<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
February 8, 1994
----------------
Date of Report (Date of earliest event reported)
UNION PLANTERS CORPORATION
--------------------------
(Exact name of registrant as specified in charter)
<TABLE>
<S> <C> <C>
TENNESSEE 0-6919 62-0859007
- ------------------------ ------------- --------------------
(State of incorporation) (Commission (I.R.S. Employer
File Number) Identification No.)
</TABLE>
UNION PLANTERS ADMINISTRATIVE CENTER
7130 GOODLETT FARMS PARKWAY
MEMPHIS, TENNESSEE 38018
--------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (901) 383-6000
Not Applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report).
<PAGE> 2
ITEM 5. OTHER EVENTS
- --------------------
Since December 31, 1992, Union Planters Corporation (the Corporation)
has completed twelve acquisitions through January 1, 1994, and has seven
probable acquisitions pending. All of the acquisitions, except two, are
individually insignificant (do not exceed 10% of consolidated pre-tax earnings
or total assets). The Corporation's aggregate insignificant acquisitions
exceed 20% of the Corporation's total assets at December 31, 1992.
Accordingly, the Corporation is filing the December 31, 1992 audited financial
statements and the most recent interim financial statements for a substantial
majority of the aggregate insignificant acquisitions in accordance with Rule
3-05 of Regulation S-X.
The following tables list the completed and probable acquisitions as
of January 31, 1994. Reference is made to the Corporation's 1992 Annual Report
on Form 10-K, September 30, 1993 Form 10-Q, and Current Reports on Form 8-K
dated September 27, and October 14, 1993 and January 10 and 11, 1994 for
additional information.
CONSUMMATED ACQUISITION
<TABLE>
<CAPTION>
Total Assets
Date Purchase Resulting at Date of
Institution Acquired Consideration Price Goodwill Acquisition
- --------------------- -------- --------------------- -------- ---------- ------------
(Dollars in millions)
<S> <C> <C> <C> <C> <C>
Bank of East Tennessee 01/01/93 Series E Preferred Stock $25.3 $7.0 $231
(BOET) (a)
Security Trust Federal 01/01/93 Cash 22.0 3.0 261
Savings and Loan
Association and
SaveTrust Federal
Savings Bank (Security
Trust/SaveTrust)
First Federal Savings 02/26/93 Common Stock NM (b) Note (c) 187
Bank of Maryville (Conversion/Acquisition-
(Maryville) 625,000 shares)
First State Bancshares, 03/12/93 Cash and Common Stock 3.9 .4 34
Inc. (FSB), Parent
Company of First State
Bank of Fayette County
in Somerville,
Tennessee (Somerville)
First Cumberland Bank 03/15/93 Cash .2 - 20
in Madison, Tennessee
Farmers Union Bank in 04/01/93 Cash 9.5 4.2 78
Ripley, Tennessee
(Farmers Union)
Garrett Bancshares, 05/31/93 Common Stock Pooling of - 174
Inc., Parent Company (613,088 shares) Interests
of Bank of
Goodlettsville in
Goodlettsville,
Tennessee (GBI)
Erin Bank & Trust 06/01/93 Series E Preferred Stock 8.3 2.1 43
Company in Erin,
Tennessee (Erin)
</TABLE>
2
<PAGE> 3
<TABLE>
<CAPTION>
Total Assets
Date Purchase Resulting at Date of
Institution Acquired Consideration Price Goodwill Acquisition
- --------------------- -------- --------------------- -------- ---------- ------------
(Dollars in millions)
<S> <C> <C> <C> <C>
Hogue Holding Company, 09/01/93 Common Stock Pooling of - $ 34
Inc., Parent Company (219,246 shares) Interests
for Bank of Weiner in
Weiner, Arkansas (HHC)
Central State Bancorp, 09/01/93 Common Stock Pooling of - 109
Inc., Parent Company for (630,350 shares) Interests
Central State Bank in
Lexington, Tennessee
(CSB)
First State Bancshares, 10/01/93 Common Stock Pooling of - 86
Inc., and its subsidiary (447,906 shares) Interests
First State Bank of
Brownsville, Tennessee
(FFS)
Mid-South Bancorp, Inc., 01/01/94 Common Stock Pooling of - 184
Parent Company of Simpson (839,542 shares) Interests
County Bank in Franklin,
Kentucky; Adairville
Banking Company in
Adairville, Kentucky;
General Trust Company in
Nashville, Tennessee; The
Peoples Bank of Elk Valley
in Fayetteville, Tennessee;
and First Citizens Bank
in Franklin, Columbia and
Mt. Pleasant, Tennessee
(MSB)
</TABLE>
(a) The Corporation had previously acquired 17.93% of the common stock of
BOET ($3.4 million), and on January 1, 1993 purchased an additional
43.93% of the common stock of BOET in exchange for 331,741 shares of
the Corporation's Series E Preferred Stock ($11.1 million). Effective
May 3, 1993, the Corporation acquired the remaining outstanding common
stock of BOET for 317,045 shares of the Corporation's Series E
Preferred Stock ($10.8 million).
(b) The Corporation acquired Maryville, a mutual savings bank, which
pursuant to a conversion/acquisition converted to a federal stock
charter, all of the stock of which was acquired by the Corporation in
exchange for a capital contribution equalling approximately $14.1
million derived in part from the proceeds of an offering of the
Corporation's Common Stock made in connection with the
conversion/acquisition.
(c) The recording of the acquisition of Maryville using the purchase
method of accounting resulted in negative goodwill of approximately
$9.4 million, $8.1 million of which was deducted from noncurrent,
nonmonetary assets (premises and equipment, fair value adjustment of
loans, prepaid software and mortgage servicing rights). The remaining
negative goodwill of $1.3 million was recorded in other liabilities
and is being amortized over 7 years.
PROBABLE ACQUISITIONS
The probable acquisitions are as follows:
<TABLE>
<CAPTION>
Method of Total
Institution Consideration Accounting Assets
- --------------------------------- ------------- ---------- ------
(In millions)
<S> <C> <C> <C>
Clin-Ark Bancshares, Inc. Parent Approximately Pooling of $ 48
Company for First National Bank 227,768 shares of Interests
of Clinton in Clinton, Arkansas the Corporation's
(Clin-Ark) Common Stock
</TABLE>
3
<PAGE> 4
<TABLE>
<CAPTION>
Method of Total
Institution Consideration Accounting Assets
- --------------------------------- ------------- ---------- ------
(In millions)
<S> <C> <C> <C>
Tennessee Bancorp, Inc., Parent Cash equal to Purchase $ 92
Company of Tennessee National 1.5 times net
Bank in Columbia, Tennessee (TBI) book value at
closing
First National Bancorp of Approximately Pooling of 164
Shelbyville, Inc., Parent Company 910,000 shares Interests
of First National Bank of of the Corporation's
Shelbyville in Shelbyville, Common Stock
Tennessee (FNB)
Anderson County Bank in Cash equal to Purchase 19
Clinton, Tennessee 1.6 times net book
value at closing
Liberty Bankshares, Inc., Approximately Pooling of 174
Parent Company of Liberty 635,000 shares Interests
Federal Savings Bank in of the Corporation's
Paris, Tennessee Common Stock
Earle Bancshares, Inc., Approximately Pooling of 40
Parent Company of 365,000 shares Interests
First Southern Bank in of the Corporation's
Earle, Arkansas Common Stock
BANCFIRST Corporation; Parent Approximately Pooling of 267
Company of BANKFIRST a federal 1,924,000 shares Interests
savings bank in Decatur, of the Corporation's
Alabama Common Stock
</TABLE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
2 Agreement and Plan of Reorganization, along with the Plan of
Merger annexed thereto as Exhibit A, dated as of January 27,
1994 between Union Planters Corporation and BFC Acquisition
Company, Inc. and BANCFIRST Corporation and BANKFIRST, a
federal savings bank
23 Accountants' Consents
(a) Consent of Deloitte & Touche to incorporate their
opinion into this Current Report on Form 8-K and into
various registration statements for benefit plans and
the dividend reinvestment plan
99 Additional Exhibits
(a) BANCFIRST and Subsidiary Consolidated Financial
Statements for the Year Ended September 30, 1993
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Independent Auditors' Report 1
2. Consolidated Statements of Financial 2-3
Condition as of September 30, 1993 and
1992
</TABLE>
4
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
3. Consolidated Statements of Income for 4-5
the Years Ended September 30, 1993,
1992, and 1991
4. Consolidated Statements of Stockholders' 6
Equity for the Years Ended September 30,
1993, 1992, and 1991
5. Consolidated Statements of Cash Flows 7-8
for the Years Ended September 30,
1993, 1992, and 1991
6. Notes to Consolidated Financial 9-26
Statements
(b) Union Planters Corporation Press Release
Accounting the Acquisition of BANCFIRST
</TABLE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
<TABLE>
<S> <C> <C>
Union Planters Corporation
--------------------------
Registrant
Date: February 14, 1994 /s/M. Kirk Walters
----------------- --------------------------------
M. Kirk Walters
Senior Vice President, Treasurer
and Chief Accounting Officer
</TABLE>
5
<PAGE> 1
EXHIBIT 2
Agreement and Plan of Reorganization, along
with the Plan of Merger annexed thereto as
Exhibit A dated as of January 27, 1994
between Union Planters Corporation and BFC
Acquisition Company, Inc. and BancFirst
Corporation and BANKFIRST, a Federal Savings
Bank
<PAGE> 2
AGREEMENT AND PLAN OF REORGANIZATION
DATED as of January 27, 1994
Between
UNION PLANTERS CORPORATION and
BFC ACQUISITION COMPANY, INC.
and
BANCFIRST CORPORATION and
BANKFIRST, A FEDERAL SAVINGS BANK
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
AGREEMENT AND PLAN OF REORGANIZATION
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
-----------
ARTICLE 2
TERMS OF THE REORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
----------
2.2 Certificate of Incorporation, Bylaws, Directors, Officers and Name of the Surviving Corporation . . . . . . . . 9
-----------------------------------------------------------------------------------------------
(a) Certificate of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
----------------------------
(b) Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
------
(c) Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
----------------------
(d) Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
----
2.3 Due Diligence Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
--------------------
2.4 Availability and Confidentiality of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
-----------------------------------------------
2.5 UPC's Right to Revise the Structure of the Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
------------------------------------------------------
2.6 Holding Period of UPC Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
----------------------------------
2.7 BFC Stock Options and Treasury Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
------------------------------------
ARTICLE 3
DESCRIPTION OF TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . 13
3.1 Terms of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
-------------------
(a) Satisfaction of Conditions to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
-------------------------------------
(b) Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
----------------------------
(c) Conversion of Shares of INTERIM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
-------------------------------
(d) Conversion and Cancellation of Shares of BFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
--------------------------------------------
(e) Conversion and Exchange of BFC Shares; Exchange Ratio . . . . . . . . . . . . . . . . . . . . . . . . . 14
-----------------------------------------------------
(f) Mechanics of Payment of Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-------------------------------------
(g) Stock Transfer Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
--------------------
(h) Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
---------------------
(i) Transfer of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
------------------
(j) Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
-------------------------
(k) Appraisal Rights of BFC Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
-------------------------------------
3.2 Time and Place of Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
-------------------------
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF UPC AND INTERIM . . . . . . . . . . . . . . . . . . 19
4.1 Organization and Corporate Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
------------------------------------
4.2 Authorization, Execution and Delivery; Reorganization Agreement Not in Breach . . . . . . . . . . . . . . . . . 20
-----------------------------------------------------------------------------
4.3 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
------------
4.4 Government Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
--------------------
4.5 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
--------------
4.6 UPC Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
------------------------
4.7 Exchange Act and Listing Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
--------------------------------
4.8 The UPC Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
--------------------
4.9 Licenses, Franchise, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
------------------------
4.10 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
--------------------------
4.11 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
-----------
4.12 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
----------
4.13 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
----------------------------------
4.14 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
--------------------
4.15 Material Contract Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
--------------------------
4.16 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
---------------------------
4.17 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
----------
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BFC AND BFSB . . . . . . . . . . . . . . . . . . . 27
5.1 Organization and Qualification of BFC and Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
------------------------------------------------------
5.2 Authorization, Execution and Delivery; Reorganization Agreement Not in Breach . . . . . . . . . . . . . . . . . 28
-----------------------------------------------------------------------------
5.3 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
------------
5.4 Government and Other Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
------------------------------
5.5 Compliance With Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
-------------------
5.6 Charter Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
-----------------
5.7 BFC Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
------------------------
5.8 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
--------------------------
5.9 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
--------
5.10 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
----------
5.11 BFC Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
----------------
5.12 Condition of Fixed Assets and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
---------------------------------------
5.13 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
-----------
5.14 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
----------
5.15 Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-------------------
5.16 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
---------
5.17 Labor and Employment Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
----------------------------
5.18 Records and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
---------------------
5.19 Capitalization of BFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
---------------------
5.20 Sole Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
--------------
5.21 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
----------
5.22 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
----------------------------------
5.23 Allowance for Possible Loan or ORE Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
-----------------------------------------
5.24 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
--------------------
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C> <C>
5.25 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
----------------------
5.26 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
------------------
5.27 Material Contract Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
--------------------------
5.28 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
-------
5.29 Exchange Act and Listing Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
--------------------------------
5.30 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
---------------------------
ARTICLE 6
COVENANTS OF UPC . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.1 Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
--------------------
6.2 Reservation, Listing and Registration of UPC Common Stock under the Securities Laws . . . . . . . . . . . . . . 53
-----------------------------------------------------------------------------------
6.3 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
-----------------
6.4 Conduct of Business; Notice of Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
---------------------------------------------
ARTICLE 7
COVENANTS OF BFC AND BFSB . . . . . . . . . . . . . . . . . . . . . . . . 54
7.1 Proxy Statement; BFC Shareholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
-----------------------------------------
7.2 Conduct of Business -- Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
--------------------------------------------
7.3 Conduct of Business -- Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
-----------------------------------------
7.4 Conduct of Business -- Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
--------------------------------------
ARTICLE 8
CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.1 Conditions to the Obligations of BFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
------------------------------------
(a) Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
-----------
(b) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
------------------------------
(c) Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
---------
(d) Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
-------------
(e) Opinion of UPC's and INTERIM's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
--------------------------------------
(f) Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
----------------
(g) Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
-----------
8.2 Conditions to the Obligations of UPC and INTERIM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
------------------------------------------------
(a) Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
-----------
(b) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
------------------------------
(c) Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
---------
(d) Destruction of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
-----------------------
(e) Inspections Permitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
---------------------
(f) No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
--------------------------
(g) Opinion of BFC's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
------------------------
(h) Other Business Combinations, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
--------------------------------
(i) Maintenance of Certain Covenants, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
-------------------------------------
(j) Non-Compete Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
----------------------
(k) Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
-----------
(l) Pooling of Interests Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
-----------------------------------------
(m) Receipt of Affiliate Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
----------------------------
(n) Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
---------------------
(o) Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
----------------
</TABLE>
iii
<PAGE> 6
<TABLE>
<S> <C> <C>
8.3 Conditions to Obligations of All Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
----------------------------------------
(a) No Pending or Threatened Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
-------------------------------
(b) Governmental Approvals and Acquiescence Obtained . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
------------------------------------------------
(c) Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
----------------------
(d) Shareholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
--------------------
ARTICLE 9
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
-----------
9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
---------------------
ARTICLE 10
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 76
10.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
-------
10.2 Assignability and Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
-------------------------------------
10.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
-------------
10.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
------------
10.5 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
------------
10.6 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
---------
10.7 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
----------------
10.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
------------
10.9 Modifications, Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
-------------------------------------
10.10 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
--------------
10.11 Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
-------------------
10.12 Finders and Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
-------------------
10.13 Equitable Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
------------------
10.14 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
---------------
10.15 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
------------------------------------------
10.16 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
---------
10.17 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
-------------------
</TABLE>
iv
<PAGE> 7
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Reorganization
Agreement") dated as of the 27th day of January, 1994, by and between UNION
PLANTERS CORPORATION ("UPC"), a corporation chartered and existing under the
laws of the State of Tennessee which is registered both as a bank holding
company and a savings and loan holding company and whose principal offices are
located at 7130 Goodlett Farms Parkway, Memphis, Shelby County, Tennessee
38018; BFC ACQUISITION COMPANY, INC. ("INTERIM"), a corporation chartered and
existing under the laws of the State of Delaware, whose principal place of
business is located at 7130 Goodlett Farms Parkway, Memphis, Shelby County,
Tennessee 38018, and which is a wholly-owned subsidiary of UPC; BANCFIRST
CORPORATION ("BFC" or "Surviving Corporation" as the context may require), a
corporation chartered and existing under the laws of the State of Delaware
which is a registered savings and loan holding company and whose principal
offices are located at 255 Grant Street, S.E., Decatur, Morgan County, Alabama
35601; and BANKFIRST, a federal savings bank ("BFSB"), a federal savings bank,
chartered and existing under the laws of the United States of America, having
its main office at 255 Grant Street, S.E., Decatur, Morgan County, Alabama
35601, and which is a wholly-owned subsidiary of BFC.
UPC, INTERIM, BFC, and BFSB are sometimes referred to herein as the
"Parties."
RECITALS
A. BFC is the beneficial owner and holder of record of 1,000
shares of the common stock, $.01 par value per share, of BFSB which constitute
all of the shares of common stock of BFSB issued and outstanding (the "BFSB
Common Stock"), and desires to have itself and BFSB acquired by UPC on the
terms and subject to the conditions set forth in this Reorganization Agreement
and the accompanying Plan of Merger (attached hereto as Exhibit A) (the "Plan
of Merger").
B. UPC is the beneficial owner and holder of record of 1,000
shares of the common stock, $.01 par value per share, of INTERIM which
constitute all of the shares of common stock of INTERIM issued and outstanding
(the "INTERIM Common Stock"), and desires to acquire BFC and BFSB on the terms
and subject to the conditions set forth in this Reorganization Agreement and
the accompanying Plan of Merger.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 1
<PAGE> 8
C. The Boards of Directors of BFC and BFSB deem it desirable and
in the best interests of the shareholders of BFC (the "BFC Shareholders") that
INTERIM be merged with and into BFC (which would survive the merger as the
Surviving Corporation, as defined herein) on the terms and subject to the
conditions set forth in this Reorganization Agreement and in the manner
provided in this Reorganization Agreement and the Plan of Merger (the
"Merger").
D. The Boards of Directors of UPC and INTERIM deem it desirable
and in the best interests of UPC and INTERIM and the shareholders of UPC that
(i) INTERIM be merged with and into BFC on the terms and subject to the
conditions set forth in this Reorganization Agreement and in the manner
provided in this Reorganization Agreement and the Plan of Merger.
E. The respective Boards of Directors of UPC, INTERIM, BFC and
BFSB have each adopted (or will each adopt) resolutions setting forth and
adopting this Reorganization Agreement and the Plan of Merger, and have
directed that this Reorganization Agreement and the Plan of Merger and all
resolutions adopted by said Boards of Directors and by the BFC Shareholders
related to this Reorganization Agreement, be submitted with appropriate
applications to, and filed with the Board of Governors of the Federal Reserve
System (the "Federal Reserve"), the Alabama State Banking Department (the
"ASBD"), the Office of Thrift Supervision (the "OTS") and such other
regulatory agencies or authorities as may be necessary in order to obtain all
governmental authorizations required to consummate the proposed Merger and the
transactions contemplated in this Reorganization Agreement in accordance with
this Reorganization Agreement, the Plan of Merger and applicable law.
NOW THEREFORE, in consideration of the foregoing premises and the
mutual representations, warranties, covenants and agreements herein contained
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties agree as follows:
AGREEMENT
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Reorganization
-----------
Agreement, the following terms have the definitions
indicated:
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 2
<PAGE> 9
"AFFILIATE" of a party means any person, partnership,
corporation, association or other legal entity directly or indirectly
controlling, controlled by or under common Control, as that term is defined
herein, with that party.
"ALABAMA CODE" shall mean the Alabama Code of 1975 Annotated,
as amended.
"ALABAMA SUPERINTENDENT" shall mean the Superintendent of
Banks of the State of Alabama.
"AMEX" shall mean the American Stock Exchange, or its
successor, upon which shares of the BFC Common Stock are listed for trading.
"APPLICABLE ENVIRONMENTAL LAWS" shall have the meaning
assigned to such term in Section 5.15(a) of this Reorganization Agreement.
"ASBD" shall mean the Alabama State Banking Department.
"AUDITED FINANCIAL STATEMENTS OF BFC" shall have the meaning
assigned to such term in Section 5.7 of this Reorganization Agreement.
"BALANCE SHEET DATE" shall have the meaning assigned to such
term in Section 5.8 of this Reorganization Agreement.
"BFC" means BANCFIRST Corporation, a corporation chartered and
existing under the laws of the State of Delaware which is a registered savings
and loan holding company and whose principal offices are located at 255 Grant
Street, S.E., Decatur, Morgan County, Alabama 35601.
"BFC COMMON STOCK" has the meaning assigned to such term in
Section 3.1(d) of this Reorganization Agreement.
"BFC COMPANIES" shall mean BFC and all of its Subsidiaries,
including BFSB and all BFSB Subsidiaries.
"BFC EMPLOYEE PLANS" shall mean any pension plans, profit
sharing plans, deferred compensation plans, stock option plans, cafeteria
plans, and any other such or related benefit plans or arrangements offered or
funded by BFC or any BFC Subsidiary, including, but not limited to, BFSB, to or
for the benefit of the officers, directors or employees of BFC or any BFC
Subsidiary.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 3
<PAGE> 10
"BFC RECORD HOLDERS" means the holders of record of all of the
issued and outstanding shares of BFC Common Stock immediately prior to the
Effective Time of the Merger.
"BFC SHAREHOLDERS" shall have the meaning assigned to such
term in Recital D of this Reorganization Agreement.
"BFC STOCK OPTIONS" shall have the meaning assigned to such
term in Section 2.7 of this Reorganization Agreement.
"BFSB" means BANKFIRST, a federal savings bank, a federal
savings bank, chartered and existing under the laws of the United States of
America, having its main office at 255 Grant Street, S.E., Decatur, Morgan
County, Alabama 35601, and which is a wholly-owned subsidiary of BFC.
"BFSB COMMON STOCK" shall have the meaning assigned to such
term in Recital A of this Reorganization Agreement.
"BHCA" shall mean the Bank Holding Company Act of 1956, as
amended.
"BROKERED DEPOSITS" shall mean all Deposits of BFSB for which
BFSB has paid a commission or an interest rate substantially above that paid by
BFSB to the general depositors of BFSB.
"BUSINESS DAY" shall mean any Monday, Tuesday, Wednesday,
Thursday or Friday that is not a federal or state holiday generally recognized
by banks in either Alabama or Tennessee.
"CERCLA" shall have the meaning set forth in Section 5.15(a)
of this Reorganization Agreement.
"CLOSING" shall have the meaning assigned to such term in
Section 3.1(a) of this Reorganization Agreement.
"CLOSING DATE" shall have the meaning assigned to such term in
Section 3.2 of this Reorganization Agreement.
"COMPTROLLER" shall mean the Office of the Comptroller of the
Currency, or any successor thereto.
"CONSIDERATION" shall mean the value to be received by the BFC
Record Holders in exchange for their BFC Common Stock, such value to be
determined as provided in Article 3, Section 3.1(e), of this Reorganization
Agreement.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 4
<PAGE> 11
"CONTROL" shall have the meaning assigned to such term in
Section 2(a)(2) of the Bank Holding Company Act of 1956, as amended.
"DELAWARE CODE" shall mean the Delaware Code (1974 Revision),
as amended.
"DEPOSITS" shall mean all deposits (including, but not limited
to, certificates of deposit, savings accounts, NOW accounts and checking
accounts) of BFSB.
"EFFECTIVE DATE OF THE MERGER" shall mean that date on which
the Effective Time of the Merger shall have occurred.
"EFFECTIVE TIME OF THE MERGER" shall have the meaning assigned
in Section 3.3 of the Plan of Merger and Section 3.1(b) of this Reorganization
Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"EXCHANGE AGENT" shall mean Union Planters National Bank,
Memphis, Tennessee, acting through its Corporate Trust Department.
"EXCHANGE RATIO" shall have the meaning assigned to such term
in Section 3.1(e) of this Reorganization Agreement.
"FDIC" means the Federal Deposit Insurance Corporation, or any
successor thereto.
"FEDERAL RESERVE" shall mean the Board of Governors of the
Federal Reserve System and shall include the Federal Reserve Bank of St. Louis
acting under delegated authority.
"FIXED ASSETS" shall mean the furniture, fixtures and
equipment of the referenced Party.
"GAAP" shall mean generally accepted accounting principles,
consistently applied.
"GOVERNMENTAL APPROVALS" shall have the meaning assigned to
such term in Section 4.4 of this Reorganization Agreement.
"HOLA" shall mean the Home Owners' Loan Act of 1933, as
amended and recodified.
"HAZARDOUS SUBSTANCES" shall have the meaning set forth in
Section 5.15(a) of this Reorganization Agreement.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 5
<PAGE> 12
"INTERIM" shall mean BFC Acquisition Company, Inc., a
corporation chartered and existing under the laws of the State of Delaware,
whose principal place of business is located at 7130 Goodlett Farms Parkway,
Memphis, Shelby County, Tennessee 38018, and which is a wholly-owned subsidiary
of UPC formed solely to effect the Merger.
"INTERIM COMMON STOCK" shall have the meaning assigned to such
term in Section 3.1(c) of this Reorganization Agreement.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended.
"MERGER" shall, as described in Section 2.1 of this
Reorganization Agreement, mean the merger of INTERIM with and into BFC, which
shall survive the Merger as the Surviving Corporation.
"NYSE" shall mean the New York Stock Exchange, or its
successor, upon which shares of the UPC Common Stock are listed for trading.
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"OFFICER" shall have the meaning set forth in Section 5.8(k)
of this Reorganization Agreement.
"OTS" shall mean the Office of Thrift Supervision, or any
successor thereto.
"PARTIES" shall mean BFC, BFSB, UPC and INTERIM collectively;
BFC and BFSB on the one hand, or UPC and INTERIM on the other hand, may
sometimes be referred to as a "PARTY."
"PENSION PLAN" shall mean any employee pension benefit plan as
such term is defined in Section 3(2) of ERISA which is maintained by the
referenced Party.
"PERSON" shall mean any natural person, fiduciary,
corporation, partnership, joint venture, association, business trust or any
other entity of any kind.
"PLAN OF MERGER" shall mean the Plan of Merger substantially
in the form of Exhibit A hereto to be executed by authorized representatives of
BFC, UPC and INTERIM and filed with the Delaware Secretary of State along with
the Certificate of
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 6
<PAGE> 13
Merger in accordance with Title 8-Chapter 485-Section 251 of the Delaware Code
and providing for the Merger of INTERIM with and into BFC as contemplated by
Section 2.1 of this Reorganization Agreement.
"PROPERTY" shall have the meaning assigned to such term in
Section 5.15(a) of this Reorganization Agreement.
"PROXY STATEMENT" shall mean the proxy statement to be used by
BFC to solicit proxies with a view to securing the approval of the BFC
Shareholders of this Reorganization Agreement and the Plan of Merger.
"REALTY" means the real property of BFC or BFSB owned or
leased by BFC or BFSB or any Subsidiary of BFC or BFSB.
"RECORDS" means all available records, minutes of meetings of
the Board of Directors, committees and shareholders of BFC or BFSB, original
instruments and other documentation, pertaining to BFC, BFC's assets (including
plans and specifications relating to the Realty), BFC's liabilities, the BFC
Common Stock, the BFSB Common Stock, the Deposits and the loans, and all other
business and financial records which are necessary or customary for use in the
conduct of BFC's or BFSB's business by UPC and BFC on and after the Effective
Time of the Merger as it was conducted prior to the Closing Date.
"REGULATORY AUTHORITIES" shall mean, collectively, the Federal
Reserve, the ASBD, the OTS, the SEC, or any other state or federal governmental
or quasi-governmental entity which has, or may hereafter have, jurisdiction
over any of the transactions described in this Reorganization Agreement.
"RELEASE" shall have the meaning assigned to such term in
Section 5.15(b)(i) of this Reorganization Agreement.
"REORGANIZATION" shall mean the Merger (as described in
Section 2.1(a) of this Reorganization Agreement) and the transactions
contemplated in this Reorganization Agreement and the Plan of Merger annexed
hereto as Exhibit A.
"REORGANIZATION AGREEMENT" means this Agreement and Plan of
Reorganization together with the Plan of Merger (Exhibit A) and all Exhibits
and Schedules annexed to, and incorporated by specific reference as a part of,
this Reorganization Agreement.
"SEC" shall mean the Securities and Exchange Commission, or
any successor thereto.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 7
<PAGE> 14
"SEC DOCUMENTS" shall mean all reports, proxy statements and
registration statements filed, or required to be filed, by a Party or any of
its Subsidiaries pursuant to the Securities Laws, whether filed, or required to
be filed, with the SEC, the OTS, the Comptroller, the FDIC, the Federal Reserve
or with any other Regulatory Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of
1940, as amended, the Trust Indenture Act of 1939, as amended, and the rules
and regulations of the SEC promulgated thereunder, as well as any similar state
securities laws and any similar rules and regulations promulgated by the
applicable federal bank Regulatory Authorities.
"SHAREHOLDERS MEETING" shall mean the meeting of the BFC
Shareholders to be held pursuant to Section 7.1 of this Reorganization
Agreement, including any adjournment or adjournments thereof.
"SUBSIDIARIES" shall mean all of those corporations, banks,
associations or other entities of which the entity in question owns or controls
5% or more of the outstanding voting equity securities either directly or
through an unbroken chain of entities as to each of which 5% or more of the
outstanding equity securities is owned directly or indirectly by its parent;
provided, however, that there shall not be included any such entity acquired
- -------- -------
through foreclosure or in satisfaction of a debt previously contracted in good
faith, any such entity that owns or operates an automatic teller machine
interchange network, any such entity that is a joint venture of the parent or
of a Subsidiary of the parent, or any such entity the equity securities of
which are owned or controlled in a fiduciary capacity or through a small
business investment corporation.
"SURVIVING CORPORATION" shall mean BFC as the corporation
resulting from the consummation of the Merger as set forth in Section 2.1(a) of
this Reorganization Agreement and which shall continue to be the sole
shareholder of BFSB subsequent to the Merger.
"TENNESSEE CODE" shall mean the Tennessee Code Annotated, as
amended.
"UPC" shall mean Union Planters Corporation, a
Tennessee-chartered bank holding company which is also registered as a savings
and loan holding company having its principal place of business in Memphis,
Shelby County, Tennessee.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 8
<PAGE> 15
"UPC COMMON STOCK" shall have the meaning set forth in Section
4.5 of this Reorganization Agreement.
"UPC FINANCIAL STATEMENTS" shall mean (i) the audited
consolidated balance sheets and related consolidated statements of earnings, of
changes in shareholders' equity, and of cash flows (including related notes) of
UPC and its Subsidiaries as of December 31, 1991 and 1992 and each subsequent
December 31 prior to the Effective Time of the Merger, and (ii) the related
unaudited consolidated balance sheets and related consolidated statements of
earnings, of changes in shareholders' equity, and of cash flows (including
related notes) of UPC and its Subsidiaries for each of the quarters ended or
ending after January 1, 1993, as filed by UPC in SEC Documents.
"UPC PREFERRED STOCK" shall have the meaning assigned to such
term in Section 4.5 of this Reorganization Agreement.
ARTICLE 2
TERMS OF THE REORGANIZATION
2.1 The Merger. Subject to the satisfaction (or waiver)
----------
of all of the conditions to the obligations of each of the Parties to this
Reorganization Agreement, at the Effective Time of the Merger, INTERIM shall be
merged with and into BFC (the "Merger"), which latter corporation (the
"Surviving Corporation") shall survive the Merger and continue to be the sole
shareholder of BFSB.
2.2 Certificate of Incorporation, Bylaws, Directors,
-----------------------------------------------
Officers and Name of the Surviving Corporation.
- ----------------------------------------------
(a) Certificate of Incorporation. At the
----------------------------
Effective Time of the Merger, the Certificate of Incorporation of BFC, as in
effect immediately prior to the Effective Time of the Merger, shall continue to
be the Certificate of Incorporation of BFC as the Surviving Corporation, unless
and until the same shall be amended thereafter as provided by law and the terms
of such Certificate of Incorporation.
(b) Bylaws. At the Effective Time of the Merger,
-------
the Bylaws of BFC, as in effect immediately prior to the Effective Time of the
Merger, shall continue to be the Bylaws of BFC as the Surviving Corporation,
unless and until amended or repealed as provided by law, its Certificate of
Incorporation and such Bylaws.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 9
<PAGE> 16
(c) Directors and Officers. The directors and
----------------------
officers of BFC in office immediately prior to the Effective Time of the Merger
shall continue to be the directors and officers of the Surviving Corporation,
to hold office as provided in the Certificate of Incorporation and Bylaws of
the Surviving Corporation, unless and until their successors shall have been
elected or appointed and shall have qualified or until they shall have been
removed in the manner provided therein.
(d) Name. The name of BFC as the Surviving
----
Corporation following the Merger shall remain unchanged and continue to be:
BANCFIRST CORPORATION
or such corporate name as BFC shall elect to adopt.
2.3 Due Diligence Review. Prior to the execution by the
--------------------
Parties of this Reorganization Agreement, each Party has had an opportunity to
conduct a due diligence review of the books, records and operations of the
other Party, including, but not limited to, a review of the Party's loan
portfolios, ORE and classified assets, investment portfolios and properties, to
verify the reasonableness of the Party's earnings projections, growth
projections and sustained earnings prospects after consummation of the Merger
at reasonable growth rates.
2.4 Availability and Confidentiality of Information.
-----------------------------------------------
Each Party shall continue to provide to the other Party, its Officers,
employees, agents, and representatives access, on reasonable notice and during
customary business hours, to all of the books, records, properties and
facilities of the Party and shall use its best efforts to cause its Officers,
employees, agents and representatives to cooperate with any of the reviewing
Party's reasonable requests for information which would be customary in order
to revise or update the information obtained through the reviewing Party's due
diligence undertaken in accordance with Section 2.3 of this Reorganization
Agreement. Each party shall keep all non-public information obtained by the
other Party with respect to the transactions contemplated in this
Reorganization Agreement confidential and shall not disclose or use such
information in any manner without the prior written consent of the other Party.
2.5 UPC's Right to Revise the Structure of the
------------------------------------------
Transaction. UPC shall have the unilateral right to revise the structure of
- -----------
the corporate Reorganization contemplated by this Reorganization Agreement in
order to achieve tax benefits or for any other reason which UPC may deem
advisable; provided, however, that UPC shall not have the right, without the
approval of the
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 10
<PAGE> 17
Board of Directors of BFC, to make any revision to the structure of the
Reorganization which (i) changes the amount of Consideration which the BFC
Record Holders are entitled to receive (determined in the manner provided in
Section 3.1(e) of this Reorganization Agreement); (ii) changes the intended
tax-free effects of the Merger to UPC, INTERIM, BFC or BFSB; (iii) would permit
UPC to pay the Consideration other than by delivery of shares of UPC Common
Stock registered with the SEC (in the manner described in Section 6.2 of this
Reorganization Agreement); or (iv) would adversely affect the employee
benefits, fringe benefits or the organizational structure contemplated by this
Reorganization Agreement. UPC may exercise this right of revision by giving
written Notice to BFC and BFSB in the manner provided in Section 10.1 of this
Reorganization Agreement which Notice shall be in the form of an amendment to
this Reorganization Agreement or in the form of an Amended and Restated
Agreement and Plan of Reorganization.
2.6 Holding Period of UPC Common Stock. BFC and BFSB hereby
----------------------------------
acknowledge and agree that, in order to qualify the Merger under the Internal
Revenue Code as a tax-free reorganization and for accounting purposes as a
pooling of interests under the rules and regulations promulgated by the SEC,
Accounting Principles Board Opinion No. 16 and GAAP, any BFC Record Holder who
would be deemed an Affiliate of BFC at the time of Closing under the Securities
Laws and who accepts shares of UPC Common Stock as Consideration for the
cancellation, exchange and conversion of his shares of BFC Common Stock in
connection with the Merger, shall not pledge, assign, sell, transfer, devise,
otherwise alienate or take any action which would eliminate or diminish the
risk of owning or holding the shares of UPC Common Stock to be received by such
BFC Record Holder upon consummation of the Merger, nor enter into any formal or
informal agreement to pledge, assign, sell or transfer, devise, or otherwise
alienate his right, title and interests in any of the shares of BFC Common
Stock held prior to the Merger or UPC Common Stock to be delivered by UPC to
such BFC Record Holder in connection with the Merger for a period of thirty
(30) days prior to Closing and until such time as UPC shall have publicly
released a statement of UPC's earnings reflecting the combined financial
results of operations of UPC and BFC for a period of not less than thirty (30)
days subsequent to the Effective Time of the Merger. BFC further acknowledges
and agrees that any UPC Common Stock Certificates issued in connection with the
Merger to BFC Record Holders who would be deemed Affiliates of BFC or UPC at
the time of Closing under the Securities Laws shall be subject to and bear a
restrictive legend substantially in the form as follows:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE HELD SUBJECT
TO ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 11
<PAGE> 18
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE RULES AND
REGULATIONS PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION
("SEC") THEREUNDER. NO SALES, TRANSFERS OR OTHER DISPOSITION OF THESE
SHARES MAY BE MADE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT (OTHER THAN A REGISTRATION
STATEMENT ON SEC FORM S-4) OR UPON THE PRIOR DELIVERY TO UNION
PLANTERS CORPORATION ("UPC") OF AN OPINION FROM LEGAL COUNSEL,
SATISFACTORY TO UPC, IN FORM AND SUBSTANCE SATISFACTORY TO UPC AND ITS
LEGAL COUNSEL, STATING THAT SUCH SALE OR OTHER DISPOSITION IS BEING
MADE PURSUANT TO AND IN ACCORDANCE WITH THE REQUIREMENTS OF SEC RULES
144 AND 145 OR IS OTHERWISE EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT, AND THAT SUCH SALE OR OTHER DISPOSITION WILL NOT
AFFECT THE "POOLING OF INTERESTS" ACCOUNTING TREATMENT OF THE MERGER
WHICH RESULTED IN THESE SHARES BEING ISSUED. NO SALE, TRANSFER, OR
OTHER DISPOSITION OF THESE SHARES MAY BE MADE UNTIL AFTER THE
PUBLICATION OF FINANCIAL RESULTS COVERING AT LEAST 30 DAYS OF POST
MERGER COMBINED OPERATIONS OF UPC AND BANCFIRST CORPORATION. NO
AGREEMENT MAY BE ENTERED INTO BY THE HOLDER OF THIS CERTIFICATE WHICH
WOULD ALLOW OR REQUIRE THE SALE, TRANSFER, OR OTHER DISPOSITION OF
THESE SHARES DURING THE TIME PERIOD MENTIONED ABOVE OR WHICH WOULD
OTHERWISE REDUCE THE RISK BORNE BY THE SHAREHOLDER NAMED ON THE
REVERSE SIDE OF THIS CERTIFICATE SUBSEQUENT TO THE CONSUMMATION OF THE
MERGER.
2.7 BFC Stock Options and Treasury Stock. Except as
------------------------------------
described in Schedule 2.7 hereto, as of the date of this Reorganization
Agreement, there are 121,487 validly issued and outstanding options to purchase
shares of BFC Common Stock, 95,237 of which were issued by BFC to certain
officers of BFC in connection with BFC's 1986 Stock Option and Incentive Plan
and 26,250 of which were issued by BFC to outside directors of BFC in
connection with the BFC Non-Incentive Stock Option Plan for Outside Directors;
and no other options, rights, warrants, scrip or similar rights to purchase
shares of BFC Common Stock (collectively, the "BFC Stock Options") are (or have
been) issued and outstanding by BFC. It is contemplated by the Parties hereto
that all validly issued and outstanding BFC Stock Options outstanding
immediately prior to the Closing would be automatically converted at the
Effective Time of the Merger into options to purchase shares of UPC Common
Stock based on the Exchange Ratio. Therefore, in the event and to the extent
that there are any BFC Stock Options validly issued and outstanding at the time
of Closing, such BFC Stock Options shall at the Effective Time of the Merger
automatically and without further action on the part of anyone be converted
into options to purchase shares of UPC Common Stock on the same terms and
conditions attributable to the BFC Stock Options to purchase
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 12
<PAGE> 19
shares of BFC Common Stock in effect as of the date of this Reorganization
Agreement adjusted in all respects by and in accordance with the Exchange Ratio
(i.e. if an existing BFC Stock Option for the purchase of 1,000 shares of BFC
Common Stock were exercisable at $6.35 per share of BFC Common Stock and the
Exchange Ratio were 1.078, then at the Effective Time of the Merger such
unexercised BFC Stock Option would automatically convert into an option to
purchase 1,078 shares of UPC Common Stock at an exercise price of $6.35 per
share). As of the date of this Reorganization Agreement, BFC has not
repurchased or accelerated the purchase rights of any BFC Stock Options, nor
will it repurchase or accelerate the purchase rights of any BFC Stock Options,
and BFC has not repurchased any shares of its capital stock. Therefore, as of
the date of this Reorganization Agreement, there are no shares of BFC Common
Stock held by BFC as Treasury Stock, nor will there be any such shares at the
Effective Time of the Merger.
ARTICLE 3
DESCRIPTION OF TRANSACTION
3.1 Terms of the Merger.
-------------------
(a) Satisfaction of Conditions to Closing. After
-------------------------------------
the transactions contemplated herein have been approved by the shareholders of
BFC and INTERIM, and each other condition to the obligations of the Parties
hereto, other than those conditions which are to be satisfied by delivery of
documents by any Party to any other Party, has been satisfied or, if lawfully
permitted, waived by the Party or Parties entitled to the benefits thereof, a
closing (the "Closing") will be held on the date (the "Closing Date") and at
the time of day and place referred to in Section 3.2 of this Reorganization
Agreement. At the Closing the Parties shall use their respective best efforts
to deliver the certificates, letters and opinions which constitute conditions
to effecting the Merger and each Party will provide the other Parties with such
proof or indication of satisfaction of the conditions to the obligations of
such other Parties to consummate the Merger as such other Parties may
reasonably require. If all conditions to the obligations of each of the
Parties shall have been satisfied or lawfully waived by the Party entitled to
the benefits thereof, the Parties shall, at the Closing, duly execute a
Certificate of Merger for filing with the Secretary of State of the State of
Delaware and promptly thereafter BFC and INTERIM shall take all steps necessary
or desirable to consummate the Merger in accordance with all applicable laws,
rules and regulations and the Plan of Merger which is attached hereto as
Exhibit A and incorporated by reference as part of this
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 13
<PAGE> 20
Reorganization Agreement. The Parties shall thereupon take such other and
further actions as UPC shall direct or as may be required by law or this
Reorganization Agreement to consummate the transactions contemplated herein.
