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EXHIBIT 10.25
[EXECUTION COPY DATED DECEMBER 30, 1998 PREPARED BY ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇]
C O N F I D E N T I A L
ACQUISITION DOCUMENT
(POOLING OF INTERESTS AND TRIPARTITE FORWARD MERGER TRANSACTION)
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MERGER AGREEMENT
AMONG
BOK FINANCIAL CORPORATION,
BOKF MERGER CORPORATION NUMBER SEVEN,
FIRST BANCSHARES OF MUSKOGEE, INC.,
FIRST NATIONAL BANK AND TRUST COMPANY OF MUSKOGEE,
AND
CERTAIN SHAREHOLDERS
OF
FIRST BANCSHARES OF MUSKOGEE, INC.,
* * * *
AGREEMENT DATE OF DECEMBER 30, 1998
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INDEX
TO
MERGER AGREEMENT
SECTION PAGE
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1. Purpose of this Merger Agreement.........................................................................1
2. The Merger...............................................................................................2
3. Effect of the Merger.....................................................................................3
4. Representations and Warranties of Principal Shareholders ................................................4
5. Representations and Warranties of BOKF..................................................................13
6. Covenants...............................................................................................17
7. Conditions Precedent to Closing by BOKF and Mergercorp..................................................28
8. Conditions Precedent to Closing by First Muskogee.......................................................30
9. Closing.................................................................................................31
10. Provisions Respecting BOKF Shares.......................................................................34
11. First Muskogee Termination Damages......................................................................35
12. BOKF Termination Damages................................................................................37
13. The BOKF Common Stock Escrow............................................................................37
14. Miscellaneous Provisions................................................................................53
EXHIBIT CAPTION EXHIBIT NUMBER
--------------- --------------
Principal Shareholders 1.3
Stock Options 2.9
Subsidiaries 4.3
Material Liabilities 4.6.3
Conduct of Business Prior to Closing Exceptions 4.7
Contracts and Commitments 4.9
Litigation 4.10
Employee Contracts and Benefit Plans 4.15
Employment Agreement 6.12.1
Obligations 6.13
Compensation Exceptions 6.3.7
First Muskogee Counsel's Opinion 7.4
Non-Competition Agreement 7.7
BOKF Counsel's Opinion 8.3
Exceptions to Agreement Terminations 9.1.3
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MERGER AGREEMENT
This merger agreement ("Merger Agreement") is effective as of December
30, 1998 (the "Agreement Date") among:
(i) First Bancshares of Muskogee, Inc., an Oklahoma
Corporation ("First Muskogee");
(ii) First National Bank and Trust Company of Muskogee
("First Muskogee Bank");
(iii) The shareholders of First Muskogee set forth in
Exhibit 1.3 ("Principal Shareholders");
(iv) BOK Financial Corporation ("BOKF"); and,
(v) BOKF Merger Corporation Number Seven
("Mergercorp").
In consideration of the mutual covenants contained herein, the adequacy
of which is hereby expressly acknowledged, and intending to be legally bound
hereby, First Muskogee, First Muskogee Bank, Principal Shareholders, BOKF and
Mergercorp agree as follows:
1. PURPOSE OF THIS MERGER AGREEMENT. The purpose of this Merger Agreement
is as follows:
1.1 First Muskogee is a bank holding company organized under the
laws of Oklahoma with offices in Muskogee, Oklahoma. First
Muskogee is subject to regulation by the Federal Reserve
Board ("FRB"). First Muskogee owns all of the issued and
outstanding capital stock of First Muskogee Bank (located in
Muskogee, Oklahoma). First Muskogee Bank is a bank organized
in accordance with the laws of the United States and subject
to regulation by the Office of the Comptroller of the
Currency. The issued and outstanding capital stock of First
Muskogee consists solely of a single class of common stock of
a par value of $10.00 per share ("Common Stock") of which
81,260 shares are issued and outstanding. The issued and
outstanding Common
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Stock of First Muskogee as of the Closing is hereafter called
the "First Muskogee Common Stock".
1.2 BOKF is a bank holding company organized under the laws of
the State of Oklahoma. BOKF is subject to regulation by the
FRB. BOKF owns all of the capital stock of Mergercorp.
Mergercorp has not heretofore engaged in business, but has
been formed to effect the transaction contemplated in this
Merger Agreement. The issued and outstanding capital stock of
Mergercorp consists solely of 1,000 shares of common stock,
par value of $1.00 per share (the "Mergercorp Shares").
1.3 The Principal Shareholders set forth on Exhibit 1.3 own not
less than fifty and one tenth percent (50.1%) of the First
Muskogee Common Stock.
1.4 The purpose of this Merger Agreement is to set forth the
terms and conditions on which First Muskogee and Mergercorp
shall merge. This Merger Agreement shall constitute a plan of
merger for corporate law purposes and for federal income tax
purposes under Section 368(a)(2)(D) of the Internal Revenue
Code.
1.5 BOKF owns all of the issued and outstanding capital stock of
Bank of Oklahoma, National Association ("BOk").
1.6 As used in this Merger Agreement, the term "Holders" includes
the Principal Shareholders and all other holders of First
Muskogee Common Stock, including all holders of Stock Options
(as hereafter defined) which are exercised prior to the
Closing or converted at the Closing.
2. THE MERGER. On the terms and conditions hereafter stated, First
Muskogee shall be merged into Mergercorp (the "Merger").
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2.1 Mergercorp shall be the surviving corporation ("Surviving
Corporation").
2.2 The Certificate of Incorporation of Mergercorp shall be the
Certificate of Incorporation of the Surviving Corporation
until changed as provided by law.
2.3 The Bylaws of Mergercorp shall be the Bylaws of the Surviving
Corporation until changed as provided by law.
2.4 The officers of Mergercorp shall be the officers of the
Surviving Corporation, until changed as provided by law.
2.5 The directors of Mergercorp shall be the directors of the
Surviving Corporation until changed as provided by law.
2.6 The Merger shall be effective at the Closing (as hereafter
provided in Section 9).
2.7 Each share of First Muskogee Common Stock shall, subject to
the provisions of Section 1091 of the Oklahoma General
Corporation Act, automatically and without any action on the
part of the holder thereof, be converted into:
2.7.1 14.3089 shares (Conversion Ratio") of fully paid and
non- assessable shares of Common Stock, par value of
$0.0006 per share, of BOKF ("BOKF Common Stock");
provided, however, no fractional shares shall be
issued and, in lieu of any fractional share to which
any person or entity who or which is a record holder
of First Muskogee Common Stock is entitled, a full
share of BOKF Common Stock shall be issued; and,
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2.7.2 Each Holder shall have the right to receive, upon
termination of the BOKF Common Stock Escrow (as
hereafter defined in Section 13), his or her share
of the Escrow Shares (as hereafter defined)
distributable to Holders upon termination of the
BOKF Common Stock Escrow.
2.8 The shares of BOKF Common Stock issued in accordance with
Section 2.7 and Section 2.9 are hereafter collectively called
the "BOKF Shares".
2.9 Each stock option to buy one share of First Muskogee Common
Stock described in Exhibit 2.9 which remains outstanding at
the Closing (collectively, the "Stock Options") shall
automatically and without any action on the part of the
holders of the Stock Options be converted (without the
payment of the Option Price) into 10.6596 shares of BOKF
Common Stock; provided, however, no fractional shares shall
be issued and, in lieu of any fractional share to which any
person who is a record holder of Stock Options is entitled, a
full share of BOKF Common Stock shall be issued.
Notwithstanding the foregoing, if permitted by the accounting
rules pertaining to accounting for the Merger as a pooling of
interest under A.P.B. 16 (as determined by the opinion
described in Section 7.5), each Stock Option to buy one share
of First Muskogee Common Stock which remains outstanding at
the Closing shall automatically and without any action on the
part of the holders of the Stock Options be converted
(without the payment of the Option Price) into 6.8221 shares
of BOKF Common Stock and BOKF shall, in respect of each such
Stock Option, withhold and pay over in lieu of any other
withholding $181.32 to the Internal Revenue Service for the
account of the holder of such Stock Option; provided,
however, no fractional
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shares shall be issued and, in lieu of any fractional share
to which any person who is a record holder of Stock Options
is entitled, a full share of BOKF Common Stock shall be
issued. If any of the Stock Options terminate without being
exercised, the Conversion ratio and the conversion factor for
the Stock Options shall be recalculated by mutual agreement
of BOKF and First Muskogee to accomplish the intention of the
parties.
2.10 A portion of the BOKF Common Stock issuable to Holders of
First Muskogee Common Stock and Stock Options will be
delivered to the BOKF Common Stock Escrow (as defined in
Section 13) (the "Escrow Shares"). The Escrow Shares shall
consist of a total number of shares of BOKF Common Stock
having a market value on the Closing date of $1 million
(determined in the manner provided in Section 13.6), adjusted
for any rounding requirements. The number of shares of BOKF
Common Stock deliverable into escrow shall be prorated
between the holders of First Muskogee Common Stock
outstanding on the Closing Date (excluding any dissenting
shares) (based on the number of shares of First Muskogee
Common Stock owned by each Holder) and the holders of Stock
Options at the Closing date (based on the number of shares of
First muskogee Common Stock the optionee would have received
had the option been exercised in full prior to the closing),
rounded in the case of each Holder up to the nearest whole
share.
3. EFFECT OF THE MERGER. The Merger shall have the following effects:
3.1 The corporate franchise, existence, rights and liabilities of
Mergercorp shall continue unaffected and unimpaired.
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3.2 The corporate franchise, existence, rights and liabilities of
First Muskogee shall be merged into Mergercorp and the
separate existence of First Muskogee shall cease.
3.3 Mergercorp shall have and be vested with all of the rights,
powers, assets, property, liabilities and obligations of
First Muskogee.
4. REPRESENTATIONS AND WARRANTIES OF FIRST MUSKOGEE AND FIRST MUSKOGEE
BANK. First Muskogee and First Muskogee Bank hereby, jointly and
severally, represent and warrant to BOKF that:
4.1 INCORPORATION AND CORPORATE POWER. First Muskogee is a
corporation duly organized, validly existing and in good
standing under the laws of Oklahoma. First Muskogee Bank is a
bank duly organized, validly existing and in good standing
under the laws of the United States. Each of First Muskogee
and First Muskogee Bank has all the corporate power and
authority necessary and required to own its properties and to
conduct its business as such business is now being conducted.
Each of First Muskogee and First Muskogee Bank is (A) in
material compliance with all applicable provisions of all
applicable federal, state and local statutes, laws,
regulations, ordinances and other requirements of any
governmental authorities (including, but not limited to,
whether similar or dissimilar, the Bank Holding Company Act
of 1956, the Oklahoma General Corporation Act, the National
Bank Act and the filing of all administrative reports and the
payment of all fees) in effect as of the date of this Merger
Agreement and (B) shall be in material compliance therewith
at the time of Closing.
