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EXHIBIT 1 TO SCHEDULE 13D
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
FIRST MUTUAL BANCORP, INC.
AND
UNION PLANTERS CORPORATION
DATED AS OF JULY 2, 1998
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TABLE OF CONTENTS
Page
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ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER..................................1
1.1 MERGER..........................................................1
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...................................................2
2.1 CHARTER.........................................................2
2.2 BYLAWS..........................................................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........................................3
3.3 SHARES HELD BY MUTUAL OR UPC....................................3
3.4 FRACTIONAL SHARES...............................................4
3.5 CONVERSION OF STOCK RIGHTS......................................4
ARTICLE 4 - EXCHANGE OF SHARES................................................4
4.1 EXCHANGE PROCEDURES.............................................4
4.2 RIGHTS OF FORMER MUTUAL STOCKHOLDERS............................5
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF MUTUAL..........................5
5.1 ORGANIZATION, STANDING, AND POWER...............................5
5.2 AUTHORITY; NO BREACH BY AGREEMENT...............................5
5.3 CAPITAL STOCK...................................................6
5.4 MUTUAL SUBSIDIARIES.............................................7
5.5 SEC FILINGS; FINANCIAL STATEMENTS...............................7
5.6 ABSENCE OF UNDISCLOSED LIABILITIES..............................8
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS............................8
5.8 TAX MATTERS.....................................................8
5.9 ASSETS..........................................................9
5.10 ENVIRONMENTAL MATTERS..........................................9
5.11 COMPLIANCE WITH LAWS..........................................10
5.12 LABOR RELATIONS...............................................10
5.13 EMPLOYEE BENEFIT PLANS........................................11
5.14 MATERIAL CONTRACTS............................................13
5.15 LEGAL PROCEEDINGS.............................................13
5.16 REPORTS.......................................................14
5.17 STATEMENTS TRUE AND CORRECT...................................14
5.18 TAX AND REGULATORY MATTERS....................................14
5.19 STATE TAKEOVER LAWS...........................................14
5.20 CHARTER PROVISIONS............................................14
5.21 RIGHTS AGREEMENT..............................................15
5.22 DERIVATIVES...................................................15
5.23 YEAR 2000.....................................................15
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ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF UPC............................15
6.1 ORGANIZATION, STANDING, AND POWER..............................15
6.2 AUTHORITY; NO BREACH BY AGREEMENT..............................15
6.3 CAPITAL STOCK..................................................16
6.4 UPC SUBSIDIARIES...............................................16
6.5 SEC FILINGS; FINANCIAL STATEMENTS..............................17
6.6 ABSENCE OF UNDISCLOSED LIABILITIES.............................17
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS...........................17
6.8 TAX MATTERS....................................................18
6.9 ASSETS.........................................................18
6.10 ENVIRONMENTAL MATTERS.........................................19
6.11 COMPLIANCE WITH LAWS..........................................20
6.12 LABOR RELATIONS...............................................20
6.13 LEGAL PROCEEDINGS.............................................20
6.14 REPORTS.......................................................20
6.15 STATEMENTS TRUE AND CORRECT...................................21
6.16 TAX AND REGULATORY MATTERS....................................21
6.17 EMPLOYEE BENEFIT PLANS........................................21
6.18 DERIVATIVES...................................................22
6.19 YEAR 2000.....................................................22
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION.........................22
7.1 AFFIRMATIVE COVENANTS OF BOTH PARTIES..........................22
7.2 NEGATIVE COVENANTS OF MUTUAL...................................22
7.3 ADVERSE CHANGES IN CONDITION...................................24
7.4 REPORTS........................................................24
ARTICLE 8 - ADDITIONAL AGREEMENTS............................................25
8.1 REGISTRATION STATEMENT; PROXY STATEMENT; STOCKHOLDER
APPROVAL. .................................................25
8.2 EXCHANGE LISTING...............................................25
8.3 APPLICATIONS...................................................25
8.4 FILINGS WITH STATE OFFICES.....................................25
8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE..........................25
8.6 INVESTIGATION AND CONFIDENTIALITY..............................26
8.7 PRESS RELEASES.................................................26
8.8 CERTAIN ACTIONS................................................26
8.9 TAX TREATMENT..................................................27
8.10 STATE TAKEOVER LAWS...........................................27
8.11 CHARTER PROVISIONS............................................27
8.12 AGREEMENT OF AFFILIATES.......................................27
8.13 EMPLOYEE BENEFITS AND CONTRACTS...............................27
8.14 INDEMNIFICATION...............................................28
8.15 CERTAIN MODIFICATIONS.........................................29
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE................29
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY........................29
9.2 CONDITIONS TO OBLIGATIONS OF UPC...............................31
9.3 CONDITIONS TO OBLIGATIONS OF MUTUAL............................31
ARTICLE 10 - TERMINATION.....................................................32
10.1 TERMINATION...................................................32
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10.2 EFFECT OF TERMINATION.........................................33
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS.................33
ARTICLE 11 - MISCELLANEOUS...................................................34
11.1 DEFINITIONS...................................................34
11.2 EXPENSES......................................................40
11.3 BROKERS AND FINDERS...........................................41
11.4 ENTIRE AGREEMENT..............................................41
11.5 AMENDMENTS....................................................41
11.6 WAIVERS.......................................................41
11.7 ASSIGNMENT....................................................42
11.8 NOTICES.......................................................42
11.9 GOVERNING LAW.................................................43
11.10 COUNTERPARTS.................................................43
11.11 CAPTIONS.....................................................43
11.12 INTERPRETATIONS..............................................43
11.13 ENFORCEMENT OF AGREEMENT.....................................43
11.14 SEVERABILITY.................................................43
LIST OF EXHIBITS
Exhibit 1 Stock Option Agreement
Exhibit 2 Plan of Merger
Exhibit 3 Affiliate Agreement
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement")
is made and entered into as of July 2, 1998, by and between FIRST MUTUAL
BANCORP, INC. ("Mutual"), a corporation organized and existing under the Laws of
the State of Delaware, with its principal office located in Decatur, Illinois;
and UNION PLANTERS CORPORATION ("UPC"), a corporation organized and existing
under the Laws of the State of Tennessee, with its principal office located in
Memphis, Tennessee.
PREAMBLE
The Boards of Directors of Mutual and UPC are of the opinion
that the transactions described herein are in the best interests of the parties
to this Agreement and their respective stockholders. This Agreement provides for
the acquisition of Mutual by UPC pursuant to the merger (the "Merger") of Mutual
with and into Union Planters Holding Corporation ("UPHC"), a wholly-owned
subsidiary of UPC organized under the Laws of the State of Tennessee. At the
effective time of the Merger, the outstanding shares of the common stock of
Mutual shall be converted into shares of the common stock of UPC (except as
provided herein). As a result, stockholders of Mutual shall become stockholders
of UPC, and UPHC shall continue to conduct the business and operations of Mutual
as a wholly-owned subsidiary of UPC. The transactions described in this
Agreement are subject to the approvals of the stockholders of Mutual, the Board
of Governors of the Federal Reserve System, and certain 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.
Immediately after the execution and delivery of this
Agreement, as a condition and inducement to UPC's willingness to enter into this
Agreement, Mutual and UPC are entering into a stock option agreement (the "Stock
Option Agreement"), in substantially the form of Exhibit 1, pursuant to which
Mutual is granting to UPC an option to purchase shares of Mutual 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, Mutual shall be merged with and into UPHC 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 Section
▇▇-▇▇-▇▇▇ of the TBCA and with the effect provided in Section ▇▇-▇▇-▇▇▇ of the
TBCA (the "Merger"). UPHC 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 Board of Directors of Mutual and has been
or will be adopted by the Board of Directors of UPC, and the Plan of Merger, in
substantially the form of Exhibit 2, which has been approved and
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adopted by the Board of Directors of Mutual and will be approved and adopted by
the Board of Directors of UPHC prior to the Effective Time.
1.2 TIME AND PLACE OF CLOSING. The consummation of the Merger (the
"Closing") shall 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 duly
authorized officers, may mutually agree. The place of Closing shall be at such
location as may be mutually agreed upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and the other transactions contemplated
by this Agreement shall become effective on the date and at the time the
Certificate of Merger shall become effective with the Secretary of State of the
State of Delaware and the Articles of 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 duly authorized officers of each Party, the Parties shall use
their reasonable efforts to cause the Effective Time to occur on or before the
15th business day (as designated by UPC) 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 and (ii) the date on which the stockholders of
Mutual approve the matters relating to this Agreement required to be approved by
such stockholders by applicable Law.
1.4 EXECUTION OF STOCK OPTION AGREEMENT. Immediately after the
execution of this Agreement and as a condition hereto, Mutual is executing and
delivering to UPC the Stock Option Agreement.
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 Mutual, to make any
revision to the structure of the Merger which: (i) changes the amount of the
consideration which the holders of shares of Mutual Common Stock are entitled 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 Mutual 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 Mutual or holders of shares of Mutual
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
Mutual 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 UPHC in effect immediately prior to the
Effective Time shall be the Charter of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
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2.2 BYLAWS. The Bylaws of UPHC in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of UPHC in office immediately
prior to the Effective Time, together with such additional individuals
thereafter elected, shall serve as the directors of the Surviving Corporation
from and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation. The officers of UPHC in office immediately prior to the Effective
Time, together with such additional individuals thereafter elected, shall serve
as the officers of the Surviving Corporation from and after the Effective Time
in accordance with the Bylaws 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 or Mutual, or the stockholders of either of the foregoing, the
shares of the constituent corporations shall be converted as follows:
(a) Each share of UPC Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding from
and after the Effective Time.
(b) Each share of UPHC 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 Mutual Common Stock, but excluding shares
held by any Mutual Company or any UPC Company (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 be converted into a fraction of a share
of UPC Common Stock equal to the quotient obtained (the "Exchange Ratio") by
dividing [i] $18.50 by [ii] 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 chosen by UPC) for the 20
consecutive full trading days in which such shares are traded on the NYSE
preceding the third business day prior to the Closing Date. Pursuant to the UPC
Rights Agreement, each share of UPC Common Stock issued in connection with the
Merger upon conversion of Mutual Common Stock shall be accompanied by a UPC
Right.
3.2 ANTI-DILUTION PROVISIONS. In the event Mutual changes the number of
shares of Mutual Common Stock issued and outstanding prior to the Effective Time
as a result of a stock split, stock dividend, recapitalization, or similar
transaction with respect to such stock, the Exchange Ratio shall be
proportionately adjusted. 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, recapitalization, or similar transaction 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 MUTUAL OR UPC. Each of the shares of Mutual Common
Stock issued but not outstanding or held by any Mutual Company or by any UPC
Company, in each case
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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 Mutual 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
last sale price of UPC Common Stock on the NYSE-Composite Transactions List (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 stockholder in respect of any fractional shares.
3.5 CONVERSION OF STOCK RIGHTS. At or prior to the Closing, Mutual
shall cause each option to purchase shares of Mutual Common Stock granted by
Mutual under the Mutual Stock Plans, which are outstanding, whether or not then
exercisable, to be canceled in exchange for cash in an amount equal to the
product of (i) the total number of shares of Mutual Common Stock subject to such
option and (ii) the excess of $18.50 over the exercise price per share subject
to such option.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, UPC and
Mutual shall cause the exchange agent selected by UPC (the "Exchange Agent") to
mail to the former stockholders of Mutual appropriate transmittal materials
(which shall specify that delivery shall be effected, and risk of loss and title
to the certificates theretofore representing shares of Mutual Common Stock shall
pass, only upon proper delivery of such certificates to the Exchange Agent).
After the Effective Time, each holder of shares of Mutual 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 Mutual 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 Mutual Common Stock is entitled as a result of the Merger until
such holder surrenders such holder's certificate or certificates representing
the shares of Mutual Common Stock for exchange as provided in this Section 4.1.
The certificate or certificates of Mutual Common Stock so surrendered shall be
duly endorsed as the Exchange Agent may require. Any other provision of this
Agreement notwithstanding, neither the Surviving Corporation nor the Exchange
Agent shall be liable to a holder of Mutual Common Stock for any amounts paid or
property delivered in good faith to a public official pursuant to any applicable
abandoned property Law.
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4.2 RIGHTS OF FORMER MUTUAL STOCKHOLDERS. At the Effective Time, the
stock transfer books of Mutual shall be closed as to holders of Mutual Capital
Stock immediately prior to the Effective Time and no transfer of Mutual Capital
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 Mutual
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 Mutual in respect of such shares of Mutual Common Stock in accordance with
the terms of this Agreement and which remain unpaid at the Effective Time. To
the extent permitted by Law, former stockholders of record of Mutual shall be
entitled to vote after the Effective Time at any meeting of UPC stockholders the
number of whole shares of UPC Common Stock into which their respective shares of
Mutual Common Stock are converted, regardless of whether such holders have
exchanged their certificates representing Mutual Common Stock for certificates
representing UPC Common Stock in accordance with the provisions of this
Agreement. 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 declaration shall include dividends or other distributions on all shares
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 Mutual 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 Mutual 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
to be paid for fractional share interests (without interest) shall be delivered
and paid with respect to each share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MUTUAL
Except as set forth below and as set forth in the Mutual
Disclosure Memorandum referencing a specific section of this Agreement, Mutual
hereby represents and warrants to UPC as follows:
5.1 ORGANIZATION, STANDING, AND POWER. Mutual is a corporation duly
organized and validly existing 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 Material Assets. Mutual is duly qualified or
licensed to transact business as a foreign corporation 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 Mutual.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Mutual 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. Except as set forth in Section 5.2(a) of the Mutual
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Disclosure Memorandum, the execution, delivery, and performance of this
Agreement and the Plan of Merger, 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 Mutual, subject to the approval of this Agreement and the Plan of Merger
by holders of a majority of the issued and outstanding shares of Mutual Common
Stock, voting together as one class, as required by Law, which is the only
stockholder vote required for approval of this Agreement and the Plan of Merger
and consummation of the Merger by Mutual. Subject to such requisite stockholder
approval and as set forth in Section 5.2(a) of the Mutual Disclosure Memorandum,
this Agreement and the Plan of Merger represent legal, valid, and binding
obligations of Mutual, enforceable against Mutual 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).
(b) Neither the execution and delivery of this Agreement
and the Plan of Merger by Mutual, nor the consummation by Mutual of the
transactions contemplated hereby or thereby, nor compliance by Mutual with any
of the provisions hereof or thereof, will (i) conflict with or result in a
breach of any provision of Mutual's Certificate of Incorporation or Bylaws 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 Mutual Company
under, any Contract or Permit of any Mutual Company, where such Default or Lien,
or any failure to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Mutual, 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 Mutual Company or any
of their respective Material Assets.
(c) Other than in connection or compliance with the
provisions of the Securities Laws and applicable state corporate and securities
Laws and rules of the Nasdaq, 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 Mutual, no notice
to, filing with, or Consent of, any public body or authority is necessary for
the consummation by Mutual 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 Mutual consists, as
of the date of this Agreement, of (i) 8,000,000 shares of Mutual Common Stock,
of which 3,530,570 shares were issued and outstanding, and 1,169,430 shares were
held by Mutual in treasury, as of June 30, 1998, and not more than 3,530,570
shares will be issued and outstanding, and not more than 1,169,430 shares will
be held by Mutual in treasury, at the Effective Time and (ii) 2,000,000 shares
of Mutual Preferred Stock, of which no shares are issued and outstanding and of
which no shares will be issued and outstanding at the Effective Time. All of the
issued and outstanding shares of Mutual Common Stock are duly and validly issued
and outstanding and are fully paid and nonassessable under the DGCL. None of the
outstanding shares of Mutual Common Stock has been issued in violation of any
preemptive rights of the current or past stockholders of Mutual.
(b) Except (i) as set forth in Section 5.3(a) of this
Agreement, (ii) with respect to 383,700 shares of Mutual Common Stock subject to
outstanding options under the Mutual Stock
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Plans, and (iii) as provided pursuant to the Stock Option Agreement, there are
no shares of capital stock or other equity securities of Mutual outstanding and
no outstanding Rights relating to the capital stock of Mutual.
