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): Commission File Number
January 17, 1996 0-7674
FIRST FINANCIAL BANKSHARES, INC.
(Exact Name of Registrant as Specified in its Charter)
________Texas___________ _________75-0944023_____
(State of Incorporation) (I.R.S. Employer Identification No.)
400 Pine Street, Abilene, Texas 79601
(Address of Executive Offices and Zip Code)
Regristrant's Telephone Number (915) 675-7155
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ITEM 2. Acquisition or Disposition of Assets.
A. Acquisition of Citizens Equity Corp.
On January 17, 1996, First Financial Bankshares, Inc. (the
"Company") concluded and consummated its purchase, for cash, of all
of the issued and outstanding shares of the common stock of
Citizens Equity Corp. ("Citizens Equity"), a Texas corporation and
registered bank holding company which owns 99.3% of all of the
issued and outstanding shares of The Citizens National Bank of
Weatherford ("Citizens National"). The purchase price for the
shares purchased was $60.00 per share and the aggregate
consideration for the 106,580 issued and outstanding shares of
common stock was $6,394,800. The Company purchased the shares of
Citizens Equity common stock pursuant to a Stock Purchase and Sale
Agreement dated September 7, 1995, between the Company, Citizens
Equity, Citizens National and certain shareholders of Citizens
Equity (the "Principal Shareholders") owning, in the aggregate,
more than two-thirds (2/3) of the issued and outstanding shares of
Citizens Equity. Pursuant to the Agreement, the Company made a
cash tender offer to the remaining shareholders of Citizens Equity
and consummation of the transaction was conditioned upon tender of
100% of the issued and outstanding shares of Citizens Equity common
stock. Letters of Transmittal from all shareholders of Citizens
Equity and certificates representing all of the issued and
outstanding shares of Citizens Equity common stock were tendered to
the Escrow Agent named in the Agreement and held by the Escrow
Agent pending approval of the proposed acquisition by the Federal
Reserve Board and other federal and state regulatory authorities.
Written approval for the transaction was given by the Federal
Reserve Bank of Dallas on or about November 20, 1995. None of the
persons from whom the Company purchased Citizens Equity stock has
any material relationship with the Company, any affiliate of the
Company, any director or officer of the Company, or any associate
of any director or officer. Funding for the purchase came from
available cash of the Company.
In addition to the purchase of stock, the Company assumed
approximately $6,725,000 in indebtedness of Citizens Equity,
substantially all of which was incurred by Citizens Equity when it
acquired Citizens National. Immediately following the closing of
the stock purchase, the Company contributed additional capital to
Citizens Equity in the amount of $6,698,389, of which $5,550,528
was applied to payment of Citizens Equity's debt to a commercial
bank and the balance ($1,147,861) used to acquire additional shares
of Citizens National common stock from minority shareholders of
Citizens National. The Company also caused Citizens Equity to
redeem all 311 issued and outstanding shares of Citizens Equity's
preferred stock for a total cash consideration of $26,948.15.
Citizens Equity is a Texas corporation having its principal
office and place of business in the City of Weatherford, Parker
County, Texas, on the west end of the Dallas-Fort Worth
metropolitan area. Its authorized capital consists of 1,000,000
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shares of common stock, par value $1.00 each, of which 106,580 are
presently issued and outstanding and 1,000,000 shares of 7.5
percent cumulative preferred stock, par value $86.65, of which 311
shares were previously issued, but have now been redeemed.
Citizens Equity has total assets of approximately $13.2 million,
substantially all of which is its stock in Citizens National, its
only operating subsidiary. Citizens National was originally
chartered in 1868 and at December 31, 1995, had total assets of
approximately $97.9 million and Shareholders' Equity of
approximately $13.1 million. Its authorized capital consists of
110,000 shares of common stock, par value $5.00, of which 91,661
shares are presently issued and outstanding, and of those 91,037
shares are now owned by Citizens Equity. Following acquisition of
all of the issued and outstanding shares of Citizens Equity common
stock, a new Board of Directors was elected comprised of Kenneth T.
Murphy, Chairman of the Board, President and Chief Executive
Officer of the Company, Curtis R. Harvey, Executive Vice President
and Chief Financial Officer of the Company, and Tommy J. Barrow,
Executive Vice President of the Company. It is the intent of the
Company to merge Citizens Equity with and into the Company and,
ultimately, to merge Citizens National with and into Weatherford
National Bank.
B. Acquisition of Weatherford National Bancshares, Inc.
On January 17, 1996, the Company commenced consummation of the
Stock Exchange Offer (the "Exchange Offer") made to the
shareholders of Weatherford National Bancshares, Inc. ("Weatherford
Bancshares"), pursuant to the Stock Exchange Agreement and Plan of
Reorganization (the "Exchange Agreement") dated October 20, 1995,
between the Company, Weatherford Bancshares, Parker Bancshares,
Inc. ("Parker Bancshares"), the wholly-owned subsidiary of
Weatherford Bancshares, and Weatherford National Bank ("Weatherford
National"), the wholly-owned subsidiary of Parker Bancshares.
Pursuant to the Exchange Agreement, the Company offered to acquire
from the shareholders of Weatherford Bancshares all (but not less
than 90%) of the issued and outstanding shares of Weatherford
Bancshares' common stock ("Weatherford Bancshares Stock") in
exchange for shares of the common stock of the Company, with cash
to be issued in lieu of any fractional shares of the Company's
stock to which the shareholders of Weatherford Bancshares would
otherwise be entitled. The shares of the Company's common stock
issued in connection with the Exchange Offer were registered with
the Securities and Exchange Commission and the Registration
Statement was declared effective on December 15, 1995. Prior to
commencing the Exchange Offer, the Company and Weatherford
Bancshares had obtained the approval of the Federal Reserve Board
and other regulatory authorities for the Company to acquire
Weatherford Bancshares and its subsidiaries.
Pursuant to the terms of the Exchange Agreement, and as set
forth in the Prospectus delivered to the shareholders of
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Weatherford Bancshares, the Company offered to exchange 1.50 shares
of the Company's common stock for each share of Weatherford
Bancshares Stock tendered by Weatherford Bancshares' shareholders
and to pay cash for any fractional shares of the Company's stock to
which Weatherford Bancshares' shareholders would otherwise be
entitled on the basis of $33.00 per share. Consummation of the
Exchange Offer required that at least 90% of the issued and
outstanding shares of Weatherford Bancshares' Stock be tendered for
exchange and that certain other conditions precedent to
consummation of the transaction (as set forth in the Exchange
Agreement) also be satisfied. On January 16, 1995, the Company was
notified by the Escrow Agent named in the Exchange Agreement that
the Escrow Agent had received for exchange stock certificates for
more than 94% of the issued and outstanding shares of Weatherford
Bancshares Stock. On January 17, 1996, upon satisfaction of the
remaining conditions precedent to consummation of the transaction,
the Company instructed the Escrow Agent to commence mailing
certificates for the Company's common stock (and checks in payment
for any fractional shares of such stock) to the shareholders of
Weatherford Bancshares who had tendered their shares of Weatherford
Bancshares Stock. As of January 18, 1996, the date the Escrow
Agent commenced mailing shares of the Company's common stock to
shareholders of Weatherford Bancshares, the Company had acquired
214,988 shares (99.5%) of the issued and outstanding shares of
Weatherford Bancshares Stock and, in exchange therefor, issued
323,002 shares of the Company's common stock and checks totalling
$166.70 in payment for fractional shares. The total consideration
paid by the Company for the shares for Weatherford Bancshares Stock
tendered in exchange for the Company's stock was $10,659,233,
including the cash paid in lieu of fractional shares of the
Company's stock. The funds for payment by the Company of cash in
lieu of issuing fractional shares of its common stock were provided
by the Company out of its own cash reserves.
Weatherford Bancshares is a Texas corporation having its
principal office and place of business in the City of Weatherford,
Parker County, Texas. Weatherford Bancshares has one class of
stock, being common stock having a par value of Five Dollars
($5.00) per share, of which 215,988 shares are issued and
outstanding. As of December 31, 1995, Weatherford Bancshares had
assets of approximately $5.3 million, the principal asset of
Weatherford Bancshares being 25,096 shares (100%) of the issued and
outstanding capital stock of Parker Bancshares, a Delaware
corporation and registered bank holding company. Parker
Bancshares, as of December 31, 1995, had total assets of
approximately $5.2 million, comprised primarily of its ownership of
200,000 shares (100%) of the issued and outstanding capital stock
of Weatherford National. Weatherford National is a national
banking association located in the City of Weatherford, Parker
County, Texas. The authorized capital of Weatherford National
consists of 200,000 shares of common stock having a par value of
$5.00 per share. As of December 31, 1995, total assets of
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Weatherford National were approximately $64.0 million. In addition
to its main banking offices in the City of Weatherford, Weatherford
National also has a branch facility in the City of Weatherford.
Following consummation of the Exchange Offer, the Company
intends to merge Weatherford Bancshares with and into the Company,
merge Parker Bancshares with and into the Company's wholly-owned
subsidiary bank holding company, First Financial Bankshares of
Delaware, Inc., and then, ultimately, to merge Citizens National
with and into Weatherford National under the charter of Weatherford
National. The principal offices of Citizens National at 101 N.
Main in the City of Weatherford will become the principal banking
offices of the merged banks, Weatherford National will continue to
operate its existing facilities as branch facilities of the merged
banks, and the current branch facility of Citizens National in the
City of Aledo, Texas will likewise become a branch facility of
Weatherford National. Consummation of the mergers of the non-bank
subsidiaries will be carried out under the laws of the States of
Texas and Delaware and the merger of Citizens National into
Weatherford National will be carried out under federal banking
laws. It is anticipated that the merger of Citizens National into
Weatherford National will occur early in the second quarter of
1996.
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Item 7. Financial Statements and Exhibits
Although the events described in this Report have been
described under Item 2 of the General Instructions to Form 8-K,
neither of the acquisitions is deemed to involve a significant
amount of the assets of the Company and its subsidiaries, as
provided in (b) 4. of Item 2 of the General Instructions.
Accordingly, no financial statements or proforma financial
information is being provided with this Current Report.
Listed below are the Exhibits filed with this Report in
accordance with Item 6.01 of Regulation S-K and Item 7 of the
General Instructions to Form 8-K:
1. Stock Purchase and Sale Agreement dated September 7,
1995, between the Company, Citizens Equity Corp., The
Citizens National Bank of Weatherford and the Principal
Shareholders; and
2. Stock Exchange Agreement and Plan of Reorganization dated
October 20, 1995, between the Company, Weatherford
National Bancshares, Inc., Parker Bancshares, Inc. and
Weatherford National Bank.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has caused this
Report to be signed on its behalf by the undersigned, thereunto
duly authorized.
FIRST FINANCIAL BANKSHARES, INC.
(Registrant)
By: __________________________________
DATE: January 30, 1996 CURTIS R. HARVEY
Executive Vice President and
Chief Financial Officer
[RW 123:24]
STOCK PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made and effective as of this 7th day of
September, 1995, between (1) FIRST FINANCIAL BANKSHARES, INC.
(hereinafter referred to as "First Financial"), a Texas
corporation with its principal office in the City of Abilene,
Taylor County, Texas; (2) CITIZENS EQUITY CORP. (hereinafter
referred to as "Citizens Equity"), a Texas corporation and bank
holding company with its principal office in the City of
Weatherford, Parker County, Texas; (3) THE CITIZENS NATIONAL BANK
OF WEATHERFORD (hereinafter referred to as "Citizens National"),
a national bank having its principal office in the City of
Weatherford, Parker County, Texas; and (4) DON MAPLES, BETTY
MAPLES, DON MAPLES I.R.A. (Citizens National, Custodian), ROY
GROGAN, as Trustee, O. L. PITTS, C. KENT McINTOSH, RICHARD
HUGHES and PAMELA TRUST (Pamela Pitts McIntosh and Altus Hayes,
Trustees) (hereinafter referred to as "Principal Shareholders").
The issued and outstanding stock of Citizens Equity
Corporation, as of the date of this Agreement, consists of (1)
106,580 shares of Common Stock (the "Citizens Equity Stock")
having a par value of One Dollar ($1.00) each and (2) 311 shares
of Preferred Stock having a par value of Eighty-Six Dollars and
Sixty-Five Cents ($86.65) each (hereinafter called the "Citizens
Preferred Stock"). According to the records of Citizens Equity,
the Citizens Equity Preferred and Common Stock is presently held
by those individuals, trusts, estates, corporations and other
entities (the "Shareholders") identified in the Shareholders'
List attached hereto as Exhibit A.
The Principal Shareholders collectively own 72,936 shares
(approximately 68%) of the Citizens Equity Stock. The remaining
33,644 shares of Citizens Equity Stock (approximately 32%) are
owned by the other shareholders (the "Minority Shareholders")
identified in the Shareholders List attached hereto as Exhibit A.
Citizens Equity owns 83,010 shares (90.6%) of the issued and
outstanding capital stock of Citizens National (the "Citizens
National Stock"). It is contemplated by this Agreement that,
prior to the Closing Date (herein defined), Citizens Equity shall
acquire, or have entered into binding, enforceable and assignable
contracts to acquire (acceptable to First Financial as to price
and terms) substantially all of the Citizens National Stock not
owned by Citizens Equity as of the date of this Agreement.
Citizens National is the only subsidiary of Citizens Equity.
There are no other corporations or other business entities which
are considered affiliates of Citizens Equity or Citizens
National, except the 1868 Corporation, which is an uncapitalized,
non-operating, Delaware Corporation.
Pursuant to, and subject to, the provisions hereinafter set
forth, First Financial agrees to purchase from the Shareholders
all of the issued and outstanding shares of Citizens Equity Stock
(hereinafter referred to as the "Shares") for cash to be paid by
First Financial. First Financial shall not be obligated to
purchase, shall not offer to purchase and shall not purchase any
shares of Citizens Preferred Stock. (See Section 2.12.)
<PAGE>
THEREFORE, in consideration of the premises, and in further
consideration of the mutual covenants and on the basis of the
representations and warranties set forth herein, First Financial,
Citizens Equity, Citizens National and Principal Shareholders
have agreed, and by these presents do hereby agree, as follows:
ARTICLE 1
PURCHASE AND SALE OF CAPITAL STOCK
1.1. Sale of Stock.
(1) Subject to the terms and conditions of this
Agreement, each Principal Shareholder shall sell to First
Financial, and First Financial shall purchase from each Principal
Shareholder, all of the Shares owned by such Principal
Shareholder, the Shares owned by each Principal Shareholder and
to be sold and purchased being as follows:
Number of Shares
Name of Shareholders To Be Sold
Don and Betty Maples 15,949
Betty Maples 682
Don Maples I.R.A. 10,000
Roy Grogan, Trustee 7,952
O.L. Pitts 22,948
C. Kent McIntosh 2,726
Richard Hughes 4,274
Pamela Trust 8,405
72,936
(2) Subject to the terms and conditions of this
Agreement, or as more provided in Article 9 below, First
Financial shall offer to purchase from each of the Minority
Shareholders all of the Shares owned by the Minority
Shareholders. The number of Shares owned by Minority
Shareholders and for which First Financial shall make an offer to
purchase (the "Offer") are set out in the Shareholders List
attached hereto as Exhibit A.
(3) First Financial will not be obligated to purchase
any of the Shares unless all (100%) of the Shares are tendered
for purchase by First Financial pursuant to the Offer within the
time period specified by the Offer. If less than all Shares of
Citizens Equity stock shall be tendered for sale by the
Shareholders, but at least 90 percent of the Shares (the
"Required Amount of Citizens Equity Stock") shall be tendered for
sale, First Financial, at its election, may (but shall not be
required to) proceed to purchase all of the tendered Shares by
paying the consideration prescribed in Section 1.2.
1.2. Consideration for Sale.
(1) Subject to Paragraphs (2) and (3) below, the
purchase price to be paid by First Financial for all of the
Shares of Citizens Equity shall be $6,394,800.00 and, at Closing
(as defined below), First Financial shall pay each Shareholder
$60.00 for each Citizens Equity Share sold by the Shareholder to
First Financial.