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4.2 CAPITAL.
4.2.1 The Principal Shareholders are the record and
beneficial owners of (i) not less than fifty and one
tenth percent (50.1%) of the First Muskogee Common
Stock. The First Muskogee Common Stock is and at the
Closing will be all of the issued and outstanding
capital stock of First Muskogee. No person or entity
has any right or option to acquire any capital stock
of First Muskogee except Stock Options. The First
Muskogee Common Stock shall consist at the Closing
of no more than eighty-one thousand two hundred and
forty (81,240) shares plus the number of such shares
as may be issued upon the exercise of Stock Options.
4.2.2 First Muskogee owns all of the issued and
outstanding capital stock of First Muskogee Bank
(the "First Muskogee Bank Stock"). The First
Muskogee Bank Stock is and at the Closing will be
all of the issued and outstanding capital stock of
First Muskogee Bank. No person or entity has any
right or option to acquire any capital stock of
First Muskogee Bank.
4.3 CAPITALIZATION OF FIRST MUSKOGEE AND FIRST MUSKOGEE BANK. The
First Muskogee Common Stock and First Muskogee Bank Stock are
validly issued and outstanding, fully paid and
non-assessable. There are no outstanding subscriptions,
conversion privileges, calls, warrants, options or agreements
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obligating First Muskogee and First Muskogee Bank to issue,
sell or dispose of, or to purchase, redeem or otherwise
acquire any shares of their capital stock (collectively,
"options and rights") except the Stock Options and agreements
relating to directors qualifying shares of First Muskogee
Bank. None of the First Muskogee Common Stock and First
Muskogee Bank Stock has been issued or disposed of in
violation of any preemptive rights of any shareholder nor in
violation of any agreement to which First Muskogee or First
Muskogee Bank was or is a party. First Muskogee and First
Muskogee Bank have no subsidiaries and do not own, nor have
the right or obligation to acquire, any shares of equity
securities of any corporation except (i) First Muskogee Bank
is a subsidiary of First Muskogee and (ii) as set forth in
Exhibit 4.3.
4.4 NON-VIOLATION OF OTHER AGREEMENTS. The execution and delivery
of this Merger Agreement, and the compliance with its terms
and provisions by First Muskogee and First Muskogee Bank
(including the execution and delivery of any document
required to be executed by First Muskogee or First Muskogee
Bank) will not breach any agreement, lease, or obligation of
any nature, whether similar or dissimilar, by which First
Muskogee or First Muskogee Bank is bound.
4.5 FINANCIAL STATEMENTS. First Muskogee has delivered to BOKF,
or will have delivered to BOKF prior to the Closing as soon
as future financial statements are available, copies of the
following ("Financial Statements"):
4.5.1 Consolidated Financial Statements (Unaudited) for
First Muskogee and Subsidiaries, December 31, 1996
and 1997;
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4.5.2 Financial Statements (Unaudited) for First Muskogee
Bank, December 31, 1996 and 1997;
4.5.3 Financial Statements (Unaudited) for First Muskogee
and Subsidiaries, September 30, 1998, December 31,
1998, ▇▇▇▇▇ ▇▇, ▇▇▇▇ (▇▇ the Closing occurs after
March 31, 1999), and after March 31,1999 such
financial statements as are available; and,
4.5.4 Financial Statements (Unaudited) for First Muskogee
Bank, September 30, 1998, December 31, 1998, ▇▇▇▇▇
▇▇, ▇▇▇▇ (▇▇ the Closing occurs after March 31,
1999) and after March 31,1999 such financial
statements as are available.
The Financial Statements described in Section 4.5.1 and 4.5.2
(A) have been prepared or will have been prepared in
accordance with generally accepted regulatory accounting
principles, consistently applied and (B) fairly reflect the
financial condition and results of operations for the
indicated periods. The Financial Statements described in
Sections 4.5.3 and 4.5.4 fairly reflect the financial
condition and results of operations for the periods
indicated, subject to immaterial year-end adjustments and the
omission of footnotes.
4.6 MATERIAL LIABILITIES. Neither First Muskogee nor First
Muskogee Bank has any material liabilities (including, but
not limited to, whether similar or dissimilar, liabilities or
obligations for taxes, whether due or to become due) except:
4.6.1 Those fully reflected or reserved against, or
otherwise disclosed, in the Financial Statements;
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4.6.2 Those incurred with due care since September 30,
1998 in the normal course of business consistent
with past practices; and,
4.6.3 Those specifically disclosed in Exhibit 4.6.3 to
this Merger Agreement.
4.7 CONDUCT OF BUSINESS PRIOR TO CLOSING. Except as set forth in
Exhibit 4.7, since September 30, 1998, and until the Closing
of this transaction, (A) each of First Muskogee and First
Muskogee Bank has carried on and will carry on its business
only in the ordinary and normal course consistent with past
practices and (B) has not and will not, without the prior
consent of BOKF:
4.7.1 Incur any material liabilities, commitments or
obligations, contingent or otherwise, or dispose of
any of its assets, except in the ordinary course of
its business consistent with past practices and for
the purpose of carrying on the business as a going
concern;
4.7.2 Incur any bank or other institutional debt, or enter
into any agreement for the borrowing of money;
except borrowing of federal funds or borrowing from
the Federal Home Loan Bank by First Muskogee Bank
consistent with past practices;
4.7.3 Suffer any material adverse change in the financial
conditions, assets, liabilities, business or
property of First Muskogee taken as a whole or of
First Muskogee Bank taken as a whole; and,
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4.7.4 Make any material change in the manner in which
business is conducted (including, without
limitation, branch relations, branch closings, and
any material change in products offered to
customers).
4.8 TAX RETURNS/REPORTS. Each of First Muskogee and First
Muskogee Bank has duly filed all tax reports and returns
required to be filed by it and has duly paid all taxes and
other charges claimed to be due from it by federal, state and
local taxing authorities. No waivers of the statute of
limitation have been issued with respect to unaudited years.
First Muskogee and First Muskogee Bank have no knowledge of
any facts which could reasonably be expected to result in a
material deficiency with respect to unaudited tax returns
which would result in a material adverse effect on First
Muskogee taken as a whole or First Muskogee Bank taken as a
whole.
4.9 CONTRACTS AND COMMITMENTS.
4.9.1 A list of all contracts and commitments, other than
credit and lending, deposit or borrowing
transactions entered into in the ordinary course of
business by First Muskogee or First Muskogee Bank
which are material to the business, operations or
financial condition of First Muskogee or First
Muskogee Bank as of this date, is set forth on
Exhibit 4.9. For the purpose of Exhibit 4.9,
materiality shall mean those contracts and
commitments (including a series of related contracts
or commitments) for which payment or other
consideration to be furnished by any party is more
than $25,000.
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4.9.2 Except as set forth on Exhibit 4.9, each of First
Muskogee and First Muskogee Bank has in all material
respects performed and is performing all contractual
and other obligations required to be performed by
them.
4.10 LITIGATION. Except as set forth in Exhibit 4.10, there is not
pending, or, to the knowledge and belief of First Muskogee
and First Muskogee Bank threatened, any claim, litigation,
proceeding, order of any court or governmental agency, or
governmental investigation or inquiry to which First Muskogee
or First Muskogee Bank is a party or which involves their
business operations, any of their property or any property
leased by them which, individually or in the aggregate:
4.10.1 May reasonably result in any material adverse change
in the financial condition, business, prospects,
assets, properties or operations of First Muskogee
taken as a whole or First Muskogee Bank taken as a
whole;
4.10.2 May reasonably involve the expenditure of more than
a total of $10,000 in legal fees and/or allocated
employees' salaries or their direct or indirect
costs; or,
4.10.3 Alleges violation of any law, rule or regulation.
4.11 BROKERAGE FEES. Neither First Muskogee nor First Muskogee
Bank has incurred or will incur, directly or indirectly, any
liability for brokerage, finder's, financial advisor's or
agent's fees or commissions by virtue of any commitment made
by any of them in connection with this Merger Agreement or
any transaction contemplated hereby except for the fee to
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & Co. ("Sheshunoff") pursuant to that certain
agreement dated August 31, 1998.
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4.12 REQUIRED CORPORATE ACTION. The execution, delivery and
consummation of this Merger Agreement has been duly and
validly authorized by the board of directors of First Muskogee
and will at the time of Closing have been duly and validly
authorized by the board of directors of First Muskogee Bank
and the shareholders of First Muskogee and First Muskogee
Bank.
4.13 AUTHORIZED EXECUTION. This Merger Agreement has been duly
executed and delivered by Principal Shareholders and by duly
authorized officers of First Muskogee and First Muskogee
Bank. This Merger Agreement constitutes the legal, valid and
binding agreement and obligation of Principal Shareholders,
First Muskogee and First Muskogee Bank enforceable against
them in accordance with its terms, except as may be limited
by applicable bankruptcy, insolvency, moratorium,
receivership, and other similar laws affecting the rights of
creditors generally.
4.14 TITLE TO ASSETS; ENCUMBRANCES. First Muskogee and First
Muskogee Bank have good and valid title (with respect to fee
real estate, good and valid title shall mean such title as
may be insured on standard title insurance forms with no
exceptions materially and adversely affecting the value or
use of the fee real estate) to their assets, and in each case
subject to no mortgage, pledge, lien, security interest,
conditional sale agreement, or other encumbrance of any
nature whether similar or dissimilar, except:
4.14.1 Such encumbrances which are purchase money security
interests entered into in the ordinary course of
business consistent with past practice reflected on
their books and records;
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4.14.2 Lessors' interests in leased tangible real and
personal property reflected on their books and
records;
4.14.3 Such encumbrances for taxes and assessments not yet
due and payable;
4.14.4 Encumbrances as do not materially detract from the
value or interfere with the use or operation of the
asset subject thereto; and,
4.14.5 Repossessed and foreclosed assets acquired in
satisfaction of debt previously contracted.
4.15 EMPLOYEES. Except as set forth on Exhibit 4.15, none of the
employees of First Muskogee and First Muskogee Bank is
employed under any employment contract (oral or written) or
is the beneficiary of any compensation plan (oral or written)
or is entitled to any payment from First Muskogee and First
Muskogee Bank by reason of this Merger Agreement or the
Merger and there are no employment contracts, management
contracts, consulting agreements, union contracts, labor
agreements, pension plans, profit sharing plans or employee
benefit plans to which First Muskogee or First Muskogee Bank
are a party or by which either of them is bound. The First
Muskogee 401k Plan is in full compliance with all
requirements of the Plan and with the Employee Retirement
Income Security Act and the regulations promulgated pursuant
thereto.