5.4 MUTUAL SUBSIDIARIES. Mutual has disclosed in Section 5.4 of the
Mutual Disclosure Memorandum all of the Mutual Subsidiaries. Mutual or one of
its Subsidiaries owns all of the issued and outstanding shares of capital stock
of each Mutual Subsidiary. No equity securities of any Mutual Subsidiary are or
may become required to be issued (other than to another Mutual Company) by
reason of any Rights, and there are no Contracts by which any Mutual Subsidiary
is bound to issue (other than to another Mutual Company) additional shares of
its capital stock or Rights or by which any Mutual Company is or may be bound to
transfer any shares of the capital stock of any Mutual Subsidiary (other than to
another Mutual Company). There are no Contracts relating to the rights of any
Mutual Company to vote or to dispose of any shares of the capital stock of any
Mutual Subsidiary. All of the shares of capital stock of each Mutual Subsidiary
held by an Mutual Company are duly authorized, validly issued, and fully paid
and, except as provided in statutes pursuant to which depository institution
Subsidiaries are organized, nonassessable under the applicable corporation Law
of the jurisdiction in which such Subsidiary is incorporated or organized and
are owned by the Mutual Company free and clear of any Lien. Each Mutual
Subsidiary is either a bank, a savings association or a corporation, and is duly
organized, validly existing, and (as to national banking associations) 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 Mutual Subsidiary is duly qualified or licensed to transact business as a
foreign corporation 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 Mutual.
Each Mutual 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.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Mutual has filed and made available to UPC all forms,
reports, and documents required to be filed by Mutual with the SEC since June
30, 1995 (collectively, the "Mutual SEC Reports"). The Mutual SEC Reports (i) at
the time filed, complied in all Material respects with the applicable
requirements of the 1933 Act and the 1934 Act, as the case may be, 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 latter filing) contain
any untrue statement of a Material fact or omit to state a Material fact
required to be stated in such Mutual SEC Reports or necessary in order to make
the statements in such Mutual SEC Reports, in light of the circumstances under
which they were made, not misleading. None of Mutual's Subsidiaries is required
to file any forms, reports, or other documents with the SEC.
(b) Each of the Mutual Financial Statements (including,
in each case, any related notes) contained in the Mutual SEC Reports, including
any Mutual SEC Reports filed after the date of this Agreement until the
Effective Time, complied or will comply as to form in all Material respects with
the applicable published rules and regulations of the SEC with respect thereto,
was prepared or will be 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 statements, as
permitted by Form 10-Q of the SEC), and fairly presented or will fairly present
in all Material respects the consolidated financial position of Mutual and its
Subsidiaries as
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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 Mutual Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Mutual, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Mutual as of
March 31, 1998, included in the Mutual Financial Statements or reflected in the
notes thereto and except for Liabilities incurred in the ordinary course of
business subsequent to March 31, 1998. No Mutual Company has incurred or paid
any Liability since March 31, 1998, except for such Liabilities incurred or paid
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 Mutual and Liabilities incurred in connection with
this Agreement and the transactions contemplated hereby.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31, 1998, except
as disclosed in the Mutual Financial Statements, (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 Mutual and (ii)
the Mutual Companies have conducted their respective businesses in the ordinary
and usual course (excluding the incurrence of expenses in connection with this
Agreement and the transactions contemplated hereby).
5.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf
of any of the Mutual 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, to the Knowledge of Mutual, all Tax
Returns filed are complete and accurate in all Material respects. All Tax
Returns for periods ending on or before the date of the most recent fiscal year
end immediately preceding the Effective Time will be timely filed or requests
for extensions will be timely filed. All Taxes shown on filed Tax Returns have
been paid. There is no audit examination, deficiency, or refund Litigation with
respect to any Taxes, that is reasonably likely to result in a determination
that would have, individually or in the aggregate, a Material Adverse Effect on
Mutual, except to the extent reserved against in the Mutual Financial Statements
dated 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.
(b) None of the Mutual 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 Mutual Companies for the period or periods through and including
the date of the respective Mutual Financial Statements has been made and is
reflected on such Mutual Financial Statements.
(d) Each of the Mutual 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, except for such
instances of noncompliance and
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such omissions as are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Mutual.
(e) Except as disclosed in Section 5.8(e) of the Mutual
Disclosure Memorandum, none of the Mutual Companies has made any payments, is
obligated to make any payments, or is a party to any contract, agreement, or
other arrangement 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.
(f) There are no Material Liens with respect to Taxes
upon any of the Assets of the Mutual Companies.
(g) No Mutual Company has filed any consent under Section
341(f) of the Internal Revenue Code concerning collapsible corporations.
5.9 ASSETS. The Mutual Companies have good and marketable title, free
and clear of all Liens, to all of their respective Assets, except where the
failure to have such good and marketable title is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Mutual. All
Material tangible properties used in the businesses of the Mutual Companies are
in good condition, reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with Mutual's past practices. All Assets
which are Material to Mutual's business on a consolidated basis, held under
leases or subleases by any of the Mutual 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. The Mutual Companies currently maintain
insurance in amounts, scope, and coverage reasonably necessary for their
operations. None of the Mutual 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. The Assets of the Mutual
Companies include all Assets required to operate the business of the Mutual
Companies as presently conducted.
5.10 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of Mutual, each Mutual Company, its
Participation Facilities, and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except those violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Mutual.
(b) There is no Litigation pending or, to the Knowledge
of Mutual, threatened before any court, governmental agency, or authority, or
other forum in which any Mutual Company or any of its Participation Facilities
has been or, with respect to threatened Litigation, may reasonably be expected
to 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,
or involving a site owned, leased, or operated by any Mutual Company or any of
its 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 Mutual.
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(c) There is no Litigation pending, or to the Knowledge
of Mutual, threatened before any court, governmental agency, or board, or other
forum in which any of its Loan Properties (or Mutual in respect of such Loan
Property) has been or, with respect to threatened Litigation, may reasonably be
expected to be named as a defendant or potentially responsible party (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, or involving a Loan Property, except for
such Litigation pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Mutual.
(d) To the Knowledge of Mutual, there is no reasonable
basis for any Litigation of a type described in subsections (b) or (c), except
such as is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Mutual.
(e) To the Knowledge of Mutual, during the period of (i)
any Mutual Company's ownership or operation of any of their respective current
properties, (ii) any Mutual Company's participation in the management of any
Participation Facility, or (iii) any Mutual Company's holding of a security
interest in a Loan Property, there have been no releases of Hazardous Material
in, on, under, 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 Mutual. To the Knowledge of Mutual, prior to the
period of (i) any Mutual Company's ownership or operation of any of their
respective current properties, (ii) any Mutual Company's participation in the
management of any Participation Facility, or (iii) any Mutual Company's holding
of a security interest in a Loan Property, to the Knowledge of Mutual, there
were no releases of Hazardous Material in, on, under, or affecting any such
property, Participation Facility, or Loan Property, except such as are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Mutual.
5.11 COMPLIANCE WITH LAWS. Mutual is duly registered as a bank holding
company under the BHC Act. Each Mutual 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, except for those Permits the absence of which are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Mutual, and there has occurred no Default under any such
Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Mutual. None of
the Mutual Companies:
(a) is in violation of any Laws, Orders, or Permits
applicable to its business or employees conducting its business, except for
violations which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Mutual; 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 Mutual Company
is not in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Mutual, (ii) threatening to revoke any Permits, the revocation of
which is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Mutual, or (iii) requiring any Mutual Company (x) to enter
into or consent to the issuance of a cease and desist order, formal agreement,
directive, commitment, or memorandum of understanding, or (y) 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.
5.12 LABOR RELATIONS. No Mutual Company is the subject of any
Litigation asserting that it or any other Mutual Company has committed an unfair
labor practice (within the meaning of
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the National Labor Relations Act or comparable state Law) or seeking to compel
it or any other Mutual Company to bargain with any labor organization as to
wages or conditions of employment, nor is any Mutual Company a party to or bound
by any collective bargaining agreement, Contract, or other agreement or
understanding with a labor union or labor organization, nor is there any strike
or other labor dispute involving any Mutual Company, pending or, to the
Knowledge of Mutual, threatened, or to the Knowledge of Mutual, is there any
activity involving any Mutual Company's employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
5.13 EMPLOYEE BENEFIT PLANS.
(a) Mutual has disclosed to UPC in writing prior to the
execution of the Agreement and in Section 5.13(a) of the Mutual Disclosure
Memorandum, and has delivered or made available to UPC prior to the execution of
this Agreement correct and complete copies in each case of, all Material Mutual
Benefits Plans. For purposes of this Agreement, "Mutual Benefit Plans" means 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 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, without limitation, "employee
benefit plans" as that term is defined in Section 3(3) of ERISA maintained by,
sponsored in whole or in part by, or contributed to by, any Mutual Company 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. Any of the Mutual Benefit Plans which is an
"employee welfare benefit plan," as that term is defined in Section 3(l) of
ERISA, or an "employee pension benefit plan," as that term is defined in Section
3(2) of ERISA, is referred to herein as a "Mutual ERISA Plan." Any Mutual ERISA
Plan which is also a "defined benefit plan" (as defined in Section 414(j) of the
Internal Revenue Code or Section 3(35) of ERISA) is referred to herein as a
"Mutual Pension Plan." Neither Mutual nor any Mutual Company has an "obligation
to contribute" (as defined in ERISA Section 4212) to a "multiemployer plan" (as
defined in ERISA Sections 4001(a)(3) and 3(37)(A)). Each "employee pension
benefit plan," as defined in Section 3(2) of ERISA, maintained by any Mutual
Company at any time during the last six years that was intended to qualify under
Section 401(a) of the Internal Revenue Code and with respect to which any Mutual
Company has any Liability, is disclosed as such in Section 5.13(a) of the Mutual
Disclosure Memorandum.
(b) Mutual has delivered or made available to UPC prior
to the execution of this Agreement correct and complete copies of the following
documents: (i) all trust agreements or other funding arrangements for such
Mutual Benefit Plans (including insurance contracts), and all amendments
thereto, (ii) with respect to any such Mutual Benefit Plans or amendments
thereto, all determination letters, rulings, opinion letters, information
letters, or advisory opinions issued by the Internal Revenue Service, the United
States Department of Labor, or the Pension Benefit Guaranty Corporation after
December 31, 1994, (iii) annual reports or returns, audited or unaudited
financial statements, actuarial valuations and reports, and summary annual
reports prepared for any Mutual Benefit Plan with respect to the most recent
plan year, and (iv) the most recent summary plan descriptions and any
modifications thereto.
(c) All Mutual 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 is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Mutual. Each
Mutual 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,
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and Mutual is not aware of any circumstances which could reasonably result in
revocation of any such favorable determination letter. Each trust created under
any Mutual ERISA Plan has been determined to be exempt from Tax under Section
501(a) of the Internal Revenue Code and Mutual is not aware of any circumstance
which could reasonably result in revocation of such exemption. With respect to
each Mutual Benefit Plan, to the Knowledge of Mutual, no event has occurred
which could reasonably give rise to a loss of any intended Tax consequences
under the Internal Revenue Code or to any Tax under Section 511 of the Internal
Revenue Code that is reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect on Mutual. There is no Material pending or, to
the Knowledge of Mutual, threatened Litigation (other than routine claims for
benefits) relating to any Mutual ERISA Plan.
(d) No Mutual Company has engaged in a transaction with
respect to any Mutual Benefit Plan that, assuming the Taxable Period of such
transaction expired as of the date of this Agreement, would subject any Mutual
Company to a Material Tax or penalty imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA in amounts which are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Mutual. Neither Mutual nor, to the Knowledge of Mutual, any administrator or
fiduciary of any Mutual Benefit Plan (or any agent of any of the foregoing) has
engaged in any transaction, or acted or failed to act in any manner which could
subject Mutual to any direct or indirect Liability (by indemnity or otherwise)
for breach of any fiduciary, co-fiduciary, or other duty under ERISA, where such
Liability, individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect on Mutual. Except as disclosed under Section 5.13 of the
Mutual Disclosure Memorandum, no oral or written representation or communication
with respect to any aspect of the Mutual Benefit Plans has been made to
employees of any Mutual Company which is not in accordance with the written or
otherwise preexisting terms and provisions of such plans, where any Liability
with respect to such representation or disclosure is reasonably likely to have a
Material Adverse Effect on Mutual.
(e) No Mutual 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 all benefits (whether vested or not) accrued to date by all
present or former participants in such Mutual Pension Plan exceeds the plan's
"benefit liabilities" as that term is defined in Section 4001(a)(16) of ERISA.
For this purpose, the assumptions for valuing plan Assets or Liabilities shall
be the assumptions set forth in the most recent actuarial valuations and reports
with respect to any such Mutual Pension Plan. Since the date of the most recent
actuarial valuation, there has been (i) no Material change in the financial
position or funded status of any Mutual Pension Plan, (ii) no change in the
actuarial assumptions with respect to any Mutual Pension Plan, and (iii) no
increase in benefits under any Mutual Pension Plan as a result of plan
amendments or changes in applicable Law, any of which is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Mutual.
Neither any Mutual Pension Plan nor any "single-employer plan," within the
meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by any
Mutual Company, or the single-employer plan of any entity which is considered
one employer with Mutual under Section 4001 of ERISA or Section 414 of the
Internal Revenue Code or Section 302 of ERISA (a "Mutual ERISA Affiliate") has
an "accumulated funding deficiency" within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA (whether or not waived). All
contributions with respect to a Mutual Pension Plan or any single-employer plan
of an Mutual ERISA Affiliate have or will be timely made and there is no lien or
expected to be a lien under Internal Revenue Code Section 412(n) or ERISA
Section 302(f) or Tax under Internal Revenue Code Section 4971. No Mutual
Company has provided, or is required to provide, security to an Mutual Pension
Plan or to any single-employer plan of an Mutual ERISA Affiliate pursuant to
Section 401(a)(29) of the Internal Revenue Code. All premiums required to be
paid under ERISA Section 4006 have been timely paid by Mutual, except to the
extent any failure would not have a Material Adverse Effect on Mutual.
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(f) No Liability under Title IV of ERISA has been or is
expected to be incurred by any Mutual Company with respect to any defined
benefit plan currently or formerly maintained by any of them or by any Mutual
ERISA Affiliate that has not been satisfied in full (other than Liability for
Pension Benefit Guaranty Corporation premiums, which have been paid when due)
except to the extent any failure would not have a Material Adverse Effect on
Mutual.
(g) Except as set forth in Section 5.13(g) of the Mutual
Disclosure Memorandum, no Mutual Company has any obligations for retiree health
and retiree life benefits under any of the Mutual Benefit Plans other than with
respect to benefit coverage mandated by applicable Law.
(h) Except as set forth in Section 5.13(h) of the Mutual
Disclosure Memorandum, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will, by themselves,
(i) result in any payment (including, without limitation, severance, golden
parachute, or otherwise) becoming due to any director or any employee of any
Mutual Company from any Mutual Company under any Mutual Benefit Plan or
otherwise, (ii) increase any benefits otherwise payable under any Mutual Benefit
Plan, or (iii) result in any acceleration of the time of payment or vesting of
any such benefit.
5.14 MATERIAL CONTRACTS. Except as set forth in Section 5.14 of the
Mutual Disclosure Memorandum, none of the Mutual 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 Mutual Company or the guarantee by any
Mutual 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), and (iii) any other Contract or amendment thereto
that would be required to be filed as an exhibit to a Form 10-K filed by Mutual
with the SEC as of the date of this Agreement that has not been filed as an
exhibit to Mutual's Form 10-K filed for the fiscal year ended December 31, 1997,
or in another SEC Document (together with all Contracts referred to in Sections
5.9 and 5.13(a) of this Agreement, the "Mutual Contracts"). With respect to each
Mutual Contract: (i) the Contract is in full force and effect; (ii) no Mutual
Company is in Default thereunder, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Mutual; (iii) no Mutual 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 Mutual, in Default in any respect, other than Defaults which are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Mutual, or has repudiated or waived any Material provision
thereunder.
5.15 LEGAL PROCEEDINGS.
(a) There is no Litigation instituted or pending, or, to
the Knowledge of Mutual, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome to any Mutual Company) against any Mutual 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 Mutual, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any Mutual Company, that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Mutual.
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(b) Section 5.15(b) of the Mutual Disclosure Memorandum
includes a summary report of all Litigation as of the date of this Agreement to
which any Mutual Company is a party and which names a Mutual Company as a
defendant or cross-defendant and where the maximum exposure is estimated to be
$50,000 or more.
5.16 REPORTS. Since January 1, 1994, or the date of organization if
later, each Mutual 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 any Regulatory Authorities, except failures to file which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Mutual. 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.
5.17 STATEMENTS TRUE AND CORRECT. None of the information supplied or
to be supplied by any Mutual Company regarding Mutual 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 contain any untrue statement of a Material fact, or omit
to state any Material fact required to be stated thereunder or necessary to make
the statements therein not misleading. None of the information supplied or to
be supplied by any Mutual Company for inclusion in the Proxy Statement to be
mailed to Mutual's stockholders in connection with the Stockholders' Meeting
will, when first mailed to the stockholders of Mutual, be false or misleading
with respect to any Material fact, or contain any misstatement of Material fact,
or omit to state any Material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or, in the case of the Proxy Statement or any amendment
thereof or supplement thereto, at the time of the Stockholders' Meeting, be
false or misleading with respect to any Material fact, or omit to state any
Material fact required to be stated therein or necessary to correct any Material
statement in any earlier communication with respect to the solicitation of any
proxy for the Stockholders' Meeting. All documents that any Mutual Company 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.