<PAGE>
(2) The cash consideration to be paid by First
Financial, as described in Paragraph 1.2(1), shall be subject to
adjustment if either the total Shareholders' Equity of Citizens
National at December 31, 1995, is less than $8,000,000 after
deducting (i) the unrealized loss (net of deferred tax) in its
investment portfolio and (ii) the amount (net of deferred tax) by
which the book value of its banking facilities and land exceeds
the appraised values thereof; or the total liabilities of
Citizens Equity at December 31, 1995, exceed $6,725,000. If
either the Shareholders Equity of Citizens National is less than
$8,000,000 or the total liabilities of Citizens Equity exceed
$6,725,000 as of December 31, 1995, then First Financial may
request an adjustment of the purchase price by written notice to
Citizens Equity and the Principal Shareholders. First Financial,
Citizens Equity and the Principal Shareholders shall have ten
(10) days from the date of such notice within which to negotiate
an equitable adjustment in the purchase price. If First
Financial, Citizens Equity and the Principal Shareholders shall
be unable, within said ten-day period, to agree upon a new or
revised purchase price for the Shares, then either First
Financial or Citizens Equity may, by notice in writing to the
other, terminate this Agreement. For purposes of this Paragraph
(2), "total liabilities" of Citizens Equity shall include the
amount required by Citizens Equity to redeem and pay for all
shares of Citizens Preferred Stock and also the amount required
by Citizens Equity to purchase all of the remaining shares of
Citizens National Stock not presently owned by Citizens Equity.
(3) The cash consideration to be paid by First
Financial shall also be adjusted if, as of the Closing Date,
Citizens Equity does not own (or has not entered into binding and
enforceable contracts to acquire) at least 99.5% of the Citizens
National Stock, but First Financial waives such condition
precedent and elects to proceed with the purchase of Citizens
Equity Stock. In such event, the purchase price per Share of
Citizens Equity Stock shall be determined by multiplying the
purchase price per Share determined under Paragraphs (1) and (2)
above by a fraction, the numerator of which is the number of
shares of Citizens National Stock which Citizens Equity owns (or
is under binding agreements to purchase) and the denominator of
which is the total number of issued and outstanding shares of
Citizens National Stock.
1.3. Closing.
(1) Subject to receipt of the approvals required by
Section 2.1 and the lapse of all mandatory waiting periods, the
sale and purchase of Stock contemplated by this Agreement shall
be closed (the "Closing") at the offices of the Escrow Agent (as
defined in Section 10.2) in the City of Abilene, Texas, on such
date, and at such time, as First Financial, Citizens Equity and
the Principal Shareholders shall determine, but as soon after
January 1, 1996, as is reasonably practicable, but in any event
not later than February 29, 1996 (the "Closing Date").
(2) At Closing,
(a) each Principal Shareholder shall deliver to
First Financial the certificates representing all of the
Principal Shareholder's Shares as stated in Section 1.1, each of
which shall be duly endorsed in blank or accompanied by a
separate stock power duly executed in blank;
(b) the Escrow Agent (as defined in Section 9.2)
shall deliver to First Financial all certificates representing
Shares tendered by Minority Shareholders pursuant
<PAGE>
to the Offer, together with the Transmittal Letters executed and
delivered to the Escrow Agent by the Minority Shareholders who
have tendered Shares for purchase pursuant to the Offer;
(c) First Financial shall pay to each Principal
Shareholder in cash the total amount of the purchase price
payable to the Principal Shareholder as provided in Section 1.2,
payment to be by check drawn on First Financial's account at
First National Bank of Abilene; and
(d) First Financial shall pay to the Escrow Agent
in cash the total amount of the purchase price payable, as
provided in Section 1.2, to all Minority Shareholders who have
tendered or offered to tender Shares for purchase pursuant to the
Offer, payment to be by First Financial depositing such amount
for credit to the account of the Escrow Agent at First National
Bank of Abilene for distribution by the Escrow Agent to the
Minority Shareholders in accordance with Article 9.
1.4. Offer Termination Date.
Unless otherwise extended by First Financial, the Offer
to purchase the Citizens Equity Stock from the Minority
Shareholders shall terminate September 29, 1995.
1.5. Merger. If the Required Amount of Citizens Equity Stock
is tendered in exchange for cash, if all other conditions
precedent to consummation of the transaction are satisfied (or,
if not satisfied, are waived by First Financial) and if First
Financial shall consummate the stock purchase and sale by
delivering the cash payments to which the tendering Shareholders
are entitled hereunder, then it is the present intent of First
Financial to thereafter merge Citizens Equity with and into First
Financial's wholly-owned Delaware subsidiary holding company,
First Financial Bankshares of Delaware, Inc. ("FFB Delaware")
pursuant to applicable law.
ARTICLE 2
CONDITIONS PRECEDENT TO STOCK PURCHASE OFFER
AND CONSUMMATION OF TRANSACTION
Unless otherwise agreed in writing by First Financial,
Citizens Equity and the Principal Shareholders, the obligations
of First Financial to make the Offer to the Shareholders pursuant
to this Agreement, and thereafter, the obligations of First
Financial, Citizens Equity and the Principal Shareholders to
consummate the stock purchase and sale contemplated by this
Agreement shall be expressly subject to the satisfaction of the
following conditions except as otherwise expressly provided
herein:
2.1. Regulatory Approvals.
(1) The Board of Governors of the Federal Reserve
System shall have approved, in writing, the acquisition by First
Financial of all of the issued and outstanding capital stock of
Citizens Equity;
(2) all other approvals and authorizations of, filings
and registrations with, and notifications to, all federal, state
and local authorities required for the consummation of the
transaction contemplated hereby shall have been
<PAGE>
obtained or made and shall be in full force and effect; and
(3) all mandatory waiting periods shall have elapsed.
2.2. Accuracy of Representations and Warranties. Except as
otherwise expressly provided herein, all of the representations
and warranties of First Financial, Citizens Equity, Citizens
National and the Principal Shareholders contained in this
Agreement shall be true as of the Closing Date, with the same
force and effect as
though made on the Effective Date and Closing Date, respectively,
and there shall be delivered on the Effective Date and the
Closing Date appropriate certificates of authorized officers of
First Financial, Citizens Equity and Citizens National to such
effect.
2.3. Performance of Agreements. First Financial, Citizens
Equity, Citizens National and the Principal Shareholders shall
have performed all obligations and agreements, and shall have
complied with all covenants and conditions, contained in this
Agreement to be performed and complied with by it or them on or
prior to the Closing.
2.4. No Governmental Proceeding or Litigation. No order,
judgment or decree of any competent court, governmental body or
regulatory authority shall be outstanding which declares or seeks
a declaration that this Agreement is invalid or which restrains,
or seeks to restrain, the consummation of the cash offer
contemplated hereby; and no action or proceeding shall be pending
which questions the validity or legality of, or seeks to restrain
the consummation of, the cash offer contemplated by this
Agreement.
2.5. Independent Audit. Receipt by First Financial of
consolidated reports of Citizens Equity audited and prepared by
Arthur Andersen LLP, at First Financial's expense, covering the
length of time and prepared in such manner as will satisfy the
requirements and regulations governing the preparation and
furnishing of financial statements in connection with this stock
purchase and sale transaction.
2.6. Tender of Shares. The delivery to the Escrow Agent by
the Shareholders of duly and properly executed Transmittal Forms
which agrees to effectively transfer and assign all of their
Shares of Citizens Equity Stock (being all of the issued and
outstanding shares of Citizens Equity Stock) to First Financial
free and clear of all liens, options and encumbrances and with
all of such Stock being fully paid and non-assessable at the time
of transfer; provided, that with respect to any Shares pledged to
secure indebtedness owed by a Shareholder, the Shareholder,
joined by the creditor to whom such indebtedness is owed, shall
have delivered to the Escrow Agent a binding written agreement
(the "Commitment Letter") to deliver to the Escrow Agent duly and
properly executed Transmittal Forms, along with stock
certificates for the subject Shares, upon payment of the
indebtedness secured by such Shares and, if necessary to secure
release and delivery of the Shares, to apply all or a sufficient
portion of the purchase price payable to such Shareholder under
this Agreement and the Offer to payment of such indebtedness.
2.7. No Material Changes. The absence of any material
adverse change in the financial conditions of First Financial,
Citizens Equity or Citizens National between July 31, 1995 and
the Closing Date.
<PAGE>
2.8. Opinion of Citizens Equity's Counsel. First Financial
shall have received the written opinion of counsel for Citizens
Equity and Citizens National, dated at or as of the Closing Date
and in form and substance satisfactory to First Financial and its
counsel, that
(1) Citizens Equity is duly organized, validly existing
and in good standing under the laws of the State of Texas;
(2) Citizens National is duly organized, validly
existing and in good standing under the laws of the United States
and of the State of Texas;
(3) Citizens Equity and Citizens National have all
requisite power and authority to execute and deliver this
Agreement and to consummate the transaction contemplated thereby;
(4) the execution and delivery by Citizens Equity and
Citizens National does not, and the consummation of the
transaction contemplated thereby, will not contravene or violate
any provisions of or constitute a default under the (a) Articles
of Incorporation or Association or Bylaws of Citizens Equity or
Citizens National or (b) any law, regulation, rule, decree, order
or judgment of any court, governmental agency or public body
applicable to Citizens Equity or Citizens National or any of
their respective assets or property;
(5) all consents, approvals, authorizations, actions or
filings with any court, governmental agency or public body
required in connection with the execution, delivery and
performance by Citizens Equity and Citizens National of this
Agreement have been obtained;
(6) Citizens Equity and Citizens National have good and
merchantable title to all of their assets and properties;
(7) all of the outstanding shares of Citizens Equity
Stock and Citizens National Stock have been validly issued and
are non-assessable and fully paid;
(8) except as reflected in Disclosure Schedules C and D,
there are no known material liabilities, claims or lawsuits
pending against Citizens Equity or Citizens National or any of
their respective properties or assets;
(9) since the date of this Agreement and the Closing
Date, there has been no increase in the number of issued and
outstanding shares of Citizens Equity Stock;
(10) since the date of this Agreement and the Closing
Date, there has been no increase in the number of issued and
outstanding shares of Citizens National Stock; and
(11) except as disclosed in Disclosure Schedule F, all
Citizens National Stock owned by Citizens Equity is free and
clear of liens, security interests, transfer restrictions and
other encumbrances.
2.9. Environmental Report. First Financial shall have
received, at Citizens Equity's expense, a satisfactory Phase I
Environmental Assessment report covering all real property of
Citizens Equity and Citizens National, whether such real property
is used by Citizens Equity or Citizens National in its corporate
or banking business, held for resale or otherwise owned or held
by Citizens Equity or Citizens National.
2.10. Opinion of First Financial's Counsel. Citizens
Equity shall have received the written opinion of counsel for
First Financial, dated at or as of the Closing Date and in form
and substance satisfactory to Citizens Equity and its counsel,
that
(1) First Financial is duly organized, validly existing
and in good standing under the laws of the State of Texas;
(2) First Financial has all requisite power and
authority to execute and deliver the Agreement and to consummate
the transaction contemplated thereby;
(3) the execution and delivery by First Financial of the
Agreement does not and the consummations of the transaction
contemplated thereby will not contravene or violate any provision
of or constitute a default under the (a) articles of
incorporation or bylaws of First Financial, or (b) any law,
regulation, rule, decree, order or judgment of any court,
governmental agency or public body applicable to First Financial
or its assets or properties; and
(4) that all consents, approvals, authorizations,
actions or filings with any court, governmental agency
<PAGE>
or public body required in connection with the execution,
delivery and performance by First Financial of the Agreement have
been obtained.
2.11. Termination of Employee Stock Ownership Plan. The
Board of Directors of Citizens Equity shall, prior to the Closing
Date, adopt such resolutions, and take such other action, as may
be necessary to terminate the Citizens Equity Corporation
Employee Stock Ownership Plan (the "ESOP") as adopted effective
January 1, 1988; provided, that such resolutions may provide that
termination of the ESOP and disposition of the assets of the ESOP
shall be subject to consummation of the stock sale and purchase
transaction contemplated by this Agreement.
In addition, First Financial and its counsel shall be
satisfied, in their opinion, that (1) the ESOP is a qualified
plan under, and in full compliance with, the Employee Retirement
Income Security Act of 1974, ("ERISA"), as amended, the Internal
Revenue Code of 1986, as amended, and all other applicable laws,
rules and regulations; and
(2) no facts or circumstances exist which, in
the opinion of First Financial and its counsel, may result in
liability to First Financial, Citizens Equity, Citizens National
or any of its or their directors, officers or employees arising
out of, or in connection with, the administration of the ESOP or
termination of the ESOP if the transaction contemplated by this
Agreement is consummated.
2.12. Redemption of Preferred Stock. Citizens Equity
shall, prior to the Closing Date, adopt such resolutions, and
take such other action, as may be necessary or appropriate under
the circumstances to redeem all of the issued and outstanding
shares of Citizens Preferred Stock.
2.13. Shareholder Debt. Principal Shareholders O. L.
Pitts ("Pitts") and Pamela Trust shall have entered into binding
and enforceable written agreements (Disclosure Schedule N) which
provide for the payment from proceeds received from the sale of
their Citizens Equity Stock, respectively, of all indebtedness
including both principal and accrued interest owing to Citizens
National as of the closing date. Also, Principal Shareholders
Pitts and Pamela Trust shall have delivered to the Escrow Agent
appropriate written instructions for the Escrow Agent to remit to
Citizens National that portion of the cash proceeds otherwise
payable to Pitts and Pamela Trust as shall be required to pay, in
full, as to both principal and interest, all indebtedness of
Pitts and Pamela Trust owed to Citizens National as of the
closing date.
2.14. Citizens National Stock. Citizens Equity shall own
and/or have entered into binding, enforceable and assignable
contracts to acquire, at least 99.5% of the shares of Citizens
National Stock not owned by Citizens Equity at the time of this
Agreement.
2.15. Cancellation of Contracts. Citizens Equity and
Citizens National shall have canceled or otherwise terminated all
consulting or other similar agreements with third parties,
including any such agreement between Citizens Equity and/or
Citizens National and any shareholder, director, officer or
employee of Citizens Equity or Citizens National.
<PAGE>
2.16. Refinancing of Debt. First Financial shall have
arranged for, or assisted Citizens Equity in obtaining, a binding
written loan commitment for refinancing of Citizens Equity's
current indebtedness to First State Bank N. A., Abilene, Texas,
secured by the shares of Citizens National Stock owned by
Citizens Equity, such refinancing being as to the unpaid
principal balance owing upon such indebtedness as of October 15,
1995.
2.17 Dissolution of Subsidiary. Citizens Equity shall have
taken all necessary actions to dissolve, and shall have obtained
a Certificate of Dissolution of, 1868 Corporation, its
unorganized and non-operating Delaware subsidiary corporation.
ARTICLE 3
WARRANTIES AND REPRESENTATIONS
OF CITIZENS EQUITY AND CITIZENS NATIONAL
Citizens Equity and Citizens National hereby jointly and
severally make the following warranties and representations to
First Financial:
3.1. Organization and Standing of Citizens Equity. Citizens
Equity is a Texas corporation duly organized, validly existing
and in good standing under the laws of the State of Texas, with
corporate power to own property and carry on its business as it
is now being conducted. Citizens Equity is also a registered
bank holding company under the Bank Holding Company Act of 1956,
as amended. The copies of the Articles of Incorporation and
Bylaws of Citizens Equity, including all amendments thereto,
delivered, or to be delivered, to First Financial are, or will
be, complete and accurate in all respects.
3.2. Organization and Standing of Citizens National.
Citizens National is a national bank duly organized, validly
existing and in good standing under national banking laws, with
corporate power to own property and carry on its business as it
is now being conducted. Citizens National is an insured bank
under the Federal Deposit Insurance Act. All of the banking
business and all of the banking offices and facilities of
Citizens National are located within the State of Texas. The
copies of the Articles of Association and Bylaws of Citizens
National, including all amendments thereto, delivered, or to be
delivered, to First Financial are, or will be, complete and
accurate in all respects.
3.3. Subsidiaries and Affiliates. Except as set forth on
Page 1, Citizens Equity does not have any subsidiaries. Citizens
National does not have any subsidiaries. Neither Citizens Equity
nor Citizens National holds any interest in any other
corporation, firm, joint venture or partnership, except
(1) as security for repayment of loans to customers of
Citizens National,
(2) as acquired by Citizens National through foreclosure
or otherwise by reason of debt previously contracted, or (3) for
authorized investment securities purchased by Citizens Equity or
Citizens National for its own account (but, as a result of which
investments, neither Citizens Equity nor Citizens National is
considered to be an affiliate of the issuer of such securities or
otherwise controls, is controlled by or is under common control
with, the issuer of any such investment securities).