(b) Effective Time of the Merger. Upon the
----------------------------
satisfaction of all conditions to Closing (except those conditions waived by
the Parties), the Merger shall become effective on the date and at the time of
filing of a Certificate of Merger with the Secretary of State of the State of
Delaware or at such later date and/or time as may be agreed upon by the Parties
and set forth in the Certificate of Merger so filed (the "Effective Time of the
Merger").
(c) Conversion of Shares of INTERIM. At the
-------------------------------
Effective Time of the Merger, each share of $.01 par value common stock of
INTERIM (the "INTERIM Common Stock") issued and outstanding immediately prior
to the Effective Time of The Merger shall, by virtue of the Merger becoming
effective and without any further action on the part of anyone, be converted
into and become one share of the issued and outstanding common stock of the
Surviving Corporation.
(d) Conversion and Cancellation of Shares of BFC.
--------------------------------------------
At the Effective Time of the Merger, each share of $.01 par value common stock
of BFC (the "BFC Common Stock") validly issued and outstanding immediately
prior to the Effective Time of the Merger shall, by virtue of the Merger
becoming effective and without any further action on the part of anyone, be
converted, exchanged and cancelled as provided in Section 3.1(e) hereof.
(e) Conversion and Exchange of BFC Shares;
-------------------------------------
Exchange Ratio. At the Effective Time of the Merger, the outstanding shares of
- --------------
BFC Common Stock held by the BFC Record Holders immediately prior to the
Effective Time of the Merger shall, without any further action on the part of
anyone, cease to represent any interest (equity, shareholder or otherwise) in
BFC and shall automatically be converted exclusively into, and constitute only
the right of the BFC Record Holders to receive in exchange for their shares of
BFC Common Stock, whole shares of UPC Common Stock and a cash payment in
settlement of any remaining fractional share of UPC Common Stock in accordance
with the terms and conditions of this Section 3.1(e). The shares of UPC Common
Stock and the cash settlement of any remaining fractional share of UPC Common
Stock deliverable by UPC to the BFC Record Holders pursuant to the terms of
this Reorganization Agreement are sometimes collectively referred to herein as
the "Consideration."
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 14
<PAGE> 21
The number of shares of UPC Common Stock to be exchanged for each share of BFC
Common Stock issued and outstanding immediately prior to the Effective Time of
the Merger shall be based on an exchange ratio (the "Exchange Ratio") as
determined and set forth in this Section 3.1(e). The Exchange Ratio shall be
determined as follows:
(A) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than or equal to
$24.00 per share of UPC Common Stock, the Exchange Ratio shall be
based on a fixed Exchange Ratio of 1.078 shares of UPC Common Stock
for each share of BFC Common validly issued and outstanding
immediately prior to the Effective Time of the Merger; and
(B) In the event the Current Market Price
Per Share of UPC Common Stock should be less than $24.00 per share of
UPC Common Stock, the Exchange Ratio shall be fixed at 1.078 shares of
UPC Common Stock for each share or BFC Common Stock; provided, however,
-------- -------
BFC shall have the right to either accept the fixed Exchange Ratio of
1.078 or terminate the transaction in accordance with the terms and
provisions of this Reorganization Agreement, provided, further, in the
-------- -------
event BFC should elect to terminate this Reorganization Agreement in
accordance with this Section 3.1(e)(B), UPC may, in its sole
discretion, reinstate this Reorganization Agreement and the
transactions contemplated herein by increasing the number of shares of
UPC Common Stock to be delivered by UPC to the BFC Record Holders
hereunder (i.e. the Exchange Ratio) based on a fixed price of $25.87
per share of BFC Common Stock divided by the Current Market Price Per
------- --
Share of UPC Common Stock.
The Exchange Ratio as determined in this Section 3.1(e) shall be based on an
aggregate of no more than 1,905,680 shares of BFC Common Stock validly issued
and outstanding immediately prior to the Effective Time of the Merger and, for
purposes of this paragraph, counting all unexercised BFC Stock Options issued
and outstanding immediately prior to the Effective Time of the Merger as shares
of BFC Common Stock so converted and exchanged; provided, however, that no
-------- -------
fractional shares of UPC Common Stock shall be issued and if, after aggregating
all of the shares of UPC Common Stock to which a BFC Record Holder is entitled
based upon the Exchange Ratio, there shall be a fractional share of UPC Common
Stock remaining, such fractional share shall be settled by a cash payment
therefor pursuant to the Mechanics of Payment of the Purchase Price set forth
in Section 3.1(f) hereof, which shall be calculated based upon the Current
Market Price Per Share of one (1) full share of UPC Common Stock.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 15
<PAGE> 22
(i) DEFINITION OF "CURRENT MARKET PRICE
PER SHARE." The "Current Market Price Per Share" shall be the average
closing price per share of the "last" real time trades (i.e., closing
price) of the UPC Common Stock on the NYSE (as published in The Wall
--------
Street Journal) for each of the ten (10) NYSE general market trading
--------------
days next preceding the Closing Date on which the NYSE was open for
business (the "Pricing Period"). In the event the UPC Common Stock
does not trade on one or more of the trading days during the Pricing
Period (a "No Trade Date"), any such No Trade Date shall be
disregarded in computing the average closing price per share of UPC
Common Stock and the average shall be based upon the "last" real time
trades and number of days on which the UPC Common Stock actually
traded during the Pricing Period.
(ii) EFFECTS OF APPRAISAL RIGHTS ON THE
EXCHANGE RATIO. The Exchange Ratio shall be unaffected by Appraisal
Rights as granted under Delaware law because the BFC Common Stock is
listed for trading on the AMEX, which is a "national securities
exchange" as defined in rules promulgated by the SEC pursuant to the
1934 Act, and therefore, pursuant to Delaware Code Section 8-503-262,
no BFC Record Holder may assert Appraisal Rights in connection with
the Merger or the transactions contemplated in this Reorganization
Agreement.
(iii) EFFECT OF STOCK SPLITS, REVERSE STOCK
SPLITS, STOCK DIVIDENDS AND SIMILAR CHANGES IN THE CAPITAL OF BFC.
Should BFC effect any stock splits, reverse stock splits, stock
dividends or similar changes in its respective capital accounts
subsequent to the date of this Reorganization Agreement but prior to
the Effective Time of the Merger, the Exchange Ratio shall be adjusted
in such a manner as the Board of Directors of UPC shall deem in good
faith to be fair and reasonable in order to give effect to such
changes subject to BFC Board of Directors approval.
(f) Mechanics of Payment of Consideration. As
-------------------------------------
soon as reasonably practicable, but in any event no more than five (5) Business
Days after the Effective Time of the Merger, the Corporate Trust Department of
Union Planters National Bank, Memphis, Tennessee (the "Exchange Agent") shall
deliver to each of the BFC Record Holders such materials and information deemed
necessary by the Exchange Agent to advise the BFC Record Holders of the
procedures required for proper surrender of their certificates evidencing and
representing shares of the BFC Common Stock in order for the BFC Record Holders
to receive the Consideration. Such materials shall include, without
limitation, a Letter of Transmittal, an Instruction Sheet, and a return
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 16
<PAGE> 23
mailing envelope addressed to the Exchange Agent (collectively the "Shareholder
Materials"). All Shareholder Materials shall be sent by United States mail to
the BFC Record Holders at the addresses set forth on a certified shareholder
list to be delivered by BFC to UPC at the Closing (the "Shareholder List") and
shall also be made available at the Corporate Trust Department offices of the
Exchange Agent. As soon as reasonably practicable thereafter, the BFC Record
Holders of all of the outstanding shares of BFC Common Stock, shall deliver, or
cause to be delivered, by United States Postal Service, hand delivery or any
other means of delivery selected by such BFC Record Holders, to the Exchange
Agent, pursuant to the Shareholder Materials, the certificates formerly
evidencing and representing all of the shares of BFC Common Stock which were
validly issued and outstanding immediately prior to the Effective Time of the
Merger, and the Exchange Agent shall take prompt action to process such
certificates formerly evidencing and representing shares of BFC Common Stock
received by it (including the prompt return of any defective submissions with
instructions as to those actions which may be necessary to remedy any defects).
Upon receipt of the proper submission of the certificate(s) formerly
representing and evidencing ownership of the shares of BFC Common Stock, the
Exchange Agent shall, on or prior to the 30th day after the Effective Time of
the Merger, mail to the former BFC Record Holders in exchange for the
certificate(s) surrendered by them, the Consideration to be paid for each such
BFC Record Holder's shares of BFC Common Stock evidenced by the certificate or
certificates which were cancelled and converted exclusively into the right to
receive the Consideration upon the Merger becoming effective. After the
Effective Time of the Merger and until properly surrendered to the Exchange
Agent, each outstanding certificate or certificates which formerly evidenced
and represented the shares of BFC Common Stock of a BFC Record Holder, subject
to the provisions of this Section, shall be deemed for all corporate purposes
to represent and evidence only the right to receive the Consideration into
which such BFC Record Holder's shares of BFC Common Stock were converted and
aggregated at the Effective Time of the Merger. Unless and until the
outstanding certificate or certificates, which immediately prior to the
Effective Time of the Merger evidenced and represented the BFC Record Holder's
BFC Common Stock shall have been properly surrendered as provided above, the
Consideration payable to the BFC Record Holder(s) of the cancelled shares as of
any time after the Effective Date shall not be paid to the BFC Record Holder(s)
of such certificate(s) until such certificates shall have been surrendered in
the manner required. Each BFC Record Holder will be responsible for all
federal, state and local taxes which may be incurred by him on account of his
receipt of the Consideration to be paid in the Merger. The BFC Record
Holder(s) of any certificate(s) which shall have been lost or destroyed may
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 17
<PAGE> 24
nevertheless, subject to the provisions of this Section, receive the
Consideration to which each such BFC Record Holder is entitled, provided that
each such BFC Record Holder shall deliver to UPC and to the Exchange Agent: (i)
a sworn statement certifying such loss or destruction and specifying the
circumstances thereof and (ii) a lost instrument bond in form satisfactory to
UPC and the Exchange Agent which has been duly executed by a corporate surety
satisfactory to UPC and the Exchange Agent, indemnifying the Surviving
Corporation, UPC, the Exchange Agent (and their respective successors) to their
satisfaction against any loss or expense which any of them may incur as a
result of such lost or destroyed certificates being thereafter presented. Any
costs or expenses which may arise from such replacement procedure, including
the premium on the lost instrument bond, shall be for the account of the BFC
Record Holder.
(g) Stock Transfer Books. At the Effective Time
--------------------
of the Merger, the stock transfer books of BFC shall be closed and no transfer
of shares of BFC Common Stock shall be made thereafter.
(h) Effects of the Merger. At the Effective Time
---------------------
of the Merger, the separate existence of INTERIM shall cease, and INTERIM shall
be merged with and into BFC which, as the Surviving Corporation, shall
thereupon and thereafter possess all of the assets, rights, privileges,
appointments, powers, licenses, permits and franchises of the two merged
corporations, whether of a public or a private nature, and shall be subject to
all of the liabilities, restrictions, disabilities and duties of both BFC and
INTERIM.
(i) Transfer of Assets. At the Effective Time of
------------------
the Merger, all rights, assets, licenses, permits, franchises and interests of
BFC and INTERIM in and to every type of property, whether real, personal, or
mixed, whether tangible or intangible, and to choses in action shall be deemed
to be vested in BFC as the Surviving Corporation by virtue of the Merger
becoming effective and without any deed or other instrument or act of transfer
whatsoever.
(j) Assumption of Liabilities. At the Effective
-------------------------
Time of the Merger, the Surviving Corporation shall become and be liable for
all debts, liabilities, obligations and contracts of BFC as well as those of
INTERIM, whether the same shall be matured or unmatured; whether accrued,
absolute, contingent or otherwise; and whether or not reflected or reserved
against in the balance sheets, other financial statements, books of account or
records of BFC or INTERIM.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 18
<PAGE> 25
(k) Appraisal Rights of BFC Shareholders.
------------------------------------
Pursuant to the provisions of Section 8-503-262 of the Delaware Code, BFC
Shareholders shall not be entitled to assert Appraisal Rights in connection
with the Merger or to seek those appraisal remedies afforded by the Delaware
Code because the BFC Common Stock is listed for trading on the AMEX, which is a
"national securities exchange" as defined in rules promulgated by the SEC
pursuant to the 1934 Act, and therefore, pursuant to Delaware Code Section
8-503-262, no BFC Record Holder may assert Appraisal Rights in connection with
the Merger or the transactions contemplated in this Reorganization Agreement.
(l) Reservation, Registration and Listing of
----------------------------------------
shares of UPC Common Stock. UPC shall reserve for issuance, register under the
- --------------------------
Securities Laws and apply for listing for trading on the NYSE a sufficient
number of shares of UPC Common Stock for the purpose of issuing shares of UPC
Common Stock to the BFC Record Holders in accordance with the terms and
conditions of this Section 3.1.
3.2 Time and Place of Closing. The Closing shall take
-------------------------
place at 10:00 a.m. on the Business Day next preceding the date on which the
Effective Time of the Merger is expected to occur, or at such other time as the
Parties, acting through their chief executive officers, presidents or chief
financial officers, may mutually agree (the "Closing Date"). The place of
Closing shall be at Union Planters Administrative Center, Union Planters
Corporation Executive Offices (Fourth Floor), 7130 Goodlett Farms Parkway,
Memphis, Shelby County, Tennessee 38018. The Closing may be held at such other
time and place as may be mutually agreed upon by the Parties.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF UPC AND INTERIM
As of the date hereof and as of the Effective Time of the
Merger, UPC and INTERIM represent and warrant to BFC as follows:
4.1 Organization and Corporate Authority. UPC is a
------------------------------------
corporation duly organized, validly existing and in good standing under the
laws of the State of Tennessee. INTERIM is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
UPC and INTERIM (i) have the requisite corporate power and authority to own,
operate and lease their material properties and carry on their businesses as
they are currently being conducted; (ii) are in good standing and are duly
qualified to do business in each jurisdiction where
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 19
<PAGE> 26
the character of their properties owned or held under lease or the nature of
their business makes such qualification necessary and where the failure to so
qualify would individually or in the aggregate have a material adverse affect
on the condition (financial or otherwise), affairs, business, assets or
prospects of UPC and all UPC Subsidiaries, taken as a whole; and (iii) have in
effect all federal, state, local and foreign governmental authorizations,
permits and licenses necessary for them to own or lease their properties and
assets and to carry on their businesses as they are currently being conducted.
The corporate Charter and Bylaws of UPC and the Certificate of Incorporation
and Bylaws of INTERIM, as amended to date, are in full force and effect as of
the date of this Reorganization Agreement.
4.2 Authorization, Execution and Delivery; Reorganization
-----------------------------------------------------
Agreement Not in Breach.
- -----------------------
(a) UPC and INTERIM have all requisite corporate
power and authority to execute and deliver this Reorganization Agreement and
the Plan of Merger and to consummate the transactions contemplated hereby and
thereby. This Reorganization Agreement, and all other agreements contemplated
to be executed in connection herewith by UPC and INTERIM, have been (or upon
execution will have been) duly executed and delivered by UPC and INTERIM, have
been (or upon execution will have been) effectively authorized by all necessary
action, corporate or otherwise, and, other than the approval of UPC as sole
shareholder of INTERIM and UPC's Board of Directors, no other corporate
proceedings on the part of UPC or INTERIM are (or will be) necessary to
authorize such execution and delivery, and constitute (or upon execution will
constitute) legal, valid and enforceable obligations of UPC and INTERIM,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally, and to the application of equitable principles and
judicial discretion.
(b) The execution and delivery of this
Reorganization Agreement, the consummation of the transactions contemplated
hereby and the fulfillment of the terms hereof will not result in a breach of
any of the terms or provisions of, or constitute a default under (or an event
which, with the passage of time or the giving of notice or both, would
constitute a default under), or conflict with, or permit the acceleration of
any obligation under, any mortgage, lease, covenant, agreement, indenture or
other instrument to which UPC or INTERIM is a party or by which they or their
property or any of their assets are bound; the corporate Charter and Bylaws of
UPC or the Certificate of Incorporation and Bylaws of INTERIM; or any judgment,
decree, order or award of any court, governmental body or arbitrator by
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 20
<PAGE> 27
which UPC or INTERIM is bound; or any permit, concession, grant, franchise,
license, law, statute, ordinance, rule or regulation applicable to UPC or
INTERIM or their properties; or result in the creation of any lien, claim,
security interest, encumbrance, charge, restriction or right of any third party
of any kind whatsoever upon the property or assets of UPC or INTERIM, except
that the Government Approvals shall be required in order for UPC and INTERIM to
consummate the Merger.
4.3 No Legal Bar. Neither UPC nor INTERIM is a party to,
------------
subject to or bound by any agreement, judgment, order, writ, prohibition,
injunction or decree of any court or other governmental body of competent
jurisdiction which would prevent the execution of this Reorganization Agreement
by UPC or INTERIM, its delivery to BFC and BFSB or the consummation of the
transactions contemplated hereby, and no action or proceeding is pending
against UPC or INTERIM in which the validity of this Reorganization Agreement,
any of the transactions contemplated hereby or any action which has been taken
by any of the Parties in connection herewith or in connection with any of the
transactions contemplated hereby is at issue.
4.4 Government Approvals. No consent, approval, order or
--------------------
authorization of, or registration, declaration or filing with, any federal,
state or local governmental authority is required to be made or obtained by UPC
or INTERIM in connection with the execution and delivery of this Reorganization
Agreement or the consummation of the transactions contemplated hereby by UPC or
INTERIM, except for: (a) the prior approval of the Board of Governors of the
Federal Reserve System (the "Federal Reserve") of the Merger under the Bank
Holding Company Act of 1956, as amended; (b) the prior approval of the Alabama
State Banking Department ("ASBD") under Title 5-14A-3 et seq of the Alabama
-- ---
Code and the regulations promulgated by the ASBD thereunder; and (c) the prior
approval of the Office of Thrift Supervision under the HOLA (collectively, the
"Government Approvals"). Neither UPC nor INTERIM are aware of any facts,
circumstances or reasons why such Government Approvals should not be forth
coming or which would prevent or hinder such approvals from being obtained.
4.5 Capitalization. (a) The authorized capital stock of
--------------
UPC consists of 10,000,000 shares of preferred stock having no par value (the
"UPC Preferred Stock"), and 50,000,000 shares of common stock having a par
value of $5.00 per share (the "UPC Common Stock"). As of December 31, 1993,
UPC had issued and outstanding: 44,000 shares of $8.00 Nonredeemable Cumulative
Convertible Preferred Stock, Series B; 690,000 shares of 10-3/8% Increasing
Rate, Redeemable, Cumulative Preferred Stock, Series C; 253,655 shares of 9.5%
Redeemable, Cumulative Preferred Stock, Series D; and 3,107,922 shares of 8%
Cumulative, Convertible
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 21
<PAGE> 28
Preferred Stock, Series E. In addition, 250,000 shares of UPC Preferred Stock
have been reserved for issuance as Series A Preferred Stock pursuant to the UPC
Share Purchase Rights Agreement dated January 19, 1989, between UPC and Union
Planters National Bank as Rights Agent (the "UPC Share Purchase Rights
Agreement"). As of December 31, 1993, 19,656,924 shares of UPC Common Stock
were validly issued and outstanding.
As of the date hereof, UPC is the holder, directly or indirectly, of
all of the outstanding capital stock of its Subsidiaries, except for director
qualifying shares of UPNB.
(b) The authorized capital stock of INTERIM consists
of 1,000 shares of common stock having a par value of $.01 per share (the
"INTERIM Common Stock") and no preferred stock. As of the date hereof, INTERIM
had issued all 1,000 shares of the authorized INTERIM Common Stock to UPC.
Therefore, UPC is the record holder and beneficial owner of all of the INTERIM
Common Stock outstanding. INTERIM was formed by UPC solely to effect the
Merger and has not incurred any debts or liabilities.
4.6 UPC Financial Statements. UPC has delivered and, to
------------------------
the extent reference is made to financial statements not yet available or
capable of development, will deliver to BFC true and complete copies of: (i)
UPC's audited Consolidated Financial Statements for the calendar years ended
December 31, 1991 and 1992 (as originally issued, but without giving effect to
subsequently effected business combinations accounted for as poolings of
interests); (ii) UPC's unaudited consolidated financial statements for each of
the calendar quarters ending in calendar year 1993 and thereafter, ending prior
to the Closing Date; and (iii) upon issuance thereof, UPC's audited
Consolidated Financial Statements for the calendar year ending December 31,
1993. Such financial statements and the notes thereto present fairly, or will
present fairly when issued, the consolidated financial position of UPC at the
respective dates thereof and the consolidated results of operations and
consolidated cash flow of UPC for the periods indicated, and in each case in
conformity with GAAP consistently applied and maintained.
4.7 Exchange Act and Listing Filings.
--------------------------------
(a) The outstanding shares of UPC Common Stock are registered with
the SEC pursuant to the 1934 Act and UPC has filed with the SEC all forms and
reports required by law to be filed by UPC with the SEC, which forms and
reports, taken as a whole, are true and correct in all material respects, and
do not misstate a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 22
<PAGE> 29
contained therein, in light of the circumstances under which they were made,
not misleading.
(b) The outstanding shares of UPC Common Stock are listed for trading
on the NYSE (under the symbol "UPC") pursuant to the listing rules of the NYSE
and UPC has filed with the NYSE all material forms and reports required by law
to be filed by UPC with the NYSE, which forms and reports, taken as a whole,
are true and correct in all material respects, and do not misstate a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading.
4.8 The UPC Common Stock. All shares of UPC Common Stock
--------------------
to be issued by UPC and delivered to the BFC Record Holders in exchange for all
of the BFC Common Stock will be duly authorized, validly issued, fully paid and
non-assessable, and none of such shares of UPC Common Stock will have been
issued in violation of any preemptive rights of any UPC shareholders. The
shares of UPC Common Stock to be delivered in payment of the Consideration
shall have in all material respects such distinguishing characteristics as
those of the shares of UPC Common Stock outstanding immediately prior to the
Effective Time of the Merger.
4.9 Licenses, Franchise, Etc. UPC and all UPC
------------------------
Subsidiaries hold all licenses, franchises, permits and authorizations
necessary for the lawful conduct of their respective businesses. The benefits
of all of such licenses, franchises, permits and authorizations are in full
force and effect and may continue to be enjoyed by UPC and all UPC Subsidiaries
subsequent to the Closing of the transactions contemplated herein without any
consent or approval. Neither UPC nor any UPC Subsidiary has received notice of
any proceeding for the suspension or revocation of any such license, franchise,
permit, or authorization and no such proceeding is pending or has been
threatened by any governmental authority.
4.10 Absence of Certain Changes. Except as disclosed in
--------------------------
Schedule 4.10 or as provided for or contemplated in this Reorganization
Agreement, since December 31, 1992 (the "Balance Sheet Date") there has not
been any material adverse change in the business, property, assets (including
loan portfolios), liabilities (whether absolute, accrued, contingent or
otherwise), prospects, operations, liquidity, income, condition (financial or
otherwise) or net worth of UPC or INTERIM.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 23
<PAGE> 30
4.11 Tax Matters. Except as described in Schedule 4.11
-----------
hereto:
(a) all federal, state, local, and foreign tax
returns required to be filed by or on behalf of UPC and each UPC Subsidiary
have been timely filed or requests for extensions have been timely filed,
granted, and have not expired for periods ended on or before the date of this
Reorganization Agreement, and all returns filed are, and the information
contained therein is, complete and accurate. All tax obligations reflected in
such returns have been paid. As of the date of this Reorganization Agreement,
there is no audit examination, deficiency, or refund litigation or matter in
controversy with respect to any taxes that might result in a determination
materially adverse to UPC or any UPC Subsidiary except as fully reserved for in
the UPC Financial Statements. All taxes, interest, additions, and penalties
due with respect to completed and settled examinations or concluded litigation
have been paid.
(b) Neither UPC nor any UPC Subsidiary has executed
an extension or waiver of any statute of limitations on the assessment or
collection of any tax due that is currently in effect.
(c) Adequate provision for any federal, state,
local, or foreign taxes due or to become due for UPC and all UPC Subsidiaries
for all periods through and including December 31, 1992, has been made and is
reflected on the December 31, 1992 financial statements included in the UPC
Financial Statements, and have been and will continue to be made with respect
to periods ending after December 31, 1992.
(d) Deferred taxes of BFC and each UPC Subsidiary
have been and will be provided for in accordance with GAAP.
(e) To the best knowledge of UPC and INTERIM,
neither the Internal Revenue Service nor any foreign, state, local or other
taxing authority is now asserting or threatening to assert against UPC or any
UPC Subsidiary any deficiency or claim for additional taxes, or interest
thereon or penalties in connection therewith. All material income, payroll,
withholding, property, excise, sales, use, franchise and transfer taxes, and
all other taxes, charges, fees, levies or other assessments, imposed upon UPC
by the United States or by any state, municipality, subdivision or
instrumentality of the United States or by any other taxing authority,
including all interest, penalties or additions attributable thereto, which are
due and payable by UPC or any UPC Subsidiary, either have been paid in full, or
have been properly accrued and reflected in UPC's
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 24
<PAGE> 31
Financial Statements referred to in Section 4.6 of this Reorganization
Agreement.
4.12 Litigation. Except as set forth in Schedule 4.12
----------
hereto, there is no action, suit or proceeding pending against UPC or any UPC
Subsidiary, or to the best knowledge of UPC or INTERIM threatened against or
affecting UPC, any UPC Subsidiary or any of their assets, before any court or
arbitrator or any governmental body, agency or official that (i) would, if
decided against UPC or the UPC Subsidiary, have a material adverse impact on
the business, properties, assets, liabilities, condition (financial or other)
or prospects of UPC or INTERIM and that are not reflected in the UPC Financial
Statements or (ii) has been brought by or on behalf of any employee employed or
formerly employed by UPC or any UPC Subsidiary.
4.13 Absence of Undisclosed Liabilities. Except as
----------------------------------
described Schedule 4.13 hereto, neither UPC nor any UPC Subsidiary has any
obligation liability (contingent or otherwise) that is material to the financial
condition or operations of UPC or any UPC Subsidiary, or that, when combined
with all similar obligations or liabilities, would be material to the financial
condition or operations of UPC or any UPC Subsidiary (i) except as disclosed in
the UPC Financial Statements delivered to UPC prior to the date of this
Reorganization Agreement or (ii) except obligations or liabilities incurred in
the ordinary course of its business consistent with past practices or (iii)
except as contemplated under this Reorganization Agreement. Since December 31,
1992, neither UPC nor any UPC Subsidiary has incurred or paid any obligation or
liability which would be material to the financial condition or operations of
UPC or such UPC Subsidiary, except for obligations paid in connection with
transactions made by it in the ordinary course of its business consistent with
past practices, laws and regulations applicable to UPC or any UPC Subsidiary.
4.14 Compliance with Laws. UPC and each UPC Subsidiary:
--------------------
(a) Is in compliance with all laws, rules,
regulations, reporting and licensing requirements, and orders applicable to its
business or employees conducting its business (including, but not limited to,
those relating to consumer disclosure and currency transaction reporting) the
breach or violation of which would or could reasonably be expected to have a
material adverse effect on the financial condition or operations of UPC or any
UPC Subsidiary, or which would or could reasonably be expected to subject UPC
or any UPC Subsidiary or any of its directors or officers to civil money
penalties; and
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 25
<PAGE> 32
(b) Has received no notification or communication
from any agency or department of federal, state, or local government or any of
the Regulatory Authorities, or the staff thereof (i) asserting that UPC or any
UPC Subsidiary is not in compliance with any of the statutes, rules,
regulations, or ordinances which such governmental authority or Regulatory
Authority enforces, which, as a result of such noncompliance, would result in a
material adverse impact on UPC or any UPC Subsidiary, (ii) threatening to
revoke any license, franchise, permit, or governmental authorization which is
material to the financial condition or operations of UPC or any UPC Subsidiary,
or (iii) requiring UPC or any UPC Subsidiary to enter into a cease and desist
order, consent, agreement, or memorandum of understanding.
4.15 Material Contract Defaults. Neither UPC nor any UPC
--------------------------
Subsidiary is in default in any respect under any contract, agreement,
commitment, arrangement, lease, insurance policy, or other instrument to which
it is a party or by which its respective assets, business, or operations may be
bound or affected or under which it or its respective assets, business, or
operations receives benefits, and which default is reasonably expected to have
either individually or in the aggregate a material adverse effect on UPC or any
UPC Subsidiary, and there has not occurred any event that, with the lapse of
time or the giving of notice or both, would constitute such a default.
4.16 Statements True and Correct. None of the information
---------------------------
prepared by, or on behalf of, UPC or any UPC Subsidiary regarding UPC, INTERIM
or any other UPC Subsidiary included or to be included in the Proxy Statement
to be mailed to BFC's shareholders in connection with the BFC's Shareholders
Meeting, and any other documents to be filed with the SEC, or any other
Regulatory Authority in connection with the transaction contemplated herein,
will, at the respective times such documents are filed, and, with respect to
the Proxy Statement, when first mailed to the shareholders of BFC, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or, in the case of the Proxy
Statement or any amendment thereof or supplement thereto, at the time of the
BFC's Shareholders Meeting, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to correct any statement in
any earlier communication with respect to the solicitation of any proxy for the
BFC's Shareholders Meeting. All documents which UPC or any UPC Subsidiary is
responsible for filing with the SEC or any other Regulatory Authority in
connection with the transactions contemplated hereby will comply as to form in
all material respects with the provisions of
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 26
<PAGE> 33
applicable law, including applicable provisions of the Securities Laws and the
rules and regulations issued thereunder.
4.17 Disclosure. The information concerning, and the
----------
representations or warranties made by UPC and/or INTERIM as set forth in this
Reorganization Agreement, or in any document, statement, certificate or other
writing furnished or to be furnished by UPC and/or INTERIM to BFC and BFSB
pursuant hereto, do not and will not contain any untrue statement of a material
fact or omit and will not omit to state a material fact required to be stated
herein or therein which is necessary to make the statements and facts contained
herein or therein, in light of the circumstances under which they were or are
made, not false or misleading. Copies of all documents heretofore or hereafter
delivered or made available to BFC and BFSB by UPC and/or INTERIM pursuant
hereto were or will be complete and accurate copies of such documents.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BFC AND BFSB
As of the date hereof and as of the Effective Time of the Merger, BFC
and BFSB represent and warrant to UPC and INTERIM as follows:
5.1 Organization and Qualification of BFC and Subsidiaries.
------------------------------------------------------
BFC is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and (a) has all requisite corporate
power and authority to own, operate and lease its material properties
and to carry on its business as it is currently being conducted; (b) is in good
standing and is duly qualified to do business in each jurisdiction where the
character of its properties owned or held under lease or the nature of its
business makes such qualification necessary and where the failure to so qualify
would individually or in the aggregate have a material adverse affect on the
condition (financial or otherwise), affairs, business, assets or prospects of
BFC and all BFC Subsidiaries, taken as a whole; and (c) is a registered savings
and loan holding company with the OTS. Each BFC Subsidiary is duly chartered,
validly existing and in good standing under the laws of the state or
jurisdiction of its incorporation and (a) has all requisite corporate power and
authority to own, operate and lease its material properties and to carry on its
business as it is currently being conducted and (b) is in good standing and is
duly qualified to do business in each jurisdiction where the character of its
properties owned or held under lease or the nature of its business makes such
qualification necessary and where the failure
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 27
<PAGE> 34
to so qualify would individually or in the aggregate have a material adverse
affect on the condition (financial or otherwise), affairs, business, assets or
prospects of BFC and all BFC Subsidiaries, taken as a whole. BFC and each of
its Subsidiaries have in effect all federal, state, local and foreign
governmental authorizations, permits and licenses necessary for them to own or
lease their respective properties and assets and to carry on their business as
it is currently being conducted. BFSB is a federal stock chartered savings
bank, duly organized, validly existing and in good standing under the laws of
the United States of America and engages only in activities (and holds
properties only of the types) permitted by the HOLA and the rules and
regulations promulgated by the OTS thereunder or the FDIC for insured
depository institutions. BFSB's deposit accounts are insured by the Savings
Association Insurance Fund (the "SAIF") as administered by the FDIC to the
fullest extent permitted under applicable law.
5.2 Authorization, Execution and Delivery; Reorganization
-----------------------------------------------------
Agreement Not in Breach.
- -----------------------
(a) BFC and BFSB have all requisite power and
authority to execute and deliver this Reorganization Agreement and the Plan of
Merger and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Reorganization Agreement and the Plan of Merger
and the consummation of the proposed transaction have been duly authorized by
majorities of the entire Boards of Directors of both BFC and BFSB and, except
for the approval of the BFC Shareholders, no other corporate proceedings on the
part of BFC are necessary to authorize the execution and delivery of this
Reorganization Agreement and the Plan of Merger and the consummation of the
transactions contemplated hereby and thereby. This Reorganization Agreement
and all other agreements and instruments herein contemplated to be executed by
BFC and BFSB have been (or upon execution will have been) duly executed and
delivered by BFC and BFSB and (subject to any requisite shareholder approval
hereof) constitute (or upon execution will constitute) legal, valid and
enforceable obligations of BFC and BFSB, subject, as to enforceability, to
applicable bankruptcy, insolvency, receivership, conservatorship,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and to the application of equitable principles and
judicial discretion.
(b) The execution and delivery of this
Reorganization Agreement and the Plan of Merger, the consummation of the
transaction contemplated hereby and thereby, and the fulfillment of the terms
hereof and thereof will not result in a violation or breach of any of the terms
or provisions of, or
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 28
<PAGE> 35
constitute a default under (or an event which, with the passage of time or the
giving of notice, or both, would constitute a default under), or conflict with,
or permit the acceleration of, any obligation under any mortgage, lease,
covenant, agreement, indenture or other instrument to which BFC or any BFC
Subsidiary is a party or by which BFC or any BFC Subsidiary is bound; the
Certificate of Incorporation and Bylaws of BFC or the Federal Stock Charter and
Bylaws of BFSB; or any judgment, decree, order, regulatory letter of
understanding or award of any court, governmental body, authority or arbitrator
by which BFC or any BFC Subsidiary is bound; or (subject to the receipt of the
Government Approvals) any permit, concession, grant, franchise, license, law,
statute, ordinance, rule or regulation applicable to BFC or any BFC Subsidiary
or the properties of any of them; or result in the creation of any lien, claim,
security interest, encumbrance, charge, restriction or right of any third party
of any kind whatsoever upon the properties or assets of BFC or any BFC
Subsidiary where any such violation, conflict, breach, default, lien,
termination, acceleration or creation described in this Section 5.2 would have,
individually or in the aggregate, a material adverse effect on the condition
(financial or other), affairs, business, assets, or prospects of BFC and all
BFC Subsidiaries, taken as a whole.
5.3 No Legal Bar. Neither BFC nor BFSB is a party to,
------------
or subject to, or bound by, any agreement or judgment, order, letter of
understanding, writ, prohibition, injunction or decree of any court or other
governmental authority or body, or any law which would prevent the execution of
this Reorganization Agreement or the Plan of Merger by BFC or BFSB, the
delivery thereof to UPC and INTERIM, or the consummation of the transaction
contemplated hereby and thereby, and no action or proceeding is pending against
BFC or BFSB in which the validity of this Reorganization Agreement, the
transaction contemplated hereby or any action which has been taken by any of
the Parties in connection herewith or in connection with the transaction
contemplated hereby is at issue.
5.4 Government and Other Approvals. Except for the
------------------------------
Government Approvals described in Section 4.4, no consent, approval, order or
authorization of, or registration, declaration or filing with, any federal,
state or local governmental authority is required to be made or obtained by BFC
or BFSB in connection with the execution and delivery of this Reorganization
Agreement or the consummation of the transactions contemplated by this
Reorganization Agreement nor is any consent or approval of this Reorganization
Agreement required from any landlord, licensor or other non-governmental party
which has granted rights to BFC or BFSB in order to avoid forfeiture or
impairment of such rights. Neither BFC nor BFSB are aware of any facts,
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 29
<PAGE> 36
circumstances or reasons why such Government Approvals should not be forth
coming or which would prevent or hinder such approvals from being obtained.
5.5 Compliance With Law. BFC and all BFC Subsidiaries
-------------------
hold all licenses, franchises, permits and authorizations necessary for the
lawful conduct of their respective businesses, and BFC and BFSB as the owners
of the Realty have complied in all material respects with all applicable
statutes, laws, ordinances, rules and regulations of all federal, state and
local governmental bodies, agencies and subdivisions having, asserting or
claiming jurisdiction over BFC's or BFSB's properties or over any other part of
BFC's or BFSB's assets, liabilities or operations, the breach or violation of
which would have, individually or in the aggregate, a material adverse effect
on the condition (financial or other), affairs, business, assets, or prospects
of BFC or any BFC Subsidiary, taken as a whole. The benefits of all of such
licenses, franchises, permits and authorizations are in full force and effect
and may continue to be enjoyed by BFC and BFSB subsequent to the Closing of the
transactions contemplated herein without any consent or approval. Neither BFC
nor any BFC Subsidiary has received notice of any proceeding for the suspension
or revocation of any such license, franchise, permit, or authorization and no
such proceeding is pending or has been threatened by any governmental
authority.
5.6 Charter Documents. Included in Schedule 5.6 hereto
-----------------
are true and correct copies of the Certificate of Incorporation and Bylaws of
BFC and the Federal Stock Charter and Bylaws of BFSB, respectively. The
Certificate of Incorporation and Bylaws of BFC and the Federal Stock Charter
and Bylaws of BFSB, as amended to date, are in full force and effect.
5.7 BFC Financial Statements. Accompanying Schedule 5.7
------------------------
hereto are true copies of the audited consolidated balance sheets of BFC as of
September 30, 1993, the audited consolidated balance sheets of BFC as of
September 30, 1992, and selected financial data for BFC as of September 30,
1991, 1990 and 1989, and the related consolidated statements of income and
changes in stockholders' equity and cash flows of BFC and BFSB for the years
ended September 30, 1993, 1992 and 1991 (the "Audited Financial Statements of
BFC") and the comparative interim (or annual) financial statements for any
subsequent quarter (or year) ending after September 30, 1993 and prior to the
Closing Date. Such financial statements (i) were (or will be) prepared from
the books and records of BFC and BFSB; (ii) were (or will be) prepared in
accordance with generally accepted accounting principles consistently applied;
(iii) accurately present (or will present) BFC's and BFSB's consolidated
financial condition and the consolidated results of their operations, changes
in
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 30
<PAGE> 37
stockholders' equity and cash flows at the relevant dates thereof and for the
periods covered thereby; (iv) in the opinion of BFC's management do contain or
reflect (or will contain and reflect) all necessary adjustments and accruals
for an accurate presentation of BFC's and BFSB's consolidated financial
condition and the consolidated results of BFC's and BFSB's operations and cash
flows as stated including any amendments thereto for the periods covered by
such financial statements; (v) in the opinion of BFC's management do contain
and reflect (or will contain and reflect) adequate provisions for loan losses,
for ORE reserves and for all reasonably anticipatable liabilities for all
taxes, federal, state, local or foreign, with respect to the periods then
ended; and (vi) in the opinion of BFC's management do contain and reflect (or
will contain and reflect) adequate provisions for all reasonably anticipated
liabilities for Post Retirement Benefits Other Than Pensions ("OPEB") pursuant
to FASB 106 and 112.
5.8 Absence of Certain Changes. Except as disclosed in
--------------------------
Schedule 5.8 or as provided for or contemplated in this Reorganization
Agreement, since September 30, 1993 (the "Balance Sheet Date") there has not
been:
(a) any transaction having a value in excess of
One Hundred Thousand Dollars ($100,000) by BFC or BFSB not in the ordinary
course of business and in conformity with past practice;
(b) any material adverse change in the business,
property, assets (including loan portfolios), liabilities (whether absolute,
accrued, contingent or otherwise), prospects, operations, liquidity, income,
condition (financial or otherwise) or net worth of BFC or BFSB;
(c) any damage, destruction or loss, whether or
not covered by insurance, which has had or may have a material adverse effect
on any of the properties, business or prospects of BFC or BFSB or their future
use and operation by BFC or BFSB;
(d) any acquisition or disposition by BFC or BFSB
of any property or asset of BFC or BFSB, whether real or personal, having a
fair market value, singularly or in the aggregate, in an amount greater than
Fifty Thousand Dollars ($50,000), except in the ordinary course of business and
in conformity with past practice or with respect to the disposition of
repossessed or foreclosed assets at fair value;
(e) any mortgage, pledge or subjection to lien,
charge or encumbrance of any kind on any of the respective properties or assets
of BFC or BFSB, except to secure extensions
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 31
<PAGE> 38
of credit in the ordinary course of business and in conformity with past
practice;
(f) any amendment, modification or termination of
any contract or agreement, relating to BFC or BFSB, to which BFC or BFSB is a
party which would have a material adverse effect upon the financial condition
or operations of BFC or BFSB.
