Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
By and Between
FIRST UNITED BANCORPORATION
And
REGIONS FINANCIAL CORPORATION
Dated as of October 28, 1997
TABLE OF CONTENTS
Page
Parties................................................................. 1
Preamble................................................................ 1
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
ARTICLE 2 - TERMS OF MERGER............................................. 2
2.1 Certificate of Incorporation............................... 2
2.2 Bylaws..................................................... 2
2.3 Directors and Officers..................................... 2
ARTICLE 3 - MANNER OF CONVERTING SHARES................................. 3
3.1 Conversion of Shares....................................... 3
3.2 Anti-Dilution Provisions................................... 3
3.3 Shares Held by First United or Regions..................... 3
3.4 Dissenting Stockholders.................................... 3
3.5 Fractional Shares.......................................... 4
3.6 Conversion of Stock Options; Restricted Stock.............. 4
ARTICLE 4 - EXCHANGE OF SHARES.......................................... 5
4.1 Exchange Procedures........................................ 5
4.2 Rights of Former First United Stockholders................. 5
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF FIRST UNITED.............. 6
5.1 Organization, Standing, and Power.......................... 6
5.2 Authority; No Breach By Agreement.......................... 6
5.3 Capital Stock.............................................. 7
5.4 First United Subsidiaries.................................. 7
5.5 Financial Statements....................................... 8
5.6 Absence of Undisclosed Liabilities......................... 9
5.7 Absence of Certain Changes or Events....................... 9
5.8 Tax Matters................................................ 9
5.9 Assets..................................................... 10
5.10 Environmental Matters...................................... 11
5.11 Compliance With Laws....................................... 12
5.12 Labor Relations............................................ 12
5.13 Employee Benefit Plans..................................... 12
5.14 Material Contracts......................................... 15
5.15 Legal Proceedings.......................................... 15
5.16 Statements True and Correct................................ 15
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5.17 Accounting, Tax, and Regulatory Matters.................... 16
5.18 Articles of Incorporation Provisions....................... 16
5.19 Support Agreements......................................... 16
5.20 Derivatives Contracts...................................... 16
5.21 Year 2000.................................................. 17
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF REGIONS................... 17
6.1 Organization, Standing, and Power.......................... 17
6.2 Authority; No Breach By Agreement.......................... 17
6.3 Capital Stock.............................................. 18
6.4 SEC Filings; Financial Statements.......................... 18
6.5 Absence of Undisclosed Liabilities......................... 19
6.6 Absence of Certain Changes or Events....................... 19
6.7 Compliance With Laws....................................... 19
6.8 Legal Proceedings.......................................... 20
6.9 Statements True and Correct................................ 20
6.10 Accounting, Tax, and Regulatory Matters.................... 21
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION.................... 21
7.1 Covenants of Both Parties.................................. 21
7.2 Covenants of First United.................................. 21
7.3 Covenants of Regions....................................... 23
7.4 Adverse Changes in Condition............................... 23
7.5 Reports.................................................... 23
ARTICLE 8 - ADDITIONAL AGREEMENTS....................................... 24
8.1 Registration Statement; Proxy Statement;
Stockholder Approval ................................... 24
8.2 Nasdaq/NMS Listing......................................... 24
8.3 Applications............................................... 24
8.4 Agreement as to Efforts to Consummate...................... 25
8.5 Investigation and Confidentiality.......................... 25
8.6 Press Releases............................................. 25
8.7 Certain Actions............................................ 25
8.8 Tax Matters................................................ 26
8.9 Agreement of Affiliates.................................... 26
8.10 Employee Benefits and Contracts............................ 27
8.11 Indemnification............................................ 27
8.12 Articles of Incorporation Provisions....................... 28
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO
CONSUMMATE........................................................ 28
9.1 Conditions to Obligations of Each Party.................... 28
9.2 Conditions to Obligations of Regions....................... 29
9.3 Conditions to Obligations of First United.................. 30
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ARTICLE 10 - TERMINATION................................................ 31
10.1 Termination................................................ 31
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........................................ 40
11.4 Entire Agreement........................................... 41
11.5 Amendments................................................. 41
11.6 Waivers.................................................... 41
11.7 Assignment................................................. 41
11.8 Notices.................................................... 42
11.9 Governing Law.............................................. 42
11.10 Counterparts............................................... 43
11.11 Captions................................................... 43
11.12 Severability............................................... 43
Signatures.............................................................. 43
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of October 28, 1997, by and between FIRST UNITED BANCORPORATION ("First
United"), a corporation organized and existing under the laws of the State of
South Carolina, with its principal office located in Anderson, South Carolina,
and REGIONS FINANCIAL CORPORATION ("Regions"), a corporation organized and
existing under the laws of the State of Delaware, with its principal office
located in Birmingham, Alabama.
Preamble
The Boards of Directors of First United and Regions are of the opinion that
the transactions described herein are in the best interests of the parties and
their respective stockholders. This Agreement provides for the acquisition of
First United by Regions pursuant to the merger of First United into and with
Regions. At the effective time of such merger, the outstanding shares of the
capital stock of First United shall be converted into shares of the common stock
of Regions (except as provided herein). As a result, stockholders of First
United shall become stockholders of Regions and the subsidiaries of First United
shall continue to conduct their business and operations as wholly-owned
subsidiaries of Regions. The transactions described in this Agreement are
subject to the approvals of the stockholders of First United, the Board of
Governors of the Federal Reserve System and other regulatory agencies and the
satisfaction of certain other conditions described in this Agreement. It is the
intention of the parties to this Agreement that the merger (i) for federal
income tax purposes shall qualify as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code and (ii) for accounting purposes
shall be accounted for as a "pooling of interests."
As a condition and inducement to Regions' willingness to consummate the
transactions contemplated by this Agreement, prior to the execution of this
Agreement, each of First United's directors will execute and deliver to Regions
an agreement (a "Support Agreement"), in substantially the form of Exhibit 1 to
this Agreement.
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, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, 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, First United shall be merged into and with Regions in accordance
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with the provisions of Section 252 of the DGCL and with the effect provided in
Section 259 of the DGCL and in accordance with Section ▇▇-▇▇-▇▇▇ of the SCBCA
with the effect provided in Section ▇▇-▇▇-▇▇▇ of the SCBCA (the "Merger").
Regions shall be the Surviving Corporation of the Merger and shall continue to
be governed by the Laws of the State of Delaware. The Merger shall be
consummated pursuant to the terms of this Agreement, which has been approved and
adopted by the Boards of Directors of First United and Regions.
1.2 Time and Place of Closing. The Closing will take place at 9:00 A.M. on
the date that the Effective Time occurs (or the immediately preceding day if the
Effective Time is earlier than 9:00 A.M.), or at such other time as the Parties,
acting through their duly authorized officers, may mutually agree. The place of
Closing shall be at the offices of Regions, or such other place as may be
mutually agreed upon by the Parties.
1.3 Effective Time. The Merger and other transactions contemplated by this
Agreement shall become effective on the date and at the time the South Carolina
Articles of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of South Carolina and the Delaware Certificate
of Merger reflecting the Merger shall become effective with the Secretary of
State of the State of Delaware (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 the last day of the month in
which occurs 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, or (ii)
the date on which the stockholders of First United approve this Agreement to the
extent such approval is required by applicable Law.
ARTICLE 2
TERMS OF MERGER
2.1 Certificate of Incorporation. The Certificate of Incorporation of
Regions in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation after the Effective
Time until otherwise amended or repealed.
2.2 Bylaws. The Bylaws of Regions 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 Regions in office immediately
prior to the Effective Time, together with such additional persons as may
thereafter be elected, shall serve as the directors of the Surviving Corporation
from and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation. The officers of Regions in office immediately prior to the
Effective Time, together with such additional persons as may thereafter be
elected, shall serve as the officers of the Surviving Corporation from and after
the Effective Time in accordance with the Bylaws of the Surviving Corporation.
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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 the holders thereof, the shares of the constituent corporations shall be
converted as follows:
(a) Each share of Regions 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 First United Common Stock (excluding shares held by First
United or any of its Subsidiaries or by Regions or any of its Subsidiaries, in
each case other than in a fiduciary capacity or as a result of debts previously
contracted) issued and outstanding at the Effective Time shall be converted into
.5173 of a share of Regions Common Stock, subject to adjustment as provided in
Section 10.1(g) of this Agreement (the "Exchange Ratio").
3.2 Anti-Dilution. Provisions In the event First United changes the number
of shares of First United Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock, the Exchange Ratio shall be
proportionately adjusted. In the event Regions changes the number of shares of
Regions Common Stock issued and outstanding prior to the Effective Time as a
result of a stock split, stock dividend, or similar recapitalization with
respect to such stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be prior to
the Effective Time, the Exchange Ratio shall be proportionately adjusted.
3.3 Shares. Held by First United or Regions. Each of the shares of First
United Common Stock held by any First United Company or by any Regions 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 Dissenting Stockholders. Any holder of shares of First United Common
Stock who perfects such holder's dissenters' rights of appraisal in accordance
with and as contemplated by Sections ▇▇-▇▇-▇▇▇, et seq. of the SCBCA shall be
entitled to receive the value of such shares in cash as determined pursuant to
such provision of Law; provided, however, that no such payment shall be made to
any dissenting stockholder unless and until such dissenting stockholder has
complied with the applicable provisions of the SCBCA and surrendered to First
United the certificate or certificates representing the shares for which payment
is being made. In the event that after the Effective Time a dissenting
stockholder of First United fails to perfect, or effectively withdraws or loses,
such holder's right to appraisal and of payment for such holder's shares,
Regions shall issue and deliver the consideration to which such holder of shares
of First United Common Stock is entitled under this Article 3 (without interest)
upon surrender by such holder of the certificate or certificates representing
shares of First United Common Stock held by such holder. First United will
establish an escrow account with an amount sufficient to satisfy the maximum
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aggregate payment that may be required to be paid to dissenting stockholders.