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4.16 ENVIRONMENTAL LAWS. The existence, use and operation of the
assets of First Muskogee and First Muskogee Bank are in
material compliance with all applicable statutes, rules and
regulations including, without limiting the generality of the
foregoing, all environmental and zoning laws and the
Americans With Disabilities Act.
4.17 SURVIVAL AND INDEPENDENCE OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties of First Muskogee and
First Muskogee Bank made in this Merger Agreement shall
survive the Closing hereof notwithstanding any investigation
or knowledge of BOKF; provided BOKF or Mergercorp shall give
notice to Agent (as hereafter defined) of any claim of a
breach of any such representations and warranties on or
before the earlier of one year following the Closing or the
first audit of financial statements containing the combined
operations of BOKF and First Muskogee by BOKF's independent
auditors, at which any such breach would reasonably be
expected to be encountered in the audit process (the "Claim
Notice Deadline"). Each of the representations and warranties
of First Muskogee and First Muskogee Bank set forth in this
Merger Agreement is a separate and independent representation
and warranty, shall be cumulative of and in addition to all
other warranties and representations, and shall not limit or
be interpreted to be in derogation of any other
representation or warranty made herein.
4.18 FIRST MUSKOGEE AND FIRST MUSKOGEE BANK INDEMNIFICATION. First
Muskogee and First Muskogee Bank shall defend and indemnify
BOKF against, and hold BOKF harmless from, all loss, cost and
expense (including interest at the judgment rate and
attorney's fees) arising out of any material
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breach of any representation or warranty made by First
Muskogee and First Muskogee Bank in this Merger Agreement;
provided, BOKF shall, on or before the Claim Notice Deadline,
give notice of any breach of such representations and
warranties to Agent (as hereafter defined); and, provided
further, the sole remedy for a breach of such representations
and warranties following the Closing shall be a claim against
the Escrow Shares.
5. REPRESENTATIONS AND WARRANTIES OF BOKF. BOKF and Mergercorp represent
and warrant, jointly and severally, to First Muskogee and Holders that:
5.1 INCORPORATION AND CORPORATE POWER. BOKF and Mergercorp are
corporations duly organized, validly existing and in good
standing under the laws of Oklahoma. BOKF and Mergercorp have
all the corporate power and authority necessary and required
to consummate the transactions contemplated by this Merger
Agreement.
5.2 NON-VIOLATION OF OTHER AGREEMENTS. The execution and delivery
of this Merger Agreement, and compliance with its terms and
provisions by BOKF and Mergercorp and the execution of any
document required to be executed by BOKF or Mergercorp, will
not:
5.2.1 Violate, conflict with or result in the breach of
their respective certificates of incorporation or
bylaws or any of the terms, conditions or provisions
of any agreement or instrument to which BOKF or
Mergercorp is a party, or by which BOKF or
Mergercorp is bound;
5.2.2 Result in the creation or imposition of any lien,
charge, encumbrance or restriction of any nature
whatever upon any
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of the property, contracts or business of BOKF and
Mergercorp; or,
5.2.3 Require the consent of any party to a contract with
BOKF and Mergercorp in order to keep the contract
enforceable.
5.3 ISSUANCE OF BOKF SHARES. The issuance and delivery of the
BOKF Shares have been duly authorized and the BOKF Shares
have been duly reserved for issuance by all necessary
corporate actions on the part of BOKF. The BOKF Shares, when
issued and delivered in accordance with this Merger
Agreement, shall be duly authorized, validly issued and
outstanding, fully paid and non-assessable, and free and
clear of any liens or encumbrances.
5.4 REQUIRED CORPORATE ACTION. The execution, delivery and
consummation of this Merger Agreement by BOKF and Mergercorp
have been duly and validly authorized by the boards of
directors of BOKF and Mergercorp and the approval of the
shareholders of Mergercorp. The approval of the shareholders
of BOKF is not required. This Merger Agreement has been duly
executed and delivered by duly authorized officers of BOKF
and Mergercorp. This Merger Agreement constitutes a legal,
valid and binding agreement and obligation of BOKF and
Mergercorp enforceable against BOKF and Mergercorp in
accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, moratorium, receivership,
and other similar laws affecting the rights of creditors
generally.
5.5 CAPITALIZATION. As of September 30, 1998, the authorized
capital stock of BOKF consisted of (i) 2.5 billion shares of
Common Stock, 22,505,709 shares of which are currently issued
and outstanding and (ii) one billion
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shares of Preferred Stock, of which 2.5 million shares of
Series A Preferred Stock are currently issued and outstanding
which are currently convertible into 2,985,132 shares of BOKF
Common Stock. All outstanding shares of BOKF Common Stock and
Preferred Stock have been duly authorized and validly issued,
and are fully paid and nonassessable.
5.6 LITIGATION. There is no action, suit, proceeding or
investigation pending, or, to the knowledge of BOKF or
Mergercorp, threatened, against BOKF or Mergercorp which
questions the validity of this Merger Agreement or the right
of BOKF or Mergercorp to enter into this Merger Agreement or
to consummate the transactions contemplated hereby.
5.7 BROKERAGE FEES. Neither BOKF nor Mergercorp has incurred or
will incur, directly or indirectly, any liability for
brokerage, finder's, financial advisor's or agent's fees or
commissions by virtue of any commitment made by BOKF or
Mergercorp in connection with this Merger Agreement or any
transaction contemplated hereby. Neither BOKF nor Mergercorp
has any knowledge that any party has asserted any claim of
such nature against BOKF or Mergercorp.
5.8 SEC DOCUMENTS AND FINANCIAL STATEMENTS. BOKF has furnished or
made available to First Muskogee and First Muskogee Bank a
true and complete copy of each statement, annual, quarterly,
registration statement and other report filed with the
Securities and Exchange Commission ("SEC") since December 31,
1997, other than preliminary material (the "BOKF SEC
Documents). The BOKF SEC Documents are all documents required
to be filed by BOKF since such date. As of their respective
filing dates, the BOKF
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SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933 and the Securities
Exchange Act of 1934, as the case may be, and none of the
BOKF SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact necessary
in order to make the statements therein, in light of the
circumstances in which they were made, not misleading, except
to the extent corrected by a subsequently filed BOKF SEC
Document. The financial statements of BOKF in the BOKF SEC
Documents (the "BOKF Financial Statements") comply as to form
in all material respects with applicable accounting
requirements and with the published rules and regulations of
the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles
consistently applied (except as may be indicated in the notes
thereto or, in the case of unaudited statements, as permitted
by Form 10Q of the SEC) and fairly present the consolidated
financial position of BOKF and its consolidated subsidiaries
at the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended
(subject, in the case of unaudited statements to normal,
recurring audit adjustments). There have been no changes in
BOKF's accounting policies or estimates except as described
in the notes to the BOKF Financial Statements.
5.9 SURVIVAL AND INDEPENDENCE OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties of BOKF and Mergercorp
made in this Merger Agreement shall survive the Closing
hereof notwithstanding any investigation or knowledge of the
Principal Shareholders; provided Holders shall give notice to
BOKF on or before the Claim Notice Deadline of any
23
claim of a breach of any such representations and warranties.
Each of the representations and warranties of BOKF and
Mergercorp set forth in this Merger Agreement is a separate
and independent representation and warranty, shall be
cumulative of and in addition to all other warranties and
representations; and shall not limit any other representation
or warranty made herein.
5.10 BOKF AND MERGERCORP INDEMNIFICATION. BOKF and Mergercorp
shall indemnify Holders against, and hold Holders harmless
from, all loss, cost and expense (including interest at the
judgment rate and attorney's fees) arising out of any breach
by BOKF and Mergercorp of any representation or warranty made
in this Merger Agreement; provided, Agent shall, on or before
the Claim Notice Deadline, give notice of any breach of such
representations and warranties to BOKF and Mergercorp on the
request of a majority in interest of the Holders.
6. COVENANTS.
6.1 FULL ACCESS. In order that BOKF shall have the full
opportunity to make such investigations as it shall
reasonably desire concerning First Muskogee and First
Muskogee Bank and their business affairs, First Muskogee and
First Muskogee Bank shall:
6.1.1 Give BOKF, its employees, counsel, accountants and
other authorized representatives, as necessary to
conduct the investigation and whose names shall have
been provided to First Muskogee, full access, upon
reasonable notice to First Muskogee and at
reasonable times without unduly
24
interfering with the conduct of business by First
Muskogee and First Muskogee Bank throughout the
period up to the Closing, to all of the facilities,
properties, books, contracts and records of First
Muskogee and First Muskogee Bank.
6.1.2 Authorize its accountants to give BOKF full access
to the accountant's records, including work papers;
and,
6.1.3 Furnish to BOKF during that period all additional
financial, operating and other information
concerning First Muskogee and First Muskogee Bank
and their business affairs, as BOKF may reasonably
request and which First Muskogee and First Muskogee
Bank shall have available.
6.1.4 All information provided pursuant to this Section
6.1 shall be subject to the provisions of Section
6.7.
6.2 CONDUCT OF BUSINESS PRIOR TO THE CLOSING DATE. From this date
until the Closing Date, each of First Muskogee and First
Muskogee Bank shall, except as may be first approved in
writing by BOKF or as is otherwise permitted or contemplated
in this Merger Agreement:
6.2.1 Maintain their corporate existence in good standing;
6.2.2 Maintain the general character of their business and
conduct their business in their ordinary and usual
manner consistent with past practices;
6.2.3 Maintain proper business and accounting records
generally in accordance with past practices;
6.2.4 Maintain their properties (except repossessed and
foreclosed
25
assets acquired in satisfaction of debt previously
contracted) in normal repair and condition, normal
wear and tear and damage due to fire or other
unavoidable casualty excepted;
6.2.5 Preserve their business organizations intact, use
their reasonable efforts to maintain satisfactory
relationships with suppliers, customers and others
having business relations with them whose
relationships they believe are desirable to
maintain, and use their reasonable efforts to
procure the willingness of all of the personnel
employed by them immediately prior to the execution
of this Merger Agreement who are material to the
success of their business to continue in their
employ on substantially the same terms and
conditions as those on which such personnel were
employed immediately prior to the execution of this
Merger Agreement;
6.2.6 Maintain in full force and effect insurance
comparable in amount and in scope of coverage to
that now maintained by them;
6.2.7 Except as otherwise disclosed in this Merger
Agreement, perform all of their obligations under
all material contracts, leases and agreements
relating to or affecting their assets, properties
and businesses; and,
6.2.8 Comply in all material respects with and perform all
obligations and duties imposed upon them by federal,
state
26
and local laws, and all rules, regulations and
orders imposed by federal, state or local
governmental authorities, except as may be contested
by them in good faith by appropriate proceedings.