(g) any increase in, or commitment to increase,
the compensation payable or to become payable to any officer, director,
employee or agent of BFC or BFSB, or any bonus payment or similar arrangement
made to or with any of such officers, directors, employees or agents, other
than routine increases made in the ordinary course of business not exceeding
the greater of ten percent (10%) per annum or $6,000 for any of them
individually;
(h) any incurring of, assumption of, or taking
of, by BFC or BFSB, any property subject to, any liability, except for
liabilities incurred or assumed or property taken subsequent to the Balance
Sheet Date in the ordinary course of business and in conformity with past
practice;
(i) any material alteration in the manner of
keeping the books, accounts or Records of BFC or BFSB, or in the accounting
policies or practices therein reflected, except as may be required by GAAP or
the OTS;
(j) any release or discharge of any obligation or
liability of any person or entity related to or arising out of any loan made by
BFC or BFSB of any nature whatsoever, except in the ordinary course of business
and in conformity with past practice; or
(k) to the best of BFC's and BFSB's knowledge,
information and belief any loan (except credit card loans, passbook loans or
home loans) by BFC or BFSB to any Officer, director or known 2% shareholder of
BFC or BFSB or any Affiliate of BFC or BFSB; or to any member of the immediate
family of such Officer, director or 2% shareholder of BFC or BFSB or any
Affiliate of BFC; or to any Person in which such Officer, director or 2%
shareholder directly or indirectly owns beneficially or of record ten percent
(10%) or more of any class of equity securities in the case of a corporation,
or of any equity interest, in the case of a partnership or other non-corporate
entity; or to any trust or estate in which such Officer, director or 2%
shareholder has a ten percent (10%) or more beneficial interest; or as to which
such Officer, director or 2% shareholder serves as a trustee or in a similar
capacity. As used in this Section 5.8, "Officer" shall refer to a person
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 32
<PAGE> 39
who holds the title of chairman, president, executive vice president, senior
vice president, controller, secretary, cashier or treasurer or who performs the
normal duties of such officer whether or not he or she is compensated for such
service or has an official title.
5.9 Deposits. None of the BFSB Deposits is a Brokered
--------
Deposit or subject to any encumbrance, legal restraint or other legal process.
Except as set forth in Schedule 5.9, no portion of the Deposits represents a
Deposit by any Affiliate of BFC or BFSB.
5.10 Properties. Except as described in Schedule 5.10 hereto
----------
or in the opinion of management of BFC and BFSB adequately reserved against in
the Audited Financial Statements of BFC, BFC and each BFC Subsidiary has good
and marketable title free and clear of all material liens, encumbrances,
charges, defaults, or equities of whatever character to all of the material
properties and assets, tangible or intangible, reflected in the Audited
Financial Statements of BFC as being owned by BFC or any BFC Subsidiary as of
the dates thereof. All buildings, and all fixtures, equipment, and other
property and assets that are material to the business of BFC and its
Subsidiaries on a consolidated basis, held under leases or subleases by BFC or
any BFC Subsidiary, are held under valid instruments enforceable in accordance
with their respective terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other laws
affecting the enforcement of creditors' rights generally, and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceedings
may be pending).
5.11 BFC Subsidiaries. Schedule 5.11 hereto lists all of the
----------------
active and inactive BFC Subsidiaries (including any BFSB Subsidiary) as of the
date of this Reorganization Agreement and describes generally the business
activities conducted, or permitted to be conducted, by each BFC Subsidiary. No
equity securities of any of the BFC Subsidiaries are or may become required to
be issued (other than to BFC or BFSB) by reason of any options, warrants,
scrip, rights to subscribe to, calls, or commitments of any character
whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of the capital stock of any BFC Subsidiary, and there
are no contracts, commitments, understandings, or arrangements by which any BFC
Subsidiary is bound to issue (other than to BFC) any additional shares of its
capital stock or options, warrants, or rights to purchase or acquire any
additional shares of its capital stock. All of the shares of capital stock of
each BFC Subsidiary held by BFC or by any BFC Subsidiary are fully paid
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 33
<PAGE> 40
and nonassessable and are owned by BFC or such BFC Subsidiary free and clear of
any claim, lien, or encumbrance of any nature whatsoever, whether perfected or
not.
5.12 Condition of Fixed Assets and Equipment. Except as
---------------------------------------
disclosed in Schedule 5.12 hereto, each item of BFC's or BFSB's fixed assets
and equipment having a net book value in excess of Twenty Thousand Dollars
($20,000) included in the Fixed Assets is in good operating condition and
repair, normal wear and tear excepted.
5.13 Tax Matters. Except as described in Schedule 5.13
-----------
hereto:
(a) all federal, state, local, and foreign tax
returns required to be filed by or on behalf of BFC and each BFC Subsidiary
have been timely filed or requests for extensions have been timely filed,
granted, and have not expired for periods ended on or before the date of this
Reorganization Agreement, and all returns filed are, and the information
contained therein is, complete and accurate in all material respects. All tax
obligations reflected in such returns have been paid. As of the date of this
Reorganization Agreement, there is no audit examination, deficiency, or refund
litigation or matter in controversy with respect to any taxes that might result
in a determination materially adverse to BFC or any BFC Subsidiary except as
fully reserved for in the Audited Financial Statements of BFC. All taxes,
interest, additions, and penalties due with respect to completed and settled
examinations or concluded litigation have been paid.
(b) Neither BFC nor any BFC Subsidiary has executed
an extension or waiver of any statute of limitations on the assessment or
collection of any tax due that is currently in effect.
(c) To the best of the knowledge, information and
belief of the management of BFC and BFSB, adequate provision for any federal,
state, local, or foreign taxes due or to become due for BFC and all BFC
Subsidiaries for all periods through and including September 30, 1993, has been
made and is reflected on the September 30, 1993 financial statements included
in the Audited Financial Statements of BFC, and have been and will continue to
be made with respect to periods ending after September 30, 1993.
(d) Deferred taxes of BFC and each BFC Subsidiary
have been and will be provided for in accordance with GAAP.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 34
<PAGE> 41
(e) To the best knowledge of BFC and BFSB, neither
the Internal Revenue Service nor any foreign, state, local or other taxing
authority is now asserting or threatening to assert against BFC or any BFC
Subsidiary any deficiency or claim for additional taxes, or interest thereon or
penalties in connection therewith. All material income, payroll, withholding,
property, excise, sales, use, franchise and transfer taxes, and all other
taxes, charges, fees, levies or other assessments, imposed upon BFC by the
United States or by any state, municipality, subdivision or instrumentality of
the United States or by any other taxing authority, including all interest,
penalties or additions attributable thereto, which are due and payable by BFC
or any BFC Subsidiary, either have been paid in full, or have been properly
accrued and reflected in the Audited Financial Statements of BFC referred to in
Section 5.7 of this Reorganization Agreement.
5.14 Litigation. Except as set forth in Schedule 5.14
----------
hereto or otherwise reflected in the Audited Financial Statements of BFC, there
is no action, suit or proceeding pending against BFC or any BFC Subsidiary, or
to the best knowledge of BFC or BFSB threatened against or affecting BFC, any
BFC Subsidiary or any of their assets, before any court or arbitrator or any
governmental body, agency or official that (i) would, if decided against BFC or
the BFC Subsidiary, have a material adverse impact on the business, properties,
assets, liabilities, condition (financial or other) or prospects of BFC or BFSB
taken as a whole and that are not reflected in the Audited Financial Statements
of BFC or (ii) has been brought by or on behalf of any employee employed or
formerly employed by BFC or any BFC Subsidiary.
5.15 Hazardous Materials. All statements made by BFC and any
-------------------
BFC Subsidiaries in this Section 5.15 are made to the best of the knowledge,
information and belief of BFC and such BFC Subsidiaries. For purposes of this
Section 5.15, the term "knowledge, information and belief" means that of the
directors and officers of BFC and all BFC Subsidiaries and includes their
actual knowledge as well as that which could have been obtained by a reasonably
prudent person in exercise of reasonable inquiry; provided, however, such
-------- -------
inquiry shall not be construed to require a Phase I environmental survey,
unless under the specific facts and circumstances a reasonably prudent person
would do so.
(a) BFC and all BFC Subsidiaries have obtained
all permits, licenses and other authorizations which are required to be
obtained by BFC or its Subsidiaries with respect to the Property (as defined
herein) under all Applicable Environmental Laws (as defined herein) except to
the extent that failure to have such permits, licenses, or authorizations would
not have a material adverse effect on the consolidated financial condition,
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 35
<PAGE> 42
operations, business or prospects of BFC or any BFC Subsidiary. All Property
controlled, directly or indirectly, by BFC or any BFC Subsidiary is in
compliance with the terms and conditions of all of such permits, licenses and
authorizations, and is also in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any Applicable Environmental Laws or in
any regulation, code, plan, order, decree, judgment, injunction, notice or
demand letter issued, entered, promulgated or approved thereunder, except as
described in detail in Schedule 5.15 hereto and except to the extent that
failure to have such permits, licenses, or authorizations would not have a
material adverse effect on the consolidated financial condition, operations,
business or prospects of BFC or any BFC Subsidiary. For purposes hereof, the
following terms shall have the following meanings:
"APPLICABLE ENVIRONMENTAL LAWS" shall mean all federal, state,
local and municipal environmental laws, rules or regulations to the extent
applicable to the Property, including, but not limited to, (a) the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq. ("CERCLA"); (b) the Resource Conservation and Recovery
-- ---
Act, 42 U.S.C. Section 6901 et seq. "RCRA"; (c) the Federal Water Pollution
-- ---
Control Act, 33 U.S.C. Section 1251 et seq.; (d) the Clean Air Act, 42 U.S.C.
-- ---
Section 7401 et seq.; (e) the Hazardous Materials Transportation Act, 49 U.S.C.
-- ---
Section 1471 et seq.; (f) the Toxic Substances Control Act, 15 U.S.C. Section
-- ---
2601 et seq.; (g) the Emergency Planning and Community Right-to-Know Act, 42
-- ---
U.S.C. Section 11001 et seq.; (h) the National Environmental Policy Act, 42
-- ---
U.S.C. Section 4321 et seq.; (i) the Rivers and Harbours Act of 1899, 33 U.S.C.
-- ---
Section 401 et seq.; (j) the Occupational Safety and Health Act, 29 U.S.C.
-- ---
Section 651 et seq.; (k) the Safe Drinking Water Act, 42 U.S.C. Section 300(f)
-- ---
et seq.; (l) the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; (m)
- -- --- -- ---
the Hazardous Waste Management Act of 1977, Sections 68-46-101 et seq. of the
-- ---
Tennessee Code; (n) the Hazardous Waste Management Act of 1983, Sections
68-46-201 et seq. of the Tennessee Code; (o) the Hazardous Waste Reduction Act
-- ---
of 1990, Sections 68-46-301 et seq. of the Tennessee Code; (p) the Petroleum
-- ---
Underground Storage Tank Act, Sections 68-58-101 et seq. of the Tennessee Code;
-- ---
(q) any amendments to the foregoing Acts as adopted from time to time on or
before the Closing; (r) all Alabama laws comparable to the laws set forth
above; and (s) any rule, regulation, order, injunction, judgment, declaration
or decree implementing or interpreting any of the foregoing Acts or laws, as
amended.
"HAZARDOUS SUBSTANCES" shall mean any substance, material,
waste, or pollutant that is now (or prior to the Closing) listed, defined,
characterized or regulated as
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 36
<PAGE> 43
hazardous, toxic or dangerous under or pursuant to any statute, law, ordinance,
rule or regulation of any federal, state, regional, county or local
governmental authority having jurisdiction over the Property of BFC or any BFC
Subsidiary or its use or operation, including, without limitation, (a) any
substance, material, element, compound, mixture, solution, waste, chemical or
pollutant listed, defined, characterized or regulated as hazardous, toxic or
dangerous under any Applicable Environmental Laws, (b) petroleum, petroleum
derivatives or by-products, and other hydrocarbons, (c) polychlorinated
biphenyls (PCBs), asbestos and urea formaldehyde, and (d) radioactive
substances, materials or waste.
"PROPERTY" shall be deemed to include, but shall not be
limited to, all real property owned, controlled, leased or held by BFC or a BFC
Subsidiary, in whole or in part, solely or in a joint venture or other business
arrangement, either for operational or investment purposes, and whether
assigned, purchased, or obtained through foreclosure (or similar action) or in
satisfaction of debts previously contracted.
(b) In addition, except as set forth in Schedule
5.15(b) hereto:
(i) No notice, notification, demand,
request for information, citation, summons or order has been issued,
no complaint has been filed, no penalty has been assessed and no
investigation or review is pending by any governmental or other entity
with respect to any alleged failure by BFC or any BFC Subsidiary to
have any permit, license or authorization required in connection with
the conduct of the business of BFC or any BFC Subsidiary or with
respect to any generation, treatment, storage, recycling,
transportation, release or disposal, or any release as defined in 42
U.S.C. Section 9601(22) ("Release"), of any Hazardous Substances
generated by BFC or any Affiliate of BFC at the Property;
(ii) None of the Property has received
or held any Hazardous Substances in such amount and in such manner as
to constitute a violation of the Applicable Environmental Laws, and no
Hazardous Substances have been Released or disposed of on, in or under
any of the Property during or prior to BFC's or any BFC Subsidiary's
occupancy thereof, or during or prior to the occupancy thereof by any
assignee or sublessee of BFC or any BFC Subsidiary, except in
compliance with all Applicable Environmental Laws;
(iii) There are no Hazardous Substances
being stored at any Property or located in, on or upon, any
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 37
<PAGE> 44
Property (including the subsurface thereof) or installed or affixed to
structures or equipment on the Property; and there are no underground
storage tanks for Hazardous Substances, active or abandoned, at any
Property; and
(iv) No Hazardous Substances have been
Released in a reportable quantity, where such a quantity has been
established by statute, ordinance, rule, regulation or order, at, on
or under any Property.
(c) Neither BFC nor any Affiliate of BFC has
transported or arranged for the transportation of any Hazardous Substances to
any location which is listed on the National Priorities List under CERCLA,
listed for possible inclusion on the National Priorities List by the
Environmental Protection Agency in the CERCLA Information System ("CERCLIS") or
on any similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to claims against
the owner of the Property for cleanup costs, remedial work, damages to natural
resources or for personal injury claims, including, but not limited to, claims
under CERCLA.
(d) Except as set forth in Schedule 5.15(d), no
Hazardous Substances have been generated, recycled, treated, stored, disposed
of or Released by, BFC or any Affiliate of BFC in violation of Applicable
Environmental Laws.
(e) No oral or written notification of a Release
of Hazardous Substances has been filed by or on behalf of BFC or any Affiliate
of BFC relating to the Property and no Property is listed or proposed for
listing on the National Priority List promulgated pursuant to CERCLA, on
CERCLIS or on any similar state list of sites requiring investigation or
clean-up.
(f) There are no liens arising under or pursuant
to any Applicable Environmental Laws on any Property, and no government actions
have been taken or, to the best knowledge of BFC, threatened, or are in process
which could subject any of such properties to such liens and none of the
Property would be required to place any notice or restriction relating to the
presence of Hazardous Substances at any Property in any deed to such Property.
(g) Except as described in Schedule 5.15(g)
hereto, there have been no environmental investigations, studies, audits,
tests, reviews or other analyses conducted by or which are in the possession of
BFC or any Affiliate of BFC in relation to any Property, which have not been
made available to UPC.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 38
<PAGE> 45
(h) Neither BFC nor BFSB is aware of any facts
which might suggest that BFC or any BFC Subsidiary has engaged in any
management practice with respect to any of its past or existing borrowers which
could reasonably be expected to subject BFC or any BFC Subsidiary or the
Property to any liability, either directly or indirectly, under the principles
of law as set forth in United States v. Fleet Factors Corp., 901 F.2d 1550
-----------------------------------
(11th Cir. 1990), as modified by 40 C.F.R. Part 300.
5.16 Insurance. BFC and BFSB have paid all material
---------
amounts due and payable under any insurance policies and guaranties applicable
to BFC and BFSB and BFC's or BFSB's assets and operations; all such insurance
policies and guaranties are in full force and effect; BFC and BFSB and all of
BFC's and BFSB's material assets, businesses, Realty and other material
properties are insured against fire, casualty, theft, liability, loss,
interruption, title and such other events against which it is customary to
insure, all such insurance policies being in amounts that are adequate and
consistent with past practice and experience; and the fidelity bonds in effect
as to which BFC or BFSB is a named insured are believed by BFC to be
sufficient.
5.17 Labor and Employment Matters. Except as reflected
----------------------------
in Schedule 5.17 hereto, there is no (i) collective bargaining agreement or
other labor agreement to which BFC or any BFC Subsidiary is a party or by which
any of them is bound; (ii) employment, profit sharing, deferred compensation,
bonus, stock option, purchase, retainer, consulting, retirement, welfare or
incentive plan or contract to which BFC or any BFC Subsidiary is a party or by
which it is bound; or (iii) plan or agreement under which "fringe benefits"
(including, but not limited to, vacation plans or programs, sick leave plans or
programs and related benefits) are afforded any of the employees of BFC or any
BFC Subsidiary. No party to any such agreement, plan or contract is in default
with respect to any material term or condition thereof, nor has any event
occurred which, through the passage of time or the giving of notice, or both,
would constitute a default thereunder or would cause the acceleration of any
obligation of any party thereto. Neither BFC nor any BFC Subsidiary has
received notice from any governmental agency of any alleged violation of
applicable laws that remains unresolved respecting employment and employment
practices, terms and conditions of employment and wages and hours. BFC and
each BFC Subsidiary have complied in all material respects with all applicable
laws, rules and regulations relating to the employment of labor, including
those related to its employment practices, employee disabilities, wages, hours,
collective bargaining and the payment and withholding of taxes and other sums
as required by the appropriate governmental authorities, except for failures to
comply with such laws which would not have a material adverse
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 39
<PAGE> 46
effect on the business or operations of BFC and the BFC Subsidiaries taken as a
whole, and BFC and each BFC Subsidiary have withheld and paid to the
appropriate governmental authorities or are holding for payment not yet due to
such authorities, all amounts required to be withheld from the employees of BFC
and each BFC Subsidiary and are not liable for any arrears of wages, taxes,
penalties or other sums for failure to comply with any of the foregoing.
Except as set forth in Schedule 5.17, there is no: unfair labor practice
complaint against BFC or any BFC Subsidiary pending before the National Labor
Relations Board or any state or local agency; pending labor strike or other
labor trouble affecting BFC or any BFC Subsidiary; labor grievance pending
against BFC or any BFC Subsidiary; pending representation question respecting
the employees of BFC or any BFC Subsidiary; pending arbitration proceedings
arising out of or under any collective bargaining agreement to which BFC or any
BFC Subsidiary is a party, or to the best knowledge of BFC, any basis for which
a claim may be made under any collective bargaining agreement to which BFC or
any BFC Subsidiary is a party.
5.18 Records and Documents. The Records of BFSB are and will
---------------------
be sufficient to enable BFSB to continue conducting its business as a Federal
savings bank under similar standards as BFSB has heretofore conducted such
business.
5.19 Capitalization of BFC. The authorized capital stock
---------------------
of BFC consists of 3,200,000 shares of common stock having a par value of $.01
per share (the "BFC Common Stock"), 400,000 shares of preferred stock having a
par value of $.01 per share (the "BFC Preferred Stock") and no other class of
equity security. As of the date of this Reorganization Agreement, a total of
1,784,193 shares of BFC Common Stock were issued and outstanding, no shares of
BFC Common Stock were held by BFC as treasury stock and no shares of BFC
Preferred Stock were issued and outstanding. All of the outstanding BFC Common
Stock is validly issued, fully-paid and nonassessable and has not been issued
in violation of any preemptive rights of any BFC Shareholder. Except as
described in Section 2.7 of this Reorganization Agreement or as described on
Schedule 5.19 hereto, as of the date hereof, there are no outstanding
securities or other obligations which are convertible into BFC Common Stock or
into any other equity or debt security of BFC, and there are no outstanding
options, warrants, rights, scrip, rights to subscribe to, calls or other
commitments of any nature which would entitle the holder, upon exercise
thereof, to be issued BFC Common Stock or any other equity or debt security of
BFC. Accordingly, immediately prior to the Effective Time of the Merger, there
will be not more than 1,905,680 shares of BFC Common Stock issued and
outstanding. Except as set forth in Schedule 5.19 hereto, BFC
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 40
<PAGE> 47
owns and is the beneficial record holder of, and has good and freely
transferable title to, all of the 1,000 shares of BFSB Common Stock
outstanding, and recorded on the books and Records of BFSB as being held in its
name, free and clear of all liens, charges or encumbrances, and such stock is
not subject to any voting trusts, agreements or similar arrangements or other
claims which could effect the ability of BFC to freely vote such stock in
support of the transactions contemplated herein.
5.20 Sole Agreement. Except as described in Schedule 5.20
--------------
hereto, with the exception of this Reorganization Agreement, neither BFC, nor
BFSB, nor any Subsidiary of either has been or is a party to: any letter of
intent or agreement to merge, to consolidate, to sell or purchase assets (other
than in the normal course of its business) or to any other agreement which
contemplates the involvement of BFC or BFSB or any Subsidiary of either (or any
of their assets) in any business combination of any kind; or any agreement
obligating BFC or BFSB to issue or sell or authorize the sale or transfer of
BFC Common Stock or the capital stock of BFSB. Except as described in Schedule
5.20 hereto, there are no (nor will there be at the Effective Time of the
Merger any) shares of capital stock or other equity securities of BFC
outstanding, except for shares of BFC Common Stock presently issued and
outstanding, and there are no (nor will there be at the Effective Time of the
Merger any) outstanding options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock of BFC or
BFSB, or contracts, commitments, understandings, or arrangements by which BFC
or BFSB is or may be bound to issue additional shares of their capital stock or
options, warrants, or rights to purchase or acquire any additional shares of
their capital stock. There are no (nor will there be at the Effective Time of
the Merger any) contracts, commitments, understandings, or arrangements by
which BFC or any BFC Subsidiary is or may be bound to transfer or issue to any
third party any shares of the capital stock of any BFC Subsidiary, and there
are no (nor will there be at the Effective Time of the Merger any) contracts,
agreements, understandings or commitments relating to the right of BFC to vote
or to dispose of any such shares.
5.21 Disclosure. The information concerning, and
----------
representations and warranties made by, BFC and BFSB set forth in this
Reorganization Agreement, or in the Schedules of Exceptions of BFC hereto, or
in any document, statement, certificate or other writing furnished or to be
furnished by BFC or BFSB to UPC and INTERIM pursuant hereto, does not contain
any untrue statement of a material fact or omit and will not omit to state a
material fact required to be stated herein or therein necessary
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 41
<PAGE> 48
to make the statements and facts contained herein or therein, in light of the
circumstances in which they were or are made, not false or misleading. Copies
of all documents heretofore or hereafter delivered or made available to UPC or
INTERIM by BFC or BFSB pursuant hereto were or will be complete and accurate
copies of such documents.
5.22 Absence of Undisclosed Liabilities. Except as described
----------------------------------
in Schedule 5.22 hereto, to the best of the knowledge, information and belief
of BFC and BFSB neither BFC nor any BFC Subsidiary has any obligation or
liability (contingent or otherwise) that is material to the financial condition
or operations of BFC or any BFC Subsidiary, or that, when combined with all
similar obligations or liabilities, would be material to the financial
condition or operations of BFC or any BFC Subsidiary (i) except as disclosed in
the Audited Financial Statements of BFC delivered to UPC prior to the date of
this Reorganization Agreement or (ii) except obligations or liabilities
incurred in the ordinary course of its business consistent with past practices
or (iii) except as contemplated under this Reorganization Agreement. Since
September 30, 1993, neither BFC nor any BFC Subsidiary has incurred or paid any
obligation or liability which would be material to the financial condition or
operations of BFC or such BFC Subsidiary, except for obligations paid by BFC or
BFSB under the terms of this Reorganization Agreement (all such obligations or
payments are fully described by BFC in Schedule 5.22 hereto) or in connection
with transactions made by it in the ordinary course of its business consistent
with past practices, laws and regulations applicable to BFC or any BFC
Subsidiary.
5.23 Allowance for Possible Loan or ORE Losses. To the best
-----------------------------------------
of the knowledge, information and belief of BFC and BFSB, the allowance for
possible loan losses shown on the Audited Financial Statements of BFC is (with
respect to periods ended on or before September 30, 1993) or will be (with
respect to periods ending subsequent to September 30, 1993) adequate in all
respects to provide for anticipated losses inherent in Loans outstanding or for
commitments to extend credit or similar off-balance-sheet items (including
accrued interest receivable) as of the dates thereof. Except as disclosed in
Schedule 5.23 hereto, as of the date thereof, neither BFC nor BFSB has any Loan
which has been criticized or classified by bank examiners representing any
Regulatory Authority or by its independent auditors as "Other Assets Especially
Mentioned," "Substandard," "Doubtful" or "Loss" or as a "Potential Problem
Loan."
The allowance for possible losses on other real estate ("ORE") shown
on the Audited Financial Statements of BFC is (with
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 42
<PAGE> 49
respect to periods ended on or before September 30, 1993) or will be (with
respect to periods ending subsequent to September 30, 1993) adequate in all
respects to provide for anticipated losses inherent in ORE owned or held by BFC
or any BFC Subsidiary and the net book value of ORE on the Balance Sheet of the
Audited Financial Statements of BFC is the fair value of the ORE in accordance
with Statement of Position 92-3.
5.24 Compliance with Laws. BFC and each BFC Subsidiary:
--------------------
(a) To the best of the knowledge, information and
belief of the management of BFC and each BFC Subsidiary, is in compliance with
all laws, rules, regulations, reporting and licensing requirements, and orders
applicable to its business or employees conducting its business (including, but
not limited to, those relating to consumer disclosure and currency transaction
reporting) the breach or violation of which would or could reasonably be
expected to have a material adverse effect on the financial condition or
operations of BFC or any BFC Subsidiary, or which would or could reasonably be
expected to subject BFC or any BFC Subsidiary or any of its directors or
officers to civil money penalties; and
(b) Has received no notification or communication
from any agency or department of federal, state, or local government or any of
the Regulatory Authorities, or the staff thereof (i) asserting that BFC or any
BFC Subsidiary is not in compliance with any of the statutes, rules,
regulations, or ordinances which such governmental authority or Regulatory
Authority enforces, which, as a result of such noncompliance, would result in a
material adverse impact on BFC or any BFC Subsidiary, (ii) threatening to
revoke any license, franchise, permit, or governmental authorization which is
material to the financial condition or operations of BFC or any BFC Subsidiary,
or (iii) requiring BFC or any BFC Subsidiary to enter into a cease and desist
order, consent, agreement, or memorandum of understanding.
5.25 Employee Benefit Plans.
----------------------
(a) BFC has previously provided to UPC true and
complete copies of each "employee pension benefit plan," as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974 ("ERISA") which, to
the best of its knowledge, is subject to any provision of ERISA and covers any
employee, whether active or retired, of BFC or any BFC Subsidiary or any other
entity which is a member of a controlled group or is under common control with
BFC or its Subsidiaries in the manner defined and further described in Section
414(b), (c), or (m) of the Internal Revenue Code of 1986 (the "Code"). Such
plans are
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 43
<PAGE> 50
hereinafter referred to collectively as the "Employee Pension Benefit Plans",
and each such Employee Pension Benefit Plan is listed in Schedule 5.25(a)
hereto. BFC has also provided to UPC true and complete copies of all trust
agreements, collective bargaining agreements, and insurance contracts related
to such Employee Pension Benefit Plans.
To the best knowledge of BFC and its Subsidiaries,
each Employee Pension Benefit Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified and each trust forming a part
thereof is exempt from tax pursuant to Section 501(a) of the Code. Copies of
the latest determination letters concerning the qualified status of each
Employee Pension Benefit Plan which is intended to be qualified under Section
401(a) of the Code have been provided to UPC. Requests for determination
letters relating to amendments required to cause such Employee Pension Benefit
Plans to be in compliance with the Tax Equity and Fiscal Responsibility Act of
1982, the Deficit Reduction Act of 1984 and the Retirement Equity Act of 1984
were timely filed and have been received by BFC and its Subsidiaries. Requests
for determination letters relating to any subsequent amendments to such plans
which are currently pending have been provided to UPC. All such requests were
timely and properly filed and appropriate notice of any such filing was timely
and properly provided to affected plan participants and beneficiaries.
To the best of the knowledge, information and belief
of BFC and BFSB, each of the Employee Pension Benefit Plans has been operated
in substantial conformity with the written provisions of the applicable plan
documents which have been delivered to UPC and in compliance with the
requirements prescribed by all statutes, orders, rules, and regulations
including, but not limited to, ERISA and the Code, which are applicable to such
Employee Pension Benefit Plans. To the extent that the operation of an
Employee Pension Benefit Plan has deviated from the written provisions of the
plan, such operational deviations have been disclosed in Schedule 5.25(a)
hereto. All such deviations have been made in conformity with applicable laws,
including ERISA and the Code.
With respect to Employee Pension Benefit Plans which
are subject to the annual report requirement of ERISA Section 103 or to the
annual return requirement of Code Section 6047, all required annual reports and
annual returns, or such other documents as may have been required as
alternative means of compliance with the annual report requirement, have been
timely filed. Copies of all such annual returns/reports, including all
attachments and Schedules, for the three (3) plan years immediately preceding
the current date have been delivered
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 44
<PAGE> 51
to UPC. With respect to Employee Pension Benefit Plans which complied with the
annual return requirement by satisfaction of an alternate compliance method,
any documents required to be filed with the Department of Labor in satisfaction
of such requirements have been provided to UPC.
With respect to all Employee Pension Benefit Plans
which are subject to the summary plan description requirement of ERISA Section
102, all such summary plan descriptions as were required to be filed with the
Department of Labor and distributed to participants and beneficiaries have been
timely filed and distributed. Copies of all such summary plan descriptions
have been delivered to UPC. No Employee Pension Benefit Plan constitutes a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA.
No Employee Pension Benefit Plan subject to Part III
of Subtitle B of ERISA or Section 412 of the Code, or both, has incurred an
"accumulated funding deficiency" within the meaning of Code Section 412,
whether or not waived. All required contributions to all Employee Pension
Benefit Plans have been timely made. Any penalties or taxes which have been
incurred by BFC or its subsidiaries or by any Employee Pension Benefit Plan
with respect to the timing or amount of payment of any contribution to an
Employee Pension Benefit Plan have been timely paid. The limitations of Code
Section 415 have not been exceeded with respect to any Employee Pension Benefit
Plan or combination of such plans to which such limitations apply.
No "reportable event" (as described in Section
4043(b) of ERISA) has occurred with respect to any Employee Pension Benefit
Plan. No Employee Pension Benefit Plan or any trust created thereunder, nor
any "disqualified person" with respect to the plan (as defined in Section 4975
of the Code), has engaged in a "prohibited transaction", as such term is
defined in Section 4975 of the Code, which could subject such Employee Pension
Benefit Plan, any such trust or any such disqualified person (other than a
person for whom neither BFC nor any BFC Subsidiary is directly or indirectly
responsible) to liability under Title I of ERISA or to the imposition of any
tax under Section 4975 of the Code.
No condition exists with regard to any Employee
Pension Benefit Plan which constitutes grounds for the termination of such plan
pursuant to Section 4042 of ERISA.
The fair market value of the assets of any Employee
Pension Benefit Plan which is subject to Title IV of ERISA (excluding for these
purposes any accrued but unpaid contributions) exceeded the present value of
all benefits accrued
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 45
<PAGE> 52
under any such plan, determined on a termination basis using the assumptions
established by the Pension Benefit Guaranty Corporation as in effect on such
date. Neither BFC nor its Subsidiaries have incurred any liability under Title
IV of ERISA arising in connection with the termination of, or complete or
partial withdrawal from, any plan covered or previously covered by Title IV of
ERISA. The termination of any Code Section 401(a) qualified Employee Pension
Benefit Plan previously terminated by BFC or any BFC Subsidiary did not
adversely affect the qualification of such Employee Pension Benefit Plan. The
distribution of the assets of any such Employee Pension Benefit Plan was made
or is currently being made in conformity with the requirements of that Employee
Pension Benefit Plan and of applicable legal requirements and has not resulted
in, will not result in, and is reasonably not anticipated to result in the
assessment of any tax, penalty, or excise tax against such pension plan, its
related trusts, the fiduciary and administrators of the Employee Pension
Benefit Plan, BFC or its Subsidiaries, or any disqualified person (as defined
in Code Section 4975) with respect to the Employee Pension Benefit Plan.
Except as disclosed in Schedule 5.25(a) hereto, all
Employee Pension Benefit Plans were in effect for substantially all of calendar
year 1992. There has been no material amendment of any such plans (other than
amendments required to comply with applicable law) or material increase in the
cost of maintaining such plans or providing benefits thereunder on or after the
last day of the plan year which ended in calendar year 1992 for each such
Employee Pension Benefit Plan.
BFC has provided to UPC copies of the annual
actuarial valuation or allocation report for each Employee Pension Benefit Plan
for the three (3) plan years for such plan immediately preceding the current
date. With regard to Employee Pension Benefit Plans which are not intended to
be qualified under Section 401(a) of the Code, copies of financial statements
or reports containing information regarding the expense of maintaining any such
Employee Pension Benefit Plan for the three (3) plan years preceding the
current date have been delivered to UPC.
(b) BFC has furnished to UPC true and complete copies of
each "Employee Welfare Benefit Plan" as defined in Section 3(1) of ERISA,
which, to the best of its knowledge, is subject to any provision of ERISA and
covers any employee, whether active or retired, of BFC or any BFC Subsidiary or
members of a controlled group or entities under common control with BFC or its
Subsidiaries in the manner defined and further described in Section 414(b),
(c), or (m) of the Code. Such plans
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 46
<PAGE> 53
are hereinafter referred to collectively as the "Employee Welfare Benefit
Plans", and each such Employee Welfare Benefit Plan is listed in Schedule
5.25(b) hereto.
BFC has also provided to UPC true and complete copies
of documents establishing all funding instruments for such Employee Welfare
Benefit Plans, including but not limited to, trust agreements, cafeteria plans
(pursuant to Code Section 125), and voluntary employee beneficiary associations
(pursuant to Code Section 501(c)(9)). Each of the Employee Welfare Benefit
Plans has been operated in substantial conformity with the written provisions
of the plan documents which have been delivered to UPC and in compliance with
the requirements prescribed by all statutes, orders, rules, and regulations
including, but not limited to, ERISA and the Code, which are applicable to such
Employee Welfare Benefit Plans. Any deviation in the operation of such plans
from the requirements of the plan documents or of applicable laws have been
listed in Schedule 5.25(b) hereto. BFC has provided any notification required
by law to any participant covered under any Employee Welfare Benefit Plan which
has failed to comply with the requirements of any Code section which results in
the imposition of a tax on benefits provided to such participants under such
plan.
With respect to all Employee Welfare Benefit Plans
which are subject to the annual report requirement of ERISA Section 103 or to
the annual return requirement of Code Section 6039D, all annual reports and
annual returns as were required to be filed pursuant to such sections have been
timely filed. Copies of all such annual returns/reports, including all
attachments and Schedules, for the three (3) plan years immediately preceding
the current date for all plans subject to such requirements have been delivered
to UPC. With respect to all Employee Welfare Benefit Plans which are subject
to the summary plan description requirement of ERISA Section 102, all such
summary plan descriptions as were required to be filed with the Department of
Labor and distributed to participants and beneficiaries have been timely filed
and distributed. Copies of all such summary plan descriptions have been
delivered to UPC.
Except as disclosed in Schedule 5.25(b) hereto, all
Employee Welfare Benefit Plans which are in effect were in effect for
substantially all of calendar year 1992. Except as disclosed in Schedule
5.25(b) hereto, there has been with respect to such Employee Welfare Benefit
Plans no material amendment thereof or material increase in the cost thereof or
benefits payable thereunder on or after January 1, 1993.
To the best of the knowledge, information and belief
of BFC and BFSB, no Employee Welfare Benefit Plan or any
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 47
<PAGE> 54
trust created thereunder, nor any "party in interest" with respect to the plan
(as defined in Section 3(14) of ERISA), has engaged in a "prohibited
transaction", as such term is defined in Section 406 of ERISA, which could
subject such Employee Welfare Benefit Plan, any such trust, or any party in
interest (other than a person for whom neither BFC nor any BFC Subsidiary is
directly or indirectly responsible) to the imposition of a penalty for such
prohibited transaction under Section 502(i) of ERISA. The Department of Labor
has not assessed any such penalty or served notice to BFC or any of its
Subsidiaries that such a penalty may be imposed upon any Employee Welfare
Benefit Plan.
Neither BFC nor any BFC Subsidiary has failed to make
any contribution to, or pay any amount due and owing by BFC or an BFC
Subsidiary under the terms of, an Employee Welfare Benefit Plan. Except as
disclosed in Section 5.25(b) hereto, no claims have been incurred with respect
to any Employee Welfare Benefit Plan which may, to the best knowledge,
information and belief of BFC, constitute a liability for BFC or any BFC
Subsidiary after the application of any insurance, trust or other funds which
are applicable to the payment of such claims.
Except as disclosed in Schedule 5.25(b) hereto, to
the best knowledge, information and belief of BFC, no condition exists that
could subject any Employee Welfare Benefit Plan or any person (other than a
person for whom neither BFC or any BFC Subsidiary is directly or indirectly
responsible) to liabilities, damages, losses, taxes, or sanctions that arise
under Section 4980B of the Code or Sections 601 through 608 of ERISA for
failure to comply with the continuation health care coverage requirements of
ERISA Sections 601 through 608 and Code Section 4980B with respect to any
current or former employee of BFC or any BFC Subsidiary, or the beneficiaries
of such employee.
(c) BFC has furnished to UPC true and complete copies
and/or descriptions of each plan or arrangement maintained or otherwise
contributed to by BFC or any BFC Subsidiary which is not an Employee Pension
Benefit Plan and is not an Employee Welfare Benefit Plan and which (exclusive
of base salary and base wages) provides for any form of current or deferred
compensation, bonus, stock option, profit sharing, retirement, group health or
insurance, welfare benefits, fringe benefits, or similar plan or arrangement
for the benefit of any employee or class of employees, whether active or
retired, or independent contractors of BFC or any BFC subsidiary. Such plans
and arrangements shall collectively be referred to herein as "Benefit
Arrangements" and all such Benefit Arrangements of BFC and BFC's Subsidiaries
are listed on Schedule 5.25(c) hereto. Except as disclosed in Schedule 5.25(c)
hereto, there are no other benefit arrangements of the BFC companies and all
Benefit Arrangements which are in
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 48
<PAGE> 55
effect were in effect for substantially all of calendar year 1992. Except as
disclosed in Schedule 5.25(c) hereto, there has been with respect to Benefit
Arrangements no material amendment thereof or material increase in the cost
thereof or benefits payable thereunder on or after January 1, 1993. There has
been no material increase in the base salary and wage levels of BFC or any BFC
Subsidiary and, except in the ordinary course of business, no change in the
terms or conditions of employment (including severance benefits) compared, in
each case, to those prevailing for substantially all of calendar year 1992.
Except as disclosed in Schedule 5.25(c) hereto, there has been no material
increase in the compensation of, or benefits payable to, any senior executive
employee of BFC or any BFC subsidiary on or after January 1, 1993, nor has any
employment, severance, or similar contract been entered into with any such
employee, nor has any amendment to any such contract been made on or after
January 1, 1993.
With respect to all Benefit Arrangements which are
subject to the annual return requirement of Code Section 6039D, all annual
returns as were required to be filed have been timely filed. Copies of all
such annual returns for the three (3) plan years immediately preceding the
current date have been delivered to UPC.
(d) Listed on Schedule 5.25(d) hereto are all Employee
Pension Benefit Plans, Employee Welfare Benefit Plans, and Benefit Arrangements
which provide compensation or benefits which become effective upon a change in
control of BFC or any BFC Subsidiary, including, but not limited to, additional
compensation or benefits, or acceleration in the amount or timing of payment of
compensation or benefits which had become effective prior to the date of such
acceleration. Except as disclosed in Schedule 5.25(d) hereto, there is no
Employee Pension Benefit Plan, Employee Welfare Benefit Plan, or Benefit
Arrangement covering any employee of BFC or any BFC Subsidiary which
individually or collectively could give rise to the payment of any amount which
would constitute an "excess parachute payment", as such term is defined in
Section 280G of the Code and Regulations proposed pursuant to that section.
(e) Except as described in Schedule 5.25(e) hereto, each
Employee Pension Benefit Plan, Employee Welfare Benefit Plan, or Benefit
Arrangement and each personal services contract, fringe benefit, consulting
contract or similar arrangement with or for the benefit of any officer,
director, employee, or other person may be terminated by BFC (or by BFC as the
Surviving Corporation) within a period of no more than thirty (30) days
following the effective time of the merger, without payment of any amount as a
penalty, bonus, premium, severance pay, or other
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 49
<PAGE> 56
compensation for such termination. No limitation on the right to terminate any
such plan has been communicated by BFC or its Subsidiaries to employees, former
employees, or retirees who are or may be participants in or beneficiaries of
such plans or arrangements. Each Employee Pension Benefit Plan which is
qualified under Section 401(a) of the Code as a qualified defined benefit
pension plan permits the reversion of excess assets to the employer maintaining
the plan or its successors or assigns upon a plan termination and such
provision has been included in the Employee Pension Benefit Plan for the period
required under ERISA Section 4044(d).
(f) Except as disclosed in Schedule 5.25(f) hereto,
neither BFC nor any BFC Subsidiary has received notice from any governmental
agency of any alleged violation of applicable laws or of any prospective audit
or other investigation for the purpose of reviewing compliance with applicable
laws with respect to any Employee Pension Benefit Plan, Employee Welfare
Benefit Plan or Benefit Arrangement.
Except as disclosed in Schedule 5.25(f) hereto, no
suits, actions, or claims have been filed in any court of law or with any
governmental agency regarding the operation of any Employee Pension Benefit
Plan, Employee Welfare Benefit Plan, or Benefit Arrangement and no such
additional suits, actions, or claims are, to the best information, knowledge
and belief of BFC, anticipated to be filed.
5.26 Material Contracts. Except as reflected in the Audited
------------------
Financial Statements of BFC, or as described in Schedule 5.26 hereto, neither
BFC nor any BFC Subsidiary, nor any of their respective assets, businesses, or
operations, is as of the date of this Reorganization Agreement a party to, or
is bound or obligated by, or receives benefits under any contract or agreement
or amendment thereto that in each case would (assuming that each were a
reporting company under the 1934 Act, whether or not it is so registered) be
required to be filed as an exhibit to an Annual Report on Form 10-K filed by
BFC as of the date of this Reorganization Agreement that has not already been
filed as an exhibit to BFC's Form 10-K filed for the fiscal year ended
September 30, 1993, or in any other SEC Document filed prior to the date of
this Reorganization Agreement.
