<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 8, 1995
FIRST UNITED BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
ARKANSAS 0-11916 71-0538646
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
Number)
</TABLE>
MAIN AND WASHINGTON STREETS, EL DORADO, ARKANSAS 71730
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (501) 863-3181
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 31, 1995, First United Bancshares, Inc., El Dorado,
Arkansas ("First United"), acquired all of the issued and outstanding common
stock of FirstBank, Texarkana, Texas ("FirstBank"), pursuant to an Agreement
and Plan of Reorganization, dated July 28, 1994 ("Agreement"), whereby First
United established a wholly owned subsidiary company under the name of First
United of Texas, Inc. ("First Texas"), being incorporated under the laws of the
State of Arkansas, and said First Texas in turn created an interim bank under
the laws of the State of Texas which merged with and into FirstBank. After
consummation of the Agreement, First United owns one hundred percent (100%) of
the issued and outstanding common stock of First Texas. First Texas owns all
of the 107,747 shares of common stock of FirstBank. As consideration for the
purchase of these shares, First United paid to the stockholders of FirstBank an
aggregate purchase price of $25,000,000.00, less $200,000.00 which was escrowed
pending the resolution of certain litigation.
FirstBank is a Texas state bank having its principal office in
Texarkana, Texas, with operating branch offices in New Boston, Pleasant Grove,
Hooks, Maude and Red Water, Texas. As of February 1, 1995, FirstBank had total
assets of $154,770,003.00, deposits of $135,470,639.00, and total capital of
$17,650,000.00.
As a result of the consummation of the Agreement, First United had
consolidated assets of approximately $1.27 billion, consolidated deposits of
$1.09 billion, and consolidated stockholders' equity of $109 million. In
addition to FirstBank, First United wholly owns and operates seven other bank
subsidiaries located in El Dorado, Magnolia, Fort Smith, Camden, Alma,
Stuttgart, and Melbourne, Arkansas.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
It is impracticable to provide the audited financial statements of
FirstBank, Texarkana, Texas as of December 31, 1994 and 1993 and for the years
then ended and the pro-forma financial information of First United and
FirstBank, Texarkana, Texas as of and for the year ended December 31, 1994, at
the time of this current report on Form 8-K. First United shall file such
statements under cover of Form 8-K/A as soon as practicable, but not later than
60 days after this report on Form 8-K must be filed.
(2) Exhibits.
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<S> <C>
2 Agreement and Plan of Reorganization between First United Bancshares, Inc. and FirstBank,
Texarkana, Texas and Sellers, as defined therein, and Plan of Merger attached as Exhibit A
thereto dated July 28, 1994.
</TABLE>
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRST UNITED BANCSHARES, INC.
(REGISTRANT)
By /s/ John E. Burns
---------------------------------
John E. Burns, Vice President and
Chief Financial Officer
Date: February 8, 1995
<PAGE> 1
EXHIBIT 2
AGREEMENT AND PLAN OF REORGANIZATION
AMONG
FIRST UNITED BANCSHARES, INC.,
FIRSTBANK, TEXARKANA, TEXAS
AND
SELLERS
(as defined in Exhibit 1 of this Agreement)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
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<S> <C>
ARTICLE I
THE MERGER
SECTION 1.01. The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.03. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.04. Establishment of First United of Texas, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.05. Establishment of Interim Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.06. Deferred Compensation Agreement and Incentive
Deferred Compensation Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.07. Bank Earnings Prior to Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.08. Merger of Retirement Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.09. Non-Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
EFFECT OF THE MERGER ON BANK COMMON STOCK
SECTION 2.01. Effect on Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BANK AND SELLERS
SECTION 3.01. Organization, Standing and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3.02. Subsidiaries; Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.03. Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.04. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.05. Bank Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.06. Bank Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.07. Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.08. Authorizations; Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.09. Litigation and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<S> <C>
SECTION 3.11. Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.12. Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.13. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.14. Conduct of Bank to Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.15. Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.16. Properties, Leases and Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.17. No Untrue Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.18. Existence and Enforceability of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.19. Not in Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.20. Trust Validity; Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.21. Correction of Examination Deficiencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.22. Sellers Informed Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.23. Limitation on Representations and Warranties of Sellers . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF UNITED
SECTION 4.01. Organization, Standing and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.02. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE V
COVENANTS OF BANK AND SELLERS
SECTION 5.01. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.02. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.03. Access and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.04. Update Disclosure; Breaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.05. Vote of Bank Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Shareholders Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<S> <C>
SECTION 6.02. Legal Conditions to Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.03. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.04. Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 6.05. Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 6.06. Governmental and Other Third Party Approvals . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01. Conditions to Each Party's Obligation to Effect the Merger . . . . . . . . . . . . . . . . 26
SECTION 7.02. Conditions to Obligations of United . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7.03. Conditions to Obligations of Bank and Sellers . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE VIII
TERMINATION AND AMENDMENT
SECTION 8.01. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 8.02. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 8.03. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 8.04. Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 9.02. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 9.03. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 9.04. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 9.05. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 9.06. Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 9.07. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 9.08. Knowledge of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<S> <C>
SECTION 9.09. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 9.10. Effect of Closing on Representations and Warranties . . . . . . . . . . . . . . . . . . . 33
SECTION 9.11. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
EXHIBIT A Plan of Merger
EXHIBIT 1 Sellers
EXHIBIT 2.01(a) Escrow Agreement
</TABLE>
<PAGE> 6
INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
SECTION
-------
<S> <C>
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 1
Agreement Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.09
Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 1
Bank Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12(a)
Bank Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 1
Bank Disclosure Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02(b)(ii)
Bank Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05(a)
Bank Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08
Bank Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08
Bank Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.06
BHC Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.01
BSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02(b)(i)
BSC Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02(b)(i)
BSC Articles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02(b)(i)
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.03
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.03
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12(a)
Competing Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.09
Competing Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.02(f)
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12(a)
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04
FDIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.06
Federal Reserve Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.03
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
SECTION
-------
<S> <C>
First Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.04
Governmental Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04
IBS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02(b)(ii)
IBS Articles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02(b)(ii)
IBS Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02(b)(ii)
Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(d)
Interim Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05
Interim Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.07
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.10
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 1
Merger Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 1
Plan of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 1
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01(a)
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02
Surviving Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 1
Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.10
TBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01
Toxic Substances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08
United . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 1
Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04
Voting Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03
</TABLE>
<PAGE> 8
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("Agreement") is made as of
July 28, 1994, by and between First United Bancshares, Inc. ("United"),
FirstBank, Texarkana, Texas ("Bank" or "Surviving Bank"), and the Shareholders
of Bank listed in Exhibit 1 attached hereto, said Shareholders being referred
to collectively as Sellers and individually as Seller.
WHEREAS, Sellers and related parties own fifty and 76/100 percent
(50.76%) of the issued and outstanding shares of the common stock of Bank
consisting of 54,703 shares of the total of 107,747 shares issued and
outstanding (the "Bank Common Stock"); and
WHEREAS, United desires to acquire the Bank Common Stock and Sellers
wish to sell the Bank Common Stock upon the terms and conditions hereinafter
set forth; and
WHEREAS, the respective Boards of Directors of United and Bank have
approved the merger of an interim bank chartered under the laws of the State of
Texas (which, conditioned upon obtaining all necessary regulatory approvals,
will be wholly owned by United through a subsidiary holding company, as
described below) with and into Bank (the "Merger") pursuant to a Plan of Merger
in substantially the form attached hereto as Exhibit A (the "Plan of Merger");
and
WHEREAS, the respective Boards of Directors of United and Bank believe
that such proposed Merger and the payment of cash for the Bank Common Stock,
pursuant and subject to the terms of this Agreement and the Plan of Merger (the
"Merger Agreements"), is desirable and in the best short-term and long-term
interests of their respective organizations and shareholders; and
WHEREAS, United, Bank and Sellers desire to make certain
representations, warranties and agreements in connection with the Merger and
also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the promises and the
representations, warranties and agreements herein contained, the parties hereto
agree as follows:
ARTICLE I
THE MERGER
1.01. The Merger. Subject to the terms and conditions of this
Agreement, United, Bank and Sellers agree to effect the Merger of an interim
bank established by United in accordance with the Texas Banking Code, as
amended (the "TBC") with and into Bank. All of the expenses of the Merger will
be borne by United.
<PAGE> 9
1.02. Effective Time of the Merger. The Merger shall become effective
at 5:00 p.m. Central Standard Time on the date of the Closing (the "Effective
Time").
1.03. Closing. The closing of the Merger (the "Closing") will take
place at the offices of United at a time and on a date (the "Closing Date") to
be specified by the parties as soon as reasonably practicable after the later
to occur of (i) approval of the Merger by the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") and the expiration of any waiting
period, and (ii) approval by other regulatory agencies and third parties,
including the Texas Banking Department, and the expiration of all waiting
periods.
1.04. Establishment of Subsidiary Holding Company. United agrees to
make application to the Federal Reserve Board to establish a subsidiary bank
holding company ("First Texas"). First Texas shall be wholly owned by United
and after the Effective Time will directly own one hundred percent (100%) of
the issued and outstanding shares of common stock of Bank.
1.05. Establishment of Interim Bank. United agrees to make application
to the Texas Banking Department to charter an interim bank ("Interim Bank")
which will be merged with and into Bank at the Effective Time. Bank will be
the surviving bank, under the name and title of FirstBank.
1.06. Deferred Compensation Agreement and Incentive Deferred
Compensation Agreement. Bank and Gene D. Wyatt, a Seller, have entered into a
certain deferred compensation agreement, dated June 1, 1990 as supplemented
September 15, 1993 and amended May 18, 1994, and a certain Incentive Deferred
Compensation Agreement, dated July 21, 1993, as supplemented January 13, 1994.
The obligations under the deferred compensation agreements shall remain in full
force and effect as obligations of Bank after consummation of the Merger. For
and in consideration of the receipt of continued benefits under the deferred
compensation agreement and the incentive deferred compensation agreement Mr.
Wyatt agrees to forego any future participation in any and all employee benefit
or retirement plans, including but not limited to the United defined benefit
pension plan, employee stock ownership plan or equity participation plan. Mr.
Wyatt agrees to execute all documentation required by law to opt out of said
plans. However, Mr. Wyatt shall be entitled to participate in the United
401(k) plan and shall be provided health and/or dental insurance benefits until
his retirement.
1.07. Bank Earnings Prior to Closing Date. Subject to any regulatory
limitation, all earnings of Bank from July 1, 1994 until the Closing Date (the
"Interim Period") shall be paid to the shareholders of Bank by way of cash
dividends. Bank agrees to operate during the Interim Period in a manner that
is consistent with safe and sound banking principles, that is consistent with
the historical operation of the Bank, and that is consistent with Generally
Accepted
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Accounting Principles and Regulatory Accounting Principles. As used in this
paragraph the term earnings shall mean net income of Bank from continuing
operations exclusive of (i) gains on the sale of securities, real property or
any other assets of Bank, (ii) income resulting from a change in accounting
principle or accounting estimate and (iii) other extraordinary items of income
as defined by generally accepted accounting principles.
1.08. Merger of Retirement Plan. Bank has established the FirstBank
Retirement Plan for the benefit of its employees. The plan is a combination of
an employee stock purchase plan and a deferred income 401(k) plan. At the
Effective Time the FirstBank Retirement Plan shall be merged with and into the
United 401(k) Savings Plan and Trust Agreement.
1.09. Non-Competition. During a period beginning on the Effective Date
and ending five (5) years thereafter ("Agreement Period") Sellers will not,
either directly or indirectly, as an officer, director, shareholder, owner,
partner, joint venturer, employee, promoter, consultant, manager, independent
contractor, agent, or in another similar capacity, participate in any business,
other than the business of Bank, which engages in the provision of banking
services or any services or products closely related to banking that are being
provided by United, Bank or any of their subsidiaries or affiliates now or at
any time during the Agreement Period ("Competing Business") within Bowie
County, Texas and Miller County, Arkansas and any counties contiguous thereto.
Notwithstanding the preceding sentence to the contrary, Sellers may own five
percent (5%) or less of a publicly held corporation engaged in a Competing
Business; Seller Cook shall not be prohibited from owning stock in Bodcaw Bank,
Stamps, Arkansas, and Texarkana National Bancshares, Texarkana, Texas; and
Seller Martin shall not be prohibited from owning stock in Texarkana National
Bancshares, Texarkana, Texas.