Upon satisfaction of all claims of dissenting stockholders, the remaining
escrowed amount, reduced by payment of the fees and expenses of the escrow
agent, will be returned to First United.
3.5 Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of shares of First United Common Stock exchanged pursuant
to the Merger, or of options to purchase shares of First United Common Stock,
who would otherwise have been entitled to receive a fraction of a share of
Regions 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 Regions Common Stock
multiplied by the market value of one share of Regions Common Stock at the
Effective Time, in the case of shares exchanged pursuant to the Merger, or the
date of exercise, in the case of options. The market value of one share of
Regions Common Stock at the Effective Time or the date of exercise, as the case
may be, shall be the last sale price of such common stock on the Nasdaq/NMS (as
reported by The Wall Street Journal or, if not reported thereby, any other
authoritative source) on the last trading day preceding the Effective Time, in
the case of shares exchanged pursuant to the Merger, and the date of exercise,
in the case of options. No such holder will be entitled to dividends, voting
rights, or any other rights as a stockholder in respect of any fractional
shares.
3.6 Conversion of Stock Options; Restricted Stock.
(a) At the Effective Time, all rights, which are outstanding at the
Effective Time, with respect to First United Common Stock pursuant to stock
options or stock appreciation rights ("First United Options") granted by First
United under the First United Stock Plans whether or not exercisable, shall be
converted into and become rights with respect to Regions Common Stock, and
Regions shall assume each First United Option, in accordance with the terms of
the First United Stock Plan and stock option agreement by which it is evidenced.
From and after the Effective Time, (i) each First United Option assumed by
Regions may be exercised solely for shares of Regions Common Stock (or cash in
the case of stock appreciation rights), (ii) the number of shares of Regions
Common Stock subject to such First United Option shall be equal to the number of
shares of First United Common Stock subject to such First United Option
immediately prior to the Effective Time multiplied by the Exchange Ratio, and
(iii) the per share exercise price under each such First United Option shall be
adjusted by dividing the per share exercise price under each such First United
Option by the Exchange Ratio and rounding down to the nearest cent. It is
intended that the foregoing assumption shall be undertaken in a manner that will
not constitute a "modification" as defined in Section 424 of the Internal
Revenue Code, as to any stock option which is an "incentive stock option." First
United agrees to take all necessary steps to effectuate the foregoing provisions
of this Section 3.6.
(b) All restrictions or limitations on transfer with respect to First
United Common Stock awarded under the First United Stock Plans or any other
plan, program, or arrangement of any First United Company, to the extent that
such restrictions or limitations shall not have already lapsed, and except as
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otherwise expressly provided in such plan, program, or arrangement, shall remain
in full force and effect with respect to shares of Regions Common Stock into
which such restricted stock is converted pursuant to Section 3.1 of this
Agreement.
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. Promptly after the Effective Time, Regions shall
cause the exchange agent selected by Regions (the "Exchange Agent") to mail to
the former stockholders of First United appropriate transmittal materials (which
shall specify that delivery shall be effected, and risk of loss and title to the
certificates theretofore representing shares of First United Common Stock shall
pass, only upon proper delivery of such certificates to the Exchange Agent).
After the Effective Time, each holder of shares of First United 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 3.5 of this
Agreement, each holder of shares of First United 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 Regions Common Stock to which such holder may be otherwise
entitled (without interest). Regions shall not be obligated to deliver the
consideration to which any former holder of First United Common Stock is
entitled as a result of the Merger until such holder surrenders such holder's
certificate or certificates representing the shares of First United Common Stock
for exchange as provided in this Section 4.1. The certificate or certificates of
First United Common Stock so surrendered shall be duly endorsed as the Exchange
Agent may require. Any other provision of this Agreement notwithstanding,
neither Regions, First United, nor the Exchange Agent shall be liable to a
holder of First United 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 First United Stockholders. At the Effective Time, the
stock transfer books of First United shall be closed as to holders of First
United Common Stock immediately prior to the Effective Time, and no transfer of
First United Common Stock by any such holder shall thereafter be made or
recognized. Until surrendered for exchange in accordance with the provisions of
Section 4.1 of this Agreement, each certificate theretofore representing shares
of First United Common Stock (other than shares to be canceled pursuant to
Section 3.3 of this Agreement or as to which the holder thereof has perfected
dissenters' rights of appraisal as contemplated by Section 3.4 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 3.5 of
this Agreement in exchange therefor. To the extent permitted by Law, former
stockholders of record of First United shall be entitled to vote after the
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Effective Time at any meeting of Regions stockholders the number of whole shares
of Regions Common Stock into which their respective shares of First United
Common Stock are converted, regardless of whether such holders have exchanged
their certificates representing First United Common Stock for certificates
representing Regions Common Stock in accordance with the provisions of this
Agreement. Whenever a dividend or other distribution is declared by Regions on
the Regions Common Stock, the record date for which is at or after the Effective
Time, the declaration shall include dividends or other distributions on all
shares of Regions Common Stock issuable pursuant to this Agreement, but no
dividend or other distribution payable to the holders of record of Regions
Common Stock as of any time subsequent to the Effective Time shall be delivered
to the holder of any certificate representing shares of First United 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 First United Common Stock certificate, both the
Regions Common Stock certificate (together with all such undelivered dividends
or other distributions without interest) and any undelivered 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 FIRST UNITED
First United hereby represents and warrants to Regions as follows:
5.1 Organization, Standing, and Power. First United is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
South Carolina, and has the corporate power and authority to carry on its
business as now conducted and to own, lease, and operate its Assets. First
United is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on First United.
5.2 Authority; No Breach By Agreement
(a) First United has the corporate power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby, subject to the approval of this
Agreement by the holders of a two-thirds of the outstanding shares of First
United Common Stock. The execution, delivery, and performance of this Agreement
and the consummation of the transactions contemplated herein, including the
Merger, have been or will be duly and validly authorized by all necessary
corporate action in respect thereof on the part of First United, subject to the
approval of this Agreement by the holders of two-thirds of the outstanding
shares of First United Common Stock. Subject to such requisite approval, this
Agreement represents a legal, valid, and binding obligation of First United,
enforceable against First United in accordance with its terms (except in all
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cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by First United,
nor the consummation by First United of the transactions contemplated hereby,
nor compliance by First United with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of First United's Articles
of Incorporation or Bylaws, or (ii) except as disclosed in Section 5.2(b) of the
First United Disclosure Memorandum, 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 First United Company under, any Contract or Permit of any First
United Company, or (iii) subject to receipt of the requisite approvals referred
to in Section 9.1(b) of this Agreement, violate any Law or Order applicable to
any First United Company or any of their respective Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
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 First United, no notice to, filing with, or Consent
of, any public body or authority is necessary for the consummation by First
United of the Merger and the other transactions contemplated in this Agreement.
5.3 Capital Stock.
(a) The authorized capital stock of First United consists of 15,000,000
shares of First United Common Stock, of which 3,983,910 shares are issued and
outstanding as of the date of this Agreement and not more than 4,247,957 shares
will be issued and outstanding at the Effective Time and 10,000,000 shares of
preferred stock (no par value), of which none are issued and outstanding. All of
the issued and outstanding shares of First United Common Stock are duly and
validly issued and outstanding and are fully paid and nonassessable. None of the
outstanding shares of First United Common Stock has been issued in violation of
any preemptive rights of the current or past stockholders of First United. First
United has reserved 430,091 shares of First United Common Stock for issuance
under the First United Stock Plans, pursuant to which options to purchase not
more than 264,047 shares of First United Common Stock are outstanding.
(b) Except as set forth in Section 5.3(a) of this Agreement, there are no
shares of capital stock or other equity securities of First United outstanding
and no outstanding options, warrants, scrip, rights to subscribe to, calls, or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of the capital stock of First
United or contracts, commitments, understandings, or arrangements by which First
United is or may be bound to issue additional shares of First United capital
stock or options, warrants, or rights to purchase or acquire any additional
shares of its capital stock.
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5.4 First United Subsidiaries. First United has disclosed in Section 5.4 of
the First United Disclosure Memorandum all of the First United Subsidiaries as
of the date of this Agreement. Except as disclosed, First United or one of its
Subsidiaries owns all of the issued and outstanding shares of capital stock of
each First United Subsidiary. No equity securities of any First United
Subsidiary are or may become required to be issued (other than to a First United
Company) by reason of any options, warrants, scrip, rights to subscribe to,
calls, or commitments of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of the capital stock of any
such Subsidiary, and there are no Contracts by which any First United Subsidiary
is bound to issue (other than to a First United Company) additional shares of
its capital stock or options, warrants, or rights to purchase or acquire any
additional shares of its capital stock or by which any First United Company is
or may be bound to transfer any shares of the capital stock of any First United
Subsidiary (other than to a First United Company). There are no Contracts
relating to the rights of any First United Company to vote or to dispose of any
shares of the capital stock of any First United Subsidiary. All of the shares of
capital stock of each First United Subsidiary held by a First United Company are
duly authorized, validly issued, and fully paid and nonassessable (except
pursuant to 12 U.S.C. Section 55 in the case of national banks and comparable,
applicable state Law, if any, in the case of state depository institutions)
under the applicable corporation Law of the jurisdiction in which such
Subsidiary is incorporated or organized and are owned by the First United
Company free and clear of any Lien. Each First United Subsidiary is a
corporation, and is duly organized, validly existing, and 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 First United
Subsidiary is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on First United. Each First United 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 the Savings Association Insurance
Fund, as appropriate.