5.27 Material Contract Defaults. To the best of the
--------------------------
knowledge, information and belief of BFC and BFSB, neither BFC nor any BFC
Subsidiary is in default in any respect under any contract, agreement,
commitment, arrangement, lease, insurance policy, or other instrument to which
it is a party or by which its respective assets, business, or
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 50
<PAGE> 57
operations may be bound or affected or under which it or its respective assets,
business, or operations receives benefits, and which default is reasonably
expected to have either individually or in the aggregate a material adverse
effect on BFC or any BFC Subsidiary on a consolidated basis, and there has not
occurred any event that, with the lapse of time or the giving of notice or
both, would constitute such a default.
5.28 Reports. Since September 30, 1989, or in the case of
-------
BFC the date of the organization of BFC as a savings and loan holding company,
BFC and BFSB have filed all reports and statements, together with any
amendments required to be made with respect thereto, that it was required to
file with (i) the ASBD; (ii) the OTS; (iii) the Federal Reserve, (iv) the FDIC,
(v) the SEC, including, but not limited to, Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Reports on Forms 2900 and FFIEC 034 and
proxy statements; and (vi) any other applicable federal or state securities or
banking authorities (except, in the case of federal or state securities
authorities, filings that are not material). As of their respective dates,
each of such reports and documents, including the financial statements,
exhibits, and schedules thereto, complied in all material respects with all of
the requirements of their respective forms and all of the statutes, rules, and
regulations enforced or promulgated by the Regulatory Authority with which they
were filed. All such reports were true and complete in all material respects
and did not contain any untrue statement as stated including any amendments
thereto 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. BFC has previously
provided to UPC true and correct copies of all such reports filed by BFC or
BFSB after September 30, 1989.
5.29 Exchange Act and Listing Filings.
--------------------------------
(a) The outstanding shares of BFC Common Stock are registered with
the SEC pursuant to the 1934 Act and BFC has filed with the SEC all material
forms and reports required by law to be filed by BFC with the SEC, which forms
and reports, taken as a whole, are true and correct in all material respects,
and do not misstate a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements contained therein, in
light of the circumstances under which they were made, not misleading.
(b) The outstanding shares of BFC Common Stock are listed for trading
on the AMEX (under the symbol "BNF") pursuant to the listing rules of the AMEX
and BFC has filed with the AMEX all material forms and reports required by law
to be filed by BFC with the AMEX, which forms and reports, taken as a whole,
are
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 51
<PAGE> 58
true and correct in all material respects, and do not misstate a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements contained therein, in light of the circumstances under
which they were made, not misleading.
5.30 Statements True and Correct. None of the information
---------------------------
prepared by, or on behalf of, BFC or any BFC Subsidiary regarding BFC, BFSB or
any other BFC Subsidiary included or to be included in the Proxy Statement to
be mailed to BFC's shareholders in connection with the Shareholders Meeting,
and any other documents to be filed with the SEC, or any other Regulatory
Authority in connection with the transaction contemplated herein, at the
respective times such documents are filed, and, with respect to the Proxy
Statement, when first mailed to the shareholders of BFC, be false or misleading
with respect to any material fact, or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, or, in the case of the Proxy Statement or any
amendment thereof or supplement thereto, at the time of the Shareholders
Meeting, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for the
Shareholders Meeting. All documents which BFC or any BFC Subsidiary is
responsible for filing with the SEC or any other Regulatory Authority in
connection with the transactions contemplated hereby will comply as to form in
all material respects with the provisions of applicable law, including
applicable provisions of the Securities Laws and the rules and regulations
issued thereunder.
ARTICLE 6
COVENANTS OF UPC
6.1 Regulatory Approvals. Within sixty (60) days after
--------------------
execution of this Reorganization Agreement, UPC shall file any and all
applications with the appropriate government Regulatory Authorities in order to
obtain the Government Approvals and shall take such other actions as may be
reasonably required to consummate the transactions contemplated in this
Reorganization Agreement and the Plan of Merger with reasonable promptness.
UPC shall pay all fees and expenses arising in connection with such
applications for regulatory approval. UPC agrees to provide the appropriate
Regulatory Authorities with the information required by such authorities in
connection with UPC's applications for regulatory approval and UPC agrees to
use its best efforts to obtain such regulatory approvals, and any other
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 52
<PAGE> 59
approvals and consents as may be required for the Closing, as promptly as
practicable; provided, however, that nothing in this Section 6.1 shall be
-------- -------
construed to obligate UPC to take any action to meet any condition required to
obtain prior regulatory approval if UPC shall, in UPC's reasonable judgement,
deem such condition to be unreasonable or inconsistent with previous regulatory
approvals received by UPC in transactions of this type and to constitute a
significant impediment upon UPC's ability to carry on its business or
acquisition programs or to require UPC to increase UPC's capital ratios to
amounts in excess of the Federal Reserve's minimum capital ratio guidelines
which may be in effect from time to time. UPC shall not knowingly take any
action, or omit to take any action during the term of this Reorganization
Agreement which would adversely affect the receipt by UPC of the Government
Approvals or adversely affect the ability of UPC to perform its obligations
under this Reorganization Agreement. Subject to the terms and conditions of
this Reorganization Agreement, UPC and INTERIM agree to use all reasonable
efforts and to take, or to cause to be taken, all actions, and to do, or to
cause to be done, all things necessary, proper, or advisable under applicable
laws and regulations to consummate and make effective, with reasonable
promptness after the date of this Reorganization Agreement, the transaction
contemplated by this Reorganization Agreement, including, without limitation,
using reasonable efforts to lift or rescind any injunction or restraining or
other order adversely affecting the ability of the Parties to consummate the
transaction contemplated by this Reorganization Agreement. UPC shall use, and
shall cause each of its Subsidiaries to use, its best efforts to obtain
consents of all third parties and Regulatory Authorities necessary or desirable
for the consummation of each of the transactions contemplated by this
Reorganization Agreement.
6.2 Reservation, Listing and Registration of UPC Common Stock
----------------------------------------------------------
under the Securities Laws. UPC shall reserve for issuance that number of
- -------------------------
shares of UPC Common Stock necessary to satisfy the Consideration to be paid to
the BFC Record Holders at the Effective Time of the Merger. UPC shall
cooperate with BFC in the preparation of the BFC Proxy Statement to be used at
the Shareholders Meeting (and which shall serve also as UPC's prospectus with
respect to UPC's issuance of shares of the UPC Common Stock) and shall cause a
registration statement on the appropriate form of the SEC to be prepared and
filed so as to cause any shares of UPC Common Stock which may be delivered to
the BFC Record Holders in payment of the Consideration to be registered under
the 1933 Act and to be duly qualified under appropriate state securities laws.
UPC shall also list for trading on the NYSE the shares of UPC Common Stock so
delivered. Such reservation, registration, qualification and listing shall be
effected prior to the Closing.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 53
<PAGE> 60
6.3 Employee Benefits. Following the consummation of the
-----------------
transactions contemplated herein, UPC shall not be obligated to make further
contributions to any of the Employee Plans or Benefit Arrangements of BFC or
the BFC Subsidiaries and all employees of BFC and the BFC Subsidiaries
immediately prior to the Effective Time of the Merger who shall continue as
employees of BFC as the Surviving Corporation or as employees of any other UPC
Subsidiary will be afforded the opportunity to participate in any employee
benefit plans maintained by UPC or UPC's Subsidiaries, including but not
limited to any "employee benefit plan," as that term is defined in ERISA, on an
equal basis with employees of UPC or any UPC Subsidiaries with comparable
positions, compensation, and tenure. Service with BFC or with any BFC
Subsidiary prior to the Effective Time of the Merger by such former BFC Company
employees will be deemed service with UPC for purposes of determining
eligibility for participation and vesting in such employee benefit plans of UPC
and UPC's Subsidiaries. In its sole discretion, UPC may elect to postpone
until the first day of January next following the Effective Time of the Merger
the participation of the employees of BFC and BFC's Subsidiaries in the
employee benefit plans maintained by UPC or UPC's Subsidiaries; provided,
--------
however, during any such postponement period, the BFC Employee Plans and all
- -------
related employee benefit plans shall continue in full force and effect,
(including the continued receipt of all customary corporate contributions in
accordance with the past practice of BFC and BFSB for the period prior to the
termination of the plans), except as expressly modified or amended by the terms
of this Reorganization Agreement, or until such time as the plans are replaced
by benefit plans maintained by UPC.
6.4 Conduct of Business; Notice of Adverse Change. UPC shall
---------------------------------------------
not knowingly engage in any activity which in the opinion of the management of
UPC would prohibit UPC or INTERIM from delivering the Consideration to the
Exchange Agent at Closing or consummating the transactions contemplated in this
Reorganization Agreement. UPC shall notify BFC in writing immediately upon
becoming aware of any material adverse change in the financial condition or
prospects of UPC or any event which would prohibit UPC's performance under the
terms of this Reorganization Agreement.
ARTICLE 7
COVENANTS OF BFC AND BFSB
7.1 Proxy Statement; BFC Shareholder Approval. BFC shall
-----------------------------------------
call the Shareholders Meeting to be held as soon as reasonably practicable
after the date of this Reorganization
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 54
<PAGE> 61
Agreement and shall use its best efforts to ensure that such meeting is held
not later than April 30, 1994, for the purpose of (i) approving this
Reorganization Agreement and the Plan of Merger, and (ii) such other related
matters as it deems appropriate. In connection with the Shareholders Meeting,
(i) BFC shall, with UPC's assistance, prepare a Proxy Statement to be filed
with the SEC as part of UPC's registration statement and with any other
appropriate Regulatory Authority; shall mail or cause to be mailed such Proxy
Statement to the BFC Shareholders and shall provide UPC the opportunity to
review and comment on the Proxy Statement at least five (5) business days prior
to the filing of the Proxy Statement with the Regulatory Authorities for prior
review and at least five (5) business days prior to the mailing of the Proxy
Statement to the BFC Shareholders; (ii) the Parties shall furnish to each other
all information concerning them that the other Party may reasonably request in
connection with the preparation of such Proxy Statement; (iii) the Board of
Directors of BFC shall recommend (subject to compliance with their legal and
fiduciary duties as advised by counsel) to BFC Shareholders the approval of
this Reorganization Agreement and the Plan of Merger; and (iv) BFC shall use
its best efforts, subject to compliance with its legal and fiduciary duty as
advised by counsel, to obtain such BFC Shareholders' approvals.
7.2 Conduct of Business -- Affirmative Covenants. Unless the
--------------------------------------------
prior written consent of UPC shall have been obtained, which consent will not
be unreasonably withheld by UPC and shall be forthcoming by UPC within five (5)
Business Days from the submission of a written request by BFC therefor and,
except as otherwise contemplated herein:
(a) Except as may be required by statute, rule or
regulation, BFC and BFSB shall, and shall cause each BFC Subsidiary to:
(i) Operate its business only in the usual,
regular, and ordinary course;
(ii) Preserve intact its business
organizations and assets and to maintain its rights and franchises;
(iii) Take no action, unless otherwise
required by law, rules or regulation, that would (A) adversely affect
the ability of any of them or UPC to obtain any necessary approvals of
Regulatory Authorities required to consummate the transactions
contemplated by this Reorganization Agreement, or (B) adversely affect
the ability of such Party to perform its covenants and agreements
under this Reorganization Agreement;
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 55
<PAGE> 62
(iv) Except as they may terminate in
accordance with their terms, keep in full force and effect, and not
default in any of their obligations under, all material contracts;
(v) Keep in full force and effect insurance
coverage with responsible insurance carriers which is reasonably
adequate in coverage and amount for companies the size of BFC or such
BFC Subsidiary and for the businesses and properties owned by each and
in which each is engaged, to the extent that such insurance is
reasonably available;
(vi) Use its best efforts to retain BFSB's
present customer base and to facilitate the retention of such
customers by BFSB and its branches after the Effective Time of the
Merger; and
(vii) Maintain, renew, keep in full force
and effect, and preserve its business organization and material rights
and franchises, permits and licenses, and to use its best efforts to
maintain positive relations with its present employees so that such
employees will continue to perform effectively and will be available
to BFC, BFSB or UPC and UPC's Subsidiaries at and after the Effective
Time of the Merger, and to use its best efforts to maintain its
existing, or substantially equivalent, credit arrangements with banks
and other financial institutions and to assure the continuance of
BFSB's customer relationships;
(viii) Prior to the Effective Time of the
Merger, BFC or BFSB shall make payment to William D. Powell and C.
Raymond Duncan of $389,774 and $230,765, respectively, in full
satisfaction of the rights of Mr. Powell and Mr. Duncan under their
respective Employment Agreements with BFSB dated February 15, 1991.
(b) BFC and BFSB agree to use their best efforts to
assist UPC in obtaining the Government Approvals necessary to complete the
transactions contemplated hereby and do not know of any reason that such
Government Approvals can not be obtained, and BFC and BFSB shall provide to UPC
or to the appropriate governmental authorities all information reasonably
required to be submitted in connection with obtaining such approvals;
(c) BFC and BFSB, at their own cost and expense,
shall use their best efforts to secure all necessary consents and all consents
and releases, if any, required of BFC, BFSB or third parties and shall comply
with all applicable laws, regulations and rulings in connection with this
Reorganization Agreement and the consummation of the transactions contemplated
hereby;
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 56
<PAGE> 63
(d) At all times to and including, and as of, the
Closing, BFC and BFSB shall inform UPC in writing of any and all facts
necessary to amend or supplement the representations and warranties made herein
and the Schedules attached hereto as necessary so that the information
contained herein and therein will accurately reflect the current status of BFC
and BFSB; provided, however, that any such updates to Schedules shall be
-------- -------
required prior to the Closing only with respect to matters which represent
material changes to the Schedules and the information contained therein; and
provided further, that before such amendment, supplement or update may be
- -------- -------
deemed to be a part of this Reorganization Agreement, UPC shall have agreed in
writing to each amendment, supplement or update to the Schedules made
subsequent to the date of this Reorganization Agreement as an amendment to this
Reorganization Agreement;
(e) On and after the Closing Date, BFC and BFSB
shall give such further assistance to UPC and shall execute, acknowledge and
deliver all such documents and instruments as UPC may reasonably request and
take such further action as may be necessary or appropriate effectively to
consummate the transactions contemplated by this Reorganization Agreement;
(f) Between the date of this Reorganization
Agreement and the Closing Date, BFC and BFSB shall afford UPC and its
authorized agents and representatives reasonable access during normal business
hours to the properties, operations, books, records, contracts, documents, loan
files and other information of, or relating to BFC and BFSB. BFC and BFSB
shall provide reasonable assistance to UPC in its investigation of matters
relating to BFC and BFSB; and
(g) Subject to the terms and conditions of this
Reorganization Agreement, BFC and BFSB agree to use all reasonable efforts and
to take, or to cause to be taken, all actions, and to do, or to cause to be
done, all things necessary, proper, or advisable under applicable laws and
regulations to consummate and make effective, with reasonable promptness after
the date of this Reorganization Agreement, the transactions contemplated by
this Reorganization Agreement, including, without limitation, using reasonable
efforts to lift or rescind any injunction or restraining or other order
adversely affecting the ability of the Parties to consummate the transaction
contemplated by this Reorganization Agreement. BFC shall use, and shall cause
each of its Subsidiaries to use, its best efforts to obtain consents of all
third parties and Regulatory Authorities necessary or desirable for the
consummation of each of the transactions contemplated by this Reorganization
Agreement.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 57
<PAGE> 64
7.3 Conduct of Business -- Negative Covenants. From the date
-----------------------------------------
of this Reorganization Agreement until the earlier of the Effective Time of the
Merger or the termination of this Reorganization Agreement, BFC and BFSB
covenant and agree that they will neither do, nor agree or commit to do, nor
permit any BFC Subsidiary to do or commit or agree to do, any of the following
without the prior written consent of the chief executive officer, president, or
chief financial officer of UPC, which consent will not be unreasonably
withheld, or as expressly permitted by this Reorganization Agreement:
(a) Except as expressly contemplated by this
Reorganization Agreement or the Plan of Merger, amend its Certificate of
Incorporation or Bylaws; or
(b) Impose, or suffer the imposition, on any share
of capital stock held by it or by any of its Subsidiaries of any lien, charge,
or encumbrance, or permit any such lien, charge, or encumbrance to exist; or
(c) (i) Repurchase, redeem, or otherwise acquire or
exchange, directly or indirectly, any shares of its capital stock or other
equity securities or any securities or instruments convertible into any shares
of its capital stock, or any rights or options to acquire any shares of its
capital stock or other equity securities, except in satisfaction of any
exercised BFC Stock Options or as expressly permitted by this Reorganization
Agreement or the Plan of Merger; or (ii) split or otherwise subdivide its
capital stock; or (iii) recapitalize in any way; or (iv) declare a stock
dividend on the BFC Common Stock; or (v) pay or declare a cash dividend or make
or declare any other type of distribution on the BFC Common Stock except as
expressly permitted by Section 8.2(i)(vi) of this Reorganization Agreement or
the Plan of Merger; or
(d) Except as expressly permitted by this
Reorganization Agreement, acquire direct or indirect control over any
corporation, association, firm, organization or other entity, other than in
connection with (i) mergers, acquisitions, or other transactions approved in
writing by UPC, (ii) internal reorganizations or consolidations involving
existing Subsidiaries, (iii) foreclosures in the ordinary course of business
and not knowingly exposing it to liability by reason of Hazardous Substances,
(iv) acquisitions of control in its fiduciary capacity, or (v) the creation of
new subsidiaries organized to conduct or continue activities otherwise
permitted by this Reorganization Agreement; or
(e) Except as expressly permitted by this
Reorganization Agreement or the Plan of Merger, to (i) issue,
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 58
<PAGE> 65
sell, agree to sell, or otherwise dispose of or otherwise permit to become
outstanding any additional shares of BFC Common Stock (except in satisfaction
of any exercised BFC Stock Options), or any other capital stock of BFC or of
any BFC Subsidiary, or any stock appreciation rights, or any option, warrant,
conversion, call, scrip, or other right to acquire any such stock, or any
security convertible into any such stock, unless any such shares of such stock
are directly sold or otherwise directly transferred to BFC or any BFC
Subsidiary, or are issued in connection with any of the above-described
securities encompassed in the BFC Option Plans, or (ii) sell, agree to sell, or
otherwise dispose of any substantial part of the assets or earning power of BFC
or of any BFC Subsidiary; or (iii) sell, agree to sell, or otherwise dispose of
any asset of BFC or any BFC Subsidiary other than in the ordinary course of
business for reasonable and adequate consideration; or (iv) buy, agree to buy
or otherwise acquire a substantial part of the assets or earning power of any
other Person or entity; or
(f) Incur, or permit any BFC Subsidiary to incur,
any additional debt obligation or other obligation for borrowed money [other
than (i) in replacement of existing short-term debt with other short-term debt
of an equal or lesser amount, (ii) financing of banking related activities
consistent with past practices, or (iii) indebtedness of BFC or any BFC
Subsidiary to BFSB or another BFC Subsidiary] in excess of an aggregate of
$50,000 (for BFC and its Subsidiaries on a consolidated basis) except in the
ordinary course of the business of BFC or such BFC Subsidiary consistent with
past practices (and such ordinary course of business shall include, but shall
not be limited to, creation of deposit liabilities, entry into repurchase
agreements or reverse repurchase agreements, purchases or sales of federal
funds, Federal Reserve advances, FHLB advances, and sales of certificates of
deposit); or
(g) Except as expressly required by the terms of
this Reorganization Agreement, grant any increase in compensation or benefits
to any of its employees or officers, except in accordance with past practices
or as required by law; pay any bonus except in accordance with past practices;
enter into any severance agreements with any of its officers or employees;
grant any material increase in fees or other increases in compensation or other
benefits to any director of BFC or of any BFC Subsidiary; or effect any change
in retirement benefits for any class of its employees or officers, unless such
change is required by applicable law; or
(h) Except as expressly required by the terms of
this Reorganization Agreement, amend any existing employment contract between
it and any person having a salary thereunder in
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 59
<PAGE> 66
excess of $30,000 per year (unless such amendment is required by law) to
increase the compensation or benefits payable thereunder; or to enter into any
new employment contract with any person having an annual salary thereunder in
excess of $30,000 that BFC or BFSB (or their respective successors) do not have
the unconditional right to terminate without liability (other than liability
for services already rendered), at any time on or after the Effective Time of
the Merger; or
(i) Except as expressly required by the terms of
this Reorganization Agreement, adopt any new employee benefit plan or terminate
or make any material change in or to any existing employee benefit plan other
than any change that is required by law or that, in the opinion of counsel, is
necessary or advisable to maintain the tax-qualified status of any such plan;
or
(j) Enter into any new service contracts, purchase
or sale agreements or lease agreements having a value in excess of One Hundred
Thousand Dollars ($100,000) to BFC or any BFC Subsidiary; or
(k) Make any capital expenditure except for ordinary
purchases, repairs, renewals or replacements; or
(l) Enter into any transactions other than in the
ordinary course of business; or
(m) Grant or commit to grant any new extension of
credit to any officer, director or known holder of 2% or more of the
outstanding BFC Common Stock, or to any corporation, partnership, trust or
other entity controlled by any such person, if such extension of credit,
together with all other credits then outstanding to the same borrower and all
affiliated persons of such borrower, would exceed two percent (2%) of the
capital of BFC or amend the terms of any such credit outstanding on the date
hereof.
7.4 Conduct of Business -- Certain Actions.
--------------------------------------
(a) Except to the extent necessary to consummate the
transactions specifically contemplated by this Reorganization Agreement, BFC
and BFSB shall not, and shall use their respective best efforts to ensure that
their respective directors, officers, employees, and advisors do not, directly
or indirectly, institute, solicit, or knowingly encourage (including by way of
furnishing any information not legally required to be furnished) any inquiry,
discussion, or proposal, or participate in any discussions or negotiations
with, or provide any confidential or non-public information to, any corporate,
partnership, person or
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 60
<PAGE> 67
other entity or group (other than to UPC or any UPC Subsidiary) concerning any
"Acquisition Proposal" (as defined below), except for actions reasonably
considered by the Board of Directors of BFC, based upon the advice of outside
legal counsel, to be required in order to fulfill its fiduciary obligations.
BFC shall notify UPC immediately if any Acquisition Proposal has been or should
hereafter be received by BFC or BFSB, such notice to contain, at a minimum, the
identity of such persons, and, subject to disclosure being consistent with the
fiduciary obligations of BFC's Board of Directors, a copy of any written
inquiry, the terms of any proposal or inquiry, any information requested or
discussions sought to be initiated, and the status of any reports, negotiations
or expressions of interest. For purposes of this Section, "Acquisition
Proposal" means any tender offer, agreement, understanding or other proposal
pursuant to which any corporation, partnership, person or other entity or
group, other than UPC or any UPC Subsidiary, would directly or indirectly (i)
acquire or participate in a merger, share exchange, consolidation or any other
business combination involving BFC or BFSB; (ii) acquire the right to vote ten
percent (10%) or more of the BFC Common Stock or BFSB Common Stock; (iii)
acquire a significant portion of the assets or earning power of BFC or of BFSB;
or (iv) acquire in excess of ten percent (10%) of the outstanding BFC Common
Stock or BFSB Common Stock.
(b) As a condition of and as an inducement to UPC's
entering into this Reorganization Agreement, BFC and BFSB covenant,
acknowledge, and agree that it shall be a specific, absolute, and
unconditionally binding condition precedent to either BFC's or BFSB's entering
into a letter of intent, agreement in principle, or definitive agreement
(whether or not considered binding, non-binding, conditional or unconditional)
with any third-party with respect to an Acquisition Proposal, or supporting or
indicating an intent to support an Acquisition Proposal, other than this
Reorganization Agreement and the transactions contemplated in this
Reorganization Agreement, regardless of whether BFC or BFSB has otherwise
complied with the provisions of Section 7.4(a) hereof, that BFC or such
third-party which is a party to any Acquisition Proposal shall have paid UPC
the sum of Three Million Five Hundred Thousand and No/100 Dollars ($3,500,000),
which sum represents the (i) direct costs and expenses (including, but not
limited to, fees and expenses incurred by UPC's financial or other consultants,
printing costs, investment bankers, accountants, and counsel) incurred by or on
behalf of UPC in negotiating and undertaking to carry out the transactions
contemplated by this
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 61
<PAGE> 68
Reorganization Agreement; (ii) indirect costs and expenses of UPC in connection
with the transactions contemplated by this Reorganization Agreement, including
UPC's management time devoted to negotiation and preparation for the
transactions contemplated by this Reorganization Agreement; and (iii) UPC's
loss as a result of the transactions contemplated by this Reorganization
Agreement not being consummated. Accordingly, BFC and BFSB hereby jointly and
severally stipulate and covenant that prior to BFC's or BFSB's entering into a
letter of intent, agreement in principle, or definitive agreement, (whether
binding or non-binding, conditional or unconditional) with any third-party with
respect to an Acquisition Proposal or supporting or indicating an intent to
support an Acquisition Proposal, either BFC or such third-party shall have paid
to UPC the amount set forth above in immediately available funds to satisfy the
specific, absolute, and unconditionally binding condition precedent imposed by
this Section 7.4. Notwithstanding anything in this Section 7.4(b) to the
contrary, in the event such Acquisition Proposal should be the result of an
unsolicited offer or takeover of BFC or BFSB, any sums due UPC by BFC pursuant
to the terms of this Section 7.4 shall be paid by BFC to UPC at the closing of
the transactions set forth in such Acquisition Proposal and all obligations of
UPC to hold the Closing by the Target Date shall be tolled until such time as
the transactions set forth in any such Acquisition Proposal shall have been
consummated or until such time as the Acquisition Proposal shall have expired
plus such reasonable time as UPC shall require. UPC and INTERIM each
acknowledges that under no circumstances shall any officer or director of BFC
or BFSB (unless such officer or director shall have an interest in a potential
acquiring party in any Acquisition Proposal) be held personally liable to UPC
or INTERIM for any amount of the foregoing payment. On payment of such amount
to UPC, UPC and INTERIM shall have no cause of action or claim (either in law
or equity) whatsoever against BFC or BFSB, or any officer or director of BFC or
BFSB, with respect to or in connection with such Acquisition Proposal, this
Reorganization Agreement or the Plan of Merger.
(c) The requirements, conditions, and obligations
imposed by this Section 7.4 shall continue in full force and effect from the
date of this Reorganization Agreement until October 1, 1994, unless and until
the earlier of any of the following events shall occur, in which event,
thereafter neither BFC nor BFSB shall be obligated to pay the amount required
by this Section 7.4 as a condition precedent to such transaction:
(1) This Reorganization Agreement shall have been terminated (i)
mutually by the Parties pursuant to Section 9.1(a) of this
Reorganization Agreement; (ii) by UPC and INTERIM pursuant to
Section 9.1(b) of this Reorganization Agreement; (iii) by UPC
and INTERIM or BFC and BFSB pursuant to Section 9.1(c) of this
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 62
<PAGE> 69
Reorganization Agreement; (iv) by UPC and INTERIM or BFC and
BFSB pursuant to Section 9.1(d) of this Reorganization
Agreement; (v) by UPC and INTERIM or BFC and BFSB pursuant to
Section 9.1(e) of this Reorganization Agreement, and in the
case of termination pursuant to Section 9.1(e), only on the
basis of the failure to satisfy the conditions enumerated in
subparagraph (2) below; (vi) by UPC and INTERIM pursuant to
Section 9.1(f) of this Reorganization Agreement; (vii) by UPC
and INTERIM or BFC and BFSB pursuant to Section 9.1(g) of this
Reorganization Agreement; (viii) by UPC and INTERIM pursuant
to Section 9.1(h) of this Reorganization Agreement; (ix) by
UPC and INTERIM pursuant to Section 9.1(i) of this
Reorganization Agreement; and (x) by UPC and INTERIM or BFC
and BFSB pursuant to Section 9.1(j) of this Reorganization
Agreement; or
(2) In the event the Merger should not be consummated as a result
of the failure to satisfy any of the following conditions:
(i) Material inaccuracy (without waiver thereof) of
representations and warranties of UPC as contemplated
by the provisions of Section 8.1(b) of this
Reorganization Agreement;
(ii) Noncompliance by UPC or INTERIM with their
respective obligations as required by the provisions
of Section 8.1(a) of this Reorganization Agreement;
(iii) The failure by UPC or INTERIM to effect all
corporate action necessary on their respective parts
as required by the provisions of Section 8.1 of this
Reorganization Agreement or to satisfy the conditions
set forth in Sections 8.1(d) or 8.1(g) of this
Reorganization Agreement;
(iv) The failure to receive the requisite approvals
as required by the provisions of Section 8.3(b) of
this Reorganization Agreement other than any such
failure arising out of any action or inaction on the
part of BFC or BFSB;
(v) The occurrence of material legal proceedings as
contemplated by the provisions of Section 8.3(a) of
this Reorganization Agreement;
(vi) The failure on the part of the appropriate
officers of UPC to deliver the certificates set forth
in Section 8.1(c) of this Reorganization
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 63
<PAGE> 70
Agreement, or the failure on the part of counsel to
UPC to deliver the requisite opinion required by the
provisions of Section 8.1(e) of this Reorganization
Agreement; or
(vii) UPC shall have determined not to consummate the
Merger pursuant to Sections 8.2(d), 8.2(f), 8.2(i),
8.2(k) or 8.2(l).
ARTICLE 8
CONDITIONS TO CLOSING
8.1 Conditions to the Obligations of BFC. Unless waived
------------------------------------
in writing by BFC, the obligation of BFC to consummate the transaction
contemplated by this Reorganization Agreement is subject to the satisfaction at
or prior to the Closing Date of the following conditions:
(a) Performance. Each of the material acts and
-----------
undertakings of UPC and INTERIM to be performed at or prior to the Closing Date
pursuant to this Reorganization Agreement shall have been duly performed,
except for breaches of acts and undertakings which would not have, or would not
reasonably be expected to have, any material adverse effect on the business or
operations of UPC and the UPC Subsidiaries taken as a whole;
(b) Representations and Warranties. The
------------------------------
representations and warranties of UPC and INTERIM contained in Article 4 of
this Reorganization Agreement shall be true and complete, in all material
respects, on and as of the Effective Time of the Merger with the same effect as
though made on and as of the Effective Time of the Merger, except (i) for any
such representations and warranties made as of a specified date, which shall be
true and correct in all material respects as of such date and (ii) for breaches
or representations and warranties which would not have, or would not reasonably
be expected to have, a material adverse effect on the business or operations of
UPC and the UPC Subsidiaries taken as a whole;
(c) Documents. In addition to the other
---------
deliveries of UPC or INTERIM described elsewhere in this Reorganization
Agreement, BFC shall have received the following documents and instruments:
(i) a certificate signed by the
Secretary or an assistant secretary of UPC and INTERIM dated as of the
Closing Date certifying that:
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 64
<PAGE> 71
(A) UPC's and INTERIM's respective
Boards of Directors have duly adopted resolutions (copies of
which shall be attached to such certificate) approving the
substantive terms of this Reorganization Agreement (including
the Plan of Merger) and authorizing the consummation of the
transactions contemplated by this Reorganization Agreement and
certifying that such resolutions have not been amended or
modified and remain in full force and effect;
(B) each person executing this
Reorganization Agreement on behalf of UPC or INTERIM is an
officer of UPC or INTERIM, as the case may be, holding the
office or offices specified therein, with full power and
authority to execute this Reorganization Agreement and any and
all other documents in connection with the Merger, and that
the signature of each person set forth on such certificate is
his or her genuine signature;
(C) the charter documents of UPC
and INTERIM attached to such certificate remain in full force
and effect; and
(D) UPC and INTERIM are in good
standing under their respective corporate charters; and
(ii) a certificate signed respectively by
duly authorized officers of UPC and INTERIM stating that the
conditions set forth in Section 8.1(a) and Section 8.1(b) of this
Reorganization Agreement have been fulfilled;
(d) Consideration. BFC shall have received a
-------------
certificate executed by an authorized officer of the Exchange Agent to the
effect that the Exchange Agent has received and holds in its possession proper
authorization to issue certificates evidencing shares of UPC Common Stock and
cash or other good funds sufficient to meet the obligations of UPC to the BFC
Record Holders to deliver the Consideration under this Reorganization Agreement
and the Plan of Merger;
(e) Opinion of UPC's and INTERIM's Counsel. BFC
--------------------------------------
shall have been furnished with an opinion of counsel to UPC and INTERIM, dated
as of the Closing Date, addressed to and in form and substance satisfactory to
BFC, to the effect that:
(i) UPC is a Tennessee corporation duly
organized, validly existing, and in good standing under the laws of
the State of Tennessee; and INTERIM is a Delaware
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 65
<PAGE> 72
corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware;
(ii) this Reorganization Agreement has
been duly and validly authorized, executed and delivered by UPC, and
INTERIM and (assuming this Reorganization Agreement is a binding
obligation of BFC and BFSB) constitutes a valid and binding obligation
of UPC and INTERIM enforceable in accordance with its terms, subject
as to enforceability to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and to the application of equitable
principles and judicial discretion;
(iii) neither the execution and delivery by
UPC or INTERIM of this Reorganization Agreement nor any of the
documents to be executed and delivered by UPC or INTERIM in connection
herewith violates or conflicts with UPC's, or INTERIM's corporate
charters or bylaws or, to the best of the knowledge, information and
belief (without making special inquiry) of such counsel, any material
contracts, agreements or other commitments of UPC or INTERIM;
(iv) to the knowledge of such counsel
after due inquiry, no consent or approval by any Governmental
Authority which has not already been obtained is required for
execution and delivery by UPC and INTERIM of this Reorganization
Agreement or any of the documents to be executed and delivered by UPC
or INTERIM in connection herewith; and
(v) the shares of UPC Common Stock to be
issued in the names of the BFC Record Holders and delivered in
exchange for their BFC Common Stock will be duly authorized, validly
issued, fully paid and non-assessable.
Such opinion may (i) expressly rely as to matters of fact upon certificates
furnished by appropriate officers of UPC or INTERIM or appropriate government
officials; (ii) in the case of matters of law governed by the laws of the
states in which they are not licensed, reasonably rely upon the opinions of
legal counsel duly licensed in such states and may be limited, in any event, to
Federal Law and the State of Tennessee; and (iii) incorporate, be guided by,
and be interpreted in accordance with, the Legal Opinion Accord of the ABA
Section of Business Law (1991);
(f) Fairness Opinion. BFC shall have received a
----------------
"fairness opinion" letter from its independent financial adviser to the effect
that, in the opinion of such adviser the Consideration to be received by the
BFC Record Holders is fair to
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 66
<PAGE> 73
the shareholders of BFC from a financial point of view, and such "fairness
opinion" shall not have been withdrawn prior to the Closing Date, and BFC shall
have received an updated "fairness opinion" letter from such advisers within
five (5) days prior to the Closing Date reinforcing the opinions provided in
the initial "fairness opinion" letter; and
(g) Tax Opinion. BFC shall have received a
-----------
written opinion from counsel to the effect that the transactions contemplated
by this Reorganization Agreement and the Plan of Merger will constitute one or
more tax-free reorganizations under Section 368 of the Internal Revenue Code
and that the BFC Record Holders will not recognize any gain or loss to the
extent that such BFC Record Holders exchange shares of BFC Common Stock for
shares of UPC Common Stock as contemplated by this Reorganization Agreement and
the Plan of Merger assuming that the shares of BFC Common Stock so exchanged by
such BFC Record Holders are held by them as capital assets at the time of such
exchange.
8.2 Conditions to the Obligations of UPC and INTERIM.
------------------------------------------------
Unless waived in writing by UPC and INTERIM, the obligation of UPC and INTERIM
to consummate the transactions contemplated by this Reorganization Agreement is
subject to the satisfaction at or prior to the Closing Date of the following
conditions:
(a) Performance. Each of the material acts and
-----------
undertakings of BFC and BFSB to be performed at or before the Closing Date
pursuant to this Reorganization Agreement shall have been duly performed,
except for breaches of acts and undertakings which would not have, or would not
reasonably be expected to have, any material adverse effect on the business or
operations of BFC and the BFC Subsidiaries taken as a whole;
(b) Representations and Warranties. The
------------------------------
representations and warranties of BFC and BFSB contained in Article 5 of this
Reorganization Agreement shall be true and correct, in all material respects,
on and as of the Closing Date with the same effect as though made on and as of
the Closing Date, except (i) for any such representations and warranties made
as of a specified date, which shall be true and correct in all material
respects as of such date and (ii) for breaches or representations and
warranties which would not have, or would not reasonably be expected to have, a
material adverse effect on the business or operations of BFC and the BFC
Subsidiaries taken as a whole;
(c) Documents. In addition to the documents
---------
described elsewhere in this Reorganization Agreement, UPC shall have received
the following documents and instruments:
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 67
<PAGE> 74
(i) a certificate signed by the
Secretary or an assistant secretary of BFC and BFSB dated as of the
Closing Date certifying that:
(A) BFC's and BFSB'S respective
Boards of Directors and shareholders have duly adopted
resolutions (copies of which shall be attached to such
certificate) approving the substantive terms of this
Reorganization Agreement (including the Plan of Merger) and
authorizing the consummation of the transactions contemplated
by this Reorganization Agreement and certifying that such
resolutions have not been amended or modified and remain in
full force and effect;
(B) each person executing this
Reorganization Agreement on behalf of BFC or BFSB, is an
officer of BFC or BFSB, as the case may be, holding the office
or offices specified therein, with full power and authority to
execute this Reorganization Agreement and any and all other
documents in connection with the Merger, and that the
signature of each person set forth on such certificate is his
or her genuine signature;
(C) the charter documents of BFC
and BFSB attached to such certificate remain in full force and
effect; and
(D) BFC and BFSB are in good
standing under their respective corporate charters; and
(ii) a certificate signed by the
respective President, Chief Executive Officer or an Executive Vice
President of each of BFC and BFSB stating that the conditions set
forth in Section 8.2(a), Section 8.2(b) and 8.2(f) this Reorganization
Agreement have been satisfied;
(d) Destruction of Property. Between the date of
-----------------------
this Reorganization Agreement and the Closing Date, there shall have been no
damage to or destruction of real property, improvements or personal property of
BFC or BFSB which materially reduces the market value of such property, and no
zoning or other order, limitation or restriction imposed against the same that
might have a material adverse impact upon the operations, business or prospects
of BFC or BFSB; provided, however, that the availability of insurance coverage
-------- -------
shall be taken into account in determining whether there has been such a
material adverse impact or material reduction in market value. In the event of
such damage, destruction, order, limitation or restriction, UPC and INTERIM may
elect either (i) to close the contemplated
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 68
<PAGE> 75
transactions in accordance with the terms of this Reorganization Agreement or
(ii) to terminate this Reorganization Agreement without penalty;
(e) Inspections Permitted. Between the date of
---------------------
this Reorganization Agreement and the Closing Date, BFC and BFSB shall have
afforded UPC and its authorized agents and representatives reasonable access
during normal business hours to the properties, operations, books, records,
contracts, documents, loan files and other information of or relating to BFC
and BFSB. BFC and BFSB shall have caused all BFC or BFSB personnel to provide
reasonable assistance to UPC in its investigation of matters relating to BFC
and BFSB;
(f) No Material Adverse Change. No material
--------------------------
adverse change in the business, property, assets (including loan portfolios),
liabilities (whether absolute, contingent or otherwise), prospects, operations,
liquidity, income, or condition (financial or otherwise) of BFC and BFSB taken
as a whole shall have occurred since the date of this Reorganization Agreement.
In the event of such a material adverse change with respect to BFC or BFSB, UPC
may elect either (i) to close the contemplated transactions in accordance with
the terms of this Reorganization Agreement or (ii) to terminate this
Reorganization Agreement without penalty;
(g) Opinion of BFC's Counsel. UPC shall have
------------------------
been furnished with an opinion of legal counsel to BFC and BFSB, dated the
Closing Date, addressed to and in form and substance satisfactory to UPC, to
the effect that:
(i) BFC is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware;
(ii) BFSB is a federal stock savings
bank, duly organized, validly existing, and in good standing under the
laws of the United States of America;
(iii) this Reorganization Agreement has
been duly and validly authorized, executed and delivered by BFC
and BFSB and (assuming that this Reorganization Agreement is a binding
obligation of UPC and INTERIM and the Plan of Merger is a binding
obligation of UPC and INTERIM) constitutes a valid and binding
obligation of BFC and BFSB enforceable in accordance with its terms,
subject as to enforceability to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and to the
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 69
<PAGE> 76
application of equitable principles and judicial discretion; and
(iv) to the knowledge of such counsel after
due inquiry, no consent or approval, which has not already been
obtained, by any governmental authority is required for execution and
delivery by BFC or BFSB of this Reorganization Agreement or any of the
documents to be executed and delivered by BFC and BFSB in connection
herewith.