ARTICLE II
EFFECT OF THE MERGER ON BANK COMMON STOCK
2.01. Effect on Common Stock. As of the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any of Bank's
Common Stock:
(a) Conversion of Bank Common Stock. One hundred percent
of the issued and outstanding shares of Bank Common Stock shall be converted
into the right to receive an aggregate cash payment of Twenty Five Million
Dollars ($25,000,000.00). However, Two Hundred Thousand Dollars ($200,000.00)
shall be escrowed, pursuant to the Escrow Agreement attached hereto as Exhibit
2.01(a), with First National Bank of El Dorado, El Dorado, Arkansas, for
payment of Bank's potential liability in the cases of Dennis Shirk,
administrator of estates of Daniel Clay Sparks and
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Edna Lovett Sparks, deceased v. FirstBank, et al, Graco Robotics, Inc. v.
Oaklawn Bank, and Otis Weaver v. various parties, including FirstBank. The
escrowed funds, if any remain, will be distributed to the shareholders of Bank
upon resolution of the cases. Said Escrow Agreement has been signed by all
parties and shall be dated and become effective as of the Closing Date.
Each shareholder of Bank shall be entitled to receive a cash
payment specified above based upon each shareholder's pro rata ownership of
Bank Common Stock immediately prior to the Effective Time.
(b) Cancellation of Shares. All shares of Bank Common
stock issued and outstanding immediately prior to the Effective Time shall no
longer be outstanding and shall automatically be cancelled and retired and
shall cease to exist, and each holder of a certificate representing any such
shares shall cease to have any rights with respect thereto, except the right to
receive his pro rata cash payment in consideration therefor upon the surrender
of such certificate in accordance with the Plan of Merger, without interest.
(c) Conversion of Stock of Interim Bank. At the Effective
Time, the shares of the Interim Bank common stock validly issued and
outstanding immediately prior to the Effective Time will, by virtue of the
Merger and without any action by the holder thereof, be converted into the
capital stock, of the Surviving Bank, so that all shares of capital stock of
the Surviving Bank will be owned by First Texas. The outstanding certificates
representing shares of the Interim Bank common stock will, after the Effective
Time, be deemed to represent the number of shares of the Surviving Bank into
which they have been converted and may be exchanged for new certificates of the
Surviving Bank upon request of the holder thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BANK AND SELLERS
Bank and Sellers hereby represent and warrant to United and, effective
as of the time of their creation, to First Texas and to Interim Bank, as
follows:
3.01. Organization, Standing and Power. Bank is a State bank duly
organized, validly existing and in good standing under the laws of the State of
Texas and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted,
except where the failure to have such power or authority would not have a
material adverse effect on the business, operations or financial condition of
Bank. Bank is not qualified to do business in any other state or foreign
jurisdiction, and its ownership or leasing of property or the conduct of its
business does not require it to be so qualified. Bank is chartered as a State
bank with the Texas Banking
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Department under the TBC. Bank has delivered to United true, accurate and
complete copies of the currently effective Articles of Association and By-laws
of Bank, including all amendments thereto.
3.02 Subsidiaries; Affiliates. Bank has the following subsidiaries and
affiliates:
(a) Subsidiaries. Bank has no subsidiaries other than
Texarkana OFC, Inc., a Texas corporation having only minimum capital
("Subsidiary"). Bank owns 100% of the authorized and issued and outstanding
shares of stock of such subsidiary. Subsidiary will not engage in any business
or other activities from and after the date of this Agreement and will be
dissolved not later than the date of Closing by filing a Certificate of
Dissolution with the Secretary of State of the State of Texas, which will be
delivered to United at the Closing. Bank has delivered to United true,
accurate and complete copies of the currently effective Articles of
Incorporation and Bylaws of Subsidiary, including, all amendments thereto.
(b) Affiliates. Bank is a member of the following limited
liability companies organized under the provisions of the Texas Limited
Liability Company Act:
(i) BSC Alliance Limited Company ("BSC"). The
Articles of Organization of BSC (the "BSC Articles") contain a broad "purpose"
clause. Its actual purpose is to provide securities brokerage services for the
convenience of customers of its members. The Bank was one (1) of four (4)
initial members of BSC. It made an initial cash contribution of $68,479.83 to
the capital of BSC for which it acquired a 20% ownership interest. Two (2)
additional members were subsequently admitted to BSC and the Bank now holds a
one-sixth (1/6) ownership interest. Each of the members of BSC is a commercial
bank. A member may be required to make additional pro-rata cash contributions
to BSC to enable it to be properly operated and maintained and to discharge the
costs, obligations and liabilities associated with operations. An assessment
of additional contributions requires a vote of the members of BSC under
procedures outlined in the Regulations of BSC (the "BSC Regulations"). The BSC
Regulations provide that a member shall not be otherwise liable for the debts,
obligations or liabilities of BSC unless it has agreed in writing to so be
liable. The BSC Regulations impose certain restrictions on disposition of a
membership interest. Under procedures outlined in the BSC Regulations, a
member may voluntarily withdraw from BSC by giving notice of voluntary
withdrawal at least four (4) months prior to its withdrawal. True, accurate
and complete copies of the currently effective BSC Articles and the BSC
Regulations, including all amendments thereto, have been delivered to United by
Bank.
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(ii) Independent Bank Services, L.C. ("IBS"). The Articles
or Organization of IBS (the "IBS Articles") contain a broad "purpose" clause.
It is actually operated for the purpose of performing internal auditing, loan
review and compliance review services for its members. The Bank is one (1) of
six (6) members of IBS, each of which is a commercial bank. The Bank made an
initial cash contribution of $10,000.00 to the capital of IBS for which it
acquired a one-sixth (1/6) ownership interest. A member may be required to
make additional pro-rata cash contributions to the capital of IBS to enable it
to be properly operated and maintained. An assessment of additional
contributions requires a vote of all of the members of BSC under procedures
outlined in the Regulations of IBS (the "IBS Regulations"). The IBS
Regulations provide that a member shall not be otherwise liable for the debts,
obligations or liabilities of IBS unless it has consented in writing to so be
liable. The IBS Regulations impose certain restrictions on disposition of a
membership interest. Under procedures outlined in the IBS Regulations, a
member may voluntarily withdraw form IBS by giving notice of voluntary
withdrawal at least four (4) months prior to its withdrawal. True, accurate
and complete copies of the currently effective IBS Articles and the IBS
Regulations, including all amendments thereto, have been delivered to United by
Bank.
Except as set forth in this Section and in the Bank Disclosure Letter
(which is a letter of even date herewith delivered by Bank to United), the
receipt thereof having been acknowledged by United executing a copy thereof,
and except for securities held in its capacity as fiduciary, Bank does not own
beneficially, directly or indirectly, any class of equity securities,
partnership interests, membership interests, or similar interests of any
corporation, bank, partnership, limited partnership, limited liability company,
business trust, association or similar organization.
3.03. Capital Structure. As of the date hereof, the authorized capital
stock of Bank consists of 107,747 shares of common stock, $27.843 par value.
As of the date hereof, (i) 107,747 shares of Bank common stock are outstanding,
(ii) no shares of Bank Common Stock are held by Bank in its treasury, and (iii)
neither Bank nor Subsidiary has issued and has outstanding bonds, debentures,
notes or other indebtedness having the right to vote (or convertible into
securities having the right to vote) on any matters on which shareholders may
vote ("Voting Debt"). All outstanding shares of Bank Common Stock are validly
issued, fully paid and nonassessable, and, as to those shares owned by Sellers
and related parties, at the Effective Time will be free and clear of any claim,
lien, encumbrance or agreement with respect thereto. There are no options,
warrants, calls, rights, or agreements of any character whatsoever to which
Bank or Subsidiary is a party or by which it is bound obligating Bank or
Subsidiary to issue, deliver or sell, or cause to be issued,
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delivered or sold, additional shares of capital stock or any Voting Debt
securities or obligating Bank or Subsidiary to grant, extend or enter into any
such option, warrant, call, right or agreement. Immediately before and after
the Effective Time, there will be no option, warrant, call, right or agreement
obligating Bank or Subsidiary to issue, deliver or sell, or cause to be issued,
delivered or sold, any shares of capital stock or obligating Bank or Subsidiary
to grant, extend or enter into any such option, warrant, call, right or
agreement.
3.04. Authority. Bank has all requisite corporate power and authority
to enter into this Agreement and the Plan of Merger and, subject only to
approval of this Agreement and the Plan of Merger by the shareholders of Bank,
to consummate the transactions contemplated hereby and thereby. The execution
and delivery of this Agreement and the Plan of Merger and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of Bank, subject to such approval of
this Agreement and the Plan of Merger by the shareholders of Bank. This
Agreement and the Plan of Merger Agreement have been duly executed and
delivered by Bank, and each constitutes a valid and binding obligation of Bank
enforceable in accordance with its terms, except as the enforceability of the
Agreement may be subject to or limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws relating to or
affecting the rights of creditors. The execution and delivery of this
Agreement and the Plan of Merger do not, and the consummation of the
transactions contemplated hereby and thereby will not, conflict with, or result
in any violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or the loss of a material benefit, or the
creation of a lien, pledge, security interest or other encumbrance on assets
(any such conflict, violation, default, right of termination, cancellation or
acceleration loss or creation, a "Violation"), pursuant to any provision of (a)
the Articles of Association or By-laws of Bank or Subsidiary or (b) except (i)
as set forth in the Bank Disclosure Letter or (ii) as contemplated by the next
sentence hereof, any loan or credit agreement, note, mortgage, indenture,
lease, or other agreement, obligation, instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Bank or Subsidiary or their respective properties or
assets which Violation would have a material adverse effect on Bank or
Subsidiary. Other than in connection or in compliance with the provisions of
the TBC, the Securities Act of 1933, as amended, and the rules and regulations
thereunder, the Securities and Exchange Act of 1934, as amended, and the rules
and regulations thereunder (the "Exchange Act"), the securities or blue sky
laws of the various states, and consents, authorizations, approvals, notices or
exemptions required under the TBC, and from other
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regulatory agencies, no consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign (a "Governmental Entity"), is required by or with respect to Bank or
Subsidiary in connection with the execution and delivery of this Agreement and
the Plan of Merger by Bank or the consummation by Bank of the transactions
contemplated hereby and thereby.
3.05. Bank Financial Statements. (a) The consolidated balance sheets
of Bank as of December 31, 1993 and 1992 (and, if available on the Closing
Date, December 31, 1994) and the related consolidated statements of income,
consolidated statements of cash flows and consolidated statements of
shareholders equity for the periods ended December 31, 1993 and 1992 (and, if
available on the Closing Date, December 31, 1994) certified by Thomas & Thomas,
C.P.A., and the internally prepared financial statements dated June 30, 1994,
copies of which have been furnished by Bank to United (the "Bank Financial
Statements"), have been or will be prepared in accordance with generally
accepted accounting principles and practices on a consistent basis, and present
fairly the consolidated financial condition of Bank at the dates, and the
consolidated results of operations and cash flows for the periods, stated
therein. Neither Bank nor Subsidiary has any liability of any nature, whether
direct, indirect, accrued, absolute, contingent or otherwise, which is material
to Bank or Subsidiary, except as provided for or disclosed in the Bank
Financial Statements or in the Bank Disclosure Letter and except for such of
the following liabilities as are incurred in the ordinary course of business:
(i) deposit liabilities and interest payable
thereon,
(ii) federal funds purchased and securities sold
under repurchase agreements and interest
payable thereon,
(iii) other short term borrowings,
(iv) contingent liability upon negotiable
instruments endorsed for the purpose of
collection,
(v) taxes,
(vi) accounts payable of the operating business,
(vii) salaries and benefits payable,
(viii) unearned income and premiums,
(ix) abandoned and garnished accounts, and
(x) letters of credit and similar commitments.
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(b) Without limitation to the foregoing, Bank's allowance
for loan losses included in the Bank Financial Statements was adequate as of
the date thereof to absorb potential losses in the loan portfolios of Bank and
Subsidiary. There are no known facts which should cause Bank to increase the
level of such allowance for loan losses.