5.5 Financial Statements. First United has disclosed in Section 5.5 of the
First United Disclosure Memorandum, and has delivered to Regions copies of, all
First United Financial Statements prepared for periods ended prior to the date
hereof and will deliver to Regions copies of all First United Financial
Statements prepared subsequent to the date hereof. The First United Financial
Statements (as of the dates thereof and for the periods covered thereby) (i) are
or, if dated after the date of this Agreement, will be in accordance with the
books and records of the First United Companies, which are or will be, as the
case may be, materially complete and correct and which have been or will have
been, as the case may be, maintained in accordance with good business practices,
and (ii) present or will present, as the case may be, fairly the consolidated
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financial position of the First United Companies as of the dates indicated and
the consolidated results of operations, changes in stockholders' equity, and
cash flows of the First United Companies for the periods indicated, in
accordance with GAAP (subject to any exceptions as to consistency specified
therein or as may be indicated in the notes thereto or, in the case of interim
financial statements, to normal recurring year-end adjustments that are not
material).
5.6 Absence of Undisclosed Liabilities. No First United Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First United, except Liabilities which
are accrued or reserved against in the consolidated balance sheets of First
United as of June 30, 1997 included in the First United Financial Statements or
reflected in the notes thereto. No First United Company has incurred or paid any
Liability since June 30, 1997, except for such Liabilities incurred or paid (a)
to counsel, accountants and investment bankers in connection with the Merger or
(b) 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 First United.
5.7 Absence of Certain Changes or Events. Since June 30, 1997, except as
disclosed in the First United Financial Statements or in Section 5.7 of the
First United Disclosure Memorandum, (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 First United, and (ii) the First
United Companies have not taken any action, or failed to take any action, prior
to the date of this Agreement, which action or failure, if taken after the date
of this Agreement, would represent or result in a material breach or violation
of any of the covenants and agreements of First United provided in Article 7 of
this Agreement.
5.8 Tax Matters.
(a) All Tax returns required to be filed by or on behalf of any of the
First United Companies have been timely filed, or requests for extensions have
been timely filed, granted, and have not expired for periods ended on or before
December 31, 1996, and on or before the date of the most recent fiscal year end
immediately preceding the Effective Time to the Knowledge of First United, and
all returns filed are complete and accurate to the Knowledge of First United.
All Taxes shown on filed 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 First United, except to the extent
reserved against in the First United 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 First United 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
First United Companies for the period or periods through and including the date
of the respective First United Financial Statements has been made and is
reflected on such First United Financial Statements.
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(d) Deferred Taxes of the First United Companies have been adequately
provided for in the First United Financial Statements.
(e) Each of the First United 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 First United.
(f) None of the First United 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.
(g) There are no Liens with respect to Taxes upon any of the assets of the
First United Companies.
(h) There has not been an ownership change, as defined in Internal Revenue
Code Section 382(g), of the First United Companies that occurred during or after
any Taxable Period in which the First United Companies incurred a net operating
loss that carries over to any Taxable Period ending after December 31, 1994.
(i) No First United Company has filed any consent under Section 341(f) of
the Internal Revenue Code concerning collapsible corporations.
(j) All material elections with respect to Taxes affecting the First United
Companies as of the date of this Agreement have been or will be timely made as
set forth in Section 5.8 of the First United Disclosure Memorandum. After the
date hereof, no election with respect to Taxes will be made without the prior
written consent of Regions, which consent will not be unreasonably withheld.
(k) No First United Company has or has had a permanent establishment in any
foreign country, as defined in any applicable tax treaty or convention between
the United States and such foreign country.
5.9 Assets. Except as disclosed or reserved against in the First United
Financial Statements, the First United Companies have good and marketable title,
free and clear of all Liens, to all of their respective Assets that are material
to the business of the First United Companies. All material tangible properties
10
used in the businesses of the First United Companies are in good condition,
reasonable wear and tear excepted, and are usable in the ordinary course of
business consistent with First United's past practices. All Assets which are
material to the business of the First United Companies, which are held under
leases or subleases by any of the First United 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.
5.10 Environmental Matters
(a) To the Knowledge of First United, each First United Company, its
Participation Facilities, and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except for violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on First United.
(b) To the Knowledge of First United, there is no Litigation pending or
threatened before any court, governmental agency, or authority, or other forum
in which any First United Company or any of its Participation Facilities has
been or, with respect to threatened Litigation, may be named as a defendant (i)
for alleged noncompliance (including by any predecessor) with any Environmental
Law or (ii) relating to the release into the environment of any Hazardous
Material (as defined below) or oil, whether or not occurring at, on, under, or
involving a site owned, leased, or operated by any First United 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 First United.
(c) To the Knowledge of First United, there is no Litigation pending or
threatened before any court, governmental agency, or board, or other forum in
which any of its Loan Properties (or First United in respect of such Loan
Property) has been or, with respect to threatened Litigation, may 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 or oil, 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 First United.
(d) To the Knowledge of First United, 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 First United.
(e) To the Knowledge of First United, during the period of (i) any First
United Company's ownership or operation of any of their respective current
properties, (ii) any First United Company's participation in the management of
any Participation Facility, or, (iii) any First United Company's holding of a
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security interest in a Loan Property, there have been no releases of Hazardous
Material or oil in, on, under, or affecting such properties, except such as are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on First United. Prior to the period of (i) any First United
Company's ownership or operation of any of their respective current properties,
(ii) any First United Company's participation in the management of any
Participation Facility, or (iii) any First United Company's holding of a
security interest in a Loan Property, to the Knowledge of First United, there
were no releases of Hazardous Material or oil 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 First United.
5.11 Compliance With Laws. Each First United Company has in effect all
Permits necessary for it to own, lease, or operate its 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 First United, 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 First United.
Except as disclosed in Section 5.11 of the First United Disclosure Memorandum,
none of the First United 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 First United; 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 First United Company is not in
compliance with any of the material Laws or material 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 First United, (ii) threatening to revoke any material
Permits the revocation of which is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on First United, or (iii) requiring any
First United 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 management, or the payment of dividends.
5.12 Labor Relations. No First United Company is the subject of any
Litigation asserting that it or any other First United 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 First United Company
to bargain with any labor organization as to wages or conditions of employment,
nor is any First United 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
First United Company, pending or threatened, or to its Knowledge, is there any
activity involving any First United Company's employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
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5.13 Employee Benefit Plans
(a) First United has disclosed in Section 5.13 of the First United
Disclosure Memorandum, and has delivered or made available to Regions prior to
the execution of this Agreement correct and complete copies in each case of, all
pension, retirement, profit-sharing, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, bonus, or other incentive
plan, all other written employee programs 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 First United 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 (collectively, the "First United
Benefit Plans"). Any of the First United 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 "First United ERISA Plan." Any First United
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 "First United Pension Plan." On or after September 26, 1980, neither First
United nor any First United Company has had 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)). The only "employee pension benefit plan," as
defined in Section 3(2) of ERISA, ever maintained by any First United Company
that was intended to qualify under Section 401(a) of the Internal Revenue Code,
is the First United Bancorporation Employee Savings Plan & Trust.
(b) First United has delivered or made available to Regions 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 First
United Benefit Plans (including insurance contracts), and all amendments
thereto, (ii) with respect to any such First United Benefit Plans or amendments,
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, 1974, (iii) annual reports or returns, audited or unaudited financial
statements, actuarial valuations and reports, and summary annual reports
prepared for any First United Benefit Plan with respect to the most recent three
plan years, and (iv) the most recent summary plan descriptions and any material
modifications thereto.
(c) All First United Benefit Plans are in compliance with the applicable
terms of ERISA, the Internal Revenue Code, and any other applicable Laws the
breach or violation of which are reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on First United. Each First United
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
13
Internal Revenue Service, and First United is not aware of any circumstances
which will or could result in revocation of any such favorable determination
letter. Each trust created under any First United ERISA Plan has been determined
to be exempt from Tax under Section 501(a) of the Internal Revenue Code and
First United is not aware of any circumstance which will or could result in
revocation of such exemption. With respect to each First United Benefit Plan,
except as disclosed in Section 5.13(c) of the First United Disclosure
Memorandum, to the Knowledge of First United, no event has occurred which will
or could 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. There
is no material pending or threatened Litigation relating to any First United
ERISA Plan. No First United Company has engaged in a transaction with respect to
any First United Benefit Plan that, assuming the taxable period of such
transaction expired as of the date hereof, would subject any First United
Company to a 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 First
United.
(d) No First United Pension Plan has any "unfunded current liability," as
that term is defined in Section 302(d)(8)(A) of ERISA, and the fair market value
of the assets of any such plan exceeds the plan's "benefit liabilities," as that
term is defined in Section 4001(a)(16) of ERISA, when determined under actuarial
factors that would apply if the plan terminated in accordance with all
applicable legal requirements. Since the date of the most recent actuarial
valuation, there has been (i) no material change in the financial position of
any First United Pension Plan, (ii) no change in the actuarial assumptions with
respect to any First United Pension Plan, and (iii) no increase in benefits
under any First United Pension Plan as a result of plan amendments or changes in
applicable Law which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First United or materially adversely
affect the funding status of any such plan. Neither any First United Pension
Plan nor any "single-employer plan," within the meaning of Section 4001(a)(15)
of ERISA, currently or formerly maintained by any First United Company, or the
single-employer plan of any entity which is considered one employer with First
United under Section 4001 of ERISA or Section 414 of the Internal Revenue Code
or Section 302 of ERISA (whether or not waived) (an "ERISA Affiliate") has an
"accumulated funding deficiency" within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA. No First United Company has
provided, or is required to provide, security to a First United Pension Plan or
to any single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29)
of the Code.
