EXHIBIT 10.1
Agreement and Plan of Reorganization between BankFirst Corporation and BB&T
Corporation, dated as of August 22, 2000
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AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN
BANKFIRST CORPORATION
and
BB&T CORPORATION
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS........................................................ 1
ARTICLE II THE MERGER........................................................ 5
2.1 Merger................................................................ 5
2.2 Filing; Plan of Merger................................................ 5
2.3 Effective Time........................................................ 6
2.4 Closing............................................................... 6
2.5 Effect of Merger...................................................... 6
2.6 Further Assurances.................................................... 6
2.7 Merger Consideration.................................................. 6
2.8 Conversion of Shares; Payment of Merger Consideration................. 7
2.9 Conversion of Stock Options........................................... 8
2.10 Merger of Subsidiaries................................................ 9
2.11 Anti-Dilution......................................................... 9
2.12 Dissenting Shares..................................................... 9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BANKFIRST...................... 10
3.1 Capital Structure..................................................... 10
3.2 Organization, Standing and Authority.................................. 10
3.3 Ownership of Subsidiaries............................................. 10
3.4 Organization, Standing and Authority of the Subsidiaries.............. 11
3.5 Authorized and Effective Agreement.................................... 11
3.6 Securities Filings; Financial Statements; Statements True............. 11
3.7 Minute Books.......................................................... 12
3.8 Adverse Change........................................................ 12
3.9 Absence of Undisclosed Liabilities.................................... 12
3.10 Properties............................................................ 12
3.11 Environmental Matters................................................. 12
3.12 Loans; Allowance for Loan Losses...................................... 13
3.13 Tax Matters........................................................... 13
3.14 Employees; Compensation; Benefit Plans................................ 14
3.15 Certain Contracts..................................................... 17
3.16 Legal Proceedings; Regulatory Approvals............................... 17
3.17 Compliance with Laws; Filings......................................... 18
3.18 Brokers and Finders................................................... 18
3.19 Repurchase Agreements; Derivatives.................................... 18
3.20 Deposit Accounts...................................................... 18
3.21 Related Party Transactions............................................ 19
3.22 Certain Information................................................... 19
3.23 Tax and Regulatory Matters............................................ 19
3.24 State Anti-Takeover Laws.............................................. 19
3.25 Labor Relations....................................................... 19
3.26 No Right to Dissent................................................... 19
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BB&T............................ 20
4.1 Capital Structure of BB&T............................................. 20
4.2 Organization, Standing and Authority of BB&T.......................... 20
4.3 Authorized and Effective Agreement.................................... 20
4.4 Organization, Standing and Authority of BB&T Subsidiaries............. 21
4.5 Securities Documents; Statements True................................. 21
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4.6 Certain Information................................................... 21
4.7 Tax and Regulatory Matters............................................ 21
4.8 Share Ownership....................................................... 21
4.9 Legal Proceedings; Regulatory Approvals............................... 21
4.10 Adverse Change........................................................ 21
ARTICLE V COVENANTS.......................................................... 22
5.1 BankFirst Shareholder Meeting......................................... 22
5.2 Registration Statement; Proxy Statement/Prospectus.................... 22
5.3 Plan of Merger; Reservation of Shares................................. 22
5.4 Additional Acts....................................................... 23
5.5 Best Efforts.......................................................... 23
5.6 Certain Accounting Matters............................................ 23
5.7 Access to Information................................................. 23
5.8 Press Releases........................................................ 24
5.9 Forebearances of BankFirst............................................ 24
5.10 Employment Agreements................................................. 26
5.11 Affiliates............................................................ 26
5.12 Section 401(k) Plan; Other Employee Benefits.......................... 26
5.13 Directors and Officers Protection..................................... 27
5.14 Forbearances of BB&T.................................................. 28
5.15 Reports............................................................... 28
5.16 Exchange Listing...................................................... 28
5.17 Advisory Boards....................................................... 28
5.18 Board of Directors of Branch Banking and Trust Company................ 29
ARTICLE VI CONDITIONS PRECEDENT.............................................. 29
6.1 Conditions Precedent--BB&T and BankFirst............................. 29
6.2 Conditions Precedent--BankFirst....................................... 29
6.3 Conditions Precedent--BB&T............................................ 30
ARTICLE VII TERMINATION, WAIVER AND AMENDMENT................................ 31
7.1 Termination........................................................... 31
7.2 Effect of Termination................................................. 31
7.3 Survival of Representations, Warranties and Covenants................. 32
7.4 Waiver................................................................ 32
7.5 Amendment or Supplement............................................... 32
ARTICLE VIII MISCELLANEOUS................................................... 32
8.1 Expenses.............................................................. 32
8.2 Entire Agreement...................................................... 32
8.3 No Assignment......................................................... 33
8.4 Notices............................................................... 33
8.5 Specific Performance.................................................. 34
8.6 Captions.............................................................. 34
8.7 Counterparts.......................................................... 34
8.8 Governing Law......................................................... 34
8.9 Severability.......................................................... 34
ANNEXES
Annex A Articles of Merger
Annex B Employment Agreement with Xxxx X. Xxxxxx (omitted)
Annex C Employment Agreement with R. Xxxxxxx Xxxxxx (omitted)
Annex D Employment Agreements with five additional employees (omitted)
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement"), dated as of August
22, 2000 is among BANKFIRST CORPORATION ("BankFirst"), a Tennessee corporation
having its principal office at Knoxville, Tennessee, and BB&T CORPORATION
("BB&T"), a North Carolina corporation having its principal office at Winston-
Salem, North Carolina;
R E C I T A L S:
The parties desire that BankFirst shall be merged with and into BB&T (said
transaction being hereinafter referred to as the "Merger") pursuant to a plan of
merger (the "Plan of Merger") substantially in the form attached as Annex A
hereto, and the parties desire to provide for certain undertakings, conditions,
representations, warranties and covenants in connection with the transactions
contemplated hereby. As a condition and inducement to BB&T's willingness to
enter into the Agreement, BankFirst is concurrently granting to BB&T an option
to acquire, under certain circumstances, 2,199,000 shares of the common stock,
par value $2.50 per share, of BankFirst.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions
When used herein, the capitalized terms set forth below shall have the
following meanings:
"Affiliate" means, with respect to any Person, any other Person, who
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with such Person and, without
limiting the generality of the foregoing, includes any executive officer or
director of such Person and any Affiliate of such executive officer or
director.
"Articles of Merger" shall mean the Articles of Merger required to be filed
with the office of the Secretary of State of North Carolina, as provided in
Section 55-11-05 of the NCBCA, and with the office of the Secretary of State
of Tennessee, as provided in Section 00-00-000 of the TBCA.
"Bank Holding Company Act" shall mean the federal Bank Holding Company Act
of 1956, as amended.
"BankFirst Common Stock" shall mean the shares of voting common stock, par
value $2.50 per share, of BankFirst. The BankFirst Common Stock has no Rights
attached, except as provided in Section 3.1.
"BankFirst Disclosure Memorandum" shall mean the written information in one
or more documents, each of which is entitled "BankFirst Disclosure Memorandum"
and dated on or before the date of this Agreement and delivered not later than
the date of execution of this Agreement by BankFirst to BB&T, and describing
in reasonable detail the matters contained therein. Each disclosure made
therein shall be in existence on the date of this Agreement and shall
specifically reference each Section of this Agreement under which such
disclosure is made. Information disclosed with respect to one Section shall
not be deemed to be disclosed for purposes of any other Section not
specifically referenced.
"BankFirst Preferred Stock" shall mean the shares of nonvoting,
noncumulative, convertible 5% Preferred Stock, $5.00 par value of BankFirst,
convertible into 3.0875 shares of BankFirst Common Stock for each share of
BankFirst Preferred Stock.
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"BankFirst Subsidiaries" shall mean BankFirst, BankFirst Trust Company,
First National Bank and Trust Company of Athens, Xxxxxx Mortgage Company,
Eastern Life Insurance Company, and Friendly Finance Company, Inc., all of
which are incorporated under the laws of the State of Tennessee, and any and
all other Subsidiaries of BankFirst as of the date hereof and any corporation,
bank, savings association, or other organization acquired as a Subsidiary of
BankFirst after the date hereof and held as a Subsidiary by BankFirst at the
Effective Time.
"BB&T Common Stock" shall mean the shares of voting common stock, par value
$5.00 per share, of BB&T, with rights attached issued pursuant to Rights
Agreement dated December 17, 1996 between BB&T and Branch Banking and Trust
Company, as Rights Agent, relating to BB&T's Series B Junior Participating
Preferred Stock, $5.00 par value per share.
"BB&T Option Agreement" shall mean the Stock Option Agreement dated as of
even date herewith, as amended from time to time, under which BB&T has an
option to purchase shares of BankFirst Common Stock, which shall be executed
immediately following execution of this Agreement.
"BB&T Subsidiaries" shall mean Branch Banking and Trust Company, Branch
Banking and Trust Company of South Carolina and Branch Banking and Trust
Company of Virginia.
"Benefit Plan Determination Date" shall mean, with respect to any employee
pension or welfare benefit plan or program maintained by BankFirst at the
Effective Time, the date determined by BB&T with respect to each such plan or
program which shall be not later than January 1 following the close of the
calendar year in which the last of the BankFirst Subsidiaries which is a bank
or other savings institution is merged into BB&T or one of the BB&T
Subsidiaries.
"Business Day" shall mean all days other than Saturdays, Sundays and
Federal Reserve holidays.
"CERCLA" shall mean the Comprehensive Environmental Response
Compensation and Liability Act, as amended, 42 U.S.C. 9601 et seq.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" shall mean the Securities and Exchange Commission.
"CRA" shall mean the Community Reinvestment Act of 1977, as amended.
"Disclosed" shall mean disclosed in the BankFirst Disclosure Memorandum,
referencing the Section number herein pursuant to which such disclosure is
being made.
"Environmental Claim" means any notice from any governmental authority or
third party alleging potential liability (including, without limitation,
potential liability for investigatory costs, cleanup or remediation costs,
governmental response costs, natural resources damages, property damages,
personal injuries or penalties) arising out of, based upon, or resulting from
a violation of the Environmental Laws or the presence or release into the
environment of any Hazardous Substances.
"Environmental Laws" means all applicable federal, state and local laws and
regulations, as amended, relating to pollution or protection of human health
or the environment (including ambient air, surface water, ground water, land
surface, or subsurface strata) and which are administered, interpreted, or
enforced by the United States Environmental Protection Agency and state and
local agencies with jurisdiction over and including common law in respect of,
pollution or protection of the environment, including without limitation
CERCLA, the Resource Conservation and Recovery Act, as amended, 42 U.S.C. 6901
et seq., and other laws and regulations relating to emissions, discharges,
releases, or threatened releases of any Hazardous Substances, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of any Hazardous Substances.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"Federal Reserve Board" shall mean the Board of Governors of the Federal
Reserve System.
"Financial Statements" shall mean (a) with respect to BB&T, (i) the
consolidated balance sheets (including related notes and schedules, if any) of
BB&T as of December 31, 1999, 1998, and 1997, and the related consolidated
statements of income and cash flows (including related notes and schedules, if
any) for each of the three years ended December 31, 1999, 1998, and 1997, as
filed by BB&T in Securities Documents and (ii) the consolidated balance sheets
of BB&T (including related notes and schedules, if any) and the related
consolidated statements of income and cash flows (including related notes and
schedules, if any) included in Securities Documents filed by BB&T with respect
to periods ended subsequent to December 31, 1999, and (b) with respect to
BankFirst, (i) the consolidated balance sheets (including related notes and
schedules, if any) of BankFirst as of December 31, 1999, 1998 and 1997, and
the related consolidated statements of income and cash flows (including
related notes and schedules, if any) for each of the three years ended
December 31, 1999, 1998 and 1997 as filed by BankFirst in Securities Documents
and (ii) the consolidated balance sheets of BankFirst (including related notes
and schedules, if any) and the related consolidated statements of income and
cash flows (including related notes and schedules, if any) included in
Securities Documents filed by BankFirst with respect to periods ended
subsequent to December 31, 1999.
"GAAP" shall mean generally accepted accounting principles applicable to
financial institutions and their holding companies, as in effect at the
relevant date.
"Hazardous Substances" means any substance or material (i) identified in
CERCLA; (ii) determined to be toxic, a pollutant or a contaminant under any
applicable federal, state or local statutes, law, ordinance, rule or
regulation, including but not limited to petroleum products; (iii) asbestos;
(iv) radon; (v) poly-chlorinated biphiphenyls and (vi) such other materials,
substances or waste which are otherwise dangerous, hazardous, harmful to human
health or the environment.
"IRS" shall mean the Internal Revenue Service.
"Knowledge" shall mean, as used with respect to a Person (including
references to such Person being aware of a particular matter), the personal
knowledge after due inquiry of the chief executive officer, chief financial
officer, chief human resources officer, chief operating officer and chief
credit officer of such Person.
"Material Adverse Effect" on BB&T or BankFirst, as applicable, shall mean
an event, change, or occurrence which, individually or together with any other
event, change or occurrence, (i) has a material adverse effect on the
financial condition, results of operations, business or business prospects of
BB&T and the BB&T Subsidiaries taken as a whole, or BankFirst and the
BankFirst Subsidiaries taken as a whole, or (ii) materially impairs the
ability of BB&T or BankFirst to perform its obligations under this Agreement
or to consummate the Merger and the other transactions contemplated by this
Agreement; provided that "Material Adverse Effect" shall not be deemed to
include the impact of (a) actions and omissions of BB&T or BankFirst taken
with the prior written consent of the other in contemplation of the
transactions contemplated hereby and (b) the direct effects of compliance with
this Agreement on the operating performance of the parties, including expenses
incurred by the parties in consummating the transactions contemplated by this
Agreement or relating to any litigation arising as a result of the Merger.
"NCBCA" shall mean the North Carolina Business Corporation Act, as amended.
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"NYSE" shall mean the New York Stock Exchange, Inc.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, trust, association, unincorporated
organization, agency, other entity or group of entities, or governmental body.
"Proxy Statement/Prospectus" shall mean the proxy statement and prospectus,
together with any supplements thereto, to be sent to shareholders of BankFirst
to solicit their votes in connection with a proposal to approve this Agreement
and the Plan of Merger.
"Registration Statement" shall mean the registration statement of BB&T as
declared effective by the Commission under the Securities Act, including any
post-effective amendments or supplements thereto as filed with the Commission
under the Securities Act, with respect to the BB&T Common Stock to be issued
in connection with the transactions contemplated by this Agreement.
"Rights" shall mean warrants, options, rights, convertible securities and
other arrangements or commitments which obligate an entity to issue or dispose
of any of its capital stock or other ownership interests (other than rights
pursuant to the Rights Agreement described under the definition of "BB&T
Common Stock"), and stock appreciation rights, performance units and similar
stock-based rights whether or not they obligate the issuer thereof to issue
stock or other securities or to pay cash.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Documents" shall mean all reports, proxy statements,
registration statements and all similar documents filed, or required to be
filed, pursuant to the Securities Laws, including but not limited to periodic
and other reports filed pursuant to Section 13 of the Exchange Act.
"Securities Laws" shall mean the Securities Act; the Exchange Act; the
Investment Company Act of 1940, as amended; the Investment Advisers Act of
1940, as amended; the Trust Indenture Act of 1939 as amended; and the rules
and regulations of the Commission promulgated thereunder.
"Stock Option" shall mean, collectively, any option granted under the Stock
Option Plans, outstanding and unexercised on the date hereof to acquire shares
of BankFirst Common Stock, aggregating 1,024,100 shares.
"Stock Option Plans" shall mean BankFirst's Incentive Stock Option Plan
dated October 11, 1995.
