EXHIBIT A
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of the 16th day of December, 1997 (the
"Agreement"), by and between FFVA Financial Corporation ("FFVA Financial") and
One Valley Bancorp, Inc. ("One Valley").
WHEREAS, One Valley and FFVA Financial have entered into an Agreement
and Plan of Merger, dated as of the 16th day of December, 1997 (the "Merger
Agreement"), providing for, among other things, the merger of FFVA Financial
with and into One Valley, with One Valley as the surviving corporation; and
WHEREAS, as a condition and inducement to One Valley's execution of the
Merger Agreement, One Valley has required that FFVA Financial agree, and FFVA
Financial has agreed, to grant One Valley the Option (as defined below);
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, and intending to be legally bound hereby, FFVA Financial
and One Valley agree as follows:
1. DEFINED TERMS. Capitalized terms which are used but not defined
herein shall have the meanings ascribed to such terms in the Merger Agreement.
2. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, FFVA Financial hereby grants to One Valley an irrevocable option (the
"Option") to purchase up to 490,000 shares (as adjusted as set forth herein)
(the "Option Shares", which shall include the Option Shares before and after any
transfer of such Option Shares) of Common Stock, par value $.10 per share ("FFVA
Financial Common Stock"), of FFVA Financial at a purchase price per Option Share
(the "Purchase Price") equal to the average closing bid and ask prices on the
next business day following the public announcement of the Merger.
3. EXERCISE OF OPTION.
(a) One Valley may exercise the Option, in whole or in part, at any
time and from time to time following (but only following) the occurrence of a
Fee Event (as defined in the Merger Agreement); provided, however, that the
Option shall terminate and be of no further force and effect upon the occurrence
of a Fee Termination Event (as defined in the Merger Agreement); and provided,
further, that One Valley shall have sent the written notice of such exercise as
provided for below within six months following such Fee Event (or such later
period as provided in Section 12(k)). The rights set forth in Section 8 of this
Agreement shall terminate when the right to exercise the Option terminates
(other than as a result of a complete exercise of the Option) as set forth
herein. This Option may not be exercised at any time when One Valley shall be in
material and willful breach of any of its covenants or agreements contained in
the Merger Agreement such that FFVA Financial shall be entitled to terminate the
Merger Agreement pursuant to Section 9.1(b) thereof.
(b) In the event One Valley wishes to exercise the option, it shall
send to FFVA Financial a written notice (the date of which being herein referred
to as the "Notice Date") specifying (i) the total number of Option Shares it
intends to purchase pursuant to such exercise and (ii) a place and date not
earlier than three business days nor later than 15 business days from the Notice
Date for the closing (the "Closing") of such purchase (the "Closing Date"). If
prior notification to or approval of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") or any other regulatory authority
is required in connection with such purchase, FFVA Financial shall cooperate
with One Valley in the filing of the required notice or application for approval
and the obtaining of such approval and the Closing shall occur immediately
following such regulatory approvals (and any mandatory waiting periods).
4. PAYMENT AND DELIVERY OF CERTIFICATES.
(a) On each Closing Date, One Valley shall (i) pay to FFVA Financial,
in immediately available funds by wire transfer to a bank account designated by
FFVA Financial, an amount equal to the Purchase Price multiplied by the number
of Option Shares to be purchased on such Closing Date, and (ii) present and
surrender this Agreement to FFVA Financial at the address of FFVA Financial
specified in Section 12(f) hereof.
(b) At each Closing, simultaneously with the delivery of immediately
available funds and surrender of this Agreement as provided in Section 4(a), (i)
FFVA Financial shall deliver to One Valley (A) a certificate or certificates
representing the Option Shares to be purchased at such Closing, which Option
Shares shall be free and clear of all liens, claims, charges and encumbrances of
any kind whatsoever and subject to no preemptive rights, and (B) if the Option
is exercised in part only, an executed new agreement with the same terms as this
Agreement
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evidencing the right to purchase the balance of the shares of FFVA Financial
Common Stock purchasable hereunder, and (ii) One Valley shall deliver to FFVA
Financial a letter agreeing that One Valley shall not offer to sell or otherwise
dispose of such Option Shares in violation of applicable federal and state law
or of the provisions of this Agreement.
(c) In addition to any other legend that is required by applicable law,
certificates for the Option Shares delivered at each Closing shall be endorsed
with a restrictive legend which shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF DECEMBER 16, 1997. A COPY
OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON
RECEIPT BY FFVA FINANCIAL OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that the above legend shall be removed by
delivery of substitute certificate(s) without such legend if One Valley shall
have delivered to FFVA Financial a copy of a letter from the staff of the SEC,
or an opinion of counsel in form and substance reasonably satisfactory to FFVA
Financial and its counsel, to the effect that such legend is not required under
the Securities Act.
5. REPRESENTATIONS AND WARRANTIES OF FFVA FINANCIAL. FFVA Financial
hereby represents and warrants to One Valley as follows:
(a) DUE AUTHORIZATION. FFVA Financial has all requisite corporate power
and authority to enter into this Agreement and, subject to any approvals
referred to herein, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of FFVA Financial. This Agreement has been duly
executed and delivered by FFVA Financial.
