EXHIBIT 2
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
CAPITAL SAVINGS BANCORP, INC.
AND
UNION PLANTERS CORPORATION
Dated as of November 25, 1997
TABLE OF CONTENTS
Page
----
Parties.................................................................. 1
Preamble................................................................. 1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER............................. 2
1.1 Merger....................................................... 2
1.2 Time and Place of Closing.................................... 2
1.3 Effective Time............................................... 2
1.4 Execution of Stock Option Agreement.......................... 2
1.5 Restructure of Transaction................................... 2
ARTICLE 2 - TERMS OF MERGER.............................................. 3
2.1 Charter...................................................... 3
2.2 By-laws...................................................... 3
2.3 Directors and Officers....................................... 3
ARTICLE 3 - MANNER OF CONVERTING SHARES.................................. 3
3.1 Conversion of Shares......................................... 3
3.2 Anti-Dilution Provisions..................................... 4
3.3 Shares Held by Capital or UPC................................ 4
3.4 Fractional Shares............................................ 4
3.5 Conversion of Stock Options.................................. 5
ARTICLE 4 - EXCHANGE OF SHARES........................................... 6
4.1 Exchange Procedures.......................................... 6
4.2 Rights of Former Capital Shareholders........................ 6
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF CAPITAL.................... 7
5.1 Organization, Standing, and Power............................ 7
5.2 Authority; No Breach By Agreement............................ 7
5.3 Capital Stock................................................ 8
5.4 Capital Subsidiaries......................................... 8
5.5 SEC Filings; Financial Statements............................ 9
5.6 Absence of Undisclosed Liabilities........................... 10
5.7 Absence of Certain Changes or Events......................... 10
5.8 Tax Matters.................................................. 10
5.9 Allowance for Possible Loan Losses........................... 11
5.10 Assets....................................................... 12
5.11 Intellectual Property........................................ 12
5.12 Environmental Matters........................................ 13
5.13 Compliance With Laws......................................... 13
5.14 Labor Relations.............................................. 14
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5.15 Employee Benefit Plans....................................... 14
5.16 Material Contracts........................................... 16
5.17 Legal Proceedings............................................ 17
5.18 Reports...................................................... 17
5.19 Statements True and Correct.................................. 17
5.20 Accounting, Tax, and Regulatory Matters...................... 18
5.21 State Takeover Laws.......................................... 18
5.22 Charter Provisions........................................... 18
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF UPC........................ 18
6.1 Organization, Standing, and Power............................ 18
6.2 Authority; No Breach By Agreement............................ 19
6.3 Capital Stock................................................ 19
6.4 UPC Subsidiaries............................................. 20
6.5 SEC Filings; Financial Statements............................ 20
6.6 Absence of Undisclosed Liabilities........................... 21
6.7 Absence of Certain Changes or Events......................... 21
6.8 Tax Matters.................................................. 21
6.9 Environmental Matters........................................ 22
6.10 Compliance With Laws......................................... 22
6.11 Legal Proceedings............................................ 23
6.12 Reports...................................................... 23
6.13 Statements True and Correct.................................. 23
6.14 Accounting, Tax, and Regulatory Matters...................... 24
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION..................... 24
7.1 Affirmative Covenants of Capital............................. 24
7.2 Negative Covenants of Capital................................ 24
7.3 Covenants of UPC............................................. 27
7.4 Adverse Changes in Condition................................. 27
7.5 Reports...................................................... 27
ARTICLE 8 - ADDITIONAL AGREEMENTS........................................ 28
8.1 Registration Statement; Proxy Statement; Shareholder Approval 28
8.2 Exchange Listing............................................. 28
8.3 Applications................................................. 28
8.4 Filings with State Offices................................... 28
8.5 Agreement as to Efforts to Consummate........................ 29
8.6 Investigation and Confidentiality............................ 29
8.7 Press Releases............................................... 29
8.8 Certain Actions.............................................. 30
8.9 Accounting and Tax Treatment................................. 30
8.10 State Takeover Laws.......................................... 30
8.11 Charter Provisions........................................... 30
8.12 Agreements of Affiliates..................................... 30
8.13 Employee Benefits and Contracts.............................. 31
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8.14 Indemnification.............................................. 31
8.15 Corporate Actions of Holding................................. 32
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE............ 32
9.1 Conditions to Obligations of Each Party...................... 32
9.2 Conditions to Obligations of UPC............................. 34
9.3 Conditions to Obligations of Capital......................... 35
ARTICLE 10 - TERMINATION................................................. 36
10.1 Termination.................................................. 36
10.2 Effect of Termination........................................ 39
10.3 Non-Survival of Representations and Covenants................ 39
ARTICLE 11 - MISCELLANEOUS............................................... 40
11.1 Definitions.................................................. 40
11.2 Expenses..................................................... 48
11.3 Brokers and Finders.......................................... 48
11.4 Entire Agreement............................................. 48
11.5 Amendments................................................... 49
11.6 Waivers...................................................... 49
11.7 Assignment................................................... 49
11.8 Notices...................................................... 49
11.9 Governing Law................................................ 50
11.10 Counterparts.................................................. 51
11.11 Captions...................................................... 51
11.12 Interpretations............................................... 51
11.13 Enforcement of Agreement...................................... 51
11.14 Severability.................................................. 51
Signatures............................................................... 52
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LIST OF EXHIBITS
Exhibit Number Description
1. Plan of Merger. (ss. 1.1).
2. Form of Stock Option Agreement. (▇▇.▇▇. 1.4, 11.1).
3. Form of agreement of affiliates of Capital. (▇▇.▇▇. 8.12, 9.2(d)).
4. Form of Supplemental Letter. (▇▇.▇▇. 7.2, 11.1).
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement")
is made and entered into as of November 25, 1997, by and between CAPITAL SAVINGS
BANCORP, INC. ("Capital"), a Delaware corporation having its principal office
located in Jefferson City, Missouri; and UNION PLANTERS CORPORATION ("UPC"), a
Tennessee corporation having its principal office located in Memphis, Tennessee.
Preamble
The Boards of Directors of Capital and UPC are of the opinion
that the transactions described herein are in the best interests of the parties
and their respective shareholders. This Agreement provides for the acquisition
of Capital by UPC pursuant to the merger of Capital with and into Union Planters
Holding Corporation, a wholly owned, first-tier subsidiary of UPC organized and
existing under the Laws of the State of Tennessee (" Holding"). At the effective
time of such merger, the outstanding shares of the common stock of Capital shall
be converted into the right to receive shares of the common stock of UPC (except
as provided in Sections 3.3 and 3.4 of this Agreement). As a result,
shareholders of Capital shall become shareholders of UPC and Holding shall
continue to conduct the business and operations of Capital as a wholly owned
subsidiary of UPC. The transactions described in this Agreement are subject to
the approvals of the shareholders of Capital, the Board of Governors of the
Federal Reserve System, and other applicable federal and state regulatory
authorities, and the satisfaction of certain other conditions described in this
Agreement. It is the intention of the parties to this Agreement that the Merger
for federal income tax purposes shall qualify as a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code, and for accounting
purposes shall qualify for treatment as a pooling of interests.
Immediately after the execution and delivery of this
Agreement, as a condition and inducement to UPC's willingness to enter into this
Agreement, Capital and UPC are entering into a stock option agreement pursuant
to which Capital is granting to UPC an option to purchase shares of Capital
Common Stock.
Certain terms used in this Agreement are defined in Section
11.1 of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time, Capital shall be merged with and into Holding
in accordance with the provisions of Section 252 of the DGCL and with the effect
provided in Section 259 of the DGCL and in accordance with the provisions of
▇▇-▇▇-▇▇▇ of the TBCA with the effect provided in Section ▇▇-▇▇-▇▇▇ of the TBCA
(the "Merger"). Holding shall be the Surviving Corporation resulting from the
Merger and shall continue to be governed by the Laws of the State of Tennessee.
The Merger shall be consummated pursuant to the terms of this Agreement, which
has been approved and adopted by the respective Boards of Directors of Capital
and UPC and the Plan of Merger, in substantially the form of Exhibit 1, which
has been approved and adopted by the Board of Directors of Capital and will be
approved and adopted by the Board of Directors of Holding and UPC (in its
capacity as sole shareholder of Holding).
1.2 Time and Place of Closing. The Closing will take place at
9:00 A.M. on the date that the Effective Time occurs (or the immediately
preceding day if the Effective Time is earlier than 9:00 A.M.), or at such other
time as the Parties, acting through their chief executive officers or chief
financial officers, may mutually agree. The Closing shall be held at such place
as may be mutually agreed upon by the Parties.
1.3 Effective Time. The Merger and other transactions
contemplated by this Agreement shall become effective on the date and at the
time the Certificate of Merger reflecting the Merger shall become effective with
the Secretary of State of the State of Delaware and the Articles of Merger
reflecting the Merger shall become effective with the Secretary of State of the
State of Tennessee (the "Effective Time"). Subject to the terms and conditions
hereof, unless otherwise mutually agreed upon in writing by the chief executive
officers or chief financial officers of each Party, the Parties shall use their
reasonable efforts to cause the Effective Time to occur on such date as may be
designated by UPC within 30 days following the last to occur of (i) the
effective date (including expiration of any applicable waiting period) of the
last required Consent of any Regulatory Authority having authority over and
approving or exempting the Merger, (ii) the date on which the shareholders of
Capital approve this Agreement and the Plan of Merger as required by applicable
Law, and (iii) the date on which all other conditions precedent to each Party's
obligations hereunder shall have been satisfied or waived (to the extent
waivable by such Party).
1.4 Execution of Stock Option Agreement. Simultaneously with
the execution of this Agreement by the Parties and as a condition thereto,
Capital is executing and delivering to UPC a stock option agreement (the "Stock
Option Agreement"), in substantially the form of Exhibit 2, pursuant to which
Capital is granting to UPC an option to purchase shares of Capital Common Stock.
1.5 Restructure of Transaction. UPC shall, in its reasonable
discretion, have the unilateral right to revise the structure of the Merger
contemplated by this Agreement in order to achieve tax benefits or for any other
reason which UPC may deem advisable; provided, however, that UPC shall not have
the right, without the approval of the Board of Directors of Capital, to make
any revision to the structure of the Merger which: (i) changes the amount of the
consideration which the holders of shares of Capital Common Stock are entitled
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to receive (determined in the manner provided in Section 3.1 of this Agreement);
(ii) changes the intended tax-free effects of the Merger to UPC or the holders
of shares of Capital Common Stock; (iii) would permit UPC to pay the
consideration other than by delivery of UPC Common Stock registered with the SEC
(in the manner described in Section 4.1 of this Agreement); (iv) would be
materially adverse to the interests of Capital or holders of shares of Capital
Common Stock; (v) would unreasonably impede or delay consummation of the Merger;
or (vi) would affect any of the provisions in Sections 8.13 or 8.14 of this
Agreement. UPC may exercise this right of revision by giving written notice to
Capital in the manner provided in Section 11.8 of this Agreement which notice
shall be in the form of an amendment to this Agreement or in the form of an
Amended and Restated Agreement and Plan of Merger.
ARTICLE 2
TERMS OF MERGER
2.1 Charter. The Charter of Holding in effect immediately
prior to the Effective Time shall be the Charter of the Surviving Corporation
until otherwise amended or repealed.
2.2 By-laws. The By-laws of Holding in effect immediately
prior to the Effective Time shall be the By-laws of the Surviving Corporation
until otherwise amended or repealed.
2.3 Directors and Officers. The directors of Holding in office
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, shall serve as the directors of the Surviving
Corporation from and after the Effective Time in accordance with the By-laws of
the Surviving Corporation. The officers of Holding in office immediately prior
to the Effective Time, together with such additional persons as may thereafter
be elected, shall serve as the officers of the Surviving Corporation from and
after the Effective Time in accordance with the By-laws of the Surviving
Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares. Subject to the provisions of this
Article 3, at the Effective Time, by virtue of the Merger and without any action
on the part of UPC, Holding, Capital, or the shareholders of any of the
foregoing, the shares of the constituent corporations shall be converted as
follows:
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(a) Each share of UPC Capital Stock, including any associated
UPC Rights, issued and outstanding immediately prior to the Effective
Time shall remain issued and outstanding from and after the Effective
Time.
(b) Each share of Holding Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(c) Each share of Capital Common Stock (excluding shares held
by any Capital Company or by UPC or any of its Subsidiaries, in each case
other than in a fiduciary capacity or as a result of debts previously
contracted) issued and outstanding at the Effective Time shall cease to
be outstanding and shall be converted into and exchanged for the right to
receive .3812 of a share of UPC Common Stock (as subject to possible
adjustment as set forth in Section 10.1(g) of this Agreement, the
"Exchange Ratio"). Pursuant to the UPC Rights Agreement, each share of
UPC Common Stock issued in connection with the Merger upon conversion of
Capital Common Stock shall be accompanied by a UPC Right.
3.2 Anti-Dilution Provisions. In the event UPC changes the
number of shares of UPC Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock and the record date therefor (in the
case of a stock dividend) or the effective date thereof (in the case of a stock
split or similar recapitalization for which a record date is not established)
shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
3.3 Shares Held by Capital or UPC. Each of the shares of
Capital Common Stock held by any Capital Company or by any UPC Company, in each
case other than in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
3.4 Fractional Shares. Notwithstanding any other provision of
this Agreement, each holder of shares of Capital Common Stock exchanged pursuant
to the Merger who would otherwise have been entitled to receive a fraction of a
share of UPC Common Stock (after taking into account all certificates delivered
by such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of UPC Common Stock multiplied
by the market value of one share of UPC Common Stock at the Effective Time. The
market value of one share of UPC Common Stock at the Effective Time shall be the
closing price of such common stock on the NYSE (as reported by The Wall Street
Journal or, if not reported thereby, any other authoritative source selected by
UPC) on the last trading day preceding the Effective Time. No such holder will
be entitled to dividends, voting rights, or any other rights as a shareholder in
respect of any fractional shares.
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3.5 Conversion of Stock Options.