"Subsidiaries" shall mean all those corporations, associations, or other
business entities of which the entity in question either owns or controls 50%
or more of the outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% or more of the outstanding
equity securities is owned directly or indirectly by its parent (in
determining whether one entity owns or controls 50% or more of the outstanding
equity securities of another, equity securities owned or controlled in a
fiduciary capacity shall be deemed owned and controlled by the beneficial
owner).
"TBCA" shall mean the Tennessee Business Corporation Act, as amended.
"TILA" shall mean the federal Truth in Lending Act, as amended.
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1.2 Terms Defined Elsewhere
The capitalized terms set forth below are defined in the following sections:
Agreement Introduction
BankFirst Introduction
BB&T Introduction
BB&T Option Plan Section 2.9(a)
Closing Section 2.4
Closing Date Section 2.4
Closing Value Section 2.7(c)
Common Exchange Ratio Section 2.7(a)
Constituent Corporations Section 2.1
Effective Time Section 2.3
Employer Entity Section 5.12(a)
Merger Recitals
Merger Consideration Section 2.7(a)
PBGC Section 3.14(b)(iv)
Plan Section 3.14(b)(i)
Plan of Merger Recitals
Preferred Exchange Ratio Section 2.7(a)
Surviving Corporation Section 2.1(a)
Transferred Employee Section 5.12(a)
ARTICLE II
THE MERGER
2.1 Merger
BB&T and BankFirst are constituent corporations (the "Constituent
Corporations") to the Merger as contemplated by the NCBCA and the TBCA. At the
Effective Time:
(a) BankFirst shall be merged into BB&T in accordance with the applicable
provisions of the NCBCA and the TBCA, with BB&T being the surviving corporate
entity (hereinafter sometimes referred to as the "Surviving Corporation").
(b) The separate existence of BankFirst shall cease and the Merger shall in
all respects have the effects provided in Section 2.5.
(c) The Articles of Incorporation of BB&T at the Effective Time shall
become the Articles of Incorporation of the Surviving Corporation.
(d) The Bylaws of BB&T at the Effective Time shall become the Bylaws of the
Surviving Corporation.
2.2 Filing; Plan of Merger
The Merger shall not become effective unless this Agreement and the Plan of
Merger are duly approved by shareholders holding at least a majority of the
shares of the BankFirst Common Stock and of the shares of the BankFirst
Preferred Stock, each voting as a separate class. Upon fulfillment or waiver of
the conditions specified in Article VI and provided that this Agreement has not
been terminated pursuant to Article VII, the Constituent Corporations will cause
the Articles of Merger to be executed and filed with the Secretary of State of
North Carolina and the Secretary of State of Tennessee as provided in Section
55-11-05 of the NCBCA and
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Section 00-00-000 of the TBCA, respectively. The Plan of Merger is incorporated
herein by reference, and adoption of this Agreement by the Boards of Directors
of the Constituent Corporations and approval by the shareholders of BankFirst
shall constitute adoption and approval of the Plan of Merger.
2.3 Effective Time
The Merger shall be effective at the day and hour specified in the Articles
of Merger as filed as provided in Section 2.2 (herein sometimes referred to as
the "Effective Time").
2.4 Closing
The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx,
PLLC, Winston-Salem, North Carolina, at 10:00 a.m. on the date designated by
BB&T which is within thirty days following the satisfaction of the conditions to
Closing set forth in Article VI (other than the delivery of certificates,
opinions and other instruments and documents to be delivered at the Closing), or
such later date as the parties may otherwise agree (the "Closing Date").
2.5 Effect of Merger
From and after the Effective Time, the separate existence of BankFirst shall
cease, and the Surviving Corporation shall thereupon and thereafter, to the
extent consistent with its Articles of Incorporation, possess all of the rights,
privileges, immunities and franchises, of a public as well as a private nature,
of each of the Constituent Corporations; and all property, real, personal and
mixed, and all debts due on whatever account, and all other choses in action,
and each and every other interest of or belonging to or due to each of the
Constituent Corporations shall be taken and deemed to be transferred to and
vested in the Surviving Corporation without further act or deed; and the title
to any real estate or any interest therein vested in either of the Constituent
Corporations shall not revert or be in any way impaired by reason of the Merger.
The Surviving Corporation shall thenceforth be responsible for all the
liabilities, obligations and penalties of each of the Constituent Corporations;
and any claim, existing action or proceeding, civil or criminal, pending by or
against either of the Constituent Corporations may be prosecuted as if the
Merger had not taken place, or the Surviving Corporation may be substituted in
its place; and any judgment rendered against either of the Constituent
Corporations may be enforced against the Surviving Corporation. Neither the
rights of creditors nor any liens upon the property of either of the Constituent
Corporations shall be impaired by reason of the Merger.
2.6 Further Assurances
If, at any time after the Effective Time, the Surviving Corporation shall
consider or be advised that any further deeds, assignments or assurances in law
or any other actions are necessary, desirable or proper to vest, perfect or
confirm of record or otherwise, in the Surviving Corporation, the title to any
property or rights of the Constituent Corporations acquired or to be acquired by
reason of, or as a result of, the Merger, the Constituent Corporations agree
that such Constituent Corporations and their proper officers and directors shall
and will execute and deliver all such proper deeds, assignments and assurances
in law and do all things necessary, desirable or proper to vest, perfect or
confirm title to such property or rights in the Surviving Corporation and
otherwise to carry out the purpose of this Agreement, and that the proper
officers and directors of the Surviving Corporation are fully authorized and
directed in the name of the Constituent Corporations or otherwise to take any
and all such actions.
2.7 Merger Consideration
(a) As used herein, the term "Merger Consideration" shall mean the number
of shares of BB&T Common Stock (to the nearest ten thousandth of a share) to
be exchanged for each share of BankFirst Common Stock and for each share of
BankFirst Preferred Stock issued and outstanding as of the Effective Time, and
cash (without interest) to be payable in exchange for any fractional share of
BB&T Common Stock which would otherwise be distributable to a BankFirst
shareholder as provided in Section 2.7(b).
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The portion of a share of BB&T Common Stock to be issued for each issued and
outstanding share of BankFirst Common Stock (the "Common Exchange Ratio")
shall be .4554. The number of shares of BB&T Common Stock to be issued for
each issued and outstanding share of BankFirst Preferred Stock (the "Preferred
Exchange Ratio") shall equal 1.4060.
(b) The amount of cash payable with respect to any fractional share of BB&T
Common Stock shall be determined by multiplying the fractional part of such
share by the Closing Value. The "Closing Value" shall mean the average 4:00
p.m. eastern time closing price per share of BB&T Common Stock on the NYSE on
the Closing Date as reported on XXXXxxx.xxx.
2.8 Conversion of Shares; Payment of Merger Consideration
(a) At the Effective Time, by virtue of the Merger and without any action
on the part of BankFirst or the holders of record of BankFirst Common Stock or
BankFirst Preferred Stock, each share of BankFirst Common Stock and each share
of BankFirst Preferred Stock issued and outstanding immediately prior to the
Effective Time shall be converted into and shall represent the right to
receive, upon surrender of the certificate representing such share of
BankFirst Common Stock or BankFirst Preferred Stock (as provided in subsection
(d) below), the Merger Consideration.
(b) Each share of BB&T Common Stock issued and outstanding immediately
prior to the Effective Time shall continue to be issued and outstanding.
(c) Until surrendered, each outstanding certificate which prior to the
Effective Time represented one or more shares of BankFirst Common Stock or
BankFirst Preferred Stock shall be deemed upon the Effective Time for all
purposes to represent only the right to receive the Merger Consideration and
any declared and unpaid dividends (with respect to BankFirst Common Stock) or
accrued and unpaid dividends (with respect to BankFirst Preferred Stock). No
interest will be paid or accrued on the Merger Consideration upon the
surrender of the certificate or certificates representing shares of BankFirst
Common Stock or BankFirst Preferred Stock. With respect to any certificate for
BankFirst Common Stock or BankFirst Preferred Stock that has been lost or
destroyed, BB&T shall pay the Merger Consideration attributable to such
certificate upon receipt of a surety bond or other adequate indemnity as
required in accordance with BB&T's standard policy, and evidence reasonably
satisfactory to BB&T of ownership of the shares represented thereby. After the
Effective Time, BankFirst's transfer books shall be closed and no transfer of
the shares of BankFirst Common Stock or BankFirst Preferred Stock outstanding
immediately prior to the Effective Time shall be made on the stock transfer
books of the Surviving Corporation.
(d) Promptly after the Effective Time, BB&T shall cause to be delivered or
mailed to each BankFirst shareholder a form of letter of transmittal and
instructions for use in effecting the surrender of the certificates which,
immediately prior to the Effective Time, represented any shares of BankFirst
Common Stock or BankFirst Preferred Stock. Upon proper surrender of such
certificates or other evidence of ownership meeting the requirements of
Section 2.8(c), together with such letter of transmittal duly executed and
completed in accordance with the instructions thereto, and such other
documents as may be reasonably requested, BB&T shall promptly cause the
transfer to the persons entitled thereto of the Merger Consideration and any
declared and unpaid dividends (with respect to BankFirst Common Stock) or
accrued and unpaid dividends (with respect to BankFirst Preferred Stock).
(e) The Surviving Corporation shall pay any dividends or other
distributions with a record date prior to the Effective Time which have been
declared or made by BankFirst in respect of shares of BankFirst Common Stock
in accordance with the terms of this Agreement and which remain unpaid at the
Effective Time, subject to compliance by BankFirst with Section 5.9(b). At the
time of the Closing and incident thereto, BankFirst shall pay a per share
dividend in respect of shares of BankFirst Preferred Stock equal to the
product of $.0625 times a fraction, the numerator of which is the number of
days following the payment date of the BankFirst Preferred Stock dividend
preceding the Closing Date and the denominator of which is 91. Such payment
shall constitute the sole right of the holders of the BankFirst Preferred
Stock
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to a dividend with respect to such BankFirst Preferred Stock. To the extent
permitted by law, former shareholders of record of BankFirst shall be entitled
to vote after the Effective Time at any meeting of BB&T shareholders the
number of whole shares of BB&T Common Stock into which their respective shares
of BankFirst Common Stock or BankFirst Preferred Stock are converted,
regardless of whether such holders have exchanged their certificates
representing BankFirst Common Stock or BankFirst Preferred Stock for
certificates representing BB&T Common Stock in accordance with the provisions
of this Agreement. Whenever a dividend or other distribution is declared by
BB&T on the BB&T Common Stock, the record date for which is at or after the
Effective Time, the declaration shall include dividends or other distributions
on all shares of BB&T Common Stock issuable pursuant to this Agreement, but no
dividend or other distribution payable to the holders of record of BB&T Common
Stock as of any time subsequent to the Effective Time shall be delivered to
the holder of any certificate representing BankFirst Common Stock or BankFirst
Preferred Stock until such holder surrenders such certificate for exchange as
provided in this Section 2.8. Upon surrender of such certificate, both the
BB&T Common Stock certificate and any undelivered dividends and cash payments
payable hereunder (without interest) shall be delivered and paid with respect
to the shares of BankFirst Common Stock or BankFirst Preferred Stock
represented by such certificate.
2.9 Conversion of Stock Options
(a) At the Effective Time, each Stock Option then outstanding (and which by
its terms does not lapse on or before the Effective Time), whether or not then
exercisable, shall be converted into and become rights with respect to BB&T
Common Stock, and BB&T shall assume each Stock Option in accordance with the
terms of the Stock Option Plans, except that from and after the Effective Time
(i) BB&T and its Compensation Committee shall be substituted for BankFirst and
the Committee of BankFirst's Board of Directors administering the Stock Option
Plans, (ii) each Stock Option assumed by BB&T may be exercised solely for
shares of BB&T Common Stock, (iii) the number of shares of BB&T Common Stock
subject to each such Stock Option shall be the number of whole shares of BB&T
(omitting any fractional share) determined by multiplying the number of shares
of BankFirst Common Stock subject to such Stock Option immediately prior to
the Effective Time by the Common Exchange Ratio, and (iv) the per share
exercise price under each such Stock Option shall be adjusted by dividing the
per share exercise price under each such Stock Option by the Common Exchange
Ratio and rounding up to the nearest cent. Notwithstanding the foregoing, BB&T
may at its election substitute as of the Effective Time options under the BB&T
Corporation 1995 Omnibus Stock Incentive Plan or any other duly adopted
comparable plan (in either case, the "BB&T Option Plan") for all or a part of
the Stock Options, subject to the following conditions: (A) the requirements
of (iii) and (iv) above shall be met; (B) such substitution shall not
constitute a modification, extension or renewal of any of the Stock Options;
and (C) the substituted options shall continue in effect on the same terms and
conditions as provided in the agreement manifesting each Stock Option and the
Stock Option Plans governing each Stock Option. Each grant of a converted or
substitute option to any individual who subsequent to the Merger will be a
director or officer of BB&T as construed under Commission Rule 16b-3 shall be
approved in accordance with the provisions of Commission Rule 16b-3. Each
Stock Option which is an incentive stock option shall be adjusted as required
by Section 424 of the Code, and the Regulations promulgated thereunder, so as
to continue as an incentive stock option under Section 424(a) of the Code, and
so as not to constitute a modification, extension, or renewal of the option
within the meaning of Section 424(h) of the Code. BB&T and BankFirst agree to
take all necessary steps to effectuate the foregoing provisions of this
Section 2.9. BB&T has reserved and shall continue to reserve adequate shares
duly registered with the Commission, of BB&T Common Stock for delivery upon
exercise of any converted or substitute options. As soon as practicable after
the Effective Time, if it has not already done so, and to the extent BankFirst
shall have a registration statement in effect or an obligation to file a
registration statement, BB&T shall file a registration statement on Form S-3
or Form S- 8, as the case may be (or any successor or other appropriate
forms), with respect to the shares of BB&T Common Stock subject to converted
or substitute options and shall use its reasonable efforts to maintain the
effectiveness of such registration statement (and maintain
8
the current status of the prospectus or prospectuses contained therein) for so
long as such converted or substitute options remain outstanding. With respect
to those individuals, if any, who subsequent to the Merger may be subject to
the reporting requirements under Section 16(a) of the Exchange Act, BB&T shall
administer the Stock Option Plans assumed pursuant to this Section 2.9 (or the
BB&T Option Plan, if applicable) in a manner that complies with Rule 16b-3
promulgated under the Exchange Act to the extent necessary to preserve for
such individuals the benefits of Rule 16b-3 to the extent such benefits were
available to them prior to the Effective Time. BankFirst hereby represents
that the Stock Option Plans in their current forms comply with Rule 16b-3 to
the extent, if any, required as of the date hereof.
(b) As soon as practicable following the Effective Time, BB&T shall deliver
to the participants receiving converted options under the BB&T Option Plan an
appropriate notice setting forth such participant's rights pursuant thereto.
(c) Eligibility to receive stock option grants following the Effective Time
with respect to BB&T Common Stock shall be determined by BB&T in accordance
with its plans and procedures as in effect from time to time, and subject to
any contractual obligations.
2.10 Merger of Subsidiaries
In the event that BB&T shall request, BankFirst shall take such actions, and
shall cause the BankFirst Subsidiaries to take such actions, as may be required
in order to effect, at the Effective Time, the merger of one or more of the
BankFirst Subsidiaries with and into, in each case, one of the BB&T
Subsidiaries.
2.11 Anti-Dilution
In the event BB&T changes the number of shares of BB&T Common Stock issued
and outstanding prior to the Effective Time as a result of a stock split, stock
dividend or other similar recapitalization, and the record date thereof (in the
case of a stock dividend) or the effective date thereof (in the case of a stock
split or similar recapitalization for which a record date is not established)
shall be prior to the Effective Time, the Common Exchange Ratio and the
Preferred Exchange Ratio shall be proportionately adjusted.