Such opinion may (i) expressly rely as to matters of fact upon certificates
furnished by appropriate officers of BFC or BFSB or appropriate government
officials; (ii) in the case of matters of law governed by the laws of the
states in which they are not licensed, reasonably rely upon the opinions of
legal counsel duly licensed in such states and may be limited, in any event, to
Federal Law and the State of Delaware and (iii) incorporate, be guided by, and
be interpreted in accordance with, the Legal Opinion Accord of the ABA Section
of Business Law (1991);
(h) Other Business Combinations, Etc. Neither BFC
--------------------------------
nor BFSB shall have entered into any agreement, letter of intent, understanding
or other arrangement pursuant to which BFC or BFSB would merge; consolidate
with; effect a business combination with; sell any substantial part of BFC's or
BFSB's assets; acquire a significant part of the shares or assets of any other
Person or entity (financial or otherwise); adopt any "poison pill" or other
type of anti-takeover arrangement, any shareholder rights provision, any
"golden parachute" or similar program which would have the effect of materially
decreasing the value of BFC or BFSB or the benefits of acquiring the BFC Common
Stock;
(i) Maintenance of Certain Covenants, Etc. At
-------------------------------------
the time of Closing (i) the total assets of BFC shall be not less than
$250,000,000; (ii) the consolidated tangible equity capital of BFC shall have
been not less than $29,000,000 as of September 30, 1993, and shall have
increased since that time through normal earnings growth; (iii) the tangible
equity capital of BFSB shall have been not less than $24,500,000 as of
September 30, 1993, and shall have increased since that time through normal
earnings growth; (iv) neither BFC nor BFSB shall have issued or repurchased
from the date hereof any additional equity or debt securities, or any rights to
purchase or repurchase such securities, except as set forth in this Agreement
(therefore, there shall be not more than 1,905,680 shares of BFC Common Stock
validly issued and outstanding at the Effective Time of the Merger); (iv) from
September 30, 1993, there shall have been no extraordinary sale of assets, nor
any investment portfolio restructuring by either BFC or BFSB; (v) neither BFC
nor BFSB
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 70
<PAGE> 77
shall have issued or granted since September 30, 1993, through the Closing Date
any additional BFC Stock Options, and all validly issued and outstanding BFC
Stock Options shall have been fully exercised prior to the Closing or tendered
to BFC for conversion into options to purchase shares of UPC Common Stock as
contemplated in Section 2.7 of this Reorganization Agreement and none shall
have been repurchased by BFC or BFSB prior to the Closing; (vi) from the date
hereof, BFC shall not have declared or paid any cash dividends except its
customary and historical quarterly cash dividend (which may be increased by One
Cent ($.01) per share) prior to Closing; provided, however, in the event the
-------- -------
Closing shall not have occurred by October 1, 1994 (the "Target Date"), BFC may
increase its quarterly cash dividend for any quarter subsequent to the Target
Date and prior to Closing to an amount not to exceed the cash dividend ratio
paid by UPC on shares of UPC Common Stock adjusted by the Exchange Ratio; and
(vii) the Merger can be accounted for as a "pooling of interests" on the
financial statements of UPC. The criteria and calculations set forth above
shall be determined in accordance with GAAP assuming that BFC and BFSB shall
have been operated consistently in the normal course of their business;
provided, however, that the effects of any balance sheet expansion through
abnormal, unusual, nonrecurring or out of the ordinary borrowings or by the
realization of extraordinary or nonrecurring gains or other income from the
disposition of assets or liabilities or through similar transactions shall be
eliminated from the calculations;
(j) Non-Compete Agreements. Each member of the
----------------------
Board of Directors of BFC shall have entered into a non-compete agreement with
UPC and BFC substantially in the form of UPC's standard form of non-compete
agreement, a copy which is annexed hereto as Exhibit 8.2(j), providing for a
term of not less than two (2) years and covering the general geographic
region(s) in which BFC and BFSB currently operate and do business in or have a
present intention to do business in;
(k) Tax Opinion. UPC shall have received a
-----------
written opinion from counsel to the effect that the transactions contemplated
by this Reorganization Agreement and the Plan of Merger will constitute one or
more tax-free reorganizations under Section 368 of the Internal Revenue Code
and that the BFC Record Holders will not recognize any gain or loss to the
extent that such BFC Record Holders exchange shares of BFC Common Stock for
shares of UPC Common Stock as contemplated by this Reorganization Agreement and
the Plan of Merger assuming that the shares of BFC Common Stock so exchanged by
such BFC Record Holders are held by them as capital assets at the time of such
exchange;
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 71
<PAGE> 78
(l) Pooling of Interests Accounting Treatment.
-----------------------------------------
UPC shall have received (i) from Price Waterhouse, or other independent
accountants acceptable to UPC, a letter dated within five (5) days prior to the
Closing Date, in form and substance acceptable to UPC, stating the accountants'
opinion that, based upon the information furnished to them, the Reorganization
and Merger should be accounted for by UPC as a "pooling of interests" for
financial statement purposes and that such accounting treatment is in
accordance with generally accepted accounting principles and (ii) from BFC's
regularly retained independent accountants or other independent accountants
acceptable to UPC, a letter dated within five (5) days prior to the Closing
Date stating that, upon a review of BFC's books and records, the accountants
are aware of no reason why a business combination, such as the one contemplated
in this Reorganization Agreement, to which BFC is a party should not be
accounted for as a "pooling of interests" under generally accepted accounting
principles;
(m) Receipt of Affiliate Letters. Pursuant to
----------------------------
the provisions of Section 6.2 of this Reorganization Agreement, UPC shall have
received a written commitment in form and substance satisfactory to UPC and its
counsel (an "Affiliate Letter") from each BFC Record Holder who would be deemed
an Affiliate of BFC at the time of Closing under the Securities Laws and who
accepts shares of UPC Common Stock as Consideration for the cancellation,
exchange and conversion of his shares of BFC Common Stock pursuant to the terms
and conditions of this Reorganization Agreement, committing to UPC that such
BFC Record Holder shall not pledge, assign, sell, transfer, devise, otherwise
alienate or take any action which would eliminate or diminish the risk of
owning or holding the shares of UPC Common Stock to be received by such BFC
Record Holder upon consummation of the Merger, nor enter into any formal or
informal agreement to pledge, assign, sell or transfer, devise, or otherwise
alienate his right, title and interests in any of the shares of UPC Common
Stock to be delivered by UPC to such BFC Record Holder pursuant to the terms
and conditions of this Reorganization Agreement until such time as UPC shall
have publicly released a statement of UPC's consolidated earnings reflecting
the combined financial results of operations of UPC and BFC for a period of not
less than thirty (30) days subsequent to the Effective Time of the Merger;
(n) Employment Agreements. Mr. William D.
---------------------
Powell, President and Chief Executive Officer of BFC, and Mr. C. Raymond
Duncan, Senior Vice-President and Treasurer of BFC, shall each have entered
into an Employment Agreement with UPC or BFC substantially in the form of the
Employment Agreement annexed hereto as Exhibit 8.2(n), and in consideration for
entering into such Employment Agreements each shall have waived all rights
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 72
<PAGE> 79
under any existing employment agreements with BFC or BFSB except as provided in
Certain Post Merger Agreements; and
(o) Fairness Opinion. UPC shall have received a
----------------
"fairness opinion" letter from its independent financial adviser to the effect
that, in the opinion of such adviser the Consideration to be received by the
BFC Record Holders is fair to the shareholders of UPC from a financial point of
view, and such "fairness opinion" shall not have been withdrawn prior to the
Closing Date, and UPC shall have received an updated "fairness opinion" letter
from such advisers within five (5) days prior to the Closing Date reinforcing
the opinions provided in the initial "fairness opinion" letter.
8.3 Conditions to Obligations of All Parties. The
----------------------------------------
obligation of each party to effect the transactions contemplated hereby shall
be subject to the fulfillment, at or prior to the Closing, of the following
conditions:
(a) No Pending or Threatened Claims. That no claim,
-------------------------------
action, suit, investigation or other proceeding shall be pending or threatened
before any court or governmental agency which presents a substantial risk of
the restraint or prohibition of the transactions contemplated by this
Reorganization Agreement or the obtaining of material damages or other relief
in connection therewith;
(b) Governmental Approvals and Acquiescence
---------------------------------------
Obtained. The Parties hereto shall have received all applicable Governmental
- --------
Approvals for the consummation of the transactions contemplated herein and all
waiting periods incidental to such approvals or notices given shall have
expired;
(c) Registration Statement. The registration
----------------------
statement shall have been declared effective and shall not be subject to a stop
order of the SEC and, if the offer and sale of UPC Common Stock in the Merger
pursuant to this Reorganization Agreement is subject to the Blue Sky laws of
any state, shall not be subject to a stop order of any state securities
commission; and
(d) Shareholder Approval. This Reorganization
--------------------
Agreement and the Plan of Merger shall have been approved by the BFC
Shareholders by vote of at least the number of BFC Shareholders as required by
applicable law and the Certificate of Incorporation of BFC.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 73
<PAGE> 80
ARTICLE 9
TERMINATION
9.1 Termination. This Reorganization Agreement and the
-----------
Plan of Merger may be terminated at any time prior to the Closing, as follows:
(a) By mutual consent in writing of the Parties;
(b) By UPC or INTERIM, should BFC or any BFC
Subsidiary fail to conduct its business pursuant to BFC's and BFSB's Covenants
made in Article 7;
(c) By UPC, INTERIM or BFC in the event the Closing
shall not have occurred by October 1, 1994 (the "Target Date"), unless the
failure of the Closing to occur shall be due to the failure of the Party
seeking to terminate this Agreement to perform its obligations hereunder in a
timely manner. If UPC shall have filed any and all applications to obtain the
requisite Government Approvals within sixty (60) days of the date hereof, and
if the Closing shall not have occurred solely because of a delay caused by a
government regulatory agency or authority in its review of the application
before it, then BFC and BFSB shall, upon UPC's written request, extend the
Closing Date until such time as all Government Approvals have been obtained and
any stipulated waiting periods have expired;
(d) By either UPC, INTERIM or BFC, upon written
notice to the other Party, upon denial of any Governmental Approval necessary
for the consummation of the Merger (or should such approval be conditioned upon
a substantial deviation from the transactions contemplated); provided, however,
-------- -------
that either UPC or BFC may, upon written notice to the other, extend the term
of this Reorganization Agreement for only one sixty (60) day period to
prosecute diligently and overturn such denial, provided that such denial has
--------
been appealed within ten (10) business days of the receipt thereof;
(e) By UPC or INTERIM in the event the conditions
set forth in Sections 8.2 or 8.3 are not satisfied in all material respects as
of the Closing Date, or by BFC if the conditions set forth in Section 8.1 or
8.3 are not satisfied in all material respects as of the Closing Date, and such
failure has not been waived prior to the Closing;
(f) By UPC or INTERIM in the event that there
shall have been, in UPC's good faith opinion, a material adverse change in the
business, property, assets (including loan portfolios), liabilities (whether
absolute, accrued, contingent
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 74
<PAGE> 81
or otherwise), prospects, operations, liquidity, income, condition (financial
or otherwise) or net worth of BFC or BFSB taken as a whole, or upon the
occurrence of any event or circumstance which may have the effect of limiting
or restricting UPC's voting power or other rights normally enjoyed by the
registered holders of the BFC Common Stock which are the subject of the instant
transaction;
(g) By UPC, INTERIM or BFC in the event that
there shall have been a material breach of any obligation of the other Party
hereunder and such breach shall not have been remedied within thirty (30) days
after receipt by the breaching Party of written notice from the other Party
specifying the nature of such breach and requesting that it be remedied;
(h) By UPC or INTERIM should BFC or any BFC
Subsidiary enter into any letter of intent or agreement with a view to being
acquired by or effecting a business combination with any other Person; or any
agreement to merge, to consolidate, to combine or to sell a material portion of
its assets or to be acquired in any other manner by any other Person or to
acquire a material amount of assets or a material equity position in any other
Person, whether financial or otherwise;
(i) By UPC or INTERIM should BFC or BFSB or any BFC
Subsidiary enter into any formal agreement, letter of understanding, memorandum
or other similar arrangement with any bank regulatory authority establishing a
formal capital plan requiring BFC or BFSB to raise additional capital or to
sell a substantial portion of its assets; or
(j) By BFC or BFSB in the event the Current Market
Price Per Share of the UPC Common Stock should be less than $24.00 per share of
UPC Common Stock.
If a Party should elect to terminate this Reorganization Agreement pursuant to
subsections (b), (c), (d), (e), (f), (g), (h), (i) or (j) of this Section 9.1,
it shall give notice to the other Party, in writing, of its election in the
manner prescribed in Section 10.1 ("Notices") of this Reorganization Agreement.
9.2 Effect of Termination. In the event that this
---------------------
Reorganization Agreement should be terminated pursuant to Section 9.1 hereof,
all further obligations of the Parties under this Reorganization Agreement
shall terminate without further liability of any Party to another; provided,
--------
however, that a termination under Section 9.1 hereof shall not relieve any
- -------
Party of any liability for a breach of this Reorganization Agreement or for any
misstatement or misrepresentation made hereunder prior to such termination, or
be deemed to constitute a waiver of any
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 75
<PAGE> 82
available remedy for any such breach, misstatement or misrepresentation.
ARTICLE 10
GENERAL PROVISIONS
10.1 Notices. Any notice, request, demand and other
-------
communication which either Party hereto may desire or may be required hereunder
to give shall be in writing and shall be deemed to be duly given if delivered
personally or mailed by certified or registered mail (postage prepaid, return
receipt requested), air courier or facsimile transmission, addressed or
transmitted to such other Party as follows:
<TABLE>
<S> <C>
If to BFC or BFSB:
BANCFIRST Corporation.
255 Grant Street, S.E.
Post Office Box 1429
Decatur, Alabama 35062
Fax: (205) 351-4307
Attn: William D. Powell, President and
Chief Executive Officer
With a copy to: Breyer & Aguggia
601 13th Street, N.W.
Washington, D.C. 20005
Fax: (202) 737-7979
Attn: John F. Breyer, Jr., Esq.
If to UPC or INTERIM:
Union Planters Corporation
P.O. Box 387 (mailing address)
Memphis, Tennessee 38147
or 7130 Goodlett Farms Parkway (deliveries)
Memphis, Tennessee 38018
Fax: (901) 383-2877
Attn: Jackson W. Moore, President
Gary A. Simanson, Associate General Counsel
</TABLE>
or to such other address as any Party hereto may hereafter designate to the
other Parties in writing. Notice shall be deemed to have been given on the
date reflected in the proof or evidence of delivery, or if none, on the date
actually received.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 76
<PAGE> 83
10.2 Assignability and Parties in Interest. This
-------------------------------------
Reorganization Agreement shall not be assignable by any of the Parties hereto;
provided, however, that UPC may assign, set over and transfer all, or any part
- -------- -------
of its rights and obligations under this Reorganization Agreement to any one or
more of its present or future Affiliates. This Reorganization Agreement shall
inure to the benefit of, and be binding only upon the Parties hereto and their
respective successors and permitted assigns and no other Persons.
10.3 Governing Law. This Reorganization Agreement shall
-------------
be governed by, and construed and enforced in accordance with, the internal
laws, and not the laws pertaining to choice or conflicts of laws, of the State
of Tennessee, unless and to the extent that federal law controls. Any dispute
arising between the Parties in connection with the transactions which are the
subject of this Reorganization Agreement shall be heard in a court of competent
jurisdiction located in Shelby County, Tennessee.
10.4 Counterparts. This Reorganization Agreement may be
------------
executed simultaneously in one or more counterparts, each of which shall be
deemed an original, but all of which shall constitute but one and the same
instrument.
10.5 Best Efforts. BFC, BFSB, UPC and INTERIM each
------------
agrees to use its best efforts to complete the transactions contemplated by
this Reorganization Agreement in accordance with the terms and provisions of
this Reorganization Agreement.
10.6 Publicity. The Parties agree that press releases
---------
and other public announcements to be made by any of them with respect to the
transactions contemplated hereby shall be subject to mutual agreement.
Notwithstanding the foregoing, each of the Parties hereto may respond to
inquiries relating to this Reorganization Agreement and the transactions
contemplated hereby by the press, employees or customers without any notice or
further consent of the other Parties. Nothing in this Reorganization Agreement
shall be construed to prohibit BFC or the Board of Directors of BFC from making
any disclosure to the shareholders of BFC which in the judgement of the Board
of Directors of BFC (as advised by counsel) may be required in connection with
this Reorganization Agreement. BFC shall promptly notify UPC in writing of any
such disclosure is made.
10.7 Entire Agreement. This Reorganization Agreement,
----------------
together with the Plan of Merger which is Exhibit A hereto, Certain Post Merger
Agreements, the Schedules, Annexes, Exhibits and certificates required to be
delivered hereunder and any amendments or addenda hereafter executed and
delivered in
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 77
<PAGE> 84
accordance with Section 10.9 hereof constitute the entire agreement of the
Parties hereto pertaining to the transaction contemplated hereby and supersede
all prior written and oral (and all contemporaneous oral) agreements and
understandings of the Parties hereto concerning the subject matter hereof. The
Schedules, Annexes, Exhibits and certificates attached hereto or furnished
pursuant to this Reorganization Agreement are hereby incorporated as integral
parts of this Reorganization Agreement. Except as provided herein, by specific
language and not by mere implication, this Reorganization Agreement is not
intended to confer upon any other person not a Party to this Reorganization
Agreement any rights or remedies hereunder.
10.8 Severability. If any portion or provision of this
------------
Reorganization Agreement should be determined by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any jurisdiction, such
portion or provision shall be ineffective as to that jurisdiction to the extent
of such invalidity, illegality or unenforceability, without affecting in any
way the validity or enforceability of the remaining portions or provisions
hereof in such jurisdiction or rendering that or any other portions or
provisions of this Reorganization Agreement invalid, illegal or unenforceable
in any other jurisdiction.
10.9 Modifications, Amendments and Waivers. At any time
-------------------------------------
prior to the Closing or termination of this Reorganization Agreement, the
Parties may, solely by written agreement executed by their duly authorized
officers:
(a) extend the time for the performance of any of
the obligations or other acts of the other Party hereto;
(b) waive any inaccuracies in the representations
and warranties made by the other Party contained in this Reorganization
Agreement or in the Annexes, Schedules or Exhibits hereto or any other document
delivered pursuant to this Reorganization Agreement;
(c) waive compliance with any of the covenants or
agreements of the other Party contained in this Reorganization Agreement; and
(d) amend or add to any provision of this
Reorganization Agreement or the Plan of Merger; provided, however, that no
-------- -------
provision of this Reorganization Agreement may be amended or added to except by
an agreement in writing signed by the Parties hereto or their respective
successors in interest and expressly stating that it is an amendment to this
Reorganization Agreement.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 78
<PAGE> 85
10.10 Interpretation. The headings contained in this
--------------
Reorganization Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Reorganization Agreement.
10.11 Payment of Expenses. Except as set forth herein, UPC
-------------------
and BFC shall each pay its own fees and expenses (including, without
limitation, legal fees and expenses) incurred by it in connection with the
transactions contemplated hereunder.
10.12 Finders and Brokers. UPC, INTERIM, BFC and BFSB
-------------------
represent and warrant to each other that they have employed no broker or finder
in connection with the transactions described in this Reorganization Agreement
under an arrangement pursuant to which a fee is, or may be due to such broker
or finder as a result of the execution of this Reorganization Agreement or the
closing of the transactions contemplated herein. This section shall survive
the termination of this Reorganization Agreement.
10.13 Equitable Remedies. The Parties hereto agree that, in
------------------
the event of a breach of this Reorganization Agreement by BFC or BFSB, UPC and
INTERIM will be without an adequate remedy at law by reason of the unique
nature of BFC and BFSB. In recognition thereof, in addition to (and not in
lieu of) any remedies at law which may be available to UPC and INTERIM, UPC,
and INTERIM shall be entitled to obtain equitable relief, including the
remedies of specific performance and injunction, in the event of a breach of
this Reorganization Agreement by BFC or BFSB, and no attempt on the part of UPC
or INTERIM to obtain such equitable relief shall be deemed to constitute an
election of remedies by UPC or INTERIM which would preclude UPC or INTERIM from
obtaining any remedies at law to which it would otherwise be entitled. BFC and
BFSB covenant that they shall not contend in any such proceeding that UPC or
INTERIM is not entitled to a decree of specific performance by reason of having
an adequate remedy at law.
10.14 Attorneys' Fees. If any Party hereto shall bring an
---------------
action at law or in equity to enforce its rights under this Reorganization
Agreement (including an action based upon a misrepresentation or the breach of
any warranty, covenant, agreement or obligation contained herein), the
prevailing Party in such action shall be entitled to recover from the other
Party its reasonable costs and expenses necessarily incurred in connection with
such action (including fees, disbursements and expenses of attorneys and costs
of investigation).
10.15 Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made by the Parties hereto or in any instrument
or document furnished in connection herewith,
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 79
<PAGE> 86
shall survive the Closing and any investigation at any time made by or on
behalf of the Parties hereto and shall expire at the Effective Time of the
Merger except as to any matter which is based upon willful fraud with respect
to which the representations and warranties set forth in this Reorganization
Agreement shall expire on the earlier of six months from the Effective Time of
the Merger or the expiration of the applicable statutes of limitation. Nothing
in this Section 10.15 shall limit BFC's, BFSB's, UPC's or INTERIM's rights or
remedies for misrepresentations, breaches of this Reorganization Agreement or
any other improper action or inaction by the other Party hereto prior to the
its termination. All obligations, agreements, covenants and undertakings of
the Parties hereto or to the Certain Post Merger Agreements to be performed
either in whole or in part after the Effective Time of the Merger shall survive
the Closing and shall not expire at the Effective Time of the Merger.
10.16 No Waiver. No failure, delay or omission of or by any
---------
Party in exercising any right, power or remedy upon any breach or default of
any other Party shall impair any such rights, powers or remedies of the Party
not in breach or default, nor shall it be construed to be a waiver of any such
right, power or remedy, or an acquiescence in any similar breach or default;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of any Party
of any provisions of this Reorganization Agreement must be in writing and must
be executed by the Parties to this Reorganization Agreement and shall be
effective only to the extent specifically set forth in such writing.
10.17 Remedies Cumulative. All remedies provided in this
-------------------
Reorganization Agreement, by law or otherwise, shall be cumulative and not
alternative.
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 80
<PAGE> 87
IN WITNESS WHEREOF, each of the Parties hereto has duly executed and
delivered this Reorganization Agreement or has caused this Reorganization
Agreement to be executed and delivered in its name and on its behalf by its
representative thereunto duly authorized, all as of the date first written
above.
<TABLE>
<S> <C>
BANCFIRST CORPORATION
By:
-------------------------------
William D. Powell
Its: President and Chief
Executive Officer
ATTEST:
- ------------------------------
Miles A. Wright, Secretary
BANKFIRST, a federal savings bank
By:
-------------------------------
William D. Powell
Its: President and Chief
Executive Officer
ATTEST:
- ------------------------------
Miles A. Wright, Secretary
</TABLE>
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 81
<PAGE> 88
<TABLE>
<S> <C>
UNION PLANTERS CORPORATION
By:
-------------------------------
Jackson W. Moore
Its: President
ATTEST:
- ------------------------------
J. F. Springfield, Secretary
BFC ACQUISITION COMPANY, INC.
By:
-------------------------------
Jackson W. Moore
Its: President
ATTEST:
- ------------------------------
J. F. Springfield, Secretary
</TABLE>
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 82
<PAGE> 89
PLAN OF MERGER EXHIBIT A
SETTING FORTH THE PLAN OF MERGER
OF
BFC ACQUISITION COMPANY, INC.
(A DELAWARE CORPORATION)
WITH AND INTO
BANCFIRST CORPORATION
(A DELAWARE CORPORATION)
THIS PLAN OF MERGER ("Plan of Merger") is made and entered into as of
the 27th day of January, 1994, by and between BANCFIRST CORPORATION ("BFC"), a
corporation chartered and existing under the laws of the State of Delaware
which is a registered savings and loan holding company and whose principal
offices are located at 255 Grant Street, S.E. (Post Office Box 1429), Decatur,
Morgan County, Alabama 35602; UNION PLANTERS CORPORATION ("UPC"), a corporation
organized and existing under the laws of the State of Tennessee having its
principal office at 7130 Goodlett Farms Parkway, Memphis, Shelby County,
Tennessee 38018 and which is registered as a bank holding company under the
Bank Holding Company Act; and BFC ACQUISITION COMPANY, INC. ("INTERIM"), a
corporation chartered and existing under the laws of the State of Delaware,
whose principal place of business is located at 7130 Goodlett Farms Parkway,
Memphis, Shelby County, Tennessee 38018, and which is a wholly-owned subsidiary
of UPC. All of the authorized, issued and outstanding shares of capital stock
of INTERIM are owned and held of record by UPC.
PREAMBLE
WHEREAS, UPC, INTERIM and BFC have entered into an Agreement and Plan
of Reorganization dated as of the 27th day of January, 1994 ("Reorganization
Agreement") to which this Plan of Merger is Exhibit A and is incorporated by
reference as an integral part thereof providing for the merger of INTERIM with
and into BFC (which would be the Surviving Corporation) and the acquisition of
all of the BFC Common Stock outstanding immediately prior to the Effective Time
of the Merger by UPC for the Consideration set forth in the Reorganization
Agreement and this Plan of Merger; and
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 83
<PAGE> 90
WHEREAS, As provided in the Reorganization Agreement, UPC has caused
INTERIM to join in this Plan of Merger by executing and delivering same; and
WHEREAS, The Boards of Directors of UPC, INTERIM and BFC are each of
the opinion that the interests of their respective corporations and their
corporations' respective shareholders would best be served if INTERIM were to
be merged with and into BFC, which would survive the Merger, on the terms and
conditions provided in the Reorganization Agreement and in this Plan of Merger,
and as a result of such Merger becoming effective, the Surviving Corporation
would become a wholly-owned subsidiary of UPC.
NOW, THEREFORE, in consideration of the covenants and agreements of
the Parties contained herein, BFC, UPC and INTERIM hereby make, adopt and
approve this Plan of Merger in order to set forth the terms and conditions for
the merger of INTERIM with and into BFC (the "Merger").
ARTICLE I.
DEFINITIONS
1.1 As used in this Plan of Merger and in any amendments hereto,
all capitalized terms herein shall have the meanings assigned to such terms in
the Reorganization Agreement unless otherwise defined herein.
ARTICLE 2
CAPITALIZATION
2.1 BFC ACQUISITION COMPANY, INC.. The authorized capital stock
------------------------------
of INTERIM consists of 1,000 shares of common stock having a par value of $.01
per share (the "INTERIM Common Stock") and no shares of preferred stock. As of
the date of this Plan of Merger, 1,000 shares of INTERIM Common Stock are
issued and outstanding, and no shares of INTERIM Common Stock are held by it as
treasury stock. All such issued and outstanding shares of INTERIM Common Stock
are owned beneficially and of record by UPC.
2.2 BANCFIRST CORPORATION The authorized capital stock of BFC
---------------------
consists of 3,200,000 shares of common stock having a par value of $.01 per
share (the "BFC Common Stock") and 400,000 shares of preferred stock having a
par value of $.01 per share (the "BFC Preferred Stock). As of the date hereof,
1,784,193 shares of BFC Common Stock were issued and outstanding, no shares of
BFC Common Stock were held by BFC as BFC Treasury Stock and no shares of BFC
Preferred Stock were issued and outstanding.
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN REORGANIZATION
PAGE 84
<PAGE> 91
ARTICLE 3
PLAN OF MERGER
3.1 Constituent Corporations. The name of each constituent
------------------------
corporation to the Merger is:
BFC ACQUISITION COMPANY, INC.
and
BANCFIRST CORPORATION
3.2 Surviving Corporation. The Surviving Corporation shall be:
----------------------
BANCFIRST CORPORATION
which as of the Effective Time of the Merger shall continue to be named:
BANCFIRST CORPORATION
3.3 Terms and Conditions of Merger. The Merger shall be
------------------------------
consummated only pursuant to, and in accordance with this Plan of Merger and
the Reorganization Agreement. Conditioned upon the satisfaction or waiver
(by the Party or Parties entitled to the benefit thereof) of all conditions
precedent to consummation of the Merger, the Merger will become effective on
the date and at the time (the "Effective Time of the Merger") of the filing of
a Certificate of Merger with the Secretary of State of the State of Delaware,
or at such later time and/or date as may be agreed upon by the parties and set
forth in the Certificate of Merger. At the Effective Time of the Merger,
INTERIM shall be merged with and into BFC which will survive the Merger, and
the separate existence of INTERIM shall cease thereupon, and without further
action, BFC shall thereafter possess all of the assets, rights, privileges,
appointments, powers, licenses, permits and franchises of both BFC and
INTERIM, whether of a public or private nature, and shall be subject to all
of the liabilities, restrictions, disabilities, and duties of both BFC and
INTERIM.
3.4 Certificate of Incorporation. At the Effective Time of the
----------------------------
Merger, the Certificate of Incorporation of BFC, as in effect immediately
prior to the Effective Time of the Merger, shall constitute the Certificate
of Incorporation of BFC as the Surviving Corporation, unless and until the
same shall be amended as provided by law and the terms of such Certificate of
Incorporation.
3.5 Bylaws. At the Effective Time of the Merger, the Bylaws of
------
BFC, as in effect immediately prior to the Effective Time of the Merger, shall
continue to be its Bylaws as the Surviving Corporation, unless and until
amended or repealed as
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
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<PAGE> 92
provided by law, its Certificate of Incorporation and such Bylaws.
3.6 Directors and Officers. The directors and officers of BFC in
----------------------
office immediately prior to the Effective Time of the Merger shall continue to
be the directors and officers of the Surviving Corporation, to hold office as
provided in the Certificate of Incorporation and Bylaws of the Surviving
Corporation, unless and until their successors shall have been elected or
appointed and shall have qualified or they shall be removed as provided therein.
3.7 Name. The name of BFC as the Surviving Corporation following
----
the Merger, shall remain:
BANCFIRST CORPORATION
or such other name as BFC shall adopt.
ARTICLE 4
DESCRIPTION OF THE TRANSACTION
4.1 Conversion of the INTERIM Common Stock. At the Effective Time
--------------------------------------
of the Merger, each share of $.01 par value common stock of INTERIM (the
"INTERIM Common Stock") issued and outstanding immediately prior to the
Effective Time of The Merger shall, by virtue of the Merger becoming effective
and without any further action on the part of anyone, be converted into and
become one share of the issued and outstanding common stock of the Surviving
Corporation.
4.2 Conversion and Cancellation of Shares of BFC. At the
--------------------------------------------
Effective Time of the Merger, each share of $.01 par value common stock
of BFC issued and outstanding immediately prior to the Effective Time of the
Merger shall, by virtue of the Merger becoming effective and without any further
action on the part of anyone, be converted, exchanged and cancelled as provided
in Section 4.3 hereof.
4.3 Exchange of BFC Shares; Exchange Ratio. At the Effective Time
--------------------------------------
of the Merger, the outstanding shares of BFC Common Stock held by the BFC
Record Holders immediately prior to the Effective Time of the Merger shall,
without any further action on the part of anyone, cease to represent any
interest (equity, shareholder or otherwise) in BFC and shall automatically be
converted exclusively into, and constitute only the right of the BFC Record
Holders to receive in exchange for their shares of BFC Common Stock, whole
shares of UPC Common Stock and a cash payment in settlement of any remaining
fractional share of UPC
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
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Common Stock in accordance with the terms and conditions of this Section 4.3.
The shares of UPC Common Stock and the cash settlement of any remaining
fractional share of UPC Common Stock deliverable by UPC to the BFC Record
Holders pursuant to the terms of this Reorganization Agreement are sometimes
collectively referred to herein as the "Consideration."
The number of shares of UPC Common Stock to be exchanged for each share of BFC
Common Stock issued and outstanding immediately prior to the Effective Time of
the Merger shall be based on an exchange ratio (the "Exchange Ratio") as
determined and set forth in this Section 4.3. The Exchange Ratio shall be
determined as follows:
(A) In the event the Current Market Price
Per Share of UPC Common Stock should be greater than or equal to
$24.00 per share of UPC Common Stock, the Exchange Ratio shall be
based on a fixed Exchange Ratio of 1.078 shares of UPC Common Stock
for each share of BFC Common validly issued and outstanding
immediately prior to the Effective Time of the Merger; and
(B) In the event the Current Market Price
Per Share of UPC Common Stock should be less than $24.00 per share of
UPC Common Stock, the Exchange Ratio shall be fixed at 1.078 shares of
UPC Common Stock for each share or BFC Common Stock; provided, however,
-------- -------
BFC shall have the right to either accept the fixed Exchange Ratio of
1.078 or terminate the transaction in accordance with the terms and
provisions of the Reorganization Agreement and this Plan of Merger,
provided, further, in the event BFC should elect to terminate the
-------- -------
Reorganization Agreement and this Plan of Merger in accordance with
this Section 4.3, UPC may, in its sole discretion, reinstate the
Reorganization Agreement and this Plan of Merger and the transactions
contemplated herein by increasing the number of shares of UPC Common
Stock to be delivered by UPC to the BFC Record Holders hereunder (i.e.
the Exchange Ratio) based on a fixed price of $25.87 per share of BFC
Common Stock divided by the Current Market Price Per Share of UPC
------- --
Common Stock.
The Exchange Ratio as determined in this Section 4.3 shall be based on an
aggregate of no more than 1,905,680 shares of BFC Common Stock validly issued
and outstanding immediately prior to the Effective Time of the Merger and, for
purposes of this paragraph, counting all unexercised BFC Stock Options issued
and outstanding immediately prior to the Effective Time of the Merger as shares
of BFC Common Stock so converted and exchanged; provided, however, that no
-------- -------
fractional shares of UPC Common Stock shall be issued and if, after aggregating
all of the shares of
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
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<PAGE> 94
UPC Common Stock to which a BFC Record Holder is entitled based upon the
Exchange Ratio, there shall be a fractional share of UPC Common Stock
remaining, such fractional share shall be settled by a cash payment therefor
pursuant to the Mechanics of Payment of the Consideration set forth in Section
4.4 hereof, which shall be calculated based upon the Current Market Price Per
Share of one (1) full share of UPC Common Stock.
(i) DEFINITION OF "CURRENT MARKET PRICE
PER SHARE." The "Current Market Price Per Share" shall be the average
closing price per share of the "last" real time trades (i.e., closing
price) of the UPC Common Stock on the NYSE (as published in The Wall
---------
Street Journal) for each of the ten (10) NYSE general market trading
--------------
days next preceding the Closing Date on which the NYSE was open for
business (the "Pricing Period"). In the event the UPC Common Stock
does not trade on one or more of the trading days during the Pricing
Period (a "No Trade Date"), any such No Trade Date shall be
disregarded in computing the average closing price per share of UPC
Common Stock and the average shall be based upon the "last" real time
trades and number of days on which the UPC Common Stock actually
traded during the Pricing Period.
(ii) EFFECTS OF APPRAISAL RIGHTS ON THE
EXCHANGE RATIO. The Exchange Ratio shall be unaffected by Appraisal
Rights as granted under Delaware law because the BFC Common Stock is
listed for trading on the AMEX, which is a "national securities
exchange" as defined in rules promulgated by the SEC pursuant to the
1934 Act, and therefore, pursuant to Delaware Code Section 8-503-262,
no BFC Record Holder may assert Appraisal Rights in connection with
the Merger or the transactions contemplated in this Reorganization
Agreement.
(iii) EFFECT OF STOCK SPLITS, REVERSE STOCK
SPLITS, STOCK DIVIDENDS AND SIMILAR CHANGES IN THE CAPITAL OF BFC.
Should BFC effect any stock splits, reverse stock splits, stock
dividends or similar changes in its respective capital accounts
subsequent to the date of this Reorganization Agreement but prior to
the Effective Time of the Merger, the Exchange Ratio shall be adjusted
in such a manner as the Board of Directors of UPC shall deem in good
faith to be fair and reasonable in order to give effect to such
changes subject to BFC Board of Directors approval.
4.4 Mechanics of Payment of the Consideration. As soon as
------------------------------------------
reasonably practicable, but in any event no more than five (5) Business Days
after the Effective Time of the Merger, the Corporate Trust Department of Union
Planters National Bank,
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REOGRANIZATION
PAGE 88
<PAGE> 95
Memphis, Tennessee (the "Exchange Agent") shall deliver to each of the BFC
Record Holders such materials and information as may be deemed necessary by the
Exchange Agent to advise the BFC Record Holders of the procedures required for
proper surrender of their certificates evidencing and representing shares of
the BFC Common Stock in order for the BFC Record Holders to receive the
Consideration. Such materials shall include, without limitation, a Letter of
Transmittal, an Instruction Sheet, and a return mailing envelope addressed to
the Exchange Agent (collectively the "Shareholder Materials"). All Shareholder
Materials shall be sent by United States mail to the BFC Record Holders at the
addresses set forth on a certified shareholder list to be delivered by BFC to
UPC at the Closing (the "Shareholder List") and shall also be made available at
the Corporate Trust Department offices of the Exchange Agent. As soon as
reasonably practicable thereafter, the BFC Record Holders of all of the
outstanding shares of BFC Common Stock, shall deliver, or cause to be
delivered, by United States Postal Service, hand delivery or any other means of
delivery selected by such BFC Record Holders, to the Exchange Agent, pursuant
to the Shareholder Materials, the certificates evidencing and representing all
of the shares of BFC Common Stock which were validly issued and outstanding
immediately prior to the Effective Time of the Merger, and the Exchange Agent
shall take prompt action to process such certificates formerly evidencing and
representing shares of BFC Common Stock received by it (including the prompt
return of any defective submissions with instructions as to those actions which
may be necessary to remedy any defects). Upon receipt of the proper submission
of the certificate(s) formerly representing and evidencing ownership of the
shares of BFC Common Stock, the Exchange Agent shall, on or prior to the 30th
day after the Effective Time of the Merger, mail to the former BFC Shareholders
in exchange for the certificate(s) surrendered by them, the Consideration to be
paid for each such BFC Shareholder's shares of BFC Common Stock evidenced by
the certificate or certificates which were cancelled and converted exclusively
into the right to receive the Consideration upon the Merger becoming effective.
After the Effective Time of the Merger and until properly surrendered to the
Exchange Agent, each outstanding certificate or certificates which formerly
evidenced and represented the shares of BFC Common Stock of a BFC Record
Holder, subject to the provisions of this Section 4.4, shall be deemed for all
corporate purposes to represent and evidence only the right to receive the
Consideration into which such BFC Record Holder's shares of BFC Common Stock
were converted and aggregated at the Effective Time of the Merger. Unless and
until the outstanding certificate or certificates, which immediately prior to
the Effective Time of the Merger evidenced and represented the BFC Record
Holder's BFC Common Stock shall have been surrendered as provided above, the
Consideration payable to the BFC Record
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANINZATION
PAGE 89
<PAGE> 96
Holder(s) of the cancelled shares as of any time after the Effective Date shall
not be paid to the BFC Record Holder(s) of such certificate(s) until such
certificates shall have been surrendered in the manner required. Each BFC
Shareholder will be responsible for all federal, state and local taxes which
may be incurred by him on account of his receipt of the Consideration to be
paid in the Merger. The BFC Record Holder(s) of any certificate(s) which shall
have been lost or destroyed may nevertheless, subject to the provisions of this
Section, receive the Consideration to which each such BFC Record Holder is
entitled, provided that each such BFC Record Holder shall deliver to UPC and to
the Exchange Agent: (i) a sworn statement certifying such loss or destruction
and specifying the circumstances thereof and (ii) a lost instrument bond in
form satisfactory to UPC and the Exchange Agent which has been duly executed by
a corporate surety satisfactory to UPC and the Exchange Agent, indemnifying the
Surviving Corporation, UPC, the Exchange Agent (and their respective
successors) to their satisfaction against any loss or expense which any of them
may incur as a result of such lost or destroyed certificates being thereafter
presented. Any costs or expenses which may arise from such replacement
procedure, including the premium on the lost instrument bond, shall be for the
account of the BFC Shareholder.
4.5 Stock Transfer Books. At the Effective Time of the Merger,
--------------------
the stock transfer books of BFC shall be closed and no transfer of shares of
BFC Common Stock shall be made thereafter.
4.6 Effects of the Merger. At the Effective Time of the Merger,
---------------------
the separate existence of INTERIM shall cease, and INTERIM shall be merged with
and into BFC which, as the Surviving Corporation, shall thereupon and
thereafter possess all of the assets, rights, privileges, appointments, powers,
licenses, permits and franchises of the two merged corporations, whether of a
public or a private nature, and shall be subject to all of the liabilities,
restrictions, disabilities and duties of both BFC and INTERIM.
4.7 Transfer of Assets. At the Effective Time of the Merger, all
------------------
rights, assets, licenses, permits, franchises and interests of BFC and INTERIM
in and to every type of property, whether real, personal, or mixed, whether
tangible or intangible, and to choses in action shall be deemed to be vested in
BFC as the Surviving Corporation by virtue of the Merger and without any deed
or other instrument or act of transfer whatsoever.
4.8 Assumption of Liabilities. At the Effective Time of the
-------------------------
Merger, the Surviving Corporation shall become and be liable for all debts,
liabilities, obligations and contracts of INTERIM as well as those of the
Surviving Corporation, whether the same
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 90
<PAGE> 97
shall be matured or unmatured; whether accrued, absolute, contingent or
otherwise; and whether or not reflected or reserved against in the balance
sheets, other financial statements, books of account or records of INTERIM or
the Surviving Corporation.
4.9 Appraisal Rights of BFC Shareholders. Pursuant to the
------------------------------------
provisions of Section 8-503-262 of the Delaware Code, BFC Shareholders shall
not be entitled to assert Appraisal Rights in connection with the Merger or to
seek those appraisal remedies afforded by the Delaware Code because the BFC
Common Stock is listed for trading on the AMEX, which is a "national securities
exchange" as defined in rules promulgated by the SEC pursuant to the 1934 Act,
and therefore, pursuant to Delaware Code Section 8- 503-262, no BFC Record
Holder may assert Appraisal Rights in connection with the Merger or the
transactions contemplated in this Reorganization Agreement.
4.10 Approvals of Shareholders of BFC and INTERIM. In order to
--------------------------------------------
become effective, the Merger must be approved by the respective shareholders of
BFC and of INTERIM at meetings to be called for that purpose by their
respective Boards of Directors, or by their unanimous action by written consent
complying fully with the laws of Delaware.
4.11 BFC Stock Options. In the event and to the extent that there
-----------------
are any BFC Stock Options validly issued and outstanding at the time of
Closing, such BFC Stock Options shall at the Effective Time of the Merger
automatically and without further action on the part of anyone be converted
into options to purchase shares of UPC Common Stock on the same terms and
conditions attributable to the BFC Stock Options to purchase shares of BFC
Common Stock adjusted by and in accordance with the Exchange Ratio.
ARTICLE 5
AMENDMENTS AND WAIVERS
5.1 AMENDMENTS. To the extent permitted by law, this Plan of
Merger may be amended unilaterally by UPC and INTERIM as set forth in Section
10.9(d) of the Reorganization Agreement; provided, however, that the provisions
-------- -------
of Section 4.3 of this Plan of Merger relating to the manner or basis upon
which shares of BFC Common Stock will be converted into the exclusive right to
receive the Consideration from UPC shall not be amended in such a manner as to
reduce the amount of the Consideration payable to the BFC Record Holders
determined as provided in Section 4.3 of this Plan of Merger nor shall this
Plan of Merger be amended to permit UPC to utilize assets other than cash or
good funds to
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 91
<PAGE> 98
make payment of the Consideration as provided in Section 3.1(e) of the
Reorganization Agreement at any time after the Shareholders' Meeting without
the requisite approval (except as provided for in the Reorganization Agreement)
of the BFC Record Holders of the shares of BFC Common Stock outstanding, and
that no amendment to this Plan of Merger shall modify the requirements of
regulatory approval as set forth in Section 8.3(b) of the Reorganization
Agreement.