(a) At the Effective Time, each option to purchase or other
right with respect to shares of Capital Common Stock pursuant to stock options,
stock appreciation rights or other rights, including stock awards ("Capital
Options") granted by Capital under the Capital Stock Plans, which are
outstanding at the Effective Time, whether or not exercisable, shall be
converted into and become rights with respect to UPC Common Stock, and UPC shall
assume each Capital Option, in accordance with the terms of the Capital Stock
Plan and stock option or other agreement by which it is evidenced, except that
from and after the Effective Time, (i) UPC and its Salary and Benefits Committee
shall be substituted for Capital and the Committee of Capital's Board of
Directors (including, if applicable, the entire Board of Directors of Capital)
or other independent committee administering such Capital Stock Plan, (ii) each
Capital Option assumed by UPC may be exercised solely for shares of UPC Common
Stock (or cash in the case of stock appreciation rights), (iii) the number of
shares of UPC Common Stock subject to such Capital Option shall be equal to the
number of shares of Capital Common Stock subject to such Capital Option
immediately prior to the Effective Time multiplied by the Exchange Ratio and
rounding down to the nearest whole share, and (iv) the per share exercise price
under each such Capital Option shall be adjusted by dividing the per share
exercise price under each such Capital Option by the Exchange Ratio and rounding
up to the nearest cent. Notwithstanding the clauses (iii) and (iv) of the first
sentence of this Section 3.5, each Capital Option which is an "incentive stock
option" shall be adjusted as required by Section 424 of the Internal Revenue
Code, and the regulations promulgated thereunder, so as not to constitute a
modification, extension or renewal of the option, within the meaning of Section
424(h) of the Internal Revenue Code. UPC and Capital agree to take all necessary
steps to effectuate the foregoing provisions of this Section 3.5.
(b) As soon as practicable after the Effective Time, UPC shall
deliver to the participants in each Capital Stock Plan an appropriate notice
setting forth such participant's rights pursuant thereto and the grants subject
to such Capital Stock Plan shall continue in effect on the same terms and
conditions (subject to the adjustments required by Section 3.5(a) after giving
effect to the Merger), and UPC shall comply with the terms of each Capital Stock
Plan to ensure, to the extent required by, and subject to the provisions of,
such Capital Stock Plan, that Capital Options which qualified as incentive stock
options prior to the Effective Time continue to qualify as incentive stock
options after the Effective Time. Within 30 days after the Effective Time, UPC
shall file a registration statement on Form S-3 or Form S-8, as the case may be
(or any successor or other appropriate forms), with respect to the shares of UPC
Common Stock subject to such options and shall use its reasonable efforts to
maintain the effectiveness of such registration statements (and maintain the
current status of the prospectus or prospectuses contained therein) for so long
as such options remain outstanding.
(c) In approving this Agreement, Capital and the Committee
appointed by the Board of Directors of Capital in accordance with paragraph 3 of
the Capital Bancorp 1993 Stock Option and Incentive Plan agree not to permit the
holders of options outstanding under such plan to receive cash upon the Merger
in an amount equal to the excess of the "Market Value" of the Capital Common
Stock subject to such option over the "Exercise Price" of the shares subject to
such option in accordance with Section 13 of the Capital Bancorp 1993 Stock
Option and Incentive Plan.
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ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. Promptly after the Effective Time,
UPC and Capital shall cause the exchange agent selected by UPC (the "Exchange
Agent") to mail to the former shareholders of Capital appropriate transmittal
materials (which shall specify that delivery shall be effected, and risk of loss
and title to the certificates theretofore representing shares of Capital Common
Stock shall pass, only upon proper delivery of such certificates to the Exchange
Agent). The Exchange Agent may establish reasonable and customary rules and
procedures in connection with its duties. After the Effective Time, each holder
of shares of Capital Common Stock (other than shares to be canceled pursuant to
Section 3.3 of this Agreement) issued and outstanding at the Effective Time
shall surrender the certificate or certificates representing such shares to the
Exchange Agent and shall promptly upon surrender thereof receive in exchange
therefor the consideration provided in Section 3.1 of this Agreement, together
with all undelivered dividends or distributions in respect of such shares
(without interest thereon) pursuant to Section 4.2 of this Agreement. To the
extent required by Section 3.4 of this Agreement, each holder of shares of
Capital Common Stock issued and outstanding at the Effective Time also shall
receive, upon surrender of the certificate or certificates representing such
shares, cash in lieu of any fractional share of UPC Common Stock to which such
holder may be otherwise entitled (without interest). UPC shall not be obligated
to deliver the consideration to which any former holder of Capital Common Stock
is entitled as a result of the Merger until such holder surrenders such holder's
certificate or certificates representing the shares of Capital Common Stock for
exchange as provided in this Section 4.1. The certificate or certificates of
Capital Common Stock so surrendered shall be duly endorsed as the Exchange Agent
may require. Any other provision of this Agreement notwithstanding, neither UPC
nor the Exchange Agent shall be liable to a holder of Capital Common Stock for
any amounts paid or property delivered in good faith to a public official
pursuant to any applicable abandoned property Law. Adoption of this Agreement by
the shareholders of Capital shall constitute ratification of the appointment of
the Exchange Agent.
4.2 Rights of Former Capital Shareholders. At the Effective
Time, the stock transfer books of Capital shall be closed as to holders of
Capital Common Stock immediately prior to the Effective Time and no transfer of
Capital Common Stock by any such holder shall thereafter be made or recognized.
Until surrendered for exchange in accordance with the provisions of Section 4.1
of this Agreement, each certificate theretofore representing shares of Capital
Common Stock (other than shares to be canceled pursuant to Section 3.3 of this
Agreement) shall from and after the Effective Time represent for all purposes
only the right to receive the consideration provided in Sections 3.1 and 3.4 of
this Agreement in exchange therefor, subject, however, to the Surviving
Corporation's obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Time which have been declared or made
by Capital in respect of such shares of Capital Common Stock in accordance with
the terms of this Agreement and which remain unpaid at the Effective Time.
Whenever a dividend or other distribution is declared by UPC on the UPC Common
Stock, the record date for which is at or after the Effective Time, the
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declaration shall include dividends or other distributions on all shares of UPC
Common Stock issuable pursuant to this Agreement, but beginning 30 days after
the Effective Time no dividend or other distribution payable to the holders of
record of UPC Common Stock as of any time subsequent to the Effective Time shall
be delivered to the holder of any certificate representing shares of Capital
Common Stock issued and outstanding at the Effective Time until such holder
surrenders such certificate for exchange as provided in Section 4.1 of this
Agreement. However, upon surrender of such Capital Common Stock certificate,
both the UPC Common Stock certificate (together with all such undelivered
dividends or other distributions without interest) and any undelivered dividends
and cash payments payable hereunder (without interest) shall be delivered and
paid with respect to each share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF CAPITAL
Capital hereby represents and warrants to UPC as follows:
5.1 Organization, Standing, and Power. Capital is a
corporation duly organized, validly existing, and in good standing under the
Laws of the State of Delaware, and has the corporate power and authority to
carry on its business as now conducted and to own, lease, and operate its
Assets. Capital is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Capital.
5.2 Authority; No Breach By Agreement.
(a) Capital has the corporate power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and the Plan
of Merger and to consummate the transactions contemplated hereby and thereby.
The execution, delivery, and performance of this Agreement and the Plan of
Merger, as appropriate, and the consummation of the transactions contemplated
herein and therein, including the Merger, have been duly and validly authorized
by all necessary corporate action in respect thereof on the part of Capital,
subject to the approval of this Agreement and the Plan of Merger by the holders
of a majority of the outstanding shares of Capital Common Stock, which is the
only shareholder vote required for approval of this Agreement and the Plan of
Merger and consummation of the Merger by Capital. Subject to such requisite
shareholder approval, this Agreement and the Plan of Merger (which for purposes
of this sentence shall not include the Stock Option Agreement) represent legal,
valid, and binding obligations of Capital, enforceable against Capital in
accordance with their respective terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought).
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(b) Except as set forth in Section 5.2 of the Capital
Disclosure Memorandum, neither the execution and delivery of this Agreement or
the Plan of Merger, as appropriate, by Capital, nor the consummation by Capital
of the transactions contemplated hereby or thereby, nor compliance by Capital
with any of the provisions hereof or thereof, will (i) conflict with or result
in a breach of any provision of Capital's Certificate of Incorporation or
By-laws, or (ii) constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any material Asset of any
Capital Company under, any Contract or Permit of any Capital Company, other than
Defaults that are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Capital, or (iii) subject to receipt of
the requisite Consents referred to in Section 9.1(b) of this Agreement, violate
any Law or Order applicable to any Capital Company or any of their respective
material Assets.
(c) Other than in connection or compliance with the provisions
of the Securities Laws, applicable state corporate and securities Laws, and
rules of the NASD, and other than Consents required from Regulatory Authorities,
and other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
or under the HSR Act, and other than Consents, filings, or notifications which,
if not obtained or made, are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Capital, no notice to, filing with,
or Consent of, any public body or authority is necessary for the consummation by
Capital of the Merger and the other transactions contemplated in this Agreement
and the Plan of Merger.
5.3 Capital Stock.
(a) The authorized capital stock of Capital consists of (i)
5,200,000 shares of Capital Common Stock, of which 1,891,800 shares are issued
and outstanding as of the date of this Agreement (exclusive of treasury shares)
and not more than 2,102,146 shares will be issued and outstanding at the
Effective Time and (ii) 800,000 shares of Capital preferred stock, none of which
is outstanding. All of the issued and outstanding shares of capital stock of
Capital are duly and validly issued and outstanding and are fully paid and
nonassessable under the DGCL. None of the outstanding shares of capital stock of
Capital has been issued in violation of any preemptive rights of the current or
past shareholders of Capital. Capital has reserved 234,600 shares of Capital
Common Stock for issuance under the Capital Stock Plans, pursuant to which
options to purchase not more than 210,346 shares of Capital Common Stock are
outstanding.
(b) Except as set forth in Section 5.3(a) of this Agreement,
or as provided in the Stock Option Agreement, there are no shares of capital
stock or other equity securities of Capital outstanding and no outstanding
Rights relating to the capital stock of Capital.
5.4 Capital Subsidiaries. Capital has disclosed in Section 5.4
of the Capital Disclosure Memorandum all of the Capital Subsidiaries that are
corporations (identifying its jurisdiction of incorporation, each jurisdiction
in which the character of its Assets or the nature or conduct of its business
requires it to be qualified and/or licensed to transact business, and the number
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of shares owned and percentage ownership interest represented by such share
ownership) and all of the Capital Subsidiaries that are general or limited
partnerships or other non-corporate entities (identifying the Law under which
such entity is organized, each jurisdiction in which character of its Assets or
the nature or conduct of its business requires it to be qualified and/or
licensed to transact business, and the amount and nature of the ownership
interest therein of all Capital Companies). Capital or one of its wholly owned
Subsidiaries owns all of the issued and outstanding shares of capital stock (or
other equity interests) of each Capital Subsidiary. No capital stock (or other
equity interest) of any Capital Subsidiary is or may become required to be
issued (other than to another Capital Company) by reason of any Rights, and
there are no Contracts by which any Capital Subsidiary is bound to issue (other
than to another Capital Company) additional shares of its capital stock (or
other equity interests) or Rights or by which any Capital Company is or may be
bound to transfer any shares of the capital stock (or other equity interests) of
any Capital Subsidiary (other than to another Capital Company). There are no
Contracts relating to the rights of any Capital Company to vote or to dispose of
any shares of the capital stock (or other equity interests) of any Capital
Subsidiary. All of the shares of capital stock (or other equity interests) of
each Capital Subsidiary held by a Capital Company are fully paid and
nonassessable under the applicable corporation or similar Law of the
jurisdiction in which such Subsidiary is incorporated or organized and are owned
by the Capital Company free and clear of any Lien. Each Capital Subsidiary is
either a bank, a savings association, partnership, limited liability
corporation, or a corporation, and each such Subsidiary is duly organized,
validly existing, and (as to corporations) in good standing under the Laws of
the jurisdiction in which it is incorporated or organized, and has the corporate
power and authority necessary for it to own, lease, and operate its Assets and
to carry on its business as now conducted. Each Capital Subsidiary is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Capital. The only Capital
Subsidiary that is a depository institution is Capital Savings. Capital Savings
is an "insured institution" as defined in the Federal Deposit Insurance Act and
applicable regulations thereunder, and the deposits in which are insured by the
Savings Association Insurance Fund. The minute book and other organizational
documents for each Capital Subsidiary have been made available to UPC for its
review, and are true and complete as in effect as of the date of this Agreement
and accurately reflect all amendments thereto and all proceedings of the Board
of Directors and shareholders thereof.
5.5 SEC Filings; Financial Statements.
(a) Capital has filed and made available to UPC all SEC
Documents required to be filed by Capital since September 30, 1993 (the "Capital
SEC Reports"). The Capital SEC Reports (i) at the time filed, complied in all
material respects with the applicable requirements of the Securities Laws and
(ii) did not, at the time they were filed (or, if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
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contain any untrue statement of a material fact or omit to state a material fact
required to be stated in such Capital SEC Reports or necessary in order to make
the statements in such Capital SEC Reports, in light of the circumstances under
which they were made, not misleading. None of Capital's Subsidiaries is required
to file any SEC Documents.
(b) Each of the Capital Financial Statements (including, in
each case, any related notes) contained in the Capital SEC Reports, including
any Capital SEC Reports filed after the date of this Agreement until the
Effective Time, complied as to form in all material respects with the applicable
published rules and regulations of the SEC with respect thereto, was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited interim statements, as permitted by Form 10-QSB of
the SEC), and fairly presented in all material respects the consolidated
financial position of Capital and its Subsidiaries as at the respective dates
and the consolidated results of its operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which were not or are not
expected to be material in amount or effect.
5.6 Absence of Undisclosed Liabilities. No Capital Company has
any Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Capital, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Capital as of
June 30, 1997, included in the Capital Financial Statements made available prior
to the date of this Agreement or reflected in the notes thereto. No Capital
Company has incurred or paid any Liability since June 30, 1997, except for such
Liabilities incurred or paid (i) in the ordinary course of business consistent
with past business practice and which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Capital or (ii)
in connection with the transactions contemplated by this Agreement.
5.7 Absence of Certain Changes or Events. Since June 30, 1997,
except as disclosed in the Capital Financial Statements made available prior to
the date of this Agreement, (i) there have been no events, changes, or
occurrences which have had, or are reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Capital, and (ii) the Capital
Companies have not taken any action, or failed to take any action, prior to the
date of this Agreement, which action or failure, if taken after the date of this
Agreement, would represent or result in a material breach or violation of any of
the covenants and agreements of Capital contained in this Agreement.
5.8 Tax Matters.
(a) All Tax Returns required to be filed by or on behalf of
any of the Capital Companies have been timely filed or requests for extensions
have been timely filed, granted, and have not expired for periods ended on or
before December 31, 1996, and on or before the date of the most recent fiscal
year end immediately preceding the Effective Time, and, to the Knowledge of
Capital, all Tax Returns filed are complete and accurate. All Taxes shown on
filed Tax Returns have been paid. There is no audit examination, deficiency, or
refund Litigation with respect to any Taxes, except as reserved against in the
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Capital Financial Statements made available prior to the date of this Agreement.