2.12 Dissenting Shares.
Any holder of shares of BankFirst Preferred Stock who shall have properly
exercised rights to dissent with respect to the Merger and to demand payment of
the "fair value" of the shareholder's shares (the "Dissenting Shares") in
accordance with Sections 00-00-000 et seq. of the TBCA (the "Dissenting
Shareholder") shall thereafter have only such rights, if any, as provided to a
dissenting shareholder under Sections 00-00-000 et seq. of the TCBA and shall
have no rights to receive the Merger Consideration under Sections 2.7 and 2.8;
provided, however, that (i) nothing contained herein shall limit such Dissenting
Shareholder's rights to the payment of all accrued and unpaid dividends as of
the Effective Time; and (ii) if a Dissenting Shareholder shall withdraw (in
accordance with the TCBA) the demand for such appraisal, shall fail to perfect
such demand as required under Section 00-00-000 of the TBCA or shall become
ineligible for such appraisal, then such Dissenting Shareholder's Dissenting
Shares automatically shall cease to be Dissenting Shares and shall be converted
into and represent only the right to receive from the Surviving Corporation,
upon surrender of the certificates representing the Dissenting Shares, the
Merger Consideration provided for in Section 2.7 and accrued and unpaid
dividends as provided in Section 2.8(c) and Section 2.8(e).
9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BANKFIRST
Except as Disclosed, BankFirst represents and warrants to BB&T as follows
(the representations and warranties herein of BankFirst are made subject to the
applicable standard set forth in Section 6.3(a), and no such representation or
warranty shall be deemed to be inaccurate unless the inaccuracy would permit
BB&T to refuse to consummate the Merger under such applicable standard):
3.1 Capital Structure
The authorized capital stock of BankFirst consists of 30,000,000 shares of
BankFirst Common Stock and 1,000,000 shares of BankFirst Preferred Stock.
BankFirst has 11,050,669 shares of BankFirst Common Stock issued and outstanding
and 181,050 shares of BankFirst Preferred Stock issued and outstanding. No other
classes of capital stock of BankFirst, common or preferred, are authorized,
issued or outstanding. All outstanding shares of BankFirst capital stock have
been duly authorized and are validly issued, fully paid and nonassessable. No
shares of capital stock have been reserved for any purpose, except for (i)
shares of BankFirst Common Stock reserved in connection with the Stock Option
Plans, (ii) 2,199,000 shares of BankFirst Common Stock reserved in connection
with the BB&T Option Agreement, and (iii) 558,992 shares of BankFirst Common
Stock reserved in connection with conversion of the BankFirst Preferred Stock.
BankFirst has granted options to acquire 1,024,100 shares of BankFirst Common
Stock under the Stock Option Plans, which options remain outstanding as of the
date hereof. Except as set forth in this Section 3.1, there are no Rights
authorized, issued or outstanding with respect to, nor are there any agreements,
understandings or commitments relating to the right of any BankFirst shareholder
to own, to vote or to dispose of, the capital stock of BankFirst. Holders of
BankFirst Common Stock do not have preemptive rights.
3.2 Organization, Standing and Authority
BankFirst is a corporation duly organized, validly existing and in good
standing under the laws of the State of Tennessee, with full corporate power and
authority to carry on its business as now conducted and to own, lease and
operate its properties and assets. BankFirst is not required to be qualified to
do business in any other state of the United States or foreign jurisdiction.
BankFirst is registered as a bank holding company under the Bank Holding Company
Act.
3.3 Ownership of Subsidiaries
Section 3.3 of the BankFirst Disclosure Memorandum lists all of the BankFirst
Subsidiaries and, with respect to each, its jurisdiction of organization,
jurisdictions in which it is qualified or otherwise licensed to conduct
business, the number of shares or ownership interests owned by BankFirst
(directly or indirectly), the percentage ownership interest so owned by
BankFirst and its business activities. The outstanding shares of capital stock
or other equity interests of the BankFirst Subsidiaries are validly issued and
outstanding, fully paid and nonassessable, and all such shares are directly or
indirectly owned by BankFirst free and clear of all liens, claims and
encumbrances or preemptive rights of any person. No Rights are authorized,
issued or outstanding with respect to the capital stock or other equity
interests of the BankFirst Subsidiaries, and there are no agreements,
understandings or commitments relating to the right of BankFirst to own, to vote
or to dispose of said interests. None of the shares of capital stock or other
equity interests of the BankFirst Subsidiaries have been issued in violation of
the preemptive rights of any person. Section 3.3 of the BankFirst Disclosure
Memorandum also lists all shares of capital stock or other securities or
ownership interests of any corporation, partnership, joint venture, or other
organization (other than the BankFirst Subsidiaries and stock or other
securities held in a fiduciary capacity) owned directly or indirectly by
BankFirst.
10
3.4 Organization, Standing and Authority of the Subsidiaries
Each BankFirst Subsidiary which is a depository institution is a federally
chartered or Tennessee chartered bank with its deposits insured by the FDIC.
Each of the BankFirst Subsidiaries is validly existing and in good standing
under the laws of its jurisdiction of organization. Each of the BankFirst
Subsidiaries has full power and authority to carry on its business as now
conducted, and is duly qualified to do business and in good standing in each
jurisdiction Disclosed with respect to it. No BankFirst Subsidiary is required
to be qualified to do business in any other state of the United States or
foreign jurisdiction, or is engaged in any type of activities that have not been
Disclosed.
3.5 Authorized and Effective Agreement
(a) BankFirst has all requisite corporate power and authority to enter into
and (subject to receipt of all necessary governmental approvals and the
receipt of approval of the BankFirst shareholders of this Agreement and the
Plan of Merger) to perform all of its obligations under this Agreement, the
Articles of Merger and the BB&T Option Agreement. The execution and delivery
of this Agreement, the Articles of Merger and the BB&T Option Agreement, and
consummation of the transactions contemplated hereby and thereby, have been
duly and validly authorized by all necessary corporate action, except, in the
case of this Agreement and the Plan of Merger, the approval of the BankFirst
shareholders pursuant to and to the extent required by applicable law. This
Agreement, the Plan of Merger and the BB&T Option Agreement constitute legal,
valid and binding obligations of BankFirst, and each is enforceable against
BankFirst in accordance with its terms, in each such case subject to (i)
bankruptcy, fraudulent transfer, insolvency, moratorium, reorganization,
conservatorship, receivership, or other similar laws from time to time in
effect relating to or affecting the enforcement of the rights of creditors of
FDIC-insured institutions or the enforcement of creditors' rights generally;
and (ii) general principles of equity (whether applied in a court of law or in
equity).
(b) Neither the execution and delivery of this Agreement, the Articles of
Merger or the BB&T Option Agreement, nor consummation of the transactions
contemplated hereby or thereby, nor compliance by BankFirst with any of the
provisions hereof or thereof, shall (i) conflict with or result in a breach of
any provision of the Charter or bylaws of BankFirst or any BankFirst
Subsidiary, (ii) constitute or result in a breach of any term, condition or
provision of, or constitute a default under, or give rise to any right of
termination, cancellation or acceleration with respect to, or result in the
creation of any lien, charge or encumbrance upon any property or asset of
BankFirst or any BankFirst Subsidiary pursuant to, any note, bond, mortgage,
indenture, license, permit, contract, agreement or other instrument or
obligation, or (iii) subject to receipt of all required governmental
approvals, violate any order, writ, injunction, decree, statute, rule or
regulation applicable to BankFirst or any BankFirst Subsidiary.
(c) Other than consents or approvals required from, or notices to,
regulatory authorities as provided in Section 5.4(b), no notice to, filing
with, or consent of, any public body or authority is necessary for the
consummation by BankFirst of the Merger and the other transactions
contemplated in this Agreement.
3.6 Securities Filings; Financial Statements; Statements True
(a) BankFirst has timely filed all Securities Documents required by the
Securities Laws to be filed since December 31, 1996. BankFirst has Disclosed
or made available to BB&T a true and complete copy of each Securities Document
filed by BankFirst with the Commission after December 31, 1996 and prior to
the date hereof, which are all of the Securities Documents that BankFirst was
required to file during such period. As of their respective dates of filing,
such Securities Documents complied with the Securities Laws as then in effect,
and did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
11
(b) The Financial Statements of BankFirst fairly present or will fairly
present, as the case may be, the consolidated financial position of BankFirst
and the BankFirst Subsidiaries as of the dates indicated and the consolidated
statements of income and retained earnings, changes in shareholders' equity
and statements of cash flows for the periods then ended (subject, in the case
of unaudited interim statements, to the absence of notes and to normal
year-end audit adjustments that are not material in amount or effect) in
conformity with GAAP applied on a consistent basis.
(c) No statement, certificate, instrument or other writing furnished or to
be furnished hereunder by BankFirst or any BankFirst Subsidiary to BB&T
contains or will contain any untrue statement of a material fact or will omit
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
3.7 Minute Books
The minute books of BankFirst and each of the BankFirst Subsidiaries contain
or will contain at Closing accurate records of all meetings and other corporate
actions of their respective shareholders and Boards of Directors (including
committees of the Board of Directors), and the signatures contained therein are
the true signatures of the persons whose signatures they purport to be.
3.8 Adverse Change
Since June 30, 2000, BankFirst and the BankFirst Subsidiaries have not
incurred any liability, whether accrued, absolute or contingent, except as
disclosed in the most recent BankFirst Financial Statements, or entered into any
transactions with Affiliates, in each case other than in the ordinary course of
business consistent with past practices, nor has there been any adverse change
or any event involving a prospective adverse change in the business, financial
condition, results of operations or business prospects of BankFirst or any of
the BankFirst Subsidiaries.
3.9 Absence of Undisclosed Liabilities
All liabilities (including contingent liabilities) of BankFirst and the
BankFirst Subsidiaries are disclosed in the most recent Financial Statements of
BankFirst or are normally recurring business obligations incurred in the
ordinary course of its business since the date of BankFirst's most recent
Financial Statements.
3.10 Properties
(a) BankFirst and the BankFirst Subsidiaries have good and marketable
title, free and clear of all liens, encumbrances, charges, defaults or
equitable interests, to all of the properties and assets, real and personal,
tangible and intangible, reflected on the consolidated balance sheet included
in the Financial Statements of BankFirst as of December 31, 1999 or acquired
after such date, except for (i) liens for current taxes not yet due and
payable, (ii) pledges to secure deposits and other liens incurred in the
ordinary course of banking business, (iii) such imperfections of title,
easements and encumbrances, if any, as are not material in character, amount
or extent, or (iv) dispositions and encumbrances for adequate consideration in
the ordinary course of business.
(b) All leases and licenses pursuant to which BankFirst or any BankFirst
Subsidiary, as lessee or licensee, leases or licenses rights to real or
personal property are valid and enforceable in accordance with their
respective terms.
3.11 Environmental Matters
(a) BankFirst and the BankFirst Subsidiaries are and at all times have been
in compliance with all Environmental Laws. Neither BankFirst nor any BankFirst
Subsidiary has received any communication alleging that BankFirst or the
BankFirst Subsidiary is not in such compliance, and there are no present
circumstances that would prevent or interfere with the continuation of such
compliance.
12
(b) There are no pending Environmental Claims, neither BankFirst nor any
BankFirst Subsidiary has received notice of any pending Environmental Claims,
and there are no conditions or facts existing which might reasonably be
expected to result in legal, administrative, arbitral or other proceedings
asserting Environmental Claims or other claims, causes of action or
governmental investigations of any nature seeking to impose, or that could
result in the imposition of, any liability arising under any Environmental
Laws upon (i) BankFirst or any BankFirst Subsidiary, (ii) any person or entity
whose liability for any Environmental Claim BankFirst or any BankFirst
Subsidiary has or may have retained or assumed, either contractually or by
operation of law, (iii) any real or personal property owned or leased by
BankFirst or any BankFirst Subsidiary, or any real or personal property which
BankFirst or any BankFirst Subsidiary has or is judged to have managed or
supervised or participated in the management of, or (iv) any real or personal
property in which BankFirst or any BankFirst Subsidiary holds a security
interest securing a loan recorded on the books of BankFirst or any BankFirst
Subsidiary. Neither BankFirst nor any BankFirst Subsidiary is subject to any
agreement, order, judgment, decree or memorandum by or with any court,
governmental authority, regulatory agency or third party imposing any
liability under any Environmental Laws.
(c) BankFirst and the BankFirst Subsidiaries are in compliance with all
recommendations contained in any environmental audits, analyses and surveys
received by BankFirst relating to all real and personal property owned or
leased by BankFirst or any BankFirst Subsidiary and all real and personal
property of which BankFirst or any BankFirst Subsidiary has or is judged to
have managed or supervised or participated in the management of.
(d) There are no past or present actions, activities, circumstances,
conditions, events or incidents that could reasonably form the basis of any
Environmental Claim, or other claim or action or governmental investigation
that could result in the imposition of any liability arising under any
Environmental Laws, against BankFirst or any BankFirst Subsidiary or against
any person or entity whose liability for any Environmental Claim BankFirst or
any BankFirst Subsidiary has or may have retained or assumed, either
contractually or by operation of law.
3.12 Loans; Allowance for Loan Losses
(a) All of the loans on the books of BankFirst and the BankFirst
Subsidiaries are valid and properly documented and were made in the ordinary
course of business, and the security therefor, if any, is valid and properly
perfected. Neither the terms of such loans, nor any of the loan documentation,
nor the manner in which such loans have been administered and serviced, nor
BankFirst's procedures and practices of approving or rejecting loan
applications, violates any federal, state or local law, rule, regulation or
ordinance applicable thereto, including, without limitation, the TILA,
Regulations O and Z of the Federal Reserve Board, the CRA, the Equal Credit
Opportunity Act, as amended, and state laws, rules and regulations relating to
consumer protection, installment sales and usury.
(b) The allowances for loan losses reflected on the consolidated balance
sheets included in the Financial Statements of BankFirst are, in the
reasonable judgment of BankFirst's management, adequate as of their respective
dates under the requirements of GAAP and applicable regulatory requirements
and guidelines.
3.13 Tax Matters
(a) BankFirst and the BankFirst Subsidiaries and each of their predecessors
have timely filed (or requests for extensions have been timely filed and any
such extensions either are pending or have been granted and have not expired)
all federal, state and local (and, if applicable, foreign) tax returns
required by applicable law to be filed by them (including, without limitation,
estimated tax returns, income tax returns, information returns, and
withholding and employment tax returns) and have paid, or where payment is not
required to have been made, have set up (in accordance with GAAP) an adequate
reserve or accrual for the payment of, all taxes required to be paid in
respect of the periods covered by such
13
returns and, as of the Effective Time, will have paid, or where payment is
not required to have been made, will have set up (in accordance with GAAP) an
adequate reserve or accrual for the payment of, all taxes for any subsequent
periods ending on or prior to the Effective Time. Neither BankFirst nor any
BankFirst Subsidiary has any liability for any such taxes in excess of the
amounts so paid or reserves or accruals so established. BankFirst and the
BankFirst Subsidiaries have paid, or where payment is not required to have
been made have set up (in accordance with GAAP) an adequate reserve or accrual
for payment of, all taxes required to be paid or accrued for the preceding or
current fiscal year for which a return is not yet due.
(b) All federal, state and local (and, if applicable, foreign) tax returns
filed by BankFirst and the BankFirst Subsidiaries are complete and accurate.
Neither BankFirst nor any BankFirst Subsidiary is delinquent in the payment of
any tax, assessment or other governmental charge. No deficiencies for any tax,
assessment or other governmental charge have been proposed, asserted or
assessed (tentatively or otherwise) against BankFirst or any BankFirst
Subsidiary which have not been settled and paid. There are currently no
agreements in effect with respect to BankFirst or any BankFirst Subsidiary to
extend the period of limitations for the assessment or collection of any tax.