<PAGE>
3.4. Capitalization. As of the date of this Agreement, the
authorized capital stock of Citizens Equity consists of
1,000,000 shares of common stock of a par value of $1.00 each, of
which 106,580 are presently issued and outstanding; and
1,000,000 shares of $86.65 par value, 7.5 percent cumulative
preferred stock, of which 311 are presently issued and
outstanding.
The authorized capital stock of Citizens National consists of
110,000 shares of common stock of a par value of $5.00, of which
91,661 are presently issued and outstanding. Citizens Equity now
owns all but 8,651 shares of the issued and outstanding common
stock of Citizens National, but as of the Closing Date will have
acquired all or substantially all of the issued and outstanding
common stock of Citizens National not owned as of the date of
this Agreement. All rights, privileges, restrictions (if any),
terms and provisions governing the shares of common stock of
Citizens Equity and Citizens National are described in the
Articles of Association and Bylaws (as amended) of Citizens
Equity and Citizens National, respectively; and, except for
shares of Citizens National pledged to secure the debt of
Citizens Equity as described in Disclosure Schedule F, there are
not (nor shall be on the Closing Date) any outstanding or
authorized subscriptions, options, warrants, calls, rights or
commitments or any kind restricting the transfer of, requiring
the issuance or sale of, or otherwise relating to, any of the
capital stock of Citizens Equity or Citizens National.
3.5. Authority of Citizens Equity and Citizens National.
This Agreement has been duly executed and delivered by, and has
been duly authorized by all necessary corporate action on the
part of, Citizens Equity and Citizens National, respectively,
and, subject to the conditions precedent to closing of this
transaction set forth herein, is a valid, legally binding and
enforceable obligation of Citizens Equity and Citizens National.
Subject to First Financial's obtaining the approval of the Board
of Governors of the Federal Reserve System, neither the
execution, delivery or performance of this Agreement in its
entirety, nor the consummation of all of the transactions
contemplated hereby, will violate (with or without the giving of
notice or the passage of time), be in conflict with, result in a
breach of any provision of, or constitute a default under,
any provision in the Articles of Incorporation, Articles of
Association or Bylaws of, or any provision of law applicable to,
Citizens Equity or Citizens National or any agreement or
understanding, order, judgment, award, decree, statute,
ordinance, regulation or other restriction of any
kind or character to which Citizens Equity or Citizens National
is a party or by which any of the respective assets or properties
of Citizens Equity or Citizens National are subject or bound.
3.6. Licenses, Permits and Contracts. None of the assets,
licenses, permits, authorizations and contracts of Citizens
Equity or Citizens National will be terminated or impaired by
reason of execution, delivery or performance by Citizens Equity
or Citizens National of this Agreement or consummation of the
transactions contemplated hereby.
3.7. Claims, Suits and Proceedings. Except as reflected in
Disclosure Schedule D, there are no actions, suits, proceedings
or claims pending or, to their knowledge, threatened against
Citizens Equity or Citizens National, at law or in equity, or
before any federal, state, municipal or other governmental court,
department, commission, board, bureau, agency, instrumentality or
other person which would result in liability to Citizens Equity
or Citizens National upon consummation of the transaction
contemplated hereby or which would prevent or delay such
consummation. In particular, and without in any way limiting the
foregoing, neither Citizens Equity nor Citizens National is
subject to, or a party to, any
<PAGE>
cease-and-desist, supervisory or other agreement with any banking
or other regulatory authority which requires the consent or
approval of such authority or which is otherwise applicable to
the transaction contemplated by this Agreement.
3.8. Consents and Approvals. No consent, approval or
authorization of, or declaration, filing or registration with,
any person or governmental authority is required in connection
with the execution and delivery of this Agreement by Citizens
Equity or Citizens National, and consummation of the transactions
contemplated hereby, except for such approvals as may be required
for First Financial to acquire the Citizens Equity Stock and for
such approvals by the Boards of Directors of Citizens Equity and
Citizens National as have been given prior to execution of this
Agreement.
3.9. Regulatory Reports. Citizens Equity and Citizens
National have filed all reports, registrations and statements,
together with any amendments required to be made thereto, that
are required to be filed with the Federal Reserve Board (the
"FRB"), Comptroller of the Currency (the "OCC"), the Federal
Deposit Insurance Corporation (the "FDIC"), the Securities and
Exchange Commission (the "SEC") and any other applicable
authorities, and all of such reports, registrations and
statements are true, complete and correct in all material
respects.
3.10. Financial Statements. Citizens Equity and Citizens
National have provided, or caused to be provided, to First
Financial the Financial Statements and Reports described in
Disclosure Schedule A attached hereto and the notes thereto
(collectively, the "Financial Statements"), all of which have
been prepared in accordance with generally accepted accounting
principles ("GAAP") or regulatory accounting principles ("RAP");
and the Financial Statements, as of their respective dates,
conformed in all material respects with all applicable material
rules and regulations promulgated by the FRB, the OCC and the
FDIC.
3.11. Undisclosed Liabilities. Except to the extent
reflected in the Financial Statements or as reflected in
Disclosure Schedule B, Citizens Equity and Citizens National have
no material liabilities or obligations (absolute, accrued,
contingent or otherwise).
3.12. Absence of Certain Changes. Except as and to the
extent reflected in Disclosure Schedule C, neither Citizens
Equity nor Citizens National, from July 31, 1995, until the date
of this Agreement, has:
(a) made any amendment to its Articles of Association
or Bylaws or changed the character of its business in any
material manner;
(b) suffered any material adverse change in its
financial condition, assets, liabilities (absolute, accrued,
contingent or otherwise) or business;
(c) incurred, assumed or become subject to, whether
directly or by way of any guarantee or otherwise, any
obligations or liabilities (absolute, accrued, contingent or
otherwise) except in the ordinary course of business;
<PAGE>
(d) permitted or allowed any of its property or assets
to be subject to any mortgage, pledge, lien, security
interest, encumbrance, restriction or change of any kind;
(e) canceled any debts in excess of $25,000, waived any
claims or rights of material value, or sold, transferred, or
otherwise disposed of any of its properties or assets, except
in the ordinary course of business;
(f) disposed of or permitted to lapse any rights to the
use of any material trademark, trade name or copyright, or
disposed of or disclosed to any person other than its
employees any material trade secret not theretofore a matter
of public knowledge;
(g) granted any increase in compensation, or paid or
agreed to pay or accrue any bonus or like benefit, to or for
the credit of any director, officer or employee except in the
ordinary course of business, or entered into any employment
or consulting contract or other agreement for personal services
with any director, officer or employee, or adopted, amended or
terminated any Employee Benefit Plan, except as authorized by
Section 2.11;
(h) declared, paid or set aside for payment any
dividend or other distribution or payment in respect of its
capital stock (other than normal, regular dividends or
distributions of Citizens National to Citizens Equity);
(i) organized or acquired, except through foreclosure,
the exercise of creditors remedies or in a fiduciary capacity,
any capital stock or other equity securities of any
corporation or acquired any equity or ownership interest in
any partnership or business enterprise;
(j) issued, reserved for issuance, granted, or
authorized the issuance of any shares of its capital stock or
subscriptions, options, warrants, calls, rights or commitments
of any kind relating to the issuance of or conversion into shares
of its capital stock;
(k) made any change in any method of accounting or
accounting practice, except as required by applicable law,
regulation or GAAP;
(l) except for the transactions contemplated by this
Agreement, or as otherwise permitted hereunder, entered into
any transaction, or entered into, modified or amended any
contract or commitment, other than in the ordinary course of
business; or
(m) agreed, whether in writing or otherwise, to take
any action the performance of which would be prohibited by this
Section 3.12.
<PAGE>
3.13. Title to Properties; Encumbrances. Except for the
liens and security interests disclosed in Disclosure Schedule F
securing the indebtedness described therein, Citizens Equity and
Citizens National have, or will have upon the Closing Date,
unencumbered, good and merchantable title to all their properties
and assets, real and personal, including, without limitation, all
properties and assets reflected in the Financial Statements,
except for (i) easements, reservations, restrictions,
rights-of-way, and other encumbrances of record, other than liens
and conveyances, and (ii) those properties and assets disposed of
in the ordinary course of business consistent with safe and sound
banking practices; and, to their knowledge, all uses made of, and
activities conducted upon, any real property owned, leased or
used by Citizens Equity and Citizens National comply in all
respects with applicable state, local or municipal zoning laws
and other laws, rules, regulations and ordinances.
3.14. Litigation. Except as reflected in Disclosure
Schedule D, there are no actions, suits, proceedings or claims
pending or, to their knowledge, threatened against Citizens
Equity or Citizens National, or involving any of their properties
or assets, at law or in equity, or before or by any foreign,
federal, state, municipal or other governmental court,
department, commission, board, bureau, agency, instrumentality or
other person, which may, in the reasonable judgment of Citizens
Equity and Citizens National, result in any material liability to
Citizens Equity or Citizens National.
3.15. Tax Matters. Citizens Equity and Citizens
National:
(a) duly filed all tax returns (the "Filed Returns")
required to be filed by it involving a tax liability or other
material potential detriment for failure to file, and all of
such Filed Returns are true, complete and correct in all
material respects;
(b) paid, or established reasonable accruals for the
payment of, all federal income taxes and all state and local
income taxes and all franchise, property, sales, employment or
other taxes required to be paid in respect to the periods
covered by the Filed Returns;
(c) with respect to the periods prior to the date of
this Agreement and subsequent to the last Filed Return ,
established reasonable accruals for the payment of all federal
income taxes and all material state and local income taxes and
material franchise, property, sales, employment or other
taxes; and
(d) properly and timely withheld, remitted and/or paid
all withholding taxes, social security taxes, unemployment
taxes and other employment-related taxes which Citizens Equity
and Citizens National are, by law, required to withhold, remit or
pay.
In addition to the foregoing, neither Citizens Equity or
Citizens National (1) is the subject of, nor is there pending or
threatened, any audit with respect to or arising out of any Filed
Return; (2) has previously requested, or has filed a request for,
any extension of time to file any return or pay any tax; and
(3) has agreed or consented to the extension of any
<PAGE>
statute of limitations respecting the assessment of taxes,
additional taxes, penalty or interest in connection with any tax
liability or Filed Return. No tax liens have been filed or
threatened against Citizens Equity or Citizens National.
For the purposes of this Agreement, the term "tax" shall
include all federal, state and local taxes and related
governmental charges and any interest or penalties payable in
connection with the payment of taxes.
3.16. Employment Benefit Plans. (1) Except as reflected
in Disclosure Schedule E, neither Citizens Equity nor Citizens
National maintains or contributes to, nor is Citizens Equity or
Citizens National required to maintain or contribute to, (i) any
"employee welfare benefit plan" [as defined in Section 3(1) of
the Employee Retirement Income Security Act ("ERISA")] or (ii)
any "employee pension benefit plan" [as defined in Section 3(2)
of ERISA]. Except as reflected in Disclosure Schedule E, neither
Citizens Equity nor Citizens National maintains or contributes
to, nor has Citizens Equity or Citizens National adopted or
entered into, any deferred compensation plan, bonus plan, stock
option plan, employee stock option plan or any other employee
benefit plan, agreement, arrangement or commitment (other than
normal policies concerning holidays, vacations, accumulated sick
leave, and annual budgeted incentive bonuses previously disclosed
to First Financial).
(2) The Citizens Equity ESOP, as described in
Disclosure Schedule E, and as required by Section 2.11, will be
terminated upon or immediately following the consummation of the
stock purchase and sale transaction.
3.17. Leases, Contracts and Agreements. Disclosure
Schedule F reflects all leases, contracts and agreements to which
Citizens Equity or Citizens National is a party and which
obligate or may obligate Citizens Equity or Citizens National to
pay any amount in excess of $25,000 over the entire term of any
such lease, contract or agreement (the "Contracts"), true and
correct copies of which have been or shall be made available to
First Financial. For the purposes of this Agreement, the
Contracts shall not be deemed to include loan commitments of,
loans made by, repurchase agreements made by, bankers acceptances
of, or deposits taken by Citizens National in the ordinary course
of its banking business. Each and all of the Contracts are
legal, valid, binding and enforceable in accordance with their
terms and are in full force and effect. There are no existing
material defaults by any party to the Contracts and no event has
occurred which (whether with or without notice, lapse of time or
the happening or occurrence of any other event) would constitute
such default.
3.18. Related Company Transactions. Except for
transactions described in Disclosure Schedule G, there are no
agreements, instruments, commitments, extensions of credit, tax
sharing or allocation agreements or other contractual agreements
of any kind between Citizens Equity or Citizens National.
3.19. Transactions with Affiliates. Except as reflected
in Disclosure Schedule H, neither Citizens Equity nor Citizens
National (1) has any loans outstanding to any of its affiliates,
executive officers, or directors, or to any shareholder owning
ten percent (10%) or more of its outstanding shares or (2) is a
party to, or otherwise bound by, any contractual agreement with
any of its affiliates, executive officers, or directors, or with
any shareholder
<PAGE>
owning ten percent (10%) or more of its outstanding shares.
3.20. Compliance with Laws. Except as otherwise
disclosed in Disclosure Schedule I, Citizens Equity and Citizens
National are in compliance in all material respects with all
applicable laws and regulations and no action is pending or
threatened against Citizens Equity or Citizens National by any
federal, state or other regulatory authority.
3.21. Accuracy of Information. The factual information
relating to Citizens Equity and Citizens National contained in
this Agreement and the Disclosure Statements hereto is true,
correct and complete in all material respects. The information
relating to Citizens Equity and Citizens National supplied for
inclusion in the application of First Financial to the FRB, as of
the date supplied by Citizens Equity and Citizens National, will
be true, correct and complete in all material respects.
3.22. Insurance. Citizens Equity and Citizens National
have in effect the insurance coverage described in Disclosure
Schedule J. All insurance policies described in Disclosure
Schedule J are in full force and effect; no breach or default
exists under any such policy; and Citizens Equity and Citizens
National have timely filed all claims, if any, under any such
insurance policy.
3.23. Loans. Each loan reflected as an asset in the
Financial Statements, as well as all other extensions of credit,
guarantees, security agreements, deeds of trust and other
documents and instruments executed in connection therewith
(whether intended as security or otherwise) is the legal, valid
and binding obligation of the obligor named therein and is
enforceable in accordance with its terms. Citizens Equity and
Citizens National have made available to First Financial all
material information in possession of Citizens Equity and
Citizens National concerning all outstanding loans of Citizens
Equity and Citizens National.
3.24. Fiduciary Responsibilities. Citizens Equity and
Citizens National have each performed in all material respects
all of its duties as a trustee, executor, grantor, escrow agent
or other fiduciary in a manner which complies in all material
respects with all applicable laws, regulations, orders,
agreements, instruments and common law standards.
3.25. Regulatory Actions. Except as disclosed in
Disclosure Schedule K, there are no actions or proceedings
pending or threatened against Citizens Equity or Citizens
National by or before the FRB, the OCC, the FDIC, the SEC or any
other governmental agency or authority.
3.26. Broker's Fees. No person or entity acting on
behalf of Citizens Equity or Citizens National is or shall be
entitled, directly or indirectly, to any brokerage fee,
commission, finder's fee or financial advisory fee in connection
with the transaction contemplated by this Agreement.
3.27. Environmental Matters. Except as disclosed in
Disclosure Schedule L, there are no known material adverse
environmental problems or known conditions affecting any of the
properties of Citizens Equity or Citizens National. In
particular, and without in any way limiting the foregoing,
Citizens Equity and Citizens National, will make due inquiry,
<PAGE>
warrant and represent that to the best of their knowledge all
hazardous and toxic chemicals, substances and materials located
or used upon any of their respective properties have been and are
being stored, used, transported and disposed of in compliance
with applicable state and federal environmental laws; that there
are no underground storage tanks located upon any of their
properties; and that no action or investigation is pending or
threatened by any governmental or regulatory authority, or by any
person, firm or corporation, arising out of any failure, or
alleged failure, to comply with applicable environmental laws,
statutes, rules or regulations.
ARTICLE 4
WARRANTIES, REPRESENTATIONS AND COVENANTS
OF PRINCIPAL SHAREHOLDERS
4.1. Stock Ownership. Each Principal Shareholder warrants
and represents to First Financial that he or she is the owner, in
the capacity stated, of the number of Shares shown opposite his
or her name in Section 1.1, free of any encumbrance or claim in
favor of another, except as disclosed to First Financial and the
Escrow Agent, and that delivery of such Shares to First Financial
at Closing will, upon payment therefor by First Financial,
transfer to First Financial valid title thereto, free of any
encumbrance or claim in favor of another.