3.06. Bank Reports. Bank and Subsidiary have filed all reports,
registrations and statements, together with any amendments required to be made
with respect thereto, that were and are required to be filed with (i) the
Federal Reserve Board, (ii) the FDIC, (iii) the Texas Banking Department and
(iv) any other applicable securities, banking or regulatory authorities (all
such reports and statements are collectively referred to herein as the "Bank
Reports"). As of their respective dates, the Bank Reports complied in all
material respects with all of the statutes, rules and regulations enforced or
promulgated by the regulatory authorities with which they were filed and did
not contain any untrue statement of a material fact or omit to state a 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.
3.07. Information Supplied. None of the information supplied or to be
supplied by Bank for inclusion or incorporation by reference in any document to
be filed with the SEC, the Federal Reserve Board, or any regulatory agency in
connection with the transactions contemplated hereby, contain or will contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. Bank has, to
the best of its knowledge, disclosed to United all financial and other
information reasonably necessary to enable United to make informed judgments
concerning the state of the financial and other conditions and affairs of Bank
and Subsidiary.
3.08. Authorizations; Compliance with Applicable Laws. Bank and
Subsidiary hold all authorizations, permits, licenses, variances, exemptions,
orders and approvals of all Governmental Entities which are material to the
operations of the businesses of Bank or Subsidiary (the "Bank Permits"),
including appropriate authorizations from the Texas Banking Department. Bank
and Subsidiary are in compliance with the terms of the Bank Permits, except
where the failure so to comply would not have a material adverse effect on Bank
or Subsidiary. Except as disclosed in the Bank Disclosure Letter, the
businesses of Bank and Subsidiary are not being conducted in violation of any
domestic (federal, state or local) or foreign law, statute, ordinance or
regulation of any Governmental Entity (collectively "Laws"), including, without
limitation, Regulation O of the Federal Reserve Board, except for possible
violations which individually or in the aggregate do not and, insofar as
reasonably can be foreseen, in the future will not, have a material adverse
effect on
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Bank or Subsidiary. No investigation or review by any Governmental Entity with
respect to Bank or Subsidiary is pending or threatened, nor has any
Governmental Entity indicated an intention to conduct the same. Without
limiting the foregoing, there have been no acts or omissions occurring on or
with respect to real estate currently or previously owned, leased or otherwise
used by Bank or Subsidiary, or in which Bank or Subsidiary has or had an
investment or security interest (by mortgage, deed of trust, or otherwise),
including, without limitation, properties under foreclosure, properties held by
Bank or Subsidiary in its capacity as a trustee, or properties in which any
venture capital or similar unit of Bank or Subsidiary has or had an interest
(the "Bank Property"), which constitute or result, or may have constituted or
resulted, in the creation of any federal, state or common law nuisance (whether
or not the nuisance condition is, or was, foreseen or unforeseen) or which do
not, or have not, complied with Environmental Laws (defined as federal, state
or local environmental laws including, without limitation, the Clean Water Act,
the Resource Conservation and Recovery Act, the Toxic Substances Control Act
and the Comprehensive Environmental, Response, Compensation and Liability Act,
as amended, and their state and local law counterparts, all rules and
regulations promulgated thereunder and all other legal requirements associated
with the ownership and use of the Bank Property) and are reasonably likely to
result in a material liability to Bank. Neither Bank nor Subsidiary is subject
to or reasonably likely to incur a material liability as a result of its
ownership, lease, operation, or use of any Bank Property or as a result of its
investment or security interest (as described above) in any Bank Property (a)
that is contaminated by or contains any Toxic Substances (defined as a
substance that is contaminated by or contains any hazardous waste, toxic
substances or related materials, including without limitation asbestos, PCBs,
pesticides, herbicides, petroleum products, substances defined as "hazardous
substances" or "toxic substances" in the Environmental Laws, and any other
substances or waste that is hazardous to human health or the environment), or
(b) on which any Toxic Substance has been stored, disposed of, placed, or used
in the construction thereof. No claim, action, suit or proceeding is pending
against Bank or Subsidiary relating to the Bank Property before any court or
other governmental authority or tribunal relating to Toxic Substances,
pollution or the environment, and there is no outstanding judgment, order,
writ, injunction, decree, or award against or affecting Bank or Subsidiary with
respect thereto.
3.09. Litigation and Claims. Except as disclosed in this Agreement or
in the Bank Disclosure Letter (a) neither Bank nor Subsidiary is subject to
any continuing order of, or written agreement or memorandum of understanding
with, or continuing material investigation by, any federal or state banking or
insurance authority or other Governmental Entity,
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or any judgment, order, writ, injunction, decree or award of any Governmental
Entity or arbitrator, including, without limitation, cease-and-desist or other
orders of any bank regulatory authority, (b) there is no claim of any kind,
action, suit, litigation, proceeding, arbitration, investigation, or
controversy affecting Bank or Subsidiary pending or threatened, which in the
aggregate will have or can reasonably be expected to have a material adverse
effect on Bank or Subsidiary and (c) there are no uncured material violations,
or violations with respect to which material refunds or restitutions may be
required, cited in any compliance report to Bank or Subsidiary as a result of
the examination by any bank regulatory authority.
3.10. Taxes. Bank and Subsidiary have filed all tax returns required
to be filed by them and have paid, or have set up an adequate reserve for the
payment of, all taxes required to be paid as shown on such returns, and the
most recent Bank Financial Statements reflect an adequate reserve for all taxes
payable by Bank and Subsidiary accrued through the date of such financial
statements. The Bank Disclosure Letter will set forth, as of the date hereof,
the following information with respect to Bank: (a) the most recent tax year
through which the United States Internal Revenue Service ("IRS") has completed
its examination of such corporation, (b) whether there is an examination
pending by the IRS with respect to such corporation and, if so, the tax years
involved, (c) whether such corporation has executed or filed with the IRS any
agreement which is still in effect extending the period for assessment and
collection of any federal tax and, if so, the tax years covered by such
agreement and the expiration date of such extension, and (d) whether there are
any existing material disputes as to foreign, state, or local taxes. There are
no material liens for taxes upon the assets of Bank or Subsidiary, except for
statutory liens for taxes not yet delinquent, adequate reserves for which have
been established on Bank's books. Except as disclosed in the Bank Disclosure
Letter and except for any action, proceeding or claim as to which the taxes
sought do not exceed $25,000, neither Bank nor Subsidiary is a party to any
action or proceeding by any governmental authority for assessment and
collection of taxes, and no claim for assessment and collection of taxes has
been asserted against any of them. For the purpose of this Agreement, the term
"tax" (including, with correlative meaning, the terms "taxes" and "taxable")
shall include all federal, state, local and foreign income, profits, franchise,
gross receipts, payroll, sales, employment, use, personal and real property,
withholding, excise and other taxes, duties or assessments of any nature
whatsoever, together with all interest, penalties and additions imposed with
respect to such amounts. Bank and Subsidiary have withheld from their
employees and timely paid to the appropriate governmental agency proper and
accurate amounts for all periods in material compliance with all tax
withholding provisions of
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applicable federal, state, foreign and local laws (including without limitation
income, social security and employment tax withholding for all types of
compensation).
3.11. Certain Agreements. Except as disclosed in the Bank Disclosure
Letter, and except for this Agreement, neither Bank nor Subsidiary is a party
to any (i) consulting agreement not terminable on 60 days' or less notice or
employment agreement or other agreement providing any term of employment,
compensation guarantee, or severance or supplemental retirement benefit, (ii)
union, guild or collective bargaining agreement, (iii) agreement or plan, any
of the benefits of which will be increased, or the vesting of the benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which
will be calculated on the basis of the transactions contemplated by this
Agreement, (iv) any stock option plan, stock appreciation rights plan,
restricted stock plan, stock purchase plan or similar plan granting rights to
acquire stock in Bank or Subsidiary, or (v) contract containing covenants which
limit the ability of Bank or Subsidiary to compete in any line of business or
with any person or which involve any restriction of the geographical area in
which, or method by which, Bank or Subsidiary may carry on its business (other
than as may be required by law or applicable regulatory authorities).
3.12. Benefit Plans. (a) The Bank Disclosure Letter lists (i) each
employee bonus, incentive, deferred compensation, stock purchase, stock
appreciation right, stock option and severance pay plan, (ii) each pension,
profit sharing, stock bonus, thrift, savings and employee stock ownership plan,
and (iii) every other employee benefit plan (within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")
(collectively "Bank Benefit Plans"), which Bank or Subsidiary maintains or to
which Bank or Subsidiary contributes on behalf of current or former employees.
Except as disclosed in the Bank Disclosure Letter, all of the Bank Benefit
Plans comply in all material respects with all applicable requirements of ERISA
and all other applicable federal and state laws, including without limitation
the reporting and disclosure requirements of Part 1 of Title I of ERISA. With
respect to the Bank Benefit Plans, individually and in the aggregate, no event
has occurred and there exists no condition or set of circumstances in
connection with which Bank or Subsidiary could be subject to any liability that
is reasonably likely to have a material adverse effect upon Bank or Subsidiary
(except liability for benefits claims and funding obligations payable in the
ordinary course) under ERISA, the Code or any other applicable law. Each of
the Bank Benefit Plans that is intended to be a pension, profit sharing, stock
bonus, thrift, savings or employee stock ownership plan that is qualified under
Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
has been determined by
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the IRS to qualify under Section 401(a) of the Code, or an application for the
determination of such qualification will be made to the IRS under Section
401(b) of the Code and the regulations thereunder, and there exist no
circumstances that would materially adversely affect the qualified status of
any such Bank Benefit Plan under that section. Except as set forth in the Bank
Disclosure Letter, each Bank Benefit Plan that is a defined benefit pension
plan has assets with an aggregate value that exceeds the actuarially present
value of its liability for accrued benefits as determined on the basis of the
actuarial assumptions used for the most recent actuarial valuation of such
Plan, no such Plan has incurred an accumulated funding deficiency within the
meaning of Section 412(a) of the Code, and no such Plan is a "multiemployer
plan" within the meaning of Section 3(37) of ERISA. Except as set forth in the
Bank Disclosure Letter, there is no pending or threatened litigation,
governmental proceeding or investigation against or relating to any Bank
Benefit Plan, and there is no reasonable basis for any material proceedings,
claims, actions or proceedings against any Plan. Except as set forth in the
Bank Disclosure Letter, no "reportable event" (as defined in Section 4043(b) of
ERISA) (other than a "reportable event" for which the 30-day notice requirement
has been waived by the Pension Benefit Guaranty Corporation) has occurred with
respect to any Bank Benefit Plan, and no Bank Benefit Plan has engaged in a
"prohibited transaction" (as defined in Section 406 of ERISA and Section
4975(c) of the Code) since the date on which said sections became applicable to
such Plan which could reasonably result in a material liability.
(b) Bank has delivered to United copies of (i) each Bank
Benefit Plan, (ii) the most recent summary plan descriptions of each Bank
Benefit Plan, (iii) each trust agreement, insurance policy or other instrument
relating to the funding of any Bank Benefit Plan, (iv) the most recent Annual
Reports (Form 5500 series) and accompanying schedules filed with the IRS or
United States Department of Labor with respect to each Bank Benefit Plan, (v)
the most recent determination letter issued by the IRS with respect to each
Bank Benefit Plan that is intended to qualify under Section 401 of the Code,
(vi) the most recent available financial statements for each Bank Benefit Plan
that has assets, (vii) the most recent actuarial report for any Bank Benefit
Plan that is a defined benefit pension plan, and if any such Plan was amended
subsequent to the date of such report, information about the financial effects
of such amendment and (viii) the most recent audited financial statements for
each Bank Benefit Plan for which audited financial statements are required by
ERISA.
3.13. Insurance. Bank has delivered to United correct and complete
summaries of all material policies of insurance of Bank and Subsidiary
currently in effect. Neither Bank nor Subsidiary has any liability for unpaid
premiums or premium adjustments not properly reflected on the Bank Financial
Statements.