(b) AUTHORIZED STOCK. FFVA Financial has taken all necessary corporate
and other action to authorize and reserve and to permit it to issue, and, at all
times from the date hereof until the obligation to deliver FFVA Financial Common
Stock upon the exercise of the Option terminates, will have reserved for
issuance, upon exercise of the Option, the number of shares of FFVA Financial
Common Stock necessary for One Valley to exercise the Option, and FFVA Financial
will take all necessary corporate action to authorize and reserve for issuance
all additional shares of FFVA Financial Common Stock or other securities which
may be issued pursuant to Section 7 upon exercise of the Option. The shares of
FFVA Financial Common Stock to be issued upon due exercise of the Option,
including all additional shares of FFVA Financial Common Stock or other
securities which may be issuable pursuant to Section 7, upon issuance pursuant
hereto, shall be duly and validly issued, fully paid and nonassessable, and
shall be delivered free and clear of all liens, claims, charges and encumbrances
of any kind or nature whatsoever, including any preemptive rights of any
stockholder of FFVA Financial.
6. REPRESENTATIONS AND WARRANTIES OF ONE VALLEY. One Valley hereby
represents and warrants to FFVA Financial that:
(a) DUE AUTHORIZATION. One Valley has all requisite corporate power and
authority to enter into this Agreement and, subject to any required approvals or
consents, to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of One Valley. This Agreement has been duly executed and delivered by One
Valley.
(b) PURCHASE NOT FOR DISTRIBUTION. This Option is not being, and any
Option Shares or other securities acquired by One Valley upon exercise of the
Option will not be, acquired with a view to the public distribution thereof and
will not be transferred or otherwise disposed of except in a transaction
registered or exempt from registration under the Securities Act.
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in FFVA Financial Common Stock by reason
of a stock dividend, stock split, split-up, recapitalization, combination,
exchange of shares or similar transaction, the type and number of shares or
securities subject to the Option, and the Purchase Price therefor, shall be
adjusted appropriately, and proper provision shall be made in the agreements
governing such transaction so that One Valley shall receive, upon exercise of
the Option, the number and class of shares or other securities or property that
One Valley would have received in respect of FFVA Financial Common Stock if the
Option had been exercised immediately prior to such event, or the record date
therefor, as applicable. If any additional shares of FFVA Financial Common Stock
are issued after the date of this Agreement (other than pursuant to an event
described in the first sentence of this Section 7(a)), the number of shares of
FFVA Financial Common Stock subject to the Option shall be adjusted so that,
after
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such issuance, it, together with any shares of FFVA Financial Common Stock
previously issued pursuant hereto, equals 9.9 % of the number of shares of FFVA
Financial Common Stock then issued and outstanding, after giving effect to any
shares subject to or issued pursuant to the Option.
(b) In the event that FFVA Financial or its Subsidiary shall enter into
an agreement: (i) to consolidate with or merge into any person, other than One
Valley or one of its subsidiaries, and shall not be the continuing or surviving
corporation of such consolidation or merger, (ii) to permit any person, other
than One Valley or one of its subsidiaries, to merge into FFVA Financial and
FFVA Financial shall be the continuing or surviving corporation, but, in
connection with such merger, the then outstanding shares of FFVA Financial
Common Stock shall be changed into or exchanged for stock or other securities of
FFVA Financial or any other person or cash or any other property or the
outstanding shares of FFVA Financial Common Stock immediately prior to such
merger shall after such merger represent less than 50% of the outstanding shares
and share equivalents of the merged company, or (iii) to sell or otherwise
transfer all or substantially all of its assets or the assets of its subsidiary
to any person, other than One Valley or one of its subsidiaries, then, and in
each such case, the agreement governing such transaction shall make proper
provisions so that the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be converted
into, or exchanged for, an option (the "Substitute Option"), at the election of
One Valley, of either (x) the Acquiring Corporation (as defined below), (y) any
person that controls the Acquiring Corporation, or (z) in the case of a merger
described in clause (ii), FFVA Financial (such person being referred to as the
"Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the Option,
provided, that if the terms of the Substitute Option cannot, for legal reasons,
be the same as the Option, such terms shall be as similar as possible and in no
event less advantageous to One Valley. The Substitute Option Issuer shall also
enter into an agreement with the then holder or holders of the Substitute Option
in substantially the same form as this Agreement, which shall be applicable to
the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of
shares of the Substitute Common Stock (as is hereinafter defined) as is equal to
the Assigned Value (as is hereinafter defined) multiplied by the number of
shares of FFVA Financial Common Stock for which the Option was theretofore
exercisable, divided by the Average Price (as is hereinafter defined). The
exercise price of the Substitute Option per share of the Substitute Common Stock
(the "Substitute Purchase Price") shall be equal to the Purchase Price
multiplied by a fraction in which the numerator is the number of shares of FFVA
Financial Common Stock for which the Option was theretofore exercisable and the
denominator is the number of shares of the Substitute Common Stock for which the
Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(I) "Acquiring Corporation" shall mean (i) the continuing or surviving
corporation of a consolidation or merger with FFVA Financial (if other than FFVA
Financial), (ii) FFVA Financial in a merger in which FFVA Financial is the
continuing or surviving person, and (iii) the transferee of all or any
substantial part of FFVA Financial 's assets (or a substantial part of the
assets of its subsidiaries taken as a whole).
(II) "Substitute Common Stock" shall mean the common stock issued by
the Substitute Option Issuer upon exercise of the Substitute Option.