6.3 FIRST MUSKOGEE AND FIRST MUSKOGEE BANK PROHIBITED ACTIONS
PRIOR TO THE CLOSING DATE. From this date until the Closing
Date, First Muskogee and First Muskogee Bank shall not
(except as otherwise permitted by this Merger Agreement or as
requested or approved by BOKF which approval shall not be
unreasonably withheld, delayed, or denied):
6.3.1 Incur any indebtedness for borrowed money or incur
any noncurrent indebtedness for the purchase price
of any fixed or capital asset, or make any extension
of credit or any loans to, guarantee the obligations
of, or make any additional investments in, any other
person, corporation or joint venture (whether an
existing customer or a new customer) except:
6.3.1.1 Extensions of credit, loans and guarantees
(i) less than One Million Dollars
($1,000,000) per transaction or (ii) less
than One Hundred Thousand Dollars
($100,000) with existing First Muskogee
customers having existing credit of One
Million Dollars ($1,000,000) or more made
by First Muskogee Bank in the usual
27
and ordinary course of its banking
business, consistent with prior practices
and policies;
6.3.1.2 Legal investments by First Muskogee Bank in
the usual and ordinary course of its
banking business consistent with prior
practices and policies.
6.3.1.3 Borrowings from the Federal Home Loan Bank,
the Federal Reserve Bank, deposit
liabilities, and federal funds transactions
by First Muskogee Bank in the ordinary
course of business consistent with past
practices.
6.3.2 Make any (a) material change, except in the ordinary
and usual course of business, in their assets
(including, but not limited to, any change in the
composition of such assets so as to materially alter
the proportion of cash) or liabilities, (b) material
commitment for any capital expenditures, excluding
expenditures for repairs and remodeling in the
ordinary and usual course of business, or (c) sale
or other disposition of any material capital asset
other than for fair value in the ordinary course of
business;
6.3.3 Make any change in their Certificates of
Incorporation or Bylaws;
6.3.4 Authorize any shares of their capital stock for
issuance, issue any shares of any previously
authorized but unissued
28
capital stock or grant, issue or make any option or
commitment relating to their capital stock except
the issuance of First Muskogee Common Stock upon
exercise of the Stock Options;
6.3.5 Enter into any letter of intent or agreement to sell
any of their assets, except in the normal and
ordinary course of their business, or acquire, be
acquired by, or merge, consolidate or reorganize
with any person, firm or corporation;
6.3.6 Declare or pay any dividend, make any other
distribution or payment or set aside any amount for
payment with respect to any shares of their capital
stock or directly or indirectly, redeem, purchase or
otherwise acquire any shares of their capital stock
or make any commitment relating thereto, provided,
however, First Muskogee may (i) pay a dividend in
the amount of $750,000 in the first quarter of 1999
consistent with past practices, (ii) in addition to
the dividend described in the preceding clause (i)
and until the Closing, continue to pay quarterly
dividends in respect of the First Muskogee Common
Stock for the purpose of reimbursing the income tax
liability of the holders thereof arising by virtue
of the fact that First Muskogee is an "S"
corporation under the Internal Revenue Code, such
quarterly dividends to be paid at the times and in
the amounts and at the same
29
assumed tax rates consistent with the prior
practices of First Muskogee (the "S Corporation
Dividends"); (iii) pay the S Corporation Dividends
immediately prior to the Closing for any income
attributable to the stub-period terminating at the
Closing for which S Corporation Dividends have not
theretofore been paid; (iv) pay a final S
Corporation Dividend in respect of calendar year
1998 (in the approximate amount of $614,000) in
January 1999; (v) First Muskogee Bank may pay
dividends in an amount to make available to First
Muskogee Bancshares sufficient funds to pay the
foregoing described First Muskogee Dividends; and
(vi) First Muskogee may repurchase up to twenty (20)
shares of First Muskogee Common Stock held by
directors of First Muskogee Bank as director's
qualifying shares pursuant to existing agreements
for a total consideration not exceeding $4,000;
6.3.7 Except as set forth in Exhibit 6.3.7, make any (a)
increase in the compensation payable or to become
payable to any of their directors, officers or
employees who are subject to the provisions of
Regulation O of the Board of Governors of the
Federal Reserve System (including, without
limitation, any bonus or incentive payment or
agreement), (b) make or enter into any written
employment contract or any bonus, stock option,
profit sharing, pension, retirement or other
30
similar payment or arrangement, or (c) make any
payment to any person, except in the usual and
ordinary course of business or except as required by
an existing agreement set forth in the Exhibits
hereto;
6.3.8 Make any material change in their banking, safe
deposit or power of attorney arrangements;
6.3.9 Enter into any trust, escrow, agency and similar
trust company agreements, purchase orders and
contracts for goods and services, except in the
ordinary course of business consistent with past
practices;
6.3.10 Enter into any agreement resulting in the imposition
of any mortgage or pledge of their assets or the
creation of any lien, charge or encumbrance on any
of their assets;
6.3.11 Incur any material obligation or liability, absolute
or contingent, except in the ordinary course of
business or pursuant to existing contracts described
in this Merger Agreement;
6.3.12 Take any action which would prevent compliance with
any of the conditions of this Merger Agreement; or,
6.3.13 Increase compensation to any employee except annual
increases at the times and in amounts consistent
with past practices or pay any bonuses to any
employee except as otherwise provided in this Merger
Agreement.
31
6.4 VOTE FOR MERGER AND WAIVER OF RIGHT TO DISSENT. Each
Principal Shareholder shall vote, as a stockholder of First
Muskogee, for the Merger and use his or her best efforts to
cause the Merger to be approved by the directors and
shareholders of First Muskogee and First Muskogee Bank in
accordance with applicable law and consummated in accordance
with the terms of this Merger Agreement. Each Principal
Shareholder hereby irrevocably waives any and all rights to
dissent to the Merger.
6.5 REGULATORY APPROVAL. BOKF shall diligently file and pursue
(A) all regulatory applications required in order to
consummate the Merger and the merger of First Muskogee Bank
into Bank of Oklahoma, National Association, including but
not limited to the necessary applications for prior approval
of the Board of Governors of the Federal Reserve System and
the Office of the Comptroller of the Currency on or before
the thirtieth (30th) calendar day following the Agreement
Date and (B) thereafter promptly file any required
supplements or amendments thereto. All applications,
supplements, and amendments shall be substantially complete
when filed. BOKF shall deliver to First Muskogee a copy of
all such filings, as filed, within three (3) business days
after the filing thereof. Although all such filings shall be
the responsibility of BOKF, BOKF shall nevertheless advise
and consult with First Muskogee on an ongoing basis with
respect to the filings and all matters and events related
thereto. BOKF shall inform and make available to First
Muskogee from time to time all matters relating to the
filings and the regulatory approvals. BOKF shall diligently
proceed with reasonable deliberate speed to obtain all such
approvals. If any regulatory
32
application required to be filed by BOKF should be finally
denied or disapproved by the respective regulatory authority,
then BOKF shall immediately give notice to First Muskogee and
this Merger Agreement shall thereupon terminate, subject to
the provisions of Section 11. However, it is understood that
a request for additional information or undertaking by the
applicant, as a condition for approval, shall not be deemed
to be a denial or disapproval so long as the applicant can
reasonably be expected to provide the requested information
or undertaking. In the event an application is denied pending
an appeal, petition for review, or similar such act on the
part of the applicant, then the application will be deemed
denied unless the applicant promptly and diligently prepares
and files such appeal and continues the appellate process for
the purposes of getting the necessary approval.
6.6 CONFIDENTIALITY. Prior to the Closing, BOKF shall keep all
information disclosed to BOKF (its employees, counsel,
accountants, and other authorized representatives) by First
Muskogee or First Muskogee Bank respecting the business and
financial condition of First Muskogee and First Muskogee Bank
confidential and shall make no use of such information except
to conduct the investigation contemplated by Section 6.4 and
to consummate the transactions contemplated hereby and shall
not use such information to obtain a competitive advantage in
connection with any customer of First Muskogee Bank. In the
event this Merger Agreement is terminated for any reason BOKF
shall (i) return all copies of all information and documents
obtained from First Muskogee, First Muskogee Bank, and
33
Principal Shareholders and (ii) thereafter keep all such
information confidential and not make use of any such
information to obtain a competitive advantage in connection
with any customer of First Muskogee Bank.
6.7 BOKF PROHIBITED ACTION PRIOR TO CLOSING. From this date until
the Closing Date, BOKF shall not take any action which would
prevent compliance with any of the conditions of this Merger
Agreement. BOKF shall not, and shall cause its subsidiaries
not to, make or agree to make any acquisition, or take any
other action, that adversely affects its ability to
consummate the transactions contemplated by this Merger
Agreement and will otherwise continue to conduct its business
operations and shall cause the operations of its subsidiaries
to be conducted in a manner consistent with past operating
practices.
6.10 ACCOUNTING OPINION. BOKF shall promptly request and obtain
the opinion of Ernst & Young whether the Merger is properly
accounted for as a pooling of interests in accordance with
A.P.B. No. 16. BOKF and First Muskogee shall each use
commercially reasonable efforts to cause the Merger to be
accounted for as a pooling of interests.
6.11 TAX OPINION. First Muskogee and BOKF shall each promptly
request and obtain an opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ addressed
separately to each of them whether the Merger is a tax free
reorganization in accordance with Section 368(a)(2)(D) of the
Internal Revenue Code. BOKF and First Muskogee shall each use
commercially reasonable efforts to cause the Merger to be a
tax free reorganization in accordance with the Internal
Revenue Code.
34
6.12 EMPLOYMENT AGREEMENT. Contemporaneously herewith, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") and BOKF and First Muskogee shall enter
into an employment agreement in the form and content of
Exhibit 6.12.1 (the "▇▇▇▇▇▇▇ Employment Agreement"). ▇▇▇▇▇▇▇
hereby accepts, and shall contemporaneously with the
execution and delivery of this Merger Agreement, execute and
deliver to BOKF the ▇▇▇▇▇▇▇ Employment Agreement.
6.13 EMPLOYMENT TRANSITIONS UPON CLOSING. BOKF shall cause or
permit BOk or First Muskogee Bank to perform those
obligations described in Exhibit 6.13 attached hereto.
6.14 FIRST MUSKOGEE COVENANT TO OBTAIN APPROVALS. First Muskogee
shall promptly seek and use commercially reasonable efforts
to obtain the approval of this Merger Agreement and the
transactions contemplated hereby by the shareholders of First
Muskogee. First Muskogee Bank shall enter into an agreement
to merge with BOk, subject to the Closing of this Merger
Agreement, in form and content acceptable to BOKF.