No audit examination or deficiency or refund litigation with respect to such
returns is pending.
(c) Deferred taxes have been provided for in accordance with GAAP
consistently applied.
(d) Neither BankFirst nor any of the BankFirst Subsidiaries is a party to
any tax allocation or sharing agreement or has been a member of an affiliated
group filing a consolidated federal income tax return (other than a group the
common parent of which was BankFirst or a BankFirst subsidiary) or has any
liability for taxes of any person (other than BankFirst and the BankFirst
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign law) as a transferee or successor or by
contract or otherwise.
(e) Each of BankFirst and the BankFirst Subsidiaries is in compliance with,
and its records contain all information and documents (including properly
completed IRS Forms W-9) necessary to comply with, all applicable information
reporting and tax withholding requirements under federal, state, and local tax
laws, and such records identify with specificity all accounts subject to
backup withholding under Section 3406 of the Code.
(f) Neither BankFirst nor any of the BankFirst Subsidiaries has made any
payments, is obligated to make any payments, or is a party to any contract
that could obligate it to make any payments that would be disallowed as a
deduction under Section 280G or 162(m) of the Code.
3.14 Employees; Compensation; Benefit Plans
(a) Compensation. BankFirst has Disclosed a complete and correct list of
the name, age, position, rate of compensation and any incentive compensation
arrangements, bonuses or commissions or fringe or other benefits, whether
payable in cash or in kind, of each director, shareholder, independent
contractor, consultant and agent of BankFirst and of each BankFirst Subsidiary
and each other person (in each case other than as an employee) to whom
BankFirst or any BankFirst Subsidiary pays or provides, or has an obligation,
agreement (written or unwritten), policy or practice of paying or providing,
retirement, health, welfare or other benefits of any kind or description
whatsoever.
(b) Employee Benefit Plans.
(i) BankFirst has Disclosed an accurate and complete list of all Plans,
as defined below, contributed to, maintained or sponsored by BankFirst or
any BankFirst Subsidiary, to which BankFirst or any BankFirst Subsidiary is
obligated to contribute or has any liability or potential liability, whether
direct or indirect, including all Plans contributed to, maintained or
sponsored by each member of the controlled group of corporations, within the
meaning of Sections 414(b), 414(c), 414(m) and 414(o) of the Code, of which
BankFirst or any BankFirst Subsidiary is a member. For
14
purposes of this Agreement, the term "Plan" shall mean a plan, arrangement,
agreement or program described in the foregoing provisions of this Section
3.14(b)(i) and which is: (A) a profit-sharing, deferred compensation, bonus,
stock option, stock purchase, pension, retainer, consulting, retirement,
severance, welfare or incentive plan, agreement or arrangement, whether or
not funded and whether or not terminated, (B) an employment agreement, (C) a
material personnel policy or fringe benefit plan, policy, program or
arrangement providing for benefits or perquisites to current or former
employees, officers, directors or agents, whether or not funded, and whether
or not terminated, including, without limitation, benefits relating to
automobiles, clubs, vacation, child care, parenting, sabbatical, sick leave,
severance, medical, dental, hospitalization, life insurance and other types
of insurance, or (D) any other employee benefit plan as defined in Section
3(3) of ERISA, whether or not funded and whether or not terminated.
(ii) Neither BankFirst nor any BankFirst Subsidiary contributes to, has
an obligation to contribute to or otherwise has any liability or potential
liability with respect to (A) any multiemployer plan as defined in Section
3(37) of ERISA, (B) any plan of the type described in Sections 4063 and 4064
of ERISA or in Section 413 of the Code (and regulations promulgated
thereunder), or (C) any plan which provides health, life insurance, accident
or other "welfare-type" benefits to current or future retirees or former
employees or directors, their spouses or dependents, other than in
accordance with Section 4980B of the Code or applicable state continuation
coverage law.
(iii) None of the Plans obligates BankFirst or any BankFirst Subsidiary
to pay separation, severance, termination or similar-type benefits solely as
a result of any transaction contemplated by this Agreement or solely as a
result of a "change in control," as such term is used in Section 280G of the
Code (and regulations promulgated thereunder).
(iv) Each Plan, and all related trusts, insurance contracts and funds,
has been maintained, funded and administered in compliance in all respects
with its own terms and in compliance in all respects with all applicable
laws and regulations, including but not limited to ERISA and the Code. No
actions, suits, claims, complaints, charges, proceedings, hearings,
examinations, investigations, audits or demands with respect to the Plans
(other than routine claims for benefits) are pending or threatened, and
there are no facts which could give rise to or be expected to give rise to
any actions, suits, claims, complaints, charges, proceedings, hearings,
examinations, investigations, audits or demands. No Plan that is subject to
the funding requirements of Section 412 of the Code or Section 302 of ERISA
has incurred any "accumulated funding deficiency" as such term is defined in
such Sections of ERISA and the Code, whether or not waived, and each Plan
has always fully met the funding standards required under Title I of ERISA
and Section 412 of the Code. No liability to the Pension Benefit Guaranty
Corporation ("PBGC") (except for routine payment of premiums) has been or is
expected to be incurred with respect to any Plan that is subject to Title IV
of ERISA, no reportable event (as such term is defined in Section 4043 of
ERISA) for which the PBGC has not waived notice has occurred with respect to
any such Plan, and the PBGC has not commenced or threatened the termination
of any Plan. None of the assets of BankFirst or any BankFirst Subsidiary is
the subject of any lien arising under Section 302(f) of ERISA or Section
412(n) of the Code, neither BankFirst nor any BankFirst Subsidiary has been
required to post any security pursuant to Section 307 of ERISA or Section
401(a)(29) of the Code, and there are no facts which could be expected to
give rise to such lien or such posting of security. No event has occurred
and no condition exists that would subject BankFirst or any BankFirst
Subsidiary to any tax under Sections 4971, 4972, 4976, 4977 or 4979 of the
Code or to a fine or penalty under Section 502(c) of ERISA.
(v) Each Plan that is intended to be qualified under Section 401(a) of
the Code, and each trust (if any) forming a part thereof, has received a
favorable determination letter from the IRS as to the form of such Plan and
its related trust, and nothing has occurred since the date of such
determination letter that could adversely affect the qualification of such
Plan or the tax exempt status of such related trust.
15
(vi) No underfunded "defined benefit plan" (as such term is defined in
Section 3(35) of ERISA) has been, during the five years preceding the
Closing Date, transferred out of the controlled group of corporations
(within the meaning of Sections 414(b), (c), (m) and (o) of the Code) of
which BankFirst or any BankFirst Subsidiary is a member or was a member
during such five-year period.
(vii) As of December 31, 1999, the fair market value of the assets of
each Plan that is a tax qualified defined benefit plan equaled or exceeded,
and as of the Closing Date will equal or exceed, the present value of all
vested and nonvested liabilities thereunder determined on an ongoing basis
in accordance with reasonable actuarial methods, factors and assumptions
applicable to a defined benefit plan. With respect to each Plan that is
subject to the funding requirements of Section 412 of the Code and Section
302 of ERISA, all required contributions for all periods ending prior to or
as of the Closing Date (including periods from the first day of the
then-current plan year to the Closing Date and including all quarterly
contributions required in accordance with Section 412(m) of the Code) shall
have been made. With respect to each other Plan, all required payments,
premiums, contributions, reimbursements or accruals for all periods ending
prior to or as of the Closing Date shall have been made. No tax qualified
Plan has any unfunded liabilities.
(viii) No prohibited transaction (which shall mean any transaction
prohibited by Section 406 of ERISA and not exempt under Section 408 of ERISA
or Section 4975 of the Code, whether by statutory, class or individual
exemption) has occurred with respect to any Plan which would result in the
imposition, directly or indirectly, of any excise tax, penalty or other
liability under Section 4975 of the Code or Section 409 or 502(i) of ERISA.
Neither BankFirst nor, to the Knowledge of BankFirst, any BankFirst
Subsidiary, any trustee, administrator or other fiduciary of any Plan, or
any agent of any of the foregoing has engaged in any transaction or acted or
failed to act in a manner that could subject BankFirst or any BankFirst
Subsidiary to any liability for breach of fiduciary duty under ERISA or any
other applicable law.
(ix) With respect to each Plan, all reports and information required to
be filed with any government agency or distributed to Plan participants and
their beneficiaries have been duly and timely filed or distributed.
(x) BankFirst and each BankFirst Subsidiary has been and is presently in
compliance with all of the requirements of Section 4980B of the Code.
(xi) Neither BankFirst nor any BankFirst Subsidiary has a liability as of
December 31, 1999 under any Plan that, to the extent disclosure is required
under GAAP, is not reflected on the consolidated balance sheet included in
the Financial Statements of BankFirst as of December 31, 1999 or otherwise
Disclosed.
(xii) Neither the consideration nor implementation of the transactions
contemplated under this Agreement will increase (A) BankFirst's or any
BankFirst Subsidiary's obligation to make contributions or any other
payments to fund benefits accrued under the Plans as of the date of this
Agreement or (B) the benefits accrued or payable with respect to any
participant under the Plans (except to the extent benefits may be deemed
increased by accelerated vesting, accelerated allocation of previously
unallocated Plan assets or by the conversion of all stock options in
accordance with Section 2.9.
(xiii) With respect to each Plan, BankFirst has Disclosed or made
available to BB&T, true, complete and correct copies of (A) all documents
pursuant to which the Plans are maintained, funded and administered,
including summary plan descriptions, (B) the three most recent annual
reports (Form 5500 series) filed with the IRS (with attachments), (C) the
three most recent actuarial reports, if any, (D) the three most recent
financial statements, (E) all governmental filings for the last three years,
including, without limitation, excise tax returns and reportable events
filings, and (F) all governmental rulings, determinations, and opinions (and
pending requests for governmental rulings, determinations, and opinions)
during the past three years.
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(xiv) Each of the Plans as applied to BankFirst and any BankFirst
Subsidiary may be amended or terminated at any time by action of BankFirst's
Board of Directors, or such BankFirst's Subsidiary's Board of Directors, as
the case may be, or a committee of such Board of Directors or duly
authorized officer, in each case subject to the terms of the Plan and
compliance with applicable laws and regulations (and limited, in the case of
multiemployer plans, to termination of the participation of BankFirst or a
BankFirst Subsidiary thereunder).
3.15 Certain Contracts
(a) Neither BankFirst nor any BankFirst Subsidiary is a party to, is bound
or affected by, or receives benefits under (i) any agreement, arrangement or
commitment, written or oral, the default of which would have a Material
Adverse Effect, whether or not made in the ordinary course of business (other
than loans or loan commitments made or certificates or deposits received in
the ordinary course of the banking business), or any agreement restricting its
business activities, including, without limitation, agreements or memoranda of
understanding with regulatory authorities, (ii) any agreement, indenture or
other instrument, written or oral, relating to the borrowing of money by
BankFirst or any BankFirst Subsidiary or the guarantee by BankFirst or any
BankFirst Subsidiary of any such obligation, which cannot be terminated within
less than 60 days after the Closing Date by BankFirst or any BankFirst
Subsidiary (without payment of any penalty or cost, except with respect to
Federal Home Loan Bank or Federal Reserve Bank advances), (iii) any agreement,
arrangement or commitment, written or oral, relating to the employment of a
consultant, independent contractor or agent, or the employment, election or
retention in office of any present or former director or officer, which cannot
be terminated within less than 60 days after the Closing Date by BankFirst or
any BankFirst Subsidiary (without payment of any penalty or cost), or that
provides benefits which are contingent, or the application of which is
altered, upon the occurrence of a transaction involving BankFirst of the
nature contemplated by this Agreement or the BB&T Option Agreement, or (iv)
any agreement or plan, written or oral, including any Stock Option Plans,
stock appreciation rights plan, restricted stock plan or stock purchase plan,
any of the benefits of which will be increased, or the vesting of the benefits
of which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the BB&T Option Agreement or the value of
any of the benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement or the BB&T Option Agreement. Each
matter Disclosed pursuant to this Section 3.15(a) is in full force and effect
as of the date hereof.
(b) Neither BankFirst nor any BankFirst Subsidiary is in default under any
agreement, commitment, arrangement, lease, insurance policy, or other
instrument, whether entered into in the ordinary course of business or
otherwise and whether written or oral, and there has not occurred any event
that, with the lapse of time or giving of notice or both, would constitute
such a default.
3.16 Legal Proceedings; Regulatory Approvals
There are no actions, suits, claims, governmental investigations or
proceedings instituted, pending or, to the Knowledge of BankFirst, threatened
against BankFirst or any BankFirst Subsidiary or against any asset, interest,
Plan or right of BankFirst or any BankFirst Subsidiary, or, to the Knowledge of
BankFirst, against any officer, director or employee of any of them in their
capacity as such. There are no actions, suits or proceedings instituted, pending
or, to the Knowledge of BankFirst, threatened against any present or former
director or officer of BankFirst or any BankFirst Subsidiary that would
reasonably be expected to give rise to a claim against BankFirst or any
BankFirst Subsidiary for indemnification. There are no actual or, to the
Knowledge of BankFirst, threatened actions, suits or proceedings which present a
claim to restrain or prohibit the transactions contemplated herein or in the
BB&T Option Agreement. To the Knowledge of BankFirst, no fact or condition
relating to BankFirst or any BankFirst Subsidiary exists (including, without
limitation, noncompliance with the CRA) that would prevent BankFirst or BB&T
from obtaining all of the federal and state regulatory approvals contemplated
herein.
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3.17 Compliance with Laws; Filings
Each of BankFirst and each BankFirst Subsidiary is in compliance with all
statutes and regulations (including, but not limited to, the CRA, the TILA and
regulations promulgated thereunder, and other consumer banking laws), and has
obtained and maintained all permits, licenses and registrations applicable to
the conduct of its business, and neither BankFirst nor any BankFirst Subsidiary
has received written notification that has not lapsed, been withdrawn or
abandoned from any agency or department of federal, state or local government,
or otherwise has Knowledge that such a written notification is pending, (i)
asserting a violation or possible violation of any such statute or regulation,
(ii) threatening to revoke any permit, license, registration, or other
government authorization, or (iii) restricting or in any way limiting its
operations. Neither BankFirst nor any BankFirst Subsidiary is subject to any
regulatory or supervisory cease and desist order, agreement, directive,
memorandum of understanding or commitment, and none of them has received any
communication requesting that it enter into any of the foregoing. Since December
31, 1996, BankFirst and each of the BankFirst Subsidiaries has filed all
reports, registrations, notices and statements, and any amendments thereto, that
it was required to file with federal and state regulatory authorities,
including, without limitation, the Commission, FDIC, Federal Reserve Board and
applicable state regulators. Each such report, registration, notice and
statement, and each amendment thereto, complied with applicable legal
requirements.
3.18 Brokers and Finders
Neither BankFirst nor any BankFirst Subsidiary, nor any of their respective
officers, directors or employees, has employed any broker, finder or financial
advisor or incurred any liability for any fees or commissions in connection with
the transactions contemplated herein, in the Plan of Merger or in the BB&T
Option Agreement, except for an obligation to Xxxxxxx & XxXxxxxx, P.C., the
nature and extent of which has been Disclosed.
3.19 Repurchase Agreements; Derivatives
(a) With respect to all agreements currently outstanding pursuant to which
BankFirst or any BankFirst Subsidiary has purchased securities subject to an
agreement to resell, BankFirst or the BankFirst Subsidiary has a valid,
perfected first lien or security interest in the securities or other
collateral securing such agreement, and the value of such collateral equals or
exceeds the amount of the debt secured thereby. With respect to all agreements
currently outstanding pursuant to which BankFirst or any BankFirst Subsidiary
has sold securities subject to an agreement to repurchase, neither BankFirst
nor the BankFirst Subsidiary has pledged collateral in excess of the amount of
the debt secured thereby. Neither BankFirst nor any BankFirst Subsidiary has
pledged collateral in excess of the amount required under any interest rate
swap or other similar agreement currently outstanding.