5.2 AUTHORITY FOR AMENDMENTS AND WAIVERS. Prior to the
Effective Time of the Merger, UPC and INTERIM, acting through their respective
Boards of Directors or chief executive officers or presidents or other
authorized officers, shall have the right to amend this Plan of Merger to
postpone the Effective Time of the Merger to a date and time subsequent to the
time of filing of the Plan of Merger with the Delaware Secretary of State, to
waive any default in the performance of any term of this Plan of Merger by BFC,
to waive or extend the time for the compliance or fulfillment by BFC of any and
all of its obligations under this Plan of Merger, and to waive any or all of
the conditions precedent to the obligations of UPC and INTERIM under this Plan
of Merger, except any condition that, if not satisfied, would result in the
violation of any law or applicable governmental regulation. Prior to the
Effective Time of the Merger, BFC, acting through its Board of Directors or
chief executive officer or president or other authorized officer, shall have
the right to amend this Plan of Merger to postpone the Effective Time of the
Merger to a date and time subsequent to the time of filing of the Plan of
Merger with the Delaware Secretary of State, to waive any default in the
performance of any term of this Plan of Merger by UPC or INTERIM, to waive or
extend the time for the compliance or fulfillment by UPC or INTERIM of any and
all of their obligations under this Plan of Merger, and to waive any or all of
the conditions precedent to the obligations of BFC under this Plan of Merger
except any condition that, if not satisfied, would result in the violation of
any law or applicable governmental regulation.
ARTICLE 6
MISCELLANEOUS
6.1 NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, or by registered or certified mail, postage
pre-paid to the persons at the addresses set forth below (or at such other
addresses or facsimile numbers as may hereafter be designated as provided
below), and shall be deemed to have been delivered as of the date received by
the Party to which, or to whom it is addressed:
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 92
<PAGE> 99
If to UPC or INTERIM:
<TABLE>
<S> <C>
Union Planters Corporation
P.O. Box 387 (mailing)
Memphis, Tennessee 38147
7130 Goodlett Farms Parkway (deliveries)
Memphis, Tennessee 38018
Fax: (901) 383-2877
Attn: Mr. Jackson W. Moore, President
Gary A. Simanson,
Associate General Counsel
If to BFC: BANCFIRST Corporation
255 Grant Street, S.E.
(P.O. Box 1429)
Decatur, Alabama 35602
Fax: (205) 351-4307
Attn: Mr. William D. Powell
President and Chief Executive Officer
With a copy to: Breyer & Aguggia
601 13th Street, N.W.
Washington, D.C. 20005
Fax: (202) 737-7979
Attn: John F. Breyer, Jr., Esq.
</TABLE>
or at such other address as shall be furnished in writing by any of the Parties
to the others by notice given as provided in this section 6.1.
6.2 GOVERNING LAW. Except to the extent federal law shall be
controlling, this Plan of Merger shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware with respect to
those provisions of this Plan of Merger expressly required by Delaware law to
be included in this Plan of Merger, disregarding, however, the Delaware
conflicts of laws rules. In all other instances, this Plan of Merger shall be
governed by and construed and enforced in accordance with the laws of the State
of Tennessee disregarding, however, the Tennessee conflicts of laws rules.
6.3 CAPTIONS. The Captions heading the Sections in this Plan
of Merger are for convenience only and shall not affect the construction or
interpretation of this Plan of Merger.
6.4 COUNTERPARTS. This Plan of Merger may be executed in two
or more counterparts, each of which shall be deemed an original instrument, but
all of which together shall constitute one and the same instrument.
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
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IN WITNESS WHEREOF, each of the Parties has caused this Plan of Merger
to be duly executed and delivered by its duly authorized officers as of the
date first above written.
<TABLE>
<S> <C>
ATTEST: UNION PLANTERS CORPORATION
- ------------------- By: --------------------------
J. F. Springfield Jackson W. Moore
Its: Secretary Its: President
ATTEST: BFC ACQUISITION COMPANY, INC.
- -------------------- By:
----------------------------
J. F. Springfield Jackson W. Moore
Its: Secretary Its: President
ATTEST: BANCFIRST CORPORATION
- -------------------- By:
----------------------------
Miles A. Wright William D. Powell
Its: Secretary Its: President and
Chief Executive Officer
</TABLE>
PLAN OF MERGER - EXHIBIT A TO AGREEMENT AND PLAN OF REORGANIZATION
PAGE 94
<PAGE> 101
January 27, 1994
BANCFIRST Corporation
255 Grant Street, S.E.
Decatur, Alabama 35602
Gentlemen:
We have today entered into an Agreement and Plan of Reorganization
(the "Agreement") between Union Planters Corporation ("UPC"); BFC Acquisition
Company, Inc., a wholly owned acquisition subsidiary of UPC; BANCFIRST
Corporation ("BFC"); and BANKFIRST, a federal savings bank ("BFSB"). This
letter is intended to set forth certain additional agreements and undertakings
of each of the above parties and each of such parties agrees that this letter
is an integral part of the Agreement (as referred to in Section 10.7 thereof)
and is being entered into separately solely as an accommodation to UPC. All
terms used herein without definition shall have the same meaning as ascribed in
the Agreement.
Accordingly, in consideration of the parties having entered into the
Agreement and for other good and valuable considerations, the receipt of which
is hereby acknowledged, it is hereby further agreed that:
A. Employees.
---------
1. Following the effective date of eligibility of BFC and BFSB
employees to participate in all employee benefit plans of UPC, including all
qualified pension, profit sharing, and stock bonus, and employee stock
ownership plans and all employee welfare benefit plans, BFC and BFSB shall take
such steps as are necessary to terminate the BFSB pension plan, provide for the
merger of the BFSB 401(k) profit sharing plan with and into the UPC 401(k)
profit sharing plan, and terminate its existing employee welfare benefit plans.
Upon the termination of the BFSB pension plan, employees of BFC and BFSB who
are participants in such pension plan will, to the extent provided by under the
plan and by applicable law, become fully vested in and eligible to receive
benefits under the plan and such plan will be fully funded by BFC or BFSB prior
to termination to the extent required by applicable law. To the extent
permitted by the plan and applicable law, BFC shall distribute all vested
accrued benefits to plan participants as soon as reasonably practicable
following the termination of the BFSB pension plan in the manner required by
applicable law. BFC and BFSB shall obtain such regulatory determinations
regarding the termination or merger of any
<PAGE> 102
BANCFIRST Corporation
January 27, 1994
Page 2
tax-qualified plan as may be appropriate to insure the qualified status of such
plans (and related trusts) under the Internal Revenue Code. Upon the election
of any participant, any vested accrued benefit under any retirement plan
sponsored by BFC may be transferred to UPC's 401(k) profit sharing plan or, at
the election of the participant, to any other plan of UPC that is permitted to
accept a transfer from another qualified retirement plan.
Following the Merger and, in any event, no later than January
1, 1995, employees of BFC or BFSB shall be eligible to receive group
hospitalization, medical, life, disability, and other employee welfare benefits
no less than those provided to other employees of UPC holding comparable
positions.
Following the Merger and, in any event, no later than January
1, 1995, employees of BFC and BFSB shall be entitled to participate, to the
same extent and on the same terms as the employees of UPC, in any qualified
pension, profit sharing, stock bonus plans, and employee stock ownership plans
in effect at such time for employees of UPC. Employees of BFC and BFSB shall
receive service credit from their hire date of employment at BFC and BFSB for
purposes of eligibility and vesting requirements under UPC's employee benefit
plans. UPC shall provide full coverage under its group medical, disability,
and life insurance plans for pre-existing medical conditions (to the extent
such condition is currently covered under the BFC or BFSB plan, and such
condition would be covered under UPC's plan if it were not preexisting).
Following the Merger, all previously accrued vacation,
holiday, sick, personal or other leave of BFC or BFSB employees shall be
credited to such employees and be available for use upon such terms as local
management may provide.
Notwithstanding anything in this paragraph A(1) to the
contrary, no rights or vesting in any stock plan of BFC or BFSB, including any
stock option plan, shall be accelerated or modified in contravention of the
accounting rules necessary to account for the Merger under the "pooling of
interests" method of accounting.
2. Any changes in personnel within one year of the Merger will be
subject to the approval of BFSB's current Chief Executive Officer, Mr. William
D. Powell. Subject to the provisions of paragraph A(3), all employees who are
continued in the employ of BFC or BFSB shall retain their current titles and
position with BFC or BFSB during any period of service with BFC or BFSB
following the Merger, except as otherwise provided for herein. Following the
Merger, the salary and bonus of all employees, other than Mr. Powell, shall be
determined annually or as otherwise determined by the local management or board
of directors of BFC or BFSB, as appropriate, without prior approval by UPC.
Mr. Powell's initial salary shall be determined in accordance with the terms of
his employment agreement with UPC. Thereafter, Mr. Powell's salary and bonus
shall be determined no less frequently than annually by the management of UPC.
Following the Merger, all perquisites or similar
<PAGE> 103
BANCFIRST Corporation
January 27, 1994
Page 3
benefits currently provided to Mr. Powell and other employees of BFC or BFSB,
including, but not limited to, the use of employer-owned automobiles (as
assigned to employees by the Chief Executive Officer of BFSB), expense
accounts, free checking, professional or club memberships or dues, vacation
leave, sick leave, incentive bonuses and personal leave, shall continue to be
provided at the discretion of, and to the extent authorized by the Board of
Directors of BFC and BFSB, respectively, without prior approval by UPC.
Following the Merger, all matters relating to personnel, including the hiring
of, assignment of positions and titles to, and retention of, employees in the
normal course of business, shall be determined by the local management of BFC
or BFSB, as appropriate, without prior approval by UPC.
3. UPC will provide severance payments to employees of BFC and
BFSB (other than employees whose severance benefits are provided for in written
employment agreements) whose employment is terminated within two years (2)
years after the Effective Date due to job reductions initiated at the request
of UPC and not in the ordinary course of business by BFC or BFSB consistent
with the severance policies of UPC as set forth in Exhibit I attached hereto.
All years of service of a terminated employee with BFC or BFSB prior to the
Merger shall be counted for purposes of computing "Service" under the UPC
severance schedule. Any employee terminated pursuant to this paragraph shall
also be paid for all accrued but unused vacation days.
B. Existing Employment Agreement. UPC will cause BFC and BFSB to
-----------------------------
honor its existing employment contracts with Mr. Powell and Mr. C. Raymond
Duncan, Senior Vice President/Treasurer of BFC and BFSB, and UPC acknowledges
and agrees that the Merger constitutes a Change of Control under the existing
Employment Agreements. The payments due to Mr. Powell and Mr. Duncan upon the
Closing Date are $389,774 and $230,765, respectively. In addition, following
the Merger, Messrs. Powell and Duncan will continue to serve in their present
capacities with BFC and BFSB and will be provided with new employment contracts
in the form attached as Exhibit II. BFC, BFSB, and UPC will enter into
separate agreements to provide for the payment of supplemental retirement
benefits to Messrs. Powell and Duncan in the form attached hereto as Exhibit
III.
C. Stock Options.
-------------
1. In connection with the Merger, Messrs. Powell and Mr.
Duncan shall receive 10,000 and 5,000 options, respectively, to purchase shares
of UPC's common stock upon the terms set forth in their respective employment
agreements with UPC and the UPC 1992 Nonqualified Stock Plan. Senior Vice
Presidents Wallace Terry, Miles Wright, and Richard Gowan will each receive
stock options to purchase 1,500 shares of UPC's common stock, subject to the
terms and conditions of the UPC 1992 Nonqualified Stock Plan.
<PAGE> 104
BANCFIRST Corporation
January 27, 1994
Page 4
2. Following the merger, management personnel of BFC and
BFSB shall be reviewed for possible grants of options to purchase UPC stock at
such times and to the same extent and on the same conditions as management
personnel at other affiliates of UPC, as determined by the Stock Option
Committee of the Board of Directors of UPC.
D. Indemnification
---------------
1. From and after the Effective Time of the Merger, UPC
(including its successors) shall indemnify, defend and hold harmless each
person who is now, or has been at any time prior to the date hereof or who
becomes prior to the Effective Time of the Merger, an officer, director or
employee of BFC or BFSB (the "Indemnified Parties") against all losses, claims,
damages, costs, expenses (including attorney's fees), liabilities or judgments
or amounts that are paid in settlement of or in connection with any claim,
action, suit, proceeding or investigation (each a "Claim") in which an
Indemnified Party is, or is threatened to be made, a party or a witness based
in whole of in part on or arising in whole or in part out of the fact that such
person is or was a director, officer or employee of BFC or BFSB or any BFC
subsidiary if such Claim pertains to any matter or fact arising, existing or
occurring prior to the Effective Time of the Merger (including, without
limitation, the Merger and other transactions contemplated by the Agreement),
regardless of whether such Claim is asserted or claimed prior to, or at or
after, the Effective Time of the Merger (the "Indemnified Liabilities") to the
full extent permitted under applicable state or federal law in effect as of the
date hereof or as amended applicable to a time prior to the Effective Time of
the Merger and under BFC's Certificate of Incorporation and Bylaws and the
BFSB's Federal Stock Charter and Bylaws (and UPC shall pay expenses in advance
of the final disposition of any such action or proceeding to each Indemnified
Party to the full extent permitted by applicable state or federal law in effect
as of the date hereof or as amended applicable to a time prior to the Effective
Time of the Merger upon receipt of any undertaking required by applicable law).
Any Indemnified Party wishing to claim indemnification hereunder upon learning
of any Claim shall notify UPC (but the failure to notify UPC shall not relieve
UPC from any liability which they may have hereunder except to the extent such
failure prejudices UPC) and shall deliver to UPC the undertaking, if any,
required by applicable law. The obligations of UPC hereunder shall continue in
full force and effect, without any amendment thereto, for a period of not less
than six years from the Effective Time of the Merger; provided, however, that
all rights to indemnification in respect of any Claim asserted or made within
such period shall continue until the final disposition of such Claim.
2. From and after the Effective Time of the Merger, the
directors, officers and employees of BFC or the BFSB who become directors,
officers or employees of UPC or any of subsidiaries, (i) except for the
indemnification rights set forth in paragraph (1) hereunder, shall have
indemnification rights having prospective application only and (ii) shall be
covered on a prospective basis by UPC's directors and officers liability
insurance policy on a basis at least equal to the coverage provided to persons
in similar positions at UPC and
<PAGE> 105
BANCFIRST Corporation
January 27, 1994
Page 5
its subsidiaries. The prospective indemnification rights shall consist of such
rights to which directors, officers and employees of UPC or its subsidiaries
are entitled under the provisions of the Articles of Incorporation, or similar
governing documents, of UPC and its subsidiaries, as in effect from time to
time after the Effective Time of the Merger, as applicable, and provisions of
applicable state and federal law as in effect from time to time after the
Effective Time of the Merger.
3. The obligation of UPC provided under paragraphs (1)
and (2) hereunder are intended to benefit, and be enforceable against UPC
directly by, the Indemnified Parties, and shall be binding on all respective
successors and assigns of UPC.
E. Continuation of Business. UPC agrees to continue the separate
------------------------
corporate existence and corporate name of BFC (or such corporate name as BFC
may assume prior to, or upon, the Effective Time of the Merger) and BFSB as
subsidiaries of UPC for a period of three (3) years and provide the operation
of BFC and BFSB as community banks within UPC's corporate structure. Further,
UPC agrees to continue all existing branches of BFSB for a period of at least
one (1) year.
F. Boards of Directors of BFC and BFSB.
-----------------------------------
1. The Boards of Directors of BFC and BFSB following the
Effective Time of the Merger shall consist of those persons serving as
directors immediately prior to such effective time and each such person shall
continue to serve as a director for the remainder of the term for which he was
elected in accordance with law and the BFC's and BFSB's Charter and Bylaws.
Thereafter, UPC agrees that each such person shall be reelected director for at
least one (1) additional three (3) year term regardless of any otherwise
applicable age-related requirement; provided, however, each director shall be
eligible for reelection only if (i) he continues to qualify to serve as a
director, (ii) he is not permanently incapacitated and unable to serve as a
director, (iii) he continues to adequately perform his services as a director
and (iv) UPC has not determined that the BFSB has failed to meet the general
performance standards of other UPC banking subsidiaries. The fees paid to the
directors of the BFSB following the Effective Time of the Merger shall be at
least the same amount paid to the directors immediately prior to such time and
such fees may be increased from time to time by action of the Board. All of
the Saving Bank's directors shall be eligible to receive such fees other than
persons who serve in day to day management positions with the BFSB.
2. To further the development of business opportunities
for BFC and BFSB, the Board of BFC or BFSB may, from time to time, authorize
the creation of advisory boards thereto, provide for the appointment of
advisory directors, and establish an incentive compensation program for such
advisory directors.
<PAGE> 106
BANCFIRST Corporation
January 27, 1994
Page 6
G. Management of BFC and BFSB. As of the effective date of the
--------------------------
Merger and subject to the authority of local management as provided under
paragraph A(2), and without implying a contractual right of employment on the
part of any employees of BFSB other than Messrs. Powell and Duncan, Exhibit IV
sets forth the positions that key management employees of BFC and BFSB will
have following the Merger and the location of their employment.
H. Officer and Director Loans. Subject to restrictions of
--------------------------
applicable regulations and law, the loans from BFSB currently held by officers
and directors and employees of BFSB will not be affected by the Merger.
I. Post Merger Securities Filings. UPC shall use its best
------------------------------
efforts to ensure that not later than twenty (20) days following the end of the
first calendar quarter in which UPC and BFC have completed thirty (30) days of
combined post acquisition operations, UPC will publish financial results
containing the combined UPC and BFC results of operations.
<PAGE> 107
BANCFIRST Corporation
January 27, 1994
Page 7
Upon execution of this letter (or counterparts thereof) by the parties
hereto, this letter shall constitute an agreement between the parties to be
enforceable following the Effective Time of the Merger by either party hereto
or any other party who is intended to be benefitted hereunder.
UNION PLANTERS CORPORATION
By:
-----------------------------
BFC ACQUISITION COMPANY, INC.
By:
-----------------------------
BANCFIRST CORPORATION
By:
-----------------------------
BANKFIRST, A FEDERAL
SAVINGS BANK
By:
-----------------------------
<PAGE> 108
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made effective as of 1994, by and
--------------------
between BANCFIRST CORPORATION ("BFC"), BANKFIRST, A FEDERAL SAVINGS BANK (the
"Bank"), UNION PLANTERS CORPORATION ("UPC"), and WILLIAM D. POWELL (the
"Executive"). (All references herein to the Bank include BFC, unless otherwise
indicated).
WHEREAS, the Executive has heretofore served as President and Chief
Executive Officer of BFC and the Bank and is experienced in all phases of the
business of the Bank;
WHEREAS, BFC, the Bank, and UPC wish to be assured of the continued
services of the Executive following the acquisition of BFC by UPC on the date
first written above and the Executive is willing to serve in the employ of the
Bank and BFC on a full-time basis; and
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereby agree as follows:
1. Employment. The Bank agrees to continue the Executive in its
----------
employ, and the Executive agrees to remain in the employ of the Bank, for the
period stated in paragraph 3 hereof and upon the other terms and conditions
herein provided.
2. Position and Responsibilities. The Bank shall employ the
-----------------------------
Executive and the Executive agrees to serve as President and Chief Executive
Officer for the term and on the conditions hereinafter set forth. The
Executive agrees to perform such services not inconsistent with his position as
shall from time to time be assigned to him by the Board of Directors of the
Bank.
3. Term and Duties
---------------
(a) Term of Employment. The initial term of employment under
this Agreement shall be for the period commencing 1994 and ending
------------
1999. Upon the expiration of the initial term of employment
- -----------
hereunder, the Executive's period of employment shall be extended for one (1)
year unless 120 days prior to the expiration of the initial term of employment,
the Bank gives notice to the Executive that the term will not be so extended.
Thereafter, upon the expiration of any one-year extension, the term shall be
extended for one (1) year unless 120 days prior to the expiration of such one
year term, the Bank gives notice to Executive that the term will not be so
extended.
(b) Duties. During the period of his employment
------
hereunder and except for illnesses, reasonable vacation periods, and reasonable
leaves of absence, the Executive shall devote his business time, attention,
skill, and efforts to the faithful performance of his duties hereunder;
provided, however, the Executive may, from time to time, serve, or continue to
serve, on
<PAGE> 109
the boards of directors, of, and hold any other offices or positions in,
companies or organizations, which do not present any material conflict of
interest with the Employers, or unfavorably affect the performance of the
Executive's duties pursuant to this Agreement, or will not violate any
applicable statute or regulation.
4. Compensation and Reimbursement of Expenses.
------------------------------------------
(a) Compensation. The Bank agrees to pay the Executive
------------
during the term of this Agreement a salary at the rate of $150,000 per annum;
provided, that the rate of such salary shall be reviewed by the management of
UPC not less often than annually. Such rate of salary, or increased rate of
salary, if any, as the case may be, may be further increased (but not
decreased) from time to time in such amounts as the management of UPC in its
discretion may decide. Such salary shall be payable in accordance with the
customary payroll practices of the Bank, but in no event less frequently than
monthly.
(b) Bonuses. The Executive shall be entitled to
-------
participate in an equitable manner in any incentive bonus plan or program
maintained by UPC for senior executives of its subsidiaries. No other
compensation provided for in this Agreement shall be deemed a substitute for
the Executive's right to participate in such incentive bonus plan or program.
(c) Reimbursement of Expenses. The Bank shall pay or
-------------------------
reimburse the Executive for all reasonable travel and other expenses incurred
by the Executive in the performance of his obligations under this Agreement.
The Bank further agrees to provide the Executive with the full-time use of an
automobile of a make and model selected by the Executive, not more than two
years' old and commensurate with his position during his period of employment
and to reimburse the Executive for all initiation fees and dues associated with
membership in professional, social, civic and service clubs which the Executive
joins or has joined and which membership, in whole or part, furthers the
interests of or promotes the interest of the Bank or assists the Executive in
business relationships on behalf of the Bank.
5. Participation in Benefit Plans.
------------------------------
(a) Except as otherwise provided in this Agreement, the
payments provided in paragraphs 4, 7, and 9 hereof are in addition to any
benefits to which the Executive may be, or may become, entitled under any
general group hospitalization, health, dental care, or sick leave plan, life or
other insurance or death benefit plan, or workmen's compensation, disability or
social security, travel or accident insurance, or executive contingent
compensation plan, including, without limitation, capital accumulation and
-2-
<PAGE> 110
termination pay programs, restricted stock or stock purchase plan, stock option
plan, retirement income, tax-qualified retirement plan, supplemental pension
plan (excess benefit plan), or other present or future group employee benefit
plan or program of the Bank or UPC for which general employees of the Bank or
UPC are or shall become eligible, and the Executive shall be eligible to
receive during the period of his employment under this Agreement, and during
any subsequent period for which he shall be entitled to receive payments from
the Bank under paragraph 7 or paragraph 10, all fringe benefits and emoluments
for which executive employees of the Bank and general employees of UPC are
eligible under every such plan or program to the extent permissible under the
general terms and provisions of such plans or programs and in accordance with
the provisions thereof.
(b) Following his termination of employment (for any reason)
with the Bank and BFC at any time after attaining age 62, the Executive shall
be entitled to receive all benefits generally provided to retirees by the Bank
or UPC, including, but not limited to, retiree medical coverage for the
Executive and his spouse under the UPC Group Medical Plan on the same terms as
other UPC retirees but without regard to any "length of service" requirement to
establish eligibility for such retiree medical coverage.
6. Vacation and Sick Leave. At such reasonable times as the
-----------------------
Board of Directors of the Bank shall in its discretion permit, the Executive
shall be entitled, without loss of pay, to absent himself voluntarily from the
performance of his employment under this Agreement, all such voluntary absences
to count as vacation time; provided that:
(a) The Executive shall be entitled to annual vacation in
accordance with the policies as periodically established by the Board of
Directors of the Bank for senior management of the Bank, which shall in no
event be less than three weeks per annum.
(b) The Executive shall not be entitled to receive any
additional compensation from the Bank on account of his failure to take a
vacation; nor shall he be entitled to accumulate unused vacation from one
fiscal year to the next except to the extent authorized by the Board of
Directors of the Bank.
(c) In addition to the aforesaid paid vacations, the
Executive shall be entitled, without loss of pay, to absent himself voluntarily
from the performance of his employment with the Bank for such additional
periods of time and for such valid and legitimate reasons as the Board of
Directors of the Bank in its discretion may determine. Further, the Board may
grant to the Executive a leave or leaves of absence with or without pay at such
time or times and upon such terms and conditions as the Board in its discretion
may determine.
-3-
<PAGE> 111
(d) In addition, the Executive shall be entitled to an
annual sick leave as established by the Board of Directors of the Bank but in
no event in an amount less than that provided for pursuant to the policy
currently in effect as of the date of this Agreement. In the event any sick
leave time shall not have been used during any year, such leave shall accrue to
subsequent years only to the extent authorized by the Board.
(e) Upon termination of employment, the Executive shall
be entitled to receive additional compensation from the Bank for unused sick
leave or vacation time only to the extent provided under the general policies
of the Bank.
7. Benefits Payable Upon Disability.
--------------------------------
(a) Primary Disability Benefits. In the event of the
---------------------------
Disability (as hereinafter defined) of the Executive, the Bank shall continue
to pay the Executive the monthly compensation provided in paragraph 4 hereof
during the period of his disability provided, however, that in the event the
Executive is disabled for a continuous period exceeding eighteen (18) calendar
months, the Bank may, at its election, terminate the Agreement, in which event
the Executive shall be entitled to receive the benefits described in paragraph
7(b).
As used in this Agreement, the term "disability"
shall mean the complete inability of the Executive to perform his duties under
this Agreement as determined by an independent physician selected with the
approval of the Bank and the Executive.
(b) Secondary Disability Benefits. In the event that the
-----------------------------
Bank elects to terminate this Agreement pursuant to Section 7(a), then in lieu
of any other benefits the Executive would have been entitled to hereunder, the
Bank shall pay to the Executive a monthly disability benefit equal to seventy
(70) percent of his monthly salary at the time he became disabled. Payment of
such disability benefit shall commence on the last day of the month following
the month for which the final payment under paragraph 7(a) was made and cease
with the earlier of (i) the payment for the month in which the Executive dies
or (ii) the payment for the month preceding the month in which the Executive
attains age 65.
(c) Disability Benefit Offset. Any amounts payable under
-------------------------
paragraph 7(a) or 7(b) shall be reduced by any amounts paid to the Executive
under any other disability program maintained by UPC in which the Executive
participates; however, such payments shall not be reduced by the amount of any
payments pursuant to social security and workmen's compensation.
(d) Service During Disability. During the period the
-------------------------
Executive is entitled to receive payments under paragraphs 7(a) and
-4-
<PAGE> 112
(b), the Executive shall, to the extent that he is physically and mentally able
to do so, furnish information and assistance to the Bank and UPC.
8. Grant of Stock Options. Upon the effective date of this
----------------------
Agreement, the Executive shall be granted 10,000 options to purchase UPC Stock
(at the fair market value on such date) under the 1992 UPC Nonqualified Stock
Plan ("Stock Plan") or any similar plan then maintained by UPC. Such options
shall be issued in accordance with the terms of the Stock Plan and shall be
exercisable over a five-year period as provided under the Stock Plan, but in
any event, such options shall be fully exercisable no later than the date of
the Executive's retirement. Following the Executive's retirement, such options
shall remain exercisable for a period equal to the greater of (a) ninety (90)
days from the date of the Executive's retirement or (b) the period specified by
the Stock Option Committee of the Board of Directors of UPC.
9. Payments to the Executive Upon Termination of Employment.
--------------------------------------------------------
(a) Event of Termination. Upon the occurrence of an
--------------------
Event of Termination (as hereinafter defined) during the period of the
Executive's employment under this Agreement, the provisions of this paragraph 9
shall apply. As used in this Agreement, an "Event of Termination" shall mean
the termination of the Executive's employment hereunder for any reason other
than "cause" or retirement at or after the normal retirement age under any
qualified retirement plan(s) maintained by UPC or termination pursuant to
Paragraph 7. A termination for "cause" shall include termination because of
the Executive's personal dishonesty, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful
violation of any law, rule or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order, or material breach or any
provision of this Agreement. In the event of termination for cause the
Executive shall have no right to receive compensation or other benefits for any
period after such termination; provided, however, that, the Executive shall be
entitled to receive all vested benefits as of the date of such termination.
(b) Event of Termination Without Change of Control. Upon
----------------------------------------------
the occurrence of an Event of Termination other than after a Change of Control
(as hereinafter defined), the Bank shall pay to the Executive monthly, or in
the event of his subsequent death, to his designated beneficiary or
beneficiaries, or to his estate, as the case may be, as severance pay or
liquidated damages, or both, during the period below described a sum equal to
the highest monthly rate of salary paid to the Executive at any time under this
Agreement. Such payments shall commence on the last day of the month following
the date of said Event of Termination and shall continue until the date this
Agreement would have expired but for
-5-
<PAGE> 113
said occurrence, with such occurrence being viewed as a determination by the
Bank not to extend the Agreement as provided for in paragraph 3.
(c) Event of Termination After Change of Control. If,
--------------------------------------------
after a "Change of Control" (as hereinafter defined) of UPC, BFC, or the Bank,
any of the parties hereto, or their successors or assigns, shall terminate the
employment of the Executive during the period of employment under this
Agreement for any reason other than "cause," as defined in paragraph 9(a),
retirement at or after the normal retirement age under any tax-qualified
retirement plan(s) maintained by UPC, termination pursuant to paragraph 7, or
nonrenewal, or otherwise change the present capacity or circumstances in which
the Executive is employed as set forth in paragraph 2 of this Agreement or
cause a reduction in the Executive's responsibilities or authority or
compensation or other benefits provided under this Agreement without the
Executive's written consent, then the Executive, or his beneficiaries,
dependents and estate, as the case may be, shall be entitled to the following:
(i) The Executive shall receive a sum equal to
the total amount of the present value of 2.99 times the average annual
compensation payable under this Agreement and includible by the Executive in
gross income for the most recent five taxable years ending before the date on
which the ownership or control of UPC, BFC, or the Bank changed. Such amount
shall be payable to the Executive in a lump sum within ten (10) days of the
occurrence of an Event of Termination under this paragraph 9(c).
(ii) During a period of thirty-six (36)
calendar months beginning with the Event of Termination, the Executive, his
dependents, beneficiaries and estate shall continue to be covered under all
employee benefit plans of the Bank, BFC, or UPC, including, without limitation,
any UPC tax-qualified retirement plans, as if the Executive was still employed
during such period under this Agreement.
(iii) If and to the extent that benefits or service
credit for benefits provided by paragraph 9(c)(ii) shall not be payable or
provided under any such plans to the Executive, his dependents, beneficiaries
and estate, by reason of his no longer being an employee of the Bank, as a
result of termination of employment, UPC shall itself pay or provide for
payment of such benefits and service credit for benefits to the Executive, his
dependents, beneficiaries and estate. Any such payment relating to retirement
shall commence on a date selected by the Executive which must be a date on
which payments under any UPC tax-qualified retirement plan(s) may commence.
-6-
<PAGE> 114
(iv) The Executive shall not be required to mitigate
the amount of any payment provided for in this Agreement by seeking other
employment or otherwise nor shall any amounts received from other employment or
otherwise by the Executive offset in any manner the obligations of UPC
hereunder.
(d) Change of Control. Paragraph 9(c) shall become
-----------------
operative upon the occurrence of a Change of Control of UPC, BFC, or the Bank.
For purposes of this Agreement, "Change of Control" means the sale of
substantially all of the assets of UPC, BFC, or the Bank, or the acquisition,
whether directly, indirectly, beneficially (within the meaning of Rule 13d-3 of
the Securities Exchange Act of 1934, as amended (the "Act")), or of record, of
securities of UPC, BFC, or the Bank representing twenty-five percent (25%) or
more in the aggregate voting power of UPC's, BFC's, or the Bank's
then-outstanding Common Stock by any "person" (within the meaning of Sections
13(d) and 14(d) of the Act), including any corporation or group of associated
persons acting in concert, other than (i) UPC or its subsidiaries and/or (ii)
any tax-qualified employee stock ownership plan of UPC or its subsidiaries,
including a trust established pursuant to any such plan; provided, that a
Change of Control will not result from (A) a transfer of voting securities of
UPC, BFC, or the Bank by a person who is the beneficial owner, directly or
indirectly, of twenty-five percent (25%) or more of the voting securities of
the UPC, BFC, or the Bank (a "25 Percent Owner") to (i) a member of such 25
Percent Owner's lifetime or by will or the laws of descent and distribution;
(ii) any trust as to which the 25 Percent Owner or a member (or members) of his
immediate family (within the meaning of Rule 16a-1(e) of the Act) is the
beneficiary; (iii) any trust as to which the 25 Percent Owner is the settlor
with sole power to revoke; (iv) any entity over which such 25 Percent Owner has
the power, directly or in directly, to direct or cause the direction of the
management and policies of the entity, whether through the ownership of voting
securities, by contract or otherwise; or (v) any charitable trust, foundation
or corporation under Section 501(c)(3) of the Code which is funded by the 25
Percent Owner; or (B) the acquisition of voting securities of UPC, BFC, or the
Bank, by either (i) a person who was a 25 Percent Owner on the effective date
of the Agreement or (ii) a person, trust or other entity described in the
foregoing clauses (A)(i)-(v) of this subsection; or (C) the spin-off or other
distribution by UPC to its shareholders of the capital stock or assets of BFC
or the Bank.
(e) Suspension and Special Regulatory Rules.
---------------------------------------
(i) If the Executive is suspended and/or temporarily
prohibited from participating in the conduct of the Bank's affairs by a notice
served under section 8(e)(3) or section (g)(1) of the Federal Deposit Insurance
Act ("FDI Act"), the Bank's obligations under this Agreement shall be suspended
as of the date
-7-
<PAGE> 115
of service of such notice, unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the Bank shall (i) pay the Executive all
or part of the compensation withheld while its contract obligations were
suspended and (ii) reinstate in whole or in part any of its obligations which
were suspended.
(ii) If the Executive is removed and/or permanently
prohibited from participating in the conduct of the Bank's affairs by an order
issued under section 8(e)(4) or section (g)(1) of the FDI Act, all obligations
of the Bank under this Agreement shall terminate as of the effective date of
the order; however, no vested rights of the Executive shall be affected by such
termination.
(iii) If the Bank is in default (as defined in
section 3(x)(1) of the FDI Act), all obligations under this Agreement shall
terminate as of the date of default; however, no vested rights of the Executive
shall be affected by such termination.
(iv) All obligations under this Agreement shall be
terminated, except to the extent that it may be determined that continuation of
this Agreement is necessary for the continued operation of the Bank, (1) by the
Director of the Office of Thrift Supervision ("OTS") or his or her designee at
the time the Federal Deposit Insurance Corporation ("FDIC") or the Resolution
Trust Corporation enters into an agreement to provide assistance to or on
behalf of the Bank under the authority contained in Section 13(c) of the FDI
Act; or (2) the Director of OTS or his or her designee at any time the Director
of OTS or his or her designee approves a supervisory merger to resolve problems
related to the operation of the Bank or when the Bank is determined by the OTS
to be in an unsafe or unsound condition. No vested rights of the Executive
shall be affected by such action.
(f) Termination of Employment of, or by, the Executive.
--------------------------------------------------
The Board of Directors of the Bank may terminate the employment of the
Executive at any time; in the event of such termination, the provisions of this
paragraph 9 shall fully apply. The Executive may terminate his service under
this Agreement at any time upon three (3) months written notice to the Bank.
In the event of the Executive's voluntary termination of employment under this
paragraph 9(f), the provisions of paragraph 9(a)-(e) shall not apply and the
Executive shall be entitled to receive his salary, bonus, and other employee
benefits through his date of termination and such termination shall be without
prejudice to any other benefits as to which the Executive is vested.
10. Source of Payments; UPC Guarantee. Except as to any payments
---------------------------------
made pursuant to paragraph 9(c), all payments to the Executive under the terms
of any provision of this Agreement shall
-8-
<PAGE> 116
be paid in cash from the general funds of the Bank, and no special or separate
fund shall be established and no other segregation of assets shall be made to
assure payment. The Executive shall have no right, title, or interest whatever
in or to any investments which the Bank may make to aid the Bank in meeting its
obligations hereunder. The obligation of the Bank to make any payments or
provide any benefits under this Agreement shall, in all events and without
limitation, be guaranteed by UPC and its successors and assigns and such
guarantee shall inure to the benefit of the Executive and his successors and
assigns.
11. Confidential Information. The Executive shall not, to the
------------------------
detriment of the Bank, knowingly disclose or reveal to any authorized person
any confidential information relating to the Bank, its subsidiaries or
affiliates, or to any of the businesses operated by them, and the Executive
confirms that such information constitutes the exclusive property of the
Employers. The Executive shall not otherwise knowingly act or conduct himself
(i) to the material detriment of the Bank, or (ii) in a manner which is
inimical or contrary to the interests thereof.
12. Federal Income Tax Withholding. The Bank or UPC may withhold
------------------------------
from any benefits payable under this Agreement all federal, state, city or
other taxes as shall be required pursuant to any law or governmental regulation
or ruling.
13. Effect of Prior Agreements. This Agreement contains the
--------------------------
entire understanding between the parties hereto and supersedes any prior
employment agreement between the Bank or any predecessor of the Bank and the
Executive; provided, however, that the Executive's right to payment under
section 8(c) of that certain agreement between the Executive, the Bank, and BFC
dated February 15, 1991 following the effective date of the merger of UPC and
BFC is hereby acknowledged by UPC and shall not be affected by any provision of
this Agreement.
14. Payment of Legal Expenses. The Bank shall pay all legal fees
-------------------------
and expenses (as such fees and expenses are incurred) which the Executive may
incur as a result of any action ultimately found in favor of the Executive
contesting the validity or enforceability of this Agreement and the Executive
shall be entitled to receive interest thereon for the period of any delay in
payment from the date such payment was due at the rate determined by adding two
hundred basis points to the six month Treasury Bill rate.
15. Consolidation, Merger, or Sale of Assets. Nothing in this
----------------------------------------
Agreement shall preclude UPC from (i) consolidating or merging into or with, or
causing BFC or the Bank from consolidating or merging into or with or (ii)
transferring all or substantially all of its assets or the assets of BFC or the
Bank to, another
-9-
<PAGE> 117
corporation which assumes this Agreement and all obligations and undertakings
of the UPC, BFC, and the Bank hereunder.
16. General Provisions.
------------------
(a) Nonassignability. Neither this Agreement nor any
----------------
right or interest hereunder shall be assignable by the Executive, his
beneficiaries, or legal representatives without the Employers' prior written
consent; provided, however, that nothing in this paragraph 16(a) shall preclude
(i) the Executive from designating a beneficiary to receive any benefits
payable hereunder upon his death, or (ii) the Executors, administrators, or
other legal representatives of the Executive or his estate from assigning any
rights hereunder to the person or persons entitled thereto.
(b) No Attachment. Except as required by law, no right
-------------
to receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or to execution, attachment, levy, or similar process of
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect.
(c) Binding Agreement. This Agreement shall be binding
-----------------
upon, and inure to the benefit of, the Executive, BFC, the Bank, and UPC, and
their respective permitted successors and assigns.
17. Modification and Waiver.
-----------------------
(a) Amendment of Agreement. This Agreement may not be
----------------------
modified or amended except by an instrument in writing signed by the parties
hereto.
(b) Waiver. No term or condition of this Agreement shall
------
be deemed to have been waived, nor shall there be an estoppel against the
enforcement of any provision of this Agreement, except by written instrument of
the party charged with such waiver or estoppel. No such written waiver shall
be deemed a continuing waiver unless specifically stated therein, and each
waiver shall operate only as to the specific term or condition waived and shall
not constitute a waiver of such term or condition for the future or as to any
act other than the specifically waived.
18. Severability. If, for any reason, any provision of this
------------
Agreement is held invalid, such invalidity shall not affect any other provision
of this Agreement not held so invalid, and each such other provision shall to
the full extent consistent with law continue in full force and effect. If any
provision of this Agreement shall be held invalid in part, such invalidity
shall in no way affect the rest of such provision, together with all other
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<PAGE> 118
provisions of this Agreement, shall to the full extent consistent with law
continue in full force and effect.
19. Headings. The headings of paragraph herein are included
--------
solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
20. Applicable Law. This Agreement has been executed and
--------------
delivered in the State of Alabama, and its validity, interpretation,
performance, and enforcement shall be governed the laws of said State, except
to the extent Federal law is governing. Any payment to the Executive hereunder
shall be subject to and conditioned upon compliance with 12 U.S.C. #1828(k) and
any regulations promulgated thereunder.
-11-
<PAGE> 119
IN WITNESS WHEREOF, BFC, the Bank, and UPC have caused this Agreement
to be executed and their seals to be affixed hereunto by its officers thereunto
duly authorized, and the Executive has signed this Agreement, all as of the day
and year first above written.
<TABLE>
<S> <C>
ATTEST: BANCFIRST CORPORATION
- ------------- BY:
----------------------------
ATTEST: BANKFIRST, A FEDERAL SAVINGS BANK
- ------------- BY:
----------------------------------
ATTEST: UNION PLANTERS CORPORATION
- ------------- BY:
---------------------------------
- ------------- ------------------------------------
Witness William D. Powell
</TABLE>
-12-
<PAGE> 120
SUPPLEMENTAL RETIREMENT AGREEMENT
THIS AGREEMENT entered into as of this day of , 1994,
---- -----------
by and between BANCFIRST CORPORATION ("BFC"); BANKFIRST, A FEDERAL SAVINGS BANK
("BFSB"); UNION PLANTERS CORPORATION ("UPC"); and WILLIAM D. POWELL (the
"Executive"). (All references to BFSB shall include BFC, unless otherwise
indicated.)