5.18 TAX AND REGULATORY MATTERS. No Mutual Company has taken or agreed
to take any action, and Mutual has no Knowledge of any fact or circumstance that
is reasonably likely to (i) prevent the transactions contemplated hereby,
including the Merger, from qualifying 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.
5.19 STATE TAKEOVER LAWS. Each Mutual Company has taken all necessary
action to exempt the transactions contemplated by this Agreement and the Plan of
Merger from any applicable "moratorium," "control share," "fair price,"
"business combination," or other anti-takeover laws and regulations
(collectively, "Takeover Laws").
5.20 CHARTER PROVISIONS. Except as set forth in Section 5.2(a) of the
Mutual Disclosure Memorandum, each Mutual 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, Bylaws, or other governing
instruments of any Mutual Company or restrict or impair the ability of UPC or
any of its Subsidiaries to
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vote, or otherwise to exercise the rights of a stockholder with respect to,
shares of any Mutual Company that may be directly or indirectly acquired or
controlled by it.
5.21 RIGHTS AGREEMENT. Mutual is not a party to any rights agreement or
rights plan as a result of which any Person has or may acquire Rights with
respect to Mutual Capital Stock.
5.22 DERIVATIVES. All interest rate swaps, caps, floors, option
agreements, futures and forward contracts, and other similar risk management
arrangements, whether entered into for Mutual's own account, or for the account
of one or more of the Mutual Subsidiaries or their customers, were entered into
(i) in accordance with prudent business practices and all applicable Laws and
(ii) with counterparties believed to be financially responsible.
5.23 YEAR 2000. Mutual has disclosed to UPC a complete and accurate
copy of Mutual's plan, including an estimate of the anticipated associated
costs, for implementing modifications to Mutual's hardware, software, and
computer systems, chips, and microprocessors, to ensure proper execution and
accurate processing of all date-related data, whether from years in the same
century or in different centuries. Between the date of this Agreement and the
Effective Time, Mutual shall endeavor to continue its efforts to implement such
plan.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF UPC
UPC hereby represents and warrants to Mutual as follows:
6.1 ORGANIZATION, STANDING, AND POWER. UPC is a corporation duly
organized and validly existing under the Laws of the State of Tennessee, and has
the corporate power and authority to carry on its business as now conducted and
to own, lease, and operate its Material Assets. UPC is duly qualified or
licensed to transact business as a foreign corporation 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.
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 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, 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).
(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
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Charter or Bylaws, (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, where such Default
or Lien, or any failure to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC, 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 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 of the Merger and the other transactions contemplated in
this Agreement.
6.3 CAPITAL STOCK. The authorized capital stock of UPC consists of (i)
300,000,000 shares of UPC Common Stock as of the date of this Agreement, of
which 84,970,899 shares are issued and outstanding as of May 31, 1998 and (ii)
10,000,000 shares of UPC Preferred Stock, of which 1,156,231 shares of UPC
Series E Preferred Stock were issued and outstanding as of May 31, 1998. 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 Mutual 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 TBCA. 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 Mutual Common Stock upon consummation of the Merger
will be, issued in violation of any preemptive rights of the current or past
stockholders of UPC.
6.4 UPC SUBSIDIARIES. Except with respect to Capital Factors, Inc. or
as otherwise disclosed in the UPC SEC Reports, UPC or one of its Subsidiaries
owns all of the issued and outstanding shares of capital stock of each UPC
Subsidiary. 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 duly
authorized, validly issued, fully paid and, except as provided in statutes
pursuant to which depository institution Subsidiaries are organized,
nonassessable 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 national
banking associations) 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 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
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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 Mutual all forms,
reports, and documents required to be filed by UPC with the SEC since December
31, 1993 (collectively, the "UPC SEC Reports"). The UPC SEC Reports (i) at the
time filed, complied in all Material respects with the applicable requirements
of the 1933 Act and the 1934 Act, as the case may be, 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 latter 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 or filings required due to fiduciary holdings of
the UPC Subsidiaries, none of UPC Subsidiaries is required to file any forms,
reports, or other documents with the SEC.
(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 or will comply as to form in all Material respects with the applicable
published rules and regulations of the SEC with respect thereto, was or will be
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 statements, as permitted by Form 10-Q of
the SEC), and fairly presented or will fairly present 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
March 31, 1998, included in the UPC Financial Statements or reflected in the
notes thereto and except for Liabilities incurred in the ordinary course of
business subsequent to March 31, 1998. No UPC Company has incurred or paid any
Liability since March 31, 1998, except for such Liabilities incurred or paid 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.
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31, 1998, except
as disclosed in the UPC Financial Statements delivered 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 conducted their respective
businesses in the ordinary and usual course (excluding the incurrence of
expenses in connection with this Agreement and the transactions contemplated
hereby).
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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, to the Knowledge of UPC, all Tax Returns filed
are complete and accurate in all Material respects. All Tax Returns for periods
ending on or before the date of the most recent fiscal year end immediately
preceding the Effective Time will be timely filed or requests for extensions
will be timely filed. All Taxes shown on filed Tax Returns have been paid. There
is no audit examination, deficiency, or refund Litigation with respect to any
Taxes, that is reasonably likely to result in a determination that would have,
individually or in the aggregate, a Material Adverse Effect on UPC, except to
the extent reserved against in the UPC Financial Statements dated 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.
(b) None of the UPC 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 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.
(d) Each of the UPC 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, except for such
instances of noncompliance and such omissions as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on UPC.
(e) None of the UPC Companies has made any payments, is
obligated to make any payments, or is a party to any contract, agreement, or
other arrangement 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.
(f) There are no Material Liens with respect to Taxes
upon any of the Assets of the UPC Companies.
(g) No UPC Company has filed any consent under Section
341(f) of the Internal Revenue Code concerning collapsible corporations.
6.9 ASSETS. The UPC Companies have good and marketable title, free and
clear of all Liens, to all of their respective Assets, except where the failure
to have such good and marketable title is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC. All Material
tangible properties used in the businesses of the UPC Companies are in good
condition, reasonable wear and tear excepted, and are usable in the ordinary
course of business consistent with UPC's past practices. All Assets which are
Material to UPC's business on a consolidated basis, held under leases or
subleases by any of the UPC 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
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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. The UPC Companies currently
maintain insurance sufficient in amounts, scope, and coverage reasonably
necessary for their operations. None of the UPC 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. The
Assets of the UPC Companies include all Assets required to operate the business
of the UPC Companies as presently conducted.
6.10 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of UPC, each UPC Company, its
Participation Facilities, and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except those violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC.
(b) There is no Litigation pending or, to the Knowledge
of UPC, threatened before any court, governmental agency, or authority, or other
forum in which any UPC Company or any of its Participation Facilities has been
or, with respect to threatened Litigation, may reasonably be expected to 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,
or involving a site owned, leased, or operated by any UPC Company or any of its
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.
(c) There is no Litigation pending or, to the Knowledge
of UPC, threatened before any court, governmental agency, or board, or other
forum in which any of its Loan Properties (or UPC in respect of such Loan
Property) has been or, with respect to threatened Litigation, may reasonably be
expected to be named as a defendant or potentially responsible party (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, or involving a Loan Property, 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.
(d) To the Knowledge of UPC, there is no reasonable basis
for any Litigation of a type described in subsections (b) or (c), except such as
is not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC.
(e) To the Knowledge of UPC, 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 Loan Property, there have been no releases of Hazardous Material
in, on, under, 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. To the Knowledge of 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 Loan Property, to the Knowledge of UPC, there were no releases of
Hazardous Material in, on, under, or affecting any such property, Participation
Facility, or Loan Property, except such as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC.
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6.11 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, except for those Permits the absence of which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC, and there has occurred no Default under any such Permit, other
than Defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC. None of the UPC Companies:
(a) is in violation of any Laws, Orders, or Permits
applicable to its business or employees conducting its business, except for
violations which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on UPC; 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, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on UPC, (ii) threatening to revoke any Permits, the revocation of which
is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on UPC, or (iii) requiring any UPC Company (x) to enter into or
consent to the issuance of a cease and desist order, formal agreement,
directive, commitment, or memorandum of understanding, or (y) 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.
6.12 LABOR RELATIONS. No UPC Company is the subject of any Litigation
asserting that it or any other UPC 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 UPC Company to bargain with any
labor organization as to wages or conditions of employment, nor is any UPC
Company a party to or bound by any collective bargaining agreement, Contract, or
other agreement or understanding with a labor union or labor organization, nor
is there any strike or other labor dispute involving any UPC Company, pending
or, to the Knowledge of UPC, threatened, or to the Knowledge of UPC, is there
any activity involving any UPC Company's employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
6.13 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 to any UPC Company) 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, that are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on UPC.
6.14 REPORTS. Since January 1, 1994, or the date of organization if
later, each UPC 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 any Regulatory Authorities, except 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.
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6.15 STATEMENTS TRUE AND CORRECT. None of the information supplied or
to be supplied by any UPC Company regarding UPC 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 contain any untrue statement of a Material fact, or omit
to state any Material fact required to be stated thereunder or necessary to make
the statements therein not misleading. None of the information supplied or to
be supplied by any UPC Company for inclusion in the Proxy Statement to be mailed
to Mutual's stockholders in connection with the Stockholders' Meeting, will,
when first mailed to the stockholders of Mutual, be false or misleading with
respect to any Material fact, or contain any misstatement of Material fact, or
omit to state any Material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or, in the case of the Proxy Statement or any amendment
thereof or supplement thereto, at the time of the Stockholders' Meeting, be
false or misleading with respect to any Material fact, or omit to state any
Material fact required to be stated therein or necessary to correct any Material
statement in any earlier communication with respect to the solicitation of any
proxy for the Stockholders' Meeting. All documents that any UPC Company 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.
6.16 TAX AND REGULATORY MATTERS. No UPC Company or any Affiliate
thereof has taken or agreed to take any action, and UPC has no Knowledge of any
fact or circumstance that is reasonably likely to (i) prevent the transactions
contemplated hereby, including the Merger, from qualifying 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.
6.17 EMPLOYEE BENEFIT PLANS. All UPC 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 is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on UPC. For purposes
of this Agreement, the term "UPC Plan" means each bonus, incentive compensation,
severance pay, medical or other insurance program, retirement plan, or other
employee benefit plan program, agreement, or arrangement sponsored, maintained,
or contributed to by UPC or any trade or business, whether or not incorporated,
that together with UPC or any of its Subsidiaries would be deemed a "single
employer" under Section 4001 of ERISA or Section 414 of the Internal Revenue
Code (a "UPC ERISA Affiliate") or under which UPC or any UPC ERISA Affiliate has
any Liability or obligation. No Liability under Title IV of ERISA has been
incurred by UPC or any UPC ERISA Affiliate that has not been satisfied in full,
and no condition exists that presents a Material risk to UPC or any UPC ERISA
Affiliate of incurring any such Liability. With respect to any UPC Plan that is
subject to Title IV of ERISA, full payment has been made, or will be made in
accordance with Section 404(a)(6) of the Internal Revenue Code, of all amounts
that UPC or any UPC ERISA Affiliate is required to pay under Section 412 of the
Internal Revenue Code or under the terms of the UPC Plans, and no accumulated
funding deficiency (within the meaning of Section 412 of the Internal Revenue
Code or Section 302 of ERISA, whether or not waived) exists with respect to any
UPC Plan. There are no Material actions, suits, or claims pending, or, to the
Knowledge of UPC, threatened or anticipated relating to any UPC Plan. There has
been no Material adverse change in the financial position or funded status of
any UPC Plan that is subject to Title IV of ERISA since the date of the
information relating to the financial position and funded status of each such
plan contained in the most recent Annual Report on Form 10-K filed by UPC with
the SEC.
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6.18 DERIVATIVES. All interest rate swaps, caps, floors, option
agreements, futures and forward contracts, and other similar risk management
arrangements, whether entered into for UPC's own account, or for the account of
one or more of the UPC Subsidiaries or their customers, were entered into (i) in
accordance with prudent business practices and all applicable Laws and (ii) with
counterparties believed to be financially responsible.
6.19 YEAR 2000. UPC has disclosed to Mutual a complete and accurate
copy of UPC's plan, including an estimate of the anticipated associated costs,
for implementing modifications to UPC's hardware, software, and computer
systems, chips, and microprocessors, to ensure proper execution and accurate
processing of all date-related data, whether from years in the same century or
in different centuries. Between the date of this Agreement and the Effective
Time, UPC shall endeavor to continue its efforts to implement such plan.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF BOTH PARTIES. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of the other Party shall have been
obtained, and except as otherwise expressly contemplated herein, each Party
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, (iii) use its
reasonable efforts to maintain its current employee relationships, and (iv) take
no action which would (a) 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 (b) adversely affect the
ability of any Party to perform its covenants and agreements under this
Agreement; provided that in the case of UPC, the provisions of this Section 7.1
(other than the provisions of clause (iv) above) shall not be deemed to preclude
UPC from continuing to implement its program of acquiring unaffiliated
depository and nondepository institutions.
7.2 NEGATIVE COVENANTS OF MUTUAL. From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement, Mutual
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 or chief financial
officer of UPC, which consent shall not be unreasonably withheld:
(a) except for the Savings Bank Charter Amendment, amend
the Certificate of Incorporation, Bylaws, or other governing instruments of any
Mutual Company, or
(b) incur, guarantee, or otherwise become responsible
for, any additional debt obligation or other obligation for borrowed money
(other than indebtedness of an Mutual Company to another Mutual Company) in
excess of an aggregate of $50,000 (for the Mutual Companies on a consolidated
basis), except in the ordinary course of the business consistent with past
practices (which shall include, for Mutual 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 Mutual Company of any Lien
or permit any such Lien to exist (other than in connection with deposits,
repurchase agreements, bankers acceptances, "treasury tax and loan" accounts
established in the ordinary course of
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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
Mutual Disclosure Memorandum or incurred in the ordinary course of business
consistent with past practices); 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 Mutual Company, or declare or pay any
dividend or make any other distribution in respect of Mutual's capital stock,
provided that Mutual 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 Mutual Common Stock at a rate of $.08 per share, with
usual and regular record and payment dates in accordance with past practice as
disclosed in Section 7.2(c) of the Mutual 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 of this Agreement, 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 Mutual
Common Stock do not receive both a dividend in respect of their Mutual Common
Stock and a dividend in respect of UPC Common Stock or fail to receive any
dividend; or
(d) except for this Agreement, or pursuant to the Stock
Option Agreement or pursuant to the exercise of Rights outstanding as of the
date of this Agreement and pursuant to the terms thereof in existence on the
date of this Agreement, issue, sell, pledge, encumber, authorize the issuance
of, enter into any Contract to issue, sell, pledge, encumber, or authorize the
issuance of, or otherwise permit to become outstanding, any additional shares of
Mutual Common Stock or any other capital stock of any Mutual 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 Mutual Company or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of Mutual Common Stock,
or sell, lease, mortgage, or otherwise dispose of or otherwise encumber (i) any
shares of capital stock of any Mutual Subsidiary (unless any such shares of
stock are sold or otherwise transferred to another Mutual Company) or (ii) any
Asset having a book value in excess of $50,000 other than in the ordinary course
of business for reasonable and adequate consideration; or
(f) except for purchases of investment securities
acquired in the ordinary course of business consistent with past practice,
purchase any securities or make any Material investment, either by purchase of
stock or securities, contributions to capital, Asset transfers, or purchase of
any Assets, in any Person other than a wholly-owned Mutual 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) except as permitted by this Agreement, grant any
increase in compensation or benefits to the employees or officers of any Mutual
Company, except in accordance with the ordinary course of business consistent
with past practice 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; enter into or amend any severance
agreements with officers of any Mutual Company; grant any Material increase in
fees or other increases in compensation or other benefits to directors of any
Mutual Company except in accordance with the ordinary course of
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business consistent with past practice; or voluntarily accelerate the vesting of
any stock options or other stock-based compensation or employee benefits; or
(h) enter into or amend any employment Contract between
any Mutual Company and any Person (unless such amendment is required by Law or a
pre-existing contractual obligation) that the Mutual 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) adopt any new employee benefit plan of any Mutual
Company or make any Material change in or to any existing employee benefit plans
of any Mutual 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
(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 as necessary for
the prudent operation of its business or settle any Litigation involving any
Liability of any Mutual Company for Material money damages or restrictions upon
the operations of any Mutual Company; or
(l) except in the ordinary course of business, modify,
amend, or terminate any Material Contract or waive, release, compromise, or
assign any Material rights or claims.