(b) Neither BankFirst nor any BankFirst Subsidiary is a party to or has
agreed to enter into an exchange-traded or over-the-counter swap, forward,
future, option, cap, floor, or collar financial contract, or any other
interest rate or foreign currency protection contract not included on its
balance sheets in the Financial Statements, which is a financial derivative
contract (including various combinations thereof), except for options and
forwards entered into in the ordinary course of its mortgage lending business
consistent with past practice and current policy.
3.20 Deposit Accounts
The deposit accounts of the BankFirst Subsidiaries that are depository
institutions are insured by the FDIC to the maximum extent permitted by federal
law, and the BankFirst Subsidiaries have paid all premiums and assessments and
filed all reports required to have been paid or filed under all rules and
regulations applicable to the FDIC.
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3.21 Related Party Transactions
BankFirst has Disclosed all existing transactions, investments and loans,
including loan guarantees existing as of the date hereof, to which BankFirst or
any BankFirst Subsidiary is a party with any director, executive officer or 5%
shareholder of BankFirst or any person, corporation, or enterprise controlling,
controlled by or under common control with any of the foregoing. All such
transactions, investments and loans are on terms no less favorable to BankFirst
than could be obtained from unrelated parties.
3.22 Certain Information
When the Proxy Statement/Prospectus is mailed, and at the time of the meeting
of shareholders of BankFirst to vote on the Agreement and the Plan of Merger,
the Proxy Statement/Prospectus and all amendments or supplements thereto, with
respect to all information set forth therein provided by BankFirst, (i) shall
comply with the applicable provisions of the Securities Laws, and (ii) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances in which they were made, not misleading.
3.23 Tax and Regulatory Matters
Neither BankFirst nor any BankFirst Subsidiary has taken or agreed to take
any action which would or could reasonably be expected to (i) cause the Merger
not to constitute a reorganization under Section 368 of the Code or (ii) impede
or delay receipt of any consents of regulatory authorities referred to in
Section 5.4(b) or result in failure of the condition in Section 6.3(b).
3.24 State Anti-Takeover Laws
BankFirst and each BankFirst Subsidiary have taken all necessary action to
exempt the transactions contemplated by this Agreement from any applicable
moratorium, fair price, business combination, control share or other
anti-takeover laws, and no such law shall be activated or applied as a result of
such transactions. Neither the Charter nor the Bylaws of BankFirst, nor any
other document of BankFirst or to which BankFirst is a party, contains a
provision that requires more than a majority of the shares of BankFirst Common
Stock entitled to vote, more than a majority of the shares of BankFirst
Preferred Stock entitled to vote, or the vote or approval of any other class of
capital stock or voting security, to approve the Merger or any other
transactions contemplated in this Agreement.
3.25 Labor Relations
Neither BankFirst nor any BankFirst Subsidiary is the subject of any claim or
allegation that it has committed an unfair labor practice (within the meaning of
the National Labor Relations Act or comparable state law) or seeking to compel
it to bargain with any labor organization as to wages or conditions of
employment, nor is BankFirst or any BankFirst Subsidiary party to any collective
bargaining agreement. There is no strike or other labor dispute involving
BankFirst or any BankFirst Subsidiary, pending or threatened, or to the
Knowledge of BankFirst, is there any activity involving any employees of
BankFirst or any BankFirst Subsidiary seeking to certify a collective bargaining
unit or engaging in any other organization activity.
3.26 No Right to Dissent
Except with respect to holders of shares of BankFirst Preferred Stock under
Sections 00-00-000 et. seq. of the TBCA, nothing in the Charter or the Bylaws of
BankFirst or any BankFirst Subsidiary provides or would provide to any person,
including without limitation the holders of BankFirst Common Stock, upon
execution of this Agreement or the Plan of Merger and consummation of the
transactions contemplated hereby and thereby, rights of dissent and appraisal of
any kind.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BB&T
BB&T represents and warrants to BankFirst as follows (the representations and
warranties herein of BB&T are made subject to the applicable standard set forth
in Section 6.2(a), and no such representation or warranty shall be deemed to be
inaccurate unless the inaccuracy would permit BankFirst to refuse to consummate
the Merger under such applicable standard):
4.1 Capital Structure of BB&T
The authorized capital stock of BB&T consists of (i) 5,000,000 shares of
preferred stock, par value $5.00 per share, of which 2,000,000 shares have been
designated as Series B Junior Participating Preferred Stock and the remainder
are undesignated, and none of which shares are issued and outstanding, and (ii)
500,000,000 shares of BB&T Common Stock of which 356,760,711 shares were issued
and outstanding as of June 30, 2000. All outstanding shares of BB&T Common Stock
have been duly authorized and are validly issued, fully paid and nonassessable.
The shares of BB&T Common Stock reserved as provided in Section 5.3 are free of
any Rights and have not been reserved for any other purpose, and such shares are
available for issuance as provided pursuant to the Plan of Merger. Holders of
BB&T Common Stock do not have preemptive rights.
4.2 Organization, Standing and Authority of BB&T
BB&T is a corporation duly organized, validly existing and in good standing
under the laws of the State of North Carolina, with full corporate power and
authority to carry on its business as now conducted and to own, lease and
operate its assets, and is duly qualified to do business in the states of the
United States where its ownership or leasing of property or the conduct of its
business requires such qualification. BB&T is registered as a financial holding
company under the Bank Holding Company Act.
4.3 Authorized and Effective Agreement
(a) BB&T has all requisite corporate power and authority to enter into and
(subject to receipt of all necessary government approvals) perform all of its
obligations under this Agreement. The execution and delivery of this Agreement
and consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action in respect thereof on the
part of BB&T. This Agreement and the Plan of Merger attached hereto constitute
legal, valid and binding obligations of BB&T, and each is enforceable against
BB&T in accordance with its terms, in each case subject to (i) bankruptcy,
insolvency, moratorium, reorganization, conservatorship, receivership or other
similar laws in effect from time to time relating to or affecting the
enforcement of the rights of creditors; and (ii) general principles of equity.
(b) Neither the execution and delivery of this Agreement or the Articles of
Merger, nor consummation of the transactions contemplated hereby, nor
compliance by BB&T with any of the provisions hereof or thereof shall (i)
conflict with or result in a breach of any provision of the Articles of
Incorporation or bylaws of BB&T or any BB&T Subsidiary, (ii) constitute or
result in a breach of any term, condition or provision of, or constitute a
default under, or give rise to any right of termination, cancellation or
acceleration with respect to, or result in the creation of any lien, charge or
encumbrance upon any property or asset of BB&T or any BB&T Subsidiary pursuant
to, any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation, or (iii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to BB&T or any BB&T Subsidiary.
(c) Other than consents or approvals required from, or notices to,
regulatory authorities as provided in Section 5.4(b), no notice to, filing
with, or consent of, any public body or authority is necessary for the
consummation by BB&T of the Merger and the other transactions contemplated in
this Agreement.
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4.4 Organization, Standing and Authority of BB&T Subsidiaries
Each of the BB&T Subsidiaries is duly organized, validly existing and in good
standing under applicable laws. BB&T owns, directly or indirectly, all of the
issued and outstanding shares of capital stock of each of the BB&T Subsidiaries.
Each of the BB&T Subsidiaries (i) has full power and authority to carry on its
business as now conducted and (ii) is duly qualified to do business in the
states of the United States and foreign jurisdictions where its ownership or
leasing of property or the conduct of its business requires such qualification.
4.5 Securities Documents; Statements True
BB&T has timely filed all Securities Documents required by the Securities
Laws to be filed since December 31, 1996. As of their respective dates of
filing, such Securities Documents complied with the Securities Laws as then in
effect, and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. No statement, certificate, instrument or other writing furnished
or to be furnished hereunder by BB&T or any other BB&T Subsidiary to BankFirst
contains or will contain any untrue statement of material fact or will omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4.6 Certain Information
When the Proxy Statement/Prospectus is mailed, and at all times subsequent to
such mailing up to and including the time of the meeting of shareholders of
BankFirst to vote on the Merger, the Proxy Statement/Prospectus and all
amendments or supplements thereto, with respect to all information set forth
therein relating to BB&T, (i) shall comply with the applicable provisions of the
Securities Laws, and (ii) shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements contained therein, in light of the circumstances in which
they were made, not misleading.
4.7 Tax and Regulatory Matters
Neither BB&T nor any BB&T Subsidiary has taken or agreed to take any action
which would or could reasonably be expected to (i) cause the Merger not to
constitute a reorganization under Section 368 of the Code, or (ii) materially
impede or delay receipt of any consents of regulatory authorities referred to in
Section 5.4(b) or result in failure of the condition in Section 6.3(b);
provided, that nothing that nothing contained herein shall limit the ability of
BB&T to exercise its rights under the BB&T Option Agreement,
4.8 Share Ownership
As of the date of this Agreement, BB&T does not own (except in a fiduciary
capacity) any shares of BankFirst Common Stock.
4.9 Legal Proceedings; Regulatory Approvals
There are no actual or, to the Knowledge of BB&T, threatened actions, suits
or proceedings instituted against BB&T or any BB&T Subsidiary, which present a
claim to restrain or prohibit the transactions contemplated herein. To the
Knowledge of BB&T, no fact or condition relating to BB&T or any BB&T Subsidiary
exists (including, without limitation, noncompliance with the CRA) that would
prevent BB&T or BankFirst from obtaining all of the federal and state regulatory
approvals contemplated herein.
4.10 Adverse Change.
Since June 30, 2000, there has not been any adverse change or any event
involving a prospective adverse change in the financial condition, results of
operations or stockholders' equity of BB&T or any of the BB&T Subsidiaries.
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ARTICLE V
COVENANTS
5.1 BankFirst Shareholder Meeting
BankFirst shall submit this Agreement and the Plan of Merger to its
shareholders for approval at a meeting to be held as soon as reasonably
practicable following the date of effectiveness of the Registration Statement,
and by approving and authorizing the execution of this Agreement, the Board of
Directors of BankFirst agrees that it shall, at the time the Proxy
Statement/Prospectus is mailed to the shareholders of BankFirst, recommend that
BankFirst's shareholders vote for such approval; provided, that the Board of
Directors of BankFirst may withdraw, modify or refuse to make such
recommendation only if the Board of Directors shall determine in good faith that
such recommendation should not be made in light of its fiduciary duty to
BankFirst's shareholders after consideration of written advice of legal counsel
that, in the opinion of such counsel, such recommendation or the failure to
withdraw or modify such recommendation could reasonably be expected to
constitute a breach of the fiduciary duty of the Board of Directors to the
shareholders of BankFirst. Notwithstanding any other provisions hereof, by his
signature to this Agreement each member of the Board of Directors of BankFirst
hereby agrees that he will vote all issued and outstanding shares of voting
capital stock of BankFirst over which he has voting rights in favor of the Plan
of Merger, and will otherwise support approval of the Plan of Merger by
shareholders of BankFirst, and that he will not, prior to the record date for
any vote on the Plan of Merger, convey or otherwise dispose of the right to vote
any such shares.
5.2 Registration Statement; Proxy Statement/Prospectus
As promptly as practicable after the date hereof, BB&T shall prepare and file
the Registration Statement with the Commission. BankFirst will furnish to BB&T
the information required to be included in the Registration Statement with
respect to its business and affairs before it is filed with the Commission and
again before any amendments are filed, and shall have the right to review and
consult with BB&T on the form of, and any characterizations of such information
included in, the Registration Statement prior to the filing with the Commission.
Such Registration Statement, at the time it becomes effective and on the
Effective Time, shall in all material respects conform to the requirements of
the Securities Act and the applicable rules and regulations of the Commission.
The Registration Statement shall include the form of Proxy Statement/Prospectus.
BB&T and BankFirst shall use all reasonable efforts to cause the Proxy
Statement/Prospectus to be approved by the Commission for mailing to the
BankFirst shareholders, and such Proxy Statement/Prospectus shall, on the date
of mailing, conform in all material respects to the requirements of the
Securities Laws and the applicable rules and regulations of the Commission
thereunder. BankFirst shall cause the Proxy Statement/Prospectus to be mailed to
shareholders in accordance with all applicable notice requirements under the
Securities Laws, the TBCA and the rules and regulations of the NYSE.
5.3 Plan of Merger; Reservation of Shares
At the Effective Time, the Merger shall be effected in accordance with the
Plan of Merger. In connection therewith, BB&T acknowledges that it (i) has
adopted the Plan of Merger and (ii) will pay or cause to be paid when due the
Merger Consideration. BB&T has reserved for issuance such number of shares of
BB&T Common Stock as shall be necessary to pay the Merger Consideration and
agrees not to take any action that would cause the aggregate number of
authorized shares of BB&T Common Stock available for issuance hereunder not to
be sufficient to effect the Merger. If at any time the aggregate number of
shares of BB&T Common Stock reserved for issuance hereunder is not sufficient to
effect the Merger, BB&T shall take all appropriate action as may be required to
increase the number of shares of BB&T Common Stock reserved for such purpose.
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5.4 Additional Acts
(a) BankFirst agrees to take such actions requested by BB&T as may be
reasonably necessary to modify the structure of, or to substitute parties to
(so long as such substitute is BB&T or a BB&T Subsidiary) the transactions
contemplated hereby, provided that such modifications do not change the Merger
Consideration or abrogate the covenants and other agreements contained in this
Agreement, including, without limitation, the covenant not to take any action
that would substantially delay or impair the prospects of completing the
Merger pursuant to this Agreement and the Plan of Merger.
(b) As promptly as practicable after the date hereof, BB&T and BankFirst
shall submit notice or applications for prior approval of the transactions
contemplated herein to the Federal Reserve Board and any other federal, state
or local government agency, department or body to which notice is required or
from which approval is required for consummation of the Merger and the other
transactions contemplated hereby. BankFirst and BB&T each represents and
warrants to the other that all information included (or submitted for
inclusion) concerning it, its respective Subsidiaries, and any of its
respective directors, officers and shareholders, shall be true, correct and
complete in all material respects as of the date presented.
5.5 Best Efforts
Each of BB&T and BankFirst shall use, and shall cause each of their
respective Subsidiaries to use, its best efforts in good faith to (i) furnish
such information as may be required in connection with and otherwise cooperate
in the preparation and filing of the documents referred to in Sections 5.2 and
5.4 or elsewhere herein, and (ii) take or cause to be taken all action necessary
or desirable on its part to fulfill the conditions in Article VI, including,
without limitation, executing and delivering, or causing to be executed and
delivered, such representations, certificates and other instruments or documents
as may be reasonably requested by BB&T's legal counsel for such counsel to issue
the opinion contemplated by Section 6.1(e), and to consummate the transactions
herein contemplated at the earliest possible date. Neither BB&T nor BankFirst
shall take, or cause, or to the best of its ability permit to be taken, any
action that would substantially delay or impair the prospects of completing the
Merger pursuant to this Agreement and the Plan of Merger.
5.6 Certain Accounting Matters
BankFirst shall cooperate with BB&T concerning (i) accounting and financial
matters necessary or appropriate to facilitate the Merger (taking into account
BB&T's policies, practices and procedures), including, without limitation,
issues arising in connection with record keeping, loan classification, valuation
adjustments, levels of loan loss reserves and other accounting practices, and
(ii) BankFirst's lending, investment or asset/liability management policies;
provided, that any action taken pursuant to this Section 5.6 shall not be deemed
to constitute or result in the breach of any representation or warranty of
BankFirst contained in this Agreement; provided, however, that BankFirst shall
not be required to alter, amend, modify or change any such policies or practices
until the earlier of (i) such time as BB&T acknowledges to BankFirst or its
legal counsel that all conditions to its obligation to consummate the Merger
have been waived or satisfied (other than the delivery of certificates, opinions
and other instruments and documents to be delivered at Closing or otherwise to
be dated at the Effective Time, the delivery of which shall continue to be a
condition to BB&T's obligation to consummate the Merger) or (ii) immediately
prior to the Effective Time.