6.15 COVENANTS RESPECTING EMPLOYMENT AND NON-COMPETITION
AGREEMENTS. BOKF and First Muskogee shall use commercially
reasonable efforts to
35
cause all employment and non-competition agreements which are
a condition precedent to the obligations of BOKF under this
Merger Agreement to be executed and delivered.
6.16 EMPLOYMENT BENEFITS. Following the Closing, BOKF shall cause
all employees of First Muskogee Bank to have the same
benefits provided by BOKF generally to employees of BOKF and
its affiliates. Employees of First Muskogee Bank shall be
credited for their actual and credited service with First
Muskogee Bank for purposes of eligibility, vesting and
beneficial accrual for all BOKF employee benefit plans
including the BOKF 401k plan; provided, however, such
employees shall not be credited with prior service in BOKF's
defined benefit pension plan. First Muskogee Bank employees
shall not be subject to any exclusions for pre-existing
conditions under BOKF's medical benefit plan and shall
receive credit for any deductibles or out-of-pocket expenses
previously paid.
6.17 PUBLICATION OF COMBINED FINANCIAL RESULTS. BOKF shall file
with the SEC a report (on SEC Form 8K, Form 10K, or Form 10Q)
containing financial statements which include no less than 30
days of combined operations of BOKF and First Muskogee, not
later than the fifteenth (15th) day of the month next
following the first full calendar month of combined
operations.
6.18 TAX RETURN. BOKF shall cause the final S Corporation tax
return for First Muskogee to be prepared in a manner
consistent with First Muskogee's past practices, including
providing information to the Holders relating to their
increase in basis of First Muskogee Common Stock. Such return
will be prepared based on a closing of the First Muskogee
books as of the Closing Date.
36
6.19 ITI-UNISYS CONTRACT. First Muskogee shall terminate the
ITI-Unisys Contract.
7. CONDITIONS PRECEDENT TO CLOSING BY BOKF AND MERGERCORP. The obligation
of BOKF and Mergercorp to consummate and close this transaction is
conditioned upon each and all of the following:
7.1 The representations, warranties and covenants of First
Muskogee and First Muskogee Bank shall be materially true at
the Closing as though such representations, warranties and
covenants were also made at the Closing.
7.2 The Federal Reserve Board shall have approved the Merger, or
issued a waiver of approval, in accordance with 12 U.S.C.
Section 1842 and 12 C.F.R. Section 225. The Office of the
Comptroller of the Currency shall have approved the merger of
First Muskogee Bank into BOk in accordance with 12 U.S.C.
Section 215a and 12 C.F.R. 5.33, and such other regulatory
approval as may be required is obtained.
7.3 First Muskogee, First Muskogee Bank and Principal
Shareholders shall have performed and complied with, in all
material respects, all of their obligations under this Merger
Agreement which are to be performed or complied with by them
prior to or on the Closing Date.
7.4 First Muskogee shall have delivered to BOKF an opinion of its
counsel, dated the Closing Date, in the form and content of
the opinion attached hereto as Exhibit 7.4.
7.5 BOKF shall have received an opinion of Ernst & Young that the
Merger is appropriately accounted for as a pooling of
interest in accordance with A.P.B. No. 16.
37
7.6 The shareholders of First Muskogee shall have approved this
Merger Agreement in accordance with the Oklahoma General
Corporation Act. First Muskogee Bank shall have entered into
an agreement to merge with BOk, subject to the Closing of
this Merger Agreement, in form and content acceptable to
BOKF.
7.7 Contemporaneously herewith, each of ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇,
and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have entered into employment
agreements, subject to the Closing of this Merger Agreement,
acceptable in form and content to BOKF. Each director of
First Muskogee and First Muskogee Bank, which BOKF deems
critical in BOKF's good faith judgment, shall, prior to or at
the Closing, have entered into a non-competition agreement in
the form of Exhibit 7.7.
7.8 Neither First Muskogee taken as a whole or First Muskogee
Bank taken as a whole shall have suffered any material
adverse change in their financial conditions, assets,
liabilities, businesses or properties.
7.9 Holders of no more than eight percent (8%) of the First
Muskogee Common Stock shall have exercised appraisal rights
under Section 1091 of the Oklahoma General Corporations Act.
7.10 BOKF shall have received an opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇
addressed to BOKF that the Merger is a tax free reorganization
in accordance with Internal Revenue Code Section 368(a)(2)(D).
In the event any one or more of these conditions shall not have been
fulfilled prior to or at the Closing, BOKF and Mergercorp may terminate
this Merger Agreement by written notice
38
to First Muskogee, in which event neither party shall have any further
obligation or liability to the other except the obligations of BOKF set
forth in Section 6.7 and Section 11 and the obligations of First
Muskogee and First Muskogee Bank set forth in Section 4.11 and Section
12. BOKF shall be entitled to waive compliance with any one or more of
the conditions, representations, warranties or covenants in whole or in
part.
8. CONDITIONS PRECEDENT TO CLOSING BY FIRST MUSKOGEE. The obligation of
First Muskogee and First Muskogee Bank to consummate and close this
transaction are conditioned upon each and all of the following:
8.1 The representations, warranties and covenants of BOKF and
Mergercorp made in this Merger Agreement shall be true at the
Closing as though such representations, warranties and
covenants were also made at the Closing.
8.2 BOKF and Mergercorp shall have performed and complied, in all
material respects, with all of their obligations under this
Merger Agreement which are to be performed or complied with
by them prior to or at the Closing.
8.3 BOKF shall have delivered to the Holders an opinion of its
counsel, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Tulsa, Oklahoma, dated the Closing
Date, in the form and content of the opinion attached hereto
as Exhibit 8.3.
8.4 The Federal Reserve Board shall have approved the Merger, or
issued a waiver of approval, in accordance with 12 U.S.C.
Section 1842 and 12 C.F.R. Section 225. The Office of the
Comptroller of the Currency shall have approved the merger of
First Muskogee Bank into BOk in accordance with 12 U.S.C.
Section 215a and 12 C.F.R. 5.33, and such other regulatory
approval as may be required is obtained.
39
8.5 There shall have been no material and adverse change in the
financial condition, results of operations, assets, business
or properties of BOKF taken as a whole.
8.6 First Muskogee shall have received an opinion of ▇▇▇▇▇ &
▇▇▇▇▇▇▇ addressed to the shareholders of First Muskogee that
the Merger is a tax free reorganization in accordance with
Internal Revenue Code Section 368(a)(2)(D).
8.7 The Holders shall have approved this Merger Agreement and the
transactions contemplated hereby as required by the Oklahoma
General Corporations Act.
First Muskogee shall be entitled to waive compliance with any one or
more of the conditions, representations, warranties or covenants in
whole or in part. In the event any one or more of these conditions
shall not have been fulfilled prior to or at the Closing, First
Muskogee may terminate this Merger Agreement by notice to BOKF, in
which event no party shall have any further obligation or liability to
the other, except the obligations of BOKF set forth in Section 6.7 and
Section 11 and the obligations of First Muskogee set forth in Section
12.
9. CLOSING. The Closing ("Closing" or "Closing Date") of the transactions
contemplated by this Merger Agreement shall take place five (5)
business days following the first day on which (i) BOKF and Mergercorp
can lawfully consummate the Merger under 12 U.S.C. Section 1842, 12
C.F.R. Section 225 and other applicable laws, rules and regulations and
(ii) BOk and First Muskogee Bank can merge under 12 U.S.C. Section
215a, and 12 C.F.R. Section 5.23 and other applicable laws, rules and
regulations. In any event, if the Closing Date does not occur on or
before June 1, 1999, then either BOKF or First Muskogee may by notice
to the other, terminate this Merger Agreement, provided such notice is
given on or before June 15, 1999; and provided further such termination
shall be subject to the
40
provisions of Section 11 or Section 12, as the case may be. The Closing
shall be held at 10:00 a.m. on the Closing Date at the offices of First
Muskogee Bank or at such other time and place as BOKF and First
Muskogee may agree. At the Closing, BOKF, Mergercorp, First Muskogee,
and Principal Shareholders shall execute and deliver all of the
documents and take all other actions which are contemplated by the
terms hereof.
9.1 Without limiting the generality of Section 9 of this Merger
Agreement, the following actions shall be taken at the
Closing concurrently. First Muskogee shall:
9.1.1 Use commercially reasonable efforts to cause to be
delivered to Mergercorp certificates representing
the First Muskogee Common Stock;
9.1.2 Deliver the opinion of First Muskogee's counsel
pursuant to Section 7.4; and,
9.1.3 Except as otherwise set forth on Exhibit 9.1.3,
cause the employment agreements, plans and payments
described in Exhibit 4.15 to be terminated and
discharged at no cost to First Muskogee and First
Muskogee Bank.
9.2 Without limiting the generality of Section 9 of this Merger
Agreement, the following actions shall be taken at the
Closing concurrently. BOKF shall:
9.2.1 Issue and deliver to Mergercorp certificates to
evidence the conversion of the First Muskogee Common
Stock into shares of BOKF, as provided in Section
2.7 subject to adjustment in accordance with the
next sentence. In the event that BOKF shall, on or
prior to the Closing Date,
41
(a) declare or pay to the holders of its Common
Stock a dividend payable in any kind of shares of
stock or other equity securities of BOKF, (b) change
or divide or otherwise reclassify its Common Stock
into the same or a different number of shares of any
class or classes or authorize any such change,
division or reclassification, (c) consolidate or
merge with, or transfer its property as an entirety
or substantially as an entirety to, any other
corporation or entity or authorize any such
consolidation, merger or transfer, or (d) make any
distribution of its assets to holders of its Common
Stock as a liquidation or partial liquidation,
dividend or by way of return of capital or authorize
any such distribution, then BOKF shall issue and
deliver such additional shares of stock of BOKF, or
such reclassified shares of stock of BOKF, or such
shares of the securities or property of BOKF
resulting from such consolidation or merger or
transfer, or such assets of BOKF, which the Holders
would have been entitled to receive had the Holders
been shareholders of BOKF immediately prior to the
happening of any of the foregoing events.
9.2.2 Deliver the opinion of BOKF's counsel pursuant to
Section 8.3.
9.2.3 Cause appropriate evidences of merger to be filed in
accordance with applicable law.
42
9.3 Without limiting the generality of Section 9 of this Merger
Agreement, the following actions shall be taken at the Closing
concurrently. Mergercorp shall deliver the BOKF Shares to the
record holders (as of a date set by First Muskogee which date
shall be not later than five business days preceding the
Closing) of First Muskogee Common Stock in accordance with
Section 2.7.
