<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. 1)
Filed by the Registrant [X]
Filed by a party other than the Registrant [_]
Check the appropriate box:
[X]Preliminary Proxy Statement
[_]Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[_]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CNBT BANCSHARES, INC.
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_]No fee required
[X]Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
Common Stock, $1.00 par value per share
(2) Aggregate number of securities to which transaction applies: 5,081,031
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
$92,000,000 less investment banking fees in connection with transaction,
estimated to be approximately $550,000.
(4) Proposed maximum aggregate value of transaction: $91,450,000
(5) Total fee paid: $18,290.00
[X]Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
CNBT BANCSHARES, INC.
5320 Bellaire Boulevard
Bellaire, Texas 77401
713/661-4444
October , 2000
Dear Stockholder:
We cordially invite you to attend a special meeting of stockholders of CNBT
Bancshares, Inc. The meeting will be held on Tuesday, November 28, 2000, at
3:00 p.m., local time, at the offices of Citizens National Bank of Texas, 5320
Bellaire Boulevard, Bellaire, Texas 77401. At the special meeting, you will be
asked to adopt a merger agreement that provides for CNBT to be acquired by BOK
Financial Corporation. We hope that you will be able to attend.
If the merger is completed, each outstanding share of our common stock will
be converted into the right to receive up to approximately $18.22 in cash. Of
the $18.22 merger consideration, approximately $18.02 will be paid at the time
the merger is consummated and the balance of approximately $0.20 per share
($1,000,000 in total) will be held in escrow as security for CNBT's
representations and warranties and will be paid with interest one year after
closing subject to reduction if any valid claims are made against the escrowed
funds. The merger will be a taxable transaction to stockholders generally.
Stockholders of CNBT will have no equity interest in either CNBT or BOK
Financial after completion of the merger. The closing price of CNBT common
stock as reported on the Nasdaq Stock Market on August 18, 2000, the last full
trading day prior to public announcement of the merger, was $16.50.
Completion of the transaction is subject to certain conditions, including
receipt of various regulatory approvals and approval of the merger agreement by
the affirmative vote of a majority of the outstanding shares of our common
stock.
The board of directors has carefully considered and has approved the terms
and conditions of the merger agreement. The board believes that this
transaction is in the best interest of CNBT, its customers, employees, and
stockholders and recommends that the stockholders approve the merger agreement.
In reaching this conclusion, the board considered, among other things, the
opinion of Alex Sheshunoff & Co. Investment Banking that the merger
consideration is fair, from a financial point of view, to our stockholders.
Details of the proposed transaction and information concerning CNBT and BOK
Financial are contained in the enclosed proxy statement. We urge you to read
the proxy statement.
Your vote is very important, regardless of the number of shares you own.
Whether or not you plan to attend the meeting in person, your shares should be
represented and voted at the meeting. After reading the enclosed proxy
statement, kindly sign, date, and promptly return the proxy card or voting
instructions in the enclosed self-addressed, postage paid envelope. Submitting
the proxy or voting instructions will not preclude you from voting in person at
the meeting should you later decide to do so. If you do not vote, it will have
the same effect as voting against the transaction.
Your cooperation in promptly submitting your proxy is greatly appreciated.
On behalf of the Board of Directors, we thank you for your cooperation and
continued support.
Very truly yours,
Frank G. Cook Ralph Williams
Chairman of the Board President and Chief Executive
Officer
<PAGE>
CNBT BANCSHARES, INC.
5320 Bellaire Boulevard
Bellaire, Texas 77401
----------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
October , 2000
TIME
3:00 p.m., local time, on Tuesday, November 28,
2000.
PLACE Citizens National Bank of Texas, 5320 Bellaire
Boulevard, Bellaire, Texas 77401
ITEMS OF BUSINESS 1. To consider and vote upon a merger agreement
among CNBT, BOK Financial, and BOKF Merger
Corporation Number Ten, pursuant to which
CNBT will become a wholly owned subsidiary
of BOK Financial and each outstanding share
of CNBT's common stock will be converted
into the right to receive up to
approximately $18.22 in cash.
2. To transact any other business as may
properly come before the special meeting or
any adjournment or postponement of the
special meeting.
RECORD DATE
You are entitled to vote if you were a
stockholder at the close of business on October
, 2000.
VOTING BY PROXY Please submit a proxy as soon as possible so
that your shares can be voted at the meeting in
accordance with your instructions. You may
submit your proxy (1) over the Internet, (2) by
telephone, or (3) by mail. If your shares are
held in an account at a brokerage firm or bank,
you must instruct them on how to vote your
shares. If you do not vote or do not instruct
your broker or bank how to vote, it will have
the same effect as voting against the merger.
For specific instructions, please refer to the
Questions and Answers, beginning on page 2 of
the proxy statement and the instructions on the
proxy card or voting instructions. Additional
information regarding matters to be acted on at
the special meeting can be found in the
accompanying proxy statement.
By order of the Board of Directors
KAY CRONOVER
Secretary
PLEASE MARK, SIGN, DATE, AND RETURN YOUR PROXY IN THE
ENCLOSED ENVELOPE OR SUBMIT YOUR PROXY
BY PHONE OR THE INTERNET
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Questions and Answers About the Meeting.................................... 1
Summary.................................................................... 4
Selected Consolidated Financial and Other Information of CNBT Bancshares,
Inc....................................................................... 6
The Special Meeting........................................................ 8
Place, Time, and Date.................................................... 8
Matters to be Considered................................................. 8
Record Date; Vote Required............................................... 8
Beneficial Ownership of CNBT Common Stock................................ 8
Proxies.................................................................. 8
The Merger................................................................. 10
General.................................................................. 10
Background of the Merger................................................. 10
Our Reasons for the Merger; Recommendation of Your Board of Directors.... 12
The Consideration is Fair According to Alex Sheshunoff & Co. Investment
Banking, Our Financial Adviser.......................................... 14
You will Receive Cash for Your Shares of CNBT Common Stock............... 17
A Portion of the Merger Consideration Will Be Held in Escrow for One
Year.................................................................... 17
Option Holders Will Receive Cash for Options............................. 18
Procedure for Surrendering Your Certificates............................. 18
Representations and Warranties Made by CNBT and BOK Financial............ 18
Conditions to the Merger................................................. 19
Conduct of Business Prior to Completion of the Merger.................... 19
Approvals Needed to Complete the Merger.................................. 20
Waiver and Amendment to the Merger Agreement............................. 20
Termination of the Merger Agreement...................................... 20
Interests of Directors and Officers in the Merger that are Different from
Your Interests.......................................................... 21
Delisting and Deregistration of CNBT Common Stock after the Merger....... 22
You Have Dissenters' Rights of Appraisal................................. 22
Procedure to Exercise Dissenters' Rights................................. 23
Federal Income Tax Consequences of the Merger for CNBT Stockholders...... 24
Accounting Treatment of the Merger....................................... 25
Who Pays for What........................................................ 25
Beneficial Ownership of CNBT Common Stock.................................. 26
Stockholder Proposals...................................................... 27
Other Matters.............................................................. 27
Appendix A--Merger Agreement (excluding the exhibits thereto)
Appendix B--Opinion of CNBT's Financial Advisor
Appendix C--Statutory Dissenters' Rights
</TABLE>
(i)
<PAGE>
CNBT BANCSHARES, INC.
5320 Bellaire Boulevard
Bellaire, Texas 77401
----------------
PROXY STATEMENT
----------------
This Proxy Statement is furnished to the stockholders of CNBT in connection
with the solicitation by its board of directors of proxies to be voted at a
special meeting of stockholders to be held on Tuesday, November 28, 2000, at
3:00 p.m., local time, at 5320 Bellaire Boulevard, Bellaire, Texas 77401, and
at any adjournment or postponement thereof. This proxy statement is first being
mailed to stockholders on or about October , 2000.
QUESTIONS AND ANSWERS ABOUT THE MEETING
What is the purpose of the special meeting?
At the special meeting, stockholders will consider and vote upon a merger
agreement among CNBT, BOK Financial, and BOKF Merger Corporation Number Ten,
pursuant to which CNBT will become a wholly owned subsidiary of BOK Financial.
Why is CNBT proposing the merger?
We are proposing the merger because we believe that it is in the best
interest of our customers, employees, and stockholders.
What will I receive in the merger?
Each outstanding share of CNBT common stock will be converted into the right
to receive up to approximately $18.22 in cash.
What stockholder approval is needed?
The affirmative vote of the holders of a majority of the outstanding shares
of CNBT's common stock is required to adopt the merger agreement. Each holder
of common stock is entitled to one vote per share. As of the record date, our
directors and executive officers and their affiliates owned approximately 27.9%
of the outstanding shares. Our directors and executive officers have indicated
that they will vote their shares in favor of the merger.
What do I need to do now?
After carefully reading and considering the information contained in this
proxy statement, please respond by completing, signing, and dating your proxy
card or voting instructions and returning it in the enclosed postage paid
envelope, or if available, by submitting your proxy or voting instructions by
telephone or through the Internet, as soon as possible so that your shares may
be represented at the special meeting.
Why is my vote important?
. If you fail to respond, it will have the same effect as a vote against
the merger.
. If you respond and do not indicate how you want to vote, your proxy will
be counted as a vote in favor of the merger.
. If you respond and abstain from voting, your proxy will have the same
effect as a vote against the merger.
<PAGE>
If my shares are held in street name by my broker, will my broker automatically
vote my shares for me?
No. If your shares are held in "street name" through a brokerage firm or
bank, your broker or bank may not be permitted to exercise voting discretion
with respect to the matters to be acted upon. You should instruct your broker
to vote your shares, following the directions that your broker provides.
What if I fail to instruct my broker?
If you fail to give your broker or bank specific instructions, your shares
may not be voted on the merger. If your shares are not voted by your broker,
this will have the same effect as a vote against the merger.
Can I change my vote after I return my proxy card?
Yes. Even after you have submitted your proxy, you may change your vote at
any time before the proxy is voted at the special meeting. You can do this in
one of three ways.
. First, you can revoke your proxy.
. Second, you can submit a new proxy.
. Third, if you are a holder of record, you can attend the special meeting
and vote in person.
If you choose either of the first two methods, you must submit your notice
of revocation or your new proxy to the secretary of CNBT before the special
meeting. If your shares are held in an account at a brokerage firm or bank, you
should contact your broker or bank to change your vote. If you submit your
proxy or voting instructions electronically through the Internet or by
telephone, you can change your vote by submitting a proxy at a later date,
using the same procedures, in which case your later submitted proxy will be
recorded and your earlier proxy revoked. Attendance at the meeting will not by
itself revoke a previously granted proxy.
Who is entitled to vote?
Only stockholders of record at the close of business on the record date,
October , 2000, are entitled to receive notice of the special meeting and to
vote the shares of common stock that they held on that date at the meeting, or
any postponement or adjournment of the meeting.
Who can attend the meeting?
All stockholders as of the record date, or their duly appointed proxies, may
attend the meeting. Please note that if you hold your shares in "street name"
(that is, through a broker or other nominee) and wish to vote at the special
meeting, you will need to bring a copy of a brokerage statement reflecting your
stock ownership as of the record date. Parking is available in our parking lot.
What constitutes a quorum?
The presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of common stock outstanding on the record date will
constitute a quorum, permitting the meeting to conduct its business. As of the
record date, 4,941,361 shares of common stock were outstanding. Proxies
received but marked as abstentions will be included in the calculation of the
number of shares considered to be present at the meeting.
What is the Board of Director's recommendation?
The board's recommendation is set forth together with the description of
each item in this proxy statement. The board recommends a vote for the merger
proposal. With respect to any other matter that properly comes before the
meeting, the proxy holders will vote as recommended by the board of directors
or, if no recommendation is given, in their own discretion.
2
<PAGE>
Who will bear the cost of soliciting votes for the meeting?
The cost of soliciting proxies will be paid by CNBT. Copies of solicitation
material will be furnished to brokerage houses, fiduciaries, and custodians to
forward to beneficial owners of stock held in the name of such nominees. The
solicitation of proxies will be by mail, telephone, or otherwise through the
officers and regular employees of CNBT and the Bank without special
compensation therefor.
Who are the largest owners of our common stock?
We do not know of a single person or group that is the beneficial owner of
more than 5% of the outstanding shares of common stock. Our directors and
executive officers, as a group, beneficially owned (including currently
exercisable stock options) approximately 27.9% of the shares of common stock.
The table on page 26 shows the amount of common stock beneficially owned by our
directors, the executive officers, and the directors and executive officers as
a group.
Should I send in my stock certificates now?
No. After the merger is completed, you will receive written instructions
from the exchange agent on how to exchange your stock certificates for the
merger consideration. Please do not send in your stock certificates with your
proxy.
When do you expect the merger to be completed?
We are working to complete the merger as quickly as possible. We expect to
compete the merger in January 2001.
Who can help answer my questions?
If you have any questions about the merger or how to submit your proxy, or
if you need additional copies of this proxy statement or the enclosed proxy
card or voting instructions, you should contact:
CNBT Bancshares, Inc.
5320 Bellaire Boulevard
Bellaire, Texas 77401
Attention:
Telephone: 713-661-4444
e-mail:
3
<PAGE>
SUMMARY
This summary highlights selected information from this proxy statement. It
does not contain all the information that may be important to you. We urge you
to read carefully the entire document and the other documents to which we
refer, including the merger agreement. Each item in this summary refers to the
page where the subject is discussed in more detail.
CNBT Stockholders to Receive Up to $18.22 in Cash Per Share of CNBT Common
Stock (see page 17).
When the merger is complete, each stockholder of CNBT will receive up to
approximately $18.22 in cash for each share of CNBT common stock held. For
example, if you own 100 shares, and do not dissent, you will receive after the
merger $1,822.00. Of the total merger consideration, $1,000,000, or
approximately $0.20 per share, will be held in escrow for up to one year after
completion of the merger as security for CNBT's representations and warranties
made in the merger agreement. Therefore upon completion of the merger, CNBT
stockholders will initially receive an immediate payment of approximately
$18.02 per share. At the end of one year following completion of the merger, if
no claims have been made, the escrowed funds (approximately $0.20 per share)
will be distributed to CNBT stockholders. If a valid claim is made by BOK
Financial, the amount of the second distribution will be reduced by the amount
of the claim(s).
The Merger will be Taxable to CNBT's Stockholders (see page 24).
CNBT stockholders will recognize income for federal, and possibly state and
local, taxes on the exchange of their CNBT shares for cash. You will recognize
gain or loss equal to the difference between the amount of cash you receive and
your tax basis in the CNBT common stock. You should determine the actual tax
consequences of the merger to you. They will depend on your specific situation
and factors not within our control. You should consult your personal tax
advisor for a full understanding of the merger's tax consequences to you.
CNBT's Board of Directors Recommends Stockholder Approval (see page 12).
Our board of directors believes that the merger is in the best interest of
CNBT and its stockholders, customers, and employees and has approved the
merger. The board recommends the CNBT's stockholders vote "For" adoption of the
merger agreement.
Our Financial Advisor Says the Merger Consideration is Fair, from a Financial
Point of View, to CNBT's Stockholders (see page 13).
Our financial adviser, Alex Sheshunoff & Co. Investment Banking, has given
us its written opinion dated August 28, 2000, and updated as of October ,
2000, that the cash consideration to be paid to our stockholders is fair, from
a financial point of view. A copy of the opinion is attached to this proxy
statement as Appendix B. You should read it completely to understand the
assumptions made, matters considered, and limitations on the review performed
by Sheshunoff in issuing its opinion. We have agreed to pay Sheshunoff a fee
equal to 0.60% of the total merger consideration, which is estimated to be
approximately $552,000.
You have Dissenters' Rights (see page 22).
Under Texas law, you have dissenters' rights with respect to your shares of
CNBT common stock. If you do not wish to accept the $18.22 per share merger
consideration, you can dissent and instead choose to have the fair value of
your shares judicially determined and paid to you in cash. However, in order to
exercise your rights, you must follow specific procedures.
4
<PAGE>
Various Conditions must be Satisfied for the Merger to Occur (see page 18).
As more fully discussed in this proxy statement and the merger agreement,
the completion of the merger depends on a number of conditions being satisfied
or waived including: receipt of stockholder and regulatory approvals, and the
absence of any threatened or pending legal proceeding seeking to stop or
prohibit the merger. We cannot be certain when, or if, the conditions to the
merger will be satisfied or waived or that the merger will be completed.
The Merger is Expected to Occur in the First Quarter of 2001 (see page 19).
The merger agreement provides that the merger cannot be completed prior to
January 3, 2001. Subsequent to such date, the merger will only occur after all
the conditions to its completion have been satisfied or waived. We anticipate
that the merger will occur in the first quarter of 2001.
Financial Interests of CNBT's Officers and Directors in the Merger (see page
21).
Certain of our executive officers and directors have interests in the merger
as individuals in addition to, or different from, their interests as
stockholders, such as receiving severance payments, employment agreements, and
other benefits.
. B. Ralph Williams, President Chief Executive Officer and a director of
CNBT, has agreed to enter into a three-year employment agreement
effective upon completion of the merger.
. Joseph E. Ives, Executive Vice President and a director, Mary Walker,
Senior Vice President and a director, Randall W. Dobbs, Executive Vice
President and a director, Sheila J. Scantlin, President of the Sugar Land
Office and an Advisory Director, John M. James, Senior Vice President and
an Advisory Director, Robert J. Kramer, President of the Northwest Office
and an Advisory Director, and Charles H. Arnold, President of the
Westheimer Office and an Advisory Director, are each parties to a
severance agreement that provides if he or she is terminated without
cause or resigns for good reason within two years following the merger,
he or she will be entitled to a cash payment equal to 2.99 times his or
her annual salary in effect when his or her employment ends.
. All unvested stock options will accelerate and fully vest as of the
completion of the merger. The options will be exchanged for cash equal to
the difference between the merger consideration and the option exercise
price. The cash out value of such options, assuming no options are
exercised before the merger is completed, is approximately $1,372,072.
. BOK Financial has agreed to indemnify CNBT's officers and directors for
events that occurred before the merger.
Our board of directors was aware of these interests and considered them in
its decision to approve the merger agreement.
5
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OTHER INFORMATION
OF CNBT BANCSHARES, INC.
The following tables set forth selected and historical consolidated
financial and other data of CNBT at the dates and for the periods shown. The
historical consolidated financial data for the six months ended June 30, 2000
and 1999 is derived from unaudited consolidated financial statements. However,
in the opinion of management, all adjustments consisting of normal recurring
accruals, necessary for a fair presentation at such dates and for such periods
has been made. Operating results for the six months ended June 30, 2000, are
not necessarily indicative of the results that may be expected for any interim
period or the entire year ended December 31, 2000. The financial information
for the five years ended December 31, 1999, of CNBT is based on, and qualified
in its entirety by, the consolidated financial statements of CNBT, including
the notes thereto, which have been filed previously with the Securities and
Exchange Commission.
Selected Financial Data
The following selected consolidated financial data should be read in
conjunction with the Consolidated Financial Statements of CNBT and the Notes
thereto and the information contained in "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in CNBT's Annual Report on
Form 10-K for the year ended December 31, 1999, and Quarterly Report on Form
10-Q for the quarter ended June 30, 2000.
<TABLE>
<CAPTION>
As of and for the
As of and for the Six Months Ended
Years Ended December 31, June 30,
-------------------------------------------- -----------------
1999 1998 1997 1996 1995 2000 1999
-------- -------- -------- -------- -------- -------- --------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Interest income....... $ 26,793 $ 23,777 $ 19,941 $ 17,372 $ 14,705 $ 14,833 $ 12,850
Interest Expense...... 12,610 11,068 9,075 7,902 6,895 7,373 6,094
-------- -------- -------- -------- -------- -------- --------
Net interest income.. 14,183 12,709 10,866 9,470 7,810 7,460 6,756
Provision for loan
losses............... 600 612 877 655 200 345 300
-------- -------- -------- -------- -------- -------- --------
Net interest income
after provision for
loan losses......... 13,583 12,097 9,989 8,815 7,610 7,115 6,456
Noninterest income.... 2,697 2,862 2,507 2,322 2,053 1,468 1,354
Noninterest expenses.. 10,124 9,352 7,644 6,949 6,108 5,437 4,877
-------- -------- -------- -------- -------- -------- --------
Income before taxes.. 6,156 5,607 4,852 4,188 3,555 3,146 2,933
Provision for income
taxes................ 1,200 1,122 1,154 1,035 683 591 493
-------- -------- -------- -------- -------- -------- --------
Net income ........... $ 4,956 $ 4,485 $ 3,698 $ 3,153 $ 2,872 $ 2,555 $ 2,440
======== ======== ======== ======== ======== ======== ========
Per Share Data:
Net income, basic
(1).................. $ 1.01 $ 0.89 $ 0.89 $ 0.81 $ 0.74 $ 0.52 $ 0.50
Net income, diluted
(2)(3)............... 1.00 0.88 0.88 0.80 0.73 0.52 0.49
Book value............ 6.07 6.80 6.27 4.60 4.35 6.58 6.33
Cash dividends........ 0.60 0.37 0.40 0.36 0.30 0.22 0.40
Weighted average
common shares
outstanding, basic... 4,912 5,024 4,161 3,886 3,886 4,930 4,911
Weighted average
common shares
outstanding,
diluted.............. 4,974 5,105 4,224 3,941 3,938 4,971 4,973
Balance Sheet Data (4):
Total assets.......... $411,768 $377,930 $295,606 $258,150 $231,779 $423,820 $391,208
Securities............ 244,331 244,524 169,831 147,505 148,294 233,893 249,186
Loans................. 139,211 111,360 102,875 91,284 67,875 160,376 120,408
Allowance for loan
losses............... 1,327 1,183 1,009 687 484 1,448 1,263
Total deposits........ 346,033 330,917 260,907 238,059 208,749 346,860 340,148
Total stockholders'
equity............... 29,870 33,386 31,647 17,871 16,921 32,497 31,097
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
As of and for the
As of and for the Six Months Ended
Years Ended December 31, June 30,
------------------------------------- ------------------
1999 1998 1997 1996 1995 2000 1999
------ ------ ----- ------ ------ -------- --------
(In thousands, except per share
data)
<S> <C> <C> <C> <C> <C> <C> <C>
Performance Ratios:
Return on average
assets............... 1.25% 1.33% 1.34% 1.30% 1.34% 1.22% 1.26%
Return on average
common equity........ 15.74 13.89 16.89 18.43 19.10 16.60 14.82
Net interest margin... 3.79 4.01 4.22 4.18 3.89 3.79 3.70
Dividend payout ratio,
basic................ 59.41 41.57 44.94 44.44 40.54 42.31 80.00
Efficiency ratio (5).. 59.96 61.03 58.31 60.12 63.45 61.03 60.33
Asset Quality Ratios
(4):
Nonperforming assets
to loans and other
real estate.......... 0.92% 0.46% 1.31% 0.57% 0.67% 0.04% 0.41%
Nonperforming assets
to total assets...... 0.31 0.13 0.46 0.20 0.20 0.14 0.13
Net charge-offs to
average loans........ 0.37 0.41 0.57 0.55 0.39 0.15 0.19
Allowance for loan
losses to total
loans................ 0.95 1.06 0.98 0.75 0.71 0.90 1.05
Allowance for loan
losses to
nonperforming loans
(6).................. 299.55 261.15 74.80 131.61 105.68
Capital Ratios (4):
Leverage ratio........ 8.52% 9.37% 11.10% 7.27% 7.43% 8.43% 8.27%
Average stockholders'
equity to average
total assets......... 7.96 9.55 7.96 7.05 7.03 7.37 8.48
Tier 1 risk-based
capital ratio........ 17.59 20.44 21.42 13.87 15.22 16.98 19.81
Total risk-based
capital ratio........ 18.28 21.20 22.13 14.41 15.68 17.68 20.59
</TABLE>
--------
(1) Basic earnings per share is calculated by dividing net income by the
weighted average number of common shares outstanding during the period.