All Taxes and other Liabilities due with respect to completed and settled
examinations or concluded Litigation have been paid. There are no Liens with
respect to Taxes upon any of the Assets of the Capital Companies.
(b) None of the Capital Companies has executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due (excluding such statutes that relate to years currently under examination by
the Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) Adequate provision for any Taxes due or to become due for
any of the Capital Companies for the period or periods through and including the
date of the respective Capital Financial Statements has been made and is
reflected on such Capital Financial Statements.
(d) Deferred Taxes of the Capital Companies have been provided
for in accordance with GAAP.
(e) To the Knowledge of Capital, each of the Capital Companies
is in compliance with, and its records contain all information and documents
(including properly completed IRS Forms W-9) necessary to comply with, all
applicable information reporting and Tax withholding requirements under federal,
state, and local Tax Laws, and such records identify with specificity all
accounts subject to backup withholding under Section 3406 of the Internal
Revenue Code.
(f) Except as set forth in Section 5.8 of the Capital
Disclosure Memorandum, none of the Capital Companies has made any payments, is
obligated to make any payments, or is a party to any Contract that could
obligate it to make any payments that would be disallowed as a deduction under
Section 280G or 162(m) of the Internal Revenue Code.
(g) There has not been an ownership change, as defined in
Internal Revenue Code Section 382(g), of the Capital Companies that occurred
during or after any Taxable Period in which the Companies incurred a net
operating loss that carries over to any Taxable Period ending after December 31,
1996.
(h) Except as set forth in Section 5.8 of the Capital
Disclosure Memorandum, none of the Capital Companies is a party to any tax
allocation or sharing agreement and none of the Capital Companies has been a
member of an affiliated group filing a consolidated federal income tax return
(other than a group the common parent of which was Capital) has any Liability
for taxes of any Person (other than Capital and its Subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local, or
foreign law) as a transferee or successor or by Contract or otherwise.
5.9 Allowance for Possible Loan Losses. The allowance for
possible loan or credit losses (the "Allowance") shown on the consolidated
balance sheets of Capital included in the most recent Capital Financial
Statements dated prior to the date of this Agreement was, and the Allowance
shown on the consolidated balance sheets of Capital included in the Capital
Financial Statements as of dates subsequent to the execution of this Agreement
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will be, as of the dates thereof, in the reasonable opinion of management of
Capital adequate (within the meaning of GAAP and applicable regulatory
requirements or guidelines) to provide for all known and reasonably anticipated
losses relating to or inherent in the loan and lease portfolios (including
accrued interest receivables) of the Capital Companies and other extensions of
credit (including letters of credit and commitments to make loans or extend
credit) by the Capital Companies as of the dates thereof.
5.10 Assets. Except as disclosed or reserved against in the
Capital Financial Statements made available prior to the date of this Agreement
or in Section 5.10 of the Capital Disclosure Memorandum, the Capital Companies
have good and marketable title, free and clear of all material Liens, to all of
their respective Assets. All tangible properties used in the businesses of the
Capital Companies are in good condition, reasonable wear and tear excepted, and
are usable in the ordinary course of business consistent with Capital's past
practices. All Assets which are material to Capital's business on a consolidated
basis, held under leases or subleases by any of the Capital Companies, are held
under valid Contracts enforceable in accordance with their respective terms
(except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceedings may be brought), and each such
Contract is in full force and effect. To the Knowledge of Capital, the Capital
Companies currently maintain insurance similar in amounts, scope, and coverage
to that maintained by other peer banking organizations. None of the Capital
Companies has received notice from any insurance carrier that (i) such insurance
will be canceled or that coverage thereunder will be reduced or eliminated, or
(ii) premium costs with respect to such policies of insurance will be
substantially increased. There are presently no claims pending under any such
policies of insurance and no notices have been given by any Capital Company
under such policies, except for routine claims, none of which is material, or as
disclosed in Section 5.17 of the Capital Disclosure Memorandum.
5.11 Intellectual Property. All of the Intellectual Property
rights of the Capital Companies are in full force and effect and constitute
legal, valid, and binding obligations of the respective parties thereto, and
there have not been, and, to the Knowledge of Capital, there currently are not,
any Defaults thereunder by Capital. A Capital Company owns or is the valid
licensee of all such Intellectual Property rights free and clear of all Liens or
claims of infringement. None of the Capital Companies or, to the Knowledge of
Capital, their respective predecessors has misused the Intellectual Property
rights of others and, to the Knowledge of Capital, none of the Intellectual
Property rights as used in the business conducted by any such Capital Company
infringes upon or otherwise violates the rights of any Person, nor has any
Person asserted a claim of such infringement. To the Knowledge of Capital, no
Capital Company is obligated to pay any royalties to any Person with respect to
any such Intellectual Property. To the Knowledge of Capital, each Capital
Company owns or has the valid right to use all of the Intellectual Property
rights which it is presently using, or in connection with performance of any
material Contract to which it is a party. No officer, director, or employee of
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any Capital Company is party to any Contract which requires such officer,
director or employee to assign any interest in any Intellectual Property or keep
confidential any trade secrets, proprietary data, customer information, or other
business information, which restricts or prohibits such officer, director, or
employee from engaging in activities competitive with any Person, including any
Capital Company.
5.12 Environmental Matters. Except as set forth in Section
5.12 of the Capital Disclosure Memorandum:
(a) To the Knowledge of Capital, each Capital Company, its
Participation Facilities, and its Operating Properties are, and have been, in
compliance with all Environmental Laws, except for violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Capital.
(b) To the Knowledge of Capital, there is no Litigation
pending or threatened before any court, governmental agency, or authority or
other forum in which any Capital Company or any of its Operating Properties or
Participation Facilities (or Capital in respect of such Operating Property or
Participation Facility) has been or, with respect to threatened Litigation, may
be named as a defendant (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the release into the
environment of any Hazardous Material, whether or not occurring at, on, under,
adjacent to, or affecting (or potentially affecting) a site owned, leased, or
operated by any Capital Company or any of its Operating Properties or
Participation Facilities, except for such Litigation pending or threatened that
is not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Capital, nor is there any reasonable basis for any Litigation
of a type described in this sentence.
(c) During the period of (i) any Capital Company's ownership
or operation of any of their respective current properties, (ii) any Capital
Company's participation in the management of any Participation Facility, or
(iii) any Capital Company's holding of a security interest in a Operating
Property, to the Knowledge of Capital, there have been no releases of Hazardous
Material in, on, under, adjacent to, or affecting (or potentially affecting)
such properties, except such as are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Capital. Prior to the period
of (i) any Capital Company's ownership or operation of any of their respective
current properties, (ii) any Capital Company's participation in the management
of any Participation Facility, or (iii) any Capital Company's holding of a
security interest in a Operating Property, to the Knowledge of Capital, there
were no releases of Hazardous Material in, on, under, or affecting any such
property, Participation Facility or Operating Property, except such as are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Capital.
5.13 Compliance with Laws. Capital is duly registered as a
savings and loan holding company under the HOLA. Each Capital Company has in
effect all Permits necessary for it to own, lease, or operate its material
Assets and to carry on its business as now conducted, and there has occurred no
Default under any such Permit. None of the Capital Companies:
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(a) to the Knowledge of Capital, is in violation of any
material Laws, Orders, or Permits applicable to its business or
employees conducting its business; and
(b) except as reflected in regulatory examination reports, has
received any notification or communication from any agency or
department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any Capital Company
is not in compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, (ii)
threatening to revoke any Permits, or (iii) requiring any Capital
Company to enter into or consent to the issuance of a cease and desist
order, formal agreement, directive, commitment, or memorandum of
understanding, or to adopt any Board resolution or similar undertaking,
which restricts materially the conduct of its business, or in any
manner relates to its capital adequacy, its credit or reserve policies,
its management, or the payment of dividends.
5.14 Labor Relations. No Capital Company is the subject of any
Litigation asserting that it or any other Capital Company has committed an
unfair labor practice (within the meaning of the National Labor Relations Act or
comparable state law) or seeking to compel it or any other Capital Company to
bargain with any labor organization as to wages or conditions of employment, nor
is there any strike or other labor dispute involving any Capital Company,
pending or threatened, or to the Knowledge of Capital, is there any activity
involving any Capital Company's employees seeking to certify a collective
bargaining unit or engaging in any other organization activity.
5.15 Employee Benefit Plans.
(a) Capital has disclosed in Section 5.15 of the Capital
Disclosure Memorandum, and has delivered or made available to UPC prior to the
execution of this Agreement copies in each case of, all pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus, or other incentive plan, all other written
employee programs, arrangements, or agreements, all medical, vision, dental, or
other health plans, all life insurance plans, and all other employee benefit
plans or fringe benefit plans, including "employee benefit plans" as that term
is defined in Section 3(3) of ERISA, currently adopted, maintained by, sponsored
in whole or in part by, or contributed to by any Capital Company or ERISA
Affiliate thereof for the benefit of employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries and under which
employees, retirees, dependents, spouses, directors, independent contractors, or
other beneficiaries are eligible to participate (collectively, the "Capital
Benefit Plans"). Any of the Capital Benefit Plans which is an "employee pension
benefit plan," as that term is defined in Section 3(2) of ERISA, is referred to
herein as a "Capital ERISA Plan." Each Capital ERISA Plan which is also a
"defined benefit plan" (as defined in Section 414(j) of the Internal Revenue
Code) is referred to herein as a "Capital Pension Plan." No Capital Pension Plan
is or has been a multiemployer plan within the meaning of Section 3(37) of
ERISA.
(b) All Capital Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws the breach or violation of which are reasonably likely to have,
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individually or in the aggregate, a Material Adverse Effect on Capital. Each
Capital ERISA Plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the
Internal Revenue Service, and Capital is not aware of any circumstances likely
to result in revocation of any such favorable determination letter. No Capital
Company has engaged in a transaction with respect to any Capital Benefit Plan
that, assuming the taxable period of such transaction expired as of the date
hereof, would subject any Capital Company to a Tax imposed by either Section
4975 of the Internal Revenue Code or Section 502(i) of ERISA.
(c) No Capital Pension Plan has any "unfunded current
liability," as that term is defined in Section 302(d)(8)(A) of ERISA, and the
fair market value of the assets of any such plan exceeds the plan's "benefit
liabilities," as that term is defined in Section 4001(a)(16) of ERISA, when
determined under actuarial factors that would apply if the plan terminated in
accordance with all applicable legal requirements. Since the date of the most
recent actuarial valuation, there has been (i) no material change in the
financial position of any Capital Pension Plan, (ii) no change in the actuarial
assumptions with respect to any Capital Pension Plan, and (iii) no increase in
benefits under any Capital Pension Plan as a result of plan amendments or
changes in applicable Law which is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Capital or materially adversely
affect the funding status of any such plan. Neither any Capital Pension Plan nor
any "single-employer plan," within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any Capital Company, or the single-employer
plan of any entity which is considered one employer with Capital under Section
4001 of ERISA or Section 414 of the Internal Revenue Code or Section 302 of
ERISA (whether or not waived) (an "ERISA Affiliate") has an "accumulated funding
deficiency" within the meaning of Section 412 of the Internal Revenue Code or
Section 302 of ERISA. No Capital Company has provided, or is required to
provide, security to a Capital Pension Plan or to any single-employer plan of an
ERISA Affiliate pursuant to Section 401(a)(29) of the Internal Revenue Code.
(d) Within the six-year period preceding the Effective Time,
no Liability under Subtitle C or D of Title IV of ERISA has been or is expected
to be incurred by any Capital Company with respect to any ongoing, frozen, or
terminated single-employer plan or the single-employer plan of any ERISA
Affiliate. No Capital Company has incurred any withdrawal Liability with respect
to a multiemployer plan under Subtitle B of Title IV of ERISA (regardless of
whether based on contributions of an ERISA Affiliate). No notice of a
"reportable event," within the meaning of Section 4043 of ERISA for which the
30-day reporting requirement has not been waived, has been required to be filed
for any Capital Pension Plan or by any ERISA Affiliate within the 12-month
period ending on the date hereof.
(e) Except as disclosed in Section 5.15 of the Capital
Disclosure Memorandum, no Capital Company has any Liability for retiree health
and life benefits under any of the Capital Benefit Plans and there are no
restrictions on the rights of such Capital Company to amend or terminate any
such retiree health or benefit Plan without incurring Liability thereunder.
- 15 -
(f) Except as disclosed in Section 5.15 of the Capital
Disclosure Memorandum, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director or any employee of any Capital Company
from any Capital Company under any Capital Benefit Plan or otherwise, (ii)
increase any benefits otherwise payable under any Capital Benefit Plan, or (iii)
result in any acceleration of the time of payment or vesting of any such
benefit.
(g) The actuarial present values of all accrued deferred
compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of any Capital Company and their respective beneficiaries,
other than entitlements accrued pursuant to funded retirement plans subject to
the provisions of Section 412 of the Internal Revenue Code or Section 302 of
ERISA, have been fully reflected on the Capital Financial Statements to the
extent required by and in accordance with GAAP.
5.16 Material Contracts. Except as disclosed in the Capital
SEC Reports or as disclosed in Section 5.16 of the Capital Disclosure
Memorandum, none of the Capital Companies, nor any of their respective Assets,
businesses, or operations, is a party to, or is bound or affected by, or
receives benefits under, (i) any employment, severance, termination, consulting,
or retirement Contract providing for aggregate payments to any Person in any
calendar year in excess of $50,000, (ii) any Contract relating to the borrowing
of money by any Capital Company or the guarantee by any Capital Company of any
such obligation (other than Contracts evidencing deposit liabilities, purchases
of federal funds, fully-secured repurchase agreements, and Federal Home Loan
Bank advances of depository institution Subsidiaries, trade payables, and
Contracts relating to borrowings or guarantees made in the ordinary course of
business), (iii) any Contracts which prohibit or restrict any Capital Company
from engaging in any business activities in any geographic area, line of
business, or otherwise in competition with any other Person, (iv) any Contracts
between or among Capital Companies, (v) any exchange-traded or over-the-counter
swap, forward, future, option, cap, floor, or collar financial Contract, or any
other interest rate or foreign currency protection Contract (not disclosed in
the Capital Financial Statements delivered prior to the date of this Agreement)
which is a financial derivative Contract (including various combinations
thereof), and (vi) any other Contract or amendment thereto that would be
required to be filed as an exhibit to a Capital SEC Report filed by Capital with
the SEC prior to the date of this Agreement that has not been filed as an
exhibit to a Capital SEC Report (together with all Contracts referred to in
Sections 5.10 and 5.15(a) of this Agreement, the "Capital Contracts"). With
respect to each Capital Contract: (i) the Contract is in full force and effect;
(ii) no Capital Company is in Default thereunder; (iii) no Capital Company has
repudiated or waived any material provision of any such Contract; and (iv) no
other party to any such Contract is, to the Knowledge of Capital, in Default in
any respect or has repudiated or waived any material provision thereunder.