(e) No liability under Title IV of ERISA has been or is expected to be
incurred by any First United Company with respect to any defined benefit plan
currently or formerly maintained by any of them or by any ERISA Affiliate).
(f) No First United Company has any obligations for retiree health and
retiree life benefits under any of the First United Benefit Plans.
(g) Except as set forth in Section 5.13(g) of the First United Disclosure
Memorandum, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
14
payment (including, without limitation, severance, unemployment compensation,
golden parachute, or otherwise) becoming due to any director or any employee of
any First United Company from any First United Company under any First United
Benefit Plan or otherwise, (ii) increase any benefits otherwise payable under
any First United Benefit Plan, or (iii) result in any acceleration of the time
of payment or vesting of any such benefit.
(h) No oral or written representation or communication with respect to any
aspect of the First United Benefit Plans has been made to employees of any of
the First United Companies prior to the date hereof which is not in accordance
with the written or otherwise preexisting terms and provisions of such plans.
All First United Benefit Plan documents and annual reports or returns, audited
or unaudited financial statements, actuarial valuations, summary annual reports,
and summary plan descriptions issued with respect to the First United Benefit
Plans are correct and complete and there have been no changes in the information
set forth therein.
5.14 Material Contracts. Except as disclosed in the Section 5.14 of the
First United Disclosure Memorandum, none of the First United 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 First United Company or the guarantee
by any First United 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, trade payables, and
Contracts relating to borrowings or guarantees made in the ordinary course of
business), (iii) any Contracts between or among First United Companies; and (iv)
any other Contract or amendment thereto that would be required to be filed as an
exhibit to a Form 10-K filed by First United with the Securities and Exchange
Commission (the "SEC") as of the date of this Agreement if First United were
required to file a Form 10-K with the SEC (together with all Contracts referred
to in Sections 5.9 and 5.13(a) of this Agreement, the "First United Contracts").
None of the First United Companies is in Default under any First United Contract
which, individually or in the aggregate, is reasonably likely to have a Material
Adverse Effect on First United.
5.15 Legal Proceedings. Except to the extent specifically reserved against
in the First United Financial Statements dated prior to the date of this
Agreement, there is no Litigation instituted or pending, or, to the Knowledge of
First United, threatened (or unasserted but considered probable of assertion and
which if asserted would have at least a reasonable probability of an unfavorable
outcome) against any First United Company, or against any Asset, interest, or
right of any of them, that is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First United, nor are there any Orders
of any Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any First United Company, that are reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on First
United.
15
5.16 Statements True and Correct. No statement, certificate, instrument, or
other writing furnished or to be furnished by any First United Company or any
Affiliate thereof to Regions pursuant to this Agreement or any other document,
agreement, or instrument referred to herein contains or will contain any untrue
statement of material fact or will omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. None of the information supplied or to be supplied by any
First United Company or any Affiliate thereof for inclusion in the Registration
Statement to be filed by Regions 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 First United Company or any Affiliate thereof for inclusion in
the Proxy Statement to be mailed to First United's stockholders in connection
with the Stockholders' Meeting, and any other documents to be filed by a First
United Company or any Affiliate thereof with the SEC or any other Regulatory
Authority in connection with the transactions contemplated hereby, will, at the
respective time such documents are filed, and with respect to the Proxy
Statement, when first mailed to the stockholders of First United, 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
thereunder 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 thereunder 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 First United Company or any Affiliate thereof is responsible
for filing with any Regulatory Authority in connection with the transactions
contemplated hereby will comply as to form in all material respects with the
provisions of applicable Law.
5.17 Accounting, Tax, and Regulatory Matters. No First United Company or
any Affiliate thereof has taken any action, or agreed to take any action, or has
any Knowledge of any fact or circumstance that is reasonable likely to (i)
prevent the transactions contemplated hereby, including the Merger, from
qualifying for pooling-of-interests accounting treatment or treatment 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. To the Knowledge of
First United, there exists no fact, circumstance, or reason why the requisite
Consents referred to in Section 9.1(b) of this Agreement cannot be received in a
timely manner without imposition of any condition of the type described in the
second sentence of such Section 9.1(b).
5.18 Articles of Incorporation Provisions Each First United Company has
taken all action so that the entering into of this Agreement and the
consummation of the Merger and the other transactions contemplated by this
Agreement do not and will not result in the grant of any rights to any Person
(other than a Regions Company) under the Articles of Incorporation, Bylaws, or
16
other governing instruments of any First United Company or restrict or impair
the ability of Regions to vote, or otherwise to exercise the rights of a
stockholder with respect to, shares of any First United Company that may be
acquired or controlled by it.
5.19 Support Agreements. Each of the directors of First United has executed
and delivered to Regions an agreement in substantially the form of Exhibit 1 to
this Agreement.
5.20 Derivatives Contracts. Neither First United nor any of its
Subsidiaries is a party to or has agreed to enter into an exchange-traded or
over-the-counter swap, forward, future, option, cap, floor or collar financial
contract, or any other interest rate or foreign currency protection contract not
included on its balance sheet which is a financial derivative contract
(including various combinations thereof).
5.21 Year 2000. Except as disclosed in Section 5.22 of the First United
Disclosure Memorandum, First United represents and warrants that all computer
software necessary for the conduct of its business (the "Software") is designed
to be used prior to, during, and after the calendar year 2000 A.D., and that the
Software will operate during each such time period without error relating to the
year 2000, specifically including any error relating to, or the product of, date
data which represents or references different centuries or more than one
century. First United further represents and warrants that the Software accepts,
calculates, sorts, extracts and otherwise processes date inputs and date values,
and returns and displays date values, in a consistent manner regardless of the
dates used, whether before, on, or after January 1, 2000.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF REGIONS
Regions hereby represents and warrants to First United as follows:
6.1 Organization, Standing, and Power. Regions is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Delaware, and has the corporate power and authority to carry on its business as
now conducted and to own, lease, and operate its Assets. Regions is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Regions.
6.2 Authority; No Breach By Agreement
(a) Regions 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 Regions. This Agreement
17
represents a legal, valid, and binding obligation of Regions, enforceable
against Regions in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by Regions, nor
the consummation by Regions of the transactions contemplated hereby, nor
compliance by Regions with any of the provisions hereof, will (i) conflict with
or result in a breach of any provision of Regions' 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
Regions Company under, any Contract or Permit of any Regions Company, or (iii)
subject to receipt of the requisite approvals referred to in Section 9.1(b) of
this Agreement, violate any Law or Order applicable to any Regions Company or
any of their respective Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans
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 Regions, no notice to, filing with, or Consent of,
any public body or authority is necessary for the consummation by Regions of the
Merger and the other transactions contemplated in this Agreement.
6.3 Capital Stock. The authorized capital stock of Regions consists of
240,000,000 shares of Regions Common Stock, of which 136,722,928 shares were
issued and outstanding and no shares were held as treasury shares as of June 30,
1997. All of the issued and outstanding shares of Regions Common Stock are, and
all of the shares of Regions Common Stock to be issued in exchange for shares of
First United 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 DGCL. None of the
outstanding shares of Regions Common Stock has been, and none of the shares of
Regions Common Stock to be issued in exchange for shares of First United Common
Stock upon consummation of the Merger will be, issued in violation of any
preemptive rights of the current or past stockholders of Regions.
6.4 SEC Filings; Financial Statements
(a) Regions has filed all forms, reports, and documents required to be
filed by Regions with the SEC since December 31, 1993, other than registration
statements on Forms S-4 and S-8 (collectively, the "Regions SEC Reports"). The
Regions SEC Reports (i) at the time filed, complied in all material respects
with the applicable requirements of the Securities Act and the Exchange Act, as
the case may be, and (ii) did not at the time they were filed (or if amended or
18
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated in such Regions SEC Reports or necessary in
order to make the statements in such Regions SEC Reports, in light of the
circumstances under which they were made, not misleading.
(b) Each of the Regions Financial Statements (including, in each case, any
related notes) contained in the Regions SEC Reports, including any Regions 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 the consolidated financial
position of Regions 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.
6.5 Absence of Undisclosed Liabilities. No Regions Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Regions as of
June 30, 1997 included in the Regions Financial Statements or reflected in the
notes thereto. No Regions Company has incurred or paid any Liability since June
30, 1997, 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
Regions.
6.6 Absence of Certain Changes or Events. Since June 30, 1997, except as
disclosed in the Regions 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 Regions, and (ii)
the Regions Companies have not taken any action, or failed to take any action,
prior to the date of this Agreement, which action or failure, if taken after the
date of this Agreement, would represent or result in a material breach or
violation of any of the covenants and agreements of Regions provided in Article
7 of this Agreement.
6.7 Compliance With Laws. Regions is duly registered as a bank holding
company under the BHC Act. Each Regions Company has in effect all Permits
necessary for it to own, lease, or operate its 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 Regions, 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 Regions. None of the Regions
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 Regions; and
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(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 Regions Company is not in compliance
with any of the material Laws or material 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 Regions, (ii) threatening to revoke any Permits, the revocation of
which are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions, or (iii) requiring any Regions 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
management, or the payment of dividends.