7.3 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.
7.4 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 stockholders' 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 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.
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ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT; PROXY STATEMENT; STOCKHOLDER APPROVAL. As
soon as reasonably practicable after execution of this Agreement, 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. Prior to the filing of the Registration
Statement, UPC shall provide Mutual and its counsel copies thereof. Mutual shall
furnish all information concerning it and the holders of its capital stock as
UPC may reasonably request in connection with such action. Mutual shall call a
Stockholders' 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 (i) this Agreement and the Plan of Merger and (ii) such
other related matters as it deems appropriate. In connection with the
Stockholders' Meeting, (i) Mutual shall prepare and file with the SEC a Proxy
Statement and mail such Proxy Statement to Mutual's stockholders, (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 Mutual shall recommend to Mutual's stockholders the approval of
the matters submitted for approval, and (iv) the Board of Directors and officers
of Mutual shall use their reasonable efforts to obtain such stockholders'
approvals, provided that Mutual may withdraw, modify, or change in an adverse
manner to UPC its recommendations if the Board of Directors of Mutual, after
having consulted with and based upon the advice of outside counsel, determines
in good faith that the failure to so withdraw, modify, or change its
recommendation could constitute a breach of the fiduciary duties of Mutual's
Board of Directors under applicable Law. In addition, nothing in this Section
8.1 or elsewhere in this Agreement shall prohibit accurate disclosure by either
Party of information that is required to be disclosed in the Registration
Statement or the Proxy Statement or in any other document required to be filed
with the SEC (including, without limitation, a Solicitation/Recommendation
Statement on Schedule 14D-9 under the ▇▇▇▇ ▇▇▇) or otherwise required to be
publicly disclosed by applicable Law or regulations or rules of the NYSE or the
NASD.
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 Mutual
Common Stock pursuant to the Merger.
8.3 APPLICATIONS. UPC shall promptly prepare and file, and Mutual 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. Prior to each
filing, UPC shall provide Mutual and its counsel with copies of such
applications.
8.4 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
conditions of this Agreement, UPC shall cause UPHC to 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 the State of Tennessee.
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
reasonably practicable after the date of this Agreement, the transactions
contemplated
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by this Agreement, including, without limitation, 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. 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) Each Party agrees to give the other Party notice as
soon as practicable after any determination by it of any fact or occurrence
relating to the other Party which it has discovered through the course of its
investigation and which represents, or is reasonably likely to represent, either
a Material breach of any representation, warranty, covenant, or agreement of the
other Party or which has had or is reasonably likely to have a Material Adverse
Effect on the other Party.
(d) Neither Party nor any of their respective
Subsidiaries shall be required to provide access to or to disclose information
where such access or disclosure would violate or prejudice the rights of its
customers, jeopardize the attorney-client or similar privilege with respect to
such information or contravene any Law, rule, regulation, Order, judgment,
decree, fiduciary duty, or agreement entered into prior to the date of this
Agreement. The Parties will use their reasonable efforts to make appropriate
substitute disclosure arrangements, to the extent practicable, in circumstances
in which the restrictions of the preceding sentence apply.
8.7 PRESS RELEASES. Prior to the Effective Time, UPC and Mutual 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.
8.8 CERTAIN ACTIONS. Except with respect to this Agreement and the Plan
of Merger and the transactions contemplated hereby and thereby, no Mutual
Company nor any Affiliate thereof nor any Representatives thereof retained by
any Mutual Company shall directly or indirectly solicit or engage in
negotiations concerning any Acquisition Proposal, or provide any confidential
information or assistance to, or have any discussions with, any Person with
respect to an Acquisition Proposal. Notwithstanding the foregoing, Mutual may,
and may authorize and permit
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its Representatives to, provide Persons with confidential information, have
discussions or negotiations with, or otherwise facilitate an effort or attempt
by such Person to make or implement an Acquisition Proposal not solicited in
violation of this Agreement if Mutual's Board of Directors, after having
consulted with, and based upon the advice of, outside counsel, determines in
good faith that the failure to take such actions could constitute a breach of
the fiduciary duties of Mutual's Board of Directors under applicable Law;
provided, that Mutual shall promptly advise UPC following the receipt of any
Acquisition Proposal and the Material details thereof; and, provided further,
that prior to delivery of confidential information relating to Mutual or access
to Mutual's books, records, or properties in connection therewith, the other
Person shall have entered into a confidentiality agreement substantially similar
to the Confidentiality Agreement previously entered into between Mutual and UPC.
Nothing contained in this Section 8.8 shall prohibit the Board of Directors of
Mutual from complying with Rule 14e-2, promulgated under the 1934 Act. Mutual
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
of all its Representatives not to engage in any of the foregoing.
8.9 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 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 Mutual Company shall take all necessary
steps 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 Takeover Laws.
8.11 CHARTER PROVISIONS. Each Mutual 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, Bylaws, or other governing
instruments of any Mutual Company or restrict or impair the ability of UPC or
any of its Subsidiaries to vote, or otherwise to exercise the rights of a
stockholder with respect to, shares of any Mutual Company that may be directly
or indirectly acquired or controlled by it. Prior to the Closing, Mutual shall
cause the charter of First Mutual Bank, S.B. to be amended to delete the
provisions of Section 8.A thereof (the "Savings Bank Charter Amendment").
8.12 AGREEMENT OF AFFILIATES. Mutual has disclosed in Section 8.12 of
the Mutual Disclosure Memorandum each Person whom it reasonably believes may be
deemed an "affiliate" of Mutual for purposes of Rule 145 under the 1933 Act.
Mutual 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, in
substantially the form of Exhibit 3, providing that such Person will not sell,
pledge, transfer, or otherwise dispose of the shares of Mutual 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 UPC shall be entitled to place restrictive
legends upon certificates for shares of UPC Common Stock issued to affiliates of
Mutual 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. Following the Effective Time, but
in no event earlier than the consolidation of Mutual's depository institution
Subsidiaries with UPC's
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depository institution Subsidiaries, UPC shall provide to officers and employees
of the Mutual Companies (the "Continuing Employees"), employee benefits under
employee benefit 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 benefit accruals (but not accrual of benefits under UPC's
tax-qualified retirement plans) under such employee benefit plans, (i) service
under any qualified defined benefit or contribution plans of Mutual shall be
treated as service under UPC's qualified defined benefit or contribution plans
and (ii) service under any other employee benefit plans of Mutual shall be
treated as service under any similar employee benefit plans maintained by UPC.
UPC shall cause the UPC welfare benefit plans that cover the Continuing
Employees after the Effective Time to (i) waive any waiting period and
restrictions and limitations for preexisting conditions or insurability and (ii)
cause any deductible, co-insurance, or maximum out-of-pocket payments made by
the Continuing Employees under Mutual's welfare benefit plans to be credited to
such Continuing Employees under the UPC welfare benefit plans, so as to reduce
the amount of any deductible, co-insurance, or maximum out-of-pocket payments
payable by the Continuing Employees under the UPC welfare benefit plans. Prior
to the commencement of the Continuing Employee's participation in the UPC
employee benefit plans and programs, the benefit coverage of, and participation
in benefit plans by, the Continuing Employees shall continue under the Mutual
Benefit Plans, as in effect immediately prior to the Effective Time. During such
transition period, the coverage under and participation in the Mutual Benefit
Plans shall be deemed to provide the Continuing Employees with benefits that are
no less favorable than those offered to other employees of UPC and its
Subsidiaries. Except as expressly provided in the Supplemental Letter, UPC also
shall cause Mutual and its Subsidiaries to honor all employment, severance,
consulting, and other compensation Contracts disclosed in Section 8.13 of the
Mutual Disclosure Memorandum to UPC between any Mutual Company and any current
or former director, officer, independent contractor, or employee thereof, and
all provisions of the Mutual 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 Mutual or any of Mutual's Subsidiaries (each, a "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 Mutual's Certificate of
Incorporation and Bylaws, as in effect on the date hereof, and any indemnity
agreements entered into prior to the date of this Agreement by any of the Mutual
Companies and any director, officer, employee, or agent of any of the Mutual
Companies, including, without limitation, provisions relating to advances of
expenses incurred in the defense of any Litigation, and as provided in Section
8.14(a) of the Mutual Disclosure Memorandum. 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 ▇▇▇
▇▇
▇▇
shall not be liable to such Indemnified Parties for any legal expenses of other
counsel or any other 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 (c) 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.
(d) If either UPC or the Surviving Corporation or any of
their respective 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 either UPC or the Surviving Corporation shall assume
the obligations set forth in this Section 8.14.
(e) UPC shall pay all reasonable costs, including
attorneys' fees, that may be incurred by any Indemnified Party in enforcing the
indemnity and other obligations provided for in this Section 8.14.
(f) The provisions of this Section 8.14 are intended to
be for the benefit of, and shall be enforceable by, each Indemnified Party and
his or her heirs or representatives.
8.15 CERTAIN MODIFICATIONS. UPC and Mutual shall consult with each
other with respect to their loan, litigation, and real estate valuation policies
and practices (including loan classifications and levels of reserves) and Mutual
shall make such modifications or changes to its policies and practices, if any,
prior to the Effective Time, as may be mutually agreed upon. UPC and Mutual also
shall consult with each other with respect to the character, amount, and timing
of restructuring and Merger-related expense charges to be taken by each of the
Parties in connection with the transactions contemplated by this Agreement and
shall take such charges in accordance with GAAP as may be mutually agreed upon
by the Parties. Neither Party's representations, warranties, and covenants
contained in this Agreement shall be deemed to be inaccurate or breached in any
respect as a consequence of any modifications or charges undertaken solely on
account of this Section 8.15.
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 the Plan of Merger and to consummate
the Merger and
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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:
(a) STOCKHOLDER APPROVALS. The stockholders of Mutual
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 and by the provisions of any governing
instruments.
(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 (excluding requirements relating to the raising of
additional capital or the disposition of Assets or deposits) which in the
reasonable good faith judgment of the Board of Directors of UPC would so
materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement so as to render inadvisable the
consummation of the Merger.
(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, restricts,
or makes illegal consummation of the transactions contemplated by this
Agreement.
(e) REGISTRATION STATEMENT. The Registration Statement
shall be effective under the 1933 Act, no stop orders 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) TAX MATTERS. Mutual and UPC shall have received a
written opinion from ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ in each case in a form reasonably
satisfactory to such Party (the "Tax Opinions"), dated the date of the Effective
Time, substantially to the effect that (i) the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, (ii) no gain or loss will be recognized by holders of Mutual Common Stock
who exchange all of their Mutual Common Stock solely for UPC Common Stock
pursuant to the Merger (except with respect to any cash received in lieu of a
fractional share interest in UPC Common Stock), (iii) the tax basis of the UPC
Common Stock received by holders of Mutual Common Stock who exchange all of
their Mutual Common Stock solely for UPC Common Stock in the Merger will be the
same as the tax basis of the Mutual Common Stock surrendered in exchange for the
UPC Common Stock (reduced by an amount allocable to a fractional share interest
in UPC Common Stock for which cash is
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received), and (iv) the holding period of the UPC Common Stock received by
holders who exchange all of their Mutual Common Stock solely for UPC Common
Stock in the Merger will be the same as the holding period of the Mutual Common
Stock surrendered in exchange therefor, provided that such Mutual Common Stock
is held as a capital asset at the Effective Time. In rendering such Tax
Opinions, such counsel shall be entitled to rely upon representations of
officers of Mutual 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 Mutual 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 Mutual set
forth in Section 5.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimis in amount). The representations and warranties
of Mutual set forth in Sections 5.18, 5.19, 5.20, and 5.21 of this Agreement
shall be true and correct in all Material respects. There shall not exist
inaccuracies in the representations and warranties of Mutual set forth in this
Agreement (including the representations and warranties set forth in Sections
5.3, 5.18, 5.19, 5.20, and 5.21) such that the aggregate effect of such
inaccuracies has, or is reasonably likely to have, a Material Adverse Effect on
Mutual; provided that, for purposes of this sentence only, those representations
and warranties which are qualified by references to "material, "Material,"
"Material Adverse Effect," or variations thereof, or to the "Knowledge" of
Mutual or to a matter being "known" by Mutual shall be deemed not to include
such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all
of the agreements and covenants of Mutual 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.
(c) CERTIFICATES. Mutual shall have delivered to UPC (i)
a certificate, dated as of the Effective Time and signed on its behalf by its
duly 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 Mutual's Board of Directors
and stockholders 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) AFFILIATE AGREEMENTS. UPC shall have received from
each affiliate of Mutual the affiliates agreement referred to in Section 8.12 of
this Agreement.
9.3 CONDITIONS TO OBLIGATIONS OF MUTUAL. The obligations of Mutual 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 Mutual pursuant to Section 11.6(b) of
this Agreement:
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(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 minimis in amount). The representations and warranties
of UPC set forth in Section 6.16 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 6.16) 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,"
"Material," "Material Adverse Effect," or variations thereof, or to the
"Knowledge" of UPC or to a matter being "known" by UPC 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.
(c) CERTIFICATES. UPC shall have delivered to Mutual (i)
a certificate, dated as of the Effective Time and signed on its behalf by its
duly authorized officers, 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 Mutual
and its counsel shall request.
(d) FAIRNESS OPINION. Mutual shall have received an
opinion from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated to the effect that the Merger is
fair to shareholders of Mutual from a financial point of view dated the date of
the Proxy Statement.
ARTICLE 10
TERMINATION
10.1 TERMINATION. Notwithstanding any other provision of this Agreement
and the Plan of Merger, and notwithstanding the approval of this Agreement by
the stockholders of Mutual or UPC, this Agreement 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 Mutual; 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 Mutual and Section 9.3(a) of
this Agreement 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
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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 Mutual 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 Mutual and Section 9.3(a) in the
case of UPC) 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 for appeal, or (ii) the
stockholders of Mutual fail to vote their approval of the matters submitted for
the approval by such stockholders at the Stockholders' Meeting where the
transactions were presented to such stockholders 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 March 31, 1999, if the
failure to consummate the transactions contemplated hereby on or before such
date is not caused by any 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 Mutual and Section 9.3(a) of this
Agreement 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;
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.
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 Supplemental Letter.
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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 any other Person directly,
or indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person.
"Agreement" shall mean this Agreement and Plan of
Reorganization, including the Exhibits hereto (except the Stock Option
Agreement) delivered pursuant hereto and incorporated herein by reference.
"Articles of Merger" shall mean the Articles of Merger to be
executed by UPHC and filed with the Secretary of State of the State of Tennessee
relating to the Merger as contemplated by Sections 1.1 and 1.3 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.
"Certificate of Merger" shall mean the Certificate of Merger
to be executed by UPHC and filed with the Secretary of State of the State of
Delaware relating to the Merger as contemplated by Section 1.1 and 1.3 of this
Agreement.
"Confidentiality Agreements" shall mean those certain
Confidentiality Agreements, entered into prior to the date of this Agreement,
between Mutual and UPC.
"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.
"DGCL" shall mean the Delaware General Corporation Law.
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"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, where, in any such event, such Default is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on a Party.
"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 3, 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).
"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.
"Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended.
"Knowledge" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall mean the
personal knowledge of the chairman, president, chief financial officer, chief
accounting officer, chief credit officer, general counsel, or any executive vice
president of such Person.
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"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 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 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.
"Loan Property" shall mean any property owned, leased, or
operated by the Party in question or by any of its Subsidiaries or in which such
Party or Subsidiary holds a security or other interest (including an interest in
a fiduciary capacity), and, where required by the context, includes the owner or
operator of such property, but only with respect to such property.
"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
condition, results of operations, or business 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" 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 and their holding companies, (c)
actions and omissions of a Party (or any of its Subsidiaries) taken with the
prior informed consent of the other Party in contemplation of the transactions
contemplated hereby, and (d) the Merger and compliance with the provisions of
this Agreement (including the expense associated with the vesting of benefits
under the various employee or other benefit plans of Mutual as a result of the
Merger constituting a change of control) on the operating performance of the
Parties.
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"Mutual Capital Stock" shall mean Mutual Common Stock and
Mutual Preferred Stock.
"Mutual Common Stock" shall mean the $.10 par value common
stock of Mutual.
"Mutual Companies" shall mean, collectively, Mutual and all
Mutual Subsidiaries.
"Mutual Disclosure Memorandum" shall mean the written
information entitled "Mutual Disclosure Memorandum" delivered prior to the
execution 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 or subsection of this Agreement under
which such disclosure is being made.