10. PROVISIONS RESPECTING BOKF SHARES. The following provisions shall apply
to all BOKF Shares issued in accordance with this Merger Agreement (the
"BOKF Shares"):
10.1 Each Principal Shareholder individually represents and
warrants to BOKF that:
10.1.1 Such Principal Shareholder is not acquiring the BOKF
Shares with a view to further distribution and shall
not sell any BOKF Shares until such BOKF Shares
shall have been registered under the Securities Act
of 1933 and any applicable Blue Sky Act or are sold
in a transaction exempt from such registration.
10.1.2 Such Principal Shareholder is acquiring the BOKF
Shares for his own account.
10.2 On the terms and conditions set forth in this Section 10, (i)
BOKF shall, on the next business day following the Closing,
file an SEC registration statement on Form S-3 for the offer
and sale of BOKF Common Stock by Holders of the BOKF Shares
received by them pursuant to Section 2.7 (the "Holders
Registration"), in non-underwritten transactions from time to
time, and use BOKF's best efforts to cause such registration
statement to become effective, and (ii) in addition, BOKF
shall, on or before December 31, 1999,
43
at a time to be determined by BOKF in the exercise of its
sole discretion (without any obligation to provide any
explanation for the exercise of such discretion), file a
registration statement for an underwritten primary and/or
secondary offering (the "Underwritten Registration") with the
SEC and with the comparable state securities commissions in
such states (the securities laws of which are collectively
called the "Blue Sky Acts") as BOKF shall in the exercise of
its sole discretion (without any obligation to provide any
explanation for the exercise of such discretion) determine
and use BOKF's best efforts to cause such registration
statement to become effective. The Holders Registration and
the Underwritten Registration are hereafter individually and
collectively called the "registration" or "registration
statement"). The registration shall be on the following terms
and conditions:
10.2.1 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall be the representative of
Holders to serve as their agent for the performance
of all obligations, and the exercise of all rights
arising under this Section, Section 4 and Section 5
("Agent"). The Holders may change their designated
Agent, prospectively only, to any other person or
entity upon notice thereof to BOKF signed by a
majority in interest of all Holders then owning the
BOKF Shares. The Agent shall not be deemed a
fiduciary of Holders and shall be liable to Holders
only for gross negligence or intentional wrongdoing.
10.2.2 The registration statement shall be filed in
compliance with the Securities Act of 1933 and the
Blue Sky Acts.
44
10.2.3 BOKF shall pay all costs of the registration
(including filing fees, legal, accounting, printing,
and transfer agent costs), excluding Holders legal
fees, and underwriting discounts and commissions.
BOKF shall make available to Holders such number of
prospectus as Agent may reasonably request.
10.2.4 BOKF shall submit all registration documents to
Agent, reasonably in advance of filing or finalizing
such documents and shall receive, consider and
accept or reject (in BOKF's reasonable discretion)
such comments as Agent shall timely make. BOKF shall
file the registration statement in accordance with
all applicable laws.
10.2.5 BOKF represents and warrants that the registration
statement (including any prospectus) will (i)
contain all statements respecting BOKF (and its
subsidiaries) which are required to be stated
therein in accordance with the Securities Act of
1933 and the Blue Sky Acts, (ii) conform in all
material respects with the applicable requirements
of such acts, and (iii) will not contain any untrue
statement of a material fact concerning BOKF (and
its subsidiaries), or fail to state any material
fact necessary to make the statements therein
concerning BOKF (and its subsidiaries) not
misleading.
10.2.6 Agent shall cooperate with BOKF in the registration
as may be appropriate.
45
10.2.7 BOKF shall keep Agent reasonably advised of the
status of the registration including any
underwriting agreements into which BOKF may enter as
hereafter provided.
10.2.8 Except for the Holders Registration and the
Underwritten Registration, BOKF shall have no
obligation to register the BOKF Shares.
10.2.9 In the Underwritten Registration, BOKF may combine
the registration of the BOKF Shares issued by BOKF
with shares of BOKF Common Stock held by others,
including affiliates of BOKF. BOKF shall notify
Agent reasonably in advance of its intention to file
the Underwritten Registration and, in the event the
Agent so requests, shall combine the registration of
the BOKF Shares (or such number of BOKF Shares as
the Agent may request) with the other shares of BOKF
Common Stock being offered (whether to be issued by
BOKF or sold for the account of others including
affiliates of BOKF). In the event some or all of the
BOKF Shares are offered in the Underwritten
Registration, (i) such BOKF Shares shall be offered
for sale pursuant to such underwriting agreements
(and the terms and provisions thereof, including
such allocations among selling shareholders) as BOKF
shall in good faith enter with underwriters and (ii)
the Holders offering such
46
BOKF Shares shall pay their proportionate share of
any selling or underwriting fees and commissions
incurred in connection with an Underwritten
Registration.
10.2.10 Upon at least three (3) business days prior written
notice by BOKF given to the Agent specifying a
ninety (90) calendar day period commencing in 1999
(the "Lockup Period") those Holders owning more than
2,000 shares of First Muskogee Common Stock as of
the date hereof ("Lockup Shareholders") shall not
offer or sell BOKF Shares pursuant to the Holders'
Registration during the Lockup Period, except in
non-NASDAQ privately negotiated transactions.
47
10.2.11 If at any time, BOKF has material information not
publicly disclosed which, under the applicable
regulations of the Securities and Exchange
Commission precludes the sale of BOKF Shares without
an effective amendment to the registration
statement: 10.2.11.1 BOKF shall promptly advise
Agent and Agent shall advise Holders to cease
effecting sales of the BOKF Shares until an
appropriate amendment becomes effective;
10.2.11.2 BOKF shall withhold such information from
the public for only the reasonable period
of time a valid reason for such non-
disclosure exists; and,
10.2.11.3 BOKF shall promptly file an appropriate
amendment and use its best efforts to
cause the amendment to become effective
on the same terms and conditions as
provided above for the registration
statement.
10.2.11.4 BOKF shall use its best efforts to
maintain the effectiveness of the
48
registration statement for a period of
time from the effectiveness of the
Holders' Registration until the
expiration of two years following the
Closing.
10.2.11.5 BOKF shall amend or supplement the
registration statement at the request of
Holders' Agent to name any donee or
pledgee as a selling shareholder.
10.2.12 Each Holder offering BOKF Shares for sale pursuant
to the registration shall indemnify BOKF, its
directors and officers and each person controlling
BOKF for any costs or expenses incurred by it or
them for any material breach of Holders' agreements
under this Section and in respect of any untrue
statement of a material fact contained in the
registration statement or any omission to state
therein a material fact required to be stated
therein or necessary to make the statements therein
not misleading but only to the extent that such
untrue statement or omission is made in such
registration statement in reliance upon and in
conformity with written information furnished to
BOKF by or on behalf of such Holder for use in the
preparation of such registration statement or
prospectus included
49
therein. BOKF will indemnify each Holder for any
costs or expenses incurred by the Holder for any
material breach of BOKF's agreements under this
Section or non-compliance with law in respect of
this Section and/or in respect of any untrue
statement of a material fact contained in the
registration statement or any omission to state
therein a material fact required to be stated
therein or necessary to make the statements therein
not misleading, provided that BOKF will not be
liable in any such case to the extent that any such
cost or expense arises out of or is based upon any
untrue statement or omission made in reliance upon
and in conformity with written information furnished
to BOKF by or on behalf of such Shareholder for use
in the preparation of such registration statement or
prospectus therein.
10.2.13 BOKF shall, from the date of the issuance of the
BOKF Shares until the second anniversary of such
issuance, maintain its eligibility to use SEC Form
S-3 or its equivalent.
10.2.14 The representations and warranties made in this
Section shall survive for the maximum periods
permitted by applicable law.
10.2.15 The provisions of this Section 10 are for the
express benefit of each of the Holders, but the
Holders shall only
50
be permitted to enforce this Section by action taken
solely by Agent on behalf of all Holders determined
by the vote of a majority in interest.
10.3 RESTRICTIONS ON TRANSFER. Each BOKF Share shall be issued
subject to the following restrictions:
10.3.1 No BOKF Share issued to a person whom BOKF in the
exercise of its sole discretion (provided only such
discretion is exercised in good faith) determines is
an affiliate within the meaning of SEC Rule 405
(each herein called an "Affiliate Share") may be
sold or otherwise transferred until BOKF shall have
published financial statements which reflect at
least one month's combined operations subsequent to
the Closing.
10.3.2 Each certificate representing an Affiliate Share
shall bear a restrictive legend evidencing the
restriction described in the preceding subsection.
10.3.3 Each certificate representing an Affiliate Share
shall bear a usual and customary private placement
restricted stock legend in addition to the legend
described in the preceding subsection and shall be
subject to stop transfer orders (as reasonably
required); provided, however, at such time as BOKF
shall have published financial statements which
reflect at least one month's combined operations
subsequent to the Closing, and upon the
effectiveness of
51
the Holders' Registration or upon receipt of an
opinion of counsel that a proposed sale or other
transfer of a specified number of shares of BOKF
Common Stock will comply with or be exempt from the
Securities Act of 1933, BOKF shall as promptly as
practicable after receipt of the stock certificates
representing such Affiliate Shares (and, in any
event, within seven business days after such
receipt) direct BOKF's transfer agent to remove the
stop transfer order and reissue a stock certificate
evidencing such Affiliate Shares without any
restrictive legend.
10.3.4 First Muskogee shall use commercially reasonable
efforts to obtain agreements from its affiliates
acknowledging that the BOKF Shares are subject to
the provisions of this Section 10.
10.3.5 All certificates representing BOKF Shares shall bear
a private placement restrictive legend and the
Holders thereof shall not be entitled to sell or
transfer any such BOKF Shares except pursuant to the
Holders Registration, the Underwritten Registration,
or an opinion of counsel to BOKF (which opinion
shall not be unreasonably withheld, delayed, or
denied) that the transaction is exempt from
registration pursuant to the Securities Act of 1933
and any applicable Blue Sky Acts.
10.3.6 All certificates representing BOKF Shares issued in
respect
52
of shares of First Muskogee Common Stock held by a
Lockup Shareholder as of the date hereof shall bear
a restrictive legend.
11. FIRST MUSKOGEE TERMINATION DAMAGES. In the event this Agreement is not
consummated by reason of a failure of one or more of the conditions
precedent set forth in Sections 7.5, 8.1, 8.2, 8.3, 8.4 or 8.5 through
no fault of First Muskogee, then BOKF shall promptly pay First Muskogee
the sum of One Million Dollars ($1,000,000) as an amount to compensate
First Muskogee for damages, and not as a penalty, arising from or in
connection with such termination and failure to consummate the Merger,
which amount BOKF and First Muskogee agree would be very difficult to
determine and which agreed amount BOKF and First Muskogee agree is fair
and reasonable.