6.8 Legal Proceedings. Except to the extent specifically reserved against
in the Regions Financial Statements dated prior to the date of this Agreement,
there is no Litigation instituted or pending, or, to the Knowledge of Regions,
threatened (or unasserted but considered probable of assertion and which if
asserted would have at least a reasonable probability of an unfavorable outcome)
against any Regions Company, or against any Asset, interest, or right of any of
them, that is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any Regions Company, that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions.
6.9 Statements True and Correct. No statement, certificate, instrument, or
other writing furnished or to be furnished by any Regions Company or any
Affiliate thereof to First United pursuant to this Agreement or any other
document, agreement, or instrument referred to herein contains or will contain
any untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. None of the information supplied or to be
supplied by any Regions Company or any Affiliate thereof for inclusion in the
Registration Statement to be filed by Regions 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 Regions Company or any Affiliate thereof for inclusion in the
Proxy Statement to be mailed to First United's stockholders in connection with
the Stockholders' Meeting, and any other documents to be filed by any Regions
Company or any Affiliate thereof with the SEC or any other Regulatory Authority
in connection with the transactions contemplated hereby, will, at the respective
time such documents are filed, and with respect to the Proxy Statement, when
first mailed to the stockholders of First United, 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 thereunder 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
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material fact required to be stated thereunder or necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the Stockholders' Meeting. All documents that any Regions Company or
any Affiliate thereof is responsible for filing with any Regulatory Authority in
connection with the transactions contemplated hereby will comply as to form in
all material respects with the provisions of applicable Law.
6.10 Accounting, Tax, and Regulatory Matters. No Regions Company or any
Affiliate thereof has taken any action, or agreed to take any action, or has any
Knowledge of any fact or circumstance that is reasonably likely to (i) prevent
the transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting or treatment 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. To the Knowledge of Regions, there exists no
fact, circumstance, or reason why the requisite Consents referred to in Section
9.1(b) of this Agreement cannot be received in a timely manner without
imposition of any condition of the type described in the second sentence of such
Section 9.1(b).
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Covenants of Both Parties. 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 organizations and Assets and maintain its
rights and franchises, and (iii) take no action which would materially adversely
affect the ability of any Party to (a) obtain any Consents required for the
transactions contemplated hereby, or (b) perform its covenants and agreements
under this Agreement in all material respects and to consummate the Merger;
provided, that the foregoing shall not prevent any Regions Company from
discontinuing or disposing of any of its Assets or business, or from acquiring
or agreeing to acquire any other Person or any Assets thereof, if such action
is, in the judgment of Regions, desirable in the conduct of the business of
Regions and its Subsidiaries.
7.2 Covenants of First United. Except as specifically contemplated or
permitted by this Agreement, from the date of this Agreement until the earlier
of the Effective Time or the termination of this Agreement, First United
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 a duly authorized officer of Regions:
(a) Amend the Articles of Incorporation, Bylaws, or other governing
instruments of any First United Company; or
(b) Incur, guarantee, or otherwise become responsible for, any additional
debt obligation or other obligation for borrowed money (other than indebtedness
21
of a First United Company to another First United Company) in excess of an
aggregate of $100,000 (for the First United Companies on a consolidated basis)
except in the ordinary course of the business of First United Companies
consistent with past practices (which shall include, for First United, creation
of deposit liabilities, purchases of federal funds, advances from the Federal
Home Loan Bank or the Federal Reserve Bank, and entry into repurchase agreements
fully secured by U.S. government or agency securities), or, except as disclosed
in Section 7.2(b) of the First United Disclosure Memorandum, forgive any such
indebtedness of any Person to any First United Company (in excess of an
aggregate of $25,000), or impose, or suffer the imposition, on any share of
stock held by any First United Company of any Lien or permit any such Lien to
exist; 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 First United Company, or declare or pay any dividend or
make any other distribution in respect of any First United Common Stock;
provided that First United may (to the extent legally able to do so), but shall
not be obligated to, declare and pay regular annual cash dividends on the First
United Common Stock at an amount not to exceed 35% of First United's net income
after taxes, and in no event may such an amount per share of First United Common
Stock exceed $.98 and with the usual and regular record and payment dates as
disclosed in Section 7.2(c) of the First United Disclosure Memorandum; or
(d) Except pursuant to the exercise of stock options outstanding as of the
date hereof and pursuant to the terms thereof in existence on the date hereof,
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 First United
Common Stock or any other capital stock of any First United 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 First
United Company or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of First United Common Stock or sell,
lease, mortgage, or otherwise dispose of or otherwise encumber any shares of
capital stock of any First United Subsidiary (unless any such shares of stock
are sold or otherwise transferred to another First United Company) or any Assets
having in the aggregate a book value in excess of $100,000 other than in the
ordinary course of business for reasonable and adequate consideration; or
(f) Acquire direct or indirect control over, or invest in equity securities
of, any Person, other than in connection with (i) foreclosures in the ordinary
course of business, or (ii) acquisitions of control by First United in its
fiduciary capacity; or
(g) Grant any increase in compensation or benefits to the employees or
officers of any First United Company except as disclosed in Section 7.2(g) of
the First United Disclosure Memorandum or as required by Law; pay any bonus
except pursuant to the provisions of any applicable program or plan adopted by
22
its Board of Directors prior to the date of this Agreement and disclosed in
Section 7.2(g) of the First United Disclosure Memorandum; enter into or amend
any severance agreements with officers of any First United Company except as
disclosed in Section 7.2(g) of the First United Disclosure Memorandum; grant any
increase in fees or other increases in compensation or other benefits to
directors of any First United Company; or
(h) Enter into or amend any employment Contract between any First United
Company and any Person (unless such amendment is required by Law) that the First
United Company does not have the unconditional right to terminate without
Liability (other than Liability for services already rendered), at any time on
or after the Effective Time; or
(i) Except as disclosed in Section 7.2(i) of the First United Disclosure
Memorandum, adopt any new employee benefit plan or program of any First United
Company or make any material change in or to any existing employee benefit plans
or programs of any First United 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 accounting methods, principles, or
practices or systems of internal accounting controls, except as may be necessary
to conform to changes in regulatory accounting requirements or GAAP; or
(k) Commence or settle any Litigation other than in accordance with past
practice; provided that, except to the extent specifically reserved against in
the First United Financial Statements dated prior to the date of this Agreement,
no First United Company shall settle any Litigation involving any Liability of
any First United Company for money damages in excess of $25,000 (exclusive of
insurance proceeds) or restrictions upon the operations of any First United
Company; or
(l) Except in the ordinary course of business, enter into or terminate any
material Contract or make any change in any material lease or Contract, other
than renewals of leases and Contracts without material adverse changes of terms
or as disclosed pursuant to Sections 7.2(g), (h), or (i) of the First United
Disclosure Memorandum.
7.3 Covenants of Regions. From the date of this Agreement until the earlier
of the Effective Time or the termination of this Agreement, Regions covenants
and agrees that it will not, without the prior written consent of a duly
authorized officer of First United amend the Certificate of Incorporation or
Bylaws of Regions, in each case, in any manner which is adverse to, and
discriminates against, the holders of First United Common Stock.
7.4 Adverse Changes in Condition. Each Party agrees to give written notice
promptly to the other Party upon becoming aware of the occurrence or impending
occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) is reasonably likely to 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.
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7.5 Reports. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and First United shall deliver to Regions
copies of all such reports filed by First United promptly after the same are
filed. If financial statements are contained in any such reports filed with
appropriate Regulatory Authorities, 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 a Regulatory Authority shall be prepared in accordance with
Laws applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Registration Statement; Proxy Statement; Stockholder Approval. As soon
as reasonably practicable after the execution of this Agreement, Regions shall
file the Registration Statement with the SEC, provided First United has
provided, on a reasonably timely basis, all information concerning First United
necessary for inclusion in the Registration Statement, and shall use its
reasonable efforts to cause the Registration Statement to become effective under
the 1933 Act as soon as reasonably practicable after the filing thereof 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 Regions Common
Stock upon consummation of the Merger. First United shall promptly furnish all
information concerning it and the holders of its capital stock as Regions may
reasonably request in connection with such action. First United shall call a
Stockholders' Meeting, to be held within forty-five (45) days after the
Registration Statement is declared effective by the SEC, for the purpose of
voting upon approval of (i) this Agreement and (ii) such other related matters
as it deems appropriate. In connection with the Stockholders' Meeting, (i) First
United shall mail the Proxy Statement to all of its 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 First United shall recommend (subject to compliance with their
fiduciary duties as advised in writing by counsel to such Board) to its
stockholders the approval of this Agreement, and (iv) the Board of Directors and
officers of First United shall use their reasonable efforts to obtain such
stockholders' approval (subject to compliance with their fiduciary duties as
advised in writing by counsel to such Board).
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8.2 Nasdaq/NMS Listing. Regions shall file with the NASD a notification for
the listing on the Nasdaq/NMS relating to the proposed issuance of the shares of
Regions Common Stock to be issued to the holders of First United Common Stock
pursuant to the Merger.
8.3 Applications. As soon as reasonably practicable after execution of this
Agreement, Regions shall prepare and file, and First United 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. Regions shall use all reasonable
efforts to obtain the requisite Consents of all Regulatory Authorities as soon
as reasonably practicable after the filing of the appropriate applications.
8.4 Agreement as to Efforts to Consummate. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
practicable after the date of this Agreement, the transactions contemplated by
this Agreement, including, 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
applicable to such Party referred to in Article 9 of 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.