(III) "Assigned Value" shall mean the highest of (i) the price per
share of FFVA Financial Common Stock at which a Tender Offer or Exchange Offer
therefor has been made by any person (other than One Valley), (ii) the price per
share of FFVA Financial Common Stock to be paid by any person (other than One
Valley) pursuant to an agreement with FFVA Financial, and (iii) the highest
closing sales price per share of FFVA Financial Common Stock quoted on the
NASDAQ/NMS (or if FFVA Financial Common Stock is not quoted on the NASDAQ/NMS,
the highest bid price per share on any day as quoted on the principal trading
market or securities exchange on which such shares are traded as reported by a
recognized source chosen by One Valley) within the six-month period immediately
preceding the agreement; provided, however, that in the event of a sale of less
than all of FFVA Financial 's assets, the Assigned Value shall be the sum of the
price paid in such sale for such assets and the current market value of the
remaining assets of FFVA Financial as determined by a nationally recognized
investment banking firm selected by One Valley (or by a majority in interest of
the grantees if there shall be more than one grantee (a "Grantee Majority")),
divided by the number of shares of FFVA Financial Common Stock outstanding at
the time of such sale. In the event that an exchange offer is made for FFVA
Financial Common Stock or an agreement is entered into for a merger or
consolidation involving consideration other than cash, the value of the
securities or other property issuable or deliverable in exchange for FFVA
Financial Common Stock shall be determined by a nationally recognized investment
banking firm selected by One Valley. (If there shall then be more than one
grantee, any such selection shall be made by a Grantee Majority.)
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(IV) "Average Price" shall mean the average closing price of a share of
the Substitute Common Stock for the one year immediately preceding the agreement
referred to in subsection (b) of Section 7, but in no event higher than the
closing price of the shares of the Substitute Common Stock on the day preceding
such agreement; provided that if FFVA Financial is the issuer of the Substitute
Option, the Average Price shall be computed with respect to a share of common
stock issued by FFVA Financial, the person merging into FFVA Financial or by any
company which controls or is controlled by such person, as One Valley may elect.
(f) In no event, pursuant to any of the foregoing paragraphs, shall the
Substitute Option be exercisable for more than 9.9% of the aggregate of the
shares of the Substitute Common Stock outstanding after exercise of the
Substitute Option. In the event that the Substitute Option would be exercisable
for more than 9.9% of the aggregate of the shares of the Substitute Common Stock
but for this subsection (f), the Substitute Option Issuer shall make a cash
payment to One Valley equal to the excess of (i) the value of the Substitute
Option without giving effect to the limitation in this subsection (f) over (ii)
the value of the Substitute Option after giving effect to the limitation in this
subsection (f). This difference in value shall be determined by a nationally
recognized investment banking firm selected by One Valley (or a Grantee
Majority).
(g) FFVA Financial shall not enter into any transaction described in
subsection (b) of this Section 7 unless the Acquiring Corporation and any person
that controls the Acquiring Corporation assume in writing all the obligations of
FFVA Financial hereunder and take all other actions that may be necessary so
that the provisions of this Section 7 are given full force and effect
(including, without limitation, any action that may be necessary so that the
holders of the other shares of common stock issued by the Substitute Option
Issuer are not entitled to exercise any rights by reason of the issuance or
exercise of the Substitute Option and the shares of the Substitute Common Stock
are otherwise in no way distinguishable from or have lesser economic value than
other shares of common stock issued by the Substitute Option Issuer). In
addition, FFVA Financial shall not enter into any agreement of the type
described in Section 7(b) unless the other party thereto commits to provide the
funding required for FFVA Financial to pay the Section 8 Repurchase
Consideration.
(h) The provisions of Sections 8, 9 and 10 shall apply, with
appropriate adjustments, to any securities for which the Option becomes
exercisable pursuant to this Section 7 and, as applicable, references in such
sections to "FFVA Financial," "Option," "Purchase Price" and "FFVA Financial
Common Stock" shall be deemed to be references to "Substitute Option Issuer,"
"Substitute Option," "Substitute Purchase Price" and "Substitute Common Stock,"
respectively.
8. REPURCHASE AT THE OPTION OF ONE VALLEY.
(a) Subject to the second last sentence of Section 3(a) hereof, at the
request of One Valley at any time commencing upon the first occurrence of a
Repurchase Event (as defined in Section 8(d) below) and ending 12 months
immediately thereafter, FFVA Financial shall repurchase from One Valley (I) the
Option and (II) all shares of FFVA Financial Common Stock purchased by One
Valley pursuant hereto with respect to which One Valley then has beneficial
ownership. The date on which One Valley exercised its rights under this Section
8 is referred to as the "Request Date." Such repurchase shall be at an aggregate
price (the "Section 8 Repurchase Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by One Valley for any shares of
FFVA Financial Common Stock acquired pursuant to the option with respect to
which One Valley then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable Price (as defined below)
for each share of FFVA Financial Common Stock over (y) the Purchase Price
(subject to adjustment pursuant to Section 7), multiplied by the number of
shares of FFVA Financial Common Stock with respect to which the Option has not
been exercised; and
(iii) the excess, if any, of (x) the Applicable Price over (y) the
Purchase Price (subject to adjustment pursuant to Section 7) paid (or, in the
case of Option Shares with respect to which the Option has been exercised but
the Closing Date has not occurred, payable) by One Valley for each share of FFVA
Financial Common Stock with respect to which the Option has been exercised and
with respect to which One Valley then has beneficial ownership, multiplied by
the number of such shares.