4.2. Authority. Each Principal Shareholder warrants and
represents to First Financial that he or she has full legal right
and authority to enter into this Agreement and to sell, assign,
and transfer the Shares owned by him or her pursuant to this
Agreement; that none of such action will be in breach of any
agreement or undertaking to which he or she is a party or by
which he or she is bound or a violation of any judgment or decree
by which he or she is bound; and that, to the best of his or her
knowledge, there are no actions, suits or proceedings pending or
threatened against him or her involving his or her Shares.
4.3. Warranties Concerning Citizens Equity and Citizens
National. Each Principal Shareholder warrants and represents to
First Financial that, to the best of his or her current actual
knowledge, all of the warranties and representations of Citizens
Equity and Citizens National contained in Article 3 are in all
material respects true and correct.
4.4. Broker's Fees. Each Principal Shareholder warrants and
represents to First Financial that no person or entity acting on
his or her behalf is or shall be entitled to any brokerage fee,
commission, finder's fee or unpaid financial advisory fee
directly or indirectly in connection with the transaction
contemplated by this Agreement.
4.5. Covenants. From the date of this Agreement and until
the Closing Date, none of the Principal Shareholders shall
knowingly take any action which would cause Citizens Equity and
Citizens National to be in breach of any of its covenants
contained in Article 3, and, to the extent it is within his or
her ability to do so, each Principal Shareholder shall use his or
her best efforts to cause Citizens Equity and Citizens National
to keep and perform its covenants contained in Article 5.
<PAGE>
ARTICLE 5
CONDUCT OF BUSINESS OF CITIZENS EQUITY
AND CITIZENS NATIONAL PENDING CLOSING DATE
5.1. Affirmative Covenants. From and after the date of this
Agreement and until the Closing Date, Citizens Equity and
Citizens National shall each:
(a) operate and conduct its business in the ordinary
course and consistent with its prior practices;
(b) preserve intact its corporate existence, business
organization, assets, licenses, permits, authorizations, and
business opportunities;
(c) maintain its books, accounts and records in
accordance with generally accepted accounting principles
and/or banking practices, as applicable, and comply with all
of its contractual obligations;
(d) maintain all of its properties in good repair,
order and condition, reasonable wear and tear excepted, and
maintain insurance coverage upon all such properties with
reputable insurers which are adequate, in its reasonable
judgment, for the business conducted by it;
(e) in good faith and in a timely manner (i) cooperate
with First Financial in satisfying the conditions in this
Agreement; (ii) diligently assist First Financial, to the
extent it may reasonably require, in obtaining as promptly as
possible all consents, approvals, authorizations and rulings,
whether regulatory or corporate, as are necessary for First
Financial to carry out and consummate the transaction
contemplated by this Agreement; (iii) furnish, or cause to be
furnished, to First Financial such information as First Financial
may reasonably require for inclusion in any filings or
applications that may be necessary in that regard; and (iv)
perform all acts and execute and deliver all documents reasonably
necessary to cause the transaction contemplated by this Agreement
to be consummated at the earliest possible date;
(f) timely file with the FRB, OCC, FDIC, SEC and other
regulatory authorities all financial statements and other
reports to be filed by it and promptly thereafter deliver to
First Financial copies of all financial statements and other
reports required to be so filed;
(g) comply with all applicable laws and regulations,
noncompliance with which would have a material adverse effect
upon its financial condition, assets, liabilities (absolute,
accrued, contingent or otherwise) or business; (h) promptly give
written notice to First Financial upon obtaining
<PAGE>
knowledge of any event or fact that would cause any of the
representations or warranties of Citizens Equity or Citizens
National contained in or referred to in this Agreement to be
untrue in any material respect, and use its best efforts to
prevent or promptly remedy the same; and
(i) provide to First Financial, or provide First
Financial access to, all books, records, reports, financial
statements and other documents and information as First Financial
may from time to time request.
5.2. Negative Covenants. Except with the written consent of
First Financial, neither Citizens Equity or Citizens National
shall, from the date of this Agreement and until the Closing
Date:
(a) make or permit any amendment to its Articles of
Association or Bylaws;
(b) make or permit any changes in allocating or
charging costs which in the aggregate would cause a material
detriment, except as may be required by applicable regulation or
GAAP, and after notice to First Financial;
(c) except for negotiations and discussions between the
parties hereto relating to the transactions contemplated by
this Agreement, (i) directly or indirectly initiate contact
with any person or entity in an effort to solicit an
acquisition, merger or consolidation proposal relating to
Citizens Equity or Citizens National, (ii) enter into
negotiation of the terms of an agreement relating to the
acquisition, merger or consolidation of Citizens Equity or
Citizens National, (iii) permit access to the premises of
Citizens Equity or Citizens National for the review of its
business or operations (except as required by law), (iv) except
in the ordinary course of business, enter into any oral or
written agreement to sell the assets of Citizens Equity or
Citizens National or to merge, consolidate, liquidate or dissolve
Citizens Equity or Citizens National, or (v) authorize or engage
any officer, employee, agent or representative of Citizens Equity
or Citizens National (including but not limited to investment
bankers and financial advisers) to enter into any such
solicitation, negotiation or any such oral or written agreement;
(d) make any change in the number of shares of its
capital stock issued and outstanding, or issue, reserve for
issuance, grant, or authorize the issuance of any shares of
their capital stock or subscriptions, options, warrants,
calls, rights or commitments of any kind relating to the
issuance or conversion into shares of their capital stock;
(e) incur, assume or become subject to, whether
directly or by way of any guarantee or otherwise, any obligation
or liability (absolute, accrued, contingent or otherwise);
(f) other than the refinancing of Citizens Equity's
debt secured by the Citizens National Stock owned by Citizens
Equity and described in Disclosure
<PAGE>
Schedule F, permit or allow any of its property or assets to
become subject to any pledge, lien, security interest or
encumbrance, restrictions or change of any kind;
(g) cancel any debts in excess of $25,000, waive any
claims or rights of material value or sell, transfer, or
otherwise dispose of any of its properties or assets, except
in the ordinary course of business;
(h) dispose of or permit to lapse any of its rights to
the use of any material trademark, trade name or copyright, or
dispose of or disclose to any person any material trade secret
not theretofore a matter of public knowledge;
(i) grant or permit any increase in compensation, or
pay or agree to pay or accrue any bonus or like benefit, to or
for the credit of any of its directors, officers or employees, or
enter into, or permit, of any employment or consulting
agreement or other agreement for personal services with any of
its directors, officers or employees, or adopt, amend or
terminate (except for termination of the Citizens Equity ESOP
required by Section 2.11), any Employee Benefit Plan or
change or modify the period of vesting or retirement age for any
participant of any such plan (except as required by or to
comply with any law or regulation);
(j) declare, pay or set aside for payment any dividend
or other distribution or payment in respect of shares of its
capital stock except for normal, regular dividends or other
distributions of Citizens National to Citizens Equity.
(k) other than the acquisition of shares of Citizens
National capital stock from minority shareholders, acquire
the capital stock or other equity securities of any corporation
or any equity or ownership interest in any partnership or other
business enterprise, except through foreclosure, the exercise
of creditors' remedies or in a fiduciary capacity;
(l) make aggregate capital expenditures and commitments
in excess of $25,000 for additions to its premises or equipment;
or
(m) except as disclosed in Disclosure Schedule M,
modify any outstanding loans, make any new loans or acquire any
loan participations, unless such modifications, new loans, or
participations are made in the ordinary course of business.
5.3. Covenants. From and after the date of this Agreement
and until consummation or termination of the transaction
contemplated by this Agreement, neither Citizens Equity nor
Citizens National shall take any action which would cause
Citizens Equity or Citizens National to be in breach of any of
the covenants contained in this Article 5; and Citizens Equity
and Citizens National shall, within their ability to do so, cause
Citizens Equity and Citizens National to keep and perform all of
the covenants contained in this Article 5.
<PAGE>
ARTICLE 6
WARRANTIES, REPRESENTATIONS
AND COVENANTS OF FIRST FINANCIAL
First Financial warrants and represents to, and covenants and
agrees with, Citizens Equity and Citizens National as follows:
6.1. Organization and Standing of First Financial. First
Financial is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Texas, with
corporate power to own property and carry on its business as it
is now being conducted.
6.2. Capitalization. First Financial has an authorized
capitalization of 10,000,000 shares of common stock of the par
value of $10.00 per share, of which 5,009,679 shares are issued,
outstanding, and fully paid as of the date of this Agreement.
6.3. Authority of First Financial. This Agreement has been
duly executed and delivered by First Financial and, subject to
the conditions precedent to Closing of the transactions set forth
herein, is a valid, legally binding and enforceable obligation of
First Financial. Neither the execution, delivery or performance
of this Agreement in its entirety, nor the consummation of all of
the transactions contemplated hereby, will violate (with or
without the giving of notice or the passage of time), be in
conflict with, result in a breach of any provision of, or
constitute a default under, any provision of law applicable to
First Financial, or any agreement or understanding, order,
judgment, award, decree, statute, ordinance, regulation or other
restriction of any kind or character to which First Financial is
a party or by which any of its or their assets or properties is
subject or bound. There are no actions, suits, proceedings or
claims pending or, to its knowledge, threatened against First
Financial, at law or in equity, or before or by any foreign,
federal, state, municipal or other government court, department,
commission, board, bureau, agency,instrumentality or other person
which may result in liability to or of First Financial upon the
consummation of the transactions contemplated hereby or which
would prevent or delay such consummation.
6.4. No Adverse Change. From the date of this Agreement
until the Closing Date, First Financial shall not have suffered
any material adverse change in its financial condition, assets,
liabilities (absolute, accrued, contingent or otherwise) or
business.
6.5. Due Diligence. The officers, employees or other
representatives of First Financial have reviewed and examined the
assets, property (real and personal), leases and all other
contractual arrangements to which Citizens Equity or Citizens
National is a party and all business records of Citizens Equity
and Citizens National including, but not limited to, committee
and directors' minutes, reports of condition, reports of income,
tax returns, deposit agreements, loan portfolios, documents
pertaining to legal matters, and financial statements, all of
which review and examination was conducted upon the premises of
Citizens Equity and Citizens National, and First Financial hereby
confirms the acceptability of such due diligence review.
6.6. Covenants. First Financial covenants and agrees that it
shall:
<PAGE>
(a) use its best efforts in good faith and in a timely
manner to (i) cooperate with Citizens Equity, Citizens
National and the Principal Shareholders in satisfying the
conditions in this Agreement, (ii) obtain as promptly as
possible all consents, approvals, authorizations and rulings,
whether regulatory or corporate, as are necessary for First
Financial to carry out and consummate the transactions
contemplated by this Agreement, including specifically (but
without limitation) the approval called for by Section 5.7,
and (iii) furnish information concerning First Financial and
its subsidiaries not previously provided to Citizens Equity,
Citizens National and the Principal Shareholders required for
inclusion in any filing or applications that may be necessary
in that regard;
(b) perform all acts and execute and deliver all
documents necessary to cause the transactions contemplated by
this Agreement to be consummated at the earliest possible
date;
(c) promptly give written notice to Citizens Equity
upon obtaining knowledge of any event or fact that would cause
any of the representations or warranties of First Financial
contained in or referred to in this Agreement to be untrue in
any material respect, and use its best efforts to prevent or
promptly remedy the same; and
(d) cause its officers, directors and representatives
to treat as confidential any and all information concerning
Citizens Equity, Citizens National or the Principal
Shareholders which is furnished to First Financial, its
directors, officers, employees, shareholders, agents,
representatives or advisors, in connection with this
Agreement, or which was furnished prior to the execution of
this Agreement for the purpose of First Financial reviewing
and evaluating the transaction contemplated by this
Agreement, except insofar as disclosure to certain parties is
necessary to meet the conditions of this Agreement.
6.7. Federal Reserve Approval. Specifically, but without
limiting the effect of Section 6.6, promptly upon execution of
this Agreement, First Financial shall make application to the
Board of Governors of the Federal Reserve System (the "FRB") for
prior approval to acquire the Citizens Equity Stock in accordance
with this Agreement as required by the Bank Holding Company Act
of 1956, as amended, and applicable regulations. Promptly upon
receipt, First Financial shall furnish Citizens Equity and
Citizens National with a copy of the notice of approval or
disapproval of the application made by it to the FRB.
ARTICLE 7
SURVIVAL OF WARRANTIES, INDEMNIFICATION AND LIABILITY
7.1. Nature and Survival of Representations and Warranties.
The covenants, representations and warranties of the parties
hereto shall survive the Closing Date, and all
<PAGE>
inspections, examinations, or audits on behalf of the parties,
for a period of two (2) years after the Closing Date.
ARTICLE 8
TERMINATION
8.1. Circumstances Authorizing Termination. Notwithstanding
anything herein to the contrary, this Agreement may be terminated
and the Stock Purchase Offer contemplated hereby may be abandoned
at any time, but prior to the Closing Date:
(a) by mutual written consent duly authorized by the
Boards of Directors of First Financial and Citizens Equity;
(b) by First Financial (i) if First Financial learns or
becomes aware of a state of facts or breach or inaccuracy of
any representation or warranty or covenant of Citizens
Equity, Citizens National or any Principal Shareholder contained
in Articles 3 or 4 which constitute a material adverse change
from that represented in this Agreement, or (ii) if any of
the conditions to Closing contained in Article 2 are not
satisfied or waived in writing by First Financial;
(c) by Citizens Equity (i) if Citizens Equity learns or
becomes aware of a state of facts or breach of inaccuracy of
any representation or warranty or covenant of First Financial
contained in Article 6 which constitutes a material adverse
change from that represented in this Agreement, or (ii) if
any of the conditions to Closing contained in Article 2 are not
satisfied or waived in writing by Citizens Equity;
(d) by First Financial and Citizens Equity if the
Closing Date shall not have occurred on or before January 31,
1996, or such later date agreed to in writing by First Financial
and Citizens Equity; or
(e) by First Financial or Citizens Equity if First
Financial requests an adjustment of the purchase price for
the Citizens Equity Stock in accordance with Paragraph 1.2(2) and
the parties are unable to agree upon a new or adjusted
purchase price within the 10-day period prescribed in said
Paragraph; or
(f) by First Financial or Citizens Equity if any court
of competent jurisdiction in the United States (federal or
state) or other governmental body shall have issued an order,
decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the exchange of shares or
the merger, and such order, decree, ruling or other action
shall have been final and nonappealable.
ARTICLE 9
OFFER FOR MINORITY SHARES
9.1. Offer to Purchase.
(1) Promptly upon execution of this Agreement, First
<PAGE>
Financial shall offer to purchase, at Closing, all of the Shares
of all of the Minority Shareholders for a per share cash purchase
price of $60.00 per Share [adjusted as provided in Paragraph
1.2(2)], payable as provided in Paragraph 1.3(2).
(2) First Financial's offer (the "Offer") to purchase
Minority Shareholders' Shares shall be substantially in the form
of attached Exhibit B (with appropriate insertions) which
provides that a Minority Shareholder who wishes to accept the
Offer may do so by tendering his Shares to the Escrow Agent named
below to be held and delivered or redelivered as provided in the
Escrow Agreement (as defined below). The Offer shall also
provide that a Minority Shareholder who wishes to accept the
Offer will be required only to execute a Letter of Transmittal or
Transmittal Letter (herein so called), substantially in form of
attached Exhibit C, and to deliver the executed Letter and the
certificate(s) representing his Shares to the Escrow Agent.
(3) A Minority Shareholder shall be required to give no
warranty or representation other than that he is owner of the
Shares tendered, free and clear of any encumbrances or claims in
favor of another, that he has full legal right and authority to
sell, assign, and transfer the tendered Shares to First
Financial, and that delivery of such Shares to First Financial at
Closing will, upon payment therefor by First Financial, transfer
to First Financial valid title thereto, free of any encumbrances
or claim in favor of another.
9.2. Escrow. Promptly upon execution of this Agreement,
First Financial and the Trust Department of First National Bank
of Abilene in Abilene, Texas, (the "First National Trust
Department") as escrow agent, shall enter into an agreement (the
"Escrow Agreement") approved by all parties, substantially in the
form of attached Exhibit D, under which the First National Trust
Department, as escrow agent, (the "Escrow Agent") shall serve as
escrow agent in taking the actions therein provided.