Except as set forth in Section 5.16 of the Capital Disclosure Memorandum, all of
the indebtedness of any Capital Company for money borrowed is prepayable at any
time by such Capital Company without penalty or premium.
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5.17 Legal Proceedings. There is no Litigation instituted or
pending, or, to the Knowledge of Capital, threatened (or unasserted but
considered probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against any Capital Company,
or against any Asset, employee benefit plan, interest, or right of any of them,
that is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Capital, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any Capital Company. Section 5.17 of the Capital Disclosure Memorandum includes
a summary report of all material Litigation as of the date of this Agreement to
which any Capital Company is a party and which names a Capital Company as a
defendant or cross-defendant.
5.18 Reports. Since September 30, 1993, or the date of
organization if later, each Capital Company has timely filed all reports and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with (i) the SEC, including, but not
limited to, Forms 10-KSB, Forms 10-QSB, Forms 8-K, and proxy statements, (ii)
other Regulatory Authorities, and (iii) any applicable state securities or
banking authorities (except, in the case of other Regulatory Authorities and
state securities authorities, failures to file which are not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on
Capital). As of their respective dates, or as subsequently amended for minor
corrections, each of such reports and documents, including the financial
statements, exhibits, and schedules thereto, complied in all material respects
with all applicable Laws. As of its respective date, each such report and
document did not, in all material respects, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
5.19 Statements True and Correct. No statement, certificate,
instrument, or other writing furnished or to be furnished by any Capital Company
or any Affiliate thereof to UPC pursuant to this Agreement or any other
document, agreement, or instrument referred to herein contains or will contain
any untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. None of the information supplied or to be
supplied by any Capital Company or any Affiliate thereof for inclusion in the
Registration Statement to be filed by UPC with the SEC will, when the
Registration Statement becomes effective, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to make the
statements therein not misleading. None of the information supplied or to be
supplied by any Capital Company or any Affiliate thereof for inclusion in the
Proxy Statement to be mailed to Capital's shareholders in connection with the
Shareholders' Meeting, and any other documents to be filed by a Capital Company
or any Affiliate thereof with the SEC or any other Regulatory Authority in
connection with the transactions contemplated hereby, will, at the respective
time such documents are filed, and with respect to the Proxy Statement, when
first mailed to the shareholders of Capital, be false or misleading with respect
to any material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or, in the case of the Proxy Statement or any amendment thereof
or supplement thereto, at the time of the Shareholders' Meeting, be false or
- 17 -
misleading with respect to any material fact, or omit to state any material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of any proxy for the Shareholders' Meeting. All documents that
any Capital Company or any Affiliate thereof is responsible for filing with any
Regulatory Authority in connection with the transactions contemplated hereby
will comply as to form in all material respects with the provisions of
applicable Law.
5.20 Accounting, Tax, and Regulatory Matters. No Capital
Company or any Affiliate thereof has taken any action or has any Knowledge of
any fact or circumstance relating to Capital that is reasonably likely to (i)
prevent the transactions contemplated hereby, including the Merger, from
qualifying for pooling-of-interests accounting treatment or as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, or (ii)
materially impede or delay receipt of any Consents of Regulatory Authorities
referred to in Section 9.1(b) of this Agreement or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
section.
5.21 State Takeover Laws. Each Capital Company has taken all
necessary action to exempt the transactions contemplated by this Agreement and
the Plan of Merger from, or if necessary challenge the validity or applicability
of, any applicable "moratorium," "fair price," "business combination," "control
share," or other anti-takeover Laws (collectively, "Takeover Laws"), including
Section 203 of the DGCL.
5.22 Charter Provisions. Except as disclosed in Section 5.21
of the Capital Disclosure Memorandum, each Capital Company has taken all action
so that the entering into of this Agreement and the Plan of Merger and the
consummation of the Merger and the other transactions contemplated by this
Agreement and the Plan of Merger do not and will not result in the grant of any
rights to any Person under the Certificate of Incorporation, By-laws or other
governing instruments of any Capital Company or restrict or impair the ability
of UPC or any of its Subsidiaries to vote, or otherwise to exercise the rights
of a shareholder with respect to, shares of any Capital Company that may be
directly or indirectly acquired or controlled by it.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF UPC
UPC hereby represents and warrants to Capital as follows:
6.1 Organization, Standing, and Power. UPC and Holding are
corporations duly organized, validly existing, and in good standing under the
Laws of the State of Tennessee, and each has the corporate power and authority
to carry on its business as now conducted and to own, lease and operate its
material Assets. UPC and Holding are each duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets or the nature
or conduct of its business requires it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC.
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6.2 Authority; No Breach By Agreement.
(a) UPC has the corporate power and authority necessary to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly authorized
by all necessary corporate action in respect thereof on the part of UPC. This
Agreement (which for purposes of this sentence shall not include the Stock
Option Agreement) represents a legal, valid, and binding obligation of UPC,
enforceable against UPC in accordance with its terms (except in all cases as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
UPC, nor the consummation by UPC of the transactions contemplated hereby, nor
compliance by UPC with any of the provisions hereof, will (i) conflict with or
result in a breach of any provision of UPC's Restated Certificate of
Incorporation or By-laws, or (ii) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
Asset of any UPC Company under, any Contract or Permit of any UPC Company, or
(iii) subject to receipt of the requisite approvals referred to in Section
9.1(b) of this Agreement, violate any Law or Order applicable to any UPC Company
or any of their respective material Assets.
(c) Other than in connection or compliance with the provisions
of the Securities Laws, applicable state corporate and securities Laws, and
rules of the NYSE, and other than Consents required from Regulatory Authorities,
and other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
or under the HSR Act, and other than Consents, filings, or notifications which,
if not obtained or made, are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on UPC, no notice to, filing with, or
Consent of, any public body or authority is necessary for the consummation by
UPC or Holding of the Merger and the other transactions contemplated in this
Agreement and the Plan of Merger.
6.3 Capital Stock. The authorized capital stock of UPC
consists of (i) 100,000,000 shares of UPC Common Stock, of which 67,211,642
shares were issued and outstanding as of September 30, 1997 (exclusive of
treasury shares), and (ii) 10,000,000 shares of UPC Preferred Stock, of which no
shares of UPC Series A Preferred Stock, and 2,289,594 shares of UPC Series E
Preferred Stock were issued and outstanding as of September 30, 1997. All of the
issued and outstanding shares of UPC Capital Stock are, and all of the shares of
UPC Common Stock to be issued in exchange for shares of Capital Common Stock
upon consummation of the Merger, when issued in accordance with the terms of
this Agreement, will be, duly and validly issued and outstanding and fully paid
and nonassessable under the Tennessee Business Corporation Act. None of the
outstanding shares of UPC Capital Stock has been, and none of the shares of UPC
Common Stock to be issued in exchange for shares of Capital Common Stock upon
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consummation of the Merger will be, issued in violation of any preemptive rights
of the current or past shareholders of UPC. UPC has reserved for issuance a
sufficient number of shares of UPC Common Stock for the purpose of issuing
shares of UPC Common Stock in accordance with the provisions of Sections 3.1 and
3.5 of this Agreement.
6.4 UPC Subsidiaries. UPC or one of its Subsidiaries owns all
of the issued and outstanding shares of capital stock of each UPC Subsidiary
that is a "significant subsidiary" as defined. No equity securities of any UPC
Subsidiary are or may become required to be issued (other than to another UPC
Company) by reason of any Rights, and there are no Contracts by which any UPC
Subsidiary is bound to issue (other than to another UPC Company) additional
shares of its capital stock or Rights or by which any UPC Company is or may be
bound to transfer any shares of the capital stock of any UPC Subsidiary (other
than to another UPC Company). There are no Contracts relating to the rights of
any UPC Company to vote or to dispose of any shares of the capital stock of any
UPC Subsidiary. All of the shares of capital stock of each UPC Subsidiary held
by a UPC Company are fully paid and nonassessable (except pursuant to 12 USC
Section 55 in the case of national banks and comparable, applicable state Law,
if any, in the case of state depository institutions) under the applicable
corporation Law of the jurisdiction in which such Subsidiary is incorporated or
organized and are owned by the UPC Company free and clear of any Lien. Each UPC
Subsidiary is either a bank or a corporation, and is duly organized, validly
existing, and (as to corporations) in good standing under the Laws of the
jurisdiction in which it is incorporated or organized, and has the corporate
power and authority necessary for it to own, lease, and operate its Assets and
to carry on its business as now conducted. Each UPC Subsidiary is duly qualified
or licensed to transact business as a foreign corporation in good standing in
the States of the United States and foreign jurisdictions where the character of
its Assets or the nature or conduct of its business requires it to be so
qualified or licensed, except for such jurisdictions in which the failure to be
so qualified or licensed is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on UPC. Each UPC Subsidiary that is a
depository institution is an "insured institution" as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder, and the deposits in
which are insured by the Bank Insurance Fund or Savings Association Insurance
Fund.
6.5 SEC Filings; Financial Statements.
(a) UPC has filed and made available to Capital all SEC
Documents required to be filed by UPC since December 31, 1993 (the "UPC SEC
Reports"). The UPC SEC Reports (i) at the time filed, complied in all material
respects with the applicable requirements of the Securities Laws and (ii) did
not, at the time they were filed (or, if amended or superseded by a filing prior
to the date of this Agreement, then on the date of such filing) contain any
untrue statement of a material fact or omit to state a material fact required to
be stated in such UPC SEC Reports or necessary in order to make the statements
in such UPC SEC Reports, in light of the circumstances under which they were
made, not misleading. Except for UPC Subsidiaries that are registered as a
broker, dealer, or investment advisor, none of UPC's Subsidiaries is required to
file any SEC Documents.
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(b) Each of the UPC Financial Statements (including, in each
case, any related notes) contained in the UPC SEC Reports, including any UPC SEC
Reports filed after the date of this Agreement until the Effective Time,
complied as to form in all material respects with the applicable published rules
and regulations of the SEC with respect thereto, was prepared in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes to such financial statements or, in the case of
unaudited interim statements, as permitted by Form 10-Q of the SEC), and fairly
presented in all material respects the consolidated financial position of UPC
and its Subsidiaries as at the respective dates and the consolidated results of
its operations and cash flows for the periods indicated, except that the
unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not or are not expected to be material
in amount or effect.
6.6 Absence of Undisclosed Liabilities. No UPC Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of UPC as of June
30, 1997, included in the UPC Financial Statements made available prior to the
date of this Agreement or reflected in the notes thereto. No UPC Company has
incurred or paid any Liability since June 30, 1997, except for such Liabilities
incurred or paid (i) in the ordinary course of business consistent with past
business practice and which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on UPC or (ii) in connection with
the transactions contemplated by this Agreement.
6.7 Absence of Certain Changes or Events. Since June 30, 1997,
except as disclosed in the UPC Financial Statements made available prior to the
date of this Agreement, (i) there have been no events, changes, or occurrences
which have had, or are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC, and (ii) the UPC Companies have not
taken any action, or failed to take any action, prior to the date of this
Agreement, which action or failure, if taken after the date of this Agreement,
would represent or result in a material breach or violation of any of the
covenants and agreements of UPC contained in this Agreement.
6.8 Tax Matters.
(a) All Tax Returns required to be filed by or on behalf of
any of the UPC Companies have been timely filed or requests for extensions have
been timely filed, granted, and have not expired for periods ended on or before
December 31, 1996, and on or before the date of the most recent fiscal year end
immediately preceding the Effective Time, and, to the Knowledge of UPC, all Tax
Returns filed are complete and accurate. All Taxes shown on filed Tax Returns
have been paid. There is no audit examination, deficiency, or refund Litigation
with respect to any Taxes, except as reserved against in the UPC Financial
Statements delivered prior to the date of this Agreement. All Taxes and other
Liabilities due with respect to completed and settled examinations or concluded
Litigation have been paid. There are no Liens with respect to Taxes upon any of
the Assets of the UPC Companies.
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(b) Adequate provision for any Taxes due or to become due for
any of the UPC Companies for the period or periods through and including the
date of the respective UPC Financial Statements has been made and is reflected
on such UPC Financial Statements.
(c) Deferred Taxes of the UPC Companies have been provided for
in accordance with GAAP.
6.9 Environmental Matters.
(a) To the Knowledge of UPC, each UPC Company, its
Participation Facilities, and its Operating Properties are, and have been, in
compliance with all Environmental Laws, except for violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC.
(b) To the Knowledge of UPC, there is no Litigation pending or
threatened before any court, governmental agency, or authority or other forum in
which any UPC Company or any of its Operating Properties or Participation
Facilities (or UPC in respect of such Operating Property or Participation
Facility) has been or, with respect to threatened Litigation, may be named as a
defendant (i) for alleged noncompliance (including by any predecessor) with any
Environmental Law or (ii) relating to the release into the environment of any
Hazardous Material, whether or not occurring at, on, under, adjacent to, or
affecting (or potentially affecting) a site owned, leased, or operated by any
UPC Company or any of its Operating Properties or Participation Facilities,
except for such Litigation pending or threatened that is not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on UPC, nor
is there any reasonable basis for any Litigation of a type described in this
sentence.
(c) During the period of (i) any UPC Company's ownership or
operation of any of their respective current properties, (ii) any UPC Company's
participation in the management of any Participation Facility, or (iii) any UPC
Company's holding of a security interest in a Operating Property, to the
Knowledge of UPC, there have been no releases of Hazardous Material in, on,
under, adjacent to, or affecting (or potentially affecting) such properties,
except such as are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC. Prior to the period of (i) any UPC
Company's ownership or operation of any of their respective current properties,
(ii) any UPC Company's participation in the management of any Participation
Facility, or (iii) any UPC Company's holding of a security interest in a
Operating Property, to the Knowledge of UPC, there were no releases of Hazardous
Material in, on, under, or affecting any such property, Participation Facility
or Operating Property, except such as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC.
6.10 Compliance with Laws. UPC is duly registered as a bank
holding company under the BHC Act. Each UPC Company has in effect all Permits
necessary for it to own, lease, or operate its material Assets and to carry on
its business as now conducted, and there has occurred no Default under any such
Permit. No UPC Company:
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(a) to the Knowledge of UPC, is in violation of any material
Laws, Orders, or Permits applicable to its business or employees
conducting its business; and
(b) has received any notification or communication from any
agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any UPC
Company is not in compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, (ii)
threatening to revoke any Permits, or (iii) requiring any UPC Company
to enter into or consent to the issuance of a cease and desist order,
formal agreement, directive, commitment or memorandum of understanding,
or to adopt any Board resolution or similar undertaking, which
restricts materially the conduct of its business, or in any manner
relates to its capital adequacy, its credit or reserve policies, its
management, or the payment of dividends.