5.7 Access to Information
BankFirst and BB&T will each keep the other advised of all material
developments relevant to its business and the businesses of its Subsidiaries and
to consummation of the Merger, and each shall provide to the other, upon
request, reasonable details of any such development. Upon reasonable notice,
BankFirst shall afford to representatives of BB&T access, during normal business
hours during the period prior to the Effective Time, to all of the properties,
books, contracts, commitments and records of BankFirst and the BankFirst
Subsidiaries and, during such period, shall make available all information
concerning their businesses as may be reasonably
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requested. No investigation pursuant to this Section 5.7 shall affect or be
deemed to modify any representation or warranty made by, or the conditions to
the obligations hereunder of, either party hereto. Each party hereto shall, and
shall cause each of its directors, officers, attorneys and advisors to, maintain
the confidentiality of all information obtained hereunder which is not otherwise
publicly disclosed by the other party, said undertakings with respect to
confidentiality to survive any termination of this Agreement pursuant to Section
7.1. In the event of the termination of this Agreement, each party shall return
to the other party upon request all confidential information previously
furnished in connection with the transactions contemplated by this Agreement.
5.8 Press Releases
BB&T and BankFirst shall agree with each other as to the form and substance
of any press release related to this Agreement and the Plan of Merger or the
transactions contemplated hereby and thereby, and consult with each other as to
the form and substance of other public disclosures related thereto; provided,
that nothing contained herein shall prohibit either party, following
notification to the other party, from making any disclosure which in the opinion
of its counsel is required by law.
5.9 Forebearances of BankFirst
Except with the prior written consent of BB&T, between the date hereof and
the Effective Time, BankFirst shall not, and shall cause each of the BankFirst
Subsidiaries not to:
(a) carry on its business other than in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted, or establish
or acquire any new Subsidiary or engage in any new type of activity or expand
any existing activities;
(b) declare, set aside, make or pay any dividend or other distribution in
respect of its capital stock, other than regularly scheduled quarterly
dividends of $.0625 per share payable with respect to BankFirst Preferred
Stock, payable on record dates consistent with past practices; provided that
for the period commencing with the payment date of the last dividend paid
preceding the Closing Date and ending with the Closing Date, the dividend
payable shall be as provided in Section 2.8(e);
(c) issue any shares of its capital stock (including treasury shares),
except pursuant to the Stock Option Plans with respect to the options
outstanding on the date hereof, pursuant to the BB&T Option Agreement, or
pursuant to any conversion of shares of BankFirst Preferred Stock in
accordance with the terms and conditions of such Preferred Stock;
(d) issue, grant or authorize any Rights or effect any recapitalization,
reclassification, stock dividend, stock split or like change in capitalization
other than pursuant to the Stock Option Plans or Plans in existence on the
date hereof, in the ordinary course of business consistent with past
practices; provided, however, that in no event shall Rights to purchase more
than 100,000 shares of the capital stock of BankFirst (subject to adjustment
as may be necessary for organic changes, if any) be granted between the date
hereof and the Effective Time;
(e) amend its Charter or Bylaws;
(f) impose or permit imposition, of any lien, charge or encumbrance on any
share of stock held by it in any BankFirst Subsidiary, or permit any such
lien, charge or encumbrance to exist; or waive or release any material right
or cancel or compromise any debt or claim, in each case other than in the
ordinary course of business;
(g) merge with any other entity or permit any other entity to merge into
it, or consolidate with any other entity; acquire control over any other
entity; or liquidate, sell or otherwise dispose of any assets or acquire any
assets other than in the ordinary course of its business consistent with past
practices;
(h) fail to comply in any material respect with any laws, regulations,
ordinances or governmental actions applicable to it and to the conduct of its
business;
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(i) increase the rate of compensation of any of its directors, officers or
employees (excluding increases in compensation resulting from the exercise of
compensatory stock options outstanding as of the date of this Agreement), or
pay or agree to pay any bonus to, or provide any new employee benefit or
incentive to, any of its directors, officers or employees, except for
increases or payments made in the ordinary course of business consistent with
past practice pursuant to plans or arrangements in effect on the date hereof;
(j) enter into or substantially modify (except as may be required by
applicable law or regulation) any pension, retirement, stock option, stock
purchase, stock appreciation right, savings, profit sharing, deferred
compensation, consulting, bonus, group insurance or other employee benefit,
incentive or welfare contract, plan or arrangement, or any trust agreement
related thereto, in respect of any of its directors, officers or other
employees; provided, however, that this subparagraph shall not prevent renewal
of any of the foregoing consistent with past practice;
(k) solicit or encourage inquiries or proposals with respect to, furnish
any information relating to, or participate in any negotiations or discussions
concerning, any acquisition or purchase of all or a substantial portion of the
assets of, or a substantial equity interest in, BankFirst or any BankFirst
Subsidiary or any business combination with BankFirst or any BankFirst
Subsidiary other than as contemplated by this Agreement; or authorize any
officer, director, agent or affiliate of BankFirst or any BankFirst Subsidiary
to do any of the above; or fail to notify BB&T immediately if any such
inquiries or proposals are received, any such information is requested or
required, or any such negotiations or discussions are sought to be initiated;
provided, that this subsection (k) shall not apply to furnishing information,
negotiations or discussions with the offeror following an unsolicited offer
if, as a result of such offer, BankFirst is advised in writing by legal
counsel that in its opinion the failure to so furnish information or negotiate
would likely constitute a breach of the fiduciary duty of BankFirst's Board of
Directors to the BankFirst shareholders;
(l) enter into (i) any material agreement, arrangement or commitment not
made in the ordinary course of business, (ii) any agreement, indenture or
other instrument not made in the ordinary course of business relating to the
borrowing of money by BankFirst or a BankFirst Subsidiary or guarantee by
BankFirst or a BankFirst Subsidiary of any obligation, (iii) any agreement,
arrangement or commitment relating to the employment or severance of a
consultant or the employment, severance, election or retention in office of
any present or former director, officer or employee (this clause shall not
apply to the election of directors by shareholders or the reappointment of
officers in the normal course), or (iv) any contract, agreement or
understanding with a labor union;
(m) change its lending, investment or asset liability management policies
in any material respect, except as may be required by applicable law,
regulation, or directives, and except that after approval of the Agreement and
the Plan of Merger by its shareholders and after receipt of the requisite
regulatory approvals for the transactions contemplated by this Agreement and
the Plan of Merger, BankFirst shall cooperate in good faith with BB&T to adopt
policies, practices and procedures consistent with those utilized by BB&T,
effective on or before the Closing Date;
(n) change its methods of accounting in effect at December 31, 1999, except
as required by changes in GAAP concurred in by BB&T, which concurrence shall
not be unreasonably withheld, or change any of its methods of reporting income
and deductions for federal income tax purposes from those employed in the
preparation of its federal income tax returns for the year ended December 31,
1999, except as required by changes in law or regulation;
(o) with the exception of the capital expenditures which are reasonably
necessary to be incurred in connection with the three branch offices under
construction on the date hereof, incur any commitments for capital
expenditures or obligation to make capital expenditures in excess of $25,000,
for any one expenditure, or $100,000, in the aggregate;
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(p) incur any indebtedness other than deposits from customers, advances
from the Federal Home Loan Bank or Federal Reserve Bank and reverse repurchase
arrangements in the ordinary course of business;
(q) take any action which would or could reasonably be expected to (i)
cause the Merger not to constitute a reorganization under Section 368 of the
Code as determined by BB&T, (ii) result in any inaccuracy of a representation
or warranty herein which would allow for a termination of this Agreement, or
(iii) cause any of the conditions precedent to the transactions contemplated
by this Agreement to fail to be satisfied;
(r) dispose of any material assets other than in the ordinary course of
business; or
(s) agree to do any of the foregoing.
5.10 Employment Agreements
BB&T (or its specified BB&T Subsidiary) agrees to enter into employment
agreements with Xxxx X. Xxxxxx, substantially in the form of Annex B hereto,
with R. Xxxxxxx Xxxxxx substantially in the form of Annex C hereto, and with
Xxxxx X. Xxxxxx, C. Xxxxx Xxxxx, Xxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx and L.Xxxxx
Xxxxxxxx substantially in the form of Annex D hereto.
5.11 Affiliates
BankFirst shall use its best efforts to cause all persons who are Affiliates
of BankFirst to deliver to BB&T promptly following execution of this Agreement a
written agreement providing that such person will not dispose of BB&T Common
Stock received in the Merger, except in compliance with the Securities Act and
the rules and regulations promulgated thereunder, and in any event shall use its
best efforts to cause such affiliates to deliver to BB&T such written agreement
prior to the Closing Date.
5.12 Section 401(k) Plan; Other Employee Benefits
(a) Effective on the Benefit Plan Determination Date with respect to the
401(k) plan of BankFirst, BB&T shall cause such plan to be merged with the
401(k) plan maintained by BB&T and the BB&T Subsidiaries, or to be frozen or
to be terminated, in each case as determined by BB&T and subject to the
receipt of all applicable regulatory or governmental approvals. Each employee
of BankFirst at the Effective Time (i) who is a participant in the 401(k) plan
of BankFirst, (ii) who becomes an employee immediately following the Effective
Time of BB&T or of any subsidiary of BB&T ("Employer Entity"), and (iii) who
continues in the employment of an Employer Entity until the Benefit Plan
Determination Date, shall be eligible to participate in BB&T's 401(k) plan as
of the Benefit Plan Determination Date. Any other former employee of BankFirst
who is employed by an Employer Entity on or after the Benefit Plan
Determination Date shall be eligible to be a participant in the BB&T 401(k)
plan upon complying with eligibility requirements. All rights to participate
in BB&T's 401(k) plan are subject to BB&T's right to amend or terminate the
plan. Until the Benefit Plan Determination Date, BB&T shall continue in effect
for the benefit of participating employees the Section 401(k) plan of
BankFirst. For purposes of administering BB&T's 401(k) plan, service with
BankFirst and the BankFirst Subsidiaries shall be deemed to be service with
BB&T for participation and vesting purposes, but not for purposes of benefit
accrual. Each employee of BankFirst or a BankFirst Subsidiary at the Effective
Time who becomes an employee immediately following the Effective Time of an
Employer Entity is referred to herein as a "Transferred Employee".
(b) Each Transferred Employee shall be eligible to participate in group
hospitalization, medical, dental, life, disability and other welfare benefit
plans and programs available to employees of the Employer Entity, subject to
the terms of such plans and programs, as of the Benefit Plan Determination
Date with respect to each such plan or program, conditional upon the
Transferred Employee's being employed by an Employer Entity as of such Benefit
Plan Determination Date and subject to complying
26
with eligibility requirements of the respective plans and programs. BB&T's
plans shall recognize and give credit under such BB&T plans to each
Transferred Employee for any payments made by such Transferred Employee of
deductible amounts and for payments made by such Transferred Employee
applicable to out-of-pocket maximum obligations under the BankFirst Plans.
With respect to health care coverages, participation in BB&T's plans may be
subject to availability of HMO options. In any case in which HMO coverage is
not available, substitute coverage will be provided which may not be fully
comparable to the HMO coverage. With respect to any welfare benefit plan or
program of BankFirst which the Employer Entity determines, in its sole
discretion, provides benefits of the same type or class as a corresponding
plan or program maintained by the Employer Entity, the Employer Entity shall
continue such BankFirst plan or program in effect for the benefit of the
Transferred Employees so long as they remain eligible to participate and until
they shall become eligible to become participants in the corresponding plan or
program maintained by the Employer Entity (and, with respect to any such plan
or program, subject to complying with eligibility requirements and subject to
the right of the Employer Entity to terminate such plan or program). For
purposes of administering the welfare plans and programs subject to this
Section 5.12(b), service with BankFirst shall be deemed to be service with the
Employer Entity for the purpose of determining eligibility to participate and
vesting (if applicable) in such welfare plans and programs, but not for the
purpose of computing benefits, if any, determined in whole or in part with
reference to service (except as otherwise provided in (c) below).
(c) Except to the extent of commitments herein or other contractual
commitments, if any, specifically made or assumed hereunder by BB&T, neither
BB&T nor any Employer Entity shall have any obligation arising from the Merger
to continue any Transferred Employees in its employ or in any specific job or
to provide to any Transferred Employee any specified level of compensation or
any incentive payments, benefits or perquisites. Each Transferred Employee who
is terminated by an Employer Entity subsequent to the Effective Time,
excluding any employee who has a then existing contract providing for
severance, shall be entitled to severance pay in accordance with the general
severance policy maintained by BB&T, if and to the extent that such employee
is entitled to severance pay under such policy. Such employee's service with
BankFirst or a BankFirst Subsidiary shall be treated as service with BB&T for
purposes of determining the amount of severance pay, if any, under BB&T's
severance policy.
(d) BB&T agrees to honor all employment agreements, severance agreements
and deferred compensation agreements that BankFirst and the BankFirst
Subsidiaries have with their current and former employees and directors and
which have been Disclosed to BB&T pursuant to this Agreement, except to the
extent any such agreements shall be superseded or terminated at the Closing or
following the Closing Date. Except for the agreements described in the
preceding sentence and except as otherwise provided in this Section 5.12, the
employee benefit plans of BankFirst shall, in the sole discretion of BB&T, be
frozen, terminated or merged into comparable plans of BB&T, effective as BB&T
shall determine in its sole discretion.
5.13 Directors and Officers Protection
BB&T or a BB&T Subsidiary shall provide and keep in force for a period of
three years after the Effective Time directors' and officers' liability
insurance providing coverage to directors and officers of BankFirst for acts or
omissions occurring prior to the Effective Time. Such insurance shall provide at
least the same coverage and amounts as contained in BankFirst's policy on the
date hereof; provided, that in no event shall the annual premium on such policy
exceed 150% of the annual premium payments on BankFirst's policy in effect as of
the date hereof (the "Maximum Amount"). If the amount of the premiums necessary
to maintain or procure such insurance coverage exceeds the Maximum Amount, BB&T
shall use its reasonable efforts to maintain the most advantageous policies of
directors' and officers' liability insurance obtainable for a premium equal to
the Maximum Amount. Notwithstanding the foregoing, BB&T further agrees to
indemnify all individuals who are or have been officers, directors or employees
of BankFirst or any BankFirst Subsidiary prior to the Effective Time from any
acts or omissions in such capacities prior to the Effective Time, to the extent
that such indemnification is provided pursuant to the Charter or Bylaws of
BankFirst on the date hereof and is permitted under the NCBCA to the fullest
lawful extent.
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5.14 Forbearances of BB&T
Except with the prior written consent of BankFirst, which consent shall not
be arbitrarily or unreasonably withheld, between the date hereof and the
Effective Time neither BB&T nor any BB&T Subsidiary shall take any action which
would or might be expected to (i) cause the business combination contemplated
hereby not to constitute a reorganization under Section 368 of the Code; (ii)
result in any inaccuracy of a representation or warranty herein which would
allow for termination of this Agreement; (iii) cause any of the conditions
precedent to the transactions contemplated by this Agreement to fail to be
satisfied; (iv) exercise the BB&T Option Agreement other than in accordance with
its terms, or dispose of the shares of BankFirst Common Stock issuable upon
exercise of the option rights conferred thereby other than as permitted by the
terms thereof; or (v) fail to comply in any material respect with any laws,
regulations, ordinances or governmental actions applicable to it and to the
conduct of its business.