"Mutual Financial Statements" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any) of
Mutual as of December 31, 1997, 1996 and 1995, and the related statements of
income, changes in stockholders' equity, and cash flows (including related notes
and schedules, if any) for each of the three years ended December 31, 1997, 1996
and 1995, as filed by Mutual in SEC Documents and (ii) the consolidated
statements of condition of Mutual (including related notes and schedules, if
any) and related statements of income, changes in stockholders' equity, and cash
flows (including related notes and schedules, if any) included in SEC Documents
filed with respect to periods ended subsequent to December 31, 1997.
"Mutual Preferred Stock" shall mean the $.10 par value
preferred stock of Mutual.
"Mutual Stock Plans" shall mean the existing stock option and
other stock-based compensation plans of Mutual.
"Mutual Subsidiaries" shall mean the Subsidiaries of Mutual,
which shall include the Mutual Subsidiaries described in Section 5.4 of this
Agreement and any corporation, bank, savings association, or other organization
acquired as a Subsidiary of Mutual in the future and owned by Mutual at the
Effective Time.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"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.
"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.
"Participation Facility" shall mean any facility or property
in which the Party in question or any of its Subsidiaries participates in the
management (including, but not limited to, participating in a fiduciary
capacity) 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 Mutual or UPC, and "Parties" shall
mean both Mutual and UPC.
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"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.
"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 partner ship, limited liability company,
trust, business association, group acting in concert, or any person acting in a
representative capacity.
"Plan of Merger" shall mean the plan of merger providing for
the Merger, in substantially the form of Exhibit 2.
"Proxy Statement" shall mean the proxy statement used by
Mutual to solicit the approval of its stockholders of the transactions
contemplated by this Agreement, which shall include the prospectus of UPC
relating to the issuance of the UPC Common Stock to holders of Mutual 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 stockholders of Mutual 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 the Comptroller of the
Currency, the Federal Deposit Insurance Corporation, the Office of Thrift
Supervision, all state regulatory agencies having jurisdiction over the Parties
and their respective Subsidiaries, the NASD, the NYSE 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 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" shall mean the United States Securities and Exchange
Commission.
"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.
"Stock Option Agreement" shall mean the stock option agreement
by and between Mutual and UPC, in substantially the form of Exhibit 1.
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"Stockholders' Meeting" shall mean the meeting of the
stockholders of Mutual to be held pursuant to Section 8.1 of this Agreement,
including any adjournment or adjournments thereof.
"Subsidiaries" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or controls
50% or more of the outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% or more of the outstanding
equity securities is owned directly or indirectly by its parent; 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 between the Parties relating to certain understandings and
agreements in addition to those included in this Agreement.
"Surviving Corporation" shall mean UPHC as the surviving
corporation resulting from the Merger.
"Tax" or "Taxes" shall mean all federal, state, local, and
foreign taxes, charges, fees, levies, imposts, duties, or other assessments,
including income, gross receipts, excise, employment, sales, use, transfer,
license, payroll, franchise, severance, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs duties, capital
stock, paid-up capital, profits, withholding, Social Security, single business
and unemployment, disability, real property, personal property, registration, ad
valorem, value added, alternative or add-on minimum, estimated, or other tax of
any kind whatsoever, imposed or required to be withheld by the United States or
any state, local, or foreign government or subdivision or agency thereof,
including any interest, penalties, or additions thereto.
"Taxable Period" shall mean any period prescribed by any
governmental authority, including the United States or any state, local, or
foreign government or subdivision or agency thereof for which a Tax Return is
required to be filed or Tax is required to be paid.
"Tax Return" shall mean any report, return, information
return, or other information required to be supplied to a taxing authority in
connection with Taxes, including any return of an affiliated or combined or
unitary group that includes a Party or its Subsidiaries.
"TBCA" shall mean the Tennessee Business Corporation Act.
"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.
"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
December 31, 1997 and 1996, and the related statements of earnings, changes in
stockholders' equity, and cash flows (including related notes and schedules, if
any) for each of the three years ended December 31, 1997, 1996 and 1995, 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 stockholders' equity, and cash flows (including related
notes and schedules, if any) included in SEC Documents filed with respect to
periods ended subsequent to December 31, 1997.
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"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 Union Planters Bank, National
Association, as Rights Agent.
"UPC Subsidiaries" shall mean the Subsidiaries of UPC and any
corporation, bank, or other organization acquired as a Subsidiary of UPC in the
future and owned by UPC at the Effective Time.
"UPHC" shall mean the wholly-owned subsidiary of UPC organized
under the Laws of the State of Tennessee.
"UPHC Common Stock" shall mean the $1.00 par value common
stock of UPHC.
(b) The terms set forth below shall have the meanings
ascribed thereto in the referenced sections:
Mutual Benefit Plans Section 5.13(a)
Mutual Contracts Section 5.14
Mutual ERISA Affiliate Section 5.13(e)
Mutual ERISA Plan Section 5.13(a)
Mutual Rights Section 3.5(a)
Mutual Pension Plan Section 5.13(a)
Mutual SEC Reports Section 5.5(a)
Closing Section 1.2
Effective Time Section 1.3
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(c)
Indemnified Party Section 8.14
Merger Section 1.1
Takeover Laws Section 5.19
Tax Opinion Section 9.1(g)
UPC ERISA Affiliate Section 6.17
UPC SEC Reports Section 6.5(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 each of the Parties shall bear and pay
one-half of the printing
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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 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
as to Mutual, 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, her, or its representing or being
retained by or allegedly representing or being retained by Mutual or UPC, each
of Mutual 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 documents and instruments referred to herein)
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 (including any provision of
the Confidentiality Agreements which would act to preclude UPC (or any Holder as
defined in the Stock Option Agreement from exercising its rights under the Stock
Option Agreement) to the extent that the Stock Option Agreement is in force and
effect, but excluding the Supplemental Letter). 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.
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
stockholder approval of this Agreement has been obtained; provided, that the
provisions of this Agreement relating to the manner or basis in which shares of
Mutual Common Stock will be exchanged for UPC Common Stock shall not be amended
after the Stockholders' Meeting without the requisite approval of the holders of
the issued and outstanding shares of UPC Common Stock and Mutual Common Stock,
as the case may be, entitled to vote thereon.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, UPC, acting
through its Board of Directors, chief executive officer, chief financial
officer, or other authorized officer, shall have the right to waive any Default
in the performance of any term of this Agreement by Mutual, to waive or extend
the time for the compliance or fulfillment by Mutual 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, Mutual, acting
through its Board of Directors, chief executive officer, chief financial
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
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to waive any or all of the conditions precedent to the obligations of Mutual
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 Mutual.
(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 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:
Mutual: First Mutual Bancorp, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President and
Chief Executive Officer
Copy to Counsel: Barack ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
UPC: UNION PLANTERS CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President and
Chief Operating Officer
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Copy to Counsel: UNION PLANTERS CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇. ▇▇▇▇▇ House, Jr.
▇▇▇▇▇, TARRANT & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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 that the Laws of the State of
Delaware relate to the consummation of the Merger.
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 the
Parties.
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.
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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: FIRST MUTUAL BANCORP, INC.
By: /s/ G. ▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------- --------------------------------
G. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Secretary President and Chief Executive Officer
[CORPORATE SEAL]
ATTEST: UNION PLANTERS CORPORATION
By: /s/ ▇. ▇▇▇▇▇ House, Jr. By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------- --------------------------------
▇. ▇▇▇▇▇ House, Jr. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary President
[CORPORATE SEAL]
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Exhibit 1
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made and
entered into as of July 2, 1998, by and between FIRST MUTUAL BANCORP, INC., a
Delaware corporation ("Issuer"), and UNION PLANTERS CORPORATION, a Tennessee
corporation ("Grantee").
WHEREAS, Grantee and Issuer have entered into that certain
Agreement and Plan of Reorganization, dated as of July 2, 1998 (the "Merger
Agreement"), providing for, among other things, the merger of Issuer with and
into Union Planters Holding Corporation ("UPHC"), a wholly-owned subsidiary of
Grantee organized under the Laws of the State of Tennessee, with UPHC as the
surviving entity; and
WHEREAS, as a condition and inducement to Grantee's execution
of the Merger Agreement, Grantee has required that Issuer agree, and Issuer has
agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, and intending to be legally bound hereby, Issuer and
Grantee agree as follows:
1. DEFINED TERMS. Capitalized terms which are used but not
defined herein shall have the meanings ascribed to such terms in the
Merger Agreement.
2. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the
"Option") to purchase up to 702,583 shares (as adjusted as set forth
herein, the "Option Shares," which shall include the Option Shares
before and after any transfer of such Option Shares) of common stock,
$0.10 par value per share ("Issuer Common Stock"), of Issuer at a
purchase price per Option Share (subject to adjustment as set forth
herein, the "Purchase Price") equal to $18.50; provided, however, that
in no event shall the number of shares of Issuer Common Stock for which
this Option is exercisable exceed 19.9% of the Issuer's issued and
outstanding shares of Issuer Common Stock without giving effect to any
shares subject to or issued pursuant to the Option.
3. EXERCISE OF OPTION.
a. Provided that (i) Grantee or Holder (as hereinafter
defined), as applicable, shall not be in material breach of
its agreements or covenants contained in this Agreement or the
Merger Agreement, and (ii) no preliminary or permanent
injunction or other order against the delivery of shares
covered by the Option issued by any court of competent
jurisdiction in the United States shall be in effect, Holder
may exercise the Option, in whole or in part, at any time and
from time to time following the occurrence of a Purchase Event
and prior to the termination of the Option. The Option shall
terminate and be of no further force and effect upon the
earliest to occur of (A) the Effective Time, (B) termination
of the Merger Agreement in accordance with the terms thereof
prior to the occurrence of a Purchase Event or a Preliminary
Purchase Event (other than a termination of the Merger
Agreement by Grantee pursuant to (i) Section 10.1(b) thereof
(but only if such termination was
50
a result of a willful breach by Issuer) or (ii) Section
10.1(c) thereof (each a "Default Termination")), (C) 18 months
after a Default Termination, and (D) 18 months after any
termination of the Merger Agreement following the occurrence
of a Purchase Event or a Preliminary Purchase Event. Any
purchase of shares upon exercise of the Option shall be
subject to compliance with applicable law, including, without
limitation, the Bank Holding Company Act ("BHC Act"). The term
"Holder" shall mean the holder or holders of the Option from
time to time, and which initially is the Grantee. The rights
set forth in Section 8 shall terminate when the right to
exercise the Option terminates (other than as a result of a
complete exercise of the Option) as set forth herein.
b. As used herein, a "Purchase Event" means any of the
following events subsequent to the date of this Agreement:
i. without Grantee's prior written consent,
Issuer shall have authorized, recommended, publicly
proposed or publicly announced an intention to
authorize, recommend or propose, or entered into an
agreement with any person (other than Grantee or any
Subsidiary of Grantee) to effect an Acquisition
Transaction (as defined below). As used herein, the
term Acquisition Transaction shall mean (A) a merger,
consolidation or similar transaction involving Issuer
or any of its Subsidiaries (other than transactions
solely between Issuer's Subsidiaries and transactions
involving Issuer or any Subsidiary in which the
voting securities of Issuer outstanding immediately
prior thereto continue to represent (by either
remaining outstanding or being converted into
securities of the surviving entity or the parent
thereof) at least 75% of the combined voting power of
the voting securities of the Issuer or the surviving
entity or the parent thereof outstand ing immediately
after the consummation of the transaction), (B) the
disposition, by sale, lease, exchange or otherwise,
of Assets of Issuer or any of its Subsidiaries
representing in either case 20% or more of the
consolidated assets of Issuer and its Subsidiaries,
or (C) the issuance, sale or other disposition of
(including by way of merger, consolidation, share
exchange or any similar transaction) securities
representing 20% or more of the voting power of
Issuer or any of its Subsidiaries (any of the
foregoing, an "Acquisi tion Transaction"); or
ii. any person (other than Grantee or any
Subsidiary of Grantee) shall have acquired beneficial
ownership (as such term is defined in Rule 13d-3
promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), of or the
right to acquire beneficial ownership of, or any
"group" (as such term is defined under the Exchange
Act), other than a group of which Grantee or any of
its Subsidiaries is a member, shall have been formed
which beneficially owns or has the right to acquire
beneficial ownership of, 20% or more of the
then-outstanding shares of Issuer Common Stock.
c. As used herein, a "Preliminary Purchase Event" means
any of the following events:
i. any person (other than Grantee or any
Subsidiary of Grantee) shall have commenced (as such
term is defined in Rule 14d-2 under the
2
51
Exchange Act), or shall have filed a registration
statement under the Securities Act of 1933, as
amended (the "Securities Act") with respect to, a
tender offer or exchange offer to purchase any shares
of Issuer Common Stock such that, upon consummation
of such offer, such person would own or control 15%
or more of the then-outstanding shares of Issuer
Common Stock (such an offer being referred to herein
as a "Tender Offer" or an "Exchange Offer,"
respectively); or
ii. the holders of Issuer Common Stock shall not
have approved the Merger Agreement at the meeting of
such stockholders held for the purpose of voting on
the Merger Agreement, such meeting shall not have
been held or shall have been canceled prior to
termination of the Merger Agreement, or Issuer's
Board of Directors shall have withdrawn or modified
in a manner adverse to Grantee the recommendation of
Issuer's Board of Directors with respect to the
Merger Agreement, in each case after it shall have
been publicly announced that any person (other than
Grantee or any Subsidiary of Grantee) shall have (A)
made a proposal to engage in an Acquisition
Transaction, (B) commenced a Tender Offer or filed a
registration statement under the Securities Act with
respect to an Exchange Offer, or (C) filed an
application (or given a notice), whether in draft or
final form, under any federal or state statute or
regulation (including a notice filed under the HSR
Act and an application or notice filed under the BHC
Act, the Bank Merger Act, or the Change in Bank
Control Act of 1978) seeking the Consent to an
Acquisition Transaction from any federal or state
governmental or regulatory authority or agency.
As used in this Agreement, "person" shall have the
meaning specified in Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
d. In the event Holder wishes to exercise the Option, it
shall send to Issuer a written notice (the date of which being
herein referred to as the "Notice Date") specifying (i) the
total number of Option Shares it intends to purchase pursuant
to such exercise and (ii) a place and date not earlier than
three business days nor later than 30 business days from the
Notice Date for the closing (the "Closing") of such purchase
(the "Closing Date"). If prior Consent of any governmental or
regulatory agency or authority is required in connection with
such purchase, Issuer shall cooperate with Holder in the
filing of the required notice or application for such Consent
and the obtaining of such Consent and the Closing shall occur
immediately following receipt of such Consents (and expiration
of any mandatory waiting periods).
4. PAYMENT AND DELIVERY OF CERTIFICATES.
a. On each Closing Date, Holder shall (i) pay to Issuer,
in immediately available funds by wire transfer to a bank
account designated by Issuer, an amount equal to the Purchase
Price multiplied by the number of Option Shares to be
purchased on such Closing Date, and (ii) present and surrender
this Agreement to the Issuer at the address of the Issuer
specified in Section 13(f) hereof.
b. At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as
provided in Section 4(a), (i) Issuer shall
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deliver to Holder (A) a certificate or certificates
representing the Option Shares to be purchased at such
Closing, which Option Shares shall be free and clear of all
liens, claims, charges and encumbrances of any kind whatsoever
and subject to no pre-emptive rights, and (B) if the Option is
exercised in part only, an executed new agreement with the
same terms as this Agreement evidencing the right to purchase
the balance of the shares of Issuer Common Stock purchasable
hereunder, and (ii) Holder shall deliver to Issuer a letter
agreeing that Holder shall not offer to sell or otherwise
dispose of such Option Shares in violation of applicable
federal and state law or of the provisions of this Agreement.
c. In addition to any other legend that is required by
applicable law, certificates for the Option Shares delivered
at each Closing shall be endorsed with a restrictive legend
which shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF JULY 2,
1998. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF
WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST
THEREFOR.
It is understood and agreed that: (i) the references in the above
legend to resale restrictions of the Securities Act shall be removed by delivery
of substitute certificate(s) without such reference if Holder shall have
delivered to Issuer a copy of a letter from the staff of the SEC, or an opinion
of counsel in form and substance reasonably satisfactory to Issuer and its
counsel, to the effect that such legend is not required for purposes of the
Securities Act; (ii) the references in the above legend to the provisions of
this Agreement shall be removed by delivery of substitute certificate(s) without
such reference if the shares have been sold or transferred in compliance with
the provisions of this Agreement and under circumstances that do not require the
retention of such reference; and (iii) the legend shall be removed in its
entirety if the conditions in the preceding clauses (i) and (ii) are both
satisfied.
5. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby
represents and warrants to Grantee as follows:
a. Issuer has all requisite corporate power and
authority to enter into this Agreement and, subject to any
approvals referred to herein, to consummate the transactions
contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Issuer. This Agreement has
been duly executed and delivered by Issuer.
b. Issuer has taken all necessary corporate action to
authorize and reserve and to permit it to issue, and, at all
times from the date hereof until the obligation to deliver
Issuer Common Stock upon the exercise of the Option
terminates, will have reserved for issuance, upon exercise of
the Option, the number of shares of Issuer Common Stock
necessary for Holder to exercise the Option, and Issuer will
take all necessary corporate action to authorize and reserve
for issuance all additional shares of Issuer Common Stock or
other securities which may be issued pursuant to Section 7
upon exercise of the Option. The shares of Issuer Common Stock
to be issued upon due exercise of the Option, including all
additional shares of Issuer
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Common Stock or other securities which may be issuable
pursuant to Section 7, upon issuance pursuant hereto, shall be
duly and validly issued, fully paid, and nonassessable, and,
subject to the voting limitations set forth in Article Fourth
of Issuer's Articles of Incorporation as in effect on the date
hereof, shall be delivered free and clear of all liens,
claims, charges, and encumbrances of any kind or nature
whatsoever, including any preemptive rights of any stockholder
of Issuer.
c. Issuer has taken all action so that the entering into
of this Agreement and the consummation of the transactions
contemplated by this Agreement do not and will not result in
the grant of any rights to any Person under the Certificate of
Incorporation, Bylaws, or other governing instruments of any
Mutual Company or restrict or impair the ability of UPC or any
of its Subsidiaries to vote, or otherwise to exercise the
rights of a stockholder with respect to, shares of any Mutual
Company that may be directly or indirectly acquired or
controlled by it.
d. Issuer has taken all necessary action to exempt the
transactions contemplated by this Agreement from any
applicable Takeover Laws.
6. REPRESENTATIONS AND WARRANTIES OF GRANTEE. Grantee hereby
represents and warrants to Issuer that:
a. Grantee has all requisite corporate power and
authority to enter into this Agreement and, subject to any
approvals or consents referred to herein, to consummate the
transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Grantee. This Agreement has
been duly executed and delivered by Grantee.
b. This Option is not being, and any Option Shares or
other securities acquired by Grantee upon exercise of the
Option will not be, acquired with a view to the public
distribution thereof and will not be transferred or otherwise
disposed of except in a transaction registered or exempt from
registration under the Securities Laws.
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
a. In the event of any change in Issuer Common Stock by
reason of a stock dividend, stock split, split-up,
recapitalization, combination, exchange of shares or similar
transaction, the type and number of shares or securities
subject to the Option, and the Purchase Price therefor, shall
be adjusted appropriately, and proper provision shall be made
in the agreements governing such transaction, if any, so that
Holder shall receive, upon exercise of the Option, the number
and class of shares or other securities or property that
Holder would have received in respect of Issuer Common Stock
if the Option had been exercised immediately prior to such
event, or the record date therefor, as applicable. If any
additional shares of Issuer Common Stock are issued after the
date of this Agreement (other than pursuant to an event
described in the first sentence of this Section 7(a) or
pursuant to this Option), the number of shares of Issuer
Common Stock subject to the Option shall be adjusted so that,
after such issuance, it, together with any shares of Issuer
Common Stock previously issued pursuant hereto, shall not
exceed 19.9% of the number of shares of Issuer Common Stock
then issued and outstanding, without giving effect to any
shares subject to or issued pursuant to the Option.
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b. In the event that Issuer shall enter in an agreement:
(i) to consolidate with or merge into any person, other than
Grantee or one of its Subsidiaries, and shall not be the
continuing or surviving corporation of such consolidation or
merger; (ii) to permit any person, other than Grantee or one
of its Subsidiaries, to merge into Issuer and Issuer shall be
the continuing or surviving corporation, but, in connection
with such merger, the then outstanding shares of Issuer Common
Stock shall be changed into or exchanged for stock or other
securities of Issuer or any other person or cash or any other
property or the outstanding shares of Issuer Common Stock
immediately prior to such merger shall after such merger
represent less than 50% of the outstanding shares and share
equivalents of the merged company; or (iii) to sell or
otherwise transfer all or substantially all of its Assets to
any person, other than Grantee or one of its Subsidiaries,
then, and in each such case, the agreement governing such
transaction shall make proper provisions so that the Option
shall, upon the consummation of any such transaction and upon
the terms and conditions set forth herein, be converted into,
or exchanged for, an option (the "Substitute Option"), at the
election of Grantee, of either (x) the Acquiring Corporation
(as defined below) or (y) any person that controls the
Acquiring Corporation (in each case, such person being
referred to as the "Substitute Option Issuer").
c. The Substitute Option shall have the same terms as
the Option, provided that, if the terms of the Substitute
Option cannot, for legal reasons, be the same as the Option,
such terms shall be as similar as possible and in no event
less advantageous to Grantee. The Substitute Option Issuer
shall also enter into an agreement with the then-holder or
holders of the Substitute Option in substantially the same
form as this Agreement, which shall be applicable to the
Substitute Option.
d. The Substitute Option shall be exercisable for such
number of shares of the Substitute Common Stock (as
hereinafter defined) as is equal to the Assigned Value (as
hereinafter defined) multiplied by the number of shares of the
Issuer Common Stock for which the Option was theretofore
exercisable, divided by the Average Price (as hereinafter
defined). The exercise price of the Substitute Option per
share of the Substitute Common Stock (the "Substitute Purchase
Price") shall then be equal to the Purchase Price multiplied
by a fraction in which the numerator is the number of shares
of the Issuer Common Stock for which the Option was
theretofore exercisable and the denominator is the number of
shares for which the Substitute Option is exercisable.
e. The following terms have the meanings indicated:
i. "Acquiring Corporation" shall mean (x) the
continuing or surviving corporation of a
consolidation or merger with Issuer (if other than
Issuer), (y) Issuer in a merger in which Issuer is
the continuing or surviving person, and (z) the
transferee of all or any substantial part of the
Issuer's assets (or the assets of its Subsidiaries).
ii. "Substitute Common Stock" shall mean the
common stock issued by the Substitute Option Issuer
upon exercise of the Substitute Option.
iii. "Assigned Value" shall mean the highest of
(x) the price per share of the Issuer Common Stock at
which a Tender Offer or Exchange Offer therefor
6
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has been made by any person (other than Grantee), (y)
the price per share of the Issuer Common Stock to be
paid by any person (other than the Grantee) pursuant
to an agreement with Issuer, and (z) the highest last
sale price per share of Issuer Common Stock quoted on
the Nasdaq National Market (or if Issuer Common Stock
is not quoted on such exchange, the highest bid price
per share on any day as quoted on the principal
trading market or securities exchange on which such
shares are traded as reported by a recognized source
chosen by Grantee) within the six-month period
immediately preceding the agreement; provided, that
in the event of a sale of less than all of Issuer's
assets, the Assigned Value shall be the sum of the
price paid in such sale for such assets and the
current market value of the remaining assets of
Issuer as determined by a nationally recognized
investment banking firm selected by Grantee (or by a
majority in interest of the Grantees if there shall
be more than one Grantee (a "Grantee Majority")) and
reasonably acceptable to Issuer, divided by the
number of shares of the Issuer Common Stock
outstanding at the time of such sale. In the event
that an exchange offer is made for the Issuer Common
Stock or an agreement is entered into for a merger or
consolidation involving consideration other than
cash, the value of the securities or other property
issuable or deliverable in exchange for the Issuer
Common Stock shall be determined by a nationally
recognized investment banking firm selected by
Grantee and reasonably acceptable to Issuer (or if
applicable, Acquiring Corporation). (If there shall
be more than one Grantee, any such selection shall be
made by a Grantee Majority.)
iv. "Average Price" shall mean the average
closing price of a share of the Substitute Common
Stock for the one year immediately preceding the
consolidation, merger or sale in question, but in no
event higher than the last sale price of the shares
of the Substitute Common Stock on the day preceding
such consolidation, merger or sale; provided that if
Issuer is the issuer of the Substitute Option, the
Average Price shall be computed with respect to a
share of common stock issued by Issuer, the person
merging into Issuer or by any company which controls
or is controlled by such merger person, as Grantee
may elect.
f. In no event pursuant to any of the foregoing
paragraphs shall the Substitute Option be exercisable for more
than 19.9% of the aggregate of the shares of the Substitute
Common Stock outstanding prior to exercise of the Substitute
Option. In the event that the Substitute Option would be
exercisable for more than 19.9% of the aggregate of the shares
of Substitute Common Stock but for this clause (f), the
Substitute Option Issuer shall make a cash payment to Grantee
equal to the excess of (i) the value of the Substitute Option
without giving effect to the limitation in this clause (f)
over (ii) the value of the Substitute Option after giving
effect to the limitation in this clause (f). This difference
in value shall be determined by a nationally recognized
investment banking firm selected by Grantee (or a Grantee
Majority) and reasonably acceptable to the Acquiring
Corporation.
g. Issuer shall not enter into any transaction described
in subsection (b) of this Section 7 unless the Acquiring
Corporation and any person that controls the Acquiring
Corporation assume in writing all the obligations of Issuer
hereunder and take all other actions that may be necessary so
that the provisions of this Section
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7 are given full force and effect (including, without
limitation, any action that may be necessary so that the
shares of Substitute Common Stock are in no way
distinguishable from or have lesser economic value than other
shares of common stock issued by the Substitute Option
Issuer).
h. The provisions of Sections 8, 9, 10, and 11 shall
apply, with appropriate adjustments, to any securities for
which the Option becomes exercisable pursuant to this Section
7 and, as applicable, references in such sections to "Issuer,"
"Option," "Purchase Price" and "Issuer Common Stock" shall be
deemed to be references to "Substitute Option Issuer,"
"Substitute Option," "Substitute Purchase Price" and
"Substitute Common Stock," respectively.
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8. REPURCHASE AT THE OPTION OF HOLDER.
a. Subject to the last sentence of Section 3(a), at the
request of Holder at any time commencing upon the first
occurrence of a Repurchase Event (as defined in Section 8(d))
and ending 18 months immediately thereafter, Issuer shall
repurchase from Holder the Option and all shares of Issuer
Common Stock purchased by Holder pursuant hereto with respect
to which Holder then has beneficial ownership. The date on
which Holder exercises its rights under this Section 8 is
referred to as the "Request Date." Such repurchase shall be at
an aggregate price (the "Section 8 Repurchase Consideration")
equal to the sum of:
i. the aggregate Purchase Price paid by Holder
for any shares of Issuer Common Stock acquired by
Holder pursuant to the Option with respect to which
Holder then has beneficial ownership;
ii. the excess, if any, of (x) the Applicable
Price (as defined below) for each share of Issuer
Common Stock over (y) the Purchase Price (subject to
adjustment pursuant to Section 7), multiplied by the
number of shares of Issuer Common Stock with respect
to which the Option has not been exercised; and
iii. the excess, if any, of the Applicable Price
over the Purchase Price (subject to adjustment
pursuant to Section 7) paid (or, in the case of
Option Shares with respect to which the Option has
been exercised but the Closing Date has not occurred,
payable) by Holder for each share of Issuer Common
Stock with respect to which the Option has been
exercised and with respect to which Holder then has
beneficial ownership, multiplied by the number of
such shares.
b. If Holder exercises its rights under this Section 8,
Issuer shall, within ten business days after the Request Date,
pay the Section 8 Repurchase Consideration to Holder in
immediately available funds, and contemporaneously with such
payment Holder shall surrender to Issuer the Option and the
certificates evidencing the shares of Issuer Common Stock
purchased thereunder with respect to which Holder then has
beneficial ownership, and Holder shall warrant that it has
sole record and beneficial ownership of such shares and that
the same are then free and clear of all liens, claims, charges
and encumbrances of any kind whatsoever. Notwithstanding the
foregoing, to the extent that prior notification to or Consent
of any governmental or regulatory agency or authority is
required in connection with the payment of all or any portion
of the Section 8 Repurchase Consideration, Holder shall have
the ongoing option to revoke its request for repurchase
pursuant to Section 8, in whole or in part, or to require that
Issuer deliver from time to time that portion of the Section 8
Repurchase Consideration that it is not then so prohibited
from paying and promptly file the required notice or
application for Consent and expeditiously process the same
(and each party shall cooperate with the other in the filing
of any such notice or application and the obtaining of any
such Consent). If any governmental or regulatory agency or
authority disapproves of any part of Issuer's proposed
repurchase pursuant to this Section 8, Issuer shall promptly
give notice of such fact to Holder. If any governmental or
regulatory agency or authority prohibits the repurchase in
part but not in whole, then Holder shall have the right (i) to
revoke the repurchase request or (ii) to the extent permitted
by such agency or
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58
authority, determine whether the repurchase should apply to
the Option and/or Option Shares and to what extent to each,
and Holder shall thereupon have the right to exercise the
Option as to the number of Option Shares for which the Option
was exercisable at the Request Date less the sum of the number
of shares covered by the Option in respect of which payment
has been made pursuant to Section 8(a)(ii) and the number of
shares covered by the portion of the Option (if any) that has
been repurchased. Holder shall notify Issuer of its
determination under the preceding sentence within five
business days of receipt of notice of disapproval of the
repurchase.
Notwithstanding anything herein to the contrary, all of
Holder's rights under this Section 8 shall terminate on the date of termination
of this Option pursuant to Section 3(a).
c. For purposes of this Agreement, the "Applicable
Price" means the highest of (i) the highest price per share of
Issuer Common Stock paid for any such share by the person or
groups described in Section 8(d)(i), (ii) the price per share
of Issuer Common Stock received by holders of Issuer Common
Stock in connection with any merger or other business
combination transaction described in Section 7(b)(i), 7(b)(ii)
or 7(b)(iii), or (iii) the highest last sale price per share
of Issuer Common Stock quoted on the Nasdaq National Market
(or if Issuer Common Stock is not quoted on such exchange, the
highest bid price per share as quoted on the principal trading
market or securities exchange on which such shares are traded
as reported by a recognized source chosen by Holder) during
the 60 business days preceding the Request Date; provided,
however, that in the event of a sale of less than all of
Issuer's Assets, the Applicable Price shall be the sum of the
price paid in such sale for such assets and the current market
value of the remaining assets of Issuer as determined by an
independent nationally recognized investment banking firm
selected by Holder and reasonably acceptable to Issuer (which
determination shall be conclusive for all purposes of this
Agreement), divided by the number of shares of the Issuer
Common Stock outstanding at the time of such sale. If the
consideration to be offered, paid or received pursuant to
either of the foregoing clauses (i) or (ii) shall be other
than in cash, the value of such consideration shall be
determined in good faith by an independent nationally
recognized investment banking firm selected by Holder and
reasonably acceptable to Issuer, which determination shall be
conclusive for all purposes of this Agreement.
d. As used herein, a "Repurchase Event" shall occur if
(i) any person (other than Grantee or any subsidiary of
Grantee shall have acquired beneficial ownership (as such term
is defined in Rule 13d-3 promulgated under the Exchange Act),
or the right to acquire beneficial ownership, or any "group"
(as such term is defined under the Exchange Act) shall have
been formed which beneficially owns or has the right to
acquire beneficial ownership of 50% or more of the
then-outstanding shares of Issuer Common Stock, or (ii) any of
the transactions described in Section 7(b)(i), 7(b)(ii), or
7(b)(iii) shall be consummated.