12. BOKF TERMINATION DAMAGES. In the event this Agreement is not
consummated by reason of a failure of one or more of the conditions
precedent set forth in Sections 7.1, 7.2 (but only in the event such
condition fails because of a breach by First Muskogee or First Muskogee
Bancshares of a promise, covenant, representation or warranty set forth
in this Merger Agreement), 7.3, 7.4, 7.6, 7.7, and 7.8 through no fault
of BOKF, then First Muskogee shall promptly pay BOKF the sum of Two
Hundred Fifty Thousand Dollars ($250,000) as an amount to compensate
BOKF for damages, and not as a penalty, arising from or in connection
with such termination and failure to consummate the Merger, which
amount BOKF and First Muskogee agree would be very difficult to
determine and which agreed amount BOKF and First Muskogee agree is fair
and reasonable.
13. THE BOKF COMMON STOCK ESCROW. The BOKF Common Stock Escrow shall be
established on the following terms and conditions:
13.1 The escrow agent shall be BOk ("Escrow Agent").
53
13.2 The BOKF Common Stock Escrow shall be governed by the
standard form of escrow agreement generally in use by BOk
(the "Escrow Agreement").
13.3 BOKF shall deliver the Escrow Shares to the Escrow Agent at
the Closing.
13.4 In the event BOKF claims a breach of the representations and
warranties of First Muskogee and First Muskogee Bank arising
under this Merger Agreement, BOKF shall give notice of the
claim to the Agent (a "Claim"). The notice shall identify the
representations and warranties which BOKF claims have been
breached and describe in reasonable detail the basis of the
Claim.
13.5 In the event BOKF makes a Claim(s) prior to the Claim Notice
Deadline, the Escrow Agent shall continue to hold the Escrow
Shares until such Claim(s) is resolved by (i) the mutual
agreement of Agent and BOKF or (ii) a final adjudication
determining the merits of the Claim(s), at which time the
Escrow shall terminate and the Escrow Agent shall pay (a
"Claim Payment") the Claim as mutually agreed or finally
adjudicated (an "Allowed Claim"); provided, however, Allowed
Claims shall be paid only to the extent the total of all
Allowed Claims exceeds $100,000.
13.6 A Claim Payment shall be made by the delivery to BOKF of that
number of Escrow Shares determined by dividing the amount of
the Allowed Claim by an amount equal to the average of the
mid-points between the highest price and the lowest price at
which trades occurred (or, in the event of a single trade,
the price of such trade) for BOKF Common Stock on NASDAQ on
the five (5) trading days on which at least one trade
actually occurs immediately preceding the Closing.
54
13.7 The Escrow shall terminate at the later of the Claim Notice
Deadline or the date on which all timely noticed Claims have
been resolved by mutual agreement or final adjudication and
all Allowed Claims, if any, shall have been paid.
13.8 Upon termination of the Escrow all Escrow Shares remaining in
the Escrow shall be delivered to Holders in the same
proportion as the shares were deposited in the Escrow.
13.9 The rights of the Holders to receive BOKF Shares from the
Escrow shall not be assignable or transferable except by
operation of law or by intestacy or with the approval of BOKF
(which approval shall not be unreasonably withheld, delayed,
or denied) and will not be evidenced by any certificate or
other evidence of ownership.
13.10 BOKF shall pay the fees and costs of the Escrow Agent with
respect to the Escrow.
13.11 The cost, if any, to First Muskogee and First Muskogee Bank
of terminating the ITI-Unisys Contract shall be an Allowed
Claim.
14. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions shall
apply to this Agreement:
14.1 All notices or advices required or permitted to be given by
or pursuant to this Agreement, shall be given in writing. All
such notices and advices shall be (i) delivered personally,
(ii) delivered by facsimile or delivered by U.S. Registered
or Certified Mail, Return Receipt Requested mail, or (iii)
delivered for overnight delivery by a nationally recognized
overnight courier service. Such notices and advices shall be
deemed to have been
55
given (i) the first business day following the date of
delivery if delivered personally or by facsimile, (ii) on the
third business day following the date of mailing if mailed by
U.S. Registered or Certified Mail, Return Receipt Requested,
or (iii) on the date of receipt if delivered for overnight
delivery by a nationally recognized overnight courier
service. All such notices and advices and all other
communications related to this Agreement shall be given as
follows:
BOKF and Mergercorp:
▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President
BOK FINANCIAL CORPORATION
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ - Facsimile
and
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Secretary and General Counsel to
BOK Financial Corporation
Old City Hall
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ - Facsimile
First Muskogee, Principal Shareholders,
and First Muskogee Bank:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ - Facsimile
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇
1800 Mid-America Tower
Oklahoma City, OK
(▇▇▇) ▇▇▇-▇▇▇▇ - Facsimile
56
or to such other address as the party may have furnished to
the other parties in accordance herewith, except that notice
of change of addresses shall be effective only upon receipt.
14.2 This Agreement is made and executed in Tulsa County,
Oklahoma.
14.3 This Agreement shall be subject to, and interpreted by and in
accordance with, the laws (excluding conflict of law
provisions) of the State of Oklahoma.
14.4 This Agreement is the entire Agreement of the parties
respecting the subject matter hereof. There are no other
agreements, representations or warranties, whether oral or
written, respecting the subject matter hereof.
14.5 No course of prior dealings involving any of the parties
hereto and no usage of trade shall be relevant or advisable
to interpret, supplement, explain or vary any of the terms of
this Agreement, except as expressly provided herein.
14.6 This Agreement, and all the provisions of this Agreement,
shall be deemed drafted by all of the parties hereto.
14.7 This Agreement shall not be interpreted strictly for or
against any party, but solely in accordance with the fair
meaning of the provisions hereof to effectuate the purposes
and interest of this Agreement.
14.8 Each party hereto has entered into this Agreement based
solely upon the agreements, representations and warranties
expressly set forth herein and upon his own knowledge and
investigation. Neither party has relied upon any
representation or warranty of any other party hereto except
any such representations or warranties as are expressly set
forth herein.
57
14.9 Each of the persons signing below on behalf of a party hereto
represents and warrants that he or she has full requisite
power and authority to execute and deliver this Agreement on
behalf of the parties for whom he or she is signing and to
bind such party to the terms and conditions of this
Agreement.
14.10 This Agreement may be executed in counterparts, each of which
shall be deemed an original. This Agreement shall become
effective only when all of the parties hereto shall have
executed the original or counterpart hereof. This agreement
may be executed and delivered by a facsimile transmission of
a counterpart signature page hereof.
14.11 In any action brought by a party hereto to enforce the
obligations of any other party hereto, the prevailing party
shall be entitled to collect from the opposing party to such
action such party's reasonable litigation costs and attorneys
fees and expenses (including court costs, reasonable fees of
accountants and experts, and other expenses incidental to the
litigation).
14.12 This Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective successors and
assigns.
14.13 This is not a third party beneficiary contract except as
otherwise expressly stated herein. No person or entity other
than a party signing this Agreement shall have any rights
under this Agreement except as otherwise expressly stated
herein.
14.14 This Agreement may be amended or modified only in a writing
which specifically references this Agreement.
14.15 This Agreement may not be assigned by any party hereto.
14.16 A party to this Agreement may decide or fail to require full
or timely
58
performance of any obligation arising under this Agreement.
The decision or failure of a party hereto to require full or
timely performance of any obligation arising under this
Agreement (whether on a single occasion or on multiple
occasions) shall not be deemed a waiver of any such
obligation. No such decisions or failures shall give rise to
any claim of estoppel, laches, course of dealing, amendment
of this Agreement by course of dealing, or other defense of
any nature to any obligation arising hereunder.
14.17 The repudiation, breach, or failure to perform any obligation
arising under this Agreement by a party after reasonable
notice thereof shall be deemed a repudiation, breach, and
failure to perform all of such party's obligations arising
under this Agreement.
14.18 Time is of the essence with respect to each obligation
arising under this Agreement. The failure to timely perform
an obligation arising hereunder shall be deemed a failure to
perform the obligation.
14.19 Any cause of action for a breach or enforcement of, or a
declaratory judgment respecting, this Agreement shall be
commenced and maintained only in the United States District
Court for the Northern District of Oklahoma or the applicable
Oklahoma state trial court sitting in Tulsa, Oklahoma and
having subject matter jurisdiction.
14.20 All actions taken and documents delivered at the Closing
shall be deemed to have been taken and executed
simultaneously and no action shall be deemed taken nor any
document delivered until all have been taken and delivered.
Dated and effective the date first set forth above.
59
FIRST BANCSHARES OF MUSKOGEE, INC.,
an Oklahoma Corporation
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
FIRST NATIONAL BANK AND TRUST COMPANY
OF MUSKOGEE
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Principal Shareholders of First Bancshares of
Muskogee, Inc. (As Set Forth On Exhibit 1.3)
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, as Custodian for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, as Custodian for ▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, Trustee of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust
/s/ ▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, Trustee of the ▇▇▇ ▇▇▇▇▇▇▇ Trust
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee of the
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Trust
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Trust
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
60
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee of the
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Trust
/s/ ▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇▇
----------------------------------------------------
▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
BOK FINANCIAL CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President
BOKF MERGER CORPORATION NUMBER SEVEN
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice-President
61
EXHIBIT 1.3
TO
MERGER AGREEMENT
Principal Shareholders
# OF SHARES
▇▇▇▇▇ ▇▇▇▇▇▇▇ 410
▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 2,930
▇▇▇▇▇▇ ▇▇▇▇▇▇ 3,079
▇▇▇▇▇▇ ▇▇▇▇▇▇, as Custodian for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 571
▇▇▇▇▇▇ ▇▇▇▇▇▇, as Custodian for ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 1,229
▇▇▇▇ ▇▇▇▇▇▇▇, Trustee of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust 750
▇▇▇ ▇▇▇▇▇▇▇ 1,229
▇▇▇▇ ▇▇▇▇▇▇▇, Trustee of the ▇▇▇ ▇▇▇▇▇▇▇ Trust 750
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Trust 876
▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Trust 876
▇▇▇▇ ▇▇▇▇▇▇▇ 2,408
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Trust 4,733
▇▇▇▇▇▇ ▇▇▇▇ 2,390
▇▇▇ ▇▇▇▇▇ 11,772
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 9,000
-------
43,574
Total Shares Outstanding 81,260
Percent of Total 53.5%
62
EXHIBIT 2.9
TO
MERGER AGREEMENT
63
EXHIBIT 4.3
TO
MERGER AGREEMENT
Subsidiaries
First Bancshares of Muskogee owns 100% of
First Muskogee Insurance Corporation
64
EXHIBIT 4.6.3
TO
MERGER AGREEMENT
Material Liabilities
1. HUD Loan Indemnified
▇▇▇▇▇▇▇▇ 45,110.29 Current
▇▇▇▇▇▇▇▇▇▇ 56,617.63 Current
101,727.92
2. Sheshunoff Contract - Investment Banking Firm
3. ▇▇▇▇▇ & ▇▇▇▇▇▇▇, Attorneys - Legal Fees
4. There has been no reserve for income taxes due to Subchapter
S status or arising from termination of S Status due to the
Merger.