6.11 Legal Proceedings. There is no Litigation instituted or
pending, or, to the Knowledge of UPC, threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a reasonable
probability of an unfavorable outcome) against any UPC Company, or against any
Asset, employee benefit plan, interest, or right of any of them, that is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any UPC Company.
6.12 Reports. Since January 1, 1994, or the date of
organization if later, each UPC Company has filed all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with (i) the SEC, including, but not limited to, Forms
10-K, Forms 10-Q, Forms 8-K, and proxy statements, (ii) other Regulatory
Authorities, and (iii) any applicable state securities or banking authorities
(except, in the case of state securities authorities, failures to file which are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC). As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules thereto,
complied in all material respects with all applicable Laws. As of its respective
date, each such report and document did not, in all material respects, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
6.13 Statements True and Correct. No statement, certificate,
instrument or other writing furnished or to be furnished by any UPC Company or
any Affiliate thereof to Capital pursuant to this Agreement or any other
document, agreement, or instrument referred to herein contains or will contain
any untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. None of the information supplied or to be
supplied by any UPC Company or any Affiliate thereof for inclusion in the
Registration Statement to be filed by UPC with the SEC, will, when the
Registration Statement becomes effective, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to make the
statements therein not misleading. None of the information supplied or to be
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supplied by any UPC Company or any Affiliate thereof for inclusion in the Proxy
Statement to be mailed to Capital's shareholders in connection with the
Shareholders' Meeting, and any other documents to be filed by any UPC Company or
any Affiliate thereof with the SEC or any other Regulatory Authority in
connection with the transactions contemplated hereby, will, at the respective
time such documents are filed, and with respect to the Proxy Statement, when
first mailed to the shareholders of Capital, be false or misleading with respect
to any material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or, in the case of the Proxy Statement or any amendment thereof
or supplement thereto, at the time of the Shareholders' Meeting, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of any proxy for the Shareholders' Meeting. All documents that
any UPC Company or any Affiliate thereof is responsible for filing with any
Regulatory Authority in connection with the transactions contemplated hereby
will comply as to form in all material respects with the provisions of
applicable Law.
6.14 Accounting, Tax, and Regulatory Matters. No UPC Company
or any Affiliate thereof has taken any action or has any Knowledge of any fact
or circumstance relating to UPC that is reasonably likely to (i) prevent the
transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially
impede or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.1(b) of this Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of such Section.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Affirmative Covenants of Capital. Unless the prior written
consent of UPC shall have been obtained, and except as otherwise expressly
contemplated herein or as set forth in Section 7.1 of the Capital Disclosure
Memorandum, Capital shall and shall cause each of its Subsidiaries to (i)
operate its business only in the usual, regular, and ordinary course, (ii)
preserve intact its business organization and Assets and maintain its rights and
franchises, and (iii) take no action which would (a) materially adversely affect
the ability of any Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the type
referred to in the last sentence of Section 9.1(b) of this Agreement or prevent
the transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, or (b) materially
adversely affect the ability of any Party to perform its covenants and
agreements under this Agreement.
7.2 Negative Covenants of Capital. Except as specifically
contemplated by this Agreement or other documents or instruments executed in
connection with this Agreement, from the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, Capital
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covenants and agrees that it will not do or agree or commit to do, or permit any
of its Subsidiaries to do or agree or commit to do, any of the following without
the prior written consent of the chief executive officer, president, or chief
financial officer of UPC, which consent shall not be unreasonably withheld:
(a) amend the Certificate of Incorporation, By-laws, or other
governing instruments of any Capital Company; or
(b) incur any additional debt obligation or other obligation
for borrowed money (other than indebtedness of a Capital Company to
another Capital Company) in excess of an aggregate of $100,000 (for the
Capital Companies on a consolidated basis) except in the ordinary
course of the business of Capital Subsidiaries consistent with past
practices (which shall include, for Capital Subsidiaries that are
depository institutions, creation of deposit liabilities, purchases of
federal funds, advances from the Federal Reserve Bank or Federal Home
Loan Bank, and entry into repurchase agreements fully secured by U.S.
government or agency securities), or impose, or suffer the imposition,
on any Asset of any Capital Company of any Lien or permit any such Lien
to exist (other than in connection with deposits, repurchase
agreements, bankers acceptances, advances from the Federal Reserve
Board or Federal Home Loan Bank, "treasury tax and loan" accounts
established in the ordinary course of business, the satisfaction of
legal requirements in the exercise of trust powers, and Liens in effect
as of the date hereof that are disclosed in the Capital Disclosure
Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit
plans), directly or indirectly, any shares, or any securities
convertible into any shares, of the capital stock of any Capital
Company, or declare or pay any dividend or make any other distribution
in respect of Capital's capital stock, provided that Capital may (to
the extent legally and contractually permitted to do so), but shall not
be obligated to, declare and pay regular quarterly cash dividends on
the shares of Capital Common Stock at a rate not in excess of $.06 per
share with usual and regular record and payment dates in accordance
with past practice disclosed in Section 7.2(c) of the Capital
Disclosure Memorandum and such dates may not be changed without the
prior written consent of UPC, provided, that, notwithstanding the
provisions of Section 1.3, the Parties shall cooperate in selecting the
Effective Time to ensure that, with respect to the quarterly period in
which the Effective Time occurs, the holders of Capital Common Stock do
not become entitled to receive both a dividend in respect of their
Capital Common Stock and a dividend in respect of UPC Common Stock or
fail to be entitled to receive any dividend ; or
(d) except for this Agreement, or pursuant to the exercise of
stock options outstanding as of the date hereof or issuance of shares
to satisfy stock rights outstanding as of the date hereof, plus
dividend and accumulation rights, if any, and pursuant to the terms of
the Capital Stock Plans in existence on the date hereof, or pursuant to
the Stock Option Agreement, issue, sell, pledge, encumber, authorize
the issuance of, enter into any Contract to issue, sell, pledge,
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encumber, or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of Capital Common Stock or any other
capital stock of any Capital Company, or any stock appreciation rights,
or any option, warrant, conversion, or other right to acquire any such
stock, or any security convertible into any such stock; or
(e) adjust, split, combine or reclassify any capital stock of
any Capital Company or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of Capital
Common Stock, or sell, lease, mortgage or otherwise dispose of or
otherwise encumber any shares of capital stock of any Capital
Subsidiary (unless any such shares of stock are sold or otherwise
transferred to another Capital Company) or any Asset having a book
value in excess of $100,000 other than in the ordinary course of
business for reasonable and adequate consideration; or
(f) except as disclosed in Section 7.2(f) of the Capital
Disclosure Memorandum and for purchases of U.S. Treasury securities or
U.S. Government agency securities, which in either case have maturities
of three years or less or Federal Home Loan Bank Stock, purchase any
securities or make any material investment, either by purchase of stock
of securities, contributions to capital, Asset transfers, or purchase
of any Assets, in any Person other than a wholly owned Capital
Subsidiary, or otherwise acquire direct or indirect control over any
Person, other than in connection with (i) foreclosures in the ordinary
course of business, (ii) acquisitions of control by a depository
institution Subsidiary in its fiduciary capacity, or (iii) the creation
of new wholly owned Subsidiaries organized to conduct or continue
activities otherwise permitted by this Agreement; or
(g) grant any increase in compensation or benefits to the
employees or officers of any Capital Company, except in accordance with
past practice disclosed in Section 7.2(g) of the Capital Disclosure
Memorandum or as required by Law; pay any severance or termination pay
or any bonus other than pursuant to written policies or written
Contracts in effect on the date of this Agreement and disclosed in
Section 7.2(g) of the Capital Disclosure Memorandum; and enter into or
amend any severance agreements with officers of any Capital Company;
grant any material increase in fees or other increases in compensation
or other benefits to directors of any Capital Company except in
accordance with past practice disclosed in Section 7.2(g) of the
Capital Disclosure Memorandum; or voluntarily accelerate the vesting of
any stock options or other stock-based compensation or employee
benefits (other than the acceleration of vesting which occurs under a
benefit plan upon a change of control of Capital); or
(h) enter into or amend any employment Contract between any
Capital Company and any Person (unless such amendment is required by
Law) that the Capital Company does not have the unconditional right to
terminate without Liability (other than Liability for services already
rendered), at any time on or after the Effective Time; or
(i) except as disclosed in Section 7.2(i) of the Capital
Disclosure Memorandum, adopt any new employee benefit plan of any
Capital Company or terminate or withdraw from, or make any material
change in or to, any existing employee benefit plans of any Capital
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Company other than any such change that is required by Law or that, in
the opinion of counsel, is necessary or advisable to maintain the tax
qualified status of any such plan, or make any distributions from such
employee benefit plans, except as required by Law, the terms of such
plans or consistent with past practice; or
(j) make any significant change in any Tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in Tax Laws or regulatory accounting
requirements or GAAP; or
(k) commence any Litigation other than in accordance with past
practice, settle any Litigation involving any Liability of any Capital
Company for money damages in excess of $100,000 or restrictions upon
the operations of any Capital Company; or
(l) other than in the ordinary course of business consistent
with past practice, enter into, modify, amend, or terminate any
material Contract (excluding any loan Contract) or waive, release,
compromise, or assign any material rights or claims.
7.3 Covenants of UPC. From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement, UPC
covenants and agrees that it shall (i) continue to conduct its business and the
business of its Subsidiaries in a manner designed in its reasonable judgment, to
enhance the long-term value of the UPC Common Stock and the business prospects
of the UPC Companies, and (ii) take no action which would (a) materially
adversely affect the ability of any Party to obtain any Consents required for
the transactions contemplated hereby without imposition of a condition or
restriction of the type referred to in the last sentence of Section 9.1(b) of
this Agreement or prevent the transactions contemplated hereby, including the
Merger, from qualifying for pooling-of-interests accounting treatment or as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (b) materially adversely affect the ability of any Party to perform its
covenants and agreements under this Agreement.
7.4 Adverse Changes in Condition. Each Party agrees to give
written notice promptly to the other Party upon becoming aware of the occurrence
or impending occurrence of any event or circumstance relating to it or any of
its Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) would cause or constitute a
material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the same.
7.5 Reports. Each Party and its Subsidiaries shall file all
reports required to be filed by it with Regulatory Authorities between the date
of this Agreement and the Effective Time and shall deliver to the other Party
copies of all such reports promptly after the same are filed. If financial
statements are contained in any such reports filed with the SEC, such financial
statements will fairly present the consolidated financial position of the entity
filing such statements as of the dates indicated and the consolidated results of
operations, changes in shareholders' equity, and cash flows for the periods then
ended in accordance with GAAP (subject in the case of interim financial
statements to normal recurring year-end adjustments that are not material). As
of their respective dates, such reports filed with the SEC will comply in all
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material respects with the Securities Laws and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Any financial
statements contained in any other reports to another Regulatory Authority shall
be prepared in accordance with Laws applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Registration Statement; Proxy Statement; Shareholder
Approval. UPC shall file the Registration Statement with the SEC, and shall use
its reasonable efforts to cause the Registration Statement to become effective
under the 1933 Act and take any action required to be taken under the applicable
state Blue Sky or securities Laws in connection with the issuance of the shares
of UPC Common Stock upon consummation of the Merger. Capital shall furnish all
information concerning it and the holders of its capital stock as UPC may
reasonably request in connection with such action. Capital shall call a
Shareholders' Meeting, to be held as soon as reasonably practicable after the
Registration Statement is declared effective by the SEC, for the purpose of
voting upon approval of this Agreement and the Plan of Merger and such other
related matters as it deems appropriate. In connection with the Shareholders'
Meeting, (i) Capital shall prepare and file with the SEC a Proxy Statement and
mail such Proxy Statement to its shareholders, (ii) the Parties shall furnish to
each other all information concerning them that they may reasonably request in
connection with such Proxy Statement, (iii) the Board of Directors of Capital
shall recommend (subject to compliance with their fiduciary duties as advised by
counsel) to its shareholders the approval of the matters submitted for approval,
and (iv) the Board of Directors and officers of Capital shall (subject to
compliance with their fiduciary duties as advised by counsel) use their
reasonable efforts to obtain such shareholders' approvals.
8.2 Exchange Listing. UPC shall use its reasonable efforts to
list, prior to the Effective Time, on the NYSE, subject to official notice of
issuance, the shares of UPC Common Stock to be issued to the holders of Capital
Common Stock or Capital Options pursuant to the Merger, and UPC shall give all
notices and make all filings with the NYSE required in connection with the
transactions contemplated herein.
8.3 Applications. UPC shall prepare and file, and Capital
shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement. The
Parties shall deliver to each other copies of all filings, correspondence and
orders to and from all Regulatory Authorities in connection with the
transactions contemplated hereby as soon as practicable upon their becoming
available.
8.4 Filings with State Offices. Upon the terms and subject to
the conditions of this Agreement, Holding shall execute and file the Certificate
of Merger with the Secretary of State of the State of Delaware and the Articles
of Merger with the Secretary of State of Tennessee in connection with the
Closing.
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8.5 Agreement as to Efforts to Consummate. Subject to the
terms and conditions of this Agreement, each Party agrees to use, and to cause
its Subsidiaries to use, its reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
practicable after the date of this Agreement, the transactions contemplated by
this Agreement, including using its reasonable efforts to lift or rescind any
Order adversely affecting its ability to consummate the transactions
contemplated herein and to cause to be satisfied the conditions referred to in
Article 9 of this Agreement; provided, that nothing herein shall preclude either
Party from exercising its rights under this Agreement or the Stock Option
Agreement. Each Party shall use, and shall cause each of its Subsidiaries to
use, its reasonable efforts to obtain all Consents necessary or desirable for
the consummation of the transactions contemplated by this Agreement.
8.6 Investigation and Confidentiality.
(a) Prior to the Effective Time, each Party shall keep the
other Party advised of all material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or cause to
be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests, provided that such investigation shall be reasonably
related to the transactions contemplated hereby and shall not interfere
unnecessarily with normal operations. No investigation by a Party shall affect
the representations and warranties of the other Party.
(b) Each Party shall, and shall cause its advisers and agents
to, maintain the confidentiality of all confidential information furnished to it
by the other Party concerning its and its Subsidiaries' businesses, operations,
and financial positions and shall not use such information for any purpose
except in furtherance of the transactions contemplated by this Agreement. If
this Agreement is terminated prior to the Effective Time, each Party shall
promptly return or certify the destruction of all documents and copies thereof,
and all work papers containing confidential information received from the other
Party.