5.15 Reports
Each of BankFirst and BB&T shall file (and shall cause the BankFirst
Subsidiaries and the BB&T Subsidiaries, respectively, to file), between the date
of this Agreement and the Effective Time, all reports required to be filed by it
with the Commission and any other regulatory authorities having jurisdiction
over such party, and shall deliver to BB&T or BankFirst, as the case may be,
copies of all such reports promptly after the same are filed. If financial
statements are contained in any such reports filed with the Commission, such
financial statements will fairly present the consolidated financial position of
the entity filing such statements as of the dates indicated and the consolidated
results of operations, changes in shareholders' equity, and cash flows for the
periods then ended in accordance with GAAP (subject in the case of interim
financial statements to the absence of notes and to normal recurring year-end
adjustments that are not material). As of their respective dates, such reports
filed with the Commission will comply in all material respects with the
Securities Laws and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Any financial statements contained in any other
reports to a regulatory authority other than the Commission shall be prepared in
accordance with requirements applicable to such reports.
5.16 Exchange Listing
BB&T shall use its reasonable best efforts to list, prior to the Effective
Time, on the NYSE, subject to official notice of issuance, the shares of BB&T
Common Stock to be issued to the holders of BankFirst Common Stock pursuant to
the Merger, and BB&T shall give all notices and make all filings with the NYSE
required in connection with the transactions contemplated herein.
5.17 Advisory Boards
As of the Effective Time, BB&T shall offer to the members of the Board of
Directors of BankFirst a seat on the BB&T Advisory Board for the BB&T Community
Bank region based in Knoxville, Tennessee. For two years following the Effective
Time, the Advisory Board members appointed pursuant to this Section 5.17 and who
continue to serve shall receive, as compensation for service on the Advisory
Board, Advisory Board member's fees (annual retainer and attendance fees) equal
in amount each year (prorated for any partial year) to the annual retainer and
schedule of attendance fees for directors of BankFirst in effect on August 1,
2000. Following such two-year period, Advisory Board Members, if they continue
to serve in such capacity, shall receive fees in accordance with BB&T's standard
schedule of fees for service thereon as in effect from time to time. For two
years after the Effective Time, no such Advisory Board member shall be
prohibited from serving thereon because he or she shall have attained the
maximum age for service thereon (currently age 70). Membership of any person on
any Advisory Board shall be conditional upon execution of an agreement providing
that such person will not engage in activities competitive with BB&T for two
years following the Effective Time or, if longer, the period that he or she is a
member of the Advisory Board.
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5.18 Board of Directors of Branch Banking and Trust Company
As of the Effective Time, Branch Banking and Trust Company, a North Carolina
banking corporation, shall elect Xxxxx X. Xxxxxxx to its Board of Directors, to
serve until its next annual meeting (subject to the right of removal for cause)
and thereafter so long as he is elected and qualifies. Any member of such Board
of Directors who is not an employee of BB&T or any of its Affiliates shall be
entitled to receive fees for service on the Board in accordance with BB&T's
policies as in effect from time to time.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent--BB&T and BankFirst
The respective obligations of BB&T and BankFirst to effect the transactions
contemplated by this Agreement shall be subject to satisfaction or waiver of the
following conditions at or prior to the Effective Time:
(a) All corporate action necessary to authorize the execution, delivery and
performance of this Agreement and the Plan of Merger, and consummation of the
transactions contemplated hereby and thereby, shall have been duly and validly
taken, including, without limitation, the approval of the shareholders of
BankFirst of the Agreement and the Plan of Merger;
(b) The Registration Statement (including any post-effective amendments
thereto) shall be effective under the Securities Act, no "stop order" or like
proceedings shall be pending or to the Knowledge of BB&T threatened by the
Commission to suspend the effectiveness of such Registration Statement and the
BB&T Common Stock to be issued as contemplated in the Plan of Merger shall
have either been registered or be subject to exemption from registration under
applicable state securities laws;
(c) The parties shall have received all regulatory consents and approvals
required in connection with the transactions contemplated by this Agreement
and the Plan of Merger, all notice periods and waiting periods with respect to
such approvals shall have passed and all such approvals shall be in effect;
(d) None of BB&T, any of the BB&T Subsidiaries, BankFirst or any of the
BankFirst Subsidiaries shall be subject to any order, decree or injunction of
a court or agency of competent jurisdiction which enjoins or prohibits
consummation of the transactions contemplated by this Agreement (provided,
however, that the parties shall use their commercially reasonable efforts to
have any such court or agency order, decree or injunction vacated, reversed or
removed); and
(e) BankFirst and BB&T shall have received an opinion of BB&T's legal
counsel, in form and substance satisfactory to BankFirst and BB&T, to the
effect that the Merger will constitute a reorganization under Section 368 of
the Code and that the shareholders of BankFirst will not recognize any gain or
loss to the extent that such shareholders exchange shares of BankFirst Common
Stock or BankFirst Preferred Stock for shares of BB&T Common Stock.
6.2 Conditions Precedent--BankFirst
The obligations of BankFirst to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction of the following additional
conditions at or prior to the Effective Time, unless waived by BankFirst
pursuant to Section 7.4:
(a) All representations and warranties of BB&T shall be evaluated as of the
date of this Agreement and as of the Effective Time as though made on and as
of the Effective Time (or on the date designated in the case of any
representation and warranty which specifically relates to an earlier date),
except as otherwise contemplated by this Agreement or consented to in writing
by BankFirst. The representations
29
and warranties of BB&T set forth in Sections 4.1, 4.2 (except as relates to
qualification), 4.3(a), 4.3(b)(i) and 4.4 (except as relates to qualification)
shall be true and correct (except for inaccuracies which are de minimus).
There shall not exist inaccuracies in the representations and warranties of
BB&T set forth in this Agreement (including the representations and warranties
set forth in Sections 4.1, 4.2, 4.3(a), 4.3(b)(i) and 4.4) such that the
aggregate effect of such inaccuracies has, or is reasonably likely to have, a
Material Adverse Effect on BB&T.
(b) BB&T shall have performed in all material respects all obligations and
complied in all material respects with all covenants required by this
Agreement.
(c) BB&T shall have delivered to BankFirst a certificate, dated the Closing
Date and signed by its Chairman or President or an Executive Vice President,
to the effect that the conditions set forth in Sections 6.1(a), 6.1(b),
6.1(c), 6.1(d), 6.2(a) and 6.2(b), to the extent applicable to BB&T, have been
satisfied and that there are no actions, suits, claims, governmental
investigations or procedures instituted, pending or, to the best of such
officer's knowledge, threatened that reasonably may be expected to have a
Material Adverse Effect on BB&T or that present a claim to restrain or
prohibit the transactions contemplated herein or in the Plan of Merger.
(d) BankFirst shall have received opinions of counsel to BB&T in the form
reasonably acceptable to BankFirst's legal counsel.
(e) The shares of BB&T Common Stock issuable pursuant to the Merger shall
have been approved for listing on the NYSE, subject to official notice of
issuance.
6.3 Conditions Precedent--BB&T
The obligations of BB&T to effect the transactions contemplated by this
Agreement shall be subject to satisfaction of the following additional
conditions at or prior to the Effective Time, unless waived by BB&T pursuant to
Section 7.4:
(a) All representations and warranties of BankFirst shall be evaluated as
of the date of this Agreement and as of the Effective Time as though made on
and as of the Effective Time (or on the date designated in the case of any
representation and warranty which specifically relates to an earlier date),
except as otherwise contemplated by this Agreement or consented to in writing
by BB&T. The representations and warranties of BankFirst set forth in Sections
3.1, 3.2 (except the last sentence thereof), 3.3, 3.4 (except the last
sentence thereof), 3.5(a), 3.5(b)(i), 3.23 and 3.24 shall be true and correct
(except for inaccuracies which are de minimis). There shall not exist
inaccuracies in the representations and warranties of BankFirst set forth in
this Agreement (including the representations and warranties set forth in the
Sections designated in the preceding sentence) such that the effect of such
inaccuracies individually or in the aggregate has, or is reasonably likely to
have, a Material Adverse Effect on BankFirst and the BankFirst Subsidiaries
taken as a whole.
(b) No regulatory approval shall have imposed any condition or requirement
which, in the reasonable opinion of the Board of Directors of BB&T, would so
materially adversely affect the business or economic benefits to BB&T of the
transactions contemplated by this Agreement as to render consummation of such
transactions inadvisable or unduly burdensome.
(c) BankFirst shall have performed in all material respects all obligations
and complied in all material respects with all covenants required by this
Agreement.
(d) BankFirst shall have delivered to BB&T a certificate, dated the Closing
Date and signed by its Chairman or President, to the effect that the
conditions set forth in Sections 6.1(a), 6.1(c), 6.3(a) and 6.3(c), to the
extent applicable to BankFirst, have been satisfied and that there are no
actions, suits, claims, governmental investigations or procedures instituted,
pending or, to the best of such officer's knowledge, threatened that
reasonably may be expected to have a Material Adverse Effect on BankFirst or
that present a claim to restrain or prohibit the transactions contemplated
herein or in the Plan of Merger.
30
(e) BB&T shall have received opinions of counsel to BankFirst in the form
reasonably acceptable to BB&T's legal counsel.
(f) BB&T shall have received the written agreements from Affiliates as
specified in Section 5.11 to the extent necessary, in the reasonable judgment
of BB&T, to promote compliance with Rule 145 promulgated by the Commission.
(g) BB&T shall have received Employment Agreements substantially in the
form of Annex B executed by Xxxx X. Xxxxxx and of Annex C executed by R.
Xxxxxxx Xxxxxx.
ARTICLE VII
TERMINATION, WAIVER AND AMENDMENT
7.1 Termination
This Agreement may be terminated:
(a) At any time prior to the Effective Time, by the mutual consent in
writing of the parties hereto.
(b) At any time prior to the Effective Time, by either party (i) in the
event of a material breach by the other party of any covenant or agreement
contained in this Agreement, or (ii) in the event of an inaccuracy of any
representation or warranty of the other party contained in this Agreement,
which inaccuracy would provide the nonbreaching party the ability to refuse to
consummate the Merger under the applicable standard set forth in Section
6.2(a) in the case of BankFirst and Section 6.3(a) in the case of BB&T; and,
in the case of (i) or (ii), if such breach or inaccuracy has not been cured by
the earlier of thirty days following written notice of such breach to the
party committing such breach or the Effective Time.
(c) At any time prior to the Effective Time, by either party hereto in
writing, if any of the conditions precedent to the obligations of the other
party to consummate the transactions contemplated hereby cannot be satisfied
or fulfilled prior to the Closing Date, and the party giving the notice is not
in material breach of any of its representations, warranties, covenants or
undertakings herein.
(d) At any time, by either party hereto in writing, if any of the
applications for prior approval referred to in Section 5.4 are denied, and the
time period for appeals and requests for reconsideration has run.
(e) At any time, by either party hereto in writing, if the shareholders of
BankFirst do not approve the Agreement and the Plan of Merger.
(f) At any time following March 31, 2001 by either party hereto in writing,
if the Effective Time has not occurred by the close of business on such date,
and the party giving the notice is not in material breach of any of its
representations, warranties, covenants or undertakings herein.
(g) At any time, by either party hereto in writing, if an order, decree or
injunction is imposed by a court or agency of competent jurisdiction which
enjoins or prohibits consummation of the transactions contemplated by this
Agreement, after commercially reasonable steps have been taken by the parties
hereto to have such order, decree or injunction vacated, reversed or removed
but such order, decree or injunction is not successfully vacated, reversed or
removed and becomes non-appealable and final.
7.2 Effect of Termination
In the event this Agreement and the Plan of Merger is terminated pursuant to
Section 7.1, both this Agreement and the Plan of Merger shall become void and
have no effect, except that (i) the provisions hereof
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relating to confidentiality and expenses set forth in Sections 5.7 and 8.1,
respectively, shall survive any such termination and (ii) a termination pursuant
to Section 7.1(b) shall not relieve the breaching party from liability for a
breach of the covenant, agreement, representation or warranty giving rise to
such termination. The BB&T Option Agreement shall be governed by its own terms.
7.3 Survival of Representations, Warranties and Covenants
All representations, warranties and covenants in this Agreement or the Plan
of Merger or in any instrument delivered pursuant hereto or thereto shall expire
on, and be terminated and extinguished at, the Effective Time, other than
covenants that by their terms are to be performed after the Effective Time
(including Sections 5.13 and 5.17); provided that no such representations,
warranties or covenants shall be deemed to be terminated or extinguished so as
to deprive BB&T or BankFirst (or any director, officer or controlling person
thereof) of any defense at law or in equity which otherwise would be available
against the claims of any person, including, without limitation, any shareholder
or former shareholder of either BB&T or BankFirst, the aforesaid
representations, warranties and covenants being material inducements to
consummation by BB&T and BankFirst of the transactions contemplated herein.
7.4 Waiver
Except with respect to any required regulatory approval or other condition
required by law, each party hereto, by written instrument signed by an executive
officer of such party, may at any time (whether before or after approval of the
Agreement and the Plan of Merger by the BankFirst shareholders) extend the time
for the performance of any of the obligations or other acts of the other party
hereto and may waive (i) any inaccuracies of the other party in the
representations or warranties contained in this Agreement, the Plan of Merger or
any document delivered pursuant hereto or thereto, (ii) compliance with any of
the covenants, undertakings or agreements of the other party, or satisfaction of
any of the conditions precedent to its obligations, contained herein or in the
Plan of Merger, or (iii) the performance by the other party of any of its
obligations set out herein or therein; provided that no such extension or
waiver, or amendment or supplement pursuant to this Section 7.4, executed after
approval by the BankFirst shareholders of this Agreement and the Plan of Merger,
shall reduce either the Common Exchange Ratio, the Preferred Exchange Ratio or
the payment terms for fractional interests.
7.5 Amendment or Supplement
This Agreement or the Plan of Merger may be amended or supplemented at any
time in writing by mutual agreement of BB&T and BankFirst, subject to the
proviso to Section 7.4.
ARTICLE VIII
MISCELLANEOUS
8.1 Expenses
Each party hereto shall bear and pay all costs and expenses incurred by it in
connection with the transactions contemplated by this Agreement, including,
without limitation, fees and expenses of its own financial consultants,
accountants and counsel; provided, however, that the filing fees and printing
costs incurred in connection with the Registration Statement and the Proxy
Statement/Prospectus shall be borne 50% by BB&T and 50% by BankFirst.
8.2 Entire Agreement
This Agreement, including the documents and other writings referenced herein
or delivered pursuant hereto, contains the entire agreement between the parties
with respect to the transactions contemplated
32
hereunder and thereunder and supersedes all arrangements or understandings with
respect thereto, written or oral, entered into on or before the date hereof. The
terms and conditions of this Agreement and the BB&T Option Agreement shall inure
to the benefit of and be binding upon the parties hereto and thereto and their
respective successors. Nothing in this Agreement or the BB&T Option Agreement,
expressed or implied, is intended to confer upon any party, other than the
parties hereto and thereto, and their respective successors, any rights,
remedies, obligations or liabilities, except for the rights of directors and
officers of BankFirst to enforce rights in Sections 5.13 and 5.17.
8.3 No Assignment
Except for a substitution of parties pursuant to Section 5.4(a), none of the
parties hereto may assign any of its rights or obligations under this Agreement
to any other person, except upon the prior written consent of each other party.
8.4 Notices
All notices or other communications which are required or permitted hereunder
shall be in writing and sufficient if delivered personally or sent by nationally
recognized overnight express courier or by facsimile transmission, addressed or
directed as follows:
If to BankFirst:
BankFirst Corporation
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxx X. Xxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
With a required copy to:
Xxxxxx X. Xxxxxxx
Suite 1710, Plaza Tower
000 X. Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
If to BB&T:
Xxxxx X. Xxxx
000 Xxxxx Xxxxxxxxx Xxxx
0xx Xxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Telephone: 000-000-0000
Fax: 000-000-0000
With a required copy to:
Xxxxxxx X. Xxxxx, XX
Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Telephone: 000-000-0000
Fax: 000-000-0000
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Any party may by notice change the address to which notice or other
communications to it are to be delivered.