(b) If One Valley exercises its rights under this Section 8, FFVA
Financial shall, within 10 business days after the Request Date, pay the Section
8 Repurchase Consideration to One Valley in immediately available funds, and
contemporaneously with such payment One Valley shall surrender to FFVA Financial
the Option and the certificates evidencing the shares of FFVA Financial Common
Stock purchased thereunder with respect to which One Valley then has beneficial
ownership, and One Valley shall warrant that it has sole record and beneficial
ownership of such shares and that the same are then free and clear of all liens,
claims, charges and encumbrances of any kind whatsoever. Notwithstanding the
foregoing, to the extent that prior notification to or approval of the Office of
Thrift Supervision or other regulatory authority is required in connection with
the payment of all or any portion of the Section 8 Repurchase Consideration, One
Valley shall have the ongoing option to revoke its request
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for repurchase pursuant to Section 8, in whole or in part, or to require that
FFVA Financial deliver from time to time that portion of the Section 8
Repurchase Consideration that it is not then so prohibited from paying and
promptly file the required notice or application for approval and expeditiously
process the same (and each party shall cooperate with the other in the filing of
any such notice or application and the obtaining of any such approval). If the
Office of Thrift Supervision or any other regulatory authority disapproves of
any part of FFVA Financial's proposed repurchase pursuant to this Section 8,
FFVA Financial shall promptly give notice of such fact to One Valley. If the
Office of Thrift Supervision or other agency prohibits the repurchase in part
but not in whole, then One Valley shall have the right (i) to revoke the
repurchase request or (ii) to the extent permitted by the Office of Thrift
Supervision or other agency, require the repurchase of the Option and/or Option
Shares, and One Valley shall thereupon have the right to exercise the Option as
to the number of Option Shares for which the Option was exercisable at the
Request Date less the sum of the number of shares covered by the Option in
respect of which payment has been made pursuant to Section 8(a)(ii). One Valley
shall notify FFVA Financial of its determination under the preceding sentence
within five (5) business days of receipt of notice of partial disapproval of the
repurchase.
Notwithstanding anything herein to the contrary, all of One Valley's
rights under this Section 8 shall terminate on the date of termination of this
Option pursuant to Section 3(a).
(c) For purposes of this Agreement, the "Applicable Price" means the
highest of (i) the highest price per share of FFVA Financial Common Stock paid
for any such share by the person or groups described in Section 8(d)(i), (ii)
the price per share of FFVA Financial Common Stock received by holders of FFVA
Financial Common Stock in connection with any merger or other business
combination transaction described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii), or
(iii) the highest closing sales price per share of FFVA Financial Common Stock
quoted on the NASDAQ/NMS (or if FFVA Financial Common Stock is not quoted on the
NASDAQ/NMS, the highest bid price per share as quoted on the principal trading
market or securities exchange on which such shares are traded as reported by a
recognized source chosen by One Valley) during the 30 business days preceding
the Request Date; provided, however, that in the event of a sale of less than
all of FFVA Financial's assets, the Applicable Price shall be the sum of the
price paid in such sale for such assets and the current market value of the
remaining assets of FFVA Financial as determined by a nationally recognized
investment banking firm selected by One Valley, divided by the number of shares
of FFVA Financial Common Stock outstanding at the time of such sale. If the
consideration to be offered, paid or received pursuant to either of the
foregoing clauses (i) or (ii) shall be other than in cash, the value of such
consideration shall be determined in good faith by an independent nationally
recognized investment banking firm selected by One Valley and reasonably
acceptable to FFVA Financial, which determination shall be conclusive for all
purposes of this Agreement.
(d) As used herein, a "Repurchase Event" shall occur if (i) any person
(other than One Valley or any subsidiary of One Valley) shall have acquired
beneficial ownership of (as such term is defined in Rule 13d-3 promulgated under
the Securities Exchange Act) or the right to acquire beneficial ownership of, or
any "group" (as such term is defined under the Exchange Act) shall have been
formed which beneficially owns or has the right to acquire beneficial ownership
of, 50% or more of the then outstanding shares of FFVA Financial Common Stock,
or (ii) any of the transactions described in Section 7(b)(i), 7(b)(ii) or
7(b)(iii) shall be consummated.
9. REGISTRATION RIGHTS. One Valley shall have the registration rights
set forth in Annex A hereto.
10. QUOTATION; LISTING. If FFVA Financial Common Stock or any other
securities to be acquired upon exercise of the Option are then authorized for
quotation or trading or listing on the NASDAQ/NMS or any securities exchange,
FFVA Financial, upon the request of One Valley, will promptly file an
application, if required, to authorize for quotation or trading or listing the
shares of FFVA Financial Common Stock or other securities to be acquired upon
exercise of the Option on the NASDAQ/NMS or such other securities exchange and
will use its best efforts to obtain approval, if required, of such quotation or
listing as soon as practicable.
11. DIVISION OF OPTION. This Agreement (and the Option granted hereby)
is exchangeable, without expense, at the option of One Valley, upon presentation
and surrender of this Agreement at the principal office of FFVA Financial for
other Agreements providing for Options of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of FFVA
Financial Common Stock purchasable hereunder. The terms "Agreement" and "Option"
as used herein include any other Agreements and related Options for which this
Agreement (and the Option granted hereby) may be exchanged. Upon receipt by FFVA
Financial of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, FFVA Financial will execute and
deliver a new Agreement of like tenor and date. Any such new Agreement executed
and delivered shall constitute an additional contractual obligation on the part
of FFVA Financial, whether or not the Agreement so lost, stolen, destroyed or
mutilated shall at any time be enforceable by anyone.
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12. MISCELLANEOUS.
(a) EXPENSES. Except as otherwise provided in Section 9, each of the
parties hereto shall bear and pay all costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder, including
fees and expenses of its own financial consultants, investment bankers,
accountants and counsel.
(b) WAIVER AND AMENDMENT. Any provision of this Agreement may be waived
at any time by the party that is entitled to the benefits of such provision.
This Agreement may not be modified, amended, altered or supplemented except upon
the execution and delivery of a written agreement executed by the parties
hereto.