ARTICLE 10
MISCELLANEOUS PROVISIONS
10.1. Public Announcements. Prior to the Closing Date,
neither Citizens Equity, Citizens National, a Principal
Shareholders nor First Financial, nor any person affiliated with
any of them, shall, without the prior approval of the other
parties, make any written public announcement, or make any
written statement or release to the press with respect to this
Agreement or the transactions contemplated hereby.
10.2. Applicable Law. This Agreement and the legal
relations between the parties hereto shall be governed by and
construed in accordance with the laws of the State of Texas and
of the United States of America.
10.3. Paragraph and Other Headings. Article and section
headings contained in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this
Agreement.
<PAGE>
10.4. Waivers and Amendments. This Agreement may be
amended, modified or supplemented only by a written instrument
executed by the parties hereto. The waiver by any party hereto
of a breach of this Agreement shall not operate or be construed
as a waiver of any subsequent breach.
10.5. Expenses.
(a) Whether or not the transactions contemplated by
this Agreement are consummated, each of the parties shall be
responsible for their respective fees and expenses incident
to the negotiation, preparation, execution and consummation of
the transactions contemplated by this Agreement, including
attorneys' and accountants' fees and expenses.
(b) First Financial consents to payment by Citizens
Equity and Citizens National of attorneys' and accountants'
fees and other necessary expenses incurred by them incident
to the negotiation, preparation and execution of this Agreement
and consummation of the transaction contemplated by this
Agreement.
10.6. Entire Agreement. This Agreement, including the
Exhibits and Disclosure Schedules, embodies the entire agreement
and understanding of the parties with respect to the subject
matter contained herein. There are no restrictions, promises,
representations, warranties, covenants or undertaking other than
those expressly set forth or referred to herein.
10.7. Notices. All notices, requests, demands or other
communications which are required or may be given under this
Agreement shall be in writing and shall be deemed to have been
duly given if delivered personally or sent by registered or
certified mail, return receipt requested, postage prepaid:
(a) In the case of First Financial, to:
Mr. Kenneth T. Murphy
Chairman of the Board, President and Chief
Executive Officer
First Financial Bankshares, Inc.
Post Office Box 701
Abilene, Texas 79604
(b) In the case of Citizens Equity, Citizens National
and/or Principal Shareholders, to:
Mr. Don Maples
Chairman of the Board and President
The Citizens National Bank of Weatherford
Post Office Box 259
Weatherford, Texas 76086
<PAGE>
or to such other addresses as any party shall specify by
notice to the others.
10.8. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be
an original and all of which together shall be deemed to be one
and the same.
10.9. Attachment of Disclosure Schedules. Citizens
Equity, Citizens National, the Principal Shareholders and First
Financial acknowledge that the Disclosure Schedules referenced
herein may not be attached hereto at the time of execution of
this Agreement. It is the intent of all parties hereto that the
form and content of all such Disclosure Schedules will be
prepared in form acceptable to First Financial and that such
Disclosure Schedules shall then be attached to this Agreement
and that such Disclosure Schedules shall then become a part
of this Agreement for all purposes. In the event that the
contents in the Disclosure Schedules are not acceptable to First
Financial, this Agreement may be terminated by First Financial by
written notice and be of no further force and effect.
Notwithstanding the fact that any such Disclosure Schedules may
not be attached hereto at the time of execution, the date of this
Agreement or date of execution of this Agreement shall for all
purposes be the date first written above.
10.10. Binding Effect - Assignment. This Agreement is
binding upon the undersigned parties, their heirs, personal
representatives, successors and assigns. The rights of First
Financial under this Agreement may not be assigned without the
prior written consent of Citizens Equity, Citizens National and
the Principal Shareholders except that, at Closing, FFB Delaware
or another subsidiary of First Financial may acquire the Shares
so long as First Financial remains liable for its obligations
under this Agreement.
10.11. Definitions. In addition to other definitions
contained elsewhere in this Agreement, as used in this Agreement:
(a) an "affiliate" means any bank, corporation,
partnership or other entity which, directly or indirectly,
controls, is controlled by, or is under common control with,
Citizens Equity, Citizens National or First Financial;
(b) references to a particular "Article" or "Section"
are to the given article or section of this Agreement; and
(c) unless context otherwise requires, words of the
singular number include the plural and of the plural include
the singular and words of the masculine gender include the
feminine and neuter.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, in multiple originals, as of the day and year first
above written.
FIRST FINANCIAL BANKSHARES, INC
ATTEST:
<PAGE>
By: By:
Curtis R. Harvey Kenneth T. Murphy,
Executive Vice President Chairman of the Board, President
and Chief Financial Officer and Chief Executive Officer
CITIZENS EQUITY CORPORATION
ATTEST:
By: By:
Name: Don Maples, Chairman of the Board
Title:
THE CITIZENS NATIONAL BANK
OF WEATHERFORD
ATTEST:
By: By:
Name: Don Maples, Chairman of the Board
Title: and President
<PAGE>
PRINCIPAL SHAREHOLDERS:
DON MAPLES
BETTY MAPLES
DON MAPLES I.R.A.
By: The Citizens National Bank of Weatherford,
Custodian
By:
Title:
<PAGE>
ROY GROGAN, Trustee
O. L. PITTS
C. KENT McINTOSH
RICHARD HUGHES
PAMELA TRUST
By: Pamela Pitts McIntosh, Trustee
By: Altus Hayes, Trustee
STATE OF TEXAS
COUNTY OF
The foregoing document was acknowledged before me this
day of , 1995, by DON MAPLES and BETTY MAPLES.
Notary Public, State of Texas
Printed Name of Notary
My Commission Expires:
STATE OF TEXAS
<PAGE>
COUNTY OF
The foregoing document was acknowledged before me this
day of , 1995, by , of
The Citizens National Bank of Weatherford, as Custodian of the
Don Maples IRA.
Notary Public, State of Texas
Printed Name of Notary
My Commission Expires:
STATE OF TEXAS
COUNTY OF
The foregoing document was acknowledged before me this
day of , 1995, by ROY GROGAN, TRUSTEE.
Notary Public, State of Texas
Printed Name of Notary
My Commission Expires:
STATE OF TEXAS
COUNTY OF
The foregoing document was acknowledged before me this
day of , 1995, by O. L. PITTS.
Notary Public, State of Texas
Printed Name of Notary
My Commission Expires:
<PAGE>
STATE OF TEXAS
COUNTY OF
The foregoing document was acknowledged before me this
day of , 1995, by C. KENT McINTOSH.
Notary Public, State of Texas
Printed Name of Notary
My Commission Expires:
STATE OF TEXAS
COUNTY OF
The foregoing document was acknowledged before me this
day of , 1995, by RICHARD HUGHES.
Notary Public, State of Texas
Printed Name of Notary
My Commission Expires:
STATE OF TEXAS
COUNTY OF
The foregoing document was acknowledged before me this
day of , 1995, by PAMELA PITTS McINTOSH as
Trustee of the Pamela Trust.
Notary Public, State of Texas
Printed Name of Notary
<PAGE>
My Commission Expires:
STATE OF TEXAS
COUNTY OF
The foregoing document was acknowledged before me this
day of , 1995, by ALTUS HAYES as Trustee of the
Pamela Trust.
Notary Public, State of Texas
Printed Name of Notary
My Commission Expires:
STOCK EXCHANGE AGREEMENT
AND PLAN OF REORGANIZATION
THIS AGREEMENT is made and effective as of this 20th day of
October, 1995, between (1) FIRST FINANCIAL BANKSHARES, INC.
(hereinafter referred to as "First Financial"), a Texas
corporation with its principal office in the City of Abilene,
Taylor County, Texas; (2) Weatherford National Bancshares, Inc.
("Weatherford Bancshares"), a Texas corporation and bank holding
company with its principal office in the City of Weatherford,
Parker County, Texas; (3) Parker Bancshares, Inc. ("Parker
Bancshares"), a Delaware Corporation and bank holding company;
and (4) Weatherford National Bank ("Bank"), a national bank
having its principal office in the City of Weatherford, Parker
County, Texas.
First Financial is a registered bank holding company. First
Financial owns all of the issued and outstanding capital stock of
First Financial Bankshares of Delaware, Inc. ("FFB Delaware")
which, in turn, owns all of the issued and outstanding capital
stock of First National Bank of Abilene; First National Bank,
Sweetwater; Eastland National Bank; Hereford State Bank; First
National Bank in Cleburne; Stephenville Bank & Trust Co.; and
Southwest Bank of San Angelo.
As of the date of this Agreement, Weatherford Bancshares has
1,000,000 authorized shares of Common Stock (the "Weatherford
Bancshares Stock") having a par value of Five Dollars ($5.00)
each, with 215,988 shares being issued and outstanding.
According to the records of Weatherford Bancshares, the
Weatherford Bancshares Common Stock is presently held by those
individuals, trusts, estates, corporations and other entities
(the "Shareholders") identified in the Shareholders' List
attached hereto as Exhibit A.
Weatherford Bancshares owns 25,096 shares (100%) of the
issued and outstanding capital stock of Parker Bancshares
("Parker Bancshares Stock"). Parker Bancshares is the only
subsidiary of Weatherford Bancshares. Parker Bancshares owns
200,000 shares (100%) of the issued and outstanding capital stock
of Bank ("Bank Stock"). There are no other corporations or other
business entities which are considered affiliates of Weatherford
Bancshares, Parker Bancshares or Bank.
Pursuant to, and subject to, the provisions hereinafter set
forth, First Financial agrees to acquire from the Shareholders
all of the issued and outstanding shares of Weatherford
Bancshares (hereinafter referred to as the "Shares") in exchange
for shares of the voting common stock of First Financial ("First
Financial Stock") which shall be issued and registered by First
Financial under the Securities Act of 1933 (the "Act").
THEREFORE, in consideration of the premises, and in further
consideration of the mutual covenants and on the basis of the
representations and warranties set forth herein, First Financial,
Weatherford Bancshares, Parker Bancshares and Bank have agreed,
and
<PAGE>
by these presents do hereby agree, as follows:
ARTICLE 1
EXCHANGE OF STOCK
1.1. Means of Exchange. The offer to acquire all of the
shares of Weatherford Bancshares for shares of First Financial
Stock (the "Exchange Offer") shall be made by means of a
Prospectus to be delivered to each of the Shareholders upon or
following the effective date of a Registration Statement to be
filed by First Financial in accordance with the Securities Act of
1933.
1.2. Ratio of Exchange. Subject to all terms and conditions
of this Agreement, First Financial shall be obligated to issue
and exchange 1.5 shares of First Financial Stock for each share
of Weatherford Bancshares Stock tendered by the Shareholders who
accept the exchange offer during the time period the Exchange
Offer is in effect; PROVIDED, HOWEVER, that if First Financial,
prior to consummation of the proposed exchange offer, shall issue
any additional shares of First Financial Stock pursuant to any
stock dividend or stock split, the ratio of exchange shall be
adjusted so as to prevent dilution of the interest in First
Financial to be received by the Shareholders of Weatherford
Bancshares.
1.3. Means of Acceptance of Exchange Offer. A form of
certificate and acceptance of the exchange offer (the "Exchange
Form") shall accompany the Prospectus to be delivered to each
Shareholder of Weatherford Bancshares. Once the Exchange Form
has been signed by a Shareholder (which shall certify that such
Shareholder's stock is fully paid and non-assessable and is being
assigned to First Financial free and clear of all liens, options
and encumbrances), and delivered to the Transfer Agent named
below, the same shall be deemed to constitute an acceptance of
the Exchange Offer to the extent of the number of shares of
Weatherford Bancshares Stock accompanying such Exchange Form.
Shares of Weatherford Bancshares Stock delivered by the
Shareholders to the Transfer Agent pursuant to the exchange offer
may not be withdrawn. If, for any reason, the Exchange Offer is
terminated and the exchange of Weatherford Bancshares Stock for
First Financial Stock is not consummated, then all shares
tendered by the Shareholders for exchange shall be promptly
returned by the Transfer Agent.
1.4. Means of Consummating the Exchange. The Transfer Agent,
during the pendency of the Exchange Offer, shall notify First
Financial and Weatherford Bancshares daily of the number of
shares of Weatherford Bancshares Stock tendered for exchange
under properly executed Exchange Forms. If First Financial
receives written notice from the Transfer Agent that the Required
Amount of Weatherford Bancshares Stock (as herein defined) has
been tendered
<PAGE>
and assigned to First Financial, then, within ten (10) days after
the Closing Date (herein defined), First Financial shall issue
and mail to those Shareholders who have tendered their shares of
Weatherford Bancshares Stock, by registered mail, certificates
for the First Financial Stock representing 1.5 shares of First
Financial's stock for each share of Weatherford Bancshares Stock
received by the Transfer Agent, or such other number of shares as
may be required under Section 1.2 above. For purposes of this
Agreement, the "Closing Date" shall be the later of (i) the date
First Financial receives notice from the Transfer Agent that the
Required Amount of Weatherford Bancshares Stock (as herein
defined) has been tendered, (ii) the expiration date of the
Exchange Offer, or (iii) the date when all conditions precedent
to consummation of the exchange have been satisfied (or, if not
satisfied, have been waived in writing by First Financial).
Notwithstanding the foregoing provisions of this Section
and of Section 1.3, First Financial shall not issue any
fractional shares of its common stock. Shareholders of
Weatherford Bancshares who would otherwise be entitled to receive
fractional shares of First Financial Stock shall be paid in cash
for such fractional shares based upon a value of $33.34 per share
of First Financial Stock. Any cash payment to which a
Shareholder of Weatherford Bancshares may be entitled shall be
included with such Shareholder's certificate for First Financial
Stock when such certificate is mailed to such Shareholder.
1.5. Transfer Agent. The Transfer Agent for purposes of this
transaction shall be First National Bank of Abilene - Trust
Department, Third Floor, 400 Pine Street, Abilene, Texas 79601.
1.6. Effective Date of Exchange Offer. The effective date
for commencement of the Exchange Offer (the "Effective Date")
contemplated by this Agreement shall be the later of:
(a) The date upon which the Prospectus is mailed by
First Financial to the Shareholders of Weatherford Bancshares
pursuant to the Registration Statement (not before but on or
following the effective date thereof) filed by First Financial
with the Securities and Exchange Commission with respect to
the First Financial Stock to be issued hereunder; or
(b) Such other date as may be mutually agreed upon by
First Financial and Weatherford Bancshares.
1.7. Offer Termination Date. Unless otherwise extended by
First Financial, the Exchange Offer shall terminate twenty-one
(21) business days after the Effective Date.
1.8. Merger. If the Required Amount of Weatherford
Bancshares Stock (as defined in Section 2.2) is tendered in
exchange for First Financial Stock, and if all other conditions
precedent to consummation of the exchange are satisfied (or, if
not satisfied, are waived by First Financial) and First Financial
shall consummate
<PAGE>
the exchange by delivering to the tendering Shareholders the
shares of First Financial Stock (and, with regard to any
fractional shares, the cash payments) to which such Shareholders
are entitled hereunder, it is the intent of First Financial to
immediately thereafter merge Weatherford Bancshares with and into
FFB Delaware pursuant to applicable law. If the Exchange Offer
is consummated, but less than all of the Weatherford Bancshares
Stock is tendered in exchange for First Financial Stock, then as
part of the proposed merger of Weatherford Bancshares into FFB
Delaware, those Shareholders of Weatherford Bancshares who did
not tender their shares pursuant to the Exchange Offer made under
this Agreement will be required to accept First Financial Stock
(and cash for any fractional shares of First Financial Stock)
upon the same basis (exchange rate and cash) as the exchange of
Weatherford Bancshares Stock for First Financial Stock (and cash
for fractional shares) will be made under this Agreement, subject
only to the rights, if any, afforded by Delaware or Texas law
(whichever shall apply) to any Shareholders of Weatherford
Bancshares who dissent from the merger and refuse to accept
First Financial Stock (and cash for fractional shares) in return
for their Weatherford Bancshares Stock.