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3.14. Conduct of Bank to Date. Except as disclosed in the Bank
Disclosure Letter and except as contemplated by this Agreement and the Plan of
Merger, from and after December 31, 1993: (a) Bank and Subsidiary have carried
on their respective businesses in the ordinary and usual course consistent with
past practices, (b) Bank has not issued or sold any of its capital stock or
issued or sold any corporate debt securities which would be classified as long
term debt on the balance sheet of Bank, (c) Bank has not granted any option for
the purchase of its capital stock, effected any stock split, or otherwise
changed its capitalization, (d) Bank has not declared, set aside, or paid any
cash or stock dividend or other distribution in respect of its capital stock,
(e) neither Bank nor Subsidiary has incurred any material obligation or
liability (absolute or contingent), except normal trade or business obligations
or liabilities incurred in the ordinary course of business, or mortgaged,
pledged, or subjected to lien, claim, security interest, charge, encumbrance or
restriction any of its assets or properties, (f) neither Bank nor Subsidiary
has discharged or satisfied any material lien, mortgage, pledge, claim,
security interest, charges, encumbrance, or restriction or paid any material
obligation or liability (absolute or contingent), other than in the ordinary
course of business, (g) neither Bank nor Subsidiary has sold, assigned,
transferred, leased, exchanged, or otherwise disposed of any of its properties
or assets other than for a fair consideration in the ordinary course of
business, (h) neither Bank nor Subsidiary has increased the rate of
compensation of, or paid any bonus to, any of its directors, officers, or other
employees, except merit or promotion increases in accordance with existing
policy; entered into any new, or amended or supplemented any existing,
employment, management, consulting, deferred compensation, severance, or other
similar contract; adopted, entered into, terminated, amended or modified any
Bank Benefit Plan in respect of any of present or former directors, officers or
other employees; or agreed to do any of the foregoing, (i) neither Bank nor
Subsidiary has suffered any material damage, destruction, or loss, whether as
the result of flood, fire, explosion, earthquake, accident, casualty, labor
trouble, requisition or taking of property by any government or any agency of
any government, windstorm, embargo, riot, act of God or the enemy, or other
similar or dissimilar casualty or event or otherwise, and whether or not
covered by insurance, (j) neither Bank nor Subsidiary has cancelled or
compromised any debt to an extent exceeding $100,000 owed to Bank or Subsidiary
or claim to an extent exceeding $100,000 asserted by Bank or Subsidiary, (k)
neither Bank nor Subsidiary has entered into any transaction, contract, or
commitment outside the ordinary course of its business, (1) neither Bank nor
Subsidiary has entered, or agreed to enter, into any agreement or arrangement
granting any preferential right to purchase any of its material assets,
properties or rights or requiring the consent of any party to the transfer and
assignment of any such material assets, properties or rights, (m) there has not
been any other transaction, commitment, dispute or other event or condition
(financial or otherwise)
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of any character (whether or not in the ordinary course of business)
individually or in the aggregate having or which, insofar as reasonably can be
foreseen, in the future is reasonably likely to have, a material adverse effect
on Bank or Subsidiary, (n) there has not been any change in the method of
accounting or accounting practices of Bank and Subsidiary, and (o) Bank and
Subsidiary have kept all records in accordance with all regulatory and
statutory requirements and in accordance with industry standards specified by
the American Bankers Association, and have retained such records for the
periods required by statute, regulation or American Bankers Association
industry standards.
3.15. Material Adverse Change. Since December 31, 1993, there has been
no material adverse change in the financial condition, results of operations or
business of Bank and Subsidiary.
3.16. Properties, Leases and Other Agreements. Except (i) as may be
reflected in the Bank Financial Statements, (ii) for any lien for current taxes
not yet delinquent, (iii) for pledges to secure deposits and (iv) for such
other liens, security interests, claims, charges, options or other encumbrances
and imperfections of title which do not materially affect the value or
interfere with or impair the present and continued use of personal or real
property reflected in the Bank Financial Statements or acquired since the date
of such Statements, Bank and Subsidiary have good title, free and clear of any
liens, security interests, claims, charges, options or other encumbrances to
all of the personal and real property reflected in the Bank Financial
Statements, and all personal and real property acquired since the date of such
Statements, except such personal and real property as has been disposed of in
the ordinary course of business. Substantially all Bank's and Subsidiary's
buildings and equipment in regular use have been reasonably maintained and are
in good and serviceable condition, reasonable wear and tear excepted. All
leases material to Bank and Subsidiary pursuant to which Bank or Subsidiary, as
lessee, leases real or personal property are valid and effective in accordance
with their respective terms and there is not, under any of such leases, any
material existing default by Bank, Subsidiary or, to the best knowledge of
Bank, any other party thereto, or any event which with notice or lapse of time
or both would constitute such a material default. No options to renew said
leases have lapsed and the terms of the leases govern the rights of the
respective landlords of Bank and Subsidiary.
3.17. No Untrue Statements. No representation or warranty hereunder or
information contained in any financial statement or any other document
delivered to United pursuant to this Agreement contains any untrue statement of
a material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading.
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3.18. Existence and Enforceability of Loans. With respect to all loans
to borrowers which are payable to Bank or Subsidiary either directly or as a
participant and except for such imperfections as do not have a material net
adverse effect on the business, operations or financial condition of Bank or
Subsidiary:
(a) All loans were made for good, valuable and adequate
consideration in the normal and ordinary course of business, and the
notes and other evidences of indebtedness and any loan agreements or
security documents executed in connection therewith are true and genuine
and constitute the valid and legally binding obligations of the
borrowers to whom the loans were made and are legally enforceable
against such borrowers in accordance with their terms subject to
applicable bankruptcy, insolvency, reorganization, moratorium, and
similar debtor relief laws from time to time in effect, as well as
general principles of equity applied by a court of proper jurisdiction;
(b) The amounts represented to United as the balances owing on
the loans are the correct amounts actually and unconditionally owing,
are undisputed, and are not subject to any offsets, credits, deductions
or counterclaims;
(c) The collateral securing each loan as referenced in a loan
officer worksheet, loan summary report or similar internal loan
documentation is in fact the collateral held by Bank or Subsidiary to
secure each loan;
(d) Bank or Subsidiary have possession of all loan document
files and credit files for all loans held by them containing promissory
notes and other relevant evidences of indebtedness with original
signatures of their borrowers and guarantors;
(e) Bank and Subsidiary hold validly perfected liens or
security interests in the collateral granted to Bank or Subsidiary to
secure all loans as referenced in the loan officer worksheets, loan
summary reports or similar internal loan documentation and the loan or
credit files contain the original security agreements, mortgages, or
other lien creation and perfection documents unless originals of such
documents are filed of public record;
(f) The liens or security interests of Bank and Subsidiary in
the collateral held for loans are properly perfected in the priority
intended to be held by Bank and Subsidiary and described in the loan
officer worksheets, loan summary reports or similar internal loan
documentation contained in the loan document or credit files;
(g) Bank and Subsidiary are in possession of all collateral
that the loan document files or credit files indicate they have in their
possession;
(h) All guaranties granted to Bank and Subsidiary to insure
payment of loans constitute the valid and legally binding obligations of
the guarantors and are enforceable in accordance with their terms;
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(i) With respect to any loans in which Bank and Subsidiary have
sold participation interests to another bank or other financial
institution, none of the buyers of such participation interests are in
default under any participation agreements.
3.19. Not in Default. Bank and Subsidiary are not in default under any
material agreement, ordinance, resolution, decree, bond, note, indenture, order
or judgment to which either is a party, by which either is bound, or to which
their properties or assets are subject.
3.20. Trust Validity; Authority. The Mildred Creighton Trust; the
Martha Prieskorn Trust; the Cindy Sandefur Trust and the MCM Partnership Trust,
respectively, have been duly created under the laws of the State of Texas and
are validly existing. The undersigned trustees executing this Agreement on
behalf of said Trusts have been duly appointed, constitute all of the presently
acting Trustees of the Trusts and have all requisite power and authority to
execute and deliver this Agreement and to perform this Agreement in accordance
with its terms. The undersigned representative executing the Agreement on
behalf of the Lucille Cook Agency has been duly appointed and has all requisite
power and authority to execute and deliver this Agreement and to perform this
Agreement in accordance with its terms. MCM Limited Partnership is a Texas
limited partnership and its undersigned general partner has all requisite power
and authority to enter into this Agreement and to perform this Agreement in
accordance with its terms for and on behalf of said limited partnership. The
Individual Retirement Arrangement of Gene Wyatt is a self-directed individual
retirement arrangement and, with respect to the shares of stock of Bank
therein, he has all requisite power and authority to execute and deliver this
Agreement and to perform this Agreement in accordance with its terms. Gene
Wyatt is the beneficial owner of the shares of stock of Bank credited to his
account in the employee stock purchase plan feature of the Bank Benefit Plans
and, under the provisions of the Bank Benefit Plans, he has full power and
authority to direct the manner of the voting of such shares of stock at
meetings of shareholders of the Bank.
3.21. Correction of Examination Deficiencies. Bank shall use its best
efforts to correct, prior to the Closing, all deficiencies noted in the
compliance examination dated June 4, 1993, of the Federal Deposit Insurance
Corporation, and the Safety and Soundness examination dated March 31, 1994, of
the Federal Deposit Insurance Corporation, and United shall have received a
certificate signed on behalf of Bank by the Chairman of the Board and each
member of the Board of Bank to such effect.
3.22. Sellers Informed Decision. Each Seller is fully knowledgeable
and familiar with the business and financial condition of Bank and Subsidiary
and had access to all material information that each Seller considered
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necessary or advisable to enable each Seller to make an informed investment
decision and Sellers are not relying upon any representations made by United or
any officer, director, shareholder or agent thereof except as expressly stated
in this Agreement.
3.23. Limitation on Representations and Warranties of Sellers. It is
expressly agreed and understood by the parties that, any and all
representations and warranties by a Seller set forth in this Article III are
based solely on the personal knowledge, information and belief of the
respective Seller and in no event shall a Seller be deemed to be in breach with
respect to any representation and/or warranty unless he shall have had personal
knowledge or information (or reason to believe) that such representation and/or
warranty was unfounded.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF UNITED
United hereby represents and warrants to Bank as follows:
4.01. Organization, Standing and Power. United is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Arkansas and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted,
except where the failure to have such power or authority would not have a
material adverse effect on the business, operations or financial condition of
United and its Subsidiaries. United is not qualified to do business in any
other state or foreign jurisdiction, and its ownership or leasing of property
or the conduct of its business does not require it to be so qualified or the
failure to be so qualified would not have a material adverse effect on the
business, operations or financial condition of United and its Subsidiaries.
United is registered as a bank holding company with the Federal Reserve Board
under the Bank Holding Company Act of 1956, as amended (the "BHC Act").
4.02. Authority. Subject only to approval of this Agreement and the
Plan of Merger by the board of directors of United, United has all requisite
corporate power and authority to enter into this Agreement and the Plan of
Merger and to consummate the transactions contemplated hereby and thereby.
Upon approval by the United board of directors, the execution and delivery of
this Agreement and the Plan of Merger and the consummation of the transactions
contemplated hereby and thereby will have been duly authorized by all necessary
corporate action on the part of United. Subject to the foregoing, this
Agreement and the Plan of Merger have been duly executed and delivered by
United, and each will constitute a valid and binding obligation of United
enforceable in accordance
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with its terms, except as the enforceability of the Agreement may be subject to
or limited by bankruptcy, insolvency, reorganization, arrangement, moratorium
or other similar laws relating to or affecting the rights of creditors. The
execution and delivery of this Agreement and the Plan of Merger do not, and the
consummation of the transactions contemplated hereby and thereby will not,
result in any Violation pursuant to any provision of the Articles of
Incorporation or Bylaws of United or any of its Subsidiaries or, except as
contemplated below, result in any Violation of any loan or credit agreement,
note, mortgage, indenture, lease, or other agreement, obligation, instrument,
permit, concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to United or any of its Subsidiaries
or their respective properties or assets which Violation would have a material
adverse effect on United or any United Subsidiary; provided, however, that the
consent of First Tennessee Bank, N.A. is required before United may lawfully
consummate the transactions contemplated herein. Other than in connection or
in compliance with the provisions of the Arkansas Business Corporation Act, the
Securities Act of 1933, as amended, the Exchange Act of 1934, as amended, the
securities or blue sky laws of the various states, and consents,
authorizations, approvals, notices or exemptions required under the BHC Act,
the National Bank Act and from other regulatory authorities, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity is required by or with respect to United or any
of its Subsidiaries in connection with the execution and delivery of this
Agreement and the Plan of Merger by United or the consummation by United of the
transactions contemplated hereby and thereby, the failure to obtain which would
have a material adverse effect on United or any United Subsidiary.