(c) ENTIRE AGREEMENT: NO THIRD-PARTY BENEFICIARY; SEVERABILITY. This
Agreement, together with the Merger Agreement and the other documents and
instruments referred to herein and therein, between One Valley and FFVA
Financial (i) constitutes the entire agreement and supersedes all prior
agreements and understanding, both written and oral, between the parties with
respect to the subject matter hereof and (ii) is not intended to confer upon any
person other than the parties hereto (other than any parties indemnified under
Section 9 and transferees of the Option Shares or any permitted transferee of
this Agreement pursuant to Section 11(h)) any rights or remedies hereunder. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or a federal or state regulatory agency to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. If for any
reason such court or regulatory agency determines that the Option does not
permit One Valley to acquire, or does not require FFVA Financial to repurchase,
the full number of shares of FFVA Financial Common Stock as provided in Sections
3 and 8 (as adjusted pursuant to Section 7), it is the express intention of FFVA
Financial to allow One Valley to acquire or to require FFVA Financial to
repurchase such lesser number of shares as may be permissible without any
amendment or modification hereof.
(d) GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of West Virginia without regard to any
applicable conflicts of law rules.
(e) DESCRIPTIVE HEADINGS. The descriptive headings contained herein are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
To FFVA Financial:
FFVA Financial Corporation
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., President and CEO
With a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇, Spidi, Sloane & ▇▇▇▇▇, P.C.
One Franklin Square
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
To One Valley:
One Valley Bancorp, Inc.
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▇. ▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
One Valley Bancorp, Inc.
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▇. ▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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(g) COUNTERPARTS. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed, it
being understood that both parties need not sign the same counterpart.
(h) ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder or under the Option shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party, except that One Valley may assign this
Agreement to a wholly owned subsidiary of One Valley and One Valley may assign
its rights hereunder in whole or in part after the occurrence of a Fee Event;
provided, however, that until the Federal Reserve Board has approved an
application by One Valley to acquire the shares of FFVA Financial Common Stock
subject to the Option, One Valley may not assign its rights under the Option
except in (i) a widely dispersed public distribution, (ii) a private placement
in which no one party acquires the right to purchase in excess of 2% of the
voting shares of FFVA Financial, (iii) an assignment to a single party (e.g., a
broker or investment banker) for the purpose of conducting a widely dispersed
public distribution on One Valley's behalf or (iv) any other manner approved by
the Federal Reserve Board. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns. Any such assignment shall be in
compliance with all applicable laws.
(i) FURTHER ASSURANCES. In the event of any exercise of the Option by
One Valley, FFVA Financial and One Valley shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such exercise.
(j) SPECIFIC PERFORMANCE. The parties hereto agree that this Agreement
may be enforced by either party through specific performance, injunctive relief
and other equitable relief. Both parties further agree to waive any requirement
for the securing or posting of any bond in connection with the obtaining of any
such equitable relief and that this provision is without prejudice to any other
rights that the parties hereto may have for any failure to perform this
Agreement.
(k) EXTENSION OF PERIODS. Any period for the exercise of any right
hereunder shall be extended: (i) to the extent necessary to obtain all
regulatory approvals for the exercise of such rights (for so long as the
relevant person is using commercially reasonable efforts to obtain such
regulatory approvals), and for the expiration of all statutory waiting periods;
and (ii) to the extent necessary to avoid liability under Section 16(b) of the
Securities Exchange Act of 1934 by reason of such exercise.
13. OTHER PROVISIONS. (a)(i) Notwithstanding any other provision of
this Agreement, in no event shall One Valley's Total Profit (as hereinafter
defined) exceed $6 million and, if it otherwise would exceed such amount, One
Valley, as its sole election, shall either (a) reduce the number of shares of
Common Stock subject to this Option, (b) deliver to FFVA Financial for
cancellation Option Shares previously purchased by One Valley, (c) pay cash to
FFVA Financial, or (d) do any combination thereof, so that One Valley's actually
realized Total Profit shall not exceed $6 million after taking into account the
foregoing actions.
(ii) Notwithstanding any other provision of this Agreement, this Option
may not be exercised for a number of shares as would, as of date of exercise,
result in a Notional Total Profit (as defined below) of more than $6 million,
provided that nothing in this sentence shall restrict any exercise of the Option
permitted hereby on any subsequent date.
(iii) As used herein, the term "Total Profit" shall mean the aggregate
amount (before taxes) of the following: (i) the amount received by One Valley
pursuant to FFVA Financial's repurchase of the Option (or any portion thereof)
pursuant to Section 8, (ii) (x) the amount received by One Valley pursuant to
FFVA Financial's repurchase of Option Shares pursuant to Section 8, less (y) One
Valley's purchase price for such Option Shares, (iii) (x) the net cash amounts
received by One Valley pursuant to the sale of Option Shares (or any other
securities into which such Option Shares are converted or exchanged) to any
unaffiliated party, less (y) One Valley's purchase price of such Option Shares,
(iv) any amounts received by One Valley on the transfer of the Option (or any
portion thereof) to any unaffiliated party, and (v) any amount equivalent to the
foregoing with respect to the Substitute Option.
(iv) As used herein, the term "Notional Total Profit" with respect to
any number of shares as to which One Valley may propose to exercise this Option
shall be the Total Profit determined as of the date of such proposed exercise
assuming that this Option were exercised on such date for such number of shares
and assuming that such shares, together with all other Option Shares held by One
Valley and its affiliates as of such date, were sold for cash at the closing
market price for the Common Stock as of the close of business on the preceding
trading day (less customary brokerage commissions).