Shares have been restated in accordance with FASB 128.
(2) Diluted earnings per share is calculated by dividing net income by the
weighted average number of common shares outstanding plus the common stock
equivalents computed using the treasury stock method. Shares have been
restated in accordance with FASB 128.
(3) Outstanding shares have been adjusted for all periods presented for 10%
stock dividends declared in March 1997 and April 1996.
(4) At period end, except net charge-offs to average loans and average
stockholders' equity to average total assets.
(5) Calculated by dividing total noninterest expenses by net interest income
plus noninterest income, excluding securities gains and losses.
(6) Nonperforming loans consist of nonaccrual loans contractually past due 90
days or more.
7
<PAGE>
THE SPECIAL MEETING
Place, Time, and Date
The special meeting is scheduled to be held at 3:00 p.m., local time, on
November 28, 2000, at our main office located at 5320 Bellaire Boulevard,
Bellaire, Texas 77401.
Matters to be Considered
At the special meeting, you will be asked to approve a proposal to adopt the
merger agreement. You also may consider and vote upon such other matters as are
properly brought before the special meeting. As of October , 2000, we do not
know of any business that will be presented for consideration at the special
meeting other than the adoption of the merger agreement.
Record Date; Vote Required
Only our stockholders of record at the close of business on October ,
2000, are entitled to notice of and to vote at the special meeting. As of
September 1, 2000, there were 4,941,361 shares of our common stock outstanding
and entitled to vote at the special meeting.
Each outstanding share of our common stock is entitled to cast one vote per
share at the special meeting. You may vote in person or by submitting a
properly executed proxy. The presence, in person or by properly executed proxy,
of the holders of a majority of our outstanding shares of common stock entitled
to vote at the special meeting is necessary to constitute a quorum. Abstentions
will be treated as shares present at the special meeting for purposes of
determining the presence of a quorum. Broker non-votes will not. A broker non-
vote is an unvoted proxy submitted by a broker. Under the rules of the New York
Stock Exchange, brokers or members who hold shares in street name for customers
who are the beneficial owners of such shares cannot give a proxy to vote these
shares with respect to the merger agreement unless they receive specific
instructions from their customers.
The affirmative vote of the holders of at least a majority of the
outstanding shares is required for adoption of the merger agreement. As a
result, abstentions and broker non-votes will have the effect of a negative
vote on the merger agreement.
Approval of the merger agreement by our stockholders is one of the
conditions that must be satisfied to complete the merger. See "The Merger--
Conditions to the Merger."
Beneficial Ownership of CNBT Common Stock
As of September 1, 2000, our directors and executive officers beneficially
owned in the aggregate 1,349,105 shares (excluding stock options), or 27.3% of
our outstanding shares of common stock entitled to vote at the special meeting.
Our directors have indicated that they intend to vote their shares in favor of
the merger.
Proxies
Shares of our common stock represented by properly executed proxies received
prior to or at the special meeting will, unless they have been revoked, be
voted at the special meeting in accordance with the instructions indicated in
the proxies. If no instructions are indicated on a properly executed proxy, the
shares will be voted FOR the adoption of the merger agreement.
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You should complete and return the proxy card accompanying this proxy
statement to ensure that your vote is counted at the special meeting,
regardless of whether you plan to attend the special meeting. You can revoke
your proxy at any time before the vote is taken at the special meeting by:
. submitting written notice of revocation to the Secretary of CNBT;
. submitting a properly executed proxy of a later date; or
. voting in person at the special meeting, however simply attending the
special meeting without voting will not revoke an earlier proxy.
Written notice of revocation and other communications about revoking your
proxy should be addressed to:
CNBT Bancshares, Inc.
5320 Bellaire Boulevard
Bellaire, Texas 77401
Attention:Kay Cronover
Secretary
If any other matters are properly presented at the special meeting for
consideration, the proxy holders will have discretion to vote on such matters
in accordance with their best judgment. As of September , 2000, we know of
no such other matters.
In addition to solicitation by mail, our directors, officers, and
employees, who will not receive additional compensation for such services, may
solicit proxies from our stockholders, personally or by telephone, telegram,
or other forms of communication. Brokerage houses, nominees, fiduciaries, and
other custodians will be requested to forward soliciting materials to
beneficial owners and will be reimbursed for their reasonable expenses
incurred in sending proxy materials to beneficial owners. We will bear our own
expenses in connections with the solicitation of proxies for the special
meeting.
YOU ARE REQUESTED TO COMPLETE, DATE, AND SIGN THE ACCOMPANYING FORM OF
PROXY AND TO RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
YOU SHOULD NOT FORWARD STOCK CERTIFICATES WITH YOUR PROXY CARDS.
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THE MERGER
The information in this proxy statement concerning the terms of the merger
is qualified in its entirety by reference to the full text of the merger
agreement, which is attached hereto as Appendix A and incorporated by reference
herein. All stockholders are urged to read the merger agreement as well as the
opinion of our financial adviser attached as Appendix B.
General
As soon as possible after January 3, 2001, after the conditions to
consummation of the merger described below have been satisfied or waived, and
unless the merger agreement has been terminated as discussed below, an interim
wholly-owned subsidiary of BOK Financial will be merged with and into CNBT in
accordance with Texas law, with CNBT surviving as a wholly-owned subsidiary of
BOK Financial.
Upon completion of the merger, our stockholders will be entitled to receive
an amount equal to (i) $92,000,000 minus the amount of investment banking fees
paid to our financial adviser in connection with the merger, which are
estimated to be approximately $550,000, divided by (ii) the number of shares of
CNBT common stock outstanding on the effective date of the merger (after
exercise of all stock options), and will cease to be stockholders of CNBT. We
estimate that our stockholders will be entitled to receive up to approximately
$18.22 in consideration for each of their shares of CNBT common stock.
BOK Financial is a multi-bank holding company that provides a wide range of
retail and commercial financial products and services to customers in North
Texas, Oklahoma, Northwest Arkansas, and New Mexico through its wholly-owned
subsidiaries: Bank of Texas, N.A.; Bank of Oklahoma, N.A.; Bank of Arkansas,
N.A.; and Bank of Albuquerque, N.A. BOK Financial's trust company subsidiaries
are responsible for $17 billion in assets. TransFund, the company's electronic
funds transfer network, has more than 1,000 machines installed in an eight-
state area, and provides services for more than 280 financial institutions and
more than 1.2 million cardholders. BOK Financial's mortgage companies have
offices in Arkansas, Kansas, Missouri, New Mexico, Oklahoma, and Texas. The
executive offices of BOK Financial are located at Bank of Oklahoma Tower, P.O.
Box 2300, Tulsa, Oklahoma 74192, and their telephone number is 918-588-6000.
At June 30, 2000, BOK Financial had total assets of approximately $8.8
billion, total deposits of $5.6 billion, and total stockholders' equity of
$605.8 million.
Following the merger and upon obtaining necessary regulatory approvals it is
contemplated that in the third quarter of 2001 Citizens National Bank of Texas
will be merged with Bank of Texas, N.A. Bank of Texas currently has 13
locations, stretching from Hurst, eastward through Dallas, and north to
Sherman. Its most recent expansion came in the summer of 1999, with the
acquisitions of Swiss Avenue Bank, Canyon Creek National Bank and Mid-Cities
National Bank. Bank of Texas' had total assets of approximately $1.2 billion at
June 30, 2000.
Background of the Merger
As a substantial independent bank holding company located in Houston, Texas,
CNBT has, both before and since going public in 1997, from time-to-time
received both informal and formal unsolicited inquiries from several large
regional financial institutions or their representatives regarding a possible
business combination with CNBT or Citizens National Bank of Texas.
In April 1999, we received an unsolicited formal expression of interest from
SouthTrust Corporation in pursuing a possible combination. The offer was $82.5
million in cash, or approximately $16.23 per share. After thorough
consideration, however, our board of directors decided to remain independent
and advised SouthTrust that in its opinion the offering price was inadequate.
CNBT and SouthTrust did not pursue any further
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<PAGE>
discussions. With that one exception, none of the unsolicited inquiries
received by CNBT during this time-frame resulted in any meaningful discussions
with management regarding a possible business combination, and no formal
negotiations were conducted.
On May 11, 2000, we received a formal expression of interest from Whitney
National Bank, New Orleans, Louisiana concerning a possible business
combination. A special meeting of our board of directors was held on May 17,
2000, to consider the proposal. After discussion of the proposal, a majority of
the board voted in favor of pursuing the Whitney proposal. The board also
appointed a special committee, chaired by David E. Preng, to retain a financial
advisor to assist the board in evaluating the proposal. The other members
appointed to the special committee were C. Joe Chapman, Frank G. Cook, and
Ralph Williams.
The special committee met on May 26 and 27 to interview potential financial
advisers. Following the presentations, on May 30, 2000, the special committee
retained Alex Sheshunoff & Co. Investment Banking as our financial adviser to
assist the board in determining whether to sell or remain independent,
establishing a reasonable acquisition value for CNBT, evaluating the
acquisition market, identifying potential acquirers, and soliciting additional
expressions of interest regarding a potential business combination.
The special committee in consultation with Sheshunoff determined that a
limited offering package would be prepared and a selected list of financial
institutions would be contacted in order to reach a decision with respect to a
business combination on an accelerated timetable.
Between June 5 and June 9, Sheshunoff solicited expressions of interest on
an unnamed basis from 12 financial institutions approved by the special
committee that it believed would have an interest in pursuing a business
combination. Five of the 12 financial institutions contacted by Sheshunoff,
including BOK Financial and Whitney, responded positively to such solicitation.
Confidentiality agreements were executed with the five interested financial
institutions and additional financial information concerning CNBT was provided
to these financial institutions. Between June 8 and June 16, we and Sheshunoff
responded to questions and requests for additional information from the
interested institutions.
The interested institutions were requested to submit their proposals by June
17. The special committee met on June 17 with Sheshunoff to review the
proposals.
At its regular meeting on June 20, 2000, our board of directors, considered
the expressions of interest received as of that date. At this meeting
representatives of Sheshunoff reviewed the history of bank transactions, bank
and stock market index performance, financial institutions contacted, estimated
sales prices, current bid summaries and analysis, the present value ranges of
CNBT common stock, and financial summaries of the potential buyers. Legal
counsel advised the board of its fiduciary duty to stockholders in the context
of evaluating the terms of the proposed transaction. The board, with the
assistance of Sheshunoff, considered the expressions of interest from the five
financial institutions, including BOK Financial and Whitney. After evaluating
the five proposals, the board of directors determined that offers from two of
the five institutions were not financially attractive enough, from a financial
perspective, to warrant further consideration. The board invited two of the
three remaining financial institutions, BOK Financial and Whitney, to visit
Houston to conduct onsite due diligence reviews of CNBT. In addition, depending
on the results and continuing negotiations with BOK Financial and Whitney and
timing, the board deferred a decision to invite the third financial
institution, Southwest Bancorporation of Texas, to conduct a due diligence
review until a later date.
Representatives of BOK Financial were in our offices during the week of July
10, 2000, to perform their due diligence review. Representatives of Whitney
National Bank were in our offices during the week of July 17, 2000, to conduct
their due diligence review.
A special meeting of the board of directors was held on July 27, 2000. At
the meeting representatives of Sheshunoff made a presentation that included a
review and discussion of the financial institutions contacted and
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<PAGE>
their initial responses, original bid summaries, and current bid summaries of
BOK Financial, Whitney, and Southwest. Financial summaries of BOK Financial and
Whitney were also reviewed. The board discussed the pending offers and the
issues pertaining to the BOK Financial offer and due diligence review.
Sheshunoff also advised the board that it had received inquiries from two
additional financial institutions. Following discussion, the board made the
following decisions: (1) to advise Southwest that its offer was not
satisfactory from a financial point of view, (2) to invite one of the new
financial institutions to submit a proposal if it was interested, and (3) to
continue negotiations with BOK Financial concerning its offer.
Between July 24, 2000 and August 9, 2000, the members of the special
committee and Sheshunoff were in contact on a daily basis and we and Sheshunoff
continued discussions with BOK Financial, Whitney, and Southwest concerning the
terms of their proposals.
The special committee held meetings by telephone conference on August 4 and
9, 2000, with representatives of Sheshunoff. The committee reviewed and
discussed the offers presented by Whitney and BOK Financial and the status of
discussions with Southwest and the two other new financial institutions.
Strategies were established to pursue negotiations with BOK Financial and
discussions with Southwest.
On August 10, 2000, Ralph Williams and C. Fred Ball, Jr., President of Bank
of Texas, met in Houston to discuss the principal terms of a transaction with
BOK Financial. Mr. Williams and Mr. Ball agreed in principle on the principal
terms of a merger, subject to approval of each company's board of directors and
negotiation of definitive agreements.
On August 11, 2000, BOK Financial delivered a letter of intent to CNBT
setting forth the proposed terms of the transaction that generally provided for
an aggregate acquisition value of approximately $91,400,000, $18.22 per share,
or 2.77 times net book value.
The special committee held a meeting by telephone conference on August 11,
2000, to review the terms of the BOK letter of intent and the current status of
discussions with Southwest. A strategy was established to have Sheshunoff
discuss certain issues with BOK Financial including the payment of dividends by
CNBT prior to completion of the merger and the treatment of stock options.
Sheshunoff contacted BOK Financial concerning these matters on August 11, 2000,
and received a satisfactory response on each issue.
Our board of directors held a special meeting on August 11, 2000, which was
attended by a representative of Sheshunoff, to consider the BOK Financial
proposal. Following a review and discussion of the BOK Financial proposal and
the current status of discussions with Southwest, the board of directors
determined that BOK Financial's offer was the most attractive to CNBT and its
stockholders, customers, and employees and approved the terms of the letter of
intent with BOK Financial and authorized its execution by the appropriate
officers of CNBT. This determination was based principally on the economics of
the proposed transaction, the opinion of Sheshunoff as to the fairness, from a
financial point of view, of the merger consideration to be received by the
stockholders of CNBT in the transaction, the cultural fit between the two
organizations, and Bank of Texas' reputation as a community-oriented financial
institution. Discussions with Whitney and Southwest ceased, and CNBT and BOK
Financial began to negotiate a merger agreement.
Between August 12 and August 18, 2000, representatives of BOK Financial and
CNBT engaged in discussions and negotiations with respect to the terms and
conditions of the merger agreement. During negotiations, certain issues,
including issues relating to the treatment of employee stock options and
employee issues, were resolved to the satisfaction of both parties. The terms
of the merger agreement were finalized, and the agreement was executed by the
parties, on August 18, 2000.
Our Reasons for the Merger; Recommendation of Your Board of Directors
Our board of directors believes that the terms of the merger agreement,
which are the product of arm's length negotiations between representatives of
CNBT and BOK Financial, are in the best interests of CNBT
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<PAGE>
and our stockholders, customers, and employees. As previously noted, our board
of directors deliberated and approved the merger at a special meeting held on
August 11, 2000. In reaching its decision to approve and adopt the merger
agreement, the board consulted with management and financial and legal
advisors, and considered a number of factors. In the course of its
deliberations with respect to the merger, the board discussed the anticipated
impact of the merger on the Bank, our stockholders, customers, and employees.
In the course of reaching its determination, our board of directors considered
the following factors:
. Favorable Cash Premium. Our board of directors believes that the premium
presented by the consideration offered to our stockholders in relation to
the recent trading price of our common stock is favorable to our
stockholders. Our shareholders will receive approximately a 10.4% premium
over the $16.50 closing price of our common stock on August 18, 2000, the
last full trading day prior to public announcement of the merger and
approximately an 82.2% premium over the $10.00 average closing price of
our common stock for the period from January 3, 2000 to May 11, 2000, the
date we received a formal offer. The board of directors also believes
that the multiple of book value implied in the merger of 2.8 times June
30, 2000 book value is near the maximum multiple that could be expected
to be received.
. Competitive Environment and Financial Institution Consolidation. Our
board of directors considered the current and prospective industry and
economic conditions facing the financial services industry generally, and
CNBT in particular, including continuing consolidation in the industry,
increasing competition, and the increasing importance of operational
scale and financial resources in maintaining efficiency, remaining
competitive, and capitalizing on technological developments. The board of
directors reviewed information concerning our financial condition,
results of operations, capital levels, asset quality, and prospects in
relation to the foregoing conditions. The board of directors believes
that after the merger, BOK Financial will have the ability to compete in
relevant banking and non-banking markets.
. Improved Business Capabilities and Resources of BOK Financial. Our board
of directors believes that the merger will benefit our customers,
employees, and the community served by us through expanded commercial,
retail, and consumer banking products and services. The board considered
the greater resources and product offerings that BOK Financial will offer
CNBT's customers after the merger than CNBT currently has and the ability
of BOK Financial after the merger to compete in the Houston market. The
board also considered the compatibility of management and business
philosophies of CNBT and BOK Financial.
. Opinion of and Process Conducted by Sheshunoff. Our board of directors
considered the process conducted by Sheshunoff in exploring and
determining the potential value that could be realized by CNBT in a
business transaction, including the financial institutions contacted and
the offers received. The board also considered presentations by
Sheshunoff to the board on June 20 and July 27, 2000, and the opinion of
Sheshunoff as to the fairness of the merger consideration from a
financial point of view to our stockholders.
. Alternatives to the Merger with BOK Financial. Our board of directors
considered alternatives to the merger, including remaining independent or
entering into a business combination with another financial institution.
The board of directors believes that alternatives to the merger were not
likely to result in greater value for CNBT's stockholders than the value
to be realized in the merger. The board also considered that the merger
consideration is all cash, which provides certainty of value to our
stockholders as compared to a stock transaction.
. Terms of the Merger Agreement. Our board of directors considered the
specific terms of the merger agreement, including the taxable nature of
the purchase price. The board also considered the ability of BOK
Financial to pay the aggregate purchase price, and accordingly reviewed
the financial condition of BOK Financial. The board believes that the
terms and conditions of the merger agreement are favorable to our
stockholders and that BOK Financial has the financial capability to
complete the merger.
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In making its determination, our board of directors did not attribute any
relative or specific weights to the factors that it considered.
Our board of directors believes that the merger is in the best interest of
CNBT and our stockholders, customers, and employees. The board of directors
recommends that you vote for the adoption of the merger agreement.
The Consideration is Fair According to Alex Sheshunoff & Co. Investment
Banking, Our Financial Advisor
CNBT retained Sheshunoff to provide its opinion of the fairness from a
financial viewpoint, of the merger consideration to be received by the
stockholders of CNBT in connection with the merger with BOK Financial. As part
of its investment banking business, Sheshunoff is regularly engaged in the
valuation of securities in connection with mergers and acquisitions and
valuations for estate, corporate, and other purposes. The board of directors of
CNBT retained Sheshunoff based upon its experience as a financial advisor in
mergers and acquisitions of financial institutions and its knowledge of
financial institutions. No limitations were placed on Sheshunoff by CNBT with
respect to the scope of its investigation, procedures followed by Sheshunoff in
delivering its opinion, or otherwise.
On July 27, 2000, Sheshunoff rendered its oral opinion that, as of such
date, the merger consideration was fair, from a financial point of view, to the
stockholders of CNBT. Sheshunoff rendered its written fairness opinion as of
August 28, 2000.
The full text of the fairness opinion, which sets forth, among other things,
assumptions made, procedures followed, matters considered, and limitations on
the review undertaken, is attached as Appendix B to this proxy statement. You
are urged to read Sheshunoff's fairness opinion carefully and in its entirety.
