Exhibit 2.3
AGREEMENT
This Agreement is made this 16th day of September, 1995, by and between
BANCFIRST, an Oklahoma banking corporation, and XXXXXXX X. XXXXXXXXX
("Xxxxxxxxx").
R E C I T A L S:
BancFirst simultaneously herewith has entered into an Agreement and Plan of
Reorganization, pursuant to which BancFirst will acquire (the "Acquisition") all
of the outstanding shares of common stock of City Bankshares, Inc. ("CBI").
Xxxxxxxxx has important and valuable contacts and relationships, both
personally and in the business community. Xxxxxxxxx, as Chairman of the Board of
Directors and Chief Executive Officer of CBI and its subsidiary, City Bank &
Trust, Oklahoma City, Oklahoma ("City Bank"), has been the key person
responsible for initiating, developing, and maintaining City Bank's
relationships with customers, both retail and commercial, and both borrowers and
depositors. Xxxxxxxxx has also been responsible for causing City Bank to
establish, develop, and expand its goodwill and banking reputation in the
Oklahoma City MSA and is the primary cause of the creation of City Bank's
valuable banking franchise. In the Acquisition, BancFirst will acquire ownership
of CBI and City Bank and intends to pay for, acquire, and realize the value of
City Bank and its relationships and franchises. However, on the date of the
Acquisition (the "Acquisition Date"), Xxxxxxxxx will cease to be an officer and
director of CBI and City Bank. Therefore, in order for BancFirst to realize
value from the Acquisition, BancFirst has required as a condition to the
Acquisition that Xxxxxxxxx enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and conditions
contained herein, the parties hereto agree as follows:
1. PROHIBITED AFFILIATIONS. For a period of four (4) years following the
Acquisition Date, Xxxxxxxxx shall not serve as an officer, director, employee,
or consultant of, or control directly or indirectly five percent (5%) or more of
the stock or other equity interest in or voting power of, any financial
institution having an office in the Oklahoma City MSA (which for purposes of
this Agreement shall include all of Xxxxx, Canadian, Cleveland, McClain,
Oklahoma, and Pottawatomie Counties); provided however, that following the
expiration of two (2) years from the Acquisition Date, Xxxxxxxxx shall be
permitted to serve as a consultant for a financial institution in the Oklahoma
City MSA so long as his status or activities do not violate any other provision
of this Agreement. For all purposes under this Agreement, a financial
institution includes (i) a broker-dealer firm, (ii) a trust Company, and (iii)
any bank, savings bank, savings and loan, credit
union, or other similar type regulated financial institution which makes loans
and accepts deposits.
2. PROHIBITED ACTIVITIES. For a period of four (4) years from the
Acquisition Date, Xxxxxxxxx (i) shall not, either directly or indirectly,
canvass or solicit any banking business from any person or entity who is then a
City Bank customer or whom Xxxxxxxxx has reason to believe may be a City Bank
customer prospect, or (ii) disclose to any financial institution the name of any
such City Bank customer or prospect for the purpose of soliciting banking
business from that customer or customer prospect, or (iii) disclose to any
financial institution any confidential information regarding the business or
customers of City Bank for the purpose of allowing that financial institution to
use such information to compete with City Bank. For these purposes,
confidential information shall be any information which is material, proprietary
to City Bank, and is not otherwise available in the public domain. It is
anticipated that following the Acquisition Date, Xxxxxxxxx will have an interest
in C-Teq, Inc., which is engaged in the business of check processing and data
processing. It is possible that the range of services provided by C-Teq, Inc.
may later be expanded, and Xxxxxxxxx may become involved with companies engaged
in businesses similar or related to those of C-Teq, Inc. Those activities will
not be prohibited hereunder so long as C-Teq, Inc. or any other such entity with
whom Xxxxxxxxx is involved is not a financial institution.
3. SERVICES. Xxxxxxxxx agrees that following the Acquisition Date,
Xxxxxxxxx will advise and consult with BancFirst in connection with the
transition of ownership of CBI and City Bank. This transition will involve both
employees of CBI and City Bank as well as customers of City Bank. Then, for a
period of' four (4) years following the Acquisition Date, Xxxxxxxxx shall:
(i) promote the goodwill and business reputation of BancFirst through
his business, personal, and social contacts and relationships;
(ii) advise and consult with respect to the integration of the City
Bank franchise into the BancFirst franchise;
(iii) advise and consult with BancFirst with respect to matters of
technology and operations about which Xxxxxxxxx may have special knowledge;
and
(iv) do such other things as may be mutually agreed upon between the
parties.