9. REGISTRATION RIGHTS.
a. Issuer shall, subject to the conditions of
subparagraph (c) below, if requested by any Holder, including
Grantee and any permitted transferee ("Selling Holder"), as
expeditiously as possible prepare and file a registration
statement under the Securities Laws if necessary in order to
permit the sale or other disposition of any
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or all shares of Issuer Common Stock or other securities that
have been acquired by or are issuable to Selling Holder upon
exercise of the Option in accordance with the intended method
of sale or other disposition stated by Holder in such request
(it being understood and agreed that any such sale or other
disposition shall be effected on a widely distributed basis so
that, upon consummation thereof, no purchaser or transferee
shall beneficially own more than 5% of the shares of Issuer
Common Stock then outstanding), including, without limitation,
a "shelf" registration statement under Rule 415 under the
Securities Act or any successor provision, and Issuer shall
use its best efforts to qualify such shares or other
securities for sale under any applicable state securities
laws. Each such Holder shall provide all information
reasonably requested by Issuer for inclusion in any
registration statement to be filed hereunder.
b. If Issuer at any time after the exercise of the
Option, but prior to the termination of the Option, proposes
to register any shares of Issuer Common Stock under the
Securities Laws in connection with an underwritten public
offering of such Issuer Common Stock, Issuer will promptly
give written notice to Holder of its intention to do so and,
upon the written request of Holder given within 30 days after
receipt of any such notice (which request shall specify the
number of shares of Issuer Common Stock intended to be
included in such underwritten public offering by Selling
Holder), Issuer will use all reasonable efforts to cause all
such shares, the holders of which shall have requested
participation in such registration, to be so registered and
included in such underwritten public offering; provided, that
Issuer may elect to not cause any such shares to be so
registered (i) if the underwriters in good faith determine
that the inclusion of such shares would interfere with the
successful marketing of the shares of Issuer Common Stock for
the account of Issuer, or (ii) in the case of a registration
solely to implement a dividend reinvestment or similar plan,
an employee benefit plan or a registration filed on Form S-4
or any successor form, or a registration filed on a form which
does not permit registrations of resales; provided, further,
that such election pursuant to clause (i) may only be made
once. If some but not all the shares of Issuer Common Stock,
with respect to which Issuer shall have received requests for
registration pursuant to this subparagraph (b), shall be
excluded from such registration, Issuer shall make appropriate
allocation of shares to be registered among Selling Holders
and any other person (other than Issuer or any person
exercising demand registration rights in connection with such
registration) who or which is permitted to register their
shares of Issuer Common Stock in connection with such
registration pro rata in the proportion that the number of
shares requested to be registered by each Selling Holder bears
to the total number of shares requested to be registered by
all persons then desiring to have Issuer Common Stock
registered for sale (other than Issuer or any person
exercising demand registration rights in connection with such
registration).
c. Issuer shall use all reasonable efforts to cause the
registration statement referred to in subparagraph (a) above
to become effective and to obtain all consents or waivers of
other parties which are required therefor and to keep such
registration statement effective, provided, that Issuer may
delay any registration of Option Shares required pursuant to
subparagraph (a) above for a period not exceeding 90 days,
provided Issuer shall in good faith determine that any such
registration would adversely affect an offering or
contemplated offering of other securities by Issuer.
Notwithstanding anything to the contrary contained herein,
Issuer shall not be
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required to register Option Shares under the Securities Laws
pursuant to subpara graph (a) above:
i. prior to the occurrence of a Purchase Event
and following the termination of the Option;
ii. more than twice;
iii. within 90 days after the effective date of a
registration referred to in subparagraph (b) above
pursuant to which the Selling Holders concerned were
afforded the opportunity to register such shares
under the Securities Laws and such shares were
registered as requested; and
iv. unless a request therefor is made to Issuer
by Selling Holders holding at least 15% or more of
the aggregate number of Option Shares then
outstanding or the right to acquire at least 15% of
the Option Shares.
In addition to the foregoing, Issuer shall not be required to maintain
the effectiveness of any registration statement after the expiration of 120 days
from the effective date of such registration statement. Issuer shall use all
reasonable efforts to make any filings, and take all steps, under all applicable
state securities laws to the extent necessary to permit the sale or other
disposition of the Option Shares so registered in accordance with the intended
method of distribution for such shares, provided, that Issuer shall not be
required to consent to general jurisdiction or qualify to do business in any
state where it is not otherwise required to so consent to such jurisdiction or
to so qualify to do business.
d. Except where applicable state law prohibits such
payments, Issuer will pay all expenses (including without
limitation registration fees, qualification fees, blue sky
fees and expenses (including the fees and expenses of Issuer's
counsel), accounting expenses, printing expenses, expenses of
underwriters, excluding discounts and commissions but
including liability insurance if Issuer so desires or the
underwriters so require, and the reasonable fees and expenses
of any necessary special experts) in connection with each
registration pursuant to subparagraph (a) or (b) above
(including the related offerings and sales by Selling Holders)
and all other qualifications, notifications or exemptions
pursuant to subparagraph (a) or (b) above. Underwriting
discounts and commissions relating to Option Shares and any
other expenses incurred by such Selling Holders in connection
with any such registration (including expenses of Selling
Holders' counsel) shall be borne by such Selling Holders.
e. In connection with any registration under
subparagraph (a) or (b) above Issuer hereby agrees to
indemnify the Selling Holders, and each underwriter thereof,
including each person, if any, who controls such holder or
underwriter within the meaning of Section 15 of the Securities
Act, against all expenses, losses, claims, damages and
liabilities caused by any untrue statement of a material fact
contained in any registration statement or prospectus
(including any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading,
except insofar as such expenses, losses, claims, damages or
liabilities of such indemnified party are caused by any untrue
statement or alleged untrue
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statement or any omission or alleged omission made in reliance
upon and in conformity with, information furnished in writing
to Issuer by such indemnified party expressly for use therein,
and Issuer and each officer, director and controlling person
of Issuer shall be indemnified by such Selling Holder, or by
such underwriter, as the case may be, for all such expenses,
losses, claims, damages and liabilities caused by any untrue,
or alleged untrue, statement or omission made in reliance
upon, and in conformity with, information furnished in writing
to Issuer by such holder or such underwriter, as the case may
be, expressly for such use.
Promptly upon receipt by a party indemnified under this subparagraph
(e) of notice of the commencement of any action against such indemnified party
in respect of which indemnity or reimbursement may be sought against any
indemnifying party under this subparagraph (e), such indemnified party shall
notify the indemnifying party in writing of the commencement of such action, but
the failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
subparagraph (e), except to the extent such failure to notify materially
prejudices the indemnifying party. In case notice of commencement of any such
action shall be given to the indemnifying party as above provided, the
indemnifying party shall be entitled to participate in and, to the extent it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense of such action at its own expense, with counsel chosen by it and
reasonably satisfactory to such indemnified party. The indemnified party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel (other than
reasonable costs of investigation) shall be paid by the indemnified party unless
(i) the indemnifying party either agrees to pay the same, (ii) the indemnifying
party falls to assume the defense of such action with counsel satisfactory to
the indemnified party, or (iii) the indemnified party has been advised by
counsel that one or more legal defenses may be available to the indemnifying
party that may be contrary to the interest of the indemnified party, in which
case the indemnifying party shall be entitled to assume the defense of such
action notwithstanding its obligation to bear fees and expenses of such counsel;
provided, however, that the indemnifying party shall not be liable for the
expenses of more than one firm of counsel for all indemnified parties in any
jurisdiction. No indemnifying party shall be liable for any settlement entered
into without its consent, which consent may not be unreasonably withheld.
If the indemnification provided for in this subparagraph (e) is
unavailable to a party otherwise entitled to be indemnified in respect of any
expenses, losses, claims, damages or liabilities referred to herein, then the
indemnifying party, in lieu of indemnifying such party otherwise entitled to be
indemnified, shall contribute to the amount paid or payable by such party to be
indemnified as a result of such expenses, losses, claims, damages or liabilities
in such proportion as is appropriate to reflect the relative benefits received
by Issuer, all Selling Holders and the underwriters from the offering of the
securities and also the relative fault of Issuer, all Selling Holders and the
underwriters in connection with the statements or omissions which resulted in
such expenses, losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The amount paid or payable by a party as a
result of the expenses, losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim; provided, that in no case shall any Selling Holder be responsible, in
the aggregate, for any amount in excess of the net offering proceeds
attributable to its Option Shares included in the offering. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Any obligation by any holder to
indemnify shall be several and not joint with other holders.
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In connection with any registration pursuant to subparagraph (a) or (b)
above, Issuer and each Selling Holder (other than Grantee) shall enter into an
agreement containing the indemnifica tion provisions of this subparagraph (e).
f. Issuer shall use its best efforts to comply with all
reporting requirements and will do all such other things as
may be necessary to permit the expeditious sale at any time of
any Option Shares by Holder in accordance with and to the
extent permitted by any rule or regulation promulgated by the
SEC from time to time, including, without limitation, Rules
144 and 144A.
g. Issuer will pay all stamp taxes in connection with
the issuance and the sale of the Option Shares and in
connection with the exercise of the Option, and will save
Holder harmless, without limitation as to time, against any
and all liabilities, with respect to all such taxes.
10. QUOTATION; LISTING. If Issuer Common Stock or any other
securities to be acquired upon exercise of the Option are then
authorized for quotation or trading or listing on any securities
exchange or any automated quotations system maintained by a
self-regulatory organization, Issuer, upon the request of Holder, will
promptly file an application, if required, to authorize for quotation
or trading or listing the shares of Issuer Common Stock or other
securities to be acquired upon exercise of the Option on the securities
exchange or any automated quotations system maintained by a
self-regulatory organization and will use its best efforts to obtain
approval, if required, of such quotation or listing as soon as
practicable.
11. DIVISION OF OPTION. This Agreement (and the Option granted
hereby) are exchangeable, without expense, at the option of Holder,
upon presentation and surrender of this Agreement at the principal
office of Issuer for other Agreements providing for Options of
different denominations entitling the holder thereof to purchase in the
aggregate the same number of shares of Issuer Common Stock purchasable
hereunder. The terms "Agreement" and "Option" as used herein include
any other Agreements and related Options for which this Agreement (and
the Option granted hereby) may be exchanged. Upon receipt by Issuer of
evidence reasonably satisfactory to it of the loss, theft, destruction
or mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Agreement, if mutilated, Issuer will
execute and deliver a new Agreement of like tenor and date. Any such
new Agreement executed and delivered shall constitute an additional
contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
12. MISCELLANEOUS.
a. EXPENSES. Except as otherwise provided in Section 9,
each of the parties hereto shall bear and pay all costs and
expenses incurred by it or on its behalf in connection with
the transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers,
accountants and counsel.
b. WAIVER AND AMENDMENT. Any provision of this Agreement
may be waived at any time by the party that is entitled to the
benefits of such provision. This Agreement may not be
modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by the
parties hereto.
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c. ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARY;
SEVERABILITY. This Agreement, together with the Merger
Agreement and the other documents and instruments referred to
herein and therein, between Grantee and Issuer (a) constitutes
the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties
with respect to the subject matter hereof and (b) is not
intended to confer upon any person other than the parties
hereto (other than any transferees of the Option Shares or any
permitted transferee of this Agreement pursuant to Section
12(h) and other than as provided in the Merger Agreement) any
rights or remedies hereunder. If any term, provision, covenant
or restriction of this Agreement is held by a court of
competent jurisdiction or a federal or state governmental or
regulatory agency or authority to be invalid, void or
unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected,
impaired or invalidated. If for any reason such court or
regulatory agency determines that the Option does not permit
Holder to acquire, or does not require Issuer to repurchase,
the full number of shares of Issuer Common Stock as provided
in Sections 3 and 8 (as adjusted pursuant to Section 7), it is
the express intention of Issuer to allow Holder to acquire or
to require Issuer to repurchase such lesser number of shares
as may be permissible without any amendment or modification
hereof.
d. GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of
Tennessee without regard to any applicable conflicts of law
rules.
e. DESCRIPTIVE HEADINGS. The descriptive headings
contained herein are for convenience of reference only and
shall not affect in any way the meaning or interpretation of
this Agreement.
f. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given if
delivered personally, telecopied (with confirmation) or mailed
by registered or certified mail (return receipt requested) to
the parties at the addresses set forth in the Merger
Agreement(or at such other address for a party as shall be
specified by like notice).
g. COUNTERPARTS. This Agreement and any amendments
hereto may be executed in two counterparts, each of which
shall be considered one and the same agreement and shall
become effective when both counterparts have been signed, it
being understood that both parties need not sign the same
counterpart.
h. ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder or under the Option
shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written
consent of the other party, except that Grantee may assign
this Agreement to a wholly owned Subsidiary of Grantee and
Grantee may assign its rights hereunder in whole or in part
after the occurrence of a Purchase Event. Subject to the
preceding sentence, this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
i. FURTHER ASSURANCES. In the event of any exercise of
the Option by Holder, Issuer and Holder shall execute and
deliver all other documents and instruments
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and take all other action that may be reasonably necessary in
order to consummate the transactions provided for by such
exercise.
j. SPECIFIC PERFORMANCE. The parties hereto agree that
this Agreement may be enforced by either party through
specific performance, injunctive relief and other equitable
relief. Both parties further agree to waive any requirement
for the securing or posting of any bond in connection with the
obtaining of any such equitable relief and that this provision
is without prejudice to any other rights that the parties
hereto may have for any failure to perform this Agreement.
k. CONFIDENTIALITY AGREEMENTS. The parties hereto agree
that this Agreement supersedes any provision of the
Confidentiality Agreements that could be interpreted to
preclude the exercise of any rights or the fulfillment of any
obligations under this Agreement, and that none of the
provisions included in the Confidentiality Agreements will act
to preclude Holder from exercising the Option or exercising
any other rights under this Agreement or act to preclude
Issuer from fulfilling any of its obligations under this
Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock
Option Agreement to be signed by their respective officers thereunto duly
authorized, all as of the day and year first written above.
ATTEST: FIRST MUTUAL BANCORP, INC.
By: /s/ G. ▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------- --------------------------------
G. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Secretary Chairman, President, and
Chief Executive Officer
[CORPORATE SEAL]
ATTEST: UNION PLANTERS CORPORATION
By: /s/ ▇. ▇▇▇▇▇ House, Jr. By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------- --------------------------------
▇. ▇▇▇▇▇ House, Jr. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Secretary
[CORPORATE SEAL]
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PLAN OF MERGER EXHIBIT 2
OF
FIRST MUTUAL BANCORP, INC.
INTO AND WITH
UNION PLANTERS HOLDING CORPORATION
Pursuant to this Plan of Merger ("Plan of Merger"), FIRST
MUTUAL BANCORP, INC. ("Mutual"), a corporation organized and existing under the
Laws of the State of Delaware, shall be merged into and with UNION PLANTERS
HOLDING CORPORATION ("UPHC"), a corporation organized and existing under the
laws of the State of Tennessee and a wholly-owned subsidiary of UNION PLANTERS
CORPORATION, a corporation organized and existing under the laws of the State of
Tennessee ("UPC").
ARTICLE 1
DEFINITIONS
Except as otherwise provided herein, the capitalized terms set
forth below shall have the following meanings:
1.1 "ARTICLES OF MERGER" shall mean the Articles of Merger to be
executed by UPHC and filed with the Secretary of State of the State of Tennessee
relating to the Merger as contemplated by Section 2.1 of this Plan of Merger.
1.2 "CERTIFICATE OF MERGER" shall mean the Certificate of Merger to be
executed by UPHC and filed with the Secretary of State of the State of Delaware
relating to the Merger as contemplated by Section 2.1 of this Plan of Merger.
1.3 "CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person pursuant to
any Contract, Law, Order, or Permit.
1.4 "DGCL" shall mean the Delaware General Corporation Law.
1.5 "EFFECTIVE TIME" shall mean the date and time on which the Merger
becomes effective as defined in Section 2.2 of this Plan of Merger.
1.6 "EXCHANGE AGENT" shall mean the exchange agent selected by UPC.
1.7 "INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of
1986, as amended, and the rules and regulations promulgated thereunder.
1.8 "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.
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1.9 "MERGER" shall mean the merger of Mutual into and with UPHC as
provided in Section 2.1 of this Plan of Merger.
1.10 "MERGER AGREEMENT" shall mean the Agreement and Plan of
Reorganization, dated as of July 2, 1998, by and between UPC and Mutual.
1.11 "MUTUAL COMMON STOCK" shall mean the $.10 par value common stock
of Mutual.
1.12 "MUTUAL COMPANIES" shall mean, collectively, Mutual and all
Mutual Subsidiaries.
1.13 "MUTUAL STOCK PLANS" shall have the meaning set forth in the
Merger Agreement.
1.14 "MUTUAL SUBSIDIARIES" shall have the meaning set forth in the
Merger Agreement.
1.15 "NASD" shall mean the National Association of Securities Dealers,
Inc.
1.16 "NYSE" shall mean the New York Stock Exchange, Inc.
1.17 "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 the Comptroller of the
Currency, the Federal Deposit Insurance Corporation, the Office of Thrift
Supervision, all state regulatory agencies having jurisdiction over the Parties
and their respective Subsidiaries, the NASD, the NYSE, and the SEC.
1.18 "SEC" shall mean the United States Securities and Exchange
Commission.
1.19 "STOCKHOLDERS' MEETING" shall mean the meeting of the
stockholders of Mutual to be held pursuant to Section 8.1 of the Merger
Agreement, including any adjournment or adjournments thereof.
1.20 "SUBSIDIARIES" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or controls
50% or more of the outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% or more of the outstanding
equity securities is owned directly or indirectly by its parent; 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.
1.21 "SURVIVING CORPORATION" shall refer to UPHC as the surviving
corporation resulting from the Merger.