The fairness opinion is addressed to the board of directors of CNBT, and does
not constitute a recommendation to any stockholder of CNBT as to how such
stockholder should vote at the special shareholder meeting of CNBT.
In connection with the fairness opinion, Sheshunoff:
. reviewed the merger agreement;
. evaluated CNBT's consolidated results based upon a review of its annual
financial statements for the three-year period ending December 31, 1999
and the year-to-date period ending June 30, 2000;
. reviewed the Annual Report on Form 10-K for the period ending December
31, 1999 and the Quarterly Report on Form 10-Q for the period ending
June 30, 2000 for CNBT;
. reviewed Call Report information as of June 30, 2000 for CNBT;
. conducted conversations with executive management regarding recent and
projected financial performance of CNBT;
. compared CNBT's recent operating results with those of certain other
banks in Texas that have recently been acquired;
. compared CNBT's recent operating results with those of certain other
banks located in the United States that have recently been acquired;
. compared the pricing multiples for CNBT in the merger to those of
certain other banks in Texas that have recently been acquired;
. compared the pricing multiples for CNBT in the merger to those of
certain other banks located in the United States that have recently been
acquired;
. analyzed the net present value of the after-tax cash flows CNBT could
produce through the year 2004, based on assumptions provided by
management;
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. reviewed the recent stock price and trading volume of CNBT; and
. performed such other analyses as it deemed appropriate.
In connection with its review, Sheshunoff relied upon and assumed the
accuracy and completeness of all of the foregoing information provided to it or
made publicly available. Sheshunoff did not assume any responsibility for
independent verification of such information. Sheshunoff assumed that internal
confidential financial projections provided by CNBT were reasonably prepared
reflecting the best currently available estimates and judgments of the future
financial performance of CNBT and did not independently verify the validity of
such assumptions. Sheshunoff did not make any independent evaluation or
appraisal of the assets or liabilities of CNBT nor was Sheshunoff furnished
with any such appraisals. Sheshunoff did not examine any individual loan files
of CNBT. Sheshunoff is not an expert in the evaluation of loan portfolios for
the purposes of assessing the adequacy of the allowance for losses with respect
thereto and has assumed that such allowance is, in the aggregate, adequate to
cover such losses.
With respect to BOK Financial, Sheshunoff did not conduct any independent
evaluation or appraisal of the assets, liabilities or business prospects of BOK
Financial, was not furnished with any evaluations or appraisals, and did not
review any individual loan files of BOK Financial.
Sheshunoff's opinion is necessarily based on economic, market and other
conditions as in effect on, and the information made available to Sheshunoff as
of August 28, 2000.
In connection with delivering its opinion, Sheshunoff performed a variety of
financial analyses. The preparation of an opinion involves various
determinations as to the most appropriate and relevant methods of financial
analysis and the application of those methods to the particular circumstances.
Consequently, the fairness opinion is not readily susceptible to partial
analysis of summary description. Moreover, the evaluation of fairness, from a
financial point of view, of the merger consideration is to some extent
subjective, based on the experience and judgment of Sheshunoff, and not merely
the result of mathematical analysis of financial data. Accordingly,
notwithstanding the separate factors summarized below, Sheshunoff believes that
its analyses must be considered as a whole and that selecting portions of its
analyses and of the factors considered by it, without considering all analyses
and factors, could create an incomplete view of the evaluation process
underlying its opinion. The ranges of valuations resulting from any particular
analysis described below should not be taken to be Sheshunoff's view of the
actual value of CNBT.
In performing its analyses, Sheshunoff made numerous assumptions with
respect to industry performance, business, and economic conditions and other
matters, many of which are beyond the control of CNBT. The analyses performed
by Sheshunoff are not necessarily indicative of actual values or future
results, which may be significantly more or less favorable than suggested by
such analyses, nor are they appraisals. In addition, Sheshunoff's analyses
should not be viewed as determinative of the opinion of the board of directors
or the management of CNBT with respect to the value of CNBT.
The elements of Sheshunoff's analysis included:
. checking the premium to be paid by BOK Financial against market
precedent (paragraph 1);
. comparing the estimated future after-tax cash flow streams that CNBT
could produce through the year 2004 to the merger consideration
(paragraph 2); and
. comparing the average trading range and volume for CNBT common stock
prior to its receipt of an offer to acquire CNBT in May 2000 with the
merger consideration (paragraph 3).
The following is a summary of the analyses performed by Sheshunoff in
connection with its opinion. The following discussion contains financial
information concerning CNBT as of June 30, 2000, and market information as of
August 28, 2000.
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1. Analysis of Selected Transactions. Sheshunoff performed an analysis of
premiums paid in selected recently announced acquisitions of banking
organizations in Texas and in the United States with comparable characteristics
to the merger. Two sets of comparable transactions were analyzed to ensure a
thorough comparison.
The first set of comparable transactions consisted of a group of
transactions in Texas for which pricing data were available. These comparable
transactions consisted of four mergers and acquisitions of banks with assets
between $300 million and $600 million that were announced between January 1,
1999 and August 28, 2000. The second set of comparable transactions consisted
of a group of banks in the United States with profitability, asset size and
characteristics similar to CNBT that were purchased for cash and for which
pricing data were available. These comparable transactions consisted of seven
mergers and acquisitions of banks in the United States with total assets
between $300 million and $600 million that were announced between January 1,
1999 and August 28, 2000.
Sheshunoff calculated the following ratios with respect to the merger and
the selected transactions:
<TABLE>
<CAPTION>
Texas Transactions United States Transactions
CNBT/BOK -------------------------- --------------------------
Ratios Financial Low High Average Median Low High Average Median
------ --------- ----- ----- ------- ------ ----- ----- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Deal price per
share/book
value per share........ 2.8x 1.8x 3.8x 2.5x 2.2x 1.8x 3.8x 2.4x 2.1x
Deal price per
share/last 12
months earnings per
share.................. 18.0x 18.0x 20.9x 19.8x 20.2x 17.0x 21.9x 19.7x 19.9x
Deal price/total
assets................. 21.6% 12.7% 28.3% 19.0% 17.5% 11.8% 28.3% 18.5% 17.2%
Deal price/total
deposits............... 26.4% 14.3% 32.5% 21.3% 19.3% 13.4% 32.5% 21.2% 18.9%
</TABLE>
2. Discounted Cash Flow Analysis. Using discounted cash flow analysis,
Sheshunoff estimated the present value of the future after-tax cash flow
streams that CNBT could produce through the year 2004, under various
circumstances, assuming that it performed in accordance with the
earnings/return projections provided by management.
Sheshunoff estimated terminal values for CNBT at the end of 2004 by
multiplying the final period projected earnings by a range of multiples of
earnings. Sheshunoff discounted the annual cash flow streams (defined as the
earnings in excess of the amount required to maintain a 7.0% equity to asset
ratio) and the terminal values using various discount rates. The range of
discount rates was chosen to reflect different assumptions regarding the
required rates of return of CNBT and the inherent risk surrounding the
underlying cash flow projections.
The range of discount rates and multiples used and range of values per
diluted share of CNBT common stock are set forth in the table below:
<TABLE>
<CAPTION>
Range of Values
Discount ----------------------
Rates Terminal Values Low High Merger Consideration
-------- --------------- ------- -------- --------------------
(per share) (per share)
<S> <C> <C> <C> <C>
13% - 15% 10x - 14x $10.45 $14.62 $18.22
</TABLE>
The discounted cash flow analysis used by Sheshunoff is a widely-used
valuation methodology that relies on numerous assumptions, including asset and
earnings growth rates, terminal values and discount rates. The analysis does
not purport to be indicative of the actual or expected values of CNBT common
stock.
3. Analysis of CNBT Trading Price. Sheshunoff compared the average trading
range and volume for the common shares of CNBT prior to its receipt of an offer
in May 2000 with the merger consideration. For the period from January 3, 2000
through May 10, 2000, the average trading price for CNBT common shares was
$10.26 and the daily average trading volume was 6,104 shares. The per diluted
share merger consideration of $18.22 represents a 77.6 percent premium to the
average trading price of CNBT common shares for the aforementioned period.
After the public announcement of the merger, the per diluted share merger
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consideration represented a 10.4 percent premium to the closing price for CNBT
common shares of $16.50 on August 18, 2000, the last full trading day before
public announcement of the merger.
For the purposes of the per share analyses in this and the preceding
section, Sheshunoff assumed options outstanding were accounted for under the
treasury method.
No company or transaction used in the comparable company and comparable
transaction analyses is identical to CNBT, BOK Financial, or the merger.
Accordingly, an analysis of the results of the foregoing necessarily involves
complex considerations and judgments concerning differences in financial and
operating characteristics of CNBT and BOK Financial and other factors that
could affect the public trading value of the companies to which they are being
compared. Mathematical analysis (such as determining the average or median) is
not in itself a meaningful method of using comparable transaction data or
comparable company data.
Pursuant to an engagement letter dated May 31, 2000 between CNBT and
Sheshunoff, CNBT agreed to pay Sheshunoff a transaction fee of 0.60 percent of
the merger consideration to be received by CNBT as a result of the merger. In
addition, Sheshunoff will be reimbursed for its reasonable out-of-pocket
expenses including those of its attorneys if necessary. CNBT also agreed to
indemnify and hold harmless Sheshunoff and its officers and employees against
certain liabilities in connection with its services under the engagement
letter, except for liabilities resulting from the negligence, violation of law
or regulation or bad faith of Sheshunoff or any matter for which Sheshunoff may
have strict liability.
The fairness opinion is directed only to the question of whether the merger
consideration is fair from a financial perspective and does not constitute a
recommendation to any CNBT shareholder to vote in favor of the merger.
Based on the results of the various analyses described above, Sheshunoff
concluded that the merger consideration to be received by CNBT stockholders
pursuant to the merger is fair from a financial point of view.
You will Receive Cash for Your Shares of CNBT Common Stock
Upon completion of the merger, each outstanding share of our common stock
(other than shares as to which dissenters' rights have been asserted and
perfected in accordance with Texas law and other than treasury shares held by
us) will be converted into and represent the right to receive up to
approximately $18.22 in cash, representing the merger consideration. The
aggregate amount of the merger consideration to be paid in connection with the
merger will be equal to $92,000,000, less (i) any dividends paid in excess of
$0.12 per calendar quarter and a special dividend of $0.07, subsequent to
August 1, 2000, and (ii) the amount to be paid to CNBT's financial advisor,
Sheshunoff, for rendering the fairness opinion, which is estimated to be
approximately $552,000. The aggregate amount of merger consideration will be
divided by the number of shares of CNBT common stock outstanding as of the
effective time of the merger (and after exercise of all stock options). There
are currently 4,941,361 shares of CNBT common stock issued and outstanding and
outstanding stock options representing the right to acquire an aggregate of
139,670 shares.
A Portion of the Merger Consideration Will Be Held in Escrow for One Year
$1,000,000 of the merger consideration (approximately $0.20 per share of
CNBT common stock) will be held in escrow for a period of one year following
completion of the merger as security for CNBT's representations and warranties
contained in the merger agreement. Consequently, CNBT stockholders will
initially receive a payment of approximately $18.02 per share upon completion
of the merger. At the end of one year following completion of the merger, if no
claims are made by BOK Financial against the escrowed funds, CNBT stockholders
will receive an additional payment of approximately $0.20 per share. If a valid
claim is made by BOK Financial against the escrowed funds, the second payment
to CNBT stockholders will be reduced by the amount of the claim.
The escrowed funds will be placed in an interest bearing bank account
pending their distribution.
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Option Holders Will Receive Cash for Options
Each person who has an option to purchase CNBT common stock that has not
been exercised, must exercise such option immediately prior to the consummation
of the merger. Upon the exercise of such stock option, such option holder will
be required to pay CNBT the purchase price per share specified in the option,
but such amount will be deducted from or "netted out" of the amount of merger
consideration to be paid to such option holder. Such shares will be deemed
issued and outstanding immediately prior to the consummation of the merger.
Procedure for Surrendering your Certificates
At least 20 days prior to the effective date of the merger, Bank of New
York, acting as the exchange agent for BOK Financial, will mail to all holders
of record of our common stock a letter of transmittal, together with
instructions for the exchange of your common stock certificates for cash. Until
exchanged, each certificate representing our common stock outstanding
immediately prior to the completion of the merger will be deemed for all
purposes the right to receive the merger consideration, consisting of cash in
the amount of up to approximately $18.22 per share, into which each such share
is to be converted. YOU SHOULD NOT SEND IN YOUR STOCK CERTIFICATES OF CNBT
COMMON STOCK UNTIL YOU RECEIVE FURTHER INSTRUCTIONS. DO NOT RETURN THEM WITH
YOUR PROXY CARD.
Representations and Warranties Made by CNBT and BOK Financial
The merger agreement contains representations and warranties of CNBT, BOK
Financial, and its subsidiary that are customary in merger transactions,
including, among others, representations and warranties concerning:
. the organization and capitalization of CNBT and BOK Financial and our
respective subsidiaries;
. the due authorization, execution, delivery, and enforceability of the
merger agreement;
. the consents or approvals required, and the lack of conflicts or
violations under applicable articles of incorporation, bylaws,
instruments, and laws, with respect to the transactions contemplated by
the merger agreement;
. the absence of material adverse changes;
. the documents filed by the parties with the SEC and other regulatory
agencies;
. the absence of material, legal, or other governmental procedures
pending;
. the conduct of business in the ordinary course and absence of certain
changes; and
. the financial statements of the respective parties.
We also made certain additional representations and warranties, including,
among others, regarding environmental matters, the adequacy of insurance
coverage, taxes, employee benefit plans, certain contracts, properties, real
property, the accuracy of the information in this proxy statement, employment
of brokers or finders, compliance with laws, that loans made were made in the
ordinary course of business, and the absence of any losses by reason of our
guarantee of certain credit card accounts. BOK Financial has also represented
that it will have the funds necessary to pay the amounts required of it under
the merger agreement. The representations and warranties of CNBT and BOK
Financial are qualified by certain materiality provisions. The representations
and warranties of CNBT will survive beyond the completion of the merger,
however, (1) if the merger agreement is terminated without consummation of the
merger, there will be no liability on the part of either CNBT or BOK Financial,
except that no party will be relieved from any liability arising out of a
willful breach of any covenant, undertaking, representation or warranty in the
merger agreement and (2) CNBT's and its stockholders' liability for any breach
of a representation or warranty is limited to the $1,000,000 escrow fund
retained from the merger consideration.
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<PAGE>
Conditions to the Merger
The respective obligations of CNBT and BOK Financial to consummate the
merger are subject to the satisfaction or waiver of the following conditions
specified in the merger agreement:
. the receipt of all necessary governmental and regulatory approvals;
. approval of the merger agreement by the requisite vote of CNBT's
stockholders and the board of directors of BOK Financial;
. the compliance with or satisfaction in all material respects of all
representations, warranties, covenants, and conditions set forth in the
merger agreement;
. the absence of any order, decree or injunction, or any proceeding
initiated or threatened by a governmental entity seeking an order,
decree or injunction, enjoining or prohibiting consummation of the
merger or the other transactions contemplated by the merger agreement;
. the receipt of certain documents and certificates; and
. the amendment of CNBT's employee severance agreements.
There can be no assurance that the conditions to consummation of the merger
will be satisfied or waived. The merger will become effective when articles of
merger are filed with the Secretary of State of the State of Texas or at such
later time as may be agreed to by BOK Financial and CNBT and indicated in the
articles of merger. The merger agreement provides that the merger cannot be
completed prior to January 3, 2001. It is currently anticipated that the
effective time of the merger will occur at the beginning of the first quarter
of 2001.
Conduct of Business Prior to the Completion of the Merger
Under the terms of the merger agreement, we will conduct our businesses and
engage in transactions only in the ordinary course and consistent with past
practice or to the extent otherwise contemplated under the merger agreement,
except with the prior written consent of BOK Financial. We also will:
. preserve our business organization and that of Citizens National Bank of
Texas intact,
. keep available to CNBT and BOK Financial the present services of our
employees and those of Citizens National Bank of Texas, and
. preserve for CNBT and BOK Financial the goodwill of our customers and
those of Citizens National Bank of Texas and others with whom business
relationships exist.
We also agreed, among other things, that, except as contemplated by the
merger agreement or unless BOK Financial provides its consent, we will not, and
will cause Citizens National Bank of Texas not to,
. pay, after August 1, 2000, any dividends to our stockholders except for
two regular quarterly dividends of up to $0.12 per share, and one
additional cash dividend of up to $0.07 per share provided, however,
that we will not pay any dividend that would cause Citizens National
Bank of Texas to no longer be "well capitalized" under applicable
federal adequacy guidelines;
. issue any shares of our capital stock other than pursuant to the
exercise of existing CNBT stock options, repurchase our common stock, or
effect any change in our capitalization;
. amend our articles of incorporation, bylaws, or similar organizational
documents;
. increase the compensation of any of our directors, officers, or
employees, or pay bonuses other than in the usual and ordinary course of
business;
. create or otherwise become liable with respect to any indebtedness for
money borrowed or purchase money indebtedness;
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<PAGE>
. incur a lien on any of our real or personal property;
. extend any credit, loan, or guarantee, in excess of $500,000 per
transaction to any new customer, or in excess of $1,000,000 to any
existing customer;
. enter into or assume any material contract or obligation;
. enter into any transaction not in the ordinary course of business, any
agreement or arrangement relating to the borrowing of money by us except
certain borrowings used in the ordinary course of business and
consistent with past practice, any agreement or arrangement relating to
employment or consultancy or any amendment of such agreements, or any
agreement with a labor union;
. make any substantial renovation of any of our properties or enter into
any lease or agreement involving a substantial obligation; and
. pay more that $75,000.00 in the aggregate for consideration of certain
employees entering into retention agreements.
In addition, we have agreed not to solicit, initiate, or encourage inquiries
or proposals from, third parties concerning any merger, acquisition, or sale of
all or substantially all of our assets or equity interests of CNBT. We are
required to notify BOK Financial immediately if we receive any such inquires or
proposals. However, we are permitted to furnish information to or engage in
discussions or negotiations with third parties if, after having consulted with
our counsel, we determine that the failure to do so may cause our board of
directors to breach its fiduciary duties.
Approvals Needed to Complete the Merger
In addition to the approval of the merger agreement by our stockholders,
approval of the Federal Reserve Board and the Office of the Comptroller of the
Currency (the OCC) is required in order to consummate the merger. There can be
no assurances that these approvals will be received in a timely manner, in
which event the consummation of the merger may be delayed. In the event the
merger is not consummated on or before January 30, 2001, the merger agreement
may be terminated by us. We can give you no assurance as to the receipt or
timing of such approvals.
Waiver and Amendment of the Merger Agreement
Prior to the completion of the merger, BOK Financial and CNBT may extend the
time for performance of any obligations under the merger agreement, waive any
inaccuracies in the representations and warranties contained in the merger
agreement, and waive compliance with any covenant, agreement or, to the extent
permitted by law, any condition of the merger agreement. However, after our
stockholders have adopted the merger agreement, no waiver can modify the amount
or form of consideration to be provided to our stockholders or otherwise
materially adversely affect our stockholders without the approval of the
affected stockholders.
The merger agreement may be amended or supplemented at any time by mutual
agreement of BOK Financial and CNBT, provided that any such amendment or
supplement after our stockholders have adopted the merger agreement is subject
to the same condition in the last sentence of the preceding paragraph.
Termination of the Merger Agreement
The merger agreement may be terminated prior to the time the merger is
completed by:
. the mutual written consent of the respective Board of Directors of CNBT
and BOK Financial; or
. by CNBT and BOK Financial if:
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. the conditions of the merger are not satisfied by the other party,
including, if CNBT's stockholders do not approve the merger
agreement, unless the failure of such occurrence is due to the
failure of the party seeking to terminate to perform its obligations
under the merger agreement; or
. the merger is not completed by January 30, 2001, unless the failure
of such occurrence is due to a breach by the party seeking to
terminate; and
. by CNBT if it receives an offer from a third party with respect to a
proposal for an acquisition, and the board of directors of CNBT
determines, in good faith and after consultation with a financial
advisor, that such proposal is superior, and CNBT has given BOK
Financial two days written notice of its intentions to terminate the
merger agreement.
In the event that the merger agreement is terminated, the merger agreement
will become void and have no effect, and there shall be no liability on the
part of either CNBT or BOK Financial or their officers and directors, except
that:
. certain provisions regarding confidential information and expenses shall
survive and remain in full force and effect;
. a breaching party will not be relieved of liability or damages for any
willful breach giving rise to such termination;
. if CNBT terminates the merger agreement because its board of directors
has resolved to accept a proposal to acquire CNBT that is superior to
the merger consideration proposed to be paid by BOK Financial or BOK
Financial terminates the merger agreement because of CNBT's failure to
perform its obligations under the merger agreement, CNBT agrees to pay
BOK Financial the sum of $5,000,000; and
. if CNBT terminates the merger agreement because of BOK Financial's
failure to perform its obligations under the merger agreement, BOK
Financial agrees to pay CNBT the sum of $5,000,000.
Interests of Directors and Officers in the Merger that are Different from your
Interests
Some members of CNBT's management and CNBT's Board of Directors may have
interests in the merger that are in addition to or different from the interests
of stockholders. The CNBT's board of directors was aware of these interests and
considered them in approving the merger agreement.