ARTICLE 2
CONDITIONS PRECEDENT TO EXCHANGE OFFER
AND CONSUMMATION OF TRANSACTION
Unless otherwise agreed in writing by First Financial and
Weatherford Bancshares, the obligations of First Financial to
offer First Financial Stock to the Shareholders pursuant to this
Agreement and, thereafter, the obligations of First Financial and
Weatherford Bancshares to consummate the exchange of stock
contemplated by this Agreement shall be expressly subject to the
satisfaction of the following conditions:
2.1. Regulatory Approvals. (1) The Board of Governors of
the Federal Reserve System shall have approved, in writing, the
acquisition by First Financial of all of the issued and
outstanding capital stock of Weatherford Bancshares; (2) all
other approvals and authorizations of, filings and registrations
with, and notifications to, all federal, state and local
authorities required for the consummation of the transaction
contemplated hereby shall have been obtained or made and shall be
in full force and effect; and (3) all mandatory waiting periods
shall have elapsed.
2.2. Tax Rulings. (1) Weatherford Bancshares shall have
received a written opinion from its independent accountants
and/or tax counsel stating that the exchange of their Weatherford
Bancshares Stock by the Shareholders will not be considered a
taxable event for federal income tax purposes; and (2) First
Financial shall have received a written opinion from its
independent accounts, Arthur Andersen LLP, in form and substance
satisfactory to First Financial, stating that the acquisition by
<PAGE>
First Financial of the Required Amount of Weatherford Bancshares
Stock will be treated for accounting purposes as a "pooling-of-
interests." For purposes of this Agreement, the term "Required
Amount of Weatherford Bancshares Stock" shall mean that number of
shares of Weatherford Bancshares Stock (as determined by First
Financial's independent accountants) which must be tendered by
the Shareholders in exchange for First Financial Stock in order
for the acquisition by First Financial to be treated for
accounting purposes as a "pooling-of-interests," and which number
of shares, for purposes of this transaction, shall be at least
90% of the issued and outstanding shares of Weatherford
Bancshares Stock.
2.3. Accuracy of Representations and Warranties. Except as
otherwise expressly provided herein, all of the representations
and warranties of First Financial, Weatherford Bancshares, Parker
Bancshares, and Bank contained in this Agreement shall be true as
of the Closing Date, with the same force and effect as though
made on the Effective Date and Closing Date, respectively, and
there shall be delivered on the Effective Date and the Closing
Date appropriate certificates of authorized officers of First
Financial, Weatherford Bancshares, Parker Bancshares, and Bank.
2.4. Performance of Agreements. First Financial, Weatherford
Bancshares, Parker Bancshares, and Bank shall have performed all
obligations and agreements, and shall have complied with all
covenants and conditions, contained in this Agreement to be
performed and complied with by it or them on or prior to the
Closing.
2.5. No Governmental Proceeding or Litigation. No order,
judgment or decree of any competent court, governmental body or
regulatory authority shall be outstanding which declares or seeks
a declaration that this Agreement is invalid or which restrains,
or seeks to restrain, the consummation of the Exchange Offer; and
no action or proceeding shall be pending which questions the
validity or legality of, or seeks to restrain the consummation
of, the exchange contemplated by this Agreement.
2.6. Financial Reports. First Financial shall have received
such financial reports of Weatherford Bancshares and its
subsidiaries prepared by Weatherford Bancshares' independent
accountants as of September 30, 1995, at First Financial's
Expense, in form and content necessary to satisfy the
requirements pertaining to the filing of a registration with the
Securities and Exchange Commission of the shares of First
Financial Bankshares to be issued pursuant to this agreement.
2.7. Securities Laws. (1) The declaration by the Securities
and Exchange Commission that the Registration Statement filed by
First Financial pursuant to the Act covering the shares of First
Financial stock to be issued pursuant to this Agreement is
effective and the furnishing of a Prospectus to the Shareholders
of Weatherford Bancshares; (2) all approvals and authorization
of, filings and registrations with, and notifications to, all
<PAGE>
regulatory authorities under state securities or Blue Sky laws
required for the offer, sale, exchange or qualification of the
First Financial Stock in connection with the exchange offer shall
have been obtained or made and shall be in full force and effect;
(3) First Financial, Weatherford Bancshares, Parker Bancshares,
and Bank shall have complied with all federal and state
securities laws, statutes, rules and regulations applicable to
the exchange offer contemplated by this Agreement; and (4) no
stop order has been issued or threatened by the SEC or any state
securities authority with respect to the offer, sale, issuance or
exchange of stock contemplated hereby.
2.8. Tender of Shares. The delivery by Shareholders owning
the Required Amount of Weatherford Bancshares Stock of duly and
properly executed Exchange Forms effectively transferring and
assigning their shares of Weatherford Bancshares Stock to First
Financial free and clear of all liens, options and encumbrances
and with all of such stock being fully paid and non-assessable at
the time of transfer.
2.9. No Material Changes. The absence of any material
adverse change in the financial conditions of First Financial,
Weatherford Bancshares, Parker Bancshares, or Bank between August
31, 1995 and the Closing Date.
2.10. Opinion of Weatherford Bancshares's Counsel. First
Financial shall have received the written opinion of counsel for
Weatherford Bancshares, Parker Bancshares, and Bank dated at or
as of the Closing Date, and in form and substance satisfactory to
First Financial and its counsel, that (1) Weatherford Bancshares
is duly organized, validly existing and in good standing under
the laws of the State of Texas; (2) Parker Bancshares is duly
organized, validly existing and in good standing with the laws of
the State of Delaware; (3) Bank is duly organized, validly
existing and in good standing under the laws of the United States
and of the State of Texas; (4) Weatherford Bancshares, Parker
Bancshares, and Bank have all requisite power and authority to
execute and deliver this Agreement and to consummate the
transaction contemplated thereby; (5) the execution and delivery
by Weatherford Bancshares, Parker Bancshares, and Bank does not,
and the consummation of the transaction contemplated thereby,
will not contravene or violate any provisions of or constitute a
default under the (a) Articles of Incorporation or Association or
Bylaws of Weatherford Bancshares, Parker Bancshares, or Bank (b)
any law, regulation, rule, decree, order or judgment of any
court, governmental agency or public body applicable to
Weatherford Bancshares, Parker Bancshares, or Bank
or any of their respective assets or property; (6) all consents,
approvals, authorizations, actions or filings with any court,
governmental agency or public body required in connection with
the execution, delivery and performance by Weatherford
Bancshares, Parker Bancshares, and Bank of this Agreement have
been obtained; (7) Weatherford Bancshares, Parker Bancshares, and
Bank have good and merchantable title to all of their assets and
properties; (8) all of the outstanding shares of Weatherford
Bancshares Stock,
<PAGE>
Parker Bancshares Stock, and Bank Stock have been validly issued
and are non-assessable and fully paid; (9) except as reflected in
Disclosure Schedules C and D, there are no known material
liabilities, claims or lawsuits pending against Weatherford
Bancshares, Parker Bancshares, or Bank or any of their respective
properties or assets; (10) between the date of this Agreement and
the Closing Date, there has been no increase in the number of
issued and outstanding shares of Weatherford Bancshares Stock,
Parker Bancshares Stock or Bank Stock; and (11) except as
disclosed in Disclosure Schedule F, all Parker Bancshares Stock
owned by Weatherford Bancshares and all Bank Stock owned by
Parker Bancshares is free and clear of liens, security interests,
transfer restrictions and other encumbrances.
2.11. Environmental Report. First Financial shall have
received, at First Financial's expense, a satisfactory Phase I
Environmental Assessment report covering all real property of
Weatherford Bancshares, Parker Bancshares or Bank, whether such
real property is used by Weatherford Bancshares, Parker
Bancshares, or Bank in its corporate or banking business, held
for resale or otherwise owned or held by Weatherford Bancshares,
Parker Bancshares, or Bank.
2.12 Weatherford National 401(k) Profit Sharing Plan. The
Board of Directors of Weatherford Bancshares, Parker Bancshares,
and Weatherford National shall, prior to the consummation of the
stock exchange transaction, adopt such resolutions and take such
other action, as may be necessary, to freeze, terminate, or merge
the Weatherford National 401(k) Profit Sharing Plan as adopted
effective January 1, 1989; provided, that such resolutions may
provide that such action shall be subject to consummation of the
stock exchange transaction contemplated by this agreement.
In addition, First Financial and its counsel shall be
satisfied, in their opinion, that (1) the 401(k) Profit Sharing
Plan is a qualified plan under, and in full compliance with, the
Employee Retirement Income Security Act of 1974 ("ERISA"), as
amended, the Internal Revenue Code of 1986, as amended, and all
other applicable laws, rules and regulations; and (2) no facts or
circumstances exist which, in the opinion of First Financial and
its counsel, may result in liability to First Financial,
Weatherford Bancshares, Parker Bancshares or Bank, or any of its
or their directors, officers or employees arising out of, or in
connection with, administration of the 401(k) Profit Sharing
Plan, freezing or termination of the Plan, or merging of the Plan
with any Employee Benefit Plan administered by First Financial,
if the transaction contemplated by this Agreement is consummated.
2.13. Opinion of First Financial's Counsel. Weatherford
Bancshares shall have received the written opinion of counsel for
First Financial, dated at or as of the Closing Date and in form
and substance satisfactory to Weatherford Bancshares and its
counsel, that (1) First Financial is duly organized, validly
existing and in good standing under the laws of the State of
Texas;
<PAGE>
(2) First Financial has all requisite power and authority to
execute and deliver the Agreement and to consummate the
transaction contemplated thereby; (3) the execution and delivery
by First Financial of the Agreement does not, and consummation
of the transaction contemplated thereby will not, contravene or
violate any provision of or constitute a default under the (a)
articles of incorporation or bylaws of First Financial, or (b)
any law, regulation, rule, decree, order or judgment of any
court, governmental agency or public body applicable to First
Financial or its assets or properties; and (4) all consents,
approvals,authorizations, actions or filings with any court,
governmental agency or public body required in connection with
the execution, delivery and performance by First Financial of the
Agreement have been obtained.
ARTICLE 3
WARRANTIES AND REPRESENTATIONS OF
WEATHERFORD BANCSHARES, PARKER BANCSHARES, AND BANK
Weatherford Bancshares, Parker Bancshares, and Bank hereby
jointly and severally make the following warranties and
representations to First Financial:
3.1. Organization and Standing of Weatherford Bancshares.
Weatherford Bancshares is a Texas corporation duly organized,
validly existing and in good standing under the laws of the State
of Texas, with corporate power to own property and carry on its
business as it is now being conducted. Weatherford Bancshares is
also a registered bank holding company under the Bank Holding
Company Act of 1956, as amended. The copies of the Articles of
Incorporation and Bylaws of Weatherford Bancshares, including all
amendments thereto, delivered, or to be delivered, to First
Financial are, or will be, complete and accurate in all respects.
3.2. Organization and Standing of Parker Bancshares. Parker
Bancshares is a Delaware corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, with corporate power to own property and carry on its
business as it is now being conducted. Parker Bancshares is also
a registered bank holding company under the Bank Holding Company
Act of 1956, as amended. The copies of the Articles of
Incorporation and Bylaws of Parker Bancshares, including all
amendments thereto, delivered, or to be delivered, to First
Financial are, or will be, complete and accurate in all respects.
<PAGE>
3.3. Organization and Standing of Bank. Bank is a national
bank duly organized, validly existing and in good standing under
national banking laws, with corporate power to own property and
carry on its business as it is now being conducted. Bank is an
insured bank under the Federal Deposit Insurance Act. All of the
banking business and all of the banking offices and facilities of
Bank are located within the State of Texas. The copies of the
Articles of Incorporation and Bylaws of Bank, including all
<PAGE>
amendments thereto, delivered, or to be delivered, to First
Financial are, or will be, complete and accurate in all respects.
3.4. Subsidiaries and Affiliates. Weatherford Bancshares does
not have any subsidiaries other than Parker Bancshares. Parker
Bancshares does not have any subsidiaries other than Bank. Bank
does not have any subsidiaries. Neither Weatherford Bancshares,
Parker Bancshares, nor Bank holds any interest in any other
corporation, firm, joint venture or partnership, except (1) as
security for repayment of loans to customers of Bank, (2) as
acquired by Bank through foreclosure or otherwise by reason of
debt previously contracted, or (3) for authorized investment
securities purchased by Weatherford Bancshares, Parker
Bancshares, or Bank for its own account (but, as a result of
which investments, neither Weatherford Bancshares, Parker
Bancshares, nor Bank is considered to be an affiliate of the
issuer of such securities or otherwise controls, is controlled by
or is under common control with, the issuer of any such
investment securities).
3.5. Capitalization. As of the date of this Agreement, the
authorized capital stock of Weatherford Bancshares consists of
1,000,000 shares of common stock of a par value of $5.00 each, of
which 215,988 are presently issued and outstanding. The
authorized capital stock of Parker Bancshares consists of 200,000
shares of common stock of a par value of $ .01, of which 25,096
shares are issued and outstanding, and all of which shares of
Parker Bancshares stock are owned by Weatherford Bancshares. The
authorized capital stock of Bank consists of 200,000 shares of
common stock of a par value of $5.00, of which 200,000 are
presently issued and outstanding. Parker Bancshares now owns all
of the issued and outstanding common stock of Bank. All rights,
privileges, restrictions (if any), terms and provisions governing
the shares of common stock of Weatherford Bancshares, Parker
Bancshares, and Bank are described in the Articles of
Association and Bylaws (as amended) of Weatherford Bancshares,
Parker Bancshares, and Bank, respectively; and there are not (nor
shall be on the Closing Date) any outstanding or authorized
subscriptions, options, warrants, calls, rights or commitments or
any kind restricting the transfer of, requiring the issuance or
sale of, or otherwise relating to, any of the capital stock of
Weatherford Bancshares, Parker Bancshares, or Bank.
<PAGE>
3.6. Authority of Weatherford Bancshares, Parker Bancshares
and Bank. This Agreement has been duly executed and delivered
by, and has been duly authorized by all necessary corporate
action on the part of, Weatherford Bancshares, Parker Bancshares,
and Bank, respectively, and, subject to the conditions precedent
to closing of this transaction set forth herein, is a valid,
legally binding and enforceable obligation of Weatherford
Bancshares, Parker Bancshares, and Bank. Subject to First
Financial's obtaining the approval of the Board of Governors of
the Federal Reserve System, neither the execution, delivery or
performance of this Agreement in its entirety, nor the
consummation of all of the transactions contemplated hereby, will
violate (with or without the giving of notice or the passage of
time), be in conflict with, result in a breach of any provision
of, or constitute a default under, any provision in the
Articles of Incorporation, Articles of Association or Bylaws of,
or any provision of law applicable to, Weatherford Bancshares,
Parker Bancshares, or Bank or any agreement or understanding,
order, judgment, award, decree, statute, ordinance, regulation or
other restriction of any kind or character to which Weatherford
Bancshares, Parker Bancshares or Bank is a party or by which any
of the respective assets or properties of Weatherford Bancshares,
Parker Bancshares, or Bank are subject or bound.
3.7. Licenses, Permits and Contracts. None of the assets,
licenses, permits, authorizations and contracts of Weatherford
Bancshares, Parker Bancshares, or Bank will be terminated or
impaired by reason of execution, delivery or performance of this
Agreement by Weatherford Bancshares, Parker Bancshares or Bank,
or consummation of the transactions contemplated hereby.
3.8. Claims, Suits and Proceedings. Except as reflected in
Disclosure Schedule D, there are no actions, suits, proceedings
or claims pending or, to their knowledge, threatened against
Weatherford Bancshares, Parker Bancshares, or Bank, at law or in
equity, or before any federal, state, municipal or other
governmental court, department, commission, board, bureau,
agency, instrumentality or other person, which would result in
liability to Weatherford Bancshares, Parker Bancshares, or Bank
upon consummation of the transaction contemplated hereby or which
would prevent or delay such consummation. In particular, and
without in any way limiting the foregoing, neither Weatherford
Bancshares, Parker Bancshares, nor Bank is subject to, or a party
to, any cease-and-desist, supervisory or other agreement with any
banking or other regulatory authority which requires the consent
or approval of such authority or which is otherwise applicable to
the transaction contemplated by this Agreement.
3.9. Consents and Approvals. No consent, approval or
authorization of, or declaration, filing or registration with,
any person or governmental authority is required in connection
with the execution and delivery of this Agreement by Weatherford
Bancshares, Parker Bancshares, or Bank, and consummation of the
transaction contemplated hereby, except for such approvals as may
be required for First Financial to acquire the Weatherford
Bancshares Stock and for such approvals by the Boards of
Directors of Weatherford Bancshares, Parker Bancshares, and Bank
as have been given prior to execution of this Agreement.