ARTICLE V
COVENANTS OF BANK AND SELLERS
5.01. Affirmative Covenants. Bank hereby covenant and agree with
United that prior to the Effective Time, unless the prior written consent of
United shall have been obtained, which consent shall not be unreasonably
withheld, and except as otherwise contemplated herein, Bank and Subsidiary
will:
(a) operate its business only in the usual, regular and
ordinary course consistent with past practices;
(b) use reasonable efforts to preserve intact its business
organization and assets, maintain its rights and franchises, retain the
services of its officers and key employees (except that it shall have the right
to
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lawfully terminate the employment of any officer or key employee if such
termination is in accordance with Bank's existing employment procedures) and
maintain its relationships with customers;
(c) use reasonable efforts to maintain and keep its
properties in as good repair and condition as at present, except for
depreciation due to ordinary wear and tear;
(d) use reasonable efforts to keep in full force and effect
insurance and bonds comparable in amount and scope of coverage to that now
maintained by it; provided, however, that Bank shall not be required to
purchase insurance policies for directors' and officers' liabilities;
(e) perform in all material respects all obligations
required to be performed by it under all material contracts, leases, and
documents relating to or affecting its assets, properties, and business; and
(f) comply with and perform in all material respects all
obligations and duties imposed upon it by all Laws.
5.02. Negative Covenants. Except as specifically contemplated by this
Agreement, from the date hereof until the Effective Time, Bank shall not do, or
permit Subsidiary to do, without the prior written consent of United (which
shall not be unreasonably withheld) any of the following:
(a) incur any material liabilities or material obligations,
whether directly or by way of guaranty, including any obligation for borrowed
money whether or not evidenced by a note, bond, debenture or similar
instrument, except in the ordinary course of business consistent with past
practice;
(b) (i) grant any general increase in compensation to
its employees as a class, or to its officers or directors, except in accordance
with past practice or as required by law, or increases which are not material,
or the payment of year-end bonuses in accordance with past practice, (ii)
effect any change in retirement benefits to any class of employees or officers
(unless any such change shall be required by applicable law) which would
increase its retirement benefit liabilities, (iii) adopt, enter into, amend or
modify any Bank Benefit Plan, or (iv) enter into or amend any employment,
severance or similar agreements or arrangements with any directors or officers,
other than as is consistent with the normal severance policy of Bank in effect
on the date hereof as listed in the Bank Disclosure Letter;
(c) except as provided in Section 1.07 above, declare or
pay any dividend on, or make any other distribution in respect of, its
outstanding shares of capital stock, except dividends by Subsidiary;
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(d) (i) redeem, purchase or otherwise acquire any shares of
its capital stock or any securities or obligations convertible into or
exchangeable for any shares of its capital stock, or any options, warrants,
conversion or other rights to acquire any shares of its capital stock or any
such securities or obligations; (ii) merge with or into any other corporation
or bank, permit any other corporation or bank to merge into it or consolidate
with any other corporation or bank, or effect any reorganization or
recapitalization; (iii) purchase or otherwise acquire any substantial portion
of the assets, or more than 5% of any class of stock, of any corporation, bank
or other business; (iv) liquidate, sell, dispose of, or encumber any assets or
acquire any assets, other than in the ordinary course of its business
consistent with past practice; or (v) split, combine or reclassify any of its
capital or issue or authorize or propose the issuance of any other securities
in respect of, in lieu of or in substitution for shares of its capital stock;
(e) issue, deliver, award, grant or sell, or authorize or
propose the issuance, delivery, award, grant or sale of, any shares of its
capital stock of any class (including shares held in treasury), any Voting Debt
or any securities convertible into, or any rights, warrants or options to
acquire, any such shares, Voting Debt or convertible securities;
(f) except as may be required by applicable law, initiate,
solicit or encourage (including by way of furnishing information or
assistance), or take any other action to facilitate, any inquiries or the
making of any proposal which constitutes, or may reasonably be expected to lead
to, any Competing Transaction (as such term is defined below), or negotiate
with any person in furtherance of such inquiries or to obtain a Competing
Transaction, or agree to or endorse any Competing Transaction, or authorize or
permit any of its officers, directors or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by it
or Subsidiary to take any such action, and Bank shall promptly notify United
orally and in writing of all of the relevant details relating to all inquiries
and proposals which it may receive relating to any of such matters; for
purposes of this Agreement, "Competing Transaction" shall mean any of the
following involving Bank or Subsidiary: any merger, consolidation, share
exchange or other business combination; a sale, lease, exchange, mortgage,
pledge, transfer or other disposition of a substantial portion of assets; a
sale of shares of capital stock (or securities convertible or exchangeable into
or otherwise evidencing, or any agreement or instrument evidencing, the right
to acquire capital stock);
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(g) propose or adopt any amendments to its corporate
charter or by-laws in any way adverse to United;
(h) authorize, recommend, propose or announce an intention
to authorize, recommend or propose, or enter into an agreement in principle
with respect to any acquisition of a material amount of assets or securities or
any release or relinquishment of any material contract rights not in the
ordinary course of business;
(i) except in their fiduciary capacities, purchase any
shares of United common stock;
(j) change any of its methods of accounting in effect at
December 31, 1993, or change any of its methods of reporting income or
deductions for federal income tax purposes from those employed in the
preparation of the federal income tax returns for the taxable year ending
December 31, 1993, except as may be required by law or generally accepted
accounting principles;
(k) take action which would or is reasonably likely to (i)
adversely affect the ability of either of United or Bank to obtain any
necessary approvals of governmental authorities required for the transactions
contemplated hereby; (ii) adversely affect Bank's ability to perform its
covenants and agreements under this Agreement; or (iii) result in any of the
conditions to the Merger set forth in Article VIII not being satisfied;
(1) change the lending, investment, asset/liability
management and other material policies concerning the banking business of Bank
and Subsidiary, unless required by Law or order or unless such change does not
cause a materially adverse effect on Bank or Subsidiary;
(m) agree in writing or otherwise to do any of the
foregoing;
(n) make any new single loan or series of loans to one
borrower or related series of borrowers in an aggregate amount greater than
$500,000.00; or
(o) sell or otherwise dispose of securities owned as
investments except at maturity dates or as needed for liquidity purposes in
accordance with past practices, provided, however, that this restriction shall
not apply to securities held for sale.
5.03. Access and Information. Upon reasonable notice, Bank shall (and
shall cause Subsidiary to) afford to United's officers, employees, accountants,
counsel and other representatives, access, during normal business hours during
the period prior to the Effective Time, to all its properties, books,
contracts, commitments and records. During such period, Bank shall (and shall
cause Subsidiary to) furnish promptly to United (i) a copy of each Bank
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Report filed or received by it during such period pursuant to the requirements
of the TBC and any other federal or state banking laws promptly after such
documents are available, (ii) the monthly financial statements of Bank and
Subsidiary (as prepared by Bank in accordance with its normal accounting
procedures) promptly after such financial statements are available, (iii) a
summary of any action taken by the Board of Directors, or any committee
thereof, of Bank, and (iv) all other information concerning its business,
properties and personnel as United may reasonably request. Unless otherwise
required by law, the parties will hold any such information which is nonpublic
in confidence until such time as such information otherwise becomes publicly
available through no wrongful act of either party, and in the event of
termination of this Agreement for any reason each party shall promptly return
all nonpublic documents obtained from any other party, and any copies made of
such documents, to such other party or destroy such documents and copies.
5.04. Update Disclosure; Breaches.
(a) From and after the date hereof until the Effective
Time, Bank shall update the Bank Disclosure Letter by notice to United as
necessary to reflect any matters which have occurred from and after the date
hereof which, if existing on the date hereof, would have been required to be
described therein, provided, however, that no such update shall affect the
conditions to the obligation of United to consummate the transactions
contemplated hereby, and any and all changes contained in any such update shall
be considered in determining whether such conditions have been satisfied;
provided further that, without limiting United's rights under Section 5.03, to
the extent that any information that would be required to be included in an
update under this Section 5.04(a) has in the past been contained in internal
reports prepared by Bank or Subsidiary in the ordinary course, such update may
occur at the time such information becomes available to United in such internal
reports prepared in accordance with past practice.
(b) Bank shall, in the event it becomes aware of the
impending or threatened occurrence of any event or condition which would cause
or constitute a material breach (or would have caused or constituted a breach
had such event occurred or been known prior to the date hereof) of any of its
representations or agreements contained or referred to herein, give prompt
written notice thereof to United and use its best efforts to prevent or
promptly remedy the same.
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5.05. Vote of Bank Shareholders. Except as may be required by
applicable law, each Seller hereby agrees to vote all shares of Bank Common
Stock owned, voted or controlled by each Seller in favor of the Merger at the
Bank Shareholders Meeting called to vote on the Merger, and further agrees to
take such other action or cast such other votes as shareholders of Bank as are
reasonably deemed necessary or desirable by United to facilitate consummation
of the transactions contemplated herein.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01. Shareholder Meetings. Bank shall call a meeting of its
shareholders to be held as promptly as practicable for the purpose of voting
upon the Merger Agreements.
6.02. Legal Conditions to Merger. Each of Bank and United will take
all reasonable actions necessary to comply promptly with all legal requirements
it may have with respect to the Merger (including furnishing all information
required by the Federal Reserve Board or in connection with approvals of or
filings with any other Governmental Entity) and will promptly cooperate with
and furnish information to each other in connection with any such requirements
imposed upon any of them or any of their Subsidiaries in connection with the
Merger. Each of Bank and United will, and will cause its Subsidiaries to, take
in a prompt manner all reasonable actions necessary to obtain (and will
cooperate with each other in obtaining) any agreement, consent, authorization,
order or approval of, or any exemption by, any Governmental Entity or other
public or private third party, required to be obtained or made by United, Bank
or any of their Subsidiaries in connection with the Merger or the taking of any
action contemplated thereby or by this Agreement and the Plan of Merger.
6.03. Reports.
(a) Prior to the Effective Time, (i) Bank shall prepare and
file as and when required all Bank Reports.
(b) Bank shall prepare such Bank Reports so that (i) they
comply in all material respects with all of the statutes, rules and regulations
enforced or promulgated by the regulatory authority with which they are filed
and do not contain any untrue statement of a material fact or omit to state a
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, and (ii) with respect to any Bank Reports containing financial
information of the type
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included in the Bank Financial Statements the financial information (A) is
prepared in accordance with generally accepted accounting principles and
practices as utilized in the Bank Financial Statements applied on a consistent
basis (except as stated therein or in the notes thereto), (B) presents fairly
the consolidated financial condition of Bank at the dates, and the consolidated
results of operations and cash flows for the periods, stated therein and (C) in
the case of interim fiscal periods, reflects all adjustments, consisting only
of normal recurring items necessary for a fair presentation, subject to
year-end audit adjustments.
6.04. Brokers or Finders. Each of United and Bank represents, as to
itself, its Subsidiaries and its affiliates, that no agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
broker's or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement.
6.05. Reasonable Efforts. Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including cooperating fully with the other party. In case at any time after
the Effective Time any further action is reasonably necessary or desirable to
carry out the purposes of this Agreement or to vest United, through its
Subsidiary, with full title to all properties, assets, rights, approvals,
immunities and franchises of either of Bank or its Subsidiary, the proper
officers and directors of each party to this Agreement shall take all such
necessary action.
6.06. Governmental and Other Third Party Approvals. Bank and United
shall each use their reasonable best efforts to obtain all governmental and
other third party approvals, authorizations and consents that may be necessary
or reasonably required of them in order to effect the transactions contemplated
by this Agreement. Bank and United agree to make all filings and applications
for such approvals and reviews as soon as practicable, to prosecute the same
with reasonable diligence and to notify each other when such approvals,
authorizations and consents have been received. Bank and United will provide
each other with copies of all regulatory notices and filings made in connection
with the transactions contemplated by this Agreement prior to filing. Each
party will also promptly provide to the other copies of any correspondence
received from any regulatory agency relating to such filings, and
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shall use its best efforts to keep the other party advised of the progress of
obtaining all regulatory and third party approvals required for the
consummation of all transactions contemplated by this Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
7.01. Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger are subject to the
satisfaction prior to the Closing Date of the following conditions:
(a) Shareholder Approval. The Merger Agreements shall have
been approved and adopted by the legally required vote of the holders of the
outstanding shares of Bank.
(b) Federal Reserve Board. The Merger Agreements and the
transactions contemplated hereby, as well as the formation of First Texas as
United's subsidiary bank holding company, shall have been approved by the
Federal Reserve Board without any condition not satisfactory to United, all
conditions required to be satisfied prior to the Effective Time imposed by the
terms of such approvals shall have been satisfied and all waiting periods
relating to such approvals shall have expired.