CNBT Stock Options. As of September 1, 2000, there were an aggregate of
139,670 options to purchase our common stock outstanding. Of these stock
options, 44,830 are currently exercisable. The remaining CNBT options for
94,840 shares will become fully vested and exercisable as of the date the
merger is completed. Unexercised options to purchase shares of CNBT common
stock will be exercised immediately prior to the consummation of the merger and
will be entitled to the merger consideration (minus or net of any unpaid
exercise price). See "Beneficial Ownership of CNBT Common Stock" for the amount
of stock options held by our directors and certain executive officers.
Severance Agreements. Under the terms of severance agreements amended
pursuant to the merger agreement, if Randall W. Dobbs, and Joseph E. Ives,
Executive Vice Presidents and directors of CNBT, Mary A. Walker, Senior Vice
President and a director of CNBT, Sheila J. Scantlin, President of the Sugar
Land Office and an Advisory Director, John M. James, Senior Vice President and
an Advisory Director, Robert J. Kramer, President of the Northwest Office and
an Advisory Director, or Charles H. Arnold, President of the Westheimer Office
and Advisory Director, decide to terminate employment for good reason with
Citizens National Bank of Texas within two years after the merger is completed,
they will receive a lump sum from Citizens National Bank of Texas equal to 2.99
times their then current yearly salary. Likewise, if their employment is
terminated within two years following completion of the merger for other than
cause, then Citizens National Bank of Texas will provide a cash severance equal
to 2.99 times their then current yearly salary.
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<PAGE>
Employment Agreement. Under the terms of the merger agreement, B. Ralph
Williams, President and Chief Executive Officer of CNBT must enter into an
employment agreement with Citizens National Bank of Texas and BOK Financial.
Under the terms of the employment agreement, if, during the three-year term of
the agreement, Mr. Williams' employment is terminated without cause, BOK
Financial will be required to pay Mr. Williams his then annual salary for the
remaining portion of the term.
Protection of Directors, Officers, and Employees Against Claims. In the
merger agreement, BOK Financial has agreed to indemnify the directors and
officers of CNBT and each of our subsidiaries after the completion of the
merger to the fullest extent which we or Citizens National Bank of Texas would
have been permitted to do so under our respective articles of incorporation or
bylaws. In addition, all limitations of liability existing in favor of such
individuals in the articles of incorporation or bylaws of CNBT or Citizens
National Bank of Texas, arising out of matters existing or occurring at or
prior to the completion of the merger, shall survive the merger and shall
continue in full force and effect. BOK Financial has also agreed to provide,
for a period of not less than three years after completion of the merger, an
insurance and indemnification policy that provides our directors and officers
with coverage no less favorable than the coverage we currently provide, to the
extent that such insurance may be purchased or kept in full force without any
material increase in the premiums currently paid by BOK Financial for its
directors' and officers' liability insurance.
Delisting and Deregistration of CNBT Common Stock after the Merger
When the merger is completed, CNBT common stock will be delisted from the
Nasdaq National Market and will be deregisterd under the Securities Exchange
Act of 1934.
You Have Dissenters' Rights of Appraisal
The following discussion is not a complete statement of the law pertaining
to dissenters' rights under the Texas Business Corporation Act, referred to as
the TBCA, and is qualified in its entirety by the full text of sections 5.11,
5.12, and 5.13 of the TBCA. The pertinent portions of Sections 5.11, 5.12, and
5.13 are reprinted in their entirety as Appendix C to this proxy statement. Any
CNBT stockholder who desires to exercise his or her dissenters' rights should
review carefully Appendix C and is urged to consult a legal advisor before
electing or attempting to exercise his or her rights. All references in
Appendix C to a "stockholder" and in this summary to a "CNBT stockholder" or a
"holder of CNBT common stock" are to the record holder of shares as to which
dissenters' rights are asserted.
Subject to the exceptions stated below, holders of CNBT common stock who
comply with the applicable procedures summarized below will be entitled to
dissenters' rights under the TBCA. Voting against, abstaining from voting, or
failing to vote on approval and adoption of the proposed merger will not
constitute a demand for appraisal within the meaning of the TBCA.
CNBT stockholders electing to exercise dissenters' rights under the TBCA
must not vote for approval of the proposed merger. A vote by a stockholder
against the merger is not required to exercise dissenters' rights. However, if
a stockholder returns a signed proxy but does not specify a vote against the
proposed merger or a direction to abstain, the proxy, if not revoked prior to
the special meeting, will be voted for approval of the proposed merger, which
will have the effect of waiving that stockholder's dissenters' rights.
What are Dissenters' Rights? CNBT stockholders who follow the procedures of
the TBCA will be entitled to receive from CNBT the fair value of their shares
as determined immediately before the completion of the merger. Fair value takes
into account all relevant factors but excludes any appreciation or depreciation
in anticipation of the merger. CNBT stockholders who elect to exercise their
dissenters' rights must comply with all of the procedures to preserve those
rights.
Shares Eligible for Dissenters' Rights. Generally, if you choose to assert
your dissenters' rights, you must dissent as to all of the shares you own.
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Record Holder who is Not the Beneficial Owner. A record holder may assert
dissenters' rights on behalf of the beneficial owner. If you are a registered
owner and you wish to exercise dissenters' rights on behalf of the beneficial
owner, you must disclose the name and address of the person or persons on whose
behalf you dissent. In that event, your rights shall be determined as if the
dissenting shares and the other shares were registered in the names of the
beneficial holders.
Beneficial Owner who is not the Record Holder. A beneficial owner of CNBT
common stock who is not also the record holder may assert dissenters' rights.
If you are a beneficial owner who is not the record holder and you wish to
assert your dissenters' rights, then you must submit a written consent of the
record holder to the Secretary of CNBT prior to the vote, but in no event later
than the CNBT special meeting. You may not dissent with respect to some but
less than all of the shares you own.
Procedure to Exercise Dissenters' Rights
Notice of Intention to Dissent. If you wish to exercise your dissenters'
rights, you must follow the procedures set forth in the TBCA. You must file a
written notice of intention to demand the fair value for your shares prior to
the special meeting. You must not make any change in your beneficial ownership
of CNBT shares from the date you file the notice until the completion of the
merger. You must refrain from voting your shares for the adoption of the merger
agreement.
Notice of Approval. If our stockholders approve the merger, we will mail a
notice to all dissenters who filed a notice of intention to dissent prior to
the vote on the merger proposal and who refrained from voting for the adoption
of the merger agreement. We expect to mail the notice of approval promptly
after the merger is completed. The notice of approval will state where and when
a demand for payment must be sent. The notice of approval will also supply a
form for demanding payment which includes a request for certification of the
date on which the holder, or the person on whose behalf the holder dissents,
acquired beneficial ownership of the shares. The demand form will be
accompanied by a copy of the relevant sections of the TBCA.
If you assert your dissenters' rights, you must ensure that CNBT receives
your demand form and your certificates on or before the demand deadline. All
mailings to CNBT are at your risk. Accordingly, we recommend that your notice
of intention to dissent and demand form be sent by certified mail only, by
overnight courier, or by hand delivery.
If you fail to file a notice of intention to dissent, or fail to complete
and return the demand form, each within the specified time periods, you will
lose your dissenters' rights under the TBCA. You will retain all rights of a
stockholder, or beneficial owner, until those rights are modified by completion
of the merger.
Payment of Fair Value by CNBT. Upon timely receipt of the completed demand
form, the TBCA requires us to either:
. remit to dissenters who complied with the procedures, upon receipt of
the amount you estimate to be the fair value for such dissenting shares;
or
. give written notice that no such remittance will be made.
CNBT will determine whether to make such a remittance or to defer payment
for such shares until completion of the necessary appraisal proceedings. CNBT
may consider the number of shares, if any, with respect to which stockholders
dissented, and any objections that may be raised with respect to the standing
of the dissenting stockholder.
The remittance or notice will be accompanied by:
. a statement of CNBT's estimate of the fair value of the shares; and
. notice of the right of the dissenter to demand payment or supplemental
payment, as the case may be, accompanied by a copy of the relevant
section of the TBCA.
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Resort to Court for Relief. If, after the later of 60 days after the
completion of the merger or after the timely receipt of any holder's estimate,
demands remain unpaid, CNBT or you may file an application for relief,
requesting the court determine the fair value of the shares.
In the court proceeding, all dissenters, wherever residing, whose demands
have not been settled will be made parties to any such appraisal proceeding.
The court may appoint an appraiser to receive evidence and recommend a decision
on the issue of fair value. Each dissenter made a party will be entitled to
recover an amount equal to the fair value of the dissenter's shares, plus
interest, or if CNBT previously remitted any amount to the dissenter, any
amount by which the fair value of the dissenter's shares is found to exceed the
amount previously remitted, plus interest.
Costs and Expenses of Court Proceedings. The costs and expenses of the court
proceedings, including the reasonable compensation and expenses of the
appraiser appointed by the court, will be determined by the court and assessed
against CNBT. The court may, however, apportion and assess any part of the
costs and expenses of court proceedings as it deems appropriate against all or
some of the dissenters who are parties and whose action in demanding
supplemental payment the court finds to be in bad faith. If we fail to comply
substantially with the requirements of the TBCA the court may assess fees and
expenses of counsel and of experts for the parties as it deems appropriate
against us and in favor of any or all dissenters. The court may assess fees and
expenses of counsel and experts against either CNBT or a dissenter, if the
court finds that a party acted in bad faith. If court finds that the services
of counsel for any dissenter substantially benefitted other dissenters
similarly situated and should not be assessed against CNBT, it may award
counsel reasonable fees to be paid out of the amounts awarded to the dissenters
who benefitted.
No Right to an Injunction. Under Texas corporate law, a CNBT stockholder has
no right to obtain, in the absence of fraud or fundamental unfairness, an
injunction against the merger proposal, nor any right to valuation and payment
of the fair value of the holder's shares because of the merger proposal, except
to the extent provided by the dissenters' rights provisions of the TBCA. Texas
corporate law also provides that, absent fraud or fundamental unfairness, the
rights and remedies provided by Section 5.12.
Federal Income Tax Consequences of the Merger for CNBT Stockholders
The exchange of our common stock for cash pursuant to the terms of the
merger agreement will be a taxable transaction for federal income tax purposes
under the Internal Revenue Code, and may also be a taxable transaction under
state, local and other tax laws. Similarly, any stockholders of CNBT who
exercise their dissenters' appraisal rights and receive cash in exchange for
their shares of CNBT common stock will realize and recognize income for federal
tax purposes and may recognize income under state, local and other tax laws. A
stockholder of CNBT will recognize gain or loss equal to the difference between
the amount of cash received by the stockholder pursuant to the merger and the
tax basis in CNBT common stock exchanged by such stockholder pursuant to the
merger. Gain or loss must be determined separately for each block of CNBT
common stock exchanged pursuant to the merger. For purposes of federal tax law,
a block consists of shares of CNBT common stock acquired by the stockholder at
the same time and price.
Gain or loss recognized by the stockholder exchanging his or her CNBT common
stock pursuant to the merger or pursuant to the exercise of dissenters' rights
will be capital gain or loss if such CNBT common stock is a capital asset in
the hands of the stockholder. If CNBT common stock has been held for more than
one year, the gain or loss will be long-term. Capital gains recognized by an
exchanging individual stockholder generally will be subject to tax at the top
marginal rate applicable to the stockholder (up to a maximum of 39.6% for
short-term capital gains and 20% for long-term capital gains), and capital
gains recognized by an exchanging corporate stockholder generally will be
subject to tax at a maximum rate of 35%.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS BASED UPON CURRENT LAW.
YOU ARE URGED TO CONSULT YOUR TAX ADVISOR CONCERNING THE SPECIFIC TAX
CONSEQUENCES OF THE MERGER TO YOU, INCLUDING THE APPLICABILITY AND EFFECT OF
STATE, LOCAL OR OTHER TAX LAWS AND OF ANY PROPOSED CHANGES IN THOSE TAX LAWS
AND THE INTERNAL REVENUE CODE.
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Accounting Treatment of the Merger
The merger will be accounted for as a purchase for financial reporting
purposes. Under this method of accounting, BOK Financial will record the
acquisition of CNBT at its cost at the completion of the merger, which cost
would include the cash paid in the merger and all direct acquisition costs. The
acquisition cost will be allocated to the acquired assets and liabilities of
CNBT based upon their fair values at the completion of the merger in accordance
with generally accepted accounting principles. Acquisition cost in excess of
the fair values of the net assets acquired, if any, will be recorded as an
intangible asset and amortized for financial accounting purposes. The reported
income of BOK Financial will include the operations of CNBT after the
completion of the merger.
Who Pays for What
All out-of-pocket costs and expenses incurred in connection with the merger
(including, but not limited to, fees and expenses of financial consultants,
accountants, and counsel) will be paid by the party incurring such costs and
expenses.
If CNBT terminates the merger agreement because its board of directors has
resolved to accept a proposal to acquire CNBT that is superior to the merger
consideration proposed to be paid by BOK Financial or if BOK Financial
terminates the merger agreement because of CNBT's failure to perform its
obligations under the merger agreement, CNBT is obligated to pay BOK Financial
the sum of $5,000,000. Conversely, if CNBT terminates the merger agreement
because of BOK Financial's failure to perform its obligations under the merger
agreement, BOK Financial is obligated to pay CNBT the sum of $5,000,000.
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BENEFICIAL OWNERSHIP OF CNBT COMMON STOCK
Stockholders of record as of the close of business on October 10, 2000 will
be entitled to one vote for each share of our common stock then held. As of
that date, we had 4,941,361 shares of common stock issued and outstanding. The
following table sets forth certain information regarding the beneficial
ownership of the CNBT's common stock as of September 1, 2000, by (i) each
director, (ii) each of the Chief Executive Officer and the four most highly
compensated executive officers other than the Chief Executive Officer, (iii)
each person who is known by CNBT to own beneficially 5% or more of the common
stock, and (iv) all directors and executive officers as a group. Unless
otherwise indicated, each person has sole voting and dispositive power over the
shares indicated as owned by such person.
<TABLE>
<CAPTION>
Percentage
Number of Beneficially
Shares Owned
--------- ------------
<S> <C> <C>
John B. Barnes....................................... 150,791 3.1
William H. Bruecher, Jr.............................. 24,442 *
James K. Chancelor................................... 25,000 *
C. Joe Chapman....................................... 62,252 1.3
Frank G. Cook........................................ 162,000(1) 3.3
Robert C. Dawson..................................... 52,290 1.1
Randall W. Dobbs..................................... 30,153(1) *
James B. Earthman III................................ 64,854 1.3
Lura M. Griffin...................................... 20,328 *
Alton L. Hollis...................................... 87,296 1.8
Joseph E. Ives....................................... 23,186(1) *
Larry L. January..................................... 67,000 1.4
Albert V. Kochran.................................... 25,580(2) *
I.W. Marks..................... ..................... 238,580(3) 4.8
David E. Preng....................................... 186,200(4) 3.8
Mary A. Walker....................................... 46,651(5) *
B. Ralph Williams.................................... 102,809(1) 2.1
Directors and Executive Officers as a Group (21
persons)............................................ 1,390,935(6) 27.9
</TABLE>
--------
* Does not exceed 1.0%
(1) Includes 2,000 shares that may be acquired within 60 days pursuant to
outstanding stock options.
(2) Includes 17,649 shares owned by the Kochran Family Living Trust.
(3) Mr. Marks address is 3841 Bellaire Boulevard, Houston, Texas 77025.
(4) Includes 11,000 shares owned by Mr. Preng's spouse and 10,000 shares owned
by a minor child.
(5) Includes 12,890 shares that may be acquired within 60 days pursuant to
outstanding stock options.
(6) Includes 41,830 shares that may be acquired within 60 days pursuant to
outstanding stock options.
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STOCKHOLDER PROPOSALS
If the merger is not consummated prior to the next regularly scheduled
annual meeting of our stockholders, any proposal that a stockholder wishes to
have included in our proxy materials for the next annual meeting of
stockholders must be received at our main office located at 5320 Bellaire
Boulevard, Bellaire, Texas 77401, attention: Ms. Kay Cronover, Secretary, no
later than , 2001. Any such proposal shall be subject to the
requirements of the proxy rules adopted under the Securities Exchange Act of
1934. Otherwise, any stockholder proposal to take action at such meeting must
be received at our main office located at 5320 Bellaire Boulevard, Bellaire,
Texas 77401 by , 2001. All stockholder proposals must also comply
with our bylaws and Texas law.
OTHER MATTERS
Our board of directors is not aware of any business to come before the
special meeting other than those matters described above in this proxy
statement. However, if any other matter should properly come before the special
meeting, it is intended that proxy holders will act in accordance with their
best judgment.
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APPENDIX A
Agreement and Plan of Merger
Between
BOK Financial Corporation;
BOK Merger Corporation Number Ten
And
CNBT Bancshares, Inc.
Dated as of August 18, 2000
<PAGE>
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of August 18,
2000, is entered into by and among BOK Financial Corporation, an Oklahoma
corporation, ("BOKF"), BOKF Merger Corporation Number Ten, a Texas corporation
and a wholly-owned subsidiary of BOKF ("BOKSub"), and CNBT Bancshares, Inc., a
Texas corporation ("CNBT").
WHEREAS, BOKF is a registered bank holding company under the Bank Holding
Company Act of 1956, as amended (the "BHCA"), and BOKSub is a wholly-owned
subsidiary of BOKF; and
WHEREAS, CNBT is a registered bank holding company under the BHCA, which
controls Citizens National Bank of Texas, a national banking association (the
"Bank"); and
WHEREAS, CNBT owns all of the issued and outstanding capital stock of CNBT
Bancshares (Delaware), Inc., a Delaware corporation ("Delaware"); and
WHEREAS, Delaware is a registered bank holding company under the BHCA, which
owns all of the issued and outstanding capital stock of the Bank; and
WHEREAS, the respective Boards of Directors of each of BOKF and CNBT deem it
advisable for BOKSub to merge with and into CNBT upon the terms and subject to
the conditions described herein;
NOW, THEREFORE, for and in consideration of the mutual benefits to be
derived from this Agreement and of the representations, warranties, conditions,
and promises hereinafter contained, the parties hereto covenant and agree as
follows:
ARTICLE I
The Merger
Section 1.1. The Merger. Pursuant to the terms and provisions of this
Agreement and the Texas Business Corporation Act (the "TBCA"), BOKSub shall
merge with and into CNBT (the "Merger").
Section 1.2. Merging Corporation. BOKSub shall be the merging corporation
under the Merger and its corporate identity and existence, separate and apart
from CNBT, shall cease on consummation of the Merger.
Section 1.3. Surviving Corporation. CNBT shall be the surviving corporation
in the Merger. No changes in the articles of incorporation or bylaws of CNBT
shall be effected by the Merger. The officers and directors of CNBT after the
Merger shall be the same as the officers and directors of BOKSub as of the
Effective Time (as defined in Section 9.2).
Section 1.4. Effect of the Merger. The Merger shall have all of the effects
provided by the TBCA. CNBT, as the surviving corporation, may, at any time
after the Effective Time, take any action (including executing and delivering
any documents) in the name and on behalf of either BOKSub or CNBT as are
appropriate in order to carry out and effectuate the transactions contemplated
by this Agreement.
Section 1.5. Merger Consideration; Conversion of Shares.
(a) At the Effective Time, each share of common stock of CNBT, par value
$1.00 per share (the "CNBT Common") then issued and outstanding, other than
shares the holders of which have duly exercised and perfected their dissenters'
rights under the TBCA, shall be automatically converted into the right to
receive an amount (the "Merger Consideration") equal to (i) Ninety-Two Million
Dollars ($92,000,000), minus the amount of any dividends paid by CNBT to its
shareholders during the period from August 1, 2000, to the date of consummation
of the Merger in excess of the sum of $0.12 per share per calendar quarter for
each of two calendar quarters and one special dividend not exceeding seven
cents ($0.07), minus the payments
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contemplated by Section 12.2. divided by (ii) the number of shares of CNBT
Common issued and outstanding as of the Effective Time (and after exercise of
all of the Stock Options (as defined in Section 2.2)) The Merger Consideration
shall be paid to each holder of the CNBT Common as of the Effective Time as
herein provided.
(b) CNBT, BOKF, and BOKSub acknowledge and understand that (i) all Stock
Options shall be exercised immediately prior to consummation of the Merger,
(ii) all shares of CNBT Common issuable upon exercise of the Stock Options
shall be deemed issued and outstanding immediately prior to the consummation of
the Merger, and (iii) the CNBT Common to be converted into the right to receive
the Merger Consideration shall include, without limitation, the CNBT Common to
be issued upon the exercise of the Stock Options.
(c) At the Effective Time, BOKF shall deposit or cause to be deposited into
an interest bearing account at the Bank of Texas, National Association One
Million Dollars ($1,000,000) of the Merger Consideration to be governed by
Section 11.2 (the "Representation Escrow Funds"). The Merger Consideration less
the Representation Escrow Funds is referred to herein as the "Closing
Consideration".
(d) At the Effective Time, all of the shares of CNBT Common, by virtue of
the Merger and without any action on the part of the holders thereof, shall no
longer be outstanding and shall be canceled and retired and shall cease to
exist, and each holder of any certificate or certificates that immediately
prior to the Effective Time represented outstanding shares of CNBT Common (the
"Certificates") or of any holder of Stock Options shall thereafter cease to
have any rights with respect to such shares, except the right of such holders
to receive the Merger Consideration upon the surrender of such Certificate or
Certificates or exercise of such Stock Options in accordance with Section 1.6.
(e) At the Effective Time, each share of CNBT Common, if any, held in the
treasury of CNBT immediately prior to the Effective Time shall be canceled.
(f) At the Effective Time, each share of common stock, par value $1.00 per
share, of BOKSub outstanding immediately prior to the Effective Time shall be
converted into one share of CNBT Common.