3.10. Regulatory Reports. Weatherford Bancshares, Parker
Bancshares, and Bank have filed all reports, registrations and
statements, together with any amendments required to be made
thereto, that are required to be filed with the Federal Reserve
Board (the "FRB"), Comptroller of the Currency (the "OCC"), the
Federal Deposit Insurance Corporation (the "FDIC"), the
Securities and Exchange Commission (the "SEC") and any other
applicable
<PAGE>
authorities, and all of such reports, registrations and
statements are true, complete and correct in all material
respects.
3.11. Financial Statements. Weatherford Bancshares,
Parker Bancshares and Bank have provided, or caused to be
provided, to First Financial the Financial Statements and Reports
described in Disclosure Schedule A attached hereto and the notes
thereto (collectively, the "Financial Statements"), all of which
have been prepared in accordance with generally accepted
accounting principles ("GAAP") or regulatory accounting
principles ("RAP"); and the Financial Statements, as of their
respective dates, conformed in all material respects with all
applicable material rules and regulations promulgated by the FRB,
the OCC and the FDIC.
3.12. Undisclosed Liabilities. Except to the extent
reflected in the Financial Statements or as reflected in
Disclosure Schedule B, Weatherford Bancshares, Parker Bancshares,
and Bank have no material liabilities or obligations (absolute,
accrued, contingent or otherwise).
3.13. Absence of Certain Changes. Except as and to the
extent reflected in Disclosure Schedule C, neither Weatherford
Bancshares, Parker Bancshares, nor Bank, from August 31, 1995,
until the date of this Agreement, has:
(a) made any amendment to its Articles of Association
or Bylaws or changed the character of its business in any
material manner;
(b) suffered any material adverse change in its
financial condition, assets, liabilities (absolute, accrued,
contingent or otherwise) or business;
(c) incurred, assumed or become subject to, whether
directly or by way of any guarantee or otherwise, any
obligations or liabilities (absolute, accrued, contingent or
otherwise) except in the ordinary course of business;
<PAGE>
(d) permitted or allowed any of its property or assets
to be subject to any mortgage, pledge, lien, security
interest, encumbrance, restriction or change of any kind;
(e) canceled any debts in excess of $25,000, waived any
claims or rights of material value, or sold, transferred, or
otherwise disposed of any of its properties or assets, except
in the ordinary course of business;
(f) disposed of or permitted to lapse any rights to the
use of any material trademark, trade name or copyright, or
disposed of or disclosed to any person other than its
employees any material trade secret not theretofore a matter
of public knowledge;
(g) granted any increase in compensation, or paid or
<PAGE>
agreed to pay or accrue any bonus or like benefit, to or for the
credit of any director, officer or employee except in the
ordinary course of business, or entered into any employment or
consulting contract or other agreement for personal services with
any director, officer or employee, or adopted, amended or
terminated any Employee Benefit Plan;
(h) declared, paid or set aside for payment any
dividend or other distribution or payment in respect of its
capital stock (other than normal, regular dividends or
distributions of Bank to Parker Bancshares and Parker Bancshares
to Weatherford Bancshares);
(i) organized or acquired, except through foreclosure,
the exercise of creditors remedies or in a fiduciary
capacity, any capital stock or other equity securities of any
corporation or acquired any equity or ownership interest in
any partnership or business enterprise;
(j) issued, reserved for issuance, granted, or
authorized the issuance of any shares of its capital stock or
subscriptions, options, warrants, calls, rights or
commitments of any kind relating to the issuance of or conversion
into shares of its capital stock;
(k) made any change in any method of accounting or
accounting practice, except as required by applicable law,
regulation or GAAP;
(l) except for the transactions contemplated by this
Agreement, or as otherwise permitted hereunder, entered into
any transaction, or entered into, modified or amended any
contract or commitment, other than in the ordinary course of
business; or
<PAGE>
(m) agreed, whether in writing or otherwise, to take
any action the performance of which would be prohibited by this
Section 3.13.
3.14. Title to Properties; Encumbrances. Except for the
liens and security interests disclosed in Disclosure Schedule F
securing the indebtedness described therein, Weatherford
Bancshares, Parker Bancshares, and Bank have, or will have upon
the Closing Date, unencumbered, good and merchantable title to
all their properties and assets, real and personal, including,
without limitation, all properties and assets reflected in the
Financial Statements, except for (i) easements, reservations,
restrictions, rights-of-way, and other encumbrances of record,
other than liens and conveyances, and (ii) those properties and
assets disposed of in the ordinary course of business consistent
with safe and sound banking practices; and, to their knowledge,
all uses made of, and activities conducted upon, any real
property owned, leased or used by Weatherford Bancshares, Parker
Bancshares, and Bank comply in
<PAGE>
all respects with applicable state, local or municipal zoning
laws and other laws, rules, regulations and ordinances.
3.15. Litigation. Except as reflected in Disclosure
Schedule D, there are no actions, suits, proceedings or claims
pending or, to their knowledge, threatened against Weatherford
Bancshares, Parker Bancshares, or Bank, or involving any of their
properties or assets, at law or in equity, or before or by any
foreign, federal, state, municipal or other governmental court,
department, commission, board, bureau, agency, instrumentality or
other person, which may, in the reasonable judgment of
Weatherford Bancshares, Parker Bancshares, and Bank, result in
any material liability to Weatherford Bancshares, Parker
Bancshares, or Bank.
3.16. Tax Matters. Weatherford Bancshares, Parker
Bancshares, and Bank have each:
(a) duly filed all tax returns (the "Filed Returns")
required to be filed by it involving a tax liability or other
material potential detriment for failure to file, and all of
such Filed Returns are true, complete and correct in all
material respects;
(b) paid, or established reasonable accruals for the
payment of, all federal income taxes and all state and local
income taxes and all franchise, property, sales, employment
or other taxes required to be paid in respect to the periods
covered by the Filed Returns;
(c) with respect to the periods prior to the date of
this Agreement and subsequent to the last Filed Return ,
established reasonable accruals for the payment of all
federal income taxes and all material state and local income
taxes and material franchise, property, sales, employment or
other taxes; and
(d) properly and timely withheld, remitted and/or paid
all withholding taxes, social security taxes, unemployment
taxes and other employment-related taxes which Weatherford
Bancshares, Parker Bancshares, or Bank are, by law, required
to withhold, remit or pay.
In addition to the foregoing, neither Weatherford Bancshares,
Parker Bancshares, nor Bank (1) is the subject of, nor is there
pending or threatened, any audit with respect to or arising out
of any Filed Return; (2) has previously requested, or has filed a
request for, any extension of time to file any return or pay any
tax; or (3) has agreed or consented to the extension of any
statute of limitations respecting the assessment of taxes,
additionaltaxes, penalty or interest in connection with any tax
liability or Filed Return. No tax liens have been filed or
threatened against Weatherford Bancshares, Parker Bancshares, or
Bank.
For the purposes of this Agreement, the term "tax" shall
include all federal, state and local taxes and related
governmental charges and any interest or penalties payable in
connection with the payment of taxes.
3.17. Employment Benefit Plans. (1) Except as reflected
in Disclosure Schedule E, neither Weatherford Bancshares, Parker
Bancshares, nor Bank maintains or contributes to, nor is
Weatherford Bancshares, Parker Bancshares, or Bank required to
maintain or contribute to, (i) any "employee welfare benefit
plan" [as defined in Section 3(1) of the Employee Retirement
Income Security Act ("ERISA")] or (ii) any "employee pension
benefit plan" [as defined in Section 3(2) of ERISA]. Except as
reflected in Disclosure Schedule E, neither Weatherford
Bancshares, Parker Bancshares, nor Bank maintains or contributes
to, nor has Weatherford Bancshares, Parker Bancshares, or Bank
adopted or entered into, any deferred compensation plan, bonus
plan, stock option plan, employee stock option plan or any other
employee benefit plan, agreement, arrangement or commitment
(other than normal policies concerning holidays, vacations,
accumulated sick leave, and annual budgeted incentive bonuses
previously disclosed to First Financial).
3.18. Leases, Contracts and Agreements. Disclosure
Schedule F reflects all leases, contracts and agreements to which
Weatherford Bancshares, Parker Bancshares, or Bank is a party and
which obligate or may obligate Weatherford Bancshares, Parker
Bancshares, or Bank to pay any amount in excess of $25,000 over
the entire term of any such lease, contract or agreement (the
"Contracts"), true and correct copies of which have been or shall
be made available to First Financial. For the purposes of this
Agreement, the Contracts shall not be deemed to include loan
commitments of, loans made by, repurchase agreements made by,
bankers acceptances of, or deposits taken by Bank in the ordinary
course of its banking business. Each and all of the Contracts
are legal, valid, binding and enforceable in accordance with
their terms and are in full force and effect. There are no
existing material defaults by any party to the Contracts and no
event has occurred which (whether with or without notice, lapse
of time or the happening or occurrence of any other event) would
constitute such default.
3.19. Related Company Transactions. Except for
transactions described in Disclosure Schedule G, there are no
agreements, instruments, commitments, extensions of credit, tax
sharing or allocation agreements or other contractual agreements
of any kind between Weatherford Bancshares, Parker Bancshares, or
Bank.
3.20. Transactions with Affiliates. Except as reflected
in Disclosure Schedule H, neither Weatherford Bancshares, Parker
Bancshares, nor Bank (1) has any loans outstanding to any of its
affiliates, executive officers, or directors, or to any
shareholder owning ten percent (10%) or more of its outstanding
shares or (2) is a party to, or otherwise bound by, any
contractual agreement with any of its affiliates, executive
officers, or directors, or
<PAGE>
with any shareholder owning ten percent (10%) or more of its
outstanding shares.
3.21. Compliance with Laws. Except as otherwise
disclosed in Disclosure Schedule I, Weatherford Bancshares,
Parker Bancshares, and Bank are in compliance in all material
respects with all applicable laws and regulations and no action
is pending or threatened against Weatherford Bancshares, Parker
Bancshares, or Bank by any federal, state or other regulatory
authority.
3.22. Accuracy of Information. The factual information
relating to Weatherford Bancshares, Parker Bancshares, and Bank
contained in this Agreement and the Disclosure Statements hereto
is true, correct and complete in all material respects. The
information relating to Weatherford Bancshares, Parker
Bancshares, and Bank supplied for inclusion in the application of
First Financial to the FRB, the Registration Statement filed by
First Financial with the SEC and the Prospectus to be delivered
by First Financial to each of the Shareholders of Weatherford
Bancshares, as of the date supplied by Weatherford Bancshares,
Parker Bancshares, and Bank, will be true, correct and complete
in all material respects.
3.23. Insurance. Weatherford Bancshares, Parker
Bancshares, and Bank have in effect the insurance coverage
described in Disclosure Schedule J. All insurance policies
described in Disclosure Schedule J are in full force and effect;
no breach or default exists under any such policy; and
Weatherford Bancshares, Parker Bancshares, and Bank have timely
filed all claims, if any, under any such insurance policy.
<PAGE>
3.24. Loans. Each loan reflected as an asset in the
Financial Statements, as well as all other extensions of credit,
guarantees, security agreements, deeds of trust and other
documents and instruments executed in connection therewith
(whether intended as security or otherwise) is the legal, valid
and binding obligation of the obligor named therein and is
enforceable in accordance with its terms. Weatherford
Bancshares, Parker Bancshares, and Bank have made available to
First Financial all material information in possession of
Weatherford Bancshares, Parker Bancshares, and Bank concerning
all outstanding loans of Weatherford Bancshares, Parker
Bancshares, and Bank.
3.25. Fiduciary Responsibilities. Weatherford
Bancshares, Parker Bancshares, and Bank have each performed in
all material respects all of its duties as a trustee, executor,
grantor, escrow agent or other fiduciary in a manner which
complies in all material respects with all applicable laws,
regulations, orders, agreements, instruments and common law
standards.
3.26. Regulatory Actions. Except as disclosed in
Disclosure Schedule K, there are no actions or proceedings
pending or threatened against Weatherford Bancshares, Parker
Bancshares, or Bank by or before the FRB, the OCC, the FDIC, the
SEC or any other
<PAGE>
governmental agency or authority.
3.27. Broker's Fees. No person or entity acting on
behalf of Weatherford Bancshares, Parker Bancshares, or Bank is
or shall be entitled, directly or indirectly, to any brokerage
fee, commission, finder's fee or financial advisory fee in
connection with the transaction contemplated by this Agreement.
3.28. Environmental Matters. Except as disclosed in
Disclosure Schedule L, there are no known material adverse
environmental problems or known conditions affecting any of the
properties of Weatherford Bancshares, Parker Bancshares, or Bank.
In particular, and without in any way limiting the foregoing,
Weatherford Bancshares, Parker Bancshares, and Bank, after due
inquiry, warrant and represent that to the best of their
knowledge all hazardous and toxic chemicals, substances and
materials located or used upon any of their respective properties
have been and are being stored, used, transported and disposed of
in compliance with applicable state and federal environmental
laws; that there are no underground storage tanks located upon
any of their properties; and that no action or investigation is
pending or threatened by any governmental or regulatory
authority, or by any person, firm or corporation, arising out of
any failure, or alleged failure, to comply with applicable
environmental laws, statutes, rules or regulations.
3.29 Deferred Directors Compensation. Except as disclosed in
Disclosure Schedule M, neither Weatherford Bancshares, Parker
Bancshares, nor Weatherford National maintains, contributes to or
is otherwise obligated under any Deferred Directors Compensation
Plan.
ARTICLE 4
CONDUCT OF BUSINESS OF WEATHERFORD BANCSHARES,
PARKER BANCSHARES, AND BANK PENDING CLOSING DATE
4.1. Affirmative Covenants. From and after the date of this
Agreement and until the Closing Date, Weatherford Bancshares,
Parker Bancshares, and Bank shall each:
(a) operate and conduct its business in the ordinary
course and consistent with its prior practices;
(b) preserve intact its corporate existence, business
organization, assets, licenses, permits, authorizations, and
business opportunities;
(c) maintain its books, accounts and records in
accordance with generally accepted accounting principles
and/or banking practices, as applicable, and comply with all
of its contractual obligations;
(d) maintain all of its properties in good repair,
order and condition, reasonable wear and tear excepted, and
maintain appropriate insurance coverage upon all such properties;
(e) in good faith and in a timely manner (i) cooperate
with First Financial in satisfying the conditions in this
Agreement; (ii) diligently assist First Financial, to the
extent it may reasonably require, in obtaining as promptly as
possible all consents, approvals, authorizations and rulings,
whether regulatory or corporate, as are necessary for First
Financial to carry out and consummate the transaction
contemplated by this Agreement; (iii) furnish, or cause to be
furnished, to First Financial such information as First
Financial may reasonably require for inclusion in any filings
or applications that may be necessary in that regard; and
(iv) perform all acts and execute and deliver all documents
reasonably necessary to cause the transaction contemplated by
this Agreement to be consummated at the earliest possible
date;
(f) timely file with the FRB, OCC, FDIC, SEC and other
regulatory authorities all financial statements and other
reports to be filed by it and promptly thereafter deliver to
First Financial copies of all financial statements and other
reports required to be so filed;
(g) comply with all applicable laws and regulations,
noncompliance with which would have a material adverse effect
upon its financial condition, assets, liabilities (absolute,
accrued, contingent or otherwise) or business;
(h) promptly give written notice to First Financial
upon obtaining knowledge of any event or fact that would cause
any of the representations or warranties of Weatherford
Bancshares, Parker Bancshares, or Bank contained in or
referred to in this Agreement to be untrue in any material
respect, and use its best efforts to prevent or promptly
remedy the same; and
(i) provide to First Financial, or provide First
Financial access to, all books, records, reports, financial
statements and other documents and information as First Financial
may from time to time request.
(j) immediately or prior to the date of closing of this
contemplated transaction, establish such additional accruals and
reserves as may be necessary to conform Weatherford Bancshares',
Parker Bancshares', and Weatherford National's accounting and
credit loss
<PAGE>
reserve practices and methods to those of First Financial.
(k) engage, consistent with prior practices, its
independent accountants to conduct an audit for the year ended
December 31, 1995.