1.22 "TBCA" shall mean the Tennessee Business Corporation Act, as in
effect at the Effective Time.
1.23 "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.
1.24 "UPC COMMON STOCK" shall mean the $5.00 par value common stock of
UPC.
1.25 "UPC COMPANIES" shall mean, collectively, UPC and all UPC
Subsidiaries.
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1.26 "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.
1.27 "UPC RIGHTS" shall mean the preferred stock purchase nights
issued pursuant to the UPC Rights Agreement.
1.28 "UPC RIGHTS AGREEMENT" shall mean that certain Rights Agreement,
dated January 19, 1989, between UPC and Union Planters Bank, National
Association, as Rights Agent.
1.29 "UPHC COMMON STOCK" shall mean the $1.00 par value common stock
of UPHC.
Any capitalized term not defined herein shall have the meaning
ascribed to it in the Merger Agreement.
ARTICLE 2
TRANSACTIONS AND TERMS OF MERGER
2.1 MERGER. Subject to the terms and conditions of this Plan of
Merger, at the Effective Time, Mutual shall be merged with and into UPHC 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
Section ▇▇-▇▇-▇▇▇ of the TBCA and with the effect provided in Section ▇▇-▇▇-▇▇▇
of the TBCA (the "Merger"). UPHC shall be the Surviving Corporation resulting
from the Merger and shall continue to be governed by the Laws of the State of
Tennessee.
2.2 EFFECTIVE TIME. The Merger and the other transactions contemplated
by this Plan of Merger shall become effective on the date and at the time the
Articles of Merger shall become effective with the Secretary of State of the
State of Delaware and 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 duly authorized officers of each Party,
the Parties shall use their reasonable efforts to cause the Effective Time to
occur on or before the 15th business day (as designated by UPC) 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, and (ii) the date on which
the stockholders of Mutual approve the matters relating to this Plan of Merger
required to be approved by such stockholders by applicable Law.
2.3 CHARTER. The Charter of UPHC in effect immediately prior to the
Effective Time shall be the Charter of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
2.4 BYLAWS. The Bylaws of UPHC in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
2.5 DIRECTORS AND OFFICERS. The directors of UPHC in office
immediately prior to the Effective Time, together with such additional
individuals thereafter elected, shall serve as the directors of the Surviving
Corporation from and after the Effective Time in accordance with the Bylaws of
the Surviving Corporation. The officers of UPHC in office immediately prior to
the
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Effective Time, together with such additional individuals thereafter elected,
shall serve as the officers of the Surviving Corporation from and after the
Effective Time in accordance with the Bylaws 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 or Mutual, or the stockhold ers of either of the foregoing,
the shares of the constituent corporations shall be converted as follows:
(a) Each share of UPC Capital Stock issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(b) Each share of UPHC 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 Mutual Common Stock, but excluding
shares held by any Mutual Company or any UPC Company (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 be converted into a fraction of a share
of UPC Common Stock equal to the quotient obtained (the "Exchange Ratio") by
dividing [i] $18.50 by [ii] 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 chosen by UPC) for the 20
consecutive full trading days in which such shares are traded on the NYSE
preceding the third business day prior to the Closing Date. Pursuant to the UPC
Rights Agreement, each share of UPC Common Stock issued in connection with the
Merger upon conversion of Mutual Common Stock shall be accompanied by a UPC
Right.
3.2 ANTI-DILUTION PROVISIONS. In the event Mutual changes the
number of shares of Mutual Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, recapitalization.
or similar transaction with respect to such stock, the Exchange Ratio, as the
case may be, shall be proportionately adjusted. 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, recapitalization,
or similar transaction 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 MUTUAL OR UPC. Each of the shares of Mutual
Common Stock issued but not outstanding or held by any Mutual 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
Plan of Merger, each holder of shares of Mutual 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
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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
last sale price of UPC Common Stock on the NYSE-Composite Transactions List (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 stockholder in respect of any fractional shares.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, UPC
and Mutual shall cause the exchange agent selected by UPC (the "Exchange Agent")
to mail to the former stockholders of Mutual appropriate transmittal materials
(which shall specify that delivery shall be effected, and risk of loss and title
to the certificates theretofore representing shares of Mutual Common Stock shall
pass, only upon proper delivery of such certificates to the Exchange Agent).
After the Effective Time, each holder of shares of Mutual Common Stock (other
than shares to be canceled pursuant to Section 3.3 of this Plan of Merger)
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 Plan of Merger, together with all undelivered dividends
or distributions in respect of such shares (without interest thereon) pursuant
to Section 4.2 of this Plan of Merger. To the extent required by Section 3.4 of
this Plan of Merger, each holder of shares of Mutual 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 Mutual Common Stock is entitled as a
result of the Merger until such holder surrenders such holder's certificate or
certificates representing the shares of Mutual Common Stock for exchange as
provided in this Section 4.1. The certificate or certificates of Mutual Common
Stock so surrendered shall be duly endorsed as the Exchange Agent may require.
Any other provision of this Plan of Merger notwithstanding, neither the
Surviving Corporation nor the Exchange Agent shall be liable to a holder of
Mutual Common Stock for any amounts paid or property delivered in good faith to
a public official pursuant to any applicable abandoned property Law.
4.2 RIGHTS OF FORMER MUTUAL STOCKHOLDERS. At the Effective Time,
the stock transfer books of Mutual shall be closed as to holders of Mutual
Common Stock immediately prior to the Effective Time and no transfer of Mutual
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 Plan of Merger, each certificate theretofore representing shares of Mutual
Common Stock (other than shares to be canceled pursuant to Section 3.3 of this
Plan of Merger) shall from and after the Effective Time represent for all
purposes only the right to receive the consideration provided in Section 3.1 of
this Plan of Merger 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 Mutual in respect of such shares of Mutual Common Stock in accordance with
the terms of this Plan of Merger and which remain unpaid at the Effective Time.
To the extent permitted by Law, former stockholders of record of Mutual shall be
entitled to vote after the Effective Time at any meeting of UPC
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stockholders the number of whole shares of UPC Common Stock into which their
respective shares of Mutual Common Stock are converted, regardless of whether
such holders have exchanged their certificates representing Mutual Common Stock
for certificates representing UPC Common Stock in accordance with the provisions
of this Plan of Merger. 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 declaration shall include dividends or other distributions
on all shares issuable pursuant to this Plan of Merger, 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
Mutual 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 Plan of Merger. However, upon surrender of such Mutual 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 to be paid for fractional share
interests (without interest) shall be delivered and paid with respect to each
share represented by such certificate.
ARTICLE 5
MISCELLANEOUS
5.1 CONDITIONS PRECEDENT. Consummation of the Merger by UPHC shall
be conditioned on the satisfaction of, or waiver by UPC of, the conditions
precedent to the Merger set forth in Sections 9.1 and 9.2 of the Merger
Agreement. Consummation of the Merger by Mutual shall be conditioned on the
satisfaction of, or waiver by Mutual of, of the conditions precedent to the
Merger set forth in Sections 9.1 and 9.3 of the Merger Agreement.
5.2 TERMINATION. This Plan of Merger may be terminated at any time
prior to the Effective Time by the parties hereto as provided in Article 10 of
the Merger Agreement.
5.3 COUNTERPARTS. This Plan of Merger may be executed in
counterparts, each of which shall be an original; but all of such counterparts
together shall constitute one and the same instrument
IN WITNESS WHEREOF, the parties have caused their duly
authorized officers to execute this Plan of Merger as of the date first above
written.
FIRST MUTUAL BANCORP, INC.
ATTEST: /s/ G. ▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------- -------------------------------------
G. ▇▇▇▇ ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
President and Chief Executive Officer
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UNION PLANTERS HOLDING
CORPORATION
ATTEST: /s/ ▇. ▇▇▇▇▇ House, Jr. By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------- -------------------------------------
▇. ▇▇▇▇▇ House, Jr., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Secretary President
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AFFILIATE AGREEMENT EXHIBIT 3
Union Planters Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
and Chief Operating Officer
Gentlemen:
The undersigned is a shareholder of First Mutual Bancorp, Inc., a
corporation organized and existing under the laws of the State of Delaware, and
will become a shareholder of Union Planters Corporation ("UPC") pursuant to the
transactions described in the Agreement and Plan of Merger, dated as of July 2,
1998 (the "Agreement"), by and between UPC, Union Planters Holding Corporation
("Merger Subsidiary"), and First Mutual Bancorp, Inc. ("Mutual"). Under the
terms of the Agreement, Mutual will be merged with and into Merger Subsidiary
(the "Merger"), and shares of the $.10 par value common stock of Mutual ("Mutual
Common Stock") will be converted into and exchanged for shares of the $5.00 par
value common stock of UPC ("UPC Common Stock"). This Affiliate Agreement
represents an agreement between the undersigned and UPC regarding rights and
obligations of the undersigned in connection with the shares of UPC to be
received by the undersigned as a result of the Merger.
In consideration of the Merger and the mutual covenants contained
herein, the undersigned and UPC hereby agree as follows:
1. Affiliate Status. The undersigned understands and agrees that
as to Mutual the undersigned is an "affiliate" under Rule 145(c) as defined in
Rule 405 of the Rules and Regulations of the Securities and Exchange Commission
("SEC") under the Securities Act of 1933, as amended ("1933 Act"), and the
undersigned anticipates that the undersigned will be such an "affiliate" at the
time of the Merger.
2. Covenants and Warranties of Undersigned. The undersigned
represents, warrants, and agrees that:
(a) The UPC Common Stock received by the undersigned as a result
of the Merger will be taken for the undersigned's own account and not for
others, directly or indirectly, in whole or in part.
(b) UPC has informed the undersigned that any distribution by the
undersigned of UPC Common Stock has not been registered under the 1933 Act and
that shares of UPC Common Stock received pursuant to the Merger can only be sold
by the undersigned (1) following registration under the 1933 Act, or (2) in
conformity with the volume and other requirements of Rule 145(d) promulgated by
the SEC as the same now exists or may hereafter be amended, or (3) to the extent
some other exemption from registration under the 1933 Act might be available.
The undersigned understands that UPC is under no obligation to file a
registration statement with the SEC covering the disposition of the
undersigned's shares of UPC Common Stock or to take any other action necessary
to make compliance with an exemption from such registration available.
(c) The undersigned will register, and will cause each of the
other parties whose shares are deemed to be beneficially owned by the
undersigned pursuant to Section 7 hereof, to have all shares of Mutual Common
Stock beneficially owned by the undersigned registered in the name of the
undersigned or such parties, as applicable, prior to the Effective Date of the
Merger and, except for banks, broker-dealers or others serving as custodian or
trustee under any individual
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retirement account, pension plan or trust for the benefit of the undersigned
which are specifically identified as such on the stock transfer books of Mutual,
not in the name of any bank, broker-dealer, nominee, or clearinghouse.
(d) The undersigned is aware that UPC intends to treat the Merger
as a tax-free reorganization under Section 368 of the Internal Revenue Code
("Code") for federal income tax purposes. The undersigned agrees to treat the
transaction in the same manner as UPC for federal income tax purposes. The
undersigned acknowledges that Section 1.368-1(b) of the Income Tax Regulations
requires "continuity of interest" in order for the Merger to be treated as
tax-free under Section 368 of the Code. This requirement is satisfied if, taking
into account those Mutual shareholders who receive cash in exchange for their
stock, who receive cash in lieu of fractional shares, or who dissent from the
Merger, there is no plan, or intention on the part of the Mutual shareholders to
sell or otherwise dispose of the UPC Common Stock to be received in the Merger.
The undersigned has no prearrangement, plan, or intention to sell or otherwise
dispose of an amount of his UPC Common Stock to be received in the Merger which
would cause the foregoing requirement not to be satisfied.
3. Restrictions on Transfer. The undersigned understands and
agrees that stop order instructions with respect to the shares of UPC Common
Stock received by the undersigned pursuant to the Merger will be given to UPC's
Transfer Agent and that there will be placed on the certificates for such
shares, or shares issued in substitution thereof, a legend stating in substance:
"The shares represented by this certificate may not be sold,
transferred, or otherwise disposed of except or unless (1) covered by
an effective registration statement under the Securities Act of 1933,
as amended, (2) in accordance with (i) Rule 145(d) (in the case of
shares issued to an individual who is not an affiliate of UPC) or (ii)
Rule 144 (in the case of shares issued to an individual who is an
affiliate of UPC) of the Rules and Regulations of such Act, or (3) in
accordance with a legal opinion satisfactory to counsel for UPC that
such sale or offer is otherwise exempt from the registration
requirements of such Act."
Such legend will also be placed on any certificate representing UPC securities
issued subsequent to the original issuance of the UPC Common Stock pursuant to
the Merger as a result of any offer of such shares or any stock dividend, stock
split, or other recapitalization as long as the UPC Common Stock issued to the
undersigned pursuant to the Merger has not been transferred in such manner to
justify the removal of the legend therefrom. If the provisions of Rules 144 and
145 are amended to delete restrictions applicable to the UPC Common Stock
received by the undersigned pursuant to the Merger, or at the expiration of the
restrictive period set forth in Rule 145(d), UPC, upon the request of the
undersigned, will cause the certificates representing the shares of UPC Common
Stock issued to the undersigned in connection with the Merger to be reissued
free of any legend relating to the restrictions set forth in Rules 144 and
145(d) upon receipt by UPC of an opinion of its counsel to the effect that such
legend may be removed.
4. Understanding of Restrictions on Dispositions. The undersigned
has carefully read the Agreement and this Affiliate Agreement and discussed
their requirements and impact upon his ability to sell, transfer, or otherwise
dispose of the shares of UPC Common Stock received by the undersigned, to the
extent he believes necessary, with his counsel or counsel for Mutual.
5. Filing of Reports by UPC. UPC agrees, for a period of three
years after the Effective Time of the Merger, to file on a timely basis all
reports required to be filed by it pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended, so that the public information provisions
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of Rule 145(d) promulgated by the SEC as the same are presently in effect will
be available to the undersigned in the event the undersigned desires to transfer
any shares of UPC Common Stock issued to the undersigned pursuant to the Merger.
6. Transfer Under Rule 145(d). If the undersigned desires to sell
or otherwise transfer the shares of UPC Common Stock received by him in
connection with the Merger at any time during the restrictive period set forth
in Rule 145(d), the undersigned will provide the necessary representation letter
to the transfer agent for UPC Common Stock together with such additional
information as the transfer agent for UPC Common Stock may reasonably request.
If UPC's counsel concludes that such proposed sale or transfer complies with the
requirements of Rule 145(d), UPC shall cause such counsel to provide such
opinions as may be necessary to UPC's transfer agent so that the undersigned may
complete the proposed sale or transfer.
7. Acknowledgments. The undersigned recognizes and agrees that
the foregoing provisions also apply to all shares of the capital stock of Mutual
and UPC that are deemed to be beneficially owned by the undersigned pursuant to
applicable federal securities laws, which the undersigned agrees may include,
without limitation, shares owned or held in the name of (i) the undersigned's
spouse, (ii) any relative of the undersigned or of the undersigned's spouse who
has the same home as the undersigned, (iii) any trust or estate in which the
undersigned, the undersigned's spouse, and any such relative collectively own at
least a 10% beneficial interest or of which any of the foregoing serves as
trustee, executor, or in any similar capacity, and (iv) any corporation or other
organization in which the undersigned, the undersigned's spouse and any such
relative collectively own at least 10% of any class of equity securities or of
the equity interest. The undersigned further recognizes that, in the event that
the undersigned is a director or officer of UPC or becomes a director or officer
of UPC upon consummation of the Merger, among other things, any sale of UPC
Common Stock by the undersigned within a period of less than six months
following the Effective Time of the Merger may subject the undersigned to
liability pursuant to Section 16(b) of the Securities Exchange Act of 1934, as
amended.
8. Miscellaneous. This Affiliate Agreement is the complete
agreement between UPC and the undersigned concerning the subject matter hereof.
Any notice required to be sent to any party hereunder shall be sent by
registered or certified mail, return receipt requested, using the addresses set
forth herein or such other address as shall be furnished in writing by the
parties. This Affiliate Agreement shall be governed by the laws of the State of
Tennessee.
This Affiliate Agreement is executed as of the __ day of
_____________, 199_.
Very truly yours,
------------------------------
Affiliate Signature
------------------------------
Printed Name
______________________________
______________________________
______________________________
Address
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Add below the signatures of all registered owners of shares
deemed to be beneficially owned by the Affiliate.
------------------------------
Name:
-------------------------
------------------------------
Name:
-------------------------
AGREED TO AND ACCEPTED as of ______________________, 1998.
UNION PLANTERS CORPORATION
By:
---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
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