(g) If any holder of CNBT Common is entitled to dissent from the Agreement
and the Merger under the TBCA and such holder thereof perfects such holder's
rights under the TBCA in accordance with the provisions thereof, any issued and
outstanding shares of CNBT Common held by such dissenting holder ("Dissenting
Shares") shall not be converted as described in this Section 1.5, but from and
after the Effective Time shall represent only the right to receive such cash
consideration as may be determined to be due to such dissenting holder pursuant
to the TBCA; provided, however, that each share of CNBT Common outstanding
immediately prior to the Effective Time and held by a dissenting holder who
shall, after the Effective Time, withdraw his demand for appraisal or lose his
right of appraisal shall have only such rights as are provided under the TBCA.
Section 1.6. Exchange Procedures; Surrender of Certificates.
(a) Bank of New York, or other entity mutually satisfactory to CNBT and
BOKF, shall act as paying agent in the Merger (the "Paying Agent"). Immediately
after the Effective Time, BOKF will cause CNBT, as the surviving corporation,
to furnish the Paying Agent cash sufficient in the aggregate for the Paying
Agent to make full payment of the Merger Consideration to the holders of all
outstanding shares of CNBT Common (other than Dissenting Shares).
(b) At least twenty (20) days prior to the Effective Time, the Paying Agent
shall mail, without any further action on the part of BOKF or CNBT, to each
record holder of the Certificates, addressed to the most current address of
such shareholder according to the records of CNBT, a letter of transmittal (and
instructions) for use in effecting the surrender of the Certificates in
exchange for the Merger Consideration. Each such letter (the "Merger
Transmittal Letter") shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper receipt of the
Certificates by the Paying Agent and shall be in such form and have such other
provisions as BOKF may reasonably specify. If a holder of the CNBT Common
surrenders the Certificates representing shares of such stock and a properly
executed Merger Transmittal Letter
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to the Paying Agent at least three (3) business days prior to the Closing Date,
then on the Closing Date, the Paying Agent shall pay to such shareholder the
Closing Consideration with respect to such shares of CNBT Common. If a holder
of the CNBT Common surrenders the Certificates representing shares of such
stock and a properly executed Merger Transmittal Letter to the Paying Agent at
any time after three (3) business days prior to the Closing Date, then
promptly, and in no event later than three (3) business days after receipt of
such Certificates and Merger Transmittal Letter, the Paying Agent shall pay to
such shareholder the Closing Consideration with respect to such shares of CNBT
Common. No interest on the Closing Consideration issuable upon the surrender of
the Certificates shall be paid or accrued for the benefit of holders of
Certificates . If the Closing Consideration is to be issued to a person other
than a person in whose name a surrendered Certificate is registered, it shall
be a condition of issuance that the surrendered Certificate shall be properly
endorsed or otherwise executed in proper form for transfer and that the person
requesting such issuance shall pay to the Paying Agent any required transfer or
other taxes or establish to the satisfaction of the Paying Agent that such tax
has been paid or is not applicable.
(c) With respect to any shares of CNBT Common that are acquired as a result
of the exercise of the Stock Options, the purchase price for such shares under
the Stock Options shall be subtracted from or "netted-out" of the Closing
Merger Consideration to be paid such shareholders in order to provide for a
cashless exercise of the Stock Options. That is, upon the exercise of the Stock
Options such option holder shall not be required to pay CNBT the purchase price
specified in the Stock Options, but such amount shall be deducted from the
amount of Closing Consideration that would otherwise have been paid to such
option holder.
(d) After the Effective Time, there shall be no further registration or
transfers on the records of CNBT of outstanding certificates formerly
representing shares of CNBT Common and, if a certificate formerly representing
such shares is presented to CNBT or BOKF, it shall be forwarded to the Paying
Agent for cancellation and exchange for the Closing Consideration.
(e) All Merger Consideration paid upon the surrender of CNBT Common in
accordance with the above terms and conditions shall be deemed to have been
paid in full satisfaction of all rights pertaining to such shares of CNBT
Common.
(f) In the event any certificate for CNBT Common shall have been lost,
stolen, or destroyed, the Paying Agent shall issue in exchange for such lost,
stolen, or destroyed certificate, such Merger Consideration as may be required
pursuant to this Agreement; provided, however, that BOKF may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost, stolen, or destroyed certificate to deliver an affidavit of lost
certificate and indemnification agreement in form reasonably acceptable to
BOKF.
(g) At any time following six months after the Effective Time, BOKF shall be
entitled to terminate the Paying Agent relationship, and thereafter holders of
Certificates shall be entitled to look only to BOKF (subject to abandoned
property, escheat, or other similar laws) with respect to the Merger
Consideration payable upon surrender of their Certificates.
ARTICLE II
Representations and Warranties of CNBT
In order to induce BOKF and BOKSub to enter into, execute, deliver and
perform this Agreement, CNBT represents and warrants to BOKF and BOKSub as
follows:
Section 2.1. Organization, Standing and Power.
(a) CNBT is a corporation duly organized, validly existing, and in good
standing under laws of the State of Texas. CNBT (i) has all requisite power and
authority to own, lease, and operate its properties and to carry on its
business as it is now being conducted; (ii) is subject to the supervision of
the Board of Governors of the Federal Reserve System (the "Fed"); and (iii) is
a bank holding company registered with the Fed under the BHCA.
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(b) Delaware is a corporation duly organized, validly existing, and in good
standing under laws of the State of Delaware. Delaware (i) has all requisite
power and authority to own, lease, and operate its properties and to carry on
its business as it is now being conducted; (ii) is subject to the supervision
of the Fed; and (iii) is a bank holding company registered with the Fed under
the BHCA.
(c) The Bank is a national banking association duly organized, validly
existing, and in good standing under laws of the United States. The Bank (i)
has all requisite power and authority to own, lease, and operate its properties
and to carry on its business as it is now being conducted; (ii) is subject to
the supervision of the Federal Deposit Insurance Corporation ("FDIC") and the
Office of the Comptroller of the Currency ("OCC"); and (iii) is an insured bank
as defined in the Federal Deposit Insurance Act.
(d) CNBT has delivered to BOKF and BOKSub complete and correct copies, as of
a date not more than 30 days prior to the date hereof, of (i) the Articles of
Association or Incorporation or Certificate of Incorporation and all amendments
thereto, and (ii) the Bylaws and all amendments thereto, of each of CNBT,
Delaware, the Bank and CNB Mortgage Company, a Texas corporation..
Section 2.2. Capital Structure.
(a) The authorized capital stock of CNBT consists of 30,000,000 shares of
Common Stock, par value $1.00 per share. As of the date of this Agreement,
4,941,361 shares of CNBT Common were outstanding (net of shares held by CNBT in
treasury). CNBT does not have any commitment or obligation to repurchase,
reacquire, or redeem any of the outstanding CNBT Common. As of the date of this
Agreement, CNBT had outstanding stock options granted, pursuant to the CNBT
Employee Stock Option Plans, representing the right to acquire an aggregate of
139,670 shares of CNBT Common (the "Stock Options"). Schedule 2.2 (a) sets
forth the name of each person that has been granted Stock Options, the number
of shares that may be acquired as of the date of this Agreement by each such
person, and the exercise price of such Stock Options. The outstanding shares of
the CNBT Common are validly issued and outstanding, fully paid, and non-
assessable. Except for the Stock Options, there are no outstanding
subscriptions, conversion privileges, calls, warrants, options, commitments, or
agreements of any character obligating CNBT to issue, sell, or dispose of any
shares of any of its capital stock.
(b) The authorized capital stock of Delaware consists solely of 10,000
shares of common stock, par value $1.00 per share (the "Delaware Common
Stock"). As of the date of this Agreement, 1,000 shares of Delaware Common
Stock were issued and outstanding, and all of such outstanding shares are held
of record by CNBT. There are no outstanding subscriptions, conversion
privileges, calls, warrants, option, commitments, or agreements obligating
Delaware to issue, sell, or dispose of any shares of any of its capital stock.
(c) The authorized capital stock of the Bank consists of 30,000,000 shares
of common stock, par value $1.00 per share (the "the Bank Common Stock"). As of
the date of this Agreement, 200,000 shares of the Bank Common Stock were issued
and outstanding, all of which are held of record by Delaware. There are no
outstanding shares of preferred stock, nor any subscriptions, conversion
privileges, calls, warrants, options, commitments, or agreements obligating the
Bank to issue, sell, or dispose of any shares of any of its capital stock.
(d) CNBT has no subsidiaries except Delaware, the Bank and CNB Mortgage
Company, a Texas corporation.
Section 2.3. Authority. Subject to the approval of this Agreement by the
shareholders of CNBT as contemplated by Section 5.6 hereof, the execution and
delivery of this Agreement and the consummation of the Merger contemplated
hereby have been duly and validly authorized by all necessary corporate action
on the part of CNBT. Neither the execution and delivery of this Agreement, the
consummation of the Merger contemplated hereby, nor compliance by CNBT with any
of the provisions hereof will (i) conflict with or result in a breach of any
material provision of its Articles of Incorporation or Bylaws or constitute a
default (or give rise to any right of termination, cancellation, or
acceleration) under any of the terms, conditions, or provisions
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of any material note, bond, mortgage, indenture, license, agreement, or other
instrument or obligation to which CNBT is a party, or by which it or any of its
properties or assets may be bound, except for such conflict, breach, or default
as to which requisite waivers or consents either shall have been obtained by
CNBT by the Effective Time or the obtaining of which shall have been waived by
BOKF, or (ii) violate any material order, writ, injunction, decree, statute,
rule, or regulation applicable to CNBT or any of its properties or assets. No
other consent or approval by any governmental authority, other than compliance
with applicable federal and state securities and banking laws and regulations
of the Fed, is required in connection with the execution and delivery by CNBT
of this Agreement or the consummation by CNBT of the Merger contemplated
hereby.
Section 2.4. Financial Statements.
(a) CNBT has previously delivered or made available to BOKF complete copies
of the (i) the consolidated balance sheets of CNBT and its subsidiaries as of
December 31, 1999, and related consolidated statements of income, changes in
stockholders' equity, and cash flows for the three years ended December 31,
1999, together with the notes thereto, included in CNBT's Annual Report on Form
10-K for the year ended 1999, as currently on file with the Securities and
Exchange Commission ("SEC") and the unaudited consolidated balance sheet of
CNBT and its subsidiaries as of June 30, 2000, and the related unaudited
consolidated income statement and statements of changes in stockholders' equity
and cash flows for the six months then ended included in CNBT's Quarterly
Report on Form 10-Q for the quarter then ended, as currently on file with the
SEC and (ii) the Reports of Condition and Income of the Bank as filed with the
OCC for each of the quarterly periods during 1999 and 2000 (collectively the
"CNBT Financial Statements").
(b) The CNBT Financial Statements set forth in clause (a)(i) have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis (except as disclosed therein) and fairly present the
consolidated financial position and the consolidated results of operations,
changes in stockholders' equity, and cash flows of CNBT and its consolidated
subsidiaries as of the dates and for the periods indicated (subject, in the
case of interim financial statements, to normal recurring year-end adjustments,
none of which will be material). As of the respective date of each of the CNBT
Financial Statements, neither CNBT, nor Delaware, nor Bank has any material
liabilities (including, but not limited to, whether similar or dissimilar,
liabilities or obligations for taxes, whether due or to be come due) except
those fully reflected or reserved against, or otherwise disclosed in the
Financial Statements.
Section 2.5. Absence of Changes. Except as set forth in Schedule 2.5, since
June 30, 2000, there has not been any material adverse change in the condition
(financial or otherwise) of the assets, liabilities, earnings, or business of
CNBT, Delaware, or the Bank. Since such date, the business of CNBT, Delaware,
and the Bank has been conducted only in the ordinary course consistent with
prior practices and such entities have not incurred any additional material
liabilities (not already reflected in the CNBT Financial Statements) except:
(i) those incurred in the ordinary course of business consistent with past
practices without negligence or willful malfeasance, or (ii) expenses or
liabilities incurred in connection with this Agreement and the transactions
contemplated hereby in an amount not exceeding $175,000. Without limiting the
generality of the foregoing, since June 30, 2000, except as set forth on
Schedule 2.5 or as permitted by this Agreement, none of CNBT, Delaware, or the
Bank have paid any dividends, made any distributions of assets, made any
material changes in compensation or benefits of any employee (other than by
reason of promotion to increased responsibility), or entered into any contracts
for services or materials except such contracts and materials which either: (i)
may be terminated without penalty within 90 days or, (ii) provide for the
payment or other consideration to be furnished by CNBT, Delaware, or the Bank
in an amount of not more than $25,000, individually or $100,000 for all such
contracts and materials. Notwithstanding the foregoing, any changes in banking
laws, generally accepted accounting principles, prevailing interest rates or
other developments that affect the entire banking industry generally shall not
be deemed to have a material adverse effect in the financial condition, the
results of operations or the business of CNBT, Delaware, or the Bank.
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Section 2.6. Tax Matters.
(a) CNBT, Delaware, and the Bank have timely filed all federal, state, and
local (and, if applicable, foreign) income, franchise, bank, excise, real
property, personal property, and other tax returns required by applicable laws
to be filed by them (including, without limitation, estimated tax returns,
income tax returns, information returns, and withholding and employment tax
returns) and have paid, or where payment is not required to have been made,
have set up an adequate reserve or accrual for the payment of, all taxes
required to be paid with respect of the periods covered by such returns and, as
of the Effective Time, will have paid, or where payment is not required to have
been made, will have set up an adequate reserve or accrual for the payment of,
all taxes for any subsequent periods ending on or prior to the Effective Time.
None of CNBT, Delaware, or the Bank will have any material liability for any
such taxes in excess of the amounts so paid or reserves or accruals so
established. No payment of any amount to any employee of any of CNBT, Delaware,
or the Bank is an excess parachute payment within the meaning of Section 280G
of the Code.
(b) All federal, state and local income, franchise, bank, excise, real
property, personal property, and other tax returns filed by CNBT, Delaware and
the Bank are complete and accurate in all material respects. None of CNBT,
Delaware, or the Bank is delinquent in the payment of any tax, assessment, or
governmental charge, and none of them has requested any extension of time
within which to file any tax returns in respect of any fiscal year or portion
thereof which have not since been filed. There are currently no agreements in
effect with respect to CNBT, Delaware, or the Bank to extend the period of
limitations for the assessment or collection of any tax. As of the date hereof,
no audit, examination or deficiency or refund litigation with respect to any
such return is pending or, to CNBT's knowledge, threatened.
Section 2.7. Property. CNBT, Delaware, and the Bank own all property
reflected on the balance sheet dated June 30, 2000, included in the CNBT
Financial Statements (except personal property sold or otherwise disposed of
since June 30, 2000, in the ordinary course of business), free and clear of all
mortgages, liens, pledges, charges, or encumbrances of any nature whatsoever,
except those reflected in the CNBT Financial Statements, liens for current
taxes not yet due and payable and such encumbrances and imperfections of title,
if any, as are not substantial in character or amount or do not otherwise
materially impair business operations.
Section 2.8. Legal Proceedings. There is no material legal, administrative,
arbitration, or other proceeding or governmental investigation pending or, to
CNBT's knowledge, threatened which might reasonably be expected to result in
material money damages payable by CNBT, Delaware, or the Bank in excess of
insurance coverage or in a permanent injunction against CNBT, Delaware, or the
Bank. To CNBT's knowledge, each of CNBT, Delaware and the Bank have complied
with, and are not in default in any material respect under, any laws,
ordinances, requirements, regulations, or orders applicable to their business.
None of CNBT, Delaware, or the Bank is a party to any agreement or instrument
or subject to any charter or other corporate restriction or any judgment,
order, writ, injunction, or decree, which materially and adversely affects, or
might reasonably be expected materially and adversely to affect, the business
operations, properties, assets, or condition, financial, or otherwise, of CNBT,
Delaware, or the Bank.
Section 2.9. Brokers and Finders. Except as set forth in Section 12.2, none
of CNBT, its subsidiaries, or any of its officers, directors, or employees has
employed any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the Merger contemplated herein.
Section 2.10. Loan Portfolio. Except as to any breach that would reasonably
be expected to have an adverse effect of less than $20,000 in respect of any
single credit (related credits shall be aggregated for this purpose) and
$60,000 when aggregated with all such breaches, (i) all loans and discounts
shown on the CNBT Financial Statements at June 30, 2000, or which were entered
into after June 30, 2000, but before the Closing Date were and will be made in
all material respects for good, valuable, and adequate consideration in the
ordinary course of the Bank, in accordance in all material respects with sound
banking practices, and are not subject to any material known defenses, setoffs,
or counterclaims, including without limitation any such as are afforded by
usury or truth in lending laws, except as may be provided by bankruptcy,
insolvency, or similar
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laws or by general principles of equity; (ii) the notes or other evidences of
indebtedness evidencing such loans and all forms of pledges, mortgages, and
other collateral documents and security agreements are and will be, in all
material respects, enforceable, valid, true, and genuine and what they purport
to be; and (iii) CNBT, Delaware and the Bank have complied and will prior to
the Closing Date comply with all laws and regulations relating to such loans,
or to the extent there has not been such compliance, such failure to comply
will not materially interfere with the collection of any such loan.
Notwithstanding the foregoing, BOKF acknowledges and agrees that it has made
its own determination as to the collectibility of the loan portfolio of CNBT
and the Bank.
Section 2.11. Environmental. To CNBT's knowledge, the ownership, location,
construction, use, and operation of all real property owned or leased by CNBT
or the Bank (fixed asset or OREO) is, and has at all times been, in material
compliance with applicable Environmental Law, as hereinafter defined. Delaware
does not own or lease any real property and has not since its incorporation. To
CNBT's knowledge, there are no pending or threatened, and there have been no
administrative, regulatory, or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation, investigations,
or proceedings relating in any way to any Environmental Law relating to the
real property owned by CNBT or the Bank. To CNBT's knowledge, (i) no real
property owned by CNBT or the Bank has at any time been used by CNBT or the
Bank, or by any person, as a landfill or for the storage or disposal, or as a
site of spilling, dumping, depositing, or otherwise disposing of, any hazardous
or toxic substances or waste; and (ii) no real property owned by CNBT or the
Bank is, or has been, an industrial site or landfill. For the purposes hereof,
"Environmental Law" means any federal, state, or local statute, law, rule,
regulation, ordinance, code, policy, or rule of common law now in effect and in
each case as amended and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree, or judgment,
relating to the environment, health, safety or "hazardous materials,"
"hazardous wastes," "toxic substances," "toxic pollutants," "contaminants," or
words or terms of similar import (including under any Environmental Law),
including without limitation the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. 9601 et seq., the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. 1801 et seq., the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. 6901 et seq., the
Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq., the
Toxic Substances Control Act, 15 U.S.C. 2601 et seq., the Clean Air Act, 42
U.S.C. 7401 et seq., the Safe Drinking Water Act, 42 U.S.C. 3808 et seq., the
Texas Solid Waste Disposal Act, Tex. Health & Safety Code Ann. Ch. 361, the
Texas Clean Air Act, Tex. Health & Safety Code Ann. Ch. 382, the Texas Water
Code, Tex. Water Code Ann., and the Texas Hazardous Substances Spill Prevention
and Control Act, Tex. Water Code Ann. Section 2.12. Zoning and Related Laws. To
CNBT's knowledge, all real property owned or leased by CNBT or the Bank and the
use thereof complies with all applicable laws, ordinances, regulations, orders,
or requirements, including without limitation, building, zoning, and other
laws, except as to any violations which would not have a material adverse
affect on the financial condition of CNBT or the Bank.
Section 2.13. Compliance with Law. CNBT, Delaware, and the Bank have all
licenses, franchises, permits, and other governmental authorizations that are
legally required to enable them to conduct their respective businesses in all
material respects and are in compliance with all applicable laws and
regulations (including the Employee Retirement Income Security Act and
regulations promulgated pursuant thereto) except to the extent that the failure
to so comply could not have a material adverse effect on CNBT, Delaware or, the
Bank.
Section 2.14. Agreements with Regulatory Agencies. None of CNBT, Delaware,
or the Bank is subject to any cease-and-desist or other order issued by, or a
party to any written agreement or memorandum of understanding with or is a
party to any commitment letter or similar undertaking to, or is subject to any
order or directive, or is a recipient of any extraordinary supervisory letter
from, or has adopted any board resolutions at the request of (each a
"Regulatory Agreement") any regulatory agency that materially restricts the
conduct of its business or that in any manner relates to its capital adequacy,
its credit policies, its management or its business, nor have CNBT, Delaware,
or the Bank been advised by any regulatory agency that it is considering
issuing or requesting any Regulatory Agreement.
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Section 2.15. Employees. Except as set forth in Schedule 2.15 attached
hereto, (i) none of the employees of CNBT, Delaware, or the Bank is employed
under any employment contract (oral or written) that will survive the Merger
and (ii) none of CNBT, Delaware, or the Bank have any employee benefit plans.
Section 2.16. Contracts and Commitments. A list of all contracts, leases,
and commitments, other than deposit, safe deposit, credit, and lending
transactions entered into in the ordinary course of the Bank's banking
business, which are material to the business, operations, or financial
condition of CNBT, Delaware, or the Bank as of this date is set forth in
Schedule 2.16. For the purpose of Schedule 2.16, materiality shall mean those
contracts and commitments for which payment or other consideration to be
furnished by CNBT, Delaware, or the Bank is more than $25,000. CNBT, Delaware,
and the Bank have performed in all material respects and are performing all
material contractual and other obligations required to be performed by them.