8.5 Investigation and Confidentiality
(a) Prior to the Effective Time, each Party will 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, after the 30th day after
execution of this Agreement, shall not interfere unreasonably 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 all documents and copies thereof, and all work papers containing
confidential information received from the other Party.
(c) First United shall use its reasonable efforts to exercise its rights
under confidentiality agreements entered into with Persons which were
considering an acquisition transaction with First United to preserve the
25
confidentiality of the information relating to First United provided to such
parties.
8.6 Press Releases. Prior to the Effective Time, First United and Regions
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, however, that nothing in this Section
8.6 shall be deemed to prohibit any Party from making any disclosure which its
counsel advises is necessary or advisable in order to satisfy such Party's
disclosure obligations imposed by Law.
8.7 Certain Actions. Except with respect to this Agreement and the
transactions contemplated hereby, no First United Company nor any Affiliate
thereof nor any investment banker, attorney, accountant, or other representative
(collectively, "Representatives") retained by any First United Company shall
directly or indirectly solicit any Acquisition Proposal by any Person. Except to
the extent necessary to comply with the fiduciary duties of First United's Board
of Directors as advised in writing by counsel to such Board of Directors, no
First United Company or any Affiliate or Representative thereof shall furnish
any non-public information that it is not legally obligated to furnish,
negotiate with respect to, or enter into any Contract with respect to, any
Acquisition Proposal, and shall direct and use its reasonable efforts to cause
all of its Representatives not to engage in any of the foregoing, but First
United may communicate information about such an Acquisition Proposal to its
stockholders if and to the extent that it is required to do so in order to
comply with its legal obligations. First United shall promptly notify Regions
orally and in writing in the event that it receives any inquiry or proposal
relating to any such transaction. First United shall immediately cease and cause
to be terminated as of the date of this Agreement any existing activities,
discussions, or negotiations with any Persons conducted heretofore with respect
to any of the foregoing.
8.8 Tax Matters. The Parties agree to use their reasonable efforts to
obtain written opinions of ▇▇▇▇▇▇ & Bird to the effect that (i) the Merger will
constitute a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code, (ii) the exchange in the Merger of First United Common Stock for
Regions Common Stock will not give rise to gain or loss to the stockholders of
First United with respect to such exchange (except to the extent of any cash
received), and (iii) each of First United and Regions will be a party to that
reorganization within the meaning of Section 368(b) of the Internal Revenue Code
("Tax Opinions"). In rendering such Tax Opinions, counsel shall be entitled to
rely upon representations of officers of First United and Regions reasonably
satisfactory in form and substance to such counsel. Each of the Parties
undertakes and agrees to use its reasonable efforts to cause the Merger, and to
take no action which would cause the Merger not, to qualify for treatment as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code for Federal income tax purposes.
8.9 Agreement of Affiliates. First United has disclosed in Section 8.9 of
the First United Disclosure Memorandum each Person whom it reasonably believes
is an "affiliate" of First United for purposes of Rule 145 under the 1933 Act.
First United shall use its reasonable efforts to cause each such Person to
deliver to Regions not later than 30 days prior to the Effective Time a written
26
agreement, substantially in the form of Exhibit 20"ex_affil_agr0ex_affil_agr,
providing that such Person will not sell, pledge, transfer, or otherwise dispose
of the shares of First United 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 Regions Common Stock to be
received by such Person upon consummation of the Merger except in compliance
with applicable provisions of the 1933 Act and the rules and regulations
thereunder and until such time as financial results covering at least 30 days of
combined operations of Regions and First United have been published within the
meaning of Section 201.01 of the SEC's Codification of Financial Reporting
Policies. Shares of Regions Common Stock issued to such affiliates of First
United in exchange for shares of First United Common Stock shall not be
transferable until such time as financial results covering at least 30 days of
combined operations of Regions and First United have been published within the
meaning of Section 201.01 of the SEC's Codification of Financial Reporting
Policies, regardless of whether each such affiliate has provided the written
agreement referred to in this Section 8.9 (and Regions shall be entitled to
place restrictive legends upon certificates for shares of Regions Common Stock
issued to affiliates of First United pursuant to this Agreement to enforce the
provisions of this Section 8.9). Regions shall not be required to maintain the
effectiveness of the Registration Statement under the 1933 Act for the purposes
of resale of Regions Common Stock by such affiliates.
8.10 Employee Benefits and Contracts. Following the Effective Time, Regions
shall provide generally to officers and employees of the First United Companies,
who at or after the Effective Time become employees of a Regions Company,
employee benefits under employee benefit plans (other than stock option or other
plans involving the potential issuance of Regions Common Stock except as set
forth in this Section 8.10), on terms and conditions which when taken as a whole
are substantially similar to those currently provided by the Regions Companies
to their similarly situated officers and employees. For purposes of
participation and vesting (but not accrual of benefits) under such employee
benefit plans, (i) service under any qualified defined benefit plans of First
United should be treated as service under Regions' qualified defined benefit
plans, (ii) service under any qualified defined contribution plans of First
United shall be treated as service under Regions' qualified defined contribution
plans, and (iii) service under any other employee benefit plans of First United
shall be treated as service under any similar employee benefit plans maintained
by Regions. Regions also shall assume and honor all employment, severance,
consulting, and other compensation Contracts disclosed in Section 8.10 of the
First United Disclosure Memorandum to Regions between any First United Company
and any current or former director, officer, or employee thereof, and all
provisions for vested benefits or other vested amounts earned or accrued through
the Effective Time under the First United Benefit Plans.
8.11 Indemnification.
(a) Subject to the conditions set forth in paragraph (b) below, for a
period of six (6) years after the Effective Time, Regions shall, and shall cause
First United to, indemnify, defend, and hold harmless each person entitled to
indemnification from a First United Company (each, an "Indemnified Party")
against all Liabilities arising out of actions or omissions occurring at or
prior to the Effective Time (including, without limitation, the transactions
27
contemplated by this Agreement) to the full extent permitted by South Carolina
Law and First United's Articles of Incorporation and Bylaws, in each case as in
effect on the date hereof, including provisions relating to advances of expenses
incurred in the defense of any Litigation. Without limiting the foregoing, in
any case in which approval by the First United is required to effectuate any
indemnification, Regions shall cause the First United to 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 Regions and the
Indemnified Party.
(b) Any Indemnified Party wishing to claim indemnification under paragraph
(a), upon learning of any such Liability or Litigation, shall promptly notify
Regions thereof. In the event of any such Litigation (whether arising before or
after the Effective Time), (i) Regions or First United shall have the right to
assume the defense thereof and Regions 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 Regions or First United elects not to assume such
defense or counsel for the Indemnified Parties advises that there are
substantive issues which raise conflicts of interest between Regions or First
United and the Indemnified Parties, the Indemnified Parties may retain counsel
satisfactory to them, and Regions or First United shall pay all reasonable fees
and expenses of such counsel for the Indemnified Parties promptly as statements
therefor are received; provided, however, that Regions shall be obligated
pursuant to this paragraph (b) to pay for only one firm of counsel for all
Indemnified Parties in any jurisdiction, (ii) the Indemnified Parties will
cooperate in the defense of any such Litigation, and (iii) Regions shall not be
liable for any settlement effected without its prior written consent; and
provided further that First United 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.
8.12 Articles of Incorporation Provisions. Each First United Company shall
take all necessary action to ensure that the entering into of this Agreement and
the consummation of the Merger and the other transactions contemplated hereby do
not and will not result in the grant of any rights to any Person under the
Articles of Incorporation, Bylaws, or other governing instruments of any First
United Company or restrict or impair the ability of Regions or any of its
Subsidiaries to vote, or otherwise to exercise the rights of a stockholder with
respect to, shares of any First United Company that may be directly or
indirectly acquired or controlled by it.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party. The respective obligations of
each Party to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by both Parties pursuant to Section 11.6 of
this Agreement:
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(a) Stockholder Approval. The stockholders of First United shall have
approved this Agreement and the consummation of the transactions contemplated
hereby, including the Merger, as and to the extent required by Law or 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 so
obtained which is necessary to consummate the transactions as contemplated
hereby shall be conditioned or restricted in a manner which in the reasonable
good faith judgment of the Board of Directors of Regions would so materially
adversely impact the economic benefits of the transaction as 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
other 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. No Consent obtained which is necessary to
consummate the transactions contemplated hereby shall be conditioned or
restricted in a manner which in the reasonable judgment of the Board of
Directors of Regions 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.
(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 Regions Common Stock issuable pursuant to the Merger shall have been
received.
(f) Nasdaq/NMS Listing. The shares of Regions Common Stock issuable
pursuant to the Merger shall have been approved for listing on the Nasdaq/NMS.
(g) Tax Matters. Each Party shall have received a copy of the Tax Opinions
referred to in Section 8.8 of this Agreement. Each Party shall have delivered to
the other a Certificate, dated as of the date of the Tax Opinion, signed by its
duly authorized officers, to the effect that, to the best knowledge and belief
of such officers, the statement of facts and representations made on behalf of
the management of such Party, presented to the legal counsel delivering the Tax
29
Opinions were at the date of such presentation, true, correct, and complete, and
are on the date of such Certificate, to the extent contemplated by the
presentation, true, correct, and complete, as though such presentation had been
made on the date of such Certificate.