(c) Texas Banking Department. The creation of Interim Bank
and the Bank Merger shall have been approved by the Texas Banking Department
without any condition (other than advance notification) not satisfactory to
United, all conditions required to be satisfied prior to the Merger and the
occurrence of the Effective Time imposed by the terms of such approval shall
have been satisfied and all waiting periods relating to such approval shall
have expired and there shall exist no condition that prevents consummation of
the Merger at the Effective Time.
(d) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court
of competent jurisdiction or other legal restraint or prohibition (an
"Injunction") preventing the consummation of the Merger shall be in effect.
(e) No Proceeding or Litigation. No material action, suit
or proceeding before any court or any governmental or regulatory authority
shall have been commenced against United, Bank or any affiliate, associate,
officer or director of either of them, seeking to restrain, enjoin, prevent,
change or rescind the transactions contemplated hereby or questioning the
validity or legality of any such transactions.
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<PAGE> 34
(f) Consents Under Agreements. United, Bank and their
Subsidiaries shall have obtained the consent or approval of each person whose
consent or approval shall be required in connection with the transactions
contemplated hereby under any loan or credit agreement, note, mortgage,
indenture, lease or other agreement or instrument.
(g) Other Regulatory Approvals. All other regulatory
approvals necessary to allow consummation of the transactions contemplated by
this Agreement shall have been obtained.
7.02. Conditions to Obligations of United. The obligations of United
to effect the Merger are subject to the satisfaction of the following
conditions unless waived in writing by United:
(a) Representations and Warranties. Each of the
representations and warranties of Bank and Sellers set forth in this Agreement
shall be true and correct in all material respects as of the date of this
Agreement and as of the Closing Date as though made on and as of the Closing
Date, except for changes expressly contemplated by this Agreement, and United
shall have received a certificate signed on behalf of Bank by the Chief
Executive Officer and by the Chief Financial Officer of Bank to such effect.
(b) Performance of Obligations of Bank. Bank shall have
performed in all material respects each of the obligations required to be
performed by it under this Agreement and the Plan of Merger at or prior to the
Closing Date, and United shall have received a certificate signed on behalf of
Bank by the Chief Executive Officer and by each member of the Board of Bank to
such effect.
(c) Opinion of Counsel. Bank shall have delivered to
United an opinion of its counsel, Atchley, Russell, Waldrop & Hlavinka, L.L.P.,
dated as of the Closing Date and in form and substance satisfactory to counsel
for United, to the aggregate effect that: (i) Bank is a State chartered bank
validly existing under the laws of Texas with full corporate power and
authority to enter into this Agreement and the Plan of Merger and to consummate
the transactions contemplated thereby; (ii) all corporate proceedings and other
actions on the part of Bank necessary to be taken in connection with the Merger
and (except for the filing of the Certificate of Merger) necessary to make same
effective have been duly and validly taken; (iii) this Agreement and the Plan
of Merger have been duly and validly authorized, executed and delivered on
behalf of Bank and constitute (subject to standard exceptions to enforceability
arising from the bankruptcy laws and rules of equity) valid and binding
agreements of Bank; (iv) this Agreement and the transactions contemplated
hereby do not constitute a "disposition" within the meaning of the BSC
Regulations or IBS Regulations; and (v) Bank is not and may not be, unless Bank
so consents, liable for the debts,
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<PAGE> 35
obligations or liabilities of either BSC or IBS notwithstanding the fact that
Bank may be required to make additional pro rata cash contributions as
expressed in Section 3.02(b)(i) and (b)(ii) hereof.
(d) No Material Adverse Change. There shall have been no
material adverse change since December 31, 1993 in the financial condition,
results of operations or business of Bank and Subsidiary. Bank agrees that
upon execution of this Agreement, United shall have complete access to all
documents, financial statements or any other document used in the conduct of
Bank's business and the ability to analyze Bank's loan portfolio. Material
adverse change shall include, but is not limited to, a material change in the
credit classification of any loan or any other extension of credit, or the
commencement or making of any investigation, lawsuit or claim which, if decided
adversely to Bank or a Bank Subsidiary, would have a material adverse effect on
Bank or any Bank Subsidiary.
(e) If the Closing Date is after February 28, 1995, United
shall have received audited financial statements of Bank for the period ended
December 31, 1994, certified by Thomas & Thomas and such audited financial
statements shall reflect no material adverse change since December 31, 1993 in
the financial condition, result of operations or business of Bank and the Bank
Subsidiaries.
(f) Each Seller shall have executed and become legally
bound to the terms of this Agreement.
(g) Environmental Audits. Phase I environmental audits of
properties on which Bank operates its facilities and such other real estate
owned by Bank as is identified in the Bank's Disclosure Letter as potentially
involving problems with Environmental Laws shall have been conducted at
United's option and at Bank's expense, and shall, to United's satisfaction,
reflect no material problems under Environmental Laws. Phase I environmental
audits of any other real estate owned by Bank as United may select shall have
been conducted at United's option and expense and shall, to United's
satisfaction, reflect no material problems under Environmental Laws.
(h) Due Diligence. United shall have had the opportunity
to do general due diligence regarding any and all matters related to Bank's
business, including but not limited to a review of all loan files, trust
records and legal proceedings, an analysis of the investment securities
portfolio, and access to bank personnel, and shall be satisfied that no
material contingent liability exists other than those, if any, disclosed in the
Bank Disclosure Statement and that Bank's overall financial condition is
satisfactory to United.
(i) Escrow Agreement. The Escrow Agreement described in
Section 2.01(a) hereof shall be funded and in effect as of the Effective Time.
28
<PAGE> 36
(j) Federal Income Tax Consequences. United shall have
received an opinion of tax counsel acceptable to United in form and substance
satisfactory to United to the effect that no gain or loss will be recognized by
Bank as a result of the Merger.
7.03. Conditions to Obligations of Bank and Sellers. The obligations
of Bank and Sellers to effect the Merger are subject to the satisfaction of
the following conditions unless waived by Bank and Sellers:
(a) Representations and Warranties. Each of the
representations and warranties of United set forth in this Agreement shall be
true and correct in all material respects as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date, except for
changes expressly contemplated by this Agreement, and Bank and Sellers shall
have received a certificate signed on behalf of United by the Chief Executive
Officer and by the Chief Financial Officer of United to such effect.
(b) Performance of Obligations of United. United shall have
performed in all material respects each of the obligations required to be
performed by it under this Agreement and the Plan of Merger at or prior to the
Closing Date, and Bank shall have received a certificate signed on behalf of
United by the Chief Executive Officer and by the Chief Financial Officer of
United to such effect.
(c) Opinion of Counsel. United shall have delivered to
Bank an opinion of its counsel, Ivester, Skinner & Camp, P.A., dated as of the
Closing Date and in form and substance satisfactory to counsel for Bank, to the
aggregate effect that: (i) United is a corporation validly existing under the
laws Arkansas with full corporate power and authority to enter into this
Agreement and the Plan of Merger and to consummate the transactions
contemplated thereby; (ii) all corporate proceedings and other actions on the
part of United necessary to be taken in connection with the Merger and
necessary to make same effective have been duly and validly taken; and (iii)
this Agreement has been duly and validly authorized, executed and delivered on
behalf of United and constitutes (subject to standard exceptions to
enforceability arising from the bankruptcy laws and rules of equity) a valid
and binding agreement of United.
(d) Federal Income Tax Consequences. Bank and Sellers
shall have received an opinion of tax counsel acceptable to Bank and Sellers,
in form and substance satisfactory to Bank and Sellers, to the effect that (i)
no gain or loss will be recognized by Bank as a result of the Merger and (ii)
gain or loss will be recognized to the stockholders of Bank only to the extent
that cash is received by them as a result of the conversion of Bank Common
Stock and the distribution of cash payments as provided in Section 2.01(a)
hereof.
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<PAGE> 37
ARTICLE VIII
TERMINATION AND AMENDMENT
8.01 Termination. This Agreement and the Plan of Merger may be
terminated at any time prior to the Effective Time:
(a) by mutual consent of the Board of Directors of United
and the Board of Directors of Bank;
(b) by either United or Bank (A) if there has been a breach
in any material respect of any representation, warranty, covenant or agreement
on the part of Bank or Sellers, on the one hand, or United on the other hand,
respectively, set forth in this Agreement, or (B) if any representation or
warranty of Bank or Sellers, on the one hand, or United on the other hand,
respectively, shall be discovered to have become untrue in any material
respect, in either case which breach or other condition has not been cured
within 10 business days following receipt by the nonterminating party of notice
of such breach or other condition;
(c) by either United or Bank if any permanent Injunction
preventing the consummation of the Merger shall have become final and
nonappealable;
(d) by either United or Bank if the Merger shall not have
been consummated on or before March 31, 1995, for a reason other than the
failure of the terminating party to comply with its obligations under this
Agreement;
(e) by either United or Bank if the Federal Reserve Board
has denied approval of creation of First Texas and such denial has become final
and not subject to further review or appeal;
(f) by either United or Bank if the Texas Banking
Department has denied approval of the Merger and such denial has become final
and not subject to further review or appeal;
(g) by United or Bank if any condition precedent to the
terminating party's obligation to effect the Merger has not been satisfied and
such condition cannot reasonably be expected to be satisfied prior to the date
specified in Subsection 8.01(d).
8.02. Effect of Termination. In the event of termination of this
Agreement by either Bank or United as provided in Section 8.01, this Agreement
and the Plan of Merger shall forthwith become void and there shall be no
liability or obligation on the part of Sellers, United, Bank or their
respective officers or directors except that all costs incurred by FirstBank to
take the actions specified in Section 1.05 shall be reimbursed by United
despite such
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<PAGE> 38
termination, and except to the extent that such termination results from the
willful breach by a party hereto of any of its representations, warranties,
covenants or agreements set forth in this Agreement.
8.03. Amendment. Subject to the next following sentence, this
Agreement and the Plan of Merger may be amended by the parties hereto by action
taken or authorized by Sellers and the respective Boards of Directors of United
and Bank at any time prior to the Closing Date, but after approval by Bank's
Shareholders as contemplated by Section 6.01, no amendment shall be made which
changes in a manner adverse to Sellers the consideration to be provided to
Sellers pursuant to the Merger Agreements. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
8.04. Extension; Waiver. At any time prior to the Effective Time,
United, on the one hand, and Bank, on the other hand, by action taken or
authorized by their respective Board of Directors, may, to the extent legally
allowed, (i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties of the other contained herein or in any document
delivered by the other pursuant hereto, and (iii) waive compliance by the other
with any of the agreements or conditions contained herein. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if set forth in a written instrument signed on behalf of such party.
ARTICLE IX
GENERAL PROVISIONS
9.01. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally (with receipt
confirmed) or mailed by registered or certified mail (return receipt requested)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to United, to
Mr. John E. Burns
Chief Financial Officer
First United Bancshares, Inc.
Main and Washington Streets
El Dorado, Arkansas 71730
with a copy to:
Hermann Ivester, Esquire
Ivester, Skinner & Camp, P.A.
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<PAGE> 39
111 Center Street, Suite 1200
Little Rock, Arkansas 72201
(b) if to Bank, to
Mr. Gene D. Wyatt
Chairman of the Board
FirstBank of Texarkana
P. O. Box 5608
Texarkana, Texas 75505-5608
with a copy to:
Charles J. Hlavinka, Esquire
Atchley, Russell, Waldrop & Hlavinka, L.L.P.
1710 Moores Lane
Texarkana, Texas 75505
9.02. Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation." The phrase "made available" in
this Agreement shall mean that the information referred to has been made
available if requested by the party to whom such information is to be made
available.
9.03. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each
of the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
9.04. Entire Agreement. This Agreement (including the documents and
the instruments referred to herein, including the Plan of Merger) (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof.
9.05. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Texas.
9.06. Publicity. The parties hereto agree that they will consult with
each other concerning any proposed press release or public announcement
pertaining to the Merger and will use their best efforts to agree upon the text
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<PAGE> 40
of such press release or public announcement prior to the publication of such
press release or the making of such public announcement.