Section 2.17. Sale of Credit Card Portfolio--Sponsored Accounts. Without
limiting any other representation made herein, CNBT, Delaware, and Bank will
suffer no loss by reason of the guarantee by CNBT and/or Bank of the
collectibility of those accounts known as the Sponsored Accounts, which
guarantee was given in connection with the sale of the Bank's Credit Card
Portfolio.
ARTICLE III
Representations and Warranties of BOKF
In order to induce CNBT to enter into, execute, deliver and perform this
Agreement, BOKF represents and warrants to CNBT as follows:
Section 3.1. Organization, Standing and Power. BOKF is a corporation duly
organized, validly existing, and in good standing under the State of Oklahoma.
BOKF (i) has all requisite power and authority to execute and deliver this
Agreement and to perform its obligations hereunder, and to own, lease, and
operate its properties and to carry on its business as now being conducted; and
(ii) is a bank holding company registered with the Fed under the BHCA.
Section 3.2. Authority. The execution and delivery of this Agreement, the
consummation of the Merger and payment of the Merger Consideration, and the
other transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of BOKF. This Agreement has been
duly executed by BOKF and constitutes the valid and binding obligation of BOKF,
enforceable in accordance with its terms and conditions, except as
enforceability may be limited by bankruptcy, conservatorship, insolvency,
moratorium, reorganization, receivership, or similar laws and judicial
decisions affecting the rights of creditors generally and by general principles
of equity (whether applied in a proceeding at law or in equity). Neither the
execution and delivery of this Agreement, the consummation of the Merger and
payment of the Merger Consideration )and the other transactions contemplated
hereby, nor compliance by BOKF with any of the provisions hereof will (i)
conflict with or result in a breach of any provision of its Articles of
Incorporation or Bylaws or constitute a default (or give rise to any right of
termination, cancellation, or acceleration) under any of the terms, conditions,
or provisions of any note, bond, mortgage, indenture, license, agreement, or
other instrument or obligation to which BOKF is a party, or by which it or any
of its properties or assets may be bound except for such conflict, breach, or
default as to which requisite waivers or consents either shall have been
obtained by BOKF by the Effective Time, or the obtaining of which shall have
been waived by CNBT, or (ii) violate any order, writ, injunction, decree,
statute, rule, or regulation applicable to BOKF or any of its properties or
assets. No consent or approval by any governmental authority, other than
compliance with applicable federal and state securities and banking laws and
regulations of the Fed, is required in connection with the execution and
delivery by BOKF of this Agreement or the consummation by BOKF of the Merger
and payment of the Merger Consideration and the other transactions contemplated
hereby.
Section 3.3. Subsidiaries. Each of BOKF's subsidiaries is duly organized,
validly existing, and in good standing under the laws of the jurisdiction of
its incorporation and has the corporate power to own its respective properties
and assets, to incur its respective liabilities and to carry on its respective
business as now being conducted.
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Section 3.4. Financial Information. The consolidated balance sheets of BOKF
and its subsidiaries as of December 31, 1999 and related consolidated
statements of income, changes in stockholders' equity and cash flows for the
three years ended December 31, 1999, together with the notes thereto, included
in BOKF's Annual Report on Form 10-K for the year ended 1999, as currently on
file with the SEC and the unaudited consolidated balance sheet of BOKF and its
subsidiaries as of June 30, 2000, and the related unaudited consolidated income
statement and statements of changes in stockholders' equity and cash flows for
the six months then ended included in BOKF's Quarterly Report on Form 10-Q for
the quarter then ended, as currently on file with the SEC (together the "BOKF
Financial Statements"), have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis (except as
disclosed therein) and fairly present the consolidated financial position and
the consolidated results of operations, changes in stockholders' equity and
cash flows of BOKF and its consolidated subsidiaries as of the dates and for
the periods indicated (subject, in the case of interim financial statements, to
normal recurring year-end adjustments, none of which will be material).
Section 3.5. Absence of Changes. Since June 30, 2000, there has not been any
material adverse change in the financial condition, the results of operations,
or the business of BOKF and its subsidiaries taken as a whole, nor have there
been any events or transactions having such a material adverse effect which
should be disclosed in order to make the BOKF Financial Statements not
misleading. Notwithstanding the foregoing, any changes in banking laws,
generally accepted accounting principles, prevailing interest rates or other
developments which affect the entire banking industry generally shall not be
deemed to be a material adverse change in the financial condition, the results
of operations or the business of BOKF and its subsidiaries taken as a whole.
Section 3.6. Litigation. There is no litigation, claim, or other proceeding
pending or, to the knowledge of BOKF, threatened, against BOKF or any of its
subsidiaries, of which the property of BOKF or any of its subsidiaries is or
would be subject which if adversely determined would have a material adverse
effect on the business of BOKF and its subsidiaries taken as a whole.
Section 3.7. Reports. Since January 1, 1993 (in the case of subsidiaries of
BOKF, the date of acquisition thereof by BOKF, if later) BOKF and each of its
significant subsidiaries has 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 SEC, (ii) the Fed, (iii) the OCC, (iv) the FDIC, (v) any
applicably state securities or banking authorities, (vi) the Nasdaq Stock
Market, and (vii) any other governmental authority with jurisdiction over BOKF
or any of its significant subsidiaries. As of their respective dates, each of
such reports and documents, as amended, including the financial statements,
exhibits, and schedules thereto, complied in all material respects with the
relevant statutes, rules, and regulations enforced or promulgated by the
regulatory authority with which they were filed, and did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
Section 3.8. Compliance With Law. BOKF and its significant subsidiaries have
all licenses, franchises, permits, and other governmental authorizations that
are legally required to enable them to conduct their respective businesses in
all material respects and are in compliance with all applicable laws and
regulations, except to the extent that the failure to so comply would not have
a material adverse effect on BOKF and its subsidiaries taken as a whole.
Section 3.9. Regulatory Approvals. BOKF is not aware of any matter
(including, but not limited to, compliance with capital adequacy guidelines
adopted by the Fed and the Community Reinvestment Act) that would delay or
prevent BOKF from obtaining all requisite regulatory approvals necessary to
consummate the Merger as set forth in this Agreement.
Section 3.10. Ability to Pay Merger Consideration. BOKF will have available
to it as of the Closing Date, as a result of dividends or distributions from
its subsidiaries, borrowings on its existing line of credit, or capital
contribution, sufficient cash to pay the Merger Consideration as set forth in
Section 1.5 to the shareholders of CNBT.
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ARTICLE IV
Representations and Warranties of BOKSub
In order to induce CNBT to enter into, execute, deliver and perform this
Agreement, BOKSub represents and warrants to CNBT as follows:
Section 4.1. Organization, Standing and Power. BOKSub is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Texas, with all requisite power and authority to own, lease, and operate its
properties and to carry on its business as now being conducted.
Section 4.2. Authority. The execution and delivery of this Agreement and the
consummation of the Merger contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of BOKSub. Neither the
execution and delivery of this Agreement, the consummation of the Merger
contemplated hereby, nor the compliance by BOKSub with any of the provisions
hereof will (i) conflict with or result in a breach of any provision of its
Articles of Incorporation or Bylaws or constitute a default (or give rise to
any right of termination, cancellation, or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
license, agreement, or other instrument or obligation to which BOKSub is a
party, or by which it or any of its properties or assets may be bound except
for such conflict, breach, or default as to which requisite waivers or consents
either shall have been obtained by BOKSub by the Effective Time, or the
obtaining of which shall have been waived by BOKSub, or (ii) violate any order,
writ, injunction, decree, statute, rule, or regulation applicable to BOKSub or
any of its properties or assets. No consent or approval by any governmental
authority, other than those required by applicable federal and state securities
and banking laws and regulations is required in connection with the execution
and delivery by BOKSub of this Agreement.
ARTICLE V
Pre-Closing Covenants
Section 5.1. Access to Records and Properties of CNBT.
(a) Between the date of this Agreement and the Effective Time, CNBT agrees
to give BOKF reasonable access to all of its and the Bank's premises, books,
records (including tax returns filed and those in preparation), financial
information, and other information pertinent to its operations, including,
without limitation, access to independent auditors with respect to the
preparation of the financial statements and tax planning of CNBT and the Bank;
provided, however, that any such investigation shall be conducted in such
manner as not to interfere unreasonably with the operation of the business of
CNBT or the Bank. CNBT will cooperate fully in permitting BOKF to make a full
investigation of the business, properties, financial condition and investments
of CNBT and the Bank, in the preparation of all applications, reports, and
other documents necessary or advisable for the successful consummation of the
Merger.
(b) BOKF will treat and hold confidential any information concerning the
business and affairs of CNBT, Delaware or the Bank that is not generally
available to the public ("Confidential Information") it receives from any of
CNBT, Delaware, the Bank, or their respective shareholders, officers,
directors, or agents, in the course of its review of CNBT, Delaware or the
Bank. BOKF will not use any of the Confidential Information except in
connection with this Agreement. If this Agreement is terminated for any reason
whatsoever, BOKF and BOKSub will promptly return to CNBT, Delaware, or the
Bank, as the case may be, all tangible embodiments (and all copies) of the
Confidential Information which are in its possession, and will not at any time
use any Confidential Information for any business purpose or disclose it to any
third party. Any information provided to BOKF by CNBT, Delaware or the Bank
shall not be deemed to be Confidential Information if: (i) it was in BOKF's
lawful possession or within BOKF's knowledge at the time of disclosure; (ii) at
the time of disclosure, it was in the public domain; (iii) after CNBT's
disclosure, it becomes, through no act or omission on BOKF's part, in the
public domain; or (iv) it was lawfully and independently obtained by BOKF from
a third party who was not under an obligation of confidentiality.
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Section 5.2. Operation of the Business of CNBT. CNBT agrees that from the
date hereof to the Effective Time, except as contemplated by this Agreement or
to the extent that BOKF shall otherwise consent (which consent shall not be
unreasonably withheld),
(a) CNBT will operate its business substantially as presently operated and
only in the ordinary course, and, consistent with such operation, it will use
its reasonable best efforts to preserve intact its present business
organization and its relationships with persons having business dealings with
it.
(b) CNBT will maintain and keep its properties in as good repair and
condition as at present, except for depreciation due to ordinary wear and tear
and damage due to casualty, maintain in full force and effect insurance
comparable in amount and scope of coverage to that now maintained, perform all
its obligations under contracts, leases and documents relating to or affecting
its assets, properties and business, and fully comply with and perform all
material obligations and duties imposed upon it by applicable laws and
governmental rules, regulations and orders imposed by governmental authorities.
(c) Except as expressly permitted by subsections (e), (f), and (g) below,
CNBT will not, other than in the ordinary course of business and consistent
with CNBT's or the Bank's prior practices, (i) grant any material salary
increase to any officer or employee or enter into any new bonus, incentive
compensation, deferred compensation, profit sharing, retirement, severance,
pension, group insurance, or other benefit plan, or any new employment or
consulting agreement; (ii) create or otherwise become liable with respect to
any indebtedness for money borrowed or purchase money indebtedness; (iii) make
or allow any amendment of its Articles of Association, Articles of
Incorporation, or Bylaws; (iv) issue or contract to issue any shares of CNBT
Common or securities exchangeable for or convertible into CNBT Common, except
in connection with the exercise of the Stock Options; (v) purchase any shares
of CNBT Common; (vi) enter into or assume any material contract or obligation;
(vii) incur a lien on any of its properties either real or personal; (viii)
make any substantial renovation of any of its properties or enter into any
lease or agreement involving any substantial obligation; or (ix) waive any
right of substantial value.
(d) From August 1, 2000, until the Closing Date, CNBT will not pay total
dividends exceeding the amount of earnings at CNBT, on a consolidated basis,
during such period, CNBT will not pay dividends in excess of $0.12 (twelve
cents) per calendar quarter for each of two calendar quarters plus one special
dividend not exceeding $0.07 (seven cents), and CNBT will not permit the Bank
to pay any dividend that would cause the Bank to no longer be "well
capitalized" under applicable federal capital adequacy guidelines.
(e) Notwithstanding anything in this Agreement to the contrary, (i) the
Stock Options may be exercised and CNBT may issue CNBT Common in connection
therewith and otherwise perform its obligations thereunder; and (ii) the Stock
Option exercise dates may be accelerated or extended in the discretion of CNBT
subject to the provisions of this Agreement respecting the exercise of such
Stock Options in connection with the consummation of the Merger.
(f) Notwithstanding anything in this Agreement to the contrary, CNBT may pay
usual and customary bonuses (consistent with prior practice.
(g) Notwithstanding anything in this Agreement to the contrary, CNBT may
(subject to the approval of BOKF which approval shall not be unreasonably
denied, withheld, or delayed) commit to pay to certain key employees of CNBT or
the Bank (who do not enter into employment or noncompetition agreements) an
aggregate amount of $75,000 in consideration of such employees entering into
retention agreements whereby such employees would continue their employment
with CNBT or the Bank at least through the earlier of (i) February 28, 2002 or
(ii) the date of the data processing conversion of the Bank to the data
processing system used by Bank of Texas, National Association ("BOT").
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Section 5.3. Regulatory Approvals and Cooperation.
(a) BOKF and BOKSub shall promptly, but in no event later than twenty (20)
days after the date of this Agreement, file or cause to be filed applications
to fulfill all governmental, regulatory and other requirements (including,
without limitation, obtaining the approval of the OCC, the FDIC, the Fed, SEC,
and/or any other governmental entity having jurisdiction over CNBT, Delaware,
the Bank, or BOKF and pay all fees and expenses associated therewith) required
by BOKF, or BOKSub for the completion of the transaction contemplated by this
Agreement; and promptly furnish CNBT with copies of all such regulatory
filings.
(b) CNBT shall take all action necessary and fully cooperate in good faith
with BOKF and BOKSub to bring about the Merger contemplated by this Agreement
as soon as practicable. CNBT will give any notices to third parties, and CNBT
will use its best efforts to obtain any third party consents, that BOKF may
reasonably request in connection with the consummation of the Merger.
Section 5.4. Public Disclosure. None of BOKF, BOKSub, CNBT, or any
representative of said parties, will make any public disclosure concerning this
Agreement or the Merger contemplated herein without the mutual consent of each
of the other parties hereto to the timing and content of the disclosure;
provided, however, the parties hereto may make any disclosure (i) necessary to
maintain compliance with applicable federal or state laws or regulations, (ii)
required in connection with the making of any application necessary to effect
the Merger, or (iii) as contemplated by Section 5.6.
Section 5.6. Shareholder Approval. CNBT, acting through its Board of
Directors, shall, in accordance with applicable law:
(a) Duly call, give notice of, convene, and hold a meeting of its
shareholders on a date mutually selected by BOKF and CNBT (the "Shareholders's
Meeting") for submission of this Agreement and the Merger for approval of such
shareholders as required by the TBCA,
(b) Subject to its fiduciary duties to the shareholders of CNBT, include in
the Proxy Statement (as defined below) the recommendation of its Board of
Directors that the shareholders of CNBT vote in favor of the approval and
adoption of the Agreement and the Merger,
(c) Shall file with the SEC as soon as reasonably practicable after the date
hereof the Proxy Statement and shall use all reasonable efforts to have the
Proxy Statement approved by the SEC as promptly as practicable, and
(d) Cause the Proxy Statement to be mailed to the shareholders of CNBT as
soon as practicable, and take such other action as is reasonably necessary to
obtain approval of the Agreement and the Merger from its shareholders.
The letter to shareholders, notice of meeting, proxy statement, and form of
proxy to be distributed to shareholders of CNBT in connection with the Merger
and the Merger Agreement shall be in form and substance reasonably satisfactory
to BOKF and are collectively referred to herein as the "Proxy Statement."
Section 5.7. No Solicitation.
(a) Prior to the Effective Time, unless this Agreement is sooner terminated,
CNBT shall not, nor shall CNBT permit any officer, director, employee, agent or
representative of CNBT or the Bank to, directly or indirectly (i) solicit,
initiate or encourage inquiries or proposals with respect to the merger of CNBT
or the sale of any of the shares of CNBT Common or other material asset(s) of
CNBT (any such transaction being referred to as an "Acquisition Transaction")
from any party other than BOKF, or (ii) enter into any Acquisition Transaction
with any party except as set forth in this Agreement.
(b) Notwithstanding the provisions of paragraph (a) above, CNBT may, in
response to an unsolicited written proposal with respect to an Acquisition
Transaction ("Acquisition Proposal"), furnish (subject to the
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execution of a confidentiality agreement and standstill agreement containing
provisions substantially similar to the confidentiality and standstill
provisions of Section 5.1(b) hereof confidential or non-public information
concerning its business, properties, or assets to a financially capable
corporation, partnership, person, or other entity or group (a "Potential
Acquiror") and negotiate with such Potential Acquiror if (i) the board of
directors of CNBT after consulting with one or more of its financial advisers,
concludes that such Acquisition Proposal (if consummated pursuant to its terms)
would result in a transaction more favorable to CNBT's shareholders than the
Merger and (ii) based upon advice of its legal counsel, its board or directors
determines in good faith that the failure to provide such confidential and non-
public information to such Potential Acquiror would constitute a breach of its
fiduciary duty to its shareholders (any such Acquisition Proposal meeting the
conditions of clauses (i) and (ii) being referred to as a "Superior Proposal").
(c) CNBT shall immediately notify BOKF after receipt of any Acquisition
Proposal or any request for nonpublic information relating to CNBT or the Bank
in connection with an Acquisition Proposal or for access to the properties,
books, or records of CNBT or the Bank by any person or entity that informs the
CNBT board of directors that it is considering making, or has made, an
Acquisition Proposal. Such notice to BOKF shall be made orally and in writing
and shall indicate in reasonable detail the identity of the offeror and the
terms and conditions of such proposal, inquiry, or contact.
Section 5.8. Restrictions on Indebtedness. CNBT agrees that from the date
hereof to the Effective Time, except as contemplated by this Agreement, CNBT
shall not incur any indebtedness for borrowed money or incur any noncurrent
indebtedness for the purchase price of any fixed or capital asset, or make any
extension of credit or any loans to, guarantee the obligations of, or make any
additional investments in, any other person, corporation, or joint venture
(whether an existing customer or a new customer) except:
(a) Extensions of credit, loans and guarantees (i) less than $500,000 per
transaction or (ii) less than $1,000,000 with existing customers (related
credits being aggregated for this purpose) made by the Bank in the usual and
ordinary course of its banking business, consistent with prior practices and
policies; provided, however, that the consent of BOKF shall be deemed to have
been given unless earlier given or denied in writing (i) with respect to any
loan presented at a regularly scheduled meeting of the Bank's Loan Committee,
at the later of 3:00 p.m. on the business day of such meeting or the
adjournment of such meeting, provided that all information provided to the
members of the Bank's Loan Committee with respect to such loan is delivered to
BOKF at the same time it is delivered to such committee members, and (ii) with
respect to all other loans, at the close of business on the next business day
after BOKF's consent is requested and all information relating to the making,
renewal or alteration of such loan is furnished to BOKF.
(b) Legal investments by the Bank in the usual and ordinary course of its
banking business consistent with prior practices and policies.
(c) Borrowings from the Federal Home Loan Bank, the Federal Reserve Bank,
deposit liabilities, and federal funds transactions by the Bank in the ordinary
course of business consistent with past practices.
Section 5.9. Information for Proxy Statement and Applications. BOKF will
promptly furnish to CNBT all information concerning BOKF and BOKSub required
for inclusion in (a) the Proxy Statement and (b) any application or statement
to be made by CNBT or filed by CNBT with any body in connection with the
transactions contemplated by this Agreement, and BOKF represents and warrants
that all information so furnished for such Proxy Statement and applications
shall be true and correct in all material respects and shall not omit any
material fact required to be stated therein or necessary to make the statements
made, in light of the circumstances under which they were made, not misleading.
BOKF shall otherwise fully cooperate with CNBT and the Bank in the filing of
any applications or other documents necessary to consummate the transactions
contemplated by this Agreement, including the Merger. BOKF shall promptly
notify CNBT in writing if BOKF becomes aware of any fact or condition that
makes untrue, or shows to have been untrue, in any material respect, and
schedule or any other information furnished to CNBT or any representation or
warranty made in or pursuant to this Agreement.
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Section 5.10 Repositioning of Securities Portfolio. From and after the date
of this Agreement, CNBT shall cause the Bank to consult with BOKF concerning
the advisability of repositioning the Bank's securities portfolio, including
consideration of moving to overall shorter maturities; provided, however,
without limiting the generality of the foregoing the Bank shall not be
obligated in any event to sell any security at a loss.
Section 5.11 BOKF Guest Attendance at CNBT and Bank Board, Asset and
Liability Committee, and Loan Committee Meetings. From and after the date of
this Agreement, CNBT and the Bank shall extend an invitation to two
representatives of BOKF designated by BOKF to attend as guests all meetings of
the boards of directors and all meetings of the Asset and Liability Committee
and Loan Committee of CNBT and the Bank; provided, however, such
representatives shall excuse themselves, if requested, from such meetings while
any confidential matters respecting the rights and obligations of the parties
pursuant to this Agreement are being discussed. The representatives may differ
from meeting to meeting.
ARTICLE VI
Conditions of Merger--BOKF and BOKSub
The obligations of BOKF and BOKSub to close the transactions contemplated by
this Agreement are subject to the satisfaction of the following conditions,
unless waived by BOKF and BOKSub.
Section 6.1. Representations and Warranties. The representations and
warranties of CNBT set forth in Article II hereof shall be true and correct in
all material respects as of the date of this Agreement and as of the Closing
Date as though made on and as of the Closing Date, except as otherwise provided
or permitted by this Agreement, and BOKF shall have received a certificate,
executed by the President of CNBT to that effect.
