation (File No. 2-83583).
4(b) Articles of Amendment to the Articles of
Incorporation of the Corporation are incorporated by
reference to Exhibit 3(b) of the Corporation's Report
on form 10-K for the year ended December 31, 1987.
4(c) Articles of Amendment to the Articles of
Incorporation of the Corporation are incorporated by
reference to Exhibit 3(c) of the Corporation's Report
on Form 10-K for the year ended December 31, 1989.
4(d) Articles of Amendment to the Articles of
Incorporation of the Corporation are incorporated by
reference to Exhibit 3(d) of the Corporation's report
on Form 10-K for the year ended December 31, 1992.
4(e) Articles of Amendment to the Articles of
Incorporation of the Corporation are incorporated by
reference to Exhibit 4(e) of the Registration
Statement on Form S-3 of the Corporation (File No.
33-68334).
4(f) Bylaws of the Corporation are incorporated by
reference to Exhibit 3 of Registration Statement on
Form S-14 of the Corporation (File No. 2-83583).
(5) Opinion of Wyatt, Tarrant & Combs regarding the
validity of the Common Stock being registered.
(8) Opinion of Wyatt, Tarrant & Combs as to certain
federal income tax consequences.
(10) (a) CBT Corporation 1986 Stock Option Plan is
incorporated by reference to Exhibit 4 of the
Registration Statement on Form S-8 of the
Registrant (File No. 33-28512).
137
(b) CBT Corporation 1993 Stock Option Plan
incorporated by reference to Exhibit 1 of the
Registrant's report on Form 10-Q for the
quarter ended March 31, 1993.
(c) Phantom Stock Plan incorporated by reference
to Exhibit 10(b) of the Registrant's report
on Form 10-K for the year ended December 31,
1990.
(d) Salary Continuance Agreement incorporated by
reference to Exhibit 10(c) of the
Registrant's report on Form 10-K for the year
ended December 31, 1990.
(e) Incentive Compensation Plans incorporated by
reference to Exhibit 10(d) of the
Registrant's report on Form 10-K for the year
ended December 31, 1990.
(f) Agreement to Purchase Assets and Assume
Liabilities dated February 1, 1993 between
CBT Corporation, Citizens Bank and Trust
Company, Union Planters Corporation and
Security Trust Federal Savings and Loan
Association incorporated by reference to
Exhibit 10(e) of the Registrant's report on
Form 10-Q for the year ended December 31,
1992.
(g) CBT Corporation Dividend Reinvestment and
Stock Purchase Plan is incorporated by
reference to the Registration Statement on
Form S-3 of Registrant (File No. 33-68334).
(h) Share Exchange Agreement and Plan of Exchange
each dated July 19, 1993, between CBT
Corporation and Pennyrile Bancshares, Inc.
incorporated by reference to Exhibit 2 of
Registration Statement on Form S-4 of the
Corporation (File No. 33-69644).
(i) Guaranty of CBT Corporation to Union Planters
National Bank dated July 17, 1991
incorporated by reference to Exhibit 10(h) of
Registration Statement on Form S-4 of the
Corporation (File No. 33- 69644).
(j) Guaranty of CBT Corporation to Associates
Financial Services Company, Inc. dated
February 18, 1993 incorporated by reference
to Exhibit 2 of the Registrant's report on
Form 10-Q for the quarter ended March 31,
1993.
138
(21) List of Subsidiaries of the Registrant
incorporated by reference to Exhibit 21 of
the Registrant's report on Form 10-K for the
year ended December 31, 1993.
(23) (a) Consent of Deloitte & Touche, independent
auditors for the Registrant.
(b) Consent of Williams, Williams & Lentz,
independent auditors for BMC Bankcorp, Inc.
(c) Consent of Wyatt, Tarrant & Combs, contained
in the opinion filed as Exhibit 5 hereto.
(d) Consent of Wyatt, Tarrant & Combs, contained
in the opinion filed as Exhibit 8 hereto.
(e) Consent of The Robinson-Humphrey Company, Inc.
(24) Powers of Attorney, included on the signature
pages to this Registration Statement.
(99) (a) Opinion of The Robinson-Humphrey Company,
Inc. (included in the Proxy Statement-
Prospectus as Appendix B).
(b) Stock Option Agreement between CBT
Corporation and BMC Bankcorp, Inc.
incorporated by reference to registrant's
Current Report on Form 8-K dated January
10, 1994.
(c) Proxy form for special meeting of
shareholders of BMC Bankcorp, Inc.