5. Information Technology Inc. Contracts
6. Liability Under the Unisys Contracts
7. Accrued vacation not on financial statements
8. Liabilities described under all other exhibits
9. Liabilities under $25,000, which are not material.
65
EXHIBIT 4.7
TO
MERGER AGREEMENT
Conduct of Business Prior to Closing Exceptions
1. Contracts listed on Exhibit 4.9 since 9/30/98.
2. Payments permitted by the express terms of the Merger
Agreement
66
EXHIBIT 4.9
TO
MERGER AGREEMENT
Contracts and Commitments
None; except as listed below:
1. Contracts with Information Technology Inc.
2. Contracts with Unisys
3. Tenant leases
4. Data Processing Agreement with First Bank & Trust, ▇▇▇▇▇▇▇
5. ▇▇ ▇▇▇▇ Contracts
6. NW Mutual Life Insurance Contract on ▇.▇. ▇▇▇▇▇▇▇
7. NW Mutual Life Insurance Contract on ▇.▇. ▇▇▇▇▇▇▇
8. NW Mutual Life Insurance Contract on ▇▇▇▇ ▇▇▇▇▇
9. NW Mutual Life Insurance Contract on ▇▇▇▇▇ ▇▇▇▇▇▇▇
11. NW Mutual Life Insurance Contract on ▇▇▇▇▇ ▇▇▇▇
12. K-Mart ATM Lease
13. NW Mutual Life Insurance Contract on ▇▇▇ ▇▇▇▇
First National Bank has notified Information Technology Inc. and Unisys
of cancellation of the above contracts. This cancellation will cause
First National Bank to be in default under the contracts.
67
EXHIBIT 4.10
TO
MERGER AGREEMENT
Pending Litigation
1. Muskogee Title / U.S. Fidelity & Guaranty
2. ▇▇▇▇ ▇▇▇▇▇▇, et al
3. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Trustee
4. Various Actions Where First National Bank is Plaintiff
68
EXHIBIT 4.15
TO
MERGER AGREEMENT
Employee Contracts and Benefit Plans
1. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - Employment Contract
2. Deferred Compensation Plans for: ▇.▇. ▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ -
Attached Schedule
3. Stock Option Plan for ▇.▇. ▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇ and ▇.▇.
▇▇▇▇
4. First Bancshares of Muskogee Employees 401(K) Profit Sharing
Plan
5. Health Plan
6. Long Term Disability Plan
7. Employee Life Insurance Plan
8. Vacation and Sick Leave Plan
9. Employee benefits and agreements specifically permitted by
the Merger Agreement
69
EXHIBIT 6.12.1
TO
MERGER AGREEMENT
Employment Agreement
None; except ▇▇▇▇▇▇▇ Employment Agreement.
70
EXHIBIT 6.13
TO
MERGER AGREEMENT
Obligations
BONUS. BOKF shall cause BOk to pay a bonus ("Bonus") of Ten Thousand
Dollars (less withholding) to each of the following employees of First Muskogee
Bank who are not offered, on or before the Closing, employment by BOk in Tulsa
or Muskogee on terms and conditions, including salary, comparable to their
employment with First Muskogee: ▇. ▇▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇, ▇. ▇▇▇▇, ▇. ▇▇▇▇, and ▇.
▇▇▇▇▇. Each bonus shall be paid immediately following the Closing.
SEVERANCE PAY FOR REDUCTION IN FORCE. In the event any employees of
First Muskogee Bank shall be terminated by BOK as a result of a reduction in
force or without cause on or before the first day of the twelfth (12th)
calendar month following the Closing, BOKF shall cause BOk to pay such
employees severance pay (less usual and customary withholdings) in an amount
equal to each such employee's regular salary (excluding bonuses, incentive
compensation, and the like) for four weeks plus one week for each full year of
employment with First Muskogee Bank not exceeding twelve weeks. For the purpose
of determining entitlement to severance pay in accordance with this paragraph,
no First Muskogee Bank employee shall be required to change his place of work
from the Muskogee area.
CONSUMMATION PAY. BOKF shall cause First Muskogee Bank to pay an
aggregate amount not exceeding $105,000 to First Muskogee Bank employees (which
may be employees receiving benefits under the other provisions of this Exhibit)
for the purpose of ensuring such employees continue to perform their duties
through the date of the consummation of the Merger and the merger of First
Muskogee Bank into BOk, as mutually agreed between the Chief Executive Officer
of First Muskogee Bank and BOKF.
CHANGE IN CONTROL BONUS POOL. At or immediately before the Closing,
First Muskogee Bank may pay bonuses in the aggregate amount of approximately
$258,398 (including FICA and other indirect costs) to such employees of First
Muskogee Bank as the Chief Executive Officer of First Muskogee Bank determines,
which shall be in addition to the other bonuses and severance payments
permitted by this Merger Agreement.
71
EXHIBIT 6.3.7
TO
MERGER AGREEMENT
Compensation Exceptions
1. Payments permitted by the express terms of the Merger
Agreement
2. 1998 Stock Options for ▇.▇. ▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇ and ▇.▇.
▇▇▇▇ per Exhibit 2.9
3. Employment Agreements with ▇.▇. ▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as contemplated by Merger Agreement
72
EXHIBIT 7.4
TO
MERGER AGREEMENT
First Muskogee Counsel's Opinion
[To be prepared by mutual agreement of counsel to BOKF and
counsel to First Muskogee.]
73
EXHIBIT 7.7
TO
MERGER AGREEMENT
AGREEMENT NOT TO COMPETE
This Agreement Not to Compete ("Agreement") is made effective as of
_____________, 199___ (the "Effective Date") between:
(i) _____________________ ("Principal"); and,
(ii) BOK Financial Corporation ("BOKF").
In consideration of the mutual covenants contained herein, the adequacy
of which is hereby expressly acknowledged, and intending to be legally bound
hereby, Principal and BOKF agree as follows:
(1) PURPOSE OF THIS AGREEMENT NOT TO COMPETE. Principal is a key
officer or director and shareholder of First Muskogee and/or First
Muskogee Bank. The shareholders of First Muskogee and First
Muskogee Bank and BOKF are contemporaneously herewith entering
into that certain Merger Agreement dated effective as of
______________, 1998 to which reference is hereby made (the
"Merger Agreement"). The Merger Agreement constitutes the sale of
the goodwill of the business of First Muskogee and First Muskogee
Bank to BOKF. Principal acknowledges that competition by Principal
with BOKF would damage the goodwill being sold by Principal. The
purpose of this agreement is to set forth the terms and conditions
on which Principal agrees not to compete with BOKF. The defined
terms set forth herein shall have the meanings set forth in the
Merger Agreement.
(2) Principal hereby agrees that, from and after the Closing for one
year following the closing, Principal shall not directly or
indirectly (whether as an officer, director, employee, partner,
stockholder, creditor or agent or representative of other persons
or entities or in any other manner) engage in the banking business
in Muskogee County, State of Oklahoma or any county contiguous
thereto or in such other area where First Muskogee or First
Muskogee Bank has heretofore regularly conducted business or
maintained an office.
(3) Paragraph 2 hereof shall not apply to any investment by the
Principal in any widely-held class of securities of any banking
business, which investment comprises less than 5% of the total
number of shares of that class of securities outstanding.
(4) Principal agrees that:
74
(a) This Agreement is entered into in connection with the sale of the
goodwill of First Muskogee and First Muskogee Bank within the
meaning of the laws of Oklahoma relating to agreements not to
compete.
(b) The restrictions imposed by this Agreement (particularly the
geographical and time restrictions) are fair, reasonable and
necessary to protect the goodwill of First Muskogee and First
Muskogee Bank which is being sold to BOKF.
(c) Any remedy at law for any breach of this Agreement would be
inadequate and, in the event of any such breach, BOKF shall be
entitled to immediate and permanent injunctive relief to preclude
any such breach (in addition to any remedies at law to which BOKF
may be entitled) without any necessity of establishing irreparable
injury or posting bond or security therefore.
(d) Without limiting the generality of the obligations imposed by
Paragraph 2 hereof, Principal agrees that the Principal shall not
solicit persons or entities who are customers or clients of First
Muskogee and First Muskogee Bank at the date hereof or solicit
employees of First Muskogee or First Muskogee Bank to seek
employment with any person or entity except BOKF and its
subsidiaries, whether, in either case, such solicitation is made
within or without the area described in Paragraph 2 hereof.
(e) Principal represents that Principal is entering into this
Agreement in order to induce BOKF to enter into and consummate the
Merger Agreement and acknowledges that the consideration received
in the Merger is full and adequate consideration for the promises
of Principal made herein.
(5) MISCELLANEOUS. The following miscellaneous provisions shall apply to
this Agreement:
(a) This Agreement is made and executed in Tulsa County, Oklahoma.
(b) This Agreement shall be subject to, and interpreted by and in
accordance with, the laws of the State of Oklahoma (excluding the
conflicts of law provisions thereof).
(c) This Agreement is the entire agreement of the parties respecting
the subject matter hereof. There are no other agreements, whether
oral or written, respecting the subject matter hereof.
75
(d) This Agreement may be executed in counterparts, each of which
shall be deemed an original. This Agreement shall become effective
only when all of the parties hereto shall have executed the
original or a counterpart hereof. This Agreement may be delivered
by facsimile transmission of an executed original or counterpart
hereof.
(e) In any action brought by a party hereto to enforce the obligations
of any other party hereto, the prevailing party shall be entitled
to collect from the opposing parties to such action such party's
reasonable attorneys fees and costs (including court costs,
reasonable fees of accountants and experts, and other expenses
incidental to the action).
(f) This is not a third party beneficiary contract. No person or
entity other than an express party hereto shall have any rights
hereunder.
(g) This Agreement shall be binding upon the parties and their
respective successors and assigns. The rights of the parties under
this Agreement may not be assigned without the prior written
consent of the parties hereto.
By
----------------------------------------------
BOK FINANCIAL CORPORATION
By
----------------------------------------------
76
EXHIBIT 8.3
TO
MERGER AGREEMENT
BOKF Counsel's Opinion
[To be prepared by mutual agreement of counsel to BOKF
and counsel to First Muskogee.]
77
EXHIBIT 9.1.3
TO
MERGER AGREEMENT
EMPLOYMENT AGREEMENT EXCEPTIONS
1. Deferred compensation plans are to remain in effect provided
there is no incremental cost to First Muskogee Bank or BOKF.
2. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Contract.
3. Termination of retirement and medical plans will involve
potential routine cost to implement termination.