Section 6.2. Performance of Obligations of CNBT. CNBT shall have performed
all obligations and agreements required to be performed by it under this
Agreement in all material respects prior to or at the Closing.
Section 6.3. Authorization of Merger. All action necessary to authorize the
execution, delivery, and performance of this Agreement by CNBT and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken by the Board of Directors of CNBT, and CNBT shall have full power
and right to merge on the terms provided herein. All action necessary to
authorize and consummate the Merger contemplated hereby shall have been duly
and validly taken by the shareholders of CNBT and holders of not more than 10%
of the CNBT Common shall either (i) file with CNBT prior to the Shareholders'
Meeting a notice of their intent to exercise their right to dissent to the
Merger or (ii) vote against the Merger at the Shareholders' Meeting.
ARTICLE VII
Conditions of Merger--CNBT
The obligation of CNBT to close the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions, unless
waived by CNBT:
Section 7.1. Representations and Warranties. The representations and
warranties of BOKF and BOKSub set forth in Article III and Article IV hereof,
respectively, shall be true and correct in all material respects as of the date
of this Agreement and as of the Closing Date as though made on and as of the
Closing Date, except as otherwise provided or permitted by this Agreement, and
CNBT shall have received a certificate, executed by the Presidents of BOKF and
BOKSub to that effect.
Section 7.2. Performance of Obligations of BOKF. BOKF and BOKSub shall have
performed all obligations and agreements required to be performed by it under
this Agreement in all material respects prior to or at the Closing.
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Section 7.3. Authorization of Merger by BOKF and BOKSub. All action
necessary to authorize the execution, delivery, and performance of this
Agreement by BOKF and BOKSub and the consummation of the Merger contemplated
hereby shall have been duly and validly taken by the Boards of Directors and
shareholders of BOKF and BOKSub, respectively, and BOKSub and CNBT shall have
full power and right to merge on the terms provided herein.
Section 7.4. Authorization of Merger by CNBT. All action necessary to
authorize and consummate the Merger contemplated hereby shall have been duly
and validly taken by the shareholders of CNBT and holders of not more than one
third of the CNBT Common either (i) file with CNBT prior to the Shareholders'
Meeting a notice of their intent to exercise their right to dissent to the
Merger or (ii) vote against the Merger at the Shareholders' Meeting.
Section 7.5. Fairness Opinion. Provided CNBT shall have diligently sought
such an opinion, CNBT shall have received from a recognized investment banking
firm an opinion, dated as of the date on which the Proxy Statement is first
distributed to the shareholders of CNBT, to the effect that the Merger
Consideration is fair, from a financial point of view, to the holders of CNBT
Common.
ARTICLE VIII
Conditions to Respective Obligations of BOKF and CNBT
The respective obligations of BOKF and CNBT under this Agreement are, at
their respective options, subject to the further condition that:
Section 8.1. Governmental Approvals. The parties hereto shall have received
approval of the Merger as contemplated by this Agreement from all necessary
governmental agencies and authorities, including, to the extent required, the
Fed, the OCC, the FDIC, the SEC, and such approvals shall not have been
contested by any Federal or state governmental authority nor by any other third
party by formal proceeding, and none of such approvals or consents shall be
subject to any terms or conditions that are unreasonable or unduly burdensome
in the opinion of the party hereto which is obliged to discharge or comply with
such term or condition, and all applicable regulatory waiting periods have
expired. It is understood that if any contest as aforesaid is brought by formal
proceedings, BOKF may, but shall not be obligated to, answer and defend such
contest.
Section 8.2. Documents. Each party hereto shall have received all documents
required to be received from the other party on or prior to the Closing Date,
including those set forth in Section 9.3 hereof, all in form and substance
reasonably satisfactory to the receiving party.
Section 8.3. Litigation. No action or proceeding shall have been taken,
threatened, or instituted or be pending, and no statute, rule, regulation, or
order shall have been promulgated, enacted, entered, enforced, or deemed
applicable to the acquisition by any governmental authority or by any court,
including the entry of a preliminary or permanent injunction, that would (a)
make the Agreement or any other agreement contemplated hereby, or the
transactions contemplated hereby, illegal, invalid, or unenforceable, (b)
impose material limits in the ability of any party to this Agreement to
consummate the Agreement or the transactions contemplated hereby, or (c)
subject CNBT or the Bank or any officer, director, shareholder, or employee
thereof to criminal or civil liability.
Section 8.4. Employee Severance Agreements. All Employee Severance
Agreements between employees and CNBT, Delaware, and/or Bank shall have been
amended (which amendment CNBT shall use reasonable efforts to obtain) in a
manner approved by BOKF (provided such approval is not unreasonably denied,
withheld, or delayed), including the subparagraph (1) of the definition of Good
Reason.
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ARTICLE IX
Closing
Section 9.1. Closing. The closing (the "Closing") for the consummation of
the transactions contemplated by this Agreement shall take place at the main
offices of Bank at 10:00 a.m. Houston time on the Closing Date described in
Section 9.2, unless another date or place is agreed to in writing by the
parties hereto.
Section 9.2. Closing Date; Effective Time. The Closing shall take place on a
date (the "Closing Date") mutually agreeable to BOKF and CNBT, which date shall
be the later of ten (10) days after the receipt of all necessary regulatory,
corporate, and other approvals and the expiration of any mandatory waiting
periods and a mutually agreeable date on or after January 3, 2001 and on or
prior to January 11, 2001, provided, however, that the Closing Date shall not
occur later than January 30, 2001. Subject to the terms and conditions set
forth herein, including receipt of all regulatory approvals, the Merger shall
be effective upon the later of the filing of, or the date and time specified
in, the Certificate of Merger relating to the Merger and filed with the
Secretary of State of the State of Texas (the "Effective Time"), and the
parties shall use their best efforts to cause the Effective Time to occur on
the Closing Date.
Section 9.3. Closing Deliveries.
(a) At the Closing, CNBT shall deliver to BOKF and BOKSub:
(i) a certified copy of the Articles of Incorporation, Certificate of
Incorporation, or Articles of Association of CNBT, Delaware, and the Bank;
(ii) a certificate, signed by an appropriate officer of CNBT, acting
solely in his capacity as an officer of CNBT, stating that (A) each of the
representations and warranties contained in Article II is true and correct
in all material respects at the time of the Closing with the same force and
effect as if such representations and warranties had been made at Closing,
and (B) all of the conditions set forth in Article VII have been satisfied
or waived as provided therein;
(iii) a certified copy of the resolutions of CNBT's Board of Directors
and shareholders, as required for valid approval of the execution of this
Agreement and the consummation of the Merger and the other transactions
contemplated hereby;
(iv) good standing and existence certificates, dated a recent date, duly
certifying the existence and good standing of CNBT in Texas Delaware in
Delaware, and Bank with the OCC;
(v) executed employment agreements for B. Ralph Williams in
substantially the form as attached hereto as Exhibit "A";
(vii) an opinion of the accounting firm of Mann, Frankfort, Stein & Lipp
P.C., or another accounting firm mutually agreed to by CNBT and BOKF, in a
form reasonably acceptable to BOKF, opining that no payment, of which such
accounting firm has knowledge, to any employee of CNBT, Delaware, or the
Bank is an excess parachute payment within the meaning of Section 280G of
the Code; and,
(viii) a resolution of the Board of Directors of CNBT approving the
merger of CNBT's profit sharing plan into the defined contribution plan of
BOKF.
(b) At the Closing, BOKF shall deliver to CNBT:
(i) certified copies of the Articles of Incorporation of BOKF and
BOKSub;
(ii) a certificate signed by an appropriate officer of BOKF and BOKSub
stating that (A) each of the representations and warranties contained in
Article III and IV is true and correct in all material respects at the time
of the Closing with the same force and effect as if such representations
and warranties have been made at Closing and (B) all of the conditions set
forth in Article VI have been satisfied;
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(iii) a certified copy of the resolutions of BOKF's Board of Directors
authorizing the execution of this Agreement and the consummation of the
transactions contemplated hereby;
(iv) a certified copy of the resolutions of BOKSub's Board of Directors
and shareholder, as required for valid approval of the execution of this
Agreement and the consummation of the transactions contemplated hereby;
(v) good standing and existence certificates, dated a recent date, duly
certifying the existence and good standing of BOKSub in Texas;
(vi) executed employment agreements for B. Ralph Williams in
substantially the form as attached hereto as Exhibit "A"; and
(viii) evidence of the approval of all regulatory authorities required
for the consummation of the Merger and the transactions contemplated by
this Agreement.
ARTICLE X
Termination
Section 10.1. Termination. This Agreement may be terminated at any time
prior to the Effective Time by:
(a) The mutual consent of the respective Boards of Directors of BOKF and
CNBT;
(b) BOKF if the conditions set forth in Article VI hereof shall not have
been met;
(c) CNBT if the conditions set forth in Article VII hereof shall not have
been met;
(d) BOKF if the conditions set forth in Article VIII hereof shall not have
been met through no fault of, or reason attributable to, BOKF;
(e) CNBT if the conditions set forth in Article VIII hereof shall not have
been met through no fault of, or reason attributable to, CNBT, Delaware, or
the Bank;
(f) CNBT if (i) CNBT receives an offer from a third party (excluding any
affiliate of CNBT or any group of which any affiliate of CNBT is a member)
with respect to an Acquisition Proposal, and (ii) the board of directors of
CNBT determines, in good faith and after consultation with an independent
financial advisor, that such proposal constitutes a Superior Proposal and
resolves to accept such a Superior Proposal, and (iii) CNBT shall have given
BOKF two (2) days' prior written notice of its intention to terminate pursuant
to this provision;
(g) BOKF if the board of directors of CNBT shall have resolved to accept a
Superior Proposal; or
(h) CNBT in the event the Closing has not occurred by January 30, 2001 , or
such other date as the parties hereto agree in writing.
Any party desiring to terminate this Agreement pursuant to any of the
foregoing provisions shall give notice of such termination to the other party
in accordance with Section 12.2 hereof.
Section 10.2. Effect of Termination. Without limiting any other relief to
which either party hereto may be entitled for breach of this Agreement, in the
event of the termination and abandonment of this Agreement pursuant to the
provisions of Section 10.1 hereof, no party to this Agreement shall have any
further liability or obligation in respect of this Agreement; provided,
however, that the confidentiality provisions of Section 5.1, above, shall
survive termination. Any such termination that occurs as a result of a breach
of a representation or warranty made in this Agreement that, at the time made,
was not known to the party making such representation to be untrue, or any
such termination that through no fault of any of the parties to this
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Agreement shall be without liability to any of the parties hereto, but if such
termination results from the willful misrepresentation of a party or the wilful
failure of a party to fulfill a condition to the performance of the obligation
of the other party to this Agreement, such party shall be fully liable for any
and all damages, costs and expenses (including reasonable attorney's fees)
sustained or incurred by the other party or parties as a result of such failure
or breach.
Section 10.3. Waiver and Amendment. Any term or provision of this Agreement,
except statutory requirements and requisite approvals of regulatory
authorities, may be waived at any time by the party which is entitled to the
benefits thereof and this Agreement may be amended or supplemented at any time
by the mutual agreement of BOKF, BOKSub, and CNBT through action taken by their
respective Boards of Directors.
ARTICLE XI
Additional Covenants
Section 11.1. No Survival. None of the representations, covenants,
warranties, and agreements contained in this Agreement shall survive the
Closing and the Effective Time except (i) in accordance with Section 11.2 and
(ii) this Agreement shall continue and remain in full force and effect
regarding the covenants of BOKF that by their terms are to be performed after
the Effective Time (including without limitation the provisions in Section 1.5
concerning payment of the Merger Consideration and Sections 11.2, 11.3, 11.4,
and 11.5) for the period of the applicable statute of limitations.
Section 11.2. Escrow. At the Effective Time, BOKF shall establish an escrow
account ( the "Representation Escrow") with the Escrow Agent. The
Representation Escrow shall be governed by an escrow agreement, the form of
which is attached hereto as "Exhibit B" (the "Representation Escrow
Agreement"), which shall provide as follows:
(a) At the Effective Time, BOKF shall deposit the principal amount of
$1,000,000 into the Representation Escrow, which, together with (i) all
interest earned thereon, but reduced by (ii) any Representation Allowed Escrow
Claim (as hereafter defined) is referred to herein as the "Representation
Escrow Funds".
(b) The Representation Escrow Funds shall be invested in a certificate of
deposit at the Bank maturing one year from date, at the rate and on the terms
and conditions generally offered by Bank for certificates of deposit of
comparable size and duration, and upon maturity as necessary, in three-month
certificates of deposit at Bank at the rates and on terms and conditions
generally offered by the Bank for certificates of comparable size and duration
at each renewal date, provided that any penalty for early withdrawal of such
funds will either be waived by Bank or borne by BOKF.
(c) The representations, warranties, covenants and agreements of CNBT
contained in this Agreement shall survive the Closing, and BOKF shall be
indemnified and held harmless from any and all losses, arising from any breach
by CNBT of any such representations, warranties, covenants, and agreements
(collectively, "Losses"), provided that (i) written notice of such Losses must
be given to CNBT on or before March 31, 2002, (ii) the sole remedy available to
BOKF for Losses shall be limited solely to a claim against the Representation
Escrow Funds, (iii) all payments, if any, to be made in respect of any Losses
shall be made solely from the Representation Escrow Funds, (iv) the CNBT
shareholders shall have no obligations or liability for any such losses except
to the extent of the Representation Escrow Funds, and (v) no claim shall be
made for any Losses unless and until the aggregate amount of all Losses shall
exceed $25,000.
(d) In the event BOKF makes no claim for any Losses on or before March 31,
2002, the Representation Escrow Agreement shall terminate and the Escrow Agent
shall, on or before April 15, 2002, distribute the Representation Escrow Funds
on a pro rata basis to the holders of the CNBT Common as of the Effective Time.
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(e) In the event BOKF makes a claim for Losses on or before March 31, 2002,
the Escrow Agent shall (i) on or before April 15, 2002, distribute on a pro
rata basis to the holders of the CNBT Common as of the Effective Time an
amount equal to the Representation Escrow Funds less the amount of all Losses
claimed by BOKF, and (ii) continue to hold and invest the remaining
Representation Escrow Funds until such claim is resolved by (i) the mutual
agreement of a majority of the Agents (as defined below) and BOKF, or (ii) a
final adjudication determining the merits of the BOKF claim, at which time the
Representation Escrow Agreement shall terminate, the Escrow Agent shall pay
the claim of BOKF as mutually agreed or finally adjudicated (an
"Representation Escrow Allowed Claim"), and the Escrow Agent shall distribute
any remaining Escrow Funds on a pro rata basis to the holders of the CNBT
Common as of the Effective Time.
(f) The rights of the holders of the CNBT Common in the Representation
Escrow and the Representation Escrow Funds shall not be assignable or
transferable except by operation of law or by intestacy and will not be
evidenced by any certificate or other interest.
(g) The persons who are members of the Board of Directors of CNBT
immediately prior to the Closing shall collectively serve as agents, acting by
majority vote in the same manner as a board of directors acting under the
TCBA, for the holders of the CNBT Common as of the Effective Time and shall
have full authority to act for and on behalf thereof in the administration of
the provisions of this Section (the "Agents"). The actions of the Agents shall
be deemed actions taken by them as members of the Board of Directors of CNBT
prior to the Closing.
(h) BOKF shall pay the fees and costs of the Escrow Agent with respect to
the Representation Escrow.
Section 11.3. Indemnification; Insurance.
(a) From and after the Effective Time, BOKF (the "Indemnifying Party")
shall indemnify and hold harmless each present and former director, officer,
and employee of CNBT and the Bank determined as of the Effective Time (the
"Indemnified Parties") against any costs or expenses (including reasonably
attorneys' fees), judgments, fines, losses, claims, damages, or liabilities
(collectively, "Costs") incurred in connection with any claim, action, suit,
proceeding, or investigation, whether civil or criminal, administrative, or
investigative, arising out of matters existing or occurring at or prior to the
Effective Time, whether asserted or claimed prior to, at or after the
Effective Time to the fullest extent to which such Indemnified Parties were
entitled under the Articles of Incorporation, Certificate of Incorporation,
Articles of Association and Bylaws of CNBT, Delaware, and the Bank.
(b) Any Indemnified Party wishing to claim indemnification under this
section, upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify the Indemnifying Party, but the failure
to so notify shall not relieve the indemnifying Party of any liability it may
have to such Indemnified Party if such failure does not materially prejudice
the Indemnifying Party. In the event of any such claim, action, suit,
proceeding, or investigation (whether arising before or after the Effective
Time), (i) the Indemnifying Party shall have the right to assume the defense
thereof and the Indemnifying Party shall not be liable to such Indemnified
Parties for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnified Parties in connection with the
defense thereof, except that if the Indemnifying Party elects not to assume
such defense or counsel for the Indemnified Party and the Indemnified Parties,
the Indemnified Parties may retain counsel which is reasonably satisfactory to
the Indemnifying Party, and the Indemnifying Party shall pay, promptly as
statements therefor are received, the reasonable fees and expenses of such
counsel for the Indemnified Parties (which may not exceed one firm in any
jurisdiction unless the use of one counsel for such Indemnified Parties would
present such counsel with a conflict of interest), (ii) the Indemnified
Parties will cooperate in the defense of any such matter, and (iii) the
Indemnifying Party shall not be liable for any settlement effected without its
prior written consent.
(c) BOKF shall maintain its existing policy of directors and officers
liability insurance (or comparable coverage) for a period of not less than
three years after the Effective Time; which policy shall be amended, however,
to include the directors and officers of CNBT, Delaware, and the Bank, and
which shall be a "claims
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made" policy providing coverage for (among other things) acts or omissions
occurring prior to the Effective Time.
(d) In the event that BOKF or any of its respective successors or assigns
(i) consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger
or (ii) transfers all or substantially all of its properties and assets to any
person, then, and in each such case, the successors and assigns of such entity
shall assume the obligations set forth in this Agreement, which obligations are
expressly intended to be for the irrevocable benefit of, and shall be
enforceable by, each director and officer covered hereby.
Section 11.4. BOT Director Position. As soon as practicable after the
Effective Time, BOKF shall cause (pursuant to a voting agreement with its
controlling shareholder or otherwise) the Chief Executive Officer of the Bank
to be elected as a member of the Board of Directors of BOT. BOKF shall continue
to cause such person to be nominated and elected as a director of BOT for a
period of two years after the Effective Time. If for any reason such person
cannot or will not serve as a director of BOKF, BOKF and the board of directors
of CNBT shall mutually agree to designate another person who was on the Board
of Directors of CNBT as of the Effective Time to fill such position for such
period of time.
Section 11.5. Severance Plan. Prior to the Closing Date, the Bank will enter
into a severance policy providing for the payment to any employee who is
involuntarily dismissed within the first 180 days after the Closing Date, an
amount equal to the greater of (a) one week's pay for each year of service or
portion thereof by such employee or (b) two weeks' pay, and BOKF will honor
such policy after the Closing with respect to the employees of the Bank as of
the Closing Date.
Section 11.6. Employee Benefits. BOKF presently intends that, after the
Merger, BOKF and CNBT will not make additional contributions to the employee
benefit plans of CNBT. Each employee of CNBT or any direct or indirect
subsidiary of CNBT who remains an employee of CNBT or BOKF or any direct or
indirect subsidiary of CNBT or BOKF immediately after the Effective Time (the
"Continuing Employees") will be entitled to participate in the employee benefit
plans and programs maintained for employees of BOKF and its affiliates, in
accordance with the respective terms of such plans and programs, and BOKF shall
take all actions necessary or appropriate to facilitate coverage of the
Continuing Employees in such plans and programs from and after the Closing
Date, subject to the following:
(a) Each Continuing Employee will be entitled to credit for prior service
with CNBT for all purposes under the employee welfare benefit plans and other
employee benefit plans and programs (other than those described in
subsection(b) below and any stock option plans) sponsored by BOKF or its
affiliates. Any preexisting condition exclusion applicable to such plans and
programs shall be waived with respect to any Continuing Employee. For purposes
of determining each Continuing Employee's benefit for the year in which the
Merger occurs under the BOKF vacation program, any vacation taken by a
Continuing Employee preceding the Closing Date for the year in which the Merger
occurs will be deducted from the total BOKF vacation benefit available to such
employee for such year.
(b) Each Continuing Employee shall be entitled to credit for past service
with CNBT or any of its direct or indirect subsidiaries for the purpose of
satisfying any eligibility or vesting periods applicable to the BOKF employee
pension benefit plans that are subject to Section 401(a) and 501(a) of the
Code. Notwithstanding the foregoing, BOKF shall not grant any prior years of
service credit to employees of CNBT, with respect to any defined benefit plans
sponsored (or contributed to) by BOKF; instead, Continuing Employees shall be
treated as newly hired employees of BOKF as of the date following the Closing
Date for purposes of determining eligibility, vesting and benefit accruals
thereunder.
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ARTICLE XII
Miscellaneous
Section 12.1. Entire Agreement. This Agreement contains the entire agreement
among BOKF, BOKSub, and CNBT with respect to the Merger, and supersedes all
prior agreements and understandings relating to the subject matter of this
Agreement.
Section 12.2. Brokers. CNBT represents and warrants that except for Alex
Shesunoff & Co. Investment Banking, no broker, finder, or investment banker is
entitled to any brokerage, finder's, or other fee or commission in connection
with the Merger or the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of CNBT and that the total of the
compensation payable to Alex Shesunoff & Co. not reflected in the Financial
Statements and to the entity providing the fairness opinion described in
Section 7.5 shall not exceed $600,000.