(b) (i) One Valley may, at any time following a Repurchase Event and
prior to the occurrence of a Fee Termination Event (or such later period as
provided herein), relinquish the Option (together with any Option Shares issued
to and then owned by One Valley) to FFVA Financial in exchange for a cash fee
equal to the Surrender Price;
7
provided, however, that One Valley may not exercise it rights pursuant to this
Section 13(b) if FFVA Financial has repurchased the Option (or any portion
thereof) or any Option Shares pursuant to Section 8. The "Surrender Price" shall
be equal to $3.5 million (i) plus, if applicable, One Valley's purchase price
with respect to any Option Shares and (ii) minus, if applicable, the excess of
(A) the net cash amounts, if any, received by One Valley pursuant to the arms'
length sale of Option Shares (or any other securities into which such Option
Shares were converted or exchange) to any unaffiliated party, over (B) One
Valley's purchase price of such Option Shares.
(ii) One Valley may exercise its right to relinquish the Option and any
Option Shares pursuant to this Section 13(b) by surrendering to FFVA Financial,
at its principal office, a copy of this Agreement together with certificates for
Option Shares, if any, accompanied by a written notice stating (i) that One
Valley elects to relinquish the Option and Option Shares, if any, in accordance
with the provisions of this Section 13(b) and (ii) the Surrender Price. The
Surrender Price shall be payable in immediately available funds on or before the
second business day following receipt of such notice by FFVA Financial.
(iii) To the extent that FFVA Financial is prohibited under applicable
law or regulation, or as a consequence of administrative policy, from paying the
Surrender Price to One Valley in full, FFVA Financial shall immediately so
notify One Valley and thereafter deliver or cause to be delivered from time to
time, to One Valley, the portion of the Surrender Price that it is no longer
prohibited from paying, within five business days after the date on which FFVA
Financial is no longer so prohibited; provided, however, that if FFVA Financial
at any time after delivery of a notice of surrender pursuant to paragraph (ii)
of this Section 13(b) is prohibited under applicable law or regulation, or as a
consequence of administrative policy, from paying to One Valley the Surrender
Price in full, (i) FFVA Financial shall (A) use its reasonable best efforts to
obtain all required regulatory and legal approvals and to file any required
notices as promptly as practicable in order to make such payments, (B) within
five days of the submission or receipt of any documents relating to any such
regulatory and legal approvals, provide One Valley with copies of the same, and
(c) keep One Valley advised of both the status of any such request for
regulatory and legal approvals, as well as any discussions with any relevant
regulatory or other third party reasonably related to the same and (ii) One
Valley may revoke such notice of surrender by delivery of a notice of revocation
to FFVA Financial and, upon delivery of such notice revocation, the Fee
Termination Date shall be extended to a date six months from the date on which
the Fee Termination Date would have occurred if not for the provisions of this
Section 13(b)(iii) (during which period One Valley may exercise any of its
rights hereunder, including any and all rights pursuant to this Section 13(b)).
IN WITNESS WHEREOF, FFVA Financial and One Valley have caused this
Stock Option Agreement to be signed by their respective officers thereunto duly
authorized, all as of the day and year first written above.
ONE VALLEY BANCORP, INC.
By______________________________
Its President and CEO
FFVA Financial Corporation
By______________________________
Its President and CEO
8
ANNEX A
REGISTRATION RIGHTS
(1) DEMAND REGISTRATION RIGHTS. FFVA Financial shall, subject to the
conditions of Section (3) below, if requested by One Valley (or, if applicable,
a Grantee Majority), as expeditiously as possible prepare and file a
registration statement under the Securities Act if such registration is
necessary in order to permit the sale or other disposition of any or all shares
of FFVA Financial Common Stock or other securities that have been acquired by or
are issuable to One Valley upon exercise of the Option in accordance with the
intended method of sale or other disposition stated by One Valley in such
request, including without limitation a "shelf" registration statement under
Rule 415 under the Securities Act or any successor provision, and FFVA Financial
shall use its best efforts to qualify such shares or other securities for sale
under any applicable state securities laws.
(2) ADDITIONAL REGISTRATION RIGHTS. If FFVA Financial at any time after
the exercise of the Option proposes to register any shares of FFVA Financial
Common Stock under the Securities Act in connection with an underwritten public
offering of such FFVA Financial Common Stock, FFVA Financial promptly will give
written notice to One Valley (and any permitted transferee) of its intention to
do so and, upon the written request of One Valley (or any such permitted
transferee of One Valley) given within 30 days after receipt of any such notice
(which request shall specify the number of shares of FFVA Financial Common Stock
intended to be included in such underwritten public offering by One Valley (or
such permitted transferee)), FFVA Financial will cause all such specified
shares, the holders of which shall have requested participation in such
registration, to be so registered and included in such underwritten public
offering; provided, however, that FFVA Financial may elect to not cause any such
shares to be so registered (i) if the underwriters in good faith object for
valid business reasons, or (ii) in the case of a registration solely to
implement an employee benefit plan or a registration filed on Form S-4;
provided, further, however, that such election pursuant to (i) may only be made
one time. If some but not all the shares of FFVA Financial Common Stock, with
respect to which FFVA Financial shall have received requests for registration
pursuant to this section (2), shall be excluded from such registration, FFVA
Financial shall make appropriate allocation of shares to be registered among One
Valley and any such permitted transferee desiring to register their shares pro
rata in the proportion that the number of shares requested to be registered by
each such holder bears to the total number of shares requested to be registered
by all such holders then desiring to have FFVA Financial Common Stock registered
for sale.