(c) Capital shall use its reasonable efforts to exercise its
rights under confidentiality agreements entered into with Persons which were
considering an Acquisition Transaction with Capital to preserve the
confidentiality of the information relating to Capital provided to such Persons
and their Affiliates and Representatives.
8.7 Press Releases. Prior to the Effective Time, Capital and
UPC shall consult with each other as to the form and substance of any press
release or other public disclosure materially related to this Agreement or any
other transaction contemplated hereby; provided, that nothing in this Section
8.7 shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
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8.8 Certain Actions. Except with respect to this Agreement and
the Plan of Merger and the transactions contemplated hereby and thereby, after
the date of this Agreement, no Capital Company nor any Affiliate thereof nor any
Representatives thereof retained by any Capital Company shall directly or
indirectly solicit any Acquisition Proposal by any Person. Except to the extent
necessary to comply with the fiduciary duties of Capital's Board of Directors as
advised by counsel, no Capital Company or any Affiliate or Representative
thereof shall furnish any non-public information that it is not legally
obligated to furnish, negotiate with respect to, or enter into any Contract with
respect to, any Acquisition Proposal, but Capital may communicate information
about such an Acquisition Proposal to its shareholders if and to the extent that
it is required to do so in order to comply with its legal obligations as advised
by counsel. Capital shall promptly notify UPC orally and in writing in the event
that it receives any inquiry or proposal relating to any such transaction.
Capital shall (i) immediately cease and cause to be terminated any existing
activities, discussions, or negotiations with any Persons conducted heretofore
with respect to any of the foregoing, and (ii) direct and use its reasonable
efforts to cause all of its Representatives not to engage in any of the
foregoing.
8.9 Accounting and Tax Treatment. Each of the Parties
undertakes and agrees to use its reasonable efforts to cause the Merger, and to
take no action which would cause the Merger not, to qualify for
pooling-of-interests accounting treatment and treatment as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code for federal
income tax purposes.
8.10 State Takeover Laws. Each Capital Company shall take all
necessary steps to exempt the transactions contemplated by this Agreement from,
or if necessary challenge the validity or applicability of, any applicable
Takeover Law.
8.11 Charter Provisions. Each Capital Company shall take all
necessary action to ensure that the entering into of this Agreement and the Plan
of Merger and the consummation of the Merger and the other transactions
contemplated hereby and thereby do not and will not result in the grant of any
rights to any Person under the Certificate of Incorporation, By-laws, or other
governing instruments of any Capital Company or restrict or impair the ability
of UPC or any of its Subsidiaries to vote, or otherwise to exercise the rights
of a shareholder with respect to, shares of any Capital Company that may be
directly or indirectly acquired or controlled by it.
8.12 Agreement of Affiliates. Capital has disclosed in Section
8.12 of the Capital Disclosure Memorandum all Persons whom it reasonably
believes is an "affiliate" of Capital for purposes of Rule 145 under the 1933
Act. Capital shall use its reasonable efforts to cause each such Person to
deliver to UPC not later than 30 days prior to the Effective Time, a written
agreement, substantially in the form of Exhibit 3, providing that such Person
will not sell, pledge, transfer, or otherwise dispose of the shares of Capital
Common Stock held by such Person except as contemplated by such agreement or by
this Agreement and will not sell, pledge, transfer, or otherwise dispose of the
shares of UPC Common Stock to be received by such Person upon consummation of
the Merger except in compliance with applicable provisions of the 1933 Act and
the rules and regulations thereunder and until such time as financial results
covering at least 30 days of combined operations of UPC and Capital have been
published within the meaning of Section 201.01 of the SEC's Codification of
- 30 -
Financial Reporting Policies. If the Merger will qualify for
pooling-of-interests accounting treatment, shares of UPC Common Stock issued to
such affiliates of Capital in exchange for shares of Capital Common Stock shall
not be transferable until such time as financial results covering at least 30
days of combined operations of UPC and Capital have been published within the
meaning of Section 201.01 of the SEC's Codification of Financial Reporting
Policies, regardless of whether each such affiliate has provided the written
agreement referred to in this Section 8.12 (and UPC shall be entitled to place
restrictive legends upon certificates for shares of UPC Common Stock issued to
affiliates of Capital pursuant to this Agreement to enforce the provisions of
this Section 8.12). UPC shall not be required to maintain the effectiveness of
the Registration Statement under the 1933 Act for the purposes of resale of UPC
Common Stock by such affiliates.
8.13 Employee Benefits and Contracts. Subject to the terms of
the Supplemental Letter, following the Effective Time, UPC shall provide to
officers and employees of the Capital Companies employee benefits under employee
benefit and welfare plans, on terms and conditions which when taken as a whole
are substantially similar to those currently provided by the UPC Companies to
their similarly situated officers and employees. For purposes of participation,
vesting, and (except in the case of defined benefit plans) benefit accrual under
such employee benefit plans, the service of the employees of the Capital
Companies prior to the Effective Time shall be treated as service with a UPC
Company participating in such employee benefit plans.
8.14 Indemnification.
(a) After the Effective Time, UPC shall indemnify, defend and
hold harmless the present and former directors, officers, employees, and agents
of the Capital Companies (each, an "Indemnified Party") (including any person
who becomes a director, officer, employee, or agent prior to the Effective Time)
against all Liabilities (including reasonable attorneys' fees, and expenses,
judgments, fines and amounts paid in settlement) arising out of actions or
omissions occurring at or prior to the Effective Time (including the
transactions contemplated by this Agreement and the Stock Option Agreement) to
the full extent permitted under Delaware Law and by Capital's Certificate of
Incorporation and By-laws as in effect on the date hereof, including provisions
relating to advances of expenses incurred in the defense of any Litigation.
Without limiting the foregoing, in any case in which approval by UPC is required
to effectuate any indemnification, UPC shall direct, at the election of the
Indemnified Party, that the determination of any such approval shall be made by
independent counsel mutually agreed upon between UPC and the Indemnified Party.
(b) Any Indemnified Party wishing to claim indemnification
under paragraph (a) of this Section 8.14, upon learning of any such Liability or
Litigation, shall promptly notify UPC thereof, provided that the failure so to
notify shall not affect the obligations of UPC under this Section 8.14 unless
and to the extent such failure materially increases UPC's liability under this
Section 8.14. In the event of any such Litigation (whether arising before or
after the Effective Time), (i) UPC or the Surviving Corporation shall have the
right to assume the defense thereof and UPC shall not be liable to such
Indemnified Parties for any legal expenses of other counsel or any other
- 31 -
expenses subsequently incurred by such Indemnified Parties in connection with
the defense thereof, except that if UPC or the Surviving Corporation elects not
to assume such defense or counsel for the Indemnified Parties advises that there
are substantive issues which raise conflicts of interest between UPC or the
Surviving Corporation and the Indemnified Parties, the Indemnified Parties may
retain counsel satisfactory to them, and UPC or the Surviving Corporation shall
pay all reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received; provided, that UPC shall be
obligated pursuant to this paragraph (b) to pay for only one firm of counsel for
all Indemnified Parties in any jurisdiction, (ii) the Indemnified Parties will
cooperate in the defense of any such Litigation, and (iii) UPC shall not be
liable for any settlement effected without its prior written consent; and
provided further that the Surviving Corporation shall not have any obligation
hereunder to any Indemnified Party when and if a court of competent jurisdiction
shall determine, and such determination shall have become final, that the
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable Law.
(c) The Surviving Corporation shall not be liable for any
settlement effected without its prior written consent which shall not be
unreasonably withheld. The Surviving Corporation shall not have any obligation
hereunder to any Indemnified Party when and if a court of competent jurisdiction
shall determine, and such determination shall have become final, that the
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable Law.
(d) If the Surviving Corporation or any of its successors or
assigns shall consolidate with or merge into any other Person and shall not be
the continuing or surviving Person of such consolidation or merger or shall
transfer all or substantially all of its assets to any Person, then and in each
case, proper provision shall be made so that the successors and assigns of the
Surviving Corporation shall assume the obligations set forth in this Section
8.14.
8.15 Corporate Actions of Holding. UPC agrees to cause Holding
to effect all corporate action necessary to approve and adopt the Plan of Merger
prior to the Effective Time in accordance with the TBCA. In addition, UPC, as a
sole shareholder of Holding, shall vote prior to the Effective Time the shares
of Holding Common Stock in favor of the Plan of Merger.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party. The respective
obligations of each Party to perform this Agreement and consummate the Merger
and the other transactions contemplated hereby are subject to the satisfaction
of the following conditions, unless waived by both Parties pursuant to Section
11.6 of this Agreement:
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(a) Shareholder Approval. The shareholders of Capital shall
have approved this Agreement and the Plan of Merger, and the
consummation of the transactions contemplated hereby and thereby,
including the Merger, as and to the extent required by Law, by the
provisions of any governing instruments, or by the rules of the NASD.
(b) Regulatory Approvals. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities
required for consummation of the Merger shall have been obtained or
made and shall be in full force and effect and all waiting periods
required by Law shall have expired. No Consent obtained from any
Regulatory Authority which is necessary to consummate the transactions
contemplated hereby shall be conditioned or restricted in a manner
(other than matters relating to the raising of additional capital or
the disposition of Assets (including, but not limited to, any
divestiture or restrictions on the insurance activities of any Capital
Companies) or deposit Liabilities and associated branches) which in the
reasonable judgment of the Board of Directors of UPC would so
materially adversely impact the financial or economic benefits of the
transactions contemplated by this Agreement that, had such condition or
requirement been known, UPC would not, in its reasonable judgment, have
entered into this Agreement.
(c) Consents and Approvals. Each Party shall have obtained any
and all Consents required for consummation of the Merger (other than
those referred to in Section 9.1(b) of this Agreement) or for the
preventing of any Default under any Contract or Permit of such Party
which, if not obtained or made, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on such
Party.
(d) Legal Proceedings. No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced, or entered any Law or Order (whether temporary,
preliminary, or permanent) or taken any other action which prohibits,
materially restricts, or makes illegal consummation of the transactions
contemplated by this Agreement and the Plan of Merger.
(e) Registration Statement. The Registration Statement shall
be effective under the 1933 Act, no stop order suspending the
effectiveness of the Registration Statement shall have been issued, no
action, suit, proceeding, or investigation by the SEC to suspend the
effectiveness thereof shall have been initiated and be continuing, and
all necessary approvals under state securities Laws or the 1933 Act or
1934 Act relating to the issuance or trading of the shares of UPC
Common Stock issuable pursuant to the Merger shall have been received.
(f) Exchange Listing. The shares of UPC Common Stock issuable
pursuant to the Merger shall have been approved for listing on the
NYSE, subject to official notice of issuance.
(g) Pooling Letters. Each of the Parties shall have received
copies of the letters, dated as of the date of filing of the
Registration Statement with the SEC and as of the Effective Time,
addressed to UPC, from Price Waterhouse LLP to the effect that the
Merger will qualify for pooling-of-interests accounting treatment.
- 33 -
(h) Tax Matters. Each Party shall have received a written
opinion of counsel from ▇▇▇▇▇▇ & Bird LLP, in form reasonably
satisfactory to such Parties (the "Tax Opinion"), to the effect that
(i) the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code, (ii) the exchange in the
Merger of Capital Common Stock for UPC Common Stock will not give rise
to gain or loss to the shareholders of Capital with respect to such
exchange (except to the extent of any cash received), and (iii) none of
Capital or UPC will recognize gain or loss as a consequence of the
Merger (except for the inclusion in income of the amount of the
bad-debt reserve maintained by Capital Savings and any other amounts
resulting from any required change in accounting methods and any income
and deferred gain recognized pursuant to Treasury regulations issued
under Section 1502 of the Internal Revenue Code). In rendering such Tax
Opinion, such counsel shall be entitled to rely upon representations of
officers of Capital and UPC reasonably satisfactory in form and
substance to such counsel.
9.2 Conditions to Obligations of UPC. The obligations of UPC
to perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by UPC pursuant to Section 11.6(a) of this Agreement:
(a) Representations and Warranties. For purposes of this
Section 9.2(a), the accuracy of the representations and warranties of
Capital set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect as
though all such representations and warranties had been made on and as
of the Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of such
date). The representations and warranties of Capital set forth in
Section 5.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimus in amount). The representations and
warranties of Capital set forth in Sections 5.20, 5.21, and 5.22 of
this Agreement shall be true and correct in all material respects.
There shall not exist inaccuracies in the representations and
warranties of Capital set forth in this Agreement (including the
representations and warranties set forth in Sections 5.3, 5.20, 5.21,
and 5.22) such that the aggregate effect of such inaccuracies has, or
is reasonably likely to have, a Material Adverse Effect on Capital;
provided that, for purposes of this sentence only, those
representations and warranties which are qualified by references to
"material" or "Material Adverse Effect" shall be deemed not to include
such qualifications.
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of Capital to be performed and complied
with pursuant to this Agreement and the other agreements contemplated
hereby prior to the Effective Time shall have been duly performed and
complied with in all material respects.
- 34 -
(c) Certificates. Capital shall have delivered to UPC (i) a
certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, or other
authorized officers, to the effect that the conditions of its
obligations set forth in Section 9.2(a) and 9.2(b) of this Agreement
have been satisfied, and (ii) certified copies of resolutions duly
adopted by Capital's Board of Directors and shareholders evidencing the
taking of all corporate action necessary to authorize the execution,
delivery, and performance of this Agreement and the Plan of Merger, and
the consummation of the transactions contemplated hereby and thereby,
all in such reasonable detail as UPC and its counsel shall request.
(d) Affiliates Agreements. UPC shall have received from each
affiliate of Capital the affiliates letter referred to in Section 8.12
of this Agreement, to the extent necessary to assure in the reasonable
judgment of UPC that the transactions contemplated hereby will qualify
for pooling-of-interests accounting treatment.
(e) Employment Agreements. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ shall have entered into
employment agreements with UPC, substantially in the form of Appendices
A, B, C, and D, respectively, to the Supplemental Letter.
9.3 Conditions to Obligations of Capital. The obligations of
Capital to perform this Agreement and the Plan of Merger and consummate the
Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by Capital pursuant to
Section 11.6(b) of this Agreement:
(a) Representations and Warranties. For purposes of this
Section 9.3(a), the accuracy of the representations and warranties of
UPC set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect as
though all such representations and warranties had been made on and as
of the Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of such
date). The representations and warranties of UPC set forth in Section
6.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimus in amount). The representations and
warranties of UPC set forth in Section 6.14 of this Agreement shall be
true and correct in all material respects. There shall not exist
inaccuracies in the representations and warranties of UPC set forth in
this Agreement (including the representations and warranties set forth
in Sections 6.3 and 6.14) such that the aggregate effect of such
inaccuracies has, or is reasonably likely to have, a Material Adverse
Effect on UPC; provided that, for purposes of this sentence only, those
representations and warranties which are qualified by references to
"material" or "Material Adverse Effect" shall be deemed not to include
such qualifications.