8.5 Specific Performance
BankFirst acknowledges that the BankFirst Common Stock and the BankFirst
business and assets are unique, and that if BankFirst fails to consummate the
transactions contemplated by this Agreement such failure will cause irreparable
harm to BB&T for which there will be no adequate remedy at law, BB&T shall be
entitled, in addition to its other remedies at law, to specific performance of
this Agreement if BankFirst shall, without cause, refuse to consummate the
transactions contemplated by this Agreement.
8.6 Captions
The captions and section and descriptive headings contained in this Agreement
are for reference only and are not part of this Agreement.
8.7 Counterparts
This Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one and the same agreement.
8.8 Governing Law
This Agreement shall be governed by and construed in accordance with the laws
of the State of North Carolina, without regard to the principles of conflicts of
laws, except to the extent federal law may be applicable.
8.9 Severability
If any term or other provision of this Agreement is held invalid, illegal or
incapable of being enforced by any rule of law or public policy by a court of
competent jurisdiction, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner, to the end
that the transactions contemplated hereby are fulfilled to the extent possible.
[remainder of page intentionally left blank]
34
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have caused this Agreement to be executed in counterparts by their duly
authorized officers, all as of the day and year first above written.
BB&T CORPORATION
By: /s/ Xxxx X. Xxxxxxx, XX
-----------------------------------
Name: Xxxx X. Xxxxxxx, XX
Title: Chairman and Chief
Executive Officer
BANKFIRST CORPORATION
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: President & CEO
The undersigned each hereby agrees to comply with the provisions of Section
5.1 of the foregoing Agreement as specifically applicable to him.
/s/ Xxxxx X. Xxxxxxx
--------------------------------------
Xxxxx X. Xxxxxxx
/s/ C. Xxxxxx Xxxx
--------------------------------------
C. Xxxxxx Xxxx
/s/ Xxxx X. Xxxxxx
--------------------------------------
Xxxx X. Xxxxxx
/s/ C. Xxxxx Xxxxxxxx, Xx.
--------------------------------------
C. Xxxxx Xxxxxxxx, Xx.
/s/ Xxxxxxx X. Xxxx, Xx.
--------------------------------------
Xxxxxxx X. Xxxx, Xx.
/s/ X. X. Xxxxxxx, Xx.
--------------------------------------
X. X. Xxxxxxx, Xx.
/s/ X. X. Xxxxxx, Jr.
--------------------------------------
X. X. Xxxxxx, Jr.
/s/ Xxxxxxxx X. Xxxxxxx
--------------------------------------
Xxxxxxxx X. Xxxxxxx
35
ARTICLES OF MERGER
OF
BANKFIRST CORPORATION
WITH AND INTO
BB&T CORPORATION
The undersigned corporations, pursuant to Section 00-00-000 of the Tennessee
Business Corporation Act ("TBCA") and Section 55-11-05 of the North Carolina
Business Corporation Act ("NCBCA"), hereby execute the following Articles of
Merger.
ONE
The merger of BankFirst Corporation, a Tennessee corporation ("BankFirst"),
with and into BB&T Corporation, a North Carolina corporation ("BB&T"), shall be
in accordance with the Plan of Merger attached hereto as Exhibit I-NC (the "Plan
of Merger").
TWO
The Plan of Merger was submitted to the shareholders of BankFirst by its
Board of Directors in accordance with the provisions of Section 00-00-000 of the
TBCA and 55-11-03 of the NCBCA and was duly approved in the manner prescribed by
law by the shareholders of BankFirst on the day of
, 200 . The shareholders of BB&T were not required to approve the
Plan of Merger.
THREE
These Articles of Merger shall become effective at 11:59 p.m. on
, 2001.
[Remainder of Page Intentionally Left Blank]
36
The undersigned, each of BB&T and BankFirst, declares the facts herein stated
are true as of , 2001.
BB&T CORPORATION
By: _________________________________
Name: ____________________________
Title: ___________________________
BANKFIRST CORPORATION
By: _________________________________
Name: ____________________________
Title: ___________________________
37
ANNEX A
PLAN OF MERGER
OF
BANKFIRST CORPORATION
WITH AND INTO
BB&T CORPORATION
Section 1. Corporations Proposing to Merge and Surviving Corporation.
BankFirst Corporation, a Tennessee corporation ("BankFirst"), shall be merged
(the "Merger") with and into BB&T Corporation, a North Carolina corporation
("BB&T"), pursuant to the terms and conditions of this Plan of Merger (the "Plan
of Merger") and of the Agreement and Plan of Reorganization, dated as of August
22, 2000 (the "Agreement"), by and among BankFirst and BB&T. The effective time
for the Merger (the "Effective Time") shall be set forth in the Articles of
Merger to be filed with the Office of the Secretary of State of North Carolina
and with the Secretary of the State of Tennessee. BB&T shall continue as the
surviving corporation (the "Surviving Corporation") in the Merger and the
separate corporate existence of BankFirst shall cease.
Section 2. Effects of the Merger. The Merger shall have the effects set forth
in Section 00-00-000 of the Business Corporation Act of the State of Tennessee
(the "TBCA") and in Section 55-11-06 of the North Carolina Business Corporation
Act (the "NCBCA").
Section 3. Articles of Incorporation and Bylaws. The Articles of
Incorporation and the Bylaws of BB&T as in effect immediately prior to the
Effective Time shall remain in effect as the Articles of Incorporation and
Bylaws of the Surviving Corporation following the Effective Time until changed
in accordance with their terms and the NCBCA.
Section 4. Conversion of Shares; Payment of Merger Consideration
(a) At the Effective Time, by virtue of the Merger and without any action
on the part of BankFirst or the holders of record of the voting common stock,
par value $2.50 per share, of BankFirst ("BankFirst Common Stock"), or of the
nonvoting preferred stock, par value $5.00 per share, of BankFirst ("BankFirst
Preferred Stock") each share of BankFirst Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into and shall
represent the right to receive, upon surrender of the certificate representing
such share of BankFirst Common Stock or BankFirst Preferred Stock (as provided
in Section 4(d)), the Merger Consideration.
(b) Each share of the voting common stock of BB&T, par value $5.00 per
share, with rights attached issued pursuant to Rights Agreement dated December
17, 1996 between BB&T and Branch Banking and Trust Company, as Rights Agent,
relating to BB&T's Series B Junior Participating Preferred Stock, $5.00 par
value per share ("BB&T Common Stock") issued and outstanding immediately prior
to the Effective Time shall continue to be issued and outstanding.
(c) Until surrendered, each outstanding certificate which prior to the
Effective Time represented one or more shares of BankFirst Common Stock or
BankFirst Preferred Stock shall be deemed upon the Effective Time for all
purposes to represent only the right to receive the Merger Consideration and
any declared and unpaid dividends (with respect to BankFirst Common Stock) or
accrued and unpaid dividends (with respect to BankFirst Preferred Stock). No
interest will be paid or accrued on the Merger Consideration upon the
surrender of the certificate or certificates representing shares of BankFirst
Common Stock or BankFirst Preferred Stock. With respect to any certificate for
BankFirst Common Stock or Bank First Preferred Stock that has been lost or
destroyed, BB&T shall pay the Merger Consideration attributable to such
certificate upon receipt of a surety bond or other adequate indemnity as
required in accordance with BB&T's standard policy, and evidence reasonably
satisfactory to BB&T of ownership of the shares represented thereby. After the
Effective Time, BankFirst's transfer books shall be closed and no transfer of
the shares of BankFirst Common Stock or BankFirst Preferred Stock outstanding
immediately prior to the Effective Time shall be made on the stock transfer
books of the Surviving Corporation.
1
(d) Promptly after the Effective Time, BB&T shall cause to be delivered or
mailed to each BankFirst shareholder a form of letter of transmittal and
instructions for use in effecting the surrender of the certificates which,
immediately prior to the Effective Time, represented any shares of BankFirst
Common Stock or BankFirst Preferred Stock. Upon surrender of such certificates
or other evidence of ownership meeting the requirements of Section 4(c),
together with such letter of transmittal duly executed and completed in
accordance with the instructions thereto, and such other documents as may be
reasonably requested, BB&T shall promptly cause the transfer to the persons
entitled thereto of the Merger Consideration and any declared and unpaid
dividends (with respect to BankFirst Common Stock) or accrued and unpaid
dividends (with respect to BankFirst Preferred Stock).
(e) The Surviving Corporation shall pay any dividends or other
distributions with a record date prior to the Effective Time which have been
declared or made by BankFirst in respect of shares of BankFirst Common Stock
in accordance with the terms of the Agreement and which remain unpaid at the
Effective Time, subject to compliance by BankFirst with Section 5.9(b) of the
Agreement. At the time of the Closing and incident thereto, BankFirst shall
pay a per share dividend in respect of shares of BankFirst Preferred Stock
equal to the product of $.0625 times a fraction, the numerator of which is the
number of days following the payment date of the BankFirst Preferred Stock
dividend preceding the Closing Date and the denominator of which is 91. Such
payment shall constitute the sole right of the holders of the BankFirst
Preferred Stock to a dividend with respect to such BankFirst Preferred Stock.
To the extent permitted by law, former shareholders of record of BankFirst
shall be entitled to vote after the Effective Time at any meeting of BB&T
shareholders the number of whole shares of BB&T Common Stock into which their
respective shares of BankFirst Common Stock or BankFirst Preferred Stock are
converted, regardless of whether such holders have exchanged their
certificates representing BankFirst Common Stock or BankFirst Preferred Stock
for certificates representing BB&T Common Stock in accordance with the
provisions of the Agreement. Whenever a dividend or other distribution is
declared by BB&T on the BB&T Common Stock, the record date for which is at or
after the Effective Time, the declaration shall include dividends or other
distributions on all shares of BB&T Common Stock issuable pursuant to the
Agreement, but no dividend or other distribution payable to the holders of
record of BB&T Common Stock as of any time subsequent to the Effective Time
shall be delivered to the holder of any certificate representing BankFirst
Common Stock or BankFirst Preferred Stock until such holder surrenders such
certificate for exchange as provided in this Section 4. Upon surrender of such
certificate, both the BB&T Common Stock certificate and any undelivered
dividends and cash payments payable hereunder (without interest) shall be
delivered and paid with respect to the shares of BankFirst Common Stock or
BankFirst Preferred Stock represented by such certificate.
Section 5. Merger Consideration
As used herein, the term "Merger Consideration" shall mean the number of
shares of BB&T Common Stock (to the nearest one-hundredth of a share) to be
exchanged for each share of BankFirst Common Stock or BankFirst Preferred Stock
issued and outstanding as of the Effective Time and cash (without interest) to
be payable in exchange for any fractional share of BB&T Common Stock which would
otherwise be distributable to a BankFirst shareholder as provided in Section
4(d), determined as follows:
(a) The number of shares of BB&T Common Stock to be issued for each issued
and outstanding share of BankFirst Common Stock shall be in the ratio of .4554
shares of BB&T Common Stock for each share of BankFirst Common Stock (the
"Common Exchange Ratio"); and the number of shares of BB&T Common Stock to be
issued for each issued and outstanding share of BankFirst Preferred Stock
shall be in the ratio of 1.4060 shares of BB&T Common Stock for each share of
BankFirst Preferred Stock (the "Preferred Exchange Ratio").
(b) The amount of cash payable with respect to any fractional share of BB&T
Common Stock shall be determined by multiplying the fractional part of such
share by the Closing Value. The "Closing Value" shall mean the 4:00 p.m.
eastern time closing price per share of BB&T Common Stock on the NYSE on the
Closing Date as reported on XXXXxxx.xxx.
2
Section 6. Conversion of Stock Options
(a) At the Effective Time, each option granted under BankFirst's Incentive
Stock Option Plan dated October 11, 1995 (the "Stock Option Plan") to acquire
shares of BankFirst Common Stock then outstanding (and which by its terms does
not lapse on or before the Effective Time), whether or not then exercisable (a
"Stock Option"), shall be converted into and become rights with respect to
BB&T Common Stock, and BB&T shall assume each Stock Option in accordance with
the terms of the Stock Option Plan, except that from and after the Effective
Time (i) BB&T and its Compensation Committee shall be substituted for
BankFirst and the Compensation Committee of BankFirst's Board of Directors
administering the Stock Option Plan, (ii) each Stock Option assumed by BB&T
may be exercised solely for shares of BB&T Common Stock, (iii) the number of
shares of BB&T Common Stock subject to each such Stock Option shall be the
number of whole shares of BB&T (omitting any fractional share) determined by
multiplying the number of shares of BankFirst Common Stock subject to such
Stock Option immediately prior to the Effective Time by the Common Exchange
Ratio, and (iv) the per share exercise price under each such Stock Option
shall be adjusted by dividing the per share exercise price under each such
Stock Option by the Common Exchange Ratio and rounding up to the nearest cent.
Notwithstanding the foregoing, BB&T may at its election substitute as of the
Effective Time options under the BB&T Corporation 1995 Omnibus Stock Incentive
Plan or any other duly adopted comparable plan (in either case, the "BB&T
Option Plan") for all or a part of the Stock Options, subject to the following
conditions: (A) the requirements of (iii) and (iv) above shall be met; (B)
such substitution shall not constitute a modification, extension or renewal of
any of the Stock Options which are incentive stock options; and (C) the
substituted options shall continue in effect on the same terms and conditions
as provided in the Stock Options and the Stock Option Plan granting each Stock
Option. Each grant of a converted or substitute option to any individual who
subsequent to the Merger will be a director or officer of BB&T as construed
under Rule 16b-3 shall be approved in accordance with the provisions of Rule
16b-3. Each Stock Option which is an incentive stock option shall be adjusted
as required by Section 424 of the Code, and the Regulations promulgated
thereunder, so as to continue as an incentive stock option under Section
424(a) of the Code, and so as not to constitute a modification, extension, or
renewal of the option within the meaning of Section 424(h) of the Code. BB&T
and BankFirst shall take all necessary steps to effectuate the foregoing
provisions of this Section 6. BB&T has reserved and shall continue to reserve
adequate shares, duly registered with the Securities and Exchange Commission,
of BB&T Common Stock for delivery upon exercise of any converted or substitute
options. As soon as practicable after the Effective Time, if it has not
already done so, and to the extent BankFirst shall have a registration
statement in effect or an obligation to file a registration statement, BB&T
shall file a registration statement on Form S-3 or Form S-8, as the case may
be (or any successor or other appropriate forms), with respect to the shares
of BB&T Common Stock subject to converted or substitute options and shall use
its reasonable efforts to maintain the effectiveness of such registration
statement (and maintain the current status of the prospectus or prospectuses
contained therein) for so long as such converted or substitute options remain
outstanding. With respect to those individuals, if any, who subsequent to the
Merger may be subject to the reporting requirements under Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), BB&T shall
administer the Stock Option Plan assumed pursuant to this Section 6 (or the
BB&T Option Plan, if applicable) in a manner that complies with Rule 16b-3
promulgated under the Exchange Act to the extent necessary to preserve for
such individuals the benefits of Rule 16b-3 to the extent such benefits were
available to them prior to the Effective Time.
(b) As soon as practicable following the Effective Time, BB&T shall deliver
to the participants receiving converted options under the BB&T Option Plan an
appropriate notice setting forth such participant's rights pursuant thereto.
Section 7. Amendment. At any time before the Effective Time, this Plan of
Merger may be amended, provided that no such amendment executed after approval
by the BankFirst shareholders of the Agreement and this Plan of Merger shall
modify either the amount or the form of the consideration to be provided to
holders of BankFirst Common Stock upon consummation of the Merger.
3