(3) CONDITIONS TO REQUIRED REGISTRATION. FFVA Financial shall use all
reasonable efforts to cause each registration statement referred to in Section
(1) above to become effective and to obtain all consents or waivers of other
parties which are required therefor and to keep such registration statement
effective; provided, however, that FFVA Financial may delay any registration of
Option Shares required pursuant to Section (1) above for a period not exceeding
90 days provided FFVA Financial shall in good faith determine that any such
registration would adversely affect an offering or contemplated offering of
other securities by FFVA Financial. FFVA Financial shall not be required to
register Option Shares under the Securities Act pursuant to Section (1) above:
(i) on more than two occasions;
(ii) more than once during any calendar year;
(iii) within 90 days after the effective date of a
registration referred to in Section 2 above pursuant to which the holder or
holders of the Option Shares concerned were afforded the opportunity to register
such shares under the Securities Act and such shares were registered as
requested; and
(iv) unless a request therefor is made to FFVA Financial
by the holder or holders of at least 25% or more of the aggregate number of
Option Shares then outstanding.
In addition to the foregoing, FFVA Financial shall not be required to
maintain the effectiveness of any registration statement after the expiration of
nine months from the effective date of such registration statement. FFVA
Financial shall use all reasonable efforts to make any filings, and take all
steps, under all applicable state securities laws to the extent necessary to
permit the sale or other disposition of the Option Shares so registered in
accordance with the intended method of distribution for such shares; provided,
however, that FFVA Financial shall not be required to consent to general
jurisdiction or qualify to do business in any state where it is not otherwise
required to so consent to such jurisdiction or to so qualify to do business.
(4) EXPENSES. Except where applicable state law prohibits such
payments, FFVA Financial will pay all expenses (including without limitation
registration fees, qualification fees, blue sky fees and expenses (including the
fees and expenses of counsel), legal expenses including the reasonable fees and
expenses of one counsel to the holders whose Option Shares are being registered,
printing expenses and the costs of special audits or "cold comfort" letters,
expenses of underwriters, excluding discounts and commissions but including
liability insurance if FFVA Financial so desires or the underwriters so require,
and the reasonable fees and expenses of any necessary
9
special experts) in connection with each registration pursuant to Section (1) or
(2) above (including the related offerings and sales by holders of Option
Shares) and all other qualifications, notifications or exemptions pursuant to
Section (1) or (2) above.
(5) INDEMNIFICATION. In connection with any registration under Section
(1) or (2) above, FFVA Financial hereby indemnifies the holder of the Option
Shares, and each underwriter thereof, including each person, if any, who
controls such holder or underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, losses, claims, damages and liabilities
caused by any untrue, or alleged untrue, statement of a material fact contained
in any registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission, or alleged omission, to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such expenses, losses, claims, damages or
liabilities of such indemnified party are caused by any untrue statement or
alleged untrue statement that was included by FFVA Financial in any such
registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) in reliance upon and in
conformity with, information furnished in writing to FFVA Financial by such
indemnified party expressly for use therein, and FFVA Financial and each
officer, director and controlling person of FFVA Financial shall be indemnified
by such holder of the Option Shares, or by such underwriter, as the case may be,
for all such expenses, losses, claims, damages and liabilities caused by any
untrue, or alleged untrue, statement that was included by FFVA Financial in any
such registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) in reliance upon, and in
conformity with, information furnished in writing to FFVA Financial by such
holder or such underwriter, as the case may be, expressly for such use.
Promptly upon receipt by a party indemnified under this Section (5) of
notice of the commencement of any action against such indemnified party in
respect of which indemnity or reimbursement may be sought against any
indemnifying party under this Section (5), such indemnified party shall notify
the indemnifying party in writing of the commencement of such action, but the
failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
Section (5). In the event that notice of commencement of any such action shall
be given to the indemnifying party as above provided, the indemnifying party
shall be entitled to participate in and, to the extent it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and satisfactory to such
indemnified party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel (other than reasonable costs of investigation)
shall be paid by the indemnified party unless (i) the indemnifying party either
agrees to pay the same, (ii) the indemnifying party fails to assume the defense
of such action with counsel satisfactory to the indemnified party, or (iii) the
indemnified party has been advised by counsel that one or more legal defenses
may be available to the indemnifying party that may be contrary to the interest
of the indemnified party, in which case the indemnifying party shall be entitled
to assume the defense of such action notwithstanding its obligation to bear fees
and expenses of such counsel. No indemnifying party shall be liable for any
settlement entered into without its consent, which consent may not be
unreasonably withheld.
If the indemnification provided for in this Section (5) is unavailable
to a party otherwise entitled to be indemnified in respect of any expenses,
losses, claims, damages or liabilities referred to herein, then the indemnifying
party, in lieu of indemnifying such party otherwise entitled to be indemnified,
shall contribute to the amount paid or payable by such party to be indemnified
as a result of such expenses, losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative benefits received by FFVA
Financial, the selling shareholders and the underwriters from the offering of
the securities and also the relative fault of FFVA Financial, the selling
shareholders and the underwriters in connection with the statements or omissions
which resulted in such expenses, losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The amount paid or payable by a
party as a result of the expenses, losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim; provided, however, that in no case shall One Valley or any
of its subsidiaries or affiliates be responsible, in the aggregate, for any
amount in excess of the net offering proceeds attributable to its Option Shares
included in the offering. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Any obligation by any holder to indemnify shall be several
and not joint with other holders.
In connection with any registration pursuant to Section (1) or (2)
above, FFVA Financial and each holder of any Option Shares (other than One
Valley) shall enter into an agreement containing the indemnification provisions
of this Section (5).