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of UPC to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with in all material respects.
- 35 -
(c) Certificates. UPC shall have delivered to Capital (i) a
certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the
effect that the conditions of its obligations set forth in Section
9.3(a) and 9.3(b) of this Agreement have been satisfied, and (ii)
certified copies of resolutions duly adopted by UPC's Board of
Directors evidencing the taking of all corporate action necessary to
authorize the execution, delivery and performance of this Agreement,
and the consummation of the transactions contemplated hereby, all in
such reasonable detail as Capital and its counsel shall request.
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
shareholders of Capital, this Agreement and the Plan of Merger may be terminated
and the Merger abandoned at any time prior to the Effective Time:
(a) By mutual consent of the Board of Directors of UPC and the
Board of Directors of Capital; or
(b) By the Board of Directors of either Party (provided that
the terminating Party is not then in breach of any representation or
warranty contained in this Agreement under the applicable standard set
forth in Section 9.2(a) of this Agreement in the case of Capital and
Section 9.3(a) in the case of UPC or in material breach of any covenant
or other agreement contained in this Agreement) in the event of an
inaccuracy of any representation or warranty of the other Party
contained in this Agreement which cannot be or has not been cured
within 30 days after the giving of written notice to the breaching
Party of such inaccuracy and which inaccuracy would provide the
terminating Party the ability to refuse to consummate the Merger under
the applicable standard set forth in Section 9.2(a) of this Agreement
in the case of Capital and Section 9.3(a) of this Agreement in the case
of UPC; or
(c) By the Board of Directors of either Party (provided that
the terminating Party is not then in breach of any representation or
warranty contained in this Agreement under the applicable standard set
forth in Section 9.2(a) of this Agreement in the case of Capital and
Section 9.3(a) in the case of UPC or in material breach of any covenant
or other agreement contained in this Agreement) in the event of a
material breach by the other Party of any covenant or agreement
contained in this Agreement which cannot be or has not been cured
within 30 days after the giving of written notice to the breaching
Party of such breach; or
(d) By the Board of Directors of either Party in the event (i)
any Consent of any Regulatory Authority required for consummation of
the Merger and the other transactions contemplated hereby shall have
been denied by final nonappealable action of such authority or if any
action taken by such authority is not appealed within the time limit
- 36 -
for appeal, or (ii) the shareholders of Capital fail to vote their
approval of this Agreement and the transactions contemplated hereby as
required by the DGCL and the rules of the NASD at the Shareholders'
Meeting where the transactions were presented to such shareholders for
approval and voted upon; or
(e) By the Board of Directors of either Party in the event
that the Merger shall not have been consummated by September 30, 1998,
if the failure to consummate the transactions contemplated hereby on or
before such date is not caused by any willful breach of this Agreement
by the Party electing to terminate pursuant to this Section 10.1(e); or
(f) By the Board of Directors of either Party (provided that
the terminating Party is not then in breach of any representation or
warranty contained in this Agreement under the applicable standard set
forth in Section 9.2(a) of this Agreement in the case of Capital and
Section 9.3(a) in the case of UPC or in material breach of any covenant
or other agreement contained in this Agreement) in the event that any
of the conditions precedent to the obligations of such Party to
consummate the Merger cannot be satisfied or fulfilled by the date
specified in Section 10.1(e) of this Agreement.
(g) By the Board of Directors of Capital, if it determines by
a vote of a majority of the members of its entire Board, at any time
during the ten-day period commencing two days after the Determination
Date, if both of the following conditions are satisfied:
(1) the Average Closing Price shall be less than the
product of (i) 0.80 and (ii) the Starting Price; and
(2) (i) the quotient obtained by dividing the Average
Closing Price by the Starting Price (such number being
referred to herein as the "UPC Ratio") shall be less than
(ii) the quotient obtained by dividing the Index Price on
the Determination Date by the Index Price on the Starting
Date and subtracting 0.15 from the quotient in this clause
(2)(ii) (such number being referred to herein as the "Index
Ratio");
subject, however, to the following three sentences. If Capital refuses to
consummate the Merger pursuant to this Section 10.1(g), it shall give
prompt written notice thereof to UPC; provided, that such notice of
election to terminate may be withdrawn at any time within the
aforementioned ten-day period. During the five-day period commencing with
its receipt of such notice, UPC shall have the option to elect to
increase the Exchange Ratio to equal the lesser of (i) the quotient
obtained by dividing (1) the product of 0.80, the Starting Price, and the
Exchange Ratio (as then in effect) by (2) the Average Closing Price, and
(ii) the quotient obtained by dividing (1) the product of the Index Ratio
and the Exchange Ratio (as then in effect) by (2) the UPC Ratio. If UPC
makes an election contemplated by the preceding sentence, within such
five-day period, it shall give prompt written notice to Capital of such
election and the revised Exchange Ratio, whereupon no termination shall
- 37 -
have occurred pursuant to this Section 10.1(g) and this Agreement shall
remain in effect in accordance with its terms (except as the Exchange
Ratio shall have been so modified), and any references in this Agreement
to "Exchange Ratio" shall thereafter be deemed to refer to the Exchange
Ratio as adjusted pursuant to this Section 10.1(g).
For purposes of this Section 10.1(g), the following terms
shall have the meanings indicated:
"Average Closing Price" shall mean the average of the
daily last sales prices of UPC Common Stock as reported on the
NYSE (as reported by The Wall Street Journal or, if not reported
thereby, another authoritative source as chosen by UPC) for the 10
consecutive full trading days in which such shares are traded on
the NYSE ending at the close of trading on the Determination Date.
"Determination Date" shall mean the later of the date
(i) of the Shareholders' Meeting and (ii) on which the last
Consent of the Board of Governors of the Federal Reserve System
shall be received.
"Index Group" shall mean the 17 bank holding
companies listed below, the common stocks of all of which shall be
publicly traded and as to which there shall not have been, since
the Starting Date and before the Determination Date, any public
announcement of a proposal for such company to be acquired or for
such company to acquire another company or companies in
transactions with a value exceeding 25% of the acquiror's market
capitalization. In the event that any such company or companies
are removed from the Index Group, the weights (which shall be
determined based upon the number of outstanding shares of common
stock) shall be redistributed proportionately for purposes of
determining the Index Price. The 17 bank holding companies and the
weights attributed to them are as follows:
Bank Holding Companies Weighting
---------------------- ---------
AmSouth Bancorporation 4.87%
Central Fidelity Banks, Inc. 5.11
Compass Bancshares, Inc. 3.63
Deposit Guaranty Corporation 3.56
Fifth Third Bancorp 9.24
First American Corporation 2.60
First Commerce Corporation 3.39
First Tennessee National Corporation 5.62
First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. 2.83
Hibernia Corporation 11.25
Huntington Bancshares, Inc. 12.35
Mercantile Bancorporation, Inc. 5.30
National Commerce Bancorp 2.14
Regions Financial Corporation 5.80
- 38 -
Signet Banking Corporation 5.25
Southern National Corporation 9.55
Star Banc Corporation 7.50
------
Total 100.00%
======
"Index Price" on a given date shall mean the weighted
average (weighted in accordance with the factors listed above) of
the closing prices of the companies composing the Index Group.
"Starting Date" shall mean the fourth full trading
day after the announcement by press release of the Merger.
"Starting Price" shall mean the closing price per
share of UPC Common Stock as reported on the NYSE (as reported by
The Wall Street Journal or, if not reported thereby, another
authoritative source as chosen by UPC) on the Starting Date.
If any company belonging to the Index Group or UPC declares or
effects a stock dividend, reclassification, recapitalization, split-up,
combination, exchange of shares, or similar transaction between the date
of this Agreement and the Determination Date, the prices for the common
stock of such company or UPC shall be appropriately adjusted for the
purposes of applying this Section 10.1(g).
10.2 Effect of Termination. In the event of the termination
and abandonment of this Agreement pursuant to Section 10.1 of this Agreement,
this Agreement, the Plan of Merger, and the Supplemental Letter shall become
void and have no effect, except that (i) the provisions of this Section 10.2 and
Article 11 and Section 8.6(b) of this Agreement shall survive any such
termination and abandonment, and (ii) a termination pursuant to Sections
10.1(b), 10.1(c), or 10.1(f) of this Agreement shall not relieve the breaching
Party from Liability for an uncured willful breach of a representation,
warranty, covenant, or agreement giving rise to such termination. The Stock
Option Agreement shall be governed by its own terms as to its termination.
10.3 Non-Survival of Representations and Covenants. The
respective representations, warranties, obligations, covenants, and agreements
of the Parties shall not survive the Effective Time except this Section 10.3 and
Articles 2, 3, 4 and 11 and Sections 8.12, 8.13, and 8.14 of this Agreement and
the provisions of the Supplemental Letter.
- 39 -
ARTICLE 11
MISCELLANEOUS
11.1 Definitions.
(a) Except as otherwise provided herein, the
capitalized terms set forth below shall have the following meanings:
"Acquisition Proposal" with respect to a Party shall mean any
tender offer or exchange offer or any proposal for a merger, acquisition
of all of the stock or assets of, or other business combination involving
such Party or any of its Subsidiaries or the acquisition of a substantial
equity interest in, or a substantial portion of the assets of, such Party
or any of its Subsidiaries.
"Affiliate" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by, or under common control with such Person; (ii) any
officer, director, partner, employer, or direct or indirect beneficial
owner of any 10% or greater equity or voting interest of such Person; or
(iii) any other Person for which a Person described in clause (ii) acts
in any such capacity.
"Agreement" shall mean this Agreement and Plan of
Reorganization, including the Stock Option Agreement and the Exhibits
delivered pursuant hereto and incorporated herein by reference.
"Articles of Merger" shall mean the Articles of Merger to be
executed by Holding and filed with the Secretary of State of the State of
Tennessee relating to the Merger as contemplated by Section 1.1 of this
Agreement.
"Assets" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature, character
and description, whether real, personal or mixed, tangible or intangible,
accrued or contingent, or otherwise relating to or utilized in such
Person's business, directly or indirectly, in whole or in part, whether
or not carried on the books and records of such Person, and whether or
not owned in the name of such Person or any Affiliate of such Person and
wherever located.
"BHC Act" shall mean the federal Bank Holding Company Act of
1956, as amended.
"Capital Common Stock" shall mean the $0.01 par value common
stock of Capital.
"Capital Companies" shall mean, collectively, Capital and all
Capital Subsidiaries.
- 40 -
"Capital Disclosure Memorandum" shall mean the written
information entitled "Capital Savings Bancorp, Inc. Disclosure
Memorandum" delivered prior to the date of this Agreement to UPC
describing in reasonable detail the matters contained therein and, with
respect to each disclosure made therein, specifically referencing each
Section of this Agreement under which such disclosure is being made.
Information disclosed with respect to one Section shall not be deemed to
be disclosed for purposes of any other Section not specifically
referenced with respect thereto.
"Capital Financial Statements" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of Capital
as of June 30, 1997, 1996 and 1995, and the related statements of
earnings, changes in shareholders' equity, and cash flows (including
related notes and schedules, if any) for each of the years ended June 30,
1997, 1996 and 1995, as filed by Capital in SEC Documents, and (ii) the
consolidated balance sheets of Capital (including related notes and
schedules, if any) and related statements of earnings, changes in
shareholders' equity, and cash flows (including related notes and
schedules, if any) included in SEC Documents filed with respect to
periods ended subsequent to September 30, 1997.
"Capital Savings" shall mean Capital Savings Bank, FSB, a
federal stock savings bank and a Capital Subsidiary.
"Capital Stock Plans" shall mean the existing stock option and
other stock-based compensation plans of Capital designated as follows:
(i) Capital Savings Bancorp, Inc. Employee Stock Ownership Plan; (ii)
Capital Savings Bancorp, Inc. Recognition and Retention Plan; and (iii)
Capital Savings Bancorp, Inc. 1991 Stock Option and Incentive Plan.
"Capital Subsidiaries" shall mean the Subsidiaries of Capital,
which shall include the Capital Subsidiaries described in Section 5.4 of
the Capital Disclosure Memorandum and any corporation, bank, savings
association, or other organization acquired as a Subsidiary of Capital in
the future and owned by Capital at the Effective Time.
"Certificate of Merger" shall mean the Certificate of Merger
to be executed by Holding and filed with the Secretary of State of the
State of Delaware relating to the Merger as contemplated by Section 1.1
of this Agreement.
"Closing Date" shall mean the date on which the Closing
occurs.
"Consent" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
"Contract" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture, instrument,
lease, obligation, plan, practice, restriction, understanding, or
undertaking of any kind or character, or other document to which any
Person is a party or that is binding on any Person or its capital stock,
Assets, or business.
- 41 -
"Default" shall mean (i) any breach or violation of or default
under any Contract, Order, or Permit, (ii) any occurrence of any event
that with the passage of time or the giving of notice or both would
constitute a breach or violation of or default under any Contract, Order,
or Permit, or (iii) any occurrence of any event that with or without the
passage of time or the giving of notice would give rise to a right to
terminate or revoke, change the current terms of, or renegotiate, or to
accelerate, increase, or impose any Liability under, any Contract, Order
or Permit.
"DGCL" shall mean the Delaware General Corporation Law.
"Environmental Laws" shall mean all Laws relating to pollution
or protection of human health or the environment (including ambient air,
surface water, ground water, land surface or subsurface strata) and which
are administered, interpreted or enforced by the United States
Environmental Protection Agency and state and local agencies with
jurisdiction over, and including common law in respect of, pollution or
protection of the environment, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended, 42 U.S.C. 9601 et
seq. ("CERCLA"), the Resource Conservation and Recovery Act, as amended,
42 U.S.C. 6901 et seq. ("RCRA"), and other Laws relating to emissions,
discharges, releases, or threatened releases of any Hazardous Material,
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of any Hazardous
Material.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Exhibits" 1 through 4, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits are
hereby incorporated by reference herein and made a part hereof, and may
be referred to in this Agreement and any other related instrument or
document without being attached hereto.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"Hazardous Material" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil (and specifically shall include asbestos
requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HOLA" shall mean the Home Owners' Loan Act of 1933, as
amended.
- ▇▇ -
"▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇" shall mean the $1.00 par value common
stock of Holding.
"HSR Act" shall mean Section 7A of the ▇▇▇▇▇▇▇ Act, as added
by Title II of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"Intellectual Property" shall mean copyrights, patents,
trademarks, service marks, service names, trade names, applications
therefor, technology rights and licenses, computer software (including
any source or object codes therefor or documentation relating thereto),
trade secrets, franchises, know-how, inventions, and other intellectual
property rights.
"Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated
thereunder.
"Knowledge" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall mean
those facts that are known by the Chairman, President, Chief Financial
Officer, Chief Accounting Officer, Chief Credit Officer, or General
Counsel of such Person.
"Law" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable to a
Person or its Assets, Liabilities or business, including those
promulgated, interpreted, or enforced by any Regulatory Authority.
"Liability" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost, or expense
(including costs of investigation, collection, and defense), claim,
deficiency, guaranty, or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for collection
or deposit in the ordinary course of business) of any type, whether
accrued, absolute or contingent, liquidated or unliquidated, matured or
unmatured, or otherwise.
"Lien" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement,
lien, mortgage, pledge, reservation, restriction, security interest,
title retention, or other security arrangement, or any adverse right or
interest, charge, or claim of any nature whatsoever of, on, or with
respect to any property or property interest, other than (i) Liens for
current property Taxes not yet due and payable, and (ii) for depository
institution Subsidiaries of a Party, pledges to secure deposits and other
Liens incurred in the ordinary course of the banking business.
"Litigation" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, demand letter,
governmental or other examination or investigation, hearing, inquiry,
administrative or other proceeding, or notice (written or oral) by any
Person alleging potential Liability or requesting information relating to
or affecting a Party, its business, its Assets (including Contracts
- 43 -
related to it), or the transactions contemplated by this Agreement, but
shall not include regular, periodic examinations of depository
institutions and their Affiliates by Regulatory Authorities.
"material" for purposes of this Agreement shall be determined
in light of the facts and circumstances of the matter in question;
provided that any specific monetary amount stated in this Agreement shall
determine materiality in that instance.
"Material Adverse Effect" on a Party shall mean an event,
change, or occurrence which, individually or together with any other
event, change, or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of such Party and
its Subsidiaries, taken as a whole, or (ii) the ability of such Party to
perform its obligations under this Agreement or to consummate the Merger
or the other transactions contemplated by this Agreement, provided that
"Material Adverse Effect" and "material adverse impact" shall not be
deemed to include the impact of (a) changes in banking and similar Laws
of general applicability or interpretations thereof by courts or
governmental authorities, (b) changes in GAAP or regulatory accounting
principles generally applicable to banks, savings associations, and their
holding companies, (c) actions and omissions of a Party (or any of its
Subsidiaries) taken with the prior informed written consent of the other
Party in contemplation of the transaction contemplated hereby, and (d)
the direct effects of compliance with this Agreement (including the
expense associated with the vesting of benefits under the various
employee benefit plans of Capital as a result of the Merger constituting
a change of control) on the operating performance of the Parties,
including expenses incurred by the Parties in consummating the
transactions contemplated by the Agreement.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Nasdaq National Market" shall mean the National Market System
of the National Association of Securities Dealers Automated Quotations
System.
"NYSE" shall mean the New York Stock Exchange, Inc.
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Operating Property" shall mean any property owned by the
Party in question or by any of its Subsidiaries or in which such Party or
Subsidiary holds a security interest, and, where required by the context,
includes the owner or operator of such property, but only with respect to
such property.
"Order" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award,
ruling, or writ of any federal, state, local, or foreign or other court,
arbitrator, mediator, tribunal, administrative agency, or Regulatory
Authority.
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"Participation Facility" shall mean any facility or property
in which the Party in question or any of its Subsidiaries participates in
the management and, where required by the context, said term means the
owner or operator of such facility or property, but only with respect to
such facility or property.
"Party" shall mean either Capital or UPC, and "Parties" shall
mean both Capital and UPC.
"Permit" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets or business.
"Plan of Merger" shall mean the plan of merger providing for
the Merger, in substantially the form of Exhibit 1.
"Person" shall mean a natural person or any legal, commercial,
or governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in concert,
or any person acting in a representative capacity.
"Proxy Statement" shall mean the proxy statement used by
Capital to solicit the approval of its shareholders of the transactions
contemplated by this Agreement and the Plan of Merger, which shall
include the prospectus of UPC relating to the issuance of the UPC Common
Stock to holders of Capital Common Stock.
"Registration Statement" shall mean the Registration Statement
on Form S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by
UPC under the 1933 Act with respect to the shares of UPC Common Stock to
be issued to the shareholders of Capital in connection with the
transactions contemplated by this Agreement.
"Regulatory Authorities" shall mean, collectively, the Federal
Trade Commission, the United States Department of Justice, the Board of
the Governors of the Federal Reserve System, the Office of Thrift
Supervision (including its predecessor, the Federal Home Loan Bank
Board), the Office of the Comptroller of the Currency, the Federal
Deposit Insurance Corporation, all state regulatory agencies having
jurisdiction over the Parties and their respective Subsidiaries, the
NYSE, the NASD, and the SEC.
"Representative" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative of a
Person.
"Rights" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations of any character whatsoever
relating to, or securities or rights convertible into or exchangeable
- 45 -
for, shares of the capital stock of a Person or by which a Person is or
may be bound to issue additional shares of its capital stock or other
Rights.
"SEC Documents" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed,
or required to be filed, by a Party or any of its Subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
"Securities Laws" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act
of 1940, as amended, the Trust Indenture Act of 1939, as amended, and the
rules and regulations of any Regulatory Authority promulgated thereunder.
"Shareholders' Meeting" shall mean the meeting of the
shareholders of Capital to be held pursuant to Section 8.1 of this
Agreement, including any adjournment or postponements thereof.
"Stock Option Agreement" shall mean the Stock Option Agreement
of even date herewith issued to UPC by Capital, in substantially the form
of Exhibit 2.
"Subsidiaries" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or
controls 10% or more of the outstanding equity securities either directly
or through an unbroken chain of entities as to each of which 10% or more
of the outstanding equity securities is owned directly or indirectly by
its parent; provided, there shall not be included any such entity
acquired through foreclosure or any such entity the equity securities of
which are owned or controlled in a fiduciary capacity.
"Supplemental Letter" shall mean the supplemental letter of
even date herewith relating to certain understandings and agreements in
addition to those included in this Agreement, substantially in the form
of Exhibit 4.
"Surviving Corporation" shall mean Capital as the surviving
corporation resulting from the Merger.
"TBCA" shall mean the Tennessee Business Corporation Act.
"Tax" or "Taxes" shall mean any federal, state, county, local,
or foreign income, profits, franchise, gross receipts, payroll, sales,
employment, use, property, withholding, excise, occupancy, and other
taxes, assessments, charges, fares, or impositions, including interest,
penalties, and additions imposed thereon or with respect thereto.
"UPC Capital Stock" shall mean, collectively, the UPC Common
Stock, the UPC Preferred Stock and any other class or series of capital
stock of UPC.
"UPC Common Stock" shall mean the $5.00 par value common stock
of UPC.
- 46 -
"UPC Companies" shall mean, collectively, UPC and all UPC
Subsidiaries.
"UPC Financial Statements" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of UPC as
of June 30, 1997, and December 31, 1996, 1995 and 1994, and the related
statements of earnings, changes in shareholders' equity, and cash flows
(including related notes and schedules, if any) for the six months ended
June 30, 1997 and for each of the years ended December 31, 1996, 1995 and
1994, as filed by UPC in SEC Documents, and (ii) the consolidated balance
sheets of UPC (including related notes and schedules, if any) and related
statements of earnings, changes in shareholders' equity, and cash flows
(including related notes and schedules, if any) included in SEC Documents
filed with respect to periods ended subsequent to June 30, 1997.
"UPC Preferred Stock" shall mean the no par value preferred
stock of UPC and shall include the (i) Series A Preferred Stock and (ii)
Series E, 8% Cumulative, Convertible Preferred Stock, of UPC ("UPC Series
E Preferred Stock").
"UPC Rights" shall mean the preferred stock purchase rights
issued pursuant to the UPC Rights Agreement.
"UPC Rights Agreement" shall mean that certain Rights
Agreement, dated January 19, 1989, between UPC and UPNB, as Rights Agent.
"UPC Subsidiaries" shall mean the Subsidiaries of UPC and any
corporation, bank, savings association, or other organization acquired as
a Subsidiary of UPC in the future and owned by UPC at the Effective Time.
(b) The terms set forth below shall have the meanings ascribed
thereto in the referenced sections:
Allowance Section 5.9
Average Closing Price Section 10.1(g)
Capital Benefit Plans Section 5.15(a)
Capital Contracts Section 5.16
Capital ERISA Plan Section 5.15(a)
Capital Options Section 3.5(a)
Capital Pension Plan Section 5.15(a)
Capital SEC Reports Section 5.5(a)
Closing Section 1.2
Determination Date Section 10.1(g)
Effective Time Section 1.3
ERISA Affiliate Section 5.15(c)
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(c)
Indemnified Party Section 8.14(a)
Index Group Section 10.1(g)
- 47 -
Index Price Section 10.1(g)
Index Ratio Section 10.1(g)
Merger Section 1.1
Starting Date Section 10.1(g)
Starting Price Section 10.1(g)
Takeover Laws Section 5.21
Tax Opinion Section 9.1(h)
UPC Ratio Section 10.1(g)
UPC SEC Reports Section 6.4(a)
(c) Any singular term in this Agreement shall be deemed to
include the plural, and any plural term the singular. Whenever the words
"include," "includes," or "including" are used in this Agreement, they shall be
deemed followed by the words "without limitation."
11.2 Expenses.
(a) Except as otherwise provided in this Section
11.2, each of the Parties shall bear and pay all direct costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated
hereunder, including filing, registration and application fees, printing fees,
and fees and expenses of its own financial or other consultants, investment
bankers, accountants, and counsel, except that UPC shall bear and pay the filing
fees payable in connection with the Registration Statement and the Proxy
Statement and the printing costs incurred in connection with the printing of the
Registration Statement and the Proxy Statement.
(b) Nothing contained in this Section 11.2 shall
constitute or shall be deemed to constitute liquidated damages for the willful
breach by a Party of the terms of this Agreement or otherwise limit the rights
of the nonbreaching Party.
11.3 Brokers and Finders. Except for ABN AMRO Chicago
Corporation as to Capital, each of the Parties represents and warrants that
neither it nor any of its officers, directors, employees, or Affiliates has
employed any broker or finder or incurred any Liability for any financial
advisory fees, investment bankers' fees, brokerage fees, commissions, or
finders' fees in connection with this Agreement or the transactions contemplated
hereby. In the event of a claim by any broker or finder based upon his or its
representing or being retained by or allegedly representing or being retained by
Capital or UPC, each of Capital and UPC, as the case may be, agrees to indemnify
and hold the other Party harmless of and from any Liability in respect of any
such claim.
11.4 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement (including the other documents and instruments referred
to herein or executed in connection with this Agreement) constitutes the entire
agreement between the Parties with respect to the transactions contemplated
hereunder and supersedes all prior arrangements or understandings with respect
thereto, written or oral. Nothing in this Agreement expressed or implied, is
intended to confer upon any Person, other than the Parties or their respective
successors, any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, other than as provided in Sections 8.12 and 8.14 of this
Agreement.
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11.5 Amendments. To the extent permitted by Law, this
Agreement may be amended by a subsequent writing signed by each of the Parties
upon the approval of the Boards of Directors of each of the Parties, whether
before or after shareholder approval of this Agreement and the Plan of Merger
has been obtained; provided, that after any such approval by the holders of
Capital Common Stock, there shall be made no amendment that modifies in any
material respect the consideration to be received by the holders of Capital
Common Stock without the further approval of such shareholders.
11.6 Waivers.
(a) Prior to or at the Effective Time, UPC, acting
through its Board of Directors, chief executive officer, or other authorized
officer, shall have the right to waive any Default in the performance of any
term of this Agreement by Capital, to waive or extend the time for the
compliance or fulfillment by Capital of any and all of its obligations under
this Agreement, and to waive any or all of the conditions precedent to the
obligations of UPC under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of UPC.
(b) Prior to or at the Effective Time, Capital,
acting through its Board of Directors, chief executive officer, or other
authorized officer, shall have the right to waive any Default in the performance
of any term of this Agreement by UPC, to waive or extend the time for the
compliance or fulfillment by UPC of any and all of its obligations under this
Agreement, and to waive any or all of the conditions precedent to the
obligations of Capital under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of Capital.
(c) The failure of any Party at any time or times to
require performance of any provision hereof shall in no manner affect the right
of such Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
11.7 Assignment. Except as expressly contemplated hereby,
neither this Agreement nor any of the rights, interests, or obligations
hereunder shall be assigned by any Party hereto (whether by operation of Law or
otherwise) without the prior written consent of the other Party. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the Parties and their respective successors and assigns.
11.8 Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail, postage
- 49 -
pre-paid, or by courier or overnight carrier, to the persons at the addresses
set forth below (or at such other address as may be provided hereunder), and
shall be deemed to have been delivered as of the date so delivered:
Capital: CAPITAL SAVINGS BANCORP, INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman of the Board and
Chief Executive Officer
Copy to Counsel: SILVER, ▇▇▇▇▇▇▇▇ & TAFF, LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
UPC: UNION PLANTERS CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
Copy to Counsel: UNION PLANTERS CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇. ▇▇▇▇▇ House, Jr.
Manager, Legal Division
▇▇▇▇▇▇ & BIRD LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
11.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Tennessee, without regard
to any applicable conflicts of Laws, except to the extent the Laws of the State
of Delaware apply.
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11.10 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
11.11 Captions. The captions contained in this Agreement are
for reference purposes only and are not part of this Agreement.
11.12 Interpretations. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved against any
party, whether under any rule of construction or otherwise. No party to this
Agreement shall be considered the draftsman. The Parties acknowledge and agree
that this Agreement has been reviewed, negotiated, and accepted by all Parties
and their attorneys and shall be construed and interpreted according to the
ordinary meaning of the words used so as fairly to accomplish the purposes and
intentions of all parties hereto.
11.13 Enforcement of Agreement. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
11.14 Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
- 51 -
IN WITNESS WHEREOF, each of the Parties has caused this
Agreement to be executed on its behalf and its corporate seal to be hereunto
affixed and attested by officers thereunto as of the day and year first above
written.
ATTEST: CAPITAL SAVINGS BANCORP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------ ---------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Secretary Chairman of the Board and
Chief Executive Officer
[CORPORATE SEAL]
ATTEST: UNION PLANTERS CORPORATION
By: /s/ ▇. ▇▇▇▇▇ House, Jr. By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------- --------------------
▇. ▇▇▇▇▇ House, Jr. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary President and
Chief Operating Officer
[CORPORATE SEAL]
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