9.07. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
9.08. Knowledge of the Parties. Wherever in this Agreement any
representation or warranty is made upon the knowledge of a party hereto that is
not an individual, such knowledge shall include the actual knowledge, after due
inquiry, of any executive officer of such party or an executive officer of any
Subsidiary thereof.
9.09. Expenses. Except as otherwise provided herein, all Expenses
incurred by United and Bank in connection with or related to the authorization,
preparation and execution of this Agreement, the Plan of Merger, and all other
matters related to the closing of the transactions contemplated hereby,
including, without limitation of the generality of the foregoing, all fees and
expenses of agents, representatives, counsel and accountants employed by either
such party or its affiliates, shall be borne solely and entirely by the party
which has incurred the same.
9.10. Effect of Closing on Representations and Warranties. Except as
hereinafter provided, the representations and warranties contained in this
Agreement shall merge in the closing documents and shall not survive Closing.
Any claim which is based upon willful fraud by a party with respect to the
representations and warranties set forth in this Agreement shall survive and
shall expire only upon expiration of the applicable statute of limitations.
Any liability for willful fraud with respect to the representations and
warranties contained in this Agreement shall be asserted only against the
particular Seller who shall have participated therein and/or any Seller who had
actual knowledge thereof at Closing.
9.11. Binding Effect. This Agreement shall bind and inure to the
benfit of the parties and their respective heirs, personal representatives,
successors and assigns.
IN WITNESS WHEREOF, United, Bank, and Sellers have signed or have caused
this Agreement to be
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signed by their respective officers thereunto duly authorized, all as of the
date first written above.
FIRSTBANK, TEXARKANA, TEXAS
By: /S/ Gene D. Wyatt
------------------------------------
Gene D. Wyatt
Attest: Chairman of the Board and President
/S/ Kenneth K. Martin
- -----------------------------
SELLERS:
/S/ James M. Carlow /S/ H. J. Trammell
- ----------------------------- -------------------------------
James M. Carlow H. J. Trammell
/S/ Lucille T. Cook /S/ Graton E. White
- ----------------------------- -------------------------------
Lucille T. Cook Graton White
/S/ Delton B. Gwinn /S/ Gene D. Wyatt
- ----------------------------- -------------------------------
Delton Gwinn Gene D. Wyatt
/S/ Joe Connor Hart
- -----------------------------
Joe Connor Hart
/S/ Kenneth K. Martin
- -----------------------------
Kenneth Martin
/S/ M. L. Mayo
- -----------------------------
M. L. Mayo
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FIRST UNITED BANCSHARES, INC.
By: /S/ James V. Kelley
--------------------------
James V. Kelley
Chairman, President and
ATTEST: Chief Executive Officer
/S/ John E. Burns
- --------------------------
John E. Burns
Vice President and
Chief Financial Officer
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EXHIBIT A
PLAN OF MERGER
This Plan of Merger, dated as of July 28, 1994 ("Plan of Merger"), by and
between First United Bancshares, Inc., an Arkansas corporation ("United"),
FirstBank of Texarkana, a Texas state bank ("Bank"), and Sellers, as defined
herein.
WHEREAS, Bank is a Texas state-chartered bank with authorized capital
stock consisting of 107,747 shares of common stock, $27.843 par value of which
all shares of common stock ("Bank Common Stock") are validly issued and
outstanding on the date hereof;
WHEREAS, United is a corporation with authorized capital stock of
24,000,000 shares of common stock, $1.00 par value, of which 5,177,799 shares
are validly issued and outstanding on the date hereof;
WHEREAS, United is a corporation duly organized and existing under the
laws of Arkansas;
WHEREAS, Sellers are the shareholders of Bank listed in Exhibit 1 attached
hereto, said shareholders referred to collectively as "Sellers" and
individually as "Seller";
WHEREAS, United has made application to the Board of Governors of the
Federal Reserve System to establish First United of Texas, Inc. and conditioned
upon approval of said application United will own one hundred percent (100%) of
the issued and outstanding stock of First United of Texas, Inc. ("First
Texas");
WHEREAS, United has made application to the Texas Banking Department to
establish an interim bank charter under the name and title of FirstBank of
Texarkana ("Interim Bank") under the laws of Texas, as described more fully
below, the capital stock of which First Texas will wholly own conditioned upon
approval of said application;
WHEREAS, concurrently with the execution and delivery of this Plan of
Merger, United, Bank and Sellers have entered into an Agreement and Plan of
Reorganization (the "Agreement" and, together with this Plan of Merger, the
"Merger Agreements") that contemplates the merger of Interim Bank with and into
Bank (the "Merger") upon the terms and conditions provided in this Plan of
Merger and the Agreement and pursuant to the Texas Banking Code, as amended
(the "TBC");
<PAGE> 44
WHEREAS, the Boards of Directors of United and Bank deem it fair and
equitable to, and in the best short-term and long-term interests of, their
respective organizations and shareholders that Interim Bank be merged with and
into Bank with Bank being the surviving bank, and each such Board of Directors
has approved this Plan of Merger, has authorized its execution and delivery,
and Bank has directed that this Plan of Merger and the Merger be submitted to
its shareholders for approval; and
WHEREAS, the Board of Directors of United has authorized the execution and
delivery of this Plan of Merger.
NOW, THEREFORE, in consideration of the promises and the agreements herein
contained, the parties hereto adopt and agree to the following agreements,
terms and conditions relating to the Merger and the mode of carrying the same
into effect:
ARTICLE I
THE MERGER
1.01. The Merger. Subject to the terms and conditions of the Merger
Agreements, Interim Bank will be merged with and into Bank, which will continue
as the surviving corporation, in accordance with and with the effect provided
in the TBC.
1.02. Effective Time of the Merger. Subject to the provisions of the
Merger Agreements, the Merger shall become effective at 5:00 p.m. Central
Standard Time on the date of Closing (the "Effective Time").
1.03. Effects of the Merger. (a) At the Effective Time, (i) the separate
existence of Interim Bank shall cease and Interim Bank shall be merged with and
into Bank (Bank and Interim Bank are sometimes referred to herein as the
"Constituent Banks" and Bank is sometimes referred to herein as the "Surviving
Bank"), (ii) the Articles of Association of Bank in effect as of the Effective
Time (the "Articles") shall be the Articles of Association of the Surviving
Bank, subject to any amendments of the Articles required by the TBC as a result
of the Merger, and (iii) the Bylaws of Bank in effect as of the Effective Time
(the "Bylaws") shall be the Bylaws of the Surviving Bank.
(b) At and after the Effective Time, the Surviving Bank shall possess all
the rights, privileges, powers and franchises of a public as well as of a
private nature, and be subject to all the restrictions, disabilities and duties
of each of the Constituent Banks; and all and singular rights, privileges,
powers and franchises of each of the Constituent Banks, and all property, real,
personal and mixed and all debts due to either of the Constituent Banks
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<PAGE> 45
on whatever account, as well as for stock subscriptions and all other things in
action or belonging to each of the Constituent Banks, shall be vested in the
Surviving Bank; and all property, rights, privileges, powers and franchises,
and all and every other interest shall be thereafter as effectually the
property of the Surviving Bank as they were of the Constituent Banks, and the
title to any real estate vested by deed or otherwise, in either of the
Constituent Banks, shall not revert or be in any way impaired; but all rights
of creditors and all liens upon any property of either of the Constituent Banks
shall be preserved unimpaired, and all debts, liabilities and duties of the
Constituent Banks shall thenceforth attach to the Surviving Bank, and may be
enforced against it to the same extent as if said debts and liabilities had
been incurred by it. Any action or proceeding, whether civil, criminal or
administrative, pending by or against either Constituent Bank shall be
prosecuted as if the Merger had not taken place, and the Surviving Bank may be
substituted as a party in such action or proceeding in place of any Constituent
Bank.
ARTICLE II
EFFECT OF THE MERGER ON THE COMMON STOCK OF THE CONSTITUENT BANKS;
EXCHANGE OF CERTIFICATES
2.01. Conversion of Bank Common Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of Bank Common Stock, but subject to the rights of dissenting
shareholders of Bank:
(a) Conversion of Bank Common Stock. The issued and outstanding shares of
Bank Common Stock shall be converted in accordance with the Agreement into the
right to receive a cash payment as provided in Section 2.01 of the Agreement.
(b) Cancellation of Shares. All shares of Bank Common Stock issued and
outstanding immediately prior to the Effective Time shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate representing any such shares shall
cease to have any rights with respect thereto, except the right to receive the
cash to be paid in consideration therefor upon the surrender of such
certificate in accordance with the Plan of Merger, without interest.
2.02. Exchange of Certificates. (a) Exchange Agent. As of the Effective
Time, United shall deposit with the Trust Department of First National Bank of
El Dorado, El Dorado, Arkansas or such other bank or trust company designated
by United (the "Exchange Agent") for the benefit of the holders of shares of
Bank Common Stock, for exchange in accordance with this Article II through the
Exchange Agent, an amount of cash (the "Exchange Fund")
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<PAGE> 46
to be paid pursuant to Section 2.01 of the Agreement in exchange for shares of
Bank Common Stock outstanding immediately prior to the Effective Time.
(b) Exchange Procedures. As soon as reasonably practicable after
the Effective Time, the Exchange Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Bank Common Stock (the "Certificates") whose
shares were converted into the right to receive a cash payment pursuant to
Section 2.01 of the Agreement, (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Exchange Agent and
shall be in such form and have such other provisions as United may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the cash payment due. Upon surrender of a
Certificate for cancellation to the Exchange Agent or to such other agent or
agents as may be appointed by United, together with such letter of transmittal,
duly executed, the holder of such Certificate shall be entitled to receive in
exchange therefor the amount of cash specified in Section 2.01 of the
Agreement, and the Certificate so surrendered shall forthwith be cancelled.
Until surrendered as contemplated by this Section 2.02, each Certificate shall
be deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the amount of cash specified in Section 2.01 of the
Agreement.
(c) Distributions with Respect to Unexchanged Shares. No cash
payment of any kind shall be paid to the holder of any unsurrendered Certificate
until the holder of record of such Certificate shall surrender such Certificate.
(d) No Further Ownership Rights in Bank Common Stock. The cash
paid upon the surrender of shares of Bank Common Stock in accordance with the
terms hereof shall be deemed to have been paid in full satisfaction of all
rights pertaining to such shares of Bank Common Stock, and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Bank of the shares of Bank Common Stock which were outstanding immediately prior
to the Effective Time. If, after the Effective Time, Certificates are presented
to the Surviving Bank for any reason, they shall be cancelled and payment shall
be made as provided in this Plan of Merger.
(e) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the shareholders of Bank for six months
after the Effective Time shall be delivered to United, upon
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<PAGE> 47
demand, and any shareholders of Bank who have not theretofore complied with
this Section 2.02 shall thereafter look only to United for payment of the cash
due for their stock.
(f) No Liability. Neither United nor Bank shall be liable to any
holder of shares of Bank Common Stock for cash from the Exchange Fund delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar law.
(g) Conversion of Stock of Interim Bank. At the Effective Time,
the shares of the Interim Bank common stock validly issued and outstanding
immediately prior to the Effective Time will, by virtue of the Merger and
without any action by the holder thereof, be converted into 107,747 shares of
common stock, $27.843 par value, of the Surviving Bank so that all shares of
capital stock of the Surviving Bank will be owned by First Texas. The
outstanding certificates representing shares of the Interim Bank common stock
will, after the Effective Time, be deemed to represent the number of shares of
the Surviving Bank into which they have been converted and may be exchanged for
new certificates of the Surviving Bank upon request of the holder thereof.
ARTICLE III
CONDITIONS; TERMINATION; AMENDMENT
3.01. Conditions to the Merger. Consummation of the Merger is
conditional upon the fulfillment or waiver of the conditions precedent set
forth in Article VII of the Agreement.
3.02. Termination. This Plan of Merger may be terminated and the
Merger abandoned by mutual consent of the respective Boards of Directors of
Bank and United at any time prior to the Effective Time. If the Agreement is
terminated in accordance with Article IX thereof, then this Plan of Merger will
terminate simultaneously and the Merger will be abandoned without further
action by Bank or United.
3.03. Amendment. Subject to the next following sentence, this Plan
of Merger may be amended by the parties hereto by action taken or authorized by
their respective Boards of Directors at any time before the Closing Date. This
Plan of Merger may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
3.04. Extension; Waiver. At any time prior to the Closing Date,
United and Bank, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other party hereto
and (ii) waive compliance by the other
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<PAGE> 48
with any of the agreements or conditions contained herein. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if set forth in a written instrument on behalf of such party.