10
(6) MISCELLANEOUS REPORTING. FFVA Financial shall comply with all
reporting requirements and will do all such other things as may be necessary to
permit the expeditious sale at any time of any Option Shares by the holder
thereof in accordance with and to the extent permitted by any rule or regulation
promulgated by the SEC from time to time, including, without limitation, Rule
144A. FFVA Financial shall at its expense provide the holder of any Option
Shares with any information necessary in connection with the completion and
filing of any reports or forms required to be filed by them under the Securities
Act or the Exchange Act, or required pursuant to any state securities laws or
the rules of any stock exchange.
(7) ISSUE TAXES. FFVA Financial will pay all stamp taxes in connection
with the issuance and the sale of the Option Shares and in connection with the
exercise of the Option, and will save One Valley harmless, without limitation as
to time, against any and all liabilities, with respect to all such taxes.
11
EXHIBIT B
[DATE]
One Valley Bancorp, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: General Counsel
Ladies and Gentlemen:
I have been advised that I might be considered an "affiliate" of FFVA
Financial Corporation ("FFVA Financial"), for purposes of paragraphs (c) and (d)
of Rule 145 of the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Act"), and as such term relates to
pooling of interests accounting treatment for certain business combinations
under generally accepted accounting principles and the interpretation of the SEC
or its staff, including, without limitation, Section 201.01 of the SEC's
Codification of Financial Reporting Policies and the SEC's Staff Accounting
Bulletin No. 65.
One Valley Bancorp, Inc. ("One Valley"), and FFVA Financial have
entered into an "Agreement and Plan of Merger", dated as of the 16th day of
December, 1997 (the "Merger Agreement"). Upon consummation of the transaction
contemplated by the Merger Agreement (the "Merger"), I will receive shares of
the Common Stock, par value $10.00 per share ("One Valley Common Stock"), of One
Valley, plus cash in lieu of fractional shares, for all shares of Common Stock,
par value $.10 per share ("FFVA Financial Common Stock"), of FFVA Financial that
I own or as to which I may have an interest. I understand that One Valley and
FFVA Financial will consummate the Merger in reliance on my entering into the
agreement set forth in this letter (the "Letter Agreement").
A. I represent and warrant to, and agree with, One Valley that:
1. I have read this Letter Agreement and the Merger Agreement and, to
the extent I have felt necessary, have discussed with my counsel or the counsel
to FFVA Financial the requirements of such agreements and other applicable
limitations upon my ability to sell, pledge, transfer or otherwise dispose of
any shares of FFVA Financial Common Stock or One Valley Common Stock.
2. I shall not make any offer, sale, pledge, transfer or other
disposition in violation of the Act or the rules or regulations of the SEC under
the Act of the shares of One Valley Common Stock I receive pursuant to the
Merger.
3. Notwithstanding the foregoing and any other agreements to which I am
a party relating to any shares of FFVA Financial Common Stock or One Valley
Common Stock, I hereby agree that I will not sell or otherwise reduce my risk
relative to any shares of FFVA Financial Common Stock or One Valley Common Stock
during the period commencing on the date of this Letter Agreement and ending on
the date that financial results covering at least thirty days of combined
operations of One Valley and FFVA Financial are published following the
effective date of the Merger.
B. I understand and agree that:
1. I have been advised that any issuance of shares of One Valley Common
Stock to me pursuant to the Merger has been registered with the SEC. However, I
have also been advised that, since I may be or have been an "affiliate" of FFVA
Financial at the time the Merger will be or was submitted for a vote of the
stockholders of FFVA Financial and my disposition of shares has not been
registered under the Act, I must hold such shares indefinitely unless (i) such
disposition of shares is subject to an effective registration statement under
the Act, (ii) a sale of such shares is made in conformity with the provisions of
Rule 145(d) under the Act or (iii) in an opinion of counsel, in form and
substance reasonably satisfactory to One Valley, some other exemption from
registration is available with respect to any such proposed disposition of such
shares.
2. Stop transfer instructions in accordance with this Letter Agreement
will be given to the transfer agents of One Valley and FFVA Financial with
respect to the FFVA Financial Common Stock and One Valley Common Stock in
connection with the restrictions set forth herein, and there will be placed on
the certificate or certificates representing shares of One Valley Common Stock I
receive pursuant to the Merger, or any certificates delivered in substitution
therefor, a legend stating in substance:
12
The shares represented by this certificate were issued in a transaction
to which Rule 145 under the Securities Act of 1933 applies. The shares
represented by this certificate may be transferred only in accordance with the
terms of an agreement between the registered holder hereof and One Valley
Bancorp, Inc., a copy of which agreement is on file at the principal offices of
One Valley Bancorp, Inc.
It is understood and agreed that this Letter Agreement shall terminate
and be of no further force and effect if the Merger Agreement is terminated
pursuant to its terms. It is also understood and agreed that this Letter
Agreement shall terminate and be of no further force and effect with respect to
One Valley Common Stock (and the legends and stock transfer restrictions
provided for herein shall be removed), immediately as of the later of (i) such
time as financial results covering at least thirty days of combined operations
following the effective date of the Merger have been published, and (ii)
delivery by the undersigned to One Valley of a copy of a letter from the staff
of the SEC, an opinion of counsel in form and substance reasonably satisfactory
to One Valley, or other evidence reasonably satisfactory to One Valley, to the
effect that my transfer of my shares of One Valley Common Stock will not violate
the Act or any of the rules and regulations of the SEC under the Act.
The Letter Agreement shall be binding on my heirs, legal
representatives and successors.
Very Truly Yours,
(name of affiliate)
Agreed to this day of
_______________, 199__
ONE VALLEY BANCORP, INC.
By:_____________________
Its:____________________
13