WHEREAS, effective as of the date of this Agreement, BFC, and its
subsidiaries, including BFSB, will be acquired by UPC pursuant to the terms of
the Agreement and Plan of Reorganization between UPC and BFC dated
, 1994 (the "Merger") and continue as subsidiaries of UPC; and
- ---------------
WHEREAS, the Executive has been employed in the capacity of President
and Chief Executive Officer, and serves as a member of the Board of Directors,
of BFC and BFSB and is expected to continue to serve in these capacities
following the Merger; and
WHEREAS, the Executive's extensive knowledge and experience in the
savings and loan industry is such that BFC, BFSB, and UPC wish to seek
assurance of his continued service; and
WHEREAS, the Merger will result in the termination of the Plan and the
Executive's accrual of benefits thereunder will cease as of the date of such
termination; and
WHEREAS, BFC, BFSB, and UPC wish to establish this Agreement to
provide the Executive with certain benefits upon his retirement or other
termination of employment in recognition of the Executive's loss of retirement
income as a result of the premature termination of the Plan;
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements hereinafter contained, and other good and valuable
consideration, receipt of which is hereby acknowledged, the parties hereto
agree to this Agreement as follows:
SECTION I
DEFINITIONS
-----------
"Agreement" shall mean this agreement between the Executive, BFC,
BFSB and UPC.
"Disability" shall have the meaning set forth in, and be determined in
accordance with, Paragraph 7 of the Employment Agreement.
"Early Termination Benefit" shall mean the sum of (i) the vested
accrued lump-sum benefit distributable to the Executive in the event of the
termination of the Plan at any time prior to the Executive's normal retirement
age (65) and (ii) the cumulative earnings attributable to the Executive's
investment of the amount determined under clause (i) (assuming the transfer of
such amount to an Individual Retirement Account and a six percent annual rate
of return) during the period beginning on the date of distribution of such
amount to the Executive following termination of the Plan and ending on the
date the Executive attains age 65.
"Employment Agreement" shall mean the Executive's employment agreement
dated , 1994, by and between, the Executive, UPC, BANCFIRST,
------------------
and BANKFIRST.
"Lump Sum Amount" shall mean a sum equal to the Executive's estimated
lump-sum benefit at normal retirement age under the Plan determined as of the
date of Plan termination. Such sum shall be calculated by assuming that the
Plan had not terminated prior to the Executive's normal retirement age under
the Plan (age 65) and using (i) the assumptions stated in the Plan regarding
the calculation of actuarially equivalent benefit forms and
<PAGE> 121
(ii) the salary scale assumption used in connection with the preparation
of the Plan actuarial report prepared for the plan year beginning prior
to the date of termination.
"Plan" shall mean the BANKFIRST Pension Plan and Trust
"Surviving Spouse" shall mean the Executive's spouse on the date of
his death, but shall not include a spouse from whom he is legally separated or
divorced at the time of his death.
SECTION II
BENEFITS
--------
(a) In the event of the termination of the Plan prior to the date the
Executive attains age 65, then (i) in the event of the Executive's termination
of employment with BFSB on or after the date the Executive attains age 65 or
(ii) in the event of the Executive's death or disability while actively
employed by BFSB, BFSB shall pay the Executive the following sum at the time
specified in Section 2(c):
(1) The Executive's Lump Sum Amount less the Executive's
Early Termination Benefit;
and
(2) an amount determined as follows:
$D times (R/(1-R)) = amount of payment
For purposes of this formula, "D" shall equal
the amount determined under Section 2(a)(1),
and "R" shall equal the sum of the highest
marginal federal, state, local, and
withholding tax rates applicable to the
Executive during the calendar year in which
benefits are paid to the Executive under this
Agreement.
Any determination regarding the calculation of the Executive's Lump
Sum or Early Termination Benefits shall be made by the Plan's actuary (as
retained by BFSB or the Plan for the year in which such determination is made).
Such determination shall be binding upon the parties to this Agreement.
(b) In the event of the Executive's termination of employment with
BFSB prior to age 65, other than by reason of death or disability, the amount
determined under Section 2(a)(1) shall be reduced by 6.7 percent for each full
year that the Executive's age at termination of employment is less than age 65.
(c) The amount determined under Section 2(a) or 2(b) shall be payable
within thirty (30) days after the date of the Executive's termination of
employment with BFSB. In the event of the Executive's death prior to the date
any payment is due under this Agreement, such amount shall be payable to the
Executive's Surviving Spouse or, if none, his estate.
SECTION III
SOURCE OF BENEFITS
------------------
All payments hereunder shall constitute an unfunded, unsecured promise
by BFSB to provide such payments in the future, as and to the extent such
benefits become payable. Benefits shall be paid from the general assets of
BFSB, and no person shall, by virtue of this Agreement, have any interest in
such assets (other than an unsecured creditor of BFSB). The obligation of BFSB
to make any payments or provide any benefits under this Agreement
- 2 -
<PAGE> 122
shall, in all events and without limitation, be guaranteed by UPC and its
successors and assigns and such guarantee shall inure to the benefit of the
Executive and his successors and assigns. In the event BFC or UPC elect in
their sole option to purchase life insurance on Executive payable to BFC or UPC
to assist BFC and UPC in funding their obligations hereunder, Executive agrees
to cooperate with BFC and UPC in obtaining life insurance payable to BFC and
UPC to cover any or all of the benefits to be provided hereunder.
SECTION IV
ASSIGNMENT
----------
Except as otherwise provided by this Agreement, it is agreed that
neither the Executive nor his Surviving Spouse (if any) shall have any right to
commute, sell, assign, transfer, encumber and pledge or otherwise convey the
right to receive any benefits hereunder, which benefits and the rights thereto
are expressly declared to be nonassignable and nontransferable.
SECTION V
NO RETENTION OF SERVICES
------------------------
The benefits payable under this Agreement shall be independent of, and
in addition to, any other employment agreement that may exist from time to time
between the parties hereto, or any other compensation payable by BFSB to the
Executive, whether salary, bonus, retirement income under employee benefit
plans sponsored or maintained by UPC or BFSB, or otherwise. This Agreement
shall not be deemed to constitute a contract of employment between the parties
hereto.
SECTION VI
REORGANIZATION
--------------
BFSB and UPC further agree that neither party will cease its business
activities or terminate its existence without having made adequate provision
for the fulfillment of its obligation hereunder.
SECTION VII
AMENDMENTS
----------
This Agreement may be revoked or be amended in whole or in part only
by a writing signed by all the parties hereto.
SECTION VIII
GOVERNING LAW
-------------
This Agreement shall be construed and governed in all respects under
and by the laws of the State of Alabama. If any provision of this Agreement
shall be held by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions hereof shall continue to be fully
effective.
- 3 -
<PAGE> 123
SECTION IX
HEADINGS
--------
Headings and subheadings in this Agreement are inserted for
convenience and reference only and constitute no part of this Agreement.
SECTION X
COUNTERPARTS
------------
This Agreement may be executed in an original and any number of
counterparts, each of which shall constitute an original of one and the same
instrument.
SECTION XI
GENDER
------
This Agreement shall be construed, where required, so that the
masculine gender includes the feminine.
SECTION XII
EFFECTIVE DATE
--------------
This Agreement shall be effective as of the date first written above.
The Agreement shall remain in effect until all amounts payable hereunder have
been paid to the Executive, his Surviving Spouse, or his estate, as
appropriate.
SECTION XIII
LEGAL EXPENSES
--------------
BFSB shall promptly reimburse all legal fees and expenses which the
Executive may incur (as such fees and expenses are incurred) as a result of an
action ultimately found in favor of the Executive brought by BFSB, UPC, or the
Executive in which the validity or enforceability of this Agreement is at
issue.
SECTION XIV
SUCCESSORS AND ASSIGNS
----------------------
This Agreement shall be binding upon and inure to the benefit of BFC,
BFSB, UPC, the Executive, and their successors and assigns.
- 4 -
<PAGE> 124
IN WITNESS WHEREOF, BFC, BFSB, and UPC have caused this Agreement to
be signed in corporate name by a duly authorized officer, impressed with their
corporate seal, and properly attested to, and the Executive has hereto set his
hand, all on the day and year first above written.
<TABLE>
<S> <C>
ATTEST: BANCFIRST CORPORATION
- -------------- BY:
-----------------------------------------
ATTEST: BANKFIRST, A FEDERAL SAVINGS BANK
- -------------- BY:
-----------------------------------------
ATTEST: UNION PLANTERS CORPORATION
- -------------- BY:
-----------------------------------------
- -------------- -----------------------------------------
Witness William D. Powell
</TABLE>
- 5 -
<PAGE> 125
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made effective as of , 1994, by and
-----------------
between BANCFIRST CORPORATION ("BFC"), BANKFIRST, A FEDERAL SAVINGS BANK (the
"Bank"), UNION PLANTERS CORPORATION ("UPC"), and C. RAYMOND DUNCAN (the
"Executive"). (All references herein to the Bank include BFC, unless otherwise
indicated).
WHEREAS, the Executive has heretofore served as Senior Vice
President/Treasurer of BFC and the Bank and is experienced in all phases of the
business of the Bank;
WHEREAS, BFC, the Bank, and UPC wish to be assured of the continued
services of the Executive following the acquisition of BFC by UPC on the date
first written above and the Executive is willing to serve in the employ of the
Bank and BFC on a full-time basis; and
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereby agree as follows:
1. Employment. The Bank and BFC agree to continue the Executive
----------
in its employ, and the Executive agrees to remain in the employ of the Bank,
for the period stated in paragraph 3 hereof and upon the other terms and
conditions herein provided.
2. Position and Responsibilities. The Bank shall employ the
-----------------------------
Executive and the Executive agrees to serve as Senior Vice President/Treasurer
of the Bank for the term and on the conditions hereinafter set forth. The
Executive agrees to perform such services not inconsistent with his position as
shall from time to time be assigned to him by the Board of Directors of the
Bank.
3. Term and Duties
---------------
(a) Term of Employment. The initial term of employment under
------------------
this Agreement shall be for the period commencing 1994 and ending
----------
1997. The said 36-month period of employment may be extended for an
- -----------
additional 12 full calendar months by action of the Board of Directors of the
Bank on , 1995, and on each succeeding thereafter
-------- ----------
respectively.
(b) Duties. During the period of his employment
------
hereunder and except for illnesses, reasonable vacation periods, and reasonable
leaves of absence, the Executive shall devote his business time, attention,
skill, and efforts to the faithful performance of his duties hereunder;
provided, however, the Executive may, from time to time, serve, or continue to
serve, on the boards of directors, of, and hold any other offices or positions
in, companies or organizations, which do not present any material conflict of
interest with the Employers, or unfavorably affect the performance of the
Executive's duties pursuant to this Agreement, or will not violate any
applicable statute or regulation.
<PAGE> 126
4. Compensation and Reimbursement of Expenses.
------------------------------------------
(a) Compensation. The Bank agrees to pay the Executive
------------
during the term of this Agreement a salary at the rate of $80,000 per annum;
provided, that the rate of such salary shall be reviewed by the Board of
Directors of the Bank not less often than annually. Such rate of salary, or
increased rate of salary, if any, as the case may be, may be further increased
(but not decreased) from time to time in such amounts as the Board in its
discretion may decide. Such salary shall be payable in accordance with the
customary payroll practices of the Bank, but in no event less frequently than
monthly.
(b) Bonuses. The Executive shall be entitled to
-------
participate in an equitable manner in any incentive bonus plan or program
maintained by the Bank for senior executives of the Bank and its subsidiaries.
No other compensation provided for in this Agreement shall be deemed a
substitute for the Executive's right to participate in such incentive bonus
plan or program.
(c) Reimbursement of Expenses. The Bank shall pay or
-------------------------
reimburse the Executive for all reasonable travel and other expenses incurred
by the Executive in the performance of his obligations under this Agreement.
The Bank further agrees to provide the Executive with the use of an automobile,
and any other benefits which are commensurate with his position during his
period of employment.
5. Participation in Benefit Plans. The Executive shall be
------------------------------
eligible to participate in any fringe benefits which may become applicable to
the Bank's executive employees and any benefit plans or programs which are
generally offered to employees of the Bank or subsidiaries of UPC, including
any tax-qualified retirement programs and any group employee welfare benefit
plans.
6. Vacation and Sick Leave. At such reasonable times as the
-----------------------
Chief Executive Officer of the Bank shall in his discretion permit, the
Executive shall be entitled, without loss of pay, to absent himself voluntarily
from the performance of his employment under this Agreement, all such voluntary
absences to count as vacation time; provided that:
(a) The Executive shall be entitled to annual vacation in
accordance with the policies as periodically established by the Board of
Directors for senior management officials of the Bank, which shall in no event
be less than three weeks per annum. The timing of vacations shall be scheduled
in a reasonable manner by the Chief Executive Officer of the Bank.
(b) The Executive shall not be entitled to receive any
additional compensation from the Bank on account of his failure to
-2-
<PAGE> 127
take a vacation; nor shall he be entitled to accumulate unused vacation from
one fiscal year to the next except to the extent authorized by the Chief
Executive Officer of the Bank.
(c) In addition to the aforesaid paid vacations, the
Executive shall be entitled, without loss of pay, to absent himself voluntarily
from the performance of his employment with the Bank for such additional
periods of time and for such valid and legitimate reasons as the Chief
Executive Officer of the Bank in his discretion may determine. Further, the
Chief Executive Officer of the Bank may grant to the Executive a leave or
leaves of absence with or without pay at such time or times and upon such terms
and conditions as the Board of Directors of the Bank in its discretion may
determine after consultation with the Chief Executive Officer.
(d) In addition, the Executive shall be entitled to an
annual sick leave as established by the Board of Directors of the Bank for
senior management officials of the Bank but in no event in an amount less than
that provided for pursuant to the policy currently in effect as of the date of
this Agreement. In the event any sick leave time shall not have been used
during any year, such leave shall accrue to subsequent years only to the extent
authorized by the Board of Directors.
(e) Upon termination of employment, the Executive shall be
entitled to receive additional compensation from the Bank for unused sick leave
or vacation time only to the extent provided under the general policies of the
Bank.
7. Grant of Stock Options. Upon the effective date of this
----------------------
Agreement, the Executive shall receive a grant of 5,000 options to purchase UPC
Stock (at the fair market value on such date) under the 1992 UPC Nonqualified
Stock Plan ("Stock Plan") or any similar plan then maintained by UPC. Such
options shall be issued in accordance with the terms of the Stock Plan and
shall be exercisable over a five-year period as provided under the Stock Plan,
but in any event, such options shall be fully exercisable no later than the
date of the Executive's retirement. Following the Executive's retirement, such
options shall remain exercisable for a period equal to the greater of (a)
ninety (90) days from the date of the Executive's retirement or (b) the period
specified by the Stock Option Committee of the Board of Directors of UPC.
8. Payments to the Executive Upon Termination of Employment.
--------------------------------------------------------
(a) Event of Termination. Upon the occurrence of an
--------------------
Event of Termination (as hereinafter defined) during the period of the
Executive's employment under this Agreement, the provisions of this paragraph 8
shall apply. As used in this Agreement, an "Event of Termination" shall mean
the termination of the Executive's employment hereunder for any reason other
than "cause" or
-3-
<PAGE> 128
retirement at or after the normal retirement age under any tax-retirement plan
maintained by UPC, or termination pursuant to paragraph 9. A termination for
"cause" shall include termination because of the Executive's personal
dishonesty, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order, or material breach or any provision of this Agreement.
In the event of termination for cause the Executive shall have no right to
receive compensation or other benefits for any period after such termination;
provided, however, that, the Executive shall be entitled to receive all vested
benefits as of the date of such termination.
(b) Event of Termination Without Change of Control. Upon
----------------------------------------------
the occurrence of an Event of Termination other than after a Change of Control
(as hereinafter defined), the Bank shall pay to the Executive monthly, or in
the event of his subsequent death, to his designated beneficiary or
beneficiaries, or to his estate, as the case may be, as severance pay or
liquidated damages, or both, during the period below described a sum equal to
the highest monthly rate of salary paid to the Executive at any time under this
Agreement. Such payments shall commence on the last day of the month following
the date of said Event of Termination and shall continue until the date this
Agreement would have expired but for said occurrence, with such occurrence
being viewed as a determination by the Bank not to extend the Agreement as
provided for in paragraph 3.
(c) Event of Termination After Change of Control. If,
--------------------------------------------
after a "Change of Control" (as hereinafter defined) of UPC, BFC, or the Bank,
any of the parties hereto, or their successors or assigns, shall terminate the
employment of the Executive during the period of employment under this
Agreement for any reason other than "cause," as defined in paragraph 8(a),
retirement at or after the normal retirement age under any tax-qualified
retirement plan(s) maintained by UPC, termination pursuant to paragraph 9, or
otherwise change the present capacity or circumstances in which the Executive
is employed as set forth in paragraph 2 of this Agreement or cause a reduction
in the Executive's responsibilities or authority or compensation or other
benefits provided under this Agreement without the Executive's written consent,
then the Executive, or his beneficiaries, dependents and estate, as the case
may be, shall be entitled to the following:
(i) The Executive shall receive a sum equal to
the total amount of the present value of 2.99 times the average annual
compensation payable under this Agreement and includible by the Executive in
gross income for the most recent five taxable years ending before the date on
which the ownership or control of UPC, BFC, or the Bank changed. Such amount
shall be payable to the
-4-
<PAGE> 129
Executive in a lump sum within ten (10) days of the occurrence of an Event of
Termination under this paragraph 9(c).
(ii) During a period of thirty-six (36)
calendar months beginning with the Event of Termination, the Executive, his
dependents, beneficiaries and estate shall continue to be covered under all
employee benefit plans of the Bank, BFC, or UPC, including without limitation,
any UPC tax-qualified retirement plans, as if the Executive was still employed
during such period under this Agreement.
(iii) If and to the extent that benefits or
service credit for benefits provided by paragraph 8(c)(ii) shall not be
payable or provided under any such plans to the Executive, his dependents,
beneficiaries and estate, by reason of his no longer being an employee of the
Bank as a result of termination of employment, UPC shall itself pay or
provide for payment of such benefits and service credit for benefits to the
Executive, his dependents, beneficiaries and estate. Any such payment
relating to retirement shall commence on a date selected by the Executive
which must be a date on which payments under any UPC tax-qualified retirement
plan may commence.
(iv) The Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise nor shall any amounts received from other
employment or otherwise by the Executive offset in any manner the obligations
of the Bank hereunder.
(d) Change of Control. Paragraph 8(c) shall become
-----------------
operative upon the occurrence of a Change of Control of UPC, BFC, or the Bank.
For purposes of this Agreement, "Change of Control" means the sale of
substantially all of the assets of UPC, BFC, or the Bank, or the acquisition,
whether directly, indirectly, beneficially (within the meaning of Rule 13d-3 of
the Securities Exchange Act of 1934, as amended (the "Act")), or of record, of
securities of UPC, BFC, or the Bank representing twenty- five percent (25%) or
more in the aggregate voting power of UPC's, BFC's, or the Bank's
then-outstanding Common Stock by any "person" (within the meaning of Sections
13(d) and 14(d) of the Act), including any corporation or group of associated
persons acting in concert, other than (i) the UPC or its subsidiaries and/or
(ii) any tax-qualified employee stock ownership plan of UPC or of its
subsidiaries, including a trust established pursuant to any such plan;
provided, that a Change of Control will not result from (A) a transfer of
voting securities of UPC, BFC, or the Bank by a person who is the beneficial
owner, directly or indirectly, of twenty-five percent (25%) or more of the
voting securities of the UPC, BFC, or the Bank (a "25 Percent Owner") to (i) a
member of such 25 Percent Owner's lifetime or by will or the laws of descent
and distribution; (ii) any trust as to which the 25 Percent Owner
-5-
<PAGE> 130
or a member (or members) of his immediate family (within the meaning of Rule
16a-1(e) of the Act) is the beneficiary; (iii) any trust as to which the 25
Percent Owner is the settlor with sole power to revoke; (iv) any entity over
which such 25 Percent Owner has the power, directly or in directly, to direct
or cause the direction of the management and policies of the entity, whether
through the ownership of voting securities, by contract or otherwise; or (v)
any charitable trust, foundation or corporation under Section 501(c)(3) of the
Code which is funded by the 25 Percent Owner; or (B) the acquisition of voting
securities of UPC, BFC, or the Bank, by either (i) a person who was a 25
Percent Owner on the effective date of the Agreement or (ii) a person, trust or
other entity described in the foregoing clauses (A)(i)-(v) of this subsection;
or (C) the spin-off or other distribution by UPC to its shareholders of the
capital stock or assets of BFC or the Bank.
(e) Suspension and Special Regulatory Rules.
---------------------------------------
(i) If the Executive is suspended and/or temporarily
prohibited from participating in the conduct of the Bank's affairs by a notice
served under section 8(e)(3) or section (g)(1) of the Federal Deposit Insurance
Act ("FDI Act"), the Bank's obligations under this Agreement shall be suspended
as of the date of service of such notice, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Bank shall (i)
pay the Executive all or part of the compensation withheld while its contract
obligations were suspended and (ii) reinstate in whole or in part any of its
obligations which were suspended.
(ii) If the Executive is removed and/or permanently
prohibited from participating in the conduct of the Bank's affairs by an order
issued under section 8(e)(4) or section (g)(1) of the FDI Act, all obligations
of the Bank under this Agreement shall terminate as of the effective date of
the order; however, no vested rights of the Executive shall be affected by such
termination.
(iii) If the Bank is in default (as defined in
section 3(x)(1) of the FDI Act), all obligations under this Agreement shall
terminate as of the date of default; however, no vested rights of the Executive
shall be affected by such termination.
(iv) All obligations under this Agreement shall be
terminated, except to the extent that it may be determined that continuation of
this Agreement is necessary for the continued operation of the Bank, (1) by the
Director of the Office of Thrift Supervision ("OTS") or his or her designee at
the time the Federal Deposit Insurance Corporation ("FDIC") or the Resolution
Trust Corporation enters into an agreement to provide assistance to or on
behalf of the Bank under the authority contained in Section 13(c)
-6-
<PAGE> 131
of the FDI Act; or (2) the Director of OTS or his or her designee at any time
the Director of OTS or his or her designee approves a supervisory merger to
resolve problems related to the operation of the Bank or when the Bank is
determined by the OTS to be in an unsafe or unsound condition. No vested
rights of the Executive shall be affected by such action.
(f) Termination of Employment of, or by, the Executive.
--------------------------------------------------
The Board of Directors of the Bank may terminate the employment of the
Executive at any time; in the event of such termination, the provisions of this
paragraph 8 shall fully apply. The Executive may terminate his service under
this Agreement at any time upon three (3) months written notice to the Bank.
In the event of the Executive's voluntary termination of employment under this
paragraph 8(f), the provisions of this paragraph 8(a)-(e) shall not apply, and
the Executive shall be entitled to receive his salary, bonus, and other
employee benefits through his date of termination and such termination shall be
without prejudice to any other benefits as to which the Executive is vested.
9. Disability. If the Executive shall become disabled or
----------
incapacitated to the extent that he is unable to perform the duties of Senior
Vice President/Treasurer, he shall nevertheless continue to receive the
following percentages of his compensation under Paragraph 2 of this Amended
Agreement for the following periods of his disability: 100% for up to eighteen
(18) months, less any amount paid to the Executive under any other disability
program maintained by the Bank. Upon returning to active full-time employment,
the Executive's full compensation as set forth in this Agreement shall be
reinstated. In the event that said Executive returns to active employment on
other than a full-time basis, then his compensation (as set forth in Paragraph
2 of this Agreement) shall be reduced in proportion to the time spent in said
employment. However, if the Executive is again unable to perform the duties of
his position hereunder due to illness or other incapacity, he must have been
engaged in active full-time employment for at least twelve (12) consecutive
months immediately prior to such later absence or inability in order to qualify
for the full or partial continuance of his salary under this Paragraph 10. If
the Executive is disabled for a continuous period exceeding eighteen (18)
calendar months, the Bank may, at its election, terminate the Agreement.
10. Confidential Information. The Executive shall not, to the
------------------------
detriment of the Employers, knowingly disclose or reveal to any authorized
person any confidential information relating to the Bank, its subsidiaries or
affiliates, or to any of the businesses operated by them, and the Executive
confirms that such information constitutes the exclusive property of the
Employers. The Executive shall not otherwise knowingly act or conduct himself
(i) to the material detriment of the Employers, their subsidiaries, or
-7-
<PAGE> 132
affiliates, or (ii) in a manner which is inimical or contrary to the interests
thereof.
11. Federal Income Tax Withholding. The Bank may withhold from
------------------------------
any benefits payable under this Agreement all federal, state, city or other
taxes as shall be required pursuant to any law or governmental regulation or
ruling.
12. Effect of Prior Agreements. This Agreement contains the
--------------------------
entire understanding between the parties hereto and supersedes any prior
employment agreement between the Bank or any predecessor of the Bank and the
Executive; provided, however, that the Executive's right to payment under
section 8(c) of that certain agreement between the Executive and the Bank dated
February 15, 1991 following the effective date of the merger of UPC and BFC is
hereby acknowledged by UPC and shall not be affected by any provision of this
Agreement.
13. Payment of Legal Expenses. The Bank shall pay all legal fees
-------------------------
and expenses which the Executive may incur (as such fees and expenses are
incurred) as a result of any action ultimately found in favor of the Executive
contesting the validity or enforceability of this Agreement and the Executive
shall be entitled to receive interest thereon for the period of any delay in
payment from the date such payment was due at the rate determined by adding two
hundred basis points to the six month Treasury Bill rate.
14. Consolidation, Merger, or Sale of Assets. Nothing in this
----------------------------------------
Agreement shall preclude UPC from consolidating or merging into or with, or
transferring all or substantially all of its assets or the assets of BFC or the
Bank to another corporation which assumes this Agreement and all obligations
and undertakings of the UPC, BFC, and the Bank hereunder.
15. General Provisions.
------------------
(a) Nonassignability. Neither this Agreement nor any
----------------
right or interest hereunder shall be assignable by the Executive, his
beneficiaries, or legal representatives without the Employers' prior written
consent; provided, however, that nothing in this paragraph 15(a) shall preclude
(i) the Executive from designating a beneficiary to receive any benefits
payable hereunder upon his death, or (ii) the Executors, administrators, or
other legal representatives of the Executive or his estate from assigning any
rights hereunder to the person or persons entitled thereto.
(b) No Attachment. Except as required by law, no right
-------------
to receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or to execution, attachment, levy, or similar process of
assignment by operation of
-8-
<PAGE> 133
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect.
(c) Binding Agreement. This Agreement shall be binding
-----------------
upon, and inure to the benefit of, the Executive and the Bank and their
respective permitted successors and assigns.
16. Modification and Waiver.
-----------------------
(a) Amendment of Agreement. This Agreement may not be
----------------------
modified or amended except by an instrument in writing signed by the parties
hereto.
(b) Waiver. No term or condition of this Agreement shall
------
be deemed to have been waived, nor shall there be an estoppel against the
enforcement of any provision of this Agreement, except by written instrument of
the party charged with such waiver or estoppel. No such written waiver shall
be deemed a continuing waiver unless specifically stated therein, and each
waiver shall operate only as to the specific term or condition waived and shall
not constitute a waiver of such term or condition for the future or as to any
act other than the specifically waived.
17. Severability. If, for any reason, any provision of this
------------
Agreement is held invalid, such invalidity shall not affect any other provision
of this Agreement not held so invalid, and each such other provision shall to
the full extent consistent with law continue in full force and effect. If any
provision of this Agreement shall be held invalid in part, such invalidity
shall in no way affect the rest of such provision, together with all other
provisions of this Agreement, shall to the full extent consistent with law
continue in full force and effect.
18. Headings. The headings of paragraph herein are included
--------
solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
19. Applicable Law. This Agreement has been executed and
--------------
delivered in the State of Alabama, and its validity, interpretation,
performance, and enforcement shall be governed the laws of said State, except
to the extent Federal law is governing. Any payment to the Executive hereunder
shall be subject to and conditioned upon compliance with 12 U.S.C. Section
1828(k) and any regulations promulgated thereunder.
-9-
<PAGE> 134
IN WITNESS WHEREOF, BFC, the Bank, and UPC have caused this Agreement
to be executed and their seals to be affixed hereunto by its officers thereunto
duly authorized, and the Executive has signed this Agreement, all as of the day
and year first above written.
<TABLE>
<S> <C>
ATTEST: BANCFIRST CORPORATION
BY:
- --------------- ----------------------------
ATTEST: BANKFIRST, A FEDERAL SAVINGS BANK
BY:
- --------------- ----------------------------------
ATTEST: UNION PLANTERS CORPORATION
BY:
- --------------- ---------------------------------
- ------------- ------------------------------------
Witness C. Raymond Duncan
</TABLE>
-10-
<PAGE> 135
SUPPLEMENTAL RETIREMENT AGREEMENT
---------------------------------
THIS AGREEMENT entered into as of this day of , 1994,
---- ------------
by and between BANCFIRST CORPORATION ("BFC"); BANKFIRST, A FEDERAL SAVINGS BANK
("BFSB"); UNION PLANTERS CORPORATION ("UPC"); and C. RAYMOND DUNCAN (the
"Executive"). (All references to BFSB shall include BFC, unless otherwise
indicated.)
WHEREAS, effective as of the date of this Agreement, BFC, and its
subsidiaries, including BFSB, will be acquired by UPC pursuant to the terms of
the Agreement and Plan of Reorganization between UPC and BFC dated
, 1994 (the "Merger") and continue as subsidiaries of UPC; and
- ---------------
WHEREAS, the Executive has been employed in the capacity of Senior
Vice President/Treasurer of BFC and BFSB and is expected to continue to serve
in these capacities following the Merger; and
WHEREAS, the Executive's extensive knowledge and experience in the
savings and loan industry is such that BFC, BFSB, and UPC wish to seek
assurance of his continued service; and
WHEREAS, the Merger will result in the termination of the Plan and the
Executive's accrual of benefits thereunder will cease as of the date of such
termination; and
WHEREAS, BFC, BFSB, and UPC wish to establish this Agreement to
provide the Executive with certain benefits upon his retirement or other
termination of employment in recognition of the Executive's loss of retirement
income as a result of the premature termination of the Plan;
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements hereinafter contained, and other good and valuable
consideration, receipt of which is hereby acknowledged, the parties hereto
agree to this Agreement as follows:
SECTION I
DEFINITIONS
"Agreement" shall mean this agreement between the Executive, BFC, BFSB
and UPC.
"Early Termination Benefit" shall mean the sum of (i) the vested
accrued lump-sum benefit distributable to the Executive in the event of the
termination of the Plan at any time prior to the Executive's normal retirement
age (65) and (ii) the cumulative earnings attributable to the Executive's
investment of the amount determined under clause (i) (assuming the transfer of
such amount to an Individual Retirement Account and a six percent annual rate
of return) during the period beginning on the date of distribution of such
amount to the Executive following termination of the Plan and ending on the
date the Executive attains age 65.
"Employment Agreement" shall mean the Executive's employment agreement
dated , 1994, by and between, the Executive, UPC, BANCFIRST,
------------------
and BANKFIRST.
"Lump Sum Amount" shall mean a sum equal to the Executive's estimated
lump-sum benefit at normal retirement age under the Plan determined as of the
date of Plan termination. Such sum shall be calculated by assuming that the
Plan had not terminated prior to the Executive's normal retirement age under
the Plan (age 65) and using (i) the assumptions stated in the Plan regarding
the calculation of actuarially equivalent benefit forms and (ii) the salary
scale assumption used in connection with the preparation of the Plan actuarial
report prepared for the plan year beginning prior to the date of termination.
"Plan" shall mean the BANKFIRST Pension Plan and Trust.
<PAGE> 136
"Surviving Spouse" shall mean the Executive's spouse on the date of
his death, but shall not include a spouse from whom he is legally separated or
divorced at the time of his death.
"UPC Plan Benefits" shall mean the lump-sum amount distributable to
the Executive upon termination of employment with BFSB under all tax-qualified
retirement plans of UPC ("UPC Plans") in which the Executive is a participant
following the Merger.
SECTION II
BENEFITS
--------
(a) In the event of the termination of the Plan prior to the date the
Executive attains age 65, then (i) in the event of the Executive's termination
of employment with BFSB on or after the date the Executive attains age 65, BFSB
shall pay the Executive the following sum at the time specified in Section
2(c):
(1) The Executive's Lump Sum Amount less the sum of the
Executive's Early Termination Benefit and the
Executive's UPC Plan Benefits;
and
(2) an amount determined as follows:
$D times (R/(1-R)) = amount of payment
For purposes of this formula, "D" shall
equal the amount determined under Section
2(a)(1), and "R" shall equal the sum of
the highest marginal federal, state,
local, and withholding tax rates
applicable to the Executive during the
calendar year in which benefits are paid
to the Executive under this Agreement.
Any determination regarding the calculation of the Executive's Lump
Sum or Early Termination Benefits shall be made by the Plan's actuary (as
retained by BFSB or the Plan for the year in which such determination is made).
Such determination shall be binding upon the parties to this Agreement.
(b) In the event of the Executive's termination of employment with
BFSB prior to age 65, the amount determined under Section 2(a)(1) shall be
reduced by 6.7 percent for each full year that the Executive's age at
termination of employment is less than age 65 for the first five such years and
3.3% for each year thereafter.
(c) The amount determined under Section 2(a) shall be payable within
thirty (30) days after the date of the Executive's termination of employment
with BFSB. In the event of the Executive's death prior to the date any payment
is due under this Agreement, such amount shall be payable to the Executive's
Surviving Spouse or, if none, his estate.
SECTION III
SOURCE OF BENEFITS
------------------
All payments hereunder shall constitute an unfunded, unsecured promise
by BFSB to provide such payments in the future, as and to the extent such
benefits become payable. Benefits shall be paid from the general assets of
BFSB, and no person shall, by virtue of this Agreement, have any interest in
such assets (other than an unsecured creditor of BFSB). The obligation of BFSB
to make any payments or provide any benefits under this Agreement
-2-
<PAGE> 137
shall, in all events and without limitation, be guaranteed by UPC and its
successors and assigns and such guarantee shall inure to the benefit of the
Executive and his successors and assigns. In the event BFC or UPC elect in
their sole option to purchase life insurance on Executive payable to UPC to
assist UPC in funding its obligations hereunder, Executive agrees to cooperate
with UPC in obtaining life insurance payable to UPC to cover any or all of the
benefits to be provided hereunder.
SECTION IV
ASSIGNMENT
----------
Except as otherwise provided by this Agreement, it is agreed that
neither the Executive nor his Surviving Spouse (if any) shall have any right to
commute, sell, assign, transfer, encumber and pledge or otherwise convey the
right to receive any benefits hereunder, which benefits and the rights thereto
are expressly declared to be nonassignable and nontransferable.
SECTION V
NO RETENTION OF SERVICES
------------------------
The benefits payable under this Agreement shall be independent of, and
in addition to, any other employment agreement that may exist from time to time
between the parties hereto, or any other compensation payable by BFSB to the
Executive, whether salary, bonus, retirement income under employee benefit
plans sponsored or maintained by UPC or BFSB, or otherwise, except for those
benefits received by Executive under the UPC Plan Benefits. This Agreement
shall not be deemed to constitute a contract of employment between the parties
hereto.
SECTION VI
REORGANIZATION
--------------
BFSB and UPC further agree that neither party will cease its business
activities or terminate its existence without having made adequate provision
for the fulfillment of its obligation hereunder.
SECTION VII
AMENDMENTS
----------
This Agreement may be revoked or be amended in whole or in part only
by a writing signed by all the parties hereto.
SECTION VIII
GOVERNING LAW
-------------
This Agreement shall be construed and governed in all respects under
and by the laws of the State of Alabama. If any provision of this Agreement
shall be held by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions hereof shall continue to be fully
effective.
-3-
<PAGE> 138
SECTION IX
HEADINGS
--------
Headings and subheadings in this Agreement are inserted for
convenience and reference only and constitute no part of this Agreement.
SECTION X
COUNTERPARTS
------------
This Agreement may be executed in an original and any number of
counterparts, each of which shall constitute an original of one and the same
instrument.
SECTION XI
GENDER
------
This Agreement shall be construed, where required, so that the
masculine gender includes the feminine.
SECTION XII
EFFECTIVE DATE
--------------
This Agreement shall be effective as of the date first written above.
The Agreement shall remain in effect until all amounts payable hereunder have
been paid to the Executive, his Surviving Spouse, or his estate, as
appropriate.
SECTION XIII
LEGAL EXPENSES
--------------
BFSB shall promptly reimburse all legal fees and expenses which the
Executive may incur (as such fees and expenses are incurred) as a result of an
action ultimately found in favor of the Executive brought by BFSB, UPC, or the
Executive in which the validity or enforceability of this Agreement is at
issue.
SECTION XIV
SUCCESSORS AND ASSIGNS
----------------------
This Agreement shall be binding upon and inure to the benefit of BFC,
BFSB, UPC, the Executive, and their successors and assigns.
-4-
<PAGE> 139
IN WITNESS WHEREOF, BFC, BFSB, and UPC have caused this Agreement to
be signed in corporate name by a duly authorized officer, impressed with their
corporate seal, and properly attested to, and the Executive has hereto set his
hand, all on the day and year first above written.
<TABLE>
<S> <C>
ATTEST: BANCFIRST CORPORATION
- ---------------- BY:
-----------------------------------------
ATTEST: BANKFIRST, A FEDERAL SAVINGS BANK
- ---------------- BY:
-----------------------------------------
ATTEST: UNION PLANTERS CORPORATION
- ---------------- BY:
-----------------------------------------
- ---------------- -----------------------------------------
Witness C. Raymond Duncan
</TABLE>
-5-
<PAGE> 1
EXHIBIT 23 (A)
Accountants Consent
<PAGE> 2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the previously filed
Registration Statements on Form S-3 (No. 33-27814) and Form S-8 (Nos. 2-87392,
33-23306, 33-35928 and 33-53454) of Union Planters Corporation of our report
relating to the consolidated financial statements of BANCFIRST Corporation and
subsidiary as of September 30, 1993 and 1992 and for each of the three years
ended September 30, 1993 dated October 28, 1993 which appears in this Current
Report on Form 8-K dated February 8, 1994 of Union Planters Corporation.
DELOITTE & TOUCHE
Decatur, Alabama
February 14, 1994
<PAGE> 1
EXHIBIT 99 (A)
BANCFIRST and Subsidiary Consolidated Financial Statements
dated September 30, 1993
<PAGE> 2
BANCFIRST CORPORATION AND SUBSIDIARY
Consolidated Statements Of Financial Condition
as of September 30, 1993 and 1992 and Consolidated
Statements of Income, Stockholders' Equity and Cash
Flows for Each of the Three Years Ended September 30,
1993 and Independent Auditors' Report
<PAGE> 3
<TABLE>
<CAPTION>
BANCFIRST CORPORATION AND SUBSIDIARY
TABLE OF CONTENTS
- -------------------------------------------------------------------------------------------
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
CONSOLIDATED STATEMENTS OF:
Financial Condition as of September 30, 1993 and 1992 2-3
Income for the Years Ended September 30, 1993, 1992 and 1991 4-5
Stockholders' Equity for the Years Ended September 30, 1993, 1992 and 1991 6
Cash Flows for the Years Ended September 30, 1993, 1992 and 1991 7-8
Notes to Consolidated Financial Statements 9-26
</TABLE>
<PAGE> 4
INDEPENDENT AUDITORS' REPORT
Board of Directors of BANCFIRST Corporation
Decatur, Alabama
We have audited the accompanying consolidated statements of financial condition
of BANCFIRST Corporation and its wholly-owned subsidiary, BANKFIRST, a federal
savings bank, as of September 30, 1993 and 1992 and the related consolidated
statements of income, stockholders' equity and cash flows for each of the three
years ended September 30, 1993. These financial statements are the
responsibility of the Corporation's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of BANCFIRST Corporation and
subsidiary as of September 30, 1993 and 1992 and the results of their
operations and their cash flows for each of the three years ended September 30,
1993 in conformity with generally accepted accounting principles.
Deloitte & Touche
Birmingham, Alabama
October 28, 1993
-1-
<PAGE> 5
<TABLE>
<CAPTION>
BANCFIRST CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
SEPTEMBER 30, 1993 AND 1992 (DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------------------------------------
1993 1992
<S> <C> <C>
ASSETS
Cash and cash equivalents (including
interest-bearing deposits of $144 and
$384, respectively) $ 2,462 $ 3,486
Investment securities (Notes 2 and 16):
Held for investment (estimated market
values of $5,553 and $23,670,
respectively) 5,208 22,636
Held for sale (estimated market value of
$18,299) 17,573 -
Mortgage-backed securities (Notes 3 and 16):
Held for investment (estimated market
values of $3,163 and $79,625, respectively) 3,022 77,600
Held for sale (estimated market value of
$74,615) 73,275 -
Loans receivable, net (net of allowance for
possible loan losses of $1,162 and $1,035,
respectively) (Notes 4 and 16) 152,310 148,383
Mortgage loans held for sale 4,263 -
Accrued interest receivable:
Investment securities 410 331
Mortgage-backed securities 552 691
Loans receivable 1,221 1,223
Real estate owned and repossessed assets 407
Premises and equipment, net (Note 5) 4,466 3,013
Stock in Federal Home Loan Bank ("FHLB"),
at cost (Note 6) 1,696 1,696
Prepaid expenses and other assets (Note 8) 652 705
-------- --------
TOTAL ASSETS $267,110 $260,171
======== ========
</TABLE>
- 2 -
<PAGE> 6
<TABLE>
<CAPTION>
BANCFIRST CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
SEPTEMBER 30, 1993 AND 1992 (DOLLARS IN THOUSANDS)
- ---------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY 1993 1992
<S> <C> <C>
LIABILITIES:
Deposits (Notes 7 and 16) $217,771 $213,828
Borrowed funds (Notes 12 and 16) 17,000 17,000
Advances by borrowers for taxes and insurance 888 866
Accrued interest payable 133 147
Income taxes (Note 10):
Current 316 365
Deferred 401 242
Other liabilities 709 925
-------- --------
Total liabilities 237,218 233,373
-------- --------
COMMITMENTS (Note 13)
STOCKHOLDERS' EQUITY (Notes 10 and 11):
Serial preferred stock - $.01 par value,
400,000 shares authorized - none issued
Capital stock - $.01 par value, 2,600,000
shares authorized, 1,784,193 and 1,773,718
shares issued and outstanding, respectively 18 18
Additional paid-in capital 11,184 11,075
Retained income, substantially restricted 18,690 15,705
-------- --------
Total stockholder's equity 29,892 27,798
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $267,110 $260,171
======== ========
See notes to consolidated financial statements.