ARTICLE IV
GENERAL PROVISIONS
4.01. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally (with receipt
confirmed) or mailed by registered or certified mail (return receipt requested)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to United, to
Mr. John E. Burns
Chief Financial Officer
First United Bancshares, Inc.
P. O. Box 751
El Dorado, Arkansas 71731
with a copy to:
Hermann Ivester, Esquire
Ivester, Skinner & Camp, P.A.
111 Center Street, Suite 1200
Little Rock, Arkansas 72201
(b) if to Bank, to
Mr. Gene D. Wyatt
Chairman of the Board
FirstBank of Texarkana
P. O. Box 5608
Texarkana, Texas 75505-5608
with a copy to:
Charles J. Hlavinka, Esquire
Atchley, Russell, Waldrop & Hlavinka, L.L.P.
1710 Moores Lane
Texarkana, Texas 75505
4.02. Interpretation. When a reference is made in this Plan of
Merger to Sections, such reference shall be to a Section of this Plan of Merger
unless otherwise indicated. The headings contained in this Plan of Merger are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Plan of Merger.
6
<PAGE> 49
4.03. Counterparts. This Plan of Merger may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood
that all parties need not sign the same counterpart.
4.04. Governing Law. This Plan of Merger shall be governed and
construed in accordance with the laws of the State of Texas.
IN WITNESS WHEREOF, Bank and United have caused this Plan of Merger to
be signed by their respective officers thereunto duly authorized, all as of the
date first written above.
FIRSTBANK, TEXARKANA, TEXAS
By: /S/ Gene D. Wyatt
----------------------------------
Gene D. Wyatt
Attest: Chairman of the Board and President
/S/ Kenneth K. Martin
- ----------------------------------
SELLERS:
/S/ James M. Carlow /S/ H. J. Trammell
- ---------------------------------- ----------------------------------
James M. Carlow H. J. Trammell
/S/ Lucille T. Cook /S/ Graton E. White
- ---------------------------------- ----------------------------------
Lucille T. Cook Graton White
/S/ Delton B. Gwinn /S/ Gene D. Wyatt
- ---------------------------------- ----------------------------------
Delton Gwinn Gene D. Wyatt
/S/ Joe Connor Hart
- ----------------------------------
Joe Connor Hart
/S/ Kenneth K. Martin
- ----------------------------------
Kenneth Martin
/S/ M. L. Mayo
- ----------------------------------
M. L. Mayo
7
<PAGE> 50
FIRST UNITED BANCSHARES, INC.
By: /S/ James V. Kelley
--------------------------------------------
James V. Kelley
Attest: Chairman, President and Chief Executive
Officer
/S/ Robert G. Dudley
- ---------------------------
Robert G. Dudley, Secretary
8
<PAGE> 51
EXHIBIT 1
SELLERS
<TABLE>
<CAPTION>
NUMBER OF SHARES
AND PERCENTAGE OF BANK
SELLER OWNED OR CONTROLLED
- ------ ----------------------
<S> <C>
James M. Carlow 985
Rt. 1, Box 306 0.91%
New Boston, Texas 75570
Lucille T. Cook 6,029
6606 North Park Road 5.59%
Texarkana, Texas 75505
Delton Gwinn 2,799
P. O. Box 6838 2.60%
Texarkana, Texas 75505
Joe Connor Hart 1,000
Rt. 1, Box 109 0.93%
Hooks, Texas 75561
Kenneth Martin 3,820
2804 Magnolia 3.55%
Texarkana, Texas 75503
M. L. Mayo 2,584
2 Hickory Ridge 2.40%
Texarkana, Texas 75503
H. J. Trammell 10,207
4217 Ghio Fish Boulevard 9.48%
Texarkana, Texas 75503
Graton White 730
3616 Wyatt .68%
Texarkana, Texas 75503
Gene Wyatt 1,002
P. O. Box 5608 .93%
Texarkana, Texas 75505
</TABLE>
<PAGE> 52
EXHIBIT 2.01(A)
ESCROW AGREEMENT
This Escrow Agreement ('Escrow Agreement") made June 28 , 199 4 ,
between FIRST UNITED BANCSHARES, INC. ("United"), certain Shareholders of
FIRSTBANK, Texarkana, Texas ("Bank") listed in Exhibit 1 attached hereto
(collectively, the "Sellers" and, individually, a "Seller"); and FIRST
NATIONAL BANK OF EL DORADO, El Dorado, Arkansas (the "Escrow Agent").
WHEREAS, United, on the one hand, and Sellers and Bank, on the other,
have entered into a certain Agreement and Plan of Reorganization whereby an
interim bank established by United has been merged with and into Bank (the
"Surviving Bank"), for and in consideration of a cash payment of Twenty-Five
Million Dollars ($25,000,000.00);
WHEREAS, Article II, Section 2.01(a) of the Agreement and Plan of
Reorganization ("Agreement") provides for a certain sum of cash to be escrowed,
with the Escrow Agent, for any payment of the Bank's potential liability and
costs arising in the cases of Dennis Shirk, Administrator of Estates of Daniel
Clay Sparks and Edna Lovette Sparks, deceased vs. FirstBank, et al., Graco
Robotics, Inc. v. Oaklawn Bank, and Otis Weaver v. various parties, including
FirstBank;
WHEREAS, the Escrow Agent is a National Banking Association
incorporated and organized under the Laws of the United States and is a wholly
owned subsidiary of United and desires and is willing to act and service
pursuant to the terms of the Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties, it is agreed as
follows:
1. DEPOSIT OF FUNDS. United, pursuant to Section 2.01(a) of the
Agreement, hereby deposits Two Hundred Thousand Dollars ($200,000.00) (the
"Escrow Fund") with the Escrow Agent for any payment of potential liability and
costs arising in the cases of Dennis Shirk, Administrator of Estates of Daniel
Clay Sparks and Edna Lovette Sparks, deceased vs. First Bank, et al, Graco
Robotics, Inc. v. Oaklawn Bank, and Otis Weaver v. various parties, including
FirstBank (the "Lawsuits"). Notwithstanding the foregoing, the liability and
costs associated with the case of Graco Robotics, Inc. v. Oaklawn Bank shall be
paid from the Escrow Fund only to the extent such liability and costs exceed
the amount reserved by FirstBank for such liability and costs as of June 30,
1994.
<PAGE> 53
2. ACCEPTANCE BY ESCROW AGENT. The Escrow Agent hereby accepts
the deposit of the Escrow Fund by United and agrees to hold the Escrow Fund
pursuant to the terms and conditions set forth herein.
3. TERM. The Escrow Agent shall hold the Escrow Fund deposited
hereunder for a period not to exceed three (3) months following the
satisfaction, settlement or other termination of all other liabilities or
potential liabilities described in Section 1 hereof.
4. NOTIFICATION AND ACCOUNTING BY BANK. The Surviving Bank
shall, from time to time, notify, in writing, the Sellers, United and the
Escrow Agent of any liabilities (as that term is defined in the next sentence
hereof) incurred by Surviving Bank regarding the Lawsuits. Said liabilities
are to include all legal expenses, costs, fees and any and all liability
incurred by the Surviving Bank in the adjudication or settlement of the
Lawsuits (the "Liabilities"). Surviving Bank shall make an accounting, in
writing, to the Sellers, the Escrow Agent and United of the Liabilities, which
shall be verified by the Escrow Agent.
5. RELEASE OF FUNDS. The Escrow Agent shall disburse funds from
the Escrow Fund from time to time on or before the expiration of the term set
forth in Section 3 of this Escrow Agreement in reimbursement to the Surviving
Bank of the Liabilities upon written instructions signed by United and the
Sellers. Any portion of the Escrow Fund remaining on deposit at the expiration
of the term set forth in Section 3 of this Escrow Agreement shall be disbursed
to the shareholders of record of Bank as of the Effective Time of the Merger
(or the respective heirs, personal representatives, successors and assigns of
such shareholders).
6. ESCROW FEES. United shall pay the Escrow Agent its normal
escrow fees in consideration for performances and services hereunder.
7. INDEMNIFICATION. United, the Surviving Bank and Sellers
hereby agree to hold harmless and indemnify the Escrow Agent and its employees,
agents, and representatives against loss, damage, liability or claims arising
out of this Escrow Agreement and the escrow created hereunder other than those
caused by the agents' own gross negligence or willful misconduct. The Escrow
Agent shall not be bound in any way by any other agreement between the parties
hereto as to which the Escrow Agent is not a party, whether or not it has
knowledge thereof. The Escrow Agent shall not in any way be required to
determine whether or not the terms and conditions of this Escrow Agreement have
been complied with by the parties, except as herein provided. The Escrow Agent
may act in reliance upon any instrument or signature which it believes to be
genuine and may assume that any person purporting to give notice or advice or
instruction in connection with the provisions hereof has been duly authorized
to do so. It is agreed that the
2
<PAGE> 54
duties of the Escrow Agent are only such as herein specifically provided, being
purely ministerial in nature, and that it shall incur no liability whatever so
long as it has acted without gross negligence or willfulness conduct.
8. BINDING EFFECT. This Escrow Agreement shall bind and inure to
the benefit of the parties and their respective heirs, personal
representatives, successors and assigns.
9. AMENDMENT. This Escrow Agreement may be amended only by a
writing signed by all of the parties.
10. GOVERNING LAW. This Escrow Agreement shall be enforced and
construed under the laws of the state of Texas.
11. ENTIRE AGREEMENT. This Escrow Agreement constitutes the
entire agreement among the parties hereto and supersedes all prior agreements
and understandings related to the subject matter hereof. There are not
agreements, understandings, restrictions, warranties, or representations among
the parties other than those set forth herein.
12. NOTICES. Notices contemplated by this Escrow Agreement shall
be directed to the parties as set forth below or as a party may hereafter
designate by notice in writing given to all other parties.
If to FIRST UNITED BANCSHARES, INC.
at: Main & Washington Streets
El Dorado, Arkansas 71730
Attention: James V. Kelley
Chairman, President and Chief
Executive Officer
If to FIRSTBANK, TEXARKANA, TEXAS
at: 3000 New Boston Road
Texarkana, Texas 75501
Attention: Gene D. Wyatt
If to FIRST NATIONAL BANK OF EL DORADO
at: Main & Washington Streets
El Dorado, Arkansas 71730
Attention: Robert G. Dudley, President
If to SELLERS
c/o Charles J. Hlavinka
ATCHLEY, RUSSELL, WALDROP & HLAVINKA
at: 1710 Moores Lane - P.O. Box 5517
Texarkana, Texas 75505-5517
3
<PAGE> 55
All communications required or permitted hereunder shall be given in writing by
certified mail, return receipt requested, or by personal delivery.
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement on
the day and year first above written.
SELLERS: SURVIVING BANK:
FIRSTBANK, TEXARKANA, TEXAS
/S/ James M. Carlow 3000 New Boston Road
- ------------------------------ Texarkana, Texas 75501
JAMES M. CARLOW
/S/ Lucille T. Cook
- ------------------------------
LUCILLE T. COOK By: /S/ Gene D. Wyatt
------------------------------------
Gene D. Wyatt
/S/ Delton B. Gwinn Chairman of the Board and President
- ------------------------------
DELTON GWINN
/S/ Joe Connor Hart
- ------------------------------
JOE CONNOR HART
/S/ Kenneth K. Martin
- ------------------------------
KENNETH MARTIN
/S/ M. L. Mayo
- ------------------------------
M. L. MAYO
/S/ H. J. Trammell
- ------------------------------
H. J. TRAMMELL
/S/ Graton E. White
- ------------------------------
GRATON WHITE
/S/ Gene D. Wyatt
- ------------------------------
GENE WYATT
4
<PAGE> 56
UNITED:
FIRST UNITED BANCSHARES, INC.
Main & Washington Streets,
El Dorado, Arkansas 71730
By: /S/ James V. Kelley
-----------------------------------------------
James V. Kelley
Chairman, President and Chief Executive
Officer
ESCROW AGENT:
FIRST NATIONAL BANK OF EL DORADO
Main & Washington Streets
El Dorado, Arkansas 71730
By: /S/ Robert G. Dudley
-----------------------------------------------
Robert G. Dudley
President
5