9.2 Conditions to Obligations of Regions. The obligations of Regions 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 Regions 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 First United 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 First United
set forth in Section 5.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimus in amount). The representations and warranties
of First United set forth in Sections 5.17 and 5.18 of this Agreement shall be
true and correct in all material respects. There shall not exist inaccuracies in
the representations and warranties of First United set forth in this Agreement
(including the representations and warranties set forth in Sections 5.3, 5.17
and 5.18) such that the aggregate effect of such inaccuracies has, or is
reasonably likely to have, a Material Adverse Effect on First United; provided
that, for purposes of this sentence only, those representations and warranties
which are qualified by references to "material" or "Material Adverse Effect"
shall be deemed not to include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of the agreements
and covenants of First United 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. First United shall have delivered to Regions (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 Sections 9.2(a) and 9.2(b) of this Agreement have been satisfied, and
(ii) certified copies of resolutions duly adopted by First United'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 consummation of the transactions contemplated hereby, all in
such reasonable detail as Regions and its counsel shall request.
(d) Claims Letters. Each of the directors and officers of First United
shall have executed and delivered to Regions letters in substantially the form
of Exhibit 3 to this Agreement.
(e) Legal Opinion. Regions shall have received a written opinion, dated as
of the Effective Time, of counsel to First United, in substantially the form of
Exhibit 4 to this Agreement.
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(f) Affiliate Agreements. Regions shall have received from each affiliate
of First United the affiliates agreement referred to in Section 8.9 of this
Agreement.
(g) Pooling Letter. Regions shall have received a letter from Ernst &
Young, LLP, dated as of the Effective Time, to the effect that the Merger will
qualify for pooling-of-interests accounting treatment under Accounting
Principles Board Opinion No. 16 if closed and consummated in accordance with
this Agreement.
9.3 Conditions to Obligations of First United. The obligations of First
United 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 First United pursuant to Section 11.6(b)
of this Agreement:
(a) Representations and Warranties. For purposes of this Section 9.3(a),
the accuracy of the representations and warranties of Regions 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 Regions set
forth in Section 6.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimus in amount). The representations and warranties
of Regions set forth in Section 6.10 of this Agreement shall be true and correct
in all material respects. There shall not exist inaccuracies in the
representations and warranties of Regions set forth in this Agreement (including
the representations and warranties set forth in Sections 6.3 and 6.10) such that
the aggregate effect of such inaccuracies has, or is reasonably likely to have,
a Material Adverse Effect on Regions; provided that, for purposes of this
sentence only, those representations and warranties which are qualified by
references to "material" or "Material Adverse Effect" shall be deemed not to
include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of the agreements
and covenants of Regions 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. Regions shall have delivered to First United (i) a
certificate, dated as of the Effective Time and signed on its behalf by its duly
authorized officers, to the effect that, to the best knowledge of such officers,
after due inquiry, the conditions of its obligations set forth in Sections
9.3(a) and 9.3(b) of this Agreement have been satisfied, and (ii) certified
copies of resolutions duly adopted by Regions' Board of Directors and
stockholders evidencing the taking of all corporate action necessary to
authorize the execution, delivery, and performance of this Agreement, as
appropriate, and the consummation of the transactions contemplated hereby, all
in such reasonable detail as First United and its counsel shall request.
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(d) Legal Opinion. First United shall have received a written opinion,
dated as of the Effective Time, of counsel to Regions, in substantially the form
of Exhibit 5 to this Agreement.
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of this Agreement,
and notwithstanding the approval of this Agreement by the stockholders of First
United, 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 Regions and the Board of
Directors of First United; 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 First United and Section 9.3(a) in the
case of Regions or in material breach of any covenant or other agreement
contained in this Agreement) in the event of an inaccuracy of any representation
or warranty of the other Party contained in this Agreement which cannot be or
has not been cured within thirty (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
First United and Section 9.3(a) of this Agreement in the case of Regions; 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 First United and Section 9.3(a) in the
case of Regions or in material breach of any covenant or other agreement
contained in this Agreement) in the event of a material breach by the other
Party of any covenant or agreement contained in this Agreement which cannot be
or has not been cured within thirty (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
First United fail to vote their approval of this Agreement and the transactions
contemplated hereby as required by the Laws of the State of South Carolina at
the First United Stockholders' Meeting where the transactions were presented to
such stockholders for approval and voted upon; or
(e) By the Board of Directors of First United or by the Board of Directors
of Regions in the event that the Merger shall not have been consummated by
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September 30, 1998, in each case only 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 First United and Section 9.3(a) in the
case of Regions 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 (other than as
contemplated by Section 10.1(d) of this Agreement) cannot be satisfied or
fulfilled by the date specified in Section 10.1(e) of this Agreement as the date
after which such Party may terminate this Agreement.
(g) By the Board of Directors of First United, if it determines by a vote
of a majority of the members of its entire Board, at any time during the five
business-day period commencing on the day immediately following the
Determination Date, if the Average Closing Price shall be less than $30.00;
subject, however, to the following three sentences. If First United refuses to
consummate the Merger pursuant to this Section 10.1(g), it shall give prompt
written notice thereof to Regions; provided, that such notice of election to
terminate may be withdrawn at any time within the aforementioned five
business-day period. During the three business-day period commencing with its
receipt of such notice, Regions shall have the option to elect to increase the
Exchange Ratio to equal the quotient obtained by dividing (1) the product of
$30.00 and the Exchange Ratio (as then in effect) by (2) the Average Closing
Price. If Regions makes an election contemplated by the preceding sentence,
within such three business-day period, it shall give prompt written notice to
First United of such election and the revised Exchange Ratio, whereupon no
termination shall have occurred pursuant to this Section 10.1(g) and this
Agreement shall remain in effect in accordance with its terms (except as the
Exchange Ratio shall have been so modified), and any references in this
Agreement to "Exchange Ratio" shall thereafter be deemed to refer to the
Exchange Ratio as adjusted pursuant to this Section 10.1(g).
For purposes of this Section 10.1(g), the following terms shall have
the meanings indicated:
"Average Closing Price" shall mean the average of the daily last
sales prices of Regions Common Stock as reported on the Nasdaq/NMS (as
reported by The Wall Street Journal or, if not reported thereby,
another authoritative source as chosen by Regions) for the ten
consecutive full trading days in which such shares are traded on the
Nasdaq/NMS ending at the close of trading on the Determination Date.
"Determination Date" shall mean the seventh full trading day
immediately preceding the date of the anticipated Closing.
33
10.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 10.1 of this Agreement, this Agreement shall
become void and have no effect, except that (i) the provisions of this Section
10.2 and Article 11 and Section 8.5(b) of this Agreement shall survive any such
termination, 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. Each of the Support Agreements shall
be governed by its own terms as to its termination.
10.3 Non-Survival of Representations and Covenants. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 10.3 and
Articles 2, 3, 4, and 11 and Sections 8.9, and 8.11 of this Agreement.
ARTICLE 11
MISCELLANEOUS
11.1 Definitions. Except as otherwise provided herein, the capitalized
terms set forth below (in their singular and plural forms as applicable) shall
have the following meanings:
"Acquisition Proposal" with respect to a Party shall mean any tender
offer or exchange offer or any proposal for a merger, acquisition of all of
the stock or assets of, or other business combination involving such Party
or any of its Subsidiaries or the acquisition of a substantial equity
interest in, or a substantial portion of the assets of, such Party or any
of its Subsidiaries.
"Affiliate" of a Person shall mean (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by,
or under common control with such Person, (ii) any officer, director,
partner, employer, or direct or indirect beneficial owner of any ten
percent (10%) or greater equity or voting interest of such Person, or (iii)
any other Person for which a Person described in clause (ii) acts in any
such capacity.
"Agreement" shall mean this Agreement and Plan of Merger, including
each of the Support Agreements and the other Exhibits delivered pursuant
hereto and incorporated herein by reference.
"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.
34
"BHC Act" shall mean the federal Bank Holding Company Act of 1956, as
amended.
"Business Combination" shall mean an acquisition of, merger or
combination with, share exchange involving any class of voting stock of,
sale of more than fifty percent (50%) of the consolidated assets by, or
other business combination involving, or tender offer for or sale or
issuance of any equity securities involving an acquisition by a third-party
of more than fifty percent (50%) of the voting stock of, First United,
other than the formation of a newly organized holding company for First
United in which the shares of First United Common Stock are exchanged for
shares of the holding company on a basis that does not cause the respective
beneficial interests of each stockholder to change or transactions with a
Regions Company.
"Closing" shall mean the closing of the transactions contemplated
hereby, as described in Section 1.2 of this Agreement.
"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.
"Default" shall mean (i) any breach or violation of or default under
any Contract, Order, or Permit, (ii) any occurrence of any event that with
the passage of time or the giving of notice or both would constitute a
breach or violation of or default under any Contract, Order, or Permit, or
(iii) any occurrence of any event that with or without the passage of time
or the giving of notice would give rise to a right to terminate or revoke,
change the current terms of, or renegotiate, or to accelerate, increase, or
impose any Liability under, any Contract, Order, or Permit.
"DGCL" shall mean the Delaware General Corporation Law.
"Effective Time" shall mean the date and time at which the Merger
becomes effective as defined in Section 1.3 of this Agreement.
"Environmental Laws" shall mean all Laws which are administered,
interpreted, or enforced by the United States Environmental Protection
Agency and state and local agencies with jurisdiction over pollution or
protection of the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
35
"ERISA Plan" shall have the meaning provided in Section 5.13 of this
Agreement.
"Exchange Agent" shall have the meaning provided in Section 4.1 of
this Agreement.
"Exchange Ratio" shall have the meaning provided in Section 3.1(c) of
this Agreement.
"Exhibits" 1 through 5, 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.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"First United Benefit Plans" shall have the meaning set forth in
Section 5.13 of this Agreement.