</TABLE>
- 3 -
<PAGE> 7
<TABLE>
<CAPTION>
BANCFIRST CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED SEPTEMBER 30, 1993, 1992 AND 1991
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
- ----------------------------------------------------------------------------------------------------------------
1993 1992 1991
<S> <C> <C> <C>
INTEREST INCOME:
Mortgage loans $ 9,028 $10,170 $11,143
Consumer and other loans 4,160 3,737 3,321
Mortgage-backed securities 5,006 5,551 4,821
Investment securities 1,699 1,677 1,919
Other 98 110 114
------- ------- -------
Total interest income 19,991 21,245 21,318
------- ------- -------
INTEREST EXPENSE:
Deposits (Note 7) 7,835 10,493 13,522
Borrowed funds (Note 12) 853 444
------- ------- -------
Total interest expense 8,688 10,937 13,522
------- ------- -------
NET INTEREST INCOME 11,303 10,308 7,796
PROVISION FOR LOAN LOSSES (Note 4) 150 608 426
------- ------- -------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 11,153 9,700 7,370
------- ------- -------
NONINTEREST INCOME:
Fees and charges on loans 102 94 99
Service fee income on loans sold 73 80 92
Fees and service charges on deposit
accounts 540 496 449
Insurance commissions 76 68 81
Net gain on sale of:
Investment securities (Note 2) 28 55 3
Mortgage-backed securities (Note 3) 79 6
Other 442 447 315
------- ------- -------
Total noninterest income 1,261 1,319 1,045
------- ------- -------
NONINTEREST EXPENSE:
Salaries and employee benefits 2,626 2,428 2,120
Net occupancy expense 629 538 589
Data processing expense 572 422 410
Insurance premiums 471 542 499
Marketing and public relations 449 473 279
Professional fees 383 348 195
Printing and office supplies expense 166 113 90
Other (Note 8) 564 532 571
------- ------- -------
Total noninterest expense 5,860 5,396 4,753
------- ------- -------
</TABLE>
- 4 -
<PAGE> 8
<TABLE>
<CAPTION>
BANCFIRST CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED SEPTEMBER 30, 1993, 1992 AND 1991
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
- --------------------------------------------------------------------------------------------------------------
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
INCOME BEFORE INCOME TAX EXPENSE $ 6,554 $ 5,623 $ 3,662
INCOME TAX EXPENSE (Note 10) 2,467 2,240 1,276
--------- --------- ---------
NET INCOME $ 4,087 $ 3,383 $ 2,386
========= ========= =========
AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 1,836,365 1,802,141 1,783,388
========= ========= =========
EARNINGS PER SHARE $ 2.23 $ 1.88 $ 1.34
========= ========= =========
CASH DIVIDENDS PER SHARE $ 0.62 $ 0.57 $ 0.47
========= ========= =========
</TABLE>
See notes to consolidated financial statements.
- 5 -
<PAGE> 9
<TABLE>
<CAPTION>
BANCFIRST CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 1993, 1992 AND 1991
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
- ----------------------------------------------------------------------------------------------------------------------------------
NET UNREALIZED
DEPRECIATION
RETAINED ON CERTAIN
ADDITIONAL INCOME MARKETABLE TOTAL
CAPITAL PAID-IN SUBSTANTIALLY EQUITY STOCKHOLDERS'
STOCK CAPITAL RESTRICTED SECURITIES EQUITY
----- ------- ---------- ---------- ------
<S> <C> <C> <C> <C> <C>
BALANCE, October 1, 1990 $ 18 $10,920 $11,756 $(143) $22,551
Net income 2,386 2,386
Change in net unrealized
depreciation on certain
marketable equity securities 143 143
Cash dividends - $.47 per share (817) (817)
Proceeds from issuance of
capital stock upon exercise
of options 20 20
--- ------- ------- ----- -------
BALANCE, September 30, 1991 18 10,940 13,325 $ 0 24,283
=====
Net income 3,383 3,383
Cash dividends - $.57 per share (1,003) (1,003)
Proceeds from issuance of
capital stock upon exercise
of options 135 135
--- ------- ------- -------
BALANCE, September 30, 1992 18 11,075 15,705 26,798
Net income 4,087 4,087
Cash dividends - $.62 per share (1,102) (1,102)
Proceeds from issuance of
capital stock upon exercise
of options 109 109
--- ------- ------- -------
BALANCE, at September 30, 1993 $18 $11,184 $18,690 $29,892
=== ======= ======= =======
</TABLE>
See notes to consolidated financial statements.
- 6 -
<PAGE> 10
<TABLE>
<CAPTION>
BANCFIRST CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1993, 1992 AND 1991
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,087 $ 3,383 $ 2,386
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 150 608 426
Provision for depreciation 297 280 345
Provision for deferred income taxes 159 66 (66)
Accretion of discounts (57) (51) (62)
Amortization of premiums 400 329 133
Gain on sale of investment securities (28) (55) (3)
Loans originated for resale (13,194) (4,118) (4,990)
Proceeds from sale of loans 8,931 4,118 4,990
Gain on sale of mortgage-backed securities (79) (6)
Loss on sale of premises and equipment 41
(Increase) decrease in real estate owned 407 574 (844)
(Increase) decrease in other assets 97 65 (418)
Increase (decrease) in other liabilities (240) 481 183
-------- -------- --------
Net cash provided by operating activities 1,050 5,601 2,074
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of investment securities
(Note 2) 7,029 8,585 18,319
Proceeds from maturities of investment
securities 150 150
Purchases of investment securities (7,370) (11,388) (9,931)
Loan originations (66,906) (64,160) (35,953)
Mortgage-backed securities purchased (26,964) (35,834) (41,236)
Proceeds from sale of mortgage-backed
securities (Note 3) 4,351 9,384 2,876
Principal collections on loans 62,808 54,655 38,335
Principal collections on mortgage-backed
securities 23,668 17,341 8,560
Purchases of premises and equipment (1,952) (667) (406)
Proceeds from sale of premises and equipment 161
-------- -------- --------
Net cash used in investing activities (5,025) (21,934) (19,436)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits 3,944 333 16,218
Advances from the FHLB 17,000
Cash dividends paid (1,102) (1,003) (817)
Proceeds from issuance of capital stock 109 135 20
-------- -------- --------
Net cash provided by financing
activities 2,951 16,465 15,421
-------- -------- --------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ (1,024) $ 132 $ (1,941)
CASH AND CASH EQUIVALENTS:
BEGINNING OF YEAR 3,486 3,354 5,295
-------- -------- --------
END OF YEAR $ 2,462 $ 3,486 $ 3,354
======== ======== ========
</TABLE>
See notes to consolidated financial statements.
- 7 -
<PAGE> 11
<TABLE>
<CAPTION>
BANCFIRST CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1993, 1992 AND 1991
(DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid for:
Interest $ 8,702 $ 10,898 $ 13,552
======== ======== ========
Income taxes $ 2,354 $ 1,759 $ 1,122
======== ======== ========
Transfers to held for sale:
Investment securities $ 17,573
========
Mortgage-backed securities $ 73,275
========
</TABLE>
See notes to consolidated financial statements.
- 8 -
<PAGE> 12
BANCFIRST CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Holding Company Formation and Principles of Consolidation - On January 24,
---------------------------------------------------------
1991, stockholders of BANKFIRST approved the formation of a holding
company. On April 25, 1991, BANKFIRST became the wholly-owned subsidiary
of this holding company, BANCFIRST Corporation (formerly ALAFIRST
Bancshares, Inc.), a Delaware Corporation. Each outstanding share of
BANKFIRST's common stock was converted into one share of common stock of
BANCFIRST Corporation.
The accompanying consolidated financial statements include the accounts of
BANCFIRST Corporation and BANKFIRST. BANKFIRST's accounts include its
wholly-owned subsidiary, Sunbelt Financial Services, Inc., which was
incorporated in July, 1981. Balances and activity reflected in the
accompanying consolidated financial statements for the period prior to the
formation of BANCFIRST Corporation (through April 24, 1991 of fiscal year
1991) are those of BANKFIRST only. The operations of BANCFIRST Corporation
and BANKFIRST are collectively referred to herein as "the Bank." All
intercompany balances and transactions have been eliminated in the
accompanying consolidated financial statements.
See Note 17 for separate condensed financial information for BANCFIRST
Corporation only.
Basis of Financial Statements Presentation - The Bank's consolidated
------------------------------------------
financial statements have been prepared in accordance with generally
accepted accounting principles and with general practice within the savings
institutions industry. In preparing such financial statements, Management
is required to make estimates and assumptions that affect the reported
amounts of assets and liabilities as of the date of the balance sheet and
revenues and expenses for the period. Actual results could differ from
those estimates. Material estimates that are particularly susceptible to
significant change relate to the determination of the allowance for loan
losses and the valuation of real estate acquired in connection with
foreclosures or in satisfaction of loans. In connection with the
determination of the allowance for loan losses and the valuation of real
estate owned, Management obtains independent appraisals for significant
properties.
Cash and Cash Equivalents - Cash and cash equivalents are cash on hand,
-------------------------
cash in banks and due from banks, and overnight deposits in the FHLB.
Investments and Mortgage-Backed Securities - Certain investments and
------------------------------------------
mortgage-backed securities that Management has both the ability and intent
to hold to maturity are carried at cost, adjusted for amortization of
premiums and accretion of discounts, which are recognized as interest
- 9 -
<PAGE> 13
income using a method which approximates the interest method over the period
to maturity. Other investments and mortgage-backed securities that may be
held for indefinite periods of time, including securities that will be used
as a part of Management's asset/liability management strategy or those
securities that may be sold in response to changing interest rates,
prepayment risks, or similar economic factors, are classified as held for
sale. Such securities classified as "held for sale" are carried at lower of
cost or market. Sales of such securities are recognized based on the
specific identification method. Maturities of mortgage-backed securities
are determined by contract life.
During fiscal 1993, the Bank transferred a significant portion of its
investment and mortgage-backed securities to the held for sale category.
These transfers were the result of criteria set forth in Statement of
Financial Accounting Standards ("SFAS") No. 115 Accounting for Investments
--------------------------
in Certain Debt and Equity Securities issued in May 1993 (discussed later
-------------------------------------
in Note 1) and a change in the Bank's intent with regard to holding certain
securities because of the anticipated adoption of this statement.
Mortgage Loans Held for Sale - The Bank classifies its current originations
----------------------------
of 30-year, fixed-rate mortgage loans as held for sale. These loans are
carried at lower of cost or market.
Allowance for Possible Loan Losses - The allowance for loan losses is
----------------------------------
increased by charges to income and decreased by charge- offs (net of
recoveries). Management's periodic evaluation of the adequacy of the
allowance is based on the Bank's past loan loss experience, known and
inherent risks in the portfolio, adverse situations that may affect the
borrower's ability to repay, the estimated value of any underlying
collateral, and current economic conditions.
Non-Accrual Loans - Loans are reviewed by Management on a regular basis and
-----------------
are placed on non-accrual status generally when contractually more than 90
days past due or when, in the opinion of Management, the collection of
additional interest is doubtful.
Real Estate Owned - Real estate owned acquired through, or in lieu of, loan
-----------------
foreclosure is initially recorded at fair value at the date of foreclosure.
Costs relating to development and improvement are capitalized, whereas
costs relating to the holding of property are expensed. Valuations are
periodically performed by management, and an allowance for losses is
established by a charge to net income if the carrying value of a property
exceeds its net realizable value.
- 10 -
<PAGE> 14
Premises and Equipment - Office properties and equipment are carried at
----------------------
cost less accumulated depreciation. Depreciation is provided by the
straight-line method at rates intended to distribute the cost of buildings
and equipment over their estimated service lives of five to forty years and
three to ten years, respectively.
Loan Origination Fees and Related Costs - Loan fees are accounted for in
---------------------------------------
accordance with SFAS No. 91, Accounting for Nonrefundable Fees and Costs
-------------------------------------------
Associated with Originating or Acquiring Loans and Initial Direct Costs of
--------------------------------------------------------------------------
Leases. Loan fees and certain direct loan origination costs are deferred,
------
and the net fee or cost is recognized as an adjustment to interest income
using a method which approximates the interest method over the contractual
life of the loans, adjusted for estimated prepayments based on the Bank's
historical prepayment experience.
Income Taxes - Deferred income taxes are provided on elements of income
------------
that are recognized for financial accounting purposes in periods different
than such items are recognized for income tax purposes. The principal
elements of deferred income taxes are provisions relating to different
accounting and tax treatment of accrued income and expenses (see Note 10).
In February 1992, SFAS No. 109, Accounting for Income Taxes, was issued.
---------------------------
The principal changes required by SFAS 109 are the adoption of the
liability method of accounting for deferred taxes and revision of the
criteria for recognition and measurement of deferred tax assets. The Bank
adopted this standard for the fiscal year beginning October 1, 1992.
Because the effect on the consolidated financial statements was immaterial,
the cumulative effect of applying the new accounting method was reflected
as of October 1, 1992 as a charge to income tax expense of approximately
$32,000, and is included in the accompanying 1993 consolidated statement of
income.
Earnings Per Share - Earnings per share is based on the weighted average
------------------
number of shares plus equivalent shares outstanding. The dilutive effect
of shares issuable under stock options is immaterial.
Reclassifications - Reclassifications of certain prior period amounts were
-----------------
made for comparative purposes.
New Accounting Pronouncements Not Yet Adopted - In May, 1993, SFAS No. 114,
---------------------------------------------
Accounting by Creditors for Impairment of a Loan, was issued. SFAS No. 114
------------------------------------------------
provides guidance on recognition of impairment of a loan as well as methods
for measurement of impairment. The Bank will be required to adopt SFAS No.
114 for the fiscal year beginning October 1, 1995. The impact of this
adoption on the Bank's consolidated financial statements is not presently
determinable.
- 11 -
<PAGE> 15
Also in May, 1993, SFAS No. 115, Accounting for Certain Investments in Debt
------------------------------------------
and Equity Securities, was issued. SFAS No. 115 requires management to
---------------------
classify its investment portfolio into three categories: (i)
held-to-maturity, (ii) available-for-sale and (iii) trading securities, and
sets forth specific criteria for making these classifications. Under SFAS
No. 115 unrealized holding gains and losses for trading securities are
included in earnings while unrealized holding gains and losses for
available-for-sale securities are reported as a separate component of
stockholders' equity, net of tax effects, until realized. Held-to-maturity
securities continue to be recorded at their amortized cost. Portfolio
additions beyond the date of adoption of this statement are to be
classified into the appropriate category when purchased. The Bank will be
required to adopt SFAS No. 115 for the fiscal year beginning October 1,
1994. Early adoption is permitted and Management is evaluating that
option. The impact of adoption is not presently determinable due to the
potential for changes in the market values of the affected securities.
2. INVESTMENT SECURITIES
The Bank's investment securities held for investment are summarized as
follows (In thousands):
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
----------------
1993 1992
----------------------- -------------------------
ESTIMATED ESTIMATED
CARRYING MARKET CARRYING MARKET
VALUE VALUE VALUE VALUE
----- ----- ----- -----
<S> <C> <C> <C> <C>
Maturing within one year -
U.S. Government and agency
obligations $ 6,152 $ 6,355
Maturing between one and five years-
U.S. Government and agency
obligations 16,484 17,315
Maturing between ten and twenty
years
Municipal obligations $5,208 $5,553
------ ------ ------- -------
Total $5,208 $5,553 $22,636 $23,670
====== ====== ======= =======
</TABLE>
Gross unrealized gains and gross unrealized losses on securities held for
investment were $346,000 and $-0-, respectively at September 30, 1993, and
$1,034,000 and $-0-, respectively at September 30, 1992.
- 12 -
<PAGE> 16
The Bank's investment securities held for sale are summarized as follows
(In thousands):
<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1993
---------------------
ESTIMATED
CARRYING MARKET
VALUE VALUE
----- -----
<S> <C> <C>
Maturing within one year -
U.S. Government and agency obligations $ 3,161 $ 3,237
Maturing between one and five years -
U.S. Government and agency obligations 14,412 15,062
------- -------
Total $17,573 $18,299
======= =======
</TABLE>
Gross unrealized gains and gross unrealized losses on securities held for
sale were $736,000 and $10,000, respectively, at September 30, 1993.
For the years ended September 30, 1993, 1992 and 1991, proceeds from sales
of investment securities were $7,029,000, $8,585,000 and $18,319,000,
respectively, resulting in realized gains of $28,000, $55,000 and $43,000,
respectively, and realized losses of $-0-, $-0-, and $40,000, respectively.
The weighted average yield for all investment securities was 6.52% and
7.03% for the years ended September 30, 1993 and 1992, respectively.
Certain U.S. Government securities totaling approximately $1,074,000 and
$4,270,000 at September 30, 1993 and 1992, respectively, were pledged for
various purposes as required or permitted by law.
3. MORTGAGE-BACKED SECURITIES
Mortgage-backed securities held for investment are summarized as follows
(In thousands):
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
----------------
1993 1992
----------------------- -------------------------
ESTIMATED ESTIMATED
CARRYING MARKET CARRYING MARKET
VALUE VALUE VALUE VALUE
----- ----- ----- -----
<S> <C> <C> <C> <C>
FNMA Certificates $ 68 $ 77 $40,482 $42,142
FHLMC Certificates 2,902 3,086 36,039 37,483
Add unamortized premium on purchased
certificates 60 1,229
Deduct discount on purchased
certificates (8) (150)
------ ------ ------- -------
Total mortgage-backed securities, net $3,022 $3,163 $77,600 $79,625
====== ====== ======= =======
</TABLE>
Gross unrealized gains and gross unrealized losses on mortgage-backed
securities held for investment were $178,000 and $37,000, respectively at
September 30, 1993, and $2,025,000 and $-0-, respectively at September 30,
1992.
- 13 -
<PAGE> 17
Mortgage-backed securities held for sale are summarized as follows (In
thousands):
<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1993
---------------------
ESTIMATED
CARRYING MARKET
VALUE VALUE
----- -----
<S> <C> <C>
FNMA Certificates $49,427 $51,017
FHLMC Certificates 22,750 23,598
Add unamortized premium on purchased
certificates 1,175
Deduct discount on purchased certificates (77)
------- -------
Total mortgage-backed securities, net $73,275 $74,615
======= =======
</TABLE>
Gross unrealized gains and gross unrealized losses on mortgage-backed
securities held for sale were $1,352,000 and $13,000, respectively at
September 30, 1993.
For the years ended September 30, 1993, 1992 and 1991, proceeds from sales
of mortgage-backed securities were $4,351,000, $9,384,000 and $2,876,000,
respectively, resulting in realized gains of $86,000, $87,000 and $6,000,
respectively and realized losses of $86,000, $8,000 and $-0-, respectively.
The weighted average yield for all mortgage-backed securities was 6.47% and
7.50% for the years ended September 30, 1993 and 1992, respectively.
Certain mortgage-backed securities totaling approximately $5,805,000 and
$4,511,000 at September 30, 1993 and 1992, respectively, were pledged for
various purposes as required or permitted by law.
The Bank holds both adjustable and fixed interest rate mortgage-backed
securities for investment. At September 30, 1993, the composition of
mortgage-backed securities was as follows (In thousands):
<TABLE>
<CAPTION>
TERM TERM TO RATE
TO CONTRACTUAL MATURITY CARRYING VALUE ADJUSTMENT CARRYING VALUE
----------------------- -------------- ---------- --------------
<S> <C> <C> <C>
1 yr. - 5 yrs. $10,871 1 mo. - 1 yr. $48,967
5 yrs. - 10 yrs. 13,996
10 yrs. - 20 yrs. 2,463
After 20 years
------- -------
Total fixed $27,330 Total adjustable $48,967
======= =======
</TABLE>
- 14 -
<PAGE> 18
4. LOANS RECEIVABLE
Loans receivable are summarized as follows (In thousands):
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
----------------
1993 1992
---- ----
<S> <C> <C>
First mortgage loans (secured primarily
by 1-4 family residential property) $100,936 $103,530
Commercial loans 3,747 2,186
Construction loans 10,441 8,948
Savings account loans 2,153 2,009
Home improvement loans 18 38
Consumer loans 40,882 36,306
Other 202 232
-------- --------
Total 158,379 153,249
-------- --------
Deduct:
Allowance for possible loan losses 1,162 1,035
Undisbursed portion of loans in process 4,702 3,662
Unamortized deferred loan fees 205 169
-------- --------
Total deductions 6,069 4,866
-------- --------
Total loans receivable $152,310 $148,383
======== ========
Loans serviced for others $ 20,269 $ 20,175
======== ========
</TABLE>
The weighted average yield for all loans was 8.75% and 9.68% for the years
ended September 30, 1993 and 1992, respectively.
Periodically, the Bank originates or purchases commercial and construction
loans and commercial real estate mortgage loans, which totaled $32,916,000
at September 30, 1993. These loans are of somewhat greater risk of
uncollectibility due to the dependency on income production or future
development of the real estate. Of these loans, $18,625,000 are
collateralized by single and multi-family residential property, $9,381,000
by offices and commercial buildings, $1,163,000 by land, and $3,747,000 in
commercial business loans.
Under the Financial Institution Reform, Recovery, and Enforcement Act of
1989 ("FIRREA"), a Federally-chartered savings bank's aggregate commercial
mortgage loans may not exceed 400% of its capital as determined under the
capital standards provisions of FIRREA. BANKFIRST is subject to this
limitation. Further, BANKFIRST is subject to regulations limiting its
maximum loans outstanding to one borrower. As of September 30, 1993,
BANKFIRST is well within each of these limitations.
- 15 -
<PAGE> 19
The Bank originates both adjustable and fixed interest rate loans. At
September 30, 1993, the composition of loans receivable and held for sale
was as follows (In thousands):
<TABLE>
<CAPTION>
TERM TERM TO RATE
TO MATURITY CARRYING VALUE ADJUSTMENT CARRYING VALUE
----------- -------------- ---------- --------------
<S> <C> <C> <C>
1 mo. - 1 yr. $11,300 1 mo. - 1 yr. $49,845
1 yr. - 3yrs. 5,551 1 yr. - 3 yrs. 11,514
3 yrs. - 5 yrs. 11,126 3 yrs. - 5 yrs. 5,431
5 yrs. - 10 yrs. 18,492 After 5 years 828
10 yrs. - 20 yrs. 36,997
After 20 yrs. 11,558
------- -------
Total fixed $95,024 Total adjustable $67,618
======= =======
</TABLE>
The adjustable rate loans have interest rate adjustment limitations and
are generally indexed to U.S. Treasury Obligations or the cost of funds as
furnished by the Office of Thrift Supervision ("OTS"). The correlation of
the interest rates on adjustable loans with the rates the Bank pays on
short-term deposits may be affected by future market factors.
Activity in the allowance for possible loan losses was as follows (In
thousands):
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
SEPTEMBER 30,
-------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Balance, beginning of year $1,035 $ 440 $ 224
Provision for loan losses 150 608 426
Charge-offs, net of recoveries (23) (13) (210)
------ ------ -----
Balance, end of year $1,162 $1,035 $ 440
====== ====== =====
</TABLE>
5. PREMISES AND EQUIPMENT
Premises and equipment are summarized as follows (In thousands):
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
----------------
1993 1992
---- ----
<S> <C> <C>
Major Classifications
Land $ 620 $ 667
Buildings and improvements 5,090 3,694
Furniture, fixtures and equipment 1,916 2,479
------ ------
Total 7,626 6,840
Less accumulated depreciation 3,160 3,827
------ ------
Premises and equipment, net $4,466 $3,013
====== ======
</TABLE>
6. STOCK IN THE FHLB
BANKFIRST is a member of the FHLB System. As a member of this system, it
is required to maintain an investment in capital stock of the FHLB of
Atlanta. The investment is stated at cost. The Bank's investment in such
stock amounted to $1,696,000 at September 30, 1993 and 1992.
- 16 -
<PAGE> 20
7. DEPOSITS
Deposits are summarized as follows (In thousands):
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
-----------------------------------------
1993 1992
---------------- ---------------
RATE AMOUNT % AMOUNT %
---- ------ - ------ -
<S> <C> <C> <C> <C> <C>
NOW 1.51% $ 25,029 12% $ 22,527 11 %
Money market deposit 2.88 11,691 5 12,408 6
Passbook 2.79 36,939 17 35,202 16
Certificates:
2.51 - 3.00% 3,333 2%
3.01 - 4.00 88,058 40 $ 63,247 30%
4.01 - 5.00 31,420 14 47,659 22
5.01 - 6.00 12,545 6 15,740 7
6.01 - 7.00 2,101 1 7,655 4
7.01 - 8.00 5,502 2 7,458 3
Above 8.00 1,153 1 1,932 1
-------- --- -------- ---
144,112 66 143,691 67
-------- --- -------- ---
Total $217,771 100% $213,828 100 %
======== === ======== ===
Weighted average cost
of deposits 3.63% 4.88%
==== ====
</TABLE>
Scheduled maturities of certificate accounts are as follows (In thousands):
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
----------------
1993 1992
---- ----
<S> <C> <C>
Less than one year $ 99,012 $118,699
One year to two years 13,600 15,914
Two years to three years 24,401 4,864
Thereafter 7,099 4,214
-------- -------
Total $144,112 $143,691
======== ========
</TABLE>
The aggregate amount of short-term jumbo certificates of deposit with a
minimum denomination of $100,000 was $11,774,000 and $19,536,000 at
September 30, 1993 and 1992, respectively.
An analysis of interest expense on deposits is as follows (In thousands):
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
SEPTEMBER 30,
-------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
NOW accounts $ 438 $ 488 $ 606
Money market accounts 358 495 656
Passbook accounts 1,055 1,148 1,110
Certificate accounts 5,984 8,362 11,150
------ ------- -------
Total $7,835 $10,493 $13,522
====== ======= =======
</TABLE>
- 17 -
<PAGE> 21
8. RETIREMENT PLAN
The Bank has a noncontributory defined-benefit retirement plan covering
substantially all of its employees. Benefits are generally based upon the
employee's highest average compensation for a consecutive three year
period during the last ten years preceding retirement. It is the Bank's
policy to make contributions to the Plan sufficient to meet minimum
funding requirements of applicable laws and regulations. Plan assets
consist of certificates of deposit and a savings deposit with BANKFIRST.
The following table sets forth the plan's funded status and amounts
recognized in the Bank's consolidated statements of financial condition:
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
----------------
1993 1992
---- ----
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation
Vested $666 $603
Nonvested 14 10
---- ----
680 613
Effect of projected future compensation 284 191
---- ----
Projected benefit obligation for service rendered to date 964 804
Plan assets at fair value 968 818
---- ----
Excess of Plan assets in relation to projected benefit
obligation 4 14
Unrecognized net (gain) loss from past experience
different from that assumed and effects of changes
in assumptions 41 (28)
Unrecognized net transition obligation (from adoption
of SFAS No.87) 71 77
---- ----
Prepaid pension cost (included in other assets) $116 $ 63
==== ====
</TABLE>
The components of net pension expense are as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
SEPTEMBER 30,
-------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Service cost-benefits earned during the period $ 71 $ 69 $ 63
Interest cost on projected benefit obligation 63 56 56
Actual return on plan assets (61) (64) (52)
Net amortization and deferral (2) 7 5
---- ---- ----
Net pension expense (included in other noninterest
expense) $ 71 $ 68 $ 72
==== ==== ====
Assumptions used to develop the net periodic pension
costs were:
Discount rate 8.00% 8.00% 8.00%
Expected long-term rate of return on assets 8.00 8.00 7.50
Rate of increase in compensation levels 3.00 3.00 3.00
</TABLE>
9. STOCK OPTION PLANS
The Bank has in effect a stock option plan for the benefit of officers and
other employees under two separate grants. The option exercise prices for
these two grants are $6.35 and $11.79, respectively. In addition, during
fiscal 1992, the Bank ratified a new stock option plan for the benefit of
its directors, with an option exercise price of $9.67.
- 18 -
<PAGE> 22
The following table sets forth number of shares granted, option exercise
prices, and current year activity for these plans:
<TABLE>
<CAPTION>
STOCK OPTIONS
-------------
EMPLOYEE DIRECTOR TOTAL
-------- -------- -----
<S> <C> <C> <C> <C>
Option exercise price $ 6.35 $ 11.79 $ 9.67
======= ======= ========
Options outstanding,
September 30, 1991 68,513 0 68,513
Granted during fiscal 1992 53,137 31,500 84,637
Exercised during fiscal 1992 (20,663) (525) (21,188)
-------- ------- ------- --------
Options outstanding,
September 30, 1992 47,850 53,137 30,975 131,962
Granted during fiscal 1993
Exercised during fiscal
1993 (1,000) (4,750) (4,725) (10,475)
-------- ------- ------- --------
Options outstanding,
September 30, 1993 46,850 48,387 26,250 121,487
====== ====== ====== =======
Authorized for future grants
at September 30, 1993 49,146 21,000 70,146
====== ====== ======
</TABLE>
10. INCOME TAXES
Income tax expense is summarized as follows (In thousands):
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
SEPTEMBER 30,
-------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Federal:
Current $2,078 $1,961 $1,219
Deferred 121 70 (80)
------ ------ ------
Total 2,199 2,031 1,139
------ ------ ------
State:
Current $ 230 $ 213 $ 123
Deferred 38 (4) 14
------ ------ ------
Total 268 209 137
------ ------ ------
Total income tax expense $2,467 $2,240 $1,276
====== ====== ======
</TABLE>
Deferred income tax expense (benefit) results from differences in the
recognition of income and expense for tax and financial reporting
purposes. The sources of the differences and the related tax effects are
as follows (In thousands):
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
SEPTEMBER 30,
-------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Income and expenses recognized in the
financial statements on the accrual basis
but on the cash basis for tax purposes $(38) $56 $(112)
Effect of allowable federal tax bad debt
deduction applied to above 125 (5) 7
Effects of adoption of SFAS No. 109
(Note 1) 32
Other 40 15 39
---- --- -----
Total $159 $66 $ (66)
==== === =====
</TABLE>
- 19 -
<PAGE> 23
The provision for income tax differs from that computed at the statutory
federal corporate tax rate of 34% as follows (In thousands):
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
SEPTEMBER 30,
-------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Tax at statutory rate $2,228 $1,912 $1,245
Bad debt deduction for book purposes
in excess of amount for tax purposes 48 41
State excise tax, net 165 135 97
Tax exempt interest (56) (4) (8)
Other 130 149 (99)
------ ----- -----
Total $2,467 $2,240 $1,276
====== ====== ======
</TABLE>
Retained income at September 30, 1993 and 1992 includes approximately
$4,900,000, and $6,200,000, respectively, representing bad debt deductions
for which no deferred taxes have been provided. These amounts represent
an allocation of income to bad- debt deductions for tax purposes only.
Reduction of amounts so allocated for purposes other than tax bad-debt
losses or adjustments arising from carryback of net operating losses would
create income for tax purposes only, which would be subject to the then
current corporate income tax rate. The unrecorded deferred income tax
liability on these amounts was approximately $1,800,000 and $2,275,000 at
September 30, 1993 and 1992, respectively.
11. CAPITAL REQUIREMENTS
BANKFIRST may not declare or pay a cash dividend on, or repurchase, any of
its common stock if the effect thereof would cause the net worth of
BANKFIRST to be reduced below either the amount required for its
liquidation account or the net worth requirements imposed by the OTS. As
of September 30, 1993, BANKFIRST was in compliance with these
requirements.
- 20 -
<PAGE> 24
The following table sets forth, as of September 30, 1993, BANKFIRST's
capital under generally accepted accounting principles (GAAP), regulatory
capital, ratios and comparisons to required regulatory capital amounts
under FIRREA (In thousands):
<TABLE>
<CAPTION>
REGULATORY
------------------------------------
GAAP TANGIBLE CORE RISK-BASED
CAPITAL CAPITAL CAPITAL CAPITAL
------- ------- ------- -------
<S> <C> <C> <C> <C>
GAAP capital, per consolidated
financial statements $24,502 $24,502 $24,502 $24,502
=======
Nonallowable Assets:
Purchased-servicing assets (22) (22) (220)
Other
Additional Capital Items -
General Valuation Allowance 1,162
------- ------- -------
Regulatory capital-actual 24,480 24,480 25,642
Minimum capital required 3,932 7,863 11,105
------- ------- -------
Regulatory capital-excess $20,548 $16,617 $14,537
======= ======= =======
Actual regulatory capital as a
percentage of total assets
or risk-adjusted assets 9.34% 9.34% 18.47%
Minimum capital percentage 1.50 3.00 8.00
---- ---- -----
required
Actual regulatory capital as a
percentage in excess of requirement 7.84% 6.34% 10.47%
==== ==== =====
</TABLE>
12. BORROWED FUNDS
Borrowed funds consist entirely of advances from the FHLB and amounted to
$17,000,000 at September 30, 1993 and 1992. Pursuant to collateral
agreements with the FHLB, advances are collateralized by qualifying first
mortgage loans. Advances at September 30, 1993 have maturity dates as
follows (In thousands):
<TABLE>
<S> <C>
Less than one year $ 6,000
One year to two years 6,000
Two years to three years 2,000
Thereafter 3,000
-------
Total $17,000
=======
</TABLE>
For the years ended September 30, 1993 and 1992, the average balance of
such advances was $17,310,000 and $8,992,000, respectively, and the
maximum balance outstanding was $22,000,000 and $18,500,000, respectively.
Interest expense incurred on such advances during 1993, 1992 and 1991 was
$853,000, $444,000 and $-0-, respectively. The weighted average cost of
these advances was 4.93% and 4.94% at September 30, 1993 and 1992,
respectively.
- 21 -
<PAGE> 25
13. COMMITMENTS, FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
AND CONCENTRATIONS OF CREDIT RISK
At September 30, 1993 and 1992, financial instruments with off-balance
sheet risk to the Bank consisted of loan commitments and a letter of
credit issued as collateral for a bond issuance. Management does not
expect to incur any loss in connection with this letter of credit
commitment. Information related to these commitments is summarized as
follows (In thousands):
<TABLE>
<CAPTION>
1993 1992
----------------------- ----------------------
AMOUNT RATE AMOUNT RATE
------ ---- ------ ----
<S> <C> <C> <C> <C>
Fixed $ 5,179 6.50-9.50% $ 7,294 7.00-9.50%
Variable 8,916 4.25-7.80% 7,051 5.875-8.50%
------- -------
Total $14,095 $14,345
======= =======
Commitments consist of:
Loan originations $10,833 $11,167
Letter of credit 3,262 3,178
------- -------
Total $14,095 $14,345
======= =======
</TABLE>
The loans to which these commitments apply are fully collateralized by
single-family residences and other real property. The letter of credit is
collateralized by a multi-family property in Atlanta, Georgia.
The Bank originates the majority of its loans in Morgan, Limestone and
Lawrence counties in Alabama.
- 22 -
<PAGE> 26
14. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
Summarized quarterly financial information for the years ended September
30, 1993 and 1992 is as follows (In thousands, except per share amounts):
<TABLE>
<CAPTION>
QUARTER
----------------------------------------------
FIRST SECOND THIRD FOURTH
----- ------ ----- ------
1993:
<S> <C> <C> <C> <C>
Interest income $ 5,194 $ 4,945 $ 4,947 $ 4,905
Interest expense 2,279 2,133 2,144 2,132
------- ------- ------- -------
Net interest income 2,915 2,812 2,803 2,773
Provision for loan losses (96) (22) (32)
Noninterest income 324 331 268 338
Noninterest expense (1,434) (1,496) (1,403) (1,527)
------- ------- ------- -------
Income before income taxes 1,709 1,625 1,636 1,584
Income tax expense (694) (597) (598) (578)
------- ------- ------- -------
Net income $ 1,015 $ 1,028 $ 1,038 $ 1,006
======= ======= ======= =======
Earnings per share $ 0.56 $ 0.56 $ 0.57 $ 0.54
======= ======= ======= =======
Cash dividends per share $ 0.15 $ 0.15 $ 0.16 $ 0.16
======= ======= ======= =======
Market price per share:
Low 13 15 16 1/4 17 3/4
== == ====== ======
High 15 5/8 19 1/4 19 21 3/8
====== ====== == ======
1992:
Interest income $ 5,365 $ 5,262 $ 5,274 $ 5,344
Interest expense 3,068 2,784 2,639 2,446
------- ------- ------- -------
Net interest income 2,297 2,478 2,635 2,898
Provision for loan losses (67) (178) (183) (180)
Noninterest income 313 433 284 289
Noninterest expense (1,210) (1,296) (1,329) (1,561)
------- ------- ------- -------
Income before income taxes 1,333 1,437 1,407 1,446
Income tax expense (519) (611) (573) (537)
------- ------- ------- -------
Net income $ 814 $ 826 $ 834 $ 909
======= ======= ======= =======
Earnings per share $ 0.45 $ 0.46 $ 0.46 $ 0.51
======= ======= ======= =======
Cash dividends per share $ 0.133 $ 0.133 $ 0.15 $ 0.15
======= ======= ======= =======
Market price per share:
Low 9 1/2 10 5/8 12 12 5/8
===== ====== == ======
High 10 5/8 12 7/8 14 5/8 15 1/2
====== ====== ====== ======
</TABLE>
15. INTEREST RATE RISK
The Bank is engaged principally in providing first mortgage loans to
individuals and commercial enterprises. At September 30, 1993, the Bank's
assets consist partly of assets that earned interest at fixed interest
rates. Those assets were funded primarily with short-term liabilities
that have interest rates that vary with market rates over time. The
shorter duration of the interest-sensitive liabilities indicates that the
Bank is exposed to interest rate risk because, in a rising rate
environment, liabilities will be repricing faster at higher interest
rates, thereby reducing the market value of long-term assets and net
interest income. Conversely,in a decreasing rate environment, the Bank's
asset value and net interest income will show improvement.
- 23 -
<PAGE> 27
16. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value
of each class of the Bank's financial instruments:
Cash and Cash Equivalents - For these short-term instruments, the carrying
amount is a reasonable estimate of fair value.
Investment Securities and Mortgage-Backed Securities - Fair values of
these securities are based on quoted market prices or dealer quotes.
Loans - The fair value of loans is estimated by discounting the future
cash flows using the current rates at which similar loans would be made to
borrowers for the same remaining maturities.
Deposits - The fair value of NOW accounts, money market deposits and
passbook savings is the amount payable on demand at the reporting date.
The fair value of fixed maturity certificates of deposit is estimated by
discounting future cash flows using the rates currently offered for
deposits of similar maturities.
Borrowed Funds - The fair value of borrowed funds is estimated by
discounting future cash flows using the rates currently available when
obtaining such funds.
The estimated fair values of the Bank's financial instruments at September
30, 1993 are as follows (In thousands):
<TABLE>
<CAPTION>
CARRYING FAIR
VALUE VALUE
----- -----
<S> <C> <C>
Assets:
Cash and cash equivalents $ 2,462 $ 2,462
Investment securities held for investment 5,208 5,553
Investment securities held for sale 17,573 18,299
Mortgage-backed securities held for
investment 3,022 3,163
Mortgage-backed securities held for sale 73,275 74,615
Loans receivable, net 152,310 156,866
-------- --------
Total assets $253,850 $260,958
======== ========
Liabilities:
Deposits $217,771 $219,516
Borrowed funds 17,000 17,110
-------- --------
Total liabilities $234,771 $236,626
======== ========
</TABLE>
- 24 -
<PAGE> 28
17. PARENT COMPANY ONLY FINANCIAL STATEMENTS
Separate condensed financial statements of BANCFIRST Corporation are as
follows (In thousands):
STATEMENTS OF FINANCIAL CONDITION
SEPTEMBER 30, 1993 AND 1992
<TABLE>
<CAPTION>
ASSETS 1993 1992
---- ----
<S> <C> <C>
Cash and cash equivalents $ 419 $ 167
Investment securities:
Held for investment (estimated market value
of $2,079) 1,989
Held for sale (estimated market value of
$3,125) 2,996
Mortgage-backed securities:
Held for investment (estimated market values
of $832 and $3,102, respectively) 782 2,959
Held for sale (estimated market value of
$1,108) 1,074
Investment in BANKFIRST 24,502 21,522
Other assets 145 181
------- -------
TOTAL ASSETS $29,918 $26,818
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Taxes payable $ 2 $ 4
Other 24 16
------- -------
Total liabilities 26 20
------- -------
Stockholders' Equity:
Common stock 18 18
Additional paid-in capital 11,184 11,075
Retained income 18,690 15,705
------- -------
Total stockholders' equity 29,892 26,798
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $29,918 $26,818
======= =======
</TABLE>
- 25 -
<PAGE> 29
STATEMENTS OF INCOME
YEARS ENDED SEPTEMBER 30, 1993 AND 1992
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
INCOME:
Interest on investment securities $ 144 $ 70
Interest on mortgage-backed securities 191 309 $ 177
Dividends from BANKFIRST 1,102 1,005 5,467
------- ------- -------
Total income 1,437 1,384 5,644
------- ------- -------
EXPENSES:
Taxes (3) 28 47
Investor relations 122 125 34
Other 211 177 26
------- ------- -------
Total expenses 330 330 107
------- ------- -------
Income before undistributed earnings
from BANKFIRST 1,107 1,054 5,537
Undistributed earnings from BANKFIRST 2,980 2,329 540
------- ------- -------
NET INCOME $ 4,087 $ 3,383 $ 6,077
======= ======= =======
</TABLE>
STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1993 AND 1992
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,087 $ 3,383 $ 6,077
Adjustments to reconcile net income to
cash provided by operating activities:
Mortgage-backed securities transferred
to holding company as dividend (4,645)
Equity in undistributed earnings of
BANKFIRST (2,980) (2,329) (540)
Accretion of discounts (3) (3)
Amortization of premiums 5
Increase (decrease) in other assets 37 (15) (166)
Increase (decrease) in taxes payable (2) (26) 30
Increase in other liabilities 8 7 8
------- ------- -------
Net cash provided by operating
activities 1,147 1,022 764
------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of mortgaged-backed securities (490) (493)
Purchases of investment securities (1,004) (1,989)
Principal collections on mortgage-backed
securities 1,592 1,842 336
------- ------- -------
Net cash provided by (used in)
investing activities 98 (640) 336
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (1,102) (1,003) (467)
Proceeds from exercise of stock options 109 135 20
------- ------- -------
Net cash used in financing
activities (993) (868) (447)
------- ------- -------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 252 (486) 653
CASH AND CASH EQUIVALENTS:
BEGINNING OF YEAR 167 653
------- ------- -------
END OF YEAR $ 419 $ 167 $ 653
======= ====== ======
</TABLE>
- 26 -