Section 12.3. Notices. All notices or other communications that are required
or permitted hereunder shall be in writing and shall be deemed to have been
given or made on the date of delivery, in the case of hand delivery, or three
(3) business days after deposit in the United States Registered Mail, postage
prepaid, or upon receipt if transmitted by facsimile telecopy or any other
means, addressed (in any case) as follows:
If to BOKF or BOKSub:
BOK Financial Corporation
P.O. Box 2300
Tulsa, OK 79192
Attention: Mr. James F. Ulrich
Telecopy No.: (918) 588-6853
and
Bank of Texas, N.A.
5956 Sherry Lane, Suite 1800
Dallas, Texas 75225
Attention: Mr. C. Fred Ball, Jr., President
Telecopy No.: (214) 987-8891
With a Copy To:
Frederic Dorwart, Lawyers
Old City Hall
124 East Fourth Street
Tulsa, OK 74103-5010
Attention: Frederic Dorwart, Esq.
Telecopy No.: (918) 583-8251
If to CNBT:
CNBT Bancshares, Inc.
5320 Bellaire Boulevard
Bellaire, TX 77401
Attention B. Ralph Williams, President
Telecopy No.: (713) 661-5539
With a Copy To:
Thompson Knight Brown Parker & Leahy LLP
1200 Smith Street, Suite 3600
Houston, Texas 77002
Attention: John T. Unger
Telecopy No.: 713-654-1871
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Section 12.4. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof, including any facsimile copy
thereof, shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
Section 12.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING
EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS.
Section 12.6. Venue. ALL ACTIONS OR PROCEEDINGS WITH RESPECT TO, ARISING
DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO OR FROM THIS
AGREEMENT OR ANY OF THE OTHER DOCUMENTS SHALL BE LITIGATED IN COURTS HAVING
SITUS IN HOUSTON, HARRIS COUNTY, TEXAS, AND EACH PARTY HERETO HEREBY SUBMITS TO
THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH ACTION AND HEREBY WAIVES ANY
RIGHTS IT MAY HAVE TO TRANSFER OR CHANGE THE JURISDICTION OR VENUE OF ANY
LITIGATION BROUGHT AGAINST IT IN ACCORDANCE WITH THIS SECTION.
Section 12.7. Additional Documentation. As soon as practicable after the
Effective Time, the parties hereto shall execute and file such documents and
take such other actions as may be necessary or appropriate to effect the
transactions contemplated by this Agreement.
Section 12.8. Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, and the application
of such provision to persons or circumstances other than those to which it is
held invalid and unenforceable, shall not be affected thereby and each
provision of this Agreement shall be valid and enforced to the fullest extent
permitted by law.
Section 12.9. Expenses.
(a) Each party shall bear and pay for all of its own costs and expenses
incurred in connection with this Agreement or the Merger, including respective
fees and expenses of financial consultants, accountants and counsel.
(b) CNBT hereby agrees to , and shall, pay to BOKF $5,000,000 in funds
immediately available in Dallas, Texas not later than the second Business Day
following termination of this Agreement, (i) if CNBT terminates this Agreement
pursuant to clause (f) of Section 10.1, (ii) if BOKF terminates this Agreement
pursuant to clause (d) of Section 10.1 due to CNBT's breach of Section 6.2 , or
(iii) BOKF terminates this Agreement pursuant to clause (g) of Section 10.1.
(c) BOKF hereby agrees to, and shall, pay to CNBT $5,000,000 in funds
immediately available in Houston, Texas not later than the second Business Day
following termination of this Agreement if CNBT terminates this Agreement
pursuant to clause (e) of Section 10.1 solely due to BOKF's breach of Section
7.2.
Section 12.10. Exhibits. The exhibits and schedules attached to this
agreement, together with all documents incorporated by reference therein, form
an integral part of this Agreement and are hereby incorporated into this
Agreement wherever reference is made to them to the same extent as if they were
set out in full at the point in which the reference is made. Items disclosed on
any Exhibit or Schedule to this Agreement shall be deemed to be disclosed on
all Exhibits or Schedules hereto and the failure of CNBT to list any item on
one or more Exhibits or Schedules shall not give rise to a claim by BOKF or
BOKSub.
Section 12.11. Costs of Litigation. In any action brought by a party hereto
to enforce the obligations of any other party hereto, the prevailing party
shall be entitled to collect from the opposing party to such action such
party's reasonable litigation costs and attorneys fees and expenses (including
court costs, reasonable fees of accountants and experts, and other expenses
incidental to the litigation).
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date and year first above written.
BOK FINANCIAL CORPORATION
/s/ James Ulrich
By:__________________________________
James Ulrich, Senior Vice President
BOKF MERGER CORPORATION NUMBER TEN
/s/ James Ulrich
By:__________________________________
James Ulrich, Senior Vice President
CNBT BANCSHARES, INC.
/s/ B. Ralph Williams
By:__________________________________
B. Ralph Williams, President
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APPENDIX B
ALEX SHESHUNOFF & CO.
INVESTMENT BANKING
August 28, 2000
Board of Directors
CNBT Bancshares, Inc.
5320 Bellaire Blvd.
Bellaire, Texas 77401-3951
Members of the Board:
You have requested that we update our oral opinion given to you on July 27,
2000 as to the fairness, from a financial point of view, to the holders of the
outstanding shares of common stock of CNBT Bancshares, Inc. ("CNBT") of the
Merger Consideration to be received in the proposed merger between CNBT and BOK
Financial Corporation, Tulsa, Oklahoma (the "Corporation"). Pursuant to an
Agreement and Plan of Merger dated August 18, 2000 (the "Merger Agreement"),
the Corporation has agreed to pay $92,000,000 in cash (the "Merger
Consideration") for all of the outstanding shares of CNBT common stock. One
million dollars of the Merger Consideration will be held in escrow according to
terms set out in the Merger Agreement. Pursuant to the Merger Agreement, CNBT
will be merged with and into BOK Merger Corporation Number Ten, a subsidiary of
the Corporation (the "Merger").
Alex Sheshunoff & Co. Investment Banking, LP ("Sheshunoff") is regularly
engaged in the valuation of securities in connection with mergers and
acquisitions, private placements, and valuations for estate, corporate and
other purposes.
In connection with our opinion, we, among other things:
1. Reviewed the Merger Agreement;
2. Evaluated CNBT's consolidated results based upon a review of its
annual financial statements for the three-year period ending December
31, 1999 and the year-to-date period ending June 30, 2000;
3. Reviewed the 10-K for the period ending December 31, 1999 and the
10-Q for the period ending June 30, 2000 for CNBT;
4. Reviewed Call Report information as of June 30, 2000 for CNBT;
5. Conducted conversations with executive management regarding recent
and projected financial performance of CNBT;
6. Compared CNBT's recent operating results with those of certain other
banks in Texas which have recently been acquired;
7. Compared CNBT's recent operating results with those of certain other
banks located in the United States which have recently been acquired;
8. Compared the pricing multiples for CNBT in the Merger to those of
certain other banks in Texas which have recently been acquired;
9. Compared the pricing multiples for CNBT in the Merger to those of
certain other banks located in the United States which have recently
been acquired;
98 San Jacinto Boulevard Suite 1925 Austin, Texas 78701
Phone 512-479-8200 Fax 512-472- 8953
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<PAGE>
CNBT Bancshares, Inc.
August 28, 2000
Page 2
10. Analyzed the net present value of the after-tax cash flows CNBT
could produce through the year 2004, based on assumptions provided
by management;
11. Reviewed the recent stock price and trading volume of CNBT;
12. Performed such other analyses as we deemed appropriate.
We assumed and relied upon, without independent verification, the accuracy
and completeness of the information provided to us by CNBT for the purposes of
this opinion. In addition, where appropriate, we relied upon publicly available
information that we believe to be reliable, accurate, and complete; however, we
cannot guarantee the reliability, accuracy, or completeness of any such
publicly available information.
We did not make an independent evaluation of the assets or liabilities of
CNBT or the Corporation, nor were we furnished with any such appraisals. We are
not experts in the evaluation of loan portfolios for the purposes of assessing
the adequacy of the allowance for loan and lease losses and assumed that such
allowances for each of the companies are, in the aggregate, adequate to cover
such losses.
We assumed that all required regulatory approvals will be received in a
timely fashion and without any conditions or requirements that could adversely
affect the Merger or the Corporation's operations following the Merger.
Our opinion is necessarily based on economic, market, and other conditions
as in effect on, and the information made available to us as of, the date
hereof. Events occurring after the date hereof could materially affect the
assumptions used in preparing this opinion.
Our opinion is limited to the fairness of the Merger Consideration, from a
financial point of view, to the holders of CNBT common stock. Moreover, this
letter and the opinion expressed herein do not constitute a recommendation to
any stockholder as to any approval of the Merger or the Merger Agreement. It is
understood that this letter is for the information of the Board of Directors of
CNBT and may not be used for any other purpose without our prior written
consent; provided, however, that we hereby consent to the inclusion of this
opinion as an annex to CNBT's proxy statement dated the date hereof and to the
reference to this opinion therein.
Based on the foregoing and such other matters we have deemed relevant, it is
our opinion, as of the date hereof, that the Merger Consideration to be
received by the CNBT stockholders pursuant to the Merger is fair, from a
financial point of view.
Very truly yours,
ALEX SHESHUNOFF & CO.
INVESTMENT BANKING, LP
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APPENDIX C
STATUTORY DISSENTERS' RIGHTS
The following is the text of the applicable provisions of the Texas Business
Corporation Act that set forth the rights of CNBT stockholders to dissent from
the merger.
Article 5.11. Rights of Dissenting Shareholders in the Event of Certain
Corporate Actions
A. Any shareholder of a domestic corporation shall have the right to dissent
from any of the following corporate actions:
(1) Any plan of merger to which the corporation is a party if
shareholder approval is required by Article 5.03 or 5.16 of the Act and the
shareholder holds shares of a class or series that was entitled to vote
thereon as a class or otherwise;
(2) Omitted
(3) Omitted
B. Omitted
Article 5.12. Procedure for Dissent by Shareholders as to Said Corporate
Actions
A. Any shareholder of any domestic corporation who has the right to dissent
from any of the corporate actions referred to in Article 5.11 of this Act may
exercise that right to dissent only by complying with the following procedures:
(1)(a) With respect to proposed corporate action that is submitted to a
vote of shareholders at a meeting, the shareholder shall file with the
corporation, prior to the meeting, a written objection to the action,
setting out that the shareholder's right to dissent will be exercised if
the action is effective and giving the shareholder's address, to which
notice thereof shall be delivered or mailed in that event. If the action is
effected and the shareholder shall not have voted in favor of the action,
the corporation, in the case of action other than a merger, or the
surviving or new corporation (foreign or domestic) or other entity that is
liable to discharge the shareholder's right of dissent, in the case of a
merger, shall, within ten (10) days after the action is effected, deliver
or mail to the shareholder written notice that the action has been
effected, and the shareholder may, within ten (10) days from the delivery
or mailing of the notice, make written demand on the existing, surviving,
or new corporation (foreign or domestic) or other entity, as the case may
be, for payment of the fair value of the shareholder's shares. The fair
value of the shares shall be the value thereof as of the day immediately
preceding the meeting, excluding any appreciation or depreciation in
anticipation of the proposed action. The demand shall state the number and
class of the shares owned by the shareholder and the fair value of the
shares as estimated by the shareholder. Any shareholder failing to make
demand within the ten (10) day period shall be bound by the action.
(b) Omitted
(2) Within twenty (20) days after receipt by the existing, surviving, or
new corporation (foreign or domestic) or other entity, as the case may be,
of a demand for payment made by a dissenting shareholder in accordance with
Subsection (1) of this Section, the corporation (foreign or domestic) or
other entity shall deliver or mail to the shareholder a written notice that
shall either set out that the corporation (foreign or domestic) or other
entity accepts the amount claimed in the demand and agrees to pay that
amount within ninety (90) days after the date on which the action was
effected, and, in the case of shares represented by certificates, upon the
surrender of the certificates duly endorsed, or shall contain an estimate
by the corporation (foreign or domestic) or other entity of the fair value
of the shares, together with an offer to pay the amount of that estimate
within ninety (90) days after the date on which the action was effected,
upon receipt of notice within sixty (60) days after that date from the
shareholder that the shareholder agrees to accept that amount and, in the
case of shares represented by certificates, upon the surrender of the
certificates duly endorsed.
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(3) If, within sixty (60) days after the date on which the corporate
action was effected, the value of the shares is agreed upon between the
shareholder and the existing, surviving, or new corporation (foreign or
domestic) or other entity, as the case may be, payment for the shares shall
be made within ninety (90) days after the date on which the action was
effected and, in the case of shares represented by certificates, upon
surrender of the certificates duly endorsed. Upon payment of the agreed
value, the shareholder shall cease to have any interest in the shares or in
the corporation.
B. If, within the period of sixty (60) days after the date on which the
corporate action was effected, the shareholder and the existing, surviving, or
new corporation (foreign or domestic) or other entity, as the case may be, do
not so agree, then the shareholder or the corporation (foreign or domestic) or
other entity may, within sixty (60) days after the expiration of the sixty (60)
day period, file a petition in any court of competent jurisdiction in the
county in which the principal office of the domestic corporation is located,
asking for a finding and determination of the fair value of the shareholder's
shares. Upon the filing of any such petition by the shareholder, service of a
copy thereof shall be made upon the corporation (foreign or domestic) or other
entity, which shall, within ten (10) days after service, file in the office of
the clerk of the court in which the petition was filed a list containing the
names and addresses of all shareholders of the domestic corporation who have
demanded payment for their shares and with whom agreements as to the value of
their shares have not been reached by the corporation (foreign or domestic) or
other entity. If the petition shall be filed by the corporation (foreign or
domestic) or other entity, the petition shall be accompanied by such a list.
The clerk of the court shall give notice of the time and place fixed for the
hearing of the petition by registered mail to the corporation (foreign or
domestic) or other entity and to the stockholders named on the list at the
addresses therein stated. The forms of the notices by mail shall be approved by
the court. All shareholders thus notified and the corporation (foreign or
domestic) or other entity shall thereafter be bound by the final judgment of
the court.
C. After the hearing of the petition, the court shall determine the
stockholders who have complied with the provisions of this Article and have
become entitled to the valuation of and payment for their shares, and shall
appoint one or more qualified appraisers to determine that value. The
appraisers shall have power to examine any of the books and records of the
corporation the shares of which they are charged with the duty of valuing, and
they shall make a determination of the fair value of the shares upon such
investigation as to them may seem proper. The appraisers shall also afford a
reasonable opportunity to the parties interested to submit to them pertinent
evidence as to the value of the shares. The appraisers shall also have such
power and authority as may be conferred on Masters in Chancery by the Rules of
Civil Procedure or by the order of their appointment.
D. The appraisers shall determine the fair value of the shares of the
stockholders adjudged by the court to be entitled to payment for their shares
and shall file their report of that value in the office of the clerk of the
court. Notice of the filing of the report shall be given by the clerk to the
parties in interest. The report shall be subject to exceptions to be heard
before the court both upon the law and the facts. The court shall by its
judgment determine the fair value of the shares of the stockholders entitled to
payment for their shares and shall direct the payment of that value by the
existing, surviving, or new corporation (foreign or domestic) or other entity,
together with interest thereon, beginning 91 days after the date on which the
applicable corporate action from which the shareholder elected to dissent was
effected to the date of such judgment, to the stockholders entitled to payment.
The judgment shall be payable to the holders of uncertificated shares
immediately but to the holders of shares represented by certificates only upon,
and simultaneously with, the surrender to the existing, surviving, or new
corporation (foreign or domestic) or other entity, as the case may be, of duly
endorsed certificates for those shares. Upon payment of the judgment, the
dissenting shareholders shall cease to have any interest in those shares or in
the corporation. The court shall allow the appraisers a reasonable fee as court
costs, and all court costs shall be allotted between the parties in the manner
that the court determines to be fair and equitable.
E. Shares acquired by the existing, surviving, or new corporation (foreign
or domestic) or other entity, as the case may be, pursuant to the payment of
the agreed value of the shares or pursuant to payment of the
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judgment entered for the value of the shares, as in this Article provided,
shall, in the case of a merger, be treated as provided in the plan of merger
and, in all other cases, may be held and disposed of by the corporation as in
the case of other treasury shares.
F. The provisions of this Article shall not apply to a merger if, on the
date of the filing of the articles of merger, the surviving corporation is the
owner of all the outstanding shares of the other corporations, domestic or
foreign, that are parties to the merger.
G. In the absence of fraud in the transaction, the remedy provided by this
Article to a shareholder objecting to any corporate action referred to in
Article 5.11 of this Act is the exclusive remedy for the recovery of the value
of his shares or money damages to the shareholder with respect to the action.
If the existing, surviving, or new corporation (foreign or domestic) or other
entity, as the case may be, complies with the requirements of this Article, any
shareholder who fails to comply with the requirements of this Article shall not
be entitled to bring suit for the recovery of the value of his shares or money
damages to the shareholder with respect to the action.
Article 5.13. Provisions Affecting Remedies of Dissenting Shareholders
A. Any shareholder who has demanded payment for his shares in accordance
with either Article 5.12 or 5.16 of this Act shall not thereafter be entitled
to vote or exercise any other rights of a shareholder except the right to
receive payment for his shares pursuant to the provisions of those articles and
the right to maintain an appropriate action to obtain relief on the ground that
the corporate action would be or was fraudulent, and the respective shares for
which payment has been demanded shall not thereafter be considered outstanding
for the purposes of any subsequent vote of shareholders.
B. Upon receiving a demand for payment from any dissenting shareholder, the
corporation shall make an appropriate notation thereof in its shareholder
records. Within twenty (20) days after demanding payment for his shares in
accordance with either Article 5.12 or 5.16 of this Act, each holder of
certificates representing shares so demanding payment shall submit such
certificates to the corporation for notation thereon that such demand has been
made. The failure of holders of certificated shares to do so shall, at the
option of the corporation, terminate such shareholder's rights under Articles
5.12 and 5.16 of this Act unless a court of competent jurisdiction for good and
sufficient cause shown shall otherwise direct. If uncertificated shares for
which payment has been demanded or shares represented by a certificate on which
notation has been so made shall be transferred, any new certificate issued
therefor shall bear similar notation together with the name of the original
dissenting holder of such shares and a transferee of such shares shall acquire
by such transfer no rights in the corporation other than those which the
original dissenting shareholder had after making demand for payment for the
fair value thereof.
C. Any shareholder who has demanded payment for his shares in accordance
with either Article 5.12 or 5.16 of this Act may withdraw such demand at any
time before payment for his shares or before any petition has been filed
pursuant to Article 5.12 or 5.16 of this Act asking for a finding and
determination of the fair value of such shares, but no such demand may be
withdrawn after such payment has been made or, unless the corporation shall
consent thereto, after any such petition has been filed. If, however, such
demand shall be withdrawn as hereinbefore provided, or if pursuant to Section B
of this Article the corporation shall terminate the shareholder's rights under
Article 5.12 or 5.16 of this Act, as the case may be, or if no petition asking
for a finding and determination of fair value of such shares by a court shall
have been filed within the time provided in Article 5.12 or 5.16 of this Act,
as the case may be, or if after the hearing of a petition filed pursuant to
Article 5.12 or 5.16, the court shall determine that such shareholder is not
entitled to the relief provided by those articles, then, in any such case, such
shareholder and all persons claiming under him shall be conclusively presumed
to have approved and ratified the corporate action from which he dissented and
shall be bound thereby, the right of such shareholder to be paid the fair value
of his shares shall cease, and his status as a shareholder shall be restored
without prejudice to any corporate proceedings which may have been taken during
the interim, and such shareholder shall be entitled to receive any dividends or
other distributions made to shareholders in the interim.
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CNBT BANCSHARES, INC.
5320 Bellaire Boulevard
Bellaire, Texas 77401
This Proxy is solicited on behalf of the Board of Directors of CNBT
Bancshares, Inc. (the "Company") for the Special Meeting of Stockholders on
November 9, 2000.
The undersigned hereby constitutes and appoints B. Ralph Williams or Frank
G. Cook, or either of them, with full power of substitution and revocation to
each, the true and lawful attorneys and proxies of the undersigned at the
Special Meeting of Stockholders of CNBT Bancshares, Inc. to be held on
November 9, 2000, at 3:00 p.m. local time, at 5320 Bellaire Boulevard,
Bellaire, Texas 77401, or any adjournment thereof (the "Special Meeting") and to
vote the shares of Common Stock, $1.00 par value per share, of the Company
("Shares"), standing in the name of the undersigned on the books of the Company
on October 10, 2000, the record date for the Special Meeting, with all
powers the undersigned would possess if personally present at the Special
Meeting.
The undersigned hereby acknowledges previous receipt of the Notice of
Special Meeting of Stockholders and the Proxy Statement and hereby revokes any
proxy or proxies heretofore given by the undersigned.
_______________________________________________________________________________
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1 AND IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR SAID PROPOSAL.
1. Approval of the merger agreement dated as of August 18, 2000, among CNBT
Bancshares, Inc., BOK Financial Corporation, and BOKF Merger Corporation
Number Ten, pursuant to which BOKF Merger Corporation Number Ten will be
merged with and into CNBT and CNBT will become a wholly-owned subsidiary of
BOK Financial and each outstanding share of CNBT common stock will be
converted into the right to receive up to approximately $18.22 in cash:
FOR __________ AGAINST ___________ ABSTAIN ___________
2. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting.
FOR __________ AGAINST ___________ ABSTAIN ___________
Please sign exactly as name appears hereon. When
shares are held by joint tenants both should sign.
When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as
such. If a corporation, please sign in full
corporate name by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized persons.
Date_____________________________________
Signature _________________________________
Signature _________________________________