-2-
All of the foregoing services to be performed by Xxxxxxxxx will be performed in
such a manner, at such times, and upon such terms as will be mutually agreed
upon between BancFirst and Xxxxxxxxx. Xxxxxxxxx will spend such time in
performing these services as is reasonable and appropriate, taking into account
the time he is expected to spend with respect to his other employment, business,
investment, charitable, social, civic, and family activities. Further, Xxxxxxxxx
shall not be required to expend any personal funds or resources in connection
with the performance of these services. However, Xxxxxxxxx shall not be
entitled to be reimbursed for any expenses incurred by him in connection with
the performance of these services without the approval of BancFirst. Finally, in
the event that there occurs any material change in the ownership, business,
financial condition, or reputation of BancFirst, which could be expected to
legitimately affect Xxxxxxxxx'x willingness and good conscience in performing
the services described in this Section 3, then to that extent Xxxxxxxxx shall be
relieved of his obligation to perform those services.
4. ENFORCEABILITY. One of the purposes in the negotiation and execution
of this Agreement has been to limit the right of Xxxxxxxxx to compete with
BancFirst only to the extent necessary to protect BancFirst from unfair
competition and to permit BancFirst to enjoy the consideration received by
BancFirst in the Acquisition. The parties recognize, however, that reasonable
people may differ in making such a determination. Consequently, it is agreed
that if the scope or enforceability of the negative covenants contained in
Section 1 and Section 2, when taken together with the services required to be
performed under Section 3, are in any way disputed at any time, a court or other
trier of fact may modify and enforce the provisions thereof to the extent it
believes to be reasonable under the circumstances existing at that time.
5. DISPUTE RESOLUTION. In the event that BancFirst believes that
Xxxxxxxxx is in breach of this Agreement, then BancFirst shall give Xxxxxxxxx
notice thereof, setting forth the reasons for BancFirst's belief. Xxxxxxxxx
shall then have a period of ten (10) days from the date of such notice to
respond to BancFirst setting forth the reasons, if any, why Xxxxxxxxx believes
he is not in breach of the Agreement. Following this ten-day period, if
BancFirst still believes that Xxxxxxxxx is in breach of the Agreement, and if
there is clear and convincing evidence that Xxxxxxxxx is in breach of this
Agreement and reasonable persons would not disagree with that evidence, then
BancFirst may proceed to enforce this Agreement with all rights and remedies
available to BancFirst as provided by law. However, if following this ten-day
period BancFirst still believes that Xxxxxxxxx is in breach of this Agreement
but the evidence is not clear and convincing and the facts indicate that
reasonable persons may disagree as to whether Xxxxxxxxx is in breach of the
Agreement, then BancFirst shall have
-3-
the right to require Xxxxxxxxx to submit to binding arbitration in accordance
with the commercial arbitration rules of the American Arbitration Association,
and judgment upon the award rendered by the arbitrator or arbitrators may be
entered in any court having jurisdiction thereof.
6. PAYMENT TO XXXXXXXXX. In consideration for Xxxxxxxxx'x agreement and
services hereunder, BancFirst shall pay to Xxxxxxxxx the sum of $1,250,000 cash
as compensation, which shall be payable on the Acquisition Date. In the event
of Xxxxxxxxx'x death, disability, or incapacity, no part of this payment shall
be refundable.
7. AGREEMENT CONTINGENT ON THE ACQUISITION. The parties agree that they
shall have no obligation to each other under this Agreement unless and until (a)
the Acquisition Date occurs and (b) BancFirst receives the opinion required by
Section 8 hereof.
8. OPINION OF XXXXXXXXX'X COUNSEL. Prior to the Acquisition Date,
BancFirst shall receive an opinion of Xxxxxxxxx'x counsel to the effect that the
payment provided for in Section 6 is not a "parachute payment" within the
meaning of either Section 280G of the Internal Revenue Code of 1986, as amended,
or the Internal Revenue Service's Proposed Regulation Section 1-280G-1.
9. NOTICES. Any notice either contemplated or required hereunder may be
given either by letter addressed to either party and deposited postage prepaid,
certified or registered mail, in the United States Post Office, or by personal
delivery. Notice by personal delivery shall be deemed received on the first
business day following the date of actual personal delivery.
10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oklahoma.
-4-
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the date first above written.
BANCFIRST, an Oklahoma banking corporation
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxx, President
and Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxxxx
-5-