"First United Common Stock" shall mean the $1.66-2/3 par value common
stock of First United.
"First United Companies" shall mean, collectively, First United and
all First United Subsidiaries.
"First United Disclosure Memorandum" shall mean the written
information entitled "First United Disclosure Memorandum" delivered prior
to the date of this Agreement to Regions describing in reasonable detail
the matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section of this Agreement under
which such disclosure is being made.
"First United Financial Statements" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of First
United as of June 30, 1997, and as of December 31, 1996 and 1995, and the
related statements of income, changes in stockholders' equity, and cash
flows (including related notes and schedules, if any) for the six months
ended June 30, 1997, and for each of the three fiscal years ended December
31, 1996, 1995, and 1994, included in the First United Disclosure
Memorandum, and (ii) the consolidated balance sheets of First United
(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) with respect to periods ended subsequent to
June 30, 1997.
"First United Subsidiaries" shall mean the Subsidiaries of First
United, which shall include the First United Subsidiaries described in
Section 5.4 of this Agreement and any corporation, bank, savings
association, or other organization acquired as a Subsidiary of First United
in the future and owned by First United at the Effective Time.
36
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"Hazardous Material" shall mean any pollutant, contaminant, or
hazardous substance within the meaning of the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. ss. 9601 et seq., or
any similar federal, state, or local Law.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.
"Knowledge" as used with respect to a Person shall mean the knowledge
after due inquiry of the chairman, president, chief financial officer,
chief accounting officer, chief credit officer, general counsel, any
assistant or deputy general counsel, or any senior or executive vice
president of such Person.
"Law" shall mean any code, law, ordinance, regulation, reporting, or
licensing requirement, rule, or statute applicable to a Person or its
Assets, Liabilities, or business, including, without limitation, those
promulgated, interpreted, or enforced by any of the Regulatory Authorities.
"Liability" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost, or expense (including,
without limitation, costs of investigation, collection, and defense),
claim, deficiency, guaranty, or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for collection
or deposit in the ordinary course of business) of any type, whether
accrued, absolute, or contingent, liquidated or unliquidated, matured or
unmatured, or otherwise.
"Lien" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title
retention, or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for current property
Taxes not yet due and payable, (ii) for depository institutions, pledges to
secure deposits and other Liens incurred in the ordinary course of the
banking business, and (iii) Liens which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on a Party.
"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, but shall not include regular, periodic examinations
of depository institutions and their Affiliates by Regulatory Authorities.
37
"Loan Property" shall mean any property owned by the Party in question
or by any of its Subsidiaries or in which such Party or Subsidiary holds a
security interest, and, where required by the context, includes the owner
or operator of such property, but only with respect to such property.
"material" for purposes of this Agreement shall be determined in light
of the facts and circumstances of the matter in question; provided that any
specific monetary amount stated in this Agreement shall determine
materiality in that instance.
"Material Adverse Effect" on a Party shall mean an event, change, or
occurrence which, individually or together with any other event, change, or
occurrence, has a material adverse impact on (i) the financial position,
business, or results of operations of such Party and its Subsidiaries,
taken as a whole, or (ii) the ability of such Party to perform its
obligations under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement, provided that "material
adverse effect" 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, or (d) the Merger
and compliance with the provisions of this Agreement on the operating
performance of the Parties.
"Merger" shall mean the merger of First United with and into Regions
referred to in Section 1.1 of this Agreement.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Nasdaq/NMS" shall mean the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotations System.
"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 in which the Party in
question or any of its Subsidiaries participates in the management and,
where required by the context, includes the owner or operator or such
property, but only with respect to such property.
38
"Party" shall mean either First United or Regions and "Parties" shall
mean both First United and Regions.
"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 partnership, limited liability company,
trust, business association, group acting in concert, or any person acting
in a representative capacity.
"Proxy Statement" shall mean the proxy statement used by First United
to solicit the approval of its stockholders of the transactions
contemplated by this Agreement and shall include the prospectus of Regions
relating to the shares of Regions Common Stock to be issued to the
stockholders of First United.
"Regions Common Stock" shall mean the $.625 par value common stock of
Regions.
"Regions Companies" shall mean, collectively, Regions and all Regions
Subsidiaries.
"Regions Financial Statements" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any) of
Regions as of June 30, 1997, and the restated consolidated statements of
condition (including related notes and schedules, if any) of Regions as of
December 31, 1996 and 1995, the related statements of income, changes in
stockholders' equity, and cash flows (including related notes and
schedules, if any) for the nine months ended June 30, 1997, and the related
restated 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, 1996, 1995, and 1994, as filed by Regions in SEC
Documents, and (ii) the consolidated statements of condition of Regions
(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 June 30, 1997.
"Regions Subsidiaries" shall mean the Subsidiaries of Regions.
"Registration Statement" shall mean the Registration Statement on Form
S-4, or other appropriate form, filed with the SEC by Regions under the
1933 Act in connection with the transactions contemplated by this
Agreement.
39
"Regulatory Authorities" shall mean, collectively, the Federal Trade
Commission, the United States Department of Justice, the Board of the
Governors of the Federal Reserve System, the Office of Thrift Supervision,
the Office of the Comptroller of the Currency, the FDIC, all state
regulatory agencies having jurisdiction over the Parties and their
respective Subsidiaries, the NASD, and the SEC.
"SCBCA" shall mean the South Carolina Business Corporation Act.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC Documents" shall mean all reports and registration statements
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.
"Stockholders' Meeting" shall mean the meeting of the stockholders of
First United to be held pursuant to Section 8.1 of this Agreement,
including any adjournment or adjournments thereof.
"Subsidiary" or collectively "Subsidiaries" shall mean all those
corporations, banks, associations, or other entities of which the entity in
question owns or controls fifty percent (50%) or more of the outstanding
equity securities either directly or through an unbroken chain of entities
as to each of which fifty percent (50%) or more of the outstanding equity
securities is owned directly or indirectly by its parent; provided,
however, 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.
"Support Agreements" shall mean the various Support Agreements, each
in substantially the form of Exhibit 1 to this Agreement.
"Surviving Corporation" shall mean Regions as the surviving
corporation resulting from the Merger.
"Tax" or "Taxes" shall mean any federal, state, county, local or
foreign income, profits, franchise, gross receipts, payroll, sales,
employment, use, property, withholding, excise, occupancy, and other taxes,
assessments, charges, fares, or impositions, of any nature whatsoever,
including interest, penalties, and additions imposed thereon or with
respect thereto.
40
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 Regions shall bear and pay the filing fees payable in
connection with the Registration Statement and the Proxy Statement and printing
costs incurred in connection with the printing of the Registration Statement and
the Proxy Statement.
(b) Nothing contained in this Section 11.2 shall constitute or shall be
deemed to constitute liquidated damages for the willful breach by a Party of the
terms of this Agreement or otherwise limit the rights of the nonbreaching Party.
11.3 Brokers and Finders. 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 except for the fees payable by First United to The ▇▇▇▇▇▇-▇▇▇▇▇▇ Company.
In the event of a claim by any other broker or finder based upon his or its
representing or being retained by or allegedly representing or being retained by
First United or Regions, each of First United and Regions, 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. Nothing in this Agreement,
expressed or implied, is intended to, or shall, 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 8.9 and 8.11 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; provided, however, that after
any such approval by the holders of First United Common Stock, there shall be
made no amendment decreasing the consideration to be received by First United
stockholders without the further approval of such stockholders.
11.6 Waivers.
(a) Prior to or at the Effective Time, Regions, acting through its Board of
Directors, chief executive officer, vice chairman, or other authorized officer,
shall have the right to waive any Default in the performance of any term of this
Agreement by First United, to waive or extend the time for the compliance or
41
fulfillment by First United of any and all of its obligations under this
Agreement, and to waive any or all of the conditions precedent to the
obligations of Regions 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 Regions.
(b) Prior to or at the Effective Time, First United, acting through its
Board of Directors, chief executive officer, or other authorized officer, shall
have the right to waive any Default in the performance of any term of this
Agreement by Regions, to waive or extend the time for the compliance or
fulfillment by Regions of any and all of their obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of First
United 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 First United.
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 received:
First United: FIRST UNITED BANCORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman of the Board, President
and Chief Executive Officer
Copy to Counsel: ▇▇▇▇▇▇▇ & ▇▇▇▇, P.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
42
Regions: REGIONS FINANCIAL CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice Chairman and Executive
Financial Officer
Copy to Counsel: REGIONS FINANCIAL CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
General Counsel and Corporate
Secretary
11.9 Governing Law. Except to the extent the laws of the State of South
Carolina apply to the Merger, this Agreement shall be governed by and construed
in accordance with the Laws of the State of Delaware, without regard to any
applicable conflicts of Laws.
11.10 Counterparts. This Agreement may be executed in one 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 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.
43
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 UNITED BANCORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------- ----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Secretary Chairman of the Board, President
and Chief Executive Officer
[CORPORATE SEAL]
ATTEST: REGIONS FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------ ----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Corporate Secretary Vice Chairman and
Executive Financial Officer
[CORPORATE SEAL]
44
LIST OF EXHIBITS
Exhibit Number Description
1. Form of Support Agreement. (Sections 5.19, 11.1).
2. Form of Affiliate Agreement. (Section 8.9).
3. Form of Claims Letter. (Section 9.2).
4. Form of Opinion Letter of First United's Counsel.(Section 9.2).
5. Form of Opinion Letter of Regions' Counsel. (Section 9.3).