4.2. Negative Covenants. Except with the prior written
consent of First Financial, neither Weatherford Bancshares,
Parker Bancshares, nor Bank shall, from the date of this
Agreement and until the Closing Date:
(a) make or permit any amendment to its Articles of
Association or Bylaws;
(b) make or permit any changes in allocating or
charging costs which in the aggregate would cause a material
detriment, except as may be required by applicable regulation or
GAAP, and after notice to First Financial;
(c) except for negotiations and discussions between the
parties hereto relating to the transactions contemplated by
this Agreement, (i) directly or indirectly initiate contact
with any person or entity in an effort to solicit an
acquisition, merger or consolidation proposal relating to
Weatherford Bancshares, Parker Bancshares, or Bank, (ii)
enter into negotiation of the terms of an agreement relating to
the acquisition, merger or consolidation of Weatherford
Bancshares, Parker Bancshares, or Bank, (iii) permit access
to the premises of Weatherford Bancshares, Parker Bancshares, or
Bank for the review of its business or operations (except as
required by law), (iv) except in the ordinary course of
business, enter into any oral or written agreement to sell
the assets of Weatherford Bancshares, Parker Bancshares, or Bank
or to merge, consolidate, liquidate or dissolve Weatherford
Bancshares, Parker Bancshares, or Bank, or (v) authorize or
engage any officer, employee, agent or representative of
Weatherford Bancshares, Parker Bancshares, or Bank (including
but not limited to investment bankers and financial advisers)
to enter into any such solicitation, negotiation or any such
oral or written agreement;
(d) make any change in the number of shares of its
capital stock issued and outstanding, or issue, reserve for
issuance, grant, or authorize the issuance of any shares of
their capital stock or subscriptions, options, warrants,
calls, rights or commitments of any kind relating to the
issuance or conversion into shares of their capital stock;
(e) incur, assume or become subject to, whether
directly or by way of any guarantee or otherwise, any obligation
or liability (absolute, accrued, contingent or otherwise);
(f) permit or allow any of its property or assets to
become subject to any pledge, lien, security interest or
<PAGE>
encumbrance, restrictions or change of any kind;
(g) cancel any debts in excess of $25,000, waive any
claims or rights of material value or sell, transfer, or
otherwise dispose of any of its properties or assets, except
in the ordinary course of business;
(h) dispose of or permit to lapse any of its rights to
the use of any material trademark, trade name or copyright,
or dispose of or disclose to any person any material trade
secret not theretofore a matter of public knowledge;
(i) grant or permit any increase in compensation, or
pay or agree to pay or accrue any bonus or like benefit, to or
for the credit of any of its directors, officers or employees, or
enter into, or permit, of any employment or consulting
agreement or other agreement for personal services with any
of its directors, officers or employees, or adopt, amend or
terminate any Employee Benefit Plan or change or modify the
period of vesting or retirement age for any participant of
any such plan (except as required by or to comply with any law or
regulation);
(j) declare, pay or set aside for payment any dividend
or other distribution or payment in respect of shares of its
capital stock, except for (i) normal, regular dividends or
other distributions of Bank to Parker Bancshares and Parker
Bancshares to Weatherford Bancshares, and (ii) Weatherford
Bancshares regular dividend of $ .50 per share payable to
its shareholders in January 1996;
(k) acquire the capital stock or other equity
securities of any corporation or any equity or ownership interest
in any partnership or other business enterprise, except through
foreclosure, the exercise of creditors' remedies or in a
fiduciary capacity;
(l) make aggregate capital expenditures and commitments
in excess of $25,000 for additions to its premises or
equipment; or
(m) except as disclosed in Disclosure Schedule N,
modify any outstanding loans, make any new loans or acquire any
loan participations, unless such modifications, new loans, or
participations are made in the ordinary course of business.
4.3. Certain Activities in Ordinary Course. For the purposes
of Section 4.2(i), it shall be considered to be in the ordinary
course of business for Weatherford Bancshares and Bank to grant
reasonable salary increases to officers and employees for 1996,
and to make its usual and customary matching contribution to
contributions made by employees of Weatherford Bancshares or Bank
under its or their 401(k) Plan, but First Financial shall be
notified in writing of any such increases or contributions to be
<PAGE>
paid after the date of this Agreement.
4.4. Covenants. From and after the date of this Agreement
and until consummation or termination of the transaction
contemplated by this Agreement, neither Weatherford Bancshares,
Parker Bancshares, nor Bank shall take any action which would
cause Weatherford Bancshares, Parker Bancshares, or Bank to be in
breach of any of the covenants contained in this Article 4; and
Weatherford Bancshares, Parker Bancshares, and Bank shall, within
their ability to do so, cause Weatherford Bancshares, Parker
Bancshares and Bank to keep and perform all of the covenants
contained in this Article 4.
ARTICLE 5
WARRANTIES, REPRESENTATIONS
AND COVENANTS OF FIRST FINANCIAL
First Financial warrants and represents to, and covenants and
agrees with, Weatherford Bancshares, Parker Bancshares, and Bank
as follows:
<PAGE>
5.1. Organization and Standing of First Financial. First
Financial is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Texas, with
corporate power to own property and carry on its business as it
is now being conducted.
5.2. Capitalization. First Financial has an authorized
capitalization of 10,000,000 shares of common stock of the par
value of $10.00 per share, of which 5,012,133 shares are issued,
outstanding, and fully paid as of the date of this Agreement.
5.3. Authority of First Financial. This Agreement has been
duly executed and delivered by First Financial and, subject to
the conditions precedent to Closing of the transactions set forth
herein, is a valid, legally binding and enforceable obligation of
First Financial. Neither the execution, delivery or performance
of this Agreement in its entirety, nor the consummation of all of
the transactions contemplated hereby, will violate (with or
without the giving of notice or the passage of time), be in
conflict with, result in a breach of any provision of, or
constitute a default under, any provision of law applicable to
First Financial, or any agreement or understanding, order,
judgment, award, decree, statute, ordinance, regulation or other
restriction of any kind or character to which First Financial is
a party or by which any of its or their assets or properties is
subject or bound. There are no actions, suits, proceedings or
claims pending or, to its knowledge, threatened against First
Financial, at law or in equity, or before or by any foreign,
federal, state, municipal or other government court, department,
commission, board, bureau, agency, instrumentality or other
person which may result in liability to or of First Financial
upon the consummation of the transactions
<PAGE>
contemplated hereby or which would prevent or delay such
consummation.
5.4. No Adverse Change. From the date of this Agreement
until the Closing Date, First Financial shall not have suffered
any material adverse change in its financial condition, assets,
liabilities (absolute, accrued, contingent or otherwise) or
business.
5.5. Due Diligence. The officers, employees or other
representatives of First Financial have reviewed and examined the
assets, property (real and personal), leases and all other
contractual arrangements to which Weatherford Bancshares, Parker
Bancshares, or Bank is a party and all business records of
Weatherford Bancshares, Parker Bancshares, and Bank including,
but not limited to, committee and directors' minutes, reports of
condition, reports of income, tax returns, deposit agreements,
loan portfolios, documents pertaining to legal matters, and
financial statements, all of which review and examination was
conducted upon the premises of Weatherford Bancshares, Parker
Bancshares, and Bank, and First Financial hereby confirms the
acceptability of such due diligence review.
5.6. Covenants. First Financial covenants and agrees that it
shall:
(a) use its best efforts in good faith and in a timely
manner to (i) cooperate with Weatherford Bancshares, Parker
Bancshares, and Bank in satisfying the conditions in this
Agreement, (ii) obtain as promptly as possible all consents,
approvals, authorizations and rulings, whether regulatory or
corporate, as are necessary for First Financial to carry out
and consummate the transactions contemplated by this
Agreement, including specifically (but without limitation)
the approval called for by Section 5.7, and (iii) furnish
information concerning First Financial and its subsidiaries
not previously provided to Weatherford Bancshares, Parker
Bancshares, and Bank required for inclusion in any filing or
applications that may be necessary in that regard;
(b) perform all acts and execute and deliver all
documents necessary to cause the transactions contemplated by
this Agreement to be consummated at the earliest possible
date;
(c) promptly give written notice to Weatherford
Bancshares, Parker Bancshares, and Bank upon obtaining
knowledge of any event or fact that would cause any of the
representations or warranties of First Financial contained in
or referred to in this Agreement to be untrue in any material
respect, and use its best efforts to prevent or promptly
remedy the same; and
(d) cause its officers, directors and representatives
to treat as confidential any and all information concerning
Weatherford Bancshares, Parker Bancshares, and Bank which is
furnished to First Financial, its directors, officers,
employees, shareholders, agents, representatives or advisors,
in connection with this Agreement, or which was furnished
prior to the execution of this Agreement for the purpose of
First Financial reviewing and evaluating the transaction
contemplated by this Agreement, except insofar as disclosure
to certain parties is necessary to meet the conditions of
this Agreement.
5.7. Federal Reserve Approval. Specifically, but without
limiting the effect of Section 5.6, promptly upon execution of
this Agreement, First Financial shall make application to the
Board of Governors of the Federal Reserve System (the "FRB") for
prior approval to acquire the Weatherford Bancshares Stock in
accordance with this Agreement as required by the Bank Holding
Company Act of 1956, as amended, and applicable regulations.
Promptly upon receipt, First Financial shall furnish Weatherford
Bancshares, Parker Bancshares, and Bank with a copy of the notice
of approval or disapproval of the application made by it to the
FRB.
<PAGE>
5.8 SEC Registration. Without limiting the effect of
Section 5.6, upon execution of this Agreement, First Financial
shall proceed to file a Registration Statement with the
Securities and Exchange Commission pursuant to the Act covering
the shares of First Financial Stock to be issued pursuant to this
Agreement. Promptly upon receipt of such declaration of the
effectiveness of such Registration Statement from the Securities
and Exchange Commission, First Financial shall furnish
Weatherford Bancshares, Parker Bancshares, and Bank with a copy
of the approval or disapproval of the effectiveness of such
Registration Statement.
ARTICLE 6
SURVIVAL OF WARRANTIES, INDEMNIFICATION AND LIABILITY
6.1. Nature and Survival of Representations and Warranties.
The covenants, representations and warranties of the parties
hereto shall survive the Closing Date, and all inspections,
examinations, or audits on behalf of the parties, for a period of
two (2) years after the Closing Date.
ARTICLE 7
TERMINATION
7.1. Circumstances Authorizing Termination. Notwithstanding
anything herein to the contrary, this Agreement may be terminated
and the Stock Purchase Offer contemplated hereby may be abandoned
at any time, but prior to the Closing Date:
(a) by mutual written consent duly authorized by the
Boards of Directors of First Financial and Weatherford
<PAGE>
Bancshares, Parker Bancshares, and Bank;
(b) by First Financial (i) if First Financial learns or
becomes aware of a state of facts or breach or inaccuracy of
any representation or warranty or covenant of Weatherford
Bancshares, Parker Bancshares, or Bank contained in Article 3
which constitute a material adverse change from that
represented in this Agreement, or (ii) if any of the
conditions to Closing contained in Article 2 are not
satisfied or, if not satisfied, waived in writing by First
Financial;
(c) by Weatherford Bancshares (i) if Weatherford
Bancshares learns or becomes aware of a state of facts or
breach of inaccuracy of any representation or warranty or
covenant of First Financial contained in Article 5 which
constitutes a material adverse change from that represented
in this Agreement, or (ii) if any of the conditions to Closing
contained in Article 2 are not satisfied or, if not
satisfied, waived in writing by Weatherford Bancshares, Parker
Bancshares, and Bank;
(d) by First Financial and Weatherford Bancshares if
the Closing Date shall not have occurred on or before March 31,
1996, or such later date agreed to in writing by First
Financial and Weatherford Bancshares, Parker Bancshares, and
Bank; or
(e) by First Financial or Weatherford Bancshares if any
court of competent jurisdiction in the United States (federal
or state) or other governmental body shall have issued an
order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the exchange of
shares or the merger, and such order, decree, ruling or other
action shall have been final and nonappealable.
ARTICLE 8
MISCELLANEOUS PROVISIONS
8.1. Public Announcements. Prior to the Closing Date,
neither Weatherford Bancshares, Parker Bancshares, Bank, nor
First Financial, nor any person affiliated with any of them,
shall, without the prior approval of the other parties, make any
written public announcement, or make any written statement or
release to the press with respect to this Agreement or the
transactions contemplated hereby.
8.2. Applicable Law. This Agreement and the legal relations
between the parties hereto shall be governed by and construed in
accordance with the laws of the State of Texas and of the United
States of America.
8.3. Paragraph and Other Headings. Article and section
headings contained in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this
Agreement.
8.4. Waivers and Amendments. This Agreement may be amended,
modified or supplemented only by a written instrument executed by
the parties hereto. The waiver by any party hereto of a breach
of this Agreement shall not operate or be construed as a waiver
of any subsequent breach.
8.5. Expenses.
(a) Whether or not the transactions contemplated by
this Agreement are consummated, and except as otherwise expressly
provided in this Agreement, each of the parties shall be
responsible for their respective attorneys' fees and expenses
incident to the negotiation, preparation, execution and
consummation of the transaction contemplated by this Agreement
including attorneys' and accountants' fees and expenses.
<PAGE>
8.6. Entire Agreement. This Agreement, including the
Exhibits and Disclosure Schedules, embodies the entire agreement
and understanding of the parties with respect to the subject
matter contained herein. There are no restrictions, promises,
representations, warranties, covenants or undertaking other than
those expressly set forth or referred to herein.
8.7. Notices. All notices, requests, demands or other
communications which are required or may be given under this
Agreement shall be in writing and shall be deemed to have been
duly given if delivered personally or sent by registered or
certified mail, return receipt requested, postage prepaid:
(a) In the case of First Financial, to:
Mr. Kenneth T. Murphy
Chairman of the Board, President and Chief
Executive Officer
First Financial Bankshares, Inc.
Post Office Box 701
Abilene, Texas 79604
(b) In the case of Weatherford National Bancshares,
Inc., Parker Bancshares, Inc., and/or Weatherford
National Bank, to:
Mr. Walter F. Worthington
Chairman of the Board and President
Weatherford National Bancshares, Inc.
Post Office Box 1299
Weatherford, Texas 76086
or to such other addresses as any party shall specify by
<PAGE>
notice to the others.
8.8. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original and all of which together shall be deemed to be one and
the same.
8.9. Attachment of Disclosure Schedules. Weatherford
Bancshares, Parker Bancshares, Bank and First Financial
acknowledge that the Disclosure Schedules referenced herein may
not be attached hereto at the time of execution of this
Agreement. It is the intent of all parties hereto that the form
and content of all such Disclosure Schedules will be prepared in
form acceptable to First Financial and that such Disclosure
Schedules shall then be attached to this Agreement and that
such Disclosure Schedules shall then become a part of this
Agreement for all purposes. In the event that the contents in
the Disclosure Schedules are not acceptable to First Financial,
this Agreement may be terminated by First Financial by written
notice and be of no further force and effect. Notwithstanding
the fact that any such Disclosure Schedules may not be attached
hereto at the time of execution, the date of this Agreement or
date of execution of this Agreement shall for all purposes be the
date first written above.
8.10. Binding Effect - Assignment. This Agreement is
binding upon the undersigned parties, their heirs, personal
representatives, successors and assigns. The rights of First
Financial under this Agreement may not be assigned without the
prior written consent of Weatherford Bancshares, Parker
Bancshares, and Bank, except that, at Closing, FFB Delaware or
another subsidiary of First Financial may acquire the Shares so
long as First Financial remains liable for its obligations under
this Agreement.
8.11. Definitions. In addition to other definitions
contained elsewhere in this Agreement, as used in this Agreement:
(a) an "affiliate" means any bank, corporation,
partnership or other entity which, directly or indirectly,
controls, is controlled by, or is under common control with,
Weatherford Bancshares, Parker Bancshares, and Bank;
(b) references to a particular "Article" or "Section"
are to the given article or section of this Agreement; and
(c) unless context otherwise requires, words of the
singular number include the plural and of the plural include
the singular and words of the masculine gender include the
feminine and neuter.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, in multiple originals, as of the day and year first
above written.
FIRST FINANCIAL BANKSHARES, INC.
ATTEST:
By: By:
Curtis R. Harvey Kenneth T. Murphy,
Executive Vice President Chairman of the Board,President
and Chief Financial Officer and Chief Executive Officer
WEATHERFORD NATIONAL BANCSHARES,
INC.
ATTEST:
By: By:
Name: Walter F. Worthington,
Title: Chairman of the Board and
President
PARKER BANCSHARES, INC.
ATTEST:
By: By:
Name: President
Title:
WEATHERFORD NATIONAL BANK
ATTEST:
By: By:
Name: Walter F. Worthington,
Title: Chairman of the Board